Breaking news today from the Supreme Court, who have decided that employment tribunal fees introduced in July 2013 are unlawful as they prevented access to justice and breached UK and EU law.
The case was taken to the Supreme Court ultimately by Unison who have fought this long and hard, but now successful battle. Many of the employees who have paid fees to take their employer to tribunal will now need to be refunded. The government will have to now pay out a whopping £27 million. Before July 2013 employees could take their employer to a tribunal without charge, but this changed in 2013 when fees topping £1200 were introduced for claims related to unfair dismissal and discrimination. This has lead to a dramatic decrease in the number of claims being lodged – 78% in three years. The reduction has probably been due to a lack of affordability by many employees unable to do anything about any potential unfair illegal treatment at work. If someone was unfairly dismissed they would more than likely not have the funds to take a claim having lost their job and income. This would be particularly relevant to employees with a with low or middle income.
Time will tell how the government will tackle the need to make changes. Whilst the Supreme Court has indicated employment tribunals should be free, tribunal fees may not be completely abolished but may perhaps be vastly reduced. The government will probably organise a consultation exercise before implementing any changes to fees.
In July 2013 the government introduced a mandatory one month ACAS conciliation period which has helped to resolve approximately 90% of cases without going to an employment tribunal. This process will probably still be retained as it appears to have been very successful in helping to reduce the thousands and thousands of claims that used to swamp the employment tribunal system.
Nevertheless, it seems that this barrier to justice will now be removed so law-breaking employers should beware.
The latest employment tribunal statistics – July to September 2016 – show a marginal increase of 2% in single claims compared to the same period in 2015 whilst there has been an increase of 45% for multiple claims for the same period. A multiple claim is one that contains multiple claimants on the same form.
The employment tribunal statistics show that the average time to dispose of a single claim was 26 weeks, but 205 weeks for a multiple claim.
4,300 single claims were received during July to September 2016 with 27,200 multiple claims and over 5,245 applications were made for remission of the issue fee which can range from £160 to £250. 4,623 claims received either full or partial remission. A fee remission can be applied for where a claimant does not have a certain level of savings in the bank and/or is on a low income or income support. A separate fee remission application must be submitted. Fewer applications were made for remission of the hearing fee which can range from £230 to £950.
The latest Pensions Regulator’s commentary and analysis has revealed that 66% of employees are now members of a pension scheme, compared with 47% in 2012. The Pension Regulator declares auto enrolment a success. It seems the historic decline of the working population to provide for their pension has been reduced.
Compliance rates of 95% have been recorded in relation to the first group of small and micro employers to implement automatic enrolment. Almost 60% of employers who are still to go through the process are micro firms with between one and four employees, and around 950,000 employers are forecast to implement automatic enrolment within the next two years. It is therefore important that small and micro businesses engage with the process.
The report also found that around three million employees have been enrolled in a master trust, and more than 185,000 employers used the ‘Duties Checker’ tool on the Pensions Regulator’s website between October 2015 and March 2016.
However, the implementation of this statutory process by all businesses, continues to face problems as it has been reported that enforcement action taken against businesses for failing to comply is up by 300%. The Pension Regulator has escalating powers to deal with non-compliance in the form of fines that can accrue on a daily basis. The Pension Regulator can also ndertake investigations and issue compliance notices.
In the next two years 950,000 small and micro businesses will have to put a pension scheme in place. If they do not understand the process they should be seeking advice as soon as possible.
Outdated or non existent employment contract and employee handbook
This is one of the main reasons I am contacted by small and medium sized businesses. It is quite easy for existing documents to get out of date as the employment law changes frequently. Despite the implementation of the Employment Rights Act 1996 that requires an employer to provide a new employee with employment terms and conditions (contract) within eight weeks of starting employment, many business still do not do so. Failure to provide this document can lead to compensation equivalent to up to four weeks pay in an employment tribunal. An employee handbook sets out the guidelines and rules that all employees have to adhere to and should be drafted in accordance with current employment law. Outdated policies could lead to wrong actions being taken against an employee and a possible employment tribunal.
Lack of understanding with employment law
Since the 1990s there has been a steady stream of laws related to employment that have been implemented in the UK. Employee issues such as disability, pregnancy, discrimination, health and safety and pay can be complex to deal with. Many laws now contradict one another and it takes an employment law specialist to unpick the essentials for any given employee situation. The cost of failing to understand current employment law could lead to an employment tribunal.
A disciplinary matter needs urgent attention
From time to time a serious situation may occur in the workplace and it is important that, even if it is minor, that it is dealt with quickly. Certainly in agross misconduct situation it is often essential to suspend an employee or employees as soon as possible whilst a thorough investigation takes place. Time is of the essence to ensure that any important evidence is not hidden or destroyed. It is important to take urgent advice where you feel you are lacking experience of how to adequately handle these matters.
