Will the new Health and Work Service help or hinder business?

The idea behind the new Health and Work Service is that it will save employers money by helping sick employees get back to work. The truth, as ever, is rather more complicated than that.

The new service is reported by the BBC as providing free Occupational Health assessments ‘starting from April’. However that is not right. This April is the expected date for awarding the contract to provide the service. Roll out should begin towards the end of this year, but full implementation is scheduled for April 2015. A good overview of how the new service is going to be structured was given by a webinar for potential suppliers last October. You can read the script here – and its very interesting!

The Service is being paid for by the abolition of the last remaining subsidy for Statutory Sick Pay. The Percentage Threshold Scheme kicks in when an employer’s liability for SSP in a particular month is more than 13% of that month’s National Insurance Contributions. However the scheme will be abolished in April this year  leaving employers wholly responsible for funding the sick pay paid to absent employees.

When the Government announced this change just over a year ago it said that the scheme currently costs the exchequer some £50 million per year – mostly in the reimbursement of small amounts. I can quite see why the Government would want to stop spending this money but I find their stated reasoning for the change – that it created a perverse incentive for employers not to manage attendance effectively – pretty unconvincing. I doubt many small or medium sized companies would be relaxed about their overall sick pay bill being high enough to qualify for relief.

However the move presents a bit of a presentational problem. The Government has made great play of how it is reducing the regulatory burden on employers and yet here it is increasing that burden to the tune of £50 million a year.

Luckily they have a plan. Scrapping the Percentage Threshold Scheme ‘frees up funds’ to set up the new Health and Work Service. This will provide free Occupational Health Assessments for employees who are off sick for 4 weeks or more. It will also provide a website and  a helpline giving information and advice to anyone who wants it. The Government is talking up its likely impact. The BBC quotes ‘ministers’ as saying that it could save employers ‘up to £70m a year in reduced sickness pay and related costs’. Sky has the same figure. The idea appears to be that this new service will result in sick employees coming back to work earlier than they otherwise would. 

I’m sceptical.

Occupational Health can be a valuable service. But if it isn’t done right it can be a waste of time and effort. I regularly talk to employers who are frustrated that the OH assessments they receive simply regurgitate what the employee has told them and offer little in the way of independent or useful advice on how to get the employee back to work.  The key is to ask OH the right questions and work closely with them to come up with a return-to-work plan.

I just don’t think that the Health and Work Service will be in a position to do that. The service will provide a largely telephone-based assessment, mainly through GP referrals. The Government expects a minimum of 350,000 employees to be referred in the course of a year (out of a total of 850,000 who will qualify) and the total budget for the service is £38.5 million per year. That covers not only the costs of the assessments but also the setting up of  the website and helpline, all the capital costs, and of course a reasonable profit margin for the private sector providers who will be running the service. Ignoring all of those additional costs – and assuming minimum take up – that’s about £110 per case. I suspect that that is a whole lot less than the current cost of an average OH referral. How much does the Government realistically expect to get in the way of a personalised, case managed approach to getting the long-term sick back to work?

The truth is that they probably aren’t thinking that far ahead. By claiming that the service could save £70 million, the Government is able to argue that instead of increasing costs to business by £50 million it is actually saving business £20 million. The fact that this is unrealistic nonsense is just a technicality that can safely be ignored. The true impact will be next to impossible to measure and won’t be know until well after the next election.

A new standard in unfair dismissal cases?

If I were in the OH business, I’m not sure I would welcome the Government ploughing £38 million a year into setting up a rival that provides its services for free. As an employment lawyer, however, I have a different concern.  Once there is a free OH service available, it would seem reasonable to expect even very small employers to take advantage of that service before dismissing for ill-health. This could provide an extra hoop for employers to jump through before they can safely dismiss. An employer who did not follow the recommendations of the Government funded OH service may well be found to have unfairly dismissed an employee – or failed in its duty to make reasonable adjustments.

