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By michaelscutt, 30/04/2009 9:00 am

And if you do, do you find it useful?  I’ve been “twittering” recently, getting up to speed on tweeting, retweeting and have installed tweetdeck and twitterberry on various bits of kit.  Like most people, I initially thought it was a waste of time but I’m slowly becoming converted to it. I can see that it is a very useful way of passing on snippets of information about what’s going on elsewhere, and some of the tweets are very amusing.  For instance check out @charonqc and his recent tweets on swineflu and wine flu.  Stephen Fry’s tweets, on the other hand, are a little disappointing.  I came across a tweet from @ukemploymentlaw today and she was of the view that twitter was, with the exception of her, completely uninteresting.  What do you think? I haven’t had a poll for a while, so here is one to make up for the absence;

[polldaddy poll=1580355]

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By michaelscutt, 29/04/2009 10:22 am

On 6th May my colleagues Jill Watson and Nicola Penny are running the 5k ”Race for Life” in Battersea Park.

 They are raising money for Cancer Research UK.  If you are able, please donate – Jill is an experienced runner but Nicola is braving blisters for her first ever run.   The link is below;   

http://www.raceforlifesponsorme.org/jillandnicola

In July to prove what a fit lot the firm is we will be sending out a team on the Chase Challenge here in the City.  More on that later on.

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By michaelscutt, 28/04/2009 8:49 pm

This is something we will be hearing a lot more about over the next few months and years.  At last the government has introduced legislation that seeks to rationalise the current miasma of anti-discrimination legislation and bring it all into one piece of legislation. 

At the moment, in the workplace environment, six types of discrimination are outlawed – age, race, sex (gender), sexual orientation, religious belief and disability.  Each piece of legislation behind each type is different in certain respects so a new Act that contains all the relevant definitions, duties and defences is to be welcomed.  Whether, in practice, the Equality Act (if it gets that far) will be is another matter.  Undoubtedly it will change as it goes through Parliament but here are the current headlines

1. The Secretary of State will be given power to order employers with more than 25o employees to publish information about male and female pay levels, with a view to thus highlighting discrepancies in pay between the sexes.  This won’t be enforced for at least the next four years though.

2. Secrecy clauses in employment contracts forbidding staff discussing their pay and bonuses (what’s a bonus?) will be outlawed.

3. Associative discrimination will be made illegal.  This means that, as in a recent case, a carer of a disabled person is dismissed because of her caring obligations, she will be able to claim disability discrimination even though she is not herself disabled. 

4.  There will be new definitions of indirect discrimination and disability discrimination.

5.  Positive discrimination at recruitment in favour of disadvanteged groups will be allowed when the candidates are otherwise equally matched.  

6. Public bodies also have duties imposed upon them to promote equality.

The Bill has been mooted for some time now and it will be interesting to see how much survives the scrutiny of Parliament, especially at a time when the economy is in deep recession.  Many employers, no doubt, will not relish having additional burdens placed upon them by government.

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By michaelscutt, 24/04/2009 1:23 pm

If there are two things I like in life they are gadgets and maps (in fact there are many things I like but time here doesn’t permit). I was particularly taken by the Google Guest Map on Blawg Review, a blog carnival for the legal profession. It maps where many law bloggers are – mainly in the US because it is a US carnival – but there are a few in the UK. I’ve added myself to it and you can visit there too by following this link;

http://blawgreview.blogspot.com/2005/08/google-guest-map-w00t.html

The map is fascinating. There are some well known law bloggers here in London but I am particularly interested by the bloggers positioned in the middle of the Atlantic. Are they a 21st century update of Tony Blackburn on board the Radio Luxembourg pirate ship? Or lawyers taking time off to sail round the world? With weather like today’s that is an enticing idea.

Blawg Review is also worth a look at from time to time.  The hosts tend to be American, but there have been some UK hosts recently, most memorably Geeklawyer’s contribution from a few weeks ago which  ruffled a few transatlantic feathers.   Follow the link above to get to it.

