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APRIL 2012 // FOCUS ON: EMPLOYERS’ DUTIES

AZETTE the quarterly newsletter of Floyd Graham & Co.

Lawyers for today’s employers

IN THIS ISSUE // OBESITY IN THE WORKPLACE WHAT IS YOUR COMPANY’S POSITION ON THIS GROWING SUBJECT?

EMPLOYER RESPONSIBILITY Could you be liable for your employees’ actions?

EMPLOYMENT CONTRACTS YOUR DUTIES ARE NOT JUST CONFINED TO THOSE IN THE WRITTEN CONTRACT


Floyd Graham & Co Ltd

Lawyers for today's employers

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2 Deanery Court Grange Farm Preston Deanery Northants NN7 2DT Email: info@floydgraham.co.uk Tel: +44 (0)1604 871143 www.floydgraham.co.uk

CHAIRMAN'S VIEW Greetings to all of our FGazette readers! As the seasons change, we have

As well as the qualifying period for

decided to re-brand our quarterly

unfair dismissal, employers should

newsletter in the hope that it

also take note of the new rates

puts a “spring” back into our

for statutory maternity, paternity,

readers’ steps! As always, we

adoption and sick pay. All of

would welcome your feedback on

these details can be found on our

this. The focus of this newsletter

website.

is employers’ duties; in a general sense and in two very specific

The UK also eagerly awaits the

circumstances.

arrival of the Olympic Games. On a less positive note, there are

So, what do the next few months

murmurs from the Leader of Unite

have in store for businesses insofar

the Union that he would consider it

as employment law is concerned?

justifiable for public sector workers

In only 5 days, the qualifying period

to go on strike during the Games in

for entitlement to claim unfair

view of the extent of the proposed

dismissal and for entitlement to

public sector cuts.

written reasons for dismissal will increase from one year to two.

From a personal point of view,

While you may be breathing a sigh

I am disappointed by these

of relief, we cannot overemphasise

comments. The Games represent

the fact that there are

an opportunity to bolster the UK

circumstances where employees

economy. Strikes would without

would be able to claim for unfair

doubt dampen this and for what

dismissal irrespective of not having

gain? For the public sector workers

accrued one year’s service for

to make it known how disgruntled

example, termination as a result of

they are about proposed cuts in

discrimination. It is also important

this manner when private sector

to note that the new two year

workers have had to tolerate similar

rule will only apply to employees

cuts and carry on irrespective. I

whose employment begins on or

hope that the workers concerned

after 6 April 2012; those already

find alternative and less disruptive

in employment before that date

ways to voice their concerns.

will retain the current one-year qualifying period.

IN THIS ISSUE // page 3 // employee contracts page 4 // Is obesity a workplace issue? page 6 // employer responsibility page 8 // fg news page 11 // brainteasers


IT’S NOT ALL ABOUT THE CONTRACT Where all employment relationships are concerned, there should be an employment contract setting out the terms of the relationship between the employer and employee. It is not unusual however for there to be unwritten terms outside of the contract that are binding on the employer and employee; these are known as implied terms.

via written contractual documentation but also by way of custom and practice. The appeal of a corporate transaction could change overnight if the buyer learns, for instance, that the employees have an implied right to have their pay rises determined by a national agreement as this had been the practice for some 20 years previously.

In looking at whether there is an implied term, it is necessary to look at the presumed intention of the employer and employee at the time that the contract was made and not whether it would be reasonable to imply a term. It will be relevant whether:

There are also some terms which, although not usually specified by the employer and employee, are regarded as being a necessary part of the contract of employment. Common examples of such implied terms that affect employers are: duty to pay wages, duty to provide work, duty to give reasonable notice of termination, duty to provide a safe system of work and a safe workplace and lastly, but by no means least, the duty of mutual trust and confidence. If the employer is in breach of implied terms,

¥ the term would give the contract business efficacy; or ¥ it is the normal custom and practice to include such a term in contracts of that particular kind; or ¥ the conduct of the employer and employee demonstrates that there was an intention to include such a term; or ¥ the term is so obvious that the parties must have intended it. Some examples of where terms have been held to be implied are as follows:

¥ where the employee's job involved a degree of travelling, a mobility clause was implied; ¥

where essential maintenance work was carried out at weekends and a worker had adhered to this custom for 12 years, it was implied that he should work on weekends when requested by his employer to do so; and

