Employment Tribunal

It appears you can have your cake AND eat it

14 Jun
by Donna Obstfeld, posted in Blog, employee rights, Employment Legislation, Employment Status, Employment Tribunal, Video, Vlog   |  No Comments

So this is a very quick video to tell you that today, finally, the Supreme Court have ruled on the case of Gary Smith versus Pimlico Plumbers and Charlie Mullins.

Charlie Mullins famously said that his workers, the people that work for him, the plumbers, “couldn’t have their cake and eat it”. But it appears today that the Supreme Court have said, actually, yes they can.

This is going to go across the whole of the gig economy. What they’ve said is that although Gary Smith decided that he wanted to be self-employed, that he was VAT registered, that he hired his vehicle from Pimlico Plumbers, he was actually a worker.

Now, that doesn’t sound like a big deal to some people, but it means that he’s entitled to national minimum wage, he’s entitled to sick pay, and there are other benefits that he is entitled to.

And it’s not just him. It’s going to be anybody who works in that gig economy space. It’s going to stretch to delivery drivers, to Uber drivers, Addison Lee drivers, anybody who has plumbers, engineers, air conditioner specialists, security guards, cleaners, even waiting staff.

We’ve been waiting for this ruling. It is being seen as a landmark ruling, and the Supreme Court have said that, actually, despite the fact that Gary was given the option as to whether or not he wanted to be self-employed or whether he wanted to be an employee and given the fact that he’s been earning £100,000 a year  as a self employed person; when he got ill, he has turned the tables on his employer and decided actually he wanted to be classed as an employee or worker.

These are really, really important details for anybody who’s looking to employ contractors. It is really important to make sure that you’ve got employment status right, because again, it reinforces the fact that, it is not up to the employer or the individual to decide the basis of that employment relationship. The law determines whether or not somebody is an employee, whether or not they are genuinely self-employed, and there are a series of tests that have to be applied to every relationship to make sure that as a business owner when you take on an employee, you’re taking them on as a genuine employee, or if you take someone on as a contractor, they are a genuine contractor.

The expression that I use is, “If it looks like a duck, walks like a duck and quacks like a duck, it is a duck; regardless of whether you call it a hen, a goose, or a chicken.

Employment status is going to be all over the news in the next 24 – 48 hours; it’s all about the gig economy, and it’s all about making sure that the people who are working for you are doing so on a legally acceptable basis. You don’t get to choose, and nor do they. It’s a case of what does the law say.

We’ve finally got some clarity, but it’s going to be difficult for employers to implement.

Could you win an employment tribunal case if you needed to?

27 Jan
by Donna Obstfeld, posted in Blog, Contract of employment, Employment Legislation   |  No Comments

Most of our clients are terrified of the thought of ending up in an employment tribunal, not because they have done anything wrong, but because of the hassle, aggravation, time and money it takes to defend the case. Although the UK government have brought in charges in the hope that this would reduce the number of spurious claims, many employees are still able to find a solicitor willing to take on their cases and make something out of not a lot!

With this is mind, I was very interested to read an article this week which provided 5 reasons why companies lose employment tribunals and they are not what you might think!

 

stressed ladyThe first reason that a company may lose a case is because they are not likeable. As with everyone else you meet in life, an employment tribunal chairman is human with their own likes and dislikes. If the facts of the case mean that both the employer and employee could be right, perhaps a case of ‘he says she says’, then the chairman may go with a gut instinct about who is the ‘good guy’ in this struggle.

As the employer, your job (or that of your defence team) is to win over the affections of the judges so that you are perceived to be the good guy. The winning over may actually happen as a result of what has happened in the workplace. If you can demonstrate that you have always tried to be supportive, that you have always had the best intentions and that you have genuinely cared, but the employee has just taken advantage of you and left you no alternatives, then the judges may see you very differently if the behaviour which has led to the tribunal is part of a string of normal, perhaps bullying behaviour.

However, if the winning over needs to be done in the court room:
• Remember your manners
• Don’t argue
• Don’t talk over people
• Show empathy
• Admit any situation, where with the benefit of hindsight you could have done something differently (as long as this does not undermine your case)

 

The second reason identified as likely to lead to losing a case is loss of evidence.

Now this one made me laugh and took me back to October 2004. I was working in a further education college and was helping with an HR department to relocate. There was a locked filing cabinet and nobody could find the key. I refused to move the cabinet into the new, much smaller office space unless we knew what was in it and eventually called facilities and asked them to bring me a crow bar!!!

When the caretakers came up with the crow bar they kindly did the breaking for me and in 3 of the 4 drawers we found all the evidence for a tribunal case which had taken place 2 years earlier and the college had lost because they didn’t know where their evidence was. Seeing the contents of the filing cabinet, one of the HR team said ohhh, that must have been Mrs Jones’ filing cabinet, I think she took the keys with her when she left.

Regardless of the merits of the case, they deserved to lose if they didn’t have the wherewithal to work out where their evidence might be, given that it was in the corner of their office all the time.
Not having the right documentation in place at the time the incident / behaviour happened is the third reason given for employers losing an employment tribunal.

