One in ten Employment Tribunal claims now involves whistleblowing allegations

Lure of unlimited damages leads many disgruntled employees to dress up vanilla disputes as whistleblowing

More than one in ten Employment Tribunal cases nationwide now involves a whistleblowing claim as part of the dispute, highlighting how widespread these allegations have become, says GQ Employment Law, the specialist employment law firm.

According to Employment Tribunal data obtained by GQ Employment Law, 11% of all claims in Great Britain last year included an application under the Public Interest Disclosure Act (PIDA), which relates to employees raising concerns about malpractice or wrongdoing in their company. This is up from just 8% two years before.

Employment Tribunal Claims relating to concerns about malpractice or wrongdoing in their company

However, GQ Employment Law warns that a significant proportion of these could be spurious allegations, where a disgruntled employee is trying to increase the value of their claim by adding whistleblowing to the charge sheet.

GQ Employment Law explains that compensation for employment claims involving whistleblowing are unlimited, and there is no time limit for how long the employee has to have worked for the employer in question before making a claim. By contrast compensation for unfair dismissal is capped at the lower of 12 months’ pay or £76,574* and workers can only bring a claim after two years of service (recently increased from one year).

Darren Isaacs, Partner at GQ Employment Law, says, “The rules protecting whistleblowers are incredibly important to make sure that employees can raise legitimate concerns about malpractice without fear of losing their jobs.”

“However, such high levels of whistleblowing claims suggest that either the UK has serious and endemic whistleblowing problems in the workplace, which seems unlikely, or that there are a lot of people trying to take advantage of the system.”

“Many of the claims we see are pretty transparent attempts to make a simple employment dispute look like a whistleblowing claim in a bid to get around compensation caps.”

GQ Employment Law explains that City workers have a greater incentive to try and remove the compensation cap as they are more likely to earn more than the cap’s limit, and therefore, potentially lose some of their award.

“If you’re earning near the UK average your compensation is unlikely to come near the £76,574 cap. However, many City workers are likely to receive more than that.”

“City workers also tend to be more aware of the Employment Tribunal rules.”

Darren Isaacs continues, “Some employees are playing on the fact that their employers are reluctant to fight a costly and damaging dispute all the way through a tribunal and are using the threat of whistleblowing as part of their strategy to negotiate a higher settlement.”

“Caps on damages are particularly galling for City workers who often have higher expectations of what they deserve to receive in compensation.”

According to GQ Employment Law, a whistleblowing allegation is often made by employees to maximise their claims if they do not fit into any of the categories who can claim to be victims of discrimination, such as women, older employees, ethnic or religious minorities. Such claims have no cap on damages either.

Darren Isaacs says, “There are lots of highly paid men in the City who do not fit in any of the categories protected by the UK’s discrimination laws. They are able to add a lot of nuisance value to their dispute with their employer if they claim they are blowing the whistle.”

Reforms to whistleblowing rules will not prevent spurious claims

Darren Isaacs argues that although recent reforms to the whistleblowing laws** have been introduced to prevent spurious claims, so that claims can only be made if they are in the public interest, the rules are still not sufficiently robust.

He says, “Recent changes to the legislation have not solved the issue of jumped up allegations being thrown at businesses. For example, if a banker is envious of a colleague’s bonus, he or she might try to phrase the complaint in such a way that it sounds like there is a public interest in exposing unfairness or opacity in the way banks and other financial institutions remunerate their staff.”

*For terminations on or after 6 April 2014. For dismissals prior to this the maximum compensation is £74,200

** The Enterprise and Regulatory Reform Act 2013

This story is published courtesy of HR magazine.

 

Vince Cable threatens FTSE100 companies with legislation over bonuses

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Business secretary Vince Cable has written to the UK top 100 companies, warning them to rein in bonus awards or face new regulatory restrictions.

Cable said that the public still do not trust many companies, especially in financial services, due to the disconnect between their annual profits and the “ridiculous” bonuses awarded to executives. He said banks should “make peace” with the public by adjusting their bonus and remuneration structures.

Barclays hold their annual meeting tomorrow in London. The bank has a bonus pot of £2.4 billion, 10% larger than last year, despite the fact profits fell by 32% over the same period. The board will vote on executive pay at the meeting, and Cable urged the company to act responsibly. “With Barclays in particular coming up on Thursday, we will see how far they have listened to people who own the banks – the shareholders – and exercise responsibility in long term thinking,” he said.

