Growing Resources into Potential 
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Helping you to grow your resources into the potential they promise 
Croatian Workers 
 
With effect from 1st July 2013, Croatia has become part of the European Union and this impacts on the rights of Croatian nationals to work within the United Kingdom. Ultimately, Croatian’s nationals will have the right to work unrestricted, but for an initial period of five-years, with a possibility of extending this for a further two-years, the following restrictions, similar to those imposed on Bulgarian and Romanian workers, will apply: - 
 
Croatian nationals may enter and reside (but not work) without restriction within the UK for up to three months. If during this time, a Croatian national wishes to undertake employment they will be required to obtain a certificate of sponsorship from a Tier 2 or Tier 5 sponsor and then apply for an Accession Worker Registration Certificate. The application must be made before the employment commences. 
Permission to work will only be granted for skilled positions under Tiers 2 and 5 (or in certain circumstances under Tier 1 for gifted individuals). 
Employers who wish to employ a Croatian worker will need to be licensed with the UKBA as a Tier 2 or Tier 5 sponsor and meet all of the criteria for issuing a certificate of sponsorship, including, where applicable, a resident labour market test. Applicants under Tier 2 are exempt from the maintenance requirement but are still required to meet the relevant English language requirements. 
Croatian nationals will be granted preferential treatment over third country applicants. 
 
However, the following exemptions apply, though this is not an exhaustive list: - 
 
Croatian nationals who are currently legally present in the UK who have been previously granted settlement 
Croatians who have dual nationality with a current member state 
Croatian nationals whose spouse or civil partner is a UK national 
Croatians posted to the UK by a business based in another member state 
Self-employed persons. 
 
It is an offence to employ a Croatian national who does not hold the necessary permission to work and employers should undertake checks to ensure that any new recruit is able to legally work within the United Kingdom or face prosecution. 
 
Information and Consultation 
 
Following a ‘fitness check’; which reviewed the Collective Redundancies Directive, the Acquired Rights Directive and the Information & Consultation Directive to determine if there were any inconsistencies or gaps arising out of these and/or whether their application is overly burdensome, the European Commission has announced that it will be making some minor changes, though this seems unlikely to involve the introduction of any new laws. 
 
These changes are likely to involve the simplification of the directives and may possibly result in some consolidation of these. It has also been noted that a significant proportion of the workforce is not covered by the provisions of the directives, specifically those working in small businesses and the Commission believes that improvements can be made by:- 
 
promoting an information and consultation culture among social partners 
strengthening institutions 
promoting agreements on information and consultation, and 
disseminating good practices and raising awareness 
 
The report suggests that there is a need for further research on information and consultation in the public administration of member states and in Small and Medium Enterprises and we will continue to monitor developments in this area. 
 
TUPE Update 
 
A response has been produced by the Government into their recent consultation into proposed changes to TUPE which ended earlier in the summer (May News Update). The key outcome of this consultation is that the ‘Service Provision Change rules’ will not now be scrapped; this is following an overwhelming level of support for these to be retained within TUPE. 
 
Put simply, ‘service provision changes’ (SPC) arise between contractors and the clients who ‘hire’ their services; the SPC will apply to the contractual arrangements in place between the client and contractor and include: - 
 
contracting-out/outsourcing – where a contract for an area of work previously undertaken by the client is awarded for the first time 
re-tendering – where the contract is renewed or assigned to a new contractor and/or; 
contracting-in/in-sourcing – where a client brings a service in-house which has previously been undertaken by an external contractor. 
 
TUPE applies to any ‘organised groupings’ of employees’ whose role is to carry out these activities on behalf of the client and whilst it was anticipated that these would be removed, it seems that they are here to stay. However, the provisions will be amended to reflect recent case law in this area; i.e. that ‘the activities carried on after the change in service provision must be ‘fundamentally’ or ‘essentially the same’ as those carried out before it’, for there to be a SPC under TUPE. 
 
