The Department for Business, Innovation and Skills (BIS) will fund mediation training for employees from a group of 24 SMEs in each pilot area later this year. A network of trained mediators will be available to provide mediation to other organisations in their respective network.

An open tender to deliver the mediation training for prospective candidates has been published on the Contracts Finder website. The 24 SMEs in each area will be identified and selected later in 2012, once the mediation training contract has been awarded.

It is hoped that the pilot scheme will help to resolve workplace disputes before they escalate and need to be resolved at an employment tribunal.

Since coming to power, the Government has made it clear that it intends to create more opportunities for workplace disputes to be resolved outside the tribunals, and this pilot scheme is a further step in this direction. In November 2011, the Government published its official response to its Resolving Workplace Disputes consultation on reforming the employment tribunal system and announced that it intended to introduce a requirement for all potential tribunal claims to be lodged with Acas, so that parties have the opportunity to resolve their dispute through early conciliation. Click here for more details.

The pilots will run for 12 months and, if successful, the Government may introduce similar schemes in other parts of the country.

From 1 October 2012, and depending on the size of the PAYE scheme, employers will have to enrol eligible employees automatically into a qualifying workplace pension scheme or the National Employment Savings Trust (NEST). Employers will also have to make mandatory contributions.

Under the scheme, employers will be given a “staging date” from which they must auto-enrol eligible employees if they are using a defined-contribution scheme or NEST as their qualifying workplace pension scheme.

On 25 January 2012, the Government published a revised auto-enrolment staging timetable. Click here to see the new timetable. The publication of the new timetable follows the Government’s announcement in November 2011 that small businesses with fewer than 50 employees would begin auto-enrolment in May 2015, instead of April 2014. (Click here for further details.) Under the revised timetable, there will be no change to the staging dates of employers with 250 or more employees. All existing businesses will have enrolled their staff by April 2017, followed by all new employers by February 2018.

The Pensions Regulator has published some useful information on auto-enrolment on its website. Click here.

If you have any concerns about how auto-enrolment will affect your business, please contact me at michael.delaney@mablaw.com.

In November 2011, the transport Minister Norman Baker launched the ‘Anywhere Working’ consortium, with its purpose being to enable employers to understand the benefits of flexible working. The consortium aims to help organisations achieve greater productivity, reduce employee stress and absenteeism, and reduce carbon emissions generated by business travel.

The Anywhere Working consortium is backed by big businesses (including Business in the Community, Microsoft, Nokia, Nuffield, Vodafone and Regus) and The Trades Union Congress.

On 16 January 2012, the consortium set up a new portal (click here) which contains a number of resources for employers and employees, including training, guidance, case studies and product offers. Organisations can also use the portal’s Savings Calculator to measure how much time, money and carbon energy they can save by working more flexibly.

The consortium is holding an ‘Anywhere Working Week’, beginning on 27 February 2012, and will provide additional guidance to organisations to help them learn more about flexible working and how it can benefit them and their workforce.

When the government announced this change in October 2011, it did not confirm whether it would affect existing employees (who may already have qualified for unfair dismissal rights) or just new joiners.

The Department for Business, Innovation and Skills (BIS) has now confirmed that the regulations that will implement the change will, subject to Parliamentary approval, state that the new two-year qualifying period will only apply to employees whose employment begins on or after 6 April 2012. Employees who are already in employment before that date will retain the current one-year qualifying period.

The Government estimates that the change will save businesses £6m per year, with a reduction of 2,000 unfair dismissal claims per year.

For further details of other employment law changes taking place in 2012, please click here.

Many of these volunteers will be employees, so, in order to minimise the impact their absence may have on workplace productivity, Acas has advised employers to start talking to them now so suitable arrangements can be made.

To help employers, Acas has issued new guidance on employers’ legal obligations to employees who wish to fulfil their volunteering commitments. This provides advice on the following key questions which will inevitably arise during discussions between an employer and employee:

1. Three of my staff have got volunteer positions at the Olympics. I can only let one go. What’s the best way of handling this?

2. I have a member of staff who has got a volunteer place at the Olympics. Do they need to use their own holiday?

3. I have a member of staff who has got a volunteer place at the Olympics. Am I expected to pay for them while they volunteer?

To read this guidance (and answers to the above questions), please click here.

Statistics have revealed that depression affects approximately one in six people (and is more common in women) and it is therefore vital that employers take the necessary action to assist employees who are suffering from stress and depression, and avoid inadvertently breaking the law.

To read the full article, please click here. You may need to register to read the article in full.

If you would like to discuss the issue of depression in the workplace and what your legal rights and/or obligations are, please contact me at rebecca.fox@mablaw.com.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case shows the need for organisations to have clear IT and Internet usage policies. Organisations should also make sure that those policies have been updated since the increased use of business and personal social networking sites.”

Automatic enrolment was introduced for all employees who meet certain qualifying criteria, in an attempt by the Government to encourage more people to save for their retirement. The scheme was due to be phased in for all employers over a four-year period, with the implementation dates dependent on the number of employees that an employer has.

However, the Government has recently announced that small businesses – defined as those employers who have fewer than 50 employees - will be given additional time to prepare for the implementation of auto-enrolment.

Under the revised timetable, small businesses will have to automatically enrol their staff into a pension scheme in May 2015, instead of the April 2014.

Pensions minister Steve Webb announced in Parliament that all jobholders previously “due to be enrolled this side of July 2013 will see no change in their dates.” Based on the Government’s existing implementation timetable, these comments would suggest that auto-enrolment dates for employers with fewer than 3,000 “jobholders” may also be delayed, although no revised date has been announced yet.

The announcement is good news for smaller employers, although larger employers must still comply with the requirements as originally set out in the timetable.

The required employer contribution rate will remain unchanged until all businesses have started auto-enrolment; however, the Department for Work and Pensions has indicated that the increase in the minimum employer contribution rate from 1 per cent to 2 per cent will be delayed beyond its original date of 1 October 2016. We will have to wait and see whether the Government also delays the date on which the minimum employer contribution rate rises to 3 per cent (which is currently 1 October 2017.)

If you have any concerns about how auto-enrolment will affect your business, please contact me at michael.delaney@mablaw.com.

Employers should ensure that they have the correct workplace policies and procedures in place and that they know their employees’ rights, so that workplace disputes can be avoided.

Full details of Acas’ recommendations are here.

It has now finalised the proposals that will form the basis of its “radical” legislative and policy change. These include the following:

1. Unfair dismissal. The Government intends to increase the qualification period for unfair dismissal protection from one to two years. It is hoped that this will improve business confidence in hiring people and thereby boosting economic growth;

2. Compromise agreements. The Government will create a “standard text” and guidance for parties to use in compromise agreements. It will consider amending the Employment Rights Act 1996 to enable compromise agreements to cover all existing and future claims without the need for a full list of causes of action; it will also change the name of compromise agreements to “settlement agreements” in primary legislation;

3. Protected conversations. The Government will launch a consultation next year to look at the introduction of a system of “protected conversations” that would allow either employers or employees to initiate a discussion about an employment issue. Further details are here;

4. Mediation and early conciliation. The Government intends to introduce a requirement for all potential tribunal claims to be lodged with the advisory service Acas, so that parties have the opportunity to resolve their dispute through early conciliation. The early conciliation period will be set at one month; if this offer of conciliation is refused or is unsuccessful, the claimant will be allowed to lodge his or her claim with the employment tribunal;

5. Modernising employment tribunals. The outgoing President of the Employment Appeals Tribunal, Mr Justice Underhill, will review the Employment Tribunal Rules of Procedure, and, by 30 April 2012, produce  a streamlined procedural code that will make the Rules less complex and unwieldy. The Government will also increase the limit for deposit orders from £500 to £1,000 and for costs orders from £10,000 to £20,000;

6. Financial penalties. The Government intends to introduce a discretionary power for employment tribunals to impose a financial penalty on employers, payable to the exchequer, who lose a claim. The financial penalty will be half of the total award made by the employment tribunal, with a minimum threshold of £100 and a maximum ceiling of £5,000. A penalty will be reduced by 50 per cent if payment is made within 21 days. An employer can appeal against the imposition of a financial penalty.

