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Blake Lapthorn solicitors Employment law team held a seminar on 17 March 2010 at its London office

Blake Lapthorn solicitors Employment law team held a seminar on 17 March 2010 at its London office

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Employment law update Presentation Transcript

  • 1. Employment Law Update Key changes from 2009 Agency Workers Regulations 2010 Developments in 2010
  • 2. Key changes from 2009 Hayley Dear
  • 3. Overview
    • Dismissals
    • Discrimination issues
    • Holiday entitlement and sickness
    • New ACAS Code
  • 4. Dismissals
    • Date of termination
      • Where dismissal is communicated by letter, the date of termination will generally be the date on which the letter is read by the employee
      • Gisda Cyf v Barratt
    • Practical tips
      • Inform of dismissal face-to-face
      • If cannot meet with employee then send letter by recorded and first class post and email
  • 5. Dismissals continued…
    • Time limits
      • A redundant employee may have more than three months to bring a claim for unfair dismissal if new information comes to light after the three month deadline has expired.
      • Heslip v Teva (UK) Limited
    • Practical tip
      • Do not assume it is “safe” to rehire after three months have passed
  • 6. Discrimination - age
    • Default Retirement Age (DRA)
      • Employers can continue to rely on the DRA of 65 for the time being
      • Age UK v Sec. of State for B.I.S ( Heyday)
    • Practical tips
      • Continue to follow the statutory retirement procedure for retirement dismissals
      • Likely Government review of DRA this year
  • 7. Discrimination - religion and belief
    • “ Philosophical belief”
      • A belief in climate change and the need to act in the interests of the environment and a belief that that psychics can help solve criminal investigations are capable of amounting to “philosophical beliefs” under the legislation and therefore subject to protection
      • Grainger plc and ors v Nicholson
      • Power v Greater Manchester Police
  • 8. Discrimination – religion and belief continued…
    • Christian beliefs
      • A registrar threatened with dismissal for refusing to register same-sex civil partnerships and a relationship counsellor dismissed for refusing to counsel same-sex couples, did not suffer discrimination on the grounds of their Christian beliefs
      • Ladele v Islington LBC
      • McFarlane v Relate Avon Ltd
    • Practical tips
      • Review anti-harassment policies
      • Be mindful of potential conflicts between beliefs and duties
      • Keep your eye on the ball!
  • 9. Discrimination - sexual orientation
    • Sexual orientation
      • An employee who was known by his colleagues to be heterosexual was protected from homophobic harassment
      • English v Thomas Sanderson Blinds Ltd
    • Practical tip
      • Be aware of office banter!
      • Treat employees fairly and consistently
  • 10. Discrimination - race
    • Work Permits
      • An employer’s refusal to consider job applications from candidates requiring a work permit constituted unlawful indirect race discrimination
      • Osborne Clarke Services v Purohit
    • Practical tips
      • Do not exclude applicants on the basis of ability to work in the UK
      • Select candidates on merit alone
      • Consider obtaining a sponsor licence to avoid delays in the recruitment process
  • 11. Holiday entitlement
    • Annual leave entitlement
      • Statutory annual leave under the Working Time Regulations 1998 increased in April 2009 from 4.8 weeks to 5.6 weeks (with a maximum statutory entitlement of 28 days) for full-time workers
    • Practical tip
      • Check your contracts of employment and policies!
  • 12. Holiday entitlement and sickness
    • Holiday accrual and sickness absence
      • Employees on sick leave continue to accrue holiday and must be given the opportunity to take holiday on their return to work, even if absent for the whole leave year
      • A claim for back-dated holiday pay can be brought by using the concept of a series of “unlawful deductions from wages”
      • Stringer and ors v HMRC (Stringer)
  • 13. Holiday entitlement and sickness continued…
    • Sickness during holiday
      • An employee was entitled to a replacement holiday period as he was unable to take holiday during a period of illness
      • Pereda v Madrid Movilidad SA
      • Application of the principle in Pereda to private employers confirmed recently by UK Employment Tribunal
      • Shah v First West Yorkshire Limited
  • 14. Holiday entitlement and sickness continued…
    • Practical tips
      • Allow those on long-term sick leave to continue to accrue holiday entitlement
      • Review sickness and absence policies and update
      • Encourage those on long-term sick leave to take accrued leave during that period (if financially beneficial to them)
      • Require immediate notification if employee falls ill whilst on holiday
      • Allow employees opportunity to take accrued leave on return from sickness
      • Remember that employees only have the right to take statutory (not contractual) leave at another time or carry it over if there is insufficient time in the current leave year for them to take it.
