Representation at disciplinary hearings – employers beware

The High Court has decided that a failure to allow an employee to be accompanied by a representative of his choice, even though the employer complied with the statutory minimum requirements, was a breach of the duty of trust and confidence.

What has happened?

In this case, Dr Stevens was an academic at Birmingham University. He faced disciplinary allegations regarding his conduct in connection with some clinical trials into diabetes.

Dr Stevens was permitted under his contract of employment to representation at the disciplinary hearing by a trade union or work colleague. This complies with the legal requirements under section 10 of the Employment Relations Act 1999.

However, Dr Stevens was not a member of a trade union and could not find a suitable work colleague to accompany him. He wanted to use a Dr Palmer as his representative, who was employed by the Medical Protection Society who had been advising him since the allegations had first been made.

The university refused, Dr Stevens therefore applied to the High Court for a declaration this was a breach of the implied duty of trust and confidence that underpins every contract of employment.

What did the court say?

Dr Stevens succeeded. The High Court decided, given the seriousness of the charges and the inequality of bargaining power and that the fact the Medical Protection Society performed functions similar to a union he was entitled to the declaration.

What does this mean for employers?

This ruling does not mean that an employee can come to a hearing with a solicitor but it may mean that they could choose, for example, an experienced HR consultant if the employee is not a member of a union and cannot find a suitable work colleague, especially if dismissal is a realistic possibility if an allegation is proven.

Of more concern is that a breach of the duty of trust and confidence entitles the employee to resign and claim constructive dismissal. Employers now would be wise to consider very carefully requests made by employees for people to accompany them who fall outside the statutory requirements.

This article has been drafted on HR Legal Service’s behalf by Ward Hadaway Law Firm. Ward Hadaway Law Firm is one of HR Legal Service’s strategic legal advisory partners and provides certain services to our customers 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.

Female managers ‘work unpaid’ for 1 hour 40 minutes per day

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Female managers are effectively working for free nearly two hours every day, according to research from the Chartered Management Institute (CMI).

The 2015 National Management Salary Survey found that women earn 22% less than men working in equivalent full-time roles, meaning that they effectively work unpaid for 1 hour 40 minutes every day.

The report found the gender pay gap to be £8,524 for men and women in professional roles, with men earning an average of £39,136 and women making £30,612. This is a smaller gap than in 2014 when the pay difference stood at £9,069.

The pay gap rises to £14,943 for senior- or director-level staff, with men earning an average of £138,699 compared to the average for women of £123,756. Female managers were also awarded less when it came to bonuses; with the average man’s bonus (£4,898) almost double that of the average woman’s (£2,531).

The CMI’s report found that women comprise 67% of the workforce in entry-level roles, and outnumber men in junior management positions, compared with 43% representation at senior management level.

Stefan Martin, employment partner at Mayer Brown, said new regulations may help provide greater transparency around potential pay gaps. “The report is further evidence that the gender pay gap and the under-representation of women in senior roles remain real issues for employers,” he said. “The recently announced regulations that will require gender pay gap reporting by all businesses with more than 250 employees will highlight those with large pay gaps.

“Many employers already carry out internal equal pay audits and many more are now turning their minds to doing this, with a view to determining the extent of any gender pay gap issue.”

Lynn White, director of WDI Consulting told HR magazine that the CMI findings are disappointing. “The reduction in the pay gap for professional roles is a shift in the right direction, but that’s the only good news,” she said. “The increasing pay differential for senior- and director-level staff is very disappointing and will be uncomfortable for some organisations to explain. However, it may also be affected by the lack of women in senior roles, which is an ongoing issue for so many firms.

“The root causes of why such differentials exist need to be explored but will likely include elements of unconscious cultural and workplace bias,” White added. “The differential in the bonus awards between the genders is hugely symbolic, and points to a complex array of underlying factors that organisations need to be willing to explore if they truly want to evolve towards more inclusive cultures and reap the associated business benefits.

