Every so often people get into a “moral panic” and become fixated on a “bad thing”, about which “something” must be done. In HR/Employment Law the current “bad thing” is zero hours’ contracts.
These are employment contracts that don’t provided any guarantee to the employee of any number of hours per week. Hours can vary and in some cases the individual may not be required in any particular week – hence the Zero Hours name.
Various politicians have in recent weeks queued up to suggest reforms – from banning “exclusivity clauses” (i.e. ones which prevent an employee on a zero hours contract from working for someone else) to forcing employers to give a guaranteed number of hours after the individual has worked for them for 12 months. As a number of employment lawyers and other commentators have noted, both of these are easy for unscrupulous employers to get round if they want to.
It’s worth remembering that current estimates in the UK of people work under zero hours contracts vary from 600000 to 1.4 million. Out of a total workforce of 30 million, even at the upper end that’s less than 5%. And not all of those are unhappy with the arrangement – some surveys show that the majority who have them are happy to work under a “zero hours” contract.
As is often the case, those who are critical of these contracts are focusing on the symptom not the cause. There are two issues. Firstly, in a labour market during a recession, employers have plenty of staff to choose from so can drive costs down (wages can’t fall below minimum wage, so terms and conditions go instead). Once the economy picks up, individuals will move to more secure employment if they wish and employers will either face constant turnover of staff or have to improve their offering. It’s all about the balance of power in the employment relationship.
And secondly, our expectations as consumers are forcing employers to adopt these more flexible practices. Fancy a book from Amazon for next day delivery? Moan about the fact your train is cancelled because the driver is off sick? Expect not to wait in Costa for your coffee even though 20 of you have turned up at once? Companies don’t have banks of staff hanging around on the “off-chance” that there might be a surge in demand, but our expectation that our order will be fulfilled immediately means they need to be able to call on people at short notice for varying hours.
One very good example of this is a charity I’ve worked with who provide a personal shopper service for the elderly and housebound. They don’t know if Mrs Smith will need her groceries on a Tuesday or a Thursday, or not at all in a particular week. Hence the staff are employed under zero hours contracts by the charity.
Whatever the legal employment framework, “bad” employers will always bend the rules to their advantage and exploit individuals. One of the current mantras in HR is “don’t make rules for the 95% of decent employees based on the bad behaviour of 5%”. The same should apply to the legal restrictions on employers.
Tag Archives: employment law
Flexible friends…?
Today (30 June) marks the extension of the right to request flexible working to all employees with more than 26 weeks service. It’s deemed significant enough to feature on the headlines of Radio 4’s flagship Today programme, and to have attracted this slightly hysterical article in the Daily Mail – so what does it mean in practice for small business?
Firstly, up to today, the right to request flexible working was restricted to those with young families or caring responsibilities (e.g. looking after an elderly relative). And to make this request there was a formal process with specified deadlines which both employer and employee to follow.
From today, anyone who’s worked for you for 26 weeks or more can make a request – without having to give you a reason why – and the cumbersome paperwork is no longer required (in reality, very few small employers bothered with the bureaucracy anyway).
The important thing is that it’s a right to ask. It’s not a right to demand. You can legitimately refuse a request if it would add to your business costs, provide a worse service to customers, affect quality or productivity, if you cannot reorganise workloads or recruit additional staff, or if there is not enough work at the time the individual wishes to work. In other words, the same common sense reasons why you wouldn’t make any other change to your business.
However, don’t make your default position “no”. Despite the tabloid nonsense, most people will make a request because they have something going on in their life outside work that is impacting on work. A small adjustment might be all that’s needed to retain and motivate a member of staff. And it’s not “take it or leave it” – you can discuss options with the employee concerned and often come to a solution that works for you and them. Again, in my experience smaller employers are not only willing to try to accommodate requests, but actually find that it can be an advantage in attracting staff from competitors. It’s the big bureaucracies with their fear of “setting a precedent” that are less willing to be flexible.
It’s ironic of course that for years business leaders and employers’ organisations have been calling for workers to be more “flexible and adaptable”. Since employment is a relationship, it’s not unreasonable that some employees might want their employer to be flexible too. But in practice, despite the scaremongers, I’m not expecting that my phone will be in meltdown today as hundreds of employees besiege my clients with flexible working requests!
