New approach to equality?

Posted on May 15th, 2012 by Louise Fernandes-Owen

The Government has published consultation documents today which propose the repeal of the following provisions of the Equality Act 2010:

•third party harassment (i.e. where an employer can be held liable for the harassment of an employee by a third party, such as a client or customer).

•the power of employment tribunals to make ‘wider recommendations’ to an employer in discrimination cases (e.g. to introduce an equal opportunities policy or to retrain staff).

•the questionnaire procedure. This enables workers who believe they may have been subjected to discrimination to submit questions to their employer to help establish whether they have a claim.

The proposals to repeal the above provisions are contained in two consultation documents here and here.

The Government announced last year that it would consult on the repeal of the third party harassment provisions. The Government considered it ‘unworkable’ for businesses to take reasonable steps to prevent persistent harassment of their staff by third parties as they have no direct control over such harassment. The Government also states that there is no evidence to suggest that the third party harassment provisions are serving a practical purpose or are an appropriate or proportionate manner of dealing with the type of conduct that they are intended to cover. According to the Government, there are other legal remedies for third party harassment, under existing legislation and common law, which can be used instead.

The Government’s other two proposals, to remove employment tribunals’ power to make wider recommendations in discrimination cases and to remove the questionnaire procedure, have been made as part of the Red Tape Challenge process. The Government considers that the power to make wider recommendations goes beyond EU law and states that businesses have already expressed concern about this provision.

The proposed repeal of the long-established questionnaire procedure is unexpected. The Government notes that the time taken for employers to complete the relevant forms, together with the obligation on businesses to respond to questions within eight weeks, is burdensome and expensive. It also quotes a survey from the British Chamber of Commerce that reflects employers’ concerns about the procedure, which can sometimes be used as a ‘fishing exercise’ by potential complainants.

The consultations close on 7 August 2012. Although the Government’s proposals arguably aim to reduce the burden of these provisions on employers, they also reflect a rather ad hoc approach to reform. Given the number, and scope, of recent proposals, the Government’s commitment to change employment law may well lead to further confusion rather than clarity.

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0T code applies for post-P45 PAYE on employee shares and options from 6 April 2012

Posted on April 26th, 2012 by Mark Gearing

Readers might recall that when the OT code was introduced last year to payments made to employees after a P45 has been issued, a specific exemption was made available for any PAYE that was due in respect of employment related securities such as shares and options.

Now with effect from 6 April 2012, the PAYE regulations apply the 0T code to all post-P45 PAYE, including PAYE on income from former employees’ shares and options.

As a result there is no longer any cashflow advantage to delaying triggering any tax charges on employee shares and options until after the P45. There may be a cashflow disadvantage, as the 0T code requires PAYE to be operated on a non-cumulative basis at marginal rates of 20, 40 or 50% (as applicable to the payment), applying no personal allowance.

For more details on this change, and any other information on employment related securities such as share and option plans, please contact me.

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EMI options – notifying HMRC

Posted on April 25th, 2012 by Mark Gearing

An important piece of news for those clients and businesses that have implemented EMI option arrangements. HMRC has recently produced an updated form for notification of the grant of an EMI option (form EMI1) which includes a new address for the submission of the form. The new address is Small Company Enterprise Centre, HM Revenue & Customs, First Floor, Fitzroy House, Castle Meadow Road, Nottingham, NG2 1BD. You can find the new form at http://www.hmrc.gov.uk/shareschemes/news/index.htm.

A quick reminder why this is important. For EMI options to qualify for EMI tax treatment, they need to be notified to HMRC within 92 days of grant. Companies granting EMI options should make sure that EMI1 forms are now sent to the new address. If EMI1 forms are sent to the wrong address, they may miss the deadline for filing and the options may not qualify as EMI options.

For more information on EMI option arrangements in general, please do contact me or download our brochure.

