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Monthly update April 2002

Welcome to BusinessHR's April update! Please note the increases in statutory payments which took effect from 6 April, if you haven't already done so.

This month's hot topic looks at the first part (dealing with recruitment and selection) of the long awaited Code on Data Protection - further issues will cover the remaining parts as and when they become available. Please do double check your procedures to ensure they are in line with these!



Legal update

Increases to statutory sick and maternity pay

Statutory Sick Pay increased to £63.25 per week from 6 April 2002.

Statutory Maternity Pay increased to £75.00 per week, and the lower earnings limit was also increased to £75.00 per week.

It seems that the rules for calculating Statutory Maternity Pay from April 2003, when it increases to £100 per week, may be slightly different. Currently, employees entitled to the higher rate of SMP receive 90% of their earnings for the first six weeks, or the flat weekly rate if this is higher. From April 2003, if the proposals are approved by Parliament, women will receive the LESSER of £100 per week or 90% of their average weekly earnings. This will mean that the full £100 per week will only be paid to women with average earnings of over £111 per week.


Check your tax codes!

The Inland Revenue has admitted that thousands of tax codes, sent out for the new company car taxation system based on CO2 emissions, were inaccurate.

Company car owners could therefore be hit by incorrect tax bills unless they check that their new tax codes - which come into use this week - are correct.

For further information visit: or


Paid holiday for those on long term sick?

Are employees on long term sick entitled to their four week's statutory holiday pay?

Until the case of Kigass Aero Components Ltd v Brown, we would probably have advised you not, on the basis that the employee was unable to take his/her holiday and therefore forfeited it if untaken at the end of the holiday year.

However, an employment tribunal recently awarded thousands of pounds to a factory worker who was on sick leave for several years, as it felt that the worker was entitled to holiday pay under the Working Time Regulations (which came into force in 1998, therefore any claims could not go back any further than this).

The Engineering Employer's Federation, who contested the decision, felt that it went against the original principle of statutory paid holiday which was to assist health and safety in the workplace by ensuring that everyone gets a paid break from work each year, and strongly urged that the rules should be redrafted. However, when the case went to the EAT, the tribunal's decision was upheld.

Employees on long-term sick leave will now therefore be entitled to four weeks paid holiday each year, even when they have exhausted their rights to company and statutory sick pay.

Employers who traditionally have tended to retain staff on long term sick leave (particularly the public sector where this practice is widespread) may be more likely to dismiss them than to leave them on the payroll (even if receiving no sick pay) - however, they will need to take care not to fall foul of disability discrimination.

Other questions also arise from this ruling regarding workers taking sabbaticals and career breaks (see below).


Continuity of service is preserved during career breaks

A recent tribunal has ruled that career breaks do NOT interrupt continuity of service.

Marks & Spencer plc found this to their cost in a recent redundancy calculation based on length of service. In accordance with her employer's child break scheme, Ms Curr took a career break from work in 1990, following the end of her maternity leave, returning in 1994. In 1999 she was made redundant. Marks & Spencer calculated her redundancy pay based on the period from her return to work in 1994. The tribunal ruled that this should have been from 1973 (when she originally commenced employment) and that her continuity of employment was preserved during her career break.

If your organisation provides career or other long term breaks, you are advised to review your policy in the light of this decision.


New work permit application forms

If applying for work permits, please be advised that new application forms have been introduced for permits WP1 and WP3.

The forms are available on the government's website, where there is also information and guidance for employers. See:


Director's home addresses - new regulations

Directors, company secretaries, permanent representatives of overseas companies and partners of limited liability partnerships who are under threat of violence may now, under new regulations, apply for a Confidentiality Order, to prevent their home addresses appearing in future in public records accessible from Companies House.

These regulations are primarily aimed at protecting those who work in sectors such as the pharmaceutical, biotech, research and defence industries, where threats have been made.

Home addresses will still have to be supplied, but will only be made available to the police and regulatory authorities.

Confidentiality Orders will be granted by the Secretary of State, and only those who are at genuine risk will benefit from the regulations: in all other cases, the need for public records to be transparent and accountable will apply.


Code of practice for private contractors

The government plans to introduce a Code of Practice aimed at ensuring that new staff employed by private companies taking over local authority services do not have poorer terms than local government staff.

Existing public sector employees who transfer to the private sector are already covered by TUPE: this new code extends this to new employees who should received "fair and reasonable terms and conditions" broadly comparable to those of transferred employees. Pension provisions are included and must be either the same or comparable.


Health and Safety update

Further guidance on RSI

Last month we commented on the huge rise of RSI claims and sufferers in the workplace.

The HSE has just published revised guidance on the best ways of preventing and managing RSI and similar conditions. The updated guidance: "Upper Limb Disorders in the Workplace" (HSOG60 (rev), ISBN 0-7176-1978-8) can be ordered online via the HSE website.


This month's hot topic: the Employment Practices Data Protection Code - does it apply to me?

The answer to this question will almost always be "yes". The Code is written for all businesses, small or large, who employ staff. The Data Protection Act 1988, on which the Code is based, holds every organisation legally responsible to process personal data that it holds in a fair and proper way. Failure to do so can lead to criminal prosecution!

The Employment Practices Data Protection Code has four parts which are being released in stages over the next few months. We will be looking at Part 1: Recruitment and Selection in this issue of our newsletter, and will address the other three parts (which cover employment records, monitoring at work, and medical information) in future issues. The legal requirement on employers is to comply with the Act itself: therefore the Code gives guidance and sets benchmarks: employers may have alternative ways of meeting the requirements of the Act - however, these need to be justified and compliant with the Act.

General information and guidelines on the Data Protection Act can be found on our website: /docs/legal/dataprotection.html

Recruitment and Selection

The Code has been written to aid employers in complying with the Act when handling personal data in the workplace. It is important to note that the Act covers data which employers collect and keep on any individual (referred to in the code as a "worker"), including applicants for employment, former applicants, current and former employees, agency workers, casual workers and contract workers - so it is not just your current employees. Most of the information you collect about such workers is likely to fall within the scope of the Data Protection Act, it is therefore imperative that you review your existing practices and procedures to ensure compliance.

The Act also allows individuals to request a copy of the information an organisation holds on them. On receipt of such a request, you must respond promptly within no longer than 40 days, although you may charge up to 10 for doing this. Certain information may be withheld, further details of which can be found in the full report (see "Further information", below).

Special conditions apply before an employer can handle sensitive personal data, for example, concerning race, sex, disability, and criminal records. The most common requirements for processing such data in relation to the recruitment and selection process are:

  • to ensure the health, safety and welfare at work of a worker;
  • to select safe and competent workers;
  • to ensure a safe working environment;
  • not to discriminate on the grounds of race, sex or disability;
  • to check immigration status before employment.

1. Managing Data Protection

This section is primarily concerned with the organisation nominating an individual who will be responsible for reviewing what data is processed, ensuring current practices are compliant with the Act and checking whether the organisation needs to notify the Information Commissioner about any data held. In a small business the responsibility will probably lie with the owner(s) of the business. Where there is a management structure, responsibility may well be allocated to a senior manager. Data protection is not limited to the IT department as line managers, and indeed all workers at some point, may also be responsible for handling personal data from time to time. All workers should therefore be made aware of how data protection principles affect the way they perform their work and the likely consequences of their actions which could be disciplinary action or criminal liability.

The person responsible for data protection must ensure that the details entered on the Register of data controllers are complete, accurate, and up to date.

2. Advertising

It should be clear to applicants responding to a recruitment advert (using any form of media such as newspapers, radio, television and the internet), which organisation will be handling their application and how it will be used. "Blind" advertising (which simply gives a PO box number) will therefore be in breach of the Code. Recruitment agencies may advertise without giving the name of the potential employer, but in this case the agency must be identified and applications received should be passed to the employer in an anonymous format, and the identity of the employer given only to those candidates in whom the employer has expressed interest in receiving personally identifiable information.

If applications are to be kept on file for other future vacancies, or passed to any other organisations (eg associated companies) this should be made clear.

3. Applications

Information requested from applicants must be relevant to the recruitment decision to be made, and application forms should be restricted to the information needed for a particular position. This may mean revising your standard application form to concentrate on core information only which is required for ALL jobs(with possibly additional sheets for specific roles where further details are required). It also means the removal of information which is NOT necessary for the selection process (eg bank details, NI number etc). Sensitive personal data (eg health information and criminal records) should only be requested if essential for the post and special rules apply to this kind of data.

Applications received should be stored securely. The Code recommends that if sent by email these should be encoded, and also that steps should be taken to ensure that their confidentiality is maintained, with copies being properly disposed of.

4. Verification

There is no problem with taking up references, or with verifying qualifications and other information supplied by the candidate, provided this is explained to all applicants as early in the process as possible. (This could be a standard note included in the application form where the information is requested or an explanatory note at the end of the form which asks the applicant to give consent to this.) However, the taking up of details about an applicant's partner or relatives cannot be done without the consent of these people.

