AZETTELawyers for today’s employers

APRIL 2012 // FOCUS ON: EMPLOYERS’ DUTIES

IN THIS ISSUE //

EMPLOYMENT CONTRACTS

the quarterly newsletter of Floyd Graham & Co.

YOUR DUTIES ARE NOT JUST CONFINED TO THOSE IN THE WRITTEN CONTRACT

WHAT IS YOUR COMPANY’S POSITION ON THIS GROWING SUBJECT?

OBESITY IN THE WORKPLACE

EMPLOYER RESPONSIBILITYCOULD YOU BE LIABLE FOR YOUR EMPLOYEES’ ACTIONS?

CHAIRMAN'S VIEWAs well as the qualifying period for

unfair dismissal, employers should

also take note of the new rates

for statutory maternity, paternity,

adoption and sick pay. All of

these details can be found on our

website.

The UK also eagerly awaits the

arrival of the Olympic Games.

On a less positive note, there are

murmurs from the Leader of Unite

the Union that he would consider it

justifiable for public sector workers

to go on strike during the Games in

view of the extent of the proposed

public sector cuts.

From a personal point of view,

I am disappointed by these

comments. The Games represent

an opportunity to bolster the UK

economy. Strikes would without

doubt dampen this and for what

gain? For the public sector workers

to make it known how disgruntled

they are about proposed cuts in

this manner when private sector

workers have had to tolerate similar

cuts and carry on irrespective. I

hope that the workers concerned

find alternative and less disruptive

ways to voice their concerns.

As the seasons change, we have

decided to re-brand our quarterly

newsletter in the hope that it

puts a “spring” back into our

readers’ steps! As always, we

would welcome your feedback on

this. The focus of this newsletter

is employers’ duties; in a general

sense and in two very specific

circumstances.

So, what do the next few months

have in store for businesses insofar

as employment law is concerned?

In only 5 days, the qualifying period

for entitlement to claim unfair

dismissal and for entitlement to

written reasons for dismissal will

increase from one year to two.

While you may be breathing a sigh

of relief, we cannot overemphasise

the fact that there are

circumstances where employees

would be able to claim for unfair

dismissal irrespective of not having

accrued one year’s service for

example, termination as a result of

discrimination. It is also important

to note that the new two year

rule will only apply to employees

whose employment begins on or

after 6 April 2012; those already

in employment before that date

will retain the current one-year

qualifying period.

Greetings to all of our FGazette readers!

Lawyers for today's employersFloyd Graham & Co Ltd

2 Deanery CourtGrange Farm

Preston DeaneryNorthants NN7 2DT

Email: info@floydgraham.co.ukTel: +44 (0)1604 871143

www.floydgraham.co.uk

IN THIS ISSUE //

page 3 //employee contracts

page 4 //Is obesity a workplace issue?

page 6 //employer responsibility

page 8 //fg news

PAGE 11 //BRAINTEASERS

2

Where all employment relationships are concerned, there should be an employment contract setting out the terms of the relationship between the employer and employee. It is not unusual however for there to be unwritten terms outside of the contract that are binding on the employer and employee; these are known as implied terms.

In looking at whether there is an implied term,

it is necessary to look at the presumed intention

of the employer and employee at the time

that the contract was made and not whether it

would be reasonable to imply a term. It will be

relevant whether:

¥ the term would give the contract business efficacy; or

¥ it is the normal custom and practice to include such a term in contracts of that particular kind; or

¥ the conduct of the employer and employee demonstrates that there was an intention to include such a term; or

¥ the term is so obvious that the parties must have intended it.

Some examples of where terms have been held

to be implied are as follows:

¥ where the employee's job involved a degree of travelling, a mobility clause was implied;

¥ where essential maintenance work was carried out at weekends and a worker had adhered to this custom for 12 years, it was implied that he should work on weekends when requested by his employer to do so; and

¥ where a pilot had been demoted in the past following incidents of attempting to land without lowering the helicopter's undercarriage. As the pilot had not questioned this demotion, it was implied that there was an implied term to demote employees in similar circumstances.

Employers should note that implied

terms that derive from custom and

practice are particularly important

in the context of corporate

transactions. Lawyers carrying

out due diligence on behalf of

the buyer will not only check

what their client is inheriting

via written contractual documentation but also

by way of custom and practice. The appeal of a

corporate transaction could change overnight

if the buyer learns, for instance, that the

employees have an implied right to have their

pay rises determined by a national agreement

as this had been the practice for some 20 years

previously.

