employent law

UK Employment Law is no longer fit for purpose!!!

25 Feb
by Donna Obstfeld, posted in Brexit, employee rights, Employment Legislation, HR, Human Resources   |  No Comments
Donna Obstfeld (FCIPD), HR Specialist / Managing Director

Donna Obstfeld (FCIPD), HR Specialist / Managing Director

I’ve been in Human Resources (HR) for over 20 years. When I was first introduced to the discipline, it was known as Personnel and today when I am speaking with clients, I refer to it as ‘managing employees’ or ‘staff management’. Why give a fancy name to what business owners just need to be able to do to run their business effectively?

10 years ago I set up my own business. I didn’t have a clue what I was going to do with it or what it could become, but it was mine. I knew I didn’t want to be an interim HR Manager for large businesses, I wanted to help small businesses to grow and through their staff, achieve greater success. Over time my own business grew and like so many of my clients I had to take the decision whether to take on staff. This was an absolutely terrifying decision. Could I generate enough income for two of us? Would my clients trust someone else with their ‘HR’? How do I transfer my approach to managing employees (which is very different) to my team?

Fortunately, being in the profession, I knew how to do the people things ‘right’. How to hire, how to induct, contract of employment, how to monitor performance etc. But I was still scared. However, I had a safety net – the ‘zero hour contract’. I could guess how much time I would need the staff for and if there wasn’t enough work, they didn’t work. For one member of staff, if the work in a day dried up or she was waiting for 5 different people to come back to her and couldn’t’ move on, she would take a break for 3-4 hours and come back on later in the day. It suited my staff and it suited me and my business. It meant I could hire a number of people with different skills and deploy them as the business needed. They were employees, so bound by our policies and procedures, invested in – in terms of training and coaching, and supported with their personal development, but able to collect kids from school, take holidays or meet friends for lunch as they wanted. As a small business owner this was the flexibility I needed.

As time has gone on, my business model has changed, we have expanded and the inflow of work is more sustained, being able to pay staff at the end of each month is less scary and I know I have staff to deliver client work as needed, but I still have concerns and I believe that all small business owners feel the same:
• What happens if someone decides to take a hit at the business?
• What happens if someone thinks they have been treated unfairly?
• What happens if someone resigns and fails to work their notice period?
• What happens if someone leaves and takes your clients with them?
• What happens if someone leaves and takes your staff with them?

These are realities for almost all of my clients and some have had to shut up shop as a result!!!

Contracts of employment are great because, if written properly, they set out certain rules, policies and procedures which employers and employees commit to when signing the contract. However, as I warn many of my clients, they are not worth the paper they are written on unless you are prepared to enforce them.

Let me describe a scenario at this point –based on a real client: A firm of gardeners. Employees were provided with tools and a van. Employer came in one Monday morning to find the van unlocked in the yard with a note from the employee saying “I quit”. No notice provided. The employer then has to cancel and reschedule work at very short notice.

If the employee had been fired, the employer would have had to pay 1 months notice or the employee could take him to the employment tribunal for failing to do so. However, in this instance it is the employee who has breached his contract and not given the required notice, but what options has the employer got – in reality, none!

The situation gets worse – Over the next few weeks the business owner starts to receive cancellations from clients no longer wishing to have their gardens maintained by the company. No one would say why, but a pattern emerged. They were all clients who had been serviced by the former employee. Not only had he left with no notice, he was now poaching clients as well.

What options has the employer got? Well he could try to take out an injunction, but if the IMG_0275clients choose to leave, that is their right. They can purchase their gardening services from whomever they wish! Same gardener, same services but cheaper… why wouldn’t you?

So the business owner is left feeling ‘had’. The contract of employment, although legally binding, costs too much in time and effort to enforce. So is there another way?

I believe there is, but it requires a change in the law. Theresa May’s 10 point plan for the post-Brexit UK economy ‘supporting businesses to start and grow’ is one of her main objectives for Government intervention. This points towards the entrepreneurs, the micro and small business owners, those which account for 99.3% of private businesses in the UK and employ over 15.7million people.

With Brexit around the corner and a once in a generation opportunity to create our own laws as we come out of Europe, this is the time to really look at our employment legislation and to balance the needs of employers and their businesses with the protections required for employees.

