Employees have significant and wide ranging legal rights and it is very easy for the unsuspecting employer to infringe them resulting in claims. Once a claim is lodged it is often best to attempt to settle but sometimes the employer wishes to defend on principle or the employee may refuse to settle. Win or lose this can be a significant cost to the business.
The best way to avoid claims is to manage employees effectively and our guidance sections can help with preventing the problems which arise from time to time when you employ staff and dealing with them properly when they do.
Managers’ skills are best directed to running and developing their businesses and not keeping abreast of the constantly changing employment law scene. We can help you through the legal framework and avoid costly mistakes, giving you better control of risk and what you spend. These days, most unfair dismissal claims lost by employers are due to a procedural fault. Our clearly set out policies and procedures will help you prevent any potential claim being made, or, where a claim is made, in reducing legal costs and/or the value of any settlement agreements should they become necessary.
These policies and procedures are highly practical, relevant and supported by manager’s guidance notes and template letters which are based on actual experience as opposed to theoretical advice. In a nutshell, we can tell you how to deal with the issues and manage any resulting problems, rather than just telling you what to do. This means you can use our extensive experience to help you with the problems and pitfalls which may arise so that you don’t have to learn the hard way. Link to topic list?
If you need a more personal one to one support to conduct difficult issues, our experienced consultants or business partners will work collaboratively with you to complement your own company culture and expertise. We can help when high risk issues are involved such as conflict between Directors and/or with the CEO or high profile grievances or discipline cases where the consequences of getting it wrong pose a significant risk to the company. Finding a suitable independent internal person and maintaining confidentiality can be a problem in these circumstances and can lead to accusations about the independence of the internal HR department. Link to consultancy page
Where you stand
Do I Really Need All this? Employment law polices and HR procedures make managing employees more effective as employees know what is expected of them and see the fairness of implementing them when things go wrong. They are also rather like insurance, you may never need it but if you do, and don’t have it, it could cost you dearly. Employees now have many rights, some they will not be aware of, but someone else will. They can get advice from solicitors but also free advice from ACAS, the Citizen’s Advice Bureau, Government sites on the internet and well- meaning but often ill -informed friends. So could you, but you need to know the right questions to ask over all aspects of the law and is this the best use of your time?
The Cost of Claims
Even if you win, the cost of legal fees in preparing for a simple unfair dismissal claim are likely to be around £5,000-10,000. If there are a number of claims or a discrimination claim, it is likely to be significantly more. If you lose you will have to pay compensation to the employee. The statutory Basic award is currently limited to £2,445 the Compensatory award £80,541 and an Additional award £12,714–25,428. The Government has introduced a new upper limit of one year’s salary, if this is lower. There are no ceilings on discrimination claims and employees can also claim injury to feelings and possibly negligence if they suffer ill health such as stress as a result.
I have insurance against Tribunal Claims
In practice, insurers want a risk free dismissal and, short of a full confession this is unlikely. The outcome is they want you to keep giving the employee another chance and make it very difficult to dismiss them if you want to remain covered. Meanwhile, you have to deal with the problem employee. We can give you balanced advice setting out the potential risks and how to minimise them, but working within commercial constraints, as you must.
Do you feel lucky? Assess your risk
What rights do employees have?
These come from two sources:
- Common Law Rights – these are rights which are based on the interpretation of the law by the courts and are less certain.
The following are statutory employment rights but some of them require service qualifications.
The right to:
- Minimum and Equal Pay
- Holiday entitlement
- Rest breaks and a maximum number of working hours
- Sick pay
- Redundancy pay
- Maternity, Paternity, Adoption Leave and Pay
- Family friendly benefits such as:
- Request for flexible working
- Time off for dependants in an emergency
- Parental leave
- Statutory time off for eg public or trade union duties
- Be accompanied at discipline, grievance or dismissal meetings
- Not to suffer discrimination, harassment or victimisation or have your human rights breached
- A safe and healthy work place
- Data Protection
- Protection from detriment for a Public Disclosure (Whistleblowing)
- Be consulted about redundancy and a transfer of the business you work in (TUPE)
- Not to have deductions from pay unless the employer has a contractual right to do so
- Not be unfairly or wrongfully dismissed
- Limited pension provision (this is currently changing on a phased basis)
- Have contractual terms of employment honoured
- Keep existing terms and conditions if their job transfers to another employer (TUPE)
- Common law generally applies to the employment contract such as the right:
- To be provided with work (some limitations)
- To be paid
- To be reimbursed expenses incurred in carrying out your role
- To have a safe working environment
- For the employer to behave in such a way as not to destroy the trust and confidence in the working relationship. This is a mutual obligation and applies to employees too.
