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Breach of ContractWrongful dismissal is synonymous with breach of contract. If an employer has breached a term of the contract of employment on termination, for example, by not paying notice pay the termination may be considered “wrongful” and damages can be claimed for the notice pay and any other pay due. If the breach occurs during employment and is sufficiently serious the employee may be entitled to resign, having been constructively dismissed, and claim wrongful and potentially unfair dismissal against their employer. We can help advise whether the termination of an employment contract is lawful. We can also advise on whether treatment during the life of an employment gives rise to a claim to put right the breach or if it is fundamental enough, to allow an employee to terminate the contract.
Disability – Reasonable AdjustmentsEquality law recognises that bringing about equality for disabled people may mean changing the way in which employment is structured, the removal of physical barriers and/or providing extra support for a disabled worker. This is known as the duty to make reasonable adjustments. The duty aims to make sure that, as far as is reasonable, a disabled worker has the same access to everything that is involved in doing and keeping a job as a non-disabled person. When this duty arises, employers are under a positive and proactive duty to take steps to remove or reduce or prevent the obstacles a disabled worker or job applicant faces. An employer will only have to make adjustments where you are aware – or should reasonably be aware – that a worker has a disability. Many of the adjustments employers can make will not necessarily be expensive, and employers are not required to do more than what is reasonable. What is reasonable depends, among other factors, on the size and nature of the employer’s organisation. If, however, an employer does nothing, and a disabled worker can show that there were barriers, which should have been identified and reasonable adjustments could have been made, they can bring a claim in the Employment Tribunal, compensation may be ordered as well as an Order to make the reasonable adjustments.
Discrimination in the workplace, is, despite the huge steps we have made in recent decades still all too common. We have to acknowledge that discrimination still blights our workplaces and restricts the potential of many of our workers, which in turn means that our organisations are failing to capture and capitalise on the wealth of talent available from a diverse and multicultural workforce.
Discrimination can have a devastating impact on an employee’s career trajectory as well as their self-esteem and overall wellbeing, as well impacting on the overall morale of the wider workforce.
Discrimination can be a very costly mistake by an employer. Not only because a successful claim by a worker is uncapped in financial terms but also because of the reputational damage to the organisation.
Employers must be aware of what constitutes discrimination, not only because their staff deserve to be treated fairly, equally and with dignity and respect, but also because they could be acting unlawfully.
What is discrimination?
Discrimination in the workplace is based on certain prejudices and bias and occurs when an employee is treated unfavourably because of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation.
If any employer treats someone less favourably because they possess a protected characteristic they could be acting unlawfully.
Direct discrimination occurs when someone is treated less favourably than other employees. For example, the employee has the qualifications to do a job but the employer rejects them because it does not want to employ someone who is, for example, disabled; about to start a family or from an ethnic group that the employer has a bias against.
Direct discrimination can also occur when an employer pays someone less than other employees for no good reason, selects someone for redundancy because of a protected characteristic, or because an employer does not make reasonable adjustments for a disabled worker. Other examples are that an employer dismisses someone for making allegations of discrimination or if they unfairly and unreasonably reject a request for flexible working from a new parent.
Indirect discrimination occurs when certain policies, practices or rules put certain staff members at a disadvantage. For example, if an employer insists that all workers should work Sundays, this could be seen as discriminating against those who consider it a day of rest and worship.
An employee may also consider that they have been harassed on the grounds of their protected characteristic or that they have been victimised for having made a complaint.
The Equality Act 2010 and protected characteristics
The Equality Act 2010 consolidated several pieces of discrimination legislation under one Act and strengthened and expanded upon the laws around discrimination.
The Act refers to, nine protected characteristics:
- Gender Reassignment
- Sexual orientation
- Religion or belief
- Marriage and partnership
- Pregnancy and maternity
If an employer discriminates against an employee on one of these grounds, then they can make a complaint against the employer as well as the person who discriminated against them.
What can you do if you believe you have been discriminated against or that one of your team are discriminating against another staff member?
- Complain informally to your employer, or if you are the employer deal with the complaint informally, if appropriate.
- Raise a grievance using your employer's grievance procedures, or if you are the employer deal with the matter using the disciplinary procedure in relation to the person alleged to have discriminated and deal sensitively and professionally with any grievance raised by an employee.
