Not in the right place

What do you do when you are talking to a manager about how you can help them do their job better and they spend 80 minutes of a 90 minute meeting in tears?

Clearly the opportunity to help them do their job is limited as in between the snuffles and sobs they tell you that everything is OK and in fact it’s getting better. Really, so how do you behave when things are really bad?

Well some people are just in the wrong job and for whatever reason they will not accept this. At this point the Directors have to take a hard decision. Problem is that if you are in one of the public sector arenas you have been tied down by endless procedures and policies that just prolong the torture. Plus if you go down the procedural route it’s quite likely that the manager will get combative and you not only have a performance problem, you also have a growing antagonism between the directors and their manager, not good for the organisation or for the rest of the staff.

Whenever I post something like this on Social media I am usually met with the response that  you can avoid problems like this by always treating people with respect, agreeing an “action plan”, reviewing it on a weekly basis, giving the person achievable targets and getting their “buy in” to the solutions orientated process that has been set up. All very well as long as you’re happy to ignore the staff that have to fill in for the underperforming manager while you go through this process – who are becoming increasingly frustrated by your lack of care for their predicament.

Getting the manager’s cooperation in working towards an “action plan” can be a good way to deal with things when the manager takes up the position; but most of the time we are brought in long after things have gone wrong. If you want to make an analogy, it’s a good idea to teach people how to swim when they are in a training pool and supported, if you see them drowning you don’t spend time coaching them, you pull them out of the water.

So in short as a director or senior manager you have to think of all your staff when dealing with issues not just the one who is having a problem, which sometimes means making hard decisions.

Two Easters in one year

Does your new holiday year start on 1st April? If so then you need to read on because in the 2015-16 holiday year there will be 2 Easters and therefore 10 bank holidays whilst in 2016-17 there won’t be an Easter at all and so only 6 bank holidays.

In the absence of any guidance from the Government (maybe they have other things on their mind!) you need to agree with your workforce how you are going to handle this. The law says everyone gets 28 days holiday in a full holiday year-pro rata for part timers-which is split into 20 days to take as agreed between you and your staff and 8 days for bank holidays.

First of all, check what your contract says and talk to your staff. If you give more than the statutory minimum holidays or have staff who have accrued additional holiday entitlement due to length of service then you need take no action with them.

If you give the statutory 28 days, you can stick with that as it fully meets your legal obligation but will mean that in the coming holiday year staff have only 18 days to take when they want to but next year they will have 22. You could agree with staff that they take 2 days of next years’ bank holiday entitlement in the coming year so they still get 20 days to take when they like plus 10 bank holidays this coming year and only 6 next year. If you were feeling generous, you could award all your staff 2 extra days holiday this year but there is absolutely no obligation to do this.

If you want to talk it over please give us a ring and we will help you sort it out.

Holiday Pay and Overtime

The Employment Appeal Tribunal (EAT) has reached a decision regarding what pay should be included in Holiday pay, and stated that contractual overtime (i.e. compulsory or non-voluntary overtime) should be included in a normal weeks pay when calculating how much you should pay someone on holiday. However this is with reference to the holidays that are enshrined in the European Directive on holidays not the additional 1.6 weeks that were added to the allowance in 2008.

What is not clear is what period you will have to average the pay plus overtime out over to get a weeks’ pay.

I can feel your eyes glazing over as I write this but put simply the problem is this. Everyone in the UK is entitled to 5.6 weeks holiday a year (which is 4 weeks plus the bank holidays). In European legislation you are entitled to 4 weeks holiday.

A number of cases in European courts and in UK tribunals have held that for the 4 weeks holiday enshrined in European law, workers should receive a normal weeks pay. What the EAT has done is apply the definition of a normal weeks pay to include contractual overtime (commission payments have already been included in a previous case).

Hence for the 4 weeks holiday a year that is enshrined in European law, people who work contractual overtime will have to have that taken into account when being paid holiday pay. The remaining 1.6 weeks holiday are just paid on basic pay (at the moment….).

