HR advice from the Professionals

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

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.

Annual appraisals have been given a makeover for some of our clients by seeing performance through different perspectives. This was achieved by using 360 degree feedback surveys, which gave individuals feedback from their colleagues and managers, and in turn contributed to their appraisal review. This feedback was seen as ‘useful’ and an ‘eye opener’ to organisations, as it gives the individuals a more rounded evaluation of their performance and areas for development. It also allows the individuals to gain an understanding of other colleagues perceptions about their behaviour at work, which is an insight that can be overlooked when the appraisal is only carried out with a managers input.

If your appraisals are getting tiresome and monotonous for you and your employees, why not try 360 surveys to gain a fresh perspective?

A female employee won a sex discrimination claim accusing her boss of bullying and harassment towards because of her ‘hormonal state at work’. A series of taunts, including calling the female employee a ‘good looking girl’ and condemnation for her ‘too high standards’ led the employee to raise a grievance and then eventually resign from her role over the treatment she was receiving. This was a clear case of sexual discrimination and harassment and she was awarded over £23k plus £7.5k for injury to feelings.

I have been carrying out some research into recent case law around disability discrimination. Disability legislation is a minefield and, if not followed correctly, could result in uncapped compensation payouts and a damaging affect on the Company’s reputation. Many recent cases have focused on the reasonable adjustments employers may have to make for an employee who is recognised as disabled under the Disability Discrimination Act 1995. Below are some of these cases that have involved the disability legislation which may cover issues raised in your Company.

The Disability Discrimination Act 1995 requires employers to make”reasonable adjustments” for a disabled person put at a substantial disadvantage by a provision, criterion or practice, or a physical feature of premises. The Act prohibits discrimination in relation to employment of disabled people, including recruitment, training, promotion, benefits, dismissal, etc.

Paterson v The Commissioner of Police of the Metropolis 2007

Key Principle - ‘Reasonable adjustments to prevent substantial disadvantage’

A police officer was required to complete an assessment process to allow promotion to Superintendant. He had recently been recognised to have ‘mild dyslexia’ and he was allowed 25% more time to complete the assessment. The police officer claimed that he had been discriminated against because of his disability and that the police had failed to make reasonable adjustments affecting his ability to progress in his profession. The claim lost and the tribunal found that his dyslexia would only impact a small proportion of his work activities as exams were not a common occurrence even though he would be at a significant disadvantage in high pressure exams compared with his non-dyslexic employees. Any adverse effects of his impairment were minor.

The police officer won his appeal arguing that once it was accepted that the disability affected his ability to progress in his profession, the only reasonable inference was that it had a substantial effect on his day-to-day activities. It would fundamentally undermine the protection which the DDA was designed to provide were it otherwise.

Implications for employers:

Employers who require employees to sit exams or assessments must make reasonable adjustments for dyslexics as dyslexia is a disability if it has a substantial and long-term adverse effect on the ability to carry out normal day-to-day activities which includes sitting exams. Reasonable adjustments must be made to ensure that no practices at work put dyslexic or other disabled staff at a substantial disadvantage compared with non-disabled employees.

Eastern & Coastal Kent PCT v Grey 2009

Key Principle - ‘Knowledge of disability’

Following on from above, the DDA also recognises that employers cannot be expected to make reasonable adjustments if they did not know an employee or prospective employee has a disability. The following exert of the DDA outlines where employers are exempt from making reasonable adjustments if:-

· the employer does not know that the person has a disability;

· the employer does not know that the person is likely to be at a substantial disadvantage compared with persons who are not disabled;

· the employer could not reasonably be expected to know that the person had a disability;

· the employer could not reasonably be expected to know that the person is likely to be placed at a substantial disadvantage in comparison with persons who are not disabled.

Grey, an employee of Eastern and Coastal Kent PCT applied for a role internally, requesting that the interview panel was not told that she was dyslexic. The Tribunal found that the interview panel should have been told and reasonable adjustments made. An appeal overturned this as the suggested reasonable adjustments could not be made in the job applied for and the experience and skills of the applicant suggested she was not at a substantial disadvantage in the interview process. Therefore the employer could not be expected to make reasonable adjustments as each of the four points outlined above were satisfied.

Implications for employers:

This has come as welcomed clarification. Employers may have discrimination claims brought against them if there is sufficient evidence to suggest that the employer could have reasonably known that the employee is recognised as disabled and failed to make special arrangements. As a result of this case, employers must provide evidence that all four points outlined above are met for a successful exemption. But this is not to suggest steps should be put in place to prevent such a claim being brought in the first place.

On a lighter note…

Although an employee suffering a genuine disability is a very serious matter for both employee and employer, the courts are still willing to reject disability claims that lack merit.

A recent case involved an employee claiming he suffered a disability in that his employer removed his personal heater and he could not work in temperatures of less than 27 degrees Celsius. He claimed to suffer from various chest ailments and breathing difficulties at lower temperatures and so was disabled. The Judge decided that his condition did not qualify as a disability under the DDA and threw out the claim.

Final thought……

This is a stark reminder for employers to take care when applying procedures, including recruitment, promotion, redundancy and all other aspects of employment relations. It is important that employers follow fair, clear and consistent procedures, and reviews of such procedures are carried out regularly to ensure compliance with legislation and best practice. Employers should be proactive when it comes to recruiting, and continue to ask applicants if they have a disability as part of the application form or a separate and confidential equal opportunities monitoring form. An employer is also wise to ask if the candidate has any special requirements at interview. If an employer has been prudent and asked the questions, it will be difficult for a claimant to argue an employer should have known they are disabled.

All contents are for information purposes only and are not intended to be legal advice. If you are experiencing an issue that is covered in this case law and would like advice please contact a member of the Gravitate team. We can provide professional advice and support in creating, implementing and reviewing Company policies and recruitment material (including job application forms) to ensure you are compliant with legislation and the risk of discrimination, whether disability, sex, age, race, etc, is removed.