For the unwary employer, employment law can be a highly dangerous arena. Even unsuccessful employment tribunal claims can rack up high legal costs for employers and are highly wasteful in terms of time and resources, let alone the potential damage to staff morale.
Costly employment tribunal awards can arise out of what appeared to be minor matters - including failing to follow simple disciplinary and grievance procedures. The following are examples of some fundamental employment issues as well as hints and tips to help employers avoid employment tribunal claims.
Dismissal, Disciplinary and Grievance Procedures
The Employment Act 2002 (Dispute Resolution) Regulations 2004 require all employers, regardless of size, to operate minimum statutory dismissal, disciplinary and grievance procedures.
If an employee has been employed for 12 months or more (and has not been dismissed for gross misconduct) then they are automatically entitled to receive the minimum level of formal disciplinary procedure from their employer. It is automatically unfair dismissal if an employer dismisses an employee without following the appropriate statutory procedure. The employment tribunal system does not allow employees to bring a claim if they have not firstly exhausted any available internal grievance procedures.
A careful employer should always keep a full record of what action has been taken to prove compliance with the law. The law surrounding dismissal procedures is far reaching and employers must be aware of this. They normally have to be followed not just where the termination is on the grounds of capability or conduct but also when the employer is contemplating dismissing an employee on the grounds of redundancy and non-renewal of a fixed term contract. Where it is not possible to settle a grievance internally, consider alternative methods of dispute resolution such as mediation, conciliation or arbitration as a viable alternative to legal action.
Deductions from Wages
Under the Employment Rights Act 1996 it is generally unlawful for an employer to make any deduction from the wages of a worker unless the worker has agreed to this in writing or it is required by law (e.g. deductions for PAYE and National Insurance).
Working Time
The Working Time Regulations 1998 afford basic rights and protections with regard to the number of hours worked. It is unlawful for an employer to require workers who are not governed by sector-specific provisions to work more than an average of 48 hours a week, unless an individual employee has given prior agreement to waive this right.
Being 'on call' is normally regarded as working time under the law. There are special provisions which apply to shift work, night work, rest breaks, minimum holiday entitlement, sector-specific workers and the hours that can be worked by young workers aged 16 or 17.
Pay and Benefits
Promotion procedures and all employee benefits should be kept under review to ensure compliance with the law. As regards length of service-based pay increases, a pay system whereby employees with long service and more experience receive higher pay than those with short service and less experience does not automatically infringe the Equal Pay Act 1970, even though it is likely that the majority of those with longer service are male, but take care! Under the age discrimination legislation, benefits can be awarded on the basis of length of service where the length of service requirement is 5 years or less. Nevertheless, if an employee who has been working for six years or more claims they are being discriminated against i.e. by being paid less than another employee with less service, the employer has a responsibility to show that this is because of a legitimate business need.
Employers are required to recalculate the level of a woman's maternity pay if a pay rise takes effect at any time between the start of the reference pay period and the end of the maternity leave. Minimum wage rates change annually on 1 October. Failure to pay the minimum wage can lead to substantial fines.
Information and Consultation
The Information and Consultation of Employees Regulations 2004 give employees of organisations with more than a specified number of employees the legal right to be provided with information about and be consulted on major business decisions which affect them at work.
The legislation makes it possible for employers to be more flexible with their employees and to come to arrangements that are appropriate for their business needs.
Agreements that have been made between the employer and employee are permitted to continue.
Where there aren't any existing arrangements, the onus is on employees to ask for information and consultation agreements to be put in place.
Employers will be obliged to comply with the request if it is supported by 10 per cent of the workforce.
All employers are required to consult on Health and Safety matters, with any elected safety representatives or with employees themselves, and in certain business transfer and redundancy situations.
Unless you're absolutely certain of your legal position, any careful employer would be well advised to seek legal advice from specialist employment solicitors if any of these issues arise.