Category Archives: Compensation

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.

Top Tips for Effective Performance Management

efficacy_levelSUMMARY: Getting the best from its greatest asset, its staff, should be every organisation’s goal. This can be achieved using a combination of strategies including recruitment and retention; training and staff development, as well as performance management strategies.

We have produced a list of some simple dos and don’ts for dealing with the performance management of staff:

DOs:

  • DO take a proactive approach and seek to resolve performance management issues at an early stage. One way for achieving this is conducting regular meetings with staff at which performance management issues (as well as other general matters) can be raised informally.
  • DO investigate why the employee’s performance is falling below the standard expected; for example, consider whether the employee is dealing with an increased workload or dealing with non-work related issues which are impacting on their performance. Always consider the employee’s explanation for performance issues and identify if other policies are triggered such as health management, stress management or bullying and harassment policies.
  • DO make sure an employee is aware of the standard expected of them and give them a reasonable opportunity to meet those standards. Any goals set to underpin performance expectations should be SMART and supported by the provision of training and/or managerial support where appropriate.
  • DO use probationary periods effectively and consider extending these periods if performance is an issue. Ensure that review meetings are scheduled at appropriate intervals throughout probationary periods.
  • DO review your procedures and processes for managing poor performance on a regular basis to ensure they are in accordance with current case law and legislation.

DON’Ts:

  • DON’T use the annual staff appraisal to address performance issues. Also ensure that, where performance is discussed as part of the staff member’s appraisal, it gives an accurate picture of their performance.
  • DON’T forget to keep records of all discussions and correspondence relating to an employee’s performance – this includes both the informal and formal elements of the performance management process.
  • DON’T confuse performance management policies and/or processes with other policies and/or processes such as sickness absence or disciplinary policies and processes. Check whether your organisation has a separate policy for performance management or take advice on which policy is adopted in these situations.
  • DON’T forget that the ACAS Code of Practice on Disciplinary and Grievance Procedures applies to dismissals for poor performance. Failures to comply with the Code can result in uplifts to compensation being made where there is a failure to follow a fair procedure and the employee successfully claims unfair dismissal.
  • Finally, DON’T be afraid of tackling poor performance but DO ensure your strategy for doing so is legally compliant.

Contact Details

If you would like more information on performance management, 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.

FG Solicitors’ quick guide to key payments by employers

As part of our popular “quick guides” series, our team of employment law experts has produced an easy to use guide to key payments by employers. For more comprehensive advice on payments which should be made as well as when employees qualify for them, please contact a member of our team using the details below.

STATUTORY WEEKLY PAYMENTS DURING ABSENCES FROM WORK

April 16

Maternity/adoption pay prescribed rate (max)

£139.58

Paternity pay (max)

£139.58

Shared parental pay (max)

£139.58

Sick pay

£88.45

Lower earnings limit  (a)

£112.00

 

NATIONAL MINIMUM WAGE RATES (HOURLY)

April 16

October 16

Apprentices  (b)

£3.30

£3.40

Age 16-17

£3.87

£4.00

Age 18-20

£5.30

£5.55

Age 21-24

£6.70

£6.95

National Living Wage (Age 25+)

£7.20

£7.20

 

KEY COMPENSATION LIMITS

April 16

Week’s pay

£479

Statutory redundancy payment: up to 30 weeks’ pay

£14,370

Unfair dismissal basic award: up to 30 weeks’ pay

£14,370

Unfair dismissal compensatory award  (c)

£78,962

Breach of right to be accompanied: up to 2 weeks’ pay

£958

Breach of flexible working regulations: up to 8 weeks’ pay

£3,832

Failure to give written particulars of employment: 2 or 4 weeks’ pay  (d)

£958 or £1,916

Breach of contract claim in employment tribunal

£25,000

Failure to inform or consult: collective redundancy  (e)

90 days’ pay

Failure to inform or consult: TUPE transfer  (e)

13 weeks’ pay

…….

Key:

(a). To qualify for these payments, in addition to other criteria such as length of service, the employee must earn the same or more than the weekly lower earnings limit (“LEL”), which is set by the government. The LEL from April 2016 is £112.00 before tax.

(b). Only applicable to those under 19 or in the first year of their apprenticeship. For all other apprentices, refer to age bands.