An employee is not performing well
So many businesses have under performing employees that they fail to deal with. Unfortunately this can impact on profits and employee morale. It is not nice for fellow employees to see a poorly performing colleague not being dealt with by management. The matter should be dealt with in a structured legal framework to try and get the employee back on track. It can be time consuming to deal with but ultimately the employee can be fairly dismissed if a performance management process fails.
You have no time to deal with employee matters
Dealing with employee issues can be very time consuming. With a problematic employee you have to meet with them and keep a paper trail of what you have done to try and manage the situation. Most business owners prefer to keep their focus on the business which is time consuming enough without have to deal with problematic employees which is where HR can help.
Since pension auto enrolment was first implemented in the UK in October 2012 as a government initiative to ensure workers have sufficient pension savings for their retirement,the process has been gradually rolled out and s now affecting millions of small businesses. So having been in place for quite a few years now the government is seeking to make changes to pension auto enrolment.
Whilst large and medium sized companies in the UK have been required to comply with due process otherwise are facing huge fines, the government has become increasingly concerned about the impact of pension auto enrolment on small businesses with their lack of the resources afforded to bigger companies.
The government has now pushed back the dates for increasing contributions to April 2018 and 2019 in an effort to stave off a potentially looming crisis of small businesses and pension providers being able to cope. There has been media coverage about concerns of NEST, the only workplace pension without fees being able to manage as probably the main pension provider small businesses will look to due to its affordability. In the next few years millions of small businesses need to comply.
The qualifying earnings band for auto enrolment minimum contributions will remain at £10,000 in any pay period from April 2016. The qualifying earnings band for 2016-17 will be £5,824 and £43,000 per annum.
The DWP is aiming to simply auto enrolment with some minor changes from April 2016. There will be no need to auto enrol/re enrol company directors and members of limited liability partnerships, a simplified method for an employer bringing forward its staging date and a simplified time scale for employers to notify the pension regulator that they maintain an auto enrolment pension scheme. Consultation on these changes closes in February 2016.
One thing is for sure, as with all government legislation, these will not be the last changes to be announced by the government about pension auto enrolment.
In a landmark case the ECHR (European Court of Human Rights) have deemed that employers can read employees’ private messages whilst they are work. This has implications for UK employees who use Facebook, Twitter and other social media platforms to communicate with family and friends during their working day and highlights the increasing blur between workplace privacy as working hours become longer.
The case was taken by a Romanian engineer who messaged his partner on a private messaging platform. His employment was terminated by his employer who had a policy in place that banned staff from its employees making use of company resources for personal use. The employer had accessed his private messages on Yahoo as he also used this medium for work-related messages.
The ECHR decision goes to the heart of the employment contract with the implied term that in exchange for wages an employee commits the whole of their time to the employment for which they are being paid.
Some legal experts have warned that even after work hours have ended an employee should not use private messaging platforms for personal use with company smartphones, tablets or laptops.
Many employees may now assume that their employer could monitor their online activities whilst in work and should seriously consider what they do in this regard, however, it is important to note that in order to undertake monitoring of online activities, a policy should be in place that clearly states that this may or will take place. If there is no policy in an employee handbook for example, employers should now consider the need to establish this. An existing policy should be reviewed in accordance with this development.
A statement referring to online activity monitoring should ideally be included in an IT and/or internet use policy. An employment practices code linked to the Data Protection Act 1998 published by the Information Commission gives useful guidance on this matter. In the light of this ruling, the Information Commission may need to review its own guidance now.
In a policy the employer should be clear about the purpose of monitoring including the nature, extent and who will be doing the monitoring. With larger companies it would expected that it would be done by the IT department but small businesses would need to identify who would undertake the activiiy. The benefits of online monitoring should be included in the policy and ideally an impact assessment done to establish the risks. Monitoring should not be excessive and should only be done to meet a clearly defined purpose otherwise employees will develop mistrust of their employers intentions which is not conducive to a harmonious working environment.
Individuals who are undertaking the monitoring should be provided with training that includes maintaining privacy and confidentiality if accessing personal information. These individuals should have clear written guidelines in this regard.
If monitoring is to enforce company rules a link to the disciplinary policy should be stated with the procedure clearly explained along with sanctions for non-compliance.
Employees should be made clearly aware that the policy is being implemented or exists and has been reviewed. New employees should be informed as part of an induction procedure. Ideally an employer should get explicit written consent to monitoring in writing by implementing a consent form.
“Cover up your coughs and sneezes. If you don’t, you’ll spread diseases.”
Winter is upon us and so, it seems, tis the season for sickness according to some of my clients. Most employers notice a huge increase in sickness absence in the winter months particularly December. A few years ago a survey by BUPA found 71% of employers had a problem caused by coughs, colds and flu.
The impact on remaining staff due to increasing workloads and costs to a business due to absent staff can cause a real headache for business owners.
