Blog posts in Finance and strategy

Bullet holes by the photocopier

An award-winning journalist writes…

When I was 24, after a couple of years of dismal freelancing, I got my first staff job on a small but high-profile magazine. I was unbelievably nervous and excited when I arrived on the first day but was shown to a desk and given a few tasks to get on with.

I had only been there a couple of hours when one of the other journalists came up to me and said, "What's your name?" in a rather intense way.

"I'm Angela," I said offering him my hand. "I've just started and—"

"Angela, you've got to leave the building now," he said flatly.

I was torn between conscientiousness and alarm but decided, it being my first day, to stick with conscientiousness. So I picked up the phone.

"I'll just make this call I've been asked to do," I said breezily. He grabbed my arm and pulled me out of the office — I noticed other people marching purposefully to the exit as well. Within moments, police were flooding in.

It turned out that the work experience guy sitting opposite me, who had been complaining loudly that he “wasn't "feeling well" had brought not aspirin, but a gun to work. When, indignant at not being offered the office first-aid kit, he started brandishing it, he was marched out.

As he was led away, and we inspected the bullet holes by the photocopier, I saw him looking a bit shame-faced. But in retrospect, I wonder if he didn't have the right idea. It turned out to be a really horrible place to work.

This much I know: the employee writes:

I went for a Starbucks and rang my friends for a laugh. Call a lawyer? Why? I’ve had worse from newspaper management. 

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Licensed to thrill?

At a time when salary increases and financial incentives aren’t always commercially viable, some employers are resorting to more entertaining techniques to keep staff’s morale high in the present economic climate.

Putting a television in the workplace is an example: in a current Law Donut post, Over-refreshed and Misbehaving: the World Cup in the workplace, Michael Scutt issued a timely reminder to those employers planning to show World Cup matches live that if a television arrives on work premises it will need a TV licence and, if live football is being streamed to the workplace through the internet, a TV licence is also required for that.

Playing music at work is another boost. Whether that music is on in the background or used after hours to create a more sociable buzz, sourced ad hoc from the radio or more strategically from a digital playlist service such as Spotify, it’s considered to be a public performance; and playing music in public requires a licence, otherwise you are likely to be infringing copyright. The simplest way to get a licence is via the PPL and the Performing Rights Society, the PRS . These organisations distribute the proceeds of the licences to the rights holders: the PPL pays the performers, record companies and other royalty rights holders; the PRS pays composers, songwriters and publishers.

The alternative to getting your licence to play music at work would be to approach each individual performer, record company and rights holder to obtain their permission - an impossible task.

Depending on the type of business you have, and the way you use music, there is a licence type for you: PPL Tariff and PRS Tariff.

If a business does not obtain the correct licence the royalty holders, but most likely the PPL or PRS, could enforce a licence against the business via a court order. A court order comes with a fine of up to £10,000 and even a prison sentence.

The PPL and PRS carry out spot-checks on businesses to ensure compliance. A recent high profile case of a hairdresser refusing to obtain a licence for music being played in the salon shows the problem in action.

And while we’re on the subject of licences, do your employees access, share or copy information published online or in the traditional hard-copy format? Or does your business receive daily press cuttings? If so, and most businesses do, then you need to make sure that you are minimising the risk of copyright infringement in your business by obtaining a licence from the CLA. 

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Over-refreshed and misbehaving: the World Cup in the workplace

The quadrennial jamboree that is the World Cup is just a week away. South Africa hosts Mexico on June 11th in the opening match of the tournament, which comprises 32 teams and culminates 63 matches and one month later in Johannesburg’s final.

England qualified, of course, and we can doubtless look forward to more raised hopes, dashed expectations, broken metatarsals, penalty shootouts and sendings off (history does repeat itself, doesn’t it?). Not to mention hangovers, sickies and punch-ups – and that’s only among the players.

While the tournament may be keenly anticipated by many (and loathed by many others), there are employment law issues arising that employers ought to take into account before settling down in front of the box.

