The government's recently published Employment Bill has met with criticism from both Labour and Conservatives - Labour feeling that the government is pandering to business, and the Conservatives saying that it will harm business! So how is this bill, which is likely to come into force later this year, likely to affect us in practice?

There are 3 main parts to the bill, some of which have been mentioned separately in previous newsletters - parental leave, the internal resolution of disputes and changes to the tribunal system. We deal with them in order:

Parental Leave - changes from April 2003

(see below for immediate changes which come in this month.)

Parental and maternity leave changes again in April 2003: the effect of these changes will not be primarily financial, as employers can reclaim these payments as currently, but practical, given the difficulties of ensuring adequate cover for absent employees. From April 2003, employees will be able to take up to 12 months' maternity leave or adoption leave, with the first 6 weeks paid at 90 per cent of average earnings and another 20 weeks, (increased from 12 weeks) paid at the new flat rate of GBP100 per week (increased from GBP62) (or an employee's average earnings if he/she earns less than GBP100.). This gives a total of 26 weeks' paid leave.

Fathers may take up to 2 weeks paid paternity leave, and the adoptive parent who is not taking adoption leave (as above) may also take two weeks paid leave, to be taken in one week block within eight weeks of the birth/adoption. This will now also be paid at 90 per cent of average earnings, not at the basic flat rate as was previously thought.

Internal resolution of disputes

It will become even more important to follow the correct procedures in dealing with disciplinary and grievance matters.

Those clients who have their own Grievance and Disciplinary procedures will need to review them to ensure they are consistent with the new mandatory three-step "Dismissal and Disciplinary Procedures" (known as DPP) and "Grievance Procedures" which all employers will have to follow and which will be an implied term in all contracts of employment. Tribunals will not allow claims until the statutory procedures have been exhausted (time limits will be extended accordingly), and may penalise either party if they fail to make full use of these procedures by increasing or decreasing any compensatory awards by up to 50 per cent.

In addition, a dismissal will be automatically unfair if the employer has dismissed an employee without following the DDP, and there will be a minimum award of four weeks pay as compensation.

However, the need to follow the employer's own procedures fully in order for a dismissal to be fair will change. In future, any failure to follow an organisation's own procedures or any approved by ACAS which are extra to the DDP, and which would have made no difference to the outcome, may be disregarded by a tribunal and will no longer make a dismissal unfair.

It is hoped that forcing both parties to exhaust internal procedures first will reduce the burden on tribunals (where the number of claims has rocketed in recent years), and also that employers will be more successful at tribunals because their procedures will be correct and because the requirement to follow these procedures may help to ensure that their investigations and considerations are more thorough.

Employment tribunals

The proposal to introduce a fee, which an applicant must pay to bring a case to tribunal (previously reported in our newsletters), was dropped: however, it will now be easier for an employer who wins a case to get costs awarded against the employee. Tribunals may order either party to pay the other side's legal fees, and also, importantly, their preparation costs (which can be considerable).

The administration of tribunals will see some changes also, with new mandatory forms for claiming and defending, powers to strike out unmerited claims at Pre-Hearing Review stage, and the power to issue "practice directions" aimed at reducing or eliminating differences in practice between the various tribunals.

Miscellaneous

In addition to the above:

• The scope of compromise agreements will be broadened.
• A questionnaire will be introduced for equal pay claims (similar to those currently in use for other discrimination cases).
• "Union Learning Representatives" will be given the same rights to time off and protection from dismissal as shop stewards in respect of their role of bringing education and training opportunities to their colleagues.
• A financial sanction will be introduced in limited circumstances for those employers who fail to provide written particulars of employment.

Finally, and certainly not least because of its potential impact, the government has decided to apply the EU Fixed Term Workers Directive to require equal pay and pensions, even though the Directive itself does not require this. If you use fixed term contracts to try to ensure a flexible workforce, this could have a huge impact. This will be brought in by secondary legislation the process has only just begun, so the details are not yet available: watch this space!

Parents of children aged under five on 15 December 1999, or those who adopted children in the five years up to December 1999, are - as from 10 January 2002 - now able to take advantage of the entitlement to parental leave which was introduced two years ago. The TUC has always claimed that the government's limitation of parental leave by the imposition of this qualifying date breached the European Directive, and the European Court of Justice recently agreed with them.

Parents of children who were aged under 5 on 15 December 1999 will now be able to take 13 weeks parental leave, even if the child concerned is now over five.