It is really important to have a sickness absence procedure in place which is followed by all employees. The sickness procedure should be clearly stated in the employment contract and employee handbook. Employees who fail to call in sick should be considered AWOL which is deemed to be either misconduct or gross misconduct depending on the company’s view and statement in the employee handbook. There should be no excuses for calling in. Ideally it should be the sick employee, or if they are considered to be on their “deathbed”, a friend, partner or spouse should oblige. Compliance and adherence to the sickness absence procedure is paramount to ensure good staff morale. if employees are allowed to “get away with it”, such an attitude will cause big problems in a company.
Return to work interviews are a useful management tool so that the spotlight is placed on the returning employee who is questioned about their sickness absence. Managers should check if their version of events adds up. For example, photos on Facebook where they have been partying the night before a sick day needs to be questioned or if they have been seen out, seemingly, not worse for wear.
Many companies now operate SSP instead of generous occupational sick pay schemes. SSP can be a useful tool to prevent intermittent odd sick days with employees who are on lower wages.
An alternative can be health promotions to employees of how they can improve their health and fitness over the winter months can help eg encouragement of flu jab uptakes.
The Pension Regulator has recently published its findings in relation to small business awareness of pension auto enrolment. Worryingly the research shows that only 29% of small businesses with a staging date in 2016 know when that is.
Awareness of the auto enrolment process is highest amongst small employers compared to micro employers. The Pension Regulator is currently trying to raise awareness through TV advertising campaigns, radio and digital advertising and via social media, All employers receive a letter from the Pension Regulator twelve months before their staging date. This should be a clear prompt for that business to start preparing for the statutory process or face a large fine for non compliance. The first task should be to decide what pension scheme to choose and this will take quite a lot of time to do research. For those companies that do not wish to take up a private pension scheme the government has set up NEST which offers low cost compliance. Preparation for auto enrolment is the key to success and failing to prepare will lead to failure and high costs.
Other sources of how awareness is being raised are through professional advisors such as accountants, book keepers, pension providers, business groups and, of course, savvy HR consultants. The latter are often best placed to help small businesses with the admin burden of auto enrolment.
Information on how to comply with pension auto enrolment is readily available on the Pension Regulator website.
Unfortunately whilst many businesses do eventually get to grips with the process it appears that many forget to complete the declaration of compliance. This has to be submitted to the Pension Regulator within five months of the staging date.
Small employers on the whole believe that auto enrolment is a good thing compared to many micro employers. According to the research 41% of micro employers fear the cost of contributions, however, they need to ensure they do not coerce employees into opting out as such conduct can incur a hefty fine from the Pension Regulator. 14% of them believe they do not have to do anything to comply with this process – they will obviously have to think again if they have employees.
If a micro business does not have any employees and no one in the business has an employment contract, they may not need to comply. However, they should take advice to ensure that this is the case.
Any business that is of the opinion that compliance with auto enrolment is not needed should write to the Pension Regulator giving the reasons why and await a written response that will either confirm their assumptions or not.
The Government claims that the proposed legislation,will create greater transparency around union practices and will ensure strikes are the result of a clear and positive democratic mandate from union members after all other possibilities have been explored.
This has of course angered unions as they claim it would make all legal strikes impossible.
The government equalities office has just launched a consultation on gender pay gap reporting which will close on 6 September 2015. The reason for this is that the government is committed to introducing regulations that will require companies to publish their gender pay gaps clearly identifying the differences between average pay for males and females.
Research has shown that the UK falls way behind in the league table of worldwide equal pay. Iceland, Finland, Norway and Sweden are the top ranking countries for equality. Four decades on from the Equal Pay Act working women in the UK continue to lose out.
The regulations will only apply to companies in the UK with at least 250 employees so small and medium sized businesses will not be affected. Furthermore public authorities will not be included as they already have broad equality obligations compared to the private sector.
The regulations will be in place by March 2016 but will not take place immediately so that employers have time to prepare for implementation.
The Government appears to be considering the following options in terms of what will be reported:
1. Reporting one overall gender pay gap figure that captures the difference between the average earnings of men and women across the organisation as a percentage of men’s earnings.
2. Reporting separate gender pay gap figures for full-time and part-time employees.
3. Showing the difference in average earnings of men and women by grade or job type.
Highlighting pay differences could expose companies to equal pay claims. There will therefore be the need to put pay decisions in context as there may be fair reasons for these.
A failure to comply with the rules could, ultimately, be treated as an offence, attracting a fine.
In anticipation of the regulations being implement employers should consider the following actions:
• Be proactive – doing nothing is not an option. Understanding your pay arrangements will help you manage and present information meaningfully and in context.
• Review all current pay practices across your organisation in order to understand the differentials which may exist.
• Consider gender pay gaps which exist on a departmental/geographical/functional level and compare these with the composition of your workforce.
• Analyse the rationale behind your current arrangements to identify potential risk areas.
• Consider implementing a job evaluation scheme which will help provide defence for pay gaps