There are also some terms which, although not

usually specified by the employer and employee,

are regarded as being a necessary part of the

contract of employment. Common examples

of such implied terms that affect employers

are: duty to pay wages, duty to provide work,

duty to give reasonable notice of termination,

duty to provide a safe system of work and a

safe workplace and lastly, but by no means

least, the duty of mutual trust and confidence.

If the employer is in breach of implied terms,

the employee may resign and claim unfair

constructive dismissal (if there is a fundamental

breach).

Normally an express term in the contract will

preclude a contradictory implied term. There

have however been cases where this is not so.

For instance, where the express term confers

discretion on the employer and the implied term

restricts the employer’s ability in its exercise

of that discretion. This may commonly arise in

relation to bonus entitlement where the scheme

is expressed to be discretionary but year in, year

out, the employer has paid the same amount

irrespective of the performance of either the

business or the employee.

In essence therefore, employers should

ensure that they do not consider that

their duties in relation to an employee

are limited to those contained within the

employment contract; the duties can be

considerably more far reaching

and the consequences

of not complying with

these duties could be

devastating to a business

where, for instance, an

employee brings a claim

for constructive unfair

dismissal as a result of

an alleged fundamental

breach of an implied term.

To discuss this extensive

topic further, please do

not hesitate to contact a

member of the team at

Floyd Graham & Co Ltd.

IT’S NOT ALL ABOUT THE CONTRACTSEMINAR DETAILSTHURS 26 april 2012day 1 claims FGC OFFICE 8AM - 10AM

THURS 24 MAY 2012MOCK EMPLOYMENT TRIBUNAL in collaboration with ely place chambers hilton hotel, northampton 8AM - 12pM

FORTHCOMING SEMINARS

for more info visiT www.floydgraham.co.uk

Using practical case studies, our seminar will consider:• Thepotentialeffectofqualifying serviceincreasingto2yearsand whichemployeeswillbeaffected

• Howtospotpotentialclaims (includingautomaticunfairdismissal, whistleblowinganddiscrimination) thatemployeescanbringfromday 1oftheiremployment

• Howtomitigatetherisksof employeesbringingday1claims

Experiencefirsthand:• Theenvironmentofan EmploymentTribunal

• Thecrossexaminationofwitnesses

• Howthelawisappliedtoeveryday factualsituationsexperiencedin theworkplace

• Factorsconsideredbythe EmploymentTribunalreaching a decision

FUTURE SEMINAR dates for your diary5 july 201220 september 201206 december 2012

4 IS OBESITY A

WORKPLACE ISSUE?

As an employer have you considered what the organisation's stand point is on obesity? Some of you are likely to conclude that obesity is a public health issue. Others will say it is a life style choice of the individual concerned. In either case, the organisation has no responsibility. This is unlikely to be sustainable over the next few years. Statistics produced by the European

Commission in November 2011 identified that the UK is the most overweight/obese member state. Over the next 40 years it is predicted that some nine out of ten UK adults will be obese; productivity will be affected, and the billions already lost in earnings will continue to rise along with sickness absence levels. Many larger employers have and will continue to provide wellbeing initiatives, which may

in part help address this complex problem – obesity is not just about a lack of exercise and an excessive consumption of food. For smaller organisations particularly in the current economic climate, staff wellbeing may not be high on the human resource agenda; providing access to free health checks, subsidising gym membership or offering healthy food may not be an option due to lack of resources.

what is your company doing to combat a ‘growing’

health issue in the uk?

¥ Health and Safety Legally, employers are obliged to take care of their

workers’ health and safety by providing a safe working

environment. Risk assessments therefore need to take

account of obese workers to ascertain whether special

arrangements need to me made to remove any health

and safety risk. Can equipment accommodate their size

i.e. ladders, chairs, workspace or personal protective

equipment? Are there certain jobs obese workers may

find more difficult to do due to physical limitations? ¥ Obligation of trust and confidence Many larger employees will be able to cite examples of

where during their career they have been marginalised,

undermined or humiliated as a direct result of their

size or appearance. Whilst there is no UK legislation to

actively prohibit bullying or harassment on the grounds

of appearance, employers must not forget that they

owe their employees a duty of trust and confidence,

which includes the right to be treated with respect. A

breach of this obligation may entitle an employee to

resign and claim constructive unfair dismissal. If however

there are other protected characteristics sitting behind

the individual’s appearance, the employee may also

have additional protection from harassment under the

Equality Act 2010. Employers must therefore ensure that

both management and staff understand that bullying

and harassment because of someone’s appearance,

including size, will not be tolerated.