¥ where a pilot had been demoted in the past following incidents of attempting to land without lowering the helicopter's undercarriage. As the pilot had not questioned this demotion, it was implied that there was an implied term to demote employees in similar circumstances. Employers should note that implied terms that derive from custom and practice are particularly important in the context of corporate transactions. Lawyers carrying out due diligence on behalf of the buyer will not only check what their client is inheriting

the employee may resign and claim unfair constructive dismissal (if there is a fundamental breach). Normally an express term in the contract will preclude a contradictory implied term. There have however been cases where this is not so. For instance, where the express term confers discretion on the employer and the implied term restricts the employer’s ability in its exercise of that discretion. This may commonly arise in relation to bonus entitlement where the scheme is expressed to be discretionary but year in, year out, the employer has paid the same amount irrespective of the performance of either the business or the employee. In essence therefore, employers should ensure that they do not consider that their duties in relation to an employee are limited to those contained within the employment contract; the duties can be considerably more far reaching and the consequences of not complying with these duties could be devastating to a business where, for instance, an employee brings a claim for constructive unfair dismissal as a result of an alleged fundamental breach of an implied term. To discuss this extensive topic further, please do not hesitate to contact a member of the team at Floyd Graham & Co Ltd.

SEMINAR DETAILS

FORTHCOMING SEMINARS

THURS 26 april 2012 day 1 claims FGC OFFICE 8AM - 10AM Using practical case studies, our seminar will consider: • The potential effect of qualifying service increasing to 2 years and which employees will be affected •

How to spot potential claims (including automatic unfair dismissal, whistleblowing and discrimination) that employees can bring from day 1 of their employment

• How to mitigate the risks of employees bringing day 1 claims

THURS 24 MAY 2012

MOCK EMPLOYMENT TRIBUNAL in collaboration with ely place chambers hilton hotel, northampton

8AM - 12pM

Experience first hand: • The environment of an Employment Tribunal • The cross examination of witnesses • How the law is applied to everyday factual situations experienced in the workplace • Factors considered by the Employment Tribunal reaching a decision

FUTURE SEMINAR dates for your diary 5 july 2012 20 september 2012 06 december 2012

for more info Visit www.floydgraham.co.uk


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IS OBESITY A WORKPLACE ISSUE?

what is your company doing to combat a ‘growing’ health issue in the uk? As an employer have you considered what the organisation's stand point is on obesity? Some of you are likely to conclude that obesity is a public health issue. Others will say it is a life style choice of the individual concerned. In either case, the organisation has no responsibility.

Commission in November 2011 identified that the UK is the most overweight/obese member state. Over the next 40 years it is predicted that some nine out of ten UK adults will be obese; productivity will be affected, and the billions already lost in earnings will continue to rise along with sickness absence levels.

This is unlikely to be sustainable over the next few years. Statistics produced by the European

Many larger employers have and will continue to provide wellbeing initiatives, which may

in part help address this complex problem – obesity is not just about a lack of exercise and an excessive consumption of food. For smaller organisations particularly in the current economic climate, staff wellbeing may not be high on the human resource agenda; providing access to free health checks, subsidising gym membership or offering healthy food may not be an option due to lack of resources.


Whilst staff are ultimately responsible for maintaining their own health, employers cannot ignore the broader legal issues obesity presents in the workplace: ¥ Health and Safety Legally, employers are obliged to take care of their workers’ health and safety by providing a safe working environment. Risk assessments therefore need to take account of obese workers to ascertain whether special

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arrangements need to me made to remove any health and safety risk. Can equipment accommodate their size i.e. ladders, chairs, workspace or personal protective equipment? Are there certain jobs obese workers may find more difficult to do due to physical limitations?

¥ Obligation of trust and confidence

¥ Dismissal The usual unfair dismissal framework will apply. An

Many larger employees will be able to cite examples of

individual dismissed because of their size may have an

where during their career they have been marginalised,

unfair dismissal claim.

undermined or humiliated as a direct result of their size or appearance. Whilst there is no UK legislation to

¥ Discrimination

actively prohibit bullying or harassment on the grounds

Obesity, despite being a recognised medical

of appearance, employers must not forget that they

condition, is not an “impairment” for the purpose

owe their employees a duty of trust and confidence,

of being a “disability” under the Equality Act 2010.

