The Personnel Dept

1st FEBRUARY 2012 Statutory Rate/Limit Increases – EMPLOYERS BEWARE

Neil Buck — Thu, 02 Feb 2012 16:38:01 +0000

1. Statutory redundancy payment increases

The cap on a week’s pay for calculating statutory redundancy increases from £400 to £430. Therefore, the new maximum statutory redundancy pay is £12,900.

2. Unfair dismissal basic award increases

An award of compensation for unfair dismissal is made up of a basic award as well as a compensatory award. The limit on a week’s pay for calculating the basic award for unfair dismissal increases from £400 to £430. The basic award is calculated in the same way as statutory redundancy pay, so it is based on the employee’s age, length of service and earnings.

3. Unfair dismissal compensatory award increases

The maximum compensatory award for unfair dismissal increases from £68,400 to £72,300. Therefore, the maximum potential liability increases from £80,400 to £85,200.

Note: No maximum applies in certain circumstances, for example where the dismissal is for making a protected disclosure.

4. A “week’s pay” increases for other compensation

The increase to the statutory cap on a week’s pay from £400 to £430 will raise the limit on certain other awards a tribunal can make. These include the award for refusing to allow an employee to be accompanied at a disciplinary or grievance hearing, and for failure to follow the statutory procedure in relation to a request for flexible working.

5. Guarantee payment increases

The limit on the guarantee payment for a “workless day” rises from £22.20 to £23.50. A workless day is one where the employee is not provided with work throughout a day or shift on which they are normally required to work.

Case Law – Spaceright Europe Limited v Baillavine

Neil Buck — Fri, 27 Jan 2012 14:23:33 +0000

The Court of Appeal has clarified the case law relating to when a dismissal is automatically unfair under TUPE.

Background

When there is a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), affected employees are protected against dismissal.

Regulation 7 says that if any employee of either the transferor or transferee is dismissed before or after the relevant transfer they shall be regarded as automatically unfairly dismissed if the sole or principal reason for the dismissal is:

the transfer itself; or
a reason connected with the transfer which is not an economic, technical or organisational reason entailing changes in the workforce (an ETO reason).

Previously case law had held that dismissal of employees by the administrator of a business, in order to make it more attractive to potential buyers, could not be said to be “connected with the transfer” because no transfer was in contemplation at the time of the dismissals and the assets were not in fact sold until some months afterwards. Subsequently, the EAT gave conflicting rulings in later cases.

Facts

In Spaceright Europe Limited v Baillavine the claimant had been Chief Executive of Ultralon Holdings Limited, a company which went into administration on 23 May 2008. Mr Baillavine was dismissed along with 43 other employees of the company on that day. On 25 June the administrators sold the business and assets of Ultralon to Spaceright Europe Limited.

The Employment Tribunal found that the claimant’s dismissal was connected to the transfer and was not for an ETO reason.

Consequently, Mr Baillavine had been automatically unfairly dismissed and liability for that dismissal passed to Spaceright. The Employment Appeal Tribunal turned down an appeal and Spaceright appealed to the Court of Appeal.

The Court of Appeal decision

The Court of Appeal rejected Spaceright’s appeal. It held:

there was nothing in TUPE which required a particular transfer or transferee to be in existence or contemplation at the time of the dismissal for that dismissal to be “connected to the transfer”.
For an ETO reason to exist there must be “an intention to change the workforce and to continue to conduct the business, as distinct from the purpose of selling it”. Furthermore, the ETO reason defence is not available to enable administrators to make businesses more attractive to prospective buyers.

Conclusion

This case has cleared up the previous ambiguity and conflicting case law at EAT level. The current position is, therefore, that a person can be considered to be automatically dismissed for a reason connected with the transfer even if the transfer was not known, contemplated or foreseen at the time of the dismissal.

