Category Archives: Discrimination

Criminal Finances Act 2017: How employers can protect themselves?

SUMMARY: On 30 September 2017, the Criminal Finances Act 2017 (“CFA”) came into force.

Protect Family Hands Protection Father Child

Corporate bodies and partnerships can now be convicted for tax evasion offences committed by their employees or agents, when they had no involvement or knowledge of these offences.
The Act has created an ongoing obligation for bodies to implement and maintain effective prevention procedures against tax evasion, and has seemingly opened the door for employers to be at the mercy of the actions of their employees and agents, without the protections they previously enjoyed.

However, it is important to note that businesses that successfully take steps to comply with the CFA have not been left without a defence, and can rely on their own internal procedures and policies to demonstrate an active awareness and commitment to prevention.

Key Facts

Part 3 of the CFA creates the new offence of corporate failure to prevent the facilitation of domestic and overseas tax evasion.

The new rules do not create any new offences at an individual level, they simply ascribe liability for existing tax evasion offences to the corporate bodies.

There are three elements to the offence:

1. Criminal tax evasion under the existing law, by a tax payer who is either an individual or an organisation;

2. Criminal facilitation of the tax payer’s offence by an individual associated with a corporate body or partnership; and

3. A failure by a corporate body or partnership to prevent the representative from committing the criminal act through proportionate procedures.

If a corporate body or partnership is convicted under the CFA, it can be subject to a fine and will be obliged to disclose the conviction to those they commercially engage with, which could have reputational and financial consequences.

Defence of Proportionate Procedures

The new offences under the CFA are ones of strict liability, which means that it is no longer a defence for a corporate body to deny knowledge or involvement of an offence that an associated person commits.

An associated person is defined broadly and includes employees, workers, agents acting on behalf of the company and any person who performs services for or on behalf of the body.

The aim of the CFA is to ensure that all corporate bodies become actively responsible in preventing tax evasion. In the spirit of this, the Act creates a defence in element 3, for those who have successfully implemented recommended proportionate procedures.

HMRC have issued guidance on what prevention procedures should look like. This has been split in to six main guiding principles: risk assessment; top level commitment from management; due diligence; communication across the business including training; and monitoring and review.

It is worth noting that proportionate procedures can include taking no action where appropriate, however this approach should be managed through risk assessment.

So what does this mean for Employers in Practical Terms?

Employers will need to be switched on and take steps now to implement procedures that   will offer protection. The Government has indicated that it expects initial implementation to be rapid.

It is also clear that implementation alone will not be enough, the Government expects a rolling update of prevention procedures to be in place to ensure that employers are keeping up with the development of tax evasion offences.

Employers will need to demonstrate commitment to preventing tax evasion offences through communicated awareness and ongoing review and compliance. The natural first step for an employer is to update employment contracts and policies to ensure compliance.

HMRC guidance states that a reasonable prevention procedure could include having terms in employment contracts and other contracts for services requiring employees and others providing their services not to engage in the facilitation of tax evasion and to report any concerns immediately.

It will also be important to consider whether training will be needed for those employees in managerial positions, in order to assist them to identify how tax evasion offences in their industry could be committed, monitored and prevented.

For further guidance on this topic, or for general employment law queries, contact a member of our team: fgmedia@fgsolicitors.co.uk +44 (0) 1604 871143

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

All Men Are Created Equal Unless Their Comparators Are Female!

SJB18305THE CURRENT LAW

The law as it currently stands provides that a woman is entitled to take up to 52 weeks Maternity Leave and to receive up to 39 weeks Maternity Pay, set at a minimum level by the Government each year. Some employers choose to enhance this pay in accordance with internal policies.

Since 2015, fathers are only entitled to 2 weeks Paternity Leave, but can opt to share the Maternity Leave and Maternity Pay with a child’s mother under the Shared Parental Leave (“ShPL”) Scheme.

THIS CASE

The question for employers, and specifically that raised by Mr. Ali in this case is this…should an employer who has an internal policy of paying enhanced Maternity Pay to female employees, pay this enhanced rate of pay to a father who takes ShPL, or should the father simply be paid the statutory minimum level of pay under the Shared Parental Pay (“ShPP”) scheme?

