It is not unusual to find employers making decisions based on an understanding of the law that is centred on a series of urban myths. The problem is that, when employees make mistakes in the workplace, their employer usually has a set way of dealing with those mistakes to protect the business. However, when it is the employer who makes the mistake, it can lead to costly and long-running litigation, loss of management time and bad publicity. With the law being a quagmire ready to trap all who dare to ignore it, I spoke to two employment lawyers for their views on the most frequent of mistakes.
Lucy Gordon, director, Walker Morris LLP
Lucy Gordon puts the concept that an employee can be dismissed with less than 2 years' service and without following a process or giving a reason in prime position for debunking.
She believes that it is ‘understandable that many believe employees are required to have 2 years' service to bring a claim for unfair dismissal. However, having less service does not mean that you can dismiss with impunity’. She explains that ‘employees with any length of service can bring claims for discrimination on the grounds of a protected characteristic’, such as race, sex or for unfair dismissal.
To mitigate risk, Gordon advises clients to undertake risk assessments before carrying out dismissals, ‘otherwise they can face claims for potentially uncapped compensation, depending on the employee's losses and injury to feelings’. Employers should follow the Advisory, Conciliation and Arbitration Service (ACAS) code of practice and clearly identify a fair reason for every dismissal.
Next is the notion that if an employee does not expressly tell their employer that they have a disability, their employer cannot be found to have discriminated against them. Some believe that what they do not know will not hurt them. Employers who believe that, if they have not been told about an employee's disability, they do not need to consider whether there is a need to make reasonable adjustments or worry about a disability-related dismissal claim, should think again. The reality, according to Gordon, is that ‘employers are expected to look out for signs that could indicate that someone has a disability, and to make reasonable enquiries about an employee's health’. Simply, the legal test is whether an employer knew or could reasonably be expected to know that the employee had a disability. She notes that frequent or long-term sickness absence, a change in mood or performance or consistently making errors are all indicators of health conditions that could amount to a disability. As a result, ‘employers should be alert and sensitively make enquiries with employees to see if there are any underlying issues’. Where an employee is disabled, there is a positive duty on employers to consider whether reasonable adjustments are required. Failures relating to disability can be very costly, as claims for compensation are potentially uncapped.
Third is the view that, after a Transfer of Undertakings (Protection of Employment) (TUPE) transfer, employers must wait 2 years before they can harmonise terms and conditions of employment. This is incorrect, says Gordon. ‘This myth seems to stem from a mistaken belief that, after 2 years, the transfer will not be considered to be the reason for any changes because of the passage of time’. She continues: ‘The truth is that any variations to contractual terms are void if the transfer itself is the reason for the change. This can have important consequences for employers’.
If changes are void, even where employees consented to the change, and any less favourable terms were offset with more beneficial provisions, they can cherry pick the most favourable to them from the original and new contracts. To drive the point home, Gordon talks of employers who have sought to buy out, say, more generous holiday entitlement with a small increase to salary—‘they have often ended up paying for both benefits’.
» Employers must be careful not to dismiss employees because of their pregnancy, pregnancy-related illness or maternity leave. Such dismissals and redundancies are likely to be automatically unfair and discriminatory, which may lead to high compensation «
In her mind, the answer is to only make changes—with employee consent—where the reason for the change is related to the transfer, but ‘the sole or principal reason for the change is economic, technical or organisational’.
The last myth that Gordon busts is the thought that there is no need to follow a process or give a reason when not renewing a fixed-term contract. This, she says, is incorrect: ‘Most fixed-term contracts provide that they will terminate automatically on a set date or on conclusion of a project, without the need for further notice to the employee. Many employers assume that they can let these contracts expire without the need to follow any process or give any reason to the employee’. However, she warns that the non-renewal of a fixed-term contract amounts to a dismissal. Therefore, if the employee has 2 or more years' service or if the reason for the non-renewal is discriminatory, ‘the employee may be able to bring a claim for compensation if there is not a fair reason for the dismissal and a fair process was not followed’.
To prevent claims, Gordon suggests that employers consider why the contract is not being renewed: ‘If the role has ceased, there is likely to be a redundancy situation. Equally, if the contract is cover for maternity or sickness absence, it is possible to include wording in the contract that confirms that the contract will come to an end when the original employee returns’.
Chloe Themistocleous, senior associate, Eversheds Sutherland
Chloe Themistocleous places the understanding that employees have a right to have the day off on a public holiday and, if they do work, they must be paid more for it, at the top of her most troublesome myths.
In Themistocleous' mind, this misconception comes from the term ‘public holiday’. Experience has taught her that employers assume that, as these days are generally considered to be days off, employees have the right to them. The truth, she says, is that ‘there is actually no statutory right to time off, paid or otherwise, on any public holiday. