Skip to content

The truth about employment law protection products

Thinking about entering into an employment law insurance scheme? Then read on….

There are many employment law protection products on the market, and if you think that they are all the same, then think again. The range of prices and service levels you can expect varies significantly, and just because one type of product isn’t right for you, doesn’t mean that all of them aren’t. The difference in price relates primarily to the features and benefits of the product you are purchasing, and as with anything… you get what you pay for.

So what does an employment law protection scheme entail?

Typically they will include an HR/employment law help line, and some form of warranty or insurance to cover you in the event of an employment tribunal claim (if you have taken and followed advice), all for a fixed monthly fee. After that, the variation is huge.

At the budget end of the market (where you will find most of the well known and prolific products) you will find the lower service levels; longer contracts (maybe 3 or 5 years in duration); less specialist and less strategic advice; you will probably have access to a set of standard form employment documentation that may or may not be suitable for your business; and the advice line will be staffed mostly by unqualified and anonymous paralegals who are likely to give extremely cautious advice.

At the other end of the scale you will find higher service levels; direct lines and email addresses for named and experienced specialist employment lawyers at a firm of solicitors of your choosing; bespoke documentation for your business; and shorter contracts (typically 12 months). Those solicitors will be able to give you the specialist, strategic and commercial employment advice that you really need, and will even be able to tell you what you can do which would not be covered by insurance (and the risk associated with it), to enable you to make a judgement call based upon commercial, strategic and cost considerations. But sitting behind this high level of service is an insurance policy, which protects you against the unexpected risks.

In the middle there is a huge range of approaches, which for the most part combine elements of both of the above. 

There is one product called Praesidium that is operated by a network of solicitors firms across the UK, and which provides an online resource of guidance and standard documentation (www.praesidiumemployment.co.uk). So you can effectively take all of your advice online and through email (with or without insurance), which seems quite apt in this technological age. They are not on Twitter or Facebook yet though.

Which one do you choose?

 

Which is best for you will depend upon the needs of your business, including the level of your HR sophistication; whether you have in house lawyers; what your budget is; and your past record of dealing with employment law issues.

The budget end of the market will certainly appeal to a number of businesses, but do think twice before you enter into the contract. Consider the following in particular:

  • Is the product going to provide you with the level of service that you really need? If you are an experienced HR professional, or have some understanding of employment law, you are unlikely to be told anything you don’t already know.
  • The advice that you receive is likely to be ultra-cautious. You are most likely to find that you will be told what you cannot or should not do, but you are very unlikely to be offered any solutions.
  • You may well speak to a different person every time you call the help line, so you may feel like you need to go over the same ground time and again.
  • The standard documentation you receive may not be suitable for your business, but you may be obliged to use it to benefit from the insurance.
  • The contract length may be for 3 of 5 years. If you find that you are unhappy with the product it may turn out to be a false economy as you take further advice from elsewhere on top of the cost of the insurance product… and that advice from elsewhere will not be covered by the insurance.

If some of those points concern you, but you still want the insurance, then the answer is to pay more for a more suitable product provided by a firm of solicitors. Most solicitors who offer these arrangements will have a standard offering, but it is always open to you to negotiate over what is and is not included within the cost so as to tailor the service to meet your needs.

Value for money?

If you can, think about value for money rather than price when you are looking to enter into a contract like this. Insurance is not cheap, and if it looks like you are going to save money by swapping to an insurance based scheme, then that is probably because a) you are getting very little else on top of the insurance; and b) the insurance will be subject to significant limitations.

Remember also that if you are simply looking to fix your regular legal spend, then most (progressive) law firms will be more than happy to explore fixed price options with you, even without insurance. Solicitors are not there to sell you insurance, but they will often arrange it for you if that is what you want and need.

Finally, if you are expecting to get your normal level of service and advice, but you want insurance as well, then you should expect to pay more. Sorry.

What do you think of employment law protection, and what are you experiences (good or bad) of working with this type of arrangement? Please leave your comments.

Advertisements

will we ever be able to retire?

Why has the default retirement age (DRA) been removed, and what does it mean for the future?

