Monthly Archives: July 2016

Should Employers Take The Gender Pay Gap Seriously?

wage-gap-concept-blue-symbolizing-men-red-womenSUMMARY: A failure to address gender pay gaps can create both financial, legal and reputational risk for employers. We answer some frequently asked questions about equal pay.

Do we have to pay men and women the same?

The law provides that men and women should be treated equally when doing “equal work”.  This means men and women must be treated equally in relation to their terms and conditions of employment if they are employed to do:

  • like work. This means work that is the same or broadly similar;
  • work rated as equivalent under a job evaluation study; and
  • work found to be of equal value in terms of effort, skill or decision making.

In order to establish if there is equal treatment or otherwise, there will need to be a comparison of the terms and conditions enjoyed by a member of the opposite sex working for the same employer, doing like work of equal value.

Employers should not forget that the equal pay law protects men too.  Women who are pregnant or on maternity leave have special rights when it comes pay, benefits and bonuses.

Is there any way of defending an equal pay claim?

It is open to an employer to defend a claim if it can show the reason for the difference is due to a genuine factor and is not based on the sex of the employee. Common factors would include a difference in geographical location, experience or qualifications.

Is it just pay that we have to ensure is equal?

The equal pay law covers all aspects of pay and benefits including:

  • basic pay;
  • contractual benefits, i.e., company cars;
  • holiday pay;
  • hours of work;
  • non-discretionary bonus payments;
  • non-monetary benefits;
  • pension benefits and access to pension schemes;
  • performance related pay and benefits, overtime rates and allowances; and
  • sick pay.

The following areas would not be covered by the equal pay law but could be challenged under the sex discrimination law:

  • discretionary bonus payments;
  • discretionary pay increases;
  • promotion; and
  • the terms of a job offer.

To avoid the risk of equal pay claims we are considering banning staff from talking about how much they get paid?

Whilst employers are able to impose some restrictions on their staff about discussions concerning pay, any ban on this type of discussion would be unenforceable, if the purpose of the discussion is to identify if there is unlawful pay discrimination. This means a gagging clause in a contract of employment will not be effective if its aim is to prevent this type of discussion.

Any disadvantage including dismissal suffered by the employee as a consequence of their disclosure about pay for the purpose referred to above will be unlawful victimisation.

Do we have to respond to a request from a member of staff asking for information about pay differences?

A person who thinks they may have an equal pay claim may submit questions to the employer to help them determine whether they have such a claim.    An employer is not legally obliged to respond.  Before making the decision not to respond, an employer needs to be aware that an employment tribunal can take into account any response, or lack of response as a contributing factor when considering the issue of discrimination.

An employer faced with a request for information will need to consider carefully the nature of any response it chooses to provide and any decision not to respond. In any event, if legal proceedings are commenced the employment tribunal may order the information to be provided.

Acas has provided guidance on the question and answer process – Asking and responding to questions of discrimination in the workplace.

Should we be aware of any additional legal requirements?

It is expected from October 2016 private and voluntary sector organisations with more the 250 employees will be required to publish information about the pay differences between men and women. The first reports will have to be published by April 2018.

These requirements do not apply to the public sector.

If we lost an equal pay claim, what are the sanctions?

Any claim by an employee can be brought during their employment or no later than six months after their employment has ended.  Any individual wishing to issue a claim would have to contact Acas to consider conciliation.

A successful employee would be entitled to:

  • a declaration that their rights have been breached;
  • payment of any arrears (in the case of pay); or
  • damages (in the case of a non-pay contractual term).

In most cases arrears of pay can go back up to six years before the date the claim was brought.

Any employer who loses any case in the employment tribunal can now be ordered to pay a financial penalty of between £100 and £5,000, which is payable to the government.

In some cases, a losing employer will be required to carry out an equal pay audit and publish its findings supported by a plan to avoid breaches occurring or continuing. The penalty for failing to carry out the audit is up to £5,000.

Contact Details

If you would like more information on good equal pay practices with a view to engaging with your workforce and to minimise the risk of claims, please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

This update is for general guidance only and does not constitute definitive advice.

