Immigration Act 2014 – what’s new?

May’s announcement that the Immigration Act 2014 (IA 2014) would be making significant changes to the UK’s immigration regime has to date had little impact on employers. However as of 28th July 2014, many of the IA 2014’s provisions have now come into force – what does this mean for you?

What’s changed?

» Biometric information (such as fingerprints) is routinely required when an employee makes a visa application. The IA 2014 has extended the type of visas for which biometric information must be supplied and has extended the category of individuals who must provide this to include family members of non-EEA nationals. The definition of biometric information has been amended also.

» Changes to preventing illegal working were brought in to effect on 16th May 2014 by separate legislation to the IA 2014. Crucially, this increased the fine an employer could face if found to be employing an individual without the right to work in the UK (from £10,000 to £20,000 per employee). The IA 2014 now limits the right of appeal an employer has against such a penalty and in cases of non-payment, allows the penalty to be enforced as if it were a Court Order.

» The IA 2014 provides statutory ‘guidance’ for Court and Tribunal Judges to consider when determining whether any decision made under the Immigration Rules breaches an individual’s right to respect for private and family life. This guidance gives little weight to any private life or relationship established when the individual is in the UK unlawfully or when an individual’s immigration status is precarious. Judges should however consider that it is in the public interest to maintain effective immigration control, for individuals entering the UK to be able to speak English and be financially independent. This lessens the burden on taxpayers and allows the individual to integrate effectively.

What does this mean?

» The provision of additional biometric information may cause application processing times to slow down. Employers should check gov.uk which details current processing times for the different types of application in advance to ensure that a prospective employee’s visa is likely to be processed in time for them to commence work. Applicants should also be reminded of the likely requirement to provide biometric data after submitting their visa application. As this must be done in their country of residence, they should bear this in mind when planning overseas travel around this time.

» Where an employer is in receipt of a civil penalty notice the timescales for payment must be carefully noted to avoid a bailiff subsequently attending and if an appeal is to be made, you should seek advice regarding the process and timescale for doing so.

» The ‘guidance’ contained within the IA 2014 affirms that overturning any unfavorable immigration decision is difficult. Careful consideration should be given to whether the decision made is in the public interest before seeking to challenge this.

What else is on the horizon

The most important change for employers introduced by the IA 2014 is yet to come into force.

This is the new appeals regime which will introduce a significant reduction in the number of grounds on which a decision can be appealed. A right of appeal will only be available where an asylum or human rights application has been made and in all other applications, the appeals process will be replaced with administrative review. This will involve Home Office staff, rather than an independent Tribunal, reviewing decisions made by their Home Office colleagues.

There is no date for when this change will come into effect however it is expected that it could be as soon as October 2014.

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.

 

Bank of England to extend bonus clawback period

bonusbank

The Bank of England is due to unveil plans giving it the power to take back bankers’ bonuses up to seven years after they are awarded.

Under the current rules, bonuses can be clawed back up to five years after they are awarded. In many cases financial rewards are deferred for up to this period to discourage any wrongdoing in the interim.

Anything from making a serious loss for their employers, demonstrating poor risk management through to serious ethical misconduct could trigger the clawbacks.

During a review in March, Bank of England governor Mark Carney hinted that bankers might face having to return their bonuses up to six years after they were awarded, for serious “misbehaviour”.

However, the clawback period was only due to start after deferral periods, which meant some bankers would potentially have to return their bonuses more than 10 years after they were awarded.

Carney is expected to announce that under the new proposals the deferral and clawback period can overlap, meaning that after seven years the Bank of England will have no powers to reclaim awards.

The announcement comes in the same week that Lloyds Banking Group was fined £218 million for manipulating the Libor interest rates. Carney condemned the actions as “highly reprehensible”.

“[This is] clearly unlawful and may amount to criminal conduct on the part of the individuals involved,” he said.

Shadow chancellor Ed Balls told the BBC he regretted that Labour did not take stronger action on banking standards when they were in power.

“Most of the criticism of the Labour Government from the banking sector and the Conservative party was that we were much too tough on the banks,” he said. “Now in retrospect, those criticisms were wrong because we should have been tougher.”

 

Rejecting contractual changes leads to ‘fair’ dismissal

General Vending Services v Schofield

In this employer-friendly decision concerning changing terms and conditions of employment, the company wanted to make changes to the terms and conditions of 30 of its engineers which would result in a reduction in salary, amongst other things. The employer had good business reasons for requiring the changes but, despite 24 out of 30 employees accepting the new terms, Mr Schofield did not and this led to his dismissal and the offer of re-engagement.