Cable added that remuneration committees at all organisations should avoid damaging their brand and public image for the sake of short-term gains. “Getting pay wrong damages popular trust in business and undermines the duty to promote the long-term success of the company,” he said.

The business secretary announced plans to introduce legally binding votes for shareholders over executive pay last year, but this has not become law. This drew criticism from shadow business secretary Chuka Umuna when he responded to the announcement. “After promising to introduce annual binding shareholder votes on remuneration, Vince Cable and the tory-led government caved in and have failed to match their rhetoric with action,” he said.

The news comes the day after Cable called for more transparency over hidden owners of large organisations, hoping to clamp down of tax avoidance and money laundering.

 

CPS report calls for radical changes to pension rules

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Abolishing the lifetime allowance cap and reforming tax relief on pensions are among measures that could save the Treasury billions, a new report has recommended.

The Centre for Policy Studies report, Incentivising Retirement Saving, outlines eight key changes to retirement saving incentives. CPS research fellow Michael Johnson, who is the author of the report, says they will save Treasury money as well as making pensions fairer for all savers.

Johnson proposes scrapping the current tax relief on pensions and replacing it with a Government contribution, to be paid by the Treasury, of 50 pence for every £1 saved. This would be paid whatever the tax paying status of the saver and would be subject to an annual cap.

The report suggests pensions incentivisation schemes cost the Treasury £54 billion last year. Johnson told HR magazine the proposals would significantly reduce this figure by increasing the “effectiveness of spend” in the area. He said the changes would ensure more people would be secure in their future.

“It’s all about getting the majority of people saving, which is what most people want to see,” he said. “It’s a much better position than the situation of having a minority who can afford it saving more.”

Another of the key proposal is removing the 25% tax-free lump sum savers could take out from their pots.

Johnson said this is an emotive issues, especially for those approaching retirement. However, younger employees were less engaged with the idea.

“I have spoken to lots of people in their 20s and 30s,” he said. “For them the benefit is so remote, with an amount that is still very uncertain. The changes have not been at all effective and are not worth the £4 billion that have been spent on them.”

Proposals outlined in the report

  • Pension contributions from employers should be treated as part of employees’ gross income, and taxed as such.
  • Tax relief on pension contributions should be replaced by a Treasury contribution of 50p per £1 saved, up to an annual allowance, paid irrespective of the saver’s taxpaying status.
  • ISA and pension products should share an annual combined contribution limit of £30,000, available for saving within ISA or pension products or any combination thereof. This would replace the current ISA and pensions tax-advantaged allowances.
  • The 25% tax-free lump sum should be scrapped, with accrued rights to it protected.
  • The lifetime allowance should be scrapped. It adds considerably complexity to the pensions landscape and with a £30,000 combined contributions limit for pensions and ISAs, it would become less relevant over time.
  • The 10p tax rebate on pension assets’ dividend income should be reinstated.
  • People should be able to bequeath unused pension pot assets to third parties free of inheritance tax (perhaps limited to £100,000), provided that the assets remained within a pensions framework.
  • The annual allowance should be set at £8,000, with prior years’ unutilised allowances being permitted to be rolled up, perhaps over as much as ten years, all subject to modelling confirmation.

 

Collective consultation: how the Woolworths case changed the law

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Senior employment law consultant Chris MacNaughton (pictured) explains how the Woolworths case changed UK redundancies legislation.

Before joining employment law firm Vista, I was one of the advocates [for Unite] in the famous Woolworths case, where staff from the failed retailers received a £5 million payout. I am regularly asked to discuss the significance of the case and its impact on UK law. It is certain that its repercussions for employers seeking to make large-scale redundancies will be immense.

As well as being one of the largest ever protective awards (circa £70 million), the case had a profound effect on the legal obligation to collectively consult prior to large-scale redundancies. The Employment Appeal Tribunal’s bold step of re-writing Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) caused quite a shock.

Before this case, employers were able to make large numbers of employees redundant provided that fewer than 20 of them worked at the same site. Employers knew they could argue that each establishment, site, or unit was separate; therefore smaller scale redundancies would fly below the collective consultation radar. The change in law now means that companies must closely track dismissals across all of their locations. The key change was the removal of the phrase “at one establishment” that featured in Section 188(1) of TULRCA.

