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In this Round-up: -
Right to Request Flexible Working
National Minimum Wage - 2014 Rates
Increases in Statutory Payment Rates
Statutory Sick Pay Scheme Changes
Employment Tribunal Cases Fall
ACAS Early Conciliation Scheme
'Whistleblowing' Doctor Unfairly Dismissed
Pension and Auto-Enrolment Update
Cases of Interest 1 ~ Validity of Restrictive Covenants
Cases of Interest 2 ~ Health & Safety (Corporate Manslaughter)
The Children and Families Act has finally received Royal Assent and will introduce the right of all workers to request flexible working; whether that means working from home, job share, compressed hours or other forms of flexible working. Previously, this right was only applied to employees with children aged under 17 (aged 18 if the child has a disability) or those with other caring responsibilities.
The law, which comes into effect in April, will enable any employee, who has worked continuously for the employer for 6-months (26-weeks) to request to work flexibly after the 30th June 2014. The Act has not been welcomed from all sides and the British Chambers of Commerce and the Confederation of British Industry (CBI) have been most critical of the changes; with the former stating in 2012 that 'the changes risked causing unnecessary friction between parents and employers and will raise unrealistic expectations about the level of flexibility that most businesses are able to accommodate.'
However, it should be remembered that the right only extends to the 'request' to work flexibly and is not a 'right to work flexibly'; employers are required to 'reasonably consider all requests' that are made by eligible workers and if they are unable to accommodate such requests, they can refuse to grant them.
Employers should think about putting in place appropriate policies to manage such requests for flexible working to ensure that each request is handled fairly, particularly if there is a likelihood that they will be refused.
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It was announced in March that the National Minimum Wage for working adults will be increased by 3% from £6.31 an hour to £6.50 an hour with effect from 1st October 2014. The BBC reported that the increase will benefit a million workers who are currently employed on the minimum wage and is the first time in six years that the rate will increase at a level higher than inflation, which currently stands at 1.9%.
There will also be increases for those workers aged below 20 and apprentices as outlined below:
18 – 20 year olds will get a 10p per hour increase to £5.13 per hour (2% increase)
16 & 17 year olds will get a 7p per hour increase to £3.79 per hour (2% increase) and;
Apprentices will receive an extra 5p per hour, taking their hourly rate to £2.73 (1.9% increase)
The increase falls considerably short of 'the living wage'; which currently stands at £8.80 per hour in London and £7.65 across the rest of the UK. Consequently, whilst the increase has been welcomed in most quarters, there are some who do not believe the announced increase goes far enough...
It was suggested earlier in the year that the Chancellor backed the idea of the minimum wage increasing to £7.00 per hour by October 2015 and whilst this week's announcement goes some way towards achieving this level, it would still mean that there would need to be an increase of 7% next year alone for this to happen. This seems highly improbable, but (and it is a big but!), next year will also see a General Election being held and this is likely to result in lots of promises being made by all parties and we will need to wait and see what comes out of that...
Employers who are employing individuals on one of the minimum wage bands will need to increase their employees' pay from October this year to the new hourly rate and in the longer-term and from a budgetary planning perspective, it may be sensible to assume that there will be a significant increase announced next year and to ensure that they are prepared financially for this.
Increase in Statutory Payment Rates - 2014
With effect from the start of the new tax year, 6th April, the following statutory payment rates will apply:
Statutory sick pay will increase to £87.55 per week (from £86.70) [See below]
Statutory maternity, adoption, paternity (including additional statutory paternity) pay will increase to £138.18 per week (from £136.78)
A statutory 'weeks' pay will increase to £464 (from £450)
Statutory 'guarantee pay' increases to £25 per day
The maximum unfair dismissal basic award/statutory redundancy payment will increase to £13,920
The minimum basic award in unfair dismissal cases for Health & Safety, Employee Representative, Trades Union or Occupational Pension Trustee reasons will increase to £5,676
The maximum unfair dismissal compensatory award will increase to £76,574 or 52 weeks' gross pay (whichever is the lowest) and the maximum award that will be made in cases of unfair dismissal will be £90,494, increased from £87,700
With effect from 6th April, the Statutory Sick Pay Percentage Threshold Scheme (PTS) has been abolished; meaning that employers will be responsible for the payment of Statutory Sick Pay (SSP) and will no longer be able to reclaim any SSP that has been paid to employees. The current weekly level for SSP is £87.55 and is payable to employees who have been absent for more than four consecutive days as a result of illness (subject to qualifying conditions and regulations). Employers will have until the end of the 2015/16 tax year to claim reimbursement in respect of and SSP paid to employees who were absent from work prior to 5th April 2014.
