Legal Update: Holiday Pay

Posted by: on Mar 26, 2015 | No Comments

The most anticipated Judgment of 2015 (so far) is out…yesterday a ruling was handed down in the case of Lock v British Gas which settled once and for all whether or not commission payments should be included in holiday pay.  The short answer is that they should.

The law is far from finalised on this, but this is what we now know (and do not know) about holiday pay:

What we know:

  1. All of the recent holiday pay rulings apply to 4 weeks / 20 days holiday only. That means that the other 1.6 weeks / 8 days of employees’ statutory entitlement is not covered by these rules or the scope of this article.
  2. When on holiday, employees must receive earnings which take account of overtime (excluding, for now, truly voluntary overtime), commission, and any other payments “intrinsically linked” to role performance.
  3. The law has been amended to set out how holiday pay should be calculated whilst employees are on holiday, so that the pay they receive during their holiday is the same as what they would receive were they at work.
  4. When employees are actually on holiday, they are unable to earn commission or work overtime during that time. That means that when they return from holiday, their earnings are effectively reduced in the following weeks. Employees are now entitled to be compensated for that loss of earnings.

What we do not know:

  1. The Tribunal did not decide how to calculate compensation due to employees in respect of the commission and overtime that they are unable to earn whilst actually being on holiday. That will, unhelpfully, be determined at a later date.
  2. It has been suggested that it might be possible to interpret the law so that commission schemes operate already to effectively compensate employees for being on holiday, such that no further money is due to them. This has not been decided.
  3. For now, no ruling has been made as to whether or not bonuses are included in holiday pay. As UK law currently stands, they are not.

What can you do about this?

In most cases, the cost of complying with these obligations will not be as significant as it may first appear. However, for those employers who utilise commission and overtime heavily, and who really cannot afford to absorb the increased holiday pay costs, there are three broad options:

  1. Review existing commission and overtime arrangements and consider revising them.
  2. Consider varying other contractual terms like basic pay, hours of work, or benefits.
  3. Consider a redundancy exercise to reduce costs.

Time is of the essence, but none of these steps can be taken lightly. The Employmentor team is on hand as usual and can help guide subscribers through the above processes at our reduced hourly rates.  If you would like further advice and guidance on how to implement any of the 3 options above, please telephone 01603 281139 or email email hidden; JavaScript is required.

Note: The content of this article is for general information only and does not constitute legal advice.

Employment Law Update – March 2015

Posted by: on Mar 9, 2015 | No Comments

Spring is often a season of change for employment law, and this year is certainly no different.  With the festivities of Christmas a distant memory, employers and HR professionals alike need to keep abreast of the various new rates that are set to take effect and other legal developments.

From family matters to holiday pay, the landscape of employment law rarely stops evolving.  To help you stay updated, we have pulled together an overview of some recent decisions, and changes that you will need to be aware of as we head towards the summer months.

Shared Parental Leave (‘SPL’)

The SPL scheme is now in force and applies to children who are born or placed for adoption on or after 5 April 2015.  It allows parents or those adopting to choose how they share the care of their child in the first year of birth or adoption.  Parents can choose how to split periods of leave between them, take discontinuous blocks of leave, and can sometimes take leave simultaneously.

Although the SPL scheme may sound complex, the basic principles are fairly straightforward.  Employees will be eligible for SPL if they are the child’s mother or main adopter, the child’s father, or the spouse, civil partner or partner of the child’s mother/main adopter (alongside certain other requirements).

Those eligible will be legally entitled to share 52 weeks of SPL.  The leave can be shared in a number of blocks, or can be taken as one continuous block.  Employers are entitled to refuse a request for discontinuous blocks of SPL, for example, if the needs of the business do not permit it.

Parents taking SPL may be entitled to 39 weeks of Shared Parental Leave Pay, subject to meeting certain conditions.  For specific rates, please see below.

To take SPL, employees must first ‘opt-in’ by providing the necessary information to establish that they are eligible for SPL.  Once the employer has confirmed that they are eligible, employees must give the employer notice for each period of SPL they intend to take, at least 8 weeks before they take it.

To make the management of SPL as easy as possible, Employmentor subscribers have access to a Shared Parental Leave Policy, a checklist of requirements, and a suite of all the essential forms.

New rates

From 5 April 2015, statutory maternity, adoption, paternity, additional maternity and shared parental leave pay increases to £139.58 per week (up from £138.18 per week).

From 6 April 2015, statutory sick pay will increase to £88.45 per week (up from £87.55 per week).

Employment Tribunal compensation limits

From 6 April 2015, the Employment Tribunal compensations limits will increase.  For the purposes of the basic award, a weeks’ pay will be capped at £475 and the compensatory award will be capped at the lower of 52 weeks’ salary or £78,335.

