Wednesday, 6 August 2014

Government consults on prohibiting the advertising of jobs exclusively in other EEA countries

The government have announced a consultation to create new legislation which will prohibit the advertising of jobs exclusively in other EEA countries.


This is an interesting development as there has been recent controversy in the media regarding some companies exclusively advertising jobs to other EEA nationals while not offering those same jobs to the UK market.


This week's Channel 4 Dispatches programme covered the issue and claimed that some large, established companies had even set up recruitment offices in Lisbon solely to recruit Portuguese staff. They even had an advertisement on the homepage of their website in Portuguese for such prospective workers, asking them to visit the recruitment office in Lisbon if they were interested in employment. Worryingly, this same company had a message in English on their homepage saying that no job vacancies were available.


When contacted by Dispatches, the company in question claimed the advertisement in Portuguese was an error and that their recruitment office in Lisbon was no longer in operation. However, a worker with a secret camera revealed that the majority of staff were from Portugal or other EEA countries and were being exploited, especially around zero-hours contracts and bad working conditions. The foreign workers claimed that they would put up with such conditions due to chronic unemployment in their homeland which is why they were favoured for employment.


It would appear that such a practice has become quite widespread which is why this new government consultation is welcomed. Of course, due to open worker borders in the EEA, it is important to encourage other EEA nationals to come and work in the UK if this is their desire. Equally, it is vital that such jobs are also advertised to UK citizens, especially when we are still in times of austerity and many people cannot find work despite their best efforts.


For more information on the consultation visit:


https://www.gov.uk/government/consultations/recruitment-sector-prohibiting-the-advertising-of-jobs-exclusively-in-other-eea-countries

Tuesday, 22 July 2014

Obesity and Flexible Working - Recent Developments in Employment Law




There have been some interesting developments in employment law in the last few weeks which denote a mention and are indicative of the changing face of this oftentimes fast moving area.

The right to flexible working hours had previously been an option that employers had to consider if it was requested by employees who were carers or parents with children under the age of 17. From 30 June 2014, the right to request flexible working hours has now been extended to all employees who have been in employment for 26 weeks or more.

Employers now have a responsibility to consider such requests for flexible working hours in a 'reasonable' manner and must respond to such requests within 3 months. The employer can refuse the request but must set out their reasoning. For employers who are facing such requests it is advisable to only refuse such requests if there is a valid business reason for doing so.

An example of a valid business reason would be that the job can only be done at a specific location which would rule out a request to work certain hours of the week from home. This may apply especially to those roles that are not office based such as in the hospitality industry. ACAS has provided useful advice and guidance for employers and employees to aid them through the process.

The second development that I wanted to mention is a recent case from the Court of Justice of the European Communities which relates to obesity. A child-minder who worked for a local government body in Denmark brought a claim for disability discrimination alleging that his employment was terminated due to his obesity.

This case is of interest as obesity was not officially considered a 'disability' under EU employment law. The court held that obesity may be considered a disability under the EU Equal Treatment Framework Directive if it could be classed as 'severe'. The court went on to rule that for a case of obesity to be 'severe' the relevant person's body mass index (BMI) would need to be 40 or more. This would indicate a level of obesity that would make professional life very difficult for the individual concerned.

The Danish child-minder in question had a BMI of 54 which meant that he was able to successfully argue disability discrimination against his employer. This is a potentially tricky situation for employers as they are unlikely to know the BMI of a seemingly obese prospective employee. One solution may be to add BMI as a category on health questionnaires issued to new employees. Employers would then need to remain mindful of behaviour that an employee with a BMI of over 40 may deemed to be discriminatory.

These two changes are symptomatic of modern living practices and lifestyles and are inclusive provisions which are welcomed. Disability discrimination law is evolving as more types of disability are being identified and classified. Allowing flexible working hours, rather than being a dosser's charter as previously feared, has been proven to increase the productivity of employees, as shown by studies in the US. Employees will welcome these new rights and employers need to be aware of this fast moving area of law or risk being caught out.




Wednesday, 7 May 2014

ACAS early conciliation comes into force for Employment Tribunal claims

On 6 May 2014, a new measure came into force whereby it is necessary for those wishing to commence an Employment Tribunal claim to first consider Early Conciliation (EC) discussions with ACAS (The Advisory, Conciliation and Arbitration Service). ACAS is an independent, publically funded organisation that helps resolve employment disputes and the EC discussions are free of charge.

ACAS have promoted EC as 'the free, fast and less stressful alternative to an Employment Tribunal for resolving workplace disputes' and have set up an information page on their website.

Previously an Employment Tribunal claim would be commenced by completing and filing an ET1 Form. However, from 6 May 2014, those wishing to commence a claim must fill-out an Early Conciliation Notification Form. ACAS will then contact the potential claimant within two days of receiving this form and the claimant will subsequently be contacted by an ACAS qualified conciliator who shall try and help the parties settle the dispute without the need for a tribunal hearing.

Once the EC process is began by filing the Early Conciliation Notification Form, the parties have one month, with the help of the conciliator, to settle the dispute. This period of one month can be extended by 14 days if necessary and agreed by all the parties. If the dispute is not settled within a month then the claimant will need a Conciliation Certificate from ACAS in order to file an ET1 Form. The Conciliation Certificate confirms that the EC requirements have been adhered to.

Importantly, the three month deadline to file an Employment Tribunal claim is paused if EC is commenced. Thus, if settlement is not reached after one month via EC, then a claimant still has one month to file an ET1 Form and thus commence an Employment Tribunal claim. Moreover, the EC discussions are completely confidential so they cannot be mentioned in a subsequent Employment Tribunal hearing.

Apart from confidentiality, other advantages to EC include saving time and money and having an opportunity to see the strengths and weaknesses of your claim. This is especially useful as the other party may have a strong counter-argument which you were unaware of and would otherwise have only emerged during Employment Tribunal proceedings. Thus, the EC allows you to determine the outcome and terms of any settlement rather than risking an adverse ruling by an Employment Tribunal. This is especially relevant as new laws mean that a claimant can now be liable for some or all of a respondent's costs of Employment Tribunal proceedings in certain circumstances, such as bringing a frivolous case that is 'without merit'. In this respect, knowing the other parties' counter-argument early on is useful and potentially cost saving.

The government have introduced this change as a further stage in their 'Red Tape' campaign to improve the economy by protecting employers from costly Employment Tribunal proceedings. It also has the added benefit of minimising the risk to employees of bringing often expensive, stressful and time-consuming Employment Tribunal proceedings. Interestingly, early conciliation has also been introduced in family law proceedings. Time will tell as to whether these early conciliation measures work in practice and they do seem to be a logical progression that should both reduce the risk associated with commencing legal proceedings and free the family courts and Employment Tribunal from claims which are more suitable for settlement.

Tuesday, 18 February 2014

How Recent TUPE Changes Impact Businesses


The government has recently introduced new statutory amendments to further promote the economic revival by making regulations that affect businesses and employees more flexible and easier to navigate. One such change relates to The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), which determines what happens to existing employees on the sale of a business or change in services. TUPE has been amended by the Collective Redundancy and Transfer of Undertakings (Amendment) Regulations 2014 which came into force on 31 January 2014. I have laid out below those amendments that businesses should be most aware of.

‘Service provision change’ simplified

If a business decides to out-source, take in-house or re-tender a service that had previously been conducted by an ‘organised grouping of employees’ (which can constitute one person) whose ‘principal purpose’ was the provision of those services, then this would constitute a ‘service provision change’ under TUPE.

The amendments have narrowed the definition of ‘service provision change’. Now there will only be a TUPE transfer of employees in relation to a service provision change if the relevant activities remain ‘fundamentally’ the same as those carried out previously. Thus, any fundamental changes to the method or nature of the new services in question may not trigger a transfer of employees. This means that the planning of any such service provision change must be carefully considered so as not to trigger a transfer of unwanted employees. Altering the method or nature of the new service is one possible solution to safeguard against any such transfer, and businesses should bear this in mind at the planning stage.

Automatically unfair dismissals curtailed

Previously under TUPE, a dismissal could be deemed automatically unfair if it was ‘connected’ to a transfer. This was a wide interpretation which has now been narrowed so that a dismissal can only be considered automatically unfair if it can be proved that it was ‘by reason of’ the transfer. The government have introduced this change in order to bring it in line with EU law, although the facts of each case shall ultimately be the determining factor. Thus, businesses should be clear as to the facts relating to any dismissals that could be potentially linked to a transfer and should take legal advice in this regard before such dismissals are approved.

Relocation no longer caught by TUPE

Under TUPE, a dismissal by reason of a transfer is not unfair if it can be found to be an ‘economic, technical or organisational (ETO) reason entailing changes in the workforce’.  However, under the old regulations, an ETO reason did not include relocation of employees. The amendments have now allowed relocation to be an ETO reason which allows businesses further scope to relocate employees on a business transfer without being caught by TUPE. This is a pragmatic change that all businesses will welcome.

Changing contractual terms

Previously under TUPE, harmonisation of employees’ contractual terms between the transferring businesses was not permitted if it related to or was connected with a transfer, unless it was an ETO reason and the employee consented.

This has now been narrowed to not include harmonisation of terms ‘connected to’ the transfer but rather only to harmonisation of terms ‘related to’ the transfer (as is the case with the service provision change mentioned above). Another important change is that a variation to the terms of an employee’s contract will be permitted if the contract already had a mechanism which allowed for such a future variation. This is significant and businesses should make sure that all new employment contracts have a clause that allows for such a future variation of terms in order to avoid triggering TUPE.

