Statutory Dispute Resolution – where next?
February 29, 2008
According to new research by employment firm Peninsula, many employers are afraid to discipline staff for fear of being taken to an employment tribunal. Peninsula surveyed 1,100 employers and found that nine in ten respondents would still discipline an employee if they were “legally confident”, however, eight in ten also said they were in fear of rising employment tribunal cases due to an increase in employee rights. It is certainly true for me – having studied employment law I’m fairly confident in the regulations relating to discipline, but I still always seek additional advice when handling disciplinary issues because the thought of being taken to a tribunal is completely mortifying.
Since the Statutory Dispute Resolution Procedures were introduced in 2004, there has been a rise in the number of employment tribunal cases by more than 15,000 between 2005-06 and 2007, despite the intention being to reduce the number. The regulations (which also relate to handling grievances) have been criticised by employers and employees as they have created confusion over the complexity of the requirements. The rules were set out to try to force employers to deal with disputes within the workplace before they reached tribunal, however due to the fact that employers can be penalised for not following the specific procedures (even when it is clear that the outcome is the right one), there have been many cases involving the process rather than the problem.
The Gibbons Report, an independent Government backed review of the Statutory Dispute Resolution Procedures, was published in March 2007. The overall conclusion of this review was that the procedures should be repealed completely and a new approach taken. This includes proposals to change the way employers handle dispute resolution, as well as changing the way tribunals handle claims in order to deter claimants and encourage the use of mediation before it reaches this stage. The Government has published new legislation (The Employment Simplification Bill) in response to the Gibbons Review which is currently in the draft stage. Until this legislation is implemented however, employers will need to follow the current regulations when dealing with discipline and grievance issues.
Flexible working - who should have the right?
February 28, 2008
At the end of last year the Government announced plans to extend the right to request flexible working to parents of children up to the age of 12 or possibly even older. The current rules under this “family friendly” provision give the right to request flexible working to parents of children aged up to six (18 for disabled children), and were introduced in 2003.
Flexible working involves a change to the employees’ terms and conditions in order for them to more easily accommodate family commitments, and includes measures such as changing the working hours, part time hours, job sharing, home working, term time working and increasing annual leave allowance.
Eligible employees do not have the right to work flexibly – only the right to request this. The employer is not automatically obliged to agree to the change, however it does have a duty to consider the request properly and refusal needs to be on reasonable grounds (e.g. financial). There is a need to carefully consider the options before refusal; the number of discrimination cases (mainly sex discrimination) based on refusals of flexible working requests has been rising in recent years. There are a number of qualifying requirements for employees to be eligible for the right, and a standard process for dealing with requests. For Government guidance on dealing with this right click here to go to the Flexible Working pages on the BERR website.
After the announcement of the plans to change the right, John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform (BERR) asked Imelda Walsh, Sainsbury’s HR Director to lead an independent review of how the right could be extended, as she has had a lot of experience in dealing with family friendly provisions at the supermarket giant. At the time of the launch of the review, the extension to the right seemed a foregone conclusion with some Ministers promoting the changes and the Conservatives stating that they supported an extension for parents up to the age of 18.
However it was reported last week that Hutton now feels that extending the right may increase the likelihood of requests being turned down. Figures in November reported that 91% of workplaces that received requests in the previous year approved all requests, however extending the right would allow millions more employees to request flexible working, and Hutton warns that employers overwhelmed with new requests may feel they need to refuse everyone. He argues that the right has worked well in the last few years because it is targeted to those parents who need it most – those of younger children. The more employees who have the right, the harder it might be for employers to prioritise those who need flexible working most.
According to reports, the review, which is due to be published in spring, is expected to support Hutton’s comments, which will be good news for the small businesses who have recently criticised the proposals to extend the right; claiming that it is already difficult to cope with requests. However it may not be such good news for parents of children who are still at the age where they need constant supervision, but do not fall into the current legislation.