  • 15. Holiday entitlement - termination
    • Holiday pay on termination
      • Pay-in-lieu of untaken holiday on termination of employment is not necessarily confined to the current holiday year
      • Wang v Beijing Ton Ren Tang (UK) Ltd
    • Practical tips
      • Ensure that contractual provisions are clear regarding carry over of holiday
      • Do not make oral agreements outside the contract!
  • 16. Disciplinary and grievance procedures
    • Abolition of Statutory Procedures in April 2009
    • New ACAS Code – main changes
      • No automatic unfair dismissal for failure to comply
      • No requirement to lodge grievance before issuing claim
      • No mandatory uplift in compensation (was minimum of 10% for failure to comply)
      • Maximum increase or decrease in compensation limited to 25% (was up to 50%)
  • 17. Disciplinary and grievance procedures continued…
    • New ACAS Code of Practice – in a nutshell…
      • Act promptly, consistently, investigate, keep employee informed and allow them to put their case forward, allow employee to be accompanied and give them a right of appeal
      • Does not apply to redundancy dismissals, non-renewal of fixed-term contracts or collective grievances
      • Failure to follow can lead to increase or reduction in compensation of up to 25%
      • Not too different from old procedures – if your old procedures were compliant with the statutory procedures then they are likely to be compliant with the new Code
  • 18. Disciplinary and grievance procedures continued…
    • Practical tips
      • Check disciplinary and grievance procedures comply with the new Code
      • Make procedures non-contractual
      • Train staff on use of the procedures
      • Do not be afraid to refuse an employee’s request to be accompanied by a legal representative – this should only be permitted in very narrow circumstances
  • 19.
    • The Agency Workers Regulations 2010
    Bridget Wood
  • 20. Overview
    • How will the new Agency Workers Regulations affect agencies and their clients?
    • Introduction
    • What rights will “agency workers” have?
    • Who is an “agency worker”?
    • Possible workarounds
    • How will clients be affected?
    • How will agencies be affected?
    • Wider implications
    • Conclusion
  • 21. Introduction
    • European Agency Workers Directive first proposed in 2002
    • Blocked for 5 years by UK and some other member states
    • May 2008 TUC and CBI “deal” – UK resistance removed
    • December 2008 Agency Workers Directive became European law
    • UK must implement within 3 years whoever is in power in UK
  • 22. Introduction continued…
    • From May 2009: two rounds of consultation by the Department for Business Innovation & Skills (BIS)
    • 21 January 2010 The Agency Workers Regulations 2010 laid before Parliament
    • Come into force 1 October 2011
    • Subject to any amendments any new government makes following this year’s general election
    • BIS to publish guidance on the Regulations
    • Terminology
  • 23. What rights will “agency workers” have?
    • Directive = equal treatment from day 1
    • CBI-TUC “least worst” option deal in May 2008
      • 12 week qualifying period under UK legislation
      • various exclusions from scope
  • 24. What rights will “agency workers” have? continued…
    • 12 week qualifying period
      • minimum break of 6 weeks between assignments in order for the 12-week clock to be restarted
      • clock is also reset if the agency worker commences a new assignment which is “substantively different” from the one working on prior to the expiry of the qualifying period
      • anti-avoidance measures aimed at preventing obvious avoidance
    • Entitled to the same “basic working and employment conditions” as a comparable permanent employee of the client
    • Client will have to assess whether there is a comparable permanent employee with whom to establish equal treatment
    • “ Basic working and employment conditions” = pay, the duration of working time, night work, rest periods and breaks and annual leave
  • 25. What rights will “agency workers” have? continued…
    • What will “pay” include?
      • basic pay; and
      • any entitlements that are directly linked to the work undertaken by the agency worker while on an assignment, for example:
        • paid holiday (above Working Time Regulations entitlement if that is what a comparator is contractually entitled to)
        • payment of overtime
        • shift allowances
        • unsocial hours premiums
        • bonuses directly attributable to the amount or quality of the work performed by the agency worker, e.g. based on piece-work
  • 26. What rights will “agency workers” have? continued…
    • What will “pay” not include?
      • benefits such as share participation
      • profit sharing schemes
      • occupational sick pay
      • occupational pensions
      • contractual redundancy payment
      • bonuses based on organisational performance and those designed for long-term motivation and retention of staff
  • 27. What rights will “agency workers” have? continued…
    • Notice of client’s permanent vacancies
      • a “day 1” entitlement – not subject to the 12 week qualifying period
      • no requirement to advertise staff re-deployment vacancies
    • Access to client’s onsite facilities
      • a “day 1” right
      • canteen, childcare facilities, transport services
    • Access to training
      • to encourage access to government training
    • Rights for pregnant women and new mothers
      • e.g. paid time off to attend ante-natal appointments
  • 28. Who is an “agency worker”?