This is a problem that we have identified among our new clients, who tend to come to us once they have a problem and by that time, it is sometimes too late to put the right policies, procedures and practices in place. We find ourselves shutting the stable door after the horse has bolted.

For an employer to have a mandate to manage their business the way they want to, they need to have the right policies and procedures in place which are documented, communicated and complied with. Failure to do this just exposes your business to so much unnecessary risk. This is actually what led us to develop our HR in a Box™ product to enable micro businesses with up to 10 staff to adequately protect themselves.

When you are preparing your case for the employment tribunal, you will need to provide evidence of policies, communication etc in your bundle and it is essential to your defence that you can produce these.

 

The next reason why an employer may lose a tribunal may be down to the quality and preparation of their witnesses.

For anyone, the thought of giving evidence in a court or tribunal can be very daunting, so ensuring that your witnesses are properly prepared, fully understand what they are there to get across and are focussed on their facts is essential. The opposition will try to make things as difficult as possible for your witnesses, will try to undermine their credibility and to confuse them about their story. Your witnesses need to be prepared for this, even to the extent of role play cross examinations prior to the tribunal so that they know how it feels to be aggressively questioned and challenged.

 

Finally, employers need to show passion. You need to show that you truly care about your business, your staff and the situation you have found yourself in. You need to make the time to prepare properly for the case, you need to prioritise the headache of the tribunal at an early stage, so that you create the time and space needed to provide a consistent, passionate and robust case.

So, in summary:
1. Be likable
2. Don’t lose your evidence
3. Make sure policies and procedures are documented now to avoid problems later
4. Make sure your witnesses are adequately prepared and know what to expect
5. Have passion and be consistent

To add a cheeky sixth point here, a lesson from my Scouting Days ……. Be Prepared. A strong case can fall apart if not properly prepared and a weak case could win if enough preparation has gone into it.

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.

 

PeopleTalk – June 2013

13 Jun
by Donna Obstfeld, posted in Newsletter   |  No Comments

Welcome to June’s edition of PeopleTalk. This month has already seen us exhibiting at the Great British Business Show at London’s ExCel on Thursday 6th and Friday 7th June. With an estimated 47,000 visitors through the door it was a really exciting two days for us. Donna ran a seminar entitled “HR for SMEs” and despite the noise from surrounding seminar rooms and the exhibition itself, we had some great interaction with the delegates.

This month, we also look at the changes to the employment tribunal system and the introduction of Employee Shareholders. As always, if you need any help with your HR / people management, we are here to support you, by phone, email or in person.

Changes to the Employment Tribunal

Upsetting employees to the extent that they take a claim against you in an Employment Tribunal is not recommended! At DOHR we work really hard to keep all of our clients out of the tribunals, but sometimes you come across an employee who thinks they will take a chance. They find a solicitor willing to tell them what they want to hear and the next thing you the employer knows, you have a claim against you – sometimes fair, but so often completely unfair. However, some changes are being made to introduce fees in the employment tribunals and the employment appeals tribunal (EAT). It is hoped that these fees will put off the speculative litigant / chancer, freeing up the tribunals to deal with genuine cases. These fees are being set at £250 to raise an issue with the tribunal and £950 if it goes to a hearing. These fees will apply for most types of claim including unfair dismissal, discrimination and whistleblowing. Where the case is simpler i.e. a clear breach in employment legislation such as unlawful deductions from wages or errors in statutory redundancy payments, the fees are being discounted to £160 for raising an issue and £230 for the hearing. There will be some financial support available and the exact nature of this is still being discussed but is likely to be means tested based on disposable capital and monthly income.

Employee Shareholders

We are not at all convinced by this legislation, and nor are any of the business owners or lawyers we have spoken to. The essence is that ‘employees’ will be able to negotiate away many of their statutory rights in exchange for shares in the company. These rights apply to both during employment i.e. flexible working and post employment i.e. the right to bring a claim for unfair dismissal. Should the employee leave the business for any reason, their shares would be paid out.

The Growth and Infrastructure Bill which introduces employee shareholder status received Royal Assent at the end of April with implementation this autumn. The Bill was rejected several times by the House of Lords and in order to get the Bill passed the a number of concessions were agreed. The employee entering to the agreement must get independent legal advice, without this the contract is invalid. As with compromise agreements, the employer needs to pay for this advice. Employers must provide a written statement detailing the number of shares being given and the rights they carry. A minimum of £2000 worth of shares must be provided and they will be exempt from Capital Gains Tax up to £50,000. In addition, a ‘cooling off’ period of seven days will apply.

Recruitment

RecruitmentWe are increasingly asked to support our clients with their recruitment needs. While we are not a recruitment agency and do not hold a database of job seekers, we have a number of tools and processes available to enable us to work as part of your team to find you the right staff. From social media to job boards and telephone interviews to assessment centres, we make the job of filling vacancies, quicker, easier and cheaper. Not having a person in role can cost you more than hiring. Hiring the wrong person can be disastrous for your business as well as your bottom line. If you have a vacancy to fill, please do speak to us about how we can help you.

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