SME concessions fail to promote interests of most employees.

Employers with fewer than 250 staff will be exempted from having to give staff the right to request time off for training. This is just the forerunner of what could be a series of measures designed by the UK government to assist smaller employers.

Mark Prisk, the Business Minister at a meeting with the Federation of Small Businesses in Liverpool yesterday, made the announcement that there will be a thorough review of the effect of regulations on small businesses.

Whilst it is to be welcomed that measures are being looked at to aid business recovery in the UK, there is a danger that the rights of individual workers will be seriously eroded. It is worth noting that SMEs account for the employment of approximately 51% of all employed workers in the UK. Measures which take rights away for employees will, therefore, affect the majority of the working population.

An exemption from having to give workers the right to request time off for training is one thing, but if there are reductions in the more basic employment rights, such as changing the right to claim unfair dismissal so that a qualifying employee must have 2 years' continuous service, the progress that has been made over many years in protecting employees could be reversed.

Employment rights have been established for good reasons. There has to be a balance between the right of free enterprise on the one hand and the right of individuals to have some form of security of job tenure and freedom from oppression.

Some say that the scales have tipped too far in favour of workers. Others argue that the law should remain as it is and that it is for employers to learn to act reasonably, fairly and without discrimination when managing their staff.

In times when there is a scarcity of national funding to inject into UK businesses to aid recovery, is this simply a case of the Government wanting to be seen to be doing something to assist SMEs and playing with legal restrictions as some kind of token gesture at the expense of employee rights in the longer term?

Employment Lawyers Want Reforms to the Employment Tribunal System

11 days ago Andrew Berk asked a question on LinkedIn (Employment Lawyers Networking & Referral Group):

"What reform(s) to the Employment Tribunal System Would You recommend?"

Lawyers responded with the following suggestions and concerns:

• increase to £75,000 the power of the tribunals to deal with contractual claims
• do ETs have the expertise to deal with the range of issues that one sees across the employment/commercial contract sphere?
• there are too many cases brought which have no reasonable prospect of success; a more robust approach to awarding costs would help address this , especially where a party has made reasonable attempts to settle and the other party has refused, been obstructive or delayed entering into negotaitions. The cap on. costs which can be made by a Tribunal without having costs assessed , should be removed
• There ought to be an equivalent Part 36 jurisdiction in ET proceedings.
• I would like to see the tribunal's jurisdiction extended to cover freestanding bullying and harassment outside of discrimination.
• It's controversial, but how about this - a Claimant who is dismissed for alleged poor performance or misconduct and whose dismissal letter and references record that,should be able to go to an ET and if successful, get those documents expunged from their record with a "Tribunal ordered" document or record to replace them.
• My experience of Judicial mediation has been very positive but all too often one party will not agree to using it only to settle at a later stage - unreasonable refusal should also have some sort of penalty ?
• To introduce a more robust costs regime (and I include a Part 36 type procedure as part and parcel of that) would only serve to increase costs for both parties. It inevitably carries the danger of detailed assessment by either an Employment Judge (and they are busy enough already) or by a District Judge with little or no knowledge of the complexities of an Employment case. The tools are there, the ET just needs to be willing to use them.
• Surely, there should be some sort of Pre-Hearing Review mechanism (without the stigma) for each case (although it may not be administratively workable) so that each case is reviewed at an earlier stage so that any possible issues i.e. limitation/jurisdiction, poor merits etc are dealt with and claims and responses without any reasonable prospect of success are thrown out.
• In my view the current rules are fine, they're just not used effectively by the Tribunals. I agree completely about the failure to punish those parties who do not comply with Orders.

So there we have it. In a matter of a few days we see different views from various practitioners. This debate itself shows the difficulties that face the architects of new legislation on how the tribunal system should function for the better. The lack of consensus is to be encouraged, for it demonstrates the varied creativity of the professionals in this arena. To get the best ideas, you need to start with lots of ideas (ref. Thomas Edison).

Let's have more views, please.

Videos of Employment Tribunal Process

The Employment Tribunals Service has now published two videos online to show briefly how a case runs in practice.

Viewers can see what a typical tribunal hearing room looks like, how witnesses book in with the tribunal clerk, take the oath or make an affirmation, read out their statements and undergo cross-examination.

Financial details of payout under compromise agreement to CEO of Council were disclosable

Craven District Council has been forced to disclose the financial details of a compromise agreement it entered into with a former Chief Executive Officer, because this information concerned the use of public funds. This was the recent decision of the First-tier Tribunal (Information Rights).