“We know from extensive research that – for a variety of reasons – men are more likely to ask for promotion and salary increases and are more successful at securing them, which may also be influencing the data,” she added.

Are your employees seizing their last chance to cheat?

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Do you scrutinise contractor invoices more closely toward the end of a contract? Do you ask your accounts department to pay more attention to those last expense claims inching in before the financial year end? New evidence suggests that maybe you should.

People often face multiple opportunities to cheat undetected for financial gain. For example, a series of invoices provides several chances to overbill, and a series of expense reports provides several chances to over claim reimbursable expenses. Earlier research studies show that, when facing such opportunities for dishonesty, most people will cheat a little bit, but not as much as they could get away with.

What this earlier research did not address, however, was whether people commit their little bit of cheating at predictable time points. I recently investigated this question with fellow researchers Christopher Bryan at the Booth School of Business and J. Keith Murnighan at the Kellogg School of Management.

We theorised that people are more likely to cheat when their window of opportunity is about to close. Faced with several opportunities to enrich themselves dishonestly with no chance of getting caught, people may be more likely to cheat on the last opportunity – a “cheat-at-the-end effect.”

To test this idea, we conducted several experiments that presented more than 2,500 participants with more than 25,000 chances to cheat, undetected, for money.

The results showed that the odds of cheating were indeed higher when people knew that it was their last chance to cheat, compared to when they thought they had more chances left. The data also suggested that people cheat at the end because they want to avoid feeling regret about passing up a “last chance” for personal gain.

In one experiment, we hired 327 research assistants to perform several short work tasks over the Internet. The assistants were paid based on how long they claimed to have spent on each task. To determine whether the assistants overbilled for their time, we secretly measured how long each assistant actually spent on each task.

Different participants were assigned different numbers of tasks. The results showed that the assistants overbilled the most for whichever task was last. For example, participants overbilled for their seventh task by 42% more when they knew it was their last one, compared to when they knew that three tasks remained.

These results have important implications for organisations that want to reduce dishonesty but have limited resources to monitor employees. Such resources are perhaps best deployed when dishonesty is most likely: when the end of a contract or the close of a billing period makes people feel like it is their last chance to cheat.

This article is publsihed courtesy of HR magazine and was written by Daniel Effron (pictured), assistant professor of organisational behaviour at London Business School

Redundancy – Best Practice Guide

When an employer dismisses an employee they must do so fairly and reasonably or they are at risk of a costly unfair dismissal claim by the employee (together with other potential claims). In law there are five potentially fair reasons for dismissal, one of which is redundancy.

Definition of Redundancy

The redundancy situation must exist on its facts.  The definition of a redundancy can be found in section 139 of the Employment Rights Act 1996.  The situations that can give rise to a genuine redundancy situation are as follows:

  • The closure of a business.
  • The closure of a place of work where an employee is employed.
  • A ceased or diminishing requirement for an employee 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) – this would cover both economic downturns and business restructurings or re-organisations.

Fair Redundancy

The mere fact that a genuine redundancy situation exists give the “potentially fair” reason for a dismissal but it does not mean that a dismissal for redundancy will be found to be fair in any subsequent Employment Tribunal proceedings. The following important points must be noted:

