The roll-out of Pensions Auto-enrolment will continue and will reach employers with 350 – 499 employees. From the start of 2014, those employers will be expected to offer all employees a ‘qualifying’ pension scheme or alternatively, to register with the NEST scheme.

Employment restrictions on nationals from Bulgaria and Romania have been lifted with effect from the 1st January 2014, allowing them to freely seek employment within the UK.

The Transfer of Undertakings (TUPE) reforms, as reported in September 2013, are expected to take effect on 31st January.

In April

The ‘regulation freeze’ which exempted businesses with fewer than 10 employees from applying burdensome employment regulations will continue and is expected to be extended to include businesses with fewer than 50 employees. This will apply to any new regulation coming into force after 31st March 2014.

An employment allowance will be introduced under the National Insurance Contributions Bill; this will entitle every business and charity to a £2,000 reduction in their employer national insurance contributions bill each year.

A further change to Pensions Auto-enrolment will see the time-period for employers to auto-enrol eligible employees (workers) into a qualifying pension scheme will be extended from one-month to six-weeks. The deadline for providing information to the Pensions Regulator will also be extended from 1st April 2014.

The ‘early conciliation’ scheme will be introduced on 6th April 2014; this will mean that all claimants will have send details of their dispute to ACAS, who will attempt conciliation/settlement, before a claim can be submitted to a Tribunal.

Provisions within the Equality Act 2010 covering ‘discrimination questionnaires’, by which an individual can obtain information about potential discrimination from an alleged discriminator, will be removed on 6th April 2014.

A financial penalty of up to £5,000 can be levied by Employment Tribunals against employers who are found to have breached an employee’s employment rights will be introduced on 6th April 2014.

Rates of statutory payments (Sick Pay, Maternity/Paternity/Adoption Pay) are expected to increase, as will the weekly earnings threshold for these payments. Further information on these rates will be published as it is known.

In October

• It is expected that Employment Tribunals will be able to order an employer to carry out an equal pay audit, in circumstances where it is clear that they have breached the equal pay provisions in the Equality Act 2010.

Employment Related Acts and Bills

The following bills are continuing through Parliament and changes falling out of them are expected to be seen during the course of the year:

The Pensions Bill, bringing further changes to the state pension was introduced to the House of Commons in May 2013 and this continues to progress through Parliament.

The Children and Families Bill, introduced in February 2013 is also continuing to progress through Parliament. One of the key changes brought about by this Bill is the extension of the right to request flexible working to all employees will be introduced this year; which originally had been expected to be implemented on 6th April, but delays to the passage through Parliament of the Bill, mean that this date is now unrealistic and we await details of a new implementation date. The remaining provisions including; shared parental leave system, statutory shared parental pay and the right to time off for antenatal care are expected in 2014 – 2015.

The National Insurance Contributions Bill, introduced in October 2013 is also continuing through Parliament and one of the key changes introduced by this bill has been outlined above.

Finally, the Immigration Bill, contains provisions to further reform the immigration system.

In all cases, we will continue to monitor these areas and report on any changes/developments.

Information Source; the Chartered Institute of Personnel & Development

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National Minimum Wage - 1

From February 2014, employers who disregard the law on the National Minimum Wage (NMW) will face increased fines of up to £20,000. The current position is that any employer who is found not to be paying employees (workers) the NMW must pay the unpaid wages plus a financial penalty calculated as 50% of the total underpayment for all employees (workers) who are found to be underpaid. This penalty is currently capped at a maximum of £5,000.

However, from February this will increase to 100% of the unpaid wages that is owed to employees (workers) and the maximum penalty will be increased to £20,000.

The Regulations that will introduce these changes are subject to Parliamentary approval, but it is expected that all necessary stages will have been concluded to enable these to be in place from February.

As an early warning to readers; the Government also intends to legislate at the earliest opportunity a further change which will enable the penalty of £20,000 to be applied to each employee (worker) who has been underpaid. The intention behind this future change is to penalise those employers with the highest levels of arrears; those who are found to have made underpayments of more than £20,000 to any employee (worker) after the new legislation comes into effect will not only pay the new higher level of penalty, but will face this penalty for each such employee (worker). However, where any underpayment exceeds £20,000 for any individual or group of employees (workers) the penalty will be capped at that limit.

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National Minimum Wage - 2

It has been reported in People Management that the Chancellor has said that he would like to see an above inflation increase in the NMW for this year; stating that the ‘economy can now afford’ to sustain a potential increase to as much as £7 per hour, from the current rate of £6.31 for those aged 21 and over.

