Guide to Employment
Law
1. The Employment Contract.
2. Written Statement of Terms.
3. Itemised Pay Statement
4. Holidays
4.1. Paid Holidays
5. Working Time
6. Minimum Wage
7. Unauthorised deductions
8. Retail employment
9. Equal pay
10. Part time employees
11. Continuity of Employment
12. Choice of Trading Structure
13. Service Contracts
14. Termination of Employment
15. Notice
16. Unjustifiable Termination - unfair dismissal
17. Redundancy
18. Industrial Tribunal
19. Settling Employment Disputes
20. Discrimination
21. The Disability Discrimination Act 1985
22. Trade Unions
23. Statutory Sick Pay
24. Maternity Rights
25. Duties of the Employer towards his Employees
26. Short Term Contracts
27. Transfer of Undertaking
28. New Legislation
29. Night Workers
30. Data Protection Rights, Email and Computer Misuse
The first matter to look at is how the relationship of "employer" and "employee" is legally created. As soon as any employee commences employment a Contract of Employment is deemed to exist. There is no legal requirement that the actual contract itself should be in writing although it is preferable that this should be the case from the point of view of clarifying what has been agreed should a dispute later arise. Any contract whether written or oral will consist of at least three separate elements:-
(i) any express terms which may have been agreed between the employer and the employee;
(ii) terms which are implied by common law such as the implied duties of good faith and confidentiality which every employee owes to his employer; and
(iii) terms which are imposed by statute and more recently regulations implementing EC directive which in most cases cannot be contracted out of.
Terms of employment can also be imputed into the contract through collective agreements with trade unions.
It should be noted that after the terms of employment are agreed they can only be changed by the express agreement of the employer and the employee. Any unilateral change to employment terms made by an employer would be a breach of contract which could constitute grounds for an employee claiming constructive dismissal.
One of the obligations imposed by statute is for an employer to give an employee a written statement of prescribed terms if their employment lasts for one month or more. These prescribed matters are:-
1. The name of the employer and of the employee.
2. The date of commencement of the employment.
3. A statement as to whether any previous employment is treated as being continuous of the present employment (and if so, the date the continuous period of employment is deemed to have commenced).
4. The employee's job title and place of work.
5. The scale of remuneration or method of calculating remuneration and the intervals at which it is paid.
6. The hours of work.
7. Holiday entitlement (including public holidays) and holiday pay.
8. Any terms and conditions relating to incapacity for work due to sickness
or injury.
9. Any terms and conditions relating to pension schemes.
10. The period of notice to be given by either party to terminate the employment.
11. Any disciplinary rules applicable to the employee (or reference to a document which is reasonably accessible to the employee and which specifies any such rules).
12. The disciplinary and grievance procedures.
If there is any change in the matters specified in the written particulars, the employer is obliged to give the affected employees written notice within one month of such change.
The employee's remedy is a claim to Industrial Tribunal to order the employer to provide the statement.
Any employee has the right to be given by his employer an itemised pay statement, giving particulars of the gross amount of wages or salary, the amount of any variable or fixed deductions, and the purposes for which they are made, the net wages or salary payable and where the net amount is paid in different ways, the amount and method of each part payment.
Until October 1998 there was no general legal requirement that an employer should give holidays to his employees, either annual or Bank or Public Holidays. The position has now changed with the implementation of Working Time Regulations which are now in force giving effect to an EC Directive in terms of which employees are now entitled to paid holidays. Employees with more than thirteen weeks service now have an entitlement to four weeks paid holiday per annum. It is allowable for employers to use public holidays in part to satisfy the minimum requirement for holidays under the Regulations. This means that the number of days or weeks of holidays, payment for holidays, accrued holiday pay and days off in lieu of holidays are no longer merely matters which must be resolved by agreement between the employer and the employee under the terms of the Contract of Employment. If an employer does not provide the minimum entitlements to his employees this will constitute grounds for a claim to an Industrial Tribunal.
Under the Working Time Regulations 1998, every employee is entitled to four weeks' paid annual holidays. This is an obligation that cannot be contracted out of. As the law stands at the moment, the regulations impose a 13-week qualifying period before this holiday entitlement is asserted. Some employers may of course already have a policy in place where an employee is entitled to take their holiday entitlement from the start of their employment.
The 13-week qualifying period has now, however, been deemed to be contrary to the European Union Working Time Directive. Accordingly, the government now propose to amend the regulations to remove this qualifying period. This will mean that the entitlement to paid annual holidays starts from the first day of employment though the regulations will now introduce a system whereby entitlement to paid annual holidays will accrue during the first year of employment at a rate of one-twelfth of the entitlement per month worked. For example, this pro rata basis of holiday entitlement would mean that an employee who has worked for three months would have accrued 5 days holiday, and a part time employee working 3 days a week would have accrued 1 days holiday after one month.
The provision for giving notice to take holidays will still apply, that is, in the absence of an agreement between the employer and the employee, the employee should give at least twice the holiday period time to be taken. If the employer is to refuse the holiday request, that refusal must be within the period equivalent to the time off requested. For example, an employee wishing to take one weeks' holiday would have to give at least two weeks notice. The employer would have to come back within one week to refuse that time off.