But whose side will the OH service be on? Its no good saying that everyone shares an interest in getting sick people back to work. When it comes to the detail of how the service will be provided the inclination of the individual OH professionals providing the assessments will make a big difference. Will they essentially operate as an advocate for the employee? How often will they tell an employer ‘this person is unlikely to return to work’? How responsive will they be to points raised by the employer? Perhaps most importantly, how long will the process take? Will employers be forced to delay tackling a problem because they are waiting for someone from the Health and Work Service to get back to them?

At this stage – a year before the service begins – the Government will no doubt discount such fears. But to me, this scheme has the makings of a significant blunder which could wrap businesses up in a whole new layer of bureaucracy. Ironically, a Government scheme intended to benefit employers may actually end up costing them more.

Posted in Sick pay, Unfair Dismissal | Tagged , , , , | 3 Comments

How would Lord Rennard fare as an employee?

Lord Rennard is not an employee – and that is something he should be relieved about.

He has been investigated under the Liberal Democrats membership rules, which allow a member to be expelled for conduct which brings the Party into disrepute. The Disciplinary procedure allows (but does not require) an independent investigator to be appointed to gather evidence prior to a disciplinary hearing they chose to appoint a leading criminal fraud QC – Alistair Webster.

Under the rules his role is to look at written evidence and compile a charge sheet – or to indicate that ‘there is insufficient evidence to proceed’. This is what he has done and you can read his conclusions here.

He has concluded that there is less than a 50 per cent chance that a charge against Lord Rennard could be proved to the requisite standard. The Disciplinary Procedure makes it clear that the issue is whether the charge has been proved ‘beyond reasonable doubt’. His conclusions state:

‘it is unlikely that it could be established beyond reasonable doubt that Lord Rennard had intended to act in an indecent or sexually inappropriate way. Without proof of such an intention, I do not consider that such a charge would be tenable.’

Really? I am no expert on the constitution of the Liberal Democrats, but all I can see in their rules is talk of conduct which is likely to being the party into disrepute. I can see nothing that suggests that such conduct needs to be deliberate. Surely sexually inappropriate behaviour could bring a party into disrepute whether it was deliberate or not?

The investigation makes no findings of fact, it has merely gathered evidence. So I don’t know what was actually said or done by Lord Rennard. However if credible allegations have been made that he behaved in a way which ‘violated the personal space and autonomy’ of the complainants then it seems surprising that an investigator can conclude that there is insufficient evidence to proceed because it can’t be proved that Lord Rennard was doing that deliberately.

The standards being applied to Lord Rennard are certainly very different to those that would be applied to an employee in a similar situation. First of all, in determining disciplinary issues, we steer well clear of slippery concepts such as ‘beyond reasonable doubt’. That is the standard to be used in a criminal prosecution. In employment law we worry about whether the employer has an ‘honest belief’ in the guilt of the employee and whether that is based on ‘reasonable grounds’.

If Lord Rennard was being sued for sexual harassment – and I don’t know if that is even a possibility in this case – we can certainly say that the case would not turn on whether he intended to act in an indecent or sexually inappropriate way. His intention would not actually be relevant. The question would be whether he engaged in unwanted conduct, related to sex, which violated someone’s dignity or created an ‘intimidating, hostile, degrading, humiliating or offensive environment’ – see S.26 of the Equality Act 2010.

If we limited sexual harassment cases to those where we could show that the perpetrator intended to act in that way then nothing would ever be proved. In the modern workplace you have a duty to make sure that you behave in an appropriate way and that your conduct does not amount to harassment. If you aren’t able to see how your conduct may be perceived by others then you are a tribunal claim waiting to happen. Employers are entitled to dismiss employees who behave in a way that exposes them to this sort of liability, and they do not need to prove any intention on the employee’s part to behave indecently.

The problem the LibDems now have is that having appointed an independent investigator, they are rather stuck with his conclusions-  even if they mean that no proper hearing is ever held into what he described as ‘broadly credible’ allegations. I’m sure that Alistair Webster is a brilliant lawyer and advocate, but it does not seem that his main area of expertise is in the realm of workplace harassment. It may be that had the Lib Dems appointed an employment lawyer to carry out the investigation, the conclusion would have been different.

