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Employment Law Update

18th June 2014

Stress at Work

Average of 40 days' unpaid overtime a year, Britons work the longest hours in Europe.

In 2010/11 about 400,000 people in the UK reported work-related stress at a level they believed was making them ill.

Death

Why tackle stress?

Health & Safety executive - over 105 million days are lost to stress each year – costing UK employers £1.24 billion.

About one in five people in a stress study said that they found their work either very stressful or extremely stressful.

What is stress?

Work-related stress - not an illness but can contribute to/cause ill health.

Amorphous: with anxiety and depression, stress has been associated with heart disease, back pain and gastrointestinal illnesses.

What is stress?

The Health and Safety Executive (HSE) define stress as "the adverse

reaction people have to excessive pressures or other types of demand

placed on them".

Positive and negatives

There is a growing awareness of the importance of employee health and

safety and the recognition healthy employees make a greater

contribution to business.

Legal framework

The rights and duties of employers and employees in relation to stress derive from a combination of

sources:

Health and safety legislation

Common law tort. The main source of cases on stress is the law of negligence (a breach of the

employer's common law duty of care)

Restrictions on working hours

Disability discrimination

Other forms of discrimination, bullying or harassment

Contract

Unfair dismissal under the Employment Rights Act 1996

Excess workload or Specific Trauma Stress

Negligence

Employers are under a common law duty to take reasonable care for the

health and safety of employees in the workplace.

This duty arises under the

tort of negligence, on which

personal injury claims are usually

based.

Negligence

- Breach of duty of care

- Causal link

- Reasonable foreseeability

Johnstone v Bloomsbury Health

Authority [1991] IRLR 118

40 hours per week plus

a further 48 hours a week on call

Negligence

MacLennan v Hartford Europe Ltd [2012] EWHC 346 (QB)

-contracted chronic fatigue syndrome as a result of

workplace stress

-no proven causal link

Court of Appeal guidance

2002 CA - landmark judgment, Sutherland v Hatton;

House of Lords guidelines were "useful practical guidance“

Some key points :

One of the crucial questions is whether this kind of harm (stress-related injury) was

reasonably foreseeable in the individual.

No occupation is to be regarded as intrinsically more dangerous than another to an

individual's mental health.

Warning signs from employees will play a fundamental role in establishing liability

because once the employer is on notice of the adverse effects of stress, the

consequences are more foreseeable.

Employer which offers confidential help (for example in the form of counselling) to

employees suffering stress is unlikely to be found in breach of its duty:

Caution - not panacea

Specific Trauma Stress

Discrimination, Unfair Dismissal

Hartman, prison officer, suicide of inmates. Argument it was not reasonably foreseeable failed. Employer has to think harder.

Unfair Dismissal – Constructive dismissal.

Stress and psychiatric damage caused by discrimination– (Equality Act 2010)

Bullying, harassment can also lead to stress claims.(eg. psychiatric damage due to discrimination)

One of the most problematic areas

No need for “clinically well recognised” where possible mental disability

Quality of medical evidence

A word on compensation stress and

psychiatric injury caused by discrimination

There is no upper limit on the amount of compensation that can be awarded

Defence – took all reasonably practicable steps to prevent the discrimination

or harassment occurring

Unlike the approach in tort, however, there is no requirement that the loss

suffered be 'reasonably foreseeable'; compensation can be awarded in respect

of all harm that arises naturally and directly from the act of discrimination,

at least in cases where the discrimination was deliberate and overt

All that is required is a causal link

Main causes of stress

Demands

Control

Support

Relationships

Role

Change

Demands

make sure employees understand what they have to do and

how to do it

meet training needs

consider whether working flexible hours would help

employees to manage demands

Control

involve employees in the way work is carried out

consult employees about decisions

build effective teams with responsibility for outcomes

review performance to identify strengths and weaknesses

Support

give employees the opportunity to talk about issues causing stress

be sympathetic and supportive

keep employees informed about what is going on in the firm

Relationships

have clear procedures for handling misconduct and poor

performance

have clear procedures for employees to raise grievances

tackle any instances of bullying and harassment and make it clear

such behaviour will not be tolerated

Role

carry out a thorough induction for new employees using a checklist of

what needs to be covered

provide employees with a written statement of employment particulars

give employees clear job descriptions

maintain a close link between individual objectives and organisational

goals

Change

plan ahead so changes can be signposted and managers

and employees are prepared

consult with employees about prospective changes so

they have a real input and work together with you to

solve problems

Anti-stress policies

Including stress in risk assessments. If so, it must be clear about how stress risks are going

to be assessed, how they will be carried out and who will be responsible.