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Big brother is watching you

Posted on April 25th, 2012 by Lee Harding

What would you do if a job interviewer asked for your user name and password to your Facebook account? Would you consent? What about if you were desperate for the job? If you think this sounds fanciful or unrealistic then think again. In recent weeks there has been a clamour of discontent from disgruntled job candidates confronted with this very dilemma in the USA. This has grown so great that even the US Senate has waded into the debate. Given the business links between the UK and our US cousins across the pond, it must be only a matter of time before this appears on the radar of UK employers.

The Guardian reports that the Information Commissioner’s Office (ICO) has already warned UK employers that it would have “very serious concerns” if they were to ask for Facebook login and password details from existing or would-be employees. According to the Guardian, an ICO spokesman has said: “The UK Data Protection Act clearly says that organisations shouldn’t hold excessive information about individuals, and it’s questionable why they would need that information in the first place.”

So could this action be considered lawful? It may be doubted by the Information Commissioner that consent was genuinely and freely given by an individual who discloses his/her data in these circumstances. True consent, as required under data protection law can be very difficult to achieve in employment relationships – it must be unambiguous, freely given, specific and informed. The view of many data protection authorities across Europe, including our own ICO, is that employees do not have genuine freedom to consent due to the unequal balance of power which exists in an employer-employee relationship. And without valid employee consent, employers will have a hard time justifying access to employee social networking accounts for employee vetting purposes under UK data protection law. For further information on data protection and privacy issues, please see our Privacy and Information Law Blog.

Data protection issues aside, the argument might be made that such an approach would infringe rights to privacy under the Human Rights Act. However, a cursory examination of the developing case law in this area indicates that, so far, the courts have been reluctant to accept human rights and privacy arguments relating to action taken against employees posting inappropriate material on social media forums. Whilst there is a paucity of authority on the use of social media as part of a recruitment exercise, it is at least arguable that similar points could apply and that really this information should be considered as within the public domain rather than truly private. Admittedly, since Facebook’s Terms of Service state: “You will not share your password… let anyone else access your account, or do anything else that might jeopardise the security of your account”, Mark Zuckerberg may have something to say about this.

A more prickly problem is that employers do not know what information they might encounter on a social media website account. Employers need to be careful not to base any recruitment decision on a job candidate’s protected characteristics, such as his/her religious beliefs, sexual orientation or disability. If a candidate does give a prospective employer access to their Facebook account, there is also a risk that the candidate will automatically make a connection between the recruitment decision with the information on their account, including such protected characteristics, whether or not this is the case. Particular care must also be made not to make any enquiries about a person’s health or disability as a consequence of information uncovered on a person’s Facebook account.

Setting aside these legal difficulties for a moment, from a human relations perspective, this approach might not be the best way of attracting the best candidate for the job or of starting the employment relationship off on the right footing. For all of these reasons, and given the ICO’s comments viewson the practice, it would probably not be prudent for most employers to go down this potentially treacherous path.

Notwithstanding, the reality is that many employers already undertake informal on-line searches against prospective job candidates. This iInformation voluntarily placed in the public domain by candidates would seem to be fair game, provided they are made aware that these searches will take place. Taking things a step further and making a job offer conditional on access to a candidate’s Facebook account may in some limited circumstances be appropriate for an employer if, for example, the role is particularly media sensitive or high profile. However, this area is untested and so we would advise extreme caution.

Before embarking on this approach, consideration should first be given to whether there is a less draconian way of obtaining legitimate business information in relation to candidates. It is also very important that this approach is covered in all policies, including related data protection policies and recruitment managers receive the appropriate training. It is very important that employers take a consistent approach to all candidates, clearly explaining what information will and will not be taken into account as part of the recruitment exercise. Accurate and comprehensive records should also be maintained, including the form recording the candidate’s express consent to release this information to the employer.

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Good Friday?

Posted on April 5th, 2012 by Louise Fernandes-Owen

This Friday, 6 April 2012, is the key date for a number of significant employment law changes this year, many of which revolve around the employment tribunal system.

According to the Government, these changes will “make it easier for businesses to take on staff and improve the process when staff have to be let go”. The changes are part of the Government’s radical reform package which it believes will deliver direct net savings to business of more than £10 million a year, with wider benefits to employers estimated at more than £40 million a year.