The perfect storm came with the sad demise of two household giants, Woolworths and Ethel Austin. Both retailers had stores employing fewer than 20 individuals at different locations. In total, dismissals ran into tens of thousands. Claims sought to address what several trade unions and their members perceived to be an unfair and arbitrary outcome. Employees that worked at stores with fewer than 20 staff would not benefit from protective awards despite facing the same lack of consultation before their dismissals.

The Woolworths case appeared in the summer of 2013. Its core issue was whether the duty to collectively consult is owed when 20 employees are dismissed or when 20 are dismissed “at one establishment”: a site‑by‑site atomised approach, or a holistic approach.

The Employment Appeal Tribunal rewrote TULRCA by removing the words, “at one establishment”, thus achieving compliance with EU law: in other words, once an aggregated number of 20 employees are dismissed from any site or location in the business the duty to collectively consult will be triggered.

One of the remarkable features in the Woolworths case was that despite its unprecedented size and import, the secretary of state did not engage with the proceedings sooner. Judges at each level have been dumbfounded by the Government’s lack of participation: apparently they simply failed to grasp the possible impact.  

So what does this change in the law mean for employers today?

Any failure to collectively consult can result in a protective award claim of up to 90 days’ pay per employee affected. For example, an employer dismissing 19 people (all on £550/week) from site A and 19 from site B within a 90 day period, and failing to collectively consult, could be liable for over a quarter of a million. At a time when an employer needs to reduce staff numbers, this could send them into administration.

I don’t believe that employers should expect the status quo to return. The matter has been referred to the Court of Justice of the European Union to clarify the meaning of “establishment” for the purposes of collective consultation. While the concept of “establishment” may currently be rendered irrelevant for triggering the duty to collectively consult, businesses and lawyers alike will be keeping a keen eye on Europe.

The article above is published courtesy of HR magazine and was written by Chris MacNaughton, a senior employment law consultant at Vista.

 

Dean Royles calls for union talks over impending strikes

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NHS Employers chief executive Dean Royles has urged unions to engage in talks over employee pay as UNISON and Unite consider industrial action.

UNISON members voted to strike yesterday after health secretary Jeremy Hunt’s decided not to extend a 1% pay increase to all healthcare staff.

NHS employees at the top of healthcare pay ranges will receive the 1% pay rise, whereas those in the middle or lower end will not. They may receive an incremental increase, but this is not guaranteed.

Unite is also considering action, with plans to consult its 100,000 healthcare members this week.

Royles said he was not surprised by the actions of the unions, but warned strikes could have a negative impact on patient care. “People accessing healthcare are often at their most vulnerable,” he said. “The very prospect of strikes when they should be receiving care will be deeply distressing for many.”

Unite head of health Rachael Maskell earlier said the union had experienced anger from its members over the Government’s stance on pay. “Unite will be liaising with other health unions and professional associations in driving home the message that health service staff have had their fill of being treated with contempt by health secretary Jeremy Hunt. Enough is enough,” she said.

UNISON head of health Christina McAnea said the union’s members do not strike “often or easily” but members felt they had no choice. On the announcement of the ‘yes’ vote at a conference in Brighton she said: “We’re not asking members to strike for 1% we’re saying strike for a pay award that starts to restore the value of your pay, fight for a living wage for all.”

The first day of industrial action is due to take place on 5 June.

 

April 2014 – Changes to Employment Law

A summary of the key changes to employment law which came into effect on 6 April 2014 is below:

  • Mandatory early conciliation – early conciliation (EC) will become mandatory for all tribunal claims presented on or after 6 May 2014. Acas has set out a four-step procedure which claims must follow.
  • Abolition of discrimination questionnaires – statutory discrimination questionnaires have been abolished and tribunals can no longer draw adverse inferences from delays or failures to answer questions.
  • Abolition of Percentage Threshold Scheme – employers can no longer reclaim Statutory Sick Pay from HMRC where the 13% of NI contributions threshold has been met.
  • Increase to tribunal fees – certain claims, such as equal pay, will now attract the higher issue and hearing fees.
  • Financial penalties for losing employers – employers may now have to pay financial penalties if they lose at tribunal subject to a maximum of £5,000.
  • Abolition of SSP record-keeping obligations – employers no longer need to keep specified records of dates of sickness and Statutory Sick Pay payments.
  • Unfair dismissal compensation increase – the maximum compensatory amount for unfair dismissal has been increased to £76,574 (odd, we know).
  • Increased rates – several statutory rates have been increased, including the cap on ‘a week’s pay’ (now £464).
  • Increased penalty for illegal workers – employers now face a maximum penalty of £20,000 for employing illegal workers.
  • TUPE pension contributions – transferee employers now have the option to match the transferor’s level of employee pension contributions.
  • MPs now ‘prescribed persons’ – a whistleblower may now make protected disclosures to MPs in certain circumstances.