In addition, the rules around ‘employee liability information’ will essentially remain in place, with the only change being that the information will have to be provided no later than 28-days before the transfer takes place, as opposed to the 14-days that it has been up until now. The existing defence will remain, which is where it is not reasonably practicable for the information to be supplied 28-days before the transfer. 
 
The other changes that will be taken forward following this consultation will be: - 
 
Micro-businesses (less than 10 employees) will not have to elect employee representatives to consult with over TUPE, where there are no existing provisions in place i.e. Trades Union Representatives or other representatives. 
Consultation taken prior to the transfer by the Transferor will count for the purposes of complying with collective redundancy regulations. 
Expressly providing for a ‘static’ approach to the transfer of terms derived from collective agreements i.e. that the transferee will not be bound by national negotiations that take place after the transfer has been affected, the terms and conditions are set as those in place at the time of the transfer. 
Transferees will be able to renegotiate terms derived from collective agreements after one-year, even when the reason for the change is connected to the transfer itself; provided that the renegotiated terms are no less favourable. 
Changes to work locations after a transfer can be classed as an ‘Economic, Technical or Organisational’ (ETO) reason; this will mean that where genuine redundancies arise as a result of a relocation of the work, they will not be automatically unfair and it will be possible to agree changes to workplace locations. 
 
In addition, while dismissals and changes to terms and conditions which are by ‘reason of the transfer’ will remain unlawful, it is intended to remove the ‘alternative provision’ within TUPE which is concerned with ‘matters ‘connected with’ the transfer’. EU Law prevents ‘pure harmonisation’, but the Government are suggesting that unilateral changes to terms ‘which could otherwise have been made (but for the transfer) or for ‘Economic, Technical or Organisational’ (ETO) reasons’ may be possible. We will continue to monitor just how far this will give Organisations the flexibility to change terms and conditions following a transfer. 
 
It is intended that the draft regulations will be ready by December 2013, with January 2014 identified as the implementation date. Transitional arrangements will be put in place to allow employers a lead-in period during which they can plan any future transfers in line with these new rules. 
 
Whistleblowing Consultation 
 
Although the most recent changes to Whistleblowing laws have only just come into effect, a further consultation has been announced by the Government into the aspects of the laws which were not included in the previous review to assess whether the relevant provisions are working in the way in which they were intended or whether there is a need to make further changes to these. The Consultation is now open and will close on 1st November and we will report on the findings and response to this as it becomes known. 
 
Employee Shareholder Contract 
 
Following months of speculation and ‘will they/won’t they’ commentary; the ‘employee-shareholder contract’ has finally been introduced, with effect from 1st September 2013. These contracts are intended to encourage growth, create wealth and jobs and are particularly aimed at those businesses defined as being small, medium or start-up. 
 
The contract itself requires employees to give up some of their statutory employment rights in return for a minimum of £2,000 of shares, which should be fully paid up and free of charge. For employees accepting this type of contract, the first £50,000 of shares will be exempt from ‘capital gains’ tax, if they are later sold at a profit to the employee. 
 
The rights which are relinquished under this contract are: - 
Unfair dismissal; except for cases relating to Health and Safety, which would be automatically unfair and any discrimination cases brought under the Equalities Act 2010. 
The right to receive statutory redundancy, which an individual would ordinarily acquire the right to after two years continuous employment. 
The right to request flexible working; except in cases where the individual is returning from parental leave derived from the EU Directive and makes an application within 14-days of returning to work. 
The right to request time off for training (this right is only applicable in Organisations employing at least 250 people). 
In addition, employees on these contracts are required to give 16-weeks, as opposed to the usual 8-weeks, notice when they wish to return from periods of maternity, paternity or adoption leave. 
 
As previously reported, the following conditions are also required: - 
 
there is a 7-day cooling off period before an offer of an employee shareholder contract can be accepted 
a written statement setting out the rights to be given up and a written statement setting out the type of shares and rights associated with them 
the individual concerned will receive independent legal advice, the costs of which must be met by the offering employer. 
 
Existing employees as well as new recruits will be eligible to accept these contracts and we will continue to watch with interest, to see how well-received they are and what the take-up levels will be. 
 