Statutory redundancy payments

From 6 April 2015, when calculating statutory redundancy, a weeks’ pay will be capped at £475.  The maximum statutory redundancy payment will therefore be £14,250.

Holiday pay

A particularly popular topic with employers at the moment is how holiday pay is calculated.  Recent decisions have suggested that commission (in Lock v British Gas Trading Limited) and overtime (in BEAR Scotland v Fulton) will be included for the purposes of calculating holiday pay.

Whilst much has been written on the subject, and it is clear that compulsory overtime will need to be included in holiday pay, the law is still uncertain on how such sums are calculated.  We can expect another decision on Lock shortly and the outcome of the appeal in BEAR Scotland at the end of March.   Until we have those decisions, the position as to calculating holiday pay remains unclear.  We will publish a full article on the implications of the holiday pay cases once they have been released.

Obesity as a disability

Many of you will have read about the recent decision in the Court of Justice of the European Union (‘CJEU’) which held that, in certain circumstances, obesity may fall within the definition of disability for the purposes of equality legislation.  Contrary to some reports, this does not mean that obesity of itself is a disability.  Rather, it means that the effects that being obese have on an individual may amount to a disability under employment law.

If the obesity of a worker “hinders the full and effective participation of that person in professional life on an equal basis with other workers” then obesity may fall within the definition of disability.  The CJEU suggested that examples of this may be where mobility is substantially decreased, or if obesity gives rise to other medical conditions, such as joint problems or diabetes.

Where obesity gives rise to a disability, employers will be required to make reasonable adjustments, which may include making access to the office easier or providing more appropriate seating arrangements.  Employers will also be exposed to the risk of Employment Tribunal claims in the event that they treat a worker less favourably on the basis of the disability caused by their obesity.

There are bound to be a range of opinions on this case.  However, it is important to remember that obesity of itself is not a disability, but the effects of it can be.  Whilst employers need not start taking drastic action just yet, they will need be aware of the potential issues that may arise from this recent decision.

Reasonableness of an investigation – unfair dismissal

The Court of Appeal has recently held that an employee was fairly dismissed following an investigation which highlighted that he was claiming mileage exceeding that which was recommended for each journey by the AA and RAC.

The employee was employed as a support worker who often travelled as part of his job.  For each journey, the employee was entitled to claim travel expenses.  The employer reviewed the mileage that the employee was claiming, and found that it was in excess of that recommended for each journey.  At the disciplinary hearing, the employee claimed there were various reasons for the excessive mileage, including road works, which made the journeys longer.  The employer adjourned the hearing and carried out further investigations.  The employer concluded that the employee’s defence did not properly explain why each mileage claim was in excess of the recommended journey, but did not investigate in detail each of the employee’s explanations.  As such, he was dismissed for gross misconduct.

The employee brought a claim for unfair dismissal on the basis that, whilst the initial investigation was reasonable, the employer had not given proper consideration to his subsequent responses to the allegation.

Dismissing the employee’s appeal, the Court of Appeal held that the reasonableness of an investigation was by reference to the investigation as a whole, for the purposes of unfair dismissal.  It was said by the Court that employers are not required to enquire further than necessary into the employee’s defences or explanations; a decision of some comfort to employers.

For more information on any of the topics in this article, please contact a member of the team on 01603 281139.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any particular circumstance.

E-cigarettes in the Workplace: An Employer’s Guide

Posted by: on Jan 30, 2015 | No Comments

E-cigarettes (also known as personal vaporizers or electronic nicotine delivery systems) are becoming increasingly more prominent in society.  Whilst met with odd looks only a few years ago, they are now widely accepted as “the norm” for those who are trying to give up smoking. The fundamental distinction between e-cigarettes and the traditional tobacco cigarette is that the former contains nicotine without the tobacco.  As it stands, e-cigarettes fall outside the scope of domestic smoking legislation – meaning that it is legal to smoke them inside.

Employers are often uncertain to what extent they can prevent their employees from smoking e-cigarettes in the workplace. The fact that it is legal to smoke e-cigarettes inside is often cited by employees as to why they should be allowed to use them at work.  In fact, it is useful to remember that just because e-cigarettes can legally be used inside, employers can lawfully prevent employees from using them in the workplace if they so choose to.

Employees are under a duty to obey the reasonable and lawful instructions of their employer. For example, if an employer wished to prohibit employees eating at their desks, for health and safety reasons or otherwise, an employee would be under a duty to abide by that instruction to the extent that it was reasonable and lawful. Failure to do so would be a breach of that duty, and could be treated as a disciplinary matter.