Collective agreements and pre-transfer consultation

Another new amendment means that if a post-transfer employer was not involved in pre-transfer collective bargaining with a trade union that led to changes in employees’ contractual terms (via a collective agreement), then this new employer will not be bound by these terms. Moreover, if an employee’s contract is drawn up from a prior collective agreement then a post-transfer employer will not be bound by those terms unless such terms do not take affect for 12 months after the transfer itself and those terms are no less favourable.

The new amendments also allow an employer who wishes to make collective redundancies to start the consultation process pre-transfer. However, the transferring company needs to agree to this consultation and can withhold its consent. Business should be aware of the consultation periods depending on the amount of employees they wish to make redundant and how such periods may overlap with a transfer. Adhering to these periods could prove problematic if the transferring company refuses to give its consent to pre-transfer consultations, in which case it may be necessary to delay any such redundancies.

Employee liability information period extended

Only one of the recent changes to TUPE does not come into force on 31 January 2014, and this is the change relating to employee liability information, which comes into force on 1 May 2014. On a business transfer the company transferring the employees needs to provide certain information to the new employer relating to those employees. This information will need to be provided no later than 28 days before the transfer rather than the previous rule which was 14 days before the transfer.

In light of this change, transferring companies must make sure that they have all the relevant employee liability information ready to send at least 28 days before the transfer and the new employer should consider delaying the transfer if the transferring company is late in providing this information as such information could affect the purchase price.

Micro-businesses relief from transfer consultation

A final change relates to ‘micro-businesses’, that is, business of less than 10 employees. Such businesses will be excused from needing to consult with a trade union or employee representatives in relation to a TUPE transfer that will affect such employees. It is enough for the micro-business to consult with each employee individually. This is a welcome measure which will help small, growing businesses avoid the red-tape which can often tangle their progress.

Friday, 29 November 2013

3 Essential Employment Law Changes that Small Businesses Need to Know About


Over the last 18 months there have been some significant changes in employment law as a result of the Coalition government's 'Red Tape' scheme to enliven the economy by encouraging businesses to grow and employ new staff.  Three of these measures will serve to help protect businesses, especially small businesses, against claims of unfair dismissal.

Firstly, on 6 April 2012, the Unfair Dismissal and Statement of Reasonsfor Dismissal (Variation of Qualifying Period) Order 2012 (SI 2012/989) came into force and increased the qualifying period for bringing an unfair dismissal claim from one year to two years’ service. Thus, all staff that commenced their employment after 6 April 2012 will have to wait two years as opposed to one year in order to qualify to bring an unfair dismissal claim. This means that businesses are now free to terminate employees’ contracts within two years of them starting work without the worry of the said employee bringing an unfair dismissal claim against them.


Secondly, on 29 July 2013, section 14 of the Enterprise and Regulatory Reform Act 2013 came into force. This prevents pre-termination negotiations between employers and employees from being disclosed in Employment Tribunal proceedings for ordinary unfair dismissal claims, which was not the case previously. This enables employers to attempt to terminate a staff member’s employment through confidential negotiations rather than commence a disciplinary or redundancy process, which can often take a considerable amount of time to complete. This allows businesses to confidentially terminate employment without the risk of this evidence being used against them during Tribunal proceedings. This is especially useful for small businesses who may have limited funds and need to get rid of staff quickly in order to survive or flourish.


Thirdly, in July 2013, The Unfair Dismissal (Variation of theLimit of Compensatory Award) Order 2013 (SI2013/1949) was published. This Order came into force on 29 July 2013 and changes the upper ‘compensatory award’ limit for unfair dismissal to either 52 week's pay or £74,200, whichever is lower.


Ironically, this change has come into force at the same time as the EU officially emerges from the post-credit crunch recession, with industry sectors on the continent, especially in France and Germany, and the housing market in the UK, showing green shoots of recovery to mirror our long-awaited balmy English summer.


So what is the significance of this change? The main area of change relates to the option of 52 week's pay as the upper compensatory award limit, that is unless 52 week's pay is more than £74,200. Thus, for an employee on a yearly salary of less than £74,200, this yearly salary amount will be the maximum that they can be awarded at an Employment Tribunal for unfair dismissal (along with a possible ‘basic award’ of up to £13,500). Considering that the average 52 week salary in the UK is £26,000, this greatly limits what an employee can be awarded. This is significant for small businesses as most of their staff will be on salaries of less than £74,200 per annum. Thus, if they have to pay an award to an employee as a result of Tribunal proceedings, it is likely to be closer to the employee’s annual salary which would be easier to absorb than a much higher award of £70,000 or more.