The real world of business must go on and the World Cup, like any popular sporting event, poses problems to employers when workers would like to watch their team. England’s schedule for the first round matches is fairly kind to employers; the first two matches kick off at 19.30 BST and it is only their third match that eats into the afternoon with a 15.00 kick-off.

The Chartered Institute of Personnel and Development (CIPD) recently published its World Cup and Absence Management Guide which sets out the main issues that employers might face and is well worth a read. XPert HR also published a model policy for “sporting and other special events” in Employers’ Law dealing with the same issues.

The CIPD guide suggests that shift swaps, flexible hours and unpaid leave could be utilised or, if employers want to make more of an event (and promote team building) they could screen matches in the workplace. This later suggestion would no doubt suit football fans but for those who can’t stand the game it could cause disruption and resentment if they are excluded. Do bear in mind that if a television is being used on work premises it will need a TV licence and, if live football is being screened through a feed on to employee’s PCs a TV licence is also required for that.

The CIPD’s other suggestion of having a radio or TV on in the background strikes me as unworkable – those who want to watch will feel constrained from doing so and for those who aren’t interested it will be an unwelcome background hubbub. Whatever solution is adopted, it probably pays employers to embrace the World Cup and be flexible, if only as a more constructive approach to dealing with the inevitable problem of absenteeism if no steps are taken.

However, the problems facing employers are not confined solely to how to screen the matches. Staff absenting themselves is one obvious problem, the other might be employees becoming “over-refreshed” (which could be particularly concerning if it happens in the workplace) and committing acts of misconduct and, even, criminal offences. An employer can be vicariously liable for the actions of an employee and claims could arise from one employee offended by the words or actions of another.

For instance, the recent case of May & Baker Ltd (t/a Sanofi-Aventis Pharma) v Okerago the facts of which arose from the last World Cup , demonstrated this. Ms Okerago was employed as a pharmacy inspector. She alleged that a fellow worker made a racially offensive remark to her when asked whether she would be supporting England or her own country. When she replied “her own country” she was, unhappily, told to return to that country. She sued for race discrimination when dismissed by the company, allegedly over an issue of her conduct. The Employment Tribunal held that she had been directly discriminated against. However, on appeal the decision was overturned because (for these purposes) of a technicality. The risk of inappropriate and/or offensive comments or actions occurring will be only be increased, especially if workplace screenings involve alcohol. Employers should remind staff that such conduct or comments will not be tolerated.

What happens if the employee commits a criminal offence (involving football hooliganism, for instance) whilst supporting his team? If the offence takes place outside the workplace the employer needs to consider its position very carefully before instigating disciplinary action. The case of Post Office v Liddiard [2001] where a postman was convicted and sent to prison for being involved in football hooliganism (in France) was exceptional. The Post Office dismissed him for gross misconduct, but that was in response to the damage done to its reputation because of the public outrage that occurred in response, rather than his actual activities.

However, in 2002 another postman was caught on television kicking an opposing supporter and was dismissed by Consignia (as it then was). Although the case was not formally reported he apparently won substantial compensation at an Employment Tribunal. If an employee is alleged to have committed an act of misconduct the employer must be sure to investigate the allegation thoroughly before considering disciplinary proceedings. The employer must follow a fair procedure which complies with the ACAS Code of Practice on discipline and dismissals, or claims for unfair dismissal may arise (and be successful). An employer’s decision to dismiss an employee will be judged by an Employment Tribunal according to the “range of reasonable responses” test. 

The prudent employer will remind its staff of the company’s policies on absence, alcohol consumption at work and misconduct. If an employer sets out what is and is not acceptable behaviour and treats all staff fairly in accordance with those policies, if a problem does arise it should be easier to deal with. It should probably also tell its staff to keep away from postmen at football matches as well. 

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Avoid April Showers

Your business may have HR policies and procedures in place already; but are they current and relevant? Each April brings with it annual legislative changes which could result in your business missing a trick if you’re not prepared for them. 