  • Consider alternatives to redundancy – prior to any redundancy process being carried out an employer should consider alternatives and be able to demonstrate with evidence that these alternatives have been considered and attempted or ruled out i.e. that redundancy was the last resort. Alternatives to redundancy include recruitment freeze, retraining and redeploying staff, reducing or removing paid overtime, introducing flexible working and dispensing with the use of agency workers.
  • Fair and reasonable selection – A redundancy dismissal is likely to be unfair unless an employer considers whether or not it is necessary to identify a pool from which to select employees for redundancy. In situations where a selection pool is required it is important that the selection pool identified is appropriate and that fair and objective selection criteria are applied to those within the pool when selecting for redundancy.
  • Consultation – A necessary ingredient of a fair redundancy dismissal is an adequate and reasonable consultation process with affected employees. The method of consultation depends upon the numbers of employees that the employer proposes to dismiss for redundancy.
  • Individual Consultation – Where an employer is proposing to dismiss less than 20 employees in a period of 90 days or less this will trigger what is known as Individual Consultation. This Individual Consultation method will apply regardless of whether or not there is a need to carry out a selection process but some modifications will be required depending on whether a selection process needs to take place.
  • Collective Consultation – Where an employer is proposing to dismiss 20 or more employees in a period of 90 days or less this will trigger a Statutory Collective Consultation and the employer will have to engage in collective consultation with a recognised trade union or (if no union is recognised) with elected employee representatives. Minimum consultation periods (30 or 45 days depending on number of dismissals proposed) will apply before the expiry of which dismissals cannot take effect.
  • Alternative Vacancies – A dismissal is likely to be unfair if, at the time of dismissal the employer gave insufficient consideration to whether suitable alternative employment existed within the organisation. An employer has a positive duty to make reasonable efforts to seek alternative employment to prevent the redundancy but does not have any obligation to create new roles. Furthermore, if suitable alternative employment is available and is refused by the employee in question then in some circumstances they may lose the right to a statutory redundancy payment.
  • Time Off – An employee given notice of termination on the ground of redundancy may be entitled to reasonable time off during the notice period to look for other work or make arrangements for training for future employment. What is ‘reasonable’ is largely a matter of common sense. The time off should be paid by the employer at the appropriate hourly rate based on their weekly pay. The right is dependent upon the employee having two years’ continuous service at the date upon which the dismissal notice is due to expire.

Redundancy Pay

A dismissed employee will be entitled to a statutory redundancy payment and may be entitled to a contractual enhanced redundancy payment depending on the terms of their contract and in some instances custom and practice of their employer.

The conditions for a statutory redundancy payment are:

  • The individual must be an employee.
  • The employee must have at least two years continuous employment at the relevant date.
  • The employee must have been dismissed.
  • The dismissal must be by reason of genuine redundancy.

The amount the employee receives as their statutory redundancy payment is dependent upon their age, length of service and gross weekly wage (subject to a statutory cap which normally changes annually, as of April 2015 this is £475). The amount payable is based on the following method of calculation:

  • 1½ week’s pay for each complete year of employment during which the employee was aged 41 or over.
  • 1 week’s pay for each complete year of employment during which the employee was aged 22-40 inclusive.
  • ½ week’s pay for each complete year of employment in which the employee was aged 21 or under.

Calculation is made by working backwards from the effective date of termination to take into account, first, those years of service which provide the greater entitlement.

Where an amount of statutory redundancy pay is payable, it is not subject to Income Tax or National Insurance deductions.

To receive a free comprehensive HR Legal Service toolkit including sample policy, process flow, checklist, example business case, letters, fact sheet, and redundancy calculator go to click here and fill in your details.

 

Five per cent of workers have witnessed physical violence in the workplace

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One in 20 (5%) workers have witnessed physical violence between colleagues, according to research from employment law firm Slater and Gordon.

The survey revealed that 37% of employees had been bullied in the workplace, and a further 21% said they had witnessed bullying aimed at another colleague.

The type of bullying varied, with humiliation witnessed by almost a third of respondents (31%), and racist insults overheard by one in 10 (11%). Childish pranks were noted by 24% of those surveyed, while one in 15 (7%) saw their colleague’s work being sabotaged. One in six (16%) had witnessed a co-worker subjected to inappropriate sexual remarks.

The research also suggested that workplace bullying might not be easy to spot, with 56% of cases disguised as ‘workplace banter’. More than two-thirds (68%) of respondents who witnessed abuse described it as ‘subtle’. Examples included leaving a colleague out of work drinks, lunches and meetings.

Luke Roberts, an anti-bullying expert and former head of the Anti-Bullying Alliance, called the results “shocking but not surprising”.

“Bullying is not just something that happens to children at school. Adults can be bullied too and many feel distress from being bullied in the workplace,” he said.

“When somebody is bullied it’s a very personal thing and employers have a duty to recognise the problem if somebody complains,” he added. “From a practical point of view it’s important for the employer to recognise that bullying has an impact on productivity and morale, not only on the victim but also on the workforce as a whole.”

Claire Dawson, an employment lawyer at Slater and Gordon, warned that managers might not be able to rely on others telling them if they witness abuse. “Our research shows that most people who witness bullying prefer to do nothing about it. They are concerned for their own positions and aren’t willing to put their necks on the line, especially when they don’t know how an employer will respond to the issue,” she said.

She added that bullying in the workplace takes many forms. “As our research shows, the majority of bullying comes in the form of verbal abuse or intimidation,” she said. “The idea that people can be subjected to physical violence while at work is quite alarming. This can have a devastating impact on the person who is being bullied and can result in depression and anxiety.”

Fewer appraisals, more legal risk?

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Increasing numbers of organisations are considering moving away from formal appraisals. But in doing so employers need to bear in mind a number of management and legal issues.

There remains no substitute for well prepared and thorough feedback, however it is delivered, both in terms of managing staff performance and reducing legal risk if problems arise.

Appraisals should ideally contain no surprises, although often they do. A move to more frequent appraisals may help remove this potential for surprise. But if continuous feedback replaces formal appraisals the feedback will need to be meaningful.

Managers also need to appreciate the perennial problems that can arise from ducking issues in appraisals – too often one still finds that the most recent appraisal form is spectacularly unhelpful when trying to defend a decision to award a low bonus, or embark upon a capability process, if there has been no mention of performance issues.

If an employer’s feedback structures become less formal and more episodic, potentially with less direct HR input, proper records of what is discussed may not be kept and the quality of records could decline. Claims of constructive dismissal, unlawful discrimination or even irrational bonus awards may become more challenging to defend if businesses do not ensure that managers keep suitable records of their interactions with employees, and any decisions taken as a result. The greater the risk of there being a dispute about what feedback was given and the basis for it, the greater the risk of claims from disgruntled employees.

Managers need to ensure they keep sensible records without overburdening themselves and their staff with excessive notes and minutes of meetings. They also need to bear in mind that undue and arguably defensive formality may detract from the resolution of a performance issue.

Nonetheless, employers changing their appraisal arrangements to provide more immediate and effective feedback need to consider how such a move fits in with their processes with regard to bonus awards, salary review, formal performance management ‎and record keeping. This will minimise their exposure to claims and increase the prospects of successfully defending them.

This article is published courtesy of HR magazine and was written by Charles Wynn-Evans (pictured), a partner at international law firm Dechert

CEOs earn 183 times more than the average worker

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CEOs were paid approximately 183 times what the average UK worker earned in 2014, according to research from think tank the High Pay Centre.

The High Pay Centre found that the average FTSE 100 CEO’s pay climbed to £4.964 million in 2014, and the 10 highest-paid CEOs were paid more than £156 million between them.

Despite this, only a quarter of FTSE 100 companies are Living Wage accredited.

The figures represent a slight increase on average CEO pay from £4.923 million in 2013, and a more pronounced rise from the £4.129 million average in 2010.

High Pay Centre founding director Deborah Hargreaves said: “The coalition government introduced some welcome reforms in 2013 that have at least enabled us to get a better understanding of the executive pay racket. However, it’s clear that these reforms didn’t do nearly enough to start building a pay culture where everybody is rewarded fairly and proportionally for the work that they do.”

She added: “Pay packages of this size go far beyond what is sensible or necessary to reward and inspire top executives. It’s more likely that corporate governance structures in the UK are riddled with glaring weaknesses and conflicts of interest.”

TUC general secretary Frances O’Grady said that inequality is reaching “stratospheric levels”. “After years of falling living standards it is a disgrace that top executives are taking an even bigger share of the rewards of growth,” she said. “We need a recovery that works for the many and not just the few.”