Frances O’Grady of the TUC together with other Trade Unions and their officials claim that the fees that an employee has to pay in order to take their employer to an employment tribunal are unfair and prohibitive and should be scrapped. There is a consultation taking place at the moment on this very subject and while the whole subject of employment tribunal fees is under review, I ask the question “is the system of employment tribunals even fit for purpose?”

Another scenario for you: A customer service call centre with a sales team of 2. Both employees are new and being trained. Both have contracts and are on a 6 month probation period. One of the employees is really struggling. Extra help is bought in to support her, extra supervisions are provided and weekly meetings are being held. It emerges that the employee is spending about 3 hours a day surfing the internet. At 3 months she is given a performance review and told she is not at the required standard, reminded that she is on a probation period and that she needs to start making some profitable sales. At 5 months she announces she is pregnant. A week short of her 6 month end of probation, there is a review meeting in which she is told that as she has failed to improve, failed to take on board the training she has been provided with, is still spending too much time on her phone surfing the internet, her employment is being terminated by reason of failing her probation.

It is stressed, that she is not being fired for being pregnant (there are plenty of other workers who have been pregnant, had babies and returned to this workplace), but because she is just not capable of doing the job for which she has been employed.

IMG_0277A week later ACAS contacts the employer to advise them that the employee is taking a case against them. It eventually emerges that the employee wants £28k and is threatening a sex discrimination case on the grounds that she is pregnant.

The employer does not want to settle as they have done nothing wrong, but they now have two choices, settle and pay something or fight it and incur a lot of time money and stress with no guarantee of the outcome. ACAS makes no attempt to resolve the issue, they purely act as a go between for what should be 4 weeks, could be 6 weeks or could be less if the other side play stupid games. At the end of this period the ACAS system automatically issues a certificate saying that conciliation has failed and the employee can now take the employer to the employment tribunal. Until this point, the employee has not had to pay any money, but if the employer refuses to pay a settlement they are now likely to end up in the employment tribunal.

The TUC claims that Employment Tribunal claims have dropped since the introduction of the fees and yes they have, but not for the reasons that the TUC and others would have us believe. The figures have dropped because employers want to get on with running and managing their businesses. Business owners do not have the time, money or energy to fight with the risk of losing, with the costs of solicitors to defend the case or with the time wasted in preparing for an employment tribunal just because an ex-employee has decided to take a chance.

They are after a settlement. Their solicitors often don’t want a settlement as they earn more from defending a claim in the Employment Tribunal, but the employee wants a quick pay-out and I frequently come across people who have already taken one employer to the tribunal (or threatened to). Employers end up paying at the ACAS stage to make the employee’s claim go away, to know what the financial impact is as a fixed amount and to enable them to move on and focus on their business.

There are lots of different systems across the world and while I recognise that some are better than others, if this government is serious about enabling small businesses to grow and succeed, the noose has to be removed from around their neck and the laws need to be equalised between employer and employee.

Employee vs Worker

24 Jan
by Donna Obstfeld, posted in Agency workers, Blog, Contract of employment, employee rights, Employees, employent law, Employment Legislation, Video, Vlog   |  No Comments

As a result of some big legal cases last year, the status of workers is coming under the spotlight like never before. This will be a big area for change in 2017 as the Governement are focussing on understand and protecting Gig Workers.

 

Employee Handbook

23 Jan
by Donna Obstfeld, posted in Blog, Contract of employment, employee rights, employent law, Employment Legislation, Video, Vlog   |  No Comments

As a business grows, there is an increasing need for clarity. The Employee Handbook remains the ‘go to’ reference for employers, managers and employees.

Contracts of Employment

22 Jan
by Donna Obstfeld, posted in Annual Leave, Benefits, Blog, Bribery, Contract of employment, employee rights, Employees, employent law, Employment Legislation, Flexible working, Health and Safety, Holidays, Home-workers, Video   |  No Comments

This is a massive one for me and one that I spend most of my professional career talking about!!!

 

Is it a Duck?

28 Oct
by Donna Obstfeld, posted in Annual Leave, Blog, employee rights, employent law, pay   |  No Comments

uber

The Employment Tribunal has ruled that two drivers are infact ‘workers’ under the definition in the Employment Rights Act 1996 and therefore are afforded protections not available to genuine freelancers.

