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HR News Round-up 

Employee Relations 
Research from the Office of National Statistics (ONS) shows 1,389,700 working days were lost in the UK during 2011 as a consequence of 149 stoppages of work arising from labour disputes. This is the highest level for 20 years. 88 of these stoppages were in the Public Sector (59%) and 61 were in the Private Sector (41%). Wage disputes account for 95% of days lost; with public sector walkouts being responsible for 92% of lost working days. In all, 1.5 million workers were involved in such action, which amounts to12 times more than in 2010. 
With this in mind, the Government’s ‘austerity measures’ continue to be a source of unrest, particularly amongst Public Sector workers at the moment. It has already been announced that Teaching Unions will strike at the end of this month and further coordinated days of action are expected to be announced by more Trades Unions in the autumn, including the prospect of a ‘general strike’. 
The closure of schools perhaps presents employer with the biggest headache, as many employees will be left without appropriate childcare arrangements on this day and will look to employers to allow them to take a day away from the workplace. Where it is feasible to do so, allowing employees to work from home on this day is one option, whilst the use of annual or other leave (where such options exist) entitlements is another route that can be taken. 
It is unlikely that employees will be able to rely upon using ‘time off for dependents’ as this is generally for emergency situations only, which is not the case when the situation has been known about for some time; unless the employee can demonstrate that the provisions they have put in place for this day have fallen through at the last minute. 
Whatever employers decide upon in dealing with this situation, it should be fairly and consistently applied across the Organisation to avoid claims from employees of unfair treatment. 
Employment Tribunal Reforms 
The Government has today announced plans to consult on changes to Employment Tribunals; specifically Business Secretary, Vince Cable has proposed: - 
A limit on compensation payments for unfair dismissal to be set at a maximum of 12 month’s salary. The current maximum payment is £72,300 and; 
Introduction of ‘Settlement Agreements’, with which staff will agree to leave without recourse to an Employment Tribunal, but will get a pay-off in return. These will allow employers to remove under-performing employees without having to go through a lengthy performance measures. 
However, the proposal contained within the Beecroft Report published earlier this year, to introduce ‘no fault dismissals’ i.e. a dismissal for which an employer will not have to give a reason, will not be consulted on or introduced. 
General opinion suggests that this announcement is nothing new or ‘earth-shattering’; the current average compensation payment for unfair dismissal is currently £9,000 and nowhere near the statutory maximum and it is therefore not clear what the impact of these changes will be. 
It should also be noted that these proposals do not affect the current compensation limits in cases of discrimination, which are uncapped and for which there is no minimum period of employment before a claim can be brought to a Tribunal (from April 2012, employees have to have 2-year continuous employment before they are able to bring a claim for unfair dismissal). 
We will wait to see how these proposals develop through the consultation process. 
Checking an Individual’s right to work in the United Kingdom 
Last month we reported on the UK Borders Agency reissuing their guidance on employing people legally within the UK and the penalties faced by employers who fail to perform appropriate checks on their employees. It seems that this was not sufficient to prevent a high-profile employer from falling foul of the regulations. Tesco have been fined £200,000 for employing 20 foreign students within one of their warehouses in London who were exceeding the hours they were permitted to work whilst in the UK on a student visa. 
The rules on the hours foreign students can work will depend on the level of their studies and the date on which they were given permission to study in the UK. Generally, they will be allowed to work either: - 
up to 20 hours per week during or outside of term time; or 
10 hours a week during term time and full-time outside of term time. 
In Tesco’s case the employees were only permitted to work for 20 hours a week, but were found to have been working between 50 and 70 hours per week. Employers who recruit foreign students should routinely undertake the following checks: - 
check the passport to examine the student's Residence Permit, make copies and sign and date the copy 
check the date the permit was granted in order to establish which rules apply 
ask the student to provide a letter from the college/university confirming: 
the student's enrolment 
the term dates 
the qualification for which they are studying (for students given permission after 31 March 2009) 
confirmation that the college/university satisfies the test for an "acceptable higher education institution" or "a trusted further education institution" or a "further education institution" as relevant 
implement a system to prevent or control additional hours and advise managers of the rules regarding how many hours a student may work in any given week 
schedule a repeat check before the end of the first year. 