There is therefore nothing to stop employers (if they so wish) from preventing employees from using e-cigarettes in the workplace.   It is a reasonable management instruction that employees must obey.  If an employer has a concern that the vapour from the e-cigarette may irritate other employees or the employer’s clients, is unsure about the health implications of such use, takes the view that it looks unprofessional, or has any other sensible reason, it is absolutely justified in prohibiting use during working time.

Conversely, it may be that in an effort to help or encourage its workforce in stopping smoking tobacco cigarettes, the employer decides to allow the use of e-cigarettes at work.

Either way, it is important that an employer is clear about its rules on smoking e-cigarettes in the workplace.  We recommend that employers communicate their position on the issue to employees, and some may wish to put a policy in place to govern smoking at work (including the use of e-cigarettes).  It is important that employers set out the consequences of use of e-cigarettes at work (if that use is prohibited), which may well include disciplinary action for failure to follow instructions.

If you would like more information on any of the above, please contact a member of our Employmentor Team on 01603 281139.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.

Have yourself a trouble-free Christmas: avoiding employment issues during the festive period

Posted by: on Dec 2, 2014 | No Comments

The Christmas period is a time for festivity, reflection on a year of hard work, and an opportunity to look forward to the year to come.  However, aside from the dubious dance moves on display at the Christmas party, the festive season can give rise to a number of potential issues for employers if they do not know how to handle them.  Whilst not wanting to be Scrooge-like in their approach, it is important that employers have an awareness of the legal pitfalls that may present themselves.  The information below details common problems that an employer may face around this period and the best methods for dealing with them.

The Christmas party

Excessive drinking coupled with high spirits (no doubt due to the thought of that new pair of socks on Christmas Day) can, on occasion, lead to lowered standards of conduct.  This conduct, whether labelled as ‘banter’, ‘joking around’ or otherwise, could amount to harassment.

Unlawful harassment under the Equality Act 2010 arises where an individual engages in unwanted conduct relating to a persons’ sex, disability, race, age, religion or belief, or sexual orientation, which has the effect or purpose of creating an intimidating or hostile environment.  Employers can be liable for the actions of their employees, even where the harassment in question does not take place on the employer’s premises or during working hours.  For example, an employer may be liable if an employee were to grope a colleague at the office Christmas party, as this is more than likely to be treated as happening in the course of employment.  Further, an employer cannot simply escape liability for the actions of its employees by claiming ignorance as to the unlawful conduct; it needs to show that it took steps to prevent that conduct from occurring.

As such, it is important for employers to engage with the issue directly. Of course, employers will want their staff to enjoy themselves at Christmas functions. However, it is worth reminding them that they must treat each other with respect; what is one person’s ‘banter’ may be offensive to another.  Employers should also gently communicate to employees that they should not get too intoxicated and should refrain from any mistletoe moments that may only seem like a good idea after a few glasses of mulled wine.

In the event that employees do behave unacceptably at Christmas functions, employers should be sure to take disciplinary action against that employee on their return to the office.

The morning after

It is possible that, depending on the level of alcohol consumed at Christmas functions, some employees will have slightly sore heads the following morning. A hangover is generally not an acceptable reason for sickness absence during the festive period, much as it would not be acceptable at any other time of the year.

It is advisable that employees are reminded that sickness absence will not be treated any differently, just because it is the Christmas period. In the event that an employee suspects that he or she will be suffering from a festive hangover, employers should recommend that annual leave is booked in advance, in anticipation of such. Where employees arrive to work still drunk, or with a hangover, and are accordingly unfit for work, an employer may be entitled to send them home without pay (…but with a coffee).

‘Let it snow, let it snow, let it snow!

A white Christmas is an appealing prospect for the majority; however, adverse weather conditions such as snow can be problematic for employers when it prevents their employees from travelling to work. Recent case law has reiterated the importance for employers to have regard for the health and safety of its workforce. In circumstances where the employee reasonably believes that he or she is at risk of harm, for example due to the roads being in a hazardous condition, that employee is entitled not to come into work to avoid the risk of harm. As employers cannot force employees to come into work, it is vital to clearly set out the procedure and steps to be taken in the event of disruptive weather conditions.

It is recommended that employers communicate their stance on adverse weather and travel disruption, setting out the options available to employees in the event these issues impact their commute. These would normally include:

  • Taking the time off as unpaid leave;
  • Offering that the employee take the period of absence as paid annual leave; or
  • Allowing the employee to work from home or from an alternative location (if this is appropriate in the circumstances).

Whilst an employee may rather be making a snowman than journeying through the cold and snow to come into work, it is important that: 1) they are encouraged to make their best attempt at getting into work; and 2) they follow the correct procedure in the event that they cannot make it in. Where there is real reason to suspect that an employee has chosen to use bad weather as an excuse not to come in rather than them not being able to get in, disciplinary action may be appropriate.

Ho Ho Ho… Holiday at Christmas

Many employers shut down or close their premises over Christmas and, as such, may (and can) require employees to take specific dates off as annual leave by serving notice on them to do so. The length of notice that employers need to give is twice as long as the amount of holiday that they are requiring employees to take. For example, where employees are made to take 5 days’ holiday, then 10 days’ notice must be given.

It would also be sensible to include a provision in contracts which states that employees must retain enough holiday to cover the Christmas period if the employer chooses to shut down, or else they must take it unpaid. This will assist in managing expectations at an early stage.

If they wish to shut down over Christmas, employers should inform employees that they require them to take holiday by way of an internal memo, bearing in mind the required notice period. (Most) employees will no doubt be thankful for the time off.

These practical tips should ensure that those dodgy dance moves will be the extent of employers’ problems over the festive period. Have a Merry Christmas from all at Leathes Prior!

For further information on any of the topics raised in this article, please contact a member of the Employmentor Team on 01603 281139.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.

 

 

 

 

 

 

 

 

 

 

 

Legal update: Holiday Pay

Posted by: on Nov 6, 2014 | No Comments

The President of the Employment Appeal Tribunal, Mr Justice Langstaff, has handed down his Judgment in the cases of Hertel v WoodBEAR Scotland v Fulton & Baxter and Amec v Law, ruling that workers are entitled to receive a sum on account of normal overtime as part of their holiday pay.

Background

Holiday pay is calculated by reference to a ‘week’s pay’, which under UK law, has been considered to include basic pay only. There has been a raft of recent case law on the question of whether holiday pay should include more than merely basic pay, including the case of Lock v British Gas, in which the European Court of Justice held that holiday pay should include commission. That case has been remitted to the Employment Tribunal and we expect it to give effect to the European ruling (and therefore become part of UK law) in around March next year.

The three cases were heard together and there was much anticipation among those in employment law about the outcome, which had the potential to open the floodgates to a wave of claims for back-dated underpayments of holiday pay. The Department for Business Innovation and Skills had intervened in the case to make clear its own view that holiday pay should not include overtime.

The Judgment

The Claimants argued that their normal pay for the purposes of calculating holiday pay was not merely their basic pay, but should include the sums normally received as non-guaranteed overtime. Mr Justice Langstaff held that:

  • Non-guaranteed overtime should have been taken into account when calculating the holiday pay due to the workers;
  • Where travel time payments exceeded the expenses incurred during travel, they were part of the worker’s remuneration, so should also be included in calculations of holiday pay;
  • The relevant UK legislation, the Working Time Regulations (WTR) must be read in such a way as to give effect to the European Working Time Directive (WTD);
  • Since the WTD requires only four weeks’ (20 days) holiday in a year, the additional 1.6 weeks (8 days) available in the UK under the WTR need not include overtime or travel time payments; and
  • The workers could not claim underpayment of wages where there was more than three months between the underpayments. This has the effect of substantially limiting claims for back pay.

Impact

The Secretary for Business, Innovation and Skills, Vince Cable, has already announced that a task force has been set up to assess the potential impact of the Judgment. There remain some unanswered questions, not least because Mr Justice Langstaff granted leave for the Judgment to be appealed to the Court of Appeal. It almost certainly will be appealed and it is possible that the Court of Appeal Judgment itself could be appealed, so it could be some time before the courts provide a definitive answer to this question.

  • If you are concerned about how this will affect your business, get in touch with one of the Employmentor team. We can review your contracts and policies and advise on the likely impact of the changes as well as how to limit your risk.
  • Businesses may wish to consider including overtime payments in their holiday pay immediately, or even look at ways of limiting overtime payments.
  • However, it may be sensible to await the outcome of the appeal before making any positive changes.
  • If you receive a claim, please contact us immediately. The ordinary rules of limitation will apply but the amount of any liability will depend very much on the facts of the case.

For more information on any of the topics in this article, please contact a member of the team on 01603 281139.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.

 

Employment Law Changes: 1 October 2014

Posted by: on Oct 1, 2014 | No Comments

As has become customary for 1 October each year, a number of employment law changes take effect today. In summary these are:

Change to the National Minimum Wage:

The national minimum wage rates increase from today:

  • The standard adult rate will increase to £6.50;
  • The rate for workers between 18 and 20 will increase to £5.13;
  • The rate for workers between 16 and 17 will increase to £3.79; and
  • The rate for apprentices under 19 will increase to £2.73.