The Low Pay Commission is due to report next month on what, if any, increase there should be to the NMW and they have been provided with an assessment by the Treasury of the impact of increasing the adult rate to £7 per hour.

The rate of inflation is currently at its lowest level in 4-years and stands at 2%, but the reality is that after several years of ‘stagnant pay growth’ and high inflation, wages in real terms have fallen in the UK since the recession commenced in 2008.

We will update you further once the Low Pay Commission have made their report in February.

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Health and Work Service to be Launched

It has been announced by the BBC that the Government is intending to launch a ‘Health and Work Service’ this year, which will cover England, Wales and Scotland. The scheme will be run within the private sector and will be offered to all employees/workers who are absent from work for more than four weeks as a result of sickness absence.

Those referred to the service will be offered advice to help them get back to work more quickly as well as non-compulsory medical assessments and treatment plans.

It will be funded by the scrapping of the current ‘Statutory Sick Pay Percentage Threshold Scheme’, from which some employers who are faced with high levels of sickness absence, receive compensation. The Government has described this scheme as being ‘outdated’ and which ‘does nothing to promote or support active management of sickness absence by either the employer or employee’.

There will be no change in existing law for the scheme to be introduced and those who are entitled to receive Statutory Sick Pay of almost £90 per week from their employers will continue to receive this payment. However, it is the intention that the introduction of this scheme will see the number of people who are on long-term sickness absence (4-weeks or more) reduced.

The scheme will in effect provide ‘Occupational Health Services’ for many employers, particularly small businesses who do not currently have access to such services and will enable them to refer their employees to undergo a ‘work-focused’ assessment, which will consider if there are alternatives which might enable them to return to work more quickly. However, the scheme will not be compulsory and employees/workers will be allowed to refuse to be assessed or to follow any course of action or treatment recommended.

There is little mention as yet of how the scheme will be implemented or run and there does not seem to be any mention of what recourse employers may be afforded to deal with employees who refuse to participate in the scheme... We will continue to monitor the progress of this scheme and report back as more information becomes available.

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Police Officers win Forced Retirement Case

It has also been reported this month that five Police Forces have lost their Tribunal Case in respect of ‘Regulation A19’; which states that Police Officers below the rank of Chief Officer, ‘could be required to retire after 30-years, ‘in the general interest of efficiency’’. The ruling was made by the Central London Tribunal, who were considering a case brought on behalf of 250 Police Officers from the Nottinghamshire, West Midlands, Devon & Cornwall, North Wales and South Wales Forces and in reaching this decision, are effectively saying that the application of this Regulation by Police Forces amounts to ‘age discrimination’ and follows the earlier ruling by the High Court that it was ‘unlawful’.

The Forces involved have 42 days to appeal against the decision; however, should they choose not to appeal or indeed, if their appeal is unsuccessful, they face the prospect of paying compensation which could run into millions of pounds.

We will bring you further developments in this story as they may become available.

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TUPE

As we reported in September 2013, changes to TUPE arising out of a recent consultation exercise have now come into effect since 31st January 2014. The key points for employers to not from these changes are:

Redundancy dismissals where the workplace location changes as a result of a transfer will no longer be automatically unfair. Under TUPE a dismissal which is shown to be for an ‘economic, technical or organisational reason’ (ETO) was not deemed to be unfair, even where the dismissal took place because of the transfer; under the amended Regulations, the definition of ‘entailing changes in the workforce’ has been extended and now includes a change in the location of the workforce/workplace. Consequently, dismissals following a transfer which are for reasons workplace relocation may not now be classed as automatically unfair.

From 1st May 2014, the amended Regulations will require the ‘transferor’ (the employee who is transferring out the employees) to provide employee liability information to the transferee, much earlier in the process. This amendment will not be applied retrospectively and will only apply to transfers taking place on or after the 1st May implementation date.

The transferee (employer receiving the employees) will be able to conduct a redundancy consultation exercise with the employees that it expects to gain post-transfer, before the transfer actually takes place; rules concerning collective redundancy consultation are amended, so that if the ‘receiving employer’ who is ‘inheriting’ employees as a result of a transfer needs to make redundancies, they can undertake some or all of the necessary consultation with transferring employees before the date of transfer.