    • Within scope:
      • temps who are pay-rolled by the agency
      • anyone who undertakes “personally” to work for the client
      • umbrella company workers
    • Outside scope:
      • genuinely self-employed, e.g. company contractors
      • agency workers working on “managed service contracts” = specific service (e.g. IT support or catering) controlled and delivered by service provider – client pays for an output rather than hiring individual agency workers to work under the client’s supervision and direction
  • 29. Possible workarounds
    • 11 week assignments?
      • beware anti-avoidance measures
      • client concerns about agency worker turnover?
    • “ Swedish” derogation
      • agency workers with permanent contract of employment with agency
      • paid between assignments
  • 30. Possible workarounds continued…
    • Self-employed contractors
      • excluded if agency or client has the status of a client or customer of a profession or business undertaking carried on by the self-employed contractor
      • confirmation of how this exemption will work in practice in BIS guidance?
    • “ Project” basis without client “supervision or direction”
      • paid for delivering pre-scoped deliverable
      • substitution rights: not personal service
  • 31. How will clients be affected?
    • Administrative burden
      • agencies and clients will need to assess if agency worker is caught and, if so, compile data about pay etc.
    • Higher cost of agency workers?
      • widely reported concerns that costs will increase, but depends on type of agency workers engaged
      • lower paid agency workers?
      • high paid professional/technical agency workers?
      • cost of providing “day 1” rights?
  • 32. How will clients be affected? continued…
    • Claims against clients?
      • if an agency worker brings a claim and the agency can show that it took “reasonable steps” to ensure equal treatment by seeking the appropriate information from the client, the client will be liable to the extent there is a breach of the Regulations
      • client will be liable for failure to meet its obligations to put in place “day 1” rights
  • 33. How will clients be affected? continued…
    • May have to come to terms with new contracting models designed to avoid the application of the Regulations, for example, discontinuity resulting from turnover of agency workers to exploit the 12 week rule may:
      • reduce cost effectiveness of engaging agency workers?
      • increase recruitment and training costs?
    • Concerns about providing pay data on comparable permanent employees to agencies?
    • Will be asked by agencies to sign new contracts setting out the client’s obligations to provide such data
  • 34. How will clients be affected? continued…
    • Good news
      • the Regulations will give agency workers (and Tribunals) a framework under which agency workers can claim (relatively) limited rights to same “basic working and employment conditions” as a comparable permanent employee
      • better than the current position where agency workers assert rights as direct employees of the client and sympathetic Tribunals feel their only recourse is to “find” employment status
      • … which could trigger serious tax and class action employment claims for client per US experience
  • 35. How will agencies be affected?
    • Costs will all be passed on to agency?
      • increased pay rates will be deducted from agency’s margin?
      • cost of comparator exercise will be borne by agency?
      • clients will ask for indemnities from agencies?
  • 36. How will agencies be affected? continued…
    • Agencies will have to request “comparator” information:
      • if commercially sensitive: offer confidentiality/non-poach undertakings?
      • offer “comparator consultancy” as a value add?
      • chance for more sophisticated agencies to build deeper relationships with clients?
      • contract terms will need to be re-written to include obligations of client to co-operate and provide data
  • 37. How will agencies be affected? continued…
    • More “turn over” of agency workers:
      • helps margin where sliding scales apply, but more work finding new agency workers and potential loss of contract every 11 weeks?
      • elaborate systems of agency worker swaps between clients?
    • Immediate issue: educating and allaying fears of clients
  • 38. Wider implications
    • Trend towards employed model? Allows use of tax free travel, accommodation and subsistence expenses (not a “permanent place of work” if moved from client to client)
    • Trend towards clients setting up their own umbrella companies? Potential for VAT mitigation; agency becomes margin-only introducer of candidates
    • Umbrella companies contracting directly with clients (as part of trend away from regarding agencies as “owners” of candidates)?
  • 39. Wider implications continued…
    • Trend towards shorter term engagements and increased “turn over” of lower paid agency workers? Long-stayers managed out?
