Employment

A-Z of Employment Issues

We list alphabetically below some of the main areas of employment law, which can affect you as an employer or an employee. Our notes are meant for general guidance and specific advice must be obtained on any particular legal matter. The topics we cover are:

Absence from work
Compromise agreements
Disciplinary and grievance procedures
Discrimination (race/sex/religion/sexual orientation)
Email monitoring
Employee or self-employed
Employers' liability (for acts of employees-vicarious liability)
Employment Tribunal
Equal opportunities
Flexible working
Gross misconduct
Holidays
Maternity and paternity rights
Redundancy
Staff handbook
Trust and confidence
Unfair dismissal
Worker
Working hours

 

Absence from work
Employees can be dismissed for absence 'where it's fair and reasonable to do so.' The reason for the absence should be discussed with the employee before dismissal. A Doctor's report should be obtained where appropriate to establish a medical prognosis. The employer should discuss the medical condition with the employee and try to discover when he may be fit to return on either a full or part time basis, carrying out different duties if appropriate. An employee should be told if their continued absence is likely to put their job in jeopardy. This must be handled with some sensitivity if the employee is ill.

If there is repeated short-term absence the employee should be told what level of attendance is expected, the period in which it should be achieved and that dismissal may follow if there is no improvement.

In the case of long-term illness, with no clear medical prognosis, how long can an employee be absent before dismissal? The employer should consider the employees contract of employment or if this doesn't assist what practice has been previously adopted. An employee cannot be dismissed after 3 months if their contract provides for 6 months sick leave. Where there is no precedent to follow then it is a question of balancing the respective needs of the employer and employee. The size and financial resources of an employer can be taken into account when deciding if he has acted reasonably. An employer must consider how realistic it is to hire temporary staff to fill the position, how key the employee is to the workforce and what the financial cost is. An absence of 3 months can in certain circumstances be sufficient to justify dismissal.

An employer must not forget his obligations to the employee under the Disability Discrimination Act (details of this Act can be supplied on request)

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Compromise agreement
An agreement between employer and employee on the termination of employment in which for the payment of (what is normally) a tax-free lump sum to the employee, he waives his rights to bring a claim for unfair dismissal, redundancy etc. To be valid and effective, the agreement must be in a prescribed form and the employee must be advised by a 'relevant independent advisor' (a qualified lawyer or a trade union representative or advice centre worker, who has been certified to give such advice).

Constructive dismissal
If an employer commits a serious breach of an employee's contract, then this can give rise to constructive dismissal. The behaviour must be seriously unreasonable to qualify. The employee should say on leaving they regard themselves as being constructively dismissed. There is a limited time period in which an employee must act otherwise he will be regarded as having accepted the conduct. Reduction in pay, a complete change in the nature of a job and a failure to follow the prescribed disciplinary proceedings have all given rise to claims for constructive dismissal.

Contracts of employment
Anyone in paid employment has a contract albeit it may be a verbal one. There is no obligation to provide a written contract, although it is good practice to do so.

An employee must be given a written statement detailing the main terms of his employment within two months of starting work. The information to be provided includes; rate and interval of payment, place of work, working hours and job description.

A number of terms are implied into a contract of employment. An employee is under an obligation to work with due diligence and care and in the best interests of his employer. In turn an employer must not destroy the duty of trust and confidence with the employee and must have regard for the employee's health and safety.

The terms of an employee's contract cannot be materially altered without their consent. If an employer does so, it can give rise to a claim for constructive dismissal.

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Disciplinary and grievance procedures
The proper use of these procedures will avoid most claims for unfair dismissal. An employee's contract of employment should make reference to them. The steps to be followed when either is invoked should be set out in your staff handbook. In order to dismiss an employee for misconduct there will normally need to be a three-stage process of a verbal warning, followed by a written warning and then a final written warning. In the case of gross misconduct, an employee can be dismissed without any previous warning.

Under the Employment Act 2002, it is proposed to introduce compulsory disciplinary and grievance procedures. Employers may be penalised for failing to observe these requirements. Employees will not be able to bring a claim to an Employment Tribunal without having gone through a grievance procedure. It is anticipated this will become law in late 2004

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Discrimination
It is unlawful for employers or their employees to discriminate against or harass a person on the grounds of their race, sex, religious belief or sexual orientation. This applies not only to employees but also to self employed contractors and other Workers.