This case will be appealed by Uber, they can’t afford not to because of the implications for their global business model. Uber have also looked at the use of driverless cars and this may well speed up that development as ‘engaging workers’ is more expensive than ‘using freelancers / contractors’.

We are often asked by our clients what alternatives there are to having someone working as an employee, especially for new or small businesses, the thought of having employees and all the implications of employment law is enough to prevent them growing their business. The use of contractors, freelancers and gig workers has made business growth possible for many business who would just not have taken the risk with employing staff.

As employment law becomes more and more constraining for businesses, business owners seek ‘new and innovative’ ways of working. Until it is tested in the courts and deemed to be illegal, they will take their chances and that is exactly what has happened here.

In short, with our clients we apply the duck test:duck

If it quacks like a duck, waddles like a duck and looks like a duck, then it is a DUCK, no matter whether you call it a hen, a bird a chicken or a goose!

In this case the courts have decided that Uber has workers who are DUCKS and nothing else.

The implications are as workers:

  • they have to be given paid annual leave
  • they are subject to the working time directive regulations
  • they are entitled to National Minimum and Living wages and
  • they are protected against whistle blowing.

They are not employees, therefore there are other benefits they are not entitled to, but even the above will cause Uber and other companies to have to rethink their financial models.

Post Brexit …. The HR Crystal Ball

15 Jul
by Donna Obstfeld, posted in Brexit   |  No Comments

No one knows what will happen to employment legislation once the UK starts to withdraw from the EU, but here are some of the key employment laws we are watching for changes.

Employment law Potential changes Business impact
Agency Workers Regulations Repeal Reduction of costs in using agency staff.

Potentially makes use of agency staff more attractive.

Greater degree of flexibility.

Working Time Removal of the 48 hour maximum

Simplification of holiday rules (interaction with sickness absence).

Simplification of rules on calculating holiday pay (overtime, commission).

Qualifying period for entitlement to holiday.

Simpler practices, wider discretion on what to include as holiday pay, and how (or whether) to arrange carryover of leave to the next leave year.
Discrimination Introduction of cap on compensation. Decrease potential financial liability for such claims.

Increase likelihood of settlement of accompanying claims (eg unfair dismissal).

TUPE Relaxation of information and consultation requirements before a TUPE transfer.

Loosening of restrictions on changing terms and conditions.

Simpler process

 

The Employment Legislation Outlook

03 Jun
by Donna Obstfeld, posted in Blog, employent law, National Living Wage, National Minimum Wage, pay   |  No Comments

Below is a summary of planned employment legislation changes.

There are a couple of things to note:

  1. There was no statutory increase in rates in April of this year, except for Redundancy which increased by £4 per week
  2. There may be an alignment of the National Minimum Wage Increases and the National Living Wage increases as the October rate increases have been announced as being in place for 6 months to March 30th 2017
Jan – June 2016 Consultation on extension of shared parental leave and pay to working grandparents – if approved, legislation timetable to follow.
18 June 2016 Posted Workers (Enforcement of Employment Rights) Regulations 2016 expected to come into force.
July 2016 Public sector exit payments clawback regulations enforcement expected.
7 September 2016 New financial sector whistleblowing rules to be introduced.
1 October 2016 Increase in National Minimum Wage
October 2016 Gender pay gap reporting regulations coming into force (first reports due 2018).
October 2016 Earliest likely implementation date for measures in the Immigration Bill 2015-16.
April 2017 Increase in National Living Wage for over 25’s
Potential increase in National Minimum Wage
April 2017 Potential increase in Statutory rates in line with CPI
6 April 2017 Apprenticeship levy due to take effect.
30 April 2017 ‘Snapshot’ gender pay gap reporting begins for employers with 250+ employees.
September 2017 30 hours’ free childcare becomes available for 3 and 4-year olds in working families.
October 2017 Potential increase in National Minimum Wage – if not raised in April 2017
April 2018 Increase in National Living Wage for Over 25’s
April 2018 Potential increase in Statutory rates in line with CPI
30 April 2018 First gender pay gap reports to be published by organisations with 250 or more employees.

