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Do we need an employment lawyer?

Those eagle-eyed readers among you will have noticed that this page is no longer kept up to date. There are a few reasons for this.

Firstly, the world of UK employment law has changed drastically during the past few years. The introduction of employment tribunal fees, and the extension of the qualifying period for unfair dismissal rights has seen employment law become an increasingly narrow niche.

Claimants are fewer, and they are usually litigants in person, which means that it is easier to stand up to them in tribunal with unqualified representatives (such as unregulated consultants, or confident members of your HR team). Many of the claims that do proceed are complicated and messy, and therefore costly and time consuming. Those which have any merit are usually settled via acas. Many without merit are also settled on commercial/economic grounds.

In my opinion there is an overall picture of the de-risking of employment law (with potentially more de-regulation to follow as  consequence of the UK’s exit from the EU). Employers are less concerned about straying over the lines and incurring smaller liabilities. By way of example, despite the Government’s criticism of zero-hours contracts, and the steps they have taken with the intention of eradicating them, figures show that they are actually on the increase.

In a de-risked world of employment, the online services available to HR teams and the services of cheaper unregulated consultants are often sufficient to support your HR team in handling day to day employment law needs and queries. Provided you want to follow the spirit and the letter of the law, there is no shortage of cheap sources telling you what the law says. Let’s not forget the relentless march of artificial intelligence, which in turn will likely soon be in a position to replace many of the advice line style services provided by the unregulated consultants – within a few years a robot will have the answer to your legal question.

Traditional employment lawyers, so far as they are used for day to day employment law advice, have therefore become an expensive resource for most businesses. Being “commercial” and “practical” in their advice is now a pre-requisite, and is no longer enough to demonstrate real value to the client.

So why do we need employment lawyers? what do they do? and why are they so much more expensive than the alternatives?

Let’s deal with the last question first. Lawyers are regulated. They must maintain and develop their expertise; be registered with and authorised by the SRA; maintain high standards of quality; and hold sufficient professional indemnity insurance. Law firms are expensive businesses to run, and so the services they provide often feel expensive too (unless you feel you are getting value for money). The benefits however are that as a client of a law firm you know that you have the right to expect higher standards; the protection of regulation; the ability to pursue complaints through an independent arbiter (legal ombudsman); and the safety net of professional indemnity insurance. The advice you receive also has the benefit of “legal privilege”, which simplistically means that it is confidential from the Court, whereas advice from unregulated consultants is fully disclosable in Court proceedings.

It’s very nice to have the comfort of all of those things, but is it really worth the cost in relation to the apparently de-risked areas of day to day employment law? Perhaps not, but it will depend on your appetite for risk and the potential stakes. It will also depend on the relationship you have with your lawyer, and whether you trust them as part of your team.

Returning to the questions – Why do we need employment lawyers? and what do they do?

Well, an obvious point to make is that not all areas of employment law have been de-risked. Strategic and organisational projects often have a lot riding on them and require significant investment of time, money and other resources. It doesn’t make sense to skimp on the legal advice supporting those projects. The cost of taking proper legal advice will be money well spent when compared with the potential fall-out of getting it wrong.

Other high stakes matters include whistleblowing and discrimination complaints (particularly for more highly paid employees); arrangements in relation to pay and incentives; Staff transfers, and medium to large scale redundancies.

A common theme running through all of those areas is that they are not simply questions of law. They relate directly to a client’s strategy and objectives, with elements of brand and reputational protection as well as top line and bottom line impact.

The role of employment lawyers, as with the role of any lawyer in this context, is to provide guidance and insight (advice) to help the client identify and successfully achieve its objectives. This can only be done through gaining a deep understanding of a client’s strategy, aims and objectives in any given situation. This is where lawyers (not just employment lawyers) can start to add real value. If a client is open to involving their lawyer in a strategic discussion (and the lawyer is willing to be involved in that discussion), then there will be huge benefits to be had in identifying and implementing sound and robust initiatives and solutions at a much earlier stage, freeing up business leaders to focus on core business; provided of course that the lawyer has the ability to contribute and engage at that level. That is the difference between lawyers who can add value, and those who can’t.

This evolutionary process reflects my personal journey. My background is as an employment law specialist, but I really don’t see myself as that any more. I don’t really provide any day to day employment advice anymore, although there is a team of people around me who do. My focus is on working with clients to ensure that they have the legal (and business) insight and guidance that will help them achieve their strategic objectives. My particular area of expertise in that context is now “people strategy”, but the reality is that this is interwoven with business considerations relating group and commercial development, real estate, finance and general business risk.

