Whistleblowers to get better protection from harassment and bullying from co-workers

whistle

The protections available to whistleblowers are to be strengthened further, the Government has announced.

A proposed amendment to the Enterprise and Regulatory Reform Bill will mean that individuals who expose wrongdoings by their employer will have protection from bullying or harassment by their co-workers, as well as by their employer as the law now stands.

This protection, known as ‘vicarious liability’, mirrors provisions that already exist in equality legislation.

The amendment will introduce a provision which treats detrimental acts of one co-worker towards another who has made a complaint as being done by the employer, and therefore makes the employer responsible.

It will also provide a defence for an employer who is able to show that they took all reasonable steps to prevent the detrimental treatment by a co-worker towards another who blew the whistle.

Employment relations minister Jo Swinson said: “The protection offered by whistleblowing legislation is strong, but there are always ways to improve it.

“This amendment takes into account recent events and will place whistleblowers, who are making a difficult decision, in a better position.

“They will now have a specific employment protection in place and be able to have the full force of a tribunal behind them if they suffer any detriment, bullying or harassment from a co-worker.

She added: “The change will not impact on good employers who see that it as their responsibility to make sure their staff have a good working environment.”

Streamlined dismissal proposals raise serious questions for employers

maeve-vickery-ela-and-pardoes

As part of the review of employment law aimed at creating more flexibility for employers and employees – as well as an environment where enterprise can thrive – the Government has set out proposals, following its consultation around ending the employment relationship, which closed in late November.

The main proposal is to include in the Enterprise and Regulatory Reform Bill a provision that would allow employers and employees to hold settlement discussions without fear that these could be then used against them in the tribunal. The idea is that this would make it easier and quicker for parties to sort out situations where the employment relationship is not working out. This is different from the “without prejudice” rule, where there must be a pre-existing dispute and the discussions are a genuine attempt to settle the dispute, in which case the discussions and associated correspondence cannot be put before a court or tribunal.

The new statutory regime does not require a pre-existing dispute and only applies to potential claims for unfair dismissal – not, for example, discrimination or whistleblowing; and the protection is lost if the behaviour of either party in the discussions is “improper”. The intention is that conciliation service ACAS would produce a Statutory Code of Practice on conducting the settlement discussions in line with the new legislation and what might be considered “improper”, such as discriminatory behaviour or undue pressure to accept. There are concerns that the vagueness of the concept of ‘impropriety’ will lead to uncertainty on the part of employers about the usefulness of the procedure. Also, the fact that it only creates protection in unfair dismissal is a considerable limitation, as many employment disputes consist of a bundle of different legal claims.

While this regime is likely to help employers, in that they can enter these sorts of discussions without already being in a dispute – a requirement that has caught many employers out in the past and has meant that tackling these issues too early has left them facing a constructive dismissal claim – employers will need to be cautious in how they approach the new law.

As it only applies to unfair dismissal claims, it can only be useful in the most basic scenarios, not when there could be, for example, ill-health issues which may relate to a disability under the Equality Act 2010 affecting performance or other discrimination issue, which may be at the bottom of an individual not getting on with their manager or not “fitting in”.

Employer and employee groups have also raised concerns that this will be seen as a passport to poor performance management, as employers may not be concerned to manage situations in a way consistent with good practice if they believe they have a safe mechanism which can circumvent the need for proper performance management. This could have a damaging effect on the very businesses the change to the law is intending to assist.

Another proposal is to have formula or guideline tariffs for settlement agreements, to avoid employees having unrealistic expectations about what sort of settlement sum they might expect and to give employers an idea of where to pitch any offer. A formula would create problems in practice as it may be seen as a starting point for negotiations and lead to employers paying more to achieve settlements than they do now.

The alternative suggestion for a list of issues, which both sides can take into account, is more workable, although the factors should not be overly complicated. Proposed factors include “the perceived strength of any potential claim” and “the individual’s perception of how long it will take to get another job”. Both are areas where the employer and employee may not see eye to eye.

The Statutory Code is expected by Government to resolve the uncertainty surrounding the current proposals. But it is unlikely that any code will cure the inherent lack of clarity about the concept of ‘improper’ conduct, which may take the courts several years to explain fully. The Employment Lawyers Association is one of the stakeholders speaking to ACAS about the content of the proposed Code.

Overall, this may be a worthy attempt to ease the burden on employers, but the draft law requires considerable tweaking if it is to be fit for purpose.

