The government last week announced that it intends to shake up employment law practice and procedure with a consultation trying to rebalance the rights of employer and employee. It’s the latest episode in the long-running saga “does the law favour employees too much?”

I suspect that there is much political posturing in the consultation and I would be surprised if some aspects survive the consultation process. The headlines have been well trailed already: here is my take on the main points that caught my eye.

Issue Fees – how much is too much?

There are some interesting proposals, which deserve a welcome, such as the introduction of fees for issuing proceedings in the ET.  The difficulty will be in setting a fee that discourages serial litigants and chancers whilst not denying access to justice to genuine claims from hard-up Claimants.  I have read in various places that the fee might be £30 or £500!  £30 would have no appreciable effect on deterring unmeritorious claims and £500 would prevent those people on lower incomes, but with decent claims, from bringing them. There will be further consultation on the level of the fee.

Increasing the qualifying period for unfair dismissal would be a retrograde step

Much less welcome, for employees anyway, will also be the consultation on whether the qualifying period of 12 months continuous employment should be increased to 24 months before an employee would be eligible to bring a claim for unfair dismissal.  The effect of that would be to reduce the number of unfair dismissal claims by 3,700 – 4,700 claims annually. Employers might be keeping their fingers crossed that this measure does get adopted, I think it would be short-sighted to adopt that proposal.

Apart from denying access to justice to individuals (which is a corner-stone of the Legal Services Act which is keeping many lawyers awake at the moment) and turning the clock back to the situation that pertained prior to 1998, it will lead employees (and not just of the more vexatious or speculative persuasions) to seek to find discriminatory behaviour on the part of the employer where none exists.  Employers could therefore find themselves facing an upsurge of more unmeritorious and badly founded claims than before. The government needs to decide whether it wants to reduce unmeritorious claims or just prevent claims full stop.

ETs need to use the powers they already have

The proposals suggest that ETs should be given more flexible powers for striking out unmeritorious claims, but Employment Judges need to be readier and more willing to use these powers.  Costs orders can be made at the moment, but ETs are notoriously reluctant to use them.

Jaw, jaw not war, war

More sensibly, it is suggested that more use be made of mediation in disputes and even that all claims be submitted to ACAS for conciliation in the first instance before they be allowed to proceed to Tribunal.  On the face of it, this seems a sensible proposal but in reality it may be unworkable.  ACAS will need to be properly funded in order to cope with the vast amount of work that would be generated from this.   ACAS runs a mediation/conciliation service at the moment and it seems to me to be overstretched.

Will employers really be put on the naughty step?

In a nod towards employees, to show that not everything is weighted in favour of the employer, there is a proposal that employers who fail to abide by “their obligations” could be fined, with the revenue generated going to the state and not to the wronged employee.  I can’t see this making it on to the statute book for a moment – it would be seen as a tax by the back door on hard-pressed employers and would draw unwelcome flack on the government. Unlike most employment claims, which are designed to compensate, this would punish.  For an analysis of some other pitfalls see Laurie Anstis’s blog post on the subject.

Pointless window dressing

There’s also a rather pointless “Employer’s Charter” that, to quote Basil Fawlty does no more than state “the bleedin’ obvious”.  It is subtitled “As an Employer – as long as you act fairly and reasonably – you are entitled to …” and there then follows a list of actions and requests that employers can make, such as make people redundant, ask pregnant employees when they intend to return to work and ask employees to take a pay cut.  Follow this link for the full list of nonsense.  The subtitle contains the clue – the employer needs to act fairly and reasonable. Herein lies the heart of the debate – most employers think this obligation is too onerous and the law sets the bar on what is fair and reasonable too high.  Employees think the opposite.  The Charter in my view is no more than pointless window dressing which will not assist either employer or employee. If you think I’m putting it too strongly, read Darren Newman’s blog on the issue.

