Monthly update June 2008
Welcome to BusinessHR's June update. And we thought that June would be a quiet month!
- Employment law update
- New ACAS code on discipline and grievances
- Tax changes
- Flexible working - extension to parents of those aged up to 16 years
- Agency workers - right to receive the same pay after 12 weeks
- More proposed legislation
- More information on the points-based immigration system
- Some interesting cases....
- Working excessive hours - check second jobs carefully
- Casual workers - take care re expectations
- National Minimum Wage
- £44,000 award made to prison officer victimised after whistleblowing
- Health and safety update
- The Health and Safety (Offences) Bill
- Two thirds of workers receive little or no safety training
- New on the website
- And finally...
- Details of staff sacked for dishonesty to be made available?
- How about the use of lie detectors to reduce absence?
- Pay transparency
- Recommend a friend!
New ACAS code on discipline and grievances
We've been wondering what would replace the current, unpopular, statutory dispute resolution procedures and we now have the initial clues! ACAS has issued the first draft of its revised Code of Practice on Discipline and Grievance for public consultation.
The new code is much shorter than the existing one (8 pages - and two of these are the cover pages!) and is divided into four main sections:
- foreword, which does not form part of the statutory code
- introduction - sets out some key principles to be followed when handling disciplinary and grievance situations
- section on discipline
- section on grievances
On a first reading it seems much easier to comply with. Rather than a strict framework it contains more common sense guidance on how to handle such issues fairly, with the aim of using tribunals as a last resort - although of course it also raises many questions! It also covers discipline, but not dismissal!
The key principles in the draft Code are as follows:
- Issues should be dealt with promptly and meetings and decisions should not be unduly delayed.
- Employers should act consistently and ensure like cases are treated alike.
- Appropriate investigations should be made.
- Any grievance/discipline should be conducted by a manager not involved in the dispute (where possible).
- For performance problems, the immediate manager would be involved.
- An employee should be informed of the basis of the problem and have the opportunity to put his/her case in response.
- An employee has the right to be accompanied.
- An employee should be allowed to appeal against any formal decision made.
The most notable change in the draft Code is that there is no requirement for an employee to raise a grievance in writing prior to bringing a subsequent tribunal claim.
Similar to the other Codes of Practice, failure to follow this will not in itself make an employer liable to proceedings, however the new Employment Bill proposes that tribunals will take the code into account when considering whether cases have been reasonably dealt with, and will be able to adjust any awards made in relevant cases by up to 25% for unreasonable failure to comply with any provision of the code. ACAS will also be publishing "fuller, freestanding, non-statutory guidance" which will provide supporting information.
The code is due to come into force (and the old procedures go) in April next year. To read the code go to www.acas.gov.uk/index.aspx?articleid=2060 Consultation closes on 25th July.
In the meantime, the existing procedures still apply and the controversy around them continues. In Clyde Valley Housing Association v MacAuley, the debate concerned what constituted a written grievance. Ms MacAuley had resigned and claimed constructive dismissal and disability discrimination. It was agreed that the modified statutory procedure should be used and so her solicitors wrote to the housing association, setting out a number of allegations (but not going into any detail on these). As the letter simply made assertions, the housing association asked for clarification of exactly what acts and conduct of theirs it was that Ms MacAuley was referring to. When they didn't receive this, they wrote to say that, as a result, they had been unable to address her grievance.
The original tribunal decided that the grievance procedures had been complied with and Ms MacAuley won her case.
On appeal this was reversed by the EAT who confirmed that her written statement should have included "the answers to the essential questions that one would expect to arise in a grievance, namely: 'Who? What? Where? When? Why?'" Her claim was therefore dismissed.
Hopefully cases like this will become more rare in the future!
Is there is anyone left out there who is not aware of the government's revised tax allowances?
The government has responded to objections following the removal of the 10% tax band by giving a one-off increase in the personal allowance. Personal tax allowances for the 2008-09 tax year will therefore increase by £600 from £5435 to £6035. The extra money will be paid via a £60 lump sum in September pay packets, followed by an extra £10 each month until the end of the tax year.
The starting point for the 40% tax rate has also been reduced by £1200. The basic rate limit is reduced from £36,000 to £34,800. This means 150,000 basic rate taxpayers will become higher rate taxpayers, but they should actually be slightly better off because of the benefit from the increase in the personal allowance.
Many workers will gain from these changes, including some who had not lost out as a result of the abolition of the 10p tax rate! The changes will be included in this year's Finance Bill, which is due to come into effect in September.
Since 2003 employees with more than six months' service have had the right to request flexible working in order to care for a child under the age of six (or 18 if the child is disabled). This right was extended to carers of adults in 2007 who meet the set relationship criteria.
The government has now confirmed that it plans to extend this right to parents of children aged up to 16 years (leaving the provisions relating to disabled children under the age of 18 and persons over the age of 18 requiring care unchanged).
The proposed timescale for this is next April and the report into the proposal (the Walsh report) recommended that the extension should not be introduced in stages, but in one go, and that the existing 26 weeks' qualifying service be retained.
For details of the current statutory procedure for requesting flexible working arrangements, see /docs/legal/flexible.html
The flexible working legislation to date seems to have worked satisfactorily, perhaps because it is a 'right to request' and not a right to work flexibly. However, employer representative groups are worried that the government is going too far, and have called for a delay until October 2009 to give businesses time to prepare staff, policies and practices. The planned extension of the rules to parents of children up to 16 will dramatically increase the number of qualifying employees - an addition of more than 4.5 million parents. Interestingly, although over 90% of requests for flexible working have been granted, it would seem that employers are not happy to accept requests to work from home - the Labour Market Outlook survey (published by the CIPD with accounting firm KPMG), found that 69% 'never or occasionally' grant homeworking requests.
After much controversy and UK resistance over the past few years, the government has now agreed with the TUC and the CBI that it will work with the European Union to produce an Agency Workers' Directive. This is intended to entitle agency workers to comparable terms and conditions of employment to those enjoyed by permanent employees after a 12 week qualifying period in the job. Previous drafts had suggested a 6 week qualifying period, which the UK had resisted - and of course, our EU colleagues have not agreed to a 12 week qualifying period so discussions may still stall or the agreed period may be less than 12 weeks (in which case, if our government goes ahead and does introduce its own legislation, this may need to be subsequently amended to comply with Europe).
However, the current proposals are that once an agency worker has completed 12 weeks in a given job, the employer will have to give that worker at least the same basic working and employment conditions such as pay and holidays, that apply to workers recruited directly to do the same job. Longer-term benefits, such as pensions and sick pay, will be excluded. Temporary staff will have to work the same length of time as permanent workers to enjoy paid maternity leave. But the finer details are still awaited - for example, it is not yet known whether the new rights will only trigger once a worker has spent 12 weeks or more with an end user or whether they will apply retrospectively once the worker has completed the 12 weeks. Similarly, it is not clear whether a number of short term assignments which, together, exceed 12 weeks will be aggregated. Interestingly, the proposed changes do not address the issue of creating "unfair dismissal" or statutory redundancy payment rights for agency workers.
There are many instances of course where agency workers are compensated more generously than their "permanent" comparators. Similar to the part-time workers legislation, it would seem unlikely that the comparators will be able to challenge the difference!
Employers will still be able to employ agency workers to cover absences and short term peaks and troughs in demand without those workers becoming entitled to greater employment rights - provided that the same worker is not used for more than 12 weeks. (Half of agency assignments last less than 12 weeks.) But if you regularly use long term agency workers, it is worth considering your strategies for the future use of agency workers well before the new regime comes in.
The Government has said that it hopes that by endorsing the EU Directive now, it can be finalised in time to produce implementing legislation in the UK during the next parliamentary session - as early as next April. But it is only when Brussels passes a directive that the UK government will be able to put forward "implementing" legislation of its own.
There are estimated to be about 1.4 million agency workers in the UK.
