Employment Law in a Nutshell

1. Employment Law in a Nutshell Elizabeth Delafosse Millbank Solicitors 109-111 Farringdon Road London EC1R 3BW edelafosse@millbanklaw.com Millbank Solicitors (SRA 349339) – April 2012

2. What is Employment Law? • Law that governs the workplace – ERA 1996 – Equality Act 2010 • Offers protection for employees, workers and agents • It covers recruitment, promotion, dismissals, staff management, disciplinary action, and grievance complaints Millbank Solicitors (SRA 349339) – April 2012

3. What is my status? • Employee or worker? • Employee: “An individual who has entered into or works under a contract ofemployment” • Contract = contract of service or apprenticeship (express or implied) Millbank Solicitors (SRA 349339) – April 2012

4. Worker status • Worker: a person who is either • an employee working under a contract of employment; • or working under a contract offering a personal service in return for remuneration • Self employed contractors/freelances/ subcontractors/casual workers who are in a subordinateand dependent position = workers Millbank Solicitors (SRA 349339) – April 2012

5. Worker • Those who are self employed and are in business to provide a client or customer with professional or other services are not workers (ie: Consultant running a consultancy practice) Millbank Solicitors (SRA 349339) – April 2012

6. Employee Statutory Rights • Main Statutory rights: • Continuity of employment on transfer of undertaking • Equality for fixed term employees • Guarantee payments • Itemised pay statements • Maternity, adoption, paternity and parental rights • Minimum period notice • Not to suffer unlawful deductions • Redundancy rights • Request flexible work • Sick pay • Unfair dismissal & written statement of reasons for dismissal • Written statement of main terms Millbank Solicitors (SRA 349339) – April 2012

7. Worker Statutory Rights • Main statutory rights: • Break and rest periods • Equal pay • Equality for part time workers • Health and safety rights • National minimum wage • Not to be discriminated against • Paid annual leave • Right not to suffer detriment for inadmissible reason • Right to be accompanied at discipline and grievance hearings • Trade union activities • Whistleblowing rights Millbank Solicitors (SRA 349339) – April 2012

8. Part time and Fixed Term • Employers must ensure that part-time workers or fixed term workers are not treated less favourably than full-time or permanent staff • Fixed term employees become permanent employees if they have served under successive fixed term contracts (exception of apprentices and students on work experience) Millbank Solicitors (SRA 349339) – April 2012

9. Employee or Self Employed? • Important for Employment and Tax Law purposes • Self Employed: pay less National Insurance Contributions • Employees: have more statutory rights and will often have more contractual benefits (eg: contractual sick pay etc) • Sometimes difficulty in distinguishing – look for mutuality of obligation, sufficient control and work carried out personally Millbank Solicitors (SRA 349339) – April 2012

10. Volunteers and Interns • The legal status of volunteers and interns is not clear cut • Whether they acquire rights depends on the relationship between the parties • Case law starting to develop re: potential entitlement to national minimum wage • Volunteers only entitled to NMW if ‘workers’ Millbank Solicitors (SRA 349339) – April 2012

11. Volunteers and Interns • Avoiding the risks of creating legally binding contracts with volunteers: • Avoid making payments to volunteers that could be construed as wages – ensure that it is expenses only • Remove/minimise perks that could be considered “consideration” • Reduce obligations on part of volunteer – give volunteer the ability to refuse tasks & choose when to work • Avoid using language that sounds “contractual” – “usual”/ “suggested” • Treat volunteers fairly Millbank Solicitors (SRA 349339) – April 2012

12. What rights do employees have? • Contractual rights • Statutory rights • Common law (case law) • Rights accrue from recruitment stage (protected rights) through to dismissal • Gradually accrue more rights the longer the length of service • One year – protection from unfair dismissal • Two years – right to statutory redundancy pay • Probationary period – important to address issues as early as you can Millbank Solicitors (SRA 349339) – April 2012

13. Why is status important? • Employees have a number of rights – if not respected – could lead to tribunal claims • Every year thousands of cases are presented in employment tribunals – why and how?? • Leads to great expense in terms of time and money for employers • Many can be avoided by a little common sense and some good management...... Millbank Solicitors (SRA 349339) – April 2012

14. The Contract • Employment Rights Act states must have a contract or S.1 Statement within 2 months of commencing employment • Copy of handbook • Told where to access policies (ie: health and safety, grievance, disciplinary, etc) and pro forma forms (ie: expenses form) Millbank Solicitors (SRA 349339) – April 2012

15. The Handbook • Non – contractual document • Sets out what is expected of employees and also what they are entitled to expect in terms of leave, sickness and how a grievance and disciplinary procedure will take place • Acts as a guide for managers so they know how to conduct a disciplinary or grievance procedure • Needs to be used and referred to regularly – encourage employees to use it Millbank Solicitors (SRA 349339) – April 2012

16. Disciplinary Procedure – how it works • Case example – Misconduct Brian has been working in the finance department for 10 years. He has a clean disciplinary record, but due to some personal problems he has been behaving erratically lately. Last week one of his female colleagues, Sophie, caught him looking at inappropriate websites and reported the matter to her line manager. • What are the issues? • What would you do if you were the line manager? • If you do nothing what could happen? Millbank Solicitors (SRA 349339) – April 2012