Something must be done …

The debate is more about perception than reality – a bit like the compensation culture that rears its head every now and then. ET procedure needs to be reformed.  Why no consultation on introducing “cost shifting” into ETR procedure – i.e costs follows the event or, to be more blunt, the loser pays, as with civil litigation.  That would cause many individuals with weak claims to think twice about bringing a claim.  If the government does introduce the Jackson proposals on reform of civil litigation costs in without too much dilution, it would probably prevent the worst excesses of the claims management companies piling into employment litigation as they did with personal injury.

I can’t help but feel that something wider is afoot here.  The consultation suggests employment judges sit alone, which would have to mean a qualified lawyer would be the one hearing the case: the input from industry and management, in the persona of the two wingmen who sit with the lawyer, will be lost.  That is said to be one of the strengths of the current system.  If that is lost, taken with the amalgamation of the administration of the ETs with Her Majesty’s Court Service, can’t the entire merging (or absorption) of ETs into the Courts be but a matter of time?

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Employer vs Employee: The Saga Continues originally appeared on Jobsworth by Michael Scutt on 31/01/2011.

The signs for Christmas are everywhere – cards in the shops, pubs seeking bookings for the office party and on television: Strictly Come Dancing and The Apprentice are a sure sign that we’re on the downward run to the annual festival of eating, drinking and making merry.

However, there’s another more unpleasant sign: redundancies may be on the up. At my firm we’ve seen an increase in clients coming in with compromise agreements. Every year companies like to get the dirty business over with before management and HR settle down to a slice of turkey and a mince pie. With rumours circulating about massive public-sector redundancies and the long-awaited Public Spending Review about to be announced next week, I don’t suppose this year will be much different.

If you find that your job has been placed “at risk”, what should you do?

Here are some suggestions,

1. Try and gather as much information as possible about why your job is at risk. What will happen to your job function? How    will it be carried out once you’ve left? Is it you that’s been got rid of, not the job? (if yes to the last then you may have an unfair  dismissal on your hands)

2. How many other people have also been placed at risk? If more than 20 within a 90 day period then the employer must  consult with you for at least 28 days (90 days if more than 100 people involved)

3. If you’ve been placed in a “selection pool” and scored down against others, try and find out what the selection criteria was  and how you scored against it. The process should be as objective as possible. If not claims for unfair dismissal or  discrimination may arise.

4. What transferable skills do you have? Every employer is under a duty to try and redeploy staff into other roles, rather than just taking an axe to headcount. Very often though, that is an obligation more honoured in the breach than the observance. Get on to HR and make them aware that you want to be considered for alternative work and make it clear you want to be sent details of any vacancies.

5. If you have access to legal advice via a helpline (often bundled in with your domestic insurance) then get on to them and get their view. If still in doubt, go and see an independent solicitor.

I hope Santa has something better in store for you but if not take legal advice as soon as possible.

If you need any help with any of these issues please get in contact with me on 0207 464 8433 or via michaelscutt@dalelangley.co.uk

This article does not constitute legal advice and you should not act (or fail to act) in reliance upon it.  Always take independent legal advice on your own particular situation.

Related posts:

1. More on Christmas Redundancies

Are Redundancies on the Rise? originally appeared on Jobsworth by Michael Scutt on 12/10/2010.

Ok, imagine the scenario.  You’re told on Friday morning at 9.35 a.m to go to the 7^th floor and meet Siobhan, your HR generalist.  Only HR live on the 7^th floor, not real people.  You go into a meeting room with her and there is Charles, your line manager or maybe Fiona, who is really quite senior in HR but not usually seen during the hours of daylight.  You’re handed a lengthy letter and told that your role is at risk of redundancy.  What do you do?

Answer: try and get as much information out of Siobhan and Charles/Fiona as you can.  What to ask?