It was accepted by the tribunal that the majority of the information in the compromise agreement was exempt from disclosure under section 40(2) of the Freedom of Information Act 2000, because there was a strong expectation of privacy in connection with a compromise agreement. It would be unfair to require disclosure.

However, the Tribunal did not consider it reasonable to expect that information relating to the use of public funds could be kept back from the public on the strength of a confidentiality clause in the compromise agreement. The Tribunal was influenced by the fact that the former CEO was the most senior officer at the Council. In addition, they took into account the circumstances in which the CEO had left the council: there was an ongoing financial crisis at the time,an £800,000 overspend and a requirement to save £2.5 million.

ACTION POINT

One of the motivating factors for an employer to settle matters with a disgruntled employee is to avoid publicity. Negotiated figures sometimes reach higher levels when the employer is confident that the monetary terms are protected from disclosure by a confidentiality provision in the settlement agreement.

With this latest case, publicly funded bodies are reminded that when considering what can be withheld from public knowledge, it is not as clear cut as they might otherwise have thought.

Top 3 Employment Law Focus Areas in 2011

There are so many issues in employment law at present that it is far from easy to pick what are arguably the 3 top areas to receive focus this year. Nevertheless, I have given it a crack and here are my top 3:

1. Agency Workers Regulations (AWRs)

This has to be my number 1 foucs area. It will have huge commercial impact for those companies that use temporary workers and for the agencies that supply them.

The AWRs are due to come into force in October 2011. The key feature is that after a qualifying period of 12 weeks agency workers will be entitled to receive the same pay as comparable workers within the client business or organisation.

I know that agencies who supply temps and companies that hire them are looking at ways of minimising the adverse commercial effect of the AWRs. This is going to be a difficult task; the AWRs contain anti-avoidance provisions.

Businesses have for a long time looked upon the availability of agency workers as a means of keeping a lid on labour resource costs. At a time when UK plc is looking to pull itself out of recession, increased workforce costs are most unwelcome and restrictive. We will have to wait and see what ingenious solutions arise.

2. The abolition of the default retirement age

The UK workforce was used to the situation for many years where their employer could dismiss them and there would be no unfair dismissal claim if the employee was over the retirement age. Then the Age Regulations permitted "retirement" as a fair reason for dismissal, provided a fairly complex procedure was followed. So long as the employer followed that procedure, the employee could not complain of being dismissed on retirement.

All this will change from October 2011. From that point on, age alone cannot be a fair reason for dismissal. What can an employer do, then , if it has concerns that the age of the employee may affect their ability to do the job properly?

If an employer wants to dismiss fairly an employee over the retirement age for poor attendance or poor performance, they are going to have to follow a fair capability procedure or fair performance procedure. They will also need to show that they do not in a discriminatory way just apply those procedures to older staff. The procedures will have to be used throughout the workforce, whatever the age.

3. TUPE and administrations.

In a post on my blog on 24 Febraury 2011 I dealt with the recent case OTG Ltd v Barke and others.

The upshot of that case is that a sale of a business by an administrator, whether the sale is by way of a pre-pack or other administration process, will be caught by the Transfer of Undertakings (Protection of Employment ) Regulations 2006 so that employees will transfer to the buyer and any pre-transfer dismissals will be connected to the transfer and so automatically unfair.

This situation may appear to be good news for employees. But I feel it is likely to be disastrous for both employees and businesses. The requirement to take on a workforce which the previous employing company has been struggling to sustain is likely to be a deterrent to many buyers. The result could well be that administrators are unable to sell the business and are left with no alternative than to make all staff redundant, break up the business and sell off its assets.

That result is neither in line with the interests of good commerce, nor a sustained level of employment. For me, this development will be a material one for administrations in 2011.

Confusion over alcohol policy meant unfair dismissal

In Liberty Living Plc v Allan Reid, the Employment Appeal Tribunal (EAT) (Appeal No. UKEATS/0039/10/BI) considered a matter where the employer company had a disciplinary policy which stated that an employee could be dismissed summarily for an act of gross misconduct and this included "being under the influence of alcohol... during working hours." The company also had an alcohol and drugs policy which said that "consumption of alcohol or being under the influence of alcohol while performing company business or in the workplace is prohibited." It went on to say that "violation of this policy can result in... discharge even for a first offence." The employee had one alcoholic drink in a bar away from the workplace during the working day.