And probably cheaper.

UPDATE 20 January, 17.20

This afternoon the Lib Dems announced that they were suspending Lord Rennard pending disciplinary proceedings based on his failure to apologise. It’s not clear whether there is going to be a whole new investigation or whether the matter will go straight to a disciplinary meeting.

It’s difficult to avoid the feeling that’s this is all getting a bit messy. The danger for the Lib Dems is that it will look like a case of ‘well we can’t get him on X but perhaps we can get him on Y’. I’ve seen employers do that in relation to disciplinary matters and it rarely ends well. The question has to be why you want to take disciplinary action, not what grounds you can find to support the disciplinary action you want to take. In Lord Rennard’s case the hearing will have to focus on his refusal to apologise for incidents that have not themselves been the subject of disciplinary proceedings. Surely in order to take a view on his refusal to apologise you have to take a view on the truth or otherwise of the allegations that are prompting the calls for an apology?

The Lib Dem ministers in BIS are very keen on alternative dispute resolution. This case seems to be a good candidate for a dose of that. Unless somebody gets a grip on this it will simply drag on for months and end in the courts. No-one is emerging well from what is starting to look like a debacle.

Posted in Equality Act, Harassment | Tagged , , , | 1 Comment

Why did John McCririck lose his age discrimination claim?

So why did John McCririck lose? The simple answer is that I don’t know. And that’s a problem because I have read the 44 page Employment Tribunal decision. Explaining why one side has won and the other has lost is the most basic requirement of an ET decision, and I don’t think this one stands up to scrutiny.

The actual issues in the case were relatively straightforward. Did Channel 4 stop Mr McCririck from working as a presenter on Channel 4 Racing because of his age? If they did then the next question was whether that was a ‘proportionate means of achieving a legitimate aim’.

On this point, age discrimination works differently than discrimination based on the other protected characteristics Usually, there is no defence of ‘justification’ to a claim of direct (as opposed to indirect) discrimination.

In direct age discrimination, however, that defence is available. The employer has to show that the discrimination was a ‘proportionate means of achieving a legitimate aim’. This is a well worn phrase in employment law borrowed from indirect discrimination  where a defence of justification has always been available. We will come to how the defence applies in Mr McCririck’s case a bit later

The burden of proof in a discrimination claim is a bit complicated. I’ve written about it here, but basically, if the Claimant can show facts from which discrimination could be inferred in the absence of an adequate explanation, then the burden of proof passes to the employer to prove that discrimination did not occur.

Generally that means that the Tribunal should first of all consider whether the facts can support an inference of discrimination, followed by an assessment of the employer’s explanation for the treatment.

In its decision the Tribunal spends a good deal of time detailing the evidence that they heard. There were certainly some references to age in the consideration of Mr McCririck’s role, but it was mostly about the age of the audience that he attracted rather than his age that seemed to be in issue. The employer insisted that their objection to Mr McCririck was based on his over-the-top persona.

Its important to recognise that Mr McCririck was not claiming unfair dismissal. The question was not whether Channel 4 behaved reasonably in deciding to replace him. The only question is whether the decision was influenced by his age and – if it was – whether that was justified. The fact that he may have been treated unfairly is not in itself enough to raise the inference of discrimination. Employers behave unreasonably for lots of reasons.

At Paragraph 120 of its decision, however, the Tribunal decides that there is enough evidence for the burden of proof to pass to the employer. Two factors are key. One is the retention of a younger presenter and the other is the fact that none of the presenters dismissed as part of the revamping of the programme were under 50. The tribunal goes on to say:

‘in these circumstances, it is for the Respondent to demonstrate that the treatment of Mr McCririck was a proportionate means of achieving a legitimate aim’

But that is simply not right. Once the Tribunal has decided that the burden has shifted it must then consider whether the employer has proved that there was no discrimination. It is only if they have failed in that-  and the tribunal concludes that age really was the reason for the less favourable treatment – that the issue of whether it is a proportionate means of achieving a legitimate aim comes into play.

However the Tribunal seems to make no finding that I can see as to whether it accepts the employer’s explanation that dropping Mr McCririck had nothing to do with age. This baffles me. It is the central question of the whole case. Six days of evidence were devoted to the question of why Mr McCririick was dropped and yet, having spent nearly 40 pages discussing that evidence the Tribunal makes no finding on it.

At paragraph 136 the Tribunal does say that Mr MCririck was dismissed ‘because of his persona’ which would suggest that the employer’s explanation was accepted. However this paragraph is an aside, concerned with whether the second respondent – IMG Media Ltd – had assisted Channel 4’s unlawful act. It is far from being a finding that age was actually nothing to do with replacing Mr McCririck and in any event it is unsupported by any reasoning. 

At Paragraph 121 the Tribunal goes on to consider justification. There is no indication that this is a ‘just in case we’re wrong’ part of the judgement. The context makes it clear that this is the issue on which the case turns. Logically that can only be the case if the Tribunal has rejected Channel 4’s explanation and found that there was age discrimination.

On justification, the Tribunal identifies the aim of Channel 4 as being that ‘horse racing should be brought to a wider audience’ (para 124). In cases of direct age discrimination the aim of the employer can only form the basis of the justification defence if it has some public interest nature and the Tribunal held that in the context of horse racing coverage on television the aim of reaching a wider audience met that test.

I think the Tribunal is wrong about that. Reaching a wider audience has nothing to do with intergenerational fairness in employment – it is essentially a business aim analogous to a shop that wants to attract younger customers. There is fertile ground for an appeal here.

The Tribunal then goes on (rather briefly) to find that the employer’s means of achieving that aim (sacking Mr McCririck) were proportionate. There is no discussion of what alternatives might have been adopted to achieve the same aim – including a change in Mr McCririck’s role. Frankly this part of the judgement has a rushed  ‘OMG I need to hand this essay in first thing tomorrow’ feel about it.  If the Tribunal has found that Mr McCririck was sacked on the basis of his age, then he deserves rather more consideration than this of whether the employer’s actions were proportionate.

What on earth has gone on here? How can such a high profile case result in a written decision with such a glaring gap in the reasoning? At first I thought that the Tribunal might have deleted part of its decision by mistake, but reading Para 120 it is clear that they simply thought that having found that the burden of proof had shifted, they had to go on to discuss justification. That is simply wrong and both parties are entitled to be cross about the mistake.

If I were Mr McCririck, I would appeal. There is a serious legal point about the nature of the employer’s ‘aim’ in justifying direct age discrimination and a clear argument that the Tribunal must have found (even if they failed to say so explicitly) that discrimination had occurred. However even if an appeal is won, the most likely outcome is that we would have to run the whole case again.

PS I hope readers appreciate the complete absence of any puns about odds, falling at the first fence or stewards’ enquiries  in this post

Posted in Age discrimination, Employment Tribunals | Tagged , , | 8 Comments

Compensating Sharon Shoesmith

I’ve spent the last year confidently telling everyone I meet that there is no way that Haringey will settle Sharon Shoesmith’s case. There was such a media outcry over her role and the importance of not giving her a payout that I was certain that Haringey would have to wait until the court ordered compensation to be paid so they could at least argue that they had not done some cosy deal.

Shows how much I know!

Whatever the sum that has been agreed on – and I don’t think any of us have any real idea of how much that is – it is clear that substantial compensation will be paid to reflect the unlawfulness of the dismissal. Not all of that will be paid by Haringey, of course; the judicial review claim was not just against them but also against the Secretary of State for Education. This wasn’t, after all, an unfair dismissal claim, but a judicial review into the blatant disregard for the rules of natural justice displayed by the then Secretary of State Ed Balls together with Haringey’s over hasty disciplinary process where the outcome was a forgone conclusion.

