HMO QUARTERLY EMPLOYMENT BULLETIN
January 2010

It’s a new year – time for reflecting on what steps should be taken to avoid what could be costly disputes with employees and for checking you are up to date with Employment Law. Take a couple of minutes to check that you are up to date:

• We shall soon be celebrating the anniversary of the scrapping of the statutory dismissal and disciplinary regulation prescribed steps. You will recall that a failure to follow these gave rise to an automatically unfair dismissal. Taking their place is the ACAS Code of Practice. Are you aware of the contents of the Code, however? Do your Written Disciplinary Procedures (WDP) still tie you into the Steps 1, 2 and 3 procedure? Are you comfortable with that? Is it time to ask HMO to review and update your WDP? Remember you must have a Written Disciplinary Procedure and a Written Grievance Procedure.

• If you are involved in making redundancy payments remember that the weekly pay limit for statutory redundancy payments has risen to £380 per week with effect from the 1 October 2009.

• Check that you have implemented the minimum wage increases as follows:

For workers aged 22 and above £5.80
For workers aged 18 to 21 £4.83
For works aged 16 and 17 £3.57

A failure to do so can be met with severe sanctions.

• Bonuses: Remember that unless and until legislation is brought in (the Queen’s Speech promised such legislation) the reduction or withdrawal of a contractual bonus will not be justifiable on the basis of the recession, the duty of the Company to its shareholders or as was argued in the recent Bank Bonus case the duty of good faith on the part of an employee to act reasonably in exceptional times (whatever the morality of the situation).

• Take note that the Employment Appeal Tribunal has raised the bands for awards for injuries to feelings in discrimination cases to up to £6,000 for less serious cases, up to £18,000 for middle ranking cases and £30,000 for the more serious cases. Ill advised conduct by management or fellow workers to a worker could prove expensive. Time to review your equality and diversity policies, dress codes and the like? Time to ask HMO to do this for you?

• Remember that in discrimination cases there is no upper limit to the amount of compensation that can be awarded. This even includes compensation for the stigma of an employee having to take proceedings against the employer blighting his career for the rest of his life (in a recent case this head of claim produced a seven figure award).

• Remember that although the default retirement age of 65 has survived legal challenge, even for employees of 65 and over you must follow the proper notice procedure for retirement. This applies even where the Contract of Employment states a retirement age for example 65. Failure to give the correct notice can result in the dismissal being automatically unfair.

• Beware TUPE!  The amended Transfer of Undertakings Regulations came into force back in April 2006 but are continuing to raise eyebrows when interpreted by the Courts. One of the recurring issues raised by our clients is whether they can harmonise the terms of incoming employees under a transfer with those of the existing workforce by downgrading terms for example pay. It remains difficult to lawfully achieve harmonisation following a transfer unless there is a structural change in the workforce. Mere harmonisation for its own sake following a transfer will be void, will breach the employees Contracts of Employment and may land you in the Employment Tribunal. TUPE is an area in which you should always take advice.

• Finally one to watch – the Equality Bill – currently targeted to become law in the Autumn of 2010. The stated aim is to “streamline and simplify the law on discrimination which has developed in a piecemeal way over forty years and to strengthen the law and bring forward new measures to fight discrimination and inequality”. If enacted the Bill will contain additional safeguards for employees, which if ignored will create additional traps for the unwary employer. Will it definitely be enacted? No, many suggest that a change of Government will see substantial changes to the Bill or even it falling by the wayside.

If these issues resonate with you and you would like to discuss how we may help you give your employment procedures and polices a spring clean or you need specific advice, contact Nigel Pepper, partner or Patrick Nelson, solicitor on 01785 211411.

If you wish to catch up on developments in the Employment field over the past twelve months please click here for a link to previous employment e-bulletins for March June and October 2009.

We wish you a prosperous 2010.

11 January 2010

Disclaimer
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.