If you were unaware of any of these rights and do not have policies and procedures to cover them, your business is at risk.
What are the Risks for the employer?
Before any tribunal claims are made, you may be faced with internal complaints and formal grievances if employees feel they have been treated unfairly. These complaints could be about anything affecting the employee at work but commonly they are due to contractual disputes over pay and other benefits, health and safety, bullying from managers, colleagues or even subordinates and discrimination. If these complaints are not dealt with appropriately there will, at best, be a disgruntled employee whose performance may drop off, they may spread dissent and lower morale and productivity. At worst, you will have to find the time to manage staff problems and potentially a tribunal claim.
For advice and guidance on dealing effectively with complaints see our grievance advice.
The handbook and contracts are designed to ensure proper procedures are in place. These, if followed, will significantly reduce the risk of a procedural fault unfair dismissal (100% guarantees cannot be given as each tribunal will view the facts individually)
The general rule is that an employee recruited after 6 April 2012 has to complete 2 years’ service before they can claim unfair dismissal (before this it was 1 year but all employees recruited prior to 6 April 2012 have now acquired 1 year). However, there have always been some automatically unfair reasons for dismissal where no qualifying service is needed. Additionally, there is no qualifying service needed to make a discrimination or whistleblowing claim and tribunals are seeing an increase in these claims, especially where the employee does not have the qualifying service to claim unfair dismissal.
If you do not follow a fair procedure in dealing with a disciplinary issue, sick absences or serious ill health problems such as stress or poor performance problems the employee may make a claim to an employment tribunal. Even if you do not dismiss them, they could resign and claim constructive dismissal on the basis that your behaviour was so extreme that you did not intend to be bound by the employment contract. They usually rely on breach of trust and confidence. To avoid these problems see our discipline procedure.
An employee does not have to be dismissed to make a claim of discrimination; they can do this whilst still employed. The law on discrimination is very complex and it is easy to make mistakes making you vulnerable. Due to the legal complexity discrimination claims are difficult to defend and you will probably need to pay for legal representation which increases your costs. Added to that, you are responsible for any acts of discrimination carried out by your employees. You can reduce your risk by having the correct policies (see handbook), monitoring them and dealing with complaints appropriately.
These days, having the right policies may not be enough to protect you from vicarious liability; you need to demonstrate that you have trained staff in discrimination and diversity. It is not always possible to release employees and managers on a training course but our case studies will help them understand their responsibilities.
If you do not meet your contractual obligations you can face claims for breach of contract, claims relating to payment of and deductions from wages, less favourable treatment due to part-time working or a fixed term contract, non-payment of pension contributions to name but a few. Such claims must arise or be outstanding at the time of dismissal to be heard by an employment tribunal but the employee can, of course, claim in the County Court.
Employees have responsibilities as well as rights, although this is sometimes overlooked. These are common law terms in addition to trust and confidence which also apply to employees. These are:
- To work loyally and faithfully. Failure to do so leads to the disciplinary procedure.
- To obey reasonable lawfully management instructions. Failure to do so leads to the disciplinary procedure.
- To exercise reasonable care and skill in doing your work. Failure to do so leads to the capability procedure.
- To devote the whole of your working time to your employers business. Failure to do so leads to the disciplinary procedure.
These terms are often now written into the employment contract but whether written or implied a failure to follow them could result in disciplinary action against the employee. For guidance on how to deal with employees not performing see our discipline procedure and managing absence or poor performance sections.
Other types of employment
Workers’ rights relate mainly to pay, working hours, holiday entitlement and contractual rights, such as not to have money deducted from wages and also against detriment for making a protected disclosure (whistle blowing).
The self-employed are only protected from discrimination
The table in the contracts of employment section sets out the statutory rights applicable to employees, workers and the self-employed. If you are in any doubt you should seek advice as this is a complex area of law.
The Government’s Apprenticeships are now more common than traditional apprenticeships and involve employees combining on-the-job training with college courses to achieve NVQs or (in Scotland) SVQs. For more information see our contracts section.
Employers must ensure that the law relating to children and young people is complied with when recruiting young persons. Young workers are those who are over the compulsory minimum school leaving age but have not yet reached the age of 18. A child is defined as someone who is under the compulsory minimum school leaving age. The date on which a child is eligible to leave full-time education varies in England and Wales, Scotland and Northern Ireland.
Home workers may be on any of the above contracts. It is advisable to establish a policy setting out the employer’s expectations and the employee’s obligations when working from home.