The Working Time Regulations have further implications for the number of hours which employees work and their rest periods. The key points which should be noted are as follows:-
- The Regulations set a limit of an average of 48 hours per working
week. Individuals can voluntarily agree to disapply the weekly working
hours limit by written agreement but such arrangements can still be
cancelled in the future by employees giving an agreed period of notice.
- The Regulations provide that "night workers" are subject
to a limit of an average of 8 hours worked in each 24 hour period. Employers
have to offer night workers health assessments before they are required
to perform night work and periodically thereafter.
- Adult workers are entitled to one day off per week and adolescent
workers are entitled to two days off. As this is an "entitlement"
rather than a "requirement" an employee can voluntarily work
on these days but cannot be required to do so.
- Adult workers are entitled to 11 hours and adolescents to 12 hours
consecutive rest per day. Again these are entitlements and individuals
can voluntarily work overtime.
- Adult workers are entitled to a minimum of a 29 minute rest break in their working day if it is longer than six hours. Adolescent workers are entitled to a minimum of a 30 minute rest break if they work for longer than 4.5 hours. Again an employee can forego his rest period.
There are some exemptions from Regulations which principally cover "unmeasured working time" and "special circumstances". "Unmeasured working time" covers workers whose working time cannot be measured or pre-determined or can be determined by themselves. This can cover managing executives and family workers. Effectively these workers will only be subject to the annual leave entitlement. The second category of "special circumstances" allows for flexibility to certain categories of workers provided that they receive compensatory rest. These include security and surveillance activities and activities involving the need for continuity of service ie., dock work, hospital services, civil protection services etc.
The regulations are capable of being adopted in a flexible way but only the working hours provisions can be contracted out of on a one to one basis. A more flexible approach can be adopted in relation to the implementation of other provisions by what are called "relevant agreements". These are either "workforce agreements" (applicable where there is no recognised trade union) or "collective agreements" which apply where there are unions. These agreements require the balloting of employees or applicable sectors of employees and are binding on the entire workforce or sector to work to the same work pattern. The implementation of the Regulations will be enforced by industrial tribunals. Employers who seek to force their employees to forego legal entitlements may find themselves in breach of contract or having constructively dismissed employees.
The National Minimum Wage Act came into force in April 1999 and introduced a national minimum wage of £4.20 an hour for employees over the age of 21, and a lower rate of £3.60 per hour for those aged 18 to 21 and for workers aged 21 or over who are on accredited training courses, for a maximum of six months when starting a new job with a new employer. Employees who do not receive the minimum wage will have a contractual entitlement to recover the difference by application to an Employment Tribunal and will be protected against victimisation from doing so.
An employer is prohibited from making any deduction from a worker's wages
unless (i) the deduction is authorised by some statute or a provision
of the worker's contract; or (ii) the worker has given prior authorisation
in writing for the deduction. This does not apply to overpayment of wages
or expenses.
Deductions from wages for cash shortages or stock deficiency can now not exceed 10% of gross wages.
The law provides that men and women are entitled to receive equal pay for equal work provided that they are "in the same employment". For this to be applicable the employees must be employed at the same establishments at which common terms and conditions are observed.
The law has historically had a distinction between full time and part time employees in relation to the range of rights which are afforded to them. Until recently the law provided that an employee had to work more than 16 hours per week for two years to have full employment law rights and that an employee who had more than five years employment and who had worked more than 8 but less than 16 hours per week had full employment law rights.
This has now changed and the law now provides that it is no longer necessary for an employee to establish that he or she has worked for more than any particular number of hours per week.
This means that all employees with one years continuous service have protected employment law rights. The one year period is of importance as in most cases employees with less than one years service will be unable to pursue a claim against his or her employer for unfair dismissal.
It is worthy of mention that the qualifying period for protection against unfair dismissal has been reduced from two years service to one with effect from 1st June 1999. The change was brought in under existing powers as it had been widely publicised that new employment law legislation would bring in full employment law rights at one year and this had led to a spate of dismissal.
There are employment law implications for the choice of trading stature adopted by parties going into business. If parties go into business in partnership they are in essence self employed as they will be remunerated by taking a share of the profits. On the other hand if the parties decided to form a limited company they would be an employee of the Company which in law is regarded as a separate legal entity. This means that even in a Company with one Director and one Shareholder, that Director would be an employee and would for example, prima facie be entitled to redundancy pay if his Company went into liquidation.
There is generally no difference in the employment legislation applying
to senior executives to those of ordinary employees but although it is
not a legal requirement, it is common practice for the Directors of limited
companies to be given written Service Contracts with the company employing
them. A Service Contract will set out the terms and conditions of the
employment and will detail the Directors responsibilities to the Company
and also the benefits he or she will receive while holding such office.