So, with that in mind, the purpose of Employment Law Sense Check has become somewhat obsolete. It is my intention to set up a new blog that is more relevant to my own areas of focus, the details of which I shall post here at the time.

Oh, and if what I have described sounds interesting and compelling to you, and you don’t think you are getting it from your current advisers, please get in touch and I will be happy to explain more.



How to make money out of Employment Tribunal fees

Today, I received an email from a well establised insurance company promoting what appears to be after the event (ATE) insurance for potential Claimants in Employment Tribunal cases. I only ever work on the other side of ET cases (i.e. representing the employer), so I very nearly pressed the “delete” button without a second look. But then I thought about it a little more.

This essentially looks like “no win, no premium” cover for ET fees, so that the Claimant does not need to pay unless they win. If they lose, or abandon their case, then the insurers cover all of the ET fees.

If that is the case then it would imply that the insurance industry has taken the view that there many are ET Claimants with strong or winnable cases who are being put off purely by the upfront fees. Otherwise they wouldn’t see any profit in it.

This takes me back to a conversation I had with the Chief Executive of another insurance company (also in the legal expenses sector) who told me that someone would find a way to make money out of ET Fees and would develop an insurance product to do that. They thought that could ultimately lead to an increase in Employment Tribunal cases, if for example a claims farming approach was to be taken by someone.

I haven’t seen much evidence of that until now, and we certainly are a very long way from seeing an inreased number of claims, but I do think that the timing of this particular development is quite telling.

We know that there has been a massive reduction in the number of ET claims (up to 80% in some cases). We also now know that, according to the recent HM Courts & Tribunal Service annual report, approximately £4.5million of fee income was generated from ET fees in the period between 29 July 2013 and 30 March 2014 (which equates to approximately £6.7million when extrapolated for a full year). This is only 67% of the £10million per annum that HMCTS had hoped to generate from the introduction of ET fees.

Now, HMCTS are the people who have all of the statistics and records that show the level of issued claims and their results over the years, so you would expect their prediction to be pretty accurate. I certainly wouldn’t expect it to be 23% out, and I anticipate that is the way that the insurers are looking at it too.

The insurers are after that 23% of arguable claims which have not been lodged with the ET. If those missing claims are lodged using their ATE insurance, then the insurers can make a tidy profit from their premium when a case is settled or won by a Claimant.

Interestingly, this development lends weight to the Trades Union argument that the ET fees regime is preventing access to justice. In essence, individuals with arguable cases, are being prevented from arguing their cases. However, if ATE insurance in this sphere takes off, then that will ironically provide the mechanism for enabling access to justice again, which would then undermine the Trades Union challenge to the ET fees regime.

The end result will probably still mean less ET litigation than we have seen in the past, but an increased cost for the litigation that continues. Claimants will keep less of their settlement/award money. In the meantime HMCTS make a little revenue out of it, and the insurance companies potentially make a lot of money out of.

This time though, you can’t blame the lawyers for making money out of it. Lawyers have definitely seen a marked reduction of work in this area, even leading to some employment litigation teams reducing their headcount.

I would be really interested to hear if you have any experiences or comments to share on this subject.

The Season of Uncertainty: A selective employment law round up

If I had a pound for every time someone said that Employment Law is a very fast moving area of law, then I would be rich. The reason why it is said so often is of course because it is true. Generally speaking it is this fluidity and speed of change in employment law that businesses and organisations find hard to keep up with. This leads to a perception among some employers that employment regulation gets in the way of doing business. This is particularly the case where a business or organisation has no HR support.

In an attempt to address this, our Government has given itself a “red tape challenge” and, through its Employment Law Review, has been seeking to change employment law to make it easier for employers to do business.

The first major piece of that was put in place in April 2012 when the period of employment needed in order to claim “Unfair Dismissal” was extended to two years, or so the media would have us believe. The truth of the matter is not quite as straightforward as the media might suggest, and the result is that (as often seems to be the case these days) people don’t really know what the rules say at the moment.

So when you are at those dinner parties and it comes up as a topic of conversation as it often does (or is that just the type of dinner party I end up at?), then you can set everyone straight by explaining that anyone employed in a job since before 6 April 2012 does still have the right to claim unfair dismissal (even if they do not have two years’ service); whereas no-one who started working on 6 April 2012 or later will benefit from the right until at least 6 April 2014 (i.e. the point at which they accrue two years’ service). However, regardless of whether they can claim “unfair dismissal”, employees can still claim that they have been dismissed unlawfully if their dismissal relates to an act of unlawful discrimination or victimisation etc (no matter when they started employment).