Alongside this, the associated requirements for keeping records of employee absence have also been abolished. Although there is no longer a statutory requirement to keep such records, it is recommended that employers continue to keep such records for the purpose of managing employee attendance and that they keep such records, deemed to be 'sensitive personal data', in accordance with the requirements of the Data Protection Act.
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Fall in Employment Tribunal Cases
It has been reported in People Management that the number of employment tribunal claims has fallen significantly for a third consecutive quarter according to the latest figures produced by the Ministry of Justice. In the third quarter of 2013 (October to December) there were 9,801 new claims submitted, 79% fewer than in the same period the previous year. These figures also report that the number of 'disposals'; where cases are closed through either withdrawal, settlement, dismissal or pre-tribunal hearing decision has increased and is at the highest level since the start of this data series in 2008/09. In that same period, 34,767 employment tribunal claims were 'disposed', an increase of 36% in the same period of the previous year.
However, having produced the figures the MoJ have urged caution in accepting these as a definitive source of data, citing that the figures are provisional and could be affected by changes in the way that data is recorded/reported since the introduction of Employment Tribunal Fees. There is a mixed response to the figures from those in the legal profession; whilst some believe that this is a positive step for employers and indicative of a reduction in the number of employees bringing vexatious/malicious claims because of the introduction of fees, others believe that it is less clear-cut and the reductions could be a result of other changes such as the extension of the qualifying period before unfair dismissal claims can be brought, changes to the compensation cap for unfair dismissal claims and possibly even the use of civil courts to resolve contract claims, which is now a cheaper option.
The coming months will see further changes being introduced to Employment Tribunals including new 'strike-out' powers to ensure that weak cases are halted at the earliest opportunity, guidance from Employment Tribunal Presidents and a new procedure for 'preliminary hearings as well as the introduction of the 'Early Conciliation Rules' which will come into force on 6 April 2014. Consequently, it seems likely that it will be a while before we have figures which can be relied upon to give us an accurate picture of what is going on with Employment Tribunals.
The ACAS Early Conciliation Scheme has now been introduced and is available to all Tribunal claimants from 6th April 2014. However, it will become a legal requirement for claimants to have made an 'Early Conciliation' notification to ACAS with effect from 6th May 2014, except where exemptions apply. An example of where an exemption may apply would be in cases where there are multiple claimants and one of those claimants has made a notification to ACAS; then others involved in the case may be exempt from doing so.
Although there is a legal requirement for a notification to ACAS to be made; participation in the scheme remains voluntary and either party only need to take part in discussions and attempts to resolve the issue if they choose to do so and the process can be stopped by either party at any time.
The benefits of the scheme have been identified as:
It will provide both parties with a clear idea of the strengths and weaknesses of their potential case and explore options available for resolving the issues
If the claim can be resolved without going to Tribunal, it will save time, money and stress for both parties
It gives the parties in the dispute some control over the outcome and may provide them with options that would not be available following a Tribunal e.g. agreed references, written apologies etc.
The confidentiality of both parties can be maintained throughout the process, which is not the case with Tribunals, which are conducted in public
In cases other than dismissal, i.e. where the employee is still employed, it provides an opportunity to reach an amicable solution without the risk of the employment relationship breaking down entirely
It can be concluded much more quickly than going to a Tribunal.
The Early Conciliation process has the effect of 'pausing' the given timescales for making a claim to a Tribunal by up to six weeks (one month, plus 14-days if additional time is required); meaning that in an unfair dismissal case, an employee who would ordinarily have 3-months from the date of dismissal to make a claim will have that three months' 'paused' once they have contacted ACAS and the time will resume once confirmation has been received that Early Conciliation has concluded and the 'Certificate' issued.
For claims to proceed to a Tribunal at any stage, ACAS will need to issue a 'Conciliation Certificate', which confirms that the requirements of early conciliation have been met. Without this certificate, a claim will not be progressed.
It will be interesting to monitor the impact of this scheme on Tribunal cases and whether the voluntary nature will yield genuine and positive results and a reduction in cases progressing to Tribunal or if it will become a 'box-ticking' exercise. We will watch with interest.