The two remaining key pieces of employment legislation in the government's draft legislative programme for the next parliamentary session are the Single Equalities Bill and the Education and Skills Bill.
The former aims to "harmonise existing anti-discrimination and equality legislation as far as is practicable" and will update and extend existing provisions where appropriate; the latter will give suitably qualified young people a new right to an apprenticeship and will include a proposal to give every worker the right to request time off work to undertake training that will benefit them and their employer. It is envisaged that the procedure for making such requests will be similar to the right to request flexible working, and that employers will be obliged to seriously consider requests for training they receive but could refuse a request where there was a good business reason to do so. They will not be obliged to pay employees' salaries or meet their training costs during the time off but the Government expects that many will choose to do so.
The Home Office has now published proposals for much tighter skilled and temporary worker tiers within the new Points Based System for migrant workers from outside the EAA. Tier 2 (skilled workers with a job offer) and Tier 5 (temporary workers) will replace around 30 different routes to the UK, including the old work permit system, and are expected to be implemented this autumn. The Home Office announced that if these tighter 'Tier 2' and 'Tier 5' rules had been in place last year, around 10% fewer skilled and temporary migrants from outside Europe would have been allowed into Britain to work - around 20,000 people.
Tier 2 will have a single application process and all applicants will need to undergo biometric testing and obtain a unique Biometric Identity Card (see below). To be eligible to apply under Tier 2 all applicants must have:
- a job offer
- a certificate of sponsorship from a licensed sponsor
- scored enough points
- satisfied both the English Language and Maintenance Requirements. The former requires that all applicants under tier 2, with the exception of those applying under Intra Company Transfers for less than three years, will be expected to speak English to a “basic user standard”. The latter require initial applicants applying from outside the country in this tier to show that they have minimum funds equivalent to £800 for themselves and an additional amount of £600 for each dependant they intend to bring with them.
In addition to the above, employers will be required to prove they cannot fill the post with a worker already resident in the UK and will also have to show that the vacancy has been advertised in the UK, unless the job is on the shortage occupation list. See www.bia.homeoffice.gov.uk/workingintheuk/tier2/generalarrangements/eligibility/
Employers will have to be licensed to sponsor applicants for work permits. The cost of registration is likely to be £1,000 for most sponsors (£300 for a small sponsor), and each skilled worker certificate of sponsorship will cost £170.
From 28 April this year those requiring a UK residence permit for extension to stay as a student or as a husband, wife or civil partner will need to apply for a biometric immigration document as well as completing the usual application form. It is intended that identity cards will be introduced for all foreign nationals on a rolling basis throughout the next few years (replacing the stickers and immigration status documents currently used) and that by 2012 the cards will be issued to foreign nationals who are already settled in the UK.
The new identity cards will include digitalised photographs, fingerprints and biometric information on individuals and will stand alone as evidence of an individual's identity.
Whilst on the subject of employer checks, there seems to have been a huge increase in employer prosecutions since the introduction of tighter illegal worker rules on 29 February this year. Since the new rules came into force, 137 businesses have been caught employing illegal immigrants (10 times the number caught in 2007) and enforcement officers have imposed fines worth a total of about £500,000.
Employers who negligently hire illegal workers (those who fail to carry out any checks) face a maximum fine of £10,000. Employers who are found to have knowingly hired illegal workers could incur an unlimited fine and be sent to prison. For further details on the checks you are required to make, see /docs/legal/foreignnationals.html
It is estimated that more than 500,000 illegal immigrants are in Britain: it would cost more than £5 billion to deport them all!
Working excessive hours - check second jobs carefully
The WTR specifies a maximum hourly working week of 48 hours (calculated over a 17 week period). This is a total maximum and applies to multiple jobs. Therefore many employers include in their contracts a requirement that the employee seeks permission before taking on second jobs, and ask the employee concerned to opt out of the regulations. Many employers also issue guidelines which typically require the employee not to be too tired to do the primary job, not to compete and not to use the employers' time or equipment for any secondary employment. (See: /docs/lf/outside/index.html)
This case of Havering PCT v Bidwell is an interesting case because there are very few such cases. Miss Bidwell was a nurse who worked 37.5 hours per week for a primary care trust and also worked regular shifts at a nursing home for a private company. She was allowed to work for other employers, but was required to tell Havering PCT and not to work excessive hours which made her unsafe for duty.