This leave must be taken by 31 March 2005, unless it is postponed or leave for a disabled child. This timescale allows for 13 weeks' leave under the current fallback provisions contained in the Maternity and Parental Leave Regulations 1999. These provisions limit the leave to four weeks in any year, require leave to be taken in periods of one week, require employees to give 21 days notice of leave and give employers the power to refuse leave at a particular time for good business reasons.

The parent has to have one year's continuity of employment and parents who have changed jobs will be allowed to include qualifying continuity with a previous employer.

What is not clear is whether employees who benefitted from generous employers who ignored the previous limitation in the 1999 regulations and allowed them to take parental leave anyway, will now be entitled to the 13 weeks leave as well!

Parental leave remains unpaid. Different rules apply to the parents of disabled children, who have their leave extended to 18 weeks, and who can take their leave up to the child's 18th birthday and in periods of less than one week.

(See also last month's newsletter on the right of parents to request shorter working hours.)

Victims of work-related asbestos (and similar sorts of claim) will find it harder to gain compensation following a recent Court of Appeal decision. The widow of Arthur Fairchild was claiming compensation for asbestos-related lung cancer mesothelioma, which her husband, who died in 1996, contracted after exposure to this whilst employed by two different employers - Leeds City Council and another Leeds company, Waddingtons. Because it could not be proved at which organisation he contracted the disease, no compensation could be given.

Hundreds of compensation claims have been held up waiting for the outcome of this appeal: it is estimated that by 2010 around 10,000 people will be dying of mesothelioma each year.

By 2006 it will become unlawful to discriminate on grounds of age, and the government is now consulting on the legislation which will bring this into force.

The effect of the legislation will be much more than a requirement to simply remove references to age in job advertisements. Many practices will need to be considered, including issues such as mandatory retirement and rewarding loyalty. It is likely that the new law will be similar to current race and sex discrimination, will cover all workers and job applicants with no qualifying period for claims, and no limits on compensation. However, unlike the sex and race discrimination (where if discrimination is found, it cannot be justified) the government is to decide whether to create an exhaustive list of circumstances in which discrimination on grounds of age may be justified.

It is possible that mandatory retirement ages may be removed. Whilst this may increase employment opportunities for the over 60s, it may be unpopular with employers who perceive that it will create manpower planning difficulties and that they will have to resolve the issue of older employees with unsatisfactory performance in ways other than retirement. The Office for National Statistics calculates that in order to maintain the present balance between the working population and the number of other dependents, the retirement age will have to rise to at least 72!

A new government website Age Positive gives details of the recent Code of Practice on Age diversity and offers information, case studies and advice on tackling age discrimination across all areas of the employment relationship: for more details see www.agepositive.gov.uk/ .

In the meantime, the whole issue of discrimination remains to the fore due to yet more forthcoming additional legislation and also to recent figures which show that the compensation paid to victims of discrimination reached record levels last year - tribunals awarded a total of GBP3.53million which is an increase of 38 per cent on the previous year.

• In 2003, legislation on race, sexual orientation and religious discrimination will be implemented.
• By October 2004 the exemption for small employers from the Disability Discrimination Act will be removed. From this date also, ALL buildings from which services to the public are provided must be accessible to disabled people. These are retrospective rules and will affect the design and construction of buildings, as well as the fixtures, furnishings and equipment.
• A new single Equality Commission is being considered which will bring together the Equal Opportunities Commission, the Commission for Racial Equality and the Disability Rights Commission.

And last, but not least, the Sex Discrimination (Amendment) Bill 2001 was recently put before the House of Lords. If passed, this will extend anti-discrimination legislation in connection with the provision of goods and services to private members' clubs. These amendment provisions will not apply to any association for sporting events or competition purposes, prizes may still be offered to one gender without being offered to competitors of another gender, and single sex clubs will still be allowed. However, associations may not discriminate against for example a woman who is not a member of the association in the terms on which it is prepared to admit her to membership, and may not discriminate against a woman member in terms of benefits she is offered compared to her fellow male members.

Last month the government put forward the "Dignity at Work Bill". If this Bill is enacted, it will give every employee a right to dignity in the workplace. The Bill prohibits harassment, bullying and conduct which causes the employee "to be alarmed or distressed". This former conduct could include the following types of behaviour:

• behaviour on more than one occasion that is offensive or abusive;
• unjustified criticism on more than one occasion;
• punishment imposed without reasonable cause and/or changes to an employee's duties or responsibilities to his/her detriment without reasonable justification.

Employees may take their complaints to tribunal (there will be a time limit of three months from the date of the offence) and the tribunal may award damages, including injury to feelings. If a breach is sufficiently severe, employees may bring a claim of constructive dismissal.

