No Deal – no pay?

The Government’s recent decision to publish a series of papers outlining what organisations should do in the event of a “no deal” Brexit has attracted a good deal of publicity and comment. But one that didn’t get much media attention was on “Workplace rights”.

The reason it didn’t is that there will be almost no change to employment law as a result of the UK leaving the European Union. Existing EU laws and regulations are now all incorporated into UK law (if they weren’t already) as a result of the EU Withdrawal Act 2018.

The only two slight changes – which will only affect a very small number of employers and employees – are that if there is no deal, UK based workers will no longer have the right to request that their employer sets up a European Works Council (something which only applies if the employer operates in two or more EU countries); and that UK employees who work in an EU country will no longer be protected by the EU’s Insolvency Directive if their employer becomes insolvent.

However, one area of employment law that may become important in the event of “No Deal” – particularly if there are problems in certain sectors – is the right to lay off staff temporarily. As an employer, you can request staff not to attend work at any point, but you can only do so without paying them* if you have an explicit clause in your employment contract.

Only a minority of companies include such a clause these days, since they are rarely if ever needed, and also because those that do have fluctuating demands tend to use “zero hour” contracts or other types of contingent arrangement.

But consider this scenario. Your company makes machines. Currently, you use widgets manufactured in Germany and imported by truck. In the event of a No Deal Brexit, widget imports are delayed, perhaps for a matter of weeks, while new customs arrangements are resolved. You’ve got nothing for your workforce to do but without a lay off clause you’ll need to continue paying them. Could your business survive?

So, you may want to change your employment contracts to incorporate an appropriately worded clause – contact us if you wish to do this.

But before you do, think about these three points

  • Changing contracts – even by agreement – is a time-consuming process.
  • If some or all of your staff won’t accept the change, do you really want to go through the whole process of dismissing them and re-engaging them for something that might not happen?
  • Even if staff do accept the change, it’s likely to affect their morale and commitment. Do the benefits of a lay-off clause outweigh the possible loss of productivity, increased absence or higher turnover?

The right to impose an unpaid lay-off may be a necessary step for your business – but think about it holistically, not simply financially.

(*you may have to pay a small “guarantee payment” for the first 5 days of any lay-off period)

The 15 things that HR should do (but doesn’t always)

Working as I do with small organisations, I’ll often read an article about some great new HR initiative or theory and wonder why we make things so complex. It seems to me that we frequently get so caught up in the processes, jargon and big picture stuff that we neglect what we are really all about. Employment is a relationship and we need to be clear about what it is that we are committing to, as our side of the ‘deal’. After giving it some thought, I’ve distilled it down to 15 points that define what HR should be doing to create a successful relationship (and where there is no HR, what senior managers should make sure they have in place) 

1.       We’ll pay you correctly, on time, and at a rate that is ‘felt fair’ by both sides.

2.       We’ll make sure that you have a safe place to work, with the right equipment and any required protective clothing

3.       We’ll make sure we comply with the law around employment

4.       If you apply for a job with us, we’ll make sure the process is clear and easy to follow, and keep you informed about your application.

5.       If you need training or other support during work, we’ll make sure that it is organised for you in a timely way.

6.       We’ll keep you informed about what’s going on in the organisation and how it affects you, and we’ll listen to your views

7.       If you do something that’s not right, we’ll make you aware of what it is and why – and do what we can to make sure it doesn’t happen again.

8.       If you think we’ve done something wrong, we want you tell us (and feel comfortable about doing so)

9.       If we do get something wrong, we’ll make sure it is put right (for the future, if we can’t correct it now).

10.   We recognise that there may be times when what individuals or groups of employees want may not be the same as what the organisation wants. We’ll always discuss the best way forward and try to reach a consensus if we can

11.   We won’t tolerate a culture where individuals are abused, belittled, harassed or insulted – whoever this is by.

12.   If we need to end your employment, we’ll make sure this is done with respect, professionalism and understanding.

13.   We can’t promise that every day you work here will be enjoyable. But we’ll try to make sure that the unpleasant ones are the exception, not the rule

14.   We understand that you may have things going on in your life outside work.  We’ll do our best to support you and, if we can, accommodate them.

15.   Above all, we recognise that you are a person too.

I’m conscious that I might be accused of coming up with a ‘best practice’ list – anathema to many modern-day HR practitioners. But I prefer to see it as a core set of principles – which can be adapted to virtually any business size, structure or sector. One thing’s for sure – could you say your organisation is doing all 15 currently?

It was only a joke!

“It was only a joke”

“I didn’t mean anything by it”

“Just our normal office banter”

“Do we have to be humourless in work now?”

Over the last 12 months, the issue of harassment has come to the forefront of business, with issues such as Harvey Weinstein, and the Presidents Club. Only this week,  business leader and TV personality Lord Sugar  got into hot water for issuing a (now deleted) tweet about Senegalese footballers. His response – that it was a misguided attempt at humour –  is a common one when individuals are confronted with inappropriate comments.  In fact, the comments above are the usual reaction when a complaint is made.

If you run or manage a small business, you may be faced by an allegation of harassment and you need to take it seriously.  Dismissing claims as merely ‘banter’ can be both expensive and damaging to your business reputation, as this car dealership found out this week.  Investigate all allegations properly and – as importantly –  make it clear that inappropriate comments are not acceptable.

It doesn’t matter if the comment was not intended to be offensive, or that you can’t see anything wrong with it – in law the main concern is the perception of the individual. This doesn’t mean that every instance of an ill-judged comment is necessarily racist or sexist – case law is very clear that “it is… important not to encourage a culture of hypersensitivity or the imposition of legal liability in respect of every unfortunate phrase” – the point is that an employer must investigate a complaint properly.