(c). Maximum compensatory award is lower of statutory limit or 52 weeks’ actual gross pay at the time of dismissal. Limit does not apply where reason for dismissal or redundancy selection is carrying out health and safety activities or making a protected disclosure.

(d). Please see our guide to essential contracts.

(e). Calculated by reference to employee’s actual gross pay – the limit on a week’s pay does not apply.

Contact Details

For more details about amending handbooks or contracts of employment or consulting with your workforce 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.

Common Employment Myths

Perception v Reality

SUMMARY: Employers have a number of misconceptions about their rights in relation to employees. Read this if you want to know five common reasons employees may bring a claim against their employer when these misconceptions have been held.

Retirement

“I can retire someone when they reach 65”.

This is not the case. Retirement is no longer a fair reason for dismissal and an employer cannot force someone to retire unless it can be objectively justified (employers should seek legal advice if they think that a retirement may be objectively justified). If it cannot be justified, dismissal will be unfair and discriminatory on the grounds of age.

If an employee’s performance is not satisfactory, an employer should go through a performance management process in the normal way. If there are questions to be asked relating to workforce planning, consider incorporating discussions about an employee’s future plans, which would include retirement, into the appraisal system. However, only ask open questions about short, medium and long term goals and not direct questions about retirement. All employees irrespective of their age should be asked these questions.

All employees, irrespective of their age, should be treated consistently, otherwise there is a risk of age discrimination claims in an employment tribunal.

Probationary period

“I don’t need to give anyone an employment contract now, I’ll give it to them when they’ve done a trial”.

Employees should be issued with contracts when (or preferably before) they start employment. Employers should not wait until the “trial” period or any probationary period has expired. If certain key terms and conditions are not provided to them within two months of commencing employment, the employer could be liable to pay additional compensation to them if they bring a claim in an employment tribunal.

Employers should also be aware of the commercial risk. A retained employee could, at some point in the future, argue that they are not bound by the terms and conditions given to them after they have started. This could be an issue particularly if reliance on confidentiality provisions and post terminations restrictions is an important consideration for the employer.

Interviews and record keeping

“When I interview people, I just have a chat with them to see whether I like them or not. I don’t need to do anything more formal than that.”

An employer does not need to have an elaborate assessment regime set up to employ people. It is legitimate to have a short interview, but it is vital to have considered before-hand the skills, experience and personal attributes necessary for the job (which should have been done when creating the job description/person specification). Interview questions should focus on establishing whether the prospective employee meets the criteria for the job; similar questions should be asked of all candidates.

A record should be retained of the questions and candidates’ answers as well as the reason for selecting the successful candidate. Employers should be aware that unsuccessful candidates could make a data subject access request to obtain copies of these documents, particularly if they are unhappy with the decision. Managers when making their notes should be mindful not to incorporate opinions, which could cause embarrassment at a later date or could be used as evidence in an employment tribunal claim for discrimination.

Individuals do not have to be employed in order to bring a claim in an employment tribunal. A prospective employee who believes they have been discriminated against during the selection/recruitment process may bring a claim; any notes an employer has retained of the interview would be essential in the defence of such a claim.

Pregnancy

“She was pregnant at the interview and didn’t tell me. She’s not getting maternity leave – I’ll dismiss her.”

An employee has no obligation to tell a prospective employer that she is pregnant at the interview and the prospective employer should not ask this question because they would risk a sex/pregnancy/maternity discrimination claim. An employer cannot dismiss on these grounds as this would also be discriminatory. Compensation for discrimination in the employment tribunal is unlimited.

Employers should remember that all female employees, no matter how short a time they have been employed, are entitled to take maternity leave of up to 52 weeks and retain the right to return to a suitable job.

Outsourcing

We are going to outsource the cleaning to a cleaning company. We won’t need the cleaners we employ anymore so we will make them redundant.”

If an organisation has an outsourcing situation, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) may apply. This means that in some cases the organisation’s cleaners will automatically transfer on their current terms and conditions to the newly appointed cleaning company if this work is outsourced. If employees are dismissed because there will be an outsourcing, the employer could be in breach of TUPE and the employees could bring a claim for automatic unfair dismissal in the employment tribunal.

If an outsourcing is being considered, employers should seek early advice on whether TUPE may apply. If it does apply, an employer has information and consultation obligations to fulfil before the outsourcing takes place. Non-compliance could lead to an employer being ordered by a tribunal to pay up to 13 weeks’ gross pay per employee.