From 6 April 2012:

• The qualifying period for claiming unfair dismissal will double from one year to two years. This will only affect employees who start employment on or after this date. The qualifying period for entitlement to written reasons for dismissal will also double from one year to two years.

• The maximum level for costs awards will double from £10,000 to £20,000.

• The maximum deposit order will double from £500 to £1,000.

• Judges will be able to sit alone in unfair dismissal cases.

• Witness statements can be taken as read and stand as evidence-in-chief, unless the judge or tribunal directs otherwise.

The Government has also confirmed that, from this Friday, it will publish the average value of awards and the time taken to reach a hearing. Included in the guidance for tribunal application and response forms, this information is intended to clarify what parties can expect from the tribunal process before they enter the system.

The increase in the qualifying period for unfair dismissal, perhaps the most controversial of all the proposals, has attracted much criticism. The CIPD has stated that “there is no evidence to suggest that extending the qualification period for an employee to claim unfair dismissal will have any significant impact on the number of claims brought against employers, let alone boost the economy by increasing employers’ propensity to hire new staff”. The TUC believes that around 2.7 million workers across the UK could face an increased risk of losing their jobs as a result of the extended qualifying period.The CBI, however, has welcomed the extension as a positive step.

As with many of the Government’s proposals, it is likely to be some time before we know the true impact of the changes. In the meantime, employers should be aware that these are just some of the Government’s reforms to employment law – there are plenty more still to come…

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New employment law training programme 2012/2013

Posted on April 2nd, 2012 by Louise Fernandes-Owen

Our new employment law training programme is designed to support employers over the coming year.

The Government plans to introduce “the most radical reform to the employment law system for decades”. The year ahead therefore presents a range of challenges. Employers will not only need to cope with existing employment law issues in the workplace, they may also be faced with a variety of new proposals which could change their day-to-day work. Combining common employment law issues with the impact of new developments, our new employment law training programme will be useful for HR professionals, senior managers and in-house lawyers.

If you would like to reserve your place on any of the workshops and seminars in our programme, please email seminars@ffw.com, specifying which session you would like to attend. If you would like to be added to our mailing list, please contact louise.fernandes-owen@ffw.com.

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International Employment Bulletin – hot off the press

Posted on April 2nd, 2012 by Louise Fernandes-Owen

The latest edition of our International Employment Bulletin highlights key employment law issues from a number of jurisdictions. Read more about:

wearing a headscarf in the workplace in Belgium;
moral harassment in France;
the risks of headhunting in Germany;
termination clauses in Italian contracts; and
compulsory pensions in the UK.

If you would like to register for future editions of the International Employment Bulletin, please contact louise.fernandes-owen@ffw.com.

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Budget 2012: Hidden Help for Pensions?

Posted on March 28th, 2012 by David Gallagher

As has been widely reported, the 2012 Budget had little direct impact on private pension saving and occupational pension schemes. Most of the immediate pension implications seem to be implicit consequences of changes to tax rates and thresholds. Existing pensioners, on the other hand, do appear to have taken some of the strain created by the need to increase tax revenues. My personal view is that this is not necessarily unfair as this is the generation who have retired from the golden age of UK occupational pension schemes and will be paying slightly higher tax on a level of income which most future retirees will not reach. But that is not the purpose of this blog posting.

It appears to me that in this year’s budget George Osborne may have given a major boost to occupational pension schemes – even if he doesn’t know it himself!

A number of the structural problems which exist in UK pension schemes are caused by a combination of the protection of accrued rights (often referred to as “Section 67 protection” – because this is the Pensions Act 1995 section which gives rise to the protection) and changes in actuarial assumptions since pensions promises were made. This creates a mismatch between the cost of what was promised when it was promised and the cost of honouring the promise. There are two main “solutions” – either the employer pays more money than he’d ever budgeted for into the pension scheme, or the member’s benefits are reduced. In a defined benefits scheme, the costs fall on the employer and in a money purchase scheme, the pain falls on the member, either by way of a reduced pension, or because he or she has to pay more in or work longer, or a combination of all three.

