Employment Law Guide

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1 Employment Law Guide Settlement Agreements (Formally known as Compromise Agreements) See the separate guide. Unfair Dismissal Length of employment Employees can only bring a claim for ordinary unfair dismissal if they have the necessary period of continuous employment. Those employees whose employment commenced before 6 April 2012 must have at least one year's service to bring a claim for ordinary unfair dismissal. Those whose employment commenced after 6th April 2012 must have at least 2 year s service. For the purposes of calculating an employee's period of continuous employment, the period will start on the employee's first day of employment. There are some specific exceptions to this. Examples of these are dismissal for whistle blowing and dismissal for a reason connected with maternity. Claim to be within three months Any proceedings have to be brought within 3 months of dismissal. So, if a person is dismissed on 4thJanuary the written claim must have been received by the tribunal on 3rd April at the latest. Employee Unfair dismissal proceedings may only be brought by employees. This usually rules out independent contractors but there are often arguments as to whether a person was an employee or genuinely self employed. The Employment Tribunal will consider whether there was a fair reason for dismissal and what that was, whether the employer followed a fair and correct process in deciding to dismiss and whether the reason for dismissal was one of the automatically unfair reasons. Reasons for dismissal The employer has to have a fair reason for dismissal. The tribunal has to identify the reason for dismissal. There are a number of specified potentially fair reasons. These are: A reason related to the capability or qualifications of the employee for performing work of the kind which he or she was by the employer to do. This typically includes not achieving targets and failure to do the job to the standard required or being away from work sick regularly or over a long

2 period of time. A reason connected with the conduct of the employee. That the employee was redundant. That the employee couldn t continue to do the job without contravening the law in some way. Some other substantial reason Procedure The tribunal will consider whether a fair procedure was used in dismissing the employee and whether the decision to dismiss was reasonable. In doing this it is required to have regard to the ACAS code of practice. It will consider the following: 1. Whether the employer investigated any alleged potential disciplinary matter. If possible the investigation, including any investigatory meeting should be conducted by a different person to the one who conducts any disciplinary hearing. 2. Whether the employee was notified by the employer in writing that it was conducting disciplinary proceedings and given the date, time and place of the disciplinary meeting. This notification should contain sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting. It would normally be appropriate to provide copies of any written evidence, which may include any witness statements, with the notification. 3. Whether the employee was given an opportunity to be accompanied at the disciplinary meeting. Whether at the meeting the employer explained the complaint against the employee and went through the evidence that has been gathered. The employee should be allowed to set out their case and answer any allegations that have been made. The employee should be given a reasonable opportunity to ask questions, present evidence and call relevant witnesses. They should also be given an opportunity to raise points about any information provided by witnesses. 4. Whether the employee was given an opportunity to appeal against the decision reached. If the employee appealed there would then be an appeal meeting similar to the disciplinary hearing which should preferably be conducted by someone other than the person who conducted the disciplinary. It is not enough that the employer can show a fair reason for dismissal. The tribunal has to consider whether the employer acted reasonably or unreasonably in dismissing the employee for that reason. A major part of this consideration will be the procedure described above. The tribunal will also consider the size and administrative resources of the employer. The tribunal will look at are whether the employer made sufficient enquiries and investigations into the situation. With redundancy dismissals it will consider whether there was a redundancy situation and whether there was proper consultation with the employee.

3 Compensation Compensation is calculated by reference to two elements. 1. The Basic Award A week s gross pay subject to a maximum of 430 for each complete year worked. The maximum is The Compensatory award. This is to compensate for lost income and is subject to a maximum of The award of compensation for Unfair Dismissal is to make good the employee's loss. The tribunal awards compensation for actual losses incurred plus future estimated losses. It follows that the date when a claimant obtained a replacement income or will obtain such income is very relevant. The heads of compensation usually used by tribunals are: 1. Immediate loss of earnings. These are losses incurred between the dismissal and the hearing at which the tribunal decides on compensation. 2. Future loss of earnings These will be estimated loss after the hearing e.g. future losses based on how long it should take the claimant to find alternative employment. 3. Expenses incurred as a consequence of the dismissal. 4. Loss of statutory protection rights. This covers the fact that the employee will be unable to bring unfair dismissal proceedings for a year (or 2 depending on start date) after starting a new job. 5. Loss of pension rights Making an employment claim Making a claim to an Employment Tribunal is best done with the assistance of a qualified lawyer. A claim can be paid for in a variety of ways. The three most common are: Using legal expenses insurance - this is most often part of household insurance. No win no fee. Paying at a set hourly rate. If you wish to discuss bringing a claim ring Tony Wilkinson on