What is also not clear is how the courts will define genuinely voluntary overtime or if they will decide to just include all overtime even if there is no obligation to work it.

The little ray of good news in all of this is that the courts have restricted the backdated claims to the last three months.

The problem is that the number of grey areas is still high, so expect more litigation. Also in a move which strikes fear in the heart of anyone who craves clarity, the government has decided to set up a task force to decide what to do!

If you currently pay staff overtime give us a call and we will be happy to advise you on the best course of action for dealing with this decision.

On a purely personal note it is not surprising that the unions and workers organisations have sought to get a ruling like this, even if it does cause problems for decent employers who have sought to comply with the working time regulations. The reason for that is that a number of larger employers followed legal advice that told them they could reduce their holiday pay bill by putting workers on short hours and make up the time with overtime. Yet another “cunning plan” that turned out to be not so cunning in the long run!

“I know lets write a policy about that and put it in the staff handbook then when it happens again we will know what to do”

As part of our service we review our client’s employment documents. Most of the time they don’t have much and we have to create statements of main terms and conditions so that they comply with the Employment Rights Act 1996. However occasionally we are asked to look at a handbook that someone has written for them.

In my view the main problem with these documents is that the person writing them is not clear exactly what they are meant to achieve. They seem to include the following:

i)                    Some vague high minded purpose as to the values of the company (often from a template so any resemblance between the statement and the company is purely accidental!).

ii)                   A series of longwinded policies that reiterate statutory rules (such as a policy on flexible working I saw that was out of date when I read it because the law had changed).

iii)                 A set of guidelines for managers (for example a document setting out how to handle a disciplinary hearing which included an instruction to managers to seek legal advice before talking any disciplinary action.  This had become a contractual obligation to the employee by virtue of its inclusion in the handbook. I think it was written by a solicitor).

iv)                 Some helpful advice to employees about how to go about things such as booking holidays and requesting time off for ante natal appointments.

v)                  Lengthy and very worthy policies on such issues as bullying and equality that go into incredible detail about the principles involved but neglect to mention that discrimination is bad and bullying is not allowed. In addition they list a highly prescriptive set of actions that management will take and thus remove the ability of managers to take the most appropriate action in the circumstances.

The problem with all these policies is that they detract from the useful stuff that is in the there.

These handbooks often run into 40 or 50 pages (although in one instance I saw one that was 150 pages long for an organisation with 25 staff), and are almost universally ignored by the workforce until something goes wrong. At which point they become an excellent tool to stop management doing anything because the rules are so complicated.

So if you want to have a handbook just follow some simple rules:

i)                    Only include stuff that the employee needs to know.

Such as guidance on how they should behave towards their employer, how they should behave towards their fellow employees, and how they should behave towards your customers or clients and what will happen if they ignore that guidance.

ii)                   Do not try to reiterate statutory rules.

That way you don’t have to update it every time some politician has a “bright” idea

iii)                 Don’t automatically introduce new policies on how to deal with situations as they arise.

It’s often better to train your managers to deal with things rather than insist that they follow a set of guidelines that have been written by someone who has never managed staff in their life.

iv)                 Keep it short!

There are a few other consequences of having a lengthy handbook. The longer the document the more likely it is to be internally contradictory and, if it is not kept up to date, it becomes irrelevant. If you have to present it to an employment tribunal you have to explain why some rules are no longer enforced and others are absolutely vital to the organisation (always a fascinating debate with a judge!).

However by far the most dangerous effect of one of these handbooks is that they replace management initiative with a blind reliance on a set of rules without thinking whether they are appropriate in the circumstances.

TUPE. The revised 2006 Regulations and the new 2014 Regulations which came into force on the 31st January 2014.

Sometimes we have no choice other than to get all formal and legal and this is one of those times. The law has changed and you need to know about it so that you will be able to decide whether it applies to you or not. If you think it does, then get some advice because it is a complex area which we are happy to help you with. There are massive text books on this subject alone so we can’t possibly cover it all in a short article but we have tried to outline what the law says, how it has changed and what to look out for so that you know what questions to ask.