which includes the right to be treated with respect. A

There is therefore no law prohibiting discrimination

breach of this obligation may entitle an employee to

on the grounds of size. However, the cause of obesity

resign and claim constructive unfair dismissal. If however

(depression or a thyroid problem) or the symptoms

there are other protected characteristics sitting behind

arising from obesity (cardiovascular disease, type-2

the individual’s appearance, the employee may also

diabetes, hypertension and certain cancers) may mean

have additional protection from harassment under the

that the individual is protected by the Equality Act. This

Equality Act 2010. Employers must therefore ensure that

is because the actual cause or even the symptoms of

both management and staff understand that bullying

obesity could be an “impairment” and fall within the

and harassment because of someone’s appearance,

definition of a “disability”.

including size, will not be tolerated. Employers cannot therefore ignore the possibility that obesity may have some part to play in creating a

Whilst some US states have introduced specific laws to prohibit discrimination on the grounds of appearance, there are no plans to do the same in the UK. Despite this, the predicted UK obesity epidemic will undoubtedly become fertile ground for employment litigation and may in the long term result in new discrimination laws having to be introduced. In the meantime, whilst employers are not going to be able to provide the solution to this alarming problem and there is no actual protection against discrimination on the grounds of size, employers will need to be vigilant when dealing with this issue in the workplace; there is plenty of scope under current UK law for individuals to seek redress from the Employment Tribunal if they feel aggrieved.

potential right in relation to disability discrimination. An enquiry of any underlying medical cause and medical advice will be crucial to establishing what rights the employee may have as well as whether any reasonable adjustments to premises or working practices need to be made. There are also other types of discrimination, not immediately apparent which may arise. Research shows that men are more likely to be overweight than women. Yet there is more tolerance of men being overweight than women. There is also usually more acceptance of older people being overweight. Less favourable treatment however due to sex or age could amount to unlawful discrimination.


IS AN EMPLOYER RESPONSIBLE FOR AN EMPLOYEE’S VIOLENT RESPONSE?

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One employee attacks another employee, injuring him. Could the employer be vicariously liable (legally responsible) for the employee's violent act? The starting point for answering this question, is that an employer is vicariously liable for the torts (or wrongdoing) of its employees where these occur “in the course of employment”. In two recent cases, the Court of Appeal considered whether acts of violence occurred in “the course of employment” where one employee injured another.

Weddall v Barchester Healthcare Ltd

Wallbank v Wallbank Fox Designs Ltd

In this case, the deputy manager of a care home had

In this case, a manager at a small factory had noticed that an

requested that another employee, Mr Marsh, fill an

employee, Mr Brown, was making an error and said “come

empty shift at work. Mr Marsh, in a drunken state, cycled

on” to Mr Brown, so that he could assist him in fixing this error.

to the care home and attacked the deputy manager 20

Mr Brown instead attacked the manager, throwing him onto

minutes after his request. The Court of Appeal upheld

a table. The Court of Appeal, overturning the County Court’s

the County Court’s judgment that the employer was not

judgment, held that the employer was vicariously liable. It

vicariously liable. This was because the employee was

held that there was a sufficient connection between what

“acting personally for his own reasons”, so not in the

the employee was required to do and the unlawful violence.

course of employment. The Court of Appeal considered

The violence was an almost instantaneous response to a

that the deputy manager’s request was no more than

manager’s instruction concerning a task central to Mr Brown’s

a pretext for an act of violence unconnected with Mr

employment. In these circumstances, Mr Brown was acting in

Marsh’s work as a health assistant; the fact it happened

the course of employment.

at work was incidental. The employee’s tort had not therefore occurred in the course of employment.

The Court of Appeal also commented that although this case concerned a junior employee’s response to instructions, an employer may well be vicariously liable when a senior employee drives home an instruction with a blow.


Why was one attack by an employee found to be in the course of employment and the other one was not? In essence, the main difference between these cases is that in Weddall, the

assault happened to occur at the place of work but was otherwise a drunken act unconnected with his employment, but in Wallbank, the employee acted in the course of his employment, in immediate response to instructions given to him.

In what other situations have employers been found to be vicariously liable for the acts of their employees? • A nightclub owner was held vicariously liable when one of the doormen he

employed stabbed a person to whom he had previously refused entry to the

club. • The owner of a rugby club was responsible for one of its rugby players

punching a member of the opposite team in the course of a rugby match,

even though play had been halted at that point.

