MPs call for overhaul of Employment and Support Allowance

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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.

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

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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

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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.”

Hot topic: How will flexible working changes affect HR? Part two

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Legislation to allow all employees to request flexible working comes into effect on 30 June. With a record number of employees already working from home, do HR professionals appreciate the full impact of the changes? Daisy Group HRD Marie Wheatley gives her view.

It is crucial for HR professionals to create up-to-date policies that reflect the new legislation, so that they comply with the flexible working changes. Effective preparation, which ensures internal processes are in place to deal with requests, will help avoid any unnecessary burden on resources.

Despite the flexible working trend gaining pace as workers begin to realise its benefits, businesses shouldn’t expect a mass influx of requests. Instead departments should anticipate and cater for the long-term impact, which can be done by running surveys to predict the likely uptake.

Outlining clear parameters from the beginning will help avoid any confusion and prove an effective way to minimise unreasonable requests. It is very important that staff are aware that the regulation only ensures that their request is dealt with appropriately, as opposed to thinking it is guaranteed.

Businesses should utilise the Acas code of practice for handling requests in a ‘reasonable manner’, which although not statutory, will provide a framework for analysing requests as well as being taken into consideration by employment tribunals. The official legislation for rejecting a request represents a fair code that offers businesses protection around key considerations such as cost, logistics and productivity.

The changes, if handled properly, should represent a massive boost for the industry, offering the potential to enhance employees’ job satisfaction, which will improve morale and loyalty. Professionals don’t need to feel overwhelmed if they have a framework in place that handles each request openly, fairly and without discrimination. If this is done the changes shouldn’t cause too much of a challenge.

This article was published coutesy of HR magazine and was written by Marie Wheatley, group head of HR at telecommunications company Daisy Group

 

Hot topic: Changes to flexible working law

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Legislation to allow all employees to request flexible working came into effect on 30 June. In part one of this Hot Topic Jane Fielding, head of employment at international law firm Wragge Lawrence Graham & Co explains how HR will need to prepare.

It is debatable whether extending the right to request flexible working to all employees will really trigger a tidal wave of applications. A 2012 CIPD survey indicates that 63% of workplaces already allow all employees to request flexible working and they have not been deluged.

For most employees, it’s about balancing flexibility with affordability and, particularly during a recession, not everyone’s family finances can support reduced hours, for example.

That doesn’t mean the extended rights won’t have an impact on the workplace and HR does need to be gearing up for the changes.  As well as extending the right to request, the new regime gives more flexibility in handling the request. It replaces a fairly prescriptive procedure with a duty to consider requests in a “reasonable manner”, generally within three months.

Managers will need guidelines for dealing with requests so the situation doesn’t drift, leaving the individual hanging and reducing the time to look properly at the request (and any appeal). The statutory business reasons for rejecting a request won’t change.

Prioritising requests is also likely to be a challenge. Employers don’t have to make value judgments  – many organisations do not require someone to say why they want the change. However, firms should bear in mind how this right fits with discrimination legislation.

Most employers are familiar with the risk of indirect sexual discrimination if a woman with childcare responsibilities is refused a change in working pattern. But if requests do start to come from a wider range of staff (such as male employees wanting to look after children or older employees seeking to wind down towards retirement), employers need to treat those even-handedly if they want to avoid discrimination claims. There will be some difficult judgment calls if not all requests can be accommodated.

This article is published courtesy of HR magazine. Read part two of hot topic tomorrow featuring the views of Daisy Group HRD Marie Wheatley.

 

Employees in small enterprises less likely to face discrimination

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Staff at businesses with fewer than 50 people are up to 10 times less likely to face discrimination than those working in larger companies, according to research by employment solicitors Doyle Clayton.

The report, Age Over Beauty?, seen exclusively by HR magazineis based on interviews with 1,000 employees and looks at discrimination faced due to age and gender.

It found that 10% of workers in companies with more than 50 staff or more face barriers due to their gender, compared to 1.3% in micro-businesses (between one and nine employees) and small companies (between 10 and 49).

Additionally, in micro-businesses and small employers the number who have witnessed age discrimination is almost zero, compared to 20% in medium-sized employers and larger.

Doyle Clayton partner Jessica Corsi told HR magazine HR issues can often arise when a company grows quickly from a small start-up to a larger organisation.

“Often in these circumstances it won’t feel like you have time to focus on HR issues,” she said. “Other growth issues such as finance will demand immediate attention and people issues may get left behind. It’s a good idea to make sure processes and sound policies are put in place as early as possible.”

Corsi also warned that discrimination can become a “self-fulfilling prophecy” during this period.

“If you’ve grown from a small business of fewer than 10 people, it can go from feeling like a family to something less personal,” she said. “If one person starts to feel discriminated against in this environment, others may look at their situation and decide the same applies to them. If you’re not careful things can go badly wrong very quickly.”

Carter Backer Winter HR director Nicola Bell told HR magazine it is important to have “open, clear and transparent policies”. She also encouraged companies to seek HR advice, even if they don’t have the resources for a full-time HR department.

“You can get advice from an external consultancy,” she said. “This can help get all the people issues consolidated. Sometimes it’s better that all these things are in one place.”

 

Conservatives call for tighter rules on public sector strikes

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Conservative cabinet office minister Francis Maude has outlined plans to tighten rules around public sector strike ballots.

Maude proposed withdrawing legal protection for striking workers unless unions could prove that half or more of their members had voted for the strike.

He added he also wished to prevent unions taking action on mandates that are more than two years old.

“It can’t be right that the unions can come back year after year, based on a mandate that is several years old, in order to call strike action that can cause real harm, not just to our children but also to hard-working parents,” he said.

While unlikely to come in under the current coaltion Government, if the change were to be enacted in the next parliament, unions would be at risk of being sued for damage caused by a strike if they do not have the votes of at least 50% of their members for the strike.

The announcement comes ahead of widespread industrial action on 10 July, including members from Unite, UNISON and the TUC, among others.

Unite national officer Fiona Farmer told HR magazine the union’s members felt they had “no option” but to strike after years of pay restraint in the public sector.

“Come October, local government workers will actually see their pay drop below the minimum wage, due to inflation,” she said. “We don’t believe employers in the public sector are standing up for their workforce.”

Louise Tibbert, HR director for Hertfordshire County Council and chair of the Public Sector People Managers’ Association (PPMA), told HR magazine continuing budget restraints in the public sector mean many employers’ hands are tied regarding pay.

“We know that public sector workers don’t take action lightly,” she said. “My council and others are trying hard to increase staff engagement and working conditions, but pay increases in the sector would lead to job losses, which is something nobody wants.”