That’s why the compensation could be substantially more than the usual limit for unfair dismissal claims. Shoesmith’s argument will have been that since she was never lawfully dismissed she was essentially entitled to back pay covering the years she has spent unemployed and unemployable.

I thought there was an interesting point to argue here. In an unfair dismissal claim the tribunal would look to make a Polkey deduction – reducing compensation to reflect the likelihood of dismissal occurring even if a fair procedure had been followed. That could have reduced her compensation to a few weeks’ pay, assuming the tribunal accepted that her position was basically untenable. It would have been interesting to see if the High Court would have followed a similar approach in considering her judicial review case. Now we will never know.

One outcome of the case is that judicial review is now clearly an attractive prospect wherever senior public sector employees are sacked in a way they regard as procedurally unfair. The Court of Appeal held that the limit on compensation available for unfair dismissal meant that it wasn’t an adequate private remedy, making judicial review appropriate. It’s expensive of course, but then so is going to an employment tribunal nowadays.

I would love to know how the deal was done, and why it took so long. Who held out and whose nerve failed? Of course the confidentiality clause which is absolutely standard in cases of settlement will mean that we’ll never know. Although if the Department for Education publishes its share of the cost, that will give us a clue.

Whatever he details, no-one emerges well from this. Shoesmith’s refusal to fall on her sword and accept responsibility is less than noble; but faced with no income what was she supposed to do? Haringey failed to stand up to a Secretary of State making a political announcement at the expense of an employee’s right to a fair hearing and then of course there is the Secretary of State himself. It would have cost very little to deal with Shoesmith In a fair way. He chose not to do so and what follows is basically his fault.

Lets be clear about just what Ed Balls did wrong.

As Secretary of State, he had powers under S.497A(4B) of the Education Act 1996 to make directions to Haringey regarding its children’s services and it was these powers that he used to remove Ms Shoesmith from office. He did that by an Order made on 1st December 2008. The OFSTED report that he had commissioned into the case had been completed only the previous evening so by any standards this was a swift decision. Ms Shoesmith had been consulted in the preparation of the report but had not seen it or been asked for her comments on it. Crucially, however, the OFSTED report, in keeping with their normal practice, did not make direct personal criticism of any individuals. On the morning of 1st December, however, Ed Balls met with the officials involved in preparing the report and in the course of his conversation with them they did directly criticise her as having ‘no grip’ and said that Haringey was ‘exceptionally bad’ as regards ‘management and systemic failing’.  Ms Shoesmith was given absolutely no opportunity to respond to these comments or to defend herself against any accusation that she was personally to blame for any of the failings identified by OFSTED.

It was after this meeting with officials that Ed Balls made his decision to remove Ms Shoesmith from office. He did not arrange for her to be told that that was about to happen or to make any representations to either himself or his officials. She found out about the decision when he announced it in a press conference later that day. She was telephoned by Haringey during the press conference and told that she was suspended.

Surely any impartial observer would describe that process as being unfair? Isn’t it pretty fundamental (and obvious) that before anyone is removed from office on the basis of criticisms that have been made of them they should be informed of those criticisms and given an opportunity to respond? That doesn’t require a huge delay or a complicated quasi-judicial procedure, just a common-sense pause to allow the individual to make some sort of reasoned response.

Ed Balls has said that he has no regrets about what he did. I’m sure that’s true. He believes that public confidence demanded that he act swiftly. Perhaps. Its certainly true that media pressure demanded swift action and that’s sort of the same thing isn’t it?  Had Ed Balls given a press conference where he said ‘I received this report last night and will now be discussing how Haringey can take swift action to address its findings’ he would have seemed less in control and less on top of things. By making his unlawful decision  to replace Shoesmith without giving her a fair hearing he managed to seem decisive and to have a firm grip on things. I have no doubt that he would do the same thing again. That’s what is often so disappointing about politicians.