The above piece is written by Maeve Vickery (pictured) who jointly chaired the Employment Lawyers Association (ELA) working party, which responded to the BIS consultation on “Ending the Employment Relationship”. She is a partner and head of commercial and employment at Pardoes Solicitors. This article is published here courtesy of HR magazine.

 

Government plans allowing employers to offer ‘settlement agreements’ before formal tribunal disputes, welcomed by CIPD

mergers and acquisitions

The Government has unveiled plans for “greater business flexibility and quicker resolution for workplace disputes”.

In his opening speech at the second reading of the Enterprise and Regulatory Reform Bill, the business secretary Vince Cable set out the Government’s plans to introduce a measure to boost business confidence and ease the handling of workplace disputes through facilitating the use of settlement agreements between employers and employees.

Under these measures, employers will be able to offer settlement agreements before a formal dispute arises and will be legally protected from this offer being used as evidence in an unfair dismissal tribunal case. Employees will also continue to enjoy full protection of their employment rights, as they can choose to reject the offer of a settlement agreement and proceed to a tribunal.

According to the Department of Business Innovation and Skills (BIS) evidence from the private sector shows that a sensible compromise can be reached in the majority of cases.

Cable said: “This Bill is an important part of this Government’s plan for long-term growth: fostering enterprise, supporting business and creating jobs.

“Settlement agreements are smart, fair and pro-business reforms, which deliver results for employees and employers. It empowers employers by enabling them to keep their workforce flexible and encouraging alternative ways of solving workplace problems rather than resorting to a tribunal. But crucially it does so in a way that keeps the necessary protections for employees in place.

“Our proposed measures and guidance will achieve this objective. Making this approach simple to use will encourage employers to take on staff in the knowledge this there is an effective mechanism for dealing with serious problems if they occur.

“We have spent time ensuring we have got this measure right and I truly believe this a smart confidence boosting measure for business.”

Employment relations minister Norman Lamb added: “There are inevitably occasions when the employment relationship doesn’t work out. Employers have to feel confident in dealing with situations such as where an employee isn’t pulling their weight or where someone is unreliable or even guilty of misconduct.

“In these instances it is sometimes in the best interests of both employee and employer to end the relationship speedily by reaching a settlement. An employee leaving by agreement can do so with their dignity intact. The employer secures peace of mind knowing that they will not face expensive tribunal proceedings.

“We know that many large companies use settlement agreements in this type of situation but we want to ensure that all employers – large and small – can make use of them without incurring large legal fees.”

The Government wants to encourage greater use of settlement agreements and make it easier and quicker for employers – including SMEs – and employees to end the employment relationship by mutual agreement in a way that protects workers rights but helps businesses remain flexible.

The agreements are currently available for employers in some circumstances. However, Government wants to encourage more businesses to use them, including before they have reached the stage of a formal dispute. By making settlement offers and discussions inadmissible in unfair dismissal claims, businesses can be more confident that they will not be used against them at a tribunal.

The offer could be in the form of a letter to the employee and include detail on what kind of payment could be expected while employees can still choose whether to accept the offer. Settlement agreements should not replace proper performance management but there are occasions when both parties recognise that it makes sense to end the employment relationship. If an employee does not accept then the employer will still need to follow a fair process before finally deciding to dismiss the employee.

But according to the CIPD, the Government’s proposal merits careful consideration, and is a “definite improvement on the blunt weapon of compensated no-fault dismissal proposed by Adrian Beecroft”.

But as the Government publishes further details of what it is proposing and how it will work in practice, the CIPD says it is imperative that it is made clear that settlement agreements should be used to encourage better and more consistent performance management by employers, not as a substitute for it.

Mike Emmott, employee relations adviser at the CIPD, said: “The principle that employers should be able to manage the performance of their employees effectively, without fearing expensive and time consuming tribunals, is a good one. The reality that employment relationships sometimes don’t work out, and that compromise agreements can be used as a quick, face-saving way out for employees and employers is also recognised. However, an employer’s first point of call shouldn’t be to stick a compromise agreement on the table and show staff the door if an employee’s ‘face doesn’t fit’. This can only have a corrosive effect on employee engagement at an individual firm level, and job security and its hand-in-hand relationship with consumer confidence at a macroeconomic level. Perhaps most importantly, there is a law of basic common decency that says employers shouldn’t show employees that door for no good reason – undermining this risks undermining mutual trust and confidence in the workplace with catastrophic consequences for organisational performance and competitiveness.