5. Shortlisting

Ensure consistency is applied when shortlisting and inform candidates if an automated process is used at this stage. In order to meet with the requirements of the Act, only those who are trained to do so should assess psychometric and other complex tests to ensure they are conducted fairly.

6. Interviews

Ensure all data recorded and retained following interview is relevant and necessary for the recruitment process itself. Warn your managers that candidates will have access to any interview notes which are retained about them - it may be useful to use standard documentation for recording interviews to ensure match against job specification, and it certainly is worth strongly advising them not to note down details of personal characteristics (often used to help remember each candidate when considering them all at the end) which may be offensive to the applicant and possibly discriminatory!

7. Pre-employment vetting

This form of verification of details should be confined to areas of special risk. It may be a legal requirement for some jobs, for example under the Protection of Children Act 1999, however ordinarily vetting should only be undertaken where there is a particular and significant risk to the employer, clients, customers or others. There are strict guidelines on the information which can be obtained and how it is subsequently used - see further information below.

8. Retention of recruitment records

The Code does not specify a particular time period, however, personal data should not be kept for longer than is necessary for the particular purpose which is based on business need. Certain information may need to be retained to protect against legal action. Employers should therefore consider carefully what information they hold and why they hold it, and be able to justify whatever period they adopt.

Whether you use a standard application form or invite cvs, you should consider carefully which information is to be transferred to the worker's employment record. (The Code suggests that information relating to past employment etc may not be necessary eg previous salary details.)


Even if you have already entered details on the Register for maintaining employee records, most employers will need to review their current practices and procedures to ensure they are still fully compliant with the requirements of the Act. Line managers and other members of staff should also be given guidelines on their responsibilities.

The Code includes an extremely useful checklist for each of the above points 1 - 8. It is too long to be included here, but we would recommend that you use this to assist you in ensuring compliance (see below).

Further information

See businesshr's guidelines on data protection: /docs/legal/dataprotection.html

also, our recruitment and selection guidelines: /docs/recruitment.html

To access the code itself and the checklist (Section 5), see:

To view the Data Protection register and to find out more about notification, see:

For more information on the Data Protection Act and the Code of Practices, see:


And finally...

A few employment tribunal statistics to consider

A recent report on the results of employment tribunal claims makes interesting reading! The report, published by the Engineering Employers Federation, includes the following statistics:

  • 78% of cases were settled or withdrawn by the applicant prior to the hearing
  • 63% of employers and 49% of employees consulted a solicitor
  • 63% of discrimination cases were settled for £3K or less (however also note that discrimination claims accounted for some of the highest settlements)
  • only 4% of applicants are actually successful at final hearings

Whilst this offers some consolation, as with all statistics, there is room for interpretation! Many companies (particularly those in the private sector) take a pragmatic view before the hearing and consider the total costs of appearing in court versus a "pay-off", even when they have a sound case and a strong chance of winning. These figures obviously cannot show how many cases would have been won by applicants and how many by the respondents. Also does the 4% of applicants come from a reduced pool of 22% of cases (given the 78% of cases which were settled or withdrawn)?

With the number of cases still rising at a rate of 25% per year, we still advocate using good sound policies and ensuring that, as far as possible, the chances of claims are minimised!


Do your employees use e-mail for 'point scoring'?

A recent NOP survey highlighted concerns about email usage. As many have suspected, it showed a significant number of employees prefer to hide behind an email when dealing with sensitive issues and also believe that email provides them with a sense of protection, as everything is documented.

Many office workers also use email as a means of point scoring over fellow colleagues - particularly those in London! (55% as opposed to the nationwide average of 38%).

Workers in London also fared worse in terms of sending offensive email, with an astonishing 36% of them admitting to sending racist, sexist, pornographic or discriminatory emails at work. Not only do these employees run the risk of dismissal, they put their employers at risk of having legal action brought against them.

A clear case in favour of the introduction of a specific, clear and well considered email policy, communication of this and proper training! Such a policy should set the parameters for use, indicate whether personal use of the internet and email is allowed and the extent to which it is permitted. Clear warnings of the consequence of any abuse of the policy should be given.

Most policies also deal with "house style", are linked to equal opportunities and harassment policies, and aim to put into place the same checks and balances for email communication that the employer has for other written communications.


Increase in numbers of working mothers

Over the last two years, the fastest growing sector of the labour market has been that of mothers with young children. The employment rate of women with children under 5 rose by 10.5% to 53.9% between 1999-2001 - an increase which is steeper than that experienced during World War 2.


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