work in progress - 10th year anniversary - employment law update

Employment Law UpdateGreg Guilford, HR Solutions

Topics to Cover

• Abolishment of Default Retirement Age (DRA)

• Maternity/ Paternity Provisions• The Equality Act• The Bribery Act• Agency Workers Regulations

Abolishment of the Default Retirement Age (DRA)

Default Retirement Age

• The background…

• Previously allowed to dismiss employees simply because of their age

• Age Discrimination introduced ‘retirement’ as a fair reason for dismissal

Default Retirement Age

• From 1st October 2011• The DRA and statutory retirement

procedures will be abolished.

• Quite simply, employer enforced retirement is no longer an option based on age*• *Unless it can be objectively

justified…

Default Retirement Age

• Objectively justifying retirement

• In order for retirement to be considered ‘justified’, its aim must be both ‘legitimate’ and ‘proportionate’

Default Retirement Age

Proportionate

• What the employer is doing is actually achieving its aim

• The discriminatory effect significantly outweighs the importance and benefit of the aim

• The employer should have no reasonable alternative to the action

Legitimate

• The health, safety and welfare of the individual concerned

• Economic factors, such as the needs and the efficiency of running the business

• The particular training requirements of the job

Default Retirement Age

• So where does this leave employers?

• Performance / Capability Management

• Introduce performance management initiatives• Performance Appraisal System• Absence Management • Capability Policy / Procedure

Default Retirement Age

Capability is still a ‘fair’ reason for

dismissal.

Default Retirement Age

• Succession Planning• Developing talent for the future• Management of expectations• Discussions with employees about their

future, i.e. are they planning on ‘retiring’,

• Offer financial discussions with pension provider, etc.

Default Retirement Age

• Company Benefits• Health Schemes• Death in Service• Employer Liability Insurance• Company Car Insurance

These may either increase substantially, or no longer cover employees over 65…

Default Retirement Age

• How we are helping our clients?• Revised current policies, issue of new

policies• Capability• Retirement Policy

• Preparation of draft letters to employees with regards to the impact on their benefits

Maternity / Paternity Provisions

Maternity / Paternity

• The background…

• Previous position• Father entitled to 10 days paternity

leave (only)• Quite often the father took holiday

instead of paternity leave

Maternity / Paternity

• Additional Paternity Leave• This came into effect from 3rd April 2011

• This now allows fathers* to take up to 26 weeks paternity leave in the first year of the child’s life.

• This effectively allows parents to share the full 52 weeks maternity leave.

• *see wider definition in factsheet

Maternity / Paternity

• Overview of rules:• Fathers will only be able to start their

APP:• 20 or more weeks after the child’s birth

or placement for adoption • Once their partner has returned to work

from statutory maternity leave or statutory adoption leave and/or ended their entitlement to statutory maternity or adoption pay, or maternity allowance

Maternity / Paternity

• In addition 8 weeks before the father wishes APL to start, they must provide:

• Notice of when they wish their leave to start

• A declaration stating that they are taking the leave to care for the child

• A declaration from the mother or other adoptive parent stating certain information

Maternity / Paternity

• How we are helping our clients?• Revised current policies, issue of new

policies• Maternity Policy• Paternity Policy• Family Friendly Policy (incl. Adoption Leave)

• Preparation of draft letters and forms to help manage the process

The Equality Act (2010)

The Equality Act (2010)

• The background…

• Previous position• Previously 9 different acts relating to

discrimination• And now…

• Only one act, covering all aspects of discrimination

The Equality Act (2010)

The Equality Act (2010)

The Bribery Act (2010)

The Bribery Act (2010)

• The background…• Prior to the introduction of The Bribery

Act, the topic of bribery was contained over various pieces of legislation.

• These pieces of law, some of which were over 100 years old have now been bought together and make up The Bribery Act 2011.

The Bribery Act 2010 came into force in the UK on 1st July 2011.

• The Bribery Act will:• strengthen the UK’s reputation as one of

the least corrupt countries in the world, • pave the way for fairer practice,

encouraging companies to adopt and put into place anti-bribery safeguards.

• The Four Key Principles:• Paying (or offering) a Bribe• Accepting a Bribe• Failing to prevent bribery• Bribing a Foreign or public official

• Failing to Prevent Bribery• Failure to prevent bribery is also known

as the ‘corporate offence’. • This occurs when a company fails to

prevent or tackle people who are operating on its behalf from being involved in bribery.

• Companies need to pay the upmost attention to this ‘corporate offence’ as it involves everyone associated with them.

• This offence could occur from a range of associated people who operate on behalf of the company whether it is an employee, agent or a consultant.

• Possible Defences• The possible defence against bribery

would be the company’s ability to demonstrate that it had adequate policies and procedures in place to stop any bribery from occurring.

• Adequate Policies and Procedures• anti-corruption culture in the

organisation• named senior individual who is

responsible for anti-corruption polices and procedures.