In this specific case, female employees employed by Capita Customer Management (“Capita”) who had transferred into the business via TUPE, were entitled to Maternity Pay comprising 14 weeks’ pay at the level of their basic salary, before moving to 25 weeks’ pay at the statutory minimum level (currently £140.98 per week). Transferring male employees were entitled to 2 weeks paid Paternity Leave.

Mr Ali, took 2 weeks’ Paternity Leave immediately following the birth of his daughter, but then took the decision to request further time off work to care for his daughter. Capita advised that he was entitled to take a period of ShPL, but informed him that he would be paid ShPP only – he would not be entitled to the 14 weeks’ pay at the level of his basic salary as his partner would have been if she had decided to continue Maternity Leave.

Mr. Ali objected to this, alleging that it was open to parents to choose which one of them should be the primary caregiver, and for an employer to elect to pay a mother more than a father in respect of the necessary leave taken for this purpose was direct sex discrimination.

The Tribunal upheld Mr. Ali’s argument. It confirmed that he could compare himself to how a hypothetical female colleague who had taken Maternity Leave would have been treated, and the denial of full pay to Mr. Ali was unfavourable treatment due to his sex.

CONTRASTING DECISION

However, employers should be aware that this is only a first instance Tribunal decision and is currently being appealed.

In another recent case based on similar circumstances, the Tribunal reached a different decision (Hextall v Chief Constable of Leicestershire Police), where it was held that Maternity Leave and Maternity Pay are “special treatment” afforded to women in connection with pregnancy and childbirth, which did not go any further than “reasonably necessary” on the basis that women suffer disadvantages in work due to pregnancy and maternity, which typically detrimentally affects a mother’s finances more than a fathers.

Capita and Hextall also conflict on whether a valid comparison can be made between a mother taking Maternity Leave and parents taking ShPL. Both men and women can take ShPL, whereas only a female can take Maternity Leave. Maternity leave is also different in that women can choose to start this before their child’s birth, whereas ShPL cannot start until 2 weeks’ after birth, and it is impossible to take ShPL without both parents agreeing to this, whereas Maternity Leave can be taken as of right.

The Hextall Tribunal concluded that the correct comparator for the father in question was a woman taking ShPL, and as the woman would receive ShPP on the same terms as the man, there was no less favourable treatment and accordingly no discrimination.

WHAT NOW?

The question as to which case is the correct interpretation of the law will now be left to the Appeal Tribunals. Therefore, before employers rush to change their policies, they may wish to review the business reasons behind their current family policies, whilst keeping abreast of the final decisions in these cases.

If you would like more advice about any of the issues raised in this article, please contact a member of our team on 01604 871143.

What’s Next For Employment Law – You Decide?

1622450 - thinker isolated over blueAll three major political parties have now published their manifestos ahead of the snap General Election to be held on Thursday, 8 June 2017, but what do the parties have in store for employment law?

The Labour Party was the first to divulge its plans in the document “For the Many, Not the Few,” which contains numerous pledges in relation to employment rights.

The Liberal Democrats followed closely with the release of its manifesto “Change Britain’s Future,” which includes an acknowledgement that they believe the Conservative Party will win the general election, but that the Liberal Democrats are the only effective opposition, particularly on issues such as Brexit.

Finally, the Conservative Party released “Forward Together,” which Theresa May claims “contains the “greatest expansion in workers’ rights by any Conservative Government in history.” 

We have covered some of the key points from each manifesto in relation to employment law below, but this is not a substitute for reading each manifesto in full, we also provide this update for information only and not with the aim of supporting any particular political party.

Brexit

Conservatives Labour Liberal Democrats
The Conservatives pledge to maintain all rights given to workers by European Legislation post Brexit, for example working time, annual leave, TUPE legislation and anti-discrimination legislation to name a few. Labour has also included a statement that it will ensure that all rights given to workers by European Legislation post Brexit will be protected. Similarly, the Lib Dems have made a pledge to unilaterally guarantee the rights of existing EU nationals in the UK. They have also stated an intention to remain part of the single market and to retain the right to freedom of movement as far as possible due to the vital role that EU workers have to play in the UK economy.


Human Rights

Conservatives Labour Liberal Democrats
The Conservatives have vowed to retain the Human Rights Act during the Brexit process, but would consider amendments to this in due course. Labour intends to preserve the Human Rights Act. The Lib Dems will oppose any attempt to withdraw from the Human Rights Act.


