Employment Law Updates

Age Equality Regulations

By now you should have looked at your procedures and practices to ensure they are compliant with the new regulations due to come in to force on 1 October, less than 2 months away!! The DTI have published the Age Discrimination Questionnaire which works very much in the same way as the other questionnaires already in use. It is suggest that you download a copy and familiarise yourselves with it so that if one lands on your desk it does not come as a complete surprise! Ageism Legislation - 1st October 2006

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Environmental Health Officers from South Lakeland District Council will be contacting businesses in the entertainment sector including nightclubs, bars and pubs to ensure they are prepared for the Control of Noise at Work Regulations 2005, which come into force on the 6th April 2008.

The new regulations require employers to reduce risks to employees hearing from exposure to excessive noise at work.

An employer will be required to assess the risks from noise and where necessary put controls in place to reduce noise exposure. There are also duties placed on employees to wear any hearing protection provided and to report and defects. Employees who work in the entertainment sector such as bar staff, glass collectors and security staff are classed as high-risk.

The new regulations are designed to protect employees against prolonged exposure to noise, which can result in loss of hearing over time or other hearing related illnesses such as tinnitus which causes ringing or buzzing in the ears.

SLDC's Environmental Health Team Leader, Tracey Howard said: "Many of the controls that employers can put into place to reduce and monitor noise exposure are simple and cost effective. We want to work with employers to ensure they are prepared for the new regulations when they come into force in April this year."

For more information and advice on the new Control of Noise at Work Regulations 2005, contact:

Don’t Rely on Expired Warnings!

Let’s say an employee has been given a warning, to expire after a specific period of time, (usually 6 or 12 months). If the employee is subsequently disciplined for the same reason, whilst it is well established that after a warning has expired the employer cannot follow on to the next level of the disciplinary action as though the previous warning had never expired, it was thought that you could take the first warning into account, given that it was for the same reason. However in a recent Scottish case the Court of Session held that no account whatsoever may be taken of the expired warning, even as one factor amongst many. Whilst this is a Scottish case it is highly likely that the English Tribunals and Courts will follow this decision.

So what can the Employer do in such a situation?

Remove any disciplinary warnings from personnel files as soon as they have expired so that they do not influence any subsequent decisions.

Review your disciplinary procedures, perhaps increasing the duration that a warning stays on an employee’s personnel file for serious matters.

Treat all employees consistently in respect of similar disciplinary offences.

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Focus on Notice Issues

There are 2 kinds of notice rights – contractual entitlements agreed between the parties and statutory entitlements laid down by legislation. As statutory notice requirements represent a minimum standard, they apply if the contractual notice rights are less favourable, but if the contractual notice rights are more favourable, then it is the contractual rights that take precedence and should be applied.

What happens if an Employer fails to give the proper notice?

This will amount to a breach of contract and will give rise to a claim for damages for wrongful dismissal. However you should be aware that if employment is terminated as a consequence of gross misconduct then you are not obliged to give the employee any notice or payment in lieu.

What happens if an Employee fails to give the proper notice?

The options for an employer in this situation are limited – surprise, surprise! You would of course not be obliged to pay the employee for those days they did not work within their notice period. Of course this may not worry the employee over much because they may be going to a better paid job.

In theory it is possible to sue the employee for breach of the notice provision in the contract. However this is rarely enforced as the financial loss to the Employer is often difficult to prove or quantify.

Another option, though again rarely used, is to counter-claim against the Employee who resigns and sues you in the tribunal for breach of contract. In practical terms, unless the employee is at senior management level it is easier and more cost efficient to cut your losses and let them go.

What happens when no notice period is stated in the contract?

In the absence of an relevant term in the contract the common law rule is that a reasonable period of notice must be given. Reasonable notice for a particular job is a matter ultimately to be determined by the civil court and is calculated according to factors such as length of service, the status of the employee and what is usual in the particular trade in question. Clearly expecting 3 months notice from a cleaner who has worked for you for 1 year is excessive, just as one week’s notice for the Chief Executive would be unacceptable.

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Harassment – additional remedy for employees

The House of Lords recently upheld the finding of the EAT that an employer can be vicariously liable in damages if an employee breaches the Protection From Harassment Act 1997. Essentially in employment terms this provides an additional remedy to an employee who is being harassed by another employee. Employers need to ensure that your employees know that any form of harassment will not be tolerated and if you do become aware of it, deal with it swiftly and effectively to avoid a claim being made against you.

An excellent example of the huge implications of making this form of protection available to employees was evident last week when a city secretary, bringing a claim under the Protection from Harassment Act was awarded £800,000 after a High Court Judge ruled that her employer had not protected her from bullying colleagues, whose behaviour included silent staring, laughter and raspberry blowing. If you find this concerning then you should be aware that the Protection from Harassment Act could also include such behaviour as abusive e-mails and text messages and even telling an employee off in front of their colleague.