Zero Hours Contracts – do they have a role to play in your business?

20 Jan
by Donna Obstfeld, posted in Blog, Contract of employment, employent law   |  No Comments

Since May 2015, employers have not been ‘allowed’ to include exclusivity clauses in zero hours contracts of employment. However at the time, there was no penalty against them if they did so or if they disciplined an employee or treated them less favourably for working elsewhere or asking for permission to work elsewhere.

Finally, some decisions have been have been taken and legislative changes made which will give workers additional protection and enable business owners to decide whether or not zero hours contracts are appropriate for use in their business; whether they provide the flexibility the business requires and whether they are the most appropriate form of contract to use.

The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 came into force on 11th January and provides employees with a number of rights and more importantly consequences for the employer if these rights are breached.

signUnfair dismissal and the right not to be subjected to detriment treatment

Any dismissal of a zero hour contract employee is automatically unfair, if the main reason is that she/he breached a contractual clause prohibiting him/her from working for another employer. No qualifying period is required to bring such an unfair dismissal claim; and, it is also illegal to submit a zero hour worker (note: worker which means they do not have to be an employee!) to detriments if they work for another employer in breach of a clause prohibiting them from doing so.

Employment Tribunal

Employees and workers now have more rights at the employment tribunal with respect to claims related to their zero hours contract.

A worker may present a complaint to an employment tribunal where an employer has infringed their rights but, the worker only has three months from the incident (or last occurrence of a number of incidents) to raise the complaint. However, a tribunal may consider any such complaint which is out of time if, in all the circumstances of the case, it considers that it is just and equitable to do so

Redress

Where an employment tribunal finds that a complaint presented to it under the regulations is well founded, it may take one of the following steps as it considers just and equitable
• making a declaration as to the rights of the complainant and the employer in relation to the matters to which the complaint relates
• ordering the employer to pay compensation to the complainant. The employment tribunals have discretion over the amount of compensation awarded and again refers to a ‘just and equitable’ decision.

Implications for employers

2016 employment law changesUntil there is some case law in this area, we really have no idea how this will impact employers: whether it provides enough of a disincentive to employers when considering the use of zero hours contracts and whether the compensation and fines handed out by the employment tribunals will make the use of zero hours contracts null and void.

There are many businesses where having your employees work for a competitor is not a problem, but there are definitely environments where not having an exclusivity clause will be an issue and employers will need to very carefully consider whether a part time contract will provide greater cover. At this stage we also don’t know whether a robust non compete clause prohiting workers working for a direct competitor will fall foul of this legislation.

Also the new Government guidance provides examples of what is considered “inappropriate use” of zero hour contracts and states that zero hours contracts should not be used as a permanent arrangement for an employee who works set hours each week, even if the hours worked are part time. At this stage it is unclear whether an exclusivity clause in a part time contract would be treated the same as in a zero hours contract should it be challenged in an employment tribunal.

As always, it is essential to get proper advice when drawing up contracts of employment. Zero hours contracts have been a huge benefit for many small and growing businesses, and fortunately their use has not been banned entirely, but their role now needs to be reassessed and their value carefully considered for each new employee taken on and a zero hours contract may no longer be the most appropriate basis of employment in the future.

 

Feeling The Heat

17 Jul
by Donna Obstfeld, posted in Absence, Blog, Business Continuity, employee rights, employent law, Health and Safety   |  1 Comments

With temperatures soaring and no sign of an end to these wonderful hot days of summer, employees and employers are both feeling the strain. For absolute clarification …… there is no legal maximum working temperature and to this point, a group of MPs now want to introduce a maximum working temperature of 30 degrees (lowered to 27 degrees for strenuous jobs). 

So how practical is such a proposal and what would its impact be on businesses?

There are some employees who are constantly working in high temperatures regardless of the weather outside. Chefs, metal workers and miners all work in hot environments and although there are health and safety precautions in place, the work still needs to be done.

So what about an office worker or a retailer assistant, could they be sent home when it reaches 30 degrees? What would happen to businesses? With a law that sent people home when the temperature rose, businesses would not be able to operate and would face closure. Is that practical for ice cream shops, beach side cafes and outdoor entertainment facilities such as theme parks and zoos who would all do there best business on hot sunny days? It certainly isn’t practical to have a law for some businesses and not for others perhaps based on location or products.