The letter inviting him to the disciplinary hearing contained an allegation of "being under the influence of alcohol during working hours." The disciplinary policy was enclosed with the letter, but the alcohol and drugs policy was not enclosed. The Employment Tribunal (ET) found as a fact that the employee was unaware of the latter policy until it was sent to him before his appeal but after his dismissal.

The employee was dismissed summarily. He was told that the reason for his dismissal was that the consumption of any alcohol at all during the working day was gross misconduct. The dismissal letter told him under the heading that indicated he was being dismissed for being under the influence of alcohol that he was being dismissed both for consuming an alcoholic drink during the working day and for being under the influence of alcohol during working hours. At his appeal, the dismissal was upheld because he had consumed alcohol during working hours.

The ET decided that this was an unfair dismissal because the employee was not aware of the alcohol and drugs policy and the policy was confusing.

The EAT agreed with the ET decision. It was incorrect for the employer to say that the employee was alleged to have been under the influence of alcohol and that this covered one alcoholic drink. The only conclusion to be drawn was that the employer had not applied its own policies nor did the employer itself know what those policies were.

What can employers learn from this case?

The employer must have clear policies, know what those policies are and make sure that employees know the policies so that they understand what standards of conduct are required of them. Any dismissals based on unclear standards of conduct or where the employee is not aware of the policies are likely to be found to be unfair.

New use of claims under the PHA?

Following the Court of Appeal decision under the Protection from Harassment Act 1997 ("PHA") in Iqbal v Dean Manson Solicitors, we may now see a wider use of the PHA to protect reputations.

The Claimant used to be employed by the defendant firm of solicitors. A few years later he represented an individual who was being sued by the Defendant in the county court. In the course of the correspondence relating to that matter, the Defendant sent three letters (two copied to the court) which contained various allegations and were serious attacks on the Claimant's character.

The Claimant issued a civil claim under the PHA alleging that the letters constituted a course of conduct which amounted to harassment.

The Court of Appeal decided that each letter was capable of being described as harassing. The judges felt that the letters arguably amounted to “a deliberate attack on the professional and personal integrity” of the Claimant, designed to put pressure on him to decline to act for his client against the Defendant firm. This meant that they were arguably evidence of a campaign of harassment against the Claimant and therefore capable of causing alarm or distress and being unreasonable and oppressive in nature.

In considering if there was a "course of conduct", the Court of Appeal decided that a claimant did not need to show that every act complained of was harassment. It is the cumulative effect of the individual acts "as a whole" that actually counts.

What are the implications of this decision?

Some commentators now suggest that, rather than sue under other torts such as defamation, it might be better to bring a claim under the PHA. The Iqbal case draws a clear connection between attacks on an individual’s reputation (especially the professional person) and the protection provided by the PHA.

Libel claims typically require allegations that a defendant has deliberately attacked the claimant’s reputation by publishing untruths. But a PHA claim could be brought for publications even if they were truthful, provided the result was the prohibited behaviour - in effect, it is possible to be both honest and oppressive and unreasonable.

The judgement can be seen in full here:

http://www.bailii.org/ew/cases/EWCA/Civ/2011/123.html

TUPE and administrations (pre-pack or otherwise)

A recent case affects what happens to employees and dismissals where a business or part of it is sold by an administrator. The case is OTG Ltd v Barke and others UKEAT/0320/09 and other cases.

The Employment Appeal Tribunal (EAT) has gone against its earlier decision in Oakland v Wellswood (Yorkshire) Ltd, and decided that administrations cannot be "bankruptcy … or … analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor" within the meaning of regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

This means that where a sale of an undertaking by an administrator amounts to a "relevant transfer" for the purposes of TUPE, the employees who are assigned to that undertaking will transfer to the buyer and be protected against dismissal for a reason related to the transfer.

This applies whether or not the sale is by way of a "pre-pack" arrangement. Oakland had said that TUPE did not apply to pre-packs in this way.

But, the administration will be "relevant insolvency proceedings" for the purposes of regulation 8(6) of TUPE. That means certain liabilities in respect of the affected employees will be taken over by the Secretary of State rather than pass to the transferee. It also means that the new owner of the business will have more scope than usual to agree variations to the terms of employment of the transferring staff.

This latest case means that there are two conflicting EAT decisions on the point. The latest case, though, (OTG Ltd) was in fact a group of cases heard together and it is thought that Employment Tribunals will most likely follow that case.

Draft guidance on definition of disability

The Government has published its Draft Guidance on matters to be taken into account in determining questions relating to the definition of disability.

