HR advice from the Professionals

With the severe weather affecting the whole of the UK since prior to Christmas, the continuing poor weather has caused travel chaos for everyone.

Below, we have set out a number of FAQ of employer and employee rights during times of severe weather:

Some employees have been unable to get to work due to the severe weather, do I have to pay my staff who haven’t made it to work?

This is becoming a controversial issue, and widely reported on the news. Employees have a statutory right not to have unauthorised deduction from wages, and in most cases it will be unauthorised unless the contract of employment specifies this, or the employee consents.  However, it is understood that an employee who fails to attend work is in breach of fulfilling their contract of employment, and may not be entitled to pay.

You must consider whether an employee has made all reasonable efforts to attend work and or does your organisation have the ability to enable employees to work from home?

Many employers have made the decision to pay, particularly during the recent cold snap, and employers should be sympathetic to the fact that reports of this Winter being the coldest in almost 30 years!

For those who have been unable to attend work, should I record this as an absence or treat it as a holiday from the annual entitlement?

A less heavy handed approach is to treat as a holiday, due to the fact unpaid may be viewed as an unauthorised deduction from pay; however there is little case law to set a precedent. Equally, we would question whether an employer has the right to enforce annual leave at such short notice. Appropriate notice is usually said to be twice as long as the duration of the leave i.e. 2 days notice where the employer requests a day’s leave.

If you are choosing to dock pay from an employee who has been unable to attend work, good practice suggests making it clear to all employees, through a policy or staff communication of this practice.

What if I suspect that staff are using the cold weather as an excuse for not attending work?

In our experience, investigating the legitimacy of an absence in this situation requires a lot of time and resources, and would have to be backed up with sufficient doubt or evidence to suggest that the employee could have made it to work.  However, whatever you decide to communicate to staff in a policy or communication, it may be the case that staff who previously could not attend work start finding ways and means of attending!

An important aspect to bear in mind is health and safety and the overriding statutory duty of care. Whilst the authorities are urging individuals not to travel in certain areas unless absolutely necessary, you may wish to consider the pressure that you are putting people under to attend work. Also, be understanding if an employee turns up late for work, or needs to leave early to avoid additional travel disruption, particularly if conditions worsen throughout the course of the working day.

Give special consideration to those employees who are considered to have a disability, and encourage that they do not travel to work.

Employees should use their common sense however, and not attend to come in without taking unnecessary risks.

Some employees have had to attend to childcare after school closures, where do we stand?

It is understood that many schools close at short notice, often that morning. Where your employees have direct childcare responsibilities, flexibility should be offered to those who need to seek emergency childcare.

Under the statutory right for dependent leave, employees have the right to unpaid time off to deal with emergency situations and in the current weather, short notice of school closure could be regarded as an emergency. Strictly speaking, this could be an unpaid day or half day to sort out childcare, although you may wish to consider a holiday approach.

Whichever approach you take, ensure that it is consistent, for those employees with and without children.

You will see that there is no right or wrong answers to these questions, and it ultimately comes down to good communication, consistency in your approach in managing non-attendance. This is best guided by a robust severe weather policy.  Employers should take a balanced approach in encouraging employees to make all reasonable efforts to attend and forcing them into a situation where they are putting themselves at risk to get to work.

I read an interesting article this week regarding redundancies and the right to appeal. With the repeal of the statutory dispute resolution procedures in April 2009, there is now, no formal right to appeal during the redundancy process. However, our advice has always been to continue with current disciplinary and grievance procedures, as they go above and beyond the legal requirement.

This may sound like good news, making a redundancy process quicker, however a quick discussion round the office and we see that this may not be the best way to handle redundancies. Read on for our opinion on the right to appeal during redundancy.

Firstly, a redundancy is essentially no different to a ‘normal’ termination, where you are required to go through a number of key steps to avoid making it automatically unfair, offer the right to appeal to a more senior member of management or impartial Director. Therefore it is difficult to understand why due to the repeal of the dispute resolution regulations, that the right to appeal during redundancy has been removed, where all other employment rights apply.

Although an appeal process can lengthen a redundancy process, add more layers and potentially make decision making more bureaucratic, it does have it’s advantages, and bodes well for a fair and transparent process, that ACAS require. It may not be long before ACAS recognise the benefits that an appeal process brings to a redundancy situation, as we may now find, many organisations use this ‘loop-hole’ to their advantage - however could it not be to their disadvantage? Negating the need for an appeal, only heightens the risk for formal legal action. Wouldn’t you rather get any flaws of your redundancy process out in front of an appeal panel, rather than a Board room of lawyers, or even worse in a tribunal? Despite being 100% sure on the business case, there are always going to be pit falls, although often minor, in the selection process or criterion and therefore any employee selected for redundancy should get a chance to put their case forward, if they feel they have not been fully considered or unfairly selected.

In addition to this, having an appeal process in place, can often make the person taking responsibility for the initial redundancy decisions think more carefully about their choices, processes and procedures, should they have to justify their decision making to appeal boards or senior management.  It makes the process fairer, transparent and open, as employees feel that they have recourse.

Our advice is always to include the right of appeal in all termination situations, and include this clearly in your policy.

