MPs and Constructive Dismissal

MPs and Constructive Dismissal

One of the side products of this week’s decision by a group of Tory and Labour MPs to quit their parties and sit as an independent group was a somewhat heated discussion on parts of social media as to whether some of them, particularly Liverpool Wavertree MP Luciana Berger, would be able to claim constructive dismissal over their alleged treatment by their party organisations.

The first thing to say is that MPs are not employees of their political parties, so the simple answer is no. But as constructive dismissal is something that worries many small employers, it’s worth clarifying what it is – and isn’t.

Constructive dismissal is behaviour by the employer that is so awful that the employee can consider that they no longer have any trust or confidence in the organisation they work for and resigns as a consequence. It can be thought of in some respects as the opposite of gross misconduct (a situation where an employee commits an act that the employer can no longer have any trust or confidence in them, e.g. stealing, assault, leaking commercial secrets to a competitor etc).

It could be a single act by an employer, such as unilaterally reducing someone’s pay or demoting them to a lower grade. It might be humiliating someone in the presence of their colleagues and subordinates (this Gordon Ramsay clip is a good example – warning contains strong language). It can also be the final straw in a series of events which allows the person to conclude they can no longer work there.

It’s also worth remembering that an employer is responsible for the behaviour of their staff. So, if an organisation ignored or failed to deal with allegations of bullying, harassment, insulting or threatening behaviour against an individual employee by their colleagues, which then led to the individual resigning, they could be deemed to have constructively dismissed the employee.

Constructive dismissal isn’t a situation where an employer makes a decision that the employee is unhappy about (I’ve been asked questions about in the past about whether making someone move from a private to a shared office could be constructive dismissal for example – it wasn’t). And remember that if the person doesn’t resign there can be no constructive dismissal.

Constructive dismissal is also quite rare. There are, I think, two reasons for this. The first is that it takes a lot of courage, even in a very difficult situation, to simply walk out of a job.  The second is that to win a case at a tribunal, the onus is on the employee to show that the employer’s actions were such that they were justified in resigning, rather than a normal unfair dismissal where the onus is on the employer to show that its decision was fair and reasonable.  Even though the case is – like all employment matters – decided on the balance of probability (what the judge thinks is the most credible explanation of events) rather than the criminal standard of absolute proof, it still puts an additional hurdle in the way of a successful claim.

Based solely on the reports and social media postings I have seen, had she been an employee then Ms Berger certainly would have strong grounds for a claim. Whether she would have succeeded would have been up to a tribunal judge to decide. But it’s a useful reminder to employers that trying to ‘force’ someone  (or allowing colleagues to force them) out of an organisation can have far-reaching consequences.

Gordon Ramsay

Prepare for the Worst, Hope for the “not too bad”

This week’s parliamentary shenanigans have left the possibility of a “No Deal” Brexit very much on the cards – despite repeated statements from politicians of all sides that No Deal is not what they want.

Given that there is – at the time of writing – only two months to 29 March, the date on which the UK is due to leave, small businesses should be taking steps now to prepare for the worst-case scenario. In HR and employment terms some of the common queries I have had are:

1.       Can I still employ existing staff who come from the EU?

Yes, you can, although they will – after 29 March – need to apply to the Home Office for what is called ‘Settled Status’. Information on the process is available here.  You can continue to employ them while they go through the process. The official Government position – for what it is worth – is that unless there is a specific reason to deny settled status (e.g. criminal convictions) it will be granted.

If there is a deal, they will still have to apply for settled status but have up to 31 December 2020 to make their application.

People who have been in the UK for less than 5 years may only be allowed to apply for “Pre-Settled Status”. You will still be able to continue to employ them provided they have applied for,  and then been granted this.

2.      Can I recruit people from the EU after 29 March?

If there is a deal (with a transitional period) then yes. But if there’s no deal, then the situation is very unclear.

The worst-case situation is that new recruits from EU countries will need to meet the same or similar criteria to workers from other countries. This will mean applying for work visas (the new name for work permits) and registering your company as a sponsor organisation. This is a long-winded and convoluted procedure which many small firms have avoided in the past precisely for that reason. There are proposals to change the system, but they haven’t as yet been agreed or implemented.

If your business uses short-term ‘low skill’ labour (e.g. seasonal agricultural or hospitality staff) then there are proposals to implement a scheme of 12-month visas which will allow people to work in the UK temporarily. Again however it needs to be stressed that these are still only proposals.

