Applying the Employment Act 2002

THOROGOOD PROFESSIONAL INSIGHTS

A SPECIALLY COMMISSIONED REPORT

APPLYING THE EMPLOYMENT ACT 2002 CRUCIAL DEVELOPMENTS FOR EMPLOYERS AND EMPLOYEES

Audrey Williams

THOROGOOD PROFESSIONAL INSIGHTS

A SPECIALLY COMMISSIONED REPORT

APPLYING THE EMPLOYMENT ACT 2002 CRUCIAL DEVELOPMENTS FOR EMPLOYERS AND EMPLOYEES

Audrey Williams

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About the author Audrey Williams qualified as a Solicitor in 1989 and is now a Partner in the Employment Law Team at Eversheds. She is a Member of the Chartered Institute of Personnel and Development. She has particular expertise in Discrimination, Harassment, Equal Pay and Disability Discrimination. Whilst the majority of her work is conducted on behalf of employers, she has represented employees in a number of key discrimination cases, including one of the first transsexual discrimination cases. Audrey also undertakes cases for the Equal Opportunities Commission in Wales. Audrey has particular experience of undertaking advocacy in large and complex tribunal cases on unfair dismissal and discrimination – the longest running to 13 days! Frequently undertaking reviews of equal opportunities, maternity, harassment, discipline, grievance and counselling policies, Audrey has assisted Clients in providing training to establish these policies within the workplace. She has written a number of books on aspects of employment law including Croner’s Guide to Contracts of Employment (which she co-authored). She is a regular contributor to the Law at Work column in the IPD’s People Management magazine, CCH’s Management Newsletter and Croner’s Discrimination and Pay & Benefits Briefings. Audrey’s latest publication with Jordans is Harassment At Work, written in conjunction with two Eversheds colleagues. She is a member of the Employment Lawyers Association, Discrimination Law Association and the Institute of Directors, and is a listed expert in both ‘Chambers & Partners’ and the ‘Legal 500’.

THOROGOOD PROFESSIONAL INSIGHTS

Contents

Implementation table .................................................................................vi Introduction..................................................................................................1

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DISCIPLINARY PROCEDURES AND UNFAIR DISMISSAL RIGHTS

3

Introduction..................................................................................................4 All employers ...............................................................................................6 Notification to employees ...........................................................................6 Contractual right to statutory procedures................................................8 Significance of the contractual term..........................................................8 The employer’s procedures.........................................................................8 The statutory disciplinary procedure ........................................................9 The impact on unfair dismissal claims ....................................................11 Impact on unfair dismissal awards..........................................................14 When will the new procedures have to be applied?..............................18 Grievance procedures ...............................................................................18 Action points ..............................................................................................23

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FLEXIBLE WORKING

24

Introduction................................................................................................25 Eligible employees? ...................................................................................26 Types of flexible working ..........................................................................27 The procedure ............................................................................................28 Refusing the request..................................................................................30 Limited recourse the Employment Tribunal ..........................................31 Tribunal compliant – time limits ..............................................................31 Range of working arrangements ............................................................32 Future protection ......................................................................................32 Action points .............................................................................................33

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NEW FAMILY RIGHTS

34

Introduction................................................................................................35 Maternity leave entitlement ......................................................................37 Adoption leave rights................................................................................43 Paternity leave and paternity pay ............................................................48 Action points ..............................................................................................51

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FIXED-TERM WORKERS

52

Introduction................................................................................................53 Who is protected?......................................................................................54 What rights are provided?........................................................................55 Permissible inequality ...............................................................................57 Complaints about less favourable treatment..........................................59 Legal changes to the contract itself/re-writing the fixed-term contract..............................................................................59 Detrimental and less favourable treatment outlawed............................62 Redundancy exclusion – repealed............................................................64 Conclusion ..................................................................................................64 Action points ..............................................................................................65

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EQUAL PAY QUESTIONNAIRES AND OTHER CHANGES

66

Introduction................................................................................................67 Equal pay questionnaires..........................................................................69 Key points for a complainant ...................................................................71 Obligations on the respondent.................................................................72 Confidentiality ............................................................................................73 The guidance notes....................................................................................74 Additional changes....................................................................................74 Changes to damages .................................................................................76 Procedural changes ...................................................................................77 Implementation dates................................................................................78 Action points ..............................................................................................78

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EMPLOYMENT TRIBUNAL CHANGES

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Encouraging conciliation ........................................................................81 Employment Tribunal forms ...................................................................82 Practice directions ...................................................................................83 Speeding the Tribunal process ...............................................................83 Extended power to award costs .............................................................84

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TRAINING AND SKILLS

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Introduction ...............................................................................................88 Work focused interviews .........................................................................88 Union learning representatives ...............................................................89

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CONCLUSION

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The Act received royal assent on the 8th July 2002.

Implementation table New Provision

Due Date

Fixed-term employees – new rights

1st October 2002

Improved maternity rights (pay and leave)

6 April 2003

Paternity leave

6 April 2003

Adoption leave

6 April 2003

Union learning rights

2004 Onwards

Change to the unfair dismissal laws

Late 2003

Obligation to pursue grievance

April 2004

Right to statutory disciplinary procedure

April 2003

Equal pay questionnaires

April 2003

Change to damages /remedies in equal pay claims

July 2003

Procedural changes in equal value claims

December 2003

Right to request flexible working

April 2003

Changes to Tribunal rules:

April 2004

•

costs;

•

adjustments to awards.

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INTRODUCTION

Introduction The Employment Act 2002 received royal assent on the 8th July 2002, however, many of its key provisions do not take effect until 2003. In many ways, to describe the provisions contained within the Act or indeed the piece of legislation itself as the Employment Act 2002 is a misnomer. The main effect of the Act is to amend the existing employment rights contained in key legislation, in particular the Employment Rights Act 1996 and the Trade Union and Labour Relations (Consolidation) Act 1992. Thus, it is largely an enabling piece of legislation rather than an Act in its own right. By reason of the fact that its affect is to amend existing employment laws and Acts of Parliament, it covers a range of different subjects. It would be true to say that there is in fact no common theme. It covers subjects as diverse as: •

flexible working;

•

family rights (adoption, paternity and improved maternity leave);

•

changes to internal disciplinary and grievance procedures;

•

significant changes to unfair dismissal legislation;

•

new rights for those employed on fixed-term contracts; and

•

the introduction of new rights for learning representatives from an employer’s trade union.

In this publication, we will examine each of the key developments where the Act will change existing provisions, or introduce new rights, and each chapter will deal with discreet areas. In some cases the provisions being introduced have not been comprehensively outlined in the Act itself. Recent legislative history demonstrates a growing practice of introducing new provisions and rights by way of statutory regulations (statutory instruments) rather than a formal Act of Parliament; in many areas, the Employment Act 2002 simply enables the Secretary of State to lay certain regulations introducing the new rights, with the detail being contained in separate regulations themselves. In some cases, these detailed regulations are either still in draft form or indeed the detail is still being awaited. From the Government’s perspective, the Employment Act 2002 is aimed at creating a “........... highly productive, modern and successful” workplace, with

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INTRODUCTION

the emphasis being on fairness and partnership at work; “it will deliver a balanced package of support for working parents, at the same time as reducing red tape for employers by simplifying rules governing maternity, paternity and adoption leave and pay, and make it easier to settle disputes in the workplace”.1 It will be interesting to see whether these aspirations are met once the new provisions take effect. For employers, significant new rights will have to be granted to those with family responsibilities and this is not just limited to family related time-off. Working patterns and working arrangements will have to be revised and individual requests seriously considered, where a particular employee needs adjustments to balance work and home life. Moreover, a common working arrangement in the current climate, which has significantly increased in the last few decades, is the use of employees on fixed-term contracts, rather than appointments as permanent members of the workforce. Employers who adopt practices of this nature will in future find that their contractual arrangements are not only regulated by key provisions in the Employment Act and related regulations, but terms which have been contractually agreed between employer and employee will be varied and affected by these legal obligations. Of all of the provisions contained within the new Act, it is probably these areas where the most impact will be felt. Finally, the proposed changes to internal disciplinary and grievance obligations, extension of tribunal powers and variation to well established unfair dismissal legislation, is the Governments response to the huge increase in Tribunal claims since unfair dismissal protection was first introduced. The latest ACAS Report (2001/2002) demonstrates that although it is often claims of discrimination which hit the headlines, the majority of tribunal claims are for unfair dismissal. ACAS’s Annual Report for 2001/2002 identifies that in that year alone 137,500 tribunal applications were referred to them; this contrasts with 38,590 in 1985. The Employment Act’s provisions in part seek to encourage both employers and employees alike to resolve matters internally (through use of grievance and disciplinary procedures satisfying the bare minimum) rather than through recourse to tribunal proceedings. The resulting impact on the number of tribunal claims will make interesting reading.

1 DTI Guidance on the Employment Act 2002 dated 17.07.2002

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Chapter 1 Disciplinary procedures and unfair dismissal rights Introduction............................................................................................4 All employers .........................................................................................6 Notification to employees .....................................................................6 Contractual right to statutory procedures..........................................8 Significance of the contractual term ...................................................8 The employer’s procedures ..................................................................8 The statutory disciplinary procedure ..................................................9 The impact on unfair dismissal claims ..............................................11 Impact on unfair dismissal awards....................................................14 When will the new procedures have to be applied?........................18 Grievance procedures .........................................................................18 Action points ........................................................................................23

Chapter 1 Disciplinary procedures and unfair dismissal rights

Introduction One of the aims behind the Employment Act 2002, is to reflect the Government’s wish to introduce mechanisms to encourage employers and employees to resolve workplace issues without recourse to Employment Tribunals. Since their inception, Employment Tribunals have been intended to provide a quick and inexpensive method of resolving workplace disputes. The reality however, has been quite different. This has partly been as a consequence of the increase in rights given not just to employees but also to workers. In addition, membership of the European Union has brought with it additional European labour rights and indeed European case law. Both developments are against the backdrop of an increasingly sophisticated society, where individuals not only know their rights, but (some would argue) are more prepared to challenge and litigate to achieve them. The latest report, issued on an annual basis, through the Advisory Conciliation and Arbitration Service identifies that the number of tribunal claims has increased more than ten fold in the last ten years. According to the most recent ACAS Annual Report for 2001-2002, a total of 137,500 cases were issued at the Employment Tribunal in that year; of these, 46,420 concerned unfair dismissal and 26,420 breach of contract. In 1985 this figure was 38,590 and in 1998, 81,894.(Explaining the Growth in the Number of Applications to Industrial Tribunals 1972-1997, DTI Employment Relations Research Series No 107- Burgess, Propper & Wilson). The increase is self evident. One of the very first rights which Employment Tribunals were given to deal with, were those of unfair dismissal. These rights have not changed substantially over the years, although those who have gained the right to claim unfair dismissal as a population has changed through the qualifying period (the minimum period for which you have to be employed before you gain your unfair dismissal rights); this initially started at 6 months, moving to 2 years and was changed again, following a European law challenge, to 1 year.

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There has also been a trend of increasing rights being provided when an individual does not have to have any minimum period of employment or service, where automatic unfair dismissal applies if the reason for dismissal is based on unlawful grounds: for example trade union membership. Unfair dismissal rights being a basic tenet upon which the tribunal process is based, have thus changed very little over the years, although significant cases which effect the interpretation of the rights which individuals are given, have appeared regularly. The 2002 Employment Act will have a quite revolutionary effect, not just on the unfair dismissal laws themselves – seeking to make changes to principles established by case law – but introduces for the first time minimum rights and indeed minimum obligations on an employee, which should be provided and observed before dismissal or resignation. Before these new rights come into effect, the limited obligation on an employer was to notify to an employee the following: •

details of any disciplinary rules which apply to their employment or refer them to a document containing these rules; and

•

identify who would deal with any matters of discipline if he or she is dissatisfied, i.e. any management responsible for dealing with appeals against discipline.

Moreover, employers with less than 20 employees currently do not even have to provide this information. The new rights, likely to come into effect in early 2004: •

will require more specific and detailed information to be provided;

•

will apply to all employers;

•

will extend beyond disciplinary rules and appeal rights, to require minimum stages to be followed as part of any disciplinary process; and

•

will, for the first time, place upon the employee obligations and indeed penalties for a failure to utilise the procedures.

The general regime, particularly in the case of an employer who fails to either apply their own disciplinary procedure or follow a process which could be considered to be fair, was a finding of unfair dismissal but there were no specific penalties dealing with efforts to avoid or indeed, short circuit the process in any particular case.

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Before examining the minimum requirements which will apply, it is worth dealing with some initial observations regarding the scope of these new provisions.

All employers Section 36 of the Employment Act 2002 will, when enacted, mean that what were previously termed small employers with less than 20 employees, will no longer be able to rely upon the exemption contained in the Employment Act 1996. All employers regardless of their size will have an obligation to notify employees about the disciplinary rules and procedures and those to whom they can appeal. Moreover, the minimum procedures set out within the schedule to the Employment Act itself, will have to be adopted and applied as a minimum again by all employers regardless of size. As this might suggest, the statutory minimum disciplinary procedure, i.e. that set out in Schedule 2 of the Act, is the standard below which no employer should fall when dealing with matters of discipline within their organisation.

Notification to employees In future all employees will remain entitled to receive a written statement of the minimum employment particulars (as set out in sections 1 to 4 of the Employment Rights Acts 1996). This information is commonly known as the Section 1 Statement. However, when addressing matters of discipline, such a notice will now have to include: •

as previously, details of any disciplinary rules applicable, whether by listing them or providing the employee with information as to where such rules can be accessed;

•

identifying the person to whom the employee can apply or appeal, in respect of any disciplinary action; and

•

as a new provision, the section 1 statement must also identify any procedure which is to be applied when matters of discipline arise.

This latter information regarding procedure can either be provided by setting out the procedure itself within whatever document comprises the section 1 statement (commonly an offer letter or the contract of employment itself) or alternatively, as with disciplinary rules, it should tell the employee where they can gain access to this procedure. Importantly, this information must be provided,

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not just in relation to matters of discipline, but specifically the employer must outline the procedure, rules and persons responsible for dealing with any appeal, where matters of dismissal are concerned. Under the existing law it is perfectly acceptable for an employer to provide the disciplinary information in a document other than the offer letter or contract. It can, for example, be provided in a collective agreement or another document (such as a staff handbook) provided the employee has an opportunity of reading it or it is made accessible. In practice, it is not uncommon for employees to be told that they can get this information via the Human Resources Department or indeed, from their particular department manager. Strictly the obligation also states that this minimum information (and indeed the other details required under the 1996 Act) should be provided not less than 2 months after the employee’s employment commences. In case there were any doubt, a new section 7A has been introduced by the 2002 Act, to confirm that it is perfectly permissible for this information to be lawfully provided, in compliance with sections 1 to 5, if given before the employment starts in the form of a contract or letter of engagement (section 7B).

Failure to give particulars The penalty if an employer fails to provide this minimum information is that the employer will be penalised and ordered to make a payment by the Employment Tribunal. The amount is at the discretion of the Tribunal, although there is a minimum which must be paid and which can be increased if considered just and equitable by the Tribunal. The minimum penalty is two weeks pay and the higher or maximum amount, 4 weeks pay. The only situation in which an Employment Tribunal can decide not to order this compensation is where there are ‘exceptional circumstances’ such that making this order would be unjust or inequitable. Precisely what amounts to exceptional circumstances are not defined but certainly the way the Act is structured, simply because the individual might lose their unfair dismissal case, does not mean that they should not be given this minimum award because of the employer’s separate failure to provide the written particulars. It should be borne in mind that a week’s pay for these purposes is calculated according to the specific detail and formula set out in the Employment Rights Act 1996 with which readers will be familiar. It will be the actual week’s pay which the individual has subject to the maximum cap which is applicable at the relevant time. The current week’s pay maximum (from 1 February 2003) is £260.

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Contractual right to statutory procedures So far the above provisions are all focussed on the requirement to notify the disciplinary procedure applicable. However the new provisions go beyond simply ‘tinkering’ with the notification rights of employees. For the first time employees have a right to a minimum disciplinary procedure which must be followed before disciplinary action or dismissal is taken. More importantly, by section 30 of the Employment Act 2002, this statutory procedure becomes a contractual right not just for the employee but also for the employer. In effect the statutory disciplinary procedure becomes a term of the contract of employment as does the need to ensure that it is followed, adopted and implemented when matters of discipline arise.

Significance of the contractual term It is important to observe that the right to ensure application of the statutory disciplinary procedure is one not just of the employee but also of the employer. This means that individuals have certain obligations to comply with and observe the procedures which are in place. We will examine the obligations which each party to the contract carries as a consequence later.

The employer’s procedures It is important to bear in mind that the statutory disciplinary procedure is in place as the bare minimum, or the floor below which procedures operated within the work environment cannot fall. In fact the Act expressly states that nothing shall prevent an employer from operating more detailed procedures or procedures tailored to the specific organisation. Many employers, for example, have separate capability procedures (where matters of poor performance arise or absence and ill health) where the process followed and the steps involved (for example, warnings and meetings) might differ, for example, from a misconduct procedure. This is all perfectly permissible under the new legislation provided that each and every procedure adopted does not fall below the minimum steps and requirements. Thus there is nothing to prevent an employer from adding to the process, whether through more stages, steps or increasing the number of members of management involved. What is not permissible is to reduce the minimum obligations.

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The statutory disciplinary procedure To be accurate there are actually 2 statutory disciplinary procedures which must be followed dependent upon the circumstances. They are labelled the standard procedure and the modified procedure. The standard procedure is the one which should apply to all matters where disciplinary action is being taken against the employee whether for matters of conduct ‘characteristics’ or ‘other circumstances’. This therefore, encompasses all the situations in which an employer might envisage issuing a warning, taking disciplinary action against the employee or dismissing someone. The modified procedure applies where dismissal for misconduct has already taken place and is limited only to matters of misconduct itself, more likely in actual fact to be serious or gross misconduct. There will be further regulations (not as yet available) to explain when the statutory procedure is to be used.