7. Rapid Resolution Scheme. The Government will launch a consultation on how to introduce a scheme that would be an alternative to the tribunal process and would provide quicker, cheaper determinations in low value, straightforward employment claims (e.g. holiday pay) with the intention of saving time and money. This scheme may not involve judges or oral hearings.

The Government is obviously determined to bring about a change in workplace culture. However, whilst it is promoting new ways of quickly resolving employment disputes (without the need for an employment tribunal hearing), it is questionable how successful these will be and whether Acas could cope with the extra workload.

There is a real risk that the changes may not benefit either employees or employers: employees may feel that these changes will reduce their ability to seek redress when their employment rights are breached, whilst employers may be faced with more regulations and red tape.

In March 2011, the Office of Tax Simplification (OTS) published its interim report on the simplification of the tax treatment of small businesses. In it, the OTS recommended that the income tax and NICs regimes should be amalgamated and that the Government should begin work towards this objective by the end of 2011.

Following the Government’s call for evidence on the matter in July 2011, it became obvious that there was a real desire for reform, with the majority of respondents stating that there are potential gains to be made from aligning income tax and NICs. Respondents recommended that (1) the system for calculating NICs should be altered to reflect how income tax is calculated, and that (2) the same employee earnings should be made subject to the calculations for both taxes.

However, any reform will take time (and will only happen if the benefits outweigh the costs of making the change.)

The Government intends to work with stakeholders over the next few months, with a view to identifying high level options for reform by Budget 2012. Even if this happens, the Government has predicted that, due to the number of consultations on reform that would have to take place and the need to give employers sufficient time to prepare for a new tax system, any reform would probably not take place until 2017. Also, it appears that any reform will focus on alignment, simplification or operational integration rather than a complete merger of the two regimes.

In the past, governments have steered away from merging or integrating income tax and NICs, so it is surprising that reform is now a real possibility. However, the Government has accepted that there could be winners and losers even if there is just an integration of income tax and NICs, so it will need to fully investigate the impact any reform could have on individuals before deciding to proceed.

The Government has also published a discussion paper that outlines its proposals for simplifying the administration of personal taxes, by making tax information more accessible to taxpayers. It believes that online and mobile technology can help to improve taxpayer awareness of their tax liabilities. The discussion paper looks at systems in other countries, where taxpayers are able to access (and input) their own tax information online throughout the tax year. HM Treasury’s view is that a system that encourages greater taxpayer engagement also encourages greater taxpayer compliance.

Interesting times…

The change was initially mentioned by the Deputy Prime Minister late last month, when he unveiled a raft of new measures designed to reduce bureaucracy and restrict inspection for businesses.

Under the proposals, employers and employees could, at either’s request, have frank discussions about issues such as underperformance and retirement plans. These conversations would be inadmissible in employment tribunal proceedings.

The announcement will be welcomed by business groups, which have long called for the introduction of protected conversations as a means of informally resolving workplace disputes.

The Prime Minister also reiterated that the Government will be increasing the qualifying period for unfair dismissal claims from one year to two years from 6 April 2012. Click here for full details.

Also, from 6 April 2013, employees will have to pay £250 to apply for an employment tribunal hearing and a further £1,000 if a hearing is granted. The money will be refunded if the claimant is successful, but will be forfeited if they lose. Click here for full details. Since the announcement, the Government has said that “poor claimants” will not have to pay the fees, although we are still awaiting clarification as to how a claimant qualifies as being “poor.”

It has not yet been confirmed when the consultation on protected conversations will take place.

1. The unfair dismissal qualifying period will rise from one year to two years; and

2. Fees will be introduced for employment tribunal claims.

Since the speech, the Department for Business, Innovation and Skill (BIS) has confirmed that the change to unfair dismissal law will take effect on 6 April 2012. However, as yet, no further detail has been given. The Government claims that increasing the period to two years will help to reduce the number of unfair dismissal claims by approximately 2,000 per year, saving businesses £6m per year.

Fees for claimants lodging employment tribunal claims are expected to be introduced from 6 April 2013. The introduction of the fees are an attempt by the Government to reduce the number of “vexatious” claims which cost employers millions of pounds each year. Details of how much the fees will be set at are expected to be included in a consultation paper, due to be published by the end of November 2011. There have been reports in the press that employees will have to pay £250 to apply for a tribunal hearing, and pay a further £1,000 if a hearing is granted. The fees would be refunded if the claimant was successful. However, these are only suggested figures, and we will have to wait for the consultation paper (or further announcements from the Government) to find out for sure.

UPDATE: Since this announcement, the Government has said that “poor claimants” will not have to pay the fees, although we are still awaiting clarification as to how a claimant qualifies as being “poor.”

The guide also highlights that such actions can impact on the productivity and profitability of an employee to the business, whilst also risking legal action being taken against the business itself. Examples of infringing activity include an employee using work systems to sell goods both within the business and outside of the business, and even simply selling actual counterfeit goods from behind their desk.

During the presentation and in the following questions session, there was much debate about Regulation 10 of the Agency Workers Regulations (AWR). This Regulation has the potential to exclude the operation of the AWR in respect of pay. Compliance with the various provisions outlined by Regulations 10 and 11 are essential to avoid the equal treatment provisions in respect of equal pay.

Some temporary work agencies have been putting in place contracts with their agency workers, whom they have placed purporting to amount to a contract of employment wherein such contracts set out minimum rates of pay, location where the agency worker may be expected to work, the expected hours to be worked, nature of the work and a statement to the effect that during periods of absence of any assignment the agency as an employer will pay the agency worker a minimum amount of remuneration. The minimum amount of pay is calculated by reference to Regulation 11 and will generally be not less than 50 per cent of the pay paid to an agency worker during a relevant pay period. Furthermore any pay made will not be less than the national minimum wage and any pay due during a period where no work is undertaken must not be less than four weeks’ pay. 

One of the principle issues that have arisen is whether or not a temporary work agency can be an employer for the purposes of satisfying Regulation 10. This is because it is unlikely that such an arrangement would amount to a relationship of employer and employee. This is because based on tests laid down by case law, an employer must be in a position to exercise a sufficient degree of control over the worker, there must be mutuality of obligation and that the provisions of any contract must be consistent with it being a contract of service.

Umbrella companies have also been considering putting in place permanent contracts of employment so as to potentially exclude the operation of the Regulations in respect of pay. Remember umbrella companies are classed as intermediaries under Regulation 4.1.b and are potentially liable for any breaches of the AWR. I made a point during the session that again umbrella companies may find it difficult to persuade an employment tribunal that they are genuine employers. Whilst HMRC readily accept umbrella companies as having employer status, Leading Counsel instructed by us had expressed reservations as to whether or not a temporary work agency or an umbrella company could amount to a proper employer in these circumstances for the purposes of avoiding liability under the AWR.

The response from the floor was that an umbrella company is a proper employer and could put in place contracts of employment so as to exclude obligations insofar as they related to pay under Regulation 10. However, it will almost always be a question of fact in each case as to whether the arrangements put in place with agency workers amount to an employment relationship and not merely a device to get around obligations as to pay under the AWR.

If a temporary work agency or an umbrella company wish to argue that they are true employers, then they will need to satisfy the employment tests which I have referred to above and laid down by iMcKenna J in Readimix Concrete (South East) Limited v Minister of Pensions and National Insurance (1968), which still remains good law and has been cited in a number of recent Court of Appeal decisions.

Furthermore the guidance issued by BIS, published in May 2011, states on page 6 that an individual is not prevented from being an agency worker under the Regulations simply because they work through an intermediary body. It cites the example of an individual working through an umbrella company who finds work through a temporary work agency will normally have an overarching employment contract with the umbrella company with full employment rights.  In such circumstances, according to the BIS guidance, this would not prevent the individual from benefiting from these Regulations.