The Guidance deals with the main elements of the definition of disability, meaning of "impairment", exclusions form the definition, people with disabilities in the past. It "explains substantial adverse effect", effects of the environment, effects of treatment, progressive conditions, "long term effects", normal day to day activities, disabled children and disability as a particular protected characteristic.

It is a recommended read for advisers, because determining bodies, including Employment Tribunals, will be required to take note of it.

ACAS paper - the future of workplace relations

ACAS has published a new paper on its view of the change in workplace relations.

The paper refers to fragmentation, demographic change, complex contractual relationships, remote management, individualisation and a vacuum in representation for both employees and employers. It says this will create a more challenging environment for good employment relations in the years to come.

The paper calls for new structures and approaches to facilitate dialogue employers, employees and their respective representatives. It claims that information, advice and guidance via the internet is going to be increasingly more important because of the reach that this provides to smaller and dispersed workplaces. It calls for greater use of mediation and other forms of conflict management.

UK being encouraged to pull out of Strasbourg jurisdiction

The Policy Exchange argues in a report that the European Court of Justice is "inefficient, unaccountable and remote". It says the UK government should consider withdrawing from its jurisdiction if it cannot negotiate substantial reforms to the way the Court is run.

The Policy Exchange claims that the Court has "tended to stretch the original text of the European Convention on Human Rights to fit situations well outside the expectation of those who drafted and ratified it". Lord Hoffmann argues that "the very concept of human rights is being trivialized by silly interpretations of grand ideas" and says that "repatriating" UK human rights law to UK courts would be worthwhile.

Read the report.

Lessons from Orr v Milton Keynes Council

In the Orr case, the Court of Appeal decided that the knowledge of a manger could not be imputed to the disciplinary chair and so the dismissal was fair.

There is a danger that employers may draw incorrect conclusions form this case. There is still a need to carry out a reasonable investigation. This requires all relevant parties to be interviewed. What the Orr case means is that if an interviewed person withholds information which the interviewer should not suspect is being withheld, that information cannot be deemed to be known by the disciplinary chair or the employer.

A fair and reasonable investigation is still required.

Twitter and good deeds

As a kid, I was a boy scout. Yes, I know you might say how sweet that is. But seriously, I didn't realise at the time how important being a scout was in preparing me for later life.

Let me give you two examples. Firstly, we formed a scout band. We had cavalry trumpets in B flat pitch with no valves so the only notes you could play were the harmonics of C. We had snare drums, tenor drums, a bass drum and glockenspiels. We entered marching band contests and did ok.

I showed promise on the cavalry trumpet so my parents were persuaded to get me a valve trumpet and from there I progressed really well. I went to the Junior School at the RNCM at age 15 and was eventually offered a place on the graduate course at the college. That was one of only two places with 57 people auditioning. I had an offer of a place to study law at the same time at the University of Manchester. It was music I loved, but I looked ahead and realised that although I aimed to play professionally in an orchestra, I would end up waiting for dead men's shoes. So I took the place to study law and switched to brass bands as a cornet player, met my future wife there and the rest as they say is history.

All that from joining the scouts.

What else did scouting teach me? It taught me to be on the look out to do a good deed every day. Simple motto, but what a world we'd have if we all did that.

Brings me to today and Twitter. I was working on the pc this evening when I heard the letter box close. I went to see what had been posted through and there was a leaflet from people I had no knowledge of, Ben and Caroline Lomax, asking for old clothes, bedding, curtains, belts and handbags to raise money for Christies cancer charity. I read the leaflet and thought that if I posted a request on Twitter and appealed to local people, I might just get some takers. I sent out a general tweet and asked people to retweet it. I also sent a few tweets addressed to local individuals I follow.

Result. Within 10 minutes @CoffeeApe replied and said his family had 4 bags full of good quality clothes they had been meaning to take to a charity and he would be happy to donate them to Ben's appeal.

I mailed Ben and got a wonderfully grateful email in reply from Ben and Caroline. They said that they had hoped that just one response would result from their leaflet drops this evening and how pleased they were that I was that one response. They were thrilled.

Here's the thing. It took very little effort on my part. Far less effort than Ben and Caroline had put in by producing the leaflets and posting them through may letterboxes.The simple step was connecting the leaflet to how I might use Twitter to promote the cause. I just then posted a few tweets. Job done.

That emotion of contribution when you are able to help people like this really is one of the power emotions that Anthony Robins talks about in his work, "Giant Steps".