- Try and resolve the matter using the mandatory ACAS Conciliation process
- If you are an employee make a claim to the Employment Tribunal and if you are an employer respond to any allegations made against your organisation.
Employees must be aware that if they do decide to make a claim to the Employment Tribunal, they need to tell them about their claim (by filling in a form) within three months (less one day) of what happened (or six months in equal pay claims). This period is extended by the mandatory ACAS conciliation process. The first step is to notify ACAS which effectively “stops the clock” running on the limitation period. It is essential to take advice on when the limitation period expires in each case and to ensure that ACAS has been notified before a claim can submitted to the tribunals.
An employee does not have to go to their employer before making a claim to the Employment Tribunal, but there are two good reasons for doing this:
- Making a claim will be demanding on your time, finances (if you instruct a solicitor) and emotions, health and wellbeing, so before starting the process an employee may want to look at whether or not they have a good chance of success. We can advise you on the merit and value of your claims. An employee may also want to see if there are better ways of sorting out their complaint, such as mediation. An employee should think carefully about whether making a claim to the Employment Tribunal is the right thing for them personally. Commitment is essential to the process as it can take several months to complete.
- If an employee does not use their employer's grievance procedures to solve a problem before they make a claim to the Employment Tribunal, and they win their case, the Tribunal can reduce the amount of money it instructs the employer to pay the employee by up to a quarter if it thinks the employee acted unreasonably.
Do not forget that even if an employee tries to sort the matter out with their employer first, formally or informally, they must keep to the Tribunal time limits if they want to bring an Employment Tribunal case. In order to keep within the time limit, an employee may have to start a case before they have completed the internal process with their employer. For employers therefore it is crucial that they deal with complaints promptly and as quickly as possible, whilst always ensuring that a thorough and fair process has been conducted.
Employment Contracts, Policies & ProceduresIt is a statutory requirement to provide all employees with a written statement of terms within 2 months of the employment starting. The statement of terms is a simple but essential record of the basics of the employment relationship. A written contract also helps to provide a useful if not essential record of the agreed terms between employers and their employees, workers or freelancers. Indeed the contract will often prove essential if the terms are later in dispute. It is also important to have up to date policies and procedures, not only do these help to make clear what is expected of employees but also helps to create and maintain a professional working environment. Many policies set out legal procedures which are mandatory for all employers, no matter how small. We can help you draw up contracts, policies and procedures that both comply with your legal requirements and work for your business, no matter the size your enterprise. We offer fixed fees to help you budget, and discounted rates for SME’s. For employees we can advise you on the terms of your contract, at any time from the early negation stage right through to any proposed exit.
Equal PayThe equal pay provisions in the Equality Act 2010, which can also be found in Article 141 of the EU Treaty, are part of the anti- discrimination legislation and gives men and women the right to the same pay and terms and conditions of employment for doing the same work (like work), work rated equivalent or work of equal value. Pay has a wide meaning and includes benefits. The Act implies a sex equality clause into everyone’s contract of employment, modifying any term that is less favourable to someone of the opposite sex. The European Commission and the Equality and Human Rights Commission publish codes of practice, which although not legally binding, may be used in evidence in equal pay claims. The law requires a four stage approach: (1) Selecting an appropriate comparator of the opposite sex. (2) Proving that the comparator is employed to carry out equal work. (3) Comparing the claimant’s and the comparator’s terms and conditions of employment. (4) Assessing whether the employer can explain any discrepancy in pay (“the material factor defence”) and whether the difference is due to sex discrimination. Employers are advised to carry out regular Equal Pay audits to ensure their workforce remains competitive and motivated and to avoid the possibility of an equal pay challenge.
Flexible WorkingAll employees can as of June 2014 apply under the flexible working legislation for flexible working. Employees must have 26 weeks’ service. An application to work flexibly can cover: hours of work; times of work; place of work (as between home and place of business only); and must be taken seriously by the employer. Employees can make up to one written request every year, the employer needs to deal with it within three months, and can refuse on any of eight (very wide) business grounds. A tribunal cannot normally investigate the rights and wrongs of the refusal, only whether the procedure has been properly followed. Maximum compensation for a failure to comply is eight weeks’ pay (currently capped at £464 per week).
Grievance/Disciplinary ProceduresAll employers are required to conduct disciplinary and grievance procedures in accordance with the ACAS Code of Practice on Disciplinary and Grievance Procures which sets out guidance on dealing with discipline and grievance issues. It is still strongly advisable for both employers and employees to follow the guidance as the employment tribunals can increase or decrease any award made by up to 25% if they feel the code has been unreasonably breached. We can provide up to date procedures for employers tailored to their individual needs and help guide both employers and employees through conducting or participating in the disciplinary or grievance process.
Maternity, Paternity & AdoptionBoth mothers and fathers of biological and adopted children have rights to take family leave to take care of their children. These rights continue to expand and develop as family friendly policies remain at the top of the political agenda. It is important that employers ensure that their policies and practices are up to date in this constantly changing area of employment law. Likewise employees should ensure that they are fully aware of their rights before during and after they take family leave.
MediationThe world of business is becoming ever more proactive in dealing with workforce issues of all kinds. Workplace mediation can help. Some issues which arise in the workplace are not easily dealt with using the traditional routes of disciplinary and grievance processes. Whether you want to resolve a difficult working relationship, or proactively address a minor issue before it develops to a formal disciplinary or grievance matter, we can help you. The essence of mediation is flexibility. We use our skills to build trust between the parties, create the right conditions for the staff involved to speak honestly and openly to each other about the issues they face, and agree solutions. We can help you to mediate a very wide variety of workplace issues using techniques which are very flexible and tailored to the specific situation. Most of our work involves either providing a mediator to work with the staff involved or to come to your workplace and host a meeting to help the staff create a long term and mutually agreeable solution, or training staff to be mediators themselves and mentoring them as they develop their experience and deal with difficult problems.
Mulberry’s In-House is an innovative in house employment law service providing you with accurate, efficient and practical employment law advice whenever you need it, either on an ongoing basis or for a specific project: like having an in-house employment law team, without the overheads.
We will work with your business to provide a fee structure that fits with your business or project, with no added costs.
Our In-House services starts from just £150 plus VAT per month, which includes all employment law advice and assistance, whether over the ‘phone or by email and the preparation of all required employment law documentation.
Many of our clients have worked with us on this basis for many years and believe it offers fantastic support and value for money. As we get to know you and your business we are able to offer an ever more bespoke and personal service, just like having your own in-house employment law team, but without the overheads!
Post Termination RestrictionsMany employment contracts contain clauses which seek to prevent an employee working for a competitor after they have left employment or from poaching the employer’s customers, clients or employees. Such clauses will only be enforceable if they go no further than is necessary for to protect the employer’s legitimate business interest. It is crucial to take expert advice on such clauses if you think that your new venture or employment may infringe them as your employer may be able to obtain an injunction preventing the breach or damages in the event that the employer suffers loss as a result. If you are a business which wants to ensure that your business is protected we can help you prepare contracts that will give you the peace of mind you need to protect your business.
RedundancyRedundancy has a specific technical meaning and is often misunderstood by employers and employees alike. Redundancy is defined as where the employer has ceased to carry on business for the purposes of which the employee was employed or to carry on business in the place where the employee was employed or where the requirements of the business for work of a particular kind has ceased or diminished either entirely or in the place where the employee worked. Not only does the employer have to ensure that the employee is genuinely redundant but also that a fair redundancy procedure is followed to be confident that the dismissal will be held fair.
Re-organisations & Restructures – TUPEOn the sale or transfer of a business or part of a business or where a major contract is transferred employees may find the identity of their employer has changed. In cases such as this many of an employees’ basic terms and conditions of employment may still be protected by The Transfer of Undertakings (Protection of Employment) Regulations, or TUPE. When a transfer of employment takes place, a proper consultation should take place which gives employees the right to information about the transfer, including when it will happen, the reason for it, the legal, economic or social implications, and whether any new measures are likely to be introduced by the new employer in relation to their employees. All major changes to fundamental terms of employment, such as pay and hours of work by a new employer may constitute a breach of contract, meaning that transferred employees could claim constructive unfair dismissal. Also any dismissals which take place either before or after the transfer may be automatically unfair unless correct procedures have been followed. It is vital therefore to seek advice early in the process when considering a sale or transfer of your business or part of your business to ensure that the TUPE provisions are complied with. Employees should take advice if they consider that the transfer has had a detrimental impact on their employment terms or conditions.