1. What is the company doing?  Is it a restructure/rationalization/other reason.
2. Why you?  Crucial – why is your role in the organization no longer needed? 
3. What will happen to your work once you’ve gone?  Will it be divided up amongst remaining people/sent to Bangalore/no longer needed because the business is getting out of that sector?
4. Who else is at risk?  If your role is a unique one and a layer of management is being stripped out of the organisation, this is less relevant.  But, see next one down. What is the selection criteria they are using? 
5. What is the selection criteria they are using? If there are ten in your team and five are being put at risk, how has the company decided you should be placed at risk, but not Tony who sits next to you?  Selection criteria must be objective as far as possible.
6. What is your score against the criteria?
7. How did your comparators score?  Usually HR won’t give you this information because of confidentiality reasons, but you can ask to be given it on an anonymised basis.
8. How many people in your “establishment” are being placed at risk?  If more than 20 or 100 then time limits for consultation apply.  Get suspicious if HR won’t tell you.
9.  What other roles are available?  Redundancy should be the last resort.  Employers should try and exhaust all other possibilities before dismissing you.  Have they thought of pay-cuts or unpaid leave, or could they redeploy you to another part of the business, making use of your transferable skills?
10. What is the timescale for the process?  When will the decision be made?  When will we have the next meeting?

Finally, the 11^th question: where can I get some good legal advice on my rights?  Answer: here.

I can help you with all these issues, or advise you if you’ve been given a compromise agreement.  Please call me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk.

Related posts:

1. Just been made redundant? Don’t forget …
2. I'm being made redundant – what do I do?
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10 questions to ask if you’re made redundant originally appeared on Jobsworth by Michael Scutt on 08/10/2009.

What obligations are there on an employer to consult with its workforce and when should they do so?  Many people will be aware of the provisions of s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 which imposes a requirement on all employers making 20 or more staff redundant in a 90 day period to collectively consult with any recognised Trade Union or employee representatives on the need for and ways of avoiding redundancies.    I’ve covered this issue before and it is particularly relevant in the current climate of large numbers of redundancies.

However, there is a more general obligation to consult, on a much wider basis under the provisions of the Information and Consultation of Employees Regulations 2004 SI 2004/3426(ICER).  The regs. apply to “undertakings” with more than 50 employees (it was more but have been gradually whittled down since 2005). An undertaking can be a public or private business or not-for-profit organisation. In brief if more than 10% of the employees in that company (and that does not include group companies) request the employer to inform them or consult with them about matters affecting the business, the employer must set up a consultation system.  If the employer fails to do so they can be fined up to a maximum of £75,000 by the Employment Appeals Tribunal.  If an employee is dismissed for exercising his/her rights under the regs, that will be an automatically unfair dismissal, meaning no qualifying period of employment is required (usually 12 months is needed) but the claim will be capped at the current maximum of £66,200, although this increases each February in line with inflation.

What does the employer have to do?

The regs require the employer to provide employee representatives with information on the following issues;

1.  Future developments in the business, its activities and economic situation
2. The employment situation in the business and any threats to employment
3. Any decisions likely to lead to substantial changes in the workforce, e.g restructuring of the workforce or the business

The employer has to set up a system of ballots and facilities to allow the information to be disseminated and for consultation to take place and the regs make it clear that the employer must consult with and provide the information so that it can be considered and digested by the employee representatives prior to consultations.

The regs do not require the employer to consult in respect of pension issues where there is a duty to inform and consult under the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 SI 2006/349 (and as amended).  Also, in mass redundancy situations, if the employer announces that it will consult in accordance with s.188 TULR(C)A 1992  there is no need for it also to consult under ICER.

Complaints of non-compliance are made to faintly sinister sounding Central Arbitration Committee (CAC).  This isn’t some ancient remnant of the old USSR but a statutory body headed up by a senior employment Judge.  It has various duties under the regs to monitor, supervise and enforce.

Quite frankly, I find the regs rather underwhelming and I await my first client complaining of being dismissed for seeking to exercise his/her rights under them.  I would welcome feedback from anyone, employer employee or lawyer on what difference the regs really make.