Is this the biggest shake-up to legal services in 800 years?

april-cover

Liberalisation of the legal services market hasn’t brought about massive change overnight, but it is forcing providers to reassess their offering in light of fresh competition. Katie Jacobs unravels the implications for HR.

Not much has happened to change the legal services landscape in the past 800 years. It’s been a largely closed, self-regulated market where solicitors charge by the minute and barristers wear almost exactly the same outfits as their 19th century predecessors. Change has been practically non-existent – until now.

In recent years, new legislation has come in that aims to transform the legal services market, subjecting it to the kind of liberalisation and competition that other professional services industries are used to. And although progress has been slow, the ripples of these changes are starting to spread. In 2011, provisions of the 2007 Legal Services Act came into effect to allow alternative business structures (ABSs). This means non-lawyers in professional, management or ownership roles can offer regulated legal services in England and Wales.

While that might not sound like much to an outsider, experts called it a “big bang moment” for the profession. “It’s a unique thing for law because, previously, only lawyers were allowed to run law firms,” says James Meyrick, regulatory project manager at the Legal Services Board, set up in 2010 to regulate this new market. “This allows non-lawyers to own law firms. It’s bringing law to the rest of business by getting rid of restrictions.” By losing restrictions, the intention is to liberalise the market, which has up until now been a closed shop, and encourage more competition (currently only around 22% of people seeking legal advice shop around for the best deal), innovation and diversification. It could mean practices taking a fresh look at how they deliver their services, or risk losing clients to more customer-focused upstarts.

Opening a closed market

Right now, it’s a closed market to a large degree,” says Peter Byrne, head of HR Legal Service. “Firms can provide services of any quality, at any price they choose. There’s no real competition driving change. The real excitement is that this legislation means new competition will emerge.”

“What some law firms and most customers don’t realise yet is that this is not a cyclical change, it’s a structural one,” adds Karl Chapman, CEO of ABS Riverview Law, which is backed by DLA Piper. “It is fundamental, it is structural and it will change the legal market – and about time too. Lawyers have invented this myth that law is magic, but it’s no different from any other professional service.”

Since 2011, the Legal Services Board says about 300 ABS-licensed firms have entered the market, with more in the pipeline. Some of these are existing law firms opting to change their structure, while others are high-street names, with The Co-op, The AA and Saga among those jumping on the bandwagon. A recent survey by YouGov found 60% of people would consider buying legal services from brands such as Barclays or Kwik-Fit, suggesting more brands will look to seize the opportunity. But, not too surprisingly given the nature of the sector, change has been slow.

“We are only a few years in and one could argue law is one of the more conservative professions,” says Meyrick. “There’s an awful lot of wait and see. Things take time to change and it’s not going to be an overnight thing – but it is happening.”

Will employment law be next?

The personal market has so far been more shaken up by the new legislation, with most ABSs playing in areas such as personal injury, where they now account for a third of all turnover. Will employment legal provision be next? Or, for HR, will it be less big bang, more small whimper? New research from the Solicitors Regulation Authority shows just under 80% of ABSs claim to be exploring the employment law space, although this only accounts for about 6% of total market turnover.

“Generally the first movers are in the areas which are more commoditised, like personal injury,” explains Meyrick. “But there’s no reason why those firms offering HR and payroll services won’t come into the market in increasing numbers.”

This potential competition is putting some employment lawyers and law firms on their guard, forcing them to innovate. Jamie Gamble is employment partner at Ward Hadaway, a firm which has been focusing on modernising and diversifying its offering by providing fixed-fee employment packages for SMEs. He believes ABS is both a threat and an opportunity for traditional law firms.