A settlement agreement is a contract that records an employee’s agreement not to pursue a claim relating, in most cases, to the termination of their employment against their employer in exchange, usually, for a payment of money.
In order to settle an employee’s potential claims against an employee, the parties can enter into a settlement agreement. This agreement must comply with certain legal requirements and the employee must obtain independent legal advice in order for the agreement to be effective and enforceable. It is important to get the wording right too, otherwise all claims intended to be settled might not be caught by the agreement. For employees, we don’t just rubber stamp the agreement, we will carefully consider whether it is in your best interest to sign the agreement, and often negotiate far better terms and conditions for you, including a higher compensation amount and better overall severance package. We can usually offer a same day service for advising on a settlement agreement. For employers we can guide you through the settlement process with confidence, ensuring that the potential dispute is settled as sensitively, quickly and inexpensively as possible.
A settlement agreement can cover almost any kind of potential claim including:
- Breach of contract/wrongful dismissal
- Unfair dismissal
- Unpaid Wages
There are some conditions that need to be in place for the settlement agreement to be legally binding. For example:
- The agreement must be in writing
- The agreement must relate to a specific claim that the employee could raise against the employer
- The employee must have received independent legal advice
A solicitor will need to make sure that the agreement fulfills all the necessary requirements and is one you should be entering into.
Waiving Your Employment Rights
By signing the settlement agreement you will be agreeing to waive the right to pursue any employment related claims against your employer. This is the crux of the agreement. This is why it is vital that you get specialist employment law advice. You need to know what sort of a claim you may have, what it could be worth and also what else in the agreement might affect you.
It is very common these days to be offered a settlement agreement even if you have no potential claim, for example if you are leaving because you are being made redundant, or where you are leaving your employment on amicable agreed terms. Some, indeed many, employers use settlement agreements as a matter of course just to be on the safe side, belt and braces if you like. So, being offered a settlement agreement doesn’t mean that you necessarily have a claim, it could just be your employer’s policy to use them in all cases where an employee is leaving.
Settlement agreements will usually have a long exhaustive list of potential claims. All you need to understand is that you will not be able to bring any claim at all against your employer once you leave and have entered into the agreement.
It is crucial that you tell your solicitor if you believe that you have a potential claim against your employer. Your solicitor would then be able to properly advise you on whether the compensation payment being offered in the agreement is adequate.
So, what should I expect in the Settlement Agreement?
Firstly, you should expect to receive your contractual payments, that is your notice pay (if you have not worked your notice) and other benefits, any accrued holiday pay, and payment of any outstanding expenses. These payments will normally be taxable.
It is also common, and we would usually always ask for an agreed reference to be included in the settlement agreement along with reciprocal confidentiality and a clause ensuring that neither party makes disparaging remarks about the other after you have left.
Sometimes employees have shares or share options and it is important to agree what will happen to those rights after you leave as they are likely to be affected by the termination of your employment.
The Compensation Payment
You will usually also be offered a compensation payment. How much this will be depends on many factors.
It is difficult to say how much this will or should be because it depends on the circumstances under which you are leaving. However, as you are waiving your right to bring any kind of employment claims, the amount offered should reflect the value of the claims that you’re giving up. However, sometimes the amount also reflects the commercial value to the employer of having you leave quickly, confidentially and amicably.
So, the issues that you may need to discuss with your solicitor include:
- Do you have a potential claim that you could bring against your employer?
- If yes, how likely is it that the claim would succeed at a tribunal?
- If you did succeed, how much would you be likely to recover?
- Do you have another job lined up?
- Are there any other factors that would lead your employer to pay you something to leave?
Your solicitor will cover these issues with you and discuss the pros and cons of accepting the amount on offer or negotiating for more. It is important to understand that in making a counter offer you are rejecting their original offer, which may then come off the table. This is rare but still something to think about.
Should You Negotiate?
Very often the compensation payable under a settlement agreement has been agreed and the parties are happy with what has been set out in the agreement. Everyone just wants to move on. In such circumstances your solicitors job will be to ensure that the small print is fair and balanced for you.
However, sometimes what is on offer is not adequate and it is appropriate to negotiate.
In negotiating for you your solicitor will usually put to your employer the potential claim(s) that you have and the likely value of the claim(s) to persuade them to increase the offer to something which relates more closely to the value of what you are potentially giving up.
