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Archive for the ‘Employment Law’ Category

National Living Wage (NLW) comes into force on April 1st – but is it all it is cracked up to be?

On 1st April all employers must pay employees over the age of 25 the new living wage – £7.20. On the surface, this seems a positive step towards greater employee rights. However, as has been reported over the past few weeks, the consequences of implementing a 50p per hour jump has led some employers to revisit their employment practices.
It has been reported that Next, Whitbread, Tesco and B&Q, some of the largest employers in the UK, have cut overtime and reduced recruitment, with changes to night work pay and additional pay for completing hazardous work (such as forklift truck driving) also suggested. The Institute of Economic Affairs has described the move as “a tax on businesses employing low-skilled workers”, warning that there could be a move towards even greater use of zero-hours contracts and unpaid internships as an alternative.
The Office of Budget Responsibility has also suggested that the NLW will cost 60,000 jobs by 2020 in the lower-skilled working sector. The also predicted that some of the costs will be passed on to consumers. So while people may have, on average, and extra £28 per week in their back pocket, costs of goods and services may well increase.
Alongside these changes are the well documented reductions in the welfare budget – with more announcements on this expected in his Budget later today (16th March 2016). In real terms, cuts to working tax credits and housing benefits also leave those on lower income out of pocket. From April 2016, those out of employment, either due to sickness or disability, or through being a jobseeker will be reduced to £73.10 per week.
Universal Credit, which replaces a number of working age benefits, can be claimed for those on low incomes. The basic personal allowance is £317.82 per month for single people without children over 25, although additional elements can be added up to a maximum of £1517. This is reducible by 65p for every £1 earned over “work allowance”, currently at £111 per month, and limited to those with savings under £16,000, even if applying as a couple. However, from 11th April 2016 claimants must have responsibility for children and/or a limited capacity to work in order to claim. The monthly work allowance will be either £192 if housing support is included or £397 if not. There will no longer be support for those simply in lower incomes.
On these figures then, currently it would take only 15 hours of work per month to reach the limit where universal credit is reduced. A 65% taper then still applies, meaning that for every hour worked, people lose £4.68 in their universal credit. It would therefore take only 82 hours of working at the NLW per month, or 20 hours per week, before entitlement completely reduces, assuming qualification in the first place.
Suddenly an increase of 50p per hour doesn’t look as generous to employees as first thought.


More UK jobs fail to pay the living wage

The Office for National Statistics has revealed that the number of jobs outside London which paid less than £7.85, the current “living wage”, rose to 23% in 2014. The living wage, set independently to reflect the rising costs of living, has recently gained political and employer support. In July, the Chancellor announced an increase to the minimum wage of £7.20, rising to £9 by 2020. Retailer Morrisons also made headlines earlier this year by stating it would increase its wages to £8.20 per hour for 90,000 staff. Considering retail is one of the traditionally lower paid roles, this is encouraging.
Here in Bristol, it is well known that the city’s living costs are not dissimilar to London, whose living wage is set at £9.15. With one of the most expensive urban housing markets, many have called for a higher rate to be set. Recently, some of the lowest paid staff at Bristol City Council have had their wages increased via bonus payments, bringing their rate to £7.65. As Councillor Mike Wollacott said at the time;
“This is a start. We hope the council can lead the way towards Bristol becoming a Living Wage City. We will be taking this campaign to the next stage insisting that all the council’s contractors will have to be Living Wage employers too.
As well as increasing the pay of some 579 low paid staff this scheme will help the economy locally because those staff spend the vast majority of their pay in local shops and businesses. This is what we want other employers to realise.
Indeed we do not understand why many employers pursue a low pay culture. Unpaid interns are common in Bristol. And while apprentices should be encouraged – they too should get the Living Wage.
Bristol is often talked about as one of the richest cities outside London yet there is an astonishing gap between the rich and poor here. Thousands of our lowest paid have to claim benefits to make ends meet for their families. This means that taxpayers funding those benefits are subsidising low-pay employers. Paying the Living Wage cuts the benefits bill and boosts the economy.”

Unfortunately, there seems a long way to go before employers increase their wage bills voluntarily.


Key changes in Employment Law in 2012

2012 is a year that many have been anticipating more than most. For many Britons, the promise of the Olympics coming to London in the summer has provided a brief respite from the gloom of austerity. Against this renewed optimism, there are the pessimists that believe, thanks to the Mayans, that this year really will be spectacular, albeit based on the belief that the world will end on 23rd December.

In between these two extremes; optimism and pessimism, summer and winter, and  the varying degrees of state in between, us civilians still have to pick our way through the malaise of everyday life. Unfortunately, the warnings coming from Europe and economists is that this year, financially, will be as tough as the previous few. Further, with the effects of the recession now filtering through to more job losses, pressures on employment law to react become even more heightened.