The fine imposed on Tesco may be reduced if it can be shown that they checked the right to work before each student joined them and repeated this check on an annual basis at least and retained copies of the documents. 
Full guidance on employing overseas workers can be downloaded from the UK Border Agency website. 
National Minimum Wage Increases 
The annual review of the National Minimum Wage will be implemented with effect from October 2012 and will see the following rates in place: - 
Employees aged 21+ ~ £6.19 per hour (an increase of £0.11 per hour) 
Employees aged 18 – 20 ~ £4.98 per hour (no change) 
Employees aged 16 & 17 ~ £3.68 per hour (no change) 
Apprentices ~ £2.65 per hour (an increase of £0.05 per hour) 
‘Name & Shame’ Scheme becomes Reality 
In the week that the new National Minimum Wage (NMW) rates are announced; a Government scheme, introduced on 1st January 2011 and which aims to ‘name and shame’ employers who flout their legal obligations in respect of the National Minimum Wage, has ‘named’ the first employer to fall foul of this scheme. Rita Patel, a Hair & Beauty Salon owner failed to pay a former worker over £3,000 in arrears of the NMW, a debt which has now been enforced by the HMRC through the Courts. 
For the scheme to be enforced, an employer must meet one of seven criteria listed below: - 
knowingly or deliberately failed to comply with their NMW obligations 
previously received advice from HMRC about the steps they need to take to ensure future compliance with NMW which they have not complied with 
failed to take adequate steps to keep or preserve NMW records 
delayed or obstructed a NMW compliance officer in the performance of their duties 
refused or neglected to answer a NMW compliance officer’s questions 
refused or neglected to provide information or produce documents to a NMW compliance officer, or 
refused or neglected to pay arrears of the NMW to workers, following HMRC intervention, which has resulted in HMRC taking action against the employer to ensure payment of arrears to workers 
However, cases won’t be referred to the Department for Business, Innovation and Skills unless the total arrears owed is at least £2,000 and the average arrears per worker is at least £500. 
A full guidance document can be downloaded from the Department for Business, Innovation & Skills website. 
Contracts, Employment Status and Dismissal 
Some recent case law has provided employers with useful guidance on the employment status of those employees working on a casual basis. In Drake v. Ipsos Mori Ltd, a useful reminder has been served that casual workers may be ‘employees’ during the periods in which they are actually conducting work for you. Mr Drake worked as a market researcher and was contracted on an ‘assignment by assignment’ basis between 2005 and 2010. He was told that there was no obligation on the company to offer him work or any obligation on him to accept any work that was offered to him (‘mutuality of obligation’) and was not issued with a contract of employment or a statement of terms and conditions of employment. 
When Mr Drake was removed from the panel of interviewers, he brought an unfair dismissal claim and argued that each individual assignment was in fact a separate contract of employment, which gave him sufficient continuity of service to bring the claim. 
However, the Tribunal agreed with the employer that, given that there was no 'mutuality of obligation', Mr Drake was a worker, not an employee. When the case was referred to the EAT, they felt that there was sufficient mutuality of obligation for an employment relationship to exist during each period of work. Whilst undertaking each assignment, Mr Drake was obliged to work personally for the company until either he completed the assignment or it was withdrawn. The fact that the assignment could be brought to an end at any time did not mean there was no contract in existence while the assignment was ongoing. 
The case has now been sent back to the employment tribunal to consider his actual employment status and whether he had sufficient continuous service to pursue a claim for unfair dismissal and so we await the outcome of this case to further define the employment status issue... 
A second case on this has provided some useful guidance as to the definition of a ‘client’ or ‘customer’ as well as defining ‘self-employed’ versus ‘employed; this case is The Hospital Medical Group Ltd v. Westwood. 
In this case, the Court of Appeal decided that a doctor who was integrated into a business will be a worker even if carrying out a business in his own name. Dr Westwood provided surgical services (hair restoration procedures) to a private clinic on a part-time basis. His contract specified that he was self-employed; but when it was terminated he claimed employment status and unfair dismissal or alternatively, that he was a 'worker' and entitled to unpaid wages. 
