15 December 2006

NEWS

Businesses to Save £700 Million a Year as DTI Cuts Red Tape

The DTI has published a new plan which will cut the administrative burdens on businesses and will be a giant step towards the target of cutting 25 per cent of all DTI red tape by 2010.  Read more

Employers Must Help Employees Boost Their Health

With research by the Work Foundation indicating that 3-5 per cent of the UK workforce is away from work through illness and 25 per cent of those at work are underperforming because of physical or mental illness, the National Institute for Health and Clinical Excellence (Nice) has published recommendations aimed at employers to help boost workers' health.  Read more

Giving Employers Control Over Skills Spending "Extremely Risky"

Responding to Lord Letch's recommendation that employers are given control over the spending of the skills budget on workers, the outgoing chief inspector of the Adult Learning Inspectorate, David Sherlock, has said that such a move would pose risks. Read more

Prisoners to be Given Training to Tackle Skills Shortage

In response to the current skills shortages in the workforce, employers in some areas are looking towards the prison service to find trained workers. Read more

Employee Stress Triggered By Poor Communications

A report commissioned by the Chartered Institute of Personnel and Development (CIPD) has found that poor communication in the workplace leads to employee stress which in turn leads to underperformance.  Read more

Energy-Saving Call to Businesses

Research has shown that the energy used by equipment left on standby over the festive period will be costly for the environment and the office budget. Read more

LEGISLATION

CASES

Guidance on Compliance with Statutory Dismissal Procedure

The EAT has held that an employer who provided the information required by steps one and two of the statutory dismissal procedure in advance of an investigatory meeting, but failed to provide it again in advance of the disciplinary meeting, had complied with the statutory dismissal procedure.  Read more

Inconsistent Treatment Not a Bar to Fair Dismissal

The EAT has held that an Employment Tribunal was wrong to find a dismissal unfair on the basis of inconsistent treatment. Read more

Long Term Sick Questions for ECJ

The House of Lords has decided on the questions that should be referred to the ECJ on whether employees on long term sick leave are entitled to paid annual leave. Read more

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NEWS

Businesses to Save £700 Million a Year as DTI Cuts Red Tape

The DTI has published a new plan which will cut the administrative burdens on businesses and will be a giant step towards the target of cutting 25 per cent of all DTI red tape by 2010.

Alistair Darling commented: "By cutting unnecessary red tape and making essential regulation simpler, we can help sustain a strong economy. The plan published today is the product of listening to business.  By continuing to work closely every step of the way, we can make simplifications a reality.  We are determined to do that."

The plans include:-

• the simplification of consumer protection legislation;
• a root and branch review of employment dispute resolution (as discussed in last week's HR Briefing);
• an initiative to reduce the number of inspections by trading standards, environmental health, health and safety bodies and fire authorities; and
• permission for companies to communicate with shareholders electronically.
  

The simplification of employment regulation has received a positive response.  John Cridland, CBI deputy director-general said: "The DTI's regulatory simplification focuses effort in the right areas that matter to business.  Employment legislation is the biggest regulatory concern for most companies and action here will be particularly important."  Brendan Barber, general secretary of the TUC, said: "It is important that all regulation is as easy to understand and implement as possible, without detracting from basic protections for employees and consumers.  To this end, we welcome the DTI's simplification plan, which will benefit both."  (Personnel Today, 11 December 2006)  Back

Employers Must Help Employees Boost Their Health

With research by the Work Foundation indicating that 3-5 per cent of the UK workforce is away from work through illness and 25 per cent of those at work are underperforming because of physical or mental illness, the National Institute for Health and Clinical Excellence (Nice) has published recommendations aimed at employers to help boost workers' health.

From encouraging workers to cycle to work or take the stairs instead of the lift, to offering healthy alternatives in the canteen, the recommendations are wide ranging.  In addition, employers are encouraged to provide information that will aid an informed choice for their workers, including "tailored educational programmes" on healthy eating. 

Nice has pre-empted the argument by employers that it is up to individuals to manage their own diet and activity by adding that workers do not have enough free time to engage in sports and therefore that activity needs to be built into the working day.

The Work Foundation also says that employment status is as important to health outcomes as exercise.  David Coats, Associate Director at the Foundation said: "Workers in lower status jobs enjoy worse health and lower life expectancy than workers in higher status jobs.  The argument can be summarised quite simply.  Workers in lower status jobs are exposed to more stressors than their more highly paid and highly qualified colleagues, which, in turn, increases the risk of mental illness, gastro-intestinal conditions and coronary heart disease.  Contrary to the popular misconception, the security guard in the entrance lobby is a more likely heart attack victim than the archetypal "highly stressed" senior manager on the executive floor."

The Work Foundation recommends an extension of the "right to request flexible working" to all groups of workers and a general change in working practices, such as allowing more home-working, to help improve employee health.  (Workplace Law, 11 December 2006) Back

Giving Employers Control Over Skills Spending "Extremely Risky"

Responding to Lord Letch's recommendation that employers are given control over the spending of the skills budget on workers, the outgoing chief inspector of the Adult Learning Inspectorate, David Sherlock, has said that such a move would pose risks. 