The first draft of an EU directive on agency workers is due out this month. Whilst the directive will not be law until 2003-4, this directive is already causing controversy. If the EC decides that agency workers' rights should be comparable to those of permanent staff, as seems likely, there will be far reaching implications on those employers who regularly use agency staff to maintain flexible manning levels. It is not clear yet whether the directive will restrict itself to employment conditions such as contractual benefits, opportunities for training etc, or whether pay and pensions will be included. If the latter is the case, pay levels and terms and conditions of existing staff may need to be revealed to agency workers (which in some cases will have to be handled with care to avoid breaking confidentiality with the employees). It is also not clear on how far restrictions will be placed on the use of agency work - legislation could set a maximum period for temporary assignments or a maximum number of renewals of a temporary work assignment.

This legislation will affect employers in the UK and Ireland much more than the rest of Europe, where the use of agency staff is much lower and where traditionally there have been greater limitations on the use of temps.

It has until now been unclear whether staff who work in the activities excluded from the Working Time Directive (air, road, sea, inland waterway and lake transport, sea fishing and other work at sea), but who are non-travelling, were covered by the directive. The European Court of Justice recently confirmed that they are not: in Bowden v Tufnells Parcels Express, Bowden, a part-time clerical worker at a transport firm, was not entitled to paid leave under the directive.

However, this will change on 1st August 2003, when the amended Working Time Directive will apply to non-travelling workers in the transport industry.

The EU member states have now agreed a new directive - which will be implemented in 3 years - creating a legal right for staff to be consulted on major business issues. All business with more than 50 employees will be obliged to provide information and to consult workers before major decisions - especially those involving jobs - are made. Information includes the economic situation of the business, developments in employment and consultation on "decisions likely to lead to substantial changes in work organisation". Failure to comply with this will result in fines. (Initially the proposal was that implementation of the decision would be delayed, but this has now been modified.)

Member states do have the ability to require that the employees request the information (rather than requiring the employers to provide it irrespective), they can ensure that sensitive information can be withheld, and employee representatives can be bound by confidentiality clauses.

Employers who already have existing consultation arrangements will have some freedom to preserve these intact: employers without consultation arrangements should start considering how they wish to manage this requirement now.

The directive will come into force in phases:

• within 3 years for employers with 150+ staff
• within 5 years for those with 100+ staff
• within 6 years for those with 50+ staff.

What is it?

The term "family friendly" was widely used during the 1990s to describe more flexible working practices. "Work life balance" is now becoming the accepted term for such practices. This is not only about working women juggling a career, home and family, although that is an important part of it. It is also about adjusting working patterns so that everyone, regardless of age, race or gender, can find a rhythm that enables them more easily to combine work with their other responsibilities or aspirations.

Work-life balance is about providing the flexibility to enable different ways of working: this may include flexitime, annual hours, part-time, term-time, job sharing, self-managed rostering and homeworking. It is about giving people working options that fit in with business needs, but which will also relieve potential stresses on employees (such as managing the balance between work and home life), to produce a more focused, committed team.

Why bother?

Improved recruitment and retention are the main benefits acknowledged by employers who offer work life policies, together with the consequent savings on training, higher productivity, better morale and commitment and a reduction in absenteeism. Offering more flexible working arrangements attracts a wider range of candidates, for example, older part-time workers and carers. People with disabilities or health problems can also gain improved access to work.

The principles

"Work-life balance" means different things to different people. "Employers for Work Life Balance" is an alliance of 22 business leaders who believe that the introduction of work life policies has benefited their organisation. The organisations involved are committed to the following principles:

• UK employers operate in an increasingly competitive environment in which flexibility is key to meeting customer demands. At the same time, employees need to be able to balance work and their other interests.
• Employees are most productive if they are able to balance their work and personal lives effectively, thereby facilitating enhanced delivery or organisational objectives.

• recognises that effective practices to promote work-life balance will benefit the organisation and its employees.
• acknowledges that individuals at all stages of their lives work best when they are able to achieve an appropriate balance between work and all other aspects of their lives.
• highlights the employer's and the employee's joint responsibility to discuss workable solutions and encourages a partnership between individuals and their line managers.
• develops appropriate policies and practical responses that meet the specific needs of the organisation and its employees, having regard to:
  • fairness and consistency;

  • valuing employees for their contribution to the business, not their working pattern;

  • monitoring and evaluation.
• communicates its commitment to work-life strategies to its employees.
• demonstrates leadership from the top of the organisation and encourages managers to lead by example.