There was no active monitoring by the PCT of the hours worked for others by its employees.
The PCT found out that Miss Bidwell had been working on average between 78-109.5 hours per week, and on three occasions had worked a continuous period of 27 hours (comprising a night shift in the home between a late and an early shift for the PCT). On discovering this, they dismissed her as they decided her working hours could create a risk to patients.
However, the tribunal found that the decision to dismiss fell outside the range of reasonable responses because it was too harsh a penalty in the circumstances.
An appeal by the PCT was dismissed but the EAT made it clear that its decision related specifically to this claim and should not be taken to mean that dismissal for a first offence of working excessive hours could never be fair.
So do request that your employees who have second jobs tell you of this, but do ensure that you investigate fully before taking action against them because of their additional work.
The case of Carmichael & Anor v National Power 1999 (House of Lords) established that where there is no obligation on employer or worker to either offer work or accept that work then there is no mutuality of obligation. So whilst a worker may be employed under a contract of service during the period of work, no over-arching contract exists during periods when no work is undertaken. Continuity of employment is not maintained and periods of employment cannot be linked together.
In St Ives Plymouth Limited v Haggerty however, the EAT decided that where a worker is offered work on a regular basis, and there is an expectation that work will be offered and accepted, an over-arching contract may exist linking the periods of work, even where there is an express clause that there is no obligation to offer or accept work.
In this case the tribunal found that whilst the work fluctuated greatly and at short notice there was a clear expectation of work - they established that if a reasonable amount of work had not been offered to Miss Haggerty she would have sought work elsewhere; and also that the employer would have removed her from its pool of casual workers had she consistently refused it. This is something that many of us would regard as normal, but this case does remind us that casuals should be used as such and that any regular offer/acceptance of work may unwittingly lead to an employee relationship. We appreciate that many employers either tend to use the casual workers they think are the better ones more regularly (often prior to offering them employment on an ongoing basis), or else to attempt a fair and equitable allocation of work to all workers - either of these approaches would seem to carry some risk.
Miss Haggerty was allowed to bring her claim for constructive dismissal as the employment tribunal held that she had the necessary year's continuous employment as she was employed under an "umbrella contract". St Ives appealed but the EAT agreed that there was evidence of a continuing obligation between the parties.
A Nottingham shop owner, Robert Singh, was fined £500 and £150 costs after pleading guilty to neglecting to produce appropriate records to the HMRC compliance officers who were attempting to establish whether a former employee had received the National Minimum Wage,
Employers who prevent HMRC's officers from checking staff records and who refuse to comply with the law can receive both a fine and a criminal record. The six potential criminal offences under section 31 of the NMW Act are:
- Employer refuses or wilfully neglects to pay NMW.
- Person fails to keep or preserve records.
- Person knowingly causes or allows false entry in records.
- Person produces or furnishes false records or information.
- Person delays or obstructs compliance officer.
- Person refuses or neglects to answer any questions or produce documents for compliance officer.
Each criminal offence carries a maximum £5,000 fine and a criminal record. For more details about the minimum wage see: /docs/legal/minimumwage.html For current and future rates (where known) see /docs/legal/keystatistics.html#nmw
Emma Howie, a prison officer, was awarded £43,875 in damages after succeeding in her claim of victimisation by colleagues for appearing as a witness in a high-profile whistleblowing case. After giving evidence at a disciplinary hearing at Full Sutton prison, near York, she claimed fellow officers turned on her. She was later transferred to the high-security Wakefield prison, where in December 2004 she again gave evidence, this time on behalf of a senior prison officer.