The amazing disappearing insurance man
February 27, 2008
I’ve just read an article on the Telegraph site about a manager for the insurance company Legal and General who got sacked for working as a magician whilst on paid sick leave. Peter Hopkins, or ‘Mr Hocus Pocus’ was performing magic tricks at a Christening party after having been off sick for six months. He got caught because a HR Officer from his company was one of the guests at the party. Gutted!
Whilst this is quite an amusing story, the reality of staff ‘moonlighting’ whilst being paid to be off sick is not so funny. It’s something that employers need to be able to deal with as quickly and effectively as possible, but it isn’t that easy to handle. There are however a number of ways in which employers can help to protect themselves from this situation and be able to deal with it easily if it becomes apparent that an employee is moonlighting.
It needs to be stated in employees’ contracts that they have a duty to only work for you, and must request authorisation when wishing to carry out additional work. If this clause isn’t in the contract, it is possible that the act of working whilst off sick would constitute a breach of the duty to maintain mutual trust and confidence by the employee, which could be deemed gross misconduct. However express written clauses normally have more clout in employment tribunals than common law duties such as this. In Hopkins’ case, he had already been warned that carrying out work when off sick was not acceptable when he performed a magic show whilst off with flu in 2004. This helped the tribunal that heard his claim for breach of contract to reach the conclusion that the employer had acted fairly in dismissing him.
When dismissing an employee for any act of gross misconduct, a full investigation and reasonable evidence that the act took place is required. A general suspicion will not be enough to make a decision. Hopkins had been seen performing at a party, and additionally his website was still operational and he was still advertising his services in the Yellow Pages whilst he was off sick. Some employers choose to enlist the services of a private investigator; although this should be used with caution: if there is no initial evidence or strong suspicion then this could be invasion of privacy. The disciplinary procedures should always be followed before making a decision to dismiss; giving the individual a chance to voice their side of the story. An employment tribunal will need to be satisfied that you followed the correct process, and that you acted reasonably. For example, dismissing an employee after they were spotted out at a gig when they were off with work related stress will probably be seen as excessive and unreasonable.
One absence management initiative for employees on long term sick is to carry out home visits after a certain length of time. This is good practice and helps to ensure the company is providing enough support to the employee, keeps the employee informed about any workplace developments and reduces their feelings of alienation, and is an opportunity to discuss the possibilities of a return to work. The home visit also gives you an opportunity to reiterate the employee’s duties whilst they are off sick (one of which is to not work). As one person on an online discussion about this topic said: “if people think they can get away with something, they often will. If they know you are keeping track of them (within the law and their contract) it’s amazing how things improve”.
The prevention of illegal working
February 26, 2008
On 29th February the provisions of Sections 15-25 of the Immigration, Asylum and Nationality Act 2006 come into force. These provisions have new obligations for employees recruited after this date.
The changes mean that there are new penalties for employers who employ illegal workers, essentially a possible fine of up to a maximum of £10,000 per illegal worker (this is double the previous fine). The purpose of the changes is to make it harder for illegal workers to remain in work, and easier for employers to ensure their employees are legally allowed to work in the position they have been selected for.
Employers who knowingly employ illegal workers will have no argument against this legislation, and in these cases there may be a penalty of two years’ imprisonment or an unlimited fine for a company director or manager who knew the worker was illegally working.
So what can employers do? The new Act allows employers to use a “statutory excuse” to defend any legal action as a result of employing illegal workers. To use this defence, employers must be able to show that initial checks on specified documents were carried out prior to the employment of the employee. Documents include a valid passport or birth certificate combined with a document indicating a UK National Insurance Number (e.g. P45). The type and number of documents needed depends on the level of entitlement to stay and work in the UK, and there are separate document lists for workers with permanent or temporary entitlement.
