10 KEY EMPLOYMENT ISSUES - downslaw.co.uk · •Avoiding liability for employee’s discriminatory...

10 KEY EMPLOYMENT ISSUES

SPEAKER

David Seals

Partner

Employment Department

Downs Solicitors LLP

SPEAKER

10 KEY EMPLOYMENT ISSUES

1. Unfair dismissal

2. Contracts of Employment

3. Discrimination law under the Equality Act 2010

4. Family friendly rights

5. The Working Time Regulations

6. Disciplinary and grievance procedures

7. Dealing with poor performance

8. Redundancies

9. Business transfers

10. Employment law reform

CONTENTS

UNFAIR DISMISSAL

• Who can claim?

- Employees only

- Beware labelling worker ‘self-employed’

- 2 years’ qualifying period

• Automatically unfair dismissals: no service period required e.g.

- Whistleblowers

- H & S cases

- Asserting a statutory right

- Pregnant employees

UNFAIR DISMISSAL

• How much can they claim?

- basic award: max. £13,500

- compensatory award: (EL Reform: from July 2013 TBC) limit is

lesser of:-

- £74,200

- a year’s pay

UNFAIR DISMISSAL

• How are claims decided?

• Did employer have a potentially fair reason to dismiss?

- Conduct

- Capability

- Statutory illegality

- Redundancy

- SOSR

• Did employer act reasonably in treating that reason as sufficient to

dismiss?

• Where employers often go wrong: procedure

CONTRACTS OF EMPLOYMENT

• S.1 Employment Rights Act 1996

• Protecting employer’s interests – key areas:

- intellectual property rights

- confidential information

- customer relationships

- workforce


• Contract should have provisions for:

- IP

- loyalty/non-competition

- non-disclosure of trade secrets/confidential information

- garden leave

- post-termination restrictive covenants


• Other important issues

- Notice

- Probationary period

- Flexibility of duties

- Lay-off/short-time working

- Deductions

- Data protection/monitoring communications

DISCRIMINATION UNDER THE EQUALITY ACT 2010

• Equality Act 2010 protects employees against discrimination because

of:

- age

- disability

- gender reassignment

- marriage and civil partnership

- pregnancy and maternity

- race

- religion or belief

- sex

- sexual orientation


• Types of discrimination

- direct

- indirect

- harassment

- victimisation

- (disability cases) failure to make reasonable adjustments


• associative discrimination

• perception discrimination

• third party discrimination (EL Reform: to be scrapped from 1st October

2013)


• Compensation

- uncapped

- injury to feelings (inc. aggravated damages)

• Liability of employers

- reasonable steps to prevent discrimination


• Avoiding liability for employee’s discriminatory acts:

- key documents (e.g. equality and diversity policy/anti-harassment

and bullying policy)

- training and awareness

- compliance with E & D policies

FAMILY FRIENDLY RIGHTS

• Maternity leave and pay

• Adoption leave and pay

• Paternity leave and pay


• Parental leave

• Time-off for dependents

• Flexible working


• Protection from dismissal, detriment and discrimination in connection

with family leave


• EL reform

- shared parental leave (from 2015)

- extension of flexible working requests to all employees (from

Spring 2014)

WORKING TIME REGULATIONS

• 48 hour average maximum working week

- Opt-outs

• Young workers (under 18)

- limit 8 hours per day/40 per week

• Record keeping

− 2 years

• Breach punishable by fine/prison


• Night work limits

• Health assessments for night workers

• Rest breaks

- 11 hours daily

- 24 hours weekly

- 20 minutes after 6 hours work

• Young workers


• Holiday

- 5.6 weeks’ paid holiday per annum

• Difficult areas:

- carrying over of leave

- amount of holiday pay (e.g. workers with commission, varying

hours)

- workers on sick leave

Seminar 20 June 2013

Charles Owen

Tax Partner

Vista Partners Limited

Alphabet Shares

Dividend – v – Bonus

Class1 NIC savings – employer’s & employee’s

Increase in rates of Class 1 NIC and reductions

in Corporation Tax rates

Alphabet Shares

Marginal rates of tax for a higher rate

taxpayer with a small company

Dividend 40%

Salary 49.03%

Alphabet Shares

Marginal rates of tax for an additional rate

taxpayer with a small company

Dividend 44.44%

Salary 53.43%

Alphabet Shares

Larger Companies

The preceding analysis re tax efficiency of

dividends still holds true.