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By michaelscutt, 23/04/2009 9:00 am

As you will probably have heard by now, the Chancellor announced an increase to Statutory Redundancy Payment in the Budget yesterday, from the current figure of £350 to £380 per week. He hasn’t said from when the new increase will take effect and the lower figure itself was only introduced in February this year.  The government is also considering further legislation on SRP rates in the next Parliament.

So, what does the increase mean?  SRP is only payable (by the employer) to employees with two years’ continuous employment experience and that figure is paid to employees between the ages of 22 and 41.  For qualifying employees over 41 they will receive 1.5 times £380 = £570.  For those under 22 the applicable figure becomes £190 per week.

SRP is, in reality, a cap.  If the employee earns less than £380 per week, assuming they qualify for SRP when made redundant, they will be paid their weekly salary multiplied by the number of complete years they have served with that employer.     The minimum annual gross salary needed in order to reach the cap is £19,760.  Many employers pay enhanced payments on redundancy, but these are usually discretionary and difficult to enforce legally unless there is a contractual entitlement. 

The Budget Report states (at para 5.27 p.96) that the increase is intended “to help provide adequate support for individuals who have been made redundant”.  For people receiving enhanced redundancy packages today’s announcement will seem academic. But for those smaller employers that can only afford to pay the “official” SRP this increase will be an added burden on them.  It is also hard to see how the increase will materially improve the financial position of employees suddenly finding themselves out of a job.

The TUC was campaigning recently for SRP to be increased to £500. The Chancellor clearly didn’t take their arguments on board and neither was he swayed to increase the maximum amount of tax relief from its current ceiling of £30,000 to £50,000. The HMRC currently allows a concession, pursuant to the Income Tax (Earnings & Pensions) Act 2003, whereby the first £30,000 of a compensation payment for loss of employment, can be paid free of income tax and national insurance deductions.  The limit has been set at £30,000 for many years now and an increase is long overdue.  Presumably the government thought that increasing that limit would be seen as benefiting the better off and thus politically unpalatable at the moment.   They probably also didn’t want to reduce the tax take at a time when redundancies are increasing massively and there is more pressure on the public purse.  However, increasing the tax free limit would do much more to help more people made redundant and reduce the burden on employers.

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By michaelscutt, 20/04/2009 9:00 am

I have just stumbled upon a blog called “Employment Tribunal Claims” (thanks to Usefully Employed for bringing it to my attention) which provides a succinct explanation of the new rules.  I recommend everyone to read it and wish I had come upon it sooner.  Here is the link:  http://etclaims.co.uk/  

(Do note the date, if in doubt)

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By michaelscutt, 17/04/2009 11:07 am

I posted on this subject a while ago and it has received such a lot of visits I thought I better give my public more of what they want. It also gives me an opportunity to provide an update on the poll I set up below on this issue. At the moment 57% of respondents would elect a pay cut and 31% would take redundancy.  The remaining 11% didn’t know.   Whether those results will change after this post wil be interesting to see.

In my previous post on the 27th February I wrote that the risk to an employer in reducing or attempting to reduce salary was that it might constitute a breach of contract and could lead to litigation if the employee didn’t agree  to the cut.  A claim for breach of contract and/or unlawful deduction from wages  and/or constructive unfair dismissal could be the result.  Only employees with more than one year’s service can claim unfair dismissal, but any employee can claim for breach of contract or for unlawful deduction of wages, which is what an unagreed reduction in pay would be.  The crucial issue, therefore,  is to get the agreement of the employees concerned and, if this is obtained, many of the problems fall away. How does an employer go about this?

By consultation is the answer. An employer needs to approach the matter with sensitivity and it needs to set out to the employees concerned the reason for the proposal and to show that it has considered other options to a pay cut.  Employees need to be given time to consider the proposals  (within a defined timetable) and to put forward any suggestions they have, which should then be given due consideration. In all probability, other options to a  pay cut will include redundancy and the employer will need to set out the business and financial reasons for suggesting the pay cut.  Other options though might include laying off employees, reducing hours and reducing benefits.  A pay cut is likely to be more palatable for employees if it is stated to be a temporary reduction, e.g.  for six months pending further review by employer and employee.