Training both for managers (who will implement the policy) and staff (to raise awareness

and develop skills).

Clear and open channels of communication and effective methods of investigating reported

workplace incidents or behaviour giving rise to stress:

Short-term absences

The effect of the pattern of absences on the business.

The likelihood of continuing absences and the impact they are likely

to have.

Whether there are changes to the employee's job or redeployment

opportunities that would assist

Whether the employee has a disability and, if so, whether there are

any reasonable adjustments to be made.

Whether it is appropriate to give the employee a formal warning

When absences become a problem

Meetings to determine:

The reasons for the absence.

When the employee is likely to return to work (in cases of long-term absence).

When the employee is likely to show improved attendance patterns (in the case of short-

term absence).

Investigating the reason for the absence is likely to involve

obtaining medical evidence and consulting with the employee.

Disability Discrimination

Disabled if:

• physical/mental impairment

• long term

• substantial & adverse

effect on ability to carry

out normal day to day activities

Discrimination arising from disability

Individual treated unfavourably (not less favourably)

because of something arising in consequence of their

disability there will be discrimination unless:

The employer can show that it was a proportionate

means of achieving a legitimate aim – objective

justification; or

Employer did not know or could not reasonably be

expected to know of disability

Duty to make reasonable adjustments

• If applicant/employee is disabled (looked at definition)

• duty to make reasonable adjustments

• to avoid physical feature or provision, criterion or

practice (e.g. working practices) putting them at a

substantial disadvantage.

• Provide auxiliary aids (e.g. computer adapted

equipment) to avoid substantial disadvantage

Examples of adjustments:

Making adjustments to premises (e.g. wheelchair access);

Acquiring or modifying equipment (e.g. suitable computer packages);

Providing information in an accessible format;

Allocating some of the disabled person’s duties to another worker;

Transferring the disabled worker to fill an existing vacancy (e.g. if no

reasonable adjustments can be made to their current role);

Altering the disabled worker’s hours of work (e.g. later starts);

Assigning the disabled worker to a different place of work;

Allowing the disabled worker to be absent during working or training hours

for rehabilitation, assessment or treatment.

What is reasonable?

• Consider:

• whether taking any particular steps would be effective in preventing the substantial disadvantage

•the practicability of the step

• the financial and other costs of making the adjustment and the extent of any disruption caused

• the extent of the employer’s financial or other resources

• the type and size of the employer

Croft Vets Ltd and others v Butcher

UKEAT/0430/12

Held that it would be a reasonable

adjustment for an employer to pay

for a depressed employee's private

counselling

Managing stress checklist

Carrying out a stress audit.

Using return to work interviews after sickness absence, performance appraisals

and employee surveys

Training managers

Designing a stress policy.

Consulting employees, employee representatives or unions on organisational

changes

Avoiding placing unreasonable demands on employees

Providing adequate training

Providing support

TUPE

Guest Speaker Andrew Smith

Grievances

A Grievance culture?

Key Performance Indicators for next

year are…

• reduce number of grievances

• reduce length of time grievances

take

• reduce number of tribunal claims

• reduce legal spend on grievances

A perfect storm brewing?

Combination of:

• High awareness of rights and employers’

duties

• Cost-cutting

• High organisational stress

• Tight labour market

What is a grievance?

Definition in the Acas Code: "concerns, problems or

complaints that employees raise with their employers“

• Individual/collective

• Trivial/very serious

• Informal/formal

• Breach of:

Contract

Legal duties – discrimination,

health and safety

•Complaints about matters

of public concern

•Complaints about other

unfavourable/less

favourable treatments

Consequences of not responding to a

grievance

• Breach of contract/constructive dismissal

• Breach of Acas Code

• Risk of discrimination complaints

• Risk of personal injury complaints

• Protection from Harassment Act

A gripe or a grievance?

How should the company respond?