    • Use of company contractors/project agreements? Specialist higher paid contractors are likely to be relatively unaffected, especially if not under the “supervision and direction” of the client
  • 40. Conclusions
    • Will be law in the UK from 1 October 2011
    • May be changes to the Regulations if we have a new government this year
    • BIS to publish guidance which should help clarify how the Regulations are intended to work
    • Don’t panic - beware scaremongering – unlikely to apply to all agency workers and little effect in many cases
  • 41. Conclusions continued…
    • Identify which, if any, of your temporary workforce may be affected and break down by skill sets and pay grades
    • Clients and agencies need to start talking to each other about possible “workarounds”: no single solution will suit everyone – different industries will adopt different solutions for different skill sets and pay grades, but there will be solutions
    • Proper planning should mean that agencies and clients can set up contracting models avoiding major risk and allowing safe use of agency workers
    • Keep an eye out for updates following the general election and for the publication of BIS’s guidance
  • 42. Developments in 2010 Michelle Lawlor
  • 43. Overview
    • Equality Bill
    • Fit Notes
    • Additional Paternity Leave
    • Changes to compensation limits
  • 44. The Equality Bill
    • Most provisions expected to come into force October 2010
    • Will replace 9 existing major pieces of discrimination legislation with 1 set of rules
    • Aims:
      • harmonise
      • strengthen
  • 45. Equality Bill - protected characteristics
    • age
    • disability
    • gender reassignment
    • marriage and civil partnership
    • pregnancy and maternity
    • race
    • religion or belief
    • sex
    • sexual orientation
  • 46. Equality Bill - simplifying the law
    • Definition of indirect discrimination standardised
    • Existing concept of “disability-related discrimination” replaced by a similar concept of “discrimination arising from disability”
    • Discrimination by association
    • Protection from harassment extended
    • Need for comparator removed for victimisation
  • 47. Equality Bill - extending the law
    • Pre-employment health questionnaires
    • Pay transparency
    • Extension of “positive action”
    • Extra tribunal powers
  • 48. Equality Bill - practical tips
    • Practical tips
      • Monitor the progress of the Bill
      • Review existing policies and procedures and consider Equal Opportunities policies and monitoring
      • Train employees
      • Read guidance from Equality and Human Rights Commission
  • 49. Fit Notes
    • In force on 6 April 2010
    • Focus on fitness rather than sickness
  • 50. Fit Notes - what are the changes?
    • Two options:
    • unfit for work; or
    • may be fit for work taking account of the following advice, such as:
      • a phased return to work
      • amended duties
      • altered hours
      • workplace adaptations
  • 51. Fit Notes - what are the changes? continued…
    • Onus fully on employers to conclude what activities employee who is declared “may be fit for work” can or cannot do
    • Maximum duration of fit note reduced from 6 months to 3 months during the first 6 months off sick
  • 52. Fit Notes - what stays the same?
    • Fit note is still not required until after the seventh calendar day of sickness
    • Requirements for the payment of Statutory Sick Pay have not changed
    • Employers’ obligations under the Disability Discrimination Act to make reasonable adjustments have not changed
  • 53. Fit Notes - what is good about the new scheme?
    • Process of returning to work no longer requires 100% fitness
    • Encourages communication regarding possible changes that may facilitate a return to work
    • Employers not required to follow the GPs’ recommendations (subject to any obligations under the Disability Discrimination Act)
    • Fewer forms to deal with
    • New occupational health advice line available for employers with up to 249 employees from 1 April 2010
  • 54. Fit Notes - what is bad about the new scheme?
    • No pilot of new scheme – inconsistencies?
    • Disputes about changes to be made inevitable
    • Greater expense for employers?
  • 55. Fit Notes - practical tips
    • Practical tips
      • Amend policies and contracts
      • Provide training
      • Discuss changes with employee and carry out a risk assessment to assess fitness for work
      • Consider referral to an independent specialist
  • 56. Additional paternity leave & pay
    • Regulations in force on 6 April 2010
    • Families of babies born/adopted on or after 3 April 2011 will be able to choose whether the mother should forfeit up to 26 weeks maternity leave, which can then be taken by the father as additional paternity leave (APL)
    • APL will be in addition to the current entitlement to 2 weeks statutory paternity leave
  • 57. APL & Pay – practical tips
    • Practical tips
      • Update policies and provide training
      • Consider offering same terms and conditions for APL as employees receive during Additional Maternity Leave
      • Watch this space!
  • 58. Changes in compensation limits
    • Unfair dismissal – compensation award £65,300 from 1 February 2010
    • Injury to feelings:
      • £500 to £6,000 for less serious cases
      • £6,000 to £18,000 for moderately serious cases
      • £18,000 to £30,000 for the most serious cases
  • 59.