Service Contracts usually contain enhanced employment law rights compared
to those given by statute to ordinary employees and their provisions are
usually agreed by negotiation between the Executive and the Company. Service
Contracts are usually for a fixed period with the intention usually being
to give the Director a degree of security of tenure. After the expiry
of the fixed period the Service Contract will usually continue to "roll
on" until such time as either party gives notice to terminate. Statute
prohibits the fixed period being in excess of five years and it is not
thought to be good practice for this period to exceed three years. The
reason for this is that if the Contract is terminated early without legal
justification the Company would have to pay out the Directors salary for
the unexpired element of the fixed period or, once this had passed the
notice period. Although this amount can be reduced in certain circumstances
this sort of payment can be substantial.
It is also common for Service Contracts to contain restrictions on competition which will apply after the Director has ceased to be an employee of the Company. These are only enforceable to the extent which they protect the legitimate interests of the Company.
It should be noted that a non-executive Director of a Company who has no Service Contract is not an employee.
Very often people only see legal issues as something they have to deal with when they are staring them in the face instead of taking advice and planning how to deal with legal issues in advance. This sort of approach can lead to difficulties. This is the case where issues arise in relation to employment matters, particularly in relation to the termination of employment contracts where the failure to take legal advice before acting can result in an employer facing severe financial penalties.
Subject to situations such as gross misconduct of an employee, employment cannot be terminated without notice.
Statute provides that where notice is required the employee is entitled to a period of notice based on a sliding scale which increases with his length of service whereas the employer is entitled to one weeks' notice only. After an employee has "one months" continuous employment the employee is entitled to one weeks notice for every year of continuous employment completed, subject to a minimum of one weeks notice and a maximum of 12 weeks notice.
Statute provides for only one weeks notice by an employee, no matter the length of employment.
It is often the case that an employer will provide for greater periods of notice than those required by statute in the contract or written particulars of employment. This is often a good idea so that the employer has a longer period of notice in which he can find a replacement.
Unjustifiable Termination - Unfair Dismissal
Legally the termination of any Contract of Employment can have certain consequences on an employer. In circumstances where the employer has unjustifiably terminated the contract or where an employee is entitled to bring the contract to an end because an employer has committed a serious breach of the contract an employee will have two potential claims. These are:-
1. Damages if the employer has failed to provide contractual notice (known as a claim for wrongful dismissal); and
2. In certain circumstances a statutory claim for unfair dismissal will arise if the dismissal cannot be shown to be fair. Claims for unfair dismissal arise by virtue of statute and are brought in an Industrial Tribunal. An aggrieved party who's employment has been terminated has up to three months from the last date of his or her employment to file a claim before an Industrial Tribunal. In order for an dismissal to be "fair" it is for the employer to show that the reason or principal reason for the dismissal was one of the statutory reasons recognised as capable of being "fair" reasons. Thus, the onus of proof is on the employer. These are:-
- capability/qualifications;
- conduct;
- redundancy;
- contravention of a duty or restriction imposed by a statute; or
- some other substantial reason.
It is up to the Industrial Tribunal to decide whether any dismissal was fair or unfair in all the circumstances.
If an employee is successful in his application for unfair dismissal a Tribunal may order reinstatement or re-engagement or award compensation.
The award of compensation comprises a basic award and a compensatory award. The basic award is calculated with reference to the age of the employee and the number of years he has been employed. The is subject to a maximum of 20 years, a notional maximum weeks pay of £220 and a maximum basic award of £6,300. The formula is as follows:-
Per year of employment where employee not less than age 41 - 1.5 weeks pay
Per year of employment where employee not less than age 22 - 1 weeks pay
Per year of employment where employee neither -5 weeks pay
This element of the award would be reduced by the amount of any redundancy
payment awarded by the Tribunal or paid by the employer on the ground
that the dismissal was for reason of redundancy.
The amount of basic award would also be reduced by such amount as the
Tribunal considers just and equitable if the dismissal was caused or contributed
to by any act of the complainant or because the complainant has unreasonably
refused an offer of reinstatement or because of his conduct before the
dismissal.
The entitlement to the basic award is automatic once a dismissal is held to be unfair and would not be reduced on the ground that there was no financial loss to the applicant. It is payable even if no compensatory award is made. The compensatory award is a discretionary amount of "damages" which the Tribunal will order to be paid having regard to the loss sustained by the complainant, including any expenses reasonably incurred by him and the loss of any benefit which he might reasonably be expected to have. In assessing all of this the Tribunal will take into account such matters as:-
- immediate loss of wages.
- the manner of dismissal (in so far as this may cause some financial loss).
- loss of future earnings (this may involve the Tribunal making its "best guess" at the length of time it will take an employee to find new employment).
The maximum amount of the compensatory award since October 1999 is £53,500. This is the maximum sum which can be awarded after taking into account payments already made, or any reductions made as a result of contributory conduct or failure to mitigate on the part of the employee.
The permitted reasons for dismissal by redundancy require further consideration. This is not as straightforward a ground as it might appear. The law says that a dismissal will only be by reason of redundancy where any of the following criteria apply. These are:-
a. The employer ceases or intends to cease carrying on the business for which the employee was employed;
b. The employer ceases or intends to cease carrying on that business in the place where the employee was employed;
c. The business no longer needs or needs less employees to carry out work of a particular kind; or
d. The business no longer needs or needs less employees to carry out work of a particular kind in the place where the employee was employed.