This is a very grey area which no doubt will be an issue that will come before the employment tribunals for determination in due course.

1. The Agency Workers Regulations 2010 come into force

The Agency Workers Regulations 2010 (AWR) will establish new rights for temporary agency workers from 1 October 2011.

After a 12-week qualifying period, agency workers will be entitled to “basic working and employment conditions” that are no less favourable than if the worker had been recruited directly by the hirer. These entitlements include pay, annual leave, duration of working time, rest breaks, rest periods, and night work.

NB: The right to equal treatment in relation to pay after the 12-week qualifying period includes fees, bonuses linked to individual performance, commission, vouchers and holiday pay.

From the beginning of an assignment, a hirer must ensure that all its agency workers have access to information about its job vacancies and that they can access its facilities and amenities (e.g.  canteens, gyms, transport and parking facilities), unless the hirer can justify exclusion on grounds other than cost alone.

It is possible for hirers to be ordered to pay compensation to agency workers if inequality of treatment in relation to employment conditions arises due to the hirer supplying inaccurate or no information to the agency about its terms and conditions.

2. National Minimum Wage rises

Following an announcement by the Government on 7 April 2011, the new rates for the National Minimum Wage will increase on 1 October to the following:

* Adult rate (21 years old or more): £6.08 an hour (an increase of 15p an hour);

* 18-20 year olds: £4.98 an hour (an increase of 6p an hour);

* 16-17 year olds: £3.68 an hour (an increase of 4p an hour); and

* Apprentices: £2.60 an hour (an increase of 10p an hour.) This applies to those who are under 19 years of age, or those aged 19 and over but in the first year of their apprenticeship. All other apprentices will continue to receive the national minimum wage at the appropriate age rate.

Over the past few months, Matthew Arnold & Baldwin have hosted and taken part in a number of seminars on the AWR, explaining to hirers what they need to do in order to be compliant from 1 October. We will be taking part in a further two seminars this month.

I will be the guest speaker at recruitment specialist Hay’s breakfast seminar, discussing the implications of the AWR, on Tuesday 20 September in High Wycombe. Full details of the seminar and how to attend are here.

Also, in collaboration with Scottsdale Consulting, Matthew Arnold & Baldwin will be hosting a legal workshop on 22nd September 2011 in Newport Pagnell. This workshop will cover the AWR and pensions auto-enrolment, due to take place in 2012.  Full details of the workshop and how to attend are here.

If you have any concerns regarding the AWR, or anything else employment-related, please contact me at michael.delaney@mablaw.com.

According to Acas, almost six out of 10 workers now use social media at work, either on their computers or their mobile phones. However, whilst some employers encourage their employees to use social media for business development and marketing during work time (and others ban it altogether), many employers are naturally concerned that workers may be spending too much of their working day looking at personal-interest webpages, ‘tweeting’ or blogging; and it would appear that these concerns are well-founded, as Acas claims such behaviour costs the UK economy up to £14bn per year. However, despite these concerns, research has found that fewer than one in ten employers actually have a social media policy.

Through this new guide, Acas aims to provide guidance to employers about what they should be doing in regard to social media. The guide is split into the following areas:

1. Managing performance;

2. Recruitment;

3. Discipline and grievances;

4. Bullying; and

5. Defamation, data protection and privacy.

Acas recommends that employers should consult with staff and trade unions, and make it clear what employees can and can’t do when using the internet and social media (including the consequences of breaching its social media policy.)

The use of social media presents both risks and opportunities for companies. As well as a loss of productivity in the workplace, legal liabilities can arise from the use of social media – for example, discriminatory online comments made by one employee about another, leaks of confidential company information, the use of online information when recruiting new employees, data protection, and loss of company reputation.

With the use of social media still growing rapidly, employers must ensure that they act within the law and do not leave themselves open to a claim. An effective workplace social media policy is the first step.

If you would like any advice on this issue, or anything else employment-related, please contact our head of employment, Michael Delaney at michael.delaney@mablaw.com.

Munir Yakub Patel is due to appear before Southwark Crown Court on 14 October 2011 for allegedly “requesting and receiving a bribe intending to improperly perform his functions” (a breach of section 2 of the Act.) It is alleged that Mr Patel told an individual, who had been summonsed to court for a motoring offence, that he could influence the course of the proceedings in exchange for £500.

The Bribery Act, which came into force on 1 July 2011, increases the maximum penalty for bribery from seven to 10 years imprisonment. Further details of the Act are here.

The Act has also introduced a corporate offence of failure to prevent bribery by persons working on behalf of a business. To avoid breaching the Act, employers must demonstrate that they have adequate procedures in place to prevent bribery. For more details of what employers should be doing to avoid breaching the Act, please click here to read an article by our head of employment, Michael Delaney.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “The Bribery Act is the biggest legal development of the year and given its very wide reach and political force behind it, it is no surprise to see a prosecution so soon after it came into force.  What this prosecution shows is that the law is there not just to catch big businesses on complex international deals, but also small payments made on a local level too.  Prosecutors will take action regardless of size.  Every business should be aware of the Act and should take appropriate steps to stop its employees, agents and other representatives from breaking the law, particularly as their actions can in turn leave their business criminally liable too.”

The case involved the provision of services by workers to Autoclenz, which in turn had a contract to provide valet services to British Car Auctions. In the contracts between Autoclenz and the individual workers, they were described as providing the services as subcontractors on a subcontract basis, they could provide a substitute worker (subject to complying with the standards set out in the agreement), there was no mutuality of obligation and the workers could refuse work. In addition, they wore BCA’s rather than Autoclenz’s overalls (as had been worn previously). Although Autoclenz provided the cleaning products and equipment and arranged insurance cover, Autoclenz deducted a fixed amount for the cleaning products and equipment and insurance cover from payments. The workers were responsible for paying tax and national insurance to HMRC. On the key relevant issues of control, mutuality of obligation and personal service, HMRC took the view that the workers were self-employed. Everything seemed to point in that direction.

The workers claimed to have been employees, though, and claimed employment rights. The matter ended up before the Supreme Court, which ruled that they were in fact employees. The workers were therefore entitled to minimum wage and statutory annual leave. Of most importance to businesses and service providers is the approach the Court took to considering whether to disregard the terms stated in the written contract. The Court said that those terms needed to reflect the reality of the position from inception and throughout, and the actual agreement of the parties – rather than the stated position in writing. The Court dismissed an argument that it could only set aside the stated position if there was an intention to mislead; an intention to mislead was not relevant. The Court said that all the evidence of the situation should be examined, including the written terms and how the parties conducted themselves in practice. The mere fact that a particular provision, such as a right of substitution, is not exercised does not mean that it is not genuine. But the evidence of how the parties conduct themselves can be so persuasive as to set aside what has been agreed in writing.

In this case, the following four key terms were what had really been agreed: (1) valet workers would perform services for Autoclenz within a reasonable time and in a good and workmanlike manner; (2) the workers would be paid for that work; (3) they were obliged to carry out the work offered to them and Autoclenz was obligated to give them that work; and (4) the workers must do the work personally and could not provide a substitute.

The Supreme Court argued that one critical difference between employment and ordinary commercial contracts is inequality between the parties. In an employment situation, the person obtaining the services often finds it easier to dictate terms. Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, questions that reasoning. He says: “There are many situations where there is inequality of bargaining power in a commercial contract context and that does not mean that they are really employees. It’s just the fact of the commercial matter that some commercial entities find themselves in a position that they have to accept terms imposed by the other party.”

Paul adds: “The case does, however, provide useful guidance on whether someone is an employee or self-employed. This can have important tax and employment rights consequences. Although the case provides guidelines, each case must be judged according to its own particular circumstances. As can be seen in this case, it is possible for HMRC and the courts to come to different conclusions as to the status of the service provider. MAB provides assistance in helping clients through this tricky area. Please contact me if you would like our help on this.”