So it would seem that in an attempt to make it easier for employers to do business, elements of uncertainty have been introduced which are likely to make things more confusing and difficult, at least for a while. And that is not the only area of uncertainty at the moment either, as a number of other changes are being introduced.

So what other employment law topics are you likely to talk about over your prawn cocktail and duck a l’orange? Well, it could be one of the following subjects:

Pre-termination Negotiations

The summer of 2013 saw the introduction of new provisions aimed at enabling employers to have “pre-termination negotiations”, and offer a “settlement agreement” to unwanted employees, supposedly without fear of their discussions ending up in tribunal. Unlike without prejudice discussions, there does not need to be an existing dispute with an employee before pre-termination negotiations can take place.

However the pre-termination negotiation provisions only provide protection in relation to standard unfair dismissal claims. The protection in pre-termination negotiations does not therefore apply where for example the employee claims to have been dismissed for a discriminatory reason, or whistleblowing etc.

Pre-termination negotiations may help employers enter into settlement discussions where there is no existing dispute, but the problem is that they can be referred to in any claims other than standard unfair dismissal cases. Consequently employers cannot tell with any certainty that their discussions will not be disclosed in front of an employment tribunal, which heavily limits the usefulness of the pre-termination negotiations.

Pre-termination negotiations should therefore only be used with caution. The old advice continues to apply. Only say (or write) something that you would be happy to hear being repeated in the employment tribunal.

New Employment Tribunal Rules and Fees

New employment tribunal rules came into force from 29 July 2013. This included the introduction of a new fee system, with “issue fees” and “hearing fees” payable by the claimant.

The introduction of the new fee system has been challenged by applications for Judicial Review in both England & Wales and Scotland, on the basis that the fees may be unlawful as being discriminatory and preventing access to justice.

Both challenges will be considered at full hearings but have not prevented the changes going live on 29 July 2013 in the meantime. It could lead to the fees being repealed or changed in the near future. Or maybe they won’t?

It is intended that these fees will lead to a reduction in the number of cases going through the employment tribunal system. I have however already see communications from insurance companies who are supporting claimants and claimant lawyers with the tribunal fees after the event. A whole new breed of claims farmers could yet evolve in this area.

Collective Redundancy Consultation

Recently the period of time which employers need to spend consulting with employees where over 100 redundancies are proposed at one establishment was reduced to 45 days. A 30 day consultation is still required where between 20 and 99 redundancies are proposed.

That change will be helpful to employers entering into large scale restructuring, but unfortunately an element of uncertainty has been introduced from a different direction on this occasion.

You may recall that some time ago, the Administrators for Woolworths avoided having to pay out any additional compensation to redundant employees, because the meaning of “at one establishment” related to each individual shop. As there were less than 20 proposed redundancies at each shop, the collective consultation requirements were avoided. This is the basis upon which many multi-site redundancy processes have been handled over the years.

Unfortunately and to everyone’s surprise, when the case was appealed the appeal Judge took the decision that the words “at one establishment” should be disregarded for the purposes of collective consultation. As a consequence it was necessary to look at the employer as a whole, which meant that there were more than 20 proposed redundancies. The Judge did this on the basis of his interpretation that the wording of the UK legislation was inconsistent with European Law. The decision is subject to further appeal, and every other employment lawyer I have spoken with hopes an appeal will be successful.

The impact of the current position could be quite significant, and burdensome on some employers. There is however a potential light at the end of the tunnel from our counterparts in Northern Ireland. They have a similar, but slightly different employment tribunal system over there which means that they can make different decisions on the same piece of law.

Similarly to the Woolworths case, the Northern Irish case relates to claims for failure to collectively consult where the employer relied on the fact that the redundant employees were all employed at stores with less than 20 affected employees. However, instead of adopting the approach of the Judge in the Woolworths case, the Northern Ireland Employment Tribunal has referred the matter to the European Court of Justice to determine the meaning of “one establishment”. We await their decision.

At this moment in time the decision of the appeal Judge in the Woolworths case still takes precedence in England and Wales, so you will need to be mindful of that when undertaking more than 20 redundancies across the entire business. But if the ECJ provides a helpful decision, it will impact on the issue faced in the Woolworths case and could ultimately take us back to using the previous approach where we can often treat a single place of work as an “establishment”.

TUPE Changes

Okay, so I admit it, this one is unlikely to come up at the dinner party. But there has been a lot of talk and speculation about changes to TUPE, and in particular what will happen in relation to service provision changes.