And just because TUPE is never meant to be easy; there is still some uncertainty that some of the amendments made by the UK Government will be compliant with the European Directive relating to ‘Acquired Rights’ (2001), of which TUPE is the means by which the UK has enacted the Directive. Consequently, employers who have relied upon the amended provisions and who are challenged by their employees may find that the issue is deferred to the European Court of Justice for a decision! As ever, with all matters related to TUPE, employers are advised to seek legal guidance and advice before proceeding...

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Checking the Right of Migrant Workers to work in the UK

It has been announced that there will be some changes that will affect Employers who engage migrant workers and specifically, those who ‘sponsor’ employees under the ‘points-based’ system. There will be secondary legislation to accompany the Immigration Bill; currently progressing through the various Parliamentary stages, which will seek to simplify the checks on an individual’s right to work in the UK. These changes will include:

it will no longer be necessary to check the worker/employee’s right to work on an annual basis

the range of documents used to check the status of an employee/workers’ visa will be reduced and older documents, which have found to be easier to ‘forge’ will be removed entirely from the list of acceptable documents.

where a TUPE transfer occurs, the period allowed for the carrying out of ‘right to work’ checks undertaken by the ‘Transferee’ (the receiver of the transferring employees/workers), will be increased from 28 to 60-days.

The guidance given to employers in respect of immigration matters will be simplified and reissued.

It should also be noted that the Immigration Bill will also simplify the calculation of civil penalties for businesses employing illegal workers. If passed into legislation, the Bill will:

impose a fine starting at £15,000 per illegal worker/employee for a first offence by an employer

increase the maximum penalty to £20,000 per illegal worker, for businesses who fail to complete the necessary ‘right to work’ checks.

Introduce measures to make Directors and Partners of Limited Liability Businesses liable for their Company’s failure to pay any fines imposed for the employment of illegal workers.

Also included within the Bill, will be the introduction of a non-refundable charge for the National Health Service for temporary migrants coming into the UK. The fee will become payable when migrants apply for their UK entry visa or extend an existing visa and once paid, it will enable the individual to access the NHS free of charge in the same way that UK residents are able to.

The Bill is currently in the House of Lords Committee stages and continues to attract media attention and particularly following the recent resignation of the Government Minister responsible for Immigration, Mark Harper as reported by the BBC; who resigned at the weekend when it was discovered that a cleaner he employed, did not have the right to work in the UK. Which just goes to prove that it doesn't matter who you are, you can still be caught out by legislation!!

We will continue to update you on its progress.

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Employment Tribunal Fees

After weeks of waiting, we have a decision on the Judicial Review into the Employment Tribunal Fee structure. If you recall, the implementation of fees was challenged by Unison, who presented their evidence to the High Court at the beginning of October and this week, a ruling has been made and it is against Unison. However, the decision has been reached by the High Court on the grounds of insufficient evidence being presented by Unison, with Lord Justice Moses stating “The evidence at this stage lacks robustness necessary to overturn the regime...”. This is being interpreted as the the door being left open for a further challenge, once more information is available and more is known about the impact that Tribunal Fees will have on claimants.

So whilst it seems that this chapter has been finished, there is more to be written within this story and we will continue to monitor for any further developments and report back in due course.

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And finally...

It has been reported that two bosses from the Goodyear plant in France were taken captive and held hostage for two-days by their employees last month. The reason for this direct action? The employees were in dispute with the Company over the proposed closure of the plant and although it was initially reported that it was an attempt to stop redundancies, a later report has said that it was about securing enhanced packages for the employees concerned...

Apparently 'Boss-napping' as it is known, is not uncommon in France and whilst it may be a tempting idea for some, there are more constructive ways to resolve employee relations issues!

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Cases of Interest 1 ~ Dismissal for Smoking at Work was Unfair

The case of Vincent T/A Shield Security Service v. Hinder has been heard by the Employment Appeals Tribunal (EAT), following an appeal by the employer in this case into the ruling given by the Employment Tribunal Judge.

In the facts of this case; Mr Hinder was employed as a Security Guard and was working on a night shift at a largely unoccupied factory. During his shift, there was a break-in, which had gone unnoticed by him during his shift and which he was informed about by two colleagues when they came into the factory the following morning. The two colleagues proceeded to inspect the physical damage caused by the break-in and whilst they were doing this, observed Mr Hinder smoking two cigarettes, which was considered to be a serious breach of health and safety regulations. Mr Hinder was suspended and subsequently invited to attend a disciplinary hearing to answer allegations that he had ‘neglected his duties’ on the evening in question.