In addition to the legal issues surrounding employing illegal workers, employers are advised to consider the potential discriminatory issues relating to pre-employment checks. Only requesting documents from particular groups could lead to racial discrimination claims, as many workers from, for example, minority ethnic groups, are British Citizens. The best practice is to build the requirement for specified documents into the recruitment process and ask all applicants or successful candidates to provide the documents before employment starts. For example, the conditional offer letter could state that the offer is subject to satisfactory proof of eligibility to work in the UK, and provide a list of documents that need to be provided.
Full details of the requirements of the new provisions, including how to avoid discrimination, are specified in guidelines from the Border and Immigration Agency (BIA) entitled “Prevention of Illegal Working” and can be found here.
Personal accounts - a new kind of pension
February 25, 2008
How important do you think having a pension is? Given the total value of a company pension scheme to an employee in comparison to other benefits, a surprising number of people (particularly young people) just don’t see how good a benefit it is and choose to opt out of a scheme when there is one available. In my previous position the organisation I worked for provided a local government pension – and despite the employer contribution being a whopping 12% and the fact that it was a final salary scheme, many people decided to opt out of the scheme as they wanted the money for now. There are also many companies that still don’t provide an employer contribution-based pension scheme, even though it can be a fantastic recruitment and retention tool. The problem is that a lack of communication and understanding of the exact benefits means that a lot of people don’t see a company pension as a positive thing – and the feeling that you’ll never actually grow old contributes further to the ‘live for now’ attitude.
The Government estimates that there are 7 million people who may not be saving enough to give them an adequate income in retirement, and therefore submitted a White Paper in December 2006 called “Personal Accounts: a new way to save”. This proposed a new system which will automatically enrol employees over the age of 22 and earning at least £5000 a year into a personal pension account, unless they are already part of a company pension scheme that has more favourable benefits. Employees will be able to opt out if they do not wish to save for a pension, but it is hoped that the automatic enrolment will strongly encourage people to plan for their retirement, particularly those that come within the “target group”: employees on moderate to low incomes, younger people and women (who are a significant majority of those with lower earnings).
Under the new scheme, which will come into force in 2012, employees will be obliged to pay in a minimum of 4% of their salary, and employers will pay 3%, with an additional 1% being given in tax relief. This is probably a welcome development for employees who are not currently provided with a company pension scheme, although some critics are worried that employers currently providing better terms than this will reduce their contributions to the statutory level. I think this is unlikely as many employers will want to retain their pension scheme as an attractive benefit and the only way to do this is to provide more favourable arrangements that exceed their statutory requirements. What the proposed scheme will hopefully do is highlight the need for individuals to make provisions for their retirement and help everyone to understand their options.
Offers and counter offers
February 22, 2008
Recently my partner has been offered a new job, after being headhunted by a rival firm through a recruitment agency. He’s had a really difficult decision deciding on whether the move is right for him, which has been made even more confusing by his current company making a counter offer and giving him the hard sell about why he should stay there. This is a difficult situation to deal with, and according to top recruitment specialists the tendency for employers to make counter offers is increasing rapidly due to the need to retain key staff in a tight employment market.
My advice to my partner was always to go for the new opportunity whatever happened with the current employer. I think that once you have considered the possibility of leaving a company it’s really hard to go back and take that thought out of your head. I also feel that employers should be able to assess the ongoing issues in the workplace, gauge where there are potential future leavers, and resolve the problems before it gets to that point. Counter offers, to me, always leave me wondering why the employer couldn’t have done something earlier if they are so eager to open their pockets now. Also, the counter offer more often and not involves some sort of financial incentive, and I would say that nine times out of ten this is probably not why the employee wanted to leave in the first place. When I left my last job, my boss asked me if there was anything they could do to entice me to stay; and I didn’t even bother trying to negotiate something because the thing I wanted was a different working environment altogether, which was obviously something that couldn’t be offered.