Power to order Equal Pay Audits:

Tribunals are now compelled (save for in certain circumstances) to order employers who have been found to be in breach of equal pay law to carry out equal pay audits.

Right to time off to accompany partner to ante-natal appointments:

Employees and agency workers now have the right to take unpaid time off to accompany a pregnant woman with whom they have a ‘qualifying relationship’ to up to two antenatal appointments (up to six and a half hours maximum for each appointment). A qualifying relationship includes the pregnant woman’s husband or civil partner, a person who lives with the pregnant woman in an enduring family relationship, the expected child’s father, and certain other relationships. We have updated the Maternity and Paternity Policy on the Employmentor website to take account of this new right.

If you need any assistance in ensuring that you are compliant with the above, please contact a member of Employmentor team.

Employment Law Update – September 2014

Posted by: on Sep 10, 2014 | No Comments

The new school term often brings a flurry of activity for the employment solicitors and the HR professionals amongst us; the now inevitable changes to the law that occur every October are on the horizon, and the legal world has had the opportunity to take stock of any developments over the hot summer months.

With that in mind, we have prepared a summary of the things you need to know for this October, and a run-down on the latest position on a couple of those key issues that have been racking up column inches over the summer months:

Equal pay

On 1 October 2014, the Equality Act (Equal Pay Audits) Regulations 2014 come into force. This means that, where an Employment Tribunal finds that an employer is in breach of equal pay law, they must order the employer to conduct a mandatory equal pay audit, the scope of which to be determined by the Employment Tribunal.

National Minimum Wage

On 1 October 2014, the National Minimum Wage hourly rates will increase:

  • For those aged 21+, from £6.31 to £6.50 per hour;
  • For those aged 18-20(inclusive), from £5.03 to £5.13 per hour;
  • For individuals aged under 18, but above compulsory school leaving age,from £3.72 to £3.79; and
  • For apprentices aged under 19, or over 19 but in the first year of their apprenticeship, from £2.68 to £2.73 per hour.

Ante-natal Appointments

From 1 October 2014, fathers and partners will be entitled to take unpaid time off to accompany their partners to up to two ante-natal appointments, and will be protected from being subjected to any detriment or being dismissed for doing so.

This is the first in a suite of upcoming changes ahead of the right to Shared Parental Leave coming into force next year, which is the largest shake-up in the family leave arena for some time.

Zero Hours Contracts

It won’t have escaped many of you that zero hours contracts are a hot topic at the moment.  Following formal government consultation (and a media storm surrounding these types of agreement), the government has now formulated its proposals for reform.

The Small Business, Enterprise and Employment Bill (published in June 2014) provides, for the first time, a statutory definition as to what a zero hours contract is. The lack of clarity had caused problems with employment status, so the definition is welcome.

The Bill will also seek to make exclusivity clauses in zero hours contracts unenforceable, meaning that employers will be unable to prevent individuals engaged on zero hours contracts from working elsewhere.  Government consultation has already begun on how to tackle avoidance measures dreamed up to work around the ban on exclusivity clauses.

The Bill is expected to come into force (along with a statutory code of practice) in early 2015.

Holiday pay

Another topic attracting attention is the issue of holiday pay. It all kicked off with the case of Williams v British Airways (remember that?) when pilots claimed they should receive flying supplements whilst on holiday. The European Court of Justice agreed and said that employees should receive payment “intrinsically linked to the performance of tasks” in their holiday pay.

Three UK claims then followed, querying whether overtime and incentive bonuses should be included in holiday pay.  The Employment Tribunal initially said yes. The appeals on those decisions have recently been heard at the Employment Appeal Tribunal and a ruling is expected soon.

Most recently is the European Court of Justice case of Lock v British Gas Trading Limited.  In that case it was held that, in some situations, commission payments must be included in holiday pay calculations too.  That case is now likely to be sent back to the Employment Tribunal in England for its decision.

At the moment, the law in England remains unclear (except if you are a public authority, in which case you are in a slightly different position).  The decision of the Employment Appeal Tribunal (and the remitted decision in the Lock case) is waited with baited breath, as a decision that could change the landscape of holiday pay in the UK – potentially overtime, commission, and bonuses may need to be considered when calculating holiday pay.

The Trade Unions are apparently drumming up potential claimants for holiday cases, so it is safe to assume that this is an issue that will be around for a while. Some employers are acting now to reduce any liabilities that might come following this latest round of cases, whilst some are simply doing nothing at the moment, waiting to see what the outcome is.  What is clear is that, at some point, the law is likely to change, and will become more certain, on what exactly should be included when calculating holiday pay.  That change in law could potentially be costly for employers, both looking backwards at holiday payments already made, and forward to future payments.  Keep an eye out for updates on this point…

For more information on any of the topics in this article, please contact a member of the team on 01603 281139.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.