4 Redundancy The statutory definition of "redundancy" encompasses three types of situation: business closure, workplace closure, and reduction of workforce. The dismissal of an employee will be by reason of redundancy if it is "wholly or mainly attributable to" the employer: Ceasing or intending to cease to carry on the business for the purposes of which the employee was employed by it (business closure) Ceasing or intending to cease to carry on that business in the place where the employee was so employed (workplace closure) or Having a reduced requirement for employees to carry out work of a particular kind or to do so at the place where the employee was employed to work (reduced requirement for employees) Redundancy Pay Calculation An employee who has been continuously employed for 2 years is entitled to receive a redundancy payment. The amount of the payment depends on the employee s age and length of employment. The calculation for statutory redundancy pay is based on: how long the employee has been continuously employed the employee s age the employee s weekly pay, up to a certain limit ( 430 current maximum) The employee will get: 0.5 week s pay for each full year of service where your age was under 22 1 week s pay for each full year of service where your age was 22 or above, but under week s pay for each full year of service where your age was 41 or above The maximum number of years that can be taken into account is 20 years. An employee can't be given statutory redundancy pay for more than 20 years' employment. See the governments redundancy calculator at Contracts of Employment Relationship Where any person works for another for remuneration there is a contractual relationship. The lack of written evidence in the form of a written contract does not nullify that contractual relationship.

5 Statement of terms and conditions There is no requirement for a contract to be in writing. Within two months of starting employment employees must be issued with a written statement of the terms and conditions under which they are employed. This statement must set out:- The name of the employer and employee; The date when the employment began and the date when the employee s period of continuous employment began; The method of calculating pay and the intervals at which it would be paid. Holidays and holiday pay; Hours of work including any terms relating to normal working hours Sickness notification and payment; Length of notice; Job title; Disciplinary and grievance rules. Contractual terms may be express, (i.e., actually written down) or implied (i.e. not written down but obvious). Conditions may also be implied because of custom and practice or by being accepted by the behaviour of both parties. Discipline and Grievance Employers must include within the written statement of employment particulars details of:- Any disciplinary rules; The name or description of the person to whom the employee may apply if dissatisfied with any disciplinary decision and the name of any person to whom a grievance may be taken. The way in which any grievance will be proceeded with. Disciplinary Action It is important that any disciplinary action taken against an employee can be demonstrated to have been carried out fairly. The procedure used should therefore contain the following elements Investigation The employer must carry out a proper investigation without

6 unreasonable delay to establish the facts of the case. This may involve an investigatory meeting with the employee. Information the employer must notify the employee in writing of the case against him or her. This notification must contain sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting. Meeting - A meeting with the employee should be held without unreasonable delay whilst allowing the employee reasonable time to prepare his or her case. The employer should explain the complaint and go through the evidence. The employee should be given a reasonable opportunity to ask questions, present evidence, call witnesses and raise points about about any evidence provided by witnesses. Where either party wishes to call witnesses they must give the other party advance notice of this. The employee is entitled to be accompanied by a work colleague or trade union representative. Decision This can be the taking of no action, giving a written warning, a final written warning or dismissing the employee. Any disciplinary decision should be confirmed in writing. The decision to dismiss should be given to the employee in writing who should also be notified of the reason for the dismissal, the date on which the employment contract will end, the appropriate period of notice (if any) and that he or she may appeal against that decision. If misconduct or poor performance is established, a dismissal would usually only be appropriate if there has been a written warning and a final written warning. Gross misconduct can justify dismissal for a first offence, but not without following the disciplinary procedure. Written warnings should set out the nature of the misconduct or poor performance, the improvement required, and the timescale for improvement. They should also specify how long they will remain current, and the consequences of further misconduct (or failure to improve) within that period. Appeal This will take the form of a further meeting and should be conducted by a manager who was not previously involved in the case. The person conducting the appeal should do so conscientiously and should look at all of the evidence and if necessary make further enquiries. The employee should be notified of the result of the appeal in writing. This may lead to:- No action;; First written warning; Final written warning; Dismissal. It is not always necessary to follow all of these stages. Serious misconduct may lead directly to a final written warning while gross misconduct could lead to dismissal without notice.

7 Any employer considering disciplinary action should take legal advice at the outset. It is important to keep written records of all investigations and all disciplinary interviews. The Employment Tribunal will take account of the ACAS Code of Practice. If the ACAS Code applies and the employer has failed to comply with it compensation may be increased by up to 25%. If the employee fails to follow it, e.g. by failing to appeal, the compensation can be reduced by 25%. Variation of contracts of employment Once terms and conditions have been agreed neither party may vary the contract unilaterally. Before a contract may be varied by the employer in any substantial way the employee must agree. Implied term of mutual trust and confidence This is implied into every employment contract. The relationship between employer and employee depends upon mutual trust and confidence and the implied term is that neither side will breach that trust. Many constructive dismissal cases are founded on the allegation that the employer has breached this implied term. Discrimination The Equality Act 2010 is concerned with discrimination and harassment in respect of the following "protected characteristics", Age. Disability. Gender reassignment Marriage and civil partnership Pregnancy and maternity. Race Religion Sex Sexual orientation Advertising It is unlawful to discriminate in recruitment advertising by:- Placing advertisements which suggest that the vacancies are open only to one sex, race or marital status or which suggest that people without disability will be

