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Employment Law Bulletin - October 2014

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It’s that time of year when there’s a number of changes being introduced today including national minimum wage increase, the introduction of orders for equal pay audits and increased rights to attend ante-natal appointment.

Although it’s difficult to believe, Christmas is coming – still lots of shopping days left, but they are quickly passing and the focus for many of you  will be on ensuring that you are prepared for the  challenges of staffing that Christmas brings. Increased demand for those of you with seasonal businesses, and increased absence from the winter bugs that affect us all, mean that this is a challenging time of year.

If you are planning to take on extra employees for the Christmas season think now about the type of contract that is going to suit you best. If you want to have a number of people available on an ‘as you need them’ basis then zero hours contracts might work most effectively. Do remember, however, that an individual might not be available when you want them.

Alternatively, if you are sure that you do have the work available, a fixed term contract is likely to be most suitable. If you use such a contract be careful with your wording in relation to a termination date. If you specify a date you will need to employ the individual up to that date or pay them an amount equal to their earnings if you ask them to leave early, unless there is a disciplinary issue. Allow yourself some flexibility by adding in a clause that says that the contract might need to end early, and if so you will give at least one week’s notice.

Finally, if you’d like to ensure that you are fully up to date, please join us at ourcomplementary employment update entitled ‘nothing remains constant buy change itself’ on Tuesday 14 October.  Full details of the event can be found on our website.

Update on Zero House Contracts

We have just mentioned zero hours contracts and, yes, they have been in the news again. Back in June this year the Small Business, Enterprise and Employment Bill was published and this included the banning of exclusivity clauses in contracts of employment.  This will mean that a contract setting out that an individual cannot do any work for any other employer, or that an individual can only do other work with the employer’s agreement, will not be enforceable.

As soon as this was put forward ideas were circulating about ways that it would be possible to get round this. For example, it was suggested that individuals could be employed on a series of short fixed term contracts. However, the purpose of banning the exclusivity clauses is to give some protection to individuals who are not getting work from an employer, and not able to do any work for anyone else – hence the government has just started consultation on how the possible avoidance could be addressed.

Action point:
It will not happen in the next few months, but exclusivity clauses will be banned. It would be a good time to review your use of zero hours contracts and consider if you will need to make any changes.


Dress Codes

Acas has published a new guide on dress codes in the workplace. Of course, each business differs and hence Acas has not provided a list of rules to be followed. Rather, it has provided some very useful guidance on areas that should be addressed. The key points made by Acas are:

  1. Employers must avoid unlawful discrimination in any dress code policy
  2. Employers may have health and safety reasons for having certain standards
  3. Dress codes must apply to both men and women equally, although they may have different requirements
  4. Reasonable adjustments must be made for disabled people when dress codes are in place

The guide goes on to make some useful points about tattoos, body piercings and religious dress. Access the guidance at http://www.acas.org.uk/dresscode.

You can also read our published article entitled ‘dressed for success’ as featured in People Management on the pitfalls there maybe with dress code policies.

Action point:
Read through the Acas guide and consider whether you need to make any amendments to your current dress code policy, or whether you need to introduce a policy.


National Minimum Wage

The National Minimum Wage rates increase today (1 October 2014). Here is a reminder of the current and new rates:

Age                 1 October 2014     Current rate
21+                       £6.50                    £6.31
18-20                    £5.13                    £5.03
16-17                    £3.79                    £3.72
Apprentice rate     £2.73                    £2.68

Action point:
Ensure that the new rates of pay are actioned. You might also want to review the pay of those who are paid very close to the NMW.


Equal Pay Audits

From today (1 October 2014) if an employer loses a claim of equal pay, or sex discrimination relating to pay, in the Employment Tribunal they could be ordered to carry out a pay audit. They will not be ordered to do this if:

The draft regulations also set out that:

Micro-businesses and new businesses will not be required to carry out an audit. The definitions of these two types of businesses are reasonably complex.

Action point:
If you have never carried out an equal pay audit now might be the time to do one. Not only does this give you some useful insights into pay in your organisation and whether there are any potential problems, but it also gives you some defence if you do face a claim relating to equal pay.