Standard procedure There are three main parts to the standard procedure, firstly the pre-warning to the employee, secondly a meeting and thirdly the right of appeal. The obligation is as follows: STEP 1 the employer must first set out in writing a statement of the conduct or concern that he has which has triggered the decision to contemplate taking disciplinary action or dismissal. That statement must be sent or copied to the employee together with an invitation to a meeting. STEP 2 is the meeting itself. This must take place before any action is taken, although the provisions recognise that an employee may be immediately suspended prior to being issued with the formal notice convening the meeting and statement outlining the concern. The procedure makes clear that the meeting should not occur until the employee has been given the statement outlining the conduct or concern that has arisen and has had a reasonable opportunity to consider his response. Bearing in mind what was explained earlier, that the contractual entitlement is one applicable to both employer and employee, the standard procedure requires that the employee should take all reasonable steps to attend the meeting. The extent of the employee’s obligations flow through to the penalties which apply and are available to the Employment Tribunal for an employer, or indeed an employee’s, failure to follow the standard procedure.

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Once the meeting has taken place, the employer must inform the individual of the decision and of their right to appeal. Although this does not have to be a notice in writing good practice would certainly encourage this. Under existing law employees already have the right to request written reasons for dismissal. STEP 3 deals with the appeal. The employee who wishes to appeal must inform the employer, and if he does so, the employer has an obligation to convene an appeal meeting. Again the employee must take all reasonable steps to attend that meeting and at the end of the meeting the employer must inform the employee of the final decision. This comprises the bare minimum in terms of process. It is interesting that the standard procedure does not outline in any way the content and form of either the disciplinary meeting or indeed the appeal hearing. Neither does existing legislation, save that there is already an existing right on the part of an employee to be accompanied by a trade union or work colleague, at any disciplinary, or disciplinary appeal, hearing. Employees do already have the right to be accompanied by a trade union representative or a work colleague, under section 10 of the Employment Relations Act 1999. Again there is an obligation on the employee to take all reasonable steps to attend the meeting. Whilst specific timescales are not set out, the provisions rely upon the need for reasonableness and also make clear that where the employer is convening an appeal hearing in compliance with the statutory standard procedure, this does not mean that the action decided upon cannot be implemented. Thus, a decision taken to dismiss can take effect and be implemented before the appeal hearing occurs.

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Modified procedure The second more streamlined procedure is really an attempt to provide minimum rights within the workplace to a fair hearing, by way of an appeal hearing. It applies where dismissal has already taken effect or been decided upon but only where that is by reason of misconduct. There are only 2 stages to the modified procedure: STEP 1 the employer must set out in writing the misconduct which has led to the dismissal, the grounds upon which he concluded the employee was guilty of that misconduct and the right to appeal. Again that statement must be sent or copied to the employee; STEP 2 an appeal must be offered to the employee who, if he wishes to appeal, must inform his employer and make reasonable steps to attend the appeal meeting. The employer once notified that the individual is exercising the right to appeal, must invite him to a meeting and notify the employee of the final decision after that appeal meeting has occurred.

The impact on unfair dismissal claims These two disciplinary procedures themselves contain nothing revolutionary (indeed many employers would take measures well beyond the statutory minimums and aim to follow existing ACAS Guidelines: see Discipline at Work). It is the impact of the failure to observe the minimum that is startling. There are two key provisions applicable specifically to disciplinary or dismissal action where the statutory procedure has not been observed: 1

on the unfair dismissal finding itself; and

2

on the compensatory award which can be made.

Unfair dismissal consequences A failure on the part of the employer to follow the statutory procedure renders the dismissal automatically unfair without any possible defence. It is important to bear in mind however, when deciding what procedures to adopt, that to complain of unfair dismissal in the first place an employee must still have one year’s continuous employment. Providing an employee has one year’s service, where the employer has failed to implement the statutory disciplinary procedure before dismissing (or confirming the dismissal after appeal) that failure to follow the procedure shall render the dismissal unfair.

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Where however, the employee is complaining of automatic unfair dismissal – that he has been dismissed on prohibited grounds – he does not need one year’s employment for the main claim or the breach of procedure part of the complaint. Currently, automatic unfair dismissal rights attach to claims where the individual can establish that he has been dismissed for any of the following reasons: •

asserting a statutory right;

•

being trade union, health and safety or employee representative or pension trustee; or

•

discrimination (race, sex or disability).

This effectively introduces a new right to claim unfair dismissal. Until now, one could challenge dismissal decisions as being unfair if the reason was erroneous or false, or if a decision was unreasonable. Whether or not the disciplinary procedure or indeed a correct procedure had been followed, was a factor in assessing whether the decision to dismiss was reasonable, in accordance with equity and therefore overall fair or unfair. However, under the new regime an employer cannot argue that the procedure was reasonable overall and fair if that procedure itself did not involve the minimum (statutory steps). A Tribunal is not obliged to make a finding of unfair dismissal. However, where the employer met the minimum procedure but fell down on other aspects or parts of its own process, provided of course that the employer can show that there is a fair reason to dismiss the tribunal may find this way. The statutory five fair reasons are: 1

Conduct;

2

Capability;

3

Redundancy;

4

statutory bar; or

5

some other substantial reason.

Where the statutory minimum was met but other procedural failures occurred, the assumption (under the new section 98A) will be that the dismissal is indeed unfair unless the employer can demonstrate that the dismissal decision would have been the same, even if he had followed the procedure. Previously, whilst the employer defending a claim for unfair dismissal carried the burden for establishing the fair reason, the second part of the test (whether the dismissal was reasonable) carried a neutral burden.

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The situation will now be different provided the employer satisfies the minimum statutory tests, where he failed to follow his own procedure. It must be borne in mind as outlined previously, that the legislation expressly permits additional stages and enhanced procedures to be introduced and adopted. In encouraging employees to have in place more sophisticated procedures, the Act makes clear that employers will not be penalised for failing to follow their own additional processes. Generally speaking, the significance of procedures has become more important in unfair dismissal law since there inception. Issues such as consultation with the employee in a redundancy situation and giving the employee the opportunity to defend himself, have become extremely important. The established position is that if an employee persuades the Tribunal that there has been a failure to follow a fair procedure, an employer could not argue that following that procedure would have made no difference and thus the dismissal should still be deemed fair. The only argument open to an employer involved a much higher burden of establishing that following that procedure would have been utterly useless, in the sense that it would have served no purpose (Polkey v A E Dayton Services Limited [1987] IRLR 503). Under the new Act, failing to follow the procedure will not mean the employer’s actions are unreasonable and the dismissal could still be deemed fair, if it can be demonstrated by the employer, that he would have decided to dismiss even if he had followed his own procedure in full (section 98 A (2)). Clearly not following ones own procedure thoroughly will carry a risk for the employer and may lead the decision to be open to challenge. A more cautious and safer route would be to ensure that the fullest procedure possible (and indeed that established within the organisation and the existing ACAS Code of Practice) has been followed; this places the employer in the most secure position. Having said this, under the new provisions, provided the statutory minimum has been met all will not be lost and the employer is left with a defendable position. What will not be accepted, and thus the ‘stick’ being used to encourage compliance, is failure to observe the statutory minimum.

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Impact on unfair dismissal awards The consequences of failing to follow the statutory procedures are not just limited to the findings on the dismissal (automatically unfair). An employer who does not follow the statutory minimum risks may not just have a finding of unfair dismissal against him, but having to pay more because additional financial penalties are also part of the new regime. An employment tribunal makes two types of award in an unfair dismissal claim where the individual is successful (assuming reinstatement / re engagement is not sought or ordered): •

A basic award, which is equivalent to the statutory redundancy payment.

•

A compensatory award. This latter award is calculated by assessing the former employee’s loss of salary, benefits and costs of seeking further employment. Off set against it will be any new earnings which the employee has obtained. The Tribunal will make an assessment as to whether an individual might continue to suffer financially as a result of their unfair dismissal. The current maximum for unfair dismissal awards is £53,500.

A minimum basic award of four weeks’ pay will be ordered (save in exceptional circumstances where this would be unjust to the employer). In addition, in future the compensatory award will attract an uplift if the employer, in addition to unfairly dismissing, has failed to follow statutory procedures. This is an automatic uplift. On this occasion, unlike the penalties for not providing disciplinary information, the increase is not limited to additional weeks of pay but is calculated by reference to a percentage of the compensatory award. The amount of the uplift is a minimum of 10%. Beyond this however, the Tribunal has been given discretion to increase the award; when and by how much is left up to them. More than 10% can be awarded where this is ‘equitable’, and anything up to 50% uplift can be made. So, for example, if the ex-employee’s compensatory award is calculated at £20,000 the employer can be ordered to pay £22,000 as a minimum for failing to adopt the statutory minimum procedures, or up to £30,000 depending on the seriousness of the breach (plus any basic award). Until such time as Tribunals have begun applying these new powers, it is difficult to predict in what circumstances uplifts beyond 10% may be ordered. One can envisage circumstances where the employer disregarded all the steps within the statutory disciplinary procedure attracting the maximum uplift, whereas the

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minimum might well be considered appropriate if the employer has breached the procedure in a technical way. For example, the employee has been informed of the circumstances of their misconduct and invited to a meeting, but they have not been given the details of the circumstances of that misconduct or they have not been provided with it in writing.

Employee penalties The framework of this new legislation is very much ‘carrot and stick’. So far we have examined primarily the obligations on the part of the employer which have been adopted as a means of encouraging the notification and implementation of fair processes. From the employees point of view however, there is a ‘carrot’ which the new provisions provide them with, to encourage individuals to attend at any disciplinary meeting and make reasonable efforts to appeal. As we have previously stated, section 30 of the new Act does make it clear that every contract of employment contains the modified and standard statutory disciplinary procedure and that compliance is required not just by the employer but the employee as well. In the employee’s case, if the statutory disciplinary procedure was not completed (perhaps the meeting did not take place because the individual failed to attend, or did not attend at the appeal hearing) then the amount of the compensatory award must again be reduced by the minimum 10%, with a discretion to decrease by up to 50%. Thus an employee who disregards the options that are available to him under the employer’s disciplinary processes, does so at his peril. Using the same example adopted above, the ex-employee’s £20,000 could be reduced to £18,000 (10%) or to £10,000 (50%). This provision and penalty on the employee is not altogether new. Section 1 – 7 (A) Employment Rights Act 1996 (failure to appeal) had provided a right in the employment tribunal to reduce the compensatory award by 4 weeks pay, where an individual failed to exercise their right to appeal under the employer’s disciplinary procedure. In reality however, this power has been rarely used and will be repealed to be replaced by the new Section 30.

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The calculation itself The 10% uplift, or 10% reduction, under the new provisions is considered the minimum which the Tribunal should order but even this uplift or reduction can be made less in rare circumstances. The provisions expressly say that if there are exceptional circumstances which would make 10% increase or reduction unjust or inequitable, the Tribunal may substitute that figure for a lesser percentage. Finally, when considering the impact on the awards itself, it will be recalled that there is a further penalty which may be levied of between 2 and 4 weeks pay where an employer has failed to issue employees with the minimum disciplinary information. Section 31 (5) of the Act makes it clear that, for example, any uplift should not be made to the 2-4 week penalty so that in effect an employee would obtain up to 6 weeks for the failure to issue disciplinary rules and information. The 10% or 50% adjustment is to be made first to the compensatory award, and then the Tribunal must add any additional penalty of the minimum 2 weeks or maximum 4 weeks pay. It might be significant, from an employer’s perspective in particular, when undertaking any risk assessment or financial contingencies are being planned, to bear in mind that the maximum award still applies at which all unfair dismissal claims are capped. This means that the compensation will be calculated, the reduction or increase by the percentage ordered by the Tribunal will be made and then the maximum limit applied: currently £53,500 as of 1 February 2003.

Order of deductions Section 39 of the Act makes clear that the penalty (whether the increase against the employer or the decrease to penalise the employee) is to be applied before adjustments or deductions for contributory fault, or any enhanced redundancy payment is accounted for. Under Section 123(6) of the Employment Rights Act 1996, where a tribunal finds that an employee’s actions contributed to his dismissal and was blameworthy, it may reduce the compensatory award by such amount as it considers just and equitable. Examples where this has been done include cases where the employee only has himself to blame for infringing rules of conduct. The amount of any reduction can range from a fixed amount or, more commonly, a percentage – from 2% to as much as 50% and, in rare cases, 100%. Where a percentage uplift or reduction occurs for failure to follow the statutory procedures, the compensatory award is first adjusted for this breach and then for contributory fault.

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In the case of enhanced redundancy payments (beyond the statutory minimum) the view is that these should be encouraged and therefore, an employer who pays enhanced redundancy is entitled to full credit for the sums paid. For example, it is applied (deducted) after the application of all reductions, including contributory fault and these new statutory penalties.

Order Of Adjustments To Compensatory Award Calculate employee’s loss





Deduct any new earnings or benefits

Apply any uplift/reduction for breach of statutory grievance/disciplinary procedure/failure to provide such particulars






Deduct for any contributory fault

Deduct any enhanced redundancy paid above the statutory sum

Apply the statutory cap

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When will the new procedures have to be applied? One of the pieces of information that is still awaited, is further guidance on exactly when the statutory disciplinary procedure must be used. The Government has said that regulations will be provided to clarify this. It is likely to expressly exclude collective issues and disputes and matters such as redundancy issues. Clearly from the body of the procedures themselves, contained in schedule 2, individual meetings complying with the statutory minimum will have to be convened whenever an employer is considering taking action relating to an employee’s performance, capability such as absence or ill health and certainly their conduct.

Grievance procedures The new Act heightens the significance of grievance procedures within contracts of employment, in a way not previously contemplated. There will inevitably be an increase in the importance of grievance procedures within an organisation as a consequence. If we remind ourselves that one of the main purposes behind the legislation is to reduce Employment Tribunal claims, the ethos behind the new provisions concerning grievance procedures is that if matters can be resolved within the work environment they should, without recourse to an Employment Tribunal. Taking that further, if an employee has concerns of which an employer may be unaware, by raising this through the grievance procedure it may be that the issue can be resolved to the satisfaction of all parties. It is not surprising therefore that the new provisions introduce both the statutory grievance procedure and the same ‘carrot and stick’ approach to both parties to the employment contract, to encourage their use and also adopts significant penalties. In fact the powers which will be given to Employment Tribunals where concerns arise about an employee’s failure in particular, to make use of the grievance procedure are unique and extremely serious.

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Statutory grievance procedure Schedule 2 of the Act contains a model statutory grievance procedure. Again there are two types of statutory procedures, a standard and a modified procedure. Under the standard procedure the three steps comprise the following: STEP 1 the employee must set out in writing their grievance and send that statement or a copy to the employer. STEP 2 the employer must invite the individual to a meeting to discuss the grievance and must inform the employee of his decision and notify him of the right to appeal. The employer must have been given a reasonable opportunity to consider the written statement of grievance before the meeting and the employee must take all reasonable steps to attend that meeting. STEP 3 if the employee wishes to appeal he must inform his employer. The employer must then invite the individual to a further meeting and inform the employee of his final decision. Again the employee must take all reasonable steps to attend that meeting.

Modified procedure The modified grievance procedure contains only two steps and its use is for cases where the employee has already left the employer’s employment. STEP 1 the employee must set out in writing the grievance, its grounds and send that statement or a copy to the employer. STEP 2 the employer must respond in writing and send the statement or a copy of it to the employee. It will be noticed this modified procedure does not require the employer to invite the employee to a meeting; indeed this may be impractical if the employee has already left the organisation. As with the statutory disciplinary procedure, Section 30 of the Act recites that every contract shall have these statutory procedures in place as a term with which the employer and employee must comply. Nothing prevents the employer having a more detailed grievance procedure with more stages or processes to it.

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Impact on compensation Clearly a different approach was needed to encourage the parties to an employment contract to use and implement the grievance procedures. Unfair dismissal claims are less likely to be an issue, save perhaps where an employee resigns and claims unfair constructive dismissal. This occurs where an employer acts in breach of a term of the contract (either an express term or an implied term) and the employee resigns in response. Case law has established that a constructive dismissal can only occur if the breach is sufficiently serious that it goes to the root of the contract and the resignation is in response. (Western Excavating (ECC) Limited v Sharp [1978] IRLR 27). However, matters dealing with grievances go beyond simply constructive dismissal claims. The statutory grievance procedure sections in the Act recognise that grievances may occur over a variety of issues from complaints of discrimination to disability discrimination or unlawful deduction of wages. The legislation therefore takes a twofold approach, one of which is monetary the second of which is far more fundamental and which prevents the employee from complaining in the first place.

Adjustments to awards If an employee does not comply with the grievance procedure in some way, perhaps lodges the grievance but then does not attend the meeting or does not exercise his right to appeal, then a reduction in any subsequent award can be made if he then later seeks to complain of unfair dismissal, discrimination of any type (including equal pay, sex or race discrimination and trade union detriment and disability discrimination) about the National Minimum Wage, breach of contract or working time provisions. The amount is again as a minimum 10% (which may be reduced in exceptional circumstances) or up to 50% where this is considered to be just and equitable by the Employment Tribunal. Similarly, any award made against an employer can be increased because the employer failed to comply with any aspect of the statutory grievance procedure. This is likely to most commonly arise in claims of unfair constructive dismissal. If an employee, for example, considers that they have been discriminated against and lodges a grievance but the employer fails to invite them to a meeting to discuss (and therefore has failed to even try to resolve the matter) then in any subsequent discrimination complaint the employer may be ordered to pay not just the compensatory award but that award may be increased by between 10% and 50% on top.