Here are the five changes that your business needs to prepare for now: 

1. Allowances

From 4 April 2010 allowances for statutory maternity pay, paternity, adoption pay and maternity pay are changing from £123.06 to £124.88 per week. Allowances for statutory sick pay of £79.15 per week remain unchanged this year. 

The Government has announced that although it is committed to the principle, it will not go ahead with the planned extension of statutory maternity pay from 39 to 52 weeks this April. 

2. Fit Note Scheme

From 6 April 2010, as an employer you will no longer be presented with the traditional GP sick note setting out the reason for an employee’s absence. Instead, GPs will produce “fit notes” which will focus on the work that an ill person is able to do, rather than what they are unable to do. Again, Business Link has a helpful section of information for employers on the fit note scheme and an example fit note template is available here. 

There are differing opinions on whether the new system will be more or less beneficial to employers; we will have to see how it plays out. For the time being, as an employer, you will need to acquaint yourself with the new fit note form, know how to respond to it, and adjust your absence management procedures to ensure that any adjustments recommended by a GP in a fit note are considered. You should also maintain a record of the reasons for any non-implementation of recommendations. 

3. Right to Train

On 6 April 2010 the new Employee Study and Training Regulations come into force and give a new right for employees to request time off from work for training or study. Initially, this right will only affect employers who have over 250 employees, but by 2011, the right will extend to all employers. Essentially, the regulations set out how an employer should respond to such requests.

My advice would be to ensure your company has a policy to reflect this new right which should include how and to whom in the company the request should be made, who will consider the request and in what timeframe. I recommend maintaining a record of requests together with the reasoning behind any approvals or rejections in order to ensure consistency of process, and to demonstrate equality and fairness in your workplace.

For more information, Business Link provides an overview of the detail which you need. 

4. Paternity Leave

New laws mean babies due next spring may see more of both parents. Rules that come in on 6 April this year, but apply to families with babies due from 3 April 2011, allow dads who satisfy certain conditions up to six months’ paternity leave – provided the mother has returned to work. 

The idea is to give families more choice as to how they balance work and childcare; paternity leave entitlement currently stands at just two weeks. The Government is expected to issue guidance before April 2011 as to how employers can best manage and administer these new regulations, so you do have some breathing space.

However, now is the time to take stock of your company’s current paternity leave policy and amend accordingly, consider whether you are willing to introduce additional flexibility and enhanced rights into your workplace if it is a means for you of attracting and retaining the right employees, review your existing structure and ensure managers are prepared for the new entitlement to take effect. 

Don’t forget to also update your existing maternity leave policy to reflect the mother’s ability to share leave with the father. 

5. Equality

On the horizon, but awaiting Royal Assent at the time of writing, is the Equality Bill. Royal Assent for this Bill is expected in April 2010, and the Act will then be due to take effect in October 2010. There is some discussion as to whether the impending general election will disrupt the Bill’s timetable, but there seems to be cross-party support for it and at this stage there is no indication that the Bill’s progress through Parliament is being delayed. 

The purpose behind the Bill is to “modernise and streamline discrimination legislation” and “make Britain stronger, fairer and more equal”. As such, it’s a biggie and it will have an impact on your business. The scope of the Bill is very broad, and this post will not set out the detail here. 

My immediate advice is that, if you haven’t already, you need to get up to speed with the Bill. As an initial introduction to this mammoth piece of legislation, the Government Equalities Office has a very helpful set of resources, links and bullet-point updates which are easy to digest. Again, with this Bill, there is some breathing space prior to its introduction, but not much, so I’d strongly recommend that you start to conduct an equality audit across the range of your HR policies to ensure compliance with the Act when it comes into force.

6. Annual Healthcheck

Alongside all the above, changes in your business over the past year and expectations of your staff in the future prompt the need for an annual review of your policies; so I always recommend an annual healthcheck of policies, processes and standard employment contracts. 

The first quarter of every year is a perfect opportunity to review HR policies and practices in your business. So, to avoid showers this April, spring-clean your HR policies now.

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It's kicking off for employers...

2010 has come round pretty fast, and business owners are getting ready to deal with workers’ requests for time off to watch World Cup matches on TV - or even go to South Africa. Can you remember all the legal rules about holidays?