PS this is a slightly expanded and corrected version of this post, now that I am back in the office and not writing on a cracked ipad in a busy coffee shop. Any remaining typos I have no excuse for.

Posted in Uncategorized | 3 Comments

Ed’s pledge on zero-hours contracts

After all the talk of reviewing and inquiring into the use of zero-hours contract a politician has actually announced a policy and proposed new legislation. I watched Ed Miliband deliver his speech to the TUC and make three specific pledges to bring in legislation:

  • Banning zero-hours contracts requiring an employee to work exclusively for one employer
  • Banning zero-hour contracts where the employee is obliged to be available for work but the employer isn’t obliged to offer any and
  • Giving people a right to a contract for regular hours when that is in fact what they are working.

Of course it is one thing to propose legislation in Opposition, quite another to introduce it in Government. In Government you quickly come up against the harsh reality that someone has to actually draft the law that you are proposing – and that is when it starts to get tricky.

So what do we mean by ‘banning’? Will it be a crime to have those contracts? WIll clauses to that effect simply be declared void? Will an employee be able to sue for damages if an employer attempts to impose a banned clause? The only option that makes sense to me is to make it automatically unfair – with no requirement for a qualifying period –  to dismiss an employee who has breached one of the banned clauses by working for someone else or for not being available for work. Anything less than that is a token gesture that will simply be ignored.

But the law would have to distinguish between employees working for another employer to make ends meet because they are on a zero-hours contract and employees working for a competitor in breach of the obligation of good faith. Good luck drafting that one.

The law would also have to distinguish between an  employee who was not available to be called in at short notice on one or two occasions and an employee who never agreed to show up and was always turning work down. Would it really be automatically unfair to dismiss an employee who was simply never available for work? Striking the right balance would be far from straightforward.

Then there is the small problem of what kind of contract will be defined as a zero-hours contract. We can broadly say that a zero-hours contract is one which does not guarantee a minimum amount of work per week. But what if the employer guarantees one hour? Would that be enough to escape the three measures that Ed Miliband is proposing? If you take action against zero-hours contracts, how do you stop employers coming up with contracts that are just the other side of the definition but every bit as exploitative?

Then we get to perhaps the central proposal – the guarantee of regular hours. Frankly it is not possible to tell from the speech just what Ed Miliband is proposing here. If the rule only applies to workers who are in fact working regular hours, then won’t employers just be careful not to give regular hours to people? However, reading around the press stories it seems that the idea is that if you have been on a zero-hours contract for – say – 12 weeks, you will be entitled to a contract guaranteeing you at least the average number of hours per week as you have been working in that period.

If that is the proposal – and if anyone ‘in the know’ wants to explain what the proposal actually is then do feel free – then it is a hugely complicated idea that would cause all sorts of problems. Leaving aside the fact that employers would be careful to ensure that their contracts were not quite zero-hours contracts, I really struggle to see this working in practice. Wouldn’t it just lead to workers being sacked after 11 weeks on a zero hours contract? Even if that issue could be dealt with, it would create an incentive for employers to restrict the number of hours that new employees could work. A new recruit might be keen to work long hours for the first few weeks to clear some debts following a period of unemployment, for example. But doing that would increase the number of guaranteed hours he or she would eventually get so the employer will inevitably restrict the number of hours available.

In any event, having a range of different workers all with a different level of minimum hours based entirely on the hours they happened to work in the first 12 weeks of their employment seems a bit of an administrative nightmare. And how on earth would you enforce it?

Also, if you happen to be happy to work on a zero-hours contract (and some people are), would you have the right to opt-out of the minimum number of hours the law would require your contract to specify? Surely the law would have to provide for that. And if it did, how would you stop it becoming a semi-automatic opt-out like we have in Working Time? All workers have the right to refuse to opt-out of the 48 hour week, but how many vulnerable workers are really in a position to assert that that right?

I don’t think the legislation proposed by Ed Miliband will actually happen. Once the detail comes to be written and the consultation process starts it will all just get too complicated and cumbersome for something that is still not going to deal with the real problem.