Mr Sherlock said: "If we simply parcel out money through brokers to any employer who thinks they can use it, we will have a huge proliferation in the number of training sites.  In some ways that is a good thing, but it will also mean we will lose some control and some employers will inevitably cheat the system."

Other potential problems highlighted by Mr Sherlock in his final report as chief inspector of ALI include the new "light touch" inspection regime.  This regime will reduce the information about particular courses that is available to employers and could hinder the creation of an efficient market in adult learning and skills.  He said: "Lighter-touch inspection and greater self-regulation by providers may be perceived as reducing bureaucracy and saving money, but they also carry grave dangers – losing sight of excellence, failing to spot poor performance, sacrificing the objectivity which only external scrutiny brings."

For details of the main recommendations by Lord Leitch, click here to see last weeks HR Briefing.  (Financial Times, 12 December 2006)  Back

Prisoners to be Given Training to Tackle Skills Shortage

In response to the current skills shortages in the workforce, employers in some areas are looking towards the prison service to find trained workers. 

Phil Hope, skills minister, illustrated how the measures would work.  He said that in addition to training inmates in "soft skills" such as punctuality and teamwork, prisons could be asked to train inmates in the specific skills required by companies who may be experiencing a shortage of skilled workers.

Previous use of prisoners to fill skills gaps has proven successful.  Alison Itani, director of Wilant Industries, looked to the prison service on the advice of Jobcentre Plus and had a positive experience. 

The education secretary, Alan Johnson, has described the new measures as a "win-win situation for employers and offenders while also protecting the public by cutting crime".  He said the training would be designed with employer input and pilot schemes would "offer offenders access to training programmes designed to meet the needs of employers".

The measures have received the support of Baroness Scotland, the criminal justice minister, who believes that in is in the interest of business to get involved in prisoner training.  Adopting the "win-win" approach she said: "This is about creating the best environment to help the UK be really competitive.  It is also about reducing crime in areas where businesses operate.  Businesses are corporate victims of crime too."  (Financial Times, 14 December 2006)  Back

Employee Stress Triggered By Poor Communications

A report commissioned by the Chartered Institute of Personnel and Development (CIPD) has found that poor communication in the workplace leads to employee stress which in turn leads to underperformance.

With research estimating that 12.8 million working days were lost to stress, anxiety and depression in 2004/5, the CIPD's conclusions are worrying.

The CIPD report states that one third of employees rarely or never get feedback on their performance and 44 per cent feel under excessive pressure once a week or more.  The effects do not stop at employee absence and underperformance.  If an employee can show that he suffered from stress- related ill health and that his employer could or ought to have foreseen and prevented it, the employer could be found to be negligent.  With an uncapped limit on the compensation payable, such a finding could have severe consequences for the employer. 

To avoid the risks of employee stress, employers should ensure that their staff are trained correctly and on an ongoing basis.  This will help reduce the anxiety of workers by giving them confidence in their ability to do their jobs.  In addition, employers should ensure that they maintain a regular process of monitoring and appraisals to monitor the stress levels of employees and respond accordingly.  Finally, if an employer becomes aware of workplace stress, he should take action to remedy the problem, such as reallocating the work of burdened employees.  By actively taking measures to identify stress and address it promptly, employers will reap the benefits of a reduction in stress-related absence and negligence claims.  (Workplace Law, 12 December 2006)  Back

Energy-Saving Call to Businesses

Research has shown that the energy used by equipment left on standby over the festive period will be costly for the environment and the office budget. 

The findings produced by Canon show that, over the ten-day Christmas period, 43.6 million KwH of electricity is needlessly wasted resulting in an estimated cost of £8.66 million in unnecessary electricity bills.  With energy efficiency high on the agenda, the results are an indication of how a change in work practices could have a positive impact on the environment and also benefit the employer.

The Energy Saving Trust has said that one of Britain's most wasteful energy habits is leaving appliances on standby.  There has been confusion as to whether frequently turning computers off can result in hardware damage by weakening the links between components.  This has contributed to the £123 million wasted every year in the UK by computers that have not been shut down or left on standby.

There are a number of measures companies can take to reduce their energy usage including: -

• turning computers monitors off when not in use (saving 75 per cent of the overall energy consumption of a computer);
• replacing old CRT monitors with new LCD screens which use less power;
• using laptops rather than desktops;
• adapting the settings on computers to put them into sleep mode after a period of inactivity (rather than screensavers which don't reduce the computer's energy consumption); and
• encouraging employees to switch off all appliances at the end of the working day or when not in use for long periods.  (Workplace Law, 13 December 2006)  Back

LEGISLATION

CASES

Guidance on Compliance with Statutory Dismissal Procedure

The EAT has held that an employer who provided the information required by steps one and two of the statutory dismissal procedure in advance of an investigatory meeting, but failed to provide it again in advance of the disciplinary meeting, had complied with the statutory dismissal procedure.

