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December newsletter

Merry Christmas from everyone at the Sevier Consultancy Group! This is what is going on in the HR world this month...

Recent cases
Disability discrimination
Mitigating factors make gross misconduct dismissal unfair
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Forthcoming Legislation
January 1st 2014
April 1st 2014
April 6th 2014
May 5th 2014
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How to...
How to assist redundancy employees during their notice period
How to handle employees working additional jobs
Abbreviations used in this issue:
ET - Employment Tribunal; EAT - Employment Appeal Tribunal

Key points to take away from this month's newsletter: A lot of employees now hold second jobs to ensure they can meet increased household costs. Companies can require an employee to ask your permission so you can consider the consequences of a second job and ensure you comply with legislation. See our 'How to article'
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RECENT CASES
Duty to make reasonable adjustments does not apply to associative disability discrimination

Hainsworth v Ministry of Defence
 
Dr Hainsworth, who worked in Germany, brought a disability discrimination claim in the ET. She is not disabled, but her daughter suffers from Down's Syndrome. Dr Hainsworth alleged that her employer subjected her to direct disability discrimination and should have made reasonable adjustments to facilitate her caring duties towards her daughter. Dr Hainsworth wanted her place of work to be changed to fit in with her daughter's education requirements.
 
The issue for the EAT was whether or not it was arguable that a claim for associative disability discrimination could include a failure to make reasonable adjustments.  The EAT held that, while the duty on employers to make reasonable adjustments is wide-ranging, the wording of the Equality Act 2010 excludes claims of this nature where the employee or job applicant is not disabled. The EAT also said that the concept of 'reasonable accommodation' in the Equal Treatment Framework Directive, which is designed to allow disabled people to participate in employment or to undergo training did not apply as the accommodation sought in this case was not to accommodate a person who has an employment relationship with the employer.
 
The EAT stressed that, even if Dr Hainsworth's argument might be said to raise an important issue, that in itself is no ground for permitting the issue to go to a full hearing. If it is unarguable, the issue should not be considered, no matter how "important it might be if the world were otherwise".

Top tips
  • This case confirms that an individual who claims associative disability discrimination cannot claim that his or her employer has failed to make reasonable adjustments.
  • However, an employer could still face a claim of associative disability discrimination in relation to direct discrimination and harassment. For example, a woman who is not promoted because she has a disabled child and her employer thinks that she could not devote sufficient time to increased duties could bring a direct disability discrimination claim.
Mitigating factors make gross misconduct dismissal unfair

Brito-Babapulle V NHS
 
Ms Brito-Babapulle was a consultant haematologist employed by the NHS, although her employment contract permitted her to have private patients. The claimant suffered intermittent health problems that prevented her from being at work from 13 March 2009 until 8 June 2009. While she was on sick leave and in receipt of full contractual pay, the hospital suspected that she was still working for her private patients. The claimant had been warned by the hospital on two previous occasions that, if she was certified as sick, she should not work in private practice.
 
The disciplinary panel concluded that such action amounted to gross misconduct. The claimant was summarily dismissed, and her employer’s decision upheld on appeal. 
 
At first instance the ET dismissed her claim on the basis that the hospital 'was entitled to find that the claimant’s actions amounted to gross misconduct'. The ET went on to say 'Once gross misconduct is found, dismissal must always fall within the range of reasonable responses and it is not for this ET to substitute any sanctions we might have imposed or whether we would have dismissed the claimant in these circumstances'. 
 
The claimant appealed on the basis that in jumping straight from the question of gross misconduct to the conclusion that the dismissal was within the range of reasonable responses, the ET had failed to consider mitigating factors,for example, the length of exemplary service and the consequences of dismissal from the NHS.
 
The EAT highlighted that jumping straight from gross misconduct to the proposition that dismissal must then inevitably fall within the range of reasonable responses leaves no room for considering whether or not mitigating factors may mean the dismissal is not reasonable. 
 
Top tips
  • This case highlights the importance of considering any mitigating factors when deciding an appropriate sanction for gross misconduct and illustrates the ease with which some employers fall into the trap that gross misconduct automatically equals summary dismissal, without first considering mitigating factors
  • To avoid this, where a company is considering summary dismissal for cases of serious misconduct, it is important that you document the reasons as to why dismissal is the outcome and that other sanctions were not appropriate.
FORTHCOMING
1 January 2014
 
Changes to TUPE are made on the basis that the current TUPE provisions are 'overly bureaucratic'. The changes include:-
  • Modify what amounts to a Service Provision Change to apply only where the services after transfer are essentially the same
  • Transferor to provide employee information to Transferree 28 days before transfer (previously 14 days)
  • Small businesses (10 or less employees) can consult directly with employees if no recognised employee represenataives or trade union, previously companies had to elect representatives specifically for TUPE purposes
  • Enabling renegotiation of terms derived from collective agreements one year after the transfer, provided that the overall the change is no less favourable to the employee
  • Provision for a static approach to the transfer of terms derived from collective agreement, ie; only those in excistence at the date of transfer will be binding.   For example if there were a collective agreement in force that provided for a minimum 3% pay increase each year, currently the new employer would have to honour this going forward.  These collective agreements can be frozen post transfer and can be re-negotiated after 1 year
  • Changes in the location of the workforce following a transfer to be within the scope of economic, technical or organisational (ETO) to allow valid changes to contracts where an employee's work place changes.
1 April 2014
 