In September 2013 Employment Relations Minister Jo Swinson announced the Government’s response following its consultation relating to TUPE reform earlier in the year. We still haven’t seen any new draft regulations, which are expected by December 2013, and it now looks like that the changes will be implemented in January 2014 at the very earliest.

Whilst recognising that TUPE cannot be repealed entirely, the Government has promised to make things simpler and give greater clarity. The Government claims that through these reforms “Employers and staff in a business which is changing owner will find the process of the transfer easier, fairer and more effective”.

Amongst the key changes announced by the Government are:

Service Provision Changes

This was the most controversial area in the consultation. There was a proposal to entirely remove the concept of “service provision change” from the regulations.

This did have a touch of irony to it considering that the concept of service provision changes was initially introduced in order to provide greater clarity than the pre-2006 case law provided. The problem however is that case law has been developing since the introduction of the concept seven years ago. Removing these rules would have been unlikely to prevent the regulations applying to all service provision changes, but it would instead have led to a whole new string of case law developing either along the lines of the pre-2006 case law, or at a completely different tangent.

Consequently, the Government has decided that it will not repeal the service provision change rules.

However, the Government does intend to provide clarification of the rules on service provision changes. This will include a requirement that, for a service provision change to have happened, the activities carried on after the change must be ‘fundamentally or essentially the same’ as those carried on before it, meaning that if businesses radically change the way they provide services, that change is unlikely to be caught by the TUPE regulations.

Whilst the intention behind this feels right, it will inevitably lead to a new string of case law on what ‘fundamentally or essentially the same’ actually means. Once again, intended clarity leads to some more uncertainty.

Combined TUPE and Redundancy Consultation

One thing that we are still hoping to see in the regulations, but which has not been prominent in the announcements to date, relates to reorganisation and the proposal to enable collective redundancy consultation to take place prior to the TUPE transfer, even when those redundancies will take place following the transfer. In practice, many employers take this approach anyway, but there has always been uncertainty in the law. A clarification would therefore be very welcome.

ETO Reasons

The rules will be amended so that where the place of work changes after the transfer, any redundancies due to that change will not be automatically unfair. They will instead be treated as an ‘economic, technical or organisational reason entailing changes in the workforce’. This means that as a starting point businesses will not face possible unfair dismissal claims simply because of a change in location of the workplace. This is a very positive step for businesses, as the case law had been moving in the opposite direction.

Employers should note however that they cannot rely on this until the new regulations come into force. For the time being, dismissals arising purely from a change in work place are likely to be considered as automatically unfair.


The Government had intended to make it easier for businesses to harmonise terms and conditions of employment following a TUPE transfer. It now seems that businesses will only be able to renegotiate terms and conditions if they are provided for in collective agreements, and they do so one year after the transfer provided that overall the change is no less favourable. TUPE protects employees’ terms and conditions and does not generally allow them to be changed by reason of the transfer. However, as an exception, the Acquired Rights Directive (European Directive which TUPE implements) gives scope for changes to terms and conditions that are set out in collective agreements, from one year after the transfer. This will be of limited use to most employers, but will likely benefit those in the private sector who are taking over public sector services.

Relaxed Consultation for Micro-businesses

The new regulations will allow micro businesses to inform and consult employees directly when there is no recognised trade union or other existing representatives. The current TUPE regulations require businesses to inform and consult with trade unions representatives or elected employee representatives. Small businesses usually don’t have any employee representation arrangements in place to allow for this. The Government has therefore indicated that micro businesses of ten or fewer employees, will be able to consult directly with the affected employees. It remains to be seen how “business” and “micro-business” will be defined in this context.

At this stage we still cannot predict what the impact of the changes will be. What we can predict is that any changes that are made will lead to a period of uncertainty before we know whether or not they have been truly beneficial to employers, or not.

Looking ahead

2013 has therefore been a confusing time for everyone involved in employment law and employment rights, and that looks set to continue well into 2014 (and possibly beyond). It is a time when we are promised greater clarity and de-regulation, but we are faced instead with uncertainty and the prospect of disputes over unsettled law.

Things are sure to settle down over time, but in the meantime there are an uncomfortable number of questions for which we simply don’t have the answer.

So as we head through autumn, it continues to feel as though the current employment law landscape is just as unsettled as the seasonal weather.

Let me know what your thoughts and experiences are by leaving a comment.

Are you ready to pay into a pension for all of your staff?