Whatever system is put in place, employers will still be expected to carry out the normal “right to work” checks before employing someone.

3.     What if supplies are disrupted – can we lay staff off temporarily?

It depends – read my full post on this issue here.

4.    What about existing staff who need to travel to EU countries for work?

If there is a no-deal, the EU has said that people from the UK should not need a visa to travel to EU countries for short holidays or business trips. They will however need to apply for an ETIAS “visa waiver” document (similar to the ESTA scheme operated by the USA) every 3 years.

If you have business trips planned at the end of March or early April, there is the possibility of flight disruption.

If you have staff driving in Europe – whether this is for business trips or delivering freight –  you will have to make sure that all drivers carry a “Green Card” to show they have insurance. As this can take a month to process, you will need to apply by the end of February at the latest.

It’s also likely that in a no-deal situation, the EHIC card – which allows people to receive free health service treatment in any EU country – will no longer apply to UK citizens. So you will need to make sure that you have adequate health insurance for any employees travelling outside the UK.

The situation is extremely fluid at the moment. Although the information is correct at the time of publication, it may not be in a day or so. Keep an eye out for future posts. If you have a Brexit-related HR or employment question that isn’t covered here, please get in touch

The Luck of the Irish?

Here we are, only 5 months away from the Brexit date and, at the time of writing, no agreement on the arrangements for the UK to leave and the possibility of a “No Deal” Brexit still high. It’s small wonder that a number of my SME clients are considering options to set up operations in Ireland in order to continue trading seamlessly from April next year – especially when we read today that Brexit Secretary Dominic Raab is to order his civil servants to start issuing “No Deal” instructions to business.

But operating in a foreign country means following their employment laws. So how does Ireland differ from the UK?

The good news is that the Irish system – unlike many in the EU – is based on the same legal principles and processes as the UK. So it won’t look entirely unfamiliar to businesses and HR professionals. But there are some important differences, summarised below

Key Differences between UK and Irish Employment Law

Area of Law UK Ireland
Minimum Wage Different Levels based on age, and for apprentices Essentially an ‘under 18’ and ‘over 18’ rate although there are specific rates for those on training or in first two years of work after 18.
Working Time 20 minute Rest break entitlement after 6 hours working 15 minute rest break after 4.5 hours or 30 minutes after 6 hours
Pensions Auto enrolment No compulsory
Sick Pay SSP No compulsory
Holidays 5.6 weeks 4 weeks (with different  calculation rules for part-timers)
Zero Hours No guarantee (no work no pay) Guaranteed a minimum number of hours even if none worked (however, very few used – most employers would use “If and When” contracts – same as UK ‘casual’ – with no rights)
Agency Workers Rights only after 12 weeks with a company Rights from Day 1
Employment Status Employee, worker (limb b) or self-employed Employee or self-employed – no ‘intermediate’ worker status
Redundancy Payments Calculated on age and service Calculated on service only
Statutory Notice 1 week per complete year up to max of 12 Different ‘bands’ depending on service. Max 8 weeks after 15 years
Unfair dismissal Requires 2 years’ service Requires 1 years’ service
Working Time Can opt out of 48 hour max week No opt-out
Compensation No limit in discrimination or whistleblowing cases Limit of 2 years pay (discrimination) or 5 years pay (whistleblowing)
Settlement Agreements Can be used as an alternative to tribunal No such concept
Trade Union Right to recognition for collective bargain purposes if specific conditions met No statutory right to recognition
TUPE   More restricted definition of a transfer
Discrimination 9 protected characteristics 9 protected characteristics but some different to UK

·         Gender not Sex

·         Civil Status (= marital status in UK)

·         Family Status (parent of child under 18 – over 18 if disabled)

·         Member of Traveller Community

No: Gender reassignment, or pregnancy as a separate category (covered by gender)

Maternity Leave Pay Up to 52 weeks mat leave, 2 weeks after birth compulsory.

 

Employer must pay Statutory Maternity Pay if conditions are met

Up to 42 weeks mat leave.

Compulsory period of 2 weeks before and 4 weeks after birth.

 

No requirement on employer to pay, state maternity benefits available.

 

As with the UK, there is nothing to stop an employer offering above minimum conditions, but you can’t go below.