Any employee dismissed by reason of redundancy who has two years or more
continuous entitlement is entitled to a statutory redundancy payment calculated
according to the same formula as set out above for the basic award on
unfair dismissal. I have previously mentioned that it appears that two
years qualifying service is still required to qualify for redundancy payments
notwithstanding that the qualifying period for protection against unfair
dismissal has been reduced to one year. The apparent anomaly will be corrected
when the relevant section of the Employment Relations Act comes into force
.
It is also important to note that even if the reason for a redundancy
falls within one of the permitted fair reasons for a dismissal in certain
circumstances a redundancy can still be unfair, where for example, an
employee was unfairly selected for redundancy or where a dismissal took
place without adequate warning or consultation or where the employer failed
to consider any alternative employment which may have been available.
It should also be noted that it is not an employee who is made redundant
but rather the job an employee fulfils. This means that redundancy does
not give employers the ability to pick and choose who they want to keep
and who they want to go. Even where more than one person is a candidate
for the position which is being made redundant, there still has to be
an objectively fair criterion for selection between such employees.
Employers should also be aware of the obligation to consult in advance with Trade Unions in certain circumstances when redundancies are proposed.
(a) "Committee" format - legally qualified Chairman and two lay members -experienced in employment law.
(b) Informal procedure.
(c) No expenses to or by.
Settling Employment Disputes - the role of Compromise Agreements
It will be clear by now that employment disputes can be potential minefields for employers and there can be circumstances in which the best option is to reach a negotiated settlement with a departing employee. This can take place after a dispute has arisen often with the involvement of ACAS who will try and see if there is enough common ground to settle the dispute and avoid the need for a formal hearing. New legislation came into force on 1st August last year under the Employment Rights (Dispute Resolution) Act 1998 which introduced an ACAS arbitration scheme to deal with unfair dismissal disputes on the basis that this will be more informal, private, cheaper and quicker than Tribunals. As each side bears its own costs in taking a case to a tribunal regardless of success or failure and valuable management time will be taken up for the hearing itself settlement can be a cost effective option regardless of the rights and wrongs of the dispute. If a claimant is aware that he or she does not have a particularly strong case it is more likely that they will accept a payment to "go away" - hopefully at a reasonably modest level. It can sometimes be beneficial to see if there is scope for a termination package can be agreed at or prior to an employee's departure and avoid the potential for any further dispute. This is an issue which should be handled with great care as any offer would have to be on a "without prejudice" basis and these sort of discussions in themselves if handled incorrectly could arguably constitute grounds for constrictive dismissal.
Any formal or informal settlement of an employment dispute has to be properly
documented before it will constitute a waiver of any rights which the
employee may have had. If settlement takes place through ACAS they will
provide all of the required paperwork. If however settlement is reached
directly between employer and employee a special document called a "Compromise
Agreement" is required. A Compromise Agreement will state the details
of the financial settlement and will set out the various waivers of the
employee's potential claims that are required. The agreement will contain
reference to the fact that the employee has had independent legal representation
as without such representation the agreement will not be effective against
the employee. This sometimes means that an employer will have to make
a contribution towards an employee's legal costs as part of the settlement.
Compromise Agreements are particularly relevant where there is little
or no doubt that a departing employee has an entitlement to a future payment
from the employer. Examples of this would be where the employer knows
the dismissal is potentially "unfair" but decides that it is
still worthwhile dispending with the services of the employee sooner rather
than later and where the employee has a substantial notice period under
a contract of employment which would otherwise have to be paid out. In
the latter example it is often the case that directors with service contracts
who have not only a substantial notice period but often fringe benefits
which they would be entitled to during this period.
If a company decided that it wanted to dispose with the services of a salaried director there are important company law matters which also have to be taken into consideration ie., the requirement for "Special Notice" to be given for an EGM of the Company to remove the individual from office as a director and the possibility of conduct which could be deemed to be "unfairly prejudicial" where the individual is also a shareholder of the Company. The details of these matters although important are out with the scope of this discussion and leaving them to one side for now a director is treated in exactly the same way as any other employee to the extent that he does not have enhanced rights and protections under his service contract.
While these enhanced rights could lead to potentially very big payouts a departing director still has a duty to mitigate his losses. This means that if he obtains alternative employment fairly quickly this could significantly reduce his "wrongful dismissal" entitlement. In many cases the recognition of this will mean that there is some scope for negotiating the level of any pay off of a departing director - particularly as sums which can be said to be genuinely "ex gratia" may be payable to the director tax free as long as they are under £30,000. Recent case law has shown that the Revenue are beginning to clamp down on tax free payments - for example if a contract of employment has a clause which allows for payment in lieu of notice then this is now seen as a contractual entitlement and not a genuine ex gratia payment. Payments which are caught by this will not qualify for tax relief.
The availability of tax relief is now something which has to be looked at carefully in each case.