Sexual orientation
Means a sexual orientation towards persons of the same or opposite sex or persons of the same and opposite sex. People are protected whatever their sexual orientation. NB; This excludes paedophiles or sexual practices such as sado-masochism.

Religious belief
Means any religion, religious belief or similar philosophical belief. While members of established religions such as Catholics, Jews or Muslims will be protected, the position of less mainstream beliefs such as Druidism are less clear.

Direct and indirect discrimination
Discrimination can be either direct or indirect.

Direct discrimination
An employer directly discriminates against someone, where on grounds of their race, sex, religion or sexual orientation he treats them less favourably than he treats or would treat a another person.

Indirect discrimination
An employer indirectly discriminates where he applies a provision, criterion or practice to a person which he also applies to another but which is detrimental to more people of that sex, race, etc, and which cannot be justified irrespective of sex, race etc, and which is to the detriment of the person concerned e.g. women bear a greater responsibility for childcare than men and it is therefore discriminatory to require them to work full time.

Qualifying period and compensation
There is no minimum qualifying period of employment and neither is there any limit on the compensation that can be awarded.

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Email monitoring at work
This is governed by the Data Protection Act 1998 ('the Act'), the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 ('the Regulations') and the Employment Practices Data Protection Code 2003 ('the Code').

The Act lays down general principles for the collecting and storage of data. The Regulations must be read in light of the Act and the Code is intended to help employees understand the Act.

The Regulations permit an employer to monitor and record communications without the consent of any of the parties to that communication. The grounds on which an employer can do this are limited but include:

• making of a record of verbal business transactions
• to ascertain compliance with regulatory practices
• for training purposes
• crime prevention
• to detect breaches of company policy
• to monitor for viruses

The Code. Recorded information under the Regulations must have regard to the Act. The core principles of the Code are:

• it will normally be intrusive to monitor workers
• there is a legitimate expectation of privacy over personal matters and an entitlement to a degree of privacy in the workplace
• monitoring should be for a defined purpose and justifiable

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Employee or Self-employed
It can be difficult to determine whether someone is self-employed or an employee. The fact that a person is employed on a self employed basis, while a relevant factor, will not be the determining one. Many people are so employed as the parties see it as mutually
advantageous. If the Inland Revenue or an Employment Tribunal regard an individual as an employee and not self employed then this can result in the employer finding himself liable to pay tax and national insurance (including arrears, penalties and interest where the employee has failed to pay the tax due) and face claims for unfair dismissal, redundancy etc which he has made no provision for. Employment Tribunals don't look kindly on employers who try to avoid Employment legislation.

Three elements must be present as a bare minimum to create a contract of employment:

1. there must be an obligation to provide work personally.
2. there must be a mutual obligation to provide work and to do it.
3. there must be a sufficient degree of control over the performance of the work to
    make the employer the master.

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Employers' liability (for acts of employees - vicarious liability)

An employer is liable for the acts of his employees committed in the course of their employment. This is known as vicarious liability. It can arise where a manager destroys the duty of trust and confidence with an employee or where one employee steals from or assaults another, or commits an act of sex, race or disability discrimination.

The act must be connected with the employment. Most acts committed at work qualify. Acts outside work can also be covered if they are sufficiently connected to it e.g. an organised leaving party. It does not matter if the behaviour has been forbidden. The employer must show he took all steps reasonably practical to prevent it.

An employer isn't liable for acts totally removed from what was authorised e.g. firemen in pursuit of a 'go slow' driving at a snail's pace to a fire.

What reasonable steps should an employer take?
An employer should have clear policies in place to cover health and safety, sex, race and disability discrimination, bullying, harassment, use of email etc. All employees should be made aware of these policies and the potential penalties for any breach. The policies should be constantly reviewed and monitored to ensure they are being implemented and observed. Adequate training should be given to all employees to make sure they understand and can carry them out.

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Employment Tribunal
The Employment Tribunal deals with claims for unfair dismissal and breaches of the Employment Acts. Its practice and procedure, while similar to the civil courts, tends to be more informal.

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Equal opportunities
The adoption of an equal opportunities policy is the cornerstone to the prevention of claims for discrimination. An employer must have an active equal opportunities policy that all employees are aware of.

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Flexible working
Employees with children under the age of 6 can ask their employers to consider a request for flexible working. This is not a right to work flexibly merely a right to have such a request considered. An employer is entitled to refuse the request but must have reasoned grounds for doing so. It can be indirect sex discrimination to unreasonably refuse a female employee with children the right to work part time. In the case of small employers, or where the job is not capable of being shared, it may not be unreasonable to refuse such a request.