It is now clear that the ETO reason defence will only be available in limited circumstances, and it will not assist administrators in making a business more attractive (as was previously the case, and I would suggest was actually a good thing when we should be doing all we can to attract new buyers to faling businesses in these tough times). Those who buy businesses from administrators will need to be alive to the risk that they could inherit liability for pre-sale dismissals.

Additionally, if a transfer is likely to happen and an unrelated dismissal is required, the employer should ensure it keeps documentary evidence of the true reason for the dismissal to avoid any allegation that it was connected to the transfer.

The saving grace of all this is that an employee must bring a claim within three months of their dismissal.

However, the reality is that, in most cases, an employer will have an idea that a transfer might happen more than three months before it actually occurs.

Dealing with the extra bank holiday this year

Neil Buck — Fri, 27 Jan 2012 14:20:50 +0000

This year, Tuesday June 5 will be an extra bank holiday to mark the Queen’s Diamond Jubilee.

Question: Are staff automatically entitled to these days off and, if so, what’s the position on pay?

Answer: There’s no automatic statutory right to time off (paid or otherwise) on bank or public holidays. The statutory entitlement to 28 days’ leave may include all bank holidays. You might also require staff to work these days and there’s no statutory right to extra pay if they do. What happens in your business will depend on what your employment contracts say and what you have done in the past e.g. for last years Royal Wedding public holiday. Communicate your position well in advance to avoid any confusion or disappointment.

If you would like us to review your contracts of employment (and any other employment documentation) and update them to make them more protective of your organization, please get in touch and we’ll discuss your requirements.

Apprentice v employee status

Neil Buck — Tue, 24 Jan 2012 23:59:30 +0000

The following is taken from an excellent article in People Management online and answers a lot of the questions we often get from employers who take on apprenticeships and then wonder where they stand in relation to it being treated as ‘normal’ employment:

Increased Government funding has brought apprenticeships back in to vogue. Employers going down this training route need to remember that there are significant differences in law between an apprentice and an employee.

An apprenticeship agreement must be recorded in writing, unlike a contract of employment that can come about via an oral agreement. And an employer cannot end the apprenticeship, for example, because of a downturn in work or a change in funding arrangements. If an apprenticeship is terminated prematurely, the apprentices could claim damages for loss of wages for the remainder of their apprenticeships, along with compensation for loss of training, opportunity and status, based on them being less employable for failing to complete their training.

Performance and absence issues must be managed in a manner that results in the apprentice achieving the required standards. Generally, employers can only terminate apprenticeships if the apprentices’ conduct is such that it makes it impossible to carry out the central purpose of the relationship, which is teaching them their trade. This is a much higher threshold than employers are used to.

What should an apprenticeship agreement cover?
Employers should consider including the following provisions:

details specified in section 1 Employment Rights Act 1996 which would normally be included in any written statement of terms and conditions, such as start date, hours of work, and so on
how long the apprenticeship will last (there is no set period in law) or the qualification that the apprentice is to achieve
a signature by a parent or guardian if the apprentice is under 18 years old, independently witnessed, to confirm that the signatory entered into the agreement freely and willingly
a statement on what is expected of apprentices and what they need to demonstrate in order to be proficient enough to complete the scheme (this could include obtaining externally assessed qualifications)
a probationary period prior to the start of the formal apprenticeship to make it easier to remove unsuitable candidates at the outset
the name of a mentor, or person with special responsibility for apprentices, appointed to look after their welfare during the apprenticeship
details of how, and how often, their progress will be reviewed and monitored
a provision allowing the employer to terminate the relationship if the apprentice does not attain the necessary standards after a sufficient opportunity to do so
the ability for the employer to reclaim certain training fees if the apprentice leaves within a set period of time
arrangements for transferring apprentices in the event of a redundancy situation, or at least to make reasonable efforts to find alternative work for them to enable them to complete their training.