Judgment call:

• manager experience

• context in which employee raises

it

• frequency with which it is raised

• dialogue with employee

representatives

Recognising when you need to

respond

Well I can’t do anything

until you put your

complaint in writing…

The label does not matter

It says he raised the matter on

several occasions… we have no

record of that!

Resolving complaints informally

• Informal resolution is not a

soft option

• Demanding on line managers

• Are they up to the job?

Set guidelines for responding informally

but HR said ‘try and deal

with it informally’

Importance of the Acas Code of Practice

Failure to follow Acas Code

can lead to an increase/

decrease in award of up to 25

%

Letting employees know about your

procedures

I am not telling employees we have

a grievance procedure – they will

just make claims!

What is a fair formal grievance procedure?

• Prompt action

• Proportionate and fair protective measures

• Investigation

• Convene a meeting to consider the issues (a

hearing)

• Opportunity to explain

• Right to be accompanied

• Appeal

• Follow your own procedure

Company-specific procedures

Follow it!

Widget & Co

Grievance

Procedure

Investigations

Employers tend to fall down on the

quality of their investigations

Investigations

Key qualities of a good

investigation:

• Neutral

• Impartial

• Experienced investigator

• Robust

John, you and I go back a long way. And you

know what she’s like - it’s just a pack of

lies!

The Grievance Hearing

Give the

Employee a

chance to

explain exactly

what their

concerns are

Make it non-

confrontational

and non-

judgmental

The Right to Be Accompanied

The Decision

An Appeal

Top Tips

Do’s…

Top Tips

Do’s…

… and Don’t’s

Redundancy

Redundancy

Redundancies can occur for a number of reasons

Keeping on track – a fair & proper process

• Employees who have been made redundant and feel that the process is not fair - may bring a claim for unfair dismissal - would have a 3 month time limit to bring a claim for unfair dismissal

• Need to ensure fair and proper redundancy process

What is redundancy?

• Redundancy one of 5 potential fair reasons for dismissing an employee

• An employee is only entitled to a redundancy payment if they are dismissed by reason of redundancy

• You may have an obligation to collectively consult with TU/employee representatives

Definition

The dismissal of an employee will be by reason of redundancy if it is

"wholly or mainly attributable to" the employer:

•Ceasing or intending to cease to carry on the business for the purposes of

which the employee was employed by it (business closure)

(section 139(1)(a)(i), ERA 1996);

•Ceasing or intending to cease to carry on that business in the place where

the employee was so employed (workplace closure)

(section 139(1)(a)(ii), ERA 1996); or

•Having a reduced requirement for employees to carry out work of a

particular kind or to do so at the place where the employee was employed

to work (reduced requirement for employees)

(section 139(1)(b), ERA 1996).

Business Closure

What is Redundancy?

• Complete & permanent • shutting a business down for good – easiest type of redundancy to recognise

• needs to be distinguished from the situation where an employer transfers its business to a new owner – beware of TUPE

Workplace Closure

• If you close a workplace any employee at that location may be facing redundancy

• Need to establish where employees actually work – not just what their contract says. Normally straightforward: just look where they work on a daily basis

Reduced requirement for work of a particular type

This might occur in the following scenarios:

• Work of a particular kind shrinks and so does the headcount –example: a customer reduces its orders

• Work of a particular kind not reduced but need less employees to carry out the work – for example: introduce a new technology

•A company wishes to better manage its resources. Where a chief accountant is dismissed and his duties are absorbed by three less senior employees.

Voluntary redundancy

• Prior to making compulsory redundancies, employers often ask for volunteers

• Voluntary redundancies

• dismissal by reason of redundancy not resignation

5 key questions

Having established that you have a redundancy situation you need to make sure that you have a fair and proper process, that means you must consider:

- Individual and Collective Consultation

- Pool for Selection

- Selection Criteria

- Suitable Alternative Employment

- Appeal

(1A) Individual Consultation

Individual consultation is fundamentally important to a fair process and so a fair dismissal

• You should keep a record of the consultation (dated and signed by the parties if possible)

• The record is evidence of the process followed so make sure you get it right

• Consultation must be meaningful

• Do not issue notice of dismissal until the consultation process is completed

(1A) Individual Consultation

• Notification of the fact that the individual has been provisionally selected for redundancy

• Opportunity for the employee to comment on their redundancy selection assessment;

• Opportunity for the employee to comment on ways to avoid their redundancy;

• Consideration of any alternative employment positions that may exist;

• Opportunity for the employee to address any other matters or concerns that they may have.

