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It’s not unusual to find employers making decisions based on an understanding of the law that is centred on a series of urban myths. The problem is that when employees make mistakes in the workplace, their employer usually has a set way of dealing with them to protect the business. But when the employer makes the mistake, it can lead to costly and long-running litigation, loss of management time and bad publicity.
With the law being a quagmire ready to trap all who dare to ignore it, Adam Bernstein sought advice from two lawyers for their views on the most frequent mistakes and how employers can reduce the chance of an employment dispute. In part one he spoke to Lucy Gordon, director of Walker Morris LLP.
Top of the list is the concept that an employee can be dismissed with less than two years’ service and without following a process or giving a reason.
Ms Gordon considers it “understandable that many believe employees are required to have two years’ service to bring a claim for unfair dismissal. However, having less service doesn’t mean you can dismiss with impunity”.
As she explains: “Employees with any length of service can bring claims for discrimination on the grounds of a protected characteristic,” such as race or sex, or for unfair dismissal.
To mitigate risk, she advises clients to undertake risk assessments before carrying out dismissals, “otherwise they can face claims for potentially uncapped compensation, depending on the employee’s losses and injury to feelings”. Employers should follow the Advisory, Conciliation and Arbitration Service Code of Practice, and clearly identify a fair reason for every dismissal.
Next is the notion that if an employee doesn’t expressly tell his or her employer that he or she has a disability, his or her employer can’t be found to have discriminated against him or her.
Some believe that what they don’t know won’t hurt them. Employers who think that if they have not been told about an employee’s disability and don’t need to consider whether they need to make reasonable adjustments, or worry about a disability-related dismissal claim, should think again.
The reality, according to Ms Gordon, is that “employers are expected to look out for signs that could indicate that someone has a disability, and to make reasonable enquiries about an employee’s health”.
The legal test is, simply, whether an employer knew – or could reasonably be expected to know – that the employee had a disability.
Ms Gordon noted that frequent or long-term sickness absence, a change in mood or performance, or consistently making errors are all indicators of health conditions that could amount to a disability.
As a result, “employers,” she said, “should be alert and sensitively make enquiries with employees to see if there are any underlying issues”.
Where an employee is disabled, employers have a positive duty to consider whether reasonable adjustments are required.
Failures relating to disability can be very costly as claims for compensation are potentially uncapped.
Third on the list is the view that after a transfer under the Transfer of Undertakings (Protection of Employment) regulations, employers have to wait two years before they can harmonise terms and conditions of employment. This is incorrect, says Ms Gordon.
She said: “This myth seems to stem from a mistaken belief that after two years, the transfer will not be considered the reason for changes because of the passage of time.
“The truth is that any variations to contractual terms are void if the transfer itself is the reason for the change. This can have important consequences for employers.”
In outline, if changes are void – even where employees consented to the change – and any less favourable terms were offset with more beneficial provisions, they can cherry‑pick the most favourable to them from the original and new contracts.
To drive the point home, Ms Gordon talked of employers that have sought to buy out, say, more generous holiday entitlement with a small increase to salary – “they’ve often ended up paying for both benefits”.
The answer in her mind is to only make changes – with employee consent – where the reason for the change is related to the transfer, but “the sole or principal reason for the change is economic, technical or organisational”.
Number four on Ms Gordon’s list is sadly appropriate for the moment – the idea that employers will trigger collective consultation obligations if they propose 20 or more redundancies at one establishment within a 90‑day period, regardless of when those dismissals take effect.
She said: “It’s logical that employers are nervous about triggering collective consultation obligations, and it’s because of the requirement to consult with a trade union or elected employee representatives, and the potential consequences of getting it wrong.”
Her reasoning is sound – failure to carry out collective consultation properly can result in claims of up to 90 days’ gross pay for each affected employee.
In a nutshell, Ms Gordon dismissed the myth by saying the requirement to engage in collective consultation only applies if the 20 or more dismissals at one establishment are proposed to take effect within a 90-day period.
She added: “Dismissals take effect when the employment contract comes to an end – so either at the end of the notice period or on the termination date if the employee is paid in lieu of notice.”
But she pointed to one saving grace – if some affected employees are on notice periods of a month, but others have, for example, six months’ notice, fewer than 20 redundancies are proposed to take effect within a 90-day period. The obligation won’t be triggered.
The final myth Ms Gordon busts is the thought no need exists to follow a process or give a reason when not renewing a fixed-term contract.
She said: “Most fixed-term contracts provide that they will terminate automatically on a set date, or on conclusion of a project, without the need for further notice to the employee.
“Many employers assume they can let these contracts expire without the need to follow any process or give any reason to the employee.”
However, she warned the non-renewal of a fixed‑term contract amounts to a dismissal. Therefore, if the employee has two or more years’ service, or if the reason for the non‑renewal is discriminatory, “the employee may be able to bring a claim for compensation if there isn’t a fair reason for the dismissal and a fair process was not followed”.
To prevent claims, Ms Gordon suggested employers give thought as to why the contract is not being renewed: “If the role has ceased there is likely to be a redundancy situation.
“Equally, if the contract is cover for maternity or sickness absence, it is possible to include wording in the contract that confirms that the contract will come to an end when the original employee returns.”
- This article first appeared in Vet Times (Volume 51, Issue 16, Pages 18-20)