Some of you will have heard about TUPE and had experience of it, but for those who haven’t it means ‘Transfer of Undertakings (Protection of Employment)’.

In broad terms the purpose of this legislation is to preserve the continuity and terms and conditions of employment for employees who transfer to a new employer when a ‘relevant transfer’ takes place.

This can happen when a business or undertaking, or part of one, is transferred from one employer to another as a going concern (often known as a ‘business transfer’) and can include situations where 2 companies cease to exist and combine to form a new 3rd company. The identity of the employer must change for this to be deemed a ‘relevant transfer’.

This law also covers situations where work is contracted out or where the contracted work is reassigned to another contractor or is brought back ‘in house’. This is called a ‘Service Provision Change’.

These 2 categories are not mutually exclusive. It often happens that a transfer is both a ‘business transfer’ and a ‘service provision change’, particularly when work is being outsourced.

For TUPE to apply the activities carried out before and after the transfer must be more or less the same and must be carried out by an ‘organised grouping of employees situated in Great Britain which has as its principle purpose the carrying out of the activities concerned on behalf of the client’. That grouping may be a small as 1 person employed by a contractor, as is often the case with cleaning small business premises.

Unfortunately there are a lot of grey areas in this legislation which means that some of the terms used in it do not have a clear definition and can only be decided by a Judge. The new law hasn’t really helped with that I’m afraid and in fact, not that much has changed in practice as most of what

is now included in the legislation was happening anyway because case law had padded out what was a very brief piece of legislation when it was first introduced.

So what has changed?

It has been clarified that where a Service Provision Change has taken place, the activities carried out before and after the change must be fundamentally the same. So, for example, if you tender for a contract that used to provide cleaning services to a block of offices, TUPE will only apply if you are contracted to provide cleaning services. You will then have to follow the procedures laid down to take on the staff and maintain their terms and conditions of employment.

It has always been the case that you could not make changes to employees’ contracts, or dismiss anyone who has TUPE’d in to you if your reasons are related to the transfer of undertaking. This has been clarified a little and now says that contracts cannot be changed if the changes are solely or principally because of the transfer. However, you can still make changes where the sole or principal reason for the change is an economical, technical or organisational reason entailing changes in the workforce. Let’s say you make a particular type of door and your main competition is in the same county and they offer to sell their business to you because it’s not their core product. You have up to date computer controlled equipment and they don’t so their process has required more staff to make fewer doors than yours does and you don’t need their staff and yours to double production. So you have to take on all their staff but you can then look at making some of the now joint workforce redundant for technical (more advanced production methods), economical (economies of scale) and organisational ( you don’t need as many people in some jobs, some jobs don’t need to be done and there are new roles too) reasons. What you can’t do is only select those who have transferred to you or that would be solely or principally because of the transfer and as such, unlawful. Remember you still need to follow a fair and legally compliant redundancy process. Changes which seek to align terms and conditions between existing staff and transferred staff would be unlawful as they are solely because of the transfer.

It may be that the transferred staff need to move to their new employers premises to continue working and so the law now says that a change to the location of the work is now covered by the phrase ‘entailing changes in the workforce’ and can be done without anyone saying it is solely because of the transfer. Of course, staff can choose not to transfer and if they do so they will be deemed to have resigned. However, if the change of location is major and makes it too difficult or expensive for an employee to transfer then they may claim constructive dismissal and if the tribunal deem that the changes constituted a ‘substantial change in working conditions’ and the employer is found to have acted unreasonably, they may win.

If more than a year has passed since the transfer and the employer needs to vary terms of the contracts of employment that were incorporated from collective agreements they can do so as long as the employees are no worse off overall.

There is a new provision that in some circumstances, rights to terms and conditions provided for in collective agreements which were entered into after the date of the transfer do not transfer. This is so that preferential changes to contracts which would have to be honoured by the new employer cannot be made to give the transferring staff an advantage that they would not have had but for the transfer. I have seen additional holiday added in, company sick pay provisions, pay rises etc. Such changes do not normally have to be matched by the new employer.