Reserve Forces
The Reserve Forces Regulations which provide financial assistance to employers whose employees are absent due to mobilised service, are amended. The amendments will ensure that the financial limits and the types of costs open for claim, including for training of replacement staff, are appropriate and that the administrative arrangements are streamlined. The Government also plans to introduce legislation that will allow the Secretary of State to make a payment of £500 per reservist per month when mobilised to small- and medium-sized enterprises.

6 April 2014

Financial penalties
ETs will have the power to levy a financial penalty against employers that are in breach of employment rights where the breach has one or more aggravating features. If the tribunal makes an award of compensation, the amount of the penalty will be 50% of the award. The penalty is subject to a minimum threshold of £100 and an upper ceiling of £5,000. Employers will qualify for a reduction of 50% if they pay the penalty within 21 days.
5 May 2014
 
Flexible working
Extension of the right to request flexible working to all employees. Currently, the right applies to employees who have children under the age of 17 (18 if a child is disabled) or who are carers. The statutory flexible working procedure for considering requests is replaced with a duty on employers to deal with requests in a reasonable manner, and a statutory code of practice is introduced to give guidance as to the meaning of 'reasonable'.
HOW TO...
...assist redundancy employees during their notice period
 
Employees who leave the company due to redundancy are entitled to take a reasonable amount of paid time off work to look for new employment or make arrangements for training for future employment.  This article provides you with some best practice tips to help you manage this statutory right.
 
In the event that redundancies are unavoidable, the task of assisting redundant employees usually falls to HR. Good practice in this instance means going beyond the letter of the law to ensure that all redundant employees are treated fairly and respectfully during a potentially stressful and challenging time.
 
Employers can benefit from providing assistance to their redundant employees in a number of ways: 
  • Positive reputation of the Company: In providing assistance to redundant employees, companies can maintain good community and investor relations and maintain the employer brand. They can also help to ensure that their Company remains attractive to good employees
  • Improving the morale, and retention, of remaining staff and reducing absenteeism levels: Where employees provide assistance to redundant employees this decreases stress among retained members of staff and helps to maintain performance levels. 
  • Reduced likelihood of employees challenging the decision to dismiss: If employers provide employees with assistance in dealing with the effects of redundancy, the employees are less likely to issue proceedings for unfair dismissal in the ET, reducing legal costs and time spent defending tribunal claims.
The overall result is likely to be less disruption to the business and less resistance to the changes that can occur during and following the redundancy procedure. In turn this is likely to help in maintaining productivity and competitiveness at a difficult time.
 
 - Outplacement costs
Although providing assistance to redundant employees can attract costs, employers should bear in mind the above effects of redundancy on employees and provide assistance where possible. The desire to provide quality assistance to redundant employees and the need to minimise costs at a time when the organisation is likely to be struggling can, thought, result in conflict.
 
In order to obtain the greatest value for all parties concerned, there are a number of guidelines that employers can follow: 
  • The provision of in-house support involves minimal costs and could make a significant difference to the redundant employees' experience 
  • If using an external consultant, the choice of outplacement provider should be well researched to ensure value for money. It is advisable to spend money only on the elements of outplacement that research has shown to be effective which are regular, face-to-face meetings. However, to meet budgetary demands,you could organise for face-to-face meetings to be interspersed with less costly telephone calls or email interaction. 
  • Group workshops for employees of the same professional level are also cost effective and can cover topics such as CV writing, interview skills, and the use of the internet and computer databases in finding employment-related information.
  • Employers should ensure that outplacement services are tailored to employees' individual needs to avoid wasting resources. For example, teaching generic networking skills is likely to be very helpful to lower-level employees, but of limited value to upper-level managers, given the smaller, more specialised marketplace in which they operate.
  • The scope and objectives of the outplacement service should be communicated to the recipients. This should help them understand what is expected of them so that they participate fully and gain real value from the service. For instance, it is important to inform redundant employees that the aim of the service is to help them develop and implement a job-hunting strategy, so that they do not expect the service to find them a new job.
- Time off during notice period
Employers have a legal requirement to provide employees who have at least two years' service (by the time their notice is due to expire) and have been given notice of dismissal by reason of redundancy with a reasonable amount of paid time off work to look for new employment or make arrangements for training for future employment.
 
Employers could consider extending this time-off provision to all employees who have been given notice of dismissal by reason of redundancy, regardless of their length of service.
 
The amount of time off given should be decided on an individual basis by the employee's manager will depend on what is reasonable in the circumstances. Employers should take into account the amount of time off requested, and its purpose, in determining what is reasonable.
 