My partner was told he was very important and valued within the company, that he had a bright future there and that he might regret leaving etc. Whilst I do feel that his immediate managers value him very highly and might have big plans for a good career for him there, there’s no doubt that there are other factors that affect the need to keep him, including the cost and hassle of replacing him, training new staff up, the impact on clients, and the fact that another key member of staff leaving that department would make them look bad. It was, however, a really hard decision for him, made worse that the fact he was headhunted; which meant that he hadn’t even intended to find a new job; he was quite happy where he was before the recruitment consultant phoned him. I have always been in the position where I was looking for a new job myself because I was completely ready to leave: so the decision has never been that difficult.
I feel that a new challenge in your career is a good enough reason in itself to move on when offered a new role; you need to work in different environments to grow your capabilities in the world of work. What’s the worse that can happen? I have moved jobs in the past and absolutely hated every minute of the new job, but I found myself another one within three months and never looked back. That three months of hell has still given me experiences and new skills that I will always be able to use. If you’re going to leave a company, you need to be strong in your decision and the last thing you should do is spend the next few months lamenting the things you have lost if you’re a bit unsure of the new place: look at all the positive things you have gained, not least the variety of experience.
You hear a lot of horror stories about people who stay put and then the promises that were made in a counter offer turn out to be empty. The relationship between the employee and the manager has been eroded by the perceived lack of loyalty in looking for another job, which can affect future decisions relating to career progression, salary increases etc. According to statistics, 80% of employees who accept a counter offer subsequently leave the company or are dismissed within 12 months. Furthermore, of this 80%, over half reinstate their job search within three months. The best advice in this situation is to follow your gut instinct – only you know exactly what your company and manager are like – but be aware of the wider issues affecting the counter offer and understand that it is not only for the innocent reasons of how well you are valued by the company. You are, above all else, a resource that will cost time and money to replace. If you do decide to stay it should be beacuse you have considered everything objectively and feel that your company has a better future potential for you, not because your manager desperately tries to bribe you with an enticing offer that is unliklely to be fulfilled.
Finally, the best thing to do if you decide to leave is to do so graciously, do not burn any bridges, and it is likely that you will always have a job to go back to in the future (although once you have moved on you are unlikely to want to go back).
The benefits of work experience programmes
February 21, 2008
Everybody remembers going on their work experience placement when they were in school. Many people take work experience in their further and higher education as well, including summer internships, gap year placements and workplace based projects. There are obvious benefits to the individual such as developing their work related skills, increasing their marketability and the opportunity to find out what it is they want to do as a career.
There are also benefits to be gained for an employer in taking on students for various work experience opportunities, including quite simply the ability to get additional labour into the business for a low cost. Developing relationships with academic institutions can also help to reduce recruitment costs in the future by targeting recruitment campaigns there or keeping interns on for full time positions after the end of their education.
Students can also bring the most up to date academic thinking into the workplace, and can provide a fresh pair of eyes to help solve problems. Introducing a programme can provide opportunities for more inexperienced staff who are seeking progression to learn and practice management skills on work experience placements.
Work experience programmes can assist with employer brand development and marketing, as well as raising the profile of the company within the local community. From an ethical and corporate social responsibility (CSR) point of view, offering work experience gives employers the chance to influence the skill set of the future labour force.
Fit is the new sick
February 20, 2008
New plans to revise the Med3 certificate, or “sick note” are expected to be unveiled in the near future. The current purpose of the note, to sign the patient off work, will be changed to a “fit note” so that GPs have to indicate what the employee is still able to do; helping employers to adapt the work or workplace to enable the employee to remain in work. The Government hopes this will come into force in early 2009. Two groups; one of medical practitioners and one of employers are currently consulting on the details of the plans.
BBC news reports that 175 million working days are lost to sickness each year, at a cost of £13 billion. The changes to the Med3 certificate form part of a range of plans designed to cut this number down and also reduce the number of people currently claiming incapacity benefit, which is claimed after six months of claiming statutory sick pay. Another initiative will be work programmes to enable and encourage people on incapacity benefits to go back to work.