 A guest post by Tobias Hole

Continuing with a trend seen over the past few years, pensions are front page news at the moment.  Most of the stories are about the proposed changes to public sector pensions, along with pensioner poverty, the ageing workforce and the general effect of the recent stock market crash.

However, there has been very little in the press about the new employer duty to automatically enrol staff into a contributory pension scheme…  and the changes are not that far off.  Although it may seem like a boring subject, the new automatic enrolment duties really do deserve a lot more attention than they are getting at the moment!

In a nutshell – the key changes and necessary preparation, along with a few thoughts…

The duties are to be introduced in stages (on the employer’s “staging date”) based on employee numbers.  From October 2012, very large employers will have to “automatically enrol” almost all staff into a “qualifying pension scheme” and start making at least the minimum 1% employer contribution.  This minimum is currently scheduled to increase to 2% from October 2016 and then 3% from October 2017.

The timetable for fully implementing automatic enrolment was initially planned to take place over a period of four years.  However, the Government announced in November last year that there will be a delay in implementation for small businesses (those with fewer than 50 employees).  Pensions minister Steve Webb has said that the delay has been made in order to give small businesses “additional breathing space during these tough economic times”.

Such businesses will now have until May 2015 to begin automatic enrolment, as opposed to their original staging date of April 2014.  According to the Department for Work and Pensionswebsite, no employer with an existing staging date on or before 1 July 2013 will be affected.  Based on the existing timetable, this suggests that staging dates for any employers with fewer than 3,000 jobholders may also be delayed.  Clarification on this point, by way of a detailed staging profile for all employers, is to be published in January 2012…

Steve Webb has also proposed using this year’s London Olympics as inspiration for further encouraging better saving.  He has suggested that the current minimum contribution rates should perhaps be awarded a bronze “medal”, 10% a silver and 15% a gold.  These silver and gold medals would currently earn the National Association of Pension Funds Quality Mark and Quality Mark Plus.

Especially with the above in mind, it would not come as a huge surprise if what we are looking at here, is very much the “thin end of the wedge”.  It is easy to imagine that the minimum contributions will, over time, be cranked up (towards that gold medal status…)  Perhaps we shall eventually end up with a system a little more like the one in Australia, where the contribution rate from employers, is a mandatory 9%.

Anyway, enough speculating and back to the point.  To comply with the new duty, employers will need to use either the National Employment Savings Trust (NEST) or a new or existing pension scheme, which meets a minimum standard (and some providers are already coming to market with products which compete directly with NEST).

If using a scheme other than NEST, employers will need to review their arrangements and certify to the Pensions Regulator that their alternative scheme meets the minimum standard.  The vast majority of staff will be automatically enrolled into such a scheme without any active decision on their part and although these staff may subsequently opt-out, they will need to be automatically re-enrolled, every three years!

Another brief pause for thought.  What is actually going on here?  It is safe to assume that a few options were available to government, in terms of encouraging/ enforcing adequate saving for retirement.  A more simple approach, would have been to up national insurance contributions and in turn, the Basic State Pension.  Of course, this would have been politically unacceptable (and who would trust government not to spend the money elsewhere, before it were actually required!?)

It could be argued that automatic enrolment is essentially a private sector version of the same solution.  Far more palatable, of course (mostly because of the employee option to opt-out but also, for ring-fencing the money away from government).  However, relying on the private sector to meet the implementation and maintenance costs is not so great, especially if increased minimum contributions and other unknowns lurk ahead…

Again, back to the point.  This is happening.  Key issues for preparation will include budgeting for the minimum contributions and making sure that HR, finance, payroll and IT are ready to deal with the administration of these new requirements.  It will be particularly important to understand who will be eligible and then to keep accurate records in relation to all staff, to be used for making sure that automatic enrolment occurs on time and that opt-outs and re-enrolment also take place correctly.  Employers also have a duty to communicate the new requirements to staff and there are penalties for encouraging staff to opt-out, in any way.

Preparing for and complying with these new duties is going to take a lot of work (particularly for employers with complicated payrolls).  Small/ medium sized employers, who may not have a large HR or finance team to call on, will need to think carefully about how they deal with these new duties.  More directly, there is also the financial burden of the minimum employer contributions to budget for over the next few years.

I would recommend employers investigate this new duty and keep it firmly on their radar. For employers with fewer than 500 staff, I would recommend starting preparations over the next 6 to 12 months and for employers with more than 500 staff, that the wheels are put into motion now, if they have not been already.