The 'Future is Now' 
 
The Government is moving into the 21st Century and is embracing the increasing popularity of Social Media it seems. The Disclosure and Barring Service has created and uploaded two ‘YouTube’ videos explaining how their ‘Update’ service can benefit both employers and applicants. The update service was introduced in June 2013 and provides mobility by allowing individuals to transfer their DBS certificate from employer to employer, within certain parameters and also allows employers to conduct on-line checks for employers. Membership of the update service is by subscription by individuals, though some employers are now opting to pay the subscription fee or reimburse employees who have paid for it. 
 
The videos can be watched here
 
 
And finally... 
 
Two snippets found in People Management magazine this month... 
 
"If you owe someone €2, advise that you are short of change right now and can return the change at the end of the service." - Money saving advice contained in a Ryanair Training Manual for Cabin Staff, which concludes - "If it doesn't work, don't worry - at least you tried." Infer from that what you will!!! 
 
“Wedding 6 weeks this Saturday, followed by 2 weeks in Fuerteventura!! Can’t wait”... The ill-advised way, Wigan Council executive Terry Dunn, signed off an e-mail to staff about potential job losses. The Council said he had been told to include ‘personal details’ in his internal communications!!!! 
 
Cases of Interest 1 ~ Race Discrimination 
 
In the case of Morgan v. Halls of Gloucester, the ‘winner’ on this occasion would be forgiven for believing that he had a Pyrrhic victory. Mr Morgan brought a claim of ‘race discrimination’ against his employer, relying on the provision within the Equality Act which states that ‘discrimination on the grounds of a protected characteristic does not have to be directed at the claimant personally’. 
 
Mr Morgan complained about ‘name calling’ directed at his colleague Mr Ennis, which Mr Morgan claimed that this violated his own dignity. Mr Ennis had not complained personally, but it was established that his co-workers called him ‘golliwog Brian’ and ‘black Brian’. The employer said that the workers used those names to distinguish between Mr Ennis and a white colleague who was also called Brian; but the white colleague was not referred to as ‘white Brian’. 
 
The Tribunal found that the owner of the business had ‘tolerated a culture of racism’ and Mr Morgan, having successfully claimed for ‘constructive dismissal’, was awarded £14,286 in lost earnings, on top of an award of £13,427 made in 2011 for ‘race discrimination’; though sadly, he may not receive this award as Halls have now been placed into administration. 
 
Cases of Interest 2 ~ Social Media Contacts 
 
Specifically this case focuses on the use of the business ‘social’ networking site LinkedIn and the ownership of contacts established in the course of business. The case is Whitmar Publications Ltd v. Gamage and others. 
 
The facts of this case being; Mr Gamage and two other senior colleagues left the business to set up their own Company, working in direct competition with the employer. Mr Gamage and his colleagues solicited clients whilst still employed by the employer and also took with them when they left, some 450 business cards containing the details of Whitmar’s clients. In addition, they used Whitmar’s LinkedIn groups to promote their new company and refused to disclose the username, password and other access details to the employer – essentially leaving them without administrative access to their own LinkedIn groups. 
 
Whitmar applied for and was successful in obtaining interim injunctions to prevent Mr Gamage and his colleagues from: - 
 
Misusing confidential information to gain unfair competitive advantage 
Doing anything to stop the Company from accessing its own LinkedIn Pages (as well as requiring them to hand over the administrative access rights) and; 
From entering into contractual relations with any of the clients whose business cards they took from the Company. 
 
In acquiring these injunctions, the Company was able to rely on the ‘implied duty of good faith and fidelity’ which had been breached by the employees by their actions during their employment with the Company. 
 
In this case, the employees did not have written contracts of employment nor was there any restrictive covenants in place; so the pertinent lessons to be learnt from this case is that employers should not only have robust contracts in place, with enforceable post-termination restrictions; but they should also have IT or Social Media policies in place which explicitly deal with the ownership of business contacts made during the course of employment. 
 
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