Whilst staff are ultimately responsible for maintaining their own health, employers cannot ignore the broader legal issues obesity presents in the workplace:

Whilst some US states have introduced specific laws

to prohibit discrimination on the grounds of appearance,

there are no plans to do the same in the UK. Despite

this, the predicted UK obesity epidemic will undoubtedly

become fertile ground for employment litigation and

may in the long term result in new discrimination laws

having to be introduced. In the meantime, whilst

employers are not going to be able to provide the

solution to this alarming problem and there is no actual

protection against discrimination on the grounds of size,

employers will need to be vigilant when dealing with this

issue in the workplace; there is plenty of scope under

current UK law for individuals to seek redress from the

Employment Tribunal if they feel aggrieved.

¥ Dismissal The usual unfair dismissal framework will apply. An

individual dismissed because of their size may have an

unfair dismissal claim.

¥ Discrimination Obesity, despite being a recognised medical

condition, is not an “impairment” for the purpose

of being a “disability” under the Equality Act 2010.

There is therefore no law prohibiting discrimination

on the grounds of size. However, the cause of obesity

(depression or a thyroid problem) or the symptoms

arising from obesity (cardiovascular disease, type-2

diabetes, hypertension and certain cancers) may mean

that the individual is protected by the Equality Act. This

is because the actual cause or even the symptoms of

obesity could be an “impairment” and fall within the

definition of a “disability”.

Employers cannot therefore ignore the possibility

that obesity may have some part to play in creating a

potential right in relation to disability discrimination. An

enquiry of any underlying medical cause and medical

advice will be crucial to establishing what rights the

employee may have as well as whether any reasonable

adjustments to premises or working practices need to be

made.

There are also other types of discrimination, not

immediately apparent which may arise. Research shows

that men are more likely to be overweight than women.

Yet there is more tolerance of men being overweight

than women. There is also usually more acceptance

of older people being overweight. Less favourable

treatment however due to sex or age could amount to

unlawful discrimination.

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7

IS AN EMPLOYER RESPONSIBLE FOR AN EMPLOYEE’SVIOLENTRESPONSE?

6

The starting point for answering this question, is that an employer is vicariously liable for the torts (or wrongdoing) of its employees

where these occur “in the course of employment”. In two recent cases, the Court of Appeal considered whether acts of violence

occurred in “the course of employment” where one employee injured another.

In this case, the deputy manager of a care home had

requested that another employee, Mr Marsh, fill an

empty shift at work. Mr Marsh, in a drunken state, cycled

to the care home and attacked the deputy manager 20

minutes after his request. The Court of Appeal upheld

the County Court’s judgment that the employer was not

vicariously liable. This was because the employee was

“acting personally for his own reasons”, so not in the

course of employment. The Court of Appeal considered

that the deputy manager’s request was no more than

a pretext for an act of violence unconnected with Mr

Marsh’s work as a health assistant; the fact it happened

at work was incidental. The employee’s tort had not

therefore occurred in the course of employment.

In this case, a manager at a small factory had noticed that an

employee, Mr Brown, was making an error and said “come

on” to Mr Brown, so that he could assist him in fixing this error.

Mr Brown instead attacked the manager, throwing him onto

a table. The Court of Appeal, overturning the County Court’s

judgment, held that the employer was vicariously liable. It

held that there was a sufficient connection between what

the employee was required to do and the unlawful violence.

The violence was an almost instantaneous response to a

manager’s instruction concerning a task central to Mr Brown’s

employment. In these circumstances, Mr Brown was acting in

the course of employment.

The Court of Appeal also commented that although this

case concerned a junior employee’s response to instructions,

an employer may well be vicariously liable when a senior

employee drives home an instruction with a blow.

One employee attacks another employee, injuring him. Could the employer be vicariously liable (legally responsible) for the employee's violent act?

Weddall v Barchester Healthcare Ltd Wallbank v Wallbank Fox Designs Ltd

7

In essence, the main difference between these cases is that in Weddall, the

assault happened to occur at the place of work but was otherwise a drunken act

unconnected with his employment, but in Wallbank, the employee acted in the

course of his employment, in immediate response to instructions given to him.

• Anightclubownerwasheldvicariouslyliablewhenoneofthedoormenhe

employed stabbed a person to whom he had previously refused entry to the

club.

• Theownerofarugbyclubwasresponsibleforoneofitsrugbyplayers

punching a member of the opposite team in the course of a rugby match,

even though play had been halted at that point.