I looked at Ben and Caroline's website. Take a look yourself here and sponsor one of the squares that will be on the flag they are to take to the top of Mount Kilimanjaro. Do you know someone who might sponsor them?

So think how you can use Twitter or any other form of social networking for your good deeds and make a difference today.

Increase in loss of statutory rights awards?

The Coalition Government's recent consultation paper, Resolving Workplace Disputes issued last week, contains a proposal in Chapter IV to extend the qualification period for employees to bring a claim of unfair dismissal from one to two years.

If that proposal becomes law, it will inevitably have a significant impact on those employees who succeed in a finding of unfair dismissal and are faced with having to build up again a continuous period of two years of employment with a new employer before they qualify for unfair dismissal protection. One of the elements to be considered by an Employment Tribunal at the remedies stage of a case is what sum they should award the successful claimant for the loss of this protection from unfair dismissal. This is known as an award for "loss of statutory rights" (LOSR).

At present, the award tends to be somewhere in the region of £250 to £350. In theory, if the qualification period is doubled from one to two years, then the award for LOSR should be at least doubled to say £700.

There is no fixed and fast rule used by the Tribunal members in deciding the amount of the LOSR award. Figures vary between Tribunals, depending on the regional centre where the case is heard.

One could argue that as the maximum compensatory award for unfair dismissal creeps up (£68,400 from 1 February 2011), the value of the LOSR is higher and so the award for LOSR should be higher as well. When the maximum award for unfair dismissal was as low as £10,000 I recall LOSR awards being about £150. However, they do not appear to have increased in proportion to the increase in the cap figure for the compensatory award.

The Government consultation paper does not raise or address this issue.

Lessons from Sky dismissal of Andy Gray

The dismissal of Andy Gray today by the broadcaster, Sky shows just how importantly employers can and should take behaviour amounting to sex discrimination.

We have yet to learn the full reasons for the termination of Mr Gray's appointment as TV presenter, but it is undoubtedly related in part to his comments on more than one occasion about female referees not understanding the rules of football and the innuendo that women should not be officiating in the alleged "man's game".

There have been UK statutory provisions outlawing discrimination on the grounds of sex for more than 35 years now. Serious cases of infringement of these laws have been publicised widely during that time.

Whilst Mr Gray's comments about female officials in football were not directed at a work colleague (referees not being employed by Sky), there has been suggestion on Sky News this evening that some of the conduct alleged to have been the cause of concern involved Gray asking a studio assistant to help him to attach a microphone to his trousers. If such conduct were to be seen as being discriminatory, it was certainly carried out in the course of employment and towards a colleague, so the Equality Act is highly relevant.

The employer simply has to take a strong line here. If Gray was aware of the employer's requirement for its employees to comply with standards concerning diversity in the workplace (no doubt contained in the company's employment policies), then repeated conduct after warning has to be dealt with severely.

AVOIDING VICARIOUS LIABILITY

Apart from addressing the issues in this case, one of the reasons for this is likely to be the company's desire to be able to rely in future on the statutory defence of having taken such steps as were reasonably practicable to prevent this sort of conduct. The company would be vicariously liable in future if other staff carried out discriminatory acts and the company could not show that it deals with such matters in a serious manner.

KEY ACTION STEPS

This episode prompts employers to think about what thy need to do in order to protect themselves against a vicarious liability claim when an employee steps out of line and carries out a discriminatory act. Here is a summary of the key steps:

1. Have an up to date and clearly written equal opportunities policy. The policy will set out the standards of behaviour required and state the seriousness of a breach of its terms.

2. Make sure that breach of the equal opportunities policy will be viewed as a serious act of misconduct which could lead to dismissal. The disciplinary policy should say so.

3. Carry out regular training of employees on diversity issues.

4. Keep records of diversity training for each employee. These may well be required to be disclosed in any future Employment Tribunal proceedings where the employer wants to demonstrate it took reasonable steps.

5. Where an employee has transgressed, but not in such a serious way to warrant dismissal, make sure they receive more diversity training. Keep records of it.

6. Deal with breaches of the policy in a serious way, begin prepared to dismiss if necessary.

7. Whilst not essential, it is sometimes a practice of larger employers to set up a confidential telephone facility where staff can report concerns and receive counselling. Such a facility indicates just how reasonable the employer is trying to be.

CHECK YOUR POSITION

There is no doubt that more details about the Gray dismissal will emerge in time. For now, employers should reflect on their own procedures and policies so that thy are well placed to deal with any situations concerning discrimination.