• Risk assessments should be in place to determine the potential risk of bribery occurring.

• Companies should have a clear code of conduct that addresses anti-corruptions issues.

• Penalties for participating in corrupt activities should be clearly spelt out in employees’ contracts of employment.

• Companies should have a gifts and hospitality procedure that sets out what is and what is not acceptable

• Employees should be given training in anti-corruption matters.

• Such financial controls should be set in place so that the possibility of bribery occurring is made unlikely.

• Whistle blowing procedures should be in place where employees can report any matters relating to corruption without, fear of retaliation.

• How we are helping our clients?• Revised current policies, issue of new

policies• Code of Conduct• Disciplinary Policy• Business Gifts and Hospitality• Expenses Policy• Business Ethics Policy• Whistleblowing Policy

• Updated Written Statements

• SpeakUP Integrity Programme• Whistleblowing Hotline• Confidential Reporting

Agency Workers Regulations

• The Agency Worker Regulations 2010 will come into force from 1 October 2011.

• These Regulations have come in on the principle of equal treatment between agency workers and staff recruited directly via a company

• They do not change the employment status of agency workers.

• The rule of thumb on what these Regulations mean as ‘equal treatment’ is that they must simply be treated as if they have been recruited directly for the position.

• Who is covered by these Regulations?• These new Regulations cover agency

workers, temporary work agencies and employers.

•  An Agency Worker is an individual who is “supplied by a temporary work agency to work temporarily for and under the supervision and direction of a company”.  

• They do not cover self-employed people who work for a company under a contract for services.

• Qualifying Periods• The Regulations will give agency workers

2 rights:•  The right from day 1 of their

assignment to equal access to employment opportunities and collective facilities, and

• The right after undertaking the same role, for the same company for 12 continuous weeks to the same basic working and employment conditions.

• Avoidance by a structure of assignments

• Offering 11 week assignments is going to be seen as anti-avoidance if you then break and re-start their assignment.

• A break to discount the qualifying period will need to be at least 6 calendar weeks or more.

• From day 1 the agency worker will: • have the right to be informed of relevant

vacancies• have the same access to facilities

• It does not cover off-site facilities such as an off site gym that is provided as part of a benefit package.

• After 12 weeks • The agency worker has the same basic

working and employment conditions as those employees recruited directly.

• This includes:• Contractual holiday pay• Overtime pay• Shift Allowances / Unsocial hours premiums• Bonuses linked to individual performance• Luncheon or transport vouchers

• Preparation• Assess the number of agency workers

you use• Assess the number of assignments

which last 12 weeks or more • Review if there are differences between

the employment terms and conditions and access to collective facilities

• Things to Consider• Restricting assignments to less than 12

weeks• Increasing your direct recruitment of

temporary employees• Engaging casual workers through an ‘in

house’ bank• Increase the use of self-employed

workers• Increase the use of managed/outsourced

services• Negotiate with agency suppliers, to

reduce risks and costs

• The risks• Agency workers will have the right to

bring a claim to an Employment Tribunal to enforce their right to equal treatment.

• The Employment Tribunal can award compensation to take account of any financial loss suffered by the agency worker and can make an additional award of up to £5,000 for any breach of the anti-avoidance provisions.

Pension Reforms

• The background:• In 2012, the Government will be

implementing pension reforms in order to increase workplace pension provision.

• The key driver is that there will be more pensioners in the future and those pensioners will live longer.

• This will put a massive strain on the State pension system.

• To alleviate this burden, the Pensions Acts 2007 & 2008 make changes to the Basic State Pension, the State Second Pension and introduce new employer duties for pensions.

• The Pensions Act (2008) will auto-enrol some 12 million employees who are not already making the required level of pension contributions into a Qualifying Workplace Pension Scheme (QWPS).

• The employer duties• From October 2012, employers will be

required by law to:• Automatically enrol all their eligible

employees not already in a good quality pension scheme into a QWPS on the day the employee becomes eligible, and

• Pay contributions for every employee who does not opt-out of the QWPS.

Timetable

The Contributions

• Quality Qualifying Workplace Pension Scheme (QQWPS)• Employers can avoid much of the

administration burden associated with automatic enrolment by setting up a QQWPS where:

• The total minimum contribution is 11% of qualifying earnings, of which

• At least 6% must come from the employer,• Automatic enrolment dates can be

postponed up to 90 days

• Eligible Employees• All employees will have to be auto-

enrolled unless:• They are already in a qualifying workplace

pension scheme, • They are under the age of 22,• They are over the State Pension Age, or• They earn less than £5,035 a year (in

2006/2007 terms).

What happens next?It’s up to you..

• You can wait until 2012 and let someone else, who knows nothing about your business, set up and run a pension scheme for your employees

Or• You can set up your own scheme and

retain complete control over your benefits package.