There used to be a time when people had a career for life, worked until they were 60 or 65 years old, and then retired with the fanfare of a gold watch, or a carriage clock, and a healthy pension to boot. But times have changed.

These days there is very little loyalty left in the labour market. Things are much more fluid and people are much less likely to stay with their employer for 25, 30 or more years. Even if they had wanted to stay with the same employer, the latest technology, or some irritating recession comes along to scupper their plans, culminating in what is generally a pretty meagre redundancy payment and notice of termination of employment. If they are lucky they will find another similar job, but for many people a complete rethink is required.

Age discrimination has without doubt had its part to play in this change, with employers either consciously or subconsciously looking to trade in their aging workers, for newer younger workers. But it would be wrong to suggest that this is all (or even mainly) about age discrimination.

The truth is that workers have become more transient and mercenary in response to business becoming more “commercial” over the years. Outside of the professions employees hop from one career to the next, looking to find that “happy place” which will help them achieve their inflated aspirations: to own that house; and that car; and pay for that £35 per month iphone contract. Likewise, within the professions those employees who stick with their chosen career often hop from one employer to the next trying to climb up the career ladder.

There is nothing necessarily wrong with any of this, except that it means that the majority of workers now think about the here and now. Planning out a job for life has become a very rare occurrence, and at the same time people have stopped planning for their retirements. In moving from employer to employer every few years, employees neglect the matter of pension savings; the State pension is probably on its last legs; and the age profile of the population is increasing.

Now, the European Court of Justice has ruled that it is possible (in the right circumstances) to justify a default retirement age. So whilst theUK’s legal concept of unlawful age discrimination came from Europe, we cannot blame Europe for theUK’s removal of its own DRA. What is clear, however, is that our population needs to work longer in order to pay for its own retirement.

Another thing that the Government is doing to tackle this issue is the introduction of NEST as a semi-compulsory scheme (unless you have something just as good in place) in order to fill the pensions hole. But it will take a long time to feel the benefits of that, if indeed it works as planned. (More on NEST in a future blog)

In the long term the removal of the DRA may mean that older workers are less likely to be dismissed, but in the short term it has led to an acute increase in the number of employees aged 65 or above who were “retired” in advance of the change in the law. Things should settle down now and slowly older workers should start to see some benefit from this.

But what about the employees who want to retire? Are they allowed to? Yes, of course they are, but the problem is that employers may find it very hard to raise the subject without crossing over the line into unlawful age discrimination.

What should employers do now?

One of the biggest issues facing employers is how to allow their employees to retire with dignity. This is a difficult and delicate issue, and it is worth pointing out that every single employer is in a different situation here. One size certainly does not fit all. Things that you should consider are:

  • Can your business justify its own normal retirement age? Remember that the ECJ has said that it is possible to do this. Also remember however that justification is quite a high hurdle to overcome, and this stage requires appropriate investment of time and resources, together with specialist legal assistance, to put you in the best position to justify your own normal retirement age;
  • If you have historically employed people beyond the DRA or any normal retirement age, you will almost certainly be unable to justify a normal retirement age now.
  • Putting in place a decent pension provision (rather than just the bare minimum) will also help employees make the transition into retirement.
  • Easier said than done, but explore the way in which retirement discussions can form part of the appraisal/career development process for all employees (yes, even the 19 year old office junior). This will help with your workforce planning for the future; it should improve employee engagement; it enables you to identify when employees want to retire; and because it applies to all staff (regardless of age) it should not constitute age discrimination.
  • Put in place a mechanism, or procedure that allows employees to ask to retire and publish it (for example in the employee handbook) to all staff. Perhaps some kind of “phasing out” (semi-retirement) policy could also be useful for your business.
  • Ultimately, you may be forced to use capability procedures to terminate the employment of older workers who are no longer fit to perform their duties. No one wants to be in this situation, as it does not feel right to terminate the employment of someone who has been a good employee for the past 45 years on capability grounds… but that is what the current legislative landscape leaves us with.

Finally, if you have started a capability procedure against an older worker, who then says they want to retire, bite their hand off (metaphorically of course). Stop the capability procedure and finalise the end of their employment through an agreed retirement, which is far safer than a capability dismissal.