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A residual discretion remains available to the Tribunal not to apply these penalties where it would not be just and equitable to do so. If an employee had raised the grievance about discrimination, a meeting had taken place but the employee failed to appeal because they had suffered victimisation, it might not be just and equitable to reduce their award by any amount or indeed by as much as 10%, if they persuaded an Employment Tribunal that they had no confidence in the employer because of the victimisation.

Bar on proceedings The second power contained in Section 32 of the Act, is far more wide reaching and certainly will have the effect of reducing tribunal claims if it is used by Tribunals because it allows a Tribunal to prevent an employee from complaining at all. As it has such far reaching consequences, the power only applies in the limited circumstance where the employee failed to raise the grievance in writing in the first place (either under the standard or the modified grievance procedure). It is important to note that this draconian provision only applies to specific claims, which are listed in the Act, in Schedule 5 (see below). Firstly, the provision states that an employee cannot present their complaint to the Employment Tribunal, until such time as the written grievance has been raised. It then goes on to state that it is not enough simply to have raised the written grievance, but a reasonable time must be allowed to elapse to enable the employer to address their concerns. This is addressed in Section 32(3) of the Act, which says quite clearly that a complaint cannot be presented to the Employment Tribunal until 28 days have passed since the grievance statement was raised (i.e. the grievance was lodged) in writing and copied to the employer. Finally, there is a saving provision which prevents an employee from seeking to resurrect a claim which is technically out of time. All except one of the types of tribunal complaints to which the obligatory grievance procedure applies carries a three-month time limit, that means that any Employment Tribunal complaint in these areas have to be issued within three months from the date of the Act which is the subject of proceedings, and in the case of the Equal Pay Act 1970, the time limit is six months. These claims to which the obligatory grievance procedures apply, where there is a risk of a claim being barred, are: •

Equal pay under the Equal Pay Act 1970.

•

Sex discrimination in employment.

•

Race discrimination in employment.

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•

Detriment in relation to trade union membership and activities.

•

Detriment in relation to union recognition rights.

•

Disability discrimination by an employer.

•

Unauthorised deductions and payments from wages.

•

Detrimental treatment in employment (Section 48 victimisation for relying upon or exercising: health and safety rights, the right or role as a trustee of an employer pension scheme, being (or standing as) an elected representative, pregnancy, maternity leave, parental leave or emergency time-off for a dependant, and in the future, paternity, adoption leave or rights or opting out of Sunday working).

•

Unfair dismissal.

•

Redundancy payment dispute.

•

Detrimental treatment in relation to the National Minimum Wage, tax credits or membership of the European Works Council.

•

Breach of the Working Time Regulations.

Section 32(4) of the Act is aimed at encouraging the timely raising of grievances. Whilst the employee must wait 28 days from the raising of a grievance before they can issue proceedings, these proceedings cannot be issued if the employee did not raise their internal grievance until more than a month after the three months (or in the case of an equal pay grievance, six-month) time limit had passed. So not only must a grievance be raised in a timely fashion, but if it is never raised at all and it concerns one of the items within this list, the complainant will be debarred from ever complaining to the Employment Tribunal. There is likely to be some further guidance as to when an employee would not be required (notwithstanding these provisions) to raise a grievance and where it might be inappropriate. Suggestions at present are that this may occur where there is a collective dispute.

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Action points Employers should review their offer letters/contracts of employment/Section 1 statements and process for issuing: •

Do they contain the required references to the Disciplinary and Grievance procedures?

•

Are they issued within the obligatory timescale?

Review disciplinary and grievance procedures: •

Do they meet or exceed the minimum steps?

•

Do all managers understand their importance and the obligation to follow?

•

Train managers on significance and usage.

•

Warn employees of their obligations/rights: –

to use procedures;

–

attend meetings; and

–

implement appeals.

Thus encouraging internal resolution of disputes/issues.

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Chapter 2 Flexible working Introduction..........................................................................................25 Eligible employees? .............................................................................26 Types of flexible working ....................................................................27 The procedure ......................................................................................28 Refusing the request............................................................................30 Limited recourse the Employment Tribunal ....................................31 Tribunal compliant – time limits ........................................................31 Range of working arrangements ......................................................32 Future protection ................................................................................32 Action points .......................................................................................33

Chapter 2 Flexible working

Introduction One of the Government’s stated aims has been to help parents achieve a better work/life balance. The Employment Act 2002 contains a series of provisions aimed at enhancing the rights of those caring for children. These build upon provisions that were introduced in 1999, which for the first time gave a right to parental leave. Some of the provisions on family rights deal with the long overdue need to streamline and simplify rights to maternity leave, as well as make them more consistent with other similar rights, such as adoption leave. Brand new rights to request flexible working are also to be introduced and will come into effect in April 2003. The flexible working provisions have a long history but are likely to have the greatest impact, not least because of the likelihood that it will in the long-term lead to changes to working arrangements. The matter has been under discussion since June of 2001 when the Work and Parents Taskforce first began investigating the options for improved rights and working arrangements. In October of 2002 a series of regulations were issued which together set out the details of those who will be entitled to request flexible working and the procedures which go behind the exercise of such rights. One matter which has been of particular concern regarding these new provisions, is the level of enforcement. Set alongside the existing concern not to over burden Employment Tribunals and indeed the other provisions of the Employment Act which are aimed at resolving disputes before they reach a tribunal, the Government was keen not to have employer’s face another area of challenge. It is for this reason that a limited right to complain to the Tribunal has been provided.

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Currently there are two sets of regulations outlining the new rights, which supplement the provisions already contained in section 47 of the Act. As with much of this new legislation, what it is going to do is introduce a new section within the Employment Rights Act 1996 specifically on flexible working. This will place the new provisions alongside the existing rights to time-off for dependants and the maternity and parental leave rights.

Eligible employees? Only specific individuals with parenting responsibilities for a child under the age of 6 (or a child in receipt of a disability living allowance under the age of 18) will be eligible to make a request for flexible working. In order to ensure that sufficient time is allowed before making such a request, the latest date upon which a request for flexible working can be made in respect of the child, is the fourteenth day before that child reaches the age of 6 or 18 as the case may be. However, as well as being able to point to a specific child of the right age, the individual employee must also be able to demonstrate that they have parenting responsibilities. They can do this in a variety of ways: •

by demonstrating that they are the biological parent, guardian or adoptive parent of the child; or

•

that they are a foster parent

•

and it will be noticed that either parent or indeed foster parent are eligible to make the request (or indeed both parents).

A person can also make the request if they are married to, or a partner of, a biological, guardian, adoptive or foster parent of that child. For these purposes, a partner will include a person of the same or opposite sex. This was needed in order to ensure that the Government itself complied with proposed anti-discrimination provisions, due to be introduced in 2003, to prevent discrimination on grounds of a person’s sexual orientation. To satisfy the definition of being a partner, the individual must show that they are in an enduring family relationship with the relevant parent. The final requirement on top of the above is to show that they have or will have responsibility for the upbringing of the child.

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Service requirement It is not enough under the new provisions simply to demonstrate the right relationship to the child and the need for the flexible working because of parenting responsibilities. There is also a service requirement and an employee must first show that they have been employed for the minimum period of time before they can make a request. Consistent with the other new family rights being introduced, an individual must have 26 weeks continuous employment with the employer and those 26 weeks must be achieved by the date that the application for flexible working is made.

Flexible working entitlement

Do they have 26 weeks’ continuous employment by the date of the application

No entitlement

NO

YES

Legitimate application which must be considered in accordance with the required procedure

Figure 1: Flexible working entitlement

Types of flexible working The provisions state quite clearly that the changes to the contract which an employee can seek can be particularly broad and include: •

hours of work;

•

times of work, for example, a late start and finish – but perhaps working the same hours in the working day; and

•

place of work (as between home and employer’s business location).

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The procedure Employee’s requirements Having satisfied the eligibility qualifications, it is incumbent upon the individual to then ensure that they make the request in the right way and against the correct timescales. An application for flexible working must be in writing, be signed and dated. Strictly, a parent can only make a request at most once every 12 months. Section 80F(4) of the Act says that once an individual has made an application with his employer, he cannot make a further application to the same employer before 12 months have elapsed from the date when the previous application was made. To help employers with this information – although it is recommended they keep their own records – the application from the employee must also identify the date of any previous application for flexible working. The flexible working provisions outline the sort of flexibility which an employee can request. It is for the employee to identify, within their application, what particular working pattern or flexible arrangement they are seeking. It must be clear on the face of the application that it is an application for flexible working and must identify the details of their parenting responsibilities. The section actually says that it is for the employee to explain how they meet the parenting responsibility conditions, thus one assumes that the child and their age must be identified, together with details of the employee’s relationship with that child vis a vis themselves or indeed (if appropriate), their partner. In the application itself, the employee should also identify in light of the request that they are making, what impact it may have upon the working environment, make suggestions as to how this could be dealt with and also identify from which date the employee is seeking flexibility.

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Employer’s requirements It will come as no surprise, particularly given the emphasis upon procedure already outlined in the Act (through the statutory disciplinary and grievance procedures introduced for the first time) to know that in assessing an application for flexible working the employer is under an obligation to follow a quite strict procedure and process before reaching a conclusion. The process and timescales are as follows: •

upon receipt of a written application, the employer must convene a meeting within 28 days of having received the application;

•

this meeting is to discuss the employee’s request, explore the issues and the employer should also make any counter proposals at the same time;

•

within 14 days of that meeting, the employer must give notice of the decision in writing.

Clearly, if the request is acceded to, that will be the end of the matter. However, if the employer refuses the request or puts forward an alternative proposal, that notice must also outline their right to appeal against this decision and must also outline the reasons why the request is refused (see below): •

If the employee then wishes to appeal he must do so in writing and must set out the grounds for appeal within 14 days.

•

The employer must convene an appeal meeting within 14 days of receiving that notice of appeal and confirm the outcome of the appeal within 14 days.

The periods and timescales can be extended by agreement but any such agreement should be confirmed in writing and must identify the alternative date which has been agreed. At any of these meetings the employee also has the right to be accompanied by a work colleague.

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Refusing the request As well as having to ensure that the correct process is followed, it is incumbent upon an employer to ensure that a genuine and fair assessment is made of the circumstances surrounding the employee’s request. If the decision is taken to refuse the request this must be because it causes genuine business difficulties and there are limits upon the reasons and circumstances in which an employer can lawfully refuse the request. Section 80G of the Act, says clearly than an employer can only refuse an application if one or more of the following situations apply: •

that agreeing to the request would burden the business with additional costs;

•

that it would have a detrimental effect on the ability to meet customer demand;

•

that the employer would be unable to reorganise the work amongst his existing staff;

•

that the employer is unable to recruit additional staff to enable him to release the employee;

•

that it would have a detrimental effect on quality or upon performance;

•

that there is insufficient work available during the periods during which the employee proposes to work – for example, that the work which would be available at home is insufficient and would not keep the employee occupied;

•

that the proposals cause difficulties or run counter to planned structural changes.

As has already been outlined, the obligation on an employer when responding to a request is to confirm in writing the reasons for any refusal and to provide an explanation. As there are limited grounds upon which a lawful refusal can be provided, the written decision should fall within one of the above categories.

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Limited recourse the Employment Tribunal The significance of the procedure and ensuring that the reasons for any refusal fall within the listed provisions, is that it is through ensuring compliance to both elements that an employer can limit, or indeed prevent, any claim to an Employment Tribunal. An employer who refuses a request for flexible working cannot have that decision challenged at the Employment Tribunal provided the reasons given are genuine and are not based on any error or incorrect facts. An employee can only challenge the refusal by making an application to the Employment Tribunal on one of two grounds: •

either that the refusal is based on incorrect grounds, i.e. it is not genuine; or

•

that the employer has failed to bring the refusal within one of the legitimate listed grounds.

Where a complaint is made the Tribunal’s powers are limited; they are not in a position to assess the facts and circumstances or draw a conclusion as to whether the request should be granted. Their powers of investigation are limited to deciding whether the reasons given by the employer were indeed genuine or were incorrect. If incorrect it does not have the power even then to make a recommendation, or indeed, to substitute its decision for the employers, but must simply return the matter to the employer and order the application be reconsidered. The Tribunal will also however, have the ability to make an award of compensation of such amount as is just and equitable. The maximum the Tribunal can award is up to 8 weeks pay (subject to the statutory maximum of £260 per week or the individual’s actual pay if this is less).

Tribunal compliant – time limits Any complaint under these provisions must be made within 3 months from the date of the appeal decision or (if the complaint is about a breach of procedure) from the date of the breach.

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Range of working arrangements The provisions have the potential to cover a range of different methods of working some of which will of course be self-explanatory but others might be new, particularly to some employers. As well as the obvious, part-time and flexible working and job sharing, employees might seek to vary their arrangements by working during term-time only (when the children are at school), compressed hours (so that they can take the children to school and collect them), working from home or twilight hours (when another parent or family member can look after the child). The Government has issued a guide for employers and employees to assist with managing these new rights and the requests that will flow from these provisions, as well as model letters. Both are available from the Department of Trade and Industry. One area which must be borne in mind is that whilst the Tribunal does not have the power to scrutinise the employer’s decision, there still remains the possibility that an employee if female, will be able to rely upon existing rights to complain of indirect sex discrimination contrary to the Sex Discrimination Act 1975, if certain types of working (particularly part-time) are refused. This is based upon the established general proposition that a refusal to allow part-time working or job sharing, amounts to a provision, criterion or practice which will exclude and disadvantage a greater proportion of women than men and thus indirectly discriminates on grounds of sex. Unless such a decision can be justified by being shown to be necessary for objective reasons, a refusal would amount to unlawful indirect sex discrimination.

Future protection Finally, two key considerations should be borne in mind by employees considering making requests of this nature. One may be of concern and the other of comfort. The first is that once a request for flexible working has been made and acceded to, it is a permanent change. The individual remains entitled to that working arrangement even when the child passes the age of 6 or 18. Equally, there is no right on the part of the individual to revert to their previous working pattern. Once they are working part-time they have no right for example to revert to full-time working arrangements. Secondly, and as is common with many of the new rights introduced over recent years by the Government, there is protection against individuals suffering either dismissal or indeed being subjected to any detriment, because they have sought

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to exercise their right to rely upon these new statutory provisions: either by making an application for flexible working or indeed, by being granted and undertaking a new flexible working pattern. Individuals who consider that they have been victimised or dismissed for these reasons have a right to complain to an Employment Tribunal and to receive compensation in respect of their treatment.

Action points Employers should review existing work patterns in readiness for applications: what flexible working does the organisation already have which operates effectively? Consider having a policy in place, outlining the process and to whom any applications should be made. Identify who in the organisation has authority to deal with such applications (and any appeals). Train managers (ensure they are aware of the new rights and the dangers of victimisation/detrimental treatment claims). Fully train those charged with responsibility for dealing with flexible working applications on the procedural requirements, business reasons and need for fully documented assessments.

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Chapter 3 New family rights Introduction..........................................................................................35 Maternity leave entitlement................................................................37 Adoption leave rights..........................................................................43 Paternity leave and paternity pay ......................................................48 Action points ........................................................................................51

Chapter 3 New family rights

Introduction One of the key aims of the Employment Act 2002 is to assist working parents to balance their home and work responsibilities. Prior to the new rights being introduced, there had already been changes to the maternity period for new mothers, for the first time parental leave entitlement (up to four weeks per year to a maximum of 13 weeks per child) and a right to emergency time-off for those responsible for dependants. This latter provision went beyond parents and extended to those with other caring responsibilities. The extension of rights to parents under the Employment Act 2002, began in December 2000 with the publication of a Green Paper Work and Parents – Competitiveness and Choice. As the title of that paper suggests, its focus was to help parents achieve the right balance for them, between the need to work and parenting. For the first time a right to flexible working will be provided to all parents of children under the age of 6 (or 18 in the case of a child in receipt of a disability living allowance) whereas previously, limited rights have been given to women to complain if they were refused the option of working part-time, job sharing or working in any way which helped them achieve this balance. The other new rights dealt with in this Chapter focus on the following additional entitlements which will have effect from 6 April 2003: •

A new regime for maternity leave which will encompass both extended maternity absence and improved maternity pay.

•

For the first time a right to paternity leave and pay for the period of that paternity absence.

•

Also, for the first time, a right to take adoption leave and to receive adoption pay, through provisions which mirror the new maternity rights.

The detail of the flexible working rights which will be introduced have been dealt with earlier.

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As is a common theme throughout the provisions of the Act, the body of the Act itself contains only ‘enabling provisions’ with the detail, outlining who is entitled to which of these rights and how much pay they receive, being introduced through a series of regulations. For completeness the details of the regulations are set out below, although the commentary as to who is entitled to what and obligations for issuing notices which is set out below, are drawn from a review of (in many cases) a combination of the entire framework of regulations in this area: •

Maternity and Parental Leave (Amendment) Regulations 2002.

•

The Social Security, Statutory Maternity and Statutory Sick Pay (Miscellaneous) Amendments Regulations 2002.

•

Paternity and Adoption Leave Regulations 2002.

•

Statutory Maternity Pay and Statutory Adoption Pay (Weekly Rates) Regulations 2002.

•

Statutory Paternity Pay and Statutory Adoption Pay (General) Regulation 2002.

•

Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002.

•

Statutory Paternity Pay and Statutory Adoption Pay (National Health Service Employees) Regulations 2002.

•

Statutory Paternity Pay and Statutory Adoption Pay (Persons Abroad and Mariners) Regulations 2002.

Happily, the Department of Trade and Industry has issued a series of helpful booklets summarising the rights to pay and leave for adoptive parents, new mothers and under the paternity provisions. There is also an interactive website which has been made available outlining these new rights, which can be found at www.tiger.gov.uk.