“Employment law is going to be one of the areas that will at some point come under attack by the big brands,” he says. “It’s going to happen and we have to make sure our clients aren’t tempted. This will shake things up. Law firms might think they are offering good customer service, but most aren’t matching the service those brands judge as good. And if big brands come into employment law, they’re not going to get it wrong, it’s going to be slick.”

Stephen Moore, partner and head of employment at law firm Ashfords, is more sceptical about big changes hitting the commercial market. “Liberalisation is already under way, but I don’t think it will have an impact in terms of commercial services,” he says. “Commercial is a different market from personal, and you have to be careful how you approach it. Employment law, despite the Government’s best efforts to make it more straightforward, is a difficult area. Get it wrong and it can be costly.”However, he is clear that law firms, “whether they like it or not”, will have to adapt. “They have to be able to compete with non-law firms,” he adds.

But whether or not such competitors enter the market, would an HR director seriously consider taking advice from a high-street brand? Sue Swanborough, HRD at General Mills, isn’t so sure. “Would I want to go to a Tesco or a Barclays [for legal services]? Possibly not. But as a smaller business, I might.”

Richard Bolger, HRD UK and Europe at financial technology provider FNZ, is more open to the idea. “I probably would trust a high-street brand,” he says. “Tesco has its own bank, for crying out loud. Looking at it objectively, anyone providing legal services has to be regulated. If set up properly and structured in the right way, I would certainly consider taking a look.”

Innovate to compete

Byrne believes it’s not just about increased competition – the major opportunity is for innovation in pricing and service offering. “This is creating a vehicle to offer legal services in a different way,” he says. “Price it differently, embrace technology, embrace sales and marketing, and place customer needs and that relationship at the heart of the business.”

Of the fixed-price model, Chapman adds: “It’s not rocket science. Fixed pricing leads to behavioural change, as you are aligned with the customer. It’s the kind of model we’ve been offering in two other sectors for the past 30 years. It only looks like innovation and disruption in the legal market, which probably tells you more about the legal market.”

Some HR professionals are already embracing change in how they source their legal services, often attracted by the no-surprises pricing model. Karen Moseley is HR manager at marketing company Haygarth and uses HR magazine’s legal partner ESP for her day-to-day legal needs. “We don’t need to worry about making a call to ask a question and then getting an invoice for £500, which often happened at my old company,” she says.

Bolger also bemoans the “by the minute” nature of buying legal services. “If I’m getting advice on TUPE or a settlement agreement, surely they could just pull their costs off the shelf?” he asks. “I often joke around with my lawyer – ‘If I buy three, can I get one free?’ – but it has a serious undertone. Nothing ever comes of it. I know it sounds a bit tacky and supermarket-like, but if I’m going to compromise 20 people out of the business in the next year, I’d like a situation where the law firm says: ‘When you hit 15, the next three are free.’ Of course, it wouldn’t encourage me to sack more people, but it’s having that commercial relationship.”

Commercial acumen

The commerciality, or otherwise, of legal advice is something mentioned by every HR professional HR magazine contacted, and there is a sense that ABSs, run by business people rather than just solicitors, could go some way towards remedying this.

Martin Tiplady, MD of Chameleon People Solutions and former HRD at the Metropolitan Police Service, is sceptical about the impact of the Legal Services Act: “Is this going to change the landscape of how legal services work and seriously challenge the legal profession? No.”

But he believes it could provide valuable space for innovation and risk-taking. “There’s space in the market for hard, managerial advice on a legal basis, making legal services distinct from case law and taking an amount of risk,” he says. “Big law firms are very rigid and ABS could have an effect of dampening that.”

“You could speculate that bringing more business acumen into the legal sector might change how it works and [how firms] approach legal problems for their clients,” adds Legal Services Board’s Meyrick. “Classically, solicitors think they are selling advice and professional knowledge, but companies want solutions to their problems, not wonderful advice.

When there’s more competition, those firms that are able to provide the solutions businesses want are more likely to be successful.” Moseley agrees: “A good lawyer is able to be business-protective, but also know how we want to treat our employees. I always say to the legal team: ‘I’m not going to let you do anything illegal, immoral or indecent, but this is a business and we cannot give away the shop.’ The old partner/solicitor model does not work for a lot of businesses anymore. I think solicitors are going to have to be more business-savvy than they were in the past.”