She called for employees to be included in workplace pay committees to “add some common sense and reality to boardroom pay decisions”. She added: “They should not be a closed shop for an elite who are only interested in looking after their own.”

The High Pay Centre website calculates the pay an average FTSE 100 CEO has earned since 5 January 2015. At the time of press it stands at more than £2.9 million.

Stephen Bevan: Dementia should not be a barrier to work

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With a rapidly ageing workforce, health conditions such as dementia should not be a barrier to having a full, fulfilling and extended working life.

How does the prospect of working until you are 70 sound? Speaking to graduates recently as they took their first steps into the world of work, I was struck by how remote this prospect seemed to them. When you are 21 or 22 I guess concerns over getting a job, finding somewhere to live, and chipping away at student debts easily outweigh any thoughts of what you will be doing almost 50 years from now. My question was met with a shrug of resignation.

The ageing workforce here in the UK has been an immutable feature of the labour market since its demographic certainty became clear back in the 1980s. The numbers are familiar – one third of the workforce will be aged 50 or over by 2020 – but I am frequently reminded of the helplessness we often feel about doing anything to manage this change, despite the pleas to ‘get ready.’

But one clear priority is making sure that the growing number of older workers who also have health problems are given the help they need to keep working. Contrary to popular opinion, older workers do not have more sick days than their younger colleagues, but they sometimes have chronic health conditions that affect their functional capacity at work, or increase their risk of having to leave employment early.

Despite the fact that the over-65s are the fastest growing segment of the workforce, the numbers leaving work before state pension age – often for health reasons – are still significant. On average men leave the labour market earlier now than they did in the 1950s and 1960s. According to the Labour Force Survey, of the 7.2 million people aged 50 to 64 who are employed, 42% are living with a health condition or disability.

The Work Foundation recently published a white paper that looked at what government could do to help employers trying to manage an ageing workforce with a higher prevalence of chronic ill-health. In putting together this paper it was clear that one of the issues that causes most anxiety among employers is early-onset dementia.

The number of people with dementia in the UK is forecast to increase to more than one million by 2025 and over two million by 2051. According to the Alzheimer’s Society there are currently more than 40,000 people with dementia under the age of 65 in the UK and 18% of them continue to work after their diagnosis is confirmed.

But the idea that nothing can be done to support people living and working with this condition is being challenged. There are excellent examples of jobs being redesigned around the capabilities of people with dementia and the adoption of simple adjustments such as allocating ‘buddies’, increasing signage and labelling in workplaces to help people find places and resources, and adapting work hours to accommodate fluctuations in symptoms or to help manage the impact of medication.

In knowledge-based organisations the tacit skills and experience of older workers should be a major asset both to employers and the wider economy. While it remains largely an intangible asset it is clear that extending the productive working lives of older workers makes sense from both an economic and social perspective.

Dementia should not be a barrier to having a full, fulfilling and extended working life. Every business faces the challenge of capturing and building on the wisdom of its older workers before they retire, and ‘dementia-friendly’ workplaces need to become routine arenas within which we make this possible on a larger scale.

This article is published courtesy of HR magazine and was written by Stephen Bevan (pictured) Director of the Centre for Workforce Effectiveness at The Work Foundation 

Discarded phones present data leak risk

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Employees could be unwittingly leaking their workplace’s data when disposing of electronic devices, according to research from Proven Legal Technologies.

The firm purchased four random smartphones on eBay, each from a different UK seller. When analysed, company data that had previously been ‘wiped’ by their former owners was present.

Items detected included confidential business records and valuable intellectual property, colleague and client contact details, and web searches and location data.

Phil Beckett, a partner at Proven Legal Technologies, said that companies and individuals must be aware that pressing delete is simply not enough. “Businesses of all sizes are vulnerable to confidential data loss, and given the vast amount of information housed on corporate devices these days, this could result in some very serious problems,” he said.