Interestingly, from 29 July 2013, Employment Tribunals will now charge fees for each claimant. The combination of Tribunal fees and lower awards means that prospective claimants for unfair dismissal may be priced out of using lawyers to represent them at Tribunals. This is exacerbated by the fact that, traditionally, legal costs cannot be recovered in an Employment Tribunal. Such prospective claimants may be forced to act as litigants-in-person which may in turn affect their chances of success. This serves as another tactical advantage for businesses.


As businesses will now be aware of the maximum compensatory award an employee could be awarded, this could prompt employers to make lower offers in settlement negotiations. This in turn will help businesses reduce litigation costs and exposure.


These changes will also make claims harder for employees as they may need to find grounds for discrimination to add to their unfair dismissal claims in order to secure higher awards, or alternatively claim only for discrimination against their employers. Either way, this narrows their options for a solution through litigation, sometimes the only option available.


There is no doubt that these new changes should promote the growth of businesses by aiding the termination of employee’s contracts via confidential negotiations and controlling litigation risk and costs regarding unfair dismissal. This should certainly be a much needed shot in the arm for small businesses, many of which have struggled since the downturn to keep afloat in stormy seas.

Friday, 8 November 2013

Mediate or Meet the Cost?? Failing to Consider Mediation Could be a Costly Strategy



The dispute resolution landscape post the Jackson Reforms earlier this year has taken on a slightly more rugged if not treacherous appearance, and this is certainly the case concerning the widespread changes to the costs regime. Lord Woolf began the crafting of a more undulating and challenging dispute resolution landscape back in 1996 and now Lord Justice Jackson has added some lofty peaks for litigants and litigators alike to be aware of, or ignore at their peril. These measures have been taken to minimise abuses and streamline the court process by introducing sanctions with a touch more bite. Certainly some sturdy trekking gear and thorough map reading will be required to navigate these new ranges.

Case law is now filtering in which is providing a picture of how the courts intend to interpret some of the new costs measures that were introduced back in April 2013. One such key measure is that the costs of a case must be 'proportionate' to the amount in dispute. No longer will excessive legal costs be justifiable because they were merely 'necessary'. Thus, if the amount in dispute is £200,000, then legal costs to trial of £150,000 would most likely be disproportionate, regardless of how much work was involved.

A judge may even agree that the costs were necessary but be forced to reduce them under the new proportionality criteria. As such, prospective litigants and litigators must carefully budget before and during the litigation process and this will be closely monitored by the court, with deviation from budgets being punished. One solution to increasing and sometimes hard-to-predict litigation costs is early mediation.

Interestingly, Lord Justice Jackson published the ADR (Alternative Dispute Resolution) Handbook as part of his wide-ranging reforms to civil litigation in 2013. This report, among other matters, stipulated that if your opponent offers mediation then this must be considered with constructive engagement. To merely ignore such an offer would attract a costs sanction.

This advice regarding mediation has now been confirmed by the Court of Appeal in the recent case of PGF II SA v OMFS Company 1 Limited [2013] EWCA Civ 1288. In this case the defendant ignored an invitation by the claimant to consider mediation. Ordinarily, a party can justify refusing an offer for mediation by citing various factors that were laid out in Halsey v Milton Keynes General NHS Trust [2004] 1 WLR 3002. Such factors include the merits of the case and whether such mediation would have a reasonable prospect of success. If a party could justify to the court a refusal to mediate according to these 'Halsey Principles' then no costs sanction would generally follow.

However, in line with Jackson's ADR Handbook advice, the Court of Appeal held that to simply ignore an offer to mediate would attract a costs sanction automatically, regardless of whether it was justifiable under the Halsey Principles or not. As such it was held that the defendant would be liable for more of the claimant's costs than if they had simply engaged with the other side in relation to their mediation request. This is in line with the new 'proportionality' requirement as a successful mediation can, in principle at least, greatly reduce subsequent litigation costs and thus is an avenue which must be at least considered properly if suggested.

Some prospective litigants may view considering or undertaking mediation, especially at the outset, as a sign of weakness. However, with possible costs recovery implications now in place around the refusal to consider mediation, litigants should ask their legal advisers to lay out the mechanics, timings and costs of a possible mediation as this may prove more cost effective than litigation, from a commercial perspective.

The key point to take away for litigants and litigators is that consideration must be given to the possibility of mediation if the other side suggest mediation, whether suggested in conversation or in writing. A response must be given to a request and if mediation is not appropriate then you must carefully apply the Halsey principles to the facts to justify your refusal. It may be that the court will issue more 'Ungley orders' - these are orders of the court which require parties to consider ADR before trial and file reasons for any refusal. These objections can then be used by the court when considering costs, which could prove costly if ADR would have proven significantly cheaper than any subsequent yet forced litigation.

No doubt more case law will emerge in the coming months to further augment the new costs regime implemented by the Jackson Reforms. It is doubly important that one now steps the path towards contested litigation with a firm and carefully placed footing, so as to avoid any unpleasant pitfalls.