'Whistleblowing' Doctor was Unfairly Dismissed
An Employment Tribunal has ruled that a Doctor was unfairly dismissed by the University Hospital of Coventry & Warwickshire NHS Trust after he had raised concerns about patient safety. In 2001, Dr Raj Mattu had 'exposed' the cases of two patients who had died in crowded bays at Walsgrave Hospital in Coventry and this was then followed by what was termed 'many detriments' by the Employment Tribunal Judge, Pauline Hughes, attributed to him being a 'whistleblower'.
The sequence of events included:
September 2001: speaks out about patients dying in overcrowded bays
February 2002: suspended over allegations he bullied a junior doctor
July 2007: allowed to return to work but only after re-training - never completed
March 2009: General Medical Council clears him of bullying allegations
November 2010: sacked by the hospital trust
August 2011: loses an appeal to overturn his dismissal
The Tribunal Judge stated that Dr Mattu's allegations about patient safety had been serious and had attracted significant media coverage and public interest and that he had not 'caused or contributed' to his dismissal. However, the Tribunal said it could not prove Dr Mattu's claim that his dismissal in 2010 was a direct consequence of the whistleblowing, as 'those claims were presented out of time'. However, the Tribunal held that he had been unfavourably treated as a consequence of a disability; but dismissed his claim that he had been racially discriminated.
The Trust has stated that they are disappointed with the ruling and will now examine the 400-page report to determine if there are grounds for an appeal.
Any amount of compensation awarded has not been reported, but it has been claimed that the long-running case has now cost the tax-payer in the region of £10 million.
The roll-out of 'auto-enrolment' continues and staging dates for employers with between 50 and 249 employees have now been reached, commencing from this month. There have been some changes to the provisions of auto-enrolment as outlined below:
With effect from 6th April 2014, the thresholds and limits have been amended as follows:
The earnings trigger for auto-enrolment is now £10,000 (was £9,440)
The lower limit of the qualifying earnings band is now £5,772 (was £5,668)
The upper limit of the qualifying earnings band is now £41,450 (was £41,865)
All figures remain linked to the income tax earnings threshold and the lower/upper limits for National Insurance Contributions.
The second phase of amendments to secondary legislation have now come into force, specifically those concerned with deadlines and sees the following deadlines extended from one month to six weeks:
Employers providing information to individuals on their 'opt-in' rights
Employers providing information to individuals on their joining rights
Provision of postponement notices
The auto-enrolment joining window
Deadlines for registration.
The only deadline which is not affected by the change is the opt-out period for workers, which remains at one month.
One further change concerns the minimum contributions made by an employer following a TUPE transfer. Until now, the TUPE Regulations and Auto-Enrolment legislation have been at odds with each other; with the former requiring the transferee (the receiving employer) to match pension contributions up to 6%. The Transfer of Employment (Pension Protection)(Amendment) Regulations 2013 now allow the transferee to match the transferors contribution even in cases where the transferor has only paid the minimum contributions into a defined contribution scheme. The existing requirements for defined benefit schemes remain unchanged.
Employers should ensure that these changes are reflected within their communications to employees about pensions and that their processes/systems are updated to manage these changes.
The world can be a very small place and and nowhere is this more evident than when you move on from a position with one employer to another; only to discover that you are working with someone you have worked with previously or who you have dealt with in a previous post. So why is it then, that some people insist on burning their bridges once they have handed in or have been given their notice... Spotted in a recent edition of People Management:
"One chap was dismissed for poor performance. A few months later a postcard turned up from New York from him, saying in effect that he had hated working for us and now had a great job, with a fab-sounding job title, was earning far more money and was jet-setting internationally. What he didn't know is that one of our Directors knew one of the Directors at the Company he had joined. Discreet enquiries revealed the chap was on a short-term contract, he had only gone overseas once and his job was far more routine than he had made out."
A recent case has shown that the restrictive covenants placed into a contract of employment limiting post-termination employment activities by an individual were legitimate, despite most of the relevant information being widely available through various internet and social media sites.
The case in question concerns a Recruitment Agency working in Essex who specialised in matching teachers to schools within Essex and a former employee Ms Palmer – East England Schools CIC (t/a 4MySchools) v Palmer. Ms Palmer had worked for EES and an integral part of her role was to build relationships with schools and teachers, who would then sign up as or remain as clients of EES. Within her contract of employment was a restrictive covenant which prevented her from soliciting or dealing with any client (school or teacher) with whom she had dealt with in her last 12-months of employment for a period of 6-months post-termination.