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Maternity leave entitlement The new maternity rights are brought into effect firstly by new regulations, particularly dealing with maternity pay and secondly by making amendments to the existing maternity leave provisions contained within the Employment Rights Act 1996. Part 8 of that Act particularly sections 71, 73 and 74, addresses the question of how much leave an individual is entitled to and what happens at the end of such leave. Changes and amendments effective from 6 April 2003 are made through sections 17 to 21 of the Employment Rights Act 2002. This will introduce a longer period of maternity leave absence to which an individual will be entitled, changes to the notification and qualification requirements (which an individual must follow to gain their maternity leave rights) as well as making changes to pay during such absence. The new rights identify those entitled to benefit from the new regime by reference to the week during which their child is expected to be born – known as the expected week of child birth. For these purposes, a week starts on a Sunday and an individual’s expected date having been identified, translates to the expected week by referring back to the Sunday of the week commencing that in which the child is due. For these purposes, any individual whose expected week of child birth or who is expecting their baby on or after 6 April 2003, will be entitled to the new rights set out below. Any person falling outside of this definition remains entitled to maternity leave provisions under the old regime. It is important to bear in mind that these provisions are entirely determined by reference to the expected week and not the actual week that the baby arrives. Thus, for example, an employee whose baby is due at the end of March, does not meet 6 April cut-off point; even though she may actually deliver the child after 6 April (by reference to her expected week she will still be entitled to the more limited rights under the old regime).

Maternity leave In future, an individual will either be entitled to ordinary maternity leave or additional maternity leave, dependent upon their length of service with the employer. Ordinary maternity leave is a total of 26 weeks (previously it was 18 weeks) which can start (subject to the employee giving the appropriate notices) up to 11 weeks before the expected week of child birth (from the beginning of the 11th week again counting from the Sunday). The leave can commence at any time between the 11th week window and the date of child birth, provided the

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appropriate notices have been given with one exception, which is that there is an automatic trigger, where the leave starts by law, in the event of illness during the four weeks before the expected week (see below). Additional maternity leave is an entitlement given to those with a longer period of service. It is added to the ordinary maternity leave and amounts to a further 26 weeks absence. Whether an individual will either be entitled to 26 weeks maternity absence or up to 52 weeks, depends upon their length of service.

Service requirements All employees, no matter how long they have been employed for, have an entitlement to 26 weeks ordinary maternity leave. Only those who have achieved 26 weeks continuous employment by the 15th week before expected week of child birth, gain the further entitlement to additional maternity leave. It should be noted that other than having an entitlement to take time-off from work and to return to their job, the rights and other entitlements vary dependent upon whether the individual is on ordinary or additional maternity leave. This is examined further below.

The automatic start of maternity leave in the event of illness Anyone taking maternity leave will have an obligation in order to acquire the right, to provide notice to the employer. Provided the notice is issued in the right format, containing the relevant information and within the obligatory timescales, an employee can choose when they wish to start their maternity leave, as long as it is no more than 11 weeks before the expected week of child birth. There is only one exception to this, and this is where an employee who is pregnant takes absence from work for a pregnant related illness at any time during the four weeks before the expected week of child birth. Where she is absent in that period and that absence is related to her pregnancy, by law she is required to start her maternity leave. These provisions are aimed at preventing individuals from being regularly absent or on sick leave in the four weeks prior to giving birth, echoing the principle that an individual cannot be on both sick leave and maternity leave at the same time. Thus, if she is unable to work in this period for a pregnancy related illness, her absence will become one of maternity absence rather than sick leave. It also enables an employer to better plan the absence and to avoid the uncertainty of knowing whether the individual will be fit enough to be at work in that four week window.

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There are two important issues to be addressed attached to this particular provision. The first is that absence for these purposes does not have to equate to any minimum period of a day and the second, is that it must be clear that the reason for absence is related to the pregnancy. Clearly medical evidence would assist on this and there is also guidance available from the Department of Trade and Industry identifying the sorts of conditions that can be pregnancy related. If however, the individual is absent for a reason unrelated to their pregnancy – for example flu – she cannot be forced to start her maternity leave.

Notice obligations Previously, the obligation on an employee to give notice as to her maternity leave differed slightly dependent upon whether she was taking the shorter statutory leave entitlement or the longer. The position has been streamlined so that notice will be the same regardless of whether the individual is taking ordinary or additional maternity leave. The notice from the employee (which does not have to be in writing but of course ought to be for the sake of good practice) must inform her employer: •

that she is pregnant;

•

identify the expected week of child birth – often by reference to a certificate known as a MATB1 available from her doctor or midwife; and

•

identify the date on which she wishes to start her maternity leave.

The timing must also be right and, whichever date the employee chooses, she must notify her employer by the 15th week before the EWC prior to the leave starting – unless it is not reasonably practicable. There is no requirement at this point for the employee to identify how much leave she is taking, how long she intends to be absent for, or indeed, whether and when she intends to return to work. Employers are therefore left to assume that the individual will take the maximum leave to which they are entitled. If later the employee wishes to change the date previously notified as the start of her leave, she must provide 28 days notice before the date she wishes to start her leave.

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Employer’s response There is however, an obligation on the employer to reply to the individual’s notice within 28 days of receiving that notice, in which the employer must identify the date upon which the employee is expected to return. This date is identified by reference to the full entitlement which the employee has, to either 26 or 52 weeks. The guidance, which has been issued by the Government, contains a sample of the type of letter that can be issued by an employer to satisfy these requirements.

During the maternity leave The status of the individual’s contract during the maternity leave varies dependent upon whether she is on ordinary or additional maternity leave. During the ordinary maternity leave, her contract continues. She is entitled to be treated as if she was not absent from work, and all benefits must be maintained – with the exception of her remuneration which is substituted for statutory maternity pay (see below) if she is eligible. By contrast, in the case of an employee who is on additional maternity leave, from week 27, her contract is effectively suspended and only the following contractual obligations have effect: •

The obligation of trust and confidence owed to her by the employer.

•

Any contractual notice provisions.

•

Contractual redundancy entitlement.

•

Disciplinary and grievance procedures.

Equally, the employee must herself observe the obligation of trust and confidence and remains bound by her requirement to give notice to terminate, any restrictions as to confidentiality, acceptance of gifts or benefits, or restrictive covenants – restraints on participating in any other business both during and after the employment. These provisions which remain unchanged apply under Regulation 17 of the existing Maternity and Parental Leave etc. Regulations 1999 (SI 1999/3312) which will be amended and replaced by the Maternity and Parental Leave (Amendment) Regulations 2002 (No 2789).

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Returning from maternity leave The new maternity rights are all based on the premise that the individual will take maternity leave to her full entitlement, and will return at the end of the 26 or 52 weeks, dependent upon whether she is entitled to ordinary or additional maternity leave. Any employee who wishes to return early can only do so if she provides the employer with 28 days notice before returning. Whereas previously there had been obligations on the part of an employee to issue a notice to return, that is swept away and an individual taking their maximum entitlement has no further requirement or step imposed upon her. The existing provisions regarding an employee’s right to return to their job or, in a redundancy situation having a right to be offered suitable alternative employment, continue to apply. Similarly, the protection given to pregnant employees and those taking maternity leave, to prevent them suffering sex discrimination or being subjected to a detriment or dismissal for any reason related to their pregnancy or because they are relying upon their rights, will also continue.

Statutory maternity pay The changes to the statutory maternity pay provisions are brought about by way of regulations and amendments to the Social Security Contributions and Benefits Act 1992. Not surprisingly, the period of statutory maternity pay is streamlined so that it dovetails with the first 26 weeks maternity leave absence (the ordinary maternity leave). Changes are also made to the notice requirements so that these are consistent with the maternity leave obligations. The right to SMP at the new level applies to any employee in receipt of statutory maternity pay after 6 April 2003.

Notice obligations An individual’s entitlement to receive statutory maternity pay is conditional on her issuing the correct notice as well as meeting certain earnings and service requirements. The employee must give notice to her employer 28 days before she wishes to claim statutory maternity pay (effectively the date she starts her maternity leave).

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Other preconditions There are also service and earnings requirements placed upon an employee, they must have average weekly earnings currently over £75 per week, the lower earnings limit for national insurance and must have been employed for 26 weeks by the 15th week before the expected week of child birth. An individual who is not entitled to statutory maternity pay, may be entitled to a maternity allowance (from the State rather than her employer). Maternity allowance is payable if any individual has been employed or self employed for 26 weeks at any time during the 66 weeks before the expected week of child birth.

Rate of maternity pay Statutory maternity pay only covers the period of the ordinary maternity leave, which is the first 26 weeks of maternity absence. It is payable throughout that period at two different rates: •

For the first 6 weeks of the ordinary maternity leave, at 90% of the employee’s average weekly earnings. This is calculated by reference to an average taken over a period of 8 weeks or 2 months in the period immediately before the 14th week before the expected week of child birth.

•

For the balance of 20 weeks, an employee receives as statutory maternity pay either 90% of their average weekly earnings or £100, whichever is the lower.

The strict requirement is that to be eligible and claim statutory maternity pay (or pay only and not leave) an employee must give at least 28 days notice of the date she is seeking to claim SMP and medical evidence that she is pregnant (probably using the MATB1 certificate). In reality, where an employee serves notice to take maternity leave by the 15th week before the expected week of child birth, she will have already satisfied the requirement to give notice for SMP purposes. In the future, once an individual has acquired the right to maternity pay by meeting the notice and service earnings requirement, and provided they are employed up to the 15th week before the EWC, she is entitled to claim that payment from her employer, even if she is no longer employed at the time her maternity leave would have begun, i.e. she leaves prior to the 11th week before the expected week of child birth – the first and earliest date upon which maternity absence can commence. This right is retained regardless of whether the reason for any departure (whether dismissal or resignation) is related to her pregnancy or maternity, or not.

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Under new provisions within the Social Security Contributions and Benefits Act 1992, employers will retain the right to off-set any maternity payment against their National Insurance bill at 92% (100% if they are a small employer) and will in future gain a right to apply to the Inland Revenue for help in funding such payments, in advance of the amounts being due for payment to the employee.

Maternity leave WK – 15

26 weeks’ service to acquire additional maternity leave, statutory maternity pay and notice

WK – 11

Earliest date to start maternity leave

WK – 4

28 days (Employee Variation of start of leave)

WK – ‘0’

28 days (Employer Notice) Expected week of child birth

+ 2 weeks from birth

Earliest return to work

+ 26 weeks from start of leave

End of ordinary maternity leave

+ 52 weeks from start of leave

End of additional maternity leave

Adoption leave rights The right to adoption leave and pay will be provided for the first time, from April 2003. Previously, new adoptive parents had to rely upon the Parental Leave rights introduced in 1999. The right to adoption leave and indeed the pay which runs alongside that period of leave, mirrors the maternity regime. The Scheme adopted by the Act in introducing adoption leave rights, is via the introduction of a new chapter (Chapter 1 A) into Part 8 of the existing Employment Rights Act 1996. This section deals entirely with the taking of adoption leave but in addition, there are further regulations which address the question of adoption leave and pay entitlement.

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Parents to elect: one parent only The provisions recognise that there may be circumstances in which a joint adoption takes place, and states that where this occurs, one of the two people matched for adoption must elect to be the child’s ‘adopter’ and thereby seek to take the adoption leave. It is not possible under the provisions which have been introduced for adoption leave, for both parents to take statutory adoption leave and claim statutory adoption pay. Only one individual in the case of an adopting couple can claim and seek to take adoption leave. The other partner’s rights to time-off are limited to the paternity leave entitlement. This is to reflect and equate the position with birth parents, where the mother can take maternity leave and the father paternity leave. The right to take adoption leave only applies where either a child is matched on or after 6 April 2003 or is placed for adoption after that same date. Although generally speaking the right attaches to the child where, under the same adoption arrangement more than one child is being matched and adopted, only one period of adoption leave can be taken (Regulation 15 (4)) of the Paternity and Adoption Leave Regulations 2002 (SI 2788). To vary any date, for example the date upon which to start the adoption leave, a further 28 days notice must be provided. Similarly, the employee only has to give notice of their intention to return, if they expect to return earlier than their maximum period of leave, in which case 28 days notice for return must be provided.

Adoption stages Many of the new adoption rights centre around the matching. Under legislation in this area and the new provisions, there are two key stages to the adoption process: 1

Matching: when the adoption agency confirms a person or couple are suitable adopters for the child; and

2

Notification: when a formal notice of the decision is issued, under the Adoption Agencies Regulations 1983 (Regulation (11(2)) or, in Scotland the Adoption Agencies (Scotland) Regulations 1996.

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Entitlement to adoption leave Employees with more than 26 weeks employment by the notified date of placement (matching), can take adoption leave. The adopter must within 7 days of being notified of the match, issue notice to the employer of their wish to take adoption leave and identify when they wish to start their leave. The employee may begin their adoption leave either on the date of the placement or up to 14 days before. Prior to the placement, an employee will have been notified of a successful match with a child, and later a date for placement will be identified. Where an employee has been notified that she has been matched for adoption he or she has an obligation to provide the employer with notice of the matching within seven days of receiving the notification of matching themselves. Any variation of the date of leave can be made through a 28 day notice.

Period of adoption leave Again, as with maternity leave absence, there are two periods of adoption leave, a short period (ordinary adoption leave) and a longer period (additional adoption leave). Ordinary adoption leave (which is paid – see further below) amounts to 26 weeks absence. Additional adoption leave follows on from the first 26 weeks, and amounts to a further period of 26 weeks. The rights are only given to new adoptive parents so that those who are already step parents or foster carers, and who effectively already know the child, do not gain the right to any adoption leave at all. Moreover, the adoptive child has to be under the age of 18 for the right to be acquired.

Start of leave Adoption leave can be taken from the date that the child is actually placed with the adoptive parent, however, there may be circumstances where an adoptive parent wishes to prepare for the arrival of a child. In such circumstances, the earliest possible date (and subject of course to having given the requisite 7 day notice) is 14 days before the expected date of placement – this latter date will have been confirmed by the adoption agency. Any change which an employee may wish to make to their adoption leave, for example, to change the date they start their leave has to provide 28 days notice.

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Employee’s notice The employee’s 7 day notice must include a copy of the certificate from the adoption agency and: •

confirm the employee’s name and address;

•

identify the adoption agency including both name and address;

•

state the date he/she was informed of the successful match; and

•

confirm the planned date of the placement.

Employer’s response Again, as with the maternity provisions, once an employer receives notice of an employee’s intention to take the adoption leave, they have an obligation within 28 days of receipt to reply (Regulation 17(7) of the Paternity and Adoption Leave Regulations 2002 (No 2788)). The reply must outline (based on the employee’s maximum entitlement) the date that they are due to return, i.e. 52 weeks from the date they start their adoption leave.

Rights during the adoption leave The status of the individual’s employment and indeed their contract, again reflects the maternity provisions. During ordinary adoption leave the employee should be treated as if they were at work and remain entitled to all benefits and terms – the exception being their right to wages or remuneration, which is substituted for statutory adoption pay. During the additional adoption leave the limited contractual terms (of trust and confidence, notice, redundancy compensation, discipline and grievance) continue, as does the employee’s own obligations of the trust and confidence, notice and restrictions on confidential information, receiving gifts and benefits and undertaking other business. An employee returning from both periods of leave has the right to return to the same job but in the case of an employee who has been absent beyond the first 26 weeks, they may be offered a suitable alternative job where it is not reasonably practicable to allow them to return to their original position. In both cases, the rights as to seniority, pension and service has to be honoured. Again, the provisions introduce a right not to be subjected to any detriment, or indeed, be dismissed for any reason related to the individual taking, or seeking to take, adoption leave.

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Returning from adoption leave An individual who returns from adoption leave earlier than the end of the 26th or 52nd weeks must provide 28 days’ notice of this early return to his or her employer.

Statutory adoption pay During the adoption leave, an individual’s entitlement to his usual remuneration is replaced by the statutory adoption pay, which has been introduced by amendments to the Social Security Contributions and Benefits Act 1992 through three sets of regulations.

Qualifying for statutory adoption pay In order to be entitled to Statutory Adoption Pay quite clearly the individual in question must be expecting to adopt a child under UK legislation. They must also have been continuously employed for 26 weeks by the week that the child is matched. The payment of the adoption leave is only triggered once the employee actually commences the leave itself and there is a lower earnings requirement that over the eight weeks or two months prior to the matching week, the employee must have earned a minimum amount, which equates to the lower earnings limit for National Insurance (currently £75).

Notice obligation The employee must also have given notice to the employer of the date from which he/she effectively wishes to take the adoption leave, i.e. the date that the employer will be liable to pay the statutory adoption pay and this must be given 28 days before the start of the leave. It is also necessary and a pre-condition that the employee should cease working altogether. If an employee has two employers and gives notice to employee A that they wish to take leave and seeks to claim statutory adoption pay, but intends to continue working for employer B, although employer B is not liable to pay the statutory adoption pay because the individual continues working, no adoption pay may be made at all. The question which arises however, is how it is that employer A is expected to know about the employee’s intentions! One assumes that the relevant authority will monitor the position.

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The amount of statutory adoption pay Exactly the same amount of adoption pay is payable as maternity pay. The maximum period is 26 weeks – so that an individual who is entitled to take additional adoption leave should be aware that they are not entitled to receive any pay for the second instalment of their 26 weeks. The amount is one set rate of either £100 per week or 90% of the employee’s normal weekly earnings (again calculated by reference to the eight week or two month period prior to the date of matching) whichever is the lesser. Thus the most any individual on adoption leave can receive under the statutory provisions (unless his employer is more generous) is £100 per week. Again employers will be able to reclaim 92% of the amount paid to employees as statutory adoption pay and small employers will be able to claim 100% dependent upon their National Insurance bill. Again, advanced funding will be available.