Lack of flexibility with dividends

Alphabet Shares

A company owned by two business partners Mr

X & Mr Y each with 50 Shares

The possibility of a dividend waiver

Convert Mr X’s shares into A shares and Mr Y’s

shares into B shares

Change only dividend rights

HMRC – v – PA Holdings

Aggressive tax planning involving employees

Certain alphabet schemes still okay for owner-

managers

Alphabet Shares

Employee Shares

1. Allot Shares

2. Phantom Share Scheme

3. Enterprise Management Incentive (EMI)

SHARES

1. Dividend Based On Profits

2. Capital Sum On Sale

SHARES

1. Dry Tax Liability

2. Loss Of Privacy

Phantom Share Scheme

1. Bonus Based On Profits / Individual

Performance

2. Bonus Paid Prior To Sale

Phantom Share Scheme

1. Right To Income (Dividend)

2. Right To Share Of Sale Proceeds

3. No Dry Tax Liability

4. No Loss Of Privacy

Phantom Share Schemes

Downside

Comparatively Expensive

PAYE TAX / NIC

Deferred Bonus Scheme

Based on performance in Year 1

Payable at the end of year 2

Year 2’s bonus payable at the end of year 3

PAYE/NIC

Enterprise Management Incentive (EMI)

1. Option To Acquire Shares

2. Exercisable Before Sale

3. Lapses If Employee Leaves

4. Incentive to work hard and build the business

Enterprise Management Incentive (EMI)

1. No Tax On Grant Of Option If At Market

Value

2. Efficient from a cash flow perspective

3. Proceeds Subject To Capital Gains Tax

- 10% If Entrepreneurs Relief Applies

- 18/28% Otherwise

Salary Sacrifice

An employee gives up salary and takes a benefit

in kind instead

Often the benefit in kind will be tax free

The paperwork must be right

Salary Sacrifice

Norman is a higher rate taxpayer (MR of 42%)

His mobile phone costs £435 a year

This costs him £750 in gross salary

The cost to the employer of £750 salary is

£853.50

Salary Sacrifice

Norman sacrifices £750 of salary and his

employer provides his mobile phone

Employer has a cost of £435 rather than

£853.50 (a 49.03% cost saving)

VAT implications

Tax Free Benefits

Workplace parking

Cycles & cyclists’ safety equipment

Works Transport Services

Public bus subsidies

Work related training

Annual parties

Childcare

Tax Free Benefits

Pension provision

Termination payments

All of the above are subject to strict conditions

DISCIPLINARY AND GRIEVANCE PROCEDURES

• ACAS code of practice 1 (April 2009)

• Employment tribunal will take code into account when deciding relevant

cases

• Applies to disciplinary cases dealing with misconduct and poor

performance but not redundancies

• Uplifts to compensation of up to 25% for breach


• Introduction to Code

• General principles:

- issues should be dealt with without unreasonable delay

- consistency

- investigation

- inform employee of the problem

- opportunity for employee to put their case

- appeal against formal decisions


• Handling disciplinary cases

- establish the facts

- investigation meeting?

- different managers dealing with investigation/disciplinary/appeal

- suspension

- inform employee of allegations and evidence


- disciplinary meeting

- companion

- recording decisions

- warnings

- dismissal (after appropriate warnings/gross misconduct)


• Handling grievances

- employee to set out grievance in writing

- grievance meeting

- companion

- decision

- appeal

- overlapping disciplinary and grievance issues

DEALING WITH POOR PERFORMANCE

• Difficult areas

- disruptive companions

- covert investigations of staff

- whistleblowers

- harassment/bullying complaints

- police involvement/court cases

DEALING WITH POOR PERFORMANCE

• 2 main areas:

- competence

- attendance

• ACAS Code minimum standards will apply

DEALING WITH POOR PERFORMANCE - COMPETENCE

• Key steps for employer:

- explain the required standard

- review performance

- issue appropriate warnings

- consider support/training/other assistance

DEALING WITH POOR PERFORMANCE - COMPETENCE

• Key steps for employer/ cont’d … :

- redeployment?

- dismissal fair?

- timeframe: 3-9 months

- consider alternatives e.g. redundancy/restructure

- EL reform: confidential settlement agreements

DEALING WITH POOR PERFORMANCE - ATTENDANCE

• Key steps for employer/ cont’d:

- review attendance

- obtain medical reports

- issue appropriate warnings

- (disabled staff) make reasonable adjustments

- consider alternatives

- NB. confidentiality of SA’s inapplicable in discrimination cases

DEALING WITH POOR PERFORMANCE - ATTENDANCE

• Difficult areas:

- employer at fault (e.g. bullying)

- health and safety/insurance issues

- unco-operative employees

- PHI cover

- continuing holiday entitlement

REDUNDANCIES

• 3 Scenarios:

- business closes

- place of business closes

- diminution of need for employees

• collective redundancies

- BIS notification

- consultation period

• statutory redundancy pay

REDUNDANCIES

• Unfair dismissal claims

- is redundancy genuine?