Welcome to the four edition of Gravitate HR’s quarterly newsletter. Each edition will detail up and coming legal changes, implications for your organisation and Gravitate HR case studies.

Download newsletter here

With constant developments in the media regarding Swine Flu, we have produced a document for employers, which provides general guidance and practical suggestions for managing Swine Flu within businesses.

We hope you find this helpful when making preparations within your organisation.

Download here

The Government are proposing to allow employees to sign themselves off sick for up to 14 days, double the current limit. The Department of health have put forward the proposals to try and contain the spread of swine flu.

There are concerns that there will be wide spread abuse of the system, however the proposals are only suggested to last for a period of 6 months.

It is imperative that companies think through their business continuity plans, should Swine Flu continue to spread at the current rate.

Any attendance at work policy should add some help to managing any abuse of the new system.

Another success for Gravitate HR working in collaboration with our clients.  For some months we have been in consultation with ACAS and a Trade Union on a proposed recognition agreement which the company did not believe was in the best interests of the workforce,  It was decided to go to ballot - with the Union requiring 40% of the vote to achieve recognition.  The outcome was strongly in favour of the NO vote

Our approach was informative, consultative and remaining open and honest with the workforce. It proved to us that our current methods of communicating with the workforce was and is being perceived positively.

We involved ACAS in order to ensure the statutory obligations were being met, to oversee the secret postal ballot.

It demontrates that a consistent approach, being open and honest and believing in what you’ve got works gets positive results.

This result allows our client to move on, how they see best for their organisation, dealing directly with the staff day to day and removing the need for a third party.

Rewarding employees for long-service has remained a grey area for many employers and HR practitioners due to the introduction of age discrimination regulations in October 2006. The regulations state that any contractual benefit which is subject to an employee reaching a certain age or which increases with length of service is potentially age discriminatory. At the stage of introduction of this recent legislation, around 36% of organisations provided benefits to their staff based on how long an individual has worked for them. Employers have now had to look at their long-service awards as part of the auditing process in response to the age discrimination legislation.

As we see a shift from ‘jobs for life’, many employers now raise concerns and question what are the best measures to put into place to retain loyal and experienced staff, ensuring long-standing commitment to the organisation? Are there any exceptions to allow offering long service awards?

Exceptions to the rule!

The first is the ‘five-year exception’. This entails any length-of-service award given in the first five years of employment is exempt from age discrimination regulations.

For benefits that accrue over longer than five years, there is a separate exception which requires employers to demonstrate that the reason for having a benefit dependant on length of service is to either ‘reward loyalty’, ‘encourage motivation’ or ‘recognise the experience of workers’.

Building a Case & Supporting Evidence

To justify a long-service award above and beyond five years of service, an employer will need to ‘build a business case’. Many employers look to recognize loyalty to the company and encourage staff retention.

What an employer must do is clearly show they have thought about how their long service award might be affected by the age discrimination regulations and come up with some evidence that demonstrates they have gone through this procedure and, importantly throughout, kept records of any decision making process.

Supporting evidence must be provided in the case of any challenge. This could include carrying out an employee survey for views on the benefit, seeking feedback during the course of exit interviews and monitoring staff retention statistics.

For example, if an employer says that they provide extra paid holiday to employees who have remained for six years and that this encourages loyalty, then the employer must have evidence that the extra holiday provision actually contributes to that legitimate aim. The evidence could include information the employer has obtained from monitoring, staff surveys or focus groups.

Therefore….

Long service awards that reward service beyond five years are exempt if you can show they ‘reward loyalty’, ‘encourage motivation’ or ‘recognise the experience of workers’.

But do not simply assume your long service award satisfies these criteria!

You will need to demonstrate that you have actively thought through how your long service award complies with age discrimination regulations carry out a full assessment of your benefit scheme, and collate supporting evidence to justify your decision.

Or, if you want to be certain there is no breach of age regulations, search for other means of rewarding loyalty and commitment. Are there any proxy measures you could apply? These might be successfully completing an induction programme, fulfilling particular training requirements or passing an internal skills or higher customer service standards test.

For further advice, or a review of your current benefit scheme, please contact a member of Gravitate HR on 0131 225 7458

As part of the Human Resources Management Masters course at Napier University in Edinburgh, students have to go on a three week placement with a local business.  I was offered a place at Gravitate HR and the placement has recently finished.  I was lucky enough to be part of a very friendly team of six HR professionals.  All team members, with no exception, have been very approachable and helpful in assisting me with my learning experience.

Gravitate HR is a consultancy that provides HR services to different clients.  This set up has enabled me to see how a diverse range of problems can be tackled.  Team members take part in team brainstorming discussions in the office about the different problems clients put forward.  Gravitate HR adds value to their clients by offering them solutions that are crafted from the collective experience of the team.

These discussions made Gravitate HR an excellent place to improve my knowledge on how to design and implement best HR practices.  Therefore in the short three weeks of my placement I learnt a great deal and even contributed to some of the ongoing projects, such as: assisting with the preparation of 360 Degree Feedback questionnaires and researching the legal requirements and potential implications for anyone wishing to hire someone on a self-employed basis.  A blog contribution and publication on the consultancy website were a great highlight of the whole experience.

I am looking forward to return in June to complete my Masters Dissertation’s field research on how the 360 degree feedback tool can positively contribute in the creation of effective management development plans.

Ricardo Mateus

In the current economic climate some companies might be tempted to hire independent contractors on a self-employed basis rather than hiring staff as employees. The advantages and flexibility seem extremely attractive as this individual will not be entitled to any employment rights (apart from non-discriminatory rights), will only be paid when he or she produces satisfactory results, and the administration and managing costs will be overall much lower.

This looks too good to be true so why aren’t other companies doing just that? The simple answer to this question is that the employment status needs to be properly justified because at some point it can be challenged. At that stage, if the company fails to justify the legality of their self-employment arrangements they can face hefty financial penalties from HRMC.

The employment status could be challenged by the person who was hired on a self-employed basis, particularly if a dispute arises regarding pay or working conditions for example. It will be the employer who has to prove the validity of the self-employment status and not the individual. At this point, the onus is on the employer to prove that the individual is not an employee.

Another possible scenario is when an Inland Revenue “status inspector” performs an employment status audit on the company. The Inland Revenue loses a great deal of revenue with self-employment arrangements (e.g. lack of employer national insurance contributions, etc) so it is on their best interest to prove that there is an employment relationship where the relationship is blurry.

How can we decide?

The Inland Revenue status inspector and Tribunals apply various tests to check the validity of the self-employment arrangement.

The main four indicative tests are:

(1) the Degree of Control Test (e.g. the amount of supervision and how much does the company control the how, when and where the individual works);

(2) Mutuality of Obligation Test (e.g. can the individual reject work without any future detriment?);

(3) the Economic Reality Test (e.g. Is the person in business on their own account? Is there a degree of financial risk? Can the person make a profit or a loss?)

(4) the Integration Test (e.g. is the self-employed individual’s work integrated with the core business or is this work only an accessory to it?).

There are other aspects that might be looked at as well, such us: is the person working on an exclusivity basis for the company or does it have several clients? Is this a short term project or is the person hired to work indefinitely? Does the contractor have the right to appoint a helper or a substitute to do the job?

Often, taking someone on as an ‘employee’ is a safer option. Additionally, making the person feeling part of the company and having more control over what the employee is doing will also bring great benefits to each party in the employment relationship.

A more flexible approach could be using “casual workers” where the casual employment relationship can widen the gap, for example, by using temporary or zero hours staff. You may wish to use this where you require flexibility or markets are unclear. It is important to note that all workers are still entitled to be paid the national minimum wage for each hour they work and that the premium that you will pay per hour to an agency might not make this option cost effective.

Each year, the Employment Tribunal Services provide statistics summarising the number of claims that have been brought to tribunal (both successful and unsuccessful), what the jurisdiction of each claim is, representation at each claim, and the subsequent compensatory awards for successful claims.

From last year’s report, the following statistics have been provided –

Total number of claims introduced into a tribunal from April 2007 to March 2008 was 180,303.

Included in those claims that were successful were:

*Only a small number of cases were brought forward to tribunal but this was an increase of 300% compared to the year below when Age Discrimination legislation was implemented.

What does this mean?

The high number of successful unfair dismissal claims can act as a stark warning to employers to ensure that best practice is applied and procedures followed, particularly in today’s climate where an increasing number of organisations are restructuring and, as a result, face potential redundancies.

The number of successful discrimination cases may be lower in comparison, yet the size of the compensatory award demonstrates the EU and the Government’s campaign for equality in the workplace. As a result of the recent age discrimination law being implemented, we may well see a continuing increase in the number of cases if employers do not respond to such legal requirements.

We have also seen recent reports of equal pay claims going through the courts from many organisations, including public sector, and therefore, there may be a knock on effect on the number of sex discrimination and equal pay claims over the coming months. The aim of the forthcoming Equality Bill will be to consolidate and streamline existing law, and also contain new measures to produce greater transparency in pay.

Discipline & Grievance Procedures

Recent developments in legislation, including the repeal of the statutory disciplinary and grievance procedures replaced by the new ACAS Code of Practice on 6^th April 2009, are expected to have an impact on how many unfair dismissal claims make it to a tribunal and the resulting success of such. The Code is aimed at promoting the resolution of disciplinary and grievance issues in the workplace, and ensuring that issues are dealt with in accordance with the basic requirements of fairness. The fairness of any procedure will be heavily dependent on whether an employer has followed the principles enshrined by the Code when dismissing an employee. A failure to comply with the code does not in itself render an employer liable for claim but it will be taken into account by the tribunal when considering whether or not the employer acted fairly or not.

Looking ahead…..

With impending legislation, a lot of discussion on the Working Time Directive, significant impacts from case law following discrimination cases, and the result of the new ACAS Code of Practice, it will be interesting to foresee what the results of next year’s tribunal statistics will look like yet it is clear that these current statistics present a benchmark for the changes.

To be sure of compliance with best practice and up to date on best practice, please contact Gravitate HR. The contents are not intended to be legal advice.