Over the last few months we have been covering some of the more proactive areas of human resource management with topics such as effective recruitment and training and development of employees.
However, we have to recognise that for many businesses, and especially the smaller ones, effective HR management often means simply keeping up to speed with current legislation and ensuring that key personnel are aware of the latest do’s and dont’s that apply to them in their day to day interactions with their colleagues.
With this in mind it is a good time to remind you of some of the recent legislative changes, as well as highlight up and coming changes that will effect your business.
You may already be aware that there were major changes introduced in the Employment Act 2002. This may seem like old news but the key thing here is that the implementation period of the act was been staggered, so all of it’s elements have not yet come in to force. There is also legislation pending called the “Information and Consultation of Employees Regulations, 2004” which will implement the European Directive on information and consultation.
The 2002 Act brought about a wide range of changes including the following:
• Maternity leave and payments
• Paternity leave
• Adoption leave
• Right to request Flexible Working
• Employment Tribunal Reform (to be • implemented 1 October 2004)
• Minimum standards for disciplinary and grievance procedures (as covered this time last year)
• The right to a written statement of particulars
Here, we take a look at each of those factors in turn.
MATERNITY
From April 4, 2004, the rate for statutory maternity pay (and for statutory paternity pay and statutory adoption payment) increased from £100 to £102.80 per week.
There have been several tribunal decisions concerning maternity leave including one where an employee successfully claimed constructive dismissal because her employer failed to inform her of a relevant vacancy whilst on maternity leave.
This type of incident sounds like it was designed to provide UKIP MEPs with ideal examples to prove their case to the media. However, even if this may have been the result of a simple oversight i.e. out of sight out of mind and may yet be subject to an appeal, it does highlight the need to ensure that, in key areas, there are now set procedural measures that have to be diligently followed in order to ensure potential costly ‘oversights’ are avoided.
FLEXIBLE WORKING
Subject to having six months’ service, the parents of a child aged under 6 (or 18 if disabled) may request in writing a change in their working contract.
This request must be properly considered with a meeting to discuss matters within 28 days and a detailed response within a further 14 days. There is a right of appeal, initially internally and then to an employment tribunal.
Refusal by the employer to allow the change must be based on sound “business reasons”. Examples of these would be such things as unacceptable cost, damage to quality of service or meeting customer demands, an inability to reorganise the workforce, an inability to recruit, insufficient work at the times that the employee wishes to work e.g. as caused by seasonal factors.
It is for the tribunal to determine whether or not the process was carried out properly and whether the business case for refusal has been properly explained to the applicant. If the applicant challenges any of the facts put forward then the tribunal may also examine these. The maximum penalty that a tribunal may impose is eight weeks’ pay.
TRIBUNAL REFORM
The key objectives here are to make the process simpler. In order to help achieve this all literature will use ‘plain English’ with a set of new standard claim and response forms that aim to seek greater information about the facts of the case in advance.
There will also be tighter rules for the respondent to seek an extension before replying to the originating claim and new rules aimed at sifting out cases that “should not go forward” i.e. aimed at reducing time and cost wasted on spurious claims.
Amongst the other changes proposed is a limitation on the time within which ACAS can conciliate.
The time limit is likely to be seven weeks for straightforward cases and 13 weeks for more complex cases. The new rule is aimed at preventing last minute settlements. Grounds for striking out a case at pre-hearing will be clarified but not extended.
Currently these include failure to comply with an order or direction, the inclusion of anything scandalous, unreasonable or vexatious in the claim, the response to the claim or in the conduct of either party during the hearing.
Further changes are to be made in terms of costs. There will be a new provision for an award of costs linked to preparation time so here it may make sense to consider keeping a log of the time spent in preparing any case that you think will go to a tribunal. It will also be possible to award costs against a representative i.e. legal or otherwise (other than “not for profit”) in respect of their own conduct before or during any hearing.