Ante-Natal Appointments

Another change resulting from the Children and Families Act 2014 will come into effect today (1 October 2014). As you will be aware, women who are pregnant are entitled to take paid time off to attend ante-natal appointments. From 1 October 2014 the partner of the woman will be entitled to attend up to 2 appointments, that are not longer than 6.5 hours in length, but this leave will not be paid.

This new right applies to employees and to agency workers, as long as they have a ‘qualifying relationship’ with the woman. This is defined as being a person who is:

It is important to note that the right only applies to ante-natal appointments that have been made on the advice of a registered medical practitioner, midwife or nurse.

When a woman attends an ante-natal appointment you can ask to see a record of the booking of the appointment, but this will not be possible for someone in a ‘qualifying relationship’ because the appointment that has been made will not be for them. However, you can ask an employee to confirm the following in writing:

Action point:
Most employers will need to review their company policies, and amend them to cover this change to the law.


TUPE

The question of which employees transfer when there is a TUPE situation is a question which bothers both employers and the courts. In the case of Costain Ltd v Armitage and ERH [2014] the question was whether the percentage of time that an employee spends on an activity can determine whether he should transfer.

Armitage managed projects under two contracts. There was one contract which guaranteed work and this was transferred to Costain. Although Costain agreed that there were some employees who were an ‘organised grouping’ assigned to the contract who transferred, it did not agree that Costain should transfer. Rather, it saw him as a ‘trouble shooter’ who was not assigned specifically to either contract. The Employment Tribunal found that Armitage was spending 67% of his time on the contract which transferred immediately before the transfer, and hence concluded that he should transfer. The EAT disagreed.

The question is whether an employee is specifically assigned to the contract that is transferring. A calculation of the allocation of duties at one point in time did not prove that there was a deliberate planning of the Claimant’s work. The case has been remitted to a fresh Employment Tribunal.

Action point:
If you are involved in a TUPE situation look to see if an employee is specifically assigned to the work that is transferring. Do not rely on a calculation of the percentage of time that an employee is spending on the work.


Defining Harassment

Harassment is defined in the Equality Act 2010 as ‘unwanted conduct connected to a protected characteristic and that conduct has the purpose or the effect of violating someone’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for an employee.’

Although the definition is thorough, there will always be an element of subjectivity in determining what amounts to harassment, because what one person might find offensive might be acceptable to another. When deciding whether there has been harassment the Employment Tribunal has to consider whether it is reasonable for the employee to have reacted in the way that they have.

In the case of Quality Solicitors CMHT v Tunstall [2014] the employee claimed that a colleague was talking about her to a potential client and said ‘She is Polish but very nice’. The colleague claimed he said ‘She is Polish and very nice’.

Tunstall argued that both versions violated her dignity, because if the word ‘but’ had been used it suggested that Polish people are not usually very nice, and if ‘and’ had been used it was referring to her race which was irrelevant and hence should not have been raised. The EAT concluded that the one remark was not sufficient to violate her dignity, and was not sufficient to create an intimidating, hostile, degrading, humiliating or offensive environment.

Action point:
Encourage a culture where comments relating to sensitive issues such as race are not acceptable and are not made. This will avoid this sort of situation arising. Take any allegations of harassment seriously and investigate them promptly.


And finally…Ensure you word your contracts carefully

Many employers commit to carrying out an annual review of salaries. It is important to ensure that this is referred to as a review, rather than as the ‘annual pay increase’ as shown in the case of The Equality and Human Rights Commission v Earle [2104].

Earle was recruited to work in a role which had a salary scale with incremental steps. She was recruited to start at the lowest level, but alleged that she was told by an HR Officer that she would receive an increment each year if her performance was satisfactory.

Her contract of employment actually said that there would be a progression review each year, which would include an assessment of performance. It specifically stated that there was no obligation on the employer to increase the salary following a review.

The government funding for the EHRC was tightened, and it did not award Earle (or anyone in the same role) a pay increment and it did not carry out a progression review. Earle argued that this was a breach of contract and an unlawful deduction from wages.

The EAT did not support Earle’s claim. The contract gave no commitment to a pay increase, and hence there was no breach of contract.

Action point:
Review the wording in your contracts to ensure that there is no suggestion that an employee will have a guaranteed annual pay increase (unless you want to be tied to that commitment).