• A company providing fumigation services was held vicariously liable for an

employee’s theft from a container he was responsible for fumigating.

When have employers not been found to be vicariously liable?

• A cleaning company was not found to be liable for the cost of international

calls made on one of its client’s telephones by one of its cleaners (a 1987

case). However, in the light of recent case law, an employer may now be

found liable in these circumstances.

• The employer was not vicariously liable when a police officer went off on a

vendetta of his own and shot a person using a gun he had improperly taken

from the police station strongbox.

What should employers do to protect themselves?

• Carry out a risk assessment as to liability to third parties (or other

employees) that employees could expose them to. This is necessary because

an employer has a duty of care not only to its staff, but also to third parties who may come into contact with its employees. • Provide employees with appropriate instruction and supervision. • Give employees the opportunity to explain their frustrations (for example by a complaints/grievance system or during the appraisal process). • Ensure adequate insurance is in place in the event that claims are brought against them. It may be that this is the employer’s best course of action, as there may be some instances where no amount of precautionary action could prevent an employer being found vicariously liable for an employee’s act.

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GO RACHAEL! One of the Floyd Graham & Co solicitors, Rachael Jessop, successfully completed the Silverstone Half Marathon on Sunday 11 March 2012. She achieved her personal best time of 2 hours and 2 minutes. Rachael has raised £370 for the Stroke Association and is now contemplating taking her running to the next level… London Marathon 2013 here she comes?!? Although she will not forgive us for it, here is a photo of Rachael “sprinting” to the finish line!

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FGC NEWs Rachael (left) at the finish line!

SEE WHAT WE’VE BEEN UP TO RECENTLY AT FLOYD GRAHAM & CO H.Q.

Floyd Graham & Co attended the Northampton Chamber Business Exhibition at the Sunley Conference Centre on 16 March 2012. This was a great opportunity to meet like-minded businesses in the Northamptonshire community and share information on the services and expertise offered by all of the exhibitors. This is the second time that we have attended this event and will certainly be looking to attend again in the future!

Hannah Scripps welcoming local business contacts to the FGC exhibition stand


UK GOVERNMENT PROPOSES THE INABILITY DISCRIMINATION ACT! “IDA” 2012 This new piece of legislation which comes into force on 1 April 2012 is being welcomed as long overdue by supporters of millions of current and potential employees who lack any real skills, potential or ambition. The view is that employers should no longer be in a position to allow employees without ability or potential to be overlooked for promotion and increased remuneration and benefits. Employers will no longer be able to grant promotions to employees who demonstrate that they have the necessary skills and aptitude to do the job in preference to those with no ability. Under the IDA it is estimated that some 2.6 million new positions will be created in the public sector and private industry combined. These new roles will attract substantial corporation tax breaks for small and medium sized employers who agree to employ two incompetent workers for every worker with the ability to do the job. The Act will contain tough new sanctions against those employers who fail to comply with its provisions. Among other things, questions designed to establish competence such as “do you have any skills or experience which relate to this job?” or “can you provide examples of previous work success?” will be prohibited due to the potential to discriminate against those without any ability.

Employers will no longer be able to grant promotions to employees who demonstrate that they have the necessary skills and aptitude to do the job in preference to those with no ability.

Mandatory non- performance linked pay rises and promotions will be given to even the most extreme cases of demonstrated inability in order to address the current imbalance. In order that employers can be properly prepared Floyd Graham & Co will be running a series of seminars over the next two weeks. Reserve your place now to avoid disappointment as spaces are limited.

We are pleased to announce that this is not real...

APRIL FOOL! (sorry!)

ST OP PR ES S!

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legislation timetable Statutory maternity, paternity and adoption pay increase

01 april, 2012

The standard rates increase from £128.73 to £134.45 per week

Statutory sick pay increase

06 april, 2012

The rate will increase from £81.60 to £85.85, with the weekly earnings threshold also rising from £102 to £107

Changes to income tax thresholds

06 april, 2012

The income tax personal allowance increases from £7,475 to £8,105

Qualifying period for unfair dismissal

06 april, 2012

The qualifying period for unfair dismissal (for those employees whose period of continuous employment begins on or after 6 April 2012) will increase from one to two years

Qualifying period for entitlement to written reasons for dismissal

06 april, 2012

The qualifying period (for those employees whose period of continuous employment begins on or after 6 April 2012) will increase from one to two years