All Employment Lawyers are not equal

Many employment lawyers demonstrate the following skills that are often accepted as the standard by clients:

  • Perseverance
  • Sound judgement
  • Analytical approach
  • Good communication

These personality traits, while indicating that the solicitor is effective at their job, don’t actually define what makes an ideal employment lawyer – and that’s where FG Solicitors considers that they can make a difference to their clients:

FG Solicitors epitomises the attributes that make the panther an incredible animal and make them the perfect choice for their clients:

  • Sensitive
  • Balanced
  • Determined
  • Sure Footed
  • Great Listener
  • Outcomes Focused
  • Calculated Aggression

These traits when used on your behalf, are the tools you need to ensure your desired outcomes and that your business goals are met.

FG Solicitors have a wealth of experience in employment law and welcome the opportunity to discuss your needs through a no obligation meeting.

To find out more contact 01604 871143.

Working out holiday pay

holiday-calculationsSUMMARY: With holiday season upon us we have produced a FAQs fact sheet to help you calculate the holiday entitlements of your workers.

What holiday entitlement do my workers benefit from?

Your first point of reference is the contract you have with your worker as this should specify that holiday to which they are entitled (which is a legal requirement for employees) – this is known as their contractual holiday entitlement. Provided their contractual holiday entitlement is equal to, or more than, their statutory holiday entitlement this is their holiday entitlement. If their statutory holiday entitlement is greater than their contractual holiday entitlement, their statutory holiday entitlement prevails.

What is the statutory holiday entitlement?

Holiday entitlement under EU law and UK law is known as statutory holiday entitlement. The table below identifies these entitlements for a full time worker – a part-time workers’ holiday entitlement is calculated on a pro-rata basis.

Source entitlement comes from Amount of holiday entitled to
EU law (Working Time Directive) 4 weeks (20 days)
UK law (Working Time Regulations) 5.6 weeks (28 days) including the 4 weeks provided for by EU law *

*This includes the eight statutory bank holidays.

Will Brexit affect the application of EU Law?

Currently there is no affect and it is generally predicted that, once we exit, the status quo regarding much EU derived employment law will be maintained. This is with the exception of holiday entitlements, in particular, in relation to including overtime and other payments when calculating holiday pay (see below), and holiday rights for those on long-term sick leave. We will provide updates when there is further information about these possible changes.

Do I need to include overtime payments with holiday pay?

This is dependent on whether the worker has normal working hours. Again, the first point of reference is the contract as this should make reference to working hours and whether that worker has normal working hours – for example, 9am to 5pm Monday to Friday.

For those with normal working hours the table below summarises whether paid overtime should be taken into account in the holiday calculation in relation to statutory holiday entitlement – contractual holiday entitlement may be different.

Type of Overtime Description Include in holiday pay calculation?
Compulsory and guaranteed
  • Must be worked
  • Regularly required
YES for 5.6 weeks
Compulsory and non-guaranteed
  • Regularly required
  • Cannot be unreasonably refused
YES for 4 weeks
Voluntary
  • Regularly worked
PROBABLY YES – 4 weeks*
Voluntary
  • Occasional
  • Irregular
PROBABLY NO*

*In every case where overtime is voluntary, whether or not it should be included in the holiday pay calculation, will depend on all the circumstances as it is necessary for employers to consider whether the payments are related to the performance of the worker’s duties.  Legal advice should be sought on a case specific basis.

Those who do not work normal hours should be paid an average of their remuneration over the previous 12 weeks – this will include overtime (of any type) as well as commission, bonuses and other payments. This is with the exception for those who have zero-hours contracts – in this instance some weeks are disregarded when calculating their 12 week average pay.

Is it just overtime payments that need to be taken into account when calculating holiday pay for workers with normal working hours?

No, any payments that are related to the performance of a worker’s duties should be taken into account in relation to the 4 weeks’ holiday (that holiday entitlement derives from EU law – see above). Such payments might include:

  • bonuses based on performance;
  • commission;
  • call-out supplements; and
  • anti-social hours allowances.