Workers’ Pay & Executive Pay Packages

Conservatives Labour Liberal Democrats
The Conservatives aim to increase the National Living Wage (which applies to workers aged 25 and over and is currently set at £7.50 per hour), in line with the current target for this rate to reach 60% of the median earnings by 2020.They have also pledged to curb executive pay by making executive packages subject to annual votes by shareholders and to commission an investigation into share buyback to ensure that this is not being used to artificially hit companies’ performance targets with the aim of inflating executive pay. Labour pledges to increase the National Minimum Wage for all workers over the age of 18 to the same level as the National Living Wage (currently £7.50 per hour). The National Minimum Wage is expected to be £10 by 2020 for all workers over 18. Labour also proposes to increase prosecutions against employers who fail to pay the minimum wage, and to reinstate the Agricultural Wages Board to monitor wages (and employment standards) in the food manufacturing, farming and fishing industries. Labour intends to reform the pay ratios for public sector employers, and those that bid for public sector contracts, to ensure that the maximum ratio between the highest paid and lowest paid would be 20:1. Labour pledges to abolish the 1% public sector cap on pay increases. Finally, Labour intends to work to close the ethnicity pay gap by introducing equal pay audits requirements on larger employers. The Lib Dems intend to establish an independent review of how to set up a genuine living wage and roll this out across central Government and where possible, across other public sector bodies. They would also call for larger employers to publish data on the number of workers earning less than the living wage and the ratio between top and median pay. They intend to end the pay freeze in the NHS and the 1% pay cap on other areas of public sector pay and to update wages in line with inflation. Finally, the Lib Dems would require binding public votes by Board members on executive pay polices.


Employment Status

Conservatives Labour Liberal Democrats
The Conservatives pledge to continue the current review of employment status and the “gig economy” with the aim to ultimately ensure that the interests of employees working in the traditional master/servant employment relationship are properly protected. Details on how this will be achieved have not been specifically defined. Labour vows to widen employment protection to provide workers with the same protection currently given to employees. In addition, Labour intends to modernise the law on employment status to include creating a statutory definition for “self-employed,” “worker” and “employee” and to crack down on the potential misuse of the self-employed status. Labour intends to ban the use of Zero Hours Contracts so that every worker will receive a minimum number of guaranteed working hours. Finally, Labour intends to support young people at work by creating a target that will see the number of completed NVQ Level 3 apprenticeships double by 2022. It intends to make apprenticeships more accessible to all, and would require the provision of annual reports on completed apprenticeships to monitor access into the workforce. Labour has pledged to maintain the current apprenticeship levy, but will aim to make this more flexible. The Lib Dems pledge to modernise employment rights to make them “fit for the age of the gig economy.” In addition they intend to stamp out the abuse of Zero Hours Contracts and create a right for workers to request a fixed-term contract. The Lib Dems intend to consult on introducing a right to make regular hours of work contractual after a period of time.


Family Friendly Rights

Conservatives Labour Liberal Democrats
The Conservatives have suggested they would introduce a new right for workers to take between 13 and 52 weeks off work to care for a family member who requires full-time care, and to return to the same job afterwards. This is an extension of the current right to take Dependant Leave, which only allows employees to take very brief unpaid periods off from work to deal with unexpected incidents or emergencies. There is also an indication that the Party will introduce a new right to Child Bereavement Leave. No details have been provided about the length of this leave and whether it will be paid or unpaid. Labour intends to increase the scope of the current 30 hours of free child care to cover all 2 year olds and will consult on the possibility of extending this to 1 year olds. Labour also intends to increase the Statutory Paternity Leave period from a maximum of 2 weeks to 4 weeks, and to increase the rate of Statutory Paternity Pay (which is currently set at £140.98 per week). Labour also intends to extend the period of Statutory Maternity Pay to 12 months from the current 39 weeks. Finally, Labour intends to consult on introducing legislation on Statutory Bereavement, however the full details of the scope of this have not yet been disclosed. The Lib Dems intend to provide 15 hours a week of free childcare to all 2 year olds and to children of all working families from the end of paid Statutory Maternity/Paternity Leave or Shared Parental Leave, with an ultimate aim to increase this to 30 hours. They intend to make the right to make a flexible working request and to take Statutory Paternity Leave a “day one” right as opposed to the current legislation that requires an employee to have 26 weeks’ continuous employment with an employer before gaining these rights. In addition, the Lib Dems intend to make the right to take Statutory Shared Parental Leave a “day one” right and also introduce a one month “use it or lose it” period for fathers to encourage them to take this type of leave.