It would seem that we are not very good in the UK at protecting whistleblowers, despite the fact that they can save businesses millions by reporting illegal or wrongful activities including rule breaking, criminal activity, cover-ups and fraud. Research by Grant Thornton puts the UK at number 16 in a list of 33 countries who make provision for potential whistleblowers. They reported that attitudes to whistleblowers means many employees are still afraid to speak out and that whistleblowers can be victimised as informants or traitors rather than being seen as a valuable early warning system which can save money and reputations.
In the US, under the US False Claims Act, whistleblowers are given a financial incentive: informants that disclose information leading to the recovery of proceeds of crime against the US Government are entitled to a percentage of the recovered sum.
Whilst UK legislation doesn't go this far, whistleblowers are protected by the Public Interest Disclosure Act. If you don't currently have a whistleblowing policy in place, then you should consider one - see http://www.businesshr.net/docs/pol/whistleblowing/index.html
The Health and Safety (Offences) Bill
Under proposed new legislation employers could face both jail sentences and bigger fines for a greater number of health and safety offences.
The Health and Safety (Offences) Bill proposes to amend the Health and Safety at Work etc Act 1974 to raise the maximum penalties available to the courts in respect of certain health and safety offences. The aim is that sentences should be sufficient to deter those tempted to break the law and deal appropriately with those who do commit offences.
The main provisions of the Bill are:
- The maximum fine for both companies and individuals which may be imposed by the lower courts would be increased to £20,000 for most health and safety offences.
- A prison sentence may be given for most health and safety offences in lower and higher courts, rather than being restricted to certain cases.
- Certain offences that can currently only go to trial in lower courts, could be heard in either the lower or higher courts - thus opening up more offences to unlimited fines.
According to the British British Safety Council's survey, "Safe and Sound?", businesses are losing £250 a second in costs and payouts for needless accidents in the workplace. The survey found that 62 per cent of workers had received little or no health and safety training from their employers. Workers in the construction industry and employees of small and medium-sized companies were found to be most at risk.
We've added a whole new range of health and safety forms and policies to our health and safety section this month. See: /docs/hasaw/docs.html
We're also working on an addition to our premium service which will offer premium subscribers only an html or text version of any letter, policy or agreement he/she is generating. Clients who have their own particular form of presentation (eg set font, layout of letters etc) will find this very useful. Hopefully this will be available within the next month. For further details of our new premium service, which costs an additional £100 per year, please see /intro/premiumservice.html
Details of staff sacked for dishonesty to be made available?
A new database which lists the details of those sacked for dishonesty is causing much controversy and debate!
Thefts by staff in the retail industry are estimated at close to £500 million. As a result the National Staff Dismissal Register (NSDR), an initiative of Action Against Business Crime (AABC), is due to go live in the near future. The register is a new service for retailers which will hold details, including photographs, of individuals who have been dismissed or have left their employment whilst under investigation for acts of dishonesty towards the employer including theft or attempted theft of money, merchandise or property from the employer, its suppliers or customers; falsification or forgery of documents; fraudulently obtaining money, services or information and/or damaging company property. An employee need not have a criminal conviction for his/her details to be added to the database and records will be retained for five years. Members will be able to search against the names, addresses, national insurance numbers, former employer and dates of birth of prospective employees for any entry on the register. A number of retailers have joined the register including Harrods, HMV, Mothercare, Selfridges, Littlewoods and outsourced staff provider Reed Managed Services.
The controversy relates to Data Protection issues and human rights, with commentators citing Orwellian big brother tactics.
AABC state that access to the database will be online via an encrypted password system and will be limited to employers who can comply with the Information Commissioner’s employment practices code. Employees will be told when they apply for a job that their details will be checked against the database and will have the right to change their entries should they be inaccurate. It will still be up to each individual employer to ensure that it is happy that sharing information about ex-employees with the wider group and using information obtained through the service meets its obligations under the Data Protection Act.
