Employment Bulletin - April 201111th Apr 2011

by on 11th Apr 2011



I have been receiving enquiries about whether employers must give employees the day off to watch the marriage of Prince William with Kate Middleton on Friday, 29th April 2011.

The day has been declared a bank holiday. This does not necessarily mean staff are allowed a day's holiday from work. It will depend on the wording of their contracts of employment. If their contracts expressly allow them to have bank holidays off, then that is conclusive. If their contracts do not, but just provide that they are allowed (say) 28 days paid holiday a year, then ultimately you as employer have the final say on what days your workforce are allowed to take.

Having said that, you are likely to find a higher absence rate than normal - much like World Cup days - if you refuse employees the chance to take the day off to watch the wedding. Think carefully about which staff are critical to have working on 29th April, and which are not. Be aware that it will be difficult to dismiss any staff for taking the day 'sick' unless you can prove they were not telling the truth, which will not be easy. A Royal Wedding comes around once a generation; sometimes flexibility is part of the cost of doing business.

Neil Andrews Partner, Coles Miller LLP

Compulsory Retirement

It's finally here. Unless you served a notice giving notice to retire an employee on or before 5th April 2011, you will probably find yourself at the wrong end of an age discrimination and unfair dismissal claim if you now retire an employee. Any compulsory retirement will only be permitted after 1st October 2011 if it is 'objectively justified'; which is unlikely to be easy to achieve (note: some exceptions will remain for dismissals up until October 2012 if certain notice provisions have been followed - always provided the first notice of intention to retire is given on or before the crucial date of 5th April 2011).

If experience to date is anything to go by, tribunals are unlikely to be sympathetic to employers who cling to the old ways and think that they can continue to dismiss somebody just because they have reached a particular age. You now need to think carefully about amending contracts of employment and making sure your company adjusts to the implications of having an older workforce - including more focused appraisals and performance management of all employees, not just those who reach a certain age.

Employment Tribunal Reform

The tribunal system is up for reform again. The proposals, which are currently under consultation, come under 4 main headings:

  1. Reduce number of claims lodged: introducing fees in employment tribunals; increasing qualification periods for unfair dismissal from one to two years.
  2. Encouraging settlements: enabling greater use of alternative dispute resolution tools such as mediation; requiring all claims to be submitted to ACAS in the first instance, rather than the Tribunals Service to offer pre-claim conciliation in all cases; including a statement of loss as required information for claims involving monetary compensation; and having a formal offer to settle process with costs consequences.
  3. Shortening tribunal hearings: witness statements to be read in advance by the judge, and not read out aloud; withdrawing the payment of expenses in tribunal hearings to discourage nonessential witnesses from appearing; extending the case categories where judges can sit alone in tribunals to include unfair dismissal.
  4. Improving case management: introducing the use of 'legal officers' to deal with some case management functions; making the power to strike out more flexible; allowing a judge to be able to issue a deposit order at any stage of the proceedings; and increasing the deposit and cost limits for weak and vexatious claims.

These are all good for employers. Less good, however, is the proposal that any employer which loses a claim shall have to pay a fine, on top of the compensation for the employee, of 50% of the award made (up to a maximum of £5,000). This money will go directly to fund the tribunal system.

The government is currently consulting on these proposals. We will continue to keep you informed.

New Compensation Limits

The tribunal compensation limits have increased, in line with inflation, for all dismissals on or after 1st February 2011.

The main changes are that the maximum week's pay for redundancy payments (or a basic award) has increased to £400; leading to a maximum award of £12,000 (30 weeks x £400). The maximum compensatory award for unfair dismissal has increased to £68,400.

Industrial Action

We are warned we might face strikes and co-ordinated industrial action over coming months, due to the government's spending cuts. The laws governing strikes are often regarded as complicated, imposing strict requirements in terms of what must go onto ballot papers, who must be entitled to vote (and, similarly, prevented from voting), and what trade unions need to include in letters to the employer.

Traditionally, even the tiniest error by a trade union can result in an employer obtaining an injunction to stop the strike (or, more accurately, to delay the strike - since the union can simply repeat the ballot process and get it right second time around).

This month, the Court of Appeal has relaxed the approach to strike injunctions, stating that the rules have to be broadly followed but a pedantic, literal approach is inappropriate. This means that unions can get away with less rigorous procedures before calling a strike, and employers will find it much harder to obtain injunctions to stop the strikes.

Draft Guidance for Agency Workers Regulations

The Department for Business, Innovation and Skills has published comprehensive draft guidance on the Agency Workers Regulations 2010 for employers and recruiters. The document is available for comments on the BIS website until 15th April 2011. The Regulations are due to come into force on 1st October 2011 and BIS will consider any feedback before finalising the guidance.

The Regulations give agency workers equal treatment to normal, permanent staff. This means giving an agency worker the same entitlements in basic working and employment conditions (e.g. conditions relating to pay, rest periods or annual leave) "as if" that worker had been recruited directly as an employee or worker to occupy the same role.

However, genuinely 'temporary' agency workers, who work for less than 12 weeks, will be exempt. The 12 week period begins on 1st October 2011, so no agency workers will be able to claim these new rights before Christmas 2011. It should be noted that equal treatment is not required in respect of all the terms and conditions that a worker would be subject to had s/he been recruited directly. Equal treatment covers basic working and employment conditions that are usually included in relevant direct employees' contracts of employment or in permanent employees' contracts as a matter of course. The principle has no effect in the case of terms and conditions that are not included in this way or in work environments in which there are no 'basic working and employment conditions'.

The Regulations will not change the employment status of agency workers.

Guidance on the Bribery Act

Guidance relating to the Bribery Act 2010 (which comes into force on 1st July 2011) has just been published. It explains procedures that commercial organisations can use to prevent bribery.

From July, it will become a criminal offence for commercial organisations (an organisation that 'carries on a business') to fail to prevent bribery. This will happen if one of your employees or contractors bribes another person, intending to obtain or retain business for your business or to obtain or retain an advantage in the conduct of your business.

However, there is an important defence. If your business had adequate procedures in place designed to prevent people associated with it from engaging in such conduct, then you will not be guilty of any criminal offence. We suggest you review your businesses, carry out the relevant risk assessments and determine whether your procedures are adequate to prevent bribery. Where they are not, you should introduce appropriate antibribery procedures without delay. Please contact us if you would like further guidance.

Ignoring your Disciplinary Procedure

You could be forgiven for thinking that we are going to remind you of the importance of following your disciplinary procedure. And of course, that's normally an important rule. But the Employment Appeal Tribunal, in a display of lateral thinking, has found a way of excusing an employer which failed to follow its own procedure.

In Ezsias v North Glamorgan NHS Trust, a consultant surgeon claimed he had been unfairly dismissed. The real reason for the dismissal was that his behaviour had led to a breakdown of his relationships with colleagues at work, and they had expressed unwillingness to continue working with him. The NHS Trust did not follow its misconduct dismissal procedure, and the Employment Appeal Tribunal said this did not make the dismissal unfair because Mr Ezsias was not dismissed for his conduct, but because of the breakdown in relationships.

Don't be too heartened by this case; it was unusual. Normally, a failure to follow your own disciplinary procedure is likely - unless the breach is minor - to make a dismissal unfair even if the employee is plainly guilty of misconduct.


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