April 9, 2014

Employment Update Spring 2014

Spring is coming

As usual there are masses of new things to say about Employment Law and I can only hope to mention a few. If there is anything else you want to know about just give me a call, I am always happy to chat.

For now here are my top points for Spring 2014; in no particular order.

Fees go UP and Cases come DOWN

As expected the introduction of fees to make claims in the Employment Tribunal seems to have deterred quite a lot of applicants. Statistics can be viewed in lots of different ways but at the moment the drop in cases seems to be somewhere between 25% and 79%. Some of the reasons for difference seem to be regional and others depend on what type of claim you are looking at. Some have hailed the reduction as the end of the speculative claims. However what we don’t know yet is how this is reflected in the number of cases that are successful for the employee i.e. have the fees really only weeded out weaker cases or have they just affected poorer former employees. On the other hand are really poor former employees still making claims and is it the middle income employees who have stopped claiming? After all fees can be waived or reduced for those on very low incomes/with low savings. For the city banker the fees are a drop in the ocean. Those in the middle will inevitably find it harder.

So for the employers amongst you is it now safer to sack your staff unfairly? Maybe statistically it is but do you want to take that risk? And remember if you are the employer on the end of a successful claim you will probably have to pick up the tribunal costs too.

We will keep an eye on the statistics and keep you updated.

Forms and more forms?

One form on its way out is the discrimination questionnaire. Designed for employees concerned that they had been discriminated against they could be sent to their employer (or former employer) to ask for information about why they were treated in a particular way. Although employers were not required to answer the questionnaire a tribunal could draw inferences from what they did (or more likely didn’t say). Although quite often used the results were often repetitive or limited so it is unlikely the withdrawal of the process will make a lot of difference. Employers can still be asked questions informally and tribunals may well still take notice of whether an employer is being evasive or inconsistent.

Acas have brought in some Guidance on Asking and Responding to Questions about Discrimination in the Workplace. If you have concerns check it out; or give me a call.

ACAS more work

In another attempt to reduce claims, or get matters settled early the ACAS early conciliation process came in on 6 April 2014. Before most types of Employment Tribunal claim can start employees will be obliged to contact ACAS about each party they may want to make a claim against. The process is intended to give an opportunity to have ACAS try to broker a settlement with their employer before the costs start to rack up. During April the process is optional but from 6 May 2014 all employee must contact ACAS and won’t be able to start their claim without an early conciliation number. Although even when the process is compulsory there is no obligation on either the employer or employee to actually try to reach a settlement. If no settlement is reached, usually within a month, ACAS issue an early conciliation number which allows the employee to issue proceedings. If settlement is reached ACAS draw up the binding agreement and that should be the end of the matter. For more about the process here is the link to the ACAS guide

Wages of Sin

The vast majority of employers don’t intend to pay employees less than the National Minimum Wage “NMW”. However there are pitfalls to look out for. For example do you provide accommodation for your employees as part of their benefit package? With property prices and rent being so high many employees may see this as a valuable benefit but do you know that it can only count up to £34.37 toward an employee’s weekly income in assessing if they are paid the NMW?

If the employee works variable hours each week it can be very difficult to prove that they were paid for each relevant hour particularly if there is an element of trust about recording those hours. Employers in some industries have to tackle other issues. For example in the care industry do employees who are sleeping over night at an employers’ premises, or where they provide care in a person’s home, have to be paid the NMW for all the hours they are there? Often the answer is yes even if they are asleep and not actually doing any work. What about other jobs for example if a machine breaks down and the employee is at work doing nothing does he have to get the NMW. Is it different if work is weather dependent and you send the staff home? In the hospitality trade can tips count towards the NMW; employers need to know. Or in schools and collages what about employees who are only paid in term time but employed throughout the year, are they receiving the NMW in July and August? What do you to about employees who receive commission which may go up and down or even have to be repaid if a customer gets a refund? Similarly what if an employer gives overtime, does all the pay including extra over and above normal hourly rates count towards the NMW? All this an employer has to be aware of (or ensure they have someone checking).

From February this year financial penalties for employers not paying the NMW rose to up to 100 per cent of the unpaid wages and there is a higher maximum penalty of up to £20,000. The penalty may also increase to apply to each individual underpaid worker.

There have also been changes in the provisions relating naming and shaming employers who under pay. Previously there were criteria which had to be met e.g. a minimum value of the underpaid wage. Now any employer who is issued with a Notice of Underpayment by HMRC can be named by the Department for Business, Innovation & Skills (BIS) unless there are very exceptional circumstances. While in 2012/13 only 736 employers were identified as underpaying it seems likely that this may still be fairly rare. However 5 employers have already been named and no doubt there will be more to come. Is it a good thing? Are the named employers just victims of circumstance or out to exploit their employees? Will it encourage employers to be more careful or just put off more people from being employers? Even the statistics may not provide the answer but we will let you know how many are in the next batch to be named.


Edit  40. This newsletter looks at new cases and employment related matters, which are likely to be of interest to many. However specialist advice should be obtained before taking or refraining from taking action based on comments in this newsletter, which is only intended as a brief note. For more information or if you have specific concerns phone me on 01233 714055 or e-mail.kirsten@moon-and-co.co.uk. To unsubscribe to our newsletters e-mail kirsten@moon-and-co.co.uk