(at the time of writing Tobias Hole was a Pensions Lawyer  with Foot Anstey)

Sacking employees is like doing housework – Should unfair dismissal laws be scrapped?

Saying that it is too difficult to sack employees, is like saying it is too difficult to do your own housework!

… by that I mean, you can either put in the time and effort to get it done yourself (and for many of us the time and effort to get it done properly is too much to ask); or you can engage some experts (at cost) to get it done properly. There is always a risk that you might knock over that expensive vase, or the curtain rail might fall down, but does that stop you doing it?

The idea that we cannot sack bad workers in the UK is ridiculous. First of all, unfair dismissal rights do not kick in until someone has been working with you for 12 months (soon to be extended to 24 months); and secondly, even when they have been working with you for long enough, you can still manage, and ultimately dismiss them with they are not up to scratch.

The only reasons why poor performers stay in their jobs without being dealt with are that managers and organisations either cannot be bothered to deal with the matter; are reluctant to put resource towards dealing with it; or they simply don’t care about it.

This is where the public sector has real problems, not because they employ “slackers” or “coasters” as some people would suggest, but because identifying who is responsible or accountable for ensuring standards of performance is really very difficult… so many people slip through the net. That however is not to say that with strong management, even public sector organisations cannot get it right.

Private sector organisations really have no excuse at all. You would not sit back and accept poor performance from your suppliers, or non-payment from your customers and clients, so why the reluctance to take employees to task for poor performance. Use that first 12 months, and weed out the rubbish. After that use a robust performance improvement plan, which any decent HR professional would recommend.

There are so many myths floating around about this subject. This morning I heard a business owner (who shall remain nameless) on the radio  saying that unfair dismissal laws should be scrapped because of what employees think they can get away with. Her reasoning was completely illogical. Firstly, she said that she wouldn’t stand those sorts of employees in her business, which in fact supports the argument that with strong management you do not need to put up with poor performers (regardless of unfair dismissal laws).

Secondly, she recounted an anecdote about an employee who had attempted to steal a (paper) client list, and when her manager grabbed it off her, she pushed her manager to the ground. Presumably having been dismissed, the employee took the business to the employment tribunal, but she was unsuccessful?! To me, all that anecdote says is that there are some very bad employees out there, who really push the boundaries too far, or step over them. But the fact is that she was sacked, and she did not have legitimate unfair dismissal claim… so the right result in the end. It is a complete fallacy to think that she would not have taken her employer to the employment tribunal if there were no unfair dismissal laws, as she was clearly vexatious anyway and would simply have dressed it up as unlawful discrimination instead.

As I see it, poor performance generally arises in the following ways:

  • The employee has always been a poor performer – in which case, why on earth did you not use the probationary period, and the first year of their employment to get rid of them? Employees who are not performing by the time they have been with you 6-9 months are highly unlikely to ever make the grade. Don’t procrastinate. Bite the bullet; terminate their employment while you can do so safely. By not doing so, you risk giving the message that their level of performance is acceptable in your business, and that is when dismissal can be viewed as unfair (if you move the goal posts later);
  • The employee used to perform well, but performance has deteriorated – Subject to health/disability or personal issues that you would work through with them, you need to jump on this asap. So, as soon as performance drops below the required standard, you put in place targets and objectives that the employee must achieve; monitor them constantly, and review them regularly. Once the employee has had a reasonable opportunity to improve (which will depend on the circumstances) but has not done so, then you can take steps to remove them from the business fairly. Those who do improve will be given a warning that if standards drop in the future, their employment may be at risk.
  • The employee’s performance remains the same, but the standards required by the employer have changed – This is the most risky area, but is in reality the responsibility of the business. A plan to improve efficiency and performance, and end a legacy of complacency and poor performance brings with it cost and risk at many levels. That however is just part of the process and needs to be factored in at the outset. The cost is likely to be particularly high in unionised environments. There are situations where poor performance dismissals in these circumstances may be fair, but they will generally take longer. Most importantly, employees need to be given the opportunity to improve, because as far as they are concerned the goalposts will have moved. Often, the best way to deal with this is in fact with a wholesale restructure, involving new job descriptions, which may have higher standards attached to them.

Scrapping unfair dismissal laws really is not the answer here. Mangers need to take the initiative, and take responsibility for ensuring the performance of their staff. If they are satisfied with the performance, fine. If not, then it is time to take action… otherwise it is the manager them self who is performing poorly.

What are your views on the current debate? How have you used performance improvement plans to good effect in the future? What else do you think can be done? Please leave a comment to have your say.

Do I really need to know about the Agency Workers Regulations?