The employer’s letters had suggested that the allegations were potentially ‘gross misconduct’ which could result in his summary dismissal. Although he was cleared of neglecting his duties; two employees had seen Mr Hinder smoking in the clients’ premises and although he had provided mitigation for his actions (confusion caused by the break-in), he had initially admitted to the investigating officer that he had been smoking and had apologised for doing so. Though he subsequently denied that he had admitted to smoking, he was dismissed for smoking ‘illegally’ within the clients’ premises. Mr Hinder had been employed by the Company for 6-years, during which time, he had an unblemished record.

The Employment Tribunal initially found that the dismissal had been unfair on five grounds:

the employer’s disciplinary procedure was unclear on whether a serious infringement of health and safety rules constituted gross misconduct

Mr Hinder had been confused at the time of the incident

neither of his colleagues had stopped him smoking

the premises were more or less empty

a reasonable employer looking at Mr Hinder’s good employment record would have considered an alternative sanction.

The employer appealed against this decision to the EAT and argued that the Judge in the initial hearing had substituted his own view on what should have been the right course of action to take and had not applied the ‘band of reasonable responses test correctly.

The appeal was dismissed by the EAT who stated, although they would not have applied the same weighting to the building being empty or to the lack of clarity in the disciplinary procedure as had been applied by the Employment Tribunal Judge; he, the Judge was best placed to consider the matter and given the facts and circumstances, dismissing an employee with a good work record, without considering whether an alternative sanction could have been applied, was ‘not the action of a reasonable employer and was not within the band of reasonable responses, as defined within section 98(4) of the Employment Rights Act 1996.

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Cases of Interest 2 ~ "The Straw that broke the..." Doctrine

A recent case has shown that the doctrine known as ‘the last straw’ applies to employers as much as it does to employees. To explain what this means, the ‘last straw’ doctrine allows an employee to resign in response to a particular incident, which on its own may appear to be relatively minor or trivial, but when taken together in a chain of earlier events, amounts to a fundamental breach of contract on the part of the employer and is most commonly associated with claims of constructive dismissal.

The case in question is Kearns v. Glencore UK Ltd and the findings of this case show that in appropriate circumstances, the employer can rely on the employee’s repudiatory behaviour as the basis for terminating their employment.

In the facts of this case; K was an Oil Trader who was summarily dismissed for gross misconduct having failed to attend two meetings on one day whilst on a business trip to Singapore. It was the belief of the employer that the reason he had failed to attend the meetings was as a result of his heavy drinking on the evening before and that his conduct on this occasion amounted to gross misconduct, for which they were entitled to dismiss K without notice. This decision was taken against a background of a number of incidents in the past where the conduct, performance and attendance of K had fallen below expected standards as a consequence of excessive alcohol consumption. The employer had also arranged for K to see a Doctor and Specialist Consultant a year earlier, but this had not had any real effect and his excessive drinking had continued.

It transpired that the employer had not conducted any investigation into this final act upon which it relied upon in the dismissal, nor had they carried out a formal disciplinary process as they were required to do by the ACAS code of practice. However, they had warned K that any further instances of lateness or absence from work as a consequence of drinking would result in his dismissal.

K did not appeal against his summary dismissal, but brought a claim for ‘wrongful’ as opposed to ‘unfair’ dismissal in the High Court, seeking recompense for loss of salary and benefits during what would have been his notice period and for the loss of valuable shares. K claimed that he had not been required to attend the meeting in question and that the reaction of the employer to his missing that meeting had been excessive and was consequently a breach of contract.

The employer argued that the failure to attend the meetings due to excessive alcohol consumption either by itself or when viewed against the background of the previous incidents amounted to a repudiatory breach of the implied term of ‘trust and confidence’. The High Court agreed with this and dismissed K’s claim; by doing so, confirmed that where an employer is seeking to show that an employee has breached the implied term of ‘trust and confidence’, they too are entitled to rely on the ‘last straw’ doctrine.

However, employers are advised that they should not rely on the outcome of this case in place of good employment practice and as a rule:

Whilst fairly minor misconduct can amount to being the ‘last straw’, the matter should be investigated to ensure that the act has occurred and that act amounts to an act of misconduct

Take early action where patterns of minor misconduct are developing; don’t rely on their being one last event to call the ‘last straw’; the ACAS code of practice allows for the cumulative effect of warnings on an individual’s record to ultimately result in the dismissal of that employee.

Where a final act deemed to be the ‘last straw’ is shown to be gross misconduct having conducting an appropriate investigation, you are entitled to summarily dismiss the employee for gross misconduct, without having to rely upon any earlier incidents or acts of misconduct.

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