Worker Representation & Trade Unions

Conservatives Labour Liberal Democrats
The Conservatives aim to improve worker representation at Board level for listed Companies by either nominating a Board Director from the workforce, creating a formal Employee Advisory Council to the Board or assigning specific responsibility for employee representation to a designated Non-Executive Director. Labour intends to repeal the Trade Union Act 2016, which covers specified turnout requirements and balloting requirements before industrial action and to replace this with a “sectoral collective bargaining regime.” Labour will also give all employees the right to receive union representation, guarantee all unions’ access to the workplace, only award public contracts to employers that recognise a union and look at introducing electronic balloting. Finally, Labour intends to launch a public enquiry on Trade Union blacklisting. The Lib Dems aim to encourage employee ownership by giving staff in listed companies with more than 250 employees the right to request shares to be held in trust for the benefit of the workforce. They would also continue the drive for Boardroom diversity by pushing for at least 40% of female boards in FTSE 350 companies and improving ethnic minority Boardroom representation.


Discrimination & Diversity

Conservatives Labour Liberal Democrats
The Conservatives intend to extend the scope of the Equality Act 2010 to cover discrimination against those suffering from mental health conditions that are “episodic and fluctuating” to cover people suffering from depression, anxiety and bi-polar disorder. Currently, the legislation provides that certain conditions are “deemed disabilities” such as blindness and cancer and protection is automatically granted. In other cases, an individual would have to demonstrate that they have a physical or mental impairment that has an adverse effect on their ability to carry out day-to-day tasks and that effect is long term. The suggestion is that a Conservative Government would potentially classify depression, anxiety and bi-polar disorder as “deemed disabilities” so that people suffering from these conditions are automatically protected under the Equality Act 2010.There is also a reference to incentives being offered to employers to employ vulnerable workers such as 1 year’s relief from Employers National Insurance Contributions. Finally, the Conservatives propose an extension to the current gender pay gap reporting regime, which came into force on 6 April 2017, by requiring employers to publish more data than is currently required. This scope of this has not been clarified. There is also a suggestion that race gap reporting could be adopted. Labour intends to enhance the Equality Act 2010 to make it easier to challenge disability discrimination at work. It would also consult on reform to the Gender Recognition Act and the Equality Act 2010 to better protect transgender people by changing the protected characteristic of “gender assignment” to “gender identity.” Labour intends to increase pay equality by introducing an independent body to ensure that the gender pay gap reporting obligations are complied with. The manifesto also provides a proposal to audit all proposed legislation to assess its potential impact on women before it is introduced and to strengthen protection for women against unfair redundancy. The Lib Dems aim to extend the current protection against discrimination to cover gender identity and expression and not just gender reassignment. They would also outlaw caste discrimination. The Lib Dems intend to extend the gender pay gap reporting scheme in the private sector to include a requirement to publish information on gender, ethnicity, and LGBT statistics. They would also require name blind recruitment in the public sector and encourage this in the private sector, and will aim to improve diversity in public appointments by including a presumption that every shortlist should include at least one black/ethnic minority candidate. Finally, the Lib Dems would guarantee the freedom to wear religious or cultural dress in the workplace.


Immigration & Modern Slavery

Conservatives Labour Liberal Democrats
The Conservatives aim to increase the Immigration Skills Charge from £1,000 per annum to £2000 per annum, which is levied on employers employing migrant workers. They will also review the application of the Modern Slavery Act to strengthen measures against exploitation of vulnerable workers. The Labour manifesto includes a statement that Labour is committed to working with Trade Unions to ensure there are fair rules to prevent exploitation of migrant workers. The Lib Dems aim to strengthen companies’ responsibility for supply chains to assist in tackling modern slavery.


Tribunal Fees

Conservatives Labour Liberal Democrats
The Conservative manifesto makes no reference to Employment Tribunal fees. Labour aims to abolish Employment Tribunal Fees (which were introduced in the summer of 2013) and extend the time period for bringing a maternity related claim from 3 months to 6 months. The Lib Dems also aim to abolish Employment Tribunal Fees (which were introduced in the summer of 2013).