Mr Schofield brought a claim for unfair dismissal which succeeded at the employment tribunal on the basis that he acted reasonably in rejecting the changes as certain of them, relating to sick pay and holiday, were of particular importance to him. The employer appealed and the Employment Appeal Tribunal (EAT) overturned the finding of unfairness stating that, even where an employee has acted reasonably in rejecting new terms, it will not automatically follow that the employer has behaved unreasonably so as to fall foul of the unfair dismissal legislation.

The EAT reiterated that ‘while the reaction of employees was a relevant matter which an employer would take into account, it could not be decisive.’ In fact, legal commentary suggests that, where both parties are acting reasonably, a decision as to the fairness of a dismissal where re-engagement is offered is likely to be made in favour of the employer. The EAT also commented that a persuasive indicator of an employer’s reasonableness is the number of employees who agree to the changes which, in this case, was a clear majority.

Equality commission says all-female shortlists are illegal

Gender

Guidance released by the Equality and Human Rights Commission (EHRC) has clarified that recruiters and employers deliberately drawing up all-female shortlists is illegal.

The Appointments to Boards and Equality Law paper sets the “equality law framework within which appointments to boards must be made.” It states that all board level roles must be filled on merit, “demonstrated through fair and transparent criteria and procedures”.

It also highlights areas where employers can take positive steps to support women onto company boards. These include the creation of female networks and setting aspirational targets for the number of women on boards within defined timeframes.

The paper also gives conditions positive action on gender equality must comply with to be legal under the Equality Act 2010. Action must be proportionate to the nature of the barriers faced by women and the number of vacancies available.

EHRC commissioner Laura Carstensen said the main aim of the report is to “ensure that women have an equal opportunity to succeed on merit in gaining board positions”.

“A lack of gender balance on boards is a detriment not only to women with the ability to hold such roles but also to businesses and the economy,” she said. “In an ever more competitive and global economy, we cannot afford to be overlooking the talent of half of our population.”

Business secretary Vince Cable welcomed the clarification on issues such as all-female shortlists.

“This will really help our top businesses in what has been a bit of a legal grey area in the past,” he said. “It confirms it is good and accepted practice for companies to set ambitious, aspirational targets to increase the number of women on their boards.”

MPs call for overhaul of Employment and Support Allowance

anne-begg-2

The Employment and Support Allowance (ESA), designed to help those with health problems and disabilities into work, is not achieving its aims, a cross-party group of MPs has said.

The Work and Pensions Committee today released a report entitled Employment and Support Allowance and Work Capability Assessments. It claims Work Capability Assessments (WCAs), used to determine eligibility for ESA, are fundamentally flawed and must be reviewed immediately.

Outgoing contractors Atos have been extensively criticised for their handling of claims, but committee chair, Labour MP Anne Begg (pictured) said the problems run much deeper.

“Atos has become a lightning rod for all the negativity around the ESA process and the DWP and Atos have recently agreed to terminate the contract early,” she said.

“But it is the DWP that makes the decision about a claimant’s eligibility for ESA – the face-to-face assessment is only one part of the process. Just putting a new private provider in place will not address the problems with ESA and WCA on its own.”

Steps proposed in the report include tailoring employment support for the disabled more closely to their circumstances, along with more effective assessments of individuals’ position on the spectrum of work-readiness.

Begg called for the re-tendering of the workplace assessment contract to be a catalyst for reform within the process.

“The new contract needs to set out robust and clear service standards on the quality and timeliness of assessments and the reports produced by the contractor, and for the way claimants are dealt with,” she said.

“Here comes the sun”…and the seasonal workers

Summer is upon us and most employees will probably be looking forward to a well-deserved break. However in many industries, like hospitality and tourism, summer is the busiest period and often employers will need to recruit additional summer staff.

Employers frequently use fixed-term contracts to achieve a workable, short-term employment relationship to cope with the increased seasonal demand. However, it is important for employers to understand the legalities of fixed term contracts to make sure that they are not opening themselves up to the risk of a claim from a disgruntled employee.

1. What is a fixed term contract?

A fixed term contact is a contract of employment for a fixed duration which will perhaps terminate after a certain period of time, or even on the completion of a particular project.

Employers are often mistaken in thinking that a fixed-term employee has no employment rights – this is not true!

2. What rights do fixed-term employees have?

a) Less favourable treatment than permanent employees

In addition to the usual basic rights like being paid the National Minimum Wage and receiving the minimum statutory holiday entitlement, fixed-term employees are protected against being treated less favourably than comparable permanent employees.

Employers should be careful not to give permanent employees higher pay or benefits, better prospects of promotion or greater access to training opportunities than equivalent fixed-term employees.

Employers can justify treating a fixed term employee less favourably than a permanent employee; however, the justification would have to be on the basis of a good reason, giving due regard to the needs and rights of the individual employees, balanced against the business objectives. This is a high bar to satisfy and treating permanent and fixed-term employees unequally should be approached with caution by any employer.

b) Unfair dismissal protection

Fixed term contracts of short duration are often attractive to employers as not only do they provide flexibility but employees often do not gain the necessary two years’ qualifying service for unfair dismissal protection. Whilst this is often true of seasonal workers, employers beware!