Paternity leave and paternity pay The paternity leave provisions that again will be introduced from 6 April 2003, compliments the new maternity, and in particular, statutory adoption provisions. Thus mention was made earlier of joint adopters having to elect for one of the couple to take adoption leave, on the basis that the other is then entitled to take statutory paternity leave. In the case of birth mothers, the father will be entitled to take paternity leave and claim paternity pay in the same way.

Entitlement to paternity leave The new rights are introduced by the insertion into the Employment Rights Act 1996, of a new section 80A, 80B, 80C, 80D and 80E. Firstly, the child in respect of whom the paternity leave is to be taken, must have been born on or after 6 April 2003 or have an expected week of child birth on or after that date. Unlike the maternity provisions, this means that a child whose expected week is before the 6 April date but who arrives late, can have the benefit of at least the birth father, or one of the adoptive parents, taking leave. In the case of an adopter taking paternity leave the child must have been matched and the individual notified of the matching on or after 6 April 2003 or have been placed for adoption on or after that date.

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Similarly, in order to be a child to whom the provisions apply the minor must be under the age of 18. These are solely the provisions to entitlement pertaining to the child and, in addition, the employee seeking to take the paternity leave must have been continuously employed for at least 26 weeks by the end of the 15th week before the expected week of the child’s birth or by the notification of matching.

Premature births There is one saving provision, which applies to premature births. If the baby is born before the 15th week before the week he is due, and the employee would have had 26 weeks employment at week 15, but does not at the birth, paternity leave can still be taken.

Relationship with the child It is also necessary to demonstrate that the paternity leave is to be taken in order to care for the child and mother/adopter. This is done by demonstrating that there exists a relationship with the child. The person seeking to take the paternity leave must therefore demonstrate that they are either: •

the father of the child;

•

married to, or a partner of, the child’s mother (where they are not the child’s father);or

•

is either married to, or a partner of, the child’s adopter and expects to have responsibility for the upbringing of the child or have the main responsibility.

It should be noted that the partner for these purposes includes a person of the opposite sex as well as a person of the same sex.

Notice requirements The employee must provide to the employer notice of his intention to take the paternity leave by providing notice: •

of the expected week of child birth;

•

the length of the paternity leave they wish to take; and

•

the date on which they wish to take that leave.

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That notice must be given during or before the 15th week before the expected week of child birth, unless this is not reasonably practicable. The employee is also obliged, where this is requested by the employer, to declare (thereby confirming the position) their relationship with and responsibility for the child and that they intend to take the leave in order to care for the child or mother. This notice is being termed the self certification. In the case of a person taking paternity leave in an adoption situation the notice must be given within 7 days of the notice of matching (save where this is not reasonably practical). The date to start the paternity leave can only be varied by the giving of a further 28 days notice.

Amount of paternity leave The period of paternity leave is limited to a period of two consecutive weeks or one week’s leave. It must however, be taken within 56 days beginning with the later of the date of the expected week of childbirth or the birth; if the child is born before the expected week, i.e. is premature, it must be taken within 56 days after the actual date of the birth. In the case of an adoptive parent taking paternity leave, the 56 days run from the date of the placement. If having given notice, the baby arrives late and the employee issued notice to take the leave on a set date, he must vary his notice and identify an alternative date, as soon as reasonably practical.

Statutory paternity pay In order to qualify for statutory paternity pay, an employee must have been employed for 26 weeks, continuously, by the end of the 15th week before the expected week of the birth or the week he is notified of the matching. Provided the individual is above the lower earnings limit (in the previous eight weeks) and has issued the requisite notice (by the expected week of child birth or within seven days of having been notified of matching for adoption) the paternity leave period will attract statutory paternity pay – provided the employee ceases to work for all employers. The amount of the statutory paternity pay in such circumstances is £100 or 90% of actual normal weekly earnings, whichever is the lower.

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Rights during paternity leave During the paternity absence the employment contract continues and the employee has a right to return to their job, as well as the right not to be treated in a detrimental manner or dismissed for taking, or seeking to take, paternity leave and rely upon their rights under these new provisions. The only provision in the contract which is suspended during the period of the paternity leave is that relating to wages or salary, which are of course substituted for the statutory paternity pay. Finally, it should be noted that as with maternity and adoption leave, if more than one child is born or adopted, only one period of paternity leave can be taken.

Action points •

Employers should review and amend their existing maternity and other leave policies and any guidance issued to employees, to reflect the new rights.

•

Employees who are pregnant should identify their expected week to decide whether they have rights under the new regime and ensure compliance with all notice requirements.

•

Policies on paternity leave and adoption leave should be reviewed, if already in existence, and if appropriate, amended to ensure compliance if rights are less favourable than the statutory regime are provided.

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Chapter 4 Fixed-term workers Introduction..........................................................................................53 Who is protected?................................................................................54 What rights are provided? .................................................................55 Permissible inequality .........................................................................57 Complaints about less favourable treatment....................................59 Legal changes to the contract itself/re-writing the fixed-term contract .......................................................................59 Detrimental and less favourable treatment outlawed .....................62 Redundancy exclusion – repealed......................................................64 Conclusion............................................................................................64 Action points ........................................................................................65

Chapter 4 Fixed-term workers

Introduction The piecemeal nature of the Employment Act 2002 is probably best illustrated by Section 45 of the Act. Whilst most of the provisions under the 2002 Act have yet to come into force, Section 45 which deals specifically with fixed-term workers and changes to the law and their contracts, has been in effect since 1 October 2002. In reality all that Section 45 is, is an ‘enabling provision’, which entitles the Secretary of State to make regulations giving additional rights to employees on fixed-term contracts and introducing new rights and a new regime for those appointed on contracts of this nature. Part of the explanation for the early introduction of these Regulations is the fact that they stem from European obligations (The Fixed-Term Work Directive Number 99/70) which was due for implementation on 10 July 2002. For this reason the Regulations under Section 42 were introduced as a priority, and even then the UK Government was strictly some months outside the date by which UK legislation had to be introduced. There are separate provisions (Section 46 of the Act) which apply to those working in Northern Ireland, where the Department for Employment & Learning have responsibility for introducing similar regulations for the same purpose to implement these new rights. In this Chapter however, we will focus specifically on the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (Statutory Instrument Number 2034) and the changes which these Regulations have introduced in England, Scotland and Wales.

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Who is protected? After some debate, the final format of the Regulations which introduced new rights, covers only employees and not the wider category of those undertaking work in many organisations, known as workers. Thus, an employee for these purposes is an individual who is employed under a contract of services and, as established through case law, an individual who is carrying out work under the direction and control of an employer and not carrying out any business on his own account. Clearly however, it is only employees under a specific type of contract who gain protection under the 2002 Regulations. That is a person who is employed under a fixed-term contract. This phrase ‘fixed-term contract’, is expressly defined in Regulation 1(2), as meaning an employee whose contractual terms identify how the employment or contract will terminate either on: •

expiry of a specific term (this is probably the most common type of fixedterm contract, for example a contract may state that the individual is employed for a period of two years);

•

on the completion of a particular task (for example, where an individual has been employed in order to write a particular IT program, whose contract states that his employment will come to an end once the program has been written); or

•

on the occurrence or non-occurrence of a specific event – excluding for these purposes reaching retirement age.

This latter, perhaps more unusual type of contract, could exist when funding for a particular project (say from a government body) ends – because the employer will not be able to continue the work without the benefit of such funding. Alternatively in a business which appoints fixed-term employees to cover peaks in demand, when the business commences its autumn/winter schedule. In a different scenario, if an employee is appointed to cover another employee’s absence (due to maternity leave, adoption leave, an employee on secondment or sabbatical) when the absent employee returns to work.

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What rights are provided? Until the introduction of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations, employees working on fixed-term contracts had both limited rights and often found provisions were lawfully written into their contracts, in order to deny them certain benefits. Probably the most common of these would be the denial of particular benefits, or equivalent pay, because of the envisaged temporary nature of the work, relative to permanent employees. Over the past few years rights which previously it was perfectly lawful to deny a fixed-term worker from claiming, (such as unfair dismissal) have been rendered unlawful. The primary entitlement which a fixed-term employee now has is to equal treatment with what is deemed a permanent employee, i.e. one who is not appointed on a fixed-term contract, and a right in law to effectively re-write the fixed-term contract – in certain specific circumstances – so that they become a permanent employee.

Equality in terms and conditions The 2002 Regulations give a fixed-term employee a right to equality in terms and conditions and in treatment, as well as entitling a fixed-term employee to ensure they are not denied or omitted from any benefits. However, the obligation to ensure equality is limited so that an employer will be required to treat ‘like with like’. The technical requirements are that a fixed-term employee has the right not to be treated less favourably than a comparable permanent employee and that means with an individual who has been appointed on a permanent basis who is: •

employed by the same employer;

•

doing the same or broadly similar work – when considering matters such as qualifications and skills; and

•

works or is based at the same place of work or establishment.

The requirement is that the permanent employee must be a current employee of the employer. For these purposes, the organisation employing the two (fixedterm employee and permanent) must be the same legal entity, as one cannot read across between employers within the same group, i.e. from one limited company to another. Thus, if the fixed-term employee is employed by Company A, and a permanent employee works for a subsidiary of Company A (Company B) the fixed-term worker cannot use the permanent worker as a lawful, comparable employee.

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There is one modification to the identity of the permanent employee who may be used to compare a package or treatment of the fixed-term employee. That is where the permanent employee works at a different establishment, i.e. a different work location (but still has the same employer and is undertaking the same or broadly similar work). Provided there are no comparable permanent employees at the same base or establishment, the fixed-term employee will be able to contrast his treatment and terms with that of the permanent employee at a different location.

What can be compared: terms and opportunities Less favourable treatment for these purposes has a very wide meaning. It covers all of the terms of the contract of employment, any treatment by the employer and any omission. The Regulations expressly state that the fixed-term employee should not be treated any less favourably in the context of any service qualifications (i.e. by having to meet a two-year service rule when a permanent employee only has to meet a one-year service rule), by being denied training opportunities or the opportunity to be appointed permanently, simply because of his fixed-term status.

Notification of vacancies In this latter area there is a further obligation on an employer to ensure that any vacancies at that place of work are notified to the fixed-term employee. The Regulations make clear that in order to ensure that the fixed-term employee has been informed of vacancies, it is enough if vacancies are advertised in some way (including to all employees) provided that any fixed-term employees have a reasonable opportunity of reading or accessing the advertisements (Regulations 3(7)). Thus the provisions do not go so far as to require special notification or treatment being afforded in this circumstance to fixed-term employees.

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Permissible inequality Importantly, the right not to suffer less favourable treatment which a fixed-term employee is given is not unqualified. There has been recognition through the introduction of the Regulations, of certain circumstances in which it may be acceptable to provide for less favourable treatment and in particular, provide lesser benefits to a fixed-term employee. In law and under Regulation 4 of the provisions, this is where the less favourable treatment can be objectively justified. Clearly it is important that an employer who is going to rely upon the justification grounds, to defend less favourable treatment, can demonstrate that the particular circumstances of the fixed-term employee in question have been fully assessed.

Individual assessment There are two ways in which it could be demonstrated by an employer that the less favourable treatment is justified on objective grounds. Firstly, by demonstrating that taken as a separate issue, the less favourable treatment – for example, excluding the individual from receipt of a certain benefit such as gym membership – is justifiable, i.e. for good reasons balancing the needs and rights of the employee against those of the business that particular benefit can be shown to be denied legitimately. Considerations for example, of practical issues (cost effectiveness and balancing the period over which the employee is likely to be retained) against any difficulties in securing a benefit over such a limited period, would be factors. This would generally involve looking at each particular item or benefit in turn.

Global approach The second circumstance is to apply an overall balancing exercise, by examining the benefits and the package which the fixed-term worker has overall, some elements of which might outweigh the loss or limit of a particular benefit. This is known under the Regulations and the guidance notes which have been issued by the Department of Trade & Industry to support and explain the Regulations, as the ‘package approach’. Regulation 4 of the provisions state that an employer can objectively justify less favourable treatment on any particular term if “the terms of the fixed-term employee’s contract of employment, taken as a whole [my emphasis], are at least as favourable as the terms of the comparable permanent employee’s contract of employment”.

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Thus, an employer could defend denying a fixed-term employee a clothing allowance – perhaps because of the temporary nature of the employment – by pointing to the fact that the fixed-term employee has a higher base pay, by way of compensation. By contrast the ‘term-by-term’ comparison, looks to achieve equal treatment on each and every item or benefit. In this context the Regulations explain that a pro rata principle can be lawfully applied unless this can be shown to be inappropriate. The pro rata principle would again entitle an employer to rely upon a formula by which the fixed-term employee’s right to a particular benefit, or to pay, is calculated in a proportionate way to that of a permanent employee or alternatively, when contrasted to other terms, pay or benefits which are provided. The example of the pro rata principle which is given in the DTI Guidance refers specifically to benefits which may be offered on an annual basis: a season ticket loan or an annual health or life assurance policy renewed each year. If a fixedterm employee has been appointed for less than the twelve-month period of the policy, say for six months, it will be perfectly permissible and lawful under the pro rata principle to provide them with a season ticket loan equivalent to the six months or policy membership for that period. Thus they would get 50% of the benefit. If, by contrast, what an employer normally does is allow employees to their own health insurance policy and recompense or provide a salary sacrifice scheme, then it would be lawful in the case of a six-month fixedterm employee to provide them with 50% of the benefit cost. In order to obtain a benefit or particular work conditions or treatment, service qualifications should be the same regardless of whether an employee is appointed for a fixed-term or not, unless a different service qualification can be justified on objective grounds.

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Complaints about less favourable treatment Any employee who considers that they have been treated less favourably contrary to Regulation 3 of the provisions, has the right to complain to an Employment Tribunal and must present that claim within three months beginning with the date of the act of less favourable treatment, detriment or failure (in the case of an omission). A successful complaint could result in a declaration being made by the Tribunal and compensation which is just and equitable. Generally speaking the compensation should be based on a calculation of the loss which the individual has suffered and (unlike complaints of discrimination) cannot include compensation for injury to feelings. If the complaint is of not having been notified of a vacancy under the provisions of Regulation 3(6) & (7), the three-month time limit runs from the date or dates on which others were informed of the vacancy, that being the date when the failure to inform the fixed-term employee occurred.

Legal changes to the contract itself/re-writing the fixed-term contract One specific area of concern, regarded by many as an abuse of fixed-term contracts, which has been addressed by the Regulations, is the use of a series of fixed-term appointments, with the same employee. The situation which was not uncommon, would occur where an individual would be appointed not just for a period of say two years, but after the first two years for a further period of two years. Prior to the introduction of the Regulations and part of the rationale for this aspect being specifically addressed, was that arrangements of this nature caused uncertainty for employees, coupled with insecurity in terms of their economic wellbeing. Regulation 8 of the Fixed-Term Employees Regulations has therefore introduced a legal mechanism whereby, where certain circumstances arise and a fixed-term contract is renewed for a further limited or fixed-term period, the law re-writes the contractual terms which have been agreed between the parties, and can render the contract an indefinite or a permanent appointment. The consequences of this are self-evident, the employer will not be able to rely upon the ending of the term or limited period and thus, it is extremely important that employers are fully aware of the circumstances in which (notwithstanding what is agreed between the parties) the law will overwrite the fixed-term provisions.

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Limits on contracts to which this applies This revolutionary effect of re-writing the fixed-term part of the contract, will only apply in limited circumstances. In order to allow employers to fully appreciate the circumstance in which they may face this scenario, the provisions under Regulation 8 expressly states that the application of an indefinite provision and changing the contract from fixed-term to an indefinite contract, will only apply: •

where the contract has been renewed and continued for a specific period of four years; and

•

that in calculating that four-year period, only periods of employment under the fixed-term(s) after 10 July 2002 actually count towards the four-year calculation.

Thus for example, an individual who was appointed in July 1998 for two years, and was given a further two-year contract on 10 July 2000, does not become an indefinite employee unless and until they are issued with a two-year contract after July 2002 and a further two-year contract in 2004. This is because the 4 year total is not achieved until a second contract is issued: 2 years (July 2002 and July 2004) plus 2 years (2004 - 2006). There is nothing under these provisions which prohibits an employer from appointing an individual to a fixed-term of more than four years, the indefinite term only applies once that first fixed-term contract is renewed or the individual is re-appointed for a further fixed-term. If the employee has been continuously employed either under the same contract, by being given a second or another fixed-term contract or having the term extended which totals together four years or more, any provision which restricts the duration or period of the contract shall be of no effect. However, there is a further saving provision, which says that the contract shall only become indefinite if the employer cannot justify on objective grounds either the renewed fixed-term or the fixed-term in its entirety. The limitation of the fixed-term must be justified at the time the contract was either issued (if for more than 4 years) or renewed, whichever action has the effect of exceeding the four year trigger.

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What is important is that an employer is able to identify with effect from 10 July 2002, all fixed-term employees in service from that date and, either: •

should monitor those who may be offered a four-year or longer term or alternatively who may remain over a series of contracts of four years or more; and

•

should ensure that there is a specific business rationale (the objective justification) to justify any fixed-term appointment which goes beyond the four-year term in total, otherwise the employer will simply not be able to rely upon the fixed period.

Collective terms The Regulations do enable an employer to set out by agreement with either a recognised trade union (by collective agreement) or with employee representatives (through a workforce agreement) circumstances in which as a business, the use of fixed-terms may be objectively justified or alternatively, by such an agreement, may vary the four-year cut off point to a longer period. In order to have in place a valid collective or workforce agreement to vary the legal provisions (either the four-year limit or the justification) the agreement itself must comply with the detailed provisions of Schedule 1 of the Act and be: •

in writing;

•

for a period of not more than five years;

•

be signed by the workforce representatives (either the union or employee representatives) or, in the case of an employer with less than 20 employees, be signed by the representatives or the majority of employees; and

•

the agreement itself must have been made available to all employees, together with any copies and guidance, before the agreement itself is signed.