“It is important that, in promoting these new proposals, the government exercises its duty of care to employers in not overselling or oversimplifying what it is doing here. Employers need to understand that settlement agreements tabled in the context of without prejudice conversations will do nothing to protect them from discrimination or constructive dismissal claims if they act improperly.

“The government also needs to take extreme care to avoid the potential for a truly epic example of the law of unintended consequences. While the proposal is intended to cut red-tape and make life easier for employers, without very careful drafting there is a very real potential for the creation of complex disputes and legal arguments about whether any given conversation or settlement agreement falls within the new regulation. This could create far more disputes and red-tape than the proposal is intended to cut through.

“In the final analysis, though, the simple message for employers is that, with or without ‘settlement agreements’ there is no substitute for good management and proper performance management. Get that right, and there is no reason under the existing law why you can’t remove underperforming employees and replace them with the ones you need to drive your business forward”. The new clauses will be tabled in the forthcoming Committee stage. A consultation will be published in the summer on the principles of guidance for using settlement agreements, including draft letters and model templates for employers and employees to use. We want to make it as easy as possible for small employers to use fast settlement agreements without always having to resort to legal advice. Published on 23 May 2012, the Bill contains measures improving the employment tribunal system, setting up the new Competition and Markets Authority, enshrining the green purpose of the UK Green Investment Bank, on directors’ pay and other measures aimed at helping long term growth. The Bill continues its passage through Parliament.

of law-abiding employers.”

Last year Citizens Advice Bureaux in England and Wales helped with 523,500 employment problems.

 

The government’s proposal on ‘Settlement Agreements’ merits careful consideration, and is a definite improvement on the blunt weapon of compensated no-fault dismissal proposed by Adrian Beecroft, according to the Chartered Institute of Personnel and Development (CIPD).

However, as the government publishes further details of what they are proposing and how it will work in practice, the CIPD says it is imperative that it is made clear that settlement agreements should be used to encourage better and more consistent performance management by employers, not as a substitute for it.

Mike Emmott, Employee Relations Adviser at the CIPD, said: “The principle that employers should be able to manage the performance of their employees effectively, without fearing expensive and time consuming tribunals, is a good one. The reality that employment relationships sometimes don’t work out, and that compromise agreements can be used as a quick, face-saving way out for employees and employers is also recognised. However, an employer’s first point of call shouldn’t be to stick a compromise agreement on the table and show staff the door if an employee’s ‘face doesn’t fit’. This can only have a corrosive effect on employee engagement at an individual firm level, and job security and its hand-in-hand relationship with consumer confidence at a macroeconomic level. Perhaps most importantly, there is a law of basic common decency that says employers shouldn’t show employees that door for no good reason – undermining this risks undermining mutual trust and confidence in the workplace with catastrophic consequences for organisational performance and competitiveness.

“It is important that, in promoting these new proposals, the government exercises its duty of care to employers in not overselling or oversimplifying what it is doing here. Employers need to understand that settlement agreements tabled in the context of without prejudice conversations will do nothing to protect them from discrimination or constructive dismissal claims if they act improperly.

“The government also needs to take extreme care to avoid the potential for a truly epic example of the law of unintended consequences. While the proposal is intended to cut red-tape and make life easier for employers, without very careful drafting there is a very real potential for the creation of complex disputes and legal arguments about whether any given conversation or settlement agreement falls within the new regulation. This could create far more disputes and red-tape than the proposal is intended to cut through.

“In the final analysis, though, the simple message for employers is that, with or without ‘settlement agreements’ there is no substitute for good management and proper performance management. Get that right, and there is no reason under the existing law why you can’t remove underperforming employees and replace them with the ones you need to drive your business forward”.

Employment Tribunal Reform: The Enterprise and Regulatory Reform Bill

In the midst of the recent controversy surrounding the now infamous Beecroft report, Business Secretary Vince Cable has presented the Enterprise and Regulatory Reform Bill to Parliament.

