Oliver McCannn
|
Employers Update - April 2011
Welcome to the April edition
of Employ!
There have been a number of
developments from the last Employ!
edition, with the government
guidance published for the Bribery
Act 2010 (in force 1st July) and the
draft guidance published for the
Agency Worker Regulations (in force
1st October). In addition, a number
of important cases have been
decided.
Through Employ! we aim to keep you
informed about key developments in
HR and employment law, along with an
indication as to what these
developments actually mean for you.
As ever, keep submitting your HR
questions. If you would like an
informal discussion regarding any
matter contained within this edition
of Employ!, or indeed wish to find
out more about Taylors’ services,
please
contact us.
Oliver McCann - Partner and
Head of Employment
James Bellamy
- Employment Solicitor
Tel: 0844 8000 263
Email:
oliver.mccann@taylors.co.uk
|
|
|
|
The Agency Worker
Regulations come into force on 1st October
2011 and many have been awaiting publication
of the government’s guidance, to try to
understand the finer detail of some of the
draft regulations.
The draft guidance was
published at the beginning of April and,
following consultation, will be finalised at
the end of this month. A copy of the
guidance can be
accessed at this link.
What do I need to know?
If you use or supply agency
workers, then you need to understand the
important changes taking place from October
2011! The overriding theme is one of equal
treatment for agency workers as if they were
employed directly.
Key points:
-
Agency workers will have
day one rights – a right to equal
treatment in terms of access to onsite
facilities and information about
vacancies.
-
Agency Workers who
accrue 12 weeks service with the same
hirer in the same role will be entitled
to equal treatment in relation to pay,
working time and annual leave.
-
The accrual of 12 weeks
service is complicated with different
situations resulting in the clock either
being restarted, paused or continuing.
Understanding these situations is
important to understanding when the
agency worker acquires rights.
-
A temporary work agency
(a supplier of agency workers) may
include master/neutral vendors and
intermediaries such as umbrella
companies and person service companies.
It does not cover managed service
contracts where the contractor is
responsible for the supervision of the
workers and nor does the definition
capture secondment or bank staff
situations.
-
Pay can include hourly
rates, basic salary, fees, commission,
overtime rates, shift allowances,
holiday pay, bonuses based or
attributable to quality or quantity of
work and luncheon vouchers with a face
value. It does not include company sick
pay, pension payments (although agency
workers will be covered under compulsory
pension requirements from 2012),
maternity or paternity leave payments,
profit share schemes, long service
awards, expenses or benefits in kind.
-
The comparator test is
what terms would ordinarily be applied
if the worker had been recruited
directly by the hirer.
-
The agency worker can
request information about compliance
with obligations and which right it
relates to will determine whose
responsibility it is to respond. There
are time limits to follow. A failure to
respond can result in an Employment
Tribunal drawing adverse inferences.
-
Where there is a breach
of the Agency Worker Regulations,
liability for day one rights always
rests with the hirer and in relation to
week 12 rights initially with the agency
(but the hirer may be jointly or fully
liable if the agency can satisfy in
whole or part the defence that it has
obtained or took reasonable steps to get
details of relevant information and it
was reasonable to rely on any
information supplied by the hirer).
In practice, the Agency
Worker Regulations mean that there will have
to be a close working relationship between
the agency and the hirer with an exchange of
information (and retention) between the
parties so that each can assess the agency
workers rights, if any, under the Agency
Worker Regulations.
Note that any arrangement
which is found to deliberately avoid the
regulations where they would ordinarily
“bite”, may result in an additional penalty,
against either the agency or the hirer, of
up to £5000.
Hirers of agency workers
should be particularly aware that some
suppliers of agency workers are attempting
to use what is known as the “Swedish
Derogation” – where the worker is
permanently employed by the agency and the
worker continues to be paid between breaks
in assignments at a rate of pay at least 50%
of on assignment basic pay and no less than
the national minimum wage. Whilst this may
be permissible under the exemption, it is
critical that the hirer carries out proper
due diligence to ensure that the arrangement
would properly fall within the exemption,
failing which both hirer and agency are
exposed.
The government has now published its
guidance in relation to the Bribery Act
which means the Act will come into force on
1st July 2011.
What do I need to know?
In the January edition of Employ! we set
out the key aspects flowing from the
anticipated introduction of the Bribery Act
2010, details of which can be found here:-
www.taylors.co.uk/employ/january2011.htm.
The guidance focuses on what “adequate
procedures” are and what may be the basis of
a defence against prosecution. Six guiding
principles have been developed in relation
to adequate procedures:
- Proportionate procedures.
- Top level commitment to the
procedures.
- Risk assessments to identify risky
relationships or areas of exposure in
procedures.
- Carrying out due diligence on
business relations.
- Communication – ensuring all are
aware of the procedures.
- Ongoing monitoring and review.
The guidance can be accessed here:
http://www.justice.gov.uk/guidance/docs/bribery-act-2010-guidance.pdf.
A recent EAT decision has confirmed
that favouring a woman on maternity leave in
relation to redundancy scoring was both
unfair and unlawful sex discrimination
against the male comparator.
Here, a male solicitor was selected for
redundancy after he scored lower than his
colleague who was on maternity leave. The
female solicitor was given a maximum
notional score for a criterion which
measured performance in relation to bills
paid which in part covered the female’s
maternity leave period. The male scored
lower on this criterion and, as a result,
overall. Had the female scored any less than
the notional maximum she would have been
selected for redundancy.
Eversheds defended the claim by arguing
that s2(2) of the Sex Discrimination Act
1975 stated that “no account shall be taken
of special treatment afforded to women in
connection with pregnancy or childbirth.”
What do I need to know?
S2(2) should be construed so as only to
refer to treatment which is a proportionate
means of achieving a legitimate aim of
compensating a woman for the disadvantages
occasioned by pregnancy or maternity leave.
This does not extend to favouring such
employees beyond what is reasonably
necessary to compensate them for any
disadvantage.
Where a pregnancy or maternity related
benefit is disproportionate, a disadvantaged
colleague may claim sex discrimination.
Importantly, it was held that there were
other ways to deal with the situation on
scoring arising from the employee’s absence
due to maternity which were less
discriminatory, such as measuring the
female’s performance during the period of
employment before she commenced maternity
leave.
Employers need to carefully consider any
redundancy selection criteria to determine
whether any are potentially unfair or
favourable to certain employees. Problems
usually arise in relation to disabled
employees with poor attendance or long
periods of absence, pregnant employees,
those on maternity leave and those with poor
attendance due to childcare issues.
Under the Employment Equality (Sexual
Orientation) Regulations 2003, harassment
was defined as “unwanted conduct on grounds
of sexual orientation” which had the purpose
or effect of “violating a person’s dignity
of creating an intimidating, hostile,
degrading, humiliating or offensive
environment” for them. The Equality Act 2010
has now replaced these regulations but the
harassment provisions are basically the
same.
A recent case determined that an
employee’s claim of harassment under the Act
failed, a decision that was upheld by the
EAT.
The employee, who was not gay, complained
that he had been harassed contrary to the
Regulations. He argued that his colleagues
had subjected him to homophobic banter
because he had attended boarding school and
lived in Brighton. The banter included
calling him names such as “faggot”. The
Court of Appeal confirmed that the employee
was covered by the Regulations, despite not
being gay himself.
What do I need to know?
The employee’s claim for harassment
ultimately failed because he himself had
written a number of articles which were
riddled with sexist and ageist innuendo, was
very friendly with his alleged tormentors
throughout the period in question and did
not complain about their conduct previously.
As a result, it was held that the alleged
offensive behaviour did not, actually in the
employee’s eyes, have the effect of creating
an intimidating, hostile, degrading,
humiliating or offensive environment as he
alleged.
Courts must approach the issue of
harassment and its “effect” objectively but
keep in mind the subjective position of the
employee alleging to be the victim. A major
reason for the failure of this claim was
purely the fact that the employee had
himself demonstrated offensive behaviour and
therefore the conduct directed at him could
not have had the effect of violating his
dignity or creating an intimidating,
hostile, degrading, humiliating or offensive
environment for him.
A recent case has confirmed that
notice of dismissal only commences to run
the day after it is given.
What do I need to know?
An employee was given 3 months’ notice in
writing to terminate his employment on 3rd
November. The letter was emailed and read by
the employee on the same day.
The employer believed the date of
termination was 2nd February and so, when
the employee lodged a claim with the
Employment Tribunal on 2nd May, the employer
alleged that the claim was out of time (nb.
claims have a 3 month less one day rule and
so the claim should, if the employer was
right, have been lodged on 1st May).
The Tribunal held that the effective date
of termination was 3rd February, with notice
not starting to run until the day after it
was served, ie. 4th November. Further, the
fact that the employee was only paid until
2nd February did not bring forward the date
of termination.
This is an important issue where a
dismissal needs to be effected by a certain
date for other reasons, e.g. perhaps to
avoid additional benefits accruing, etc. The
only way to circumvent the case law is to
contractually stipulate that notice starts
to run from the day it is actually served.
Q. We have an employee who has been
absent from work since mid January 2011. We
have just received a further fit note
signing the employee off work for a further
4 weeks. This employee has, however, two
weeks holiday booked at the beginning of
May. Do we pay her holiday pay or not?
A. Case law suggests that it is up to the
employee to elect whether they wish to use
their holiday leave during periods of sick
absence. I would recommend that you contact
the employee and ask her to clarify whether
she wishes to treat such two week period as
annual leave or sick leave – her decision
will determine whether you pay sick pay or
holiday pay!
Q. We recently acquired a business which
was struggling. We understand that previous
deals for the purchase of the business had
fallen through and that the seller, in
anticipation of those deals and at the
request of the previous interested parties,
had dismissed a number of employees. We have
now received claims for unfair dismissal. Is
this possible as we were not even a
prospective purchaser at the time of the
dismissals and had no input in or influence
in relation to the dismissals?
A. I am afraid that where dismissals are
made pre-transfer with the intention of
improving the prospects of a sale, then such
dismissals will be automatically unfair by
reason of a transfer, notwithstanding the
fact that the identity of the buyer is
unknown. The dismissals should have been
identified in pre-acquisition due diligence.
You may have the benefit of an indemnity
under the Purchase Agreement, which you
could seek to enforce in relation to any
liability. You may also be able to defend
the claims if there was an economic,
technical or organisation reason for the
dismissals such as redundancy – liaise with
the seller to find out more about the
reasons for dismissal.
Copyright 2006 - 2011 Taylors Solicitors
»
Print
» |