Related posts:

1. Consultation on Redundancy
2. The Equality Act 2010: Law Society Seeks Urgent Consultation

Employers and Consultation originally appeared on Jobsworth by Michael Scutt on 04/07/2009.

Not an enviable choice to be faced with, but one that an increasing number of people seem to be having to make, or have foisted upon them, in industry.  It is a practice that doesn’t seem to have caught on here in the City where swingeing headcount cuts still rule supreme when an employer wants to cut costs.  I’ve written many times in this blog before about the redundancy process and selection criteria and the claims that can arise when employers get it wrong.  However, what must an employer do if they decide that a pay reduction is preferable to a cull? 

It’s not an easy option because any variation in an employee’s pay, if imposed unilaterally by the employer, is a breach of contract and the employee would be entitled to sue for breach of contract and/or unlawful deduction from wages.   Consequently the employer will need to obtain the consent of affected staff before proceeding and, particularly in unionized workplaces, this is unlikely to be given readily. 

Some employers take the step of terminating all employment contracts and then re-employing the same staff on reduced terms.  This is highly risky because it can give rise to claims for redundancy, unfair dismissal and breach of contract if not handled properly.  An employer would need to consult with affected staff and persuade them that the only alternative to pay cuts was job losses, in order to obtain consent. How long the consultation period would have to be would depend upon how many  employees were involved and a prudent employer would want to observe the provisions of the Trades Union and Labour Relations (Consolidation) Act 1992, which provides for fixed periods of 30 or 90 days’ consultation where more than 20 or 100 staff are involved. 

For smaller employers the process of obtaining consent is going to be viewed as just as onerous as undertaking a redundancy exercise and that might make the whole process unviable.  Having said this, the new Employment Act 2008, which comes into force in April, repeals the current statutory dismissal procedure that applies on redundancies as to all other dismissals, and that may persuade more employers to go down the route of pay cuts.  I’ll be covering  more issues arising from the new legislation in future posts.

If you need advice on any issues arising here please feel free to call me on 0207 464 8433 or email me at michaelscutt@dalelangley.co.uk.

What would you do if faced with this choice?  Please answer the poll below.

Take Our Poll 

A slightly different version of this post will appear in the “Docklands” and “Peninsula”newspapers week commencing 2nd March.

Related posts:

1. More on Redundancy v Pay Cuts
2. Consultation on Redundancy
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Redundancy or Pay Cut? originally appeared on Jobsworth by Michael Scutt on 27/02/2009.

I’ve been writing quite a lot recently on employees’ rights when selected for redundancy  and have covered most of the main issues on rights, selection criteria and compensation.  I thought it might be helpful to set out, on a no names basis of course, the general trends I am seeing from the clients from financial services companies coming in to the office.

1. Consultation – often  ignored.  If more than 20 people are placed at risk in one “establishment”, basically one office (although the law is not entirely clear on this point), within a 90 day period (or 100 people in a 90 day period)  then the employer must consult with the affected staff for at least one (three) months.  Some employers are not doing this or are paying one month’s salary as compensation for the failure to consult. 

2. Selection criteria – often not disclosed. Many people I am seeing have little or no idea why they have been selected and HR often won’t disclose what an individual’s score against the selection criteria is, let alone how that person scored against his/her comparators. 

3.  Compensation packages – not always as generous as in the past.  General custom and practice in the City in the past has been to pay one month per year of service by way of enhancement.  This is still happening, but is not of universal application.  We are seeing two weeks per year in some cases and, in smaller businesses, just the basic statutory entitlement (notice money plus a statutory redundancy payment of £330 p.w p.a of service). 