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Gross misconduct
Such behaviour normally results in immediate dismissal. The Contract of employment or staff handbook should list what behaviour will be regarded as gross misconduct. In the absence of any written guidelines an employer could face problems in dismissing an employee for conduct that falls outside the obvious (dishonesty, criminal damage, threatening and abusive behaviour etc) e.g. misuse of the internet.

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Holidays
There is a right to 20 days holiday per year. This is pro rata where less than a year is worked. Public holidays may count towards the total. There is an implied right to take off public holidays as paid employment.

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Maternity and parental rights

Fathers have the right to two weeks' paid leave at the statutory paternity pay (SPP) rate. It is the same rate as statutory maternity pay (SMP) or 90% of average earnings if less.

Conditions apply in order to qualify, which include having a period of continuous employment of 26 weeks ending in the week preceding the 14th week before the expected week of childbirth. The employee must also give notice of a desire to take paternity leave in or before the 15th week before the expected week of childbirth.

Similar rights apply to adoption.

Mothers are entitled to 26 weeks' maternity leave with the right to a further 26 weeks if they have worked for 26 weeks at the beginning of the 14th week before the expected week of confinement (EWC). To qualify for statutory maternity pay (SMP). They must have worked for 26 weeks at the 15th week before EWC. SMP is payable for 26 weeks.

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Redundancy

An employee is dismissed by reason of redundancy if:

(a) his employer has ceased or intends to cease
     (i)  to carry on the business for the purpose of which the employee was employed by him or
     (ii) to carry on that business in the place where the employee was so employed, or

(b) the requirements of the business
     (i)  for employees to carry out work of a particular kind or
     (ii) for employees to carry out work of a particular kind in the place where
          the employee was employed by the employer
     have ceased or diminished or are expected to do so.

Qualifying period
Two years employment after the age of 18.

Redundancy pay
Half a weeks' pay for each year of employment below the age of 22, a weeks pay for each year below the age of 41 and one and a half weeks pay for each year over 41. There is a maximum of 20 years which may be claimed and it is payable up to a statutory maximum per week (subject to annual adjustment).

Practice & procedure
An employer must not make employees redundant in either a dismissive or arbitrary manner. A period of consultation is required. An employer must go through a reasoned selection procedure, and discuss with the employee what alternative employment they could do, the employer offering retraining where appropriate.

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Staff handbook
This is an essential in any business. Its main purpose is to acquaint employees with the company's working practices. It is a useful place to keep the company's policies on disciplinary and grievance procedures, health and safety etc. A staff handbook does not normally form part of an employee's contract of employment and can be altered by an employer far more easily than if such terms form part of the contract of employment. If properly prepared, kept up to date and put into practice, it can be a good defence in any claim for vicarious liability.

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Trust and confidence
An employer owes a duty of trust and confidence to his employees. If he destroys or seriously damages that relationship without reasonable cause then it can give rise to a claim for constructive dismissal.

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Unfair dismissal
A claim for unfair dismissal arises where an employer dismisses an employee without good reason or without following a fair procedure. The employer must show the reason for the dismissal and the Employment Tribunal will then consider if the dismissal is fair.

If the dismissal is unfair the employee can be given his job back or as is more commonly the case awarded compensation up to a statutory maximum.

Qualifying period and Time limits
12 months employment (any notice period can be brought into account in calculating this) The claim must be brought within 3 months of dismissal.

Acceptable reasons for dismissal
The dismissal must fall within one of the following reasons:

• the capability or qualifications of the employee to do the job
• the employees conduct
• redundancy
• continued employment would be illegal
• due to some other substantive reason

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Worker
The Working Time Regulations 1998 introduced 'Worker' a term which includes not only employees but also the self employed (except where services are being provided by a profession or business undertaking on a client or customer basis). The term has been held to include a self employed building subcontractor who worked exclusively for one employer. A Worker is entitled to four weeks' paid holiday a year.

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Working hours
The Working Time Regulations 1998 provide that a Worker should not work more than 48 hours in an average week. That average is assessed over a 17 week period. Although a Worker can contract out of his rights under the regulations he can at anytime on 3 months notice contract in. Breach of the regulations by an employer can result in a claim for unfair dismissal or other proceedings before an Employment Tribunal.