It’s not unusual to find employers making decisions based on an understanding of the law which is centred on a series of urban myths.
The problem is that when employees make mistakes in the workplace, their employer usually has a set way of dealing with those mistakes to protect the business. But when it is the employer who makes the mistake, it can lead to costly and long-running litigation, loss of management time and bad publicity.
With the law being a quagmire ready to trap all who dare to ignore it Printweek spoke to two lawyers for their views on the most frequent of mistakes.
Lucy Gordon, director, Walker Morris
Lucy Gordon suggests the concept that an employee can be dismissed with less than two years’ service and without following a process or giving a reason is in a prime position for debunking.
She considers it “understandable that many believe employees are required to have two years’ service to bring a claim for unfair dismissal. However, having less service doesn’t mean that you can dismiss with impunity”. As she explains “employees with any length of service can bring claims for discrimination on the grounds of a protected characteristic” such as race or sex, or for unfair dismissal.
To mitigate risk, Gordon advises clients to undertake risk assessments before carrying out dismissals, “otherwise they can face claims for potentially uncapped compensation, depending on the employee’s losses and injury to feelings”. Employers should follow the ACAS Code of Practice and clearly identify a fair reason for every dismissal.
Next up is the notion that if an employee doesn’t expressly tell their employer that they have a disability, their employer can’t be found to have discriminated against them.
Some believe that what they don’t know won’t hurt them. Employers who think that if they have not been told about an employee’s disability they don’t need to consider whether there is a need to make reasonable adjustments, or worry about a disability-related dismissal claim, should think again.
The reality, according to Gordon, is that “employers are expected to look out for signs that could indicate that someone has a disability, and to make reasonable enquiries about an employee’s health.” The legal test is, simply, whether an employer knew or could reasonably be expected to know that the employee had a disability. She notes that frequent or long-term sickness absence, a change in mood or performance, or consistently making errors are all indicators of health conditions that could amount to a disability. As a result, says Gordon “employers should be alert and sensitively make enquiries with employees to see if there are any underlying issues”. Where an employee is disabled, there is a positive duty on employers to consider whether reasonable adjustments are required.
Failures relating to disability can be very costly as claims for compensation are potentially uncapped.
Third on the list after dismissals and disability is the view that after a TUPE transfer, employers have to wait two years before they can harmonise terms and conditions of employment. This is incorrect says Gordon.
“This myth,” she explains, “seems to stem from a mistaken belief that after two years, the transfer will not be considered to be the reason for any changes because of the passage of time.” She continues: “The truth is that any variations to contractual terms are void if the transfer itself is the reason for the change. This can have important consequences for employers.”
In outline, if changes are void, even where employees consented to the change, and any less favourable terms were offset with more beneficial provisions, they can cherry pick the most favourable to them from the original contract and from the new one.
To drive the point home Gordon talks of employers who have sought to buy out, say, more generous holiday entitlement with a small increase to salary – “they’ve often ended up paying for both benefits”.
The answer in her mind is to only make changes – with employee consent – where the reason for the change is related to the transfer, but “the sole or principal reason for the change is economic, technical or organisational.”
Number four on Gordon’s list is sadly appropriate for the moment: the idea that employers will trigger collective consultation obligations if they propose 20 or more redundancies at one establishment within a 90-day period, regardless of when those dismissals take effect.
She says: “It’s logical that employers are nervous about triggering collective consultation obligations, and it’s because of the requirement to consult with a trade union or elected employee representatives and the potential consequences of getting it wrong.” And her reasoning is sound: a failure to carry out collective consultation properly can result in claims of up to 90 days’ gross pay for each affected employee.
In a nutshell, Gordon dismisses the myth by saying that the requirement to engage in collective consultation only applies if the 20 or more dismissals at one establishment are proposed to take effect within a 90-day period. She adds that “dismissals take effect when the employment contract comes to an end – so either at the end of the notice period or on the termination date if the employee is paid in lieu of notice”.
But she points to one saving grace: “If some affected employees are on notice periods of a month, but others have, for example, six months’ notice, there may be less than 20 redundancies proposed to take effect within a 90-day period.” The obligation won’t be triggered.
The last myth Gordon busts is the thought that there is no need to follow a process or give a reason when not renewing a fixed-term contract.
This, she says, is wrong: “Most fixed-term contracts provide that they will terminate automatically on a set date, or on conclusion of a project, without the need for further notice to the employee. Many employers assume that they can let these contracts expire without the need to follow any process or give any reason to the employee.” However, she warns that the non-renewal of a fixed-term contract amounts to a dismissal. Therefore, if the employee has two or more years’ service, or if the reason for the non-renewal is discriminatory, “the employee may be able to bring a claim for compensation if there isn’t a fair reason for the dismissal and a fair process was not followed”.
