A Year in employment

It’s been a while since our blogs have been done, in no small part due to maternity leave, so here is a brief summary of the main things that have come up over the last year.

January 2012

Up to £67 million awarded to ex Woolworths staff where administrators failed to comply with their duty to collectively consult. The Tribunal did however treat each Woolworths shop as a separate “establishment” meaning that employees in smaller shops missed out on compensation. Employers should be aware that consultation duties are due to change in 2013. Watch this space for our blog on this issue.

February 2012

Compensation limits rose to a maximum of £12,900 for a basic award and £72,300 for a compensatory award.

Think £85,200 is a lot to lose? The limits went up again in February 2013 and are now £13,500 for the basic award and £74,200 for the compensatory award.

If employers can’t afford to pay out £87k+ in damages they need to make sure that their policies and procedures are accurate and followed appropriately.

April 2012

Anyone employed from 6th April will now have to be employed for 2 years before they are able to bring a claim for ordinary unfair dismissal. Anyone employed before 6th April 2012 will continue to only require 1 year’s service.

Claims where the dismissal is on the grounds of discrimination will continue to have no minimum service required.

May 2012

The Enterprise and Regulatory Reform Bill received its first reading in the House of Commons on 23rd May. The Bill proposed a number of procedural reforms, changes to compensation.

There have been a number of developments in relation to this so watch this space for more updates and blogs specifically relating to the Bill.

June 2012

The Equality and Human Rights Commission (EHRC) published its report “A Perfect Partnership” which reported that disabled people were still put at a disadvantage in the workplace and that employers were confused by what disability means, who is disabled and what support disabled workers might need.

Recommendations within the report were that employers should try to anticipate what adjustments and support may be needed from the outset of employment by manager led discussions and issuing a questionnaire for new starters. I

t also recommended that flexible working should be offered as an option for disabled workers and applicants.

Any employer choosing to use a questionnaire should ensure that the questionnaire does not discriminate against the disabled employee or they may face a substantial claim in the Tribunal.

July 2012

Royal Mail worker Abdul Musa, who was supported by the EHRC, was awarded an undisclosed amount of compensation after successfully showing that he had been dismissed for blowing the whistle on racist behavior.

Employers must ensure that they investigate any complaints made by employees in a timely fashion and must ensure that their Equality policies are up to date and adhered to. The costs of not could be significant.

October 2012

Employers must automatically enroll certain workers into a pension scheme and must pay a minimum level of contributions.

Lap dancing employees?

To qualify to bring a claim against your Employer in the Employment Tribunal, you must, amongst other factors, be an “employee” of the Company, employed under a “Contract of Employment”.

Many employers have made strenuous attempts to try and limit their risk to Employment Tribunal claims by hiring people on, what they say is, a “self-employed” basis, which is normally done by having them enter into complex agreements, which actually have very little resemblance to how the relationship works in practice. Such people are told they have to agree to pay their own tax and national insurance and go without paid holidays. People looking for work often have very little choice but to accept the agreement presented to them.

However, Tribunals are well aware of this power imbalance and take it into account when considering what the correct legal relationship is and establishing whether a person has “employee status”.


However, in an unusual recent case involving a lap dancer at Stringfellows restaurants, there were various documents including the Club Agreement, House Rules, Booklet, license and the Rota. She was described in these as self employed and believed initially that was the case. She only worked on certain nights of the week and danced in accordance with the Rota. However, she was not paid directly by Stringfellows, and instead received vouchers direct from customers, which she then exchanged for cash, having taken into account certain expenses (dress repairs/makeup etc).



After being dismissed from her role, she brought a claim against Stringfellows in the Employment Tribunal, on the basis that she did qualify as an employee. The Employment Appeal Tribunal decided that once there was a contract for paid work, the only issue was whether there was the degree of control necessary to make it into a "contract of employment".



This case once again emphasises the importance of 'control' in determining in many instances what the correct legal position is and whether "employee status" can be established.

If you have control over what, when and how often you work, then you are probably self employed, but if you cannot make these decisions, then there is a substantial likelihood that you are in fact an employee whatever the paperwork says.

New Year - New Changes!

The Law is forever changing in Employment, so here are a few of the key changes Employees and Employers should watch out for this year…

The Awards for Unfair Dismissal Claims are due to rise!

The maximum awards for Unfair Dismissal claims are due to rise in February. As mentioned in our last Blog, this is due to the maximum weekly pay rising from £400 to £430, which in turn means the maximum Basic Award will rise from £12,000 to £12,900 and the maximum Compensatory Award from £68,400 to £72,300.

The rise in Tribunal Awards means Employers should be all the more careful to ensure that they follow the correct Disciplinary and Dismissal Procedures, so as to avoid Employees being able to bring a successful claim in the Tribunal.

Note: The increase in weekly pay will also affect the maximum claim for Redundancy, which will also now rise from £12,000 to £12,900.

The Right to Claim Unfair Dismissal – Good for Employers, bad for Employees

The minimum length of time that an Employee must have worked for their Employer in order to qualify to make a claim for Unfair Dismissal is due to rise in April from one year’s continuous service to two years. Therefore, although the Awards for Claims are rising, the number of claims being made is likely to fall.

Increase in Rates

Also in April, the weekly rates of Statutory Maternity, Paternity and Adoption Leave Pay are due to rise from £128.73 to £135.45. The rate of Statutory Sick Pay will also rise from £81.60 to £85.85.

More Scope for Parents

As from April, parents will now be entitled to take a period of up to four months unpaid Parental Leave, instead of only three months.

Employees should however always refer to their individual Contracts of Employment to see what restrictions or conditions, if any, have been put in place with regards to when and how often the unpaid leave can be taken.

Big Businesses, Big Pensions

As from October, businesses with more than 120,000 employees should ensure their employees are ‘automatically enrolled’ into a pension scheme. It is believed that the ‘automatic-enrollment’ will gradually be introduced to businesses with fewer employees over time.

Tribunal Awards set to increase from February 2012

Just as everyone starts to enjoy some festive cheer, details of how Tribunal awards are going to increase are released.

As from 1st February 2012, new limits for compensation will come into force.

The main changes that employers need to be aware of if that for anyone making a claim in the Tribunal , the maximum rates that they will be able to recover will increase. Largely the increases are in line with the Retail Price Index but even so, any claims that need to be met are going to become more expensive.

The maximum amount that can be awarded for a week s pay will increase from £400 per week to £430 per week, in turn meaning that the maximum compensatory award that the Tribunal will be able to make will increase by £3,900 to £72,300.

Time to cancel Christmas

Cancelling the Christmas party this year might not just save you money in these tight economic times but it may also save you ending up in the Employment Tribunal.

If you are going to celebrat Christmas still and you will provide drinks at the office party, limit the number of free drinks and make sure there are plenty of non alcoholic choices available. This will avoid any issues of religious discrimination. Be prepared to send an employee home if their conduct becomes inappropriate.

Remember that employers can be held responsible for employee’s actions during and after the Christmas party. If your employees have been drinking make sure that they don’t drive home, especially in the Company vehcile, and give some thought to providing pre-arranged transport. It doesn’t have to be at your cost but paying for a cab or mini bus could save you a lot in the long run.

Driving whilst under the influence of drink or drugs in the course of employment can have serious consequences for an employer at Christmas, or any other time. If your employee causes a death as a result of driving under the influence you as the employer can be held liable and the Courts have the power to order huge fines that could bankrupt a small company. Even worse, you could be faced with a prison sentence for corporate manslaughter.

If you are planning on decking the halls of the office with boughs of holly you must also be aware of health and safety issues. The Royal Society for the Prevention of Accidents last year reported that over 1,000 people were injured by unsecured Christmas trees. If you are planning on party balloons, just be aware that over 3.6million people have a latex allergy.

Needless to say, it is essential to make sure that you have an up to date policy and a no-nonsense approach to disciplining any employee found to have acted untowardly at any Christams party or indeed even in the office and it is essential those who are found to be driving whilst under the influence are dealt with swiftly and fairly. Getting this right isn’t just for Christmas.

The cost of illness

With the cold weather about to start again it is inevitable that employers will be faced with staff illnesses but employers need to be aware that having a good sickness absence policy is key to making sure that employees are monitored appropriately.

It is estimated in the UK that about 172 million working days are lost due to sickness every year, costing the economy around £13 billion. Even with such high numbers it is estimated that there are still 28% of employers who do not have a formal sickness reporting procedure.

Employers must make sure that they have a sickness absence policy setting out clearly who to report, by what time they should report any absence and how they should report their absence. Employers should make sure hat they ask the employee what’s wrong, how long they think they will be off for and make a proper note on their personnel file. All line managers should know what the policy is and actively apply it.

If it looks like an employee may be off for sometime, make sure that you keep in contact with them and keep them fully informed about their entitlement to sick pay, contractual and otherwise. Be flexible and try and encourage an employee back to work by making simple changes to their role or workplace if necessary and consider a phased return to work.

When employees do come back, there should be a quick return to work interview, where they are asked about the cause of their absence. Again keeping g a proper note of the return to work and asking the employee to sign means that you will always have something to refer back to if you think that their absence is becoming a problem.

If people are regularly off sick and there is a pattern to their absence you need to speak to them sooner rather than later but be sure of the issues. For example work out a percentage of time off compared to others. Speak to them in private and ask them what the problem is.

It may be that they are off on regular occasions as a result of something that you can help them with, for example unfavourable behaviour by another employee or concerns about their work or workload. If it appears that there is no acceptable explanation behind their absences then tell them that if their attendance doesn’t improve then the next step will be disciplinary action.

Employers able to save £6 million

The Business Secretary Vince Cable and the Chancellor George Osborne this week announced changes to bringing unfair dismissal claims which could save employers across the country, nearly £6 million per year.

As from 6th April 2012 the qualifying period for bringing an unfair dismissal claim in the Employment Tribunal will be increased from 1 year to 2 years.

The Tribunals were originally set up to ensure that there was a cheap and relatively easy way for employees to bring claims against their employers without the need to go to the courts. The current government now intend to bring in charges to the Tribunal which will make them expensive and out of the reach of some.

When a claim is lodged in the Tribunal an upfront fee of £250 will need to be paid and a further £1,000 will be payable where a hearing is listed. If the damages sought are going to be in excess of £30,000 then the fees will be higher.

Although the fees will be refunded where a claim is successful, if a person remains out of work then the costs are likely to put a significant number of people off bringing a claim, even if their claim is not vexatious. Potentially the announcements could mean that employees are going to be unable to enforce their rights but it was also announced that those with no money would have the fee waived. There is very little detail at this stage as to who would qualify for the fees to be waived although perhaps the most likely way of assessing this is that those receiving income support will qualify.

The reality of the announcements are that although employers will have a longer period of time within which to see whether an employee is performing appropriately, they should be very wary that there may well be an increase in the number of discrimination claims on the basis that there will still be no qualifying period for such claims.

As always with such announcements more details will follow.