The announcement follows a consultation on the future of the ‘right to request time off to train or study’ regulations.

This decision follows confusion earlier in the year over whether this right was going to be extended – click here and here for full details. The previous Labour Government had passed legislation to extend the right from April 2011, but this was put on hold – and now ruled out – when the coalition Government came to power.

The Government has also confirmed that the right will continue to be available to employees in large organisations with 250 or more employees.

Like a pack of cards, the fall out from the phone hacking scandal continues to gather pace and threatens to engulf the UK. Rebekah Brooks arrested and out on bail, Commissioner Sir Paul Stephenson and Assistant Commissioner John Yates resign, Murdoch senior and junior to answer before the Culture, Media and Sports Select Committee. What next? Is No.10 under threat by employing Andy Coulson as Communications Chief, who resigned earlier this year? The very core of society shaken as politicians, police and journalists are put under the spotlight.

This innate thirst for information and knowledge is all encompassing. This need to be aware of what is happening around you, whether in business or in pursuit of a newsworthy story, has always been central to the modern world. People want to know what is going on: think Facebook, twitter.

So how far is too far? Employers will face this problem when dealing with employees and monitoring their use of the internet and emails during working hours. To protect legitimate business interests, how far can employers really go? For example, can they hack into an employees private email account such as Gmail, Yahoo? Can an employer record an employee’s telephone conversation?

Certain disciplines require telephone calls to be recorded, for instance if dealing in financial services, but the requirement is to inform members of the public and staff that their calls are being recorded. Employers should have a clear computer, internet, social networking, and email policy which sets out what is being monitored and what the consequences of an abuse of that policy will be for the employees. Will employers too face criminal charges for intercepting employees’ personal emails accounts in the pursuit of their civil case against an employee who has stolen key confidential information (which the employer is entitled to protect) and misused that information for their benefit. There have been cases dealing with this very issue, as to whether employers can use an employee’s personal email account to show the court that the employee has been abusing their duties of confidence and fidelity.

I would be interested in your views on the fine line of having access to information where there is a purpose to this information, against the threat to someone’s human rights.

Only time will tell whether this scandal will engulf the Government; I wonder if this is the UK’s Watergate?

There were a total of 218,100 claims made during 2010-11, compared to 236,100 in 2009-10. However, despite the decline, this year’s figure still represents a 44 per cent increase on 2008-09. The statistics reveal a fall in a number of claims: unfair dismissal, breach of contract, religion or belief discrimination, race discrimination, disability discrimination, and equal pay. 

However, the number of age discrimination claims rose sharply. This year, 6,800 age discrimination claims were filed – a rise of 31 per cent on 2009-10 and 79 per cent on 2008-09.

With levels of redundancy and unemployment still currently very high, these statistics will be of concern to employers, particularly as there is now more opportunities than ever for employees to bring age discrimination claims.

Employers should bear in mind that all employees – whether young or old – can potentially bring an age discrimination claim.

Recent legislation has been introduced to further clamp down on age discrimination. The Equality Act 2010, which took effect on 1 October 2010, prohibits direct age discrimination, indirect age discrimination, and age harassment in the workplace. Also, the default retirement age was abolished with effect from 6 April 2011, subject to certain transitional provisions. This means that, from this date, any dismissal because of age will constitute direct age discrimination under the Equality Act 2010, unless it falls within the transitional provisions. Total abolition of the default retirement age will take place on 1 October 2011.

The full affects of the abolition of the default retirement age have yet to be felt, but it will be unsurprising if next year’s employment tribunal statistics reveal a further rise in age discrimination claims.

In the meantime, it is essential that employers review their policies on redundancies, recruitment, employee benefits and pay to take into account these changes.

If you are concerned that your business may be open to age discrimination claims, please contact me at michael.delaney@mablaw.com.

I have outlined some of the ways employers can ensure they comply with the new Act – please click here.

This article is only intended as guidance. There are many issues to consider, so employers should seek legal advice where necessary to ensure they are not contravening the Act, or inadvertently breaking other laws when implementing compliance measures.

If you would like any legal advice regarding the Bribery Act and its implications on your business, please contact me at michael.delaney@mablaw.com.

A bribe is defined in section 1 of the Act as “a financial or other advantage” offered, promised or given to “induce a person to perform improperly a relevant function of activity, or to reward a person [for doing so.]”

This definition covers many “advantages”, including gifts, hospitality and entertainment, political or charitable donations, sponsorship and publicity.

Employers should note the following:

1. A “financial or other advantage” is still a bribe even if it is given or paid after the event; and

2. Employers or other individuals can be liable even if they unwittingly give or receive a bribe.

Section 7 of the Act introduces a criminal offence for the failure of a commercial organisation to prevent bribery by an “associated person” for its benefit. The statutory definition of “associated person” is very wide, and it covers those people who perform services for, or on behalf of, the employer (e.g. employees, agents and subsidiaries.) However, other people working for the employer, such as consultants, agency workers and volunteers, will also be “associated persons” for the purposes of the Act. Consequently, an employer is potentially responsible for the actions of a wide range of individuals, some of whom it may have only minimal control over.

Breaching the Act: The penalties

* Individuals who breach the Act could be imprisoned for up to ten years; and

* Commercial organisations can face an unlimited fine and be prevented from tending for public contracts.

Preparing for the Bribery Act: The key principles for employers

In March 2011, the Government published Guidance on the Bribery Act which set out six key principles to give commercial organisations assistance in planning, implementing, monitoring and reviewing their anti-corruption and bribery policies and procedures before the Act comes into force.

1. The employer’s anti-corruption and bribery policies (and related policies) should be clear and accessible to all those people who work for them and who  fall within the definition of “associated person”;

2. The management team should establish a zero-tolerance culture regarding bribery and corruption, and ensure that all workers, and those that the company does business with, are fully aware of the company’s anti-corruption and bribery policies;

3. Employers should be fully aware of the bribery risks they face in their sector(s) and in the countries or regions in which they do business. They should carry out regular and comprehensive risk assessments;

4. Employers must take steps to ensure that they know who they are doing business with;

5. Employers should embed anti-bribery principles into their internal controls, recruitment and remuneration policies, operations, communications and training; and

6. Employers must decide who will be responsible for monitoring and reviewing their policies and procedures. They should ensure that they have effective financial and auditing controls that pick up potential and actual irregularities.

Staying on the right side of the law: The key considerations for employers for 1 July and beyond

Employers should consider the following issues to ensure that they do not contravene the Bribery Act, and should seek legal advice where necessary.

1. Recruitment: carry out additional background checks and vetting during the recruitment process (e.g. bankruptcy checks, criminal record checks and additional references);

2. Inductions: include training on the company’s anti-corruption and bribery policies and procedures for all employees and workers (e.g. agency staff, voluntary workers and independent consultants);

3. Expenses: carry our regular audits and ensure there is evidence as to how and why money was spent for each expenses claim submitted;

4. Hospitality: create a hospitality policy, including clear guidance on both the giving and receiving of gifts;

5. Disciplinary procedures: amend disciplinary policies and procedures to make it clear that any breach of the company’s anti-corruption and bribery policies (and related policies) may amount to gross misconduct. Employers may wish to (1) consider making it a specific contractual requirement that employees and other workers comply with these policies and procedures, and (2) consider whether it should be a contractual requirement for some workers to report any suspicions or knowledge they have of a breach of these policies;

6. Bonus and commission schemes: review these schemes to ensure that, as far as possible, they do not unintentionally encourage employees to ignore bribery and corruption risks. Employers should also review incentive arrangements to ensure they do not unintentionally incentivise workers to act improperly or illegally;

7. Whistleblowing: set up a comprehensive and up-to-date whistleblowing policy. All workers should be made aware of its existence, understand how it applies and be given access to a copy of it;

8. Investigating potential breaches: ensure that every incident of a suspected breach is investigated and documented. All investigations should be fair and confidential; and

9. Discrimination: ensure that any anti-corruption and bribery policies and procedures are not based on racial stereotyping of certain nationalities.