If an employer is not providing all of the training, it should take care not to warrant the quality of training that a third party is responsible for, or expose itself to claims for failing to provide the training adequately. Unless otherwise stated, the employer will be expected to help apprentices secure the relevant qualifications needed to pursue a full-time career.

What other obligations does an employer have towards an apprentice?
An employer’s duties in discrimination law, and in the case of public authorities, wider equality duties, will apply equally to apprenticeships as to other types of worker. In particular, an employer should not apply age limits to apprenticeships, especially as the Government has lifted former age restrictions on funding. Employers should review other eligibility criteria, for example, requiring recent GCSEs, to avoid potential indirect age discrimination.

The Working Time Regulations 1998, covering rest breaks, paid holidays and so on, apply to apprentices, as well as an employer’s usual health and safety obligations.

When budgeting, employers should note that under the National Minimum Wage Act 1998 an apprentice rate applies to apprentices 19 and under, or in the first year of their apprenticeship, so costs will increase over time. Employers should also be careful of funding which may be in place for a shorter period than the apprenticeship; an employer would not necessarily be able to end the apprenticeship due to lack of funding in later years.

Unfair dismissal change will NOT be retrospective

Neil Buck — Fri, 20 Jan 2012 14:30:56 +0000

The Government have confirmed that employees starting work before 6 April 2012 will continue to be able to claim unfair dismissal after only one year’s service. Employees who commence employment on or after the 6th April 2012 will be under the new regulations and will have to have worked for two years before they can make an unfair dismissal claim.

The aim of the policy is to encourage recruitment and the Department for Business, Innovation and Skills does not believe that it is appropriate or necessary to apply it those already in work, which seems fair enough.

There is yet to be a parliamentary debate on the extension of the qualifying period, but the regulations are expected to be published soon.

Employment Law in 2012

Neil Buck — Fri, 06 Jan 2012 00:40:39 +0000

It aims to be a busy year on the employment law front as the government progresses its aim of reducing regulatory burdens on business. The following are the key developments to prepare for in 2012 include:

1 February

· Tribunal awards

The limits applying to tribunal awards and other amounts payable under employment legislation will increase for effective dates on or after 1 February 2012. The maximum amount of a ‘week’s pay’ will increase from £400 to £430 and the maximum compensatory award for unfair dismissal from £68,400 to £72,300.

April

· Rate increases

Weekly rates of statutory maternity, paternity and adoption leave pay will increase from £128.73 to £135.45 and the rate of statutory sick pay will increase from £81.60 to £85.85.

· Unfair dismissal rights

The qualifying period of service for unfair dismissal looks set to rise to two years.

· Tribunal reform

New regulation is expected to increase the amounts of costs and deposit orders in tribunal proceedings, introduce changes to witness statements and witness expenses as well as extend the circumstances in which employment judges may sit alone.

· Parental leave extension

Bringing UK into line with European requirements, the period of unpaid leave will increase from three to four months.

1 October

· Pension changes

Auto-enrolment of employees (“job holders”) into a pension scheme will commence for businesses with more than 120,000 employees, with staged introduction over the ensuing months for those with fewer staff.

National minimum wage rate change

The national minimum wage rates may increase, depending on what the Low Pay Commission recommends in February.

Developments with no confirmed date but likely to be progressed in 2012

· penalties for employers who breach of employment rights

· early compulsory ACAS conciliation of all tribunal claims

· amendment of whistleblowing rules so that disclosures about breaches of employment contracts are no longer covered

· compromise agreements to be simplified

· consultation on ‘protected conversations’ between employers and staff about employment issues without risk of dispute

· consultation on rapid resolution scheme as alternative to tribunal for low-value and straightforward disputes

· Acas Disciplinary and Grievance Code to be ‘looked at’ with a view to a simpler dismissal process

Christmas Party Risks

Neil Buck — Wed, 21 Dec 2011 21:17:24 +0000

If you’re lucky enough to be having one or treating your employees to one, bear in mind that the office / staff Christmas party is seen an extension of your normal work environment in terms of employment law. This means that the employer may still be liable for potential claims even if the soirée took place at a separate venue and outside working hours.