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Confirmation of the indefinite provision Regulation 9 allows an employee to gain confirmation of their indefinite employment status by writing to his employer and requesting a written statement confirming that he is no longer on a fixed-term contract and is effectively a permanent employee. The obligation on the employer is to respond within 21 days either agreeing or disputing the position. If the position is disputed then the employer must explain why – it may be for example, that the provisions of a workforce agreement have changed the position. In addition to this request, or indeed, if an employee so wishes to confirm their situation, an application for a declaration that they are a permanent employee may be made to an Employment Tribunal under Regulation 9(5), although an employee cannot seek such an application until they have made a written request from the employer and can only do so whilst they are still employed.

Detrimental and less favourable treatment outlawed Although an individual cannot make an application to seek a declaration of the indefinite status after they have left employment, there are special provisions in place to protect employees from being dismissed because they have made a request for a written statement; thus, the no detriment provisions prevent an employer from dismissing an individual simply in order to avoid them gaining indefinite or permanent status, when they have raised the matter. Regulation 6 states that an employee should not be subjected to any detriment (or failure), nor should they be dismissed (and if they are so dismissed they will be regarded as unfairly dismissed) simply because: •

they have brought proceedings under The Fixed-Term Employee Regulations;

•

have made a request for a written statement (as to why they may, in their view, be being treated less favourably).

Or for confirmation of their employment status: •

have given evidence or information in connection with such proceedings, either on their own behalf or on behalf of another employee;

•

done anything under the Regulations;

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•

alleged that the employer has infringed the Regulations; or

•

refused, or suggested or threatened that they will refuse, to sign away any rights conferred under the Regulations.

There are also special provisions which seek to protect those representatives of the workforce involved in negotiating with the employer, for any special terms or objective justifications, in connection with the four-year and successive contract arrangements or objective justification in circumstances thereunder. This includes preventing such representatives from being treated in a detrimental way or dismissed because they were going to stand for election or were actually representatives, or indeed, refused to sign any particular workforce agreement with the employer covering these areas. Claims of detrimental treatment and dismissal would again be made to an Employment Tribunal.

Written reasons for detrimental treatment Consistent with many of the other provisions contained in the Employment Act 2002, seeking to bring matters out into the open and allow the employer the opportunity to resolve any workplace disputes, an employee who considers they are being treated less favourably contrary to the Regulations, has the right to request a written explanation from his employer for the reasons of such treatment. An employer must respond within 21 days, failing which tribunal proceedings may be issued. As with many provisions where an employer is compelled to provide an answer, a failure to do so or indeed providing an evasive or equivocal answer may lead the Tribunal to draw an adverse inference.

Excluded employees Part 4 of the Regulations expressly exclude certain categories of employees from protection including: •

those in the Armed Forces (Navy, Military and Airforce);

•

those on Government training schemes;

•

those undertaking work experience of less than a year as part of a higher education course;

•

agency workers; and

•

apprentices.

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Redundancy exclusion – repealed Until the implementation of the Regulations, it was perfectly lawful in a fixedterm contract, to seek the employee’s agreement that if the contract came to an end at the expiry of a fixed-term, the individual was not entitled to a redundancy payment. Indeed, until 1999 it was perfectly lawful to exclude an individual from claiming unfair dismissal in a fixed-term contract. This was changed in October 1999 and the repeal of the redundancy exclusion is an extension of this principle. Any exclusions or waivers from a redundancy payment which is in a contract already agreed as at 1 October 2002 can be relied upon in the usual way. However, if that contract is renewed or extended after 1 October 2002, the waiver will no longer be valid. Similarly, any new contracts for a fixed-term period entered into after 1 October 2002 cannot lawfully exclude the individual’s right to claim a redundancy payment. Any individual with more than two years’ service has an entitlement to a statutory redundancy payment. Of course because of the provisions ensuring there is no less favourable treatment, such fixed-term employees may also have a right to any contractual redundancy payment, unless excluding them from a contractual redundancy payment or scheme can be justified objectively by the employer under the usual provisions. The Regulations introduce this provision by repealing the previous exclusion contained in the Employment Rights Act 1996, which made it perfectly lawful to exclude the right to a redundancy payment in the case of fixed-term appointments.

Conclusion According to estimates, between 25,000 and 53,000 employees will benefit from the Regulations with more being able to take advantage of redundancy payments in future.

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Action points •

Employers should identify any existing fixed-term arrangements in the business and review terms to ensure equality in benefits/clearly identify why differences exist.

•

Ensure going forward new fixed-terms are used in limited circumstances and do not go beyond 4 years unless for specific reasons.

•

Any terms over 4 years must have a clear and pressing business reason (objectively justify).

•

Ensure differentials in pay, benefits, pension, and redundancy entitlement can be explained and shown to be justifiable.

•

Appoint a person/body from whom authority to appoint on fixed contracts and the terms of such appointment must first be obtained.

•

Handle carefully any termination arrangements at the end of a fixedterm: can it be shown to be for a fair reason?

•

Advertise permanent vacancies and consider fixed-term appointees for redeployment, promotion and training opportunities.

•

Consider whether it is appropriate to vary or tailor the fixed-term arrangements within the business by collective agreement, agree more than 4 years are acceptable and/or what business reasons apply.

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Chapter 5 Equal pay questionnaires and other changes Introduction..........................................................................................67 Equal pay questionnaires....................................................................69 Key points for a complainant .............................................................71 Obligations on the respondent...........................................................72 Confidentiality......................................................................................73 The guidance notes..............................................................................74 Additional changes..............................................................................74 Changes to damages ...........................................................................76 Procedural changes .............................................................................77 Implementation dates..........................................................................78 Action points ........................................................................................78

Chapter 5 Equal pay questionnaires and other changes

Introduction There is a considerable history to what is a minor and relatively short section within the Employment Act 2002, Section 42, which enables the Secretary of State to introduce Regulations for the use of questionnaires within proceedings brought to claim equal pay. Claims of equal pay can be brought under the Equal Pay Act 1970, the purpose of which was to make unlawful paying a lesser salary or providing lesser benefits (which for these purposes covers every term compromising a benefit-in-kind under the contract of employment) where this is solely because a woman holds the job. The Equal Pay Act itself enables an employee to point to a member of the opposite sex who is doing: •

the same job or a broadly similar job to them; or

•

a job which is rated as equivalent under a job evaluation scheme operated by the employer; or

•

undertaking work of equal value (by reference to the demands and skills involved) to themselves

and to claim an entitlement to the same pay or benefit(s). An employer can defend a claim under the Equal Pay Act by proving that the differential between the claimant and her comparator has nothing to do with sex but is due to another non-gender based reason (technically known under the Equal Pay Act as a ‘material difference). Most claims for equal pay are brought by female employees but there is nothing to prevent male employees from seeking to pursue a similar complaint, as is the case with other treatment and discrimination under the Sex Discrimination Act 1975. Case law has already established that it is perfectly permissible for an individual to seek equality in this way not just with an existing employee, but with his/her predecessor in the job or indeed her successor.

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Despite the Equal Pay Act (which came into effect in 1975) having been in operation for well over a quarter of a century, it has long been recognised that equality in pay has not been achieved. This is often referred to as the ‘gender pay gap’. It is against this background that ongoing work has been undertaken to address this issue, culminating in the Government’s plans under Section 42 of the Employment Act 2002.

Impetus for change In October 1999 the Equal Opportunities Commission, whose role it is to monitor and indeed police the operation of both the Equal Pay Act and the Sex Discrimination Act, established its Equal Pay Taskforce, who reported upon the operation of the Equal Pay Act and made recommendations as to changes aimed at more successful implementation of equality in pay. The Taskforce reported and made recommendations on better implementation of equal pay in February 2001. In April 2001 the Government, appointed its own, independent reviewer when Denise Kingsmill CBE was asked to examine ways of improving women’s participation at work as well as reducing the pay gap. The aim of that review was to look at non-legislative but cost effective ways of achieving such improvements. Denise Kingsmill’s report was issued on 5 December 2001 and, amongst other recommendations, suggested that a method be introduced to improve the information which an individual employee could obtain to satisfy themselves as to whether they were receiving equal pay. This recommendation forms the basis of the provisions of Section 42. Relatively little change will be made to existing discrimination laws through the introduction of the Employment Act 2002. Plans to introduce new anti-discrimination measures (age, religion, and sexual orientation) will be introduced through separate legislation between 2003 and 2006. However, one significant proposal is the plan to implement through Section 42 of the Act, a new entitlement to issue Equal Pay Questionnaires. The use of questionnaires generally, are unique to claims for discrimination under UK law (they are currently already available to individuals who consider that they may have been discriminated against on grounds of their gender, marital status, race or disability). Provisions already exist through statutory instruments for Sex Discrimination Act Questionnaires, Race Relations Act Questionnaires and Disability Discrimination Act Questionnaires to be issued.2

2 Sex Discrimination (Questions and Replies) Order 1975 (SI 1975/2048), Race Relations (Questions and Replies) Order 1977 (SI 1977/842) and Disability Discrimination (Questions and Replies) Order 1996 (SI 1996/2793).

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The regulations for the issuing of equal pay questionnaires, follow a similar format to the existing provisions for service of other discrimination questionnaires. This means that an individual who wishes to investigate further whether there might be discrimination occurring, to explore their earnings, the earnings of others and the reasons why another male employee or employees are earning more, would be able to issue a questionnaire either: •

within 3 months from the act of discrimination; or

•

where proceedings have already been issued, within 21 days of the issue of proceedings (or later with leave of the Tribunal).

Under the Equal Pay Act 1970, the date within which proceedings must be commenced is actually 6 months from the end of the contract of employment and the Regulations reflect this 6 month timescale so that any questionnaire served under the equal pay provisions would only be admissible to an employment tribunal if served within 6 months from the employment ending (National Power v Young [2000] DCLD 46).There will also be changes to the time limits applicable to equal pay claims.

Equal pay questionnaires The Department of Trade & Industry has explained that the decision to introduce a questionnaire process for equal pay claims, is aimed at achieving a method by which it will be “easier for individuals to request key information from their employer when they are deciding whether to bring a case”; and it “will help simplify and speed up the Tribunal process benefiting both employers and employees”. This could lead to settlement, or resolution in some cases. (See DTI website on the Employment Act 2002: www.dti.gov.uk/er/employ/index.htm.) A draft of the questionnaire form itself was issued on 17 October 2002 and views were sought on both format and content, before 10 January 2003. It is anticipated that use of the questionnaire process will be available from April 2003. In addition, both draft Regulations and explanatory notes to assist in outlining the background and aims of the new equal pay provisions, are available (reference number 02/1370 (explanatory notes) and draft statutory instruments (02/1370)).

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It is important to note that the Equal Pay (Amendments) Regulations, which compromise the statutory instrument is not limited solely to the introduction of the questionnaire process but deals with other changes which are also to be made to the equal pay legislation.

Questionnaire process The format and style of the draft questionnaire is very similar to those which already exist under the Sex Discrimination Act 1975, the Race Relations Act 1976 and the Disability Discrimination Act 1995. What is different however, is the detailed guidance notes and the sections outlining the key questions which can be raised. The purpose behind the use of the questionnaire is to: •

help an individual employee decide whether to institute proceedings for equal pay in the first place;

•

helping them to evaluate whether or not they do indeed have a legitimate complaint or claim;

•

to assist them in preparing the case, by obtaining background information and explanations from the employer;

•

and finally, if they decide to continue with the claim, to help them present the case itself.

The draft Regulations deal also with procedural issues such as time limits and the assessment of damages or loss which apply under the Equal Pay Act when it is amended. Section 42 introduces a new Section 7B within the Equal Pay Act itself, setting out how an equal pay questionnaire is to operate.

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Key points for a complainant It is for a complainant to formulate the detail of their questionnaire by completing the detail of the document which will be available. There are a number of prompts and boxes which invite the individual to outline why they consider they have been treated unequally and seek information from the employer about pay arrangements, who was paid what and identifying others who they consider to be doing equal work but receiving better pay and benefits. The prescribed form is fairly straightforward and reflects the existing style and format of questionnaires currently in operation. The key to the usefulness of documents of this nature however, will be in the range and detail of questions which a particular questionnaire contains. This ultimately is a matter for the individual seeking to serve the questionnaire to address. Each questionnaire in its detail must be tailored to the particular case. In light of the fact that the equal pay questionnaire will be aimed at uncovering details regarding why an individual’s earnings are fixed at a certain level or their benefits (when compared to others) is less, likely questions will encompass: •

details of the claimant’s earnings and those of her comparators;

•

explanations as to why decisions have been taken in the past;

•

details of the gender profile across grades and within certain earnings bands within the organisation; and where relevant

•

information regarding equal pay audits, pay negotiations and collective agreements.

The timescales are important because the questionnaire process is there to help with any claim. The questionnaire can only be issued before proceedings in the Employment Tribunal are begun or alternatively within 21 days of proceedings having been issued. The thought process tends to be that if the individual does not raise the questionnaire before issuing the proceedings they are less likely to require the information in the first place. It is nevertheless possible to issue a questionnaire outside the 21 days envisaged, but to do this permission or leave of the Employment Tribunal must be sought.

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Obligations on the respondent The respondent in this context is of course the employer’s organisation who will be replying to the questionnaire. The first obligation to note is that a response to any questionnaire should be provided within eight weeks of the date of receipt of the document. This is a somewhat longer timescale than applies with other questionnaires and this is provided because the Government anticipated many employers would require a longer period to collate what could be detailed information, statistics and figures about their pay arrangements. Strictly speaking, nothing within the current discrimination questionnaire regulations and, therefore, nothing in the new regulations are likely to make replying to a questionnaire compulsory. The penalty which an employer faces however is that a failure to answer a questionnaire, or answering in an evasive or equivocal manner within a reasonable period, would allow a tribunal to draw an inference. What this means is that if a response is not provided without a reasonable excuse or there is some deliberate side stepping in the answers, a tribunal would be entitled to form an opinion that this was the response adopted because the employer had something to hide and indeed was discriminating. As is always the case with replying to questionnaires, it is important not only that a reply is provided in the first place but that the content of any response is clear and accurate. The new Section 7B will provide that an organisation which fails to reply to a questionnaire or provides an answer which is ‘evasive’ or ‘equivocal’, faces the risk of the Employment Tribunal drawing an adverse inference. This means that the Tribunal may conclude that the employer has ‘something to hide’ and may presume that there has been a breach of the Equal Pay Act 1970, hence the need to respond fully, clearly and honestly. It is rare for the response to the questionnaire itself to be enough to satisfy a tribunal that there has been a breach of equal pay legislation or discrimination, however, it will often serve as a useful indication or pointer, together with other evidence.

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Confidentiality One particular concern which is expressly addressed within the guidance notes, in the questionnaire itself, (currently issued in draft) is the question of protecting what will be sensitive information regarding other employees. A complainant is very likely to request details of the package upon which their comparator is employed. This could include details of their salary levels, pay increases in the past or benefits of which they are in receipt. The guidance notes suggest that it will be possible for an employer to reply to this information without breaching confidentiality, if they can anonymise the details. Thus, if it is possible to identify the details of the packages of others, without attributing their name to each, confidentiality is protected. Because of the need to avoid a tribunal drawing an adverse inference, clearly many employers will wish to provide the information and may feel themselves in somewhat of a dilemma: to protect their other employees by refusing to provide the information but risk the Tribunal drawing an adverse inference. It is expressly stated within the guidance notes that if the employer can provide a reasonable excuse, i.e. a legitimate and genuine explanation for refusing to provide this information, then the Tribunal should not draw an adverse inference. There is a section within the body of the questionnaire itself, which allows an employer to explain if they have not replied to some of the questions, why that it is so. It would be important for employers in future to fully explain and outline the reasons why some information may not have been provided although asked for by the complainant. Of course there may be circumstances in which it is not possible to anonymise the information because this simply will not protect the identity of the other employees. This may occur for example, where only one comparator is identified or alternatively, where what is being detailed is the salary or package of a number of specific jobs where there may only be one incumbent. It would not be a breach of confidence if an employer sought and obtained the consent of the subject comparator before disclosing the information. If consent is refused then this would provide a reasonable excuse but should be explained by the employer in the response to the questionnaire.

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The guidance notes The guidance notes that appear as Part 4 of the draft questionnaire are extremely useful and should be read carefully before completing the questionnaire (in the complainant’s case) or completing the reply (in the employer’s/respondent’s case). In particular, an employer is expressly asked whether he agrees that the individual who is seeking to complain or seeking the information, is conducting equal work (the same or broadly similar; rated as equivalent or of equal value). Some of these concepts are quite technical under the equal pay legislation and if in doubt guidance should be sought and a careful assessment made before making any admission or accepting the complainant’s assertion. Similarly, if an explanation is put forward for why a pay differential exists, clearly it must be genuine and indeed accurate. At present, many organisations are being persuaded to do their homework now and at least to have conducted an analysis of the current pay arrangements, the gender profile and pay bands, so that they will already have collated such information. This will not only help to provide a response to the questionnaire but more significantly, would identify if the organisation has a problem which needs to be addressed quickly (i.e. discrimination in their pay arrangements is occurring) so that they can actually resolve this before facing the risk of proceedings or a difficult list of questions to which they must respond.