What steps have you taken to address the issue of retirement in the post DRA era? Please share your experiences and opinions by leaving a comment.

I say TUPE, you say 2p, let’s call the whole thing off!

What happens when people can’t agree whether TUPE applies to a service provision change? This is something that I have seen a lot of recently, although it is not a new phenomenon.

Scenario

Company A has a contract to provide services to a client, and over time this has become 75% to 80% of Company A’s business and turnover. Company A has scaled up considerably over time to service this client, and whether they employ dozens or hundreds, or even thousands of employees it is clear that the business is now based upon the work for that client and they would suffer horribly (and possibly enter insolvency) if they lost that contract.

Unfortunately Company A’s worst nightmare comes true, and they lose the contract, but there is a silver lining. At least the TUPE Regulations will take effect so that all of the staff they employ on that contract will transfer over to the new contractor. Or will they?

What happens when the new contractor and/or the client maintain that TUPE doesn’t apply? And maybe this situation has been sprung on Company A without warning; so what can they do about informing and consulting with employee representatives?

The simple truth is that when this situation arises, Company A is in a really bad position and there is no way of avoiding that fact. There is no easy way out, and every option available to Company A is full of risk and/or cost. But this wouldn’t be a very helpful blog if that were all I said about it.

The Law

The strict legal position is this:

  • TUPE will operate so as to transfer the employment of all employees assigned to that contract (Company A will have the best idea of who these are, although ultimately the deciding factors may rest with the employees themselves);
  • Those employees who are not assigned to the contract will not transfer. This might apply for example to some of the management team, whom although they spend most of their time on work related to the contract, they cannot be described as being assigned to it as their responsibilities are far wider.
  • TUPE will impact upon both the transferring staff (once we know who they are) and any retained staff who are affected by the loss of the contract (for example there may be necessary changes to duties or even redundancies that affect retained staff). Information and consultation is legally required with representatives of all of these employees (regardless of whether they transfer), if they are affected by the situation. 

So who is on the hook for the employment tribunal claims? Legally, all claims relating to the employees who should transfer (except those relating to failure to properly inform and consult) will transfer to the new contractor. From the date of the transfer, Company A can effectively treat them as employees of the new contractor.

Conversely, liability for those employees who don’t (and shouldn’t) transfer will remain with Company A.

The difficulty is that the only place where a definitive answer can be given as to whether an employee should or should not transfer is in a court or tribunal. So where the picture is not entirely clear, there will be an element of risk taking involved. This risk can be mitigated through the use of settlement payments and compromise agreements, but Company A is often not in a good position to use these methods given that it has just lost its biggest contract.

What to do

So that’s the law, but you can find that out anywhere. What Company A really needs is some practical help… “what do we do?” is the question they ask. So I answer…

In practice, if you are in Company A’s position you need to:

  1. First of all, identify all of the staff who are affected by the loss of the work, then split them into two groups, those who are assigned to the contract, and those who are not. (You may need the assistance of a TUPE expert to do this).
  2. Start consultation with representatives of the groups of affected employees (there are legal requirements for this process). An all-staff communication explaining the situation would also be helpful.
  3. Make contact with the new contractor, and inform them of the situation, and the details of the employees transferring. General details will be fine in the first instance, but this will need to be followed quite quickly by the legally required “employee liability information”
  4. Finally, if agreement cannot be reached with the new contractor, then Company A needs to make a judgement call about the employees in dispute. The decision over who to deem as transferring will depend on the specific circumstances, and should only be taken with proper advice. But there will be a risk whatever you do.

It is important to remember throughout this process is that judges and tribunals want to make decisions that protect the employees, and normally that means them transferring to the new contractor, regardless of what clever arguments the new contractor’s lawyers may come up with.

Have you had any experiences involving TUPE. Please share them by leaving a comment.

How to stop employees using social media

So my client asks: “do you have a social media policy we can use”, and I reply: “yes, but what is it you are trying to achieve with your social media policy?”