Changes to tribunal procedure These will include: • Witness statements to be taken as read • Witness expenses to be borne by the losing party at the tribunal’s discretion • Employment judges to sit alone when hearing unfair dismissal claims • Increasing the maximum amount for cost and deposit orders in the tribunal

06 april, 2012


BRAINTEASERS

EMPLOYMENT LAW QUIZ

Check your level of employment law knowledge with our quick quiz on a few matters we would generally consider in an audit. 1. Section 1 of the Employment Rights Act 1996 sets out certain minimum details that must be included in a statement of terms or contract of employment. Which one of the following does not have to be included in the statement or contract under this Act? a) The employee's job title or a description of the work b) An explanation of how holiday pay is calculated on termination of employment c) Details of any restrictive covenants d) The length of notice an employee needs to give to terminate his contract of employment

2. If all the section 1 requirements are not supplied in a statement of terms or contract of employment, which one of the following sanctions can an Employment Tribunal impose on an employer? a) The Employment Tribunal can order compensation of ÂŁ5,000 to be paid to the employee b) When an employee successfully brings another claim in the Employment Tribunal, the Employment Tribunal may order the employer to pay 2 or 4 weeks' additional wages to the employee c) The Employment Tribunal can decide that any dismissal is automatically unfair d) There is no sanction for non-compliance with section 1 of the Employment Rights Act 1996

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SEE PAGE 12 FOR MORE INFO

3. Which one of the following statements in relation to the Working Time Regulations 1998 is incorrect? a) Employers may require employees to work more than 48 hours over more than a 17 week period on condition that it is reasonable when considering business need and they have employees' verbal consent b) Employees are entitled to 5.6 weeks of holiday per year including bank holidays c) Employees must consent in writing if they are to work more than 48 hours per week over a 17 week period d) If an employee has agreed in writing to opt out of the 48 hour working week, there is no limit as to the number of hours the employee can be required to work save in relation to health & safety 4. Which one of the following statements in relation to recruitment of employees is incorrect? a) Employers should not ask questions about a female prospective employee's childcare commitments during an interview b) Once an employer has received a Criminal Records Bureau check on a potential employee they should photocopy it and keep it in the employee's personnel file c) Interviewees may request disclosure of interview notes from employers under the Data Protection Act 1998 d) The employer should not retain interview notes for longer than is necessary, but it is sensible to retain these notes for at least 7 months

how did you do? answers below

Answers: 1c, 2b, 3a, 4b. Congratulations if you answered 3 or 4 questions correctly! You appear to have a good understanding of employment law. If you answered less than 3 correctly, please do give us a call to discuss any areas of uncertainty.


SPOTLIGHT ON OUR SERVICES As a dedicated employment law and HR practice, Floyd Graham & Co Ltd provides the whole spectrum of HR and employment law services. The Spotlight feature gives us the opportunity to give you an insight into a particular service in each publication. In this edition of the FGazette, we will focus on our HR and legal auditing services.

HR AND LEGAL AUDITING What does it involve? HR and legal auditing gives employers an invaluable opportunity to acquire up to date information on the current state of their business from an HR and Employment Law standpoint. Armed with this information, employers are able to make informed operational and strategic decisions which fully support their business plan. The Audit team, at your request, will come to your business and undertake a full analysis of the HR processes, strategies and policies together with any employment documentation for both legal compliance and commerciality. The Audit team will report on the business’ HR function generally, its performance management and review processes, employee reward and development programmes and employee relations. The Audit team produces a written report of its findings

and recommendations. On your instructions, the Audit team would implement the changes proposed within the report.

What are the benefits? The Audit has a proven track record of: • Identifying the extent to which the existing processes support the business’ strategic plan. • Identifying areas where efficiency and effectiveness can be improved. •

Minimising the financial, litigious and reputational risks associated with inadequate HR and employment policies, processes and documentation.

Giving owners/managers increased certainly and control and therefore greater confidence when managing their businesses from an employer standpoint.

How much does it cost? Each Audit and the associated cost is tailored to the business’ own requirements, size and number of employees. We would be delighted to arrange a no obligation initial discussion to explore your specific requirements.

To arrange a visit or for more information, please contact us on info@floydgraham.co.uk OR 01604 871148 VISIT US ONLINE: www.floydgraham.co.uk

Floyd Graham Gazette April  

Floyd Graham Gazette April