If a settlement package is agreed with a departing director the details of this will invariably be set out in a Compromise Agreement which would deal with the settlement of the contractual claim and the waivers of any statutory claims.
The law does not allow employers to discriminate on the grounds of race, sex, marital status or disability. The legal test for determining discrimination towards an employee is objective, not subjective. This means that regard has to be had to what was done, not the reason or motive behind what was done.
Any employee or job applicant who alleges that he is being discriminated
against may make an application to an Industrial Tribunal. This could
lead to a claim for compensation, a requirement that the employer will
not discriminate or an interdict against the employer.
The Disability Discrimination Act 1995
Legislation now exists in terms of which employers who discriminate against disabled people are now liable to Industrial Tribunal proceedings. However, there is an exemption for employers who have fewer than 15 employees. Until recently the exception applied to businesses with under 20 employees.
Under this legislation all employers (regardless of the size of the undertaking) will be considered to have discriminated against a disabled person if for any reason relating to their disability they treat a disabled person less favourably than others and the employer cannot show that such treatment is justified. Employers will also be deemed to discriminate if they do not take reasonable steps in relation to either their work place or working arrangements to redress the disadvantage suffered by a disabled person.
This legislation may mean that employers' have to make physical alterations to their premises or equipment or alter working hours to accommodate the needs of the disabled. Employers will also have to ensure that their recruitment arrangements do not discriminate against those with disabilities as they can now be called upon to account to a Tribunal who will require to be satisfied that the employer has given due consideration to accommodating a disabled applicant's disability.
The Disability Discrimination Act defines a "disabled person" as anyone who has a physical or mental impairment which has substantial long term effect on their ability to carry out normal day to day activities. Severe disfigurement is also covered in the Act as are progressive conditions such as cancer, multiple sclerosis and symptomatic HIV.
A disabled person claiming discrimination in the employment field can bring a claim to Industrial Tribunal. If a claim is upheld payment of compensation including compensation for injury to feelings can be ordered. There is no limit on the amount of compensation which can be awarded and the onus will be on the employer or provider of goods and services to establish that any less favourable treatment of a disabled person was objectively justifiable.
The largest award in a disability discrimination case to date is £103,146.
Another consequence of this Act is that any employer considering dismissing on the grounds of ill health would be unwise to do so without being in full possession of the facts in relation to the relevant employee. Ignorance of a disability is no defence.
Although the position will shortly change there is presently no obligation
on an employer to recognise a Union for collective bargaining purposes
- I will turn to the proposed changes on union recognition shortly. If
a Trade Union is recognised a number of rights will arise and these include
the right to receive information from the employer for the purpose of
collective bargaining, the right to be consulted on redundancies and the
right to information and consultation on transfer of undertakings, as
well as Health and Safety and occupational pension matters.
It is unlawful for an employer to refuse to employ, dismiss or discriminate against an employee because the employee is or is not a member of the Union. If an employee is dismissed because he is or is not a member of a Trade Union then that dismissal will be an automatic unfair dismissal. Under the new legislation, union recognition will become compulsory where 40% of the "relevant workforce" in the applicable business votes in favour. In addition the new legislation contains:-
- Procedures for unions to obtain recognition in organisations of more
than 20 employees;
- Protection for discrimination against trade union members or non-members
is enhanced;
- The requirement to name union members in notice for industrial action
in ballots being removed;
- The simplification of the law in industrial action ballots;
- Protection against unfair dismissal for employees taking part in lawfully organised official industrial action.
In relation to statutory sick pay the law provides that an employer is liable to pay employees up to 28 weeks statutory sick pay at a specified amount in any period of three years. SSP commences being payable after the first three days of sickness which are called "waiting days". After 28 weeks, the state takes on the obligations through transferring the employee on to state benefits - generally invalidity benefit. Formerly, most of this SSP was recoverable by the employer, however since 1995 an employer can only claim any amount by which payments of SSP in any month exceed 13% of the employers liability for NI contribution payments in respect of the same month.
It is common practice for employers to also operate their own sick pay schemes and where this is the case the conditions on which sick pay may be claimed will be set out in the employers' written particulars or contract of employment. Frequently company sick pay schemes are set up on the "top up" principle. That is to say they will make up the difference between SSP or state sickness benefit and the employee's normal wages for a specified period. The SSP scheme does not directly affect, and is not affected by, any private company sick pay scheme but an employee cannot be paid twice over. The payments under one scheme discharge the liabilities under the other.
There are various statutory employment law rights which cannot be contracted out of and these include maternity rights.
Maternity rights now extend to both full time and part time employees
regardless of any period of qualifying service. Employers must recognise
that the law provides that all women employees are entitled to:-
a. Paid time off to receive ante-natal care;
b. Protection from dismissal when pregnant (this now applies regardless of hours worked or the length of service);
c. Maternity pay where the employer is obliged to pay an employee Statutory Maternity Pay at a set rate for up to 18 weeks maternity absence. The employer can reclaim a proportion of the total amount of statutory maternity pay which they have paid. SMP is only payable to employees who have 26 weeks continuous service ending on the week immediately preceding the fourteenth week before the expected week when the baby is due. The scheme works in much the same manner as the statutory sick pay regime considered above and again only 80% of payments made by an employer can be recovered;
d. The right to a statutory period of 14 weeks maternity leave (although this will increase soon to 18 weeks to align with maternity pay); and
e. the right to return to work after the expiry of the period of statutory maternity leave.