There are changes afoot. Some are – like the summer Olympics, bringing with it messages of renewed hope, triumph over adversity etc. Others, however, will be more akin to the end of the world. Below is a summary of the some of the key changes to employment law due to be implemented in the forthcoming year.

February

1st Increase in redundancy pay

Increase to £72,300 limit on amount of compensatory award in unfair dismissal cases

April

1st Increase in statutory pay for maternity and paternity leave

6th Increase in statutory sick pay to £85.85 per week

Qualifying period will increase in unfair dismissal cases to 2 years.

The Employment Tribunal procedure will be reviewed with significant changes to be made, including bringing in a deposit order payable (currently £500) to the court to continue with proceedings.

October

1st The automatic enrolment of employees’ pensions scheme begins.

The national minimum wage MAY rise…

This is not a complete list of all relevant dates. In that respect, it is more like the Mayan’s calendar. While the increased payments are welcomed, the changes to the employment tribunal procedure represent one of the biggest threats to employment law as it currently is. How successful the changes are dependent on their final substance and implementation. It is only then that we can truly assess 2012 as either an Olympic year…or the end of the world as we know it…


Public Access Barristers

I have been in practice in Bristol since 1993. My practice has mainly involved advice in employment law matters. Bristol has a very wide range of types of employment, and there has been a steady flow of clients seeking advice in relation to employment law issues.

Until recently, clients seeking advice on employment law could only instruct a barrister through a solicitor. The profession of barrister was purely consultative. This could result in the position that clients seeking advice on employment law might have to pay twice for advice – once to the solicitor and again to the barrister where the solicitor passed the matter on.

Fortunately, this rule has now been relaxed. Employers and employees seeking advice on employment law matters can now go directly to a barrister. There are certain rules still in force which restrict the scope of a barrrister’s work in public access, but the general principle is that advice on employment law matters can now be obtained from these Chambers without the intervention of a solicitor. This means that the expertise of a barrister with significant experience in employment law can be obtained at significantly less cost.

Most employers and employees are aware that employment law can be complex. It is rapidly changing – decided cases are currently running at a rough average of three or four each week. Coherent advice on employment law can now be accessed more easily, and at less cost, thanks to the introduction of public access to barristers.


Employment law

In the context of general employment law the rules have become so detailed, complex and obscure that non-lawyers have little chance of understanding them. In Bristol, we have found that advice on employment law issues often involves explaining legal issues which are relevant to clients’ everydat working lives but which they find very difficult to understand.

Suffolk Mental Health Partnership NHS Trust v Hunt and Others (2009)

This case involved the level of detail which should be included in a written grievance relating to an equal pay claim.

Lord Justice Pill made the following comment:

  • The encouragement of negotiation, conciliation and settlement might be frustrated if the grievance procedure led to satellite litigation on technical issues about whether a statement amounted to a grievance.

Lord Justice Wall added the following:

  • Employment-related issues which were designed to be simple and understood by ordinary working people had become overlaid with degrees of sophisticated argument which at times render them unrecognisable.
  • Employment tribunals were set up as fora in which ordinary working men and women could bring claims which they had been unable to resolve in the workplace with a view to swift and straightforward resolution. To this end, the rules relating to representation were very relaxed, case management powers are wide and costs were only to be awarded in extreme circumstances.
  • His experience was that these essentially worthy aims were in grave danger of being frustrated by over-elaborate and sophisticated argument unintelligible to the layman.
  • His layman’s plea was that there should be a return to the clear intentions underlying the establishment of the employment tribunal system; that lawyers should strive for clarity and simplicity and that unions and employers should strive to make the system work in the interests of ordinary working people.

Fixed-term employment contracts

Some employers have tried to get round the rule that employees have to work for a year before being able to complain of unfair dismissal by employing them on a series of fixed-term contracts, often for 364 days at a time.

It was recognised that something should be done about this attempted evasion of employment protection law. What eventually emerged was the familiar result – a scheme of such obscurity and complexity that no-one without access to a law library could possibly understand it. This has caused real hardship to those who try to assert their employment rights.

The lawmakers (and, no doubt the parliamentary draftspersons) tried to deal with the issue by the use of procedural requirements and fictions. These are so far removed from the realities of people’s day-to-day working lives that they achieve a kind of abstract, illusory fascination comparable to a hard-fought game of chess. One aspect of this is that a person whose fixed-term contract comes to an end is deemed to have been “dismissed”. This immediately imposes a legal fiction upon a crucial everyday reality. The employee has not been “dismissed” or sacked, as most workers would say. She will certainly not tell future prospective employers that she was dismissed, but rather that her fixed-term contract expired.