The bottom line is that workers are entitled to 28 days’ paid holiday each year (a pro-rata proportion for part-timers and temps), and entitlement starts from day one of their employment. But job contracts and policies may allow your staff to carry holiday forward in some circumstances, and new case law says sick workers have the right to carry holiday forward in some circumstances, so some employees may be entitled to more than 28 days.

Contracts or policies can limit when employees can take holiday – provided they have taken their 28 days by the end of the holiday year. For example, employers may be able to insist they take part of their holiday on bank holidays and/or during an annual summer close-down, and stop them from taking holiday during peak periods or when the firm would otherwise be short-staffed – proper, objective grounds. Think about emailing employees to remind them when you can refuse holiday requests. Some employers also set limits on how long each holiday can be - for example, that no holiday can last more than a fortnight.

Contracts or policies may set out how much notice employees must give you of their holiday plans. If not, the notice an employee gives has to be twice as long as the holiday they are asking for. So two days’ holiday requires four days’ notice.

If an employer refuses proposed holiday dates they have to do so in writing, and the length of notice of the refusal must be at least as long as the holiday requested – for example, at least two weeks before the worker’s holiday is due to start if refusing a two-week holiday.

Employers often have a system for determining priority if there are holiday clashes or if they’d otherwise be left short-staffed. This needs to be fair and non- discriminatory system, which can be as simple as ‘first come, first served’. Favouring employees with longer service could discriminate against younger employees who have not had time to build up service, and may also be sex discrimination because (on average) women have shorter periods of service than men.

That’s holidays sorted – but how do you stop workers just calling in sick on their country’s match days - a particular problem with this World Cup because South Africa and the UK are on similar time zones, so matches will be on during the working day? Answers on a World Cup ticket please!

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Health and safety – have you got it covered?

Recently, an accident on a construction site in which a worker died has resulted in an £80,000 fine for the company involved, who admitted two breaches of the Health & Safety Act. The worker who died had been hit on the head while operating a digger he’d not been trained to use. 

While this is an extreme case, all businesses should be aware of their health and safety responsibilities both towards their employees and anyone working in, around or visiting their premises. 

A thorough risk assessment, including a fire risk assessment, is the most effective way of improving your firm’s health and safety. If you employ five or more people, you must have a written policy in place, of which all employees are aware, and you must display the poster ‘Health and safety law: what you should know’, available from HSE books, or distribute the leaflet. 

Find a guide to health and safety on the Law Donut as well as plenty of other useful health and safety information, including how to carry out a risk assessment and 27 health and safety FAQs.

The Health & Safety Executive website also has guidance and resources for small businesses.

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The weather outside is frightful...

One topic has dominated conversation in homes, workplaces and pubs recently – the snow. It’s continued to fall and, while it’s beautiful to look at, it’s equally as disruptive.

Commuters on the roads and rails have suffered as accidents, closures and delays become a common occurrence. The biggest headache, though, is for small-business owners who have been left short-staffed by employees who have not been able to make it in to work.  

With the arctic conditions set to continue, it may be prudent for firms without any existing procedures to consider introducing contingency plans in the event of more extreme weather.  

After the blizzard that hit the UK last February, many employers did introduce plans, embracing technology to enable employees to work flexibly, from home, and on the move. These firms will have reaped the benefit of their policies over the last few weeks. 

If you do allow your employees to work from home in extreme weather, or you are thinking about it, you must be aware of your responsibilities for the health and safety of the home working environment.

The Law Donut also has a great collection of FAQs on home working which should answer any additional questions you may have. 

Right, that’s enough from me. I’m off to build a snowman.

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Older employees heading into dangerous waters?

Talking to my dad, who isn’t many years from retirement age, the other day, I was surprised to hear him say that he expects to work past 65. Then my mum walked in smiling with brochures for a cruise and it all began to make sense!