- selection issues

- individual consultation

- alternatives to redundancy

- bumping

BUSINESS TRANSFERS

• Transfer of Undertakings (Protection of Employment) Regulation 2006

- ‘ordinary’ transfers

- service provisions changes

• EL Reform: SPL provisions to be scrapped (Autumn 2013)

BUSINESS TRANSFERS

• TUPE protects employment rights:

- preservation of T&C’s on a transfer

- harmonisation

- special protection against dismissal

- information and consultation

- non-compliance: award of 13 weeks’ pay

BUSINESS TRANSFERS

• Insolvency cases

− special rules apply

− depends on type of insolvency procedure

− protection of T&Cs and special protection against dismissal doesn’t

apply

− I & C provisions still apply

• Summer 2013

- New employment tribunal rules (from 29 July 2013)

- Fees for employment tribunal claims (from 29 July 2013)

• Spring 2014

- Mandatory ACAS early conciliation

• TBA

- Employer penalties for losing ET claims

EMPLOYMENT LAW REFORM

Downs Solicitors LLP, 156 High Street, Dorking, Surrey, RH4 1BQ and The Tanners, 75 Meadrow, Godalming, Surrey, GU7 3HU

T: 01306 880110 F: 01306 502283 E: [email protected] www.downslaw.co.uk

David Seals

Partner

Downs Solicitors LLP

DD: 01306 502218

Email: [email protected]

Presentation by

John Shaw

Business Manager

20th June 2013

Proposition

EmployLaw provides a flexible, tailor-made package of legal services suitable for any employer, whether large or small.

The service focuses on Employment Law, Human Resources (HR) advice and Health & Safety (H&S) support.

Our aim is to provide seamless, full-service legal support by qualified employment solicitors, at a fixed and affordable price, giving you not only protection against possible claims and disputes, but also and importantly, peace of mind.

HR Audit

We conduct a comprehensive review of any contracts of employment, policy documentation and staff handbook.

Where appropriate we prepare new contracts, policies and

handbooks, tailor-made for your business - ensuring your business is up-to-date with current legislation and best practice.

Such documentation includes:

Standard contracts, specific contracts (high risk, part-time, home workers etc.)

Service agreements for Directors Policies for performance, disciplinary, grievance, maternity,

bribery, equal opportunities etc., etc. Company forms e.g.: job descriptions, accident log, illness

certificate, training record.

HR Assistance

A professional service to give you specialist employment law HR support and to help you keep up-to-date with future changes in legislation.

Written and telephone advice from a solicitor specialising solely in employment law and dedicated to your business.

Regular alerts to keep you up-to-date with changes in employment law.

HR Representation

In the event of an Employment Tribunal claim against you, we can provide you with advice and representation. Through legal expenses and claims insurance, we will guide you through the process and represent you throughout.

Protects you in the event of an Employment Tribunal claim.

Ensures peace of mind - with insurance cover for:

legal fees associated with defending such a claim; and

Compensation award.

HR Training Even the most careful preparation of company policies can be let down by poor communication and implementation. This is where management training becomes so important.

We provide training that is tailor-made to your business to ensure that your staff / managers understand the need for and how to apply company policies.

Training is provided by qualified professionals to groups of up to 20 individuals, either as a half or whole day programme.

We also run seminars for delegates who wish to gain a better understanding of specific areas of law.

HR Consultancy HR Consultancy provides the services of a CIPD qualified HR professional who can work with you in a number of ways.

Our HR Consultants can conduct on-site HR project work to relieve pressure on your management or HR team, or where specific internal expertise does not exist. The types of work we can service includes:

Grievance meetings

Mediation

Disciplinary investigations

Recruitment

Outplacement support

Benefits to Clients

Unlimited advice in relation to all employment law matters

Keeps you abreast of constant changes in employment legislation

Your own qualified Employment Solicitor dedicated to your business

Practical (and not prescriptive) advice

Highly competitive fixed fees which save you time, money and headaches

Policies tailored to your specific business needs

Key Health & Safety Considerations

General Health and Safety

Fire Safety

Water Safety

Display Screen

All of which must be controlled and evidence should be available to prove this.

Health & Safety – 5 Step Process

H&S Audit - one of our H&S Consultants will update your H&S procedures and documentation to ensure they are up to date and legally compliant

H&S Assistance - 12 months telephone and email support from a H&S Specialist to help with any issues you may face

H&S Representation - insurance against any prosecution from the HSE (Health & Safety Executive)

H&S Training - tailored training on any issues applicable to your workforce. These can cover any H&S topics that may be of interest to either the entire team or just a select group

H&S Consultancy - On site project work to meet specific requirements you may have. E.g: fire risks, asbestos surveys, display screen equipment assessments etc.

Why EmployLaw? Our objective is to provide you with peace of mind, by agreeing a fixed fee for each of the services offered by EmployLaw. In this way we aim to achieve a ‘win - win’ situation resulting in:

A close, robust working relationship

In-depth knowledge and understanding of your business

Advice that gives you real added value

Speedy resolution of issues

First class levels of customer service and client satisfaction

10 KEY EMPLOYMENT ISSUES - downslaw.co.uk · •Avoiding liability for employee’s discriminatory...

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