 

 

Zero-hours contracts – an update

Posted by: on Aug 19, 2014 | No Comments

Zero-hours contracts remain a controversial subject within UK employment law. Introduced with the purpose of giving flexibility and freedom to the workforce, zero-hours contracts have since inherited a more negative reputation. See our brief overview on their current status below.

What is a zero-hours contract?

Although not legally defined, they are generally understood to be a casual contract between an employer and a worker under which the employer is not obliged to provide minimum hours of work and the worker is paid only for work carried out.

Zero-hours contracts typically do not give an individual ‘employee’ status, but instead give ‘worker’ status. This means that the individual working under the contract benefits from statutory rights relating to minimum wage and holidays (for instance), but not employment rights such as continuity of service, the right (in some situations) to a redundancy payment, and the right not to be unfairly dismissed. That said, zero-hours contracts take many forms; some are prepared so that the workers are ‘employees’ (and therefore have all the rights that go with being employees), some are prepared as ‘workers’, and some are simply unclear as to what type of relationship is intended by the parties.

It is important that both parties understand that a zero-hours contract can make their working relationship different to other contract arrangements. It is also important for employers to be aware of the pitfalls that may arise whereby the worker could develop employment rights, as how an employer treats a zero-hours worker practically may take the arrangement outside of the scope of an agreement which purports to make the individual a worker only. For example, an employer may be tempted to punish a zero-hours worker under a disciplinary procedure, making them akin to an employee.

When are they used?

Zero-hours contracts are most commonly used within the hospitality industry, or where employers have a temporary or changeable need for staff. Zero-hours contracts are useful for any company that may require cover for unexpected events, temporary staff shortages, or on-call or bank workers. This is because they create a flexible working arrangement with no guaranteed minimum hours, so an employer can call in a zero-hours worker ‘as or when’ required to meet business needs.

Why are they controversial?

Zero-hours contracts have been subject to media scrutiny since usage became increasingly popular at the start of the 21st century. Such scrutiny has increased and the subject has been subject to policy debate over recent months. The Queen referred to zero-hours contracts in her 2014 speech stating that it should be a priority to “strengthen UK employment law by… cracking down on abuse in zero-hours contracts”.

It has long been recognised that zero-hours contracts lack clarity which can result in difficulties for both parties (such as misunderstandings in relation to the employment status of a zero-hours worker). More pressingly, zero-hours contracts are viewed as exploitative; expecting workers (usually) to exclusively commit to a company without any guarantee of receiving work.

Public opinion on zero-hours contracts is mixed. Some might argue that they result in financial insecurity and exploitation on the part of the employer, however other individuals enjoy the flexibility that such agreements provide. Businesses tend to maintain that zero-hours contracts are invaluable in meeting fluctuating demand, and that they benefit the economy by keeping people in employment.

The government held a formal consultation on the use of zero-hours contracts which closed on 13 March 2014. This focussed on the two key areas of concern – exclusivity and transparency.

An exclusivity clause is a contractual provision which (a) prohibits the worker from doing work or performing services under another contract or under any other arrangement, or (b) prohibits the worker from doing so without the employer’s consent. There is concern within the labour market about the misuse of exclusivity clauses in zero-hours contracts, as it would seem that workers are fearful of turning down work, or accepting work elsewhere for fear of the risk of their contract being terminated or their hours being reduced. It is clear that there is an imbalance of power between the employer and a zero-hours worker in many cases.

Turning to transparency, as there is no clear definition of a zero-hours contract, and because they can take on different forms, there is a lack of clarity about the consequences of an individual entering into a zero-hours working arrangement. Individuals and employers have a concerning lack of awareness about what employment rights may attach to a zero-hours contract, and it appears that employers and workers alike are unsure how to clarify with any certainty what exactly their relationship is.

Proposals

A ban on zero-hours contracts has been called for altogether, however that proposal has not been taken forward as it is the opinion of many that a blanket ban would have a severe and negative impact on the current labour market.

To address the zero-hours problem, the Small Business, Enterprise and Employment Bill was published on 25 June 2014. For the first time, the Bill includes a legal definition of what a zero-hours contract actually is. In addition, a key provision of the Bill is that exclusivity clauses in zero-hours contracts will be unenforceable, meaning that zero-hours workers will be able to have other jobs.  How this will work in practice will be tricky for many businesses, as there will likely be issues arising where both ‘employers’ offer the worker some hours on the same day.