• Acompanyprovidingfumigationserviceswasheldvicariouslyliable for an

employee’s theft from a container he was responsible for fumigating.

• Acleaningcompanywasnotfoundtobeliableforthecostofinternational

calls made on one of its client’s telephones by one of its cleaners (a 1987

case). However, in the light of recent case law, an employer may now be

found liable in these circumstances.

• Theemployerwasnotvicariouslyliablewhenapoliceofficerwentoff on a

vendetta of his own and shot a person using a gun he had improperly taken

from the police station strongbox.

• Carryoutariskassessmentastoliabilitytothirdparties(orother

employees) that employees could expose them to. This is necessary because

an employer has a duty of care not only to its staff, but also to third parties

who may come into contact with its employees.

• Provideemployeeswithappropriateinstructionandsupervision.

• Giveemployeestheopportunitytoexplaintheirfrustrations(forexampleby

a complaints/grievance system or during the appraisal process).

• Ensureadequateinsuranceisinplaceintheeventthatclaimsarebrought

against them. It may be that this is the employer’s best course of action, as

there may be some instances where no amount of precautionary action could

prevent an employer being found vicariously liable for an employee’s act.

Why was one attack by an employee found to be in the course of employment and the other one was not?

In what other situations have employers been found to be vicariously liable for the acts of their employees?

When have employers not been found to be vicariously liable?

What should employers do to protect themselves?

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8

One of the Floyd Graham & Co solicitors, Rachael Jessop, successfully completed the

Silverstone Half Marathon on

Sunday 11 March 2012. She

achieved her personal best

time of 2 hours and 2 minutes.

Rachael has raised £370 for

the Stroke Association and is

now contemplating taking her

running to the next level…

London Marathon 2013 here

she comes?!? Although she

will not forgive us for it, here is

a photo of Rachael “sprinting”

to the finish line!

Floyd Graham & Co attended the Northampton Chamber Business Exhibition

at the Sunley Conference Centre on 16

March 2012. This was a great opportunity

to meet like-minded businesses in the

Northamptonshire community and share

information on the services and expertise

offered by all of the exhibitors. This is

the second time that we have attended

this event and will certainly be looking

to attend again in the future!

SEE WHAT WE’VE BEEN UP TO RECENTLY AT FLOYD GRAHAM & CO H.Q.

GO RACHAEL!

FGC NEWs

Rachael (left) at the finish line!

Hannah Scripps

welcoming local business contacts to the FGC exhibition

stand

The view is that employers should no longer be in a position to allow employees without

ability or potential to be overlooked for promotion and increased remuneration and

benefits.

Employers will no longer be able to grant promotions to employees who demonstrate

that they have the necessary skills and aptitude to do the job in preference to those with

no ability.

Under the IDA it is estimated that some 2.6 million new positions will be created in the

public sector and private industry combined. These new roles will attract substantial

corporation tax breaks for small and medium

sized employers who agree to employ two

incompetent workers for every worker with the

ability to do the job.

The Act will contain tough new sanctions

against those employers who fail to comply with

its provisions. Among other things, questions

designed to establish competence such as “do

you have any skills or experience which relate

to this job?” or “can you provide examples of

previous work success?” will be prohibited due

to the potential to discriminate against those

without any ability.

Mandatory non- performance linked pay rises

and promotions will be given to even the most extreme cases of demonstrated inability

in order to address the current imbalance.

In order that employers can be properly prepared Floyd Graham & Co will be running

a series of seminars over the next two weeks. Reserve your place now to avoid

disappointment as spaces are limited.

We are pleased to announce that this is not real...

APRIL FOOL! (sorry!)

UK GOVERNMENT PROPOSES THE INABILITY DISCRIMINATION ACT! “IDA” 2012This new piece of legislation which comes into force on 1 April 2012 is being welcomed as long overdue by supporters of millions of current and potential employees who lack any real skills, potential or ambition.

ST OP PR ES S!

9

Employers will no longer be able to grant promotions to employees who demonstrate that they have the necessary skills and aptitude to do the job in preference to those with no ability.