In all seriousness, recent research from the Chartered Institute of Personnel and Development (CIPD) reveals 71 per cent of workers aged 55 and above have had to postpone their retirement plans. Up from 40 per cent two years ago, the figures come as no real shock thanks to the current economic environment. Nearly three-quarters of over 55s admitted that money worries had forced them to keep working, with pension pots, savings and investments affected by the recession.

With more employees aiming to stay working for longer, employers must be aware they need to stick to age discrimination legislation, which makes it unlawful to treat people differently on grounds of age. On a personal level, my dad is concerned that the default retirement age, which allows employers to force people to retire at 65, may mean the option to retire is taken out of his hands, even if he remains fit and healthy. I think that’s a shame, and I tend to agree with Age Concern's head of public policy, Andrew Harrop who argues; "Employers need to start seeing beyond job applicants' age and look at the skills‚ experience and commitment older workers have to offer."

But for my family, it remains a problem a few years ahead. For now my dad really needs to work on his sea sickness.

Visit the Law Donut for more advice on age discrimination.

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How to change employee agreements – without disagreement

Employers need to change their employees’ contracts for a variety of reasons – often in today’s hard times, to help a business survive.

Once you know you need to change an employment contract, you need to know how to do it properly - unfortunately, contract changes done badly could be the downfall of a business.

Visits to online business forums will find numerous employers looking for help on how to change a contract. Invariably, forum members offer an array of advice, including enthusiastic suggestions the employer just goes ahead: “You can do this because you’re the boss.” But there’s a bit more to it – such as the law.

To understand what changes you can and can’t make, start by considering what a contract means. A contract is an agreement between two parties that governs an activity – in this case, a job: and includes specifics about, among other things, what work will be done, conditions and pay. For anything to change, employer and employee both need to agree. So it’s entirely wrong to think that anyone, boss or otherwise, can simply change a contract off their own bat.

Some contracts contain a clause that provides one party with the right to make changes without the other party’s consent. But even this has to be used in the correct, and rather limited, way – bosses can’t just increase working hours or reduce pay. These clauses can only be used to clarify existing terms, and make the odd tweak, not effectively to rewrite the agreement.

If you need to modify a contract, the most sensible option is to ensure there are clear clauses in your standard employee contract that allow for changes. These could include the right to introduce a shorter working week or temporary lay-offs.

Plan in advance – by getting comprehensive contracts in place, either at the time of appointment, or via agreed changes to the contract. Employees can’t be expected to freely agree to these changes during the contract, which is why it is wiser to get it right before staff start work. However, all is not lost if you haven’t acted in advance and need to make changes now.

Consider what is typically an annual change to the contract anyway – a pay rise. As one term of the contract – the pay – will be changing, there is no reason not to make other changes at the same time. You still need agreement (as does a pay rise, but employees don’t often protest about these). But if you’re offering a pay rise you may find staff are open to other contract changes to the contract as a condition for the increase (however modest).

Done properly, it can be very easy - even for employees on minimum wage. An offer to improve pay a couple of months early won’t cost the business much more, but the improvements to the contract could more than return the extra outlay.

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Managers’ common mistakes: which one could land you in court?

Most new business owners are too busy to read a lot of legal jargon or ‘business best-practice’, and as a result, can make some, er, interesting decisions about hiring and firing staff. We see all kinds of queries and misconceptions on our Irenicon hotline.

Here are answers to some of the most common managers’ questions:

1. “Surely small businesses are exempt from employment legislation?”

Sorry, no. There were limited exemptions for small businesses, but they have slowly been taken away, and nowadays small businesses are no more exempt from employment law than from any other law.

2. “If I don’t have any staff I can’t have any employment law problems - can I?”

‘Fraid so. The minute you pay someone to do some work for you, whether or not you view them as an employee, you can find yourself with financial and legal obligations. For instance, under PAYE, even self-employed contractors with their own limited companies can turn out to be your responsibility when it comes to tax pay – you could find the taxman coming to you for their tax and National Insurance. Check the specifics of your firm’s arrangements with HMRC’s free employer’s helpline on 08452 6070143. See points 3 and 4 too.