Consider the following advice:

· Have guidelines in place and inform staff in advance what behaviour is unacceptable and any consequences of bad behaviour. Measures could be as simple as displaying a list of employees’ responsibilities on a notice board, such as avoiding unacceptable standards of behaviour e.g., harassment, bullying and fighting. Staff should understand that, as this is technically a work activity, the normal disciplinary procedures would be applied. It is also important to ensure that staff are aware that disciplinary action might be taken against them if they fail to turn up late (or not at all) for work the next day, and there is reason to believe it is due to drinking too much alcohol.

· Bosses should avoid talking about promotion, career prospects or salary with employees who may use the atmosphere to discuss matters that are more suited to a formal appraisal.

· An employer that supplies the alcohol, or encourages its consumption may be legally responsible for the welfare of employees if they suffer from drink induced disasters – even if they occur outside of the party itself. Therefore, limit the alcohol, issue advice before the party about not driving after having an alcoholic drink. Perhaps consider hiring a minibus for the end of the night or providing the phone numbers of local taxi firms to demonstrate that reasonable steps have been taken to minimise this risk.

· Employers should consider any employees who are not Christian and may perceive particular actions or gestures towards them or other employees to be discriminatory on the basis of their religious beliefs.

· With the increased liability placed upon employers for the actions of third parties, under the Equality Act 2010, employers will also need to ensure they remind suppliers, clients and other third parties who may be invited to attend celebrations (or give a performance at it), that harassment of employees or discriminatory comments will not be tolerated.

Comment: If you do provide a Christmas party, the likelihood is that everyone will behave and there shouldn’t be any cause for concern at all – if everyone is in good spirits and common sense prevails. However, if something does happen and there are workplace repercussions, just contact us for some advice if necessary!

Russell v Transocean

admin — Wed, 21 Dec 2011 21:16:36 +0000

This was a Supreme Court case involving annual leave. It is of significance in respect of workers who do not follow a standard working pattern.

In this case, a number of workers employed on offshore oil and gas installations were contracted to work to a pattern of two weeks offshore followed by two weeks onshore. They argued that the Working Time Directive means that “annual leave” should entail release from what would otherwise be an obligation to work. In other words, they argued for their entitlement to annual leave to be out of their two-weeks “on”, rather than out of their two-weeks “off” (known as field breaks). The issue was therefore whether annual leave must be carved out of what would otherwise be working time or whether it could be taken from time which would in any event be non-working time (as their employers contended).

The workers’ claims were upheld in the Employment Tribunal, which held that the workers were entitled to take their annual leave during time when they were scheduled to be working offshore. On appeal, the EAT decided that the workers’ field breaks did constitute time available for annual leave and that it did not matter that they would not otherwise be working during those breaks. The Court of Session agreed with the EAT, but the workers appealed.

The Supreme Court refused the workers’ request for a reference to the Court of Justice of the European Union and dismissed their appeal. In so doing, the Supreme Court has stated that the term “rest period” simply means any period which is not working time, irrespective of where the worker is and what he is doing, so long as it is a period when he is not working. The periods when the workers are on field breaks therefore plainly fall within that category. As such, the employers are entitled to insist that the workers take their paid annual leave during periods when they are onshore on field breaks.

Comment: This decision will be a relief to employers in the oil and gas industry. Significantly, however, the effects could have been no less dramatic for other employers. The implications of this decision go far beyond those employed on offshore installations. For example, it is common practice in the education sector to employ staff to work on a term-time only basis. Indeed, many employees with school age children enjoy term-time only contracts. Similarly, the decision could have had a major impact on the holiday entitlement of those who work “continental” shift patterns (e.g. 4 days on, 4 days off) or annualised hours. The Supreme Court’s decision will be welcomed by employers of all such atypical workers as it means that, as far as holiday entitlement is concerned, it will be “business as usual”.