The real problem is not the particular form of contract that employees are on, it is that some workers are vulnerable to exploitation by employers because they have no negotiating power. If they aren’t prepared to work on these terms, the employer can say, there is a queue of people outside who are.

The answer to the wholesale exploitation of workers is not legislation but organisation. It sounds old fashioned, but frankly exploitative and precarious employment strikes me as quite old fashioned too. The message to workers being exploited on zero-hours contracts should not be ‘wait for a Labour Government to legislate’ but ‘join a union’.

I think that’s what Ed Miliband should have told the TUC.

Posted in Zero Hours COntracts | Tagged , , , | 4 Comments

What to do about zero-hours contracts?

The Guardian is running a campaign on the potential abuses of zero-hours contracts and they seem to have the ear of at least one side of the Coalition. Both Nick Clegg and Vince Cable have made sympathetic noises about doing something to tackle the problem.

So will anything be done? Take this quote from a Government consultation document:

Some 200,000 people in the UK work under zero hours contracts. These contracts do not specify particular hours: the person may be required at any or at specified times. These contracts maximise flexibility for employers and suit some people who want occasional earnings. Many employers ensure the contracts are used sensibly, but they have the potential to be abused…

…The Government would welcome views on whether further action should be taken to address the potential abuse of zero hours contracts and, if so, how to take this forward without undermining labour market flexibility.

Unfortunately it’s too late to send in your response because I’ve taken this from the White Paper ‘Fairness at Work’ published by the new Labour Government in 1998.

In the end nothing came of the suggestion and no limitations were placed on the use of zero-hours contracts. On the other hand, many employees stuck on those contracts would have benefited from the National Minimum Wage, the Working Time Regulations, the Part-Time Workers Regulations and changes to unfair dismissal law that the Government went on to introduce so we shouldn’t be too sniffy.

But the fact that this problem – if it is a problem – has been around for so long does suggest that it isn’t easy to solve. The very vague mumblings that have come from politicians perhaps show that they appreciate difficulty of legislating in this area. After all, you can’t ban a zero-hours contract can you? To do so you would have to provide a minimum number of hours – and how could that work? What is the minimum number of hours a worker must perform in a week? One? Five? Eight? It just makes no sense to be so prescriptive.

Another difficulty is that a ‘zero-hours contract’ is not a well defined legal creature. At one level we could just be talking about casual work where the employer draws on a pool of available workers as and when they are needed. Typically those workers are under no more of an obligation to accept work than the employer is under an obligation to provide it. A more extreme case of a zero-hours contract would be where the employer is not obliged to offer any work in a particular week but the worker is obliged to be available and to accept whatever work is offered. Clearly the second kind of contract is more likely to create hardship, but the debate seldom draws a distinction between the two.

In any event, what is written in the contract is not always the full story. When we look at how the contract is performed we might find that there is an implied term that a minimum level of work will be offered. This is the sort of argument that often crops up in an Employment Tribunal because if there is genuinely no obligation on the part of the employer to offer work – and no obligation on the worker to accept it – then the contract is not a contract of employment (because there is no ‘mutuality of obligation’) and the worker has no right to claim unfair dismissal or redundancy. When a sacked casual worker brings a claim there often needs to be a preliminary hearing to determine whether he or she was an employee or not – and the issue of whether the contract was genuinely one with no obligation to offer or accept work may well be key.

This is one area, at least, which would be quite easy to reform. The Government could amend the Employment Rights Act so that protection against unfair dismissal is no longer dependent on the existence of a contract which includes an obligation to provide and accept work. I think that this could be done by an Order under S.209 but it may be better to just redefine the concept of employee to specifically exclude any need for mutuality of obligation. The same could be done across the board in employment rights so that there was no question of zero-hours contracts being use to avoid the need for rest-breaks, Statutory Sick Pay or paid annual leave.  