George Osborne has announced that the state pension age will no longer be set in stone for people of working age. Instead, it will be regularly reviewed in light of prevailing life expectancy (or, for pessimists, mortality). The result is that, in the future, state pension age will not be fixed at a specific birthday until individuals are closer to their retirement.

This creates a fantastic planning opportunity for pension schemes and could even, if there were other economic pressures that make them attractive such as enhanced tax relief, cause a revival of defined benefit pension schemes. This is because rights can now be defined by reference to “state pension age” and so provide for risk-sharing for longevity. With this risk shared, employers may feel more able to offer a form of defined benefit. Logically, employees should not mind too much, as the only event that can cause their pension age to move is an expectation that they will live longer, which is a good thing.

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Twitter user jailed – think before you tweet…

Posted on March 27th, 2012 by Neil Johnston

In response to the news that student Liam Stacey has been jailed today for 56 days for posting racially offensive comments on Twitter about Bolton footballer Fabrice Muamba, Gary Lineker tweeted “let it be a warning to all you immature souls. #thinkbeforeyoutweet.”

Social media and recent incidents in football have come together to expose an undercurrent of racism and prejudice that many hoped had been left behind. Whilst Gary Lineker has tweeted sound advice, the most important point surely is that people still have racist views and the fight against racism and prejudice still has far to go.

Recent cases involving social media illustrate that people are posting comments on sites such as Facebook and Twitter as if they were having a conversation with their mates in a pub. However, such comments are not private and individuals will find it difficult to argue successfully that they have a right to freedom of expression or that any action on account of them is a breach of their privacy. Arguments that such comments are protected under the Human Rights Act have failed, see “Facebook friends – there is a girl at work“.

Social media has created new forums in which racism, discriminatory comments, bullying and harassment can occur. Recent events demonstrate that employers need to be more aware than ever of the risk of reputational damage that can be caused to their business through employees’ comments and conduct on social media sites, both in and outside of work. Had Mr Stacey been an employee, no doubt his employer would currently be the focus of media attention seeking to know what action would be taken against him. Where an employee’s conduct outside the workplace has a detrimental impact on his role in the workplace it gives grounds for potential disciplinary action. As mentioned previously, it is important that employers have a comprehensive social media policy in place providing guidelines for employees and potential disciplinary action that may be taken in response to a breach of that policy.

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Facebook friends – There is a girl at work …

Posted on March 22nd, 2012 by Neil Johnston

The Northern Irish Industrial Tribunal has upheld an employer’s decision to dismiss an employee for comments made on his Facebook wall in his own time outside of work about a colleague (“A”) who was not one of his Facebook friends.

Mr Teggart posted a comment on his Facebook wall about A which made reference to their employer Teletech and A’s sexual morals. A, whilst not Mr Teggart’s Facebook friend, became aware of the comment and asked Mr Teggart via his girlfriend to remove the comment. Mr Teggart was not pleased with this intervention and gave A short shrift, again via his Facebook wall. A was told of this comment by her friends and was upset. One of A’s colleagues approached a manager at Teletech who spoke to A. A confirmed her upset at the comments. Mr Teggart was suspended pending an investigation and made a further comment on his Facebook wall stating that he neither liked or disliked A and was not going to apologise.

Mr Teggart was dismissed for gross misconduct including harassment and bringing Teletech into disrepute. Mr Teggart argued he had been unfairly dismissed and his human rights to privacy and freedom of expression had been breached. The Industrial Tribunal upheld the dismissal as fair, falling within the band of reasonable responses. Further, given the postings were on Facebook pages to which members of the public had access, there was no breach of privacy nor did freedom of expression allow Mr Teggart to make comments which damaged the reputation and rights of others.

This is one of a series of cases on social media misuse in the workplace and is a useful reminder of the dangers of comments made on social media websites. Further, where the comment makes reference to the employer and an employee complains, employers can and should investigate the complaint and take disciplinary action if appropriate. The case also illustrates the value of having a comprehensive social media policy to provide clear guidelines for employees.

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