Critics point out that information regarding actual or alleged offences would be classed as "sensitive personal data" and therefore only usually disclosable with the express consent of the individual and in certain tightly regulated circumstances. The NSDR and those contributing to it will therefore either need to obtain the ex-employees' express consent to disclosure of their personal details (not likely to be easy in the circumstances) or be able to establish that the need for such consent is overridden by the need to protect the vital interests of a prospective employer - a difficult argument to support. Compensation will be payable to those who establish that incorrect information posted on the NSDR caused them damage, for example due to withdrawal of a job opportunity. Additional compensation may also be available where the error causes distress and may result in costly defamation claims. So employers who provide information, and those who access and act on it, need to take care if they are to avoid claims for compensation.
Critics also say the register could lead to injustice if people on it have been falsely accused of misconduct or unfairly dismissed. According to human rights group Privacy International, the National Staff Dismissal Register is an "unnecessary move which cannot be considered in the public interest".
No doubt the register will create more controversy before, and if, it is introduced. But it's not just retailers who suffer from theft so this is an issue of wider interest for us all:
- the Credit Industry Fraud Avoidance Scheme (CIFAS), the UK's fraud prevention service, estimates that employee fraud costs the UK £40m per year. CIFAS claims that around 1,500 employee fraudsters are dismissed each year.
- the Forum of Private Business (FPB) reports that CV fraud is becoming more prevalent and can have a negative impact on productivity, finance and reputation. Furthermore, employees don't just lie on their CVs to improve their careers, there is a criminal element who will infiltrate selected companies, and endeavour to place individuals in positions where they have access to money, goods or information.
- a survey commissioned by The Federation Against Software Theft has found that items stolen by staff range from computer software and digital downloads such as film, music and video (which 10% of staff admitted taking), pens (62%) and notebooks, printer paper and blank CDs (25%). Only 2% felt that downloading illegal software was something to feel ashamed of.
- research by Salgaldo Investigations found that workers steal over £432m worth of company property each year. The research (which stipulated that office stationary did not count) found that nearly four in five people have stolen from their place of work - including laptops, confidential personal data, TVs, and even an office pet.
- research by Globalexpense found that fraudulent expense claims account for around £350m, while £671m is paid to to employees for expenses not covered by company policy.
- a survey of blue-chip companies and government agencies by Software Europe found that almost 5% of all expense claims are fraudulent; either totally fictitious or exaggerated. Such claims account for a staggering £151.5m.
No room for complacency then! Read our guide to fraud ( see /docs/guides/fraud.html), ensure that you have robust whistleblowing and expenses policies (see /docs/TPcontract.html) and ensure that you take up proper references and any necessary security checks prior to new employees joining you.
Apparently pilot projects using Voice Risk Analysis (VRA) to detect false benefit claims in local authorities have been highly successful. A a year-long trial at Harrow Borough Council saved the authority more than £420,000 by identifying false benefit claims - the technology picks up changes in a caller's voice.
Some people have been suggesting that this technology could be used by employers to detect those who falsely claim illness! The latest CBI/AXA report shows that employers believe of the 172 million days lost to absence in 2007, 12% are not genuine, and that these sickies amount to 21 million lost days every year, at a cost of £1.6bn.
As in previous years, there is a huge difference between public and private sector rates. The average absence in the public sector was nine days, 55% higher than the 5.8 day average of the private sector. The report found that absence from work cost the UK economy £13.2bn last year, as the average employee took 6.7 days off sick.
In 2007 the average direct cost of absence was £517 per employee - which includes lost production and the expense of covering absence with temporary staff or overtime. The CBI also estimated that indirect costs, such as lower customer satisfaction, added another £263 per employee per year.
A snippet in the CIPD magazine reported that 59% of HR professionals would reveal their salaries to colleagues in a bid to eradicate pay inequality. A similar proportion felt that senior managers should be forced to disclose their pay to the rest of the workforce.
But would you go as far as the Italian government? The income of every Italian citizen was published on the internet on 30 April by the country's outgoing government. Reuters reported that curious, excited and maddened Italians overran www.agenziaentrate.gov.it in the few hours before it was taken down following a complaint by the country's privacy watchdog.
Tax minister Vincenzo Visco defended the website, saying "It's all about transparency and democracy. I don't see the problem."
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