Okay – so there are these new regulations coming into force, and they affect pretty much every business in the UK, but they look a bit boring and I don’t really need to know about them, right?

 It is really very tempting to ignore the Agency Workers Regulations. They really do not seem very interesting, and they aren’t as easy to read as Harry Potter. In any case you might not use agency workers, or you might think that the temping agencies will have it covered.

I would be inclined to agree with you, but unfortunately there are two rather annoying factors which mean that you really should know about these regulations:

  1. Even if you don’t think you use any “temps”, you might still be engaging workers who are covered by the regulations; and
  2. Even if the temping agencies have it covered (and most of them probably do), that does not mean that you will benefit from their knowledge.

So, what do you really need to know? Because you sure as hell don’t want to read the regulations or even the BIS guidance….

 … I have set out below some key points and tips, so you can spend some time with your loved ones or having a beer, rather than pouring through the regulations and making your eyes bleed.

Who is covered?

Broadly and simply, an agency worker is someone who is supplied by an agency to work temporarily under supervision or direction of you (the hirer/employer). The regulations cover any such relationship;

  • Whether or not you (the hirer) pay the agency, is completely irrelevant to the application of the regulations;
  • Just because someone is working under the umbrella of a limited company (which they may be doing for tax purposes) does not mean that they will not be caught by the regulations;
  • If you employ them directly (either temporarily or permanently) so that they have a personal contract with you (rather than the agency), then they are not an “agency worker” under the regs;
  • Where the you or the agency are the client or the customer of the worker in the course of their profession or business undertaking, then they are not an “agency worker”;

What is the effect?

From day 1 – access to the same facilities as your direct employees;

  • From day 1 – access to the same information relating to job vacancies as your direct employees;
    • But – They are not entitled to equal treatment through the application process (ie. you can favour your direct employees through the selection of candidates at any stage of the application process).
  • From 12 weeks – entitled to same basic terms compared with your direct employees, relating to: Key elements of pay; duration of working, rest breaks and arrangements for night work; annual leave;
    • But – Pay does not include: Occupation sick pay, maternity pay, pensions, share options, financial participation schemes, car allowances, long service bonuses (and various other forms of remuneration which would make the list too long).
  • From 12 weeks – Paid time off for ante-natal care (once pregnancy has been notified, except for the first appointment of course)

When will it kick in?

  • The Regulations will take effect from 1 October 2011;
  • Day 1 rights will be effective immediately;
  • 12 week entitlements, will only apply 12 weeks later (ie. 12 weeks after 1 October, because the regulations do not apply retrospectively);
  • 12 weeks does not always mean 12 weeks, because there are circumstances when the accrual of time is paused during a break in work, or is deemed to have been completed even though the worker has not been engaged for 12 weeks;
  • Don’t bother trying to be clever – Anti-avoidance provisions mean that any attempt to creatively avoid the application of the regulations will result in you being caught out.

Who is liable if we get it wrong?

Very simply…

  • You are liable for breach of day 1 entitlements (over which the agency has no control);
  • Entitlements after 12 weeks:
    • Agency is primarily liable for breach of entitlements after 12 weeks; unless
      • it has taken reasonable steps to obtain relevant information from you; and
      • it has acted reasonably in determining conditions after 12 weeks in light of that information; and
      • Where responsible for applying those conditions, it ensures that they have been applied.
      • You are liable for breach of entitlements after 12 weeks, if the agency can establish that it has complied with the requirements set out above.
      • You are each (you and the agency) liable for your own deliberate act or failure to act
      • But – the truth is that, because it is their business, the agency will probably be on top of this (and may even have included indemnities in their terms of business) so in all likelihood it will be you that is liable for any breach

Top Tip

This article is not about practical steps, but is about highlighting the key implications of the Agency Workers Regulations. However, having said that, there are two really obvious practical steps you take to make things easier for yourself:

  1. Get your house in order. Ensure that your internal processes are fit for purpose, and rationalise the way in which you use agency staff (eg: by ensuring that it all comes through a single point of contact in your business);
  2. Consolidate your relationship with the agencies you use. Only use agencies that you trust, and co-operate with those agencies in order to put in place an effective and consistent way of working, which works for both of you.


And on the off chance that you do want to make your eyes bleed – you can start learning more about the Agency Workers Regulations here –

Have you had any interesting ideas about how to react to these regulations? If so, please share them by leaving a comment.


No such thing as a free lunch? The Bribery Act 2010

This is outside of my normal area of expertise (employment law), but it is relevant to HR professionals and is important to everyone doing business in the UK.