And here’s another idea. The Part-Time Workers Directive was based on an agreement between the European social partners (unions, and employer organisations) and Clause 5(3) of the agreement says:

As far as possible, employers should give consideration to…(b) requests by workers to transfer from part-time to full-time work or to increase their working time should the opportunity arise.

This surely suggests some sort of ‘right to request’ for workers on zero-hours contracts who want a more secure supply of work. Of course many employers would just say ‘no’ – but a new right may provide a ‘nudge’ in the right direction.

It won’t happen of course. For all the sympathetic noises coming from one side of the Coalition there is no way that this Government is going to place an additional burden on employers in the shape of new rights for workers on zero-hours contracts. Even if they did, their own ‘one in, two out’ policy would require them to remove twice as much of a ‘burden’ on employers as they are imposing.

In any event, as Rick argues in the always excellent Flip Chart Fairy Tales, the real issue is not so much the nature of a zero-hours contract itself, but the state of the job market and the resulting power balance between employer and employee.  Some workers will benefit from the flexibility of a zero-hours contract and some workers will be exploited. There is a limit to what employment law can do to remedy this. 

Perhaps someone could invent some sort of organisation that workers could join to protect their interests and help redress the balance of power?

Nah, that would never catch on.

Posted in Zero Hours COntracts | Tagged , , , , | 12 Comments

Employment Tribunal Fees – a Shock to the System

Monday marks what is probably the most profound change in the Employment Tribunal system since Industrial Tribunals were given jurisdiction to hear unfair dismissal claims back in 1971. For the first time a claimant will have to pay a fee in order to bring a claim – and another (larger) fee before that claim can be heard. For details of the scheme you can consult this handy factsheet.

So what impact will the fees have on the number of Tribunal claims? Back in April the Telegraph published an article claiming that there had been a spike in Employment Tribunal claims ahead of the introduction of fees and other reforms. This was nonsense. With a three month time limit for bringing a claim, anyone dismissed that far back would have had to bring their claim before the fees kicked in anyway. Nobody with any sense would genuinely believe that those statistics were affected by people bringing early claims to avoid paying fees and the law firm EMW who wrote the press release should be ashamed of themselves.

Now, however, a sudden spike in Employment Tribunal claims is exactly what we should expect to see. I would be willing to bet that more ET claims are submitted this week than in any other week since, well, ever.

The reason is simple. Once you are dismissed (or discriminated against or suffer a deduction in your pay etc) you have three months to submit your claim. So if you were dismissed on 2 May 2013, the last day you can submit your claim will be 1st August. But you’d be a fool to wait until that last day, because if you submit your claim on 29th July or later you will have to pay the fee. The sensible thing to do is make sure you get your claim in this week when no fees are payable.

The same goes for anyone dismissed in May June or July this year. Normally your deadline would be in August, September or October – but if you can get your claim in before Monday 29th July you can avoid paying the fee.

This may not affect the overall statistics too much because August and September are likely to be pretty quiet. But the effect will still be significant. As I write this, lawyers up and down the country are frantically knocking potential ET claims into shape so that they can be submitted before the deadline. Some of those claims could have been avoided if the parties had been free to spend the next three months trying to negotiate a settlement.

I only hope the Tribunal service can cope with the extra admin.

The bigger question is what happens after the fee regime kicks in properly (this is assuming that the legal challenges to the scheme launched by Unison and Fox & Partners are unsuccessful). What impact will the need to pay a fee have on the overall levels of claims? Who will be deterred?

Frankly, none of us have a clue. The key period is the end of October onwards. That’s when people whose claim arose after the fees were introduced will be submitting their claims. It could be that the number of claims falls off a cliff and law firms up and down the country discover that they have too many people in their Employment Law Department. It could be that there is no real change or perhaps just a slight drop off in numbers. Perhaps the admin will prove to be too difficult and the whole system will grind to a halt amid a huge backlog of unresolved applications for remission.

This autumn will be a fascinating time for those of us who observe and comment on the Employment Tribunal system. But it may be a pretty stressful time for the people who actually work in it. Good luck guys.

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