10

legislation timetable

Statutory maternity, paternity and adoption pay increaseThe standard rates increase from £128.73 to £134.45 per week

Statutory sick pay increase The rate will increase from £81.60 to £85.85, with the weekly earnings threshold also rising from £102 to £107

Changes to income tax thresholds The income tax personal allowance increases from £7,475 to £8,105

Qualifying period for unfair dismissal The qualifying period for unfair dismissal (for those employees whose period of continuous employment begins on or after 6 April 2012) will increase from one to two years

Qualifying period for entitlement to written reasons for dismissalThe qualifying period (for those employees whose period of continuous employment begins on or after 6 April 2012) will increase from one to two years

Changes to tribunal procedure These will include:

• Witnessstatementstobetakenasread

• Witnessexpensestobebornebythelosingpartyatthe tribunal’s discretion

• Employment judges to sit alone when hearing unfair dismissal claims

• Increasing the maximum amount for cost and deposit orders in the tribunal

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11

EMPLOYMENT LAW QUIZCheck your level

of employment law knowledge with our quick quiz on a few matters we would generally consider in an audit.

BRAINTEASERSAnswers: 1c, 2b, 3a, 4b. Congratulations if you answered 3 or 4 questions correctly! You appear to have a good understanding of employment law. If you answered less than 3 correctly, please do give us a call to discuss any areas of uncertainty.

1. section 1 of the employment rights act 1996 sets out certain minimum details that must be included in a statement of terms or contract of employment. Which one of the following does not have to be included in the statement or contract under this act? a) The employee's job title or a description of the work b) An explanation of how holiday pay is calculated on termination of employment c) Details of any restrictive covenants d) The length of notice an employee needs to give to terminate his contract of employment

3. Which one of the following statements in relation to the Working Time regulations 1998 is incorrect? a) Employers may require employees to work more than 48 hours over more than a 17 week period on condition that it is reasonable when considering business need and they have employees' verbal consent b) Employees are entitled to 5.6 weeks of holiday per year including bank holidays c) Employees must consent in writing if they are to work more than 48 hours per week over a 17 week period d) If an employee has agreed in writing to opt out of the 48 hour working week, there is no limit as to the number of hours the employee can be required to work save in relation to health & safety

2. if all the section 1 requirements are not supplied in a statement of terms or contract of employment, which one of the following sanctions can an employment Tribunal impose on an employer? a) The Employment Tribunal can order compensation of £5,000 to be paid to the employee b) When an employee successfully brings another claim in the Employment Tribunal, the Employment Tribunal may order the employer to pay 2 or 4 weeks' additional wages to the employee c) The Employment Tribunal can decide that any dismissal is automatically unfair d) There is no sanction for non-compliance with section 1 of the Employment Rights Act 1996

4. Which one of the following statements in relation to recruitment of employees is incorrect? a) Employers should not ask questions about a female prospective employee's childcare commitments during an interview b) Once an employer has received a Criminal Records Bureau check on a potential employee they should photocopy it and keep it in the employee's personnel file c) Interviewees may request disclosure of interview notes from employers under the Data Protection Act 1998 d) The employer should not retain interview notes for longer than is necessary, but it is sensible to retain these notes for at least 7 months

how did you do? answers below

SEE PAGE 12 FOR MORE INFO

As a dedicated employment law and HR practice, Floyd Graham & Co Ltd provides the whole spectrum of HR and employment law services. The Spotlight feature gives us the opportunity to give you an insight into a particular service in each publication. In this edition of the FGazette, we will focus on our HR and legal auditing services.

HR AND LEGAL AUDITINGWhat does it involve?HR and legal auditing gives employers an invaluable opportunity to acquire up to date information on the current state of their business from an HR and Employment Law standpoint. Armed with this information, employers are able to make informed operational and strategic decisions which fully support their business plan. The Audit team, at your request, will come to your business and undertake a full analysis of the HR processes, strategies and policies together with any employment documentation for both legal compliance and commerciality. The Audit team will report on the business’ HR function generally, its performance management and review processes, employee reward and development programmes and employee relations. The Audit team produces a written report of its findings

and recommendations. On your instructions, the Audit team would implement the changes proposed within the report. What are the benefits? The Audit has a proven track record of:

• Identifying the extent to which the existing processes support the business’ strategic plan.

• Identifying areas where efficiency and effectiveness can be improved.

• Minimising the financial, litigious and reputational risks associated with inadequate HR and employment policies, processes and documentation.

• Giving owners/managers increased certainly and control and therefore greater confidence when managing their businesses from an employer standpoint.

How much does it cost? Each Audit and the associated cost is tailored to the business’ own requirements, size and number of employees. We would be delighted to arrange a no obligation initial discussion to explore your specific requirements.

To arrange a visiT or for more informaTion, please conTacT us on info@floydgraham.co.uk or 01604 871148

visiT us online:www.floydgraham.co.uk

SPOTLIGHT ON OUR SERVICES