This article is intended to simply highlight the main issues and potential problems that employers may face when trying to comply with the Bribery Act. There are many issues (and pitfalls) to consider, so employers should seek legal advice where necessary to ensure that they are not contravening the Act, or inadvertently breaking other laws when implementing compliance measures.

If you would like any legal advice regarding the Bribery Act and its implications on your business, please contact me at michael.delaney@mablaw.com.

I have reproduced the article in full below, with permission from The Financial Times.

Hard to set up exclusion zone

Q. My brother and I run an independent letting agency based in South London. We are looking to recruit, so are preparing an employment contract. We intend to include a clause to restrict employees from soliciting clients and other employees, but wondered if it would also be possible to add a clause to restrict them from setting up a business within a five-mile radius of ours?

A. Employers often wish to protect their business interests from unfair competition by employees and former employees who are employed in senior positions – and who are privy to sensitive confidential information or have developed strong client connections.

When drafting such covenants, the employer will have to demonstrate that it has not fallen foul of the restraint of trade doctrine.

Any contractual term that purports to restrict an individual’s freedom to work for others or carry out his business is void and unenforceable unless the employer can demonstrate that it has a legitimate proprietary interest that requires protection. Furthermore, any protection should be no more than is reasonable having regard to the circumstances.

The employer should almost certainly include a term within the contract of employment restricting employees from soliciting clients with whom they have had contact during the period of their employment for a period following the termination of that employment. The period of restriction should be no more than is reasonable in the circumstances and will in practice be between six to 12 months.

A clause that prevents a former employee from setting up a competing business within a radius of five miles will be difficult to enforce in an urban area given the size and nature of the population. A geographical restriction of five miles is only likely to be justifiable if the office is based in a rural location where business opportunities are more limited and the employer can establish a substantial personal connection between the employee and its relevant clients.

Michael Delaney is a partner and head of employment at Mathew Arnold & Baldwin, a law firm.

If you would like further advice on this issue, please contact me at michael.delaney@mablaw.com.

Both the existing statutory process for an employee to request a flexible working pattern and the now defunct statutory right to request working beyond a default retirement age involve a highly prescriptive procedure that the employee must follow in order to trigger their statutory rights. Although the default retirement age is to be abolished from 1 October 2011, tribunals are still dealing with claims arising from notices of intended retirement issued by employers before 5 April 2011. In one such case, Bailey v R&R Plant, The Employment Appeal Tribunal recently said that it was not enough for an employer to merely tell an employee that they were entitled to make a request to continue working beyond the employer’s proposed retirement date. In order to comply with its statutory obligations, the business had to notify the employee of the “essential conditions” that the employee had to comply with during the statutory process, ie the business had to tell the employee that in order to trigger the business’ obligation to consider his request to work beyond retirement age, the request had to be in writing and state that it was being made under paragraph 5 of Schedule 6 to the Employment Equality Age Regulations 2006 (now repealed).

The statutory flexible working request procedure is, if anything, more onerous on the employee than the statutory right to request working beyond normal retirement age was. In order to trigger a business’ obligation to conisder a flexible working request, the employee’s application must: 

• set out the work pattern the employee is requesting;
• specify their entitlement to make the application in accordance with the Employment Act 2002;
• specify any effect that they anticipate the proposed work pattern would have on the employer’s business; and
• specify how such effects might be accommodated or addressed in practice.

In the past, tribunals have held that they have no jurisdiction to hear a claim for breach of the flexible working procedure because the employee’s flexible working request did not meet these requirements. Given that background, I would be interested to see whether a tribunal would now take the view that a business is obliged to notify its employee of these requirements. The difference, of course, is that the retirement process is triggered by an employer’s notice to the employee of an intended date of requirement, whereas in the flexible working process, the first step is the employee’s application. I think it is more of a stretch to imply an obligation for an employer to notify employees of deficiencies in their flexible working application than to tell them what they have to do if they want to request working beyond a default retirement age but there are some parallels.

Even if a tribunal would not be willing to imply an obligation that a business must effectively guide its employees through a proper flexible working application, there may be good reasons for businesses to do so anyway. Irrespective of any rights arising out of the flexible working procedure, in some circumstances employees who are refused the right to work flexibly may be able to pursue claims for sex discrimination, or resign and claim constructive dismissal. The more thoroughly such requests are dealt with, the better a position the employer will be in to defend themselves against such claims.

As previously reported, the case centred on a franchise agreement for a recruitment consultancy. The High Court agreed that Antal had terminated the contract wrongly, and had itself breached the contract in doing so.

However, the claim for damages on the basis of a reduction in the company’s value as a result of the breach was rejected, with the High Court ruling that, unless the company had been put out of business by the breach, loss of value was not the correct measure for assessing the losses. The High Court’s reasoning was based largely on the fact that the value of the company before and after the breach was hypothetical, thereby making damages for loss of value difficult to assess. Since the company had chosen to pursue the valuation route rather than making a claim for loss of profits, the loss of profits route was barred to them, leaving them only with nominal damages.

Geo-location services involve any services related to the actual location of a particular device, and the people linked to that device. The services may be used in any number of growing ways, such as for tagging where a photograph was taken, providing useful information for users as to where a local service such as a restaurant is located, recovering lost or stolen items, identifying where children are or whether friends are nearby. Geo-location data can be gathered in a number of ways, such as through GSM base stations, GPS, WiFi and RFID readers.

The Working Party’s findings are particularly strict and may affect a range of different types of organisation, from network operators to controllers of geo-location infrastructure (such as WiFi access points), to application providers, through to social networking sites that provide location-based functionality for mobile devices. The Article 29 Working Party’s opinion is not legally binding, but it is best practice to do so as it is the body of the European Union’s data protection regulators and so it strongly indicates how the regulators will interpret compliance with data protection legislation.

The High Court agreed with MMP. The franchisee was responsible for the actions of its employee. It disagreed with the franchisee’s  argument that her actions were outside of the course of her employment and were a matter for her private life. This was about an employee who had misused personal data obtained from a CV obtained through her employment.  This was a breach of her employment contract, but MMP was still responsible.

However, the franchisor’s purported termination of the contract was wrongful and that action in itself was a repudiatory breach of contract as it showed an intention not to perform the contract. The reason was that the relevant clause which had been breached said that MMP must not “do anything to adversely affect our name, Trade Marks or other Intellectual Property”.  On a true construction of those words, Antal would have needed to provide evidence that MMP’s conduct had in fact damaged the Antal brand.  It had not provided that evidence.  A mere fear or concern of the harm or reputation that would be done was not sufficient on the wording used in the agreement.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case should act as a warning to businesses to be careful when selecting and managing their staff.  However, even more stark is the consequence of failing to have an agreement that says what the franchisor or other business thinks it says.  Care should be used before terminating an agreement, or the otherwise innocent party ends up being the wrongful party.  It should also have made the contract wording tighter by talking about damage to its reputation “in the franchisor’s opinion” so that it would not have to attain evidence to prove that the damage did actually occur.”

There are four elements to the proposals:

1. A system of flexible parental leave;

2. A right for all employees to request flexible working;

3. Amendments to the Working Time Regulations; and

4. Measures to encourage equal pay

The proposals

1. Flexible Parental Leave

These proposals, which are not anticipated to come into force until 2015, will essentially mean that parents will share parental leave.

* Retain 18 weeks’ maternity leave and pay exclusively for mothers around the time of the baby’s birth; and

* Reclassify the existing entitlement to a further 34 weeks’ maternity leave as “flexible parental leave”. Four weeks will be exclusive to each parent and will be taken in the first year, with the remaining 30 weeks available to either parent.