Other Provisions

Conservatives Labour Liberal Democrats
The Conservative manifesto contains a suggestion that a Conservative Government will introduce a right to request unpaid time off work for training. It also covers protection for Occupational Pension Schemes whereby the Pensions Regulator will be given greater power to review acquisitions that could potentially have an impact on an existing Occupational Pension Scheme, and to issue fines and Director disqualifications to those wilfully leaving a pension scheme under resourced. Criminal sanctions are also being considered. Labour intends to introduce 4 new Bank Holidays to increase a worker’s statutory minimum holiday entitlement to 32 days per annum. The Lib Dems aim to provide more protection to NHS whistleblowers – specific details are lacking.

Banning the Wearing of Muslim Headscarfs by Women in the Workplace Now Lawful!

68416330_lThe power of punctuation is alive and well, and proof if it were needed that the devil is always in the detail!

It would appear that the media have, over the past few days, encouraged a view that banning the wearing of Muslim headscarfs by women in the workplace is now lawful. While this is not quite “Fake news on a Trumpian scale,” it cannot be considered an accurate statement of the law either.

The igniter for these headlines is the recent European Court of Justices’ (“ECJ”) decision in the case of Achbita. In short, the case concerned a Belgian Company’s dress code that prevented employees from wearing any visible religious, political or philosophical symbols. The dress code was used as a basis for preventing a Muslim employee from wearing an Islamic headscarf while at work. The Court decided that, as the dress code applied to all religions, Ms Achbita was not treated less favourably on the grounds of her race.

Before we begin basking in the euphoria of premature conclusions that a blow has been struck for common sense, it is worth noting that the Court, unprovoked, added that it was possible for this position of neutrality adopted by the employer to be indirect discrimination.

By way of example, if Ms Achbita had not been a customer facing employee, preventing her from wearing her headscarf at work may amount to discrimination if the employer could not objectively justify the ban.

Employers need to be alert to the fact that although having a dress code prohibiting the wearing of all religious symbols in the workplace may provide a defence against a claim of direct discrimination, it will not by itself defeat all discrimination claims associated with the wearing of religious symbols. It is also worth noting, although outside the scope of this article, that if the dismissal was because of Ms Achbita’s insistence on wearing her headscarf in a customer facing role, exploring whether she may be placed in a non-customer facing role may affect, under English Law, the fairness of the employer’s decision to dismiss.

Consider for instance the case of Bougnaoui, here the ECJ decided that it was unlawful for an employer to accept a customer’s request not to be served by an employee wearing an Islamic headscarf. The Court did not consider the wishes of a customer to be a “genuine and determining occupational requirement,” which would have justified the discrimination.

There will always be a balance to be struck between the interests of the employer and the detrimental impact on the employee. In the case of Bougnaoui the ban amounted to direct discrimination because it was imposed in response to a customer’s objection rather than being based on any existing dress code designed to achieve neutrality.

As a general approach, employers should treat employees’ requests to circumvent a dress code for religious reasons carefully, sensitively and respectfully; and should consult with the employees with a view to reaching a satisfactory solution. This may very well prevent an employer from having to defend itself against such claims.

Sports Direct: Use of Zero Hours Contracts – A Business Model With Exploitation at its Heart? (Part 2)

11578822 - 3d human charcter holding green zero, 3d render, isolated on whiteSUMMARY: The Sports Direct founder Mike Ashley faced the Business Innovation and Skills (“BIS”) Select Committee on 7 June 2016 for an evidence session into the working practices adopted by Sports Direct. A month later, it was widely reported that Sports Direct’s profits had been hit. Mr Ashley’s fortunes have not improved as, at the beginning of this month, it was announced that shareholders will be asked to vote on whether there should be an independent workplace review; and this week it was reported that Sports Direct is to pay £1million to its workers for breaches of the minimum wage legislation.

But how did it come to this?

To recap, Mr Ashley received intense criticism stemming from the Guardian Newspaper’s investigation at the end of 2015, which uncovered allegations that his Company:

1. Failed to pay its workers the minimum wage;

2. Engaged a significant proportion of staff via zero hours contracts and short term hours agency worker agreements;

3. Created a culture of fear throughout its workforce due to arbitrary and outdated disciplinary practices; and

4. Conducted daily physical security searches of employees.

In the first article of a two part series, we deal with the allegation concerning a breach of national minimum wage legislation; the first article can be accessed here.