In all these circumstances the employer will be aided hugely if the employment contracts it provides to its staff contain a clause that allows the employer to make amendments to the terms of the contract (most don’t it has to be said).  In the absence of such  a clause an employee who is not minded to accept the reduction in pay, or alteration to their hours, will be strengthened in any claim for breach of contract.  That risk does not disappear even if there is such a clause because the employer must act reasonably when seeking to amend the contract, but it does give the employer scope for manoeuvre.  In other words, if the employer consults properly and frankly with affected employees  and can demonstrate the necessity for making  pay cuts, it should reduce the risk of being successfully sued for breach of contract by a disgruntled employee.  

An employer may be required to consult collectively with any recognised unions at the workplace or to get employees to elect representatives to consult on their behalf.   I covered this point in my previous post.

Assuming that agreement is reached with employees, the employer should then  get the affected employees to sign a letter confirming their agreement to the reduction in pay.  The letter should set out the company’s reasons for imposing the pay cut (ie to avoid redundancy), refer to the meeting(s) with the employee during the consultation process and ask them to sign and return a copy to signify their acceptance.   This isn’t guaranteed to prevent claims against the employer but it should help to minimise the risk of successful claims being made.  In the current economic climate, the majority of employees will probably accept a pay cut rather than take the risk of being out of work altogether.  

By the way, I mentioned “lay-offs”  above.  If an employer wants to “lay off” staff it should proceed with care  and take legal advice before doing anything; there are many pitfalls and can lead to claims for breach of contract and constructive dismissal. A lay off is where an employee is, effectively, suspended from work without pay. I will write about lay-offs in a future post.

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By michaelscutt, 07/04/2009 6:00 pm

Daniel Barnett is a barrister specialising in employment law.  He provides a very useful (free) email update service called Employment Law Bulletin.  it covers latest developments in the area and the service has just reached its 10th anniversary.  To celebrate Daniel has launched a fundraising campaign to raise £10,000 for the children’s charity Starlight, which supports seriously and terminally ill children.  I am delighted to support such a worthy cause and if you wish to do so as well, please go to the link below;

http://www.danielbarnett.co.uk/anniversary_fundraising.html

Good luck Daniel!

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By michaelscutt, 07/04/2009 9:00 am

Apart from the post below I haven’t touched upon these regulations, mainly because they are not the most interesting regulations in the world to read.  However, I have been spurred on by posting on the case of Royden & others v Barnetts  (see below) and TUPE comes up quite a few times on the search engines as a keyword.  In future posts I will look at the TUPE issues on the insolvency of the employer as well as the consultation obligations imposed upon employers by TUPE.

So, what do the Transfer of Undertakings (Protection of employment) Regulations 2006 (TUPE) actually do?

It protects those employees where the employing business changes hands, by;

 (1) protecting them from dismissal because of the transfer,

(2) by requiring the employer to inform and consult those employees affected, and

(3) transferring all rights  liabilities and obligations from the transferor company (“oldco”) to the transferee (“newco”).  

There must be more than a transfer of shares.  All employees employed by oldco at the point of transfer automatically move across to newco with the same terms and conditions of employment.  This means that if newco tries to provide amended terms and conditions to transferred staff they will be in breach of contract and may end up facing claims for constructive dismissal.

Furthermore, if newco dismisses transferring staff for a reason connected with the transfer that will be an automatically unfair dismissal , although if newco can argue that there were “economic, technical or organisational” reasons entailing changes in the workforce of either the Transferor or Transferee”  for the dismissal, it won’t be automatically unfair.  It might still be an unfair dismissal if the reason for the dismissal (not being the transfer) was also unfair. 

An ET would look at all the circumstances of the dismissal before making its finding.  In particular the ET will consider whether the employee was likely to have been dismissed even if the transfer had not occurred.  If yes then the dismissal will probably not have been for reason of the transfer, but it might still be unfair (i.e perhaps unfair selection for redundancy, or maybe discriminatory reasons were involved; the list is long).   One of the potentially fair reasons for a dismissal under the Employment Rights Act 1996 is “some other substantial reason” (SOSR).  For an employer to escape liability altogether for the dismissal it will have to show that the reason for dismissal comes within SOSR and that it was reasonable for them to rely upon that as the reason for dismissal. 