After a short silence the response is generally one of the following:

  1. I don’t know, but I think it involves the interweb” (sic); or
  2.  “to stop employees using it”; or
  3. to control employees’ use of it

 

The reality is that although Social Media is here to stay, and is a massive phenomenon, most people in business don’t understand it even on a basic level; of the few remaining, many of them only have a basic grasp of it; and a very small minority actually do understand it. That will of course change as “Generation Y” takes over the world (and all human interaction takes place through the medium of social media), but for the timebeing ignorance and confusion prevails.

This is not a problem that affects only small and medium sized employers. I have had conversations with organisations that employ thousands of staff, in which they have admitted that they are undecided about how to address social media issues.

So what do you want to achieve? Do you even understand social media well enough to know what you want to achieve?

Horror stories abound. There are the well known tales of employees insulting their managers on Facebook, when those managers are Facebook friends; Celebrities retweeting racist jokes (by accident?); inappropriate use of hashtags, and numerous other examples of slip ups that damage brand image.

Most clients come to me and ask for a social media policy shortly after something has gone terribly wrong: Maybe an employee has created and published an insulting and demeaning video on YouTube, depicting their line manager in an offensive manner and damaging the employer’s brand (yes that did happen); maybe a manager has blogged about how awful the organisation is, and told people not to apply for work there, whilst at the same time ridiculing the senior executives by comparing them to Muppets (yes that also happened); or maybe an employee’s LinkedIn profile says that they are performing the job of someone that has just been made redundant, which is then used against the employer as evidence of unfair dismissal (and yes, that happened as well).

The most common reaction is for an employer to want to control or prevent use of social media by employees, but when you scratch the surface you find out that they also understand that social media is important to their brand both now and in the future (even though they are often not sure how, or why that is). Indeed, some businesses’ whole business plan is based upon the utilisation of social media.

In reality, employers need to accept that they cannot control social media. It is a living and breathing animal and none of us know where it will go next. Any attempt to control social media will be one step behind… Herding cats anyone? If China and Iran have both tried and failed to control social media, how can we as employers hope to succeed?

Government statistics in Sept 2010 indicated that in 2009 40% men and 48% women had set up own social networking profile. Roughly double the numbers from 2007. 25% of 8–12 year olds already had a social networking profile.

Even if you could control it at work (which is difficult given the proliferation of smartphones), you cannot control what goes on in an employee’s private life.

This then presents a dilemma. If we can’t control it, what should we do?

My firm went through this process, and as an employer I asked myself the same questions that I have been posing throughout this post. A group of us, including our IT Director, Head of HR, a technology lawyer and another specialist employment lawyer all got our heads together.

The context was that the firm as a whole was not yet ready to attach its brand to a social media campaign, and it was not within our gift to change that. So we decided upon a route that empowers our employees to use social media in a personal capacity, whilst at the same time educating and supporting them in respect of their use of social media. That naturally included a written policy with FAQs and guidelines, but it goes further than that. Crucially it includes a mechanism by which employees can seek advice and guidance (without fear of embarrassment) from those of us who worked on the policy.

The point about educating employees is vital. If you educate your employees (rather than restrict them), then they really have no excuse when they mess things up. They should have known better, and this is further strengthened by the support mechanism. This enables employers to take more decisive and drastic action when things go wrong.

Without education and support, people will make mistakes when they start to mess around with social media tools that they don’t fully understand. Perhaps they didn’t fully read that post they retweeted; or maybe they messed up their privacy settings. In these circumstances it can be hard to justify coming down hard on employees.

Now, it is important to understand that our style of social media policy will not suit everyone, but the first step must always be to understand your own position and to agree an HR strategy for social media (not the same as a social media marketing strategy, but is likely to be influenced by it).

Your approach to implementing a social media policy should however always involve the following steps:

  1. Ensure that you have someone in your organisation (if not yourself) who understands social media;
  2. Ensure that you understand what social media means to your business. Identify the opportunities that you want to exploit, and the risks that you want to protect against;
  3. Identify about five key objectives that you want to achieve, and then take them to your HR/legal advisers so that they can help you produce and implement a social media policy that is fit for purpose (for your business);
  4. Remember that one size does not fit all. Don’t copy someone else’s social media policy (unless it aligns with your specific business needs and objectives).