The government has also stated that it will work with business and unions to develop a code of practice for employers that wish to use zero-hours contracts. It is said that the code of practice will be ready by the end of this year. It is possible that, as part of the code of practice, the use of zero-hours contracts may be discouraged except where there is consent from the worker who has voluntarily accepted a flexible working arrangement.

The Bill is expected to become law in early 2015 and, together with the proposed code of practice, will for the first time, provide formal rules and guidance on the use of zero-hours contract.

What do you need to do?

For now, zero-hours contracts are very much lawful and represent a high percentage of employment arrangements across the country. You do not, therefore, at present need to make any immediate changes to any zero-hour contracts you may already have in place, and can continue to engage staff on a zero-hours basis moving forwards. If you are considering engaging individuals on a zero-hours basis it is important that you clearly confirm your intentions from the outset.  We strongly suggest that you speak to a member of the Employmentor team if you are considering the need to engage individuals on a zero-hours basis to ensure that the arrangement works for your business.

It is likely that there will be much wrangling about the wording of the Bill and the code of practice.  We are hopeful that towards the end of 2014 we will have an idea of exactly what laws are expected to come into force, and what that means for zero-hours contracts.  Once it is clear how the law will change, employers who use zero-hours contracts should review their use of and the content of their zero-hours contracts to ensure they comply with the new law.  Of course we will update you when we know more on the proposals.  Watch this space…

If you would like any further advice in relation to zero-hours contracts, please contact a member of the Employmentor team on email hidden; JavaScript is required.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.

August 2014

Legal Update: Flexible Working Requests

Posted by: on Jun 23, 2014 | No Comments

On 30 June 2014, the law relating to an employee’s right to make a flexible working request is changing.  With a week to go, are you up to speed on the new law?

The main thrust of the law on flexible working requests remains the same: employees have the right to make a request to their employer for a change to their working pattern.  This may be a change of hours, a reduction in hours, a change or reduction of working days, or a change of workplace.  Where an employee makes such a request, an employer must consider it and decide whether or not to agree to the request.  If the request is granted, the employee’s working pattern is permanently changed.

Changes

Whilst the underlying principle of the right to request flexible working does not change, the category of people who can make requests and the way in which requests are dealt with will change for all requests made on or after 30 June 2014.

Firstly, the category of employees who can make a flexible working request is being extended. Currently, the right only applies to employees who are caring for children under 17 (18 if the child is disabled) or adults who are in need of care.  From 30 June 2014, any employee with 26 weeks’ continuous service can make a flexible working request.  The right to request flexible working still only applies to employees – agency workers (for instance) have no right to make such a request.

Secondly, the procedure for dealing with a flexible working request will change.  As you may be aware, under the current law there is a strict procedure (with strict time limits) which must be followed to the letter once a request has been made.  That procedure will be abolished, and will be replaced with a far less prescriptive procedure and a requirement that employers must deal with any request in a “reasonable” manner.  Instead of the strict time-limits and meeting time-table under the current regime, employers will have a 3 month decision period to consider the request, discuss it with the employee, and notify them of the outcome.

So how does it work?

The starting point for employees is the same – they make a flexible working request, which must be dated and in writing.  The application must state that it is made under the statutory procedure, and specify the changes the employee seeks and the effect of those changes.  The request must also state whether the employee has previously made a flexible working request; the law remains unchanged in that an employee can make only 1 request in any 12 month period.

The employer must then deal with the request in a “reasonable manner”.  Whilst the law does not specify what dealing with the request in a “reasonable manner” entails, ACAS is in the process of preparing a Code of Practice which suggests the procedure an employer should follow.  That Code of Practice will be a statutory code, meaning that Employment Tribunals must consider it when ruling on any claim brought in relation to any flexible working request.  Employers would therefore be well advised to follow the ACAS Code of Practice in considering any request.  The ACAS Code is currently in draft form, but will be available in its final form shortly.  ACAS has also published “good practice guidance” which sets out general principles for dealing with requests (which will not have the same statutory effect as the Code of Practice).

The draft ACAS Code of Practice sets out that employers should hold a meeting with the employee, at which they have the right to be accompanied by a colleague, to discuss the request.  Following the meeting, the employer should inform the employee of its decision in writing, and offer the employee the right to appeal that decision.

As with the current law, employers can reject a request for one of 8 reasons, namely: the burden of additional costs; the detrimental effect on ability to meet customer demand; inability to reorganise work amongst existing staff; inability to recruit additional staff; detrimental impact on quality; detrimental impact on performance; insufficient work during the proposed working period; and planned structural changes.

All flexible working requests, including any appeal, must be considered and decided on by the employer within 3 months of the employee raising the request – known from 30 June 2014 as the “decision period”.  The employee and the employer can agree to extend the 3 month decision period.