(1A) Individual Consultation

(1B) Collective consultation

When collective consultation obligation applies – propose 20 + redundancy dismissals in 90 days at 1 establishment

Woolworths case - Subject to the appeal (and the pending reference to the ECJ), the Woolworths case brings about a significant change to the current law on collective redundancy consultation.

•What collective consultation means:

• Collectively consult with recognised TU or if not recognise a TU for affected employees, with other employee representatives

• HR1 obligations – notify the Secretary of State

(1B) Collective consultation

• Need to identify which employees may be affected by dismissals

• If recognise a TU – must consult with TU – no choice.

• If do not recognise a union in respect of affected employees -consult with elected employee representatives

(1B) Collective consultation

•Specific information to be given in writing to representatives:

• The reasons for the proposals;

• The numbers and descriptions of employees you propose to dismiss as redundant;

• The total number of employees of any such description employed at the establishment in question;

• The way in which the employees will be selected for redundancy;

• How the dismissal are to be carried out, taking account of any agreed procedure, including the period over which the dismissals are to take effect;

• Any method of calculating the amount of redundancy payments to be made to those who are dismissed.

•Agency worker information – Numbers/where they work/what they do

Consult about:

Ways of avoiding dismissals

Reducing numbers to be dismissed

Mitigating consequences of dismissal

Must be genuine – not just going through motions

Actively engage with representatives

Put forward proposals

Give reps time to consider & offer counter proposals

When, and how long for?• Consultation must begin in good time

• 20 + dismissals in 90 days = 30 days before first dismissal takes effect• 100 + dismissal in 90 days = 45 days before first dismissal takes effect

• HR1 – notification must be received by Secretary of State within same time frames

Penalty = 90 days’ gross

pay per employee

(1B) Collective consultation

Penalty for failure to submit HR1 – criminal offence/fine of up to £5,000

Top tips for collective consultation

(1B) Collective consultation

• Consider whether the collective consultation obligation applies

• Consider who are affected employees

• Consider whether you need to elect workforce representatives – build that in to your time table

• Consult with employee representatives as soon as possible – including ways to avoid the redundancies/reducing numbers of redundancies/mitigating effects

• Identify selection pools/criteria/process – consult and agree as much as possible with the employee representatives

• Notify BIS and give statutory information to employee representatives

• Prepare communications – joint communications with the employee representatives if that can be achieved

• Consider additional support e.g. outplacement etc.

• pools

• criteria

•application

(2) Pool for Selection

Selection criteria:

• Objective not subjective

• Capable of independent verification – measurable.

• Examples performance/skills/knowledge/disciplinary records/attendance

records

(3) Selection Criteria

(4) Suitable Alternative Employment

• Make sure:

• that employees can access vacancies within your business

• discuss the vacancies, with the employee, as part of the consultation process

• make sure the employees have sufficient information, about any vacancies so they can make a decision about whether the role is suitable for them

• do not assume that an employee will not be interested in role, e.g. it is on a reduced salary

• do not forget about employees who are not in the work place, for example, on sick leave

• keep a record of the process followed

Employment Tribunal – unfair dismissal

Unfair dismissal• qualifying period (1 year, but 2 years if recruited after 6 April 2012)• maximum compensation – lower of either £76,574 or 1 year’s salary

Statutory Redundancy payments

One and a half weeks' pay for each year of service in

which the employee was 41 or over.

One week's pay for each year of service between ages 22

and 40.

Half a week's pay for each year of service under the age

of 22.

A maximum of 20 years can be taken into account

Week’s pay maximum - 6 April 2014 - 5 April 2015 - £464

Supporting your employees

protecting your business

• Supporting your workforce in a difficult time of redundancy means protecting your business

• Consider

• Ways to avoid redundancy – redeployment/retraining

• Be as open as possible & agree as much as possible

• Be as supportive as possible – outplacement/links with local business/interview skills/financial advice

Disciplinary Issues and Dismissals

The ‘Discipline and Dismissal Challenge’

Key Principles

Dismissing for misconduct

Are the odds really stacked against

employers?