The consultation also considers (1) whether parental leave could be taken in “chunks” (i.e. broken into two or more periods), or on a part-time basis; (2) whether the age limit for taking unpaid parental leave should be increased from the age of five to either eight, 12, 16 or 18; and (3) whether a new statutory right should be designed to give fathers the right to paid leave to attend a specific number of ante-natal appointments.

2. Flexible Working

The consultation proposes that the right to request flexible working should be extended to all employees.

* Extend, by 2013, the right to request flexible working to all employees who have been working for their employer for 26 consecutive weeks (and not just to  those with children under 17 years of age, or disabled children under 18 years of age);

* The existing statutory procedure for considering requests will be replaced by a new duty on employers to consider requests “reasonably.” The Government will consider publishing a statutory code of practice for businesses to give employers guidance on how to handle requests; and

*Allow – but not require – employers to prioritise competing flexible working requests to take account of the employees’ personal circumstances. This would mean that employees making a request due to parenting or caring responsibilities could be given higher priority than those making a request for other lifestyle reasons.

NB: There are no plans to alter the current eight business reasons for a business to turn down a flexible working request.

Currently, employees are only permitted to make one request for flexible working in any 12-month period. However, the consultation seeks views on permitting an additional request within 12 months if the employee’s original request states it is only expected to be a temporary arrangement.

3. Working Time Regulations (WTR)

The proposed changes to the WTR, anticipated to be made in 2012, enshrines recent European Court of Justice case-law. This case-law established that employees who cannot take all their annual leave entitlement, due to sickness absence or maternity/parental leave, must be permitted to carry it forward into the following annual leave year.

The Government also proposes that:

* Where someone has been on sick leave, employers may limit an employee’s ability to carry over annual leave to the four weeks required under the WTR. The employee would therefore lose the extra 1.6 weeks they receive under the WTR;

* Amend the WTR to permit the carry over of annual leave due to maternity, paternity, parental or adoption leave – this will include the full 5.6 weeks of leave entitlement per year; and

* Employers may insist that annual leave not taken due to sickness absence must be taken in the current leave year, where possible, rather than being carried over. Employers may also defer that annual leave until the following year if it can  be justified to be in the interest of the business.

Views are also sought on increasing flexibility for employers. For example, employers could be allowed to ‘buy out’ the additional 1.6 weeks of annual leave, or require employees to defer that annual leave until the first six months of the following leave year, if this can be justified to be in the interest of the business.

4. Equal Pay

The consultation considers imposing a mandatory equal pay audit on those employers who have been found by an employment tribunal to have breached equal pay legislation. The employment tribunal would be obliged to order the audit unless it believed it would not be productive to do so – e.g. if an audit had been conducted in the past three years, or if the employer has other appropriate means of ensuring a non-discriminatory pay structure.)

The consultation also seeks views on the appropriate sanction for an employer’s failure to comply with an audit requirement.

The Government has made clear in the consultation paper that there will be exemptions for micro-businesses (i.e. those with fewer than ten employees) and new start-up businesses.

All responses to this consultation are required by 8 August 2011.

LJ Burnton also held that the legal test for dismissal on discriminatory grounds was applied correctly, and that he believed the Tribunal had found that Mr Power was dismissed on the grounds of his conduct, which included a disruptive attitude in the course of role play exercises, as well as expressing his beliefs in an unacceptable way (distributing posters and CD ROMs,) and not because of his beliefs.

The areas under consideration are:

1. Compensation for discrimination;

2. Collective redundancy consultation periods; and

3. TUPE.

However, the announcement does not set out any proposals; it merely confirms that the Government will “look in detail at the case for reforming” these areas.

Although there is no commitment to change, the Government has provided some brief details on why the Government is looking at the areas in question.

1. Compensation awards for discrimination

Discrimination compensation is currently uncapped. Employers have “expressed concern” about (1) the high levels of compensation that are sometimes awarded, (2) the lack of certainty about what they may be required to pay out, and (3) vexatious litigants, who are encouraged to make claims against employers due to the high levels of compensation that can be awarded.

2. Collective redundancy consultation periods

Currently, if an employer wants to make more than 100 employees redundant in a 90-day period, he or she must consult on the issue at least 90 days before the first dismissal takes effect. However, employers feel that this consultation period is too long, as it (1) hinders flexibility when restructuring, and (2) forces struggling employers to keep paying employees after it has become clear that they should be dismissed.

3. Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)

These Regulations protect employees’ terms and conditions of employment when a business is transferred from one owner to another. Despite the Government stating in November 2010 that it had no plans to reform TUPE, employers are concerned that the Regulations are (1) ‘gold-platted’ (i.e. they went further than required to do so by the EU’s Acquired Rights Directive when they were transposed into UK law), and (2) “overly bureaucratic.”

The Government’s review will begin later this year; however, it is debatable as to whether any significant reform will happen, as these three areas are governed to some degree by EU law and any changes must comply with it.

The High Court found that SR had breached the clause requiring him not to solicit TR’s customers, and this was shown by him having taken his Outlook contact list. This justified an injunction. However, the fact that he had set up in business within five miles should not be held against him as that clause was too wide to be enforceable. Although five miles was a reasonable distance given the nature of the business, most of SR’s work for TR had not involved recurring business and was therefore not capable of creating a customer connection worth protecting. The restriction on him from setting up in business within five miles was therefore unreasonably wide in the circumstances and so it was unenforceable. TR was already well protected by the other two restrictions.

Please click here to read the article. You may need to register to read all of it.

If you would like to discuss how these recent changes will affect your business, please contact me at krishna.santra@mablaw.com.

The High Court said that P’s application could not succeed as it would have had to show that the ex-employee and K’s owner had conducted themselves in a way that had been designed to abuse the process of justice. The factual allegations for that had not been established. If they had wanted, they could have disposed of the laptop rather than give it to K’s owner’s solicitor.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “Although this case did not see the award of a contempt award on the facts, it demonstrates the tactics that can be used by a business looking to protect its confidential information against misuse. Once an order or undertaking has been given, abuse of that can then enter the realms of criminal law, for which the implications can be more serious – and therefore a greater deterrent – for a wrong-doer.”

1. TUPE

On 13 April 2011, the Supreme Court will hear the appeal in the case of Parkwood Leisure Ltd v Alemo-Herron (2010) ICR793, which reversed an earlier decision and held that TUPE only preserved those terms and conditions of employment which applied at the date of any transfer.

2. Damages/compensation

On 22 June 2011, the Supreme Court is due to hear the case of Edwards v Chesterfield Royal Hospital, whereby the Claimant is seeking compensation for loss of opportunity to hold another full-time position as an NHS consultant within the NHS. The case is unique in that the claim seeks compensation beyond an expressed contractual term.

3. Legal representation at disciplinary hearings

Later this year, the Supreme Court will rule on the decision of RV Governors of X School (2010), which relates to the right of an employee, in this case a teacher, to legal representation at a disciplinary hearing when the teacher faced serious allegations of sexual impropriatory towards a student.

4. Employment status

The Supreme Court has recently heard an appeal in the case of Autoclenz v Belcher (2009), which related to consideration of the employment status of individuals. In this case, a number of car valets, who were accepted as being self-employed by HMRC, claimed that due to their working conditions they were in fact employees as opposed to self-employed. The Court of Appeal went behind the documentation in place to ascertain the truth of the relationship. The case was heard in October 2010 and a decision is anxiously awaited.

The Government has confirmed that it will do the following:

1. Introduce a moratorium to exempt micro businesses (i.e. those with fewer than 10 employees) and start-up businesses from new domestic regulation for three years from 1 April 2011. Click here for further details;

2. Launch a public review of regulations, with a presumption that burdensome regulations will be removed unless there are good reasons for them to stay. Click here for further details;

3. Not extend the right to request time off to train to businesses with fewer than 250 employees. Click here for further details; and

4. Repeal the extension of the right to request flexible working to parents of 17 year olds. Click here for further details.