In this second article, we explore the allegation that Sports Direct sought to increase its profit margins by engaging workers on zero hours contracts and short term hours agency agreements in order to avoid many of the legal obligations of employing staff. We also review the legal considerations that your business should take into account when using either zero hours contracts or being supplied with temporary workers via an agency.

THE ALLEGATIONS

Reports revealed that nearly 80% of Sports Direct’s workers are not employees but, instead, workers engaged via zero hours contracts or short term hours agency worker agreements. During the Select Committee’s evidence session on 7 June 2016, Steven Turner, the Assistant General Secretary of the Unite Union, remarked that this practice has created a “business model that has exploitation at its heart.”

In May 2015 the Government banned exclusivity clauses in zero hours contracts; clauses that prohibit a worker from taking up work under another contract, or which require the worker to get the company’s consent beforehand can no longer be included.

However, alternative work arrangements, specifically the arrangements adopted by Transline and the Best Connection Group, who supply Sports Direct with agency workers, could be placing workers in a worse position compared to if they had been engaged via a zero hours contract post the May 2015 change.

The reason behind this claim is that the Transline and the Best Connection Group do not have an obligation to offer these agency workers any work over and above a minimum of 336 hours over a 12 month period.

However, the agency workers must accept any suitable assignment offered to them unless there is “just cause,” and if assignments are not accepted, it is likely that the worker will not be offered another.

In addition, the workers are effectively forbidden for looking for additional hours elsewhere; workers who have done so have not been offered any further assignments – this is effectively an exclusivity clause in disguise.

WHAT IS A ZERO HOURS CONTRACT?

Zero hours contracts are contracts between a company and a worker and/or an employee, which specifies that the company is not obliged to provide the worker or employee with any minimum working hours, and that the company only pays for work undertaken. Similarly, the worker or employee is not obliged to accept any of the hours offered to them.

CAN ZERO HOURS CONTRACTS STILL BE USED?

Yes, zero hours contracts can still be used by companies.

The change in the law in May 2015 did not ban companies using zero hours contracts completely, instead it prohibits zero hours contracts containing exclusivity clauses.

WHY WOULD A COMPANY USE A ZERO HOURS CONTRACT & WHEN IS IT APPROPRIATE TO DO SO?

The key benefits of a zero hours contract are that a company using these contracts:

  • does not have to guarantee a minimum amount of work, and
  • only pays for work undertaken.

This is useful if your company is a start-up business and you are unsure of your people requirements. Alternatively, zero hours contracts may be useful if a company wishes to engage staff for seasonal work, or to cover absence and holidays.

The other benefit to companies is that the relationship between the company and the worker does not have to be one of employment. However, the worker will still benefit from the right to receive the National Minimum Wage, paid annual leave, rest breaks and will be protected from discrimination.

WHAT SHOULD THE BUSINESS CONSIDER WHEN ENGAGING AGENCY WORKERS?

If like Sports Direct, your company is supplied with workers via an external agency, you should be very clear as to the employment status of these workers because this will affect their rights.

Usually, the arrangement dictates that workers supplied by an agency are classed as workers of the end user client and not as their employees.

From day 1, agency workers are entitled to access to collective facilities (such as canteen facilities, child care facilities and transport facilities) and access to information about employment vacancies. Agency workers are also entitled to take rest breaks, receive the National Minimum Wage, receive Statutory Sick Pay (if they satisfy the relevant qualifying conditions set out in the legislation), take paid annual leave and benefit from protection against discrimination.

Following 12 weeks with the Company, agency workers are entitled to receive the same pay and other basic working conditions as equivalent permanent staff; this can include the auto enrolment pension obligations.

This is a relationship which often gives rise to uncertainty of employment status and, consequently, there are many reported cases on this very issue. Companies are therefore advised to ensure that, when engaging agency workers, they have in place the appropriate documentation with both the agency supplying the worker and the agency worker.

COMMENT:

Exclusivity clauses in zero hours contracts, which could exploit the most vulnerable of workers, are now unenforceable. However, this protection does not address the real issue for zero hours workers, which is the practice of ceasing to use workers who have turned down an assignment because they have accepted an alternative assignment and are unavailable.

In addition, as is evident from the Sports Direct review, Companies are now taking advantage of other working models such as the arrangements adopted by Transline and the Best Connection Group; although these arrangements are not prohibited by law, they raise questions of morality.