It is therefore of course even more important that Employers ensure that your e-mail and telephone policies are up to date and adhered to, stating clearly that those forms of communication should not be abused in any way and that all employees are aware that to cause another employee anxiety or distress will not be tolerated.

Finally be aware that you could be liable for behaviour off the premises,
under this Act, such as the office Christmas Party, though to be able to show harassment the employee must be able to show that it occurred at least twice. Essentially make sure you know what is going on in your workplace and stamp out any unacceptable behaviour, cultivating an environment where colleagues respect each other.

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Holiday Entitlement Increases

At present each employee is entitled to 4 weeks holiday pay per year. E.g. if you work 5 days per week you are entitled to 20 days per year, if you work 4 days per week you are entitled to 16 days per year.

As from 1st October 2007 the statutory holiday entitlement has increased from 20 days to 24 days per year. The holiday entitlement will increase again on the 1st April 2009 to 28 days per year. Bank and public holidays can be included in the additional entitlement (eg if you already give your employees 4 weeks leave plus time off for bank holidays, their holiday entitlement will not increase). For part time workers holidays will be calculated on a pro-rata basis.

As an employer you may require an employee to take holidays at particular times. notice must be given if this is the case and should be given as soon as possible but no later than twice as many days in advance of the time off specified. E.g. if you require a worker to take holidays for 2 weeks beginning 1 June 2008, then notice must be given 4 weeks before.

When a bank holiday falls on an employee's normal working day and the business/company closes you can either:-

If the bank holiday falls on a day that the employee does not normally work, the employee is off work as normal and nothing is deducted from their holiday entitlement. No extra day(s) need to be given.

Holiday Rights in the Notice Period

Holiday entitlement, whether statutory or contractual continues to accrue during the notice period in the normal way. Furthermore there is nothing to stop the employee taking annual leave during the notice period subject to the notice requirements set out in Regulation 15 of the Working Time Regulations, and/or the Employment Contract.

Employees are entitled to pay in lieu of any unused statutory leave on termination of employment. If an employee’s contractual leave entitlement exceeds his or her statutory minimum, then any entitlement to payment in lieu of the contractual holiday accrued will depend on the terms of the individual employment contract. There is no general implied right to a payment in lieu of outstanding contractual leave, over and above statutory leave, in the absence of an express term on the issue. Whether such a term can be implied in a particular case will depend on factors such as custom and practice of the particular employer or in the relevant industry. In many cases the employer pays the contractual notice accrued as it rarely comes to many more than a day or two.

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Payment In Lieu of Notice

Employers often prefer to give employees a payment in lieu of notice (PILON) rather than let them work out their notice period. So what is the tax status of such payments? This will all depend on whether the PILON is contractual or non-contractual.

Contractual PILON is when the contract expressly allows the employer to dismiss the employee summarily by making a payment in lieu of notice (not to be confused with summary dismissal for gross misconduct, which of course would attract no notice pay in any event). When a PILON is made in accordance with the agreed terms of the contract, the payment is an emolument, i.e. part of the salary, and therefore is chargeable to income tax and NI contributions in the normal way.

Non-contractual PILON is when a PILON is made but there is no express term in the contract allowing such a payment and therefore in effect the employer is in breach of contract by making such payment. The payment itself then becomes a damages payment for the breach of contract and as such is not chargeable to tax or NI. But Beware – PILONS made as a matter of course will be seen by the Inland Revenue as taxable. The IR have a wide discretion to look at all such payments and deciding that they are chargeable to tax and NI. If you find yourself in such a position it is would advise that you take legal advice before you go any further.

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No one minds if the courier stops for some light-hearted banter with your receptionist or if your biggest customer enjoys a flirt with your top salesperson - or do they? New legislation has put the onus on employers to make sure that their staff do not face sexual harassment from clients, suppliers or members of the public.

The new rules, which came in to force on 6 April, mean that staff can claim unlimited damages for injury to their feelings from employers who fail to take reasonable action if they are aware that two cases of harassment have already taken place. The changes amend provisions already made in the Sex Discrimination Act 1975.

It will now be up to the employer to prove that they were not in the wrong. The rule applies if three different people have been bothering the same member of staff. So it isn't enough, for example, just to bar one wayward customer from your pub or restaurant.

It remains to be seen what exactly could constitute harassment. A tribunal might, for example, decide that a waitress who was repeatedly referred to as 'love' or 'petal' could claim damages.