It is now less than a month until the Bribery Act 2010 comes in to force.

From 1 July 2011 all commercial organisations (which includes UK incorporated companies/partnerships, and overseas companies/partnerships which carry on part of their business in the UK) could be criminally liable if persons ‘associated’ with them commit acts of bribery. Sounds scary, and to many organisations it is.

This subject is highly topical at the moment, not just because of the Bribery Act itself, but also because of the recent and continued accusations of bribery and corruption levelled at FIFA in particular over recent months.

Now, I am not going to make any comment on the veracity or otherwise of the accusations levelled at FIFA (I shall leave it to others to cast their judgment), but there is one thing that I will say about the existence of bribery.

That is…

… Not only does bribery exist, but it is an established and accepted method of doing business in many cultures and regions outside of our own.

In practice, that creates a problem for UK businesses and organisations working overseas, because your competitors are often playing by different rules. This is a problem, and although the UK Government recognises that it will not be possible to eradicate bribery over night, there does not seem to be a solution for UK businesses trading internationally in what we might consider to be “corrupt” regions.

International trade disadvantage aside, the Bribery Act represents a piece of new legislation that really cannot and should not be ignored. The biggest impact will no doubt be on the private sector, but public sector organisations should not be complacent. While public sector organisations are likely to already have anti-corruption policies (of some description) in place, such policies often only cover the activities of that organisation itself. The Bribery Act goes further than this so that public sector organisations (and officers) can be held liable for the bribes made by private sector contractors on their behalf (whether or not they have enticed such conduct). This is because corporate liability extends beyond the actions of the organisation’s employees to those more widely ‘associated’ with it. ‘Associated’ can include agents, suppliers, contractors and joint ventures etc…

It is also worth pointing out that “third sector” organisations (charities, social enterprises, etc…) will also be covered if “carrying on a business”, irrespective of whether profits are actually made or intended.

What is bribery?

Most of us have an idea of what bribery is, but when asked to define it and draw the parameters of what constitutes a bribe, we might struggle.

Without wanting to get too legal, my own view of what the Bribery Act defines as a bribe is basically this:

A bribe occurs when one person gives something to another person, in return for (or with a view to) that person improperly performing a function or activity for which they are responsible.

(nb. This is not the legal definition, but my attempt to condense the legal definition into something that actually makes sense)

Of course there are huge grey areas that are created in the legislation and in the definition of bribery. For example, at what stage can someone be described as “improperly” performing a function?

The Government recognises that routine corporate hospitality is “an established and important part of doing business” and goes on to say that “it is not the intention of the Act to criminalise such behaviour”…. whatever that means???

To be fair, the guidance does go on to provide an explanation as to the circumstances in which corporate gifts and hospitality are acceptable, and when they might stray over the line into bribery. The problem is that the line is grey and blurred with moving fluffy edges, depending upon a number of factors such as proportionality and industry sector etc…

What should you do?

The only defence available when an organisation is apparently guilty of bribery is if it had in place “adequate procedures” designed to prevent bribery. The overriding principle is proportionality determined on a risk assessment basis. If bribery risks are deemed small, overly elaborate policies and procedures may not be necessary.

The official guidance (available online) is formulated around six key principles, about which I am not going to go into any detail at this stage (other than to list them below). It states that these six principles are “not prescriptive”, but instead are “intended to be flexible and outcome focussed, allowing for the huge variety of circumstances that commercial organisations find themselves in”.

The six principles are:

1. proportionate procedures

2. top-level commitment

3. risk assessment

4. due diligence

5. communication (including training)

6. monitoring and review


So, there are many grey areas, and many unanswered questions: What constitutes improperly performing a function? what are adequate procedures? and what is proportionate? Who will decide these issues? Well, ultimately these are questions for the courts, having taken account all of the factors relevant to the case. But it is also worth noting that the SFO has issued prosecutorial guidelines (i.e. guidance as to when to prosecute or not) that mirror the ‘common sense’ approach advocated in the general guidance. Consequently prosecution will only take place if it is in the interests of justice to do so.

Clear as mud then!

What is clear though is that an organisation (and its executives) that grasps the nettle and applies its mind to these issues; puts in place and enforces policies designed to prevent bribery; and cascades the anti-bribery message from top level all the way through the ranks of employees, is in a much stronger and safer position than an organisation (and executives) that doesn’t.

What steps is your organisation taking to address the issues raised above, and what do you think of the Bribery Act 2010? Please share your thoughts by leaving a comment.