It should be noted that while all women have a right to 14 weeks maternity leave only those with two years qualifying service have the right to return to work up to 29 weeks after childbirth. Under the new employment legislation this right to additional maternity leave will be extended to any woman who has one year's service.
Duties of the Employer towards his Employees
The law requires that it is the duty of every employer to ensure so far as reasonably practicable the health, safety and welfare at work of all of his employees. In particular the employer must:-
- provide and maintain plant and systems of work that are, so far as reasonably practicable, safe and without risks to health.
- make arrangements to ensure so far as reasonably practicable, safety and absence of risks to health in connection with the use, handling, storage and transportation of articles and substances.
- ensure the provision of such information, instruction, training and supervision as is necessary to ensure so far as reasonably practicable, the health and safety and welfare at work of his employees and also where necessary persons on site who are not his employees, for example employees of sub-contractors.
- so far as is reasonably practicable as regards any place of work under his control, ensure the maintenance of it in a condition that is safe and without risks to health, and ensure the maintenance of entrances and exits to an from such premises are also safe and without risks.
- ensure the provision and maintenance of a working environment for his
employees that is, so far as is reasonably practicable safe, without risks
to health, and adequate as regards facilities and arrangements for their
welfare at work.
The Act is enforced by the Health and Safety Executive who have wide ranging
powers of examination and investigation.
The sanction for a breach of the act is a criminal rather than civil prosecution but the Health and Safety inspectorate try and avoid prosecutions and instead try and seek improvements through co-operation. The inspectorate also have powers to issue improvement and prohibition notices to offending employers.
An improvement notice which will be issued by an inspector where he is of the opinion that one or more statutory provisions has been contravened and the contravention is likely to be continued or repeated. On service of a notice the offending person is given at least 21 days to remedy the contravention.
If an inspector thinks that any activity covered by a statutory provision is being carried on or is likely to be carried on in a manner which would involve a risk of serious personal injury, he may serve a prohibition notice. The service of a prohibition notice means that the employer must stop the offending activity either at the end of the period specified in the notice or, in serious cases, immediately.
The Employment Rights Act 1999 envisages that the use of waiver clauses under which employees sign away rights to claim unfair dismissal on the termination of their employment will be abolished. Effectively this means that it will no longer be possible for an employer to induce an employee to contract out of the right to claim for unfair dismissal. This measure when introduced combined with the right to claim for unfair dismissal (which can now be enjoyed by all of employees who have more than twelve months service from 1st June 1999) means that a considerably larger number of employees will qualify for unfair dismissal rights. The net result of this is that the effective period during which a fixed term or temporary contract can be used is reduced to fewer than twelve months. These measures are likely to see a move away from the recent trend of short or fixed term contracts.
I will now turn to consider the employment law implications of what happens on "transfer of an undertaking."
On the transfer of a business the employees are legally protected from dismissal arising as a result of the transfer, and if so dismissed, they can bring an action against the acquiring or disposing company. In the case of a share purchase the company's liabilities to its employees remain unaltered regardless of who actually has legal ownership of the Company. There are limited exceptions to the transfer of undertakings provisions and there will be no claim for an unfair dismissal where the redundancy is made for an "economic, technical or organisational" reason.
In the case of an asset purchase in which the target company's business
is acquired as a going concern the purchaser will by law be liable for
the existing statutory rights of the employees of the business including
those who are dismissed in the period up to the transfer. This covers
both accrued employment rights to that date and future employment rights.
There is increasing debate about just how far the transfer of undertaking
regulations are capable of extending and there have been a number of cases
on this matter where a business takes over or acquires a contract as opposed
to another business. The examples of this have invariably been in the
service sector where a business has successfully tendered for a new contract.
The new contractor then takes over all or some of the workforce of the
previous contractor and there have been disputes about whether the new
contractor has acquired theaccrued employment law entitlements of the
new workforce. While these disputes are usually complex and every case
would have to be looked at on its own facts, if it can be said that there
is substantially the same entity doing the same thing under the new regime
as under the old that there may have been a transfer of an undertaking
with the new contractor acquiring the accrued employment law of its new
workforce.
The assumption of this continuing liability makes this an extremely important issue for purchasers acquiring a business and for those thinking of making redundancies after an acquisition as both actions will have cost implications which will require to be taken into consideration in any offer to buy a business or a tender for a new contract.
We have already seen how the new Employment Relations Act will change existing law when it comes into force.
I will conclude by summing up some of the key provisions of the new legislation which are as follows:-
Union recognition will become compulsory where 40% of the "relevant workforce" vote in favour.
The awards which an industrial tribunal can grant against employers is raised from its existing level to £50,000.