Additional changes The other changes that are to be made to the Equal Pay Act, do not strictly fall within the provisions of the Employment Act 2002 but nevertheless, there are amendments which are likely to take place over the course of the next twelve months and arise out of the same background as the introduction to the questionnaire process. Conveniently, these additional changes are set out in the amending Regulations. The additional changes centre around three aspects: the time limits within which claims must be brought, the remedy or compensation made available and the removal of a fairly technical step in the equal value claims procedure applicable to one particular type of equal pay claim, under the equal value element.

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Time limit changes The first change relates to the timescale within which Employment Tribunal proceedings, for equal pay, must be brought. The current time-limit runs from six months after the end of the employment, although a woman can bring proceedings at any time whilst her employment continues. The six-month time-limit in future will be able to be extended where: 1

An employer deliberately conceals a fact and the individual does not discover that information (or could not reasonably have discovered it) within the six-month timescale. In such circumstances the six months do not even begin to run until such time as the employee discovers the relevant fact or ought to have discovered it. This may have particular significance if an employer deliberately fails to provide information for example in response to a questionnaire.

2

The second is an extension of the time limit to do with a person’s capacity and ability to understand the proceedings which should be issued. Where an individual is a minor (under 18 or of unsound mind) (as defined under legislation in England and Wales) or (under legislation in Scotland is under 16 or incapable – as defined in the Adults with Incapacity (Scotland) Act 2000), again, the six months do not begin to run until that disability or incapability ceases to have effect.

The circumstances in which these two new provisions are likely to have effect should be rare. A third change is made to the time-limit provisions and this arises as a result of a series of claims and cases brought in the Employment Tribunal which have challenged employers’ previous practices of excluding part-time employees from any pension entitlement. This culminated in a judgement of the European Court of Justice: Preston v Wolverhampton Healthcare NHS Trust Limited [Case reference C-78/98]. The Preston case dealt specifically with the question of when time-limits apply under the equal pay legislation, where not one contract is entered into between the employer and employee, but a series of contracts. The basis of the Preston claims involved part-time employees claiming that they were employed on equal work to full-time colleagues, but were being paid less because of their exclusion from their employers’ pension scheme. In a number of claims considered by the European Court in this case, there were individuals employed on successive contracts, for example a group of teachers employed on termtime/contracts for the academic year. The question was whether the six-month time-limit ran – for each claim of equality – up to the six months from the ending of each employment contract. The European Court said no and Section 2AA,

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which is to be the amendment to the Equal Pay Act, will make clear that where there are a series of such contracts but nevertheless an underlying stable employment relationship, although there are two or more contracts or a series of them, the six-month time limit is not triggered until that underlying stable employment relationship ends.

Changes to damages If an individual is successful in her claim under the Equal Pay legislation, the current provisions of Section 2(5) of the Equal Pay Act 1970, allows her to recover the difference between her salary or the value of the benefit and that of her comparator, for a period of two years from the date proceedings were issued. The argument has been that this two-year limit on back pay renders a claim of discrimination under the Equal Pay Act less effective a remedy than normal breach of contract claims. In future tribunals will be able to award up to six years’ back pay for claims in England and Wales and up to five years for claims in Scotland. Obviously this period will be less, if the individual has been employed and working for less pay for a shorter period. This period can be extended further, to cover circumstances in which the employer deliberately concealed facts and, just as the time-limit does not begin to run until the individual realises that they have been misled, any back pay can be awarded beyond the six years, if the period during which the facts have been concealed is longer than six years. A similar extension will apply to the remedy, where proceedings are issued after the individual ceases to be under a disability. Effectively, this means that provided no more than six years have elapsed since the individual ceased to operate under a disability, or from the date the concealed facts were discovered (as the case might be because proceedings must have been issued within 6 years of that date), damages for the entire period can be awarded, dating back to the date of the contravention.

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Procedural changes The two procedural changes that are being made are at opposite ends of the spectrum, in that the first seeks to remove a ‘short circuit’ procedure which has been available under the Equal Pay Act, whilst the second seeks to expand the role of the independent expert. The first change is to remove an additional step largely in the hands of an employer which exists in equal value claims. Section 2A of the Equal Pay Act 1970, allows an Employment Tribunal to strike out an equal pay claim if it is satisfied that there are ‘no reasonable grounds’ for deciding that the work of the claimant and that of his/her comparator(s) are of equal value. This power is to be removed in its entirety. The question of whether jobs are of equal value or not is a matter that will in future have to be explored and examined by the Tribunal in all cases without the ability to reach a conclusion until all the evidence has been heard. However, if there is a job evaluation scheme in place, i.e. a formal grading structure, then provided it is an objective and fair scheme – which does not discriminate on grounds of sex – the Tribunal will be entitled to conclude that the jobs are not of equal value if the complainant and comparator have been given different values within that job evaluation scheme. The Tribunal will not be able to dismiss the claim at an early stage and conclude that the jobs are not of equal value, if there is any reason to suspect that the job evaluation scheme itself discriminates on grounds of sex. The final change is one which expands the role of an independent expert. Independent experts are used currently, where an individual brings an equal value claim. Thus, there is no argument available or being pursued that the jobs of the comparator and claimant are sufficiently similar, nor is there a job evaluation/grading scheme in place. When relying upon equal value, because that involves an assessment of the overall skills required and demands of the two jobs (or the jobs under consideration if more than one comparator is being relied upon) an independent expert can be appointed by the Tribunal to assist it in assessing that question. The expert will examine the jobs in detail, consider the job descriptions and often interview the employer/employee and any job holder, before reporting to the Employment Tribunal. There will be an additional role for an independent expert in future, and they will be able to be asked by the Tribunal to consider specifically any job evaluation scheme which is in place and conclude whether that system discriminates, is acceptable or for any reason which may be put forward, cannot be relied upon.

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Implementation dates The changes to all of the amendments under the Equal Pay Act are due to come into effect on different dates as follows: Change

Implementation Date

The use of Equal Pay Act questionnaires

April 2003

Changes to the equal value procedure and the powers of the independent expert

December 2003

Amendments to the time limits and the introduction of the six-year rule

July 2003

Action points Employers must assess the extent of the risk of equal pay claims being brought and take action to minimise that risk. •

Is there any inequality in pay? Consider an equal pay audit to identify who is paid what/receives what pay increases/benefits/are in what grades, by reference to gender.

•

Ensure decisions on pay, grading, salary increases are based on clear rationale, objective reasons and are transparent.

•

Train senior managers, board members and those involved in pay decisions/collective pay negotiations on equal pay rights and issues. Do they understand for example, how inequalities may arise inadvertently/unintentionally?

•

Reduce future risks and liabilities by addresses (and correcting) inequalities – where appropriate through negotiations and agreement with any recognised trade unions.

•

Assess and make contingencies for any past and ongoing future inequalities and be aware of the risk.

•

Arm yourself so that you can answer a questionnaire, if one is received, within the 8 week timescale.

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Chapter 6 Employment tribunal changes Encouraging conciliation ........................................................................81 Employment Tribunal forms ...................................................................82 Practice directions ...................................................................................83 Speeding the Tribunal process ...............................................................83 Extended power to award costs .............................................................84

Chapter 6 Employment Tribunal changes A number of procedural changes are to be made to Employment Tribunal claims. Some of these are merely administrative, others are aimed at streamlining and improving the process itself at hearing. There also some proposals in relation to extending the power to award costs, particularly against a party’s representative, in certain limited circumstances. Finally, continuing the theme of seeking to encourage the resolution of matters without recourse to tribunal hearings, a compulsory period of conciliation is to be introduced. The provisions within the Employment Act 2002 are only the starting point as far as tribunal changes are concerned. In October 2001 the Government also appointed an Employment Tribunal System Task Force, to investigate and make recommendations on how the Tribunal service could be improved by addressing issues such as efficiency and cost effectiveness. The Task Force issued its report at the end of 2002, making certain recommendations within its report, which are to be considered and addressed. This means that further changes to the Tribunal system and process are likely. For the moment, however, the 2002 Act sets out certain additional powers which the Secretary of State can introduce via amending regulations. At this stage, these draft regulations have not been prepared and so what is contained below is simply an outline of the principles and an explanation of the changes which will be sought. The detail of how the new rules will operate are not as yet known. It is likely that amending regulations, governing Tribunal procedures, will be issued later in 2003 effecting the changes set below, as well as further changes suggested by the Task Force.

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Encouraging conciliation The statutory disciplinary and grievance procedures contained within a separate part of the Employment Act, are all about encouraging those party to an employment contract to resolve matters in-house without recourse to an employment tribunal. Where proceedings are issued current legislation provides for the Advisory Conciliation Arbitration Service (ACAS) to conciliate, in an effort to resolve the dispute prior to the matter going to an Employment Tribunal. However, this is not ACAS’s only role, and they have a number of responsibilities all of which relate to employment rights generally. Greater emphasis is to be given to ACAS’s power to conciliate. The parties to an employment tribunal dispute will specifically have to be given a period during which to address their mind to the resolution of a claim. In particular, the aim of Section 24 of the Act is to encourage serious consideration about conciliation at a much earlier stage. Whilst the statistics (for example, the ACAS annual report) demonstrate that a high percentage of Tribunal claims are settled, often this only occurs in the weeks before (and sometimes the night before or morning of) the hearing. The ACAS Report for 2001/2002 for example, suggests some 42% of cases were resolved before the hearing. Section 25 of the Act will amend both Section 7 and 18 of the Employment Tribunals Act 1996. The Tribunal will be given power to generally postpone a case pending a compulsory conciliation period. During that conciliation period, whereas currently ACAS have the power to conciliate, they will be placed under a duty during the compulsory conciliation period, to try and resolve the issues between the parties. Once the compulsory period has expired, their obligation will continue but will revert to a general power. The regulations, which we have yet to see, will also give the conciliation officer an opportunity to extend the conciliation period if progress is being made. What we do not know at present, is what sort of timescale is likely to be allowed to elapse before the case is actually listed for hearing, to allow the early consideration to occur. The Government has indicated that it should be a relatively short timescale in the period immediately before the issue of proceedings, but as yet the best indication that we have is that it is likely to be less than three months. Clearly, there will be a need to counter-balance the aim of encouraging conciliation against the merits of swift recourse to justice.

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Employment Tribunal forms Under the current provisions it is sufficient for an individual to issue proceedings that an application is made in writing with certain minimum information (the applicant’s details, the employer or respondent’s details and the general grounds which form the basis of complaint). There is no obligation or indeed requirement to use any particular form, although there is available and commonly used an Originating Application form and a Notice of Appearance form. Section 25 of the Act will allow rules to be issued under which parties to proceedings will have to use the prescribed forms. The reason this approach has been adopted is because it is thought that the use of the prescribed form, identifying as it does certain specific minimum information and raising certain questions and facts, will help in clarifying the issues between the parties at an early stage. It is not just the Applicant or Complainant who will be required to use the Originating Application form, but a Respondent will also have to use the prescribed form. Not only will the (one assumes fuller) details in the prescribed form be used to help to resolve the issues and to clarify points for the parties but will also be useful for the Tribunal. This is important because a further power to be introduced is the ability of the Tribunal to consider striking out a claim or dispose of it without a hearing (examined further below) – together with existing powers which exist to convene a pre-hearing review or order some form of directions at the hearing. As part of this proposal the regulations may also allow for a further requirement that certain key documents relating to the claim be added to the prescribed forms: for example, any dismissal letter, statement of main particulars or contract of employment, copies of the disciplinary and grievance procedures. This will be a welcome change because until now tribunals have not been at all keen to have sight of background documents until the hearing itself. Whilst the aims of these provisions are welcomed, it remains questionable whether amending the forms – unless the changes adopted are substantial – will provide sufficient clarity and detail. A general outline of the facts and circumstances will not necessarily clarify the issues in dispute. The key to the success of this particular proposed change is going to be heavily dependent upon the way in which the new forms are designed.

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Practice directions As another administrative step, the Presidents of the Employment Tribunal will be given a general power to issue practice directions. Practice directions are general statements (which currently can be issued by the President of the Employment Appeal Tribunal) setting out rules of process such as preparation and formatting of trial bundles or witness statements. Across the country Employment Tribunal offices are grouped together into regions. Whilst consistency across the Country is attractive and of benefit, in reality there do exist different practices and preferences across different regions. Issuing practice directions will ensure that in future there will be consistency across the national tribunal system. All Section 27 of the Act does is provide the Secretary of State with the power to issue regulations to enable the Presidents (at any time) to issue such practice directions.

Speeding the Tribunal process There are two distinct proposals contained within Sections 26 and 28 of the Act, which are aimed at enabling the Tribunal to dispose of a matter without having to list the case for hearing.

Disposing of the case without a hearing The first (under Section 26) enables regulations to be introduced whereby a tribunal can decide the outcome of the case without the need for a hearing. Clearly, this is a power which is likely to be used sparingly and only in specific, defined circumstances. Again, we will have to wait for the regulations in order to identify precisely when this can occur; the indications are that it will only be in circumstances where the parties have consented to a process of this nature (effectively contracting out of the Tribunal hearing and thus such consent would have to be based on confirmation that an appropriate advisor has explained fully their rights and options). Finally, even in circumstances where the parties do consent, there will be an over-riding power on the part of the Tribunal to make the final decision as to whether to convene a full hearing or not. In effect, this means that even with consent a tribunal can still over-ride the request and agreement of the parties on this point.

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Striking out claims The second power is effectively a tidying up of an existing part of the Tribunal procedures. It is possible under the current rules for Employment Tribunals to convene a pre-hearing review (either of its own volition or on application of one of the parties). This can be requested where it is considered that a particular claim has no reasonable prospect of success. Under the current rules, if the Tribunal agrees with that assertion and therefore considers the case has little merit, it can order that the party with the weak claim, and as a condition of continuing, pays a deposit of up to £500. Generally speaking, a costs order can be the risk which that party faces. Common practice at present is for the parties to pay the deposit (particularly when often less than the £500 is ordered). They can then continue notwithstanding the fact that the Tribunal may at the pre-hearing review have expressed the opinion that there was indeed little prospect of success hence the fact that the Order was made. The only power to dismiss or strike out the claim at present is if the deposit is not actually paid within the 21 days. There is some doubt as to whether the Tribunal actually does have the power to strike out the claim in any other circumstances. This will change when new regulations allow tribunals to strike out claims which in its opinion are scandalous, misconceived or vexatious. It is probable also that as well as striking out an entire claim and the case altogether, a tribunal will be able to strike out any parts which it considers falls within this definition: for example, certain parts of paragraphs in either the Originating Application or Notice of Appearance. A concern must however, remain as to how useful such new powers will be. Tribunals are already reticent about making cost orders and indeed deposit orders and the reality is that they are likely to be just, if not even more, conservative about striking-out claims.

Extended power to award costs The final addition to the Tribunal’s armoury, which is to be introduced with a view to improving the process under the current Act, is to extend their powers to award both costs and expenses. Again these powers will be introduced by detailed regulations which have yet to be issued but the scope of these changes need to be considered against the backdrop where costs orders in the Employment Tribunal remain rare. The general principle is that unlike County Court and High Court cases, the winning party does not recover their costs against the unsuccessful party and the Tribunal can only award costs where it can be

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shown that in bringing or continuing proceedings, a party has acted vexatiously, abusively, disruptively or otherwise unreasonably. It is also possible for the Tribunal to make an award for costs where the proceedings can be shown to have been misconceived, in other words there was no reasonable prospect of success. It is common for one party who considers this to be the case to write at an early stage to the other side asserting this. It is possible under the current Tribunal rules (the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (SI 2001/1171) and Employment Tribunals (Constitution and Rules of Procedure) (Scotland) Regulations 2001 (SI 2001/1170) for a party to be ordered to pay costs on the basis, not just of their own vexatious, abusive, disruptive or unreasonable conduct, but that of their representatives. Under the new and amended rules to be introduced, the powers to award costs in these circumstances will be extended so that where a party’s representative falls foul of the provisions, the Tribunal would in fact be able to order that the representative pays the costs rather than the party. The indications from the Government are that they will exclude and thereby protect from such costs orders, voluntary organisations such as Citizen’s Advice Bureaux and Trade Union Representatives. Those however, who work on a ‘no win no fee’ basis will be at risk of costs if their conduct can be considered to be blameworthy and fall within the unacceptable grounds under the rules. As a further change to the costs rules, not only will a party be able to recover the costs of the hearing itself but in future costs of any preparation time. Guidelines are likely to be issued as to the sort of preparation and the amounts which should be considered. Costs in respect of preparation will only be able to be made in the same circumstances as other costs, namely where it can be demonstrated that the case in question has been pursued (either by the party or the representative) vexatiously, abusively, disruptively or otherwise unreasonably, or having no reasonable prospect of success, such that it is misconceived. The final change to the costs provisions is really a tidying up the existing arrangements. In a recent Court of Appeal case Kovacs v Queen Mary and Westfield College and the Royal Hospitals NHS Trust ([2002] IRLR 414) the Court of Appeal overturned the decision made by an Employment Tribunal to order an Applicant to pay costs which, after taxation, i.e. determination by the County Court, was calculated as £62,000, when her claim failed. Dr Kovacs brought an unsuccessful claim of unfair dismissal, unlawful race and unlawful sex discrimination which was dismissed. She was ordered to pay the costs of her case against the Second Respondent to be taxed (i.e. assessed in full by the Court). Following this taxation the County Court assessed to costs due as £62,000.

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The case was appealed on the grounds that the Tribunal had been at fault ordering this level of costs without first investigating whether the Applicant had the means to pay. According to the Court of Appeal, there was no such obligation placed upon a tribunal under the costs rules. This will be changed under the new section within the amending regulations and will require the Tribunals to assess the ability to pay as a factor before making a costs award or indeed any award that a party can recover their preparation time. In order to streamline and make consistent all issues to do with costs, the Employment Appeal Tribunal will be given similar powers as to costs as the Employment Tribunal itself.