Only time will tell if the ongoing review by the BIS Select Committee will result in recommendations for change. In the meantime, we would recommend carrying out a review of the arrangement that your Company adopts for the supply of its staff to ensure that any legal obligations are being met.

CONTACT DETAILS:

If you would like more information on this topic or would like to discuss a specific concern in relation to your business, please contact us:

Call: +44 (0) 808 172 93 22     Email: fgmedia@fgsolicitors.co.uk

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

FGWorks August 2016

FGWorks-Aug-16We are delighted to present the latest edition of our FGWorks newsletter! Find out how mental health at work is an issue which employers cannot afford to ignore.

Please feel free to forward FGWorks to any of your colleagues and contacts who it may be of interest to.

Your feedback is always important to us as we continually strive to improve and develop the services we offer. Please send any feedback to: fgmedia@fgsolicitors.co.uk

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.

Farewell EU – What Now?

Union Jack-01

“The will of the people must be respected” says Prime Minister David Cameron on the outcome of the UK referendum on membership of the EU. One can’t escape the view that this should read “the will of the people must be interpreted.”

As of 6.00 am today, we as a nation appear to have become victims of unanticipated consequences, and are now at the mercy of outcomes that are not the ones foreseen and intended by our purposeful actions. I fear that full appreciation of the consequences of our actions will not be achieved for some time as predictions indicate that it will take at least 2 years to achieve disentanglement from our European partners.

In the immediate haze of global reaction, currency free-fall, stock exchange hysteria and concern about future trading conditions with the remaining 27 member states of the European Union, there is a risk that UK businesses may defer undertaking a strategic review of the impact on their workforce resulting from Brexit. In the short term, the biggest risk to workforce productivity will be uncertainty, particularly for those members of the workforce that are EU nationals and those that are British nationals working throughout the EU, currently estimated to be around 1 million. The uncertainty could manifest itself in key individual members of the workforce exiting of their own accord to seek greater stability elsewhere. It is essential that individual businesses develop effective operational and communication strategies without delay!

As UK businesses grapple with the challenges of negotiating commercial trade agreements in the new post EU membership world of tariffs and barriers to entry, it is a realistic possibility that revenue streams will become less profitable and this may inevitably lead to a rebalancing of profit margins by reducing headcount. A strategic review now, if operational effectiveness is to be maintained, will be well worth the effort.

And what, I hear you cry, of existing EU Legislation? The short answer is that a lot of EU laws are already incorporated into our domestic legislation through Acts of Parliament and Regulations, while there may very well be some tinkering in the medium to long term, it is unlikely, in this employment lawyer’s view, that our exit from the EU will result in any wholesale overhaul of our domestic employment legislation.

When the dust finally settles on the UK’s exit from the EU, the issue of Border controls and immigration status will become a further challenge for UK business whether domiciled in the UK or within the EU and using UK labour. While this may very well be 2 years away, businesses are encouraged to consider the implications now and devise a strategy to deal with potential key skills loss, recruitment and succession planning.

For advice and assistance with any employment law, HR or corporate immigration issue contact FG Solicitors on 01604 871143 or visit our website at www.fgsolicitors.co.uk for further information.

Brexit – What Are the Consequences for Employment Law?

brexitSUMMARY: No one can know exactly what the consequences will be, but below are some of the areas we consider are likely to be affected.

What does the decision to leave the EU mean for employment law? This remains a personal view, as no one can know exactly what the consequences of the leave vote will be. It may be that nothing significant changes immediately (as EU laws form part of UK law), but the lack of a requirement to comply with EU law in the future is likely to shape future legislation and may lead to a reduction in workers’ rights. Here are some of the areas that we consider are likely to change in the foreseeable future:

1. Discrimination – A cap may be applied to compensation for discrimination claims; successful claimants can in theory be awarded uncapped compensation at present.  One of the most extreme examples of this is when a doctor was awarded £4.5m for successful sex and race discrimination and unfair dismissal claims in 2011.

2. Working Time - There may be amendments in relation to the Working Time Regulations so that there is a less onerous burden for employers.  This is relevant in relation to holiday, rest breaks and rest periods and the 48 hour working week.  It may be that legislation will be introduced permitting workers to completely opt out of the Working Time Regulations.