KHS AG v Winfried Schulte

admin — Wed, 21 Dec 2011 21:15:23 +0000

The Court of Justice of the European Union (CJEU) has handed down its decision in this important case about whether a worker on long term sick leave has the right to carry forward annual leave accrued whilst on sick leave to a subsequent holiday year and, if so, whether national laws can place limits on this right to carry forward.

To put Schulte in context, it is clear from previous CJEU rulings that under the EU Working Time Directive (WTD), on which the Working Time Regulations (WTR) are based, that annual leave continues to accrue during sick leave, that workers can opt to take that leave when off sick (subject to the employer’s rights to control when leave is taken) or ask for it to be deferred until a later date and that workers who go on sick leave during a period that has been scheduled as annual leave for the purposes of the WTD should be allowed to reschedule their holidays, even if that means allowing leave to be carried forward into a subsequent holiday year.

In essence the position following those CJEU decisions is that workers who are on sick leave have a choice: they can take annual leave if they wish, but if they would prefer not to do so they can insist on postponing their annual leave and taking it at a later date, possibly even in a subsequent leave year if it is not possible to schedule leave before the current year ends.

In Schulte, the German courts asked the CJEU for guidance on how long holiday accrued on sick leave can be carried forward. Its decision today provides some comfort for employers, as the Court’s decision sanctions the placing of some limits on the ability of long term sick employees to carry forward such accrued holiday, on the basis that allowing a worker to take accrued leave several years after the leave year to which it related would not achieve the WTD’s purpose of enabling the worker to recuperate from the effort and stresses of that year.

In summary, the CJEU has held that a German national law does not breach the WTD where it provides that the annual leave entitlement of a worker who is unfit for work for several consecutive holiday years extinguishes 15 months after the end of the relevant leave year (effectively giving workers over two years to use a year’s leave entitlement). However, the CJEU also appears to endorse the Advocate-General’s opinion that a carry-over period of only six months would be insufficient in such circumstances and, indeed, suggests that any carry-over period of less than 15 months may contravene the WTD.

Comment: This ruling still leaves a little doubt in the UK, because the WTR expressly state that annual leave cannot be carried forward from one year to the next. Consequently, there has been much debate about whether the WTR can be interpreted consistently with the WTD. This is a timely decision, therefore, as the Government has recently consulted over potential amendments to the WTR to reflect the existing European case law on the topic of holidays and sickness. This decision of the CJEU is now likely to influence the shape of those amendments.

GPs may lose powers over long-term sick leave

admin — Wed, 21 Dec 2011 21:14:39 +0000

GPs will no longer sign workers off on long term sick leave if the government accepts recommendations to pass this responsibility onto independent assessors.

Evidence to be revealed in a government-commissioned Independent Sickness Absence Review, published today, shows that many GPs admit signing people off sick who could have worked because they lacked the time and training to conduct an in-depth assessment.

Under the new proposals, fitness assessments would be made by a specialist government-funded service which would provide a “realistic” assessment of whether someone is fit to work, is fit to work with some adjustments, or should be signed off sick.

The review, led by Professor Dame Carol Black and David Frost, the former head of the British Chambers of Commerce, will outline radical solutions to address the costly problem of long-term absence, which the Department for Work and Pensions has estimated costs the taxpayer £60bn a year in benefits, unpaid taxes and medical bills.

In addition, the review will propose tax breaks for organisations that employ people who have long-term conditions and call for the government to support a new job-brokering service, to find work for people cannot stay in their current job because of their condition.

Comment: This could be good news for employers, since many have the long held suspicion that GP’s simply sign off fit notes without due consideration for the workplace. A new advisory service to help both employers and GPs have more certainty about someone who is sick and may not be able to go back to work, can really only be seen as a positive measure, can’t it?