Payments which do not usually need to be taken into account include:

  • benefits in kind;
  • bonuses not linked to workers’ performance; and
  • expenses (including travel expenses) which reimburse workers for costs incurred.

How do I calculate the overtime or other payment which I need to include in the holiday pay of workers with normal working hours?

One approach to calculating the holiday pay of a worker with normal working hours is taking the average remuneration received by the worker in the 12 weeks prior to their holiday, in the same way as you would for a worker who does not have normal working hours.

The difficulty associated with this approach is the impact annual performance related bonuses may have on the calculation. Unsurprisingly there is a raft of case law on this area of law and the correct approach for this calculation will be dependent on the circumstances of each case. It is therefore advisable to seek legal advice on a case specific basis.

Contact Details

If you would like more information on holiday entitlements and pay, please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

This update is for general guidance only and does not constitute definitive advice.

Absenteeism – What’s the impact on your business?

Contact Details

For more information please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

This update is for general guidance only and does not constitute definitive advice.

Protected Conversations Must Remain Secret

SUMMARY: Learn more about protected conversations with your employeesPrivate conversations

In 2013 there was a welcome change, which now enables employers to have what are called protected conversations with their employees about ending the employment relationship.  Previously, employers had been nervous about having such conversations, due to the risk that an employee would later rely on what had been said as evidence in an unfair dismissal claim.

Since then employers in some circumstances have been able to speak more freely with those employees who are not considered to have a future with the organisation, usually because their performance or conduct is substandard. Once the discussions have started, there are likely to be two outcomes:

  1. The employee agrees to leave and their departure is managed with a settlement agreement to remove the risk of any tribunal claim. To learn more about settlement agreements, please click on the following link – http://www.fgsolicitors.co.uk/news/settlement-agreements-a-perfect-ending/
  2. The employee declines the offer of an agreed departure.  If that is the case, the employer can then go back to its internal procedures to manage the situation. If the employee is subsequently dismissed, the following protection arises so that there can be no reference to either:
  • the content of any settlement offer or the pre-termination discussions; and/or
  • the fact an offer has been made or pre-termination discussions have arisen. This level of protection has recently been confirmed by the Employment Appeal Tribunal, which explained that an employee should not be able to refer to the fact discussions have taken place pre-dismissal in an unfair dismissal claim.

Clarification was also provided that the protection extends to any internal discussions between different managers and human resources.

Protected conversations are potentially a safe way of managing straightforward people management issues. Employers however wanting to have such discussions should be aware of the following:

  • The protection is lost if either party engages in improper behaviour including for example, bullying, harassment, discrimination, victimisation, physical assault, or undue pressure.

Telling an employee that the capability or conduct procedure will be invoked if terms cannot be agreed would not be improper behaviour.  Stating that the individual would be dismissed if they do not agree to leave would be improper behaviour.

  • The employee should be given a reasonable period of time to consider any offer and take advice; ten days is usually considered to be reasonable in most cases.  Although there is no statutory right to be accompanied at any meeting where a protected conversation takes place, as a matter of good practice an employee should be entitled to be accompanied by a work colleague or a trade union representative.
  • The protection will only apply in respect of “ordinary” unfair dismissal claims. Where an employee brings proceedings for automatically unfair dismissal (for example, whistleblowing or health and safety), or any other claim such as discrimination or breach of contract, the protection afforded to pre-termination negotiations will not apply.  This does therefore create inherent uncertainty in the effect of initiating a pre-termination negotiation until an employee commences proceedings, or decides not to do so as settlement terms have been agreed.

If you consider that you may want to have a protected conversation with an employee, it is preferable to take legal advice before doing so.  This will ensure that you are confident that a protected conversation is the right way forward and if not, what other ways there are to managing the situation.

Contact Details

To explore how protected conversations and settlement agreements can provide solutions to workplace problems – please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

This update is for general guidance only and does not constitute definitive advice.