Ms Palmer subsequently left EES and got a job with another teacher recruitment agency (SG) who were looking to grow their presence in Essex and when EES learned that Ms Palmer was in fact breaching the terms of her post-termination restrictions, they wrote to her and her new employer to remind them of the contractual obligations in place. Ms Palmer signed an undertaking to comply with the terms of her contract, but then continued to breach them and consequently, EES commenced High Court proceedings against both Ms Palmer and her new Agency, seeking damages and an injunction.
What was critical to establish in this case was whether Ms Palmer's contract was legally enforceable i.e. if EES had a legitimate proprietary interest to protect and if the restrictive covenant that was in place, was no wider than reasonably necessary to protect that interest.
The High Court found that the recruitment market was driven by the clients themselves rather than the Consultancies, with much of the relevant information about both schools and teachers being widely and publicly available and that there was little loyalty owed by the ultimate recruiter to the Consultant and/or Agency who had undertaken the work on their behalf. The Court rejected Ms Palmer's argument that because of the use of the internet and social media, all relevant information was in the public domain and could therefore not be considered to be confidential to any one particular Agency. Instead, it held that EES required protection because Ms Palmer's role within EES had been to build and establish relationships with clients and that a 'good, trusting relationship' could make the difference between otherwise equal Agencies in a highly competitive market. Likewise, that the relationship built between an Agency and/or their Consultant acting on behalf of the Agency and a candidate teacher could also be a deciding factor in whether a teacher chose to sign/remain with an Agency or register with someone else.
It was the opinion of the Court that although generic information such as names, contact details, qualifications etc. may have been publicly available, there was other valuable information about schools and teachers that Ms Palmer would have acquired in the course of her work with EES, which would not have been widely known including information about their likes/dislikes, personalities and special requirements, but which could be used as a basis for a trusting relationship.
Taking all of this into consideration, the Court held that it was reasonable for EES to assume when it contracted with Ms Palmer that should she leave their employment, she would be in a position to use the information acquired to influence an appreciable number of schools away from EES to her new employer and that the length of the restriction (6-months) was reasonable as these relationships took time to build. Both Ms Palmer and her new Agency were held to be liable to pay damages to EES; the latter being liable because it was held that they had sufficient knowledge of the restrictions binding Ms Palmer to make the Agency liable for procuring the breaches that she had committed.
In reaching this verdict, the Court stressed that where 'relationships with customers are fragile and easily lost because of a lack of loyalty, as was the case here, the need to protect those relationships by means of restrictive covenants will be even greater.'
Cases of Interest 2 ~ Health and Safety (Corporate Manslaughter)
Following the death of one of its employees, a cleaning company and its director have become the sixth employer to be found guilty of 'corporate manslaughter', since the offence was introduced into statute in 2007.
In this particular case a casual worker, Malcolm Hinton died from crush injuries in 2012 after working on a repair underneath a road-sweeping truck at Mobile Sweepers (Reading) Ltd. He had inadvertently removed a hydraulic hose which caused the back of the truck to fall on him; he had not been trained in mechanics, there was no protection available and the lighting on site was found to be poor. A joint Police and Health & Safety Executive investigation was conducted following the incident and found there to be major failings on the part of the Company.
The Company pleaded guilty to a charge under section 1 of the Corporate Manslaughter and Corporate Homicide Act 2007 and Mr Owens, the Company Director also admitted to a failure to discharge their duties under section 2 of the Health and Safety at Work Act 1974. A total fine of £191,000 has been imposed plus costs of £4,000; with £183,000 of the fine directed at Mr Owens and the remaining £8,000 to be paid by the Company. A 12-month period in which the fine has to be paid has also been imposed and if the payment is not made by then, a 3-year custodial sentence will be imposed.
In reaching this verdict, the Judge had stated that had the Company been a larger corporation, the fine imposed would have been much closer to £1million. Mr Owens has also been disqualified from being a Company Director for 5-years after it emerged that he had formed an almost identical company after Mobile Sweepers (Reading) Ltd ceased trading on the day of the accident and the Company has also been made subject to a 'publicity order'; meaning that notices worded by the Judge detailing the case would be placed into a range of local newspapers.
Other charges against Mr Owens and the Company have been allowed to 'lie on file', after it was established that the charges to which both had admitted under the Corporate Manslaughter and Corporate Homicide and Health & Safety at Work Acts, sufficiently reflected the criminality of the case.
Case information sourced from HR Bullets
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