Back to Basics
Originally Published in January 2014
Even in the smallest of businesses, there’s no excuse for not following basic employment procedures and for making what might be termed “schoolboy errors” when it comes to dealing with people. Recently I’ve been involved – at a very late stage – with companies that faced tribunal claims from relatively low paid staff. In these cases, the potential compensation was more than doubled because they had got one or more of the following wrong:
- Issuing a statement of terms and conditions. You have 2 months from the day the employee commences to give them this – and it doesn’t have to be a particularly complex or legalistic document. The excuse that “the employee never asked me for it” will not wash – this is your responsibility. Failing to do this, if coupled with another successful tribunal claim, means you could have to pay up to 4 weeks’ pay to the individual.
- Giving out an itemised payslip. No matter how you pay the person, they are entitled to receive a pay slip before or around the time they are paid, showing their gross pay and any deductions from it (tax, national insurance, pension etc). Failing to do so could lead to a claim for….
- Unauthorised Deductions from wages. You cannot (with a few limited exceptions involving shop workers) take money from someone’s wages or salary without them agreeing to it first, other than statutory deductions (tax etc). This applies even if the person agrees that they owe you the money. What’s more, if you do make an unauthorised deduction, then not only can the person reclaim the money but you lose the right to claim it from them another way (e.g. via debt collection)
- Not giving notice. Someone who has worked for you for more than one month is entitled to at least a week’s notice (it increases by a week for each complete year’s service – 2 weeks for 2 years etc to a maximum of 12). If you don’t give correct notice the individual can claim breach of contract and be awarded compensation equivalent to the notice they should have received. The only exception to this is a situation of gross misconduct, i.e. behaviour so appalling that you can consider the contract to have ended.
All of these situations are so easily avoided – and costly if they are missed. Moreover they’re areas where any employee, regardless of service, can make a claim to a Tribunal.
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Fear, Itself
Originally posted May 2013
Being an entrepreneur involves taking risks. Setting up a business, launching a new product, or making essential changes come as second nature to many of those who lead organisations (including those which are “not for profit”, which doesn’t make them any less enterprising).
So why is it that when it comes to people issues, so many dynamic and energetic business people suddenly become very cautious and risk averse? Is it because
- Even the most task-centred of us doesn’t like confrontation and bad feeling?
- Or because people can answer back and challenge us?
Maybe it’s because
- We believe what politicians and tabloid newspapers tell us about how complex and restrictive employment laws are?
- We fall for the scare tactics used by certain companies selling their employment insurance products?
Or perhaps it’s a result of
- Bad experiences of HR people or departments who seem process bound and too eager to say “no” (I suspect, without any evidence, that this might be the origin of the infamous Beecroft report)
- A single bad experience (maybe a very problematic employee or a badly handled tribunal) that colours our view of all employment issues
Rather like the fear of crime far outweighing the actual likelihood of a criminal event, so people will still fear HR issues no matter how many times they are told the UK has one of the most flexible labour markets in the world. And fear – as this excellent blog points out – can be paralysing.
I don’t have an answer – I’m just interested to know why it happens. And I also wonder why we don’t treat our fears like Buffy the Vampire Slayer when we realise how insignificant they actually are
You’re Fired
Originallly posted March 2013
In the world of “Reality” TV, all Lord Sugar has to say is “You’re fired” and that’s the end of his relationship with a problem employee. However, as he’s finding out currently, in real life things just aren’t that simple. If an expert like him can apparently get it wrong, is there any hope for smaller businesses and organisations? Well, yes – just read on
Sacking someone is a big step and as an employer what you need to do is ensure that you have done everything properly – by having a fair reason and following a fair procedure.
“Fair” in this situation doesn’t imply any moral judgment (something employees often forget) – in the UK there are only 5 legally “fair” reasons to dismiss someone:
- Capability (the person’s inability to do the job you employed them to do)
- Conduct (the person’s behaviour in work)
- Legal Restriction (some other aspect of law prevents you continuing to employ them – for example a driver who is banned from driving by the courts)
- Redundancy (you are ceasing to carry out the work the person undertakes, or need fewer people to do it).
- Some Other Substantial Reason (I love this legal phrase, so vague that it can keep armies of lawyers in a job – but essentially it means a significant breakdown in the working relationship that doesn’t fall into the other four categories)
A fair process means that you must
- Make the person aware of why you are considering their dismissal (and allow them to see any evidence that you may be using to support this)
- Give them the chance to put their side of the story before making your decision
- Allow them to be accompanied at any meeting by a work colleague or union rep
- Give them the right to appeal if you do sack them
While this won’t prevent someone making a claim at an Employment Tribunal if they feel they have a case, making sure that you’ve got a fair reason and followed a fair procedure will ensure that you have a strong defence to any claim.