Tag Archives: employment law

Be Careful What You Wish For

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One of the big fears for the owners and managers of small businesses is that at some point an employee will take them to an Employment Tribunal. Even if they win the case, the time, cost and stress to the owner is high. And even if the employee’s claim is apparently trivial or patently false, the thought of having your employment practices crawled over by a judge is understandably unpleasant. Matters aren’t helped by tabloid tales of companies being hit for huge compensation awards.

So the introduction of tribunal fees in 2013, which has seen a fall in tribunal claims of between 60-70%, has to be good news for small companies. Now at last businesses can get on with running effectively without fear of a discontented ex-employee making a claim against them.

Except…the pendulum may have swung too far. Most small businesses I encounter (and in my line of work that’s a lot) want to be “good” employers, they want to do things legally and properly and aren’t looking to make life as unpleasant as possible for the staff they employ. If they do something “wrong” it’s usually a genuine mistake rather than a deliberate attempt to defraud their employees.

The problem though is that when individuals can’t enforce their rights, it leaves the door open for the unscrupulous employer to ignore the law, safe in the knowledge that no-one will do anything about it. Honest, law abiding businesses that want to do things correctly are the ones that suffer, as this sad tale from the newspapers this weekend shows. The fact that the business owner is a Tory MP adds a little irony but the key point is that here is a responsible person trying to do the best for his business and employees, but is undercut by those operating at the margins – or even outside – the law.

Think about it this way. If you own a car, you pay your car insurance (no doubt moaning, as I do, about the cost of it). You do because it’s the law to have insurance. Yet if there’s no method of enforcement, why should you bother? Hundreds of thousands are estimated to be driving without insurance, taking the chance that they won’t get caught. And if they are – usually if they are involved in an accident – it’s the honest driver who bears the cost through increased premiums. If the premium becomes unaffordable you either give up your car or you drive uninsured too.

I’m not arguing that tribunal fees should be abolished completely (there’s no reason why the taxpayer should bear all the cost when they don’t in any other area of the law), but that the system needs to be rebalanced – for the benefit of decent employers as well as employees.

4 tips for Microbusinesses who need to take on staff

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Today is #microbizmattersday, a day to celebrate those who run their own businesses and employ 0-9 staff. It’s a fast growing sector and we may well see it continue to grow in the coming years.

Taking on staff can be a major issue for micro-businesses – as one report put it the owner moves from delivering their product or service to being an unpaid tax-collector and employment expert. And the sort of staffing issue that most HR professionals would take in their stride can become a serious problem, threatening the existence of the business itself. I’ve recently worked with two microbusinesses, both of whom had to handle the situation of a single disruptive employee. In both cases the situation had been exacerbated by a lack of knowledge by the business owner (primarily by failing to tackle the issues soon enough rather than by over regulatory management). And it’s certainly true that many of the microbusiness owners I work with want to be “good” employers.

It doesn’t have to be difficult to take on staff, but if you are planning to do so remember these 4 key points:

  • Get Employer’s Liability Insurance – this is a legal requirement and covers you if a member of staff has an accident or injury at work. It will normally even cover you if an individual makes a claim many years later, for example if they develop an illness which may have been the result of working for you
  • Pay people correctly – your accountant will normally operate a payroll service (or be able to recommend one) which will make sure tax and national insurance are correctly deducted and, just as importantly, paid over to HMRC. The cost of doing this is well worth the time saved trying to get your head round tax codes, allowances etc!
  • Get your health and safety right. Unless you work in a particularly hazardous environment, where you should already be aware of the risks of certain machinery or chemicals, it’s mostly common sense (keeping work areas tidy, reporting accidents etc) – although you’ll also need to start doing things like having electrical equipment (kettles, pcs, copiers etc) tested on a regular basis
  • Get your basic paperwork right. An employment contract doesn’t have to be a long winded or legalistic document, but you must give an employee a written statement.

The cost of taking advice and doing things properly far outweighs the cost of “getting it wrong” – so factor the cost of professional support in to your decision about whether you can take someone on.

If you’re a microbusiness owner, you may also find these two older posts of mine useful – One Bad Apple and Back to Basics. And if you want to know more, my book covers many of the key things a business owner needs to know. You can download it here. (I should point out that as it was published in 2012, some – but not all – of the detailed employment law has changed, although the basic principles and guidance haven’t)

I Fought The Law

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Every so often, and usually despite my better judgement, I’ll read or even get involved in a LinkedIn debate about an employment law topic. One a few weeks ago concerned the applicability of the TUPE regulations in a particular situation. What annoyed me about the debate – on this occasion – was that the first few responses, from apparently experienced and qualified HR professionals, were “ask a lawyer”, often with a subtext of “much too complicated and risky for the likes of us”.

Now I’ve nothing against Employment Lawyers (some of my best friends… etc), and their expertise is always useful. But I do find it worrying when HR people – who ought to understand the organisational and cultural context the law is being applied to – refuse to comment on a basic query and kick it upstairs to the legal profession.

So here’s a little quiz:

  1. If an individual makes an employment tribunal claim against your company, what are the processes and timescales for responding?
  2. If one of your managers asks for advice about whether a restructuring situation will result in redundancies, how do you respond?
  3. Could you advise a manager on what the protected characteristics are under the Equality Act?
  4. What is the process for a Shared Parental Leave request? And how does it differ from Additional Paternity Leave?
  5. What are the big changes being planned in Employment Law and where would you find more information?