In the Government’s Plan for Growth, which accompanied the Budget Report, the Government announced that it will publish a timetable for a further review of employment law over the course of the current Parliament. This review, which aims to reduce the estimated £1bn regulatory burden of complying with employment law, will allow businesses to provide input in to the changes that will be made.

The Government also announced in its Plan for Growth that it will:

1. Not bring forward Equality Act 2010 dual discrimination rules, which would have cost business £3m per year. The dual (or combined) discrimination provisions would have allowed individuals to bring a combined claim if they believed that they had been treated less favourably because of two “protected characteristics” (e.g. age, disability, race, gender reassignment, religion or belief, sexual orientation or gender);

2. Consult to remove the “unworkable requirement” in the Equality Act 2010 for businesses to take reasonable steps to prevent persistent harassment of their staff by third parties, as they have no direct control over it. This would save businesses £0.3m per year;

3. Invite the independent Low Pay Commission in its next report to consider and implement the best way to give business clarity on future levels of the National Minimum Wage, including consideration of two-year recommendations;

4. Promote greater transparency in transfer of undertaking (protection of employment) (TUPE) related liabilities. This will help create a level playing field for businesses bidding for public tenders; and

5. Publish a White Paper in summer 2011 on reducing the burdens imposed on business by regulatory compliance and engagement with regulators.

The Government also published details of the EU Directives and Regulations that it will seek to revise:

1. The Pregnant Workers Directive. This Directive would create a right to 20 weeks’ maternity leave and two weeks’ paternity leave on full pay. This would cost UK businesses in excess of an extra £2bn a year, with most benefits going to the highest paid women. The Government will “seek to prevent costly and regressive changes to maternity rights.”

2. The Information and Consultation of Employees Directive. This Directive would give employees in medium and large businesses a right to be informed and consulted on a regular basis about certain issues, including the business’s economic situation and employees’ contractual arrangements. The European Commission is currently reviewing the Directive and the Government will “negotiate to avoid any costly revisions.”

The Government will also urge the European Commission to (1) set a new target to cut total EU regulatory burdens over the life of this current Commission; (2) publish an annual audit of the cumulative cost of all planned EU regulations; and (3) strengthen the small and medium enterprises (SME) test so that micro businesses with fewer than 10 employees are exempted from European legislation. The Government says that special treatment, such as reduced fees, should be considered for SMEs.

Much of this is for the future, so to find out what legislative changes are happening in April 2011, please click here.

The Equality Act 2010 came into force in October 2010. A revocation order, which was laid before Parliament on 16 March 2011, will revoke the various statutory codes of practice that covered the pre-October 2010 discrimination legislation on 6 April 2011.

For further information, and to access the EHRC’s codes of practice, please click here.

On a related note, the Government has launched a consultation today on reforming the EHRC so that it concentrates on carrying out its core activities and provides “greater transparency, accountability and value for money.” Under the proposals, the EHRC, amongst other things, would concentrate on:

1. Promoting awareness of equality legislation so that individuals and employers understand their rights and obligations;

2. Assisting organisations in highlighting good practice, eliminating unlawful discrimination and advancing equality of opportunity;

3. Monitoring compliance with equality legislation;

4. Addressing non-compliance with equality legislation, including helping individuals to bring test cases to clarify and enforce the law; and

5. Helping the Government to evaluate and monitor the effectiveness of the Equality Act 2010.

The consultation closes on 15 June 2011.

The right to request flexible working for parents of children under the age of 17, or 18 if the child is disabled, is unaffected.

It appears that the Government will look again at the issue at a later date.

This move is just one of a number of steps being taken by the Government to minimise the impact of regulations on smaller UK businesses. Click here for full details.

The original version of the draft Regulations contained a drafting anomaly which suggested that only those who attained the age of 65 (or the employer’s normal retirement age, if higher,) between 6 April and 30 September 2011 could be forcibly retired. This has now been removed from the Regulations.

Instead, the employee must have attained the relevant retirement age before 1 October 2011.

However, employers should note the following:

1. The final date for issuing an intended notice of retirement under the existing law remains 5 April 2011;

2. The last date for an employee to make a request to work beyond retirement age is 4 January 2012;

3. Employers will still be able to grant an extension of employment to those who request it; and

4. If an employer agrees to a fixed extension of employment of more than six months, it will have to issue a new notice of intention to retire under Schedule 6 of the Regulations. These notices will no longer be effective after 5 April 2011. In order to avoid potential age discrimination or unfair dismissal claims, employers should ensure that any extension of the retirement date is for six months or less.

What should employers do now?

Employers should review any retirement notices that they have already issued or that they plan to issue before 4 April 2011 (the 5th April is the last day for taking effective action.) Those notices that will lead to an employee’s retirement after 5 April 2011 need to be checked since they will no longer be valid for employees who will not be 65 years of age before 1 October 2011.

This is a tricky area, so please contact me at michael.delaney@mablaw.com if you have any concerns about how the amended draft Regulations will affect you and your business. To find out what else is changing in employment law on 6 April 2011, please click here.

The Employment Tribunal disagreed and said that the decision was fair. The action had damaged his employer’s reputation and their decision was within the range of reasonable responses. Gosden’s argument that he should not be held responsible for his colleague’s decision to forward the email was dismissed because the subject was clearly something that was intended to be passed on and not remain private.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This ruling shows that employees cannot assume that offensive material accessed or posted in their spare time has no impact on their employment. People who use technology such as email and social networking sites need to be careful all the time. Meanwhile, employers should ensure that their rights are preserved and dealt with properly in an IT and Internet use policy.”

According to the research, published in Randstad’s Shifting Sands report, only 7 per cent of UK employers have conducted an assessment of how their business will be affected by the AWR, with more than a third of organisations (37 per cent) surveyed admitting that they are still unfamiliar with the AWR.

Under the AWR, agency workers will be given the right to equal treatment with those who are recruited directly by the client, subject to a 12-week qualifying period. This will cover basic working and employment conditions, including pay, annual leave, working hours, overtime and rest breaks. These changes will have wide-ranging implications for UK businesses, so it is therefore essential that businesses ensure they are ready for their introduction. Government guidance on the AWR will be available in the spring.

Over the past few months, Matthew Arnold & Baldwin has been hosting and taking part in seminars that look at how the AWR will affect businesses and what businesses should be doing to prepare for them. Further details are here.

On 15 March, we are hosting a breakfast seminar on the AWR, in conjunction with recruitment consultancy Hamlin Knight. Matthew Arnold & Baldwin’s Head of Employment Michael Delaney will be speaking on some of the important issues and implications surrounding the AWR.  Michael will also be discussing the impact of the AWR in a free seminar for local solicitors on 22 March.

If you have any concerns about how the AWR will impact on your business, please contact Michael at michael.delaney@mablaw.com. 

UPDATE: Michael Delaney has posted details of the main questions/ issues of concern that were raised by employers at our recent seminars. Please click here to read them.

The study (the Truth about Bonuses) by the University’s School of Economics involved subjects either being paid a bonus or fined depending on their performance in certain areas.  The results showed that the joint earnings of employers and workers were almost 19 per cent higher when fines were handed out than when bonuses were paid. However, while employers were better off when fines were introduced, workers earned less than in the scenario without fines.

Alternatives to bonuses

So what does work?  I suspect it depends on who you ask.

Employees (especially those in the, ahem, financial services sector) will probably say cash is king, and when it comes to it, a bonus will do nicely, thank you very much.  Now where is the Ferrari showroom?

Employers will often take a longer term approach to incentives and will often prefer employee share schemes and options.  These have the benefit of being tax efficient and of promoting long term commitment to the business since employees will benefit from future growth.

I’ve yet to come across anyone offering employee fines as an incentive and, if my boss is reading this, I am not sure that it would go down well in practice.

If you would like to discuss employee incentives for your business please contact me (for a discussion of tax), or Emma Cameron in our corporate team.

Now it is a simple case of Parliament approving the draft regulations.

Or is it?