“Our research shows that even smartphones that have previously been ‘wiped’ are still at risk. This should act as a call to action for businesses to take precautions around BYOD (bring your own device to work) schemes, and keep a close eye on where confidential information is being stored and sent; educating themselves, and employees, of the dangers.”

The top five items detected on ‘wiped’ devices were:

1. Documents and files: Between the four smartphones, 1,531 deleted files and documents were recovered, many of which contained confidential business records and valuable intellectual property.

2. Messages and calls: The four phones had 1,391 calls, 442 SMS, and 438 emails tracked and stored on them, which could leave a company open to fraud through providing access to corporate communications and details.

3. Contact details: Contact details for 54 people or organisations were located on the smartphones, with a further 10 that no-one had attempted to wipe. Proven Legal Technologies highlighted that colleagues and companies could be put at risk by criminals using phone numbers and email addresses to target their victims.

4. Private information: The previous owners of the four analysed phones unknowingly made their web searches and location data accessible, with 351 search histories stored, and 525 instances of deleted location recovered.

5. Images: More than 33,000 images were found on the secondhand devices, which could potentially compromise a company’s reputation if they are of a personal nature and fall into the wrong hands. Almost two-thirds (66%) of the pictures recovered had not been deleted.

It’s time to talk about race at work

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Business in the Community has launched the largest ever survey of race at work in the UK in partnership with YouGov. They want to hear from 10,000 people aged 16 and over who are in work across the UK.

The purpose is to help us better understand why BAME (black, Asian and minority ethnic) groups are under-represented in the workplace and inform recommendations for faster change. The survey is open until Sunday 13 September at www.raceatwork.org.uk.

We know that BAME people are under-represented at every level of work. Only one in 16 senior leadership positions are held by someone from an ethnic minority, despite there being a pool of one in eight ethnic minority people of working age in the UK.

Our benchmark analysis shows that BAME employees are less likely to be rated in the top two performance categories, to be identified as ‘high potential’, or to be selected for leadership training. The data also highlights a significant drop-off in the rate of BAME candidates progressing from application to hire in the recruitment process compared to white candidates.

The questions employers need to answer are ‘why?’ and ‘what can we do to ensure cultures and processes are equal, fair and inclusive to all employees?’.

The ‘why’ is a combination of policies and processes unintentionally excluding certain groups, and that unconscious bias could be having an impact on decision-making – particularly for individuals responsible for recruitment, progression and pay decisions.

We worked with the University of Manchester to analyse global online racial bias test data and found that 66% of top executives in the UK have a racial bias. This was lower than top executives in the USA and Europe – yet still highlights that tackling bias needs proactive leadership.

We know that everyone has biases of some kind. What’s needed is for individuals to identify and understand their own biases and be aware of how they might be affecting everyday interactions and decision-making.

The ‘what can we do’ question requires in-depth understanding of where gaps in ethnicity representation are in each business. While there is no quick fix, there are proven mechanisms that employers can implement. Some include: monitoring workforce data, as without this data it is impossible to action plan for change; a senior leader sponsoring race and diversity; and unconscious bias training for anyone involved in selection, developing of HR policy and process, key decision-making and line management – and then ensuring regular refresher modules. Also where possible we recommend including BAME people at each stage of recruitment, assessment and promotion processes.

Even with bias being addressed and mechanisms in place there can be a third, often unspoken, challenge: employers may find it difficult to talk about race at work.

Our analysis of the online racial test data found that people in the UK are more interested in testing their racial bias than their age, sexuality or gender bias. Forty per cent of them were prompted to take the test by news and media, but just 9.7% were encouraged to take part by their employer. This suggests that Britons do want to talk about race.

What can HR directors do? We need businesses to create an environment that enables open conversations with employees about race. I encourage you to complete the survey and share the link with colleagues, networks and anyone else who might be interested – use it to kickstart these conversations.

Take part at www.raceatwork.org.uk so we can move from debate to action.

This article is published courtesy of HR magazine and was written by Sandra Kerr (pictured), race equality director at Business in the Community