• employment

tribunals

• no win, no fee

• thicket of red tape

• discrimination law

‘The band of reasonable responses’

Dismissal with Notice

No action

Slapped wrist

Warning

Dismissal for gross

misconduct – no

notice

No reasonable

employer would sack

in these

circumstances

Consistency of treatment

Inconsistency of treatment is a majorreason employers lose unfair dismissalcases.

First line of defence

If you only read one…

If you only read oneemployment-law relateddocument in your life, makesure it is this one - the AcasCode of Practice on Discipline,Grievance and Dismissal

The Acas Code

•Failure to follow it also directly impacts on compensation awards.

• Tribunals can adjust an award of compensation for unfair dismissal (or grievance type claims) by up to 25% if you unreasonably fail to follow it.

• True, the tribunal can also reduce compensation by up to 25% if the employee fails to follow its provisions.

• You should make sure your line managers know its contents.

Any guarantees?

The Acas Code does not replace the primary or underlying law of what is a fair misconduct dismissal.

Tribunals expect more of larger employers.

Second line of defence

Aim for :

• consistency of treatment from each manager, and

• consistency in approach between managers

Company-specific procedures

Follow it!

ABC Limited

Disciplinary Procedure

Third line of defence

Standards of conduct :

• relevant

• contemporary

• focus on high risk

activities

• logical

• unambiguous

Fourth line of defence – keeping records

What is a fair dismissal procedure?

• Investigate

• Tell employees the case against them

• Give time to prepare a defence

• Right to have a say

• Right to be accompanied

• Appeal

• Follow your own procedure

Investigations

• The law does not require you to undertake a forensic approach

• Most cases that are lost on the quality of the investigation are lost because something really quite straightforward was not followed up.

• Be methodical. Stick to what is relevant. Look for documentary evidence and corroboration.

• Interview witnesses. Stick to the facts – not their opinions.

• If gross misconduct is suspected, you should suspend the employee, on normal pay but keep it brief and keep under review.

• Keep the investigation as confidential as possible.

The Disciplinary Hearing

There are strict formalities you should observe when conveningthe hearing:

• Employees are not taken by surprise• They know the purpose of the meeting• They are not ambushed with information they have not hada chance to consider in advance, this includes witnessstatements• They have time to prepare• They have the chance to state their case and ask questions• They have the time to arrange for a companion of theirchoice – under the statutory right to be accompanied or yourcompany procedure - to attend with them.• You should make adjustments for people who have specialneeds, such as language requirements or who have adisability.

The Right to Be Accompanied

The Appeal Hearing

Offering an appeal is crucial – the failure to do so will almost

always make a dismissal unfair

- Appeals allow you to correct any flaws in the original

investigation

- Appeals allow you to check the employee has been treated

consistently

- Appeals give you an idea of what points the employee might

raise in an unfair dismissal claim, and the opportunity to close

off those lines of attack

- An appeal should always be conducted by a more senior

manager, except where that is not possible (eg in a very small

company).

Protected Conduct

If the dismissal is based, either

partly or wholly, on one of

some ‘protected’ reasons, it

will be unfair. The main

protected reasons are:-

- whistleblowing

- raising health & safety

concerns

- trade union activities or

membership

- most things to do with

pregnancy or maternity leave

Remedy – the cost of getting it wrong

Declaration against

you

Reputational damage

Press coverage –

especially local press

Compensation

Recommendations in

some cases

CASE STUDY

Jason is being put through disciplinary proceedings by hisemployer, Sales Ltd for his behaviour at a leaving party for acolleague. It is alleged that he made inappropriate commentsto other colleagues. After the event members of staff raisedformal complaints and Sales Ltd decided to take action.

In accordance with company policy, Sales Ltd have suspendedJason while the investigation is carried out. He was sent aletter to this effect informing him that he should not attendthe workplace nor contact any employees while the matter isbeing looked into.

While investigating the issues, a key witness, Ayesha, has toldthe company that she is reluctant to give evidence as she isfearful of repercussions from Jason. She says she will only giveevidence if it is anonymised.

THANK YOU

Partners Employment Lawyers

02073746546 www.partnerslaw.co.uk

For further information please contact Hina Belitz on:

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