In a change to the law, employers may now treat a flexible working request as being withdrawn if, without good reason, the employee fails to attend a meeting (or an appeal meeting) to discuss their request, and a further rearranged meeting.

So what do you need to do?

If you have a flexible working policy in place, update it.  If you are an Employmentor subscriber, log onto the Employmentor website to download a new flexible working policy which takes account of the new law.

Communicate to your employees that you have changed your policy to bring it in line with the new law.  If you have procedures in place for changing polices (e.g. consulting with a staff group or a union), make sure you follow them.

Ensure that you are familiar with the new law in case you receive a flexible working request. We are currently preparing a suite of new letters and flowcharts to assist you when you do receive a flexible working request under the new law.  These will be on the Employmentor website in time for the new law coming into effect on 30 June 2014.

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Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.

Social media in the workplace: #twentyfirstcenturyproblems

Posted by: on Jun 11, 2014 | No Comments

Barely a week goes by without one of the Employmentor team receiving a call about employee use (or misuse) of social media.  In addition to queries about use of social media websites at work, we are receiving increasingly more frequent queries about what employees can and cannot post (either about their employer or otherwise) on such websites, and what action employers can take in response to any posts.

The problem

For employers, the unstoppable rise of social media sites such as Facebook, Twitter and LinkedIn present new problems.  Employers have to consider now what they should do (and what they can do) when employees post content that is critical of their employer, when an employee’s private posts are offensive to wider audiences, and when employees use social media to bully or harass other people (whether that be the wider public or work colleagues).   Additionally, issues may arise where employees post comments which are not consistent with company views, may breach confidentiality, or simply may make inaccurate posts or posts that contain numerous spelling errors (not ideal for instance, if you are an editor on LinkedIn).

Most employers would rather not waste management time dealing with disciplinary or other issues that arise out of a thoughtless social media post.  Patching up the reputational damage that could ensue if a post goes “viral” is not something any employer relishes, and, in some circumstances, an employer could actually be held liable for an employee’s actions in bullying another person via social media.  All in all, one misplaced social media post by an employee could result in a lot of wasted time and money for an employer.

So what can you do?

If possible, prevention of such posts is what an employer will strive for.  Communication to employees is key – both on what standards you expect them to adhere to in relation to social media and how far that duty extends (e.g. solely on their company LinkedIn page, or on their personal Facebook page too?), and what action will follow if they don’t meet those standards.

As a first step, we advise that all employers have a social media policy in place.  This sets out what standards employees are expected to adhere to when using social media websites, guidelines as to what sort of content is acceptable (and unacceptable) for posts, and whether or not the use of social media is permitted during working hours/on work computers.

Provide training to employees on the use of social media and remind them of their obligations under the policy.  We are always surprised at the lack of common sense exhibited by some employees; by providing them with clear guidance and directing them to a policy, there can be no excuse that an employee “did not know” their behaviour was inappropriate.

Once the policy is in place, enforce it.  This means taking disciplinary action (if appropriate) against employees who breach the social media policy.  This does not have to be dismissal, and it may not be legally possible to dismiss, but a strong party line will make other employees think twice about breaching social media rules.

Depending on the circumstances, employers can be firm in their approach – employees have been disciplined, and dismissed, for posting negative comments about their employers on social media websites.  For instance, you may remember the press stories of the teenager who called her job “boring”, and a number of Virgin Atlantic’s cabin crew who were less than complementary about their “chavvy” passengers and who criticised safety standards; those dismissals were found by the Employment Tribunal to be fair.

When considering whether disciplinary action is appropriate (and the appropriate sanction), employers will need to consider a number of factors, including the content of the post in question; whether it is possible to identify who the employee works for from their social media page; how many followers the employee has and what their privacy settings are; whether the conduct impacts on the employee’s ability to do their job (for instance, have they expressed that they are drunk/hungover and then turned up for work as a driver?); and whether the employer has communicated the rules about social media postings to their employees.  After weighing up all of these considerations, it may be appropriate to take firm action against the employee for their post.

How can we help?

Employmentor subscribers can log-in to the Employmentor website to view our new Social Media Policy, which can be downloaded for adaptation, implementation and use (find it in the Discipline and Grievance section).

If you are an Employmentor subscriber, if you do encounter any issues with social media, please be in touch with one of the Employmentor team.  We are happy to advise on the appropriateness of the content of posts, whether disciplinary action is appropriate and how firm you can be in terms of sanction, and to provide assistance throughout the disciplinary process. Equally, if you would simply like to discuss the content of this article in more detail, please do contact us.

If you are not a subscriber and would like to find out more about how the Employmentor team can help you, please contact us on email hidden; JavaScript is required.

Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.