 

What are your experiences? Have you grappled with the concept of social media policies, and what did you do?

[Please ignore the adds below. Nothing to do with me.]

_______________________________________

Does it matter that dual discrimination has been shelved?

One of the new concepts introduced by the Equality Act 2010 is the concept of dual discrimination. That is the idea that it is unlawful to discriminate against an individual on the basis of the combination of two protected characteristics (eg: sex and race; sex and age; race and sexual orientation etc), rather than on the basis of a single protected characteristic alone.

The whole reason for introducing such a concept is based on the premise that it might be possible to avoid a finding of discrimination by relying on a combination of characteristics rather than a single characteristic. When you deconstruct this, it is essentially the same as the flawed pub argument that is often repeated along the lines of: “I can’t be homophobic, because I [even] have gay friends” (yes I have even seen that argument used in an ET case before), or similar lines for other types of discrimination.

So I am afraid that this is a prime example of lawyers like me trying to be far too clever. The lawyer’s argument would go like this:

Hypothetical scenario in which an employer applied a rule that women over 40 may not apply for a job. The argument goes that, this would neither be direct sex or age discrimination, as not all women would be precluded from applying and not all persons over 40 would be precluded from applying. Instead the rule would amount to combined discrimination under section 14 of the Equality Act 2010, which is not unlawful at present.

That is in fact an argument that the BBC lawyer ran in the Miriam O’Reilly, Countryfile  (Age Discrimination, Sex Discrimination) case a few months back. But it didn’t work. The employment tribunal decided that when compared with another woman who was in the same position, but younger, it was apparent that age discrimination had occurred.

So do we need “Dual Discrimination”? I think not. A well argued case will succeed on a single strand of discrimination, whether or not discrimination has occurred on the basis of a combination of characteristics. So does it matter that dual discrimination probably won’t come into force? Probably not.

Having said that, the recent decision not to bring dual discrimination into force has come under a lot of criticism from gay and lesbian groups in particular, so watch this space.

Have you had any experiences relating to defending cases of combined strands of discrimination? Let me know what you think.

Is the Employment Tribunal system biased against Employers?

To misquote a recent television commercial for California…. “People have a lot of misconceptions about [employment tribunals] and most of them are wrong…?” – I always thought that all misconceptions were wrong, otherwise they wouldn’t be misconceived. But California has different rules, and so does the Employment Tribunal.

Getting a good result in an employment tribunal is one of the most satisfying parts of my job, so it pains me to say that an employment tribunal hearing is not an experience that I would wish upon any employer. It is a tiring, draining and fundamentally risky place to be for any employer.

I have a lot of experience of representing employers in employment tribunals, and I am often asked whether employment tribunals are biased against employers (or indeed I may be told that they are). But this is a misconception (and yes it is therefore wrong).

Yes, there are judges and tribunal members who are more likely to look at things from an employee’s perspective, but the opposite is equally true. Having said that, an employment tribunal’s decision is as likely to turn on believability (even likeability) of a witness as much as on the evidence, and the mood in a hearing can change like the wind. That is one reason why it is so important to have legal representation at the hearing and throughout the process, even though sometimes even that won’t be enough. Ultimately though, with the right preparation most employment tribunals will get it right most of the time.

The difficulty is that it is impossible to predict with certainty how things will go on the day. How things should go, is not the same as how they will go. This is not so bad for the Claimants (employees) who have little or nothing to lose and are often without legal representation. The employer on the other hand will have incurred legal costs, loss of management time, and reduced productivity… even if they win. So the risk and the cost often rest wholly with the employer. So, do you feel lucky?

It is for this reason that you could say that the system is loaded against the employer, who has no choice but to incur time and expense in defending a claim, and to that extent you could say that the system is biased against employers. So maybe that is a misconception that is right? (sic)

What are your experiences of unpredictable employment tribunals? Please share your stories here.

Under Construction!

Hello. Welcome to employment law sense check, where I hope to help business leaders, managers, and HR Professionals cut through some of the less appealling; confusing; or just plain wrong ideas about UK employment law.