If you’ve a CIPD qualification* and you can’t answer all of those with ease, then you really should be concerned (and if you’re one of my non-HR readers, if your HR manager or consultant can’t answer them you should be equally concerned). That’s not me being a smart-arse – those questions are based on the CIPD’s own learning outcomes for the Employment Law module in the Advanced Diploma. As an HR professional, you don’t need to know the ins and outs of the wonderfully named “Daddy’s Dance Hall” case or whether there are legitimate grounds for appeal in the recent Holiday Pay case – that is a job for the lawyers. But the basic tenets of employment law? You bet.

(* I understand some CIPD qualified people are specialists in certain areas – such as Compensation & Benefits – and don’t need a detailed knowledge of general employment law. But they still need to know how the law impacts on their own specialism)

When Love Breaks Down

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Listeners to radio soap The Archers (of which I am one) have been following for the last few weeks the ongoing affair between Elizabeth Pargetter, owner of Lower Loxley, a stately home now used as a Conference venue, and her general manager, Roy Tucker. In true soap opera fashion, Roy’s wife Hayley also works at Lower Loxley, as nanny/childminder to Elizabeth’s children. The affair ended with Elizabeth – much to Roy’s dismay – not only finishing their relationship but suggesting that Roy find another job.

Workplace relationships are an area that can be fraught for any employer, but particularly small ones where key staff can blur the boundaries between the professional and the personal. It’s not that they are uncommon either – it’s estimated that a significant proportion of personal relationships start in work (some even say a majority). Handling the breakdown of a relationship, especially between a “boss” and a “subordinate” can create many problems for a business.

Could Elizabeth sack Roy? Although she was very careful to say initially that she was not doing so, she might well have legitimate grounds for dismissal, under what is known as “some other substantial reason”. By giving Roy a period of paid leave of absence – often known as gardening leave – she’s making it clear that they can no longer work together. However, her subsequent actions of offering Roy’s job to his temporary replacement before finalising matters with him, and failing to follow any sort of process, have given him grounds for a claim of unfair dismissal (leaving aside the issue of whether he could afford to bring a claim). In practice, this is exactly the sort of situation that an employer and employee should try to resolve via a Settlement Agreement – a confidential and legally binding agreement to end an employment relationship – thus avoiding both embarrassing publicity for the business and personal information being made public.

But what about Hayley? Would Elizabeth and she be able to maintain a working relationship, especially as Hayley has now discovered the true reason for Roy’s late nights at the office? Again, Elizabeth might be able to use the “some other substantial reason” argument for dismissing her, but I suspect her case would be much weaker unless Hayley started behaving in an inappropriate manner. Hayley herself has quite understandably stated that she doesn’t really want to work with Elizabeth in the future. Here once again, a settlement agreement might be the logical way forward, unless Hayley resigns in a fit of pique.

Whatever happens – and at the time of writing it remains an unresolved issue – it will be an expensive fling for all concerned. And while The Archers is fiction, the consequences are likely to be the same if something like this happened in your business. It’s a worthwhile reminder of what the “Human” in Human Resources really means.

Brussels backs Brits on Fatties

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I’ve blogged before about the nonsense that tabloid (and sometimes more “reputable”) newspapers publish about employment law – for example here and here. So it didn’t surprise me when they cottoned on to the “obesity as a disability” story, particularly as it also allowed them to indulge in their other favourite pastime of bashing “Europe”. The Daily Star took the story to new heights of fantasy with this piece.

Of course, it’s no wonder that many small businesses have concerns about employment law when they read stories like this one. And it provides fuel for those with a political axe to grind. So let’s look at the facts in this case, rather than the fiction.

The reports reflect an opinion expressed by the Advocate General of the EU. Although this is merely an expert legal opinion, his view is usually – but not always – adopted by the European court when it makes a judgment. Updated 18 December 2014 – the European Court decision, which can be found here, does, as expected, broadly follow this, although it removes the reference to Body Mass Index below.

What the Advocate General said was that anyone who is “morbidly obese” (with a Body Mass Index of 40 or more) is not disabled. However there may be certain circumstances where the consequences of this obesity are that the person cannot fully participate in work. In such a situation the individual might be (but isn’t automatically) disabled and therefore governed by equality legislation.

This viewpoint is consistent with current UK case law, which states that obesity is not in itself a disability but it may lead people to suffer from conditions which are a disability.

In this respect, it places obesity on a similar footing to drug or alcohol addiction. Simply being dependent on drugs or alcohol is not a disability. But if someone develops a condition which is a disability (for example becoming HIV positive) as a consequence of their addiction they will be classed as disabled under the Equality Act.

Even if they are disabled, your duty as an employer is to make “reasonable adjustments”. What is reasonable for a small company in rented accommodation is vastly different to what is reasonable in a large employer with their own premises. You’re not necessarily obliged to strengthen floors, provide extra wide chairs or any of the other things that reports have mentioned.

So, as always, don’t panic when you read stories like this. Remember that newspapers are interested in juicy headlines, not the cold facts or the detail.

(Thanks are due to Equality & Diversity consultant Anne Tynan, who tweeted about the Daily Star story and Employment Barrister Daniel Barnett whose Employment Law bulletins provide a readable and accurate summary of the Advocate General’s opinion).

(I’m fully aware that the European Court is based in Strasbourg. But the alliterative headline is a tabloid staple, accurate or not)