Obviously, this is only a general summary – more information is available from the Workplace Relations Commission which is broadly speaking the Irish equivalent of ACAS (although with more powers to inspect employers)

As well as recruiting staff in Ireland, some organisations are considering posting or seconding UK based staff there. At the moment, as both countries are EU members, this isn’t an issue. But in the event of a No Deal Brexit, will this change?

Yes. If the UK is not a member of the EU, or the broader EEA (which it won’t be in a No Deal situation) then UK nationals will be classed as third country nationals and will require a work permit. The good news is that Ireland has a considerably more relaxed approach than the UK – anyone from a third country can apply for a general employment permit unless they are in an excluded category of work (which can be found here).

So, relocation to Ireland is not too difficult in legal terms, although companies will need to think about plenty of other employment and non-employment issues. But – as per the Brexit secretary – now is the time to make your decision.

Important – this post is for general advice and information and neither Ariadne Associates or the author can be held liable if you take action based solely on the contents of it. You should seek professional advice, especially as the situation is changing daily.

 

Radical or Bureaucratic? Why Labour’s HR proposals may be both

With the current political turmoil in the UK, and the possibility that we may see a change in Government in the near future, this post looks briefly at the HR and employment related announcements made this month by the opposition and consider their effects on the profession. I should stress that I’m not looking at this from a political view – HR professionals (and businesses more widely) have a responsibility to ensure our organisations work within the law, whatever our personal views of a particular piece of legislation.

Five key announcements have been made by Labour’s John McDonnell in recent weeks, in a series of speeches.

1.       Ban ‘zero hours contracts’. I’ve written before that this probably wouldn’t solve the underlying problem – since employers would either go down the route of full casualisation, or offer ‘1 hour per week with the option to do more’ contracts. But from an HR perspective, other than the admin time caused by changing existing contractual arrangements, it might cause businesses to rethink their reason why they use these types of contracts.

2.       Raise the minimum wage to £10 per hour. Not really an issue from an HR perspective, as the current Government have previously said they want to raise the level to £9 per hour, this is more a political argument as to what level the minimum wage should be.

3.       Sectoral Collective Bargaining. Collective agreements still exist on an industry wide basis – not just in the public sector – in some sectors. (I still need to dig out my ‘pink book’ – below – occasionally). But given that union membership is at a low level, doesn’t exist in certain sectors and employers aren’t currently obliged to participate in sectoral bargaining even if they do recognise unions, this seems to be more of a long-term aim than a change that will have an immediate impact on the way companies interact with their staff.

4.       Right to paid leave for victims of domestic abuse. I don’t think anyone would disagree with the principle behind this (and we will shortly have to implement paid leave for child bereavement, so it’s not really an extra administrative task). But I can see a whole host of practical difficulties. Will individuals have to pre-declare to their employer that they are in an abusive relationship? At what point will the right kick in (physical abuse? Mental cruelty?)? What evidence will be needed? This isn’t to make light of a very serious issue, but it is a subject that requires sensitive handling from HR and simply setting it up a ‘procedure’ doesn’t seem to be the way forward. (I haven’t seen a policy document, simply the announcement, so if there is more detail on how this would work I’m happy to link to it).

5.       Compulsory Share Ownership for Employees. This issue attracted the most media attention, primarily because employers with over 250 staff would be ‘forced’ to give employees a percentage of shares (up to 10% over a period of time), allowing them to earn dividends on top of their wages. Employee shareholding is not a new concept, there are many companies that operate schemes that allow some or all employees to be given shares in the organisation. Nor are ‘compulsory’ schemes anything unusual – companies are already required to enrol employees in a pension scheme and to make financial contributions to it, while a chunk of profits is already taken from larger companies in the form of the apprenticeship levy. In one sense the idea is simply a different approach to that taken by the Cameron government, but with the same aim – to allow workers a greater stake in their employer. From an HR perspective –  having spent several years working in an employee owned business – the major immediate challenges will be for learning and development professionals who will need to devise training on the different roles and responsibilities of an employee and a shareholder, and responding to the argument “you can’t sack me, I’m a shareholder” in disciplinary hearings.

And while we shouldn’t undersestimate the possible cultural effects of these proposals, the devil will be in the detail for most of them. Will they go the way of the ill-fated “Statutory Dismissal and Grievance Procedures” introduced – and quickly abolished – in the early 2000s? Or will they become just part of the regulatory environment for HR, like maternity leave or compulsory redundancy consultation? Only time (and the result of the next general election) will tell.

IMG_0036

 

 

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)