This is particularly aimed at the “no-win no-fee” cases, which can often be withdrawn at the last minute, thereby wasting a lot of time and resources of both the employer and the tribunal system. This is designed to curb the type of instances where people may be encouraged to bring claims that are somewhat tenuous in the hope that an employer will settle just to avoid the hassle of the process.
The new changes are expected to be in place by October 1, 2004.
In the meantime, the maximum compensatory award that a tribunal may make in basic unfair dismissal cases i.e. where the limit already applies, was increased from £53,000 to £55,000 in February 2004.
As a recent adjunct to this you will be pleased to hear that a recent ruling on this matter has clarified the nature of what ‘compensation’ can incorporate. A short while ago there was a case where the Court of Appeal ruled that compensation for unfair dismissal may take into account non financial losses - including injury to feelings.
This was a worrying decision in that it opened up the possibility of open-ended compensation claims. However, to the relief of employers everywhere, on July 15 this year, The House of Lords overruled this decision - a unanimous ruling which takes effect immediately. This confirms that awards are limited to financial losses and are therefore, capped at £55,000.
WEEKLY/MINIMUM WAGE
The statutory maximum weekly wage, used for calculation of compensation by tribunals, but more commonly used to calculate statutory redundancy, increased to £270 from February 2004.
The national minimum hourly rate for adults is to be increased to £4.85 in October 2004. So now is the time to check that your lowest wage and salary rates will not fall beneath the new rate. The new rate for 18 to 21 year old workers will be £4.10 and for 16 to 17 year olds, there will be a new minimum rate of £3 an hour.
INFO AND CONSULTATION
Concerning the information and consultation regulations, a final draft has just been issued. It is proposed that employees will have to be legally informed of the company’s economic situation, its key activities, employment prospects / threats, any decisions that may lead to substantial changes to work organisation and / or contracts of employment, or redundancies or business transfers. Failure could lead to fines of up to £75,000.
It is likely that these regulations will come into force for implementation in Spring 2005 for larger organisations i.e. those with over 150 employees, delayed until 2007 for those with over 100 staff and 2008 for those with over 50.
If you fall into the ‘larger’ employer category and are possibly considering a review of existing or proposed practices e.g. such as relationships with trade unions, works councils or anything similar, then it is probably a good idea for you to seek further information on these likely changes in order that you can take them into account for any manpower plans etc. that you are drawing up.
It may also be worth considering setting up any proposed agreements that you may have in the pipeline sooner rather than later in order to avoid some of the statutory detail that may be required in the near future.
WRITTEN PARTICULARS
Although this right has existed for many years, the law has now been extended to cover all employers - not just those employing more than 20 people.
A further extension incorporates the need to build in grievance and disciplinary procedures within the written particulars of employment, rather than, as before, simply naming the person to whom an appeal may be made.
The penalty for failing to comply with this extension is a minimum of a week’s pay for incomplete particulars and a minimum of two weeks’ pay in the absence of written particulars. Alternatively a tribunal making an award e.g. following unfair dismissal, may add up to five per cent to that award for incomplete particulars and up to 25 per cent for no written details at all.
IS THIS THE END OF NEW LEGISLATION?
Unfortunately no - there will undoubtedly be more employment legislation coming your way in the years ahead. In recognition of this inevitable process, the government have announced that, in future, implementation of upcoming European legislation will take place either on April 6 or October 1 each year.
There is also a promise that future European Directives will be implemented in the UK only after a three-year consultation period.
The aim of both these measures is to at least allow time for companies and individuals to assess and prepare for the impact of future changes well in advance.
As with all these matters the key thing to remember is if in doubt consult a professional. Some of these measures may seem like unpalatable extra burdens - especially to the smaller businesses with many of their previous exemptions being eroded.
However, remember that as with most things in life the general rule is that prevention is better than the cure.
Your solicitor will more than likely have someone, within their team or alternatively know someone else who specialises in employment law but there are also now individuals and organisations who specialise in this area of hr management who can help in keeping you up to date with the day to day practicalities of good practice that will hopefully keep you out of the solicitors office in the first place.
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