Under the Employment Act 2002, employers are required to take a three step approach when dealing with disciplinary and dismissal procedures:-

• STEP 1: The employer must send a written statement setting out the alleged misconduct which has led the employer to contemplate dismissing or disciplining the employee, and invite the employee to a meeting;
• STEP 2: The meeting. This must take place after the employer has informed the employee of the basis for the allegation of misconduct set out in the STEP 1 statement.  The employee must have also had a reasonable opportunity to consider their response before the meeting.  After the meeting the employer must inform the employee of its decision;
• STEP 3: The appeal.

The employee was sent a letter inviting her to attend an investigatory meeting.  The letter set out a number of grounds of alleged misconduct and was accompanied by a witness statement.  At the meeting, the employee tabled a letter rebutting the allegations made against her and there ensued a discussion about the allegations and the evidence.  Further enquiries were made by the employer following the meeting.  The employee was subsequently invited by telephone to a disciplinary meeting.  No letter was sent in respect of the disciplinary meeting, nor was any information arising from the further enquiries provided to her.  At the disciplinary hearing, the employee was told that she would be dismissed.  She claimed unfair dismissal.

The Employment Tribunal found that the dismissal was automatically unfair because the employer had not complied with the statutory dismissal procedure.  The EAT disagreed.

The letter the employer sent prior to the investigatory meeting clearly set out the alleged conduct which was leading the employer to contemplate dismissal and the grounds in the form of the witness statement.  It did not matter if the grounds for the contemplated action and the detail, or 'basis', for those grounds were contained in the same letter, provided the employee had a reasonable time before the meeting to prepare their response.  Nor did it matter that then information was contained in a letter sent out prior to what was described as an investigatory meeting.   Provided the employee has been informed of the alleged misconduct, the grounds for the allegation, been given a time to consider their response and had a meeting to discuss the dismissal, the requirements of the steps one and two of the statutory dismissal procedure have been met. It was important to look at whether the employer had complied with the statutory procedure rather than focus on the labels attached to the procedures followed by the parties. 

The EAT also said that an employer can tell an employee of the decision to dismiss at a disciplinary meeting (despite the wording in the legislation saying this must be done after the meeting) so long as the employee has had an opportunity to put their case at the meeting.

This is a helpful decision for employers. The EAT was keen to stress that tribunals must determine whether the substantive requirements of the statutory procedures have been met and should not be distracted by the fact that the parties may have been following an internal procedure with more elaborate requirements and different terminology from those required by the statute. It should nevertheless be remembered that although compliance with the statutory steps gets an employer over the first hurdle, so there is no "automatic" unfair dismissal, this does not necessarily mean there will  be no liability for "ordinary" unfair dismissal. 

YMCA Training v Mrs A Stewart  Back

Inconsistent Treatment Not a Bar to Fair Dismissal

The EAT has held that an Employment Tribunal was wrong to find a dismissal unfair on the basis of inconsistent treatment.

The employee was employed by a firm of solicitors and was subjected to the employer's disciplinary process and ultimately dismissed for missing a court deadline in proceedings for which she was responsible.  The Employment Tribunal found that procedure followed was reasonable and that dismissal was within the 'band of reasonable responses' but went on to hold that the dismissal was unfair because another member of staff had missed court deadlines on three occasions without being dismissed.

The EAT held that the ET had made an error of law.  In assessing whether an employer acted reasonably in deciding to dismiss, a tribunal must not allow questions of disparity with earlier treatment to replace the essential statutory question as to whether it was reasonable for the employer to dismiss the particular employee. Once the employer had determined that dismissal was within the band of reasonableness responses it was not open to it to find the dismissal unfair.

This decision follows earlier authorities and confirms that whilst inconsistent treatment in truly parallel circumstances might be sufficient to support an argument that it was not reasonable for an employer to dismiss, the focus must be on the particular circumstances of the individual employee.  Consequently, employers are not necessarily restricted in their disciplinary and dismissal decisions against individual employees by their past practices.

Levenes Solicitors v Dalley  Back

Long Term Sick Questions for ECJ

The House of Lords has decided on the questions that should be referred to the ECJ on whether employees on long term sick leave are entitled to paid annual leave.

The questions referred are as follows:

• Is a worker on indefinite sick leave entitled (i) to designate a future period as paid annual leave and (ii) to take paid annual leave, in either case during a period that would otherwise be sick leave?
• If a Member State exercises its discretion to replace the minimum period of paid annual leave with an allowance in lieu on termination of employment, where a worker has been absent on sick leave for all or part of the leave year in which the employment is terminated, does the Directive impose any requirements or lay down any criteria as to whether the allowance is to be paid or how it is to be calculated?

It is to be hoped that in answering the second of these questions the ECJ will have to consider the extent to which a worker who is absent for part (rather than all) of a leave year accrues holiday entitlement.

HM Revenue & Customs v Stringer  Back

© Pinsent Masons 2006

This bulletin is not intended to be a definitive analysis of legislative or other changes and professional advice should be taken before any course of action is pursued.

Should you have any questions please contact your usual Pinsent Masons advisor, your local office (see below) or hrnetwork@pinsentmasons.com

National Head of Employment

Chris Booth