Employees in hot countries such as Spain and Italy work in the heat on a regular basis and although concepts such as siestas and long lazy lunches are a familiar tradition, these are increasingly being phased out in multinational companies where they need to work with the rest of the world.

Air-Conditioning as standard also makes the heat more bearable in some countries, but there are many workers who would not be able to benefit from such facilities and they would be expensive to install and run for small companies in the UK.

What can employers do to reduce the impact of the heat?

There are several cost effect steps employers can take to tackle short term heat problems (and being the UK, this will be short term):

  • Where possible, relax the dress code. Clearly communicate what is acceptable and what is not.
  • Ensure that blinds are drawn to keep out the sun as much as possible (also make sure there is no glare on monitors)
  • Once the sun has moved to another side of the building, open windows and keep interior office doors open to help the flow of air around the building
  • Ensure there is cold water available for staff, either in a fridge or in a water cooler if the tap water is not cold enough. Staff should also be encouraged to bring in their own supplies.
  • Encourage regular breaks and perhaps increase the number of breaks or the length of breaks
  • Enable staff to move around  a little more if they are usually sat in one place
  • Consider earlier starts or later evenings with longer breaks so that people aren’t travelling in the rush hour and working in the heat of mid day (how very Mediterranean)
  • Purchase some fans to increase air flow

Employees must take practical steps to ensure their safety.

As with all things health and safety, employees do have a duty to look after themselves at work and discuss any concerns with managers in a practical way. Not turning up for work due to the weather or its effects (dehydration, lack of sleep, too much sun) is not acceptable, and an organisation has the right to discipline staff it believes have not taken reasonable steps to be at work. Staff must:

 

  • Ensure that they take on sufficient water during the day
  • Dress appropriately for business and the temperature
  • Pre-book any time off during the summer, phoning in on the day is not acceptable
  • Ensure that any food they eat at BBQs is properly cooked!!!
  • Ensure that alcohol consumed out of work does not impact time at work in any way. As well as alcohol consumption increasing in the summer, the heat intensifies the impact it has on people.

Bribery – Have you protected your business?

27 Jan
by Donna Obstfeld, posted in Blog, Bribery, Compliance, employent law, Employment Legislation, Hertfordshire, Policies and Procedures, training   |  No Comments

I was in a room with 20 different employers this week and asked a simple question….

How many of you have a policy on bribery and have trained your staff in the application of that policy?

Despite the Bribery Act 2010 having come into force in July 2011, 90% of the businesses represented did not have a policy and had not trained their staff in relation to their duties under the Bribery Act. The first case has now been brought under this legislation and a court official was found guilty of being bribed to make a speeding offence disappear.

The previous bribery legislation was mixed and confusing, some of it being over 100 years old.

For those of you who are not clear, bribery is defined as ‘the giving or taking of a reward in return for acting dishonestly and/or in breach of the law’. There are four offences under the Act:

  1. Bribing another person
  2. Being bribed
  3. Bribing a foreign public official
  4. Failure to prevent bribery

It is the last of these which employers need to be especially wary of. There is an absolute obligation for employers, even those with one employee, to have a policy which ensures that employees know that bribery is not acceptable. There is also an absolute obligation for employers to brief / train their staff in relation to the law, their policy and its application to their business environment.

So what counts as bribery? Is it…..

  1. Tipping your postman for Christmas deliveries
  2. Taking clients out for dinner
  3. Taking potential clients our for an afternoon at Wimbledon
  4. Sending clothing samples to a fashion reviewer for their children
  5. Giving a FIFA official an amount of money to secure their vote in deciding the location of the 2022 World Cup? – This news broke the week the legislation came into force!!!

To find out more about The Bribery Act 2010, it’s implications for your business and how to protect your business from prosecution,  join us at the Business Essentials Conference on 29th February 2012 where you will be able to discuss the Act in the context of your business and walk away with a policy, training guidelines and some standard forms and letters. This would normally cost approximately £500 + VAT but the one day conference will cost you just £120. For more information and to book visit www.businessessentialsconference.co.uk or call us on 01923 504100.

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