The Bill aims to introduce legislation that will, amongst other things, apparently improve the Employment Tribunal system by encouraging parties to settle their disputes before initiating an Employment Tribunal claim. The Bill also aims to make the determination of less complex disputes quicker and cheaper for employers and employees alike, through a new “Rapid Resolution” scheme. Subject to the will of Parliament, these objectives will be achieved by:

• introducing a mandatory period of Acas conciliation before Tribunal proceedings can be initiated;
• extending the limitation periods within which claims can be brought, so that pre-issue Acas conciliation can take place;
• affording the Secretary of State the power to cap unfair dismissal compensatory awards to a maximum between the national median earnings and three times the national median earnings or, in the alternative, to limit awards to one year’s earnings;
• allowing Employment Tribunals to impose a penalty on employers of 50% of any financial award where there are aggravating features; and
• permitting Employment Appeal Tribunal cases to be heard by one Judge alone, unless ordered otherwise.

The Bill also provides for the renaming of “compromise agreements” (to become “settlement agreements”), and the limitation of the definition of “qualifying disclosure” in the context of whistleblowing legislation so that disclosures are not protected unless believed to be made in the public interest. At a guess, this could rule out an employee seeking protection as a “whistleblower” if her only protected disclosure has been to say her employer is in breach of its legal obligations to her.

Following recent heated exchanges during Prime Minister’s Questions (during which Labour leader Ed Miliband condemned Prime Minister David Cameron’s alleged backing of the Beecroft report’s proposal for “no-fault dismissal”), the Coalition Government will no doubt hope that the Bill will quieten the criticism it has faced in recent weeks following accusations of “doctored” reports, perceived in-fighting and controversial proposals in respect of employment law reform.

Whistleblowing Partners

An LLP equity partner can be a worker and have protection in a whistleblowing situation, held the Employment Appeal Tribunal (EAT) in the case of Bates van Winkelhof v. Clyde & Co LLP and Morris.

The Claimant made a report to Clyde & Co’s money laundering officers that someone with whom she worked under a joint venture arrangement in Tanzania had admitted to her that he paid bribes to secure work and to secure the outcome of cases. This allegation was denied by Clyde & Co, but formed the basis of the Claimant’s whistleblowing claim.

When the Claimant was expelled from the partnership, she alleged that it was a detriment on the grounds she had made protected disclosures. She also alleged that the expulsion amounted to sex discrimination on the basis that a male partner would not have been treated in that way and/or it was pregnancy-related as she had recently informed the firm that she was pregnant. The partnership denied her claims.

Sex discrimination legislation expressly extends to partners, but to bring a whistleblowing claim the Claimant needed to have employee or worker status. She accepted that she was not an employee, but was she a worker?

The EAT said that she was a worker as defined under the Employment Rights Act 1996. Therefore, she could claim protection against suffering a detriment if she had genuinely blown the whistle and was expelled because of it. A Tribunal will now have to consider whether her various claims are well-founded.

Ms Bates van Winkelhof was not a full equity partner. Although she enjoyed a profit-related element in her pay, she was also guaranteed a certain level of remuneration. It is not clear whether a full equity partner would also be classed as a worker. It is also unclear what level of compensation she will receive for her detriment claim.

Partnerships should bear in mind the increased risk of whistleblowing claims from their partners and relevant policies and decisions should take this risk into account. They should also note that worker status is a passport to other protections, such as the right not to suffer unlawful deductions from wages, working time rights and the right to be accompanied at certain meetings.

This e-bulletin has been drafted on ESP’s behalf by Manches LLP Solicitors. Manches LLP are one of ESP’s strategic legal advisory partners and provide certain services to our clients through a range of different Legal and HR support services offered by ourselves to the Corporate market.

The content of this article does not constitute legal advice and it should not be relied upon. Specific legal advice may be required to address your specific circumstance.

 

Queen’s Speech 2012 analysis: Employers and staff will have to go through conciliation before tribunals, to reduce legislative burden

The enterprise bill, confirmed yesterday in the Queen’s Speech, will encourage employers and employees to go through conciliation rather than legal tribunals as part of Government attempts to reduce complexity and burden in employment law.

Vanessa Hogan, senior associate at law firm Hogan Lovells, said: “There were no real surprises for employers in the Queen’s Speech. As confirmed in the Resolving Workplace Disputes consultation, in future employees will be required to engage in ‘pre-claim conciliation’ to try and reduce the number of cases going to the employment tribunal.

“Employers will welcome this if it succeeds. But it remains to be seen if pre-claim conciliation is any more successful than the repealed statutory dispute resolution procedures that had the same objective.

“The Speech also contained confirmation that the Government intends to press ahead with a more flexible system of parental leave to allow parents to balance their work and family commitments. However, it is still unclear what form this system will take. Although the Government response to the Modern Workplaces consultation was originally due last year, the response has still not been published.”