Of course, good law firms understand this and, as Swanborough points out, “it’s too simplistic to say it’s traditional law firms versus the up-and-coming ones”. “Nowadays, lawyers are changing and thinking more about the services they provide,” she adds. “I am seeing more innovation and the people I interact with have become more commercial and flexible.”

Ashford’s Moore also believes lawyers have to be more commercial, adding: “You need to become more than a lawyer; you become a wider business adviser. Clients don’t want to know what section 6 of the Equality Act is – they want to know the risk and make a cost-benefit analysis.”

“Everyone puts on their website that they give commercial advice,” says Ward Hadaway’s Gamble. “But perceptions vary of what ‘commercial’ means. Some are falling short; too many lawyers give advice that is too legalistic or too safe – sticking to the textbook answer rather than offering other ways to think about things.”

Both Byrne and Chapman are adamant the ABS model allows providers to offer more customer-centric services. “The irony of the legal market is, as a new entrant, it’s very hard not to deliver higher-quality services at lower prices than the current market,” says Chapman. “The average margins of the top 100 law firms range from 24% to 54% – you’d never have that in any other market.”

Byrne points out that “people only engage with law firms when they have to” and says ABSs can offer a “more positive, long-term relationship”. However, most of the HR directors HR magazine approached spoke highly of their existing, traditional lawyer-client relationship.

Darryl Abbondanza is VP HR at financial services firm Equifax, and has been using the same law firm for 15 years. “That personal relationship is very important – it’s like a relationship with your priest,” he says. But he adds lawyers are “an expensive commodity”. Although his relationship is good enough that he isn’t charged every time he picks up the phone, he says he “suspects [he] wouldn’t get that” with the international law firm his American bosses expect him to use in larger deals or when anything “goes horribly wrong”.

Splitting legal spend

Ultimately, HR directors are never going to go to an ABS-type firm for a big strategic issue, Chapman and Byrne agree. “You wouldn’t come to us if you were looking to make a cross-border, multi-million-pound M&A deal,” says Chapman. But the splitting of the operational and more strategic legal needs could only be a positive for HR professionals and business owners, especially those struggling with restrained budgets.

“What if HR teams fundamentally looked at the way they spent their budgets?” asks Byrne. “They should be thinking about how they spend their budget and with whom, and how they split it into strategic and more operational elements. Why go to a top firm to talk about a grievance in your Birmingham office and spend £600 on a draft letter? Pick up the phone to talk to them about M&A or sacking the MD, but why for the more operational stuff? There’s an opportunity to divert that spend into other suppliers that can give equally good advice at a third of the cost, on a different pricing model.”

However, according to David Edmonds, chairman of the Legal Services Board, we are now seeing “diversity and innovation in the provision of legal services, the like of which was unthinkable even three years ago”. “It shows us a glimpse at the future of what legal services provision will be,” he said in a speech to the Westminster Legal Policy Forum last month. “[ABS] is a strong spur to find cost-effective and innovative ways of working. Change, diversity and innovation will happen.”

Whether HR directors and small-business owners decide to embrace these new options, either via traditional firms refreshing their offerings or a totally new ABS provider, one thing is clear: the market is unlikely to look the same as it has over the past eight centuries. Who knows where the next 800 years will take us?

This article was written by and published courtesy of HR magazine.

 

HR must address ‘complex’ issue of fairness

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HR professionals must address the changing and complex issue of fairness within their organisations, or risk negative impacts on employee engagement, reputation and trust, experts agreed yesterday.

Speaking at an event on organisational fairness at The Work Foundation, Paul Sparrow, director of the Centre for Performance-Led HR at Lancaster University Management School, compared starting a dialogue about fairness to “opening Pandora’s Box”.

But he added: “Does that mean we in HR can duck this issue? No, we cannot.”

Stephen Moir, director of people at NHS England, spoke about the NHS’s struggle with fairness. He said although the NHS constitution is based on the concept of fairness, it was a challenge to cascade it through the organisation.

“Inherent fairness and equity are built into the psyche, but the practicality of doing that in a workplace of 1.7 million people is a challenge,” he said.

