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Employment Law Update - November 2011

Fri, Nov 25, 2011

How to stay competitive

In the current economic climate it is more important than ever for businesses and organisations to remain competitive and efficient.To do so it is crucial you do the following to keep you business in shape:

  • Make those necessary redundancies
  • Vary terms and conditions of employment
  • Tackle poor performance
  • Address excessive Sickness Absences
  • Give your organisation an employment health check

The above issues are common but despite what you may hear they can be tackled legally and effectively.  You simply need to follow the correct processes and procedures.  Those who are properly tooled-up and pro-actively do so will be more productive, efficient and able to swiftly adapt their workforce to suit.

Day in day out our established employment team help clients deal with their employment needs by offering clear, practical and straight forward solutions.  As J P Morgan once said:

"I don't want lawyers to tell me what I cannot do; I hire them to tell me how to do what I want to do"

Making Redundancies

Nobody wants to make redundancies.  It's not pleasant and it isn't something to be relished.  But, in the absence of any other option, it is sometimes the only way to remain in business.

If this is something you may have to consider, we will help you plan the process, identify the correct procedures, carry out effective and fair consultation, make those tough decisions and, finally, ensure all the necessary paperwork is in order.

Simply tell us what you want to achieve and we will work with you establish and plan the way forward and thereafter walk you step-by-step through the process.

Vary Terms and Conditions

People want to keep their jobs.  You'd be surprised how flexible and reasonable most employees are when it comes to helping their employer avoid redundancies.  If a reduction in benefits or a reduction in hours (even for a temporary period) can avoid redundancies and the like, it is worth considering.

This can be achieved by negotiating and reaching agreement with your employees by means of formal consultation and the working up of proposals.  Any agreement reached will have to be formally documented.  If certain employees refuse to agree to contractual changes, it is possible (subject to the correct processes and procedures) to force through the changes by serving notice of termination of the existing contracts and at the same time offering immediate re-engagement on the new terms.

If you wish to consider such options, simply tell us what you want to achieve and we will set out the various options and take you through the process step-by-step.

Tackle Poor Performance

Poor performance is a difficult issue from some managers to raise and is something commonly put off for another day.  Well, as we all know, tomorrow never comes so to stay competitive in the current economic climate you need to be prepared and tooled up to address it.

Whilst unacceptably poor performance can on occasion lead to instant dismissal, for the vast majority of cases the law expects employees to have been given ample opportunity and encouragement to improve following the issue of written warnings issued.  We will therefore work with you to:

  • Identify and set out in writing the performance issues
  • Meet formally with the employee to discuss the issues and hear their viewpoint
  • Issue the appropriate warnings incorporating an action plan for improvement and the time period over which performance will be actively reviewed and assessed.
  • Issue final warnings should performance fail to improve
  • Dismiss should performance still remain unacceptably poor

The sooner you tackle it, the sooner you will see the results, whether that be improved performance, the airing of previously unknown issues, the identification of enhanced training needs or, the last resort, dismissal.

If you want to address poor performance in your business, tell us the issues and we will help you plan the necessary action to tackle it, and take you through the process step-by-step.

Address Excessive Sickness Absence

A CBI survey found that in 2010 the UK lost 190 million days to sickness absence, which equated to a financial loss to employers of £17bn.

Both long-term and persistent short-term absences are detrimental to productivity and profitability, but contrary to what many think, the law encourages you to address these issues and allows you to dismiss where appropriate.

If it's an issue for you we will help you set up the necessary procedures and apply them in practice.  Tackling poor attendance by means of a structured Sickness Absence Policy will:

  • Ensure you comply with the law
  • Place you in possession of the medical information and opinion
  • Identify any underlying or previously unknown issues
  • identify the best options for encouraging and assisting the employee's return to work
  • allow you to consider and identify any adjustments you may reasonably be required to make to assist a return to work
  • allow you to terminate employment if there is little or no prospect of a return to work, or if persistent absenteeism fails to improve.

Have an Employment Health Check

If you have not reviewed your contracts and policies recently, it may well be that they need to be updated to reflect legal changes and include clauses to assist with the above issues.  Our health check is designed to help you identify which of your practices and procedures fall below legal requirements.

How can the employment health check benefit by business?

  • It checks that your current contacts and supporting documents meet the requirements of your business, and whether they comply with employment legislation.
  • We will provide you with a report pointing out any potential issues, give you a prioritised schedule of items and outline the cost of putting them right.  You then decide what action you want to take, if any.  There is no obligation on you to take things further.