The new sick notes plans have not been met with enthusiasm by all parties though. Many GPs are not happy with the responsibility of making judgements on the parts of a job that an employee is able to do, when they are not aware of other workplace variables such as the type of equipment and the general working environment.
If the new system is to work well, the Government may have to introduce clear guidelines for GPs on how to assess workplace suitability, and better communication systems between GPs and employers. One way in which this is already being piloted is in Wales, where GPs send sick notes to employers electronically. I have experienced the difficulties in speed of communication in the past when making a request for a medical report to a GP – being able to email a doctor directly could potentially improve this problem in the future.
The mistreatment of agency workers
February 19, 2008
Following on from my previous post about agency worker rights (4th February), I’ve just read that Unite, a large Trade Union has conducted an investigation into the treatment of agency workers.
The investigation was carried out in a Cook Report style, with an undercover manufacturing worker, “Simon”, working for six weeks for apparently reputable employment agencies in the Wolverhampton area. The results weren’t good: Simon was paid a poor wage and apparently had illegal deductions taken from his wage, as well as being asked to operate machinery without appropriate training. The Union claims that this sort of treatment constitutes exploitation rather than flexibility, and the life of an agency worker is one of “hardship, desperation and a weekly struggle to make ends meet”.
Having carried out temporary assignments for agencies myself in the past, I understand that there is a certain amount of insecurity due to the lack of rights for agency workers. However I have also employed agency workers who turn up as and when they wish, with no communication and the attitude that they do not need to behave in the same way as a “regular” employee – so it works both ways. In the past I have enjoyed many benefits of temporary work, such as fitting it around my education, holidays, and anything else I wished to do at quite short notice; things that are not as easy for me to do now I am in full time permanent employment. It is possible that legislation that brings new rights for agency workers will also bring new obligations that reduce the level of flexibility they are able to enjoy.
I’m sure there are some agency workers that are exploited by unscrupulous agencies and employers, but I’m not particularly convinced of this by one example reported over six weeks. There are a number of people and organisations that don’t agree that there is a problem with agency worker rights, including the CIPD. Earlier this month Mike Emmott, employee relations adviser from the Institute said in response to the proposed EU Directive on Agency Worker Rights: “In the UK this Directive is an answer to a non-problem. Temporary workers are not an under-privileged and disaffected group. Many of them have chosen temporary work because of their lifestyle”.
Further developments are expected in this area in the near future, so I’ll keep my eye out for any news.
Annual Leave and Long Term Sickness
February 18, 2008
In 2005 Ainsworth v HMRC became a landmark case relating to long term sickness and annual leave accrual. This went to the Court of Appeal and it was held that an employee does not have the right to accrue annual leave entitlement under the Working Time Directive 1998 whilst on long term sick leave.
The case (now called Stringer v HMRC) was referred to the House of Lords on appeal, who decided to refer it to the European Court of Justice (ECJ). No ruling has been given yet but last month the Advocate General, Verica Trstenjak, gave his opinion on the case. His decision was that annual leave entitlement does accrue whilst on long term sick leave, which is a curious decision given that the Working Time Directive is a health and safety law to ensure that employees take time off from work; and employees who are off sick cannot take time off as annual leave.
This means that employees who are off sick for a long period of time would be entitled to take all their accrued annual leave once they returned from sick leave. If the employee leaves the company, they would be entitled to payment in lieu of holidays accrued but not taken, even if they were absent for the entire holiday year – this could amount to weeks or months of pay. I wonder what would happen for employees who accrued all their holidays at a full time rate whilst off sick, but then came back to work part time – they would probably have far too many holidays than they were able to take.
The ECJ ruling hasn’t been passed yet; and it may not agree with the Advocate General. However his opinion is normally a good indicator of what will be decided in court. So at the moment employers can still work on the basis that annual leave does not accrue on long term sick leave, but may need to change the process at some point in the future when the ECJ ruling is passed on this case.