8 preferred. Using words with a sexual connotation, e.g., "sales girl". Selection methods It is unlawful to discriminate on grounds of age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex and sexual orientation in the way in which candidates are assessed for selection. The law prohibits an employer from asking a job applicant about his or her health before offering him or her work. This does not prevent questions that are necessary to establish whether the job applicant will be able to comply with a requirement to undergo an assessment. Discrimination may be direct or indirect. Neither direct nor indirect discrimination are permitted. Direct discrimination This occurs when a person discriminates against another by treating that person less favourably than he treats or would treat others because of a protected characteristic. The protected characteristics are age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex and sexual orientation. It is possible to unlawfully discriminate against a person because they satisfy the protected characteristic or because someone they associate with does. Indirect discrimination This occurs when:- A applies a provision, criterion or practice ( PCP ) to B A applies or would apply the PCP to persons with whom B does not share the relevant protected characteristic the PCP puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share the characteristic the PCP puts or would put B at that disadvantage, and the PCP is not a proportionate means of achieving a legitimate aim. The definition therefore extends to claimants who would be put at a particular disadvantage by the relevant PCP. So, a person is protected who who is deterred by a discriminatory PCP from seeking employment for which he or she is otherwise qualified. The law recognises that for some jobs the protected characteristic of the successful

9 candidate may be a determining requirement of the job. There are very few exceptions of this nature. References There is no obligation in law to provide a reference. References if given should be accurate. An employer who negligently gives an inaccurate reference may be liable to pay compensation to the employee. Rehabilitation of offenders An offender becomes rehabilitated after a period of time set for the particular sentence imposed. It is unlawful for employers or prospective employers to take into account offences in relation to which the person is deemed to be rehabilitated. Non-Payment of Wages This applies to most payments other than advances of wages, expenses, pensions, redundancy payments and payments made in lieu of notice. An employer may be entitled to make deductions which are:- 1. authorised or required by law, for instance the deduction of income tax and national insurance contributions at source; 2. provided for by a term in the Contract of Employment; 3. expressly authorised in writing by the employee prior to the deduction; 4. made in connection with retail employment; 5. made to recover an overpayment of wages. If an employer has made an unlawful deduction from your wages then the general rule is that any claim must be lodged at the Employment Tribunal within three months of the deduction. If there have been a series of deductions then the three month time limit will begin to run from the most recent deduction. Employment Tribunal Claims Although Employment Tribunals were originally established to encourage individuals to deal with employment-related disputes themselves, the procedural requirements imposed by the Employment Tribunals and the complex law that can apply to the disputes can often make it desirable for both Claimants and Respondents to be legally represented. It is still possible for individuals to represent themselves, or to have a family member or friend represent them, however in most cases we would suggest that the individual obtain legal advice in connection with the claim.

10 If having issued a claim a party fails to comply with the Orders made by the Tribunal then there can be cost sanctions and claims can even be struck out. Post Termination Restrictive Covenants A contractual term restricting an employee s activities after termination will be ineffective, unless the employer can show that the covenant:- 1. is designed to protect the employer s legitimate business interests; and 2. extends no further than is reasonably necessary to protect those interests. Whether an interest is considered a legitimate business interest will be depend on the business in question. The type of interests which employers seek to protect are:- trade secrets or confidential information customer connections or goodwill supplier connections employee connections Post-termination restrictive covenants may seek to prevent an employee from:- competing soliciting customers or suppliers dealing with customers or suppliers enticing away employees using or disclosing confidential information When considering whether a post-termination restrictive covenant is enforceable a Court would take into account the following:- the seniority of the employee the nature of business/activities of the employer the duration of the covenants the extent of geographical restriction

11 Settlement Agreements Please see our separate page on Settlement Agreements If you would like to discuss a Settlement Agreement with us then please contact Tony Wilkinson on TUPE Regulations Employer buying or selling a business The Transfer of Undertakings (Protection of Employment) Regulations 2006 ( TUPE Regs ) came into force on the 6th April They apply to businesses of all sizes and seek to protect the rights of employees when their employer changes as a result of a relevant transfer of an undertaking. Where a transfer of an undertaking takes place (which can include a takeover, merger or service provision change-over) then employees employed by the transferee may automatically become employees of the transferor when the business changes hands. There is a provision within the TUPE Regs which gives employees a free-standing right to terminate the employment relationship on account of a substantial change of working conditions to his material detriment. Certain liabilities and obligations may transfer to the transferor as a result of the transfer, such as:- contractual liabilities in relation to employees arising under or in connection with the employment relationship statutory employment claims triggered during the employee s employment with the original employer contractual enhanced redundancy schemes contractual bonus commission and incentive schemes If an employee has been dismissed either before or after a transfer then he / she may have been automatically unfairly dismissed, for the purposes of an Unfair Dismissal claim (see above) if the sole or principal reason for the dismissal is:- 1. the transfer itself; or 2. a reason connected with it that is not an economic, technical or organisational reason entailing changes in the workforce. If there is to be a transfer then both the transferee and transferor are under a duty to inform and consult with the employees about the transfer. The time limit for most employment-related claims is three months.

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