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Chapter 7 Training and skills Introduction..........................................................................................88 Work focused interviews ....................................................................88 Union learning representatives..........................................................89

Chapter 7 Training and skills

Introduction There are a number of steps which the Government proposes taking, aimed at encouraging both learning at work and the development of skills for those not in employment. These proposals will conveniently be dealt with in this Chapter. Not all of the detail is yet available, particularly those dealing with the skills and ability of those in receipt of benefits, as detailed proposals and regulations have yet to be issued from the Department of Work and Pensions. The second area relating to training, concerns additional rights to be given within the work place to individuals designated Union Learning Representatives; these are individuals with specific responsibility through a recognised trade union within the work place, who will be able to gain time-off rights in order to advise on training requirements. By way of further assistance, guidance from the Advisory, Conciliation and Arbitration Service (ACAS) is being prepared.

Work focused interviews Section 49 of the Act will amend the Social Security Administration Act 1992, to enable additional steps to be taken to encourage the partners of those in receipt of Social Security Benefits, to seek work. The provisions will apply when a person is in receipt of any of the following benefits: •

Income Support.

•

Jobseekers Allowance (which is income based but not in respect of a joint claim).

•

Incapacity Benefit.

•

Severe Disablement Allowance.

•

Invalid Care Allowance.

The focus of the provisions is actually to encourage the partner of those in receipt of such benefits, to consider and assess their options for work.

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Relevant partner A partner for these purposes must be a person under the age of 60 – and the claimant must also be under the age of 60 in order for the provisions to have effect. Under the Regulations, to be introduced by the Department of Work and Benefits, a timescale may be set requiring the partner (as defined in Part 7 of the Contributions and Benefits Act 1992) of an individual who is in receipt of the benefits identified and is aged under 60 and themselves is under 60, for the partner to attend a work focused interview. Attendance at the interview can be made conditional upon continuing payment of the benefit, with the consequence that a failure, without good reason, to attend such an interview may result in the reduction of the benefits payable. According to the Department of Trade and Industry, the purpose behind these new provisions is to encourage individuals of working age to consider taking opportunities for work where their partner is in receipt of particular benefits. It is likely that the work focused interview will explore the individual’s skills and abilities with the aim of discussing and addressing any concerns and encouraging them to seek work. The DTI has also said that one specific area of support will be to help the individual find work through the New Deal arrangements.

Union learning representatives Many of the existing employment rights which attach to trade unions, their members and union officials and shop stewards, are contained within the Trade Union and Labour Relations (Consolidation) Act 1992. Section 43 of the Employment Act 2002 will introduce a new Section 168A to the existing protection. In some organisations there already exists trade union officials who have been appointed by the union with particular responsibility for training and development. Section 168A will build upon these officials, by enhancing their role and providing them with time-off as well as special protection.

Who is a Union Learning Official? In order to be able to benefit from these new rights, the individual in question must be a member of an independent trade union which is recognised by the employer and must also be a designated union representative of the trade union.

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Before an employer is required to allow for the time-off, the union must first make clear that the individual or individuals do have the special status of Union Learning Representatives. In order to do this, under Section 168A(3), the union must have given to the employer written notice confirming that the employee is a Learning Representative and has met the ‘training condition’. That training condition is effectively a way of establishing the learning representative’s status and arming him with the skills to carry out the learning representative role. It is met if: •

the Learning Representative has undergone training to enable him to carry out his role (see below); or

•

the union has in the last 6 months, given the employer notice that the employee will be undergoing such training; and

•

having given the notice of intention to undergo training, the union provides that training and when completed, the union confirms the completion of it.

Training purposes The training which will arm a Union Learning Representative must be delivered in order to meet their role. Moreover the time-off that they are then entitled to take is not just to advise members (see below) but includes paid time-off to undergo training, to enable them to carry out the training role. For these purposes training involves: •

analysing learning and training needs;

•

providing information and advice about learning or training needs; and

•

arranging learning or training and promoting its value.

The time-off being sought must be for one of the above purposes and undertaken in relation to qualifying members of the trade union. The time-off may not just be for the purposes of actually carrying out this analysis, providing information and arrangements and promotion, but consulting about such matters, as well as preparing for consultation and analyses.

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The time-off entitlement Designated Union Learning Representatives will be entitled to paid time-off to undertake these activities and in particular, in order to advise and assist qualifying members of the trade union. Qualifying members are defined under what will be the new Section 168(A)(10). These are members of the trade union who are employees of the employer and in respect of whom the union is recognised as representing. Thus, if an employer recognises a particular union for production workers but not warehouse workers, strictly that union’s learning representative is only entitled to paid time-off in order to advise members of the production team. He cannot claim a right to time-off to advise any member of the warehouse team. It would also seem that the union learning representative is not entitled to time-off to advise any member of the production team, who is not a member of his trade union. The amount of time that must be permitted is not actually set out in the Section. The provisions simply say that an employer must allow a reasonable amount of paid time-off. This will necessarily vary according to the size of the workforce, the number of Learning Representatives and the scope and range of learning activities to be undertaken and addressed. Of course the number of employees who are qualifying members is also likely to be a factor. It is because of this particular issue that an ACAS code is likely to be put in place, which will be similar to existing ACAS codes in other areas regarding time-off rights, particularly in connection with union activities. The Union Learning Representative so designated must also be permitted by the employer to take paid time-off in order to undergo training to better arm him for his responsibilities.

Employee rights Having put these entitlements in place for Union Learning Representatives and taken steps to encourage such a facility, the counter-balance must be to allow the individual employees themselves to gain access to, and seek advice from, such individuals. This is provided for within what will be a new Section 170(2A-C) of the 1992 Act. In future, an employer will have to allow members unpaid time-off to have access to their Union Learning Representative, to seek advice and guidance in relation to the learning activities as defined.

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Rights and remedies Any employee who has not been permitted their unpaid time-off or considers that they have not been allowed sufficient time (defined in the Act as reasonable) or indeed any Union Learning Representative with a similar complaint, can present a claim to the Employment Tribunal who will make a declaration if appropriate. This particular provision within the Act has a longer lead-in time and the indications from the Department of Trade and Industry is that although ACAS is working currently on the Code, these provisions are unlikely to take effect until after 2003.

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Chapter 8 Conclusion

Chapter 8 Conclusion The remit of The Employment Act 2002, as can be seen, is broad and varied. The changes which it will bring into the workplace will have far reaching effects and, for this reason, its implementation will be phased over a lengthy period. If one identifies the fixed-term employees changes as the first measure introduced by the Act in October 2002, the Act will finally have full effect in April 2004. Organisations should use this timescale to plan and make the changes required, as well as raise awareness, to ensure compliance. The growth in employment labour diversity and industrial rights within the workplace has been huge in recent years. It is likely that further changes beyond the 2002 Act will be forthcoming. For this reason, a wise employer will arm themselves early with the knowledge needed to take on board these imminent changes, before any further and future issues arise.

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£175

1 85418 286 2 • 2002 A major new report on recent changes to the law and their commercial implications and possibilities. The report explains the principles and techniques of successful international negotiation and provides a valuable insight into the commercial points to be considered as a result of the laws relating to: pre-contract, private international law, resolving disputes (including alternative methods, such as mediation), competition law, drafting common clauses and contracting electronically. It also examines in more detail certain specific international commercial agreements, namely agency and distribution and licensing. For full details of any title, and to view sample extracts please visit: www.thorogood.ws You can place an order in four ways: 1 Email: [email protected] 2 Telephone: +44 (0)20 7749 4748 3 Fax: +44 (0)20 7729 6110 4 Post: Thorogood, 10-12 Rivington Street, London EC2A 3DU, UK

S e e f u l l d e t a i l s o f a l l T h o r o g o o d t i t l e s o n w w w. t h o r o g o o d . w s

HR AND EMPLOYMENT LAW

Employee sickness and fitness for work – successfully dealing with the legal system GILLIAN HOWARD

£95.00

1 85418 281 1 • 2002 Many executives see Employment Law as an obstacle course or, even worse, an opponent – but it can contribute positively to keeping employees fit and productive. This specially commissioned report will show you how to get the best out of your employees, from recruitment to retirement, while protecting yourself and your firm to the full.

How to turn your HR strategy into reality TONY GRUNDY

£129.00

1 85418 183 1 • 1999 A practical guide to developing and implementing an effective HR strategy.

Internal communications JAMES FARRANT

£125

1 85418 149 1 • July 2003 How to improve your organisation’s internal communications – and performance as a result.

Data protection law for employers SUSAN SINGLETON

£125

There is growing evidence that the organisations that ‘get it right’ reap dividends in corporate energy and enhanced performance.

1 85418 283 8 • May 2003 The new four-part Code of Practice under the Data Protection Act 1998 on employment and data protection makes places a further burden of responsibility on employers and their advisers. The Data protection Act also applies to manual data, not just computer data, and a new tough enforcement policy was announced in October 2002.

MARK THOMAS

£69.00

1 85418 270 6 • 2001 Practical advice on how to attract and keep the best.

Successfully defending employment tribunal cases

1 85418 008 8 • 1997

This report will help you to understand the key practical and legal issues, achieve consensus and involvement at all levels, understand and implement TUPE regulations and identify the documentation that needs to be drafted or reviewed.

New ways of working STEPHEN JUPP

DENNIS HUNT

£95.00

Why do so many mergers and acquisitions end in tears and reduced shareholder value?

Successful graduate recruitment JEAN BRADING

Mergers and acquisitions – confronting the organisation and people issues

£99.00

£95 1 85418 169 6 • 2000

1 85418 267 6 • 2003 Fully up to date with all the Employment Act 2002 changes. 165,000 claims were made last year and the numbers are rising. What will you do when one comes your way?

t +44 (0)20 7749 4748

e [email protected]

New ways of working examines the nature of the work done in an organisation and seeks to optimise the working practices and the whole context in which the work takes place.

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Knowledge management SUE BRELADE, CHRISTOPHER HARMAN

changes to internal disciplinary and grievance procedures

•

significant changes to unfair dismissal legislation

•

new rights for those employed on fixed-term contracts

•

the introduction of new rights for learning representatives from an employer’s trade union

£95.00

1 85418 230 7 • 2001 Managing knowledge in companies is nothing new. However, the development of a separate discipline called ‘knowledge management’ is new – the introduction of recognised techniques and approaches for effectively managing the knowledge resources of an organisation. This report will provide you with these techniques.

Reviewing and changing contracts of employment ANNELISE PHILLIPS, TOM PLAYER and PAULA ROME

This specially commissioned new report examines each of the key developments where the Act changes existing provisions or introduces new rights. Each chapter deals with a discreet area.

Email – legal issues £125

SUSAN SINGLETON

£95.00

1 85418 215 3 • 2001

1 85418 296 X • 2003 The Employment Act 2002 has raised the stakes. Imperfect understanding of the law and poor drafting will now be very costly.

360,000 email messages are sent in the UK every second (The Guardian). What are the chances of either you or your employees breaking the law? The report explains clearly:

This new report will: •

Ensure that you have a total grip on what should be in a contract and what should not

•

Explain step by step how to achieve changes in the contract of employment without causing problems

•

Enable you to protect clients’ sensitive business information

•

Enhance your understanding of potential conflict areas and your ability to manage disputes effectively.

Applying the Employment Act 2002 – crucial developments for employers and employees AUDREY WILLIAMS

•

•

How to establish a sensible policy and whether or not you are entitled to insist on it as binding

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The degree to which you may lawfully monitor your employees’ e-mail and Internet use

•

The implications of the Regulation of Investigatory Powers Act 2000 and the Electronic Communications Act 2000

•

How the Data Protection Act 1998 affects the degree to which you can monitor your staff

•

What you need to watch for in the Human Rights Act 1998

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TUC guidelines

•

Example of an e-mail and Internet policy document.

£125

1 85418 253 6 • May 2003 The Act represents a major shift in the commercial environment, with far-reaching changes for employers and employees. The majority of the new rights under the family friendly section take effect from April 2003 with most of the other provisions later in the year. The consequences of getting it wrong, for both employer and employee, will be considerable – financial and otherwise. The Act affects nearly every aspect of the work place, including: •

flexible working

•

family rights (adoption, paternity and improved maternity leave)

For full details of any title, and to view sample extracts please visit: www.thorogood.ws You can place an order in four ways: 1 Email: [email protected] 2 Telephone: +44 (0)20 7749 4748 3 Fax: +44 (0)20 7729 6110 4 Post: Thorogood, 10-12 Rivington Street, London EC2A 3DU, UK

S e e f u l l d e t a i l s o f a l l T h o r o g o o d t i t l e s o n w w w. t h o r o g o o d . w s

SALES, MARKETING AND PR

Implementing an integrated marketing communications strategy

Tendering and negotiating for MoD contracts

NORMAN HART

TIM BOYCE

£99.00

£125.00

1 85418 120 3 • 1999

1 85418 276 5 • 2002

Just what is meant by marketing communications, or ‘marcom’? How does it fit in with other corporate functions, and in particular how does it relate to business and marketing objectives?

This specially commissioned report aims to draw out the main principles, processes and procedures involved in tendering and negotiating MoD contracts.

Defending your reputation Strategic customer planning ALAN MELKMAN AND PROFESSOR KEN SIMMONDS

SIMON TAYLOR £95.00

1 85418 255 2 • 2001 This is very much a ‘how to’ Report. After reading those parts that are relevant to your business, you will be able to compile a plan that will work within your particular organisation for you, a powerful customer plan that you can implement immediately. Charts, checklists and diagrams throughout.

1 85418 251 • 2001 ‘Buildings can be rebuilt, IT systems replaced. People can be recruited, but a reputation lost can never be regained…’ ‘The media will publish a story – you may as well ensure it is your story’ Simon Taylor ‘News is whatever someone, somewhere, does not want published’ William Randoplh Hearst When a major crisis does suddenly break, how ready will you be to defend your reputation?

Selling skills for professionals KIM TASSO

£65.00

1 85418 179 3 • 2000 Many professionals still feel awkward about really selling their professional services. They are not usually trained in selling. This is a much-needed report which addresses the unique concerns of professionals who wish to sell their services successfully and to feel comfortable doing so. ‘Comprehensive, well written and very readable… this is a super book, go and buy it as it is well worth the money’ Professional Marketing International

Insights into understanding the financial media – an insider’s view SIMON SCOTT

This practical briefing will help you understand the way the financial print and broadcast media works in the UK.

European lobbying guide £129.00

1 85418 144 0 • 2000

Corporate community investment £75.00

Understand how the EU works and how to get your message across effectively to the right people.

1 85418 192 0 • 1999 Supporting good causes is big business – and good business. Corporate community investment (CCI) is the general term for companies’ support of good causes, and is a very fast growing area of PR and marketing.

t +44 (0)20 7749 4748

£99.00

1 85418 083 5 • 1998

BRYAN CASSIDY

CHRIS GENASI

£95.00

e [email protected]

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Lobbying and the media: working with politicians and journalists

Managing corporate reputation – the new currency

MICHAEL BURRELL

SUSAN CROFT and JOHN DALTON

£95.00

1 85418 240 4 • 2001

1 85418 272 2 • June 2003

Lobbying is an art form rather than a science, so there is inevitably an element of judgement in what line to take. This expert report explains the knowledge and techniques required.

ENRON, WORLDCOM… who next?

Strategic planning in public relations KIERAN KNIGHTS

£69.00

At a time when trust in corporations has plumbed new depths, knowing how to manage corporate reputation professionally and effectively has never been more crucial.

Surviving a corporate crisis – 100 things you need to know

1 85418 225 0 • 2001

PAUL BATCHELOR

Tips and techniques to aid you in a new approach to campaign planning.

1 85418 208 0 • April 2003

Strategic planning is a fresh approach to PR. An approach that is fact-based and scientific, clearly presenting the arguments for a campaign proposal backed with evidence.

£125

£125

Seven out of ten organisations that experience a corporate crisis go out of business within 18 months. This very timely report not only covers remedial action after the event but offers expert advice on preparing every department and every key player of the organisation so that, should a crisis occur, damage of every kind is limited as far as possible.

FINANCE

Tax aspects of buying and selling companies MARTYN INGLES

Practical techniques for effective project investment appraisal £99.00

RALPH TIFFIN

£99.00

1 85418 189 0 • 2001

1 85418 099 1 • 1999

This report takes you through the buying and selling process from the tax angle. It uses straightforward case studies to highlight the issues and more important strategies that are likely to have a significant impact on the taxation position.

How to ensure you have a reliable system in place. Spending money on projects automatically necessitates an effective appraisal system – a way of deciding whether the correct decisions on investment have been made.

Tax planning opportunities for family businesses in the new regime CHRISTOPHER JONES

£49.00

1 85418 154 8 • 2000 Following recent legislative and case law changes, the whole area of tax planning for family businesses requires very careful and thorough attention in order to avoid the many pitfalls.

S e e f u l l d e t a i l s o f a l l T h o r o g o o d t i t l e s o n w w w. t h o r o g o o d . w s

MANAGEMENT AND PERSONAL DEVELOPMENT

Strategy implementation through project management TONY GRUNDY

£95.00

1 85418 250 1 • 2001 The gap Far too few managers know how to apply project management techniques to their strategic planning. The result is often strategy that is poorly thought out and executed. The answer Strategic project management is a new and powerful process designed to manage complex projects by combining traditional business analysis with project management techniques.

For full details of any title, and to view sample extracts please visit: www.thorogood.ws You can place an order in four ways: 1 Email: [email protected] 2 Telephone: +44 (0)20 7749 4748 3 Fax: +44 (0)20 7729 6110 4 Post: Thorogood, 10-12 Rivington Street, London EC2A 3DU, UK

t +44 (0)20 7749 4748

e [email protected]

w w w w. t h o r o g o o d . w s