If an employee is found to have been unfairly dismissed (whether automatically or not) the maximum amount they can recover from an ET (up to February 2010 anyway) is £66,200 plus a basic award of £350 (or £525 depending on age) per week per year of service.  The employee needs 12 months continuous employment experience with oldco to be able to claim unfair dismissal.

Claims involving TUPE can be complex and if you are concerned about your position or think you might need legal advice do call me on 0207 464 8433 or email me on michaelscutt@dalelangley.co.uk

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By michaelscutt, 06/04/2009 9:41 am

For T.S Eliot, April was the cruellest month.  For employment lawyers it can be the busiest because of the plethora of new legislation and statutory instruments being introduced.  This year is no different and today sees The Employment Act 2008  come into force, replacing the discredited Employment Act 2002 (Dispute Resolution) Regulations 2004.  In The Wasteland, TS Eliot wrote “what are the roots that clutch, what branches grow out of this stony rubbish?”.  Admittedly Eliot was talking about the human condition and the moral and spiritual bankruptcy of modern society, rather than the 2004 regulations, but there is even so great  resonance in those words for employment lawyers. Few people have had anything good to say about the rules and today they are abolished, replaced by a set of rules that are much less rigid but will give rise to other problems in the future.

The main change in the new regulations is that an ACAS Code of Practice has been introduced and it has statutory force. It is brief, only ten pages long, but it sweeps the old system aside.  The Code is supplemented by an ACAS Guidance booklet of approximately 80 pages long and which is advisory rather than legally binding. The main changes are these;

1. It replaces the old system of extensions of time for issuing proceedings if disciplinary processes are still ongoing, or where a grievance has been raised.  There is no longer a 28 day stay on proceedings before an ET being issued after the grievance has been raised. Now ET proceedings can be issued even if a grievance hasn’t been issued.

2. There will no longer be an automatically unfair dismissal where there has been a failure (any failure) to follow the rules.  There will be no consequential 10 – 50% increase/decrease in the amount of compensation following failure by one party to abide by the rules.  Instead an ET will have a discretion, where it is just and equitable to do so,  to increase/reduce an award of compensation by up to 25% where (1) a relevant code of practice applies, and (2) there was a failure to follow the code and (3) that failure was unreasonable.  In my view although this is more flexible than the old rules, it will lead to uncertainty because different ETs will take different views on what constitutes an unreasonable failure.

3.  The “modified” procedures in both disciplinary and grievance procedures is swept away, meaning there is no duty on an employer to hold these procedures for ex-employees.  This is welcome.

4. The new rules do not apply to redundancy processes and it is debatable whether they apply to ill-health/incapacity dismissals.   Also they don’t apply to dismissals upon expiry of fixed term contracts. In my view ETs will probably look to the Code of Practice when considering the fairness of the procedure used by employers in these situations, so it would be a rash employer that decided to ignore them in redundancy/expiry of fixed term and ill health situations. In the case of collective redundancies (ie more than 20 persons selected in a three month period) employers are required to consult with employees anyway, but the issue may arise in small scale redundancies of less than 20 people.

In judging whether an employer has acted unreasonably, an ET will have regard to the size and resources of the employer.  In other words, more will be expected of bigger employers than smaller outfits when considering if they have acted reasonably.

However, it is not goodbye to the old rules just yet.  A complex system of transitional provisions exist and close regard has to be had to them when deciding whether the old rules apply at the moment, or the new.  Basically, if the “trigger” event (being the disciplinary issue or grievance) occurred before the 6th April then the old rules will apply.  If the trigger event occurs on or after the 6th then the new rules apply.  Where matters get complicated is where (in grievance cases) the act complained of started before the 6th but continues after that date.  If that situation applies to you, seek legal advice.

I’ll deal with more aspects of the new rules in later posts.  In the meantime if you have any queries please do not hesitate to contact me on 0207 464 8433 or email at michaelscutt@dalelangley.co.uk

A slightly different version of this post will appear in the Docklands and Peninsula newspapers week commencing April 14th