However, it is important to consider that:
- employment tribunal proceedings are likely to take at least 6 months. Therefore, if you pursue this route, you may wait much longer before recovering any money;
- employment tribunal proceedings can be stressful and emotionally draining as well as expensive if you instruct a solicitor to act for you;
- there is no guarantee that you will be successful in an Employment Tribunal hearing, you may come away with nothing.
Your solicitor will be able to advise you of the best strategy for negotiation.
What about tax?
A common question is whether the amounts you are being paid under the settlement agreement are taxable or tax free.
As a general rule, the first £30,000 of a termination payment (including any redundancy payment) is currently exempt from tax.
Contractual payments, such as salary, holiday pay, commission and bonuses will be taxable.
The tax treatment of a payment in lieu of notice (PILON) will essentially depend on whether it’s contractual or not. If there’s a clause in your employment contract allowing your employer to make a PILON, then the PILON will be taxable. However if there is no contractual right to the PILON and no custom or practice of paying PILON then it should be exempt from tax. Your employer can pay you the same amount but call it compensation for not working your notice period. It can then be paid tax free.
Your solicitor can discuss with you whether your PILON can be paid free of tax or not .You should also consider taking tax advice from your accountant.
Shared Parental LeaveShared parental leave is a new and creative way for parents to share statutory family leave and pay on the birth of a child. It has replaced the additional paternity leave regime which enabled an eligible employee to care for their child after the mother had returned to work for a period of between two and 26 weeks, starting 20 weeks after the child’s birth. However, it is separate from the right to unpaid parental leave and has not replaced the current maternity leave and pay regime. Similar rights apply to adoptions. The intended parents in a surrogacy arrangement are also entitled to take advantage of shared parental leave. These rights also apply to partnerships of the same sex and include women in same-sex partnerships. The right to shared parental leave only applies to employees who fulfil the relevant eligibility criteria. The right allows the mother to choose to bring her maternity leave to an end at any point after the initial two week compulsory maternity leave period following the birth of the child. The parents can then choose how to split up the remaining weeks of leave between them. Shared parental leave can be taken by each parent separately or at the same time. We can give further advice on implementing or taking Shared Parental Leave.
Stress & Work Related ClaimsEmployers have a duty not to cause psychiatric damage to their employees by requiring them to undertake too much work and not providing adequate support. If they breach this duty they may be held responsible. It is essential for employers to have adequate policies and procedures in place and fully implemented to ensure that workers are fully supported.
Unfair DismissalEmployers can only dismiss employees fairly for a fair reason and following a fair process. The Employment Rights Act 1996 sets out the 5 potentially fair reasons which are: capability; conduct; redundancy; contravention of a statutory duty or some other substantial reason. Employers must also follow a fair dismissal process which complies with the ACAS Code on Disciplinary and Grievance Procedures or an uplift of up to 25% may be awarded to an employee who successfully claims unfair dismissal. An employee must normally have more than two years continuous service in order to be eligible to bring a claim of unfair dismissal.
WhistleblowingWhistleblowing claims are common in employment tribunal proceedings. One reason for this is that an award of damages in a successful whistleblowing claim is not capped in the same way as damages for unfair dismissal. In addition, there is no minimum period of service required in order to bring a claim. All workers are protected by the whisteblowing provisions including employees workers and members of LLP’s. The whistleblowing provisions protect reports about: criminal offences, e.g. Fraud; health and safety matters, danger, or risk to an individual; actual damage to the environment, a miscarriage of justice, or if the company is breaking the law, e.g. doesn’t have the right insurance or if you believe someone is covering up wrongdoing. Personal grievances (e.g. bullying, harassment, discrimination, breach of contract) aren’t covered by whistleblowing law, unless the particular case is in the public interest, which if a number of workers are affected it may be. Workers are protected from suffering a detriment, including being dismissed for having made a protected disclosure. It is essential to have proper procures in place to allow disclosures to be made and to protect those who make such reports to minimise risk of such a complaint being made. If you are concerned that you are being treated unfairly because you made a disclosure, we can help.
Working TimeSince 1998 workers have been protected by the Working Time Regulations. The EC Working Time Directive and set limits on the amount of time workers can spend at work and specify rest break and holiday entitlements. The sanctions under the regulations are both criminal and civil.
Workplace CoachingPlease visit Manumit Coaching