A closer inspection of the draft regulations would appear to reveal a potentially serious problem. The manner in which the transitional provisions have been drafted means that employers will be precluded from retiring an employee who has already reached the age of 65 by the 6 April 2011 (unless it can be objectively justified.) This is because the transitional provisions only apply to employees whose 65th birthday falls between 6 April 2011 and 30 September 2011.

In other words, as currently drafted, it may only be possible to forcibly retire an employee who reaches the age of 65 between 6th April and 30th September 2011.

So, what happens now?

Well, it is possible that this is simply a drafting error. If that’s the case, the current position can still be rectified so that the criterion is simply that an employee can be retired once they have reached the relevant age limit by September 2011.

However, it is now a case of wait and see…

The right to request time off for training was introduced for employees of large employers (i.e. those who have 250 or more employees) in April 2010, with a view to it being extended to all employers from April 2011.

The reason for the postponement is that government ministers want more time to examine the potential impact of the regulation on small and medium sized businesses (SMEs).

It is not known when the extension will be implemented, if at all.

8 February: my colleagues and I will be presenting to the ACCA at the Royal Chace Hotel, Enfield. We will discussing the impact of the Equality Act 2010, pension reforms, and the impact of the Agency Workers Regulations 2010.

9 February: I will be hosting a business breakfast for employers at our Watford office. My colleague, Bob Fahy, will be talking about the staff issues surrounding social networking during work time.

10 February: Bob Fahy and I will be talking on various HR-related issues at the Deloitte HR Forum in Milton Keynes. The event begins at 8.30am and full details are here.

9 March: I will be hosting Matthew Arnold & Baldwin’s quarterly HR forum at our Watford office, where our guest speaker will be Rob Ennis, a senior tax manager at Deloitte, who will be speaking about employment-related issues causing concern to HM Revenue & Customs.

15 March: We are presenting a seminar to business and HR professionals on the Agency Workers Regulations 2010 with Hamlin Knight at Jurys Inn hotel in Watford.

24 March: Along with HSBC, I will be hosting a mock employment tribunal in central London. This will begin at 4pm.

30 March: Due to popular demand, we will be holding another business breakfast at 7.45am at our Watford office, where Bob Fahy will once again talk about the legal issues surrounding social networking in the workplace.

If you would like to attend any of these events, or would like further information, please contact me at michael.delaney@mablaw.com.

The Bribery Act is expected to have a huge impact on the way an organisation controls its internal affairs, as it will be responsible for any corrupt action by its employees unless it can show that it had in place adequate procedures and policies to prevent those actions.

The Bribery Act places the responsibility for compliance with the organisation rather than providing a tick-box system to ensure compliance. As part of the new law, the Government needed to produce guidance to help organisations to make the correct decisions.

The initial guidance was produced by the last government, but was widely criticised, by bodies such as the Law Society, for not being clear enough. Once the new guidance has been published, the MoJ have said that there will be a three month notice period before the Bribery Act comes into force.

According to the Charter, which is designed to remind employers of their legal rights and to “dispel many of the myths” about what an employer legally can and can’t do, employers who act “fairly and reasonably” are entitled to:

1. Ask an employee to take their annual leave at a time that suits your business;

2. Contact a woman on maternity leave and ask when she plans to return;

3. Make an employee redundant if your business takes a downward turn;

4. Ask an employee to take a pay cut;

5. Withhold pay from an employee when they are on strike;

6. Ask an employee whether they would be willing to opt-out from the 48-hour limit in the Working Time Regulations;

7. Reject an employee’s request to work flexibly if you have a legitimate business reason;

8. Talk to your employees about their performance and about how they can improve;

9. Dismiss an employee for poor performance;

10. Stop providing work to an agency worker (as long as they are not employed by you); and

11. Ask an employee about their future career plans, including retirement.

This Charter is just one part of the Government’s comprehensive review of employment laws (although the Charter does not actually propose any changes to the law.) The Government is also proposing reforms to the employment tribunal system, following concerns raised by businesses that tribunals have become too time-consuming and too costly. My colleague, Bob Fahy, has looked at these proposals in detail – please click here to read them.

Although the Charter helps to clarify employers’ legal rights (and dispel some “myths”), employers should be aware that they are only entitled to these rights if they act “fairly and reasonably”. In what can be a grey area, employers must be sure that any action they take is “fair” and “reasonable” (and that an employment tribunal would deem it to be so), so legal advice should be sought before any action is taken.

If you have any concerns about anything discussed above, or would like advice on anything else employment-related, please contact me at michael.delaney@mablaw.com.

The three statutory codes of practice cover:

1. Employment;

2. Equal pay; and

3. Services, public functions and associations.

The codes, which aim to assist employers interpret and understand the provisions of the Equality Act 2010, were laid before Parliament in draft format on 12 October 2010 (click here for full details.) The EHRC does not believe that any further amendments will be made to the codes.

Employers should be aware that these codes of practice are important. Although breaching these codes does not make an employer liable to criminal or civil proceedings, the codes can be used as evidence in legal proceedings brought under the Equality Act 2010, and employment tribunals and courts must take the codes into account if they appear relevant to any questions.

If you have any concerns about these codes of practice, or anything else employment-related, please contact Michael Delaney at michael.delaney@mablaw.com.

• achieve more early resolution of workplace disputes so that parties can resolve their own problems, in a way that is fair and equitable for both sides, without having to go to an employment tribunal
• ensure that, where parties do need to come to an employment tribunal, the process is as swift, user-friendly and effective as possible; and
• help businesses and social enterprises feel more confident about hiring people.

The actual proposals set out in the consultation document cover a wide range of issues, including (to name a few):

• the extension of early mediation and conciliation in the workplace,
• new shortened forms to be submitted to ACAS,
• fixed ACAS conciliation periods before claims proceed in the tribunal,
• extended powers to strike out vexatious claims so that an employment judge can strike out claims without a hearing or at a Case Management Discussion; and
• increasing the cap on costs that a tribunal may award from £10,000 to £20,000.

Attracting most of the headlines at the moment, however, are the proposals to increase the time limit for unfair dismissal claims from one to two years continuous service and to introduce fees for bringing a tribunal claim. The battle lines are appearing already as shown by comments reported today by the BBC from the CBI and TUC. John Cridland, the CBI’s Director-General designate said, “For far too long, the tribunals system has put the interests of lawyers above those of employers and employees… Extending the qualifying period for unfair dismissal is a positive move that will give employers, especially smaller ones, the flexibility and confidence they need to hire.” TUC leader, Brendan Barber commented, “While employer groups complain that tribunals are costing them too much, they have lost sight of the fact that if firms treated their staff fairly, few would ever find themselves taken to court.”

In my view, both of these comments overlook some rather crucial points. Extending the unfair dismissal qualifying period is something of a blunt instrument. It will benefit employers by cutting out a group of employees who might otherwise have unfair dismissal claims but will make no distinction between a claim that is entirely vexatious and one that has real merit. However, to suggest that if employers treated staff fairly they would never face claims assumes that no claim is brought unless the employee has been treated unfairly, which is simply not the case (just to give you a rough idea, from 1 April 2009 to 31 March 2010, 52% of unfair dismissal cases that proceeded to a hearing were unsuccessful).

We should also remember that these proposals only affect “standard” unfair dismissal claims. There would still be no qualifying period for an unfair dismissal claim based, for instance, on alleged whistleblowing. Nor is there any qualifying period for a discrimination claim.

Based on the experiences of the civil courts in the late 1990s, I also wonder whether introducing a fee for bringing claims in the tribunal will have a significant impact in the numbers of claims brought. In the High Court and county courts, fees shot up in the late ’90s in an effort to make the courts self-funding. It was widely predicted that this would deter litigants from bringing claims but this has not been borne out. If the fees do have an impact, I suspect they are more likely to deter the claimants who are least able to afford a claim, rather than those whose prospects of success are weaker.

The consultation closes on 20 April 2011. I’m sure we will be hearing a lot more about these proposals over the next few months.