And if you aren’t sure, take advice. There’s a world of difference between referring to a colleague as “The Producer” (because she is constantly telling her team that “she’ll put them in the picture”) and referring to her as “Sugar Tits”.

Humour is important in the workplace. Harassment isn’t. And remember, as I was once told by an Employment Lawyer, “Banter isn’t an excuse –  it’s an admission”. If you need more information, this piece may help you

 

 

 

Don’t Stress over GDPR

Everywhere you look, you can’t miss the initials GDPR. Social media is full of discussions, I could spend all day every day attending “GDPR Training Course” “GDPR seminars” and then buy lots of compliance guides and products. After all – if I don’t comply the Information Commissioner is going to come in and fine me £20m.

Consequently, businesses are being sent into panic mode, running around trying to deal with misleading advice “You have to do X” “You can’t do that anymore…”

Just in case you have been in a cave somewhere, GDPR stands for the “General Data Protection Regulation” and is a major EU update to Data Protection laws. When it comes into force in the UK, in 6 weeks’ time, it will be known as the Data Protection Act 2018 and will replace the 1998 Act.

If you currently comply with Data Protection legislation, then the new Act simply requires you to tweak a few procedures and approaches. For most small businesses, it won’t require radical reform of your systems.

Most employment data is held for either a legal reason (e.g. proof of eligibility to work in the UK) or for a legitimate business reason (e.g. bank details held to pay people). People don’t need to give consent for you to hold this.

The major changes from an employment perspective are that:

·         If an individual requests a copy of their data, you can no longer charge for this and have to respond faster (30 days rather than 40)

·         You must tell employees if any of their data is passed to a third party (e.g. a payroll bureau) or outside the EU (for example, if you are part of a larger organisation)

·         You must also tell people if you use automated systems to make decisions (for example if you shortlist candidates for a job using software)

·         You must only use data for the purpose it is supplied for (e.g. you can’t hang on to a CV for an unsuccessful job candidate on the off chance that they might be suitable for a different vacancy)

You should also have very clear rules about how long you retain individual data for after an employee has left (although you should have these already!)

This isn’t to say that some types of business in certain sectors, particularly those that directly market to individuals, won’t have a great deal to do (which is why you will find that you are suddenly be asked to confirm if you still want to receive those marketing emails that you hadn’t realised you’d signed up for). And of course, if you weren’t following the current data protection legislation then you may suddenly need to get you house in order. But for most smaller businesses, the advice is

Generally, Don’t Panic, Review!

 

Plumbing the depths of Employment Law

Post updated 13 June 2018 to reflect the Supreme Court decision

The case of Pimlico Plumbers v Smith  – which has been decided today by the Supreme Court – has attracted a lot of publicity for the hitherto obscure and anoraky topic of Employment Status. As is always the case, much of the media coverage is misinformed and the case is being ‘spun’ by the various parties. Since small businesses need to be clear about their employment responsibilities, it may be helpful to explain the differences.

An employee is someone who works for you under a contract of employment. Most people in most companies are employees, which is why the issue of status doesn’t arise in most organisations. Employees have a number of legal rights (e.g. unfair dismissal, notice periods, right to a redundancy payment etc). Employers pay them through a payroll after deducting tax and national insurance
Self-employed individuals are those who work on their own account – they may do work for a variety of clients (both individuals and companies). They invoice their clients and are responsible for their own tax affairs, and they can make a  profit or a loss. They have very few rights (mainly around health and safety and some limited discrimination rights).

All employees are ‘workers’. But there are also others who can be classified as “workers”. They are those who work for you under some form of agreement where they are required to undertake the work personally. Workers are entitled to fewer rights than an employee but they do still qualify for things like paid holidays, sick pay, and minimum wage. It is this group that form the basis of both the Pimlico Plumbers case and the current debate about Uber taxi drivers, Deliveroo cyclists, couriers for City Sprint etc.

To establish employment status, there are a set of legal tests that have been established. For example, who controls where and how the work is done? Can the work be passed to a ‘substitute’? Is the person ‘integrated’ into the business? Is there an expectation that work is provided and if so that the person will do it? And most importantly, even if there is a written agreement saying one thing, if what actually happens is different then this needs to be taken into account.
And because of an oddity of law, it’s perfectly possible to be a worker for the purpose of employment rights and be self-employed for tax purposes. This is what causes many of the disputes.

In Pimlico Plumbers case, the Company and Mr Smith signed an agreement that he was a self-employed plumber. It saved the company money in Employers’ National insurance and administration time, and Mr Smith paid less tax. Mr Smith however was expected to wear a Pimlico Plumbers uniform, drove to his jobs in a Pimlico van and was required to undertake a certain number of hours per week for the company. Nor could he advertise his own personal plumbing services to Pimlico’s clients. Everyone seemed happy with this arrangement until Mr Smith had a heart attack, had his agreement with Pimlico terminated and received no sick pay.
The courts so far have applied the tests based on the facts presented to them, and concluded that Mr Smith was not an employee, but that he was a worker. The Supreme Court has now confirmed this.

But the real lessons for small businesses are that:
• Trying to fiddle or fudge employment status can come back to bite you
• If the reality of the situation changes over time you need to review your agreements
• Think about why you want someone to work for you and be clear about the intended nature of your working relationship before you start the selection process.

If you want to know more about how employment law affects small businesses, in a simple, easy to read book, just click here