3. Agency workers – There may be changes in relation to the protection which agency workers currently enjoy.  The Directive from the EU in relation to agency workers was not a popular piece of legislation and (amongst other things) requires employers to provide equal basic working and employment conditions for agency workers after 12 weeks’ work.

4. Data protection – There will need to be some discussion about the General Data Protection Regulation, which comes into force in May 2018, just before the earliest time (2 years) Britain can exit the EU.  This will replace the existing Data Protection Act and related legislation.  If Britain is to continue to trade with the EU, it will be expected to have minimum standards in place.

5. Redundancy consultation – There may be reduced redundancy collective consultation requirements.  For example, the timescales for consultation may be shortened and/or the threshold for the number of employees to trigger the need to collectively consult may increase from 20 to, for example, 100 employees.

6. Immigration - There are likely to be immigration controls introduced for workers coming from the EU and entering the EU from Britain.

We will keep you updated as any changes are announced.

Contact Details

If you have queries on the above areas, 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.

Resolving Employment Disputes

10032845_mSUMMARY: What do you do when a tribunal claim is brewing…. Fight or Flight?

Whilst the number of tribunal claims are down, claims are still happening; unfair dismissal claims still prevail but often more complex issues such as discrimination and whistleblowing are involved.

Being on the receiving end of a tribunal claim can feel acutely painful from both a time and costs perspective. The following are a few simple do’s and don’ts to help manage a dispute which is brewing.

DO consider all the options for dealing with a dispute or a tribunal claim.

For example:

  • Acas Early Conciliation

Before a claim can be started an employee must contact Acas; Acas will then establish if the employee and employer can resolve the dispute without the tribunal’s intervention. Neither party has to participate in the process and if settlement cannot be reached, the employee is then free to claim.

Even if there is no interest in settlement, this process may serve as a reconnaissance exercise to understand more about the employee’s complaint in preparation for defending any subsequent claim.

  • Defend the case

Some employers may prefer not to shy away from the gaze of the tribunal because the complaint requires a robust response.  For example:

  • there is no case to answer;
  • the employee’s settlement expectations are unrealistic; or
  • there may be important financial and commercial considerations. Disabusing staff of a settlement culture may be one reason. Broader issues may also be at stake, which relate to pay, hours and holidays.
  • Judicial Mediation

Mediation has the advantage of taking place in a less formal setting in comparison with a full tribunal hearing. The mediator, an employment judge, will work with the parties on a confidential and without prejudice basis to explore if there is a way of resolving the dispute.  The parties are free to discuss their differences and consider the options for resolving the dispute, without the fear of their discussions being repeated if the mediation fails.

Agreement can be reached on matters which a tribunal would not be able to address. For example, the employee leaving, an apology or a reference being issued, or the employee being provided with assistance to find another job.

From an employer’s perspective a satisfactory commercial outcome, without having to concede its position can often be achieved.

  • Settle the case before the hearing

Once a tribunal claim has been issued, the Acas conciliation service will still be available to consider with the parties whether there is a solution. Settlement agreements can also be used.

DON’T ignore a tribunal claim once received.

Employers only have 28 days from the date when the claim is sent to respond to the tribunal setting out why the claim is disputed.  A response will usually be rejected if received after the expiry of the 28-day time limit.  Possible consequences are that a judgment could be issued without the employer being able to defend its position. This could be costly as compensation for discrimination claims is uncapped, and the maximum compensatory award for unfair dismissal from 6 April 2016 is the lower of £78,962, or one year’s pay.

Until and unless settlement is properly concluded, a response must always be filed.

DO consider ways to limit an employee’s opportunity to bring a claim in the first place.

Effective ways to reduce the risk include:

  • having legally compliant contracts of employment and policies and procedures;
  • introducing a robust appraisal system and ensuring current job descriptions exist;
  • communicating to staff the expected workplace standard of behaviour to reduce the risk of harassment and discrimination claims; and
  • dealing promptly and fairly with grievances and whistleblowing complaints.

DON’T forget …..

…. if a dispute arises, a sound strategy, which acknowledges the needs of your organisation and the merits of the complaint, will go a long way towards finding the right solution, whether that be a hard fight in the tribunal or a quick exit via the settlement route.

Contact Details

If you would like to identify the right strategy for your employment disputes, please contact a member of our Employment Law team:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

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