17. Applying the handbook to the case Step One: Considering suspension (contract) and investigating NB: Confidentiality is key! • There could be a simple explanation and the presumption of innocence should be retained. • Talk to Sophie, ask her to write a short statement of what she saw, what was said, if there were any other witnesses – remember to write down the dates, times etc... These details will be important later on. Ask her what she considers appropriate • Speak to IT – obtain the records of websites viewed that day by Brian, length of time on websites etc • Investigating officer should write a report of his/her findings and decide whether there are grounds for disciplinary action Millbank Solicitors (SRA 349339) – April 2012

18. Investigation – what happened? • As part of his investigation, Brian’s line manager spoke to Sophie, she appeared very distressed by what she saw and said she will find it very hard, if not impossible to work with Brian again • The IT manager provided a list of websites accessed by Brian which included a number of “adult” sites which were viewed for over two hours in total that day Millbank Solicitors (SRA 349339) – April 2012

19. At the hearing.... • An appropriate manager will conduct the hearing • Decide who is appropriate • Investigating officer should be there • Notetaker should be there (warn him/her about confidentiality) • A colleague or TU rep may be present with Brian – can ask questions but cannot answer questions on his behalf • Go through allegations • Full note should be taken • Adjourn hearing if further investigation is needed Millbank Solicitors (SRA 349339) – April 2012

20. After the hearing • Confirm that a decision will be made as soon as possible and communicated to him • Notes of the meeting will be sent to him in the post • Person conducting hearing should go away and consider the evidence he/she heard and Brian’s version of events and any mitigating circumstances • The decision should be sent to him in writing and he must be offered the right to appeal if a disciplinary action is taken Millbank Solicitors (SRA 349339) – April 2012

21. Brian’s case... • In the meeting Brian admitted that he had looked at the adult websites but said that he has a lot of personal stress at the moment, his wife has asked for a divorce and he believes he is having a midlife crisis. He is seeking medical advice • Sophie has since threatened to leave if she has to work with him • Given the extenuating personal circumstances and Brian’s good personnel record, the line manager decides that the most appropriate action is to issue him with a final written warning, and move him to another department which will involve a demotion of one level Millbank Solicitors (SRA 349339) – April 2012

22. The Appeal • Brian has the right to appeal against the outcome of the disciplinary hearing • An appeal hearing should take place as quickly as possible and by someone more “senior” than the person who carried out the initial disciplinary procedure (probably the MD). Again Brian has the right to be accompanied • They will look at the documents, any new information that has come to light (ie: anything stated in Brian’s grounds to appeal letter) and conduct the appeal hearing • Final decision should be communicated to Brian by letter as soon as it has been made – no further right of appeal! Millbank Solicitors (SRA 349339) – April 2012

23. Problems if not handled properly.... • In the Brian situation Sophie could raise a grievance against the Company and Brian personally • Issues of vicarious liability – office parties etc • Breach of contract – if suspend him without having the right to do so • Breach of statutory rights – if not offered right of companion • Breach of natural justice and unfair dismissal if not investigated properly and decided to dismiss him Millbank Solicitors (SRA 349339) – April 2012

24. Grievance Procedure • What is a grievance? • Written complaint, sent by the employee to his/her line manager • Examples.... • Bullying, harassment, discrimination • Complaint about colleague Millbank Solicitors (SRA 349339) – April 2012

25. Why should I care? • Grievances can quickly go out of control • If it becomes a tribunal claim you may be a witness • Expensive, time consuming and your actual job will suffer as a result • Example of an ‘out of control’ grievance Millbank Solicitors (SRA 349339) – April 2012

26. Grievance Procedure • If an employee raises an issue – try to defuse it as quickly as possible • Informal chat, appear to care but do not necessary agree with what they say • Reasonableness is key • If they wish to take it further they need to follow the procedure in the handbook Millbank Solicitors (SRA 349339) – April 2012

27. Grievance Procedure • Similar to disciplinary procedure • Step one – investigate the grievance • Step two – grievance meeting (can be accompanied) • Step three – Letter setting out outcome • Step four – appeal • Communication is important – find out what the employee wants – sometimes it’s as simple as an acknowledgment • Will ascertain their ‘motivation’ by speaking to them Millbank Solicitors (SRA 349339) – April 2012

28. General Employment Issues • Always behave fairly and reasonably • No set rules in the employment tribunals • Communication is vital • Silence leads to bad feeling and aggravates the situation • Make a note of everything • Attendance notes, emails etc • Set up sub-folders for each of your staff in your inbox • Treat every one of your employees the same • Act promptly to any issues Millbank Solicitors (SRA 349339) – April 2012

29. Tax and National Insurance Contributions • Employees are taxed at source via the PAYE system – Employer takes income tax and NI on behalf of employee • Self employed – responsible for own payment of tax – assessed via self assessment form • Personal Allowance for tax year 2012/13 is £8,105 • NI contributions – standard rate in most cases 12% on monthly earnings between £633-£3540 Millbank Solicitors (SRA 349339) – April 2012

30. Tax Rates Millbank Solicitors (SRA 349339) – April 2012

31. Pensions • Employers who have 5 or more employees must provide access to a designated stakeholder pension • From October 2012, phased over 4 years, employers will be obliged to automatically enrol all their eligible employees into a contributory pension scheme Millbank Solicitors (SRA 349339) – April 2012

32. Overlapping Matters • Non- Employment matters that need to be considered • Health and safety (personal injury claims) • Keep a record of all accidents • Carry out “risk assessments” regularly and in particular when an employee announces she is pregnant or hurts themselves at work • Immigration • Copy of the passport/visa of each employee on file when they join – avoid discrimination issues • £10,000 fine for each illegal worker if you did not know • 2 year prison sentence if knowingly employed illegal worker Millbank Solicitors (SRA 349339) – April 2012