In addition to allowing employees time off work to attend interviews with prospective employers, visit job centres and recruitment agencies, and undertake training, it is good practice for employers to allow time off work for: 
  • Attendance at outplacement counselling
  • Preparing CVs and job application forms
  • Dealing with the psychological impact of redundancy, such as depression or sleep disturbance.
The legal right to reasonable time off work is to paid time off. However, if the employer wishes to allow a request for time off work, but does not consider that the request is reasonable, it could consider allowing the time off on an unpaid basis or to allow them to use up some holiday entitlement.
 
Employers should also consider allowing redundant employees to work flexibly. They might agree to a gradual reduction in working hours to ease the separation process from the employer and enhance adaptation.
...handle employees working additional jobs
 
The financial crisis and squeeze on living standards has forced many employees to hold additional jobs, which can cause difficulties for the main employer. 
 
Initially holding an additional job causes no problems, but over time, it may affect the employee’s performance because they have taken on too much and are too tired to work to the required standard.  This could constitute poor performance and, as such, could be dealt with under a capability procedure, but there are ways to manage the issue more pro-actively. While an employer can include an express term in the contract of employment to prohibit the employee from taking up additional work, this may be unappealing to the employee and, in some cases, will be unnecessary. A less draconian measure would be to include a requirement that the employee requests the employer’s permission before they take a second job. This clause presents the employer with the opportunity to evaluate what the employee is proposing to do and to set any parameters that might be necessary to protect its business.
 
This also helps an employer address a potential legal issue in relation to obligations under the Working Time Regulations 1998. The Regulations require that employees work no more than an average of 48 hours per week, over a 17-week period and should enjoy a certain amount of daily and weekly rest. If an employer knows one of its employees is working elsewhere in the evenings or t weekends, then the employee may not be getting adequate rest breaks and may be exceeding the 48-hour limit which is a potential breach of the employer’s obligations under the Regulations. While enforcement actions are rare for the Regulations, employers will wish to adhere to them from a compliance perspective. A clause requiring the employee to seek permission to hold a second job will help you comply with those obligations.
 
- Working during sickness absence
Holding 2 or more jobs may also call the employee’s honesty into question. It is surprisingly common for employees on long-term sick leave to try to supplement sick pay with additional income from another job. Where this arises, you should be in a good position to discipline or dismiss the employee on the basis that the employee has been dishonest about the state of his or her health.
 
However, the nature of the illness may have a genuine effect on the job they do for you but may not prevent the employee from performing other work, and therefore an investigation should be carried out. Even in the face of compelling evidence, it is important that a disciplinary process is followed in order to minimise the risk of a procedurally unfair dismissal.
 
It would assist an employer in these circumstances if the express terms of the contract prevented the employee from taking up other work without consent. In terms of additional protection, consider including a provision in your sickness absence policy prohibiting employees from working elsewhere during sickness absence.
 
- Diverting business away from the employer
More difficult issues arise where an employee is working for another business, or on his or her own business, during normal working hours, perhaps using company equipment and resources. In some cases, the employee may be moonlighting for a business that is in competition with the main employer.
 
Again, an employer’s weapon of choice in this situation will be the express terms of the contract. A well-drafted contract will contain an express term requiring the employee to devote their whole time and attention to the business of the employer during the employee’s normal working hours. Using company time to further a worker’s personal business would be in breach of this clause and the employer could instigate appropriate disciplinary sanctions. For more senior employees, an employer may also include a clause requiring them to disclose other directorships or substantial shareholdings in other companies, which can be useful in flushing out details of external interests.
 
There are, of course, occasions when an employer cannot rely on the express terms of the contract, either because the terms are not present or because there is uncertainty as to whether or not the employee actually agreed to the terms in question – perhaps because the contract was never signed. In the absence of such express contractual terms, an employer may nevertheless be able to rely on the employee’s implied duties. All contracts of employment contain an implied duty of fidelity, also known as the duty of good faith.
 
This wide-ranging duty includes an obligation on the employee not to compete with his or her employer during employment. Any employee seeking to divert business away from their employer,such as offering to undercut an employer’s prices and carry out the work during evenings or weekends,would almost certainly be in breach of that obligation, even when doing so outside their normal working hours. Disciplinary action could then be taken.
 
- What action can a company take against a moonlighting employee?
In some cases, dismissal may seem an insufficient sanction, particularly where the scope of the employee’s moonlighting activities has been extensive and the employee has been diverting business away from his or her employer. So can the employer seek financial recompense for the employee’s breach of obligations?
 
If the employee has breached his or her contract, then the employer may be able to bring a claim. However, any damages awarded are typically calculated to put the employer in the position that it would have been in had the contract been properly performed.
 
In many cases, it can be difficult to establish that the employer has suffered any sort of financial loss if the employee is carrying out other work that has no direct financial impact on his or her employer. Analyse whether or not you can show that the scope of the employee’s competing activities has gone so far as to take business away from your company before embarking on litigation.

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This bulletin is for general information only.  It is not intended to constitute professional advice.  Though The Sevier Consultancy Group is confident of its accuracy, no duty of care is assumed to any recipient of the bulletin and no liability is accepted for any omission or inaccuracy.
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