It's the one in Iceland, I can't spell it either

Now that the drama of the election is over and the novelty of the Coalition government is fading and before the whole country shuts down for the World Cup, it’s time for a brief reminder of the event that brought Europe to a standstill, Kenyan flower growers to the brink of bankruptcy and led to people having extended holidays all over the world.  Yes: the eruption of the Eyjafjallajökull  volcano (it’s only marginally easier to spell than to pronounce), which won’t quite go away (although The  Guardian reported on 23rd May that it may now be dormant) and which caused almost as much pain to news broadcasters as to those stranded in airport departure lounges.

Although there was a marked “spirit of Dunkirk” at the time, with Royal Navy ships being dispatched to the coast of Portugal, it seems many employers didn’t quite see it the same way according to a survey commissioned by recruitment consultants Badenoch & Clark. It reported that 43% of employees caught up in the chaos had their pay docked or their annual leave entitlement reduced.  Approximately one-quarter of employers were prepared to allow staff to work remotely, whilst 32% allowed staff to take the days off as additional leave.

The press release quotes Andy Powell, a Director at Badenoch & Clark, saying

“Employers cannot be expected to give out additional paid leave because of acts of God; however, it is important for employers to set a standard policy on this, so that everyone understands the consequences of any delays returning to work.  While remote working is a good solution in some cases, for many people it will not be a viable option. As such, although ensuring you are contactable by mobile or smart phone where possible is a sensible precaution, both employers and employees need to understand that the risk of disruption should be shared.”

One day you'll look back on all this and laugh ...

I think Powell has it right.  If there’s one thing everyone knows about “Eyja” it is that the last time it erupted it did so for two years.  Now is the time for employers to develop their policies on this in case it happens again.  If an employee fails to attend work without a good excuse that will usually be treated as unauthorised absence and thus a disciplinary matter.  It would be a harsh (and probably imprudent) employer that disciplined an employee who had been stranded abroad.  Employers need to make it clear what steps they will take in this situation, whether to make employees take it as unpaid leave or to reduce annual holiday entitlement and very few employers will want (or be able to afford) to grant it as additional paid leave now that the risk is known.  What is most important is that employers have a policy and adhere to it consistently, to avoid the risk of claims arising.  An employee may try and claim for breach of contract or unlawful deduction of wages if they have their pay or holiday entitlement docked, but provided an employer can show it had a policy and adhered to it, the risk of being held liable for such a claim should be much reduced.

Badenoch & Clark have created a Facebook page called CareerTalkUK   where you can get career tips and useful information, or you can follow them @CareerTalkUK.  It’s got a nice orange logo as well.

If you require any assistance on this or any other employment law issue please do get in contact with me, either on 0207 464 8433 or at michaelscutt@dalelangley.co.uk

No related posts.

Has the Dust Settled on the Ash Cloud? originally appeared on Jobsworth by Michael Scutt on 27/05/2010.

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.

Related posts:

1. Redundancy or Pay Cut?
2. Redundancy – know your rights!
3. BA is in the news again …

More on Redundancy v Pay Cuts originally appeared on Jobsworth by Michael Scutt on 17/04/2009.