Where to start

"Creating a Work-Life Balance: A good practice guide for employers", published by the then DfEE, now the Department for Education and Skills, contains nine case studies, revealing benefits to the organisation, tips on introducing work-life policies and short interviews with employees making use of the policies.

For example at King's Healthcare NHS Trust, a working group developed "Kingsflex", an innovative approach to working time and employment practices which enables staff to combine work more easily with the rest of their lives. Mike Griffin, Director of Human Resources explains: "We've been trying to develop an atmosphere where we `just say yes'. It's about having a raft of policies to support this in practice. The Kingsflex scheme enables its staff to adjust, by agreement, their work commitments to balance better with their domestic needs."

Scope for flexibility includes part-time working, temporarily reduced working hours, job share, staggered working hours, annual hours, phased return to work, working from home, career breaks, special and parental leave and personalised annual leave - an increase in leave entitlement up to a maximum of 40 days a year, with a commensurate reduction in salary or a reduction in entitlement by up to five days for additional salary. Managers and individuals discuss options within the Kingsflex framework, applying the following principles:

• The Trust will be as accommodating as is practicable.
• Service delivery, clinical standards, health and safety and legislative requirements must not be compromised.
• Colleagues who may be affected by the new working pattern must be consulted by the manager.
• Flexible working arrangements must benefit the individual and the Trust.
• Implications must be carefully considered before contractual changes are made.
• Pay and benefits will be adjusted pro rata.
• No additional costs should be incurred by the Trust in the application of Kingsflex.

Recruitment and retention are improving through a highly successful rotation programme for newly qualified nurses, giving them greater flexibility in their early experiences of specialities. A Clinical Placement Officer arranges placements of between six months and a year, depending on the individual's interests. "Return to practice" is a scheme to make it easier for predominantly part-time nurses to return to work. A free refresher course is available and the Trust will pay up to GBP 400 towards childcare while they complete it.

BT, who have just become the 2001 "Parents at Work Employer of the Year", are justifiably proud of this award. The family-friendly policies developed over the past two decades, and their commitment to flexible working have paid off: they report savings of GBP 220million on property alone, increased productivity, and also a resultant increase in customer satisfaction. Many of the flexible workers are line managers - the very group who have traditionally greeted the idea with reluctance and suspicion. BT report that staff retention has improved - saving money on training and recruitment; absenteeism is down and the return rate from maternity leave has increased.

How to proceed:

• There is no single, ideal way to achieve the correct work-life balance, but looking at what has worked for others, may help.
• Do not fail to ask the workforce. Assess what is appropriate to their work and gain their commitment to the changes so they see and appreciate the benefits.
• Don't create a paper mountain where the procedures and forms slow everything down and you end up with countless committees before decisions can be taken.
• As with all such changes, ensure there is top level backing and commitment.
• Concentrate on the human element, the process issues and the facilities needed.
• Redraft your policies taking into account the needs of the business and do not make promises you are unable to keep - if each case has to be decided on its merits, then say so and do be prepared to fully justify a request which cannot be granted.
• Remember the need to cover all of your employees - this is not just about women, but the entire workforce, whose needs and aspirations may be completely different.
• Communicate the message to all staff, not just the policy - publicise case studies, the results of trials, and role models.
• Decide how you are going to evaluate your new initiative and measure its success and then keep everyone updated about this.

Those worried about their turnover rates may feel sympathetic to their HR colleagues working in call centres, who currently experience an average annual turnover of 22 per cent, with 110 workers leaving for every 100 hired.

One of the principal reasons for this is believed to be stress and a recent joint report by the Health and Safety Executive and the Local Authority Enforcement Liaison Committee on working in call centres, gives guidance on best practice on stress management, dealing with verbal abuse, the risks to hearing, and good practice governing the length and frequency of employee breaks and the need for proper training to be provided so that employees are fully competent to take calls.

However, a consumer think tank claims that the simple introduction of call back systems could make life significantly easier for staff and customers. In a survey of 400 customers and 100 agents, 93 per cent of agents and 97 per cent of customers believed that software allowing customers to be called back rather than sitting in a queue, reduces the levels of angry and frustrated customers. Customers also said that they thought this showed the company cares about its customers.

Such systems are fully automated and the customers get their call returned within the time-frame of the queue - rather than waiting until the staff are less busy some time later. Could this be the beginning of the end of listening to piped music whilst your phone bill rockets and your time disappears?

A new website, produced by the Treasury, is aimed particularly at small and medium sized businesses who want to trade with Europe, and gives information about the Euro, including preparation material for businesses, factsheets and case studies. See www.euro.gov.uk/. There is also a helpline: telephone 08456 010199.