If you are what the legislation terms a ‘micro business’ with 10 or less employees you will not have to elect representatives to carry out your statutory duty to ‘inform and consult’ the staff who will be affected by the transfer but can do so directly by treating each employee as a representative for themselves. This duty to inform and consult involves making sure everyone knows what is happening ,and when, as soon as you know, along with any measures you expect the new employer to take including possible redundancies.

There is a legal requirement for the existing employer (the transferor) to provide the new employer (the transferee) with relevant information about the business and its staff. This is commonly known as NELI which stands for Notification of Employee Liability Information and includes all the details of the contracts of employment, employees details, any collective agreements, records of disciplinary action taken and grievances raised, details of any legal action taken by an employee in the 2 years prior to the transfer and any legal action that the transferor believes may subsequently arise. The deadline for providing this to the transferee used to be 14 days before the actual transfer but has now been increased to 28 days. This will give the transferee more time to check the data provided and have a better understanding of what they will be taking on should they proceed with the planned transaction. If the transferor fails to comply with this requirement and does not provide the information the transferee can take them to a Tribunal and may be awarded compensation of at least £500 per employee unless the Tribunal thinks this would be unjust if, for example, an honest mistake had been made rather than deliberately withholding information.

There has been an amendment made to the Trade Union and Labour Relations ( Consolidation) Act 1992 so that a transferee can start to consult on proposed collective redundancies (applicable where there are 20 or more staff) before the transfer takes place. The transferor must agree to this happening.

 OTHER THINGS TO BE AWARE OF.

If you are tendering for a contract with the public sector the rules are much the same but be aware that there is separate specific guidance for transfers of admin functions and what to do about pension provision. We can point you to the appropriate Government documents.

It is usual for the transferee to ask for the contract to contain an indemnity to protect them from any losses which would otherwise have been incurred by any wrongdoing by the transferor such as breaches of contract or employment law.

The transferee must make sure they know in advance what their liability relating to pension provision will be as if the transferred employees already have a pension scheme then the transferee will also have to provide one and may have to match some of the provisions including the previous employers’ contributions in some circumstances. This can be a substantial cost and can affect the profitability of a new contract so make sure you look into this well in advance. If the transferee has already had to comply with auto enrolment then the new employees will also have to be enrolled when they transfer.

If the transferor is insolvent there are separate arrangements to assist a new owner who tries to rescue the business which, depending on the circumstances, may mean that not all the debts transfer and some changes to terms and conditions may be allowed if this will keep the business afloat.

CONCLUSION

Well I did warn you! I could go on-and on and on and on but that’s probably enough to be going on with. If you have any questions just give us a call.

Zero Hours Contracts

These have become a big issue recently, but it has never been clear exactly why they are so popular. In truth it is far from clear that they provide anything like the protections for employers that are claimed.

Firstly if you regularly provide work for an individual over a period of time, a court may decide that they no longer have a zero hour’s contract.

Secondly, when you calculate holiday entitlement you have to take into account all hours worked (adding at least 12.07% to your wage bill) whereas you don’t include overtime when dong the calculation for a fixed contract.

Thirdly, it is difficult to ensure you workforce is available at all times thus increasing the admin costs of running your business.

I’m not sure where the whole idea of these contracts came from but I suspect it was somebody trying to sell a new idea to capitalise on the success they had with the emperors new clothes. The truth is an employer who wants to exploit their workforce in this particular way will do so, and accept the consequences of that decision whether you ban zero h0urs contracts or not.

The other problem people seem to forget (perhaps deliberately), is that as soon as something is regulated or banned it rarely helps resolve the issue it just makes more opportunities for lawyers and consultants to get involved

If you have any queries about any of the Employment contracts in your business we will do a free health-check for you, just send a copy of one of your contracts to us at info@khes.co.uk.