Contact details

If you would like advice on any of the issues raised in this article, 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. 

Counting the cost of discrimination

Megaphone - Hot Off the Press (123rf ref 8981071)The cost of litigation is always a concern for employers and never so more than in discrimination claims. Employers should never underestimate the cost and disruption a discrimination claim can give rise to. Discrimination claims are often complex and take more than a single day to be heard.  On top of the legal costs involved in defending a claim, there are the hidden costs of absent managers who have to attend to give evidence and reputational damage to the business itself.

In order for employers to assess their attitude towards risk and what the approach should be to preventing discrimination in the workplace it is helpful to understand the consequences of getting it wrong.   Compensation awarded in a discrimination claim is not subject to the statutory financial limit, which a standard unfair dismissal claim is subject to and is uncapped in relation to financial loss.  Compensation may also include a separate award for injury to feelings; the amount awarded depends upon the severity of the case. The maximum award usually sits at £30,000 for the most serious of cases, with cases involving one off minor incidents achieving up from £600.   Damages for personal injury can also be claimed as part of a discrimination claim; for employers who have been found to have acted in a high handed or oppressive way aggravated damages can be awarded.

This is not the end of the matter.  In cases presented on or after 6 April 2014, the Employment Tribunal will have the power to impose financial penalties on employers who lose in the following specified circumstances:

  • where the employer’s breach has “one or more aggravating features“; and
  • even if a financial award has not been made.

It is not clear how the employment tribunal will determine what amounts to “aggravating features”. The government has suggested penalties would be imposed where “the breach involves unreasonable behaviour, for example where there has been negligence or malice involved”. Further guidance has suggested that relevant factors could include the circumstances of the case, the size of the employer, the duration of the breach of the employment right, and the employee and employer’s behaviour.

The minimum penalty will be £100 and the maximum £5,000.  If a financial award has been made, the financial penalty must be 50% of the amount of the award (subject to the minimum and maximum caps).  An employer will not have to pay the full penalty if it pays 50% of the penalty within 21 days.  Employment tribunals will be required to take account of the employer’s ability to pay.

The penalty will be paid to the Secretary of State, who will pay the money into the Consolidated Fund (the government’s general bank account in the Bank of England).

Whilst financial penalties may be awarded in any type of claim, by their very nature discrimination claims are likely to present employment tribunals with their first opportunity to issue the new penalty.

On the upside employment tribunal claims are down. The introduction of tribunal fees from 29 July 2013 may deter some individuals from pursuing a claim.  In a discrimination claim, claimants have to pay an issue fee followed by a hearing fee (usually £250 and £950 respectively).

There is some comfort for employers as from 6 May 2014, claimants will not be able to automatically bring a claim. Claimants will have to utilise the new compulsory pre-claim Acas conciliation process by submitting details of their dispute to Acas before bringing their claims, at which point they will be offered pre-claim early conciliation (“EC”) for a period of one month. If it is refused by either party, or is unsuccessful, the claimant will be able to go ahead and present their claim to the employment tribunal. If the parties enter into EC this will “stop the clock” on the limitation period to present the claim to the employment tribunal.

If things do go wrong, which sometimes happens, EC may provide an employer with an early opportunity to settle the dispute more cost effectively on a confidential basis and at the same time avoid stressful costly litigation and the possibility of a financial penalty.  EC is free to both parties.

No employer can prevent a disgruntled employee or ex-employee from pursuing a discrimination claim. Likewise, an employer does not want to have to pay a financial penalty to the government.  Whilst EC may be one option for resolving a workplace dispute, there are many measures that can be implemented to reduce the risk of the business having to take the full force of a successful claim.  Zero tolerance on discrimination, bullying and harassment in the workplace, supported by clear consistently applied policies and procedures and training can go a long way to assist an employer to defeat a claim.

Follow the ACAS Code

Yellow Brick Road

SUMMARY: A recent case has emphasised that if in doubt, employers should follow the ACAS Code of Practice, even if the dismissal is for “some other substantial reason”. Continue reading

Some other substantial reason?

18822538_sSUMMARY: An employer’s and senior executive’s disagreement over pay did not amount to “some other substantial reason” and the employee was therefore unfairly dismissed. Continue reading