The Employment Rights Act 1996 defines a worker as an "individual who has entered into a contract of employment...or any other contract under which they undertake to perform personally any work for another party to the contract whose status is not that of a client or customer". Dr Westwood was clearly required to provide the services personally, but the question was whether the patients he treated were his customers or clients, or those of the clinic. 
The employment tribunal said that he was a 'worker'. The EAT agreed, as did the Court of Appeal who upheld the EAT's conclusion that the patients were not Dr Westwood's customers or clients but were those of the clinic. Dr Westwood did not personally market his services to the wider population but had merely contracted to provide professional services to another business. He was an integral part of the clinic's business, being promoted as "one of our surgeons". So even though he was in business on his own account, he succeeded in his claims for unlawful deductions from wages and accrued holiday pay. 
This second case reinforces the need to ensure that the contract which is place, whether it is a ‘contract for services’ or a ‘contract of employment’ reflects the working arrangements and relationships that are actually in place. There are in fact, two very different ways in which being ‘self-employed’ is defined; the HMRC’s definition focuses purely on the payment of PAYE and National Insurance and where the liability for payment of this lies, whilst an Employment Tribunal will look much more broadly at the working arrangements that are in operation. If any of these statements applies, your ‘worker’ is likely to be self-employed and will be considered as such by an Employment Tribunal: - 
they can hire someone else to do the work you have given them, or take on helpers at their own expense 
they can decide where to provide their services, as well as when and how to do the work you have given them 
you pay them an agreed fixed price - it doesn't depend on how long the job takes to finish 
they can make a loss or a profit 
Even if none of the statements in the previous list applies, your worker is still likely to be self-employed if most of the following apply to them: 
they use their own money to buy business assets, pay for running costs, etc 
they are responsible for putting right any unsatisfactory work at their own expense and in their own time 
they provide the main tools and equipment needed to do their work 
Auto-Enrolment is just around the Corner 
‘Auto-enrolment’ concerns the requirement of employers to auto-enrol eligible employees/jobholders, who are not participating in a workplace pension scheme, into either a ‘qualifying pension scheme’ or the ‘National Employment Savings Trust’ (NEST). 
The scheme will be rolled out from 1st October 2012 and will start with those employers who have more than 120,000 members in their PAYE scheme. The roll-out will continue until 2018, with a number of identified ‘staging dates’ occurring within that timeframe. A ‘staging date’ is the date by which employers will have to have appropriate provisions in place and is dependent upon the numbers of staff within their PAYE scheme. Smaller employers will be the last to go and ‘staging dates’ are determined by the employers PAYE reference number.  
Further details can be found on the Pension Regulator's website. 
1st October 2012 will also see the Employers' Duties (Implementation) (Amendment) Regulations 2012 come into force. These take into account the introduction of pensions auto-enrolment and amend the disclosure regime to introduce a one-month timescale for the trustees of auto-enrolment schemes to issue basic scheme information to jobholders; who should receive the information before the end of their opt-out period. Non-automatic enrolment schemes will be required to provide basic scheme information to members within two months of the person joining the scheme. 
Electonic Fit Notes 
The Department of Work & Pensions latest Stakeholder Bulletin advises that GPs are now starting to use computer-generated ‘Fit Note statements’. This commenced in July 2012 and most practices are expected to be using these from early 2013. The new Notes are on one-sided plain A4 paper and include the same information as the handwritten fit notes, but the information is presented ‘side by side’ rather than front and back. Employers will continue to receive a paper copy of this ‘fit-note’, which will not be sent electronically. 
Handwritten fit notes will continue to be issued until the computer system within the particular medical establishment has been upgraded. However, once rolled-out nationally, the computer-generated notes are expected to help employers in the following ways: - 
they will be easier to read 
they will include a unique barcode, which prevents the note from being altered 
they can be scanned directly into an employee record system 
the note cannot be completed by the GP unless all boxes are 'ticked'. 
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