Why should I have an employment health check?

The pace of change in employment law is rapid, therefore your documentation and procedures may be out of date.  Alternatively, you may have grown rapidly in size and not need employment contracts and documents that protect you more now that you have a larger workforce.

Compensation for unfair dismissal can now cost and employer up to £68,400.  For claims involving unlawful discrimination, there is no upper limit to the compensation which can be awarded.

Having up to date and comprehensive contracts, policies and procedures will help you:

  • avoid, minimise or defend any tribunal claims against your business;
  • address persistent or long-term sickness absence;
  • tackle poor performance;
  • stop misconduct; and
  • avoid inadvertently discriminating against certain employees.

How much does it cost?

We charge depending on the number of employees:

Up to 10 employees: £600 plus VAT

10-19 employees: £750 plus VAT

20-99 employees: £1,000 plus VAT

100+ employees: £1,250 plus VAT

If, after receiving your health check you want to take it further, we will let you know in advance the cost and agree with you before doing anything more.

If you wish to take any of the steps outline above, or arrange an employment health check, simply contact John Norrie on 0131 225 1677 or email us at healthcheck@gillespiemacandrew.co.uk

 

New hire and fire rules for unfair dismissal

Finally, after months of leaks, speculation and rumour the government has announced its proposals for what is claimed to be the biggest shake-up of employment law in a generation.  The proposals include:

  • unfair dismissal qualifying period to increase to two years
  • compulsory lodging of all claims through Acas, for an attempt at mediation, before they can be lodged with the tribunal
  • consultation on the introduction of protected conversations, with the proviso that they will not extend to protect discriminatory acts
  • a call for evidence, with a view to consultation, on reducing minimum period for redundancy consultation to 60, 45 or 30 days
  • options for a 'rapid resolution scheme', to enable simple claims to be settled within three months
  • financial penalties to be introduced on employers who breach employment rights, payable to the Exchequer, subject to a discretion exercisable by Employment Judges
  • Employment Judges to sit alone in unfair dismissal cases
  • maternity and paternity leave to be 'modernised', with emphasis on greater involvement for fathers

Also, the government has said it is still considering the option of compensated no-fault dismissals for businesses with 10 employees or less, where employers can terminate employment without the risk of an unfair dismissal claim if they pay the employee compensation.  The government has not as yet published actual proposals for this, but will instead call for evidence on the implications of no-fault dismissals for such "micro-businesses".

The Equality Act 2010

The Equality Act 2010 brings together and replaces equality rules which were previously contained in numerous different enactments, such as the Sex Discrimination Act 1975 and the Disability Discrimination Act 1995.  Theoretically, this makes it easier for employers and others affected by the Act to understand their responsibilities, but at 218 sections plus 27 schedules, you could be forgiven for thinking it's far from easy.

Understanding the practical implications of the Act is also made challenging because it sets out to establish principles of fairness in very broad terms, and it can often be difficult to decide how it applies to particular circumstances in the real world.  In the event of a dispute, it would ultimately be for a court to decide, but businesses can protect themselves by at least knowing the basic areas covered by the Act so that they can take appropriate advice if it appears a situation might be covered by it.

What does the Act cover?

The Act is concerned with discrimination and harassment in respect of the following "protected characteristics":

  • Age
  • Disability
  • Gender reassignment
  • Marriage and civil partnership
  • Pregnancy and maternity
  • Race
  • Religion or belief
  • Sex
  • Sexual orientation

Implications for employers

Employers must not discriminate against employees on the basis of the protected characteristics.  Employers are not only directly liable for their own actions;  they have a responsibility to ensure the actions of their employees don't discriminate or harass other employees.  For example, an employer will be liable if some of his staff are bullying another employee because of her religion.  The only defence for the employer will be if he can show he took all reasonable steps to prevent it.

Advice for business

The Act doesn't just apply to employment practices and employees.  Businesses supplying services must not discriminate against customers on the basis of the protected characteristics.  For example, it was on this basis that a gay couple challenged the refusal of proprietors of a bed and breakfast to rent them a double room.

Discrimination is very broadly defined as treating someone less favourably for a reason which is a protected characteristic, and the Act also makes it unlawful to practise harassment or victimisation.  The message for business is to have clear employment policies and business practices designed to ensure these things don't happen, and to keep the nine protected characteristics in mind so that an alarm bell rings when there is any suggestion of unfairness based on a protected characteristic, and advice is taken before decisions are made.  There is no upper limit to the amount of compensation which can be awarded to someone who suffers unlawful discrimination.

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