3. “How can I have responsibilities to people I’ve never hired?”

All workers have rights. Even people whom you have never taken on as employees. Whoever takes on a job for you automatically gets: protected from discrimination, entitled to the minimum wage, allowed companions at disciplinary/grievance meetings, and covered by working time regulations (holiday and hours worked in a week), as well as health and safety law. Just for starters. Get free advice from ACAS on 08457 47 47 47.

4. “Can it be true that someone else’s employees can be my legal problem?”

Yes. Not only do they have potential rights against you as workers (see above), but they can become your employees (or a drain on your cheque book) even if you have never met them - if you find yourself tangled up in the Transfer of Undertakings Regulations when you change your service provider. The rules on transfers (known as TUPE regulations) are complex and can seem irrational to the uninitiated. They also affect you and your staff if you lose a contract yourself. If you are buying services (even cleaners) or selling services you should take advice before you enter into or terminate a contract to avoid expensive mistakes. Again, call ACAS on 08457 47 47 47.

5. “Don’t my people have to work for a certain time to have rights?”

Not usually. Employees’ contractual rights begin the minute you offer them a job. The law specifically prohibits discrimination against part-timers, and the days of lengthy qualification periods are long gone. Many new, “expensive” rights such as discrimination start before an interview. Contractual rights begin when you make an offer, and ordinary unfair dismissal rights begin at one year’s qualifying service (which may be earlier than you think if you had a Saturday worker, or contract worker whose pre-employee work with you service will probably count towards their first year.

6. Surely if I am trying to do the right thing and I am fair I can’t get into trouble?

Employment law is increasingly concerned with how things are done. It ain’t what you do so much as the way that you do it. When it comes to discipline, dismissal, redundancy and many other areas, it is vital to adopt the right method or you can find yourself facing an unfair dismissal. There is no exemption for small employers and no “get out of jail free card” for new businesses. Even if you have never heard of a particular law, it applies to you.

7. “All these workers’ rights’ are very depressing - what is the point of having workers and staff?”

The point of employees is to increase your profitability. Many bosses spend more time choosing their company car than they do recruiting and contracting their staff. If you don’t chose the right people and contract them in the right way, you are more likely to run into trouble - just like picking a Porsche with your eyes shut. You can manage and improve performance in people and contract sensibly for what you need - but it is far easier to do this at the beginning before you run into trouble.

8. “Staff can just do what they want these days anyway - it’s not fair.”

Once you’re produced contracts and handbooks, communication is the key to performance management. Many employers ring our hotline when they are disappointed with their staff and convinced that an employee is being deliberately unhelpful. This is sometimes the case, but as often as not, there is a problem with communication. Wherever possible, try to be clear and consistent about what you want from a worker. A large part of a contract of employment is ’custom and practice’. Employers who tolerate bad performance over time can find it extremely difficult to raise standards again - it can be done, but it is so much easier to keep things right in the first place.

Annabel Kaye is managing director of Irenicon Ltd, a specialist employment law consultancy.

Tel: 08452 303050

Fax: 08452 303060 Website: www.irenicon.co.uk.

You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

Irenicon offer 20 mins free advice to new callers.

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Avoid the negative business impact of local transport disruption

Who is entitled to be paid if workers can't get to work due to strikes?

Many workers have recently been affected by local tube or rail disruptions. Technically it is their responsibility to find an alternative route into work, however in reality, many employers arrange home working (where appropriate) which reduces stress and improves productivity. If you have an established car sharing or lift sharing scheme, you can suggest this to employees as an alternative way of getting to work.

However you should be careful you don’t end up setting up liability for uninsured drivers. If you are unsure whether an employee is insured to drive, you should not be ordering or directing employees to get into a car with that person. If it is a fully insured company car that is different.

Hourly paid workers are usually paid only for the hours they work, though salaried workers may be paid on a different basis. You should check your contracts to see if you do in fact pay people on an hourly basis or in some other way.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.

Tel: 08452 303050 Fax: 08452 303060

Website : www.irenicon.co.uk.

You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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