4. Bonuses – very few people have pro-rated bonus clauses in their contracts of employment.  In most cases employees will be on discretionary bonus schemes which stipulate that that person is in employment (and not under notice) when the bonus is paid, which is often in February/March.  Anyone whose employment is due to terminate before the bonus season commences is going to have difficulties in arguing for a payment in respect of bonus. The law is not at all supportive of employees seeking to challenge a low or non-existent bonus.  Many of the employees I am seeing at the moment seem very surprised at learning this and seem to think that they should be paid a bonus whatever – despite the fact that the banking world, not to mention the rest of the economy, is in meltdown.  It’s time to wake up to the new reality guys.

5. Options/Restricted stock Units -  Much depends on the terms of the Scheme rules.  Some schemes allow a window of time for the stock or options to be traded following termination.  In many cases the options are well under water and currently valueless. 

6.       HR/Employers’ Lawyers – quite often they are taking a very hard line on the packages offered and are refusing to negotiate, unless there is evidence of unfairness.  I have seen a number of people recently where redundancy has been cited as the reason for terminating employment but, in reality, the real reason is often different – and probably unfair.  The current climate makes it easier for employers to get rid of those employees they see as being difficult or aren’t seen as being up to standard.

It’s not possible to generalise all the time though, but we are certainly seeing more people with “issues” on redundancy at the moment than we did back in 2002/2003 the last time there were mass redundancies.  Please also remember that if you do have “issues” with your selection or the package offered the legal fees offered by the employer will probably not be sufficient to cover a solicitor to argue the case fully for you - legal fees on offer seem to be around £400 – 500 inc/exc VAT.  That is enough to give advice on the terms of the agreement and your general rights but is not sufficient to cover negotiating a better package or challenging the reason behind the termination of your employment.

Please give me a call on 0207 464 8433 or email me at michaelscutt@dalelangley.co.uk for more advice.

No related posts.

Redundancy – what's going on? originally appeared on Jobsworth by Michael Scutt on 16/12/2008.

This is becoming a hot topic again in view of the number of large scale redundancies we are now seeing – 3,000 at RBS and 10,000 at BT announced just this week.  I’m seeing more and more people with compromise agreements seeking advice on their situations, as you might expect.  However, in some cases, the employers are not consulting with their employees at all, but are simply telling them that they will be made redundant and then showing them the door.  This should not happen and can lead to employers unfairly dismissing the employees treated in this way.  If this happens to you you may be able to argue that you have been unfairly dismissed.

Different rules apply depending upon how many employees are being made redundant at any one time and whether there is a recognized Trade Union involved. If within a 90 day period more than 20 people at one “establishment” are to be dismissed, then the employer is under a statutory duty to consult with the affected employees.  At least 30 days consultation must take place before the redundancies occur and that increases to 90 days if 100 or more employees are placed at risk.

Many employers will stage the redundancies to avoid the need to consult in this way.  However, they cannot escape the need to consult at all and must follow (until repealed next April) the statutory disciplinary and dismissal procedures introduced in 2004. Failure to consult in individual cases can lead to a finding of automatically unfair dismissal against the employer and a potential increase in the compensatory award made by an Employment Tribunal (ET). If an employer fails to follow the collective consultancy provisions then an ET can make a “protective award” for failure to consult.  That can be 30 days or 90 days’ salary. 

If a Union is involved then the employer must consult with the union’s representatives.

Since the 6^th April 2008, employees of businesses with more than 50 employees are entitled to request their employer to tell them about and consult with them on business issues which affect them.  The Information and Consultation of Employees Regulations 2004 stipulate that if ten percent of employees request it, the employer must set up a system of consultation and information.   If an employee makes that request and is sacked for it, it will be treated by an ET as automatically unfair dismissal.

Please call me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk

This column will appear in the “Docklands” and “Peninsula” newspaper week commencing 17^th November 2008.

Related posts:

1. Employers and Consultation
2. Redundancy or Pay Cut?
3. More on Redundancy v Pay Cuts

Consultation on Redundancy originally appeared on Jobsworth by Michael Scutt on 14/11/2008.