Employees with over a year's service will be entitled to extended maternity leave.
Employees are given new rights for time off unpaid for domestic incidents as well as the controversial entitlement for employees to take three months unpaid leave for time to spend with children.
There are numerous other new provisions which will supplement the existing employment legislation. One example relates to disciplinary and grievance hearings where it will now be a statutory right for an employee to be accompanied by a co-worker of his choice. An employer's refusal to accede to such a request would be grounds for a complaint to an Employment Tribunal.
With a growing trend towards 24 hour demands on our society, more and
more companies are taking on night workers. These companies should be
aware of the new protections now afforded to night workers under the Working
Time Regulations 1998. Prior to the regulations coming into force, night
workers were not given any other protection than workers on any other
shift. Now, night workers are entitled to free health assessments before
they begin night shift work, and these assessments must also be given
thereafter at regular intervals.
As a consequence of their obligations to night shift workers under the Working Time Regulations, in what is thought to be the first prosecution under the regulations, a company was fined after its failure to carry out a health assessment for a night worker in one of its premises.
With this in mind, employers should be aware the special protections contained in the Working Time Regulations. Employers need to be aware of the protections given to night workers by the Regulations. The following are issues which should be considered:
Firstly, what actually is a night worker:
The Regulations confirms that a worker who normally works more than three hours at night most days they work; or a proportion of the days they work as agreed in workforce agreement; or frequently enough that it could be said that they work these hours as a normal course, then they have the status of a night worker.
Night, for the purposes of the Regulations is between 23.00 and 06.00 unless otherwise agreed (any agreement must include the hours between 00.00 and 05.00).
An employers obligations to night workers are:
- Night workers should not work more than 8 hours for each 24 hours over a period of 17 weeks.
- Those whose work involves special hazards or heavy mental or physical strain must not work for more than 8 hours in any 24 hour period.
- It is not permitted for any person under the age of 18 to work at night.
- Night workers must be provided with a free health assessment at regular intervals and employees who usually work daytime hours may be allowed to work at night only where they have been provided with a free health assessment. Where a medical practitioner finds a night worker to be at risk because of the nature of their work, the employer has a duty to transfer the employee to day work where possible.
These obligations do not apply where:
- The night worker works a long distance from home and wishes to work longer hours over fewer days, or constantly works in a variety of locations, thus making it difficult for a pattern to be established.
- Work involves security or surveillance to protect property or individuals.
- Continuity of service or productions is required, e.g. hospitals, prisons, public utilities or industries where such work cannot be interrupted.
- There are seasonal demands in work such as tourism, post and agriculture.
- Unforeseen situations occur, or emergencies.
Should any of the above apply, the reference period for the weekly working time limit is extended from 17 to 26 weeks and the employees are entitled to compensatory rest.
Compensatory rest is where the workers are entitled to a period of rest which is equivalent to the rest time they have missed as a direct result of undertaking extra hours. All workers have a right to 90 hours of rest in a week on average.
What actions should the employer of night workers be taking:
- It is a statutory obligation to provide night workers with regular health assessments, as the retail company prosecuted have now found to their cost. The assessment should be undertaken prior to the worker starting night work, and it must be followed up at regular intervals.
- While assessments can take the form of full medicals by medical practitioners, they may also be undertaken in the form of questionnaires which are then evaluated at a distance by health advisors who can then advise as to whether the worker is deemed suitable for night work, or if there is further action to be taken.
- The working hours of night workers must be recorded.
- Those who undertake work involving special hazards must be identified.
- Where it is known that an employee works over 8 hours each night, the employer must seek to reduce those hours.
While these are the legal obligations on the employer, you should also consider other factors associated with night work and perhaps as a policy of good practice, take steps to make the adaptation of shift patterns easier to comply with. Employers may wish to consider the following when dealing with night workers:
- The shift pattern worked should be the least damaging in terms of health, especially the night shift. The body circadian rhythm runs on average at a 25 hour cycle rather than 24 hours. Accordingly, shift patterns should work with the body clock and not against it. Shift patterns should rotate forwards not backwards - mornings, lates and then nights.
- The human body can adjust to night working patterns, but is slow on average to make these adjustments. Usually this will take about 6 to 7 days. Therefore, during that week as the body adjusts a goodly sleep deficit will mount up. Research suggests that in terms of long term health the best way to work night shifts is either in short spells (the shorter the better), or in longer stretches of over one month. Night shifts worked in short spells results in the reduction of any sleep deficit and adjustment to normal living pattern is quicker.
- Workers should be encouraged to take some exercise. Regular aerobic exercise boosts energy levels and stamina and will increase alertness. It should be taken after sleep. It also raises the body temperature making the worker feel more awake.
Data Protection rights, email and computer misuse
Employers should be aware that from 24 October 2001, employees shall
have a right to see any written notes held about them. The second part
of the Data Protection Act 1998 comes into force then.
This means that for the first time employees will have a legal right to
see the manual files their employer holds about them.