If employers are using fixed-term contracts to avoid legal protection for their employees, there are two simple ways of dealing with this which everyone could understand:

  1. Make fixed-term contracts unlawful.
  2. Give employees the right to complain of unfair dismissal as soon as they start work.

Employment Act 2002 (Dispute Resolution) Regulations 2004

Regulation 13: Extension of time limits

“(1) Where a complaint is presented to an employment tribunal under a jurisdiction listed in Schedule 3 or 4 and

(a)    either of the dismissal and disciplinary procedures is the applicable statutory procedure and the circumstances specified in paragraph (2) apply; or

(b)   either of the grievance procedures is the applicable statutory procedure and the circumstances specified in paragraph (3) apply;

the normal time limit for presenting the complaint is extended for a period of three months beginning with the day after the day on which it would otherwise have expired ….

(3) The circumstances referred to in paragraph (1) (b) are that the employee presents a complaint to a tribunal –

(a)    within the normal time limit for presenting the complaint but in circumstances in which section 32(2) or (3) of the 2002 Act does not permit him to do so; or

(b)   after the expiry of the normal time limit for presenting the complaint, having complied with paragraph 6 or 9 of Schedule 2 in relation to his grievance within that normal time limit ….”

This is very difficult for experienced employment lawyers to understand, and needs access to statutory source material. For even the most determined, articulate and highly-educated non-lawyer, it is impenetrable. This sort of convoluted draftsmanship takes employment law even further away from the grasp of wronged employees and into the control of professional specialists.

The aim of these Regulations was to reduce the number of applications to the employment tribunal by encouraging the resolution of disputes before tribunal proceedings were started. It was, essentially, a cost-cutting exercise.

This was done in such a clumsy, obscure and legalistic way that the system was unworkable. It created more work for lawyers and moved employment law even further away from workers. The scheme has been described as disastrous and scandalous by many employment lawyers. It has now, thankfully, been scrapped but has left complex transitional provisions.

In one case, for example, an employee of a small charity lodged a grievance on a CD, comprising 500 pages of detailed complaints. This came within the definition of “grievance” for the purposes of the dispute resolution regulations (there was no definition) and the cumbersome and obscure machinery of the Regulations swung into place.


Employment Tribunals

Ever since their creation, Employment Tribunals have been free. Their very ethos is access to justice, which is reflected in the overriding objective, which demands that all Tribunals are

“Dealing with a case justly includes, so far as practicable: —
(a)ensuring that the parties are on an equal footing;
(b)dealing with the case in ways which are proportionate to the complexity or importance of the issues;
(c)ensuring that it is dealt with expeditiously and fairly; and
(d)saving expense.”

The recent announcement that Employment Tribunals are due to start charging thus comes as a bit of surprise. The amount isn’t nominal either. Workers will now face between £150-£250 charge to make an application, and a further £1,000 for a hearing, assuming the claim is under £30,000. For a large and complicated case, this can perhaps be soaked up in legal and general litigation costs. However, what about an unpaid wages claim? When an employer withholds wages from an employee that they are due? The proposals mean that the employee will have to pay to receive their wages. Of course, this fee will be recoverable if the case is won, but that will be stark relief for the majority of employees. For some cases, the fee will be more than the case is worth. Is this really ensuring that a case is dealt with justly?


Redundancy

The legal meaning of redundancy is far more complex than the popular view. The general principle is that redundancies arise when an employer’s requirement for work of a particular kind done by an employee has ceased or diminished, temporarily or permanently. It is often unclear whether an employer’s action in altering work arrangements amounts to redundancy or not.

In a recent case, H, who was employed as a supervisor, was given written warnings about her performance. She told one of her superiors that she was pregnant.

The employers decided that redundancies were needed because of the company’s business position. It selected employees for redundancies on the basis of scoring against a matrix scheme.

The person responsible for scoring knew that H was pregnant. H scored lowest and was selected for redundancy. The next lowest scorer was a trainee who had been supervised by H.

H complained of sex discrimination. The employment tribunal upheld her complaint and found that, if she had not been pregnant, the trainee would have been selected for redundancy. It made the following points:

• There had been considerable scope for subjective views and opinions to have influenced the scoring.
• The reason for H’s selection for dismissal was her pregnancy.
• Her selection for dismissal, and the dismissal itself, was sex discrimination and the dismissal had been unfair.
• The employer had acted in a high-handed and malicious way in deliberately scoring H lower than the trainee.
• H should be awarded a total of £16,000 compensation.