Should you keep employing an employee on successive fixed term contracts beyond two years’ continuous service, the employee may acquire unfair dismissal protection. Also, if an employee is employed for more than 4 years on a fixed term contract, the employer will have to justify its use over a permanent contract.

3. Terminating a fixed-term contract?

The summer often flies by and it is important for employers to know what their obligations are when terminating a fixed term contract.

Generally, an employer is not required to give an employee notice of a fixed-term contract coming to an end. However, if an employer wants the ability to terminate a fixed-term contract early, this should be set out in the contract of employment and proper notice should be given.

Similarly if an employer keeps a fixed-term employee on past the end of the fixed term, then they will be required to give notice to the employee in order to end the contract. Unless there is specific provision in the contract (often there is not), the amount of notice required would be the statutory minimum.

Fixed-term contracts can be incredibly useful tools to employers in reacting to peaks and troughs in demand, but employers should make sure that they fully understand their obligations to fixed-term employees.

This article has been drafted on HR Legal Service’s behalf by Ashfords LLP Solicitors. Ashfords LLP 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.

Lawyers warn of “immediate impact” of obesity ruling on UK employers

Scales

The recent European Union Court of Justice announcement that suggests obesity should be treated as a disability will have an immediate impact on British employers, according to a leading employment lawyer.

The court’s advocate general Niilo Jääskinen, its most influential legal adviser, recently announced that when obesity reaches the point where it “plainly hinders participation in professional life” it can be treated as a disability.

The announcement is in relation to a Danish child-minder, Karston Kaltoft, whose case made it to the European Court after he claims he was dismissed due to his weight.

The case is still on-going, but the advocate general’s statement is significant because it gives a strong indication of the court’s position. The point whereby an employee’s obesity can be considered a disability is likely to be set at a body mass index (BMI) of 40 or more.

Emma Hamnett, employment lawyer at Clarke Willmott, warned that employers could now face significant costs as they will be required to make “reasonable adjustments” to the workplaces of obese employees.

She added that the ruling may lead to difficult conversations with workers about their weight.

“How is an employer supposed to know a worker’s BMI?” she asked. “Asking an employee if they have a high BMI or whether they consider themselves to be at a disadvantage in the workplace because of their size could cause a great deal of upset. Employers must take care not to isolate workers on this basis, so as to avoid claims for constructive dismissal or harassment.”

Danny Clarke, occupational health manager at business support expert ELAS, urged all businesses to educate their staff and implement effective policies to avoid liability.

“The key is to make sure all people are treated as individuals and offered fair opportunities so that everyone feels valued,” he said. “Different people bring different things to the table in any workplace and discriminating against certain groups is damaging to a company and its growth.”

 

Days lost in labour disputes almost doubles in 2013

public sector strike

The number of days lost through labour disputes reached 443,600 in 2013, up 79% from 248,800 in 2012, according to a report by the Office of National Statistics (ONS).

The ONS Labour Disputes – Annual Article, 2013 reported the rise in days lost, which comes despite the number of stoppages (any instance of industrial action) decreasing from 131 to 114 over the same period.

There were 50 stoppages in the public sector and 64 in the private sector in 2013, although the public sector stoppages led to more days lost. It lost 363,000 days (up from 198,000 in 2012) while the private sector lost only 81,000.

The sector that lost the most days was education (215,000). This was followed by public administration and defence; compulsory social security (180,200) and transport, storage, information and communication (23,700).

The majority of stoppages (63%) lasted one day, with only 3% lasting 11 days or more.

ONS labour market statistician James Scruton told HR magazine “the vast majority” of stoppages are still down to pay.

“This has always been the case,” he said. “Redundancy and working conditions seem to be the next biggest causes, but pay is by far the largest at 94%.”

Unite general secretary Len McCluskey told HR magazine workers in local government and the NHS were particularly hard hit “due to policies the coalition has imposed since 2010″.

“They have, during the last four years, experienced severe cuts to their incomes in real terms,” he said. “No wonder they are taking action; especially when the UK is the seventh richest country in the world and they can also see that the government’s policies are geared to making the rich even more wealthy.”

Employment law experts ELAS head of consultancy Peter Mooney put the rise in industrial action down to employees feeling in a “secure enough position to voice their concerns”.

“It is vital that wherever possible employers effectively resolve any workplace conflicts,” he said. “Failure to react could result in high staff turnover and low employee morale, which as a consequence will severely damage productivity.”

 

Judgment handed down in landmark obesity discrimination case

Morbidly Obese Could Soon Have The Same Discrimination Rights In The Workplace As Employees Who Are Gay Or Disabled  

Individuals who are morbidly obese could soon have the same discrimination rights in the workplace as employees who are gay or disabled if the European Court of Justice (ECJ) follows the opinion of its Advocate General which was delivered this morning.

The eagerly awaited decision relates to the case of Danish nursery worker, Karsten Kaltoft, who was sacked by his local authority, Billund Kommune, purportedly on the grounds of redundancy.  Mr Kaltoft argued that this explanation was a sham and that he had been dismissed because he could not bend down to tie up a child’s shoe laces.

Karsten Kaltoft claimed he was discriminated against because of his size and weight and the Danish courts referred the issue to the ECJ.

Currently in the UK, the Equality Act 2010 protects individuals from discrimination if they have a ‘protected characteristic’ such as disability. The Act protects physical and mental conditions which result from obesity, but this was the first time a European Court had considered whether obesity is a disability in its own right.

Although the Advocate General in handing down his decision following the hearing on 12 June 2014 said that obesity does not of itself automatically amount to a disability, it could if the individual was morbidly obese.

Commenting on today’s decision, Glenn Hayes, an employment law Partner at Irwin Mitchell, said:

“It will be interesting to see how the UK courts interpret this opinion as it seems to take us a little further down the road to obesity being recognised as a disability.

“If being obese means that an individual cannot perform the essential duties of their role and this condition is likely to be long term (which in the UK means at least 12 months) then the duty to make ‘reasonable adjustments’ probably kicks in, even if there is no underlying cause or illness.  It is the effect of the obesity not its cause that is the key focus for the Tribunals.

This could mean that employers could find themselves under a legal obligation to make adjustments such as providing car park spaces close to the workplace entrance for obese employees, providing special desks, or providing duties which involve reduced walking or travelling, or possibly even ensuring that healthy meal options are provided at their staff canteen.

“Employers will certainly be looking at this opinion closely because the repercussions could be significant.”

“The issue of whether being severely overweight is a long term condition may not be straightforward to resolve.  In this case, Mr Kaltoft had been overweight for the 15 years he had been employed and had not been able to have gastric band surgery and financial support by his employers to get fit, had clearly not worked.  For example, Tribunals may be asked to consider to what extent will an employee be expected to try and lose weight to ameliorate the problems they face at work.

Mr Hayes added: “It may also have wider implications in that employers who make adverse assumptions about a “fat” candidate or employee’s commitment or ability to perform the job, based purely on an individual’s weight, will be deemed to have directly discriminated against him or her and they will also need to take a more active role in ensuring adverse comments are not made against an individual to ensure that no harassment claim is successful.”

Cost of compliance continues to rise for small firms, Forum research shows

RTI and auto-enrolment costs identified as key drivers as business compliance costs continue to rise

Despite continued government promises to reduce the amount of time and money spent on keeping up to speed on regulation changes, the average micro, small and medium-sized employer in 2014 has seen an above inflationary rise of £713 in their annual compliance bill.

That’s according to research by the Forum of Private Business which puts the total cost of compliance at more than £19.2 billion – a 4% increase compared to 2013. Smaller businesses in particular have been hit the hardest, with the compliance bill for firms with fewer than nine employees being the equivalent of £164 per employee – almost seven times the cost for companies with 50 or more workers.

The Forum research showed the amount firms are paying to external contractors was the major contributory factor for the rise increasing by 6%, twice as fast as the internal costs to the business. The employer support organisation said this was most likely down to costs associated with the end of the SME extension to introducing Real Time Information (the new HMRC payroll process), auto enrolment and advice on sector specific regulations.

As in 2013 when the Forum did its last cost of compliance study, taxation compliance remained the single biggest outlay for small firms, followed by employment law, with health and safety third.

Surprisingly, time as opposed to cost was seen as the main impact of the regulatory changes. Almost 40 per cent of businesses surveyed said the time needed to understand and implement the various changes had the most significant impact on their day-to-day operations, costing firms a total of £38.85 billion in lost opportunities, up by almost £1 billion on 2013 (£984 million).

Commenting on the findings, Phil Orford MBE, chief executive at the Forum of Private Business, said:

“Our research shows little has changed in terms of what’s costing small business the most for compliance costs, with external costs continuing to be the main contributory factor.

“We believe this is largely down to the introduction of RTI, following the end of the small business extension, and firms having to pay a payroll specialist to manage their employees’ PAYE bills. In addition we have seen the increasing need to employ specialists to advise ahead of pensions auto-enrolment.”

Prior to RTI being launched in April 2013, HMRC anticipated the cost to small business at £120m, while the Forum research puts the figure at more than double that at £311m.

“Government often underestimates the impact of regulation on businesses, so it’s no wonder small firms are getting increasingly concerned about the cost of pensions auto-enrolment, which by its very nature is going to be hugely more expensive than RTI to set-up, deliver, and also maintain.”