In light of this, companies and businesses should review their information policies to ensure that all information held on their employees is in order. And it should also be remembered that although there has been a legal right to see any information held on computerised systems since the act came into force in October 1998, this new development will in all probability bring a new awareness of these rights too, and accordingly, employers should also review their computerised files on employees.
You should also be aware of the legal implications surrounding the use of email and the internet. Policies should be set in place so your employees are aware of what is expected of them. The policy should be informative and effective, clearly setting out what an employee can and can't do.
Firstly, you should be aware of the law in respect of computer use and misuse.
Regulation of Investigatory Powers Act 2000. This regulates the interception of communications by public and private telecommunications systems. This will cover most email and intranet systems unless it is a totally stand-alone internal email system. The Act's basic principle is that the consent of senders and recipients is required before such transmissions (i.e. emails) may be monitored.
The Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000. These regulations act to dilute the above Act. They allow some monitoring, if in the course of lawful business, e.g. they allow email and telephone monitoring without consent where it is for:
Quality control monitoring- Combating crime
- Combating unauthorised use of the system (i.e. investigating suspected misuse of email or internet)
- To determine if the communication is business related. This would allow the employer to inspect the inbox of an employee who is absent from work to enable him to see whether any business related emails have come in.)
This list is not exhaustive.
Data Protection Act 1998. Regulating the processing of employees' personal data by employers. A draft Code of Practice has been issued by the Data Protection Commissioner in which she deals with the monitoring of emails and internet use by employers. This code of practice appears to impose stricter limitations than the regulations, but as it is only at draft stage it may be that this will change to bring in line with the regulations.
Employment Rights Act 1996 - this gives employees who have at least one year's service the right not to be unfairly dismissed. If an employee is fired for computer misuse, they would have a good claim for unfair dismissal if they had not been expressly informed, say by circulation of the company computer misuse policy of what is and what is not lawful use of these facilities.
Contract of Employment - this will impose an implied duty on the employer to act in a manner that will not undermine its duty of trust and confidence. Where an employer is unreasonable when investigating possible email or internet misuse, he could be in breach of that duty thus entitling the employee to resign and claim constructive dismissal.
Sex Discrimination Act 1975 and Race Relations Act 1976 - outlawing sex and race based discrimination. An email (whether internal or sent from someone outwith the company) which has sexual or racial content may amount to sexual or racial harassment and the employer should be aware that he may be liable unless he can show that steps were taken to reduce the risk of these kind of emails being distributed.
Human Rights Act 1998 - human rights implications may have to
be considered if there is an investigation into internet and email misuse.
It may be an infringement of the employee's right to respect for their
private life if their emails are inspected or monitored. This would be
particularly so where the employer had given no warning that such monitoring
would take place.
Obscene Publications Act 1959 - it is a criminal offence to send
material to another person which is likely to 'deprave or corrupt' the
recipient.
Now that you are aware of the legal protections, and the legal issues arising from email and Internet misuse, we would advise the following action should be taken.
Introduce a clear policy, which should explain clearly what is and what is not acceptable use by employees of the company computers and what penalties for misuse may be imposed if misuse is discovered.
A typical policy would:
Explain clearly what limits are to be set on internet access and how much personal use is allowed. It may be that some computers can be assigned for use at times by staff for private internet use whilst others are 'off limits'
Where personal use is allowed, specify that unlawful and unauthorised use is forbidden, including accessing, downloading or sending inappropriate, defamatory or offensive material. As this will be an obviously objective view, the company must have discretion is deciding what is and isn't such material.
Please establish clear rules on the introduction of software, disks, email attachments etc and include a process for virus checks.
Let the employees know that the company may monitor emails and what time was spent on the internet. If the company intends to do this randomly, this must also be made known to the employees. It should also be made clear that any investigations into possible misuse would include reviewing emails, internet sites visited and any material downloaded.
You must state clearly that misuse will constitute misconduct and may result in disciplinary action which may lead to possible dismissal. Please state what will be considered serious misconduct and will be gross misconduct, and explain that these instances would result in dismissal, which in the case of gross misconduct would be without notice.
The policy must be communicated to all staff and enforced consistently. Remember that if an employee is not made aware of the policy and is subsequently dismissed for misconduct, he could claim unfair dismissal.
With email and Internet facilities becoming more and more widely available employers increasingly expect their staff to use them in the course of their business. Employees naturally would be tempted to use the facilities for personal use, in a similar way to the telephone. It is from this personal use that most problems will arise, but please do bear in mind that there are of course, risks involved with email and internet use for business purposes. For example, unintentional defamotory remarks may be made, employees may enter into contracts unknowingly and the intellectual property rights of third parties may be infringed.
With regard to personal use, companies must introduce a policy which manages the following main risks:
- Obscene material being sent via email which may constitute sexual or racial harrassment, e.g. rude jokes, risque photos.
- Be mindful that the reputation of the company could be damaged if such messages were received by third parties.
- If staff are using their email or internet facilities excessively for personal use, this may impinge onto their working time.
- Downloading of obscene or pornographic images may constitute a criminal offence.
- Personal use of email and internet facilities may lead to the introduction of computer viruses when downloading images or software thus causing damage to the company.
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