He added that employee survey data revealed although most NHS employers are proud to work for the organisation and would recommend it to others, a lower proportion said they felt treated fairly. “There’s a dichotomy between what the NHS stands for and how people feel,” he said. “We have a clear purpose and a committed staff, we need to link the two more closely together.”

Sparrow and Moir also discussed the move from collectivism to individualism in the workplace, and the challenges this raises for HR. This is reflected in the fact that younger workers are less likely to join a trade union. According to 2012 trade union statistics, less than 10% of members are aged 16 to 24.

Moir said he didn’t believe HR was currently equipped to deal with more individualistic relationships and contracts. “HR needs to up-skill to be as good at negotiation as our trade union colleagues,” he said, adding that any work on formal HR standards need to reflect these skills.

Sparrow is currently seeking case studies for further research around organisational fairness with the CIPD, a follow-up to the 2013 report The Changing Contours of Fairness. “This is an important agenda and it’s time to have a discussion,” he said.

 

REC welcomes Government crackdown on illegal workers

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The Home Office has announced reforms in an attempt to stop employers exploiting vulnerable workers.

Financial penalties for employing illegal workers are to be increased from £10,000 to £20,000. The maximum fine for employers not paying the National Minimum Wage will also rise from £5,000 to £20,000. A penalty can be applied to each worker being underpaid. These changes will come into effect from May 2014.

Another part of the legislation sees a ban on advertising jobs in other EU countries without simultaneously advertising them in Britain and in English.

David Cameron said the changes were designed to give British workers “a fair crack of the whip” in the job markets. He added: “The changes we are making today will help stop practices which exploit vulnerable workers and undercut local businesses that play by the rules. That means more economic security for people across our country.”

The Recruitment and Employment Confederation (REC) launched its own Good Recruitment campaign this week.

CEO Kevin Green called the changes “sensible”. He said: “Recruiters have millions of people walking through their doors looking for work every day. Whether those people are UK nationals or EU-migrants is secondary to the ultimate goal of getting the right people into the right job at the right time.”

The Gangmasters Licensing Authority (GLA) is to be become part of the home office under the reforms. It was previously part of the Department for Food and Rural Affairs (DEFRA). It will have its powers extended to enforce the new legislation. The GLA was set up in 2004 to protect employees after the Morecambe Bay disaster, in which 23 Chinese workers died.

Green welcomed this change, saying the GLA was “more suited” to its new department. He added that the scope it had to protect migrant workers would fit better in its new home.

 

Acas denies employment changes will put pressure on employers

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Early conciliation could cost business in time in money, according to an employment lawyer. But Acas argues research shows early conciliation provides far better outcomes for employers and employees.

Changes around early conciliation, the abolition of discriminatory questionnaires and the introduction of financial penalties for employers in tribunal cases came into effect on 6 April.

Lisa Mayhew, partner and head of the employment team at Berwin Leighton Paisner, argues they may have the opposite effect to what the Government intended and lead to companies spending more time administering the changes.

“The Government is heaping yet more change and uncertainty on employers,” she said.

Mayhew said that employers were worried about the changes as 90% reported at a recent seminar that they didn’t think Government changes introduced this time last year had met their aims.

Mayhew said early conciliation, specifically designed to lessen the burden of claims on employers, would potentially lead to further disputes over the time limits around legislation.

Gill McCarthy, director of operational policy and performance at Acas, said early conciliation would reduce the burden on employers prepared to use it.

She told HR magazine: “We know from our experience in pre-claim conciliation that employers have found it cheaper, easier, more convenient, less stressful, and resolved their issue more quickly than following submission of an employment tribunal claim.

“Independent research has found that when staff, management time and legal costs are factored in employers save on average £3,200 compared to resolving a dispute once an employment tribunal claim has been made.”

When Acas is consulted about early conciliation, the time limit for employees to make claims does not take effect again until the certificate is issued confirming early conciliation has failed.

Mayhew said this could lead to “satellite litigation”, with lengthy secondary disputes over the details of how long employees have remaining to make claims.

McCarthy said Acas issue a certificate on conclusion of early conciliation to let claimants know when it ended.

She added: “If a claim is lodged, the tribunal can use this to determine whether or not a claim is lodged in time as this is a matter for the tribunal and not Acas.

“If both parties want to continue discussions with a conciliator, this is still possible before a tribunal claim is lodged and (as now) if the claim is made.”