The government was forced to change the law when the Equal Opportunities Commission (EOC) won a ruling that it had not implemented the European Equal Treatment Directive. This protects workers from 'any unwanted conduct related to their sex which violates their dignity or creates an intimidating, hostile, degrading, humiliating or offensive environment'.

According to one estimate, complying with the rules could cost small businesses over £10 million.

The EOC (now part of the Equality and Human Rights Commission) told the High Court that sexual harassment by customers was rife in the hotel and restaurant industry - which employs 670,000 females. The changes are expected to have most impact on businesses where staff are in direct contact with customers or in industries that employ a large proportion of women.

The types of workplaces where employers will have to be particularly watchful are likely to include:

A spokesman for Acas (Advisory, Conciliation and Arbitration Service) said that the law was still 'bedding in' but that the organisation could offer training to help managers to be aware of sexual harassment. Several small businesses could, for example, join together to send their managers on a bespoke course.

This might be particularly useful for the retail or catering trade. Acas already offers advice on its website about how to deal with harassment in the workplace. It will tailor this advice to deal with the new law as tribunals reveal the pitfalls to be aware of and how to deal with complaints.

Until then Acas suggests that businesses put up signs warning that harassment of staff will not be tolerated. Many places where staff have to deal directly with customers - such as hospitals, doctors' waiting rooms, ticket offices and public transport - already display such notices.

Make sure all your staff know where you stand on discrimination. Consider writing an equality policy that you can include in your staff handbook or as a separate document. Remember to include suggestions from employees and that suppliers and customers are aware of it.

Taking steps to avoid breaking the law is likely to be harder for businesses which encourage staff to socialise with customers. One possible grey area could be comments made outside the office when customers are off their guard. Feedback and suggestions from staff could help you to prepare for tricky situations.

The new law, though, may not be bad for business. A Canadian study of shop workers found that most had been sexually harassed by customers but were slow to complain because of the emphasis on putting the customer first. Instead, many avoided male customers or made a point of keeping their distance - both of which affected their performance. If employers can reassure staff they won't be harassed this could help improve productivity.

Targeted Enforcement.

HM Revenue & Customs has a network of 16 minimum wage enforcement teams around the UK, which respond to complaints about non-payment, help educate employers and employees and where necessary take enforcement action against those who fail to pay their employees what they are owed.

The third targeted programme of enforcement, the HMRC is working with representatives of the hotel sector, where a high number of migrant workers are employed. This programme will run for twelve months with targeted enforcement beginning in November 2007. They will build on this work by targeting the hospitality sector more generally throughout 2008.

As an employer, failure to meet the legal obligations under the National Minimum Wage Act constitutes a criminal offence and could result in a heavy fine.

Since 1999 the Government has helped tens of thousands of workers recover over £22.6 million in unpaid wages. The typical penalty for underpaying a worker is £200 per person. Employers who fail to pay the minimum wage can face prosecution, risking a criminal record and a £500 fine.

The excuses used by employers who avoid paying the National Minimum Wage are laid bare today as HM Revenue & Customs publishes a top 10 of some of the more unusual or outlandish reasons given to its enforcement teams.

The top ten worst excuses for not paying the minimum wage are:

By far the majority of employers are honest and scrupulous, so instances of non-payment are very much in the minority," said Paymaster General, Dawn Primarolo.

"But there are still some rogue employers out there willing to flout the law, which is why our enforcement teams are hard at work across the UK to ensure that everyone is getting paid at least the National Minimum Wage.

"We are publishing this list of excuses today to remind employers and employees of their rights and responsibilities in relation to the National Minimum Wage.”

UK Opt Out under threat

Every time EU Ministers meet further pressure is put on the UK from other EU Member States to abolish the 48 hour week opt-out. Whilst the Government continues to take a hard line on this it is unlikely to go away, with member states such as France and Spain likely to continue to raise the issue under successive EU Presidencies.

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The Work And Families Act has now received the Royal Assent so that
the parties and statutory entitlements laid down by legislation. As
statutory notice requirements represent a minimum standard, they apply if the contractual notice rights are less favourable, but if the contractual notice rights are more favourable, then it is the contractual rights that take precedence and should be applied.

What happens if an Employer fails to give the proper notice?

This will amount to a breach of contract and will give rise to a claim for damages for wrongful dismissal. However you should be aware that if employment is terminated as a consequence of gross misconduct then you are not obliged to give the employee any notice or payment in lieu.

What happens if an Employee fails to give the proper notice?

The options for an employer in this situation are limited – surprise surprise! You would of course not be obliged to pay the employee for those days they did not work within their notice period. Of course this may not worry the employee over much because they may be going to a better paid job.

In theory it is possible to sue the employee for breach of the notice, managers to avoid disruption and complaints to the employment tribunal. Also ensure your policies and handbooks are updated to reflect the changes.

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