To prevent claims, Gordon suggests employers give thought as to why the contract is not being renewed: “If the role has ceased there is likely to be a redundancy situation. Equally, if the contract is cover for maternity or sickness absence, it is possible to include wording in the contract that confirms that the contract will come to an end when the original employee returns.”
Chloe Themistocleous, senior associate, Eversheds Sutherland
Chloe Themistocleous puts the thorny matter of employment contracts and in particular, the view that if there is no written contract between the employer and employee, there is no contract at all, at the top of her most troublesome myths.
As she tells, “this myth may have sprung out of the misconception that the only contracts that are valid are written contracts.” In fact, she adds: “The contractual relationship can be based on what the employer and employee have said to each other and their subsequent course of conduct.” Worryingly for employers, where they have failed to provide clear terms when they were able and obliged by law to do so, employment tribunals often find in favour of the employee. And so, in Themistocleous’ opinion, “employers should be careful to provide a written contract, signed by both the employee and a representative of the employer, when each new employee starts work”. Not having a contract can not only lead to a dispute about the terms but also a claim for up to four weeks’ pay for failure to provide written terms.
Next comes the understanding that employees have a right to have the day off on a public holiday and, if they do work, they must be paid more for it.
This misconception, in Themistocleous’ mind, comes from the term ‘public holiday’. Experience has taught her that employers assume that, as these days are generally considered to be days off, employees have the right to them. The truth, she says, is that “there is actually no statutory right to time off, paid or otherwise, on any public holiday. Employees are entitled to the basic minimum holiday entitlement of 5.6 weeks each year, but how and when this is taken is up to the employer and employee”. That said, an employee’s contract may specify that that they are entitled to take public holidays off or to extra pay for working those days. And if the employer breaches the contract with regards to public holidays, Themistocleous warns that an employee could bring a claim against them. There is only one solution in her mind: “Ensure that the employer’s position on public holidays is consistent between employees and, where possible, see that the position is set out in the employment contract.”
With workers having families it’s not unreasonable for some employers to think that employees with children have the right to work part-time or on a flexible basis. The actuality is quite different according to Themistocleous. “Employers can think that because employees with 26 weeks’ service have the statutory right to request flexible or part-time working, the employer must accept requests. However, no employee has the right to flexible or part-time working, regardless of their status as a parent.” As a result, she says that an employer can reject the request for certain defined reasons, including “the burden of additional costs, detrimental impact on the quality or performance of the business, or the inability to recruit additional staff or reorganise work.” Nevertheless, she would advise employers to carefully consider any request for flexible or part-time working and “if they must deny the request, ensure it can be justified by one of the prescribed reasons.” Her logic is based on the right of an employee who is wrongly denied flexible or part-time working to bring a claim to make the employer reconsider the request and/or pay up to eight weeks’ wages in compensation.
The fourth myth that Themistocleous tackles is the view that an employer is not allowed to give an employee a bad reference.
While it’s possible that employers believe this myth to be true because it can seem easier and less risky than giving a bad reference, there is nothing in law that states that an employer must give a reference for an employee. However, as Themistocleous advises, “where the employer does give a reference, it should not be untrue or inaccurate. That said, there is no law preventing an employer from giving a negative, but factually faithful, reference in appropriate circumstances”. But employers must tread carefully she says: “If an employer gives a misleadingly positive reference, the recipient of the reference can bring a claim against the employer for negligent misstatement. Alternatively, “if an employer gives a misleadingly negative reference, the ex-employee may bring a claim for defamation”.
To reduce risks, some employers have a policy of only confirming the employee’s dates of employment and position with the company, which sidesteps the issue altogether. But this can also have a negative impact on those employees who deserve a glowing reference.
The last myth that Themistocleous has seen cause trouble for employers is the belief that employees who are pregnant or on maternity leave cannot be dismissed.
The root of this particular myth may lie in the stance that some employers take as they are conscious of not discriminating against pregnant employees or employees on maternity leave. Critically for Themistocleous, no employee is immune from dismissal. However, she says that “employers must be careful not to dismiss employees because of their pregnancy, pregnancy-related illness or maternity leave. Such dismissals and redundancies are likely to be automatically unfair and discriminatory, which may lead to high compensation for loss of earnings and injury to feelings”.The only path open to employers is to follow their disciplinary process for these employees in the same way as for any other employee, but with consideration as to whether and to what extent the pregnancy has impacted their conduct or performance.
In summary
The very fact that employment lawyers invariably have long, and storied, careers indicates one thing – that employers and employees often fall foul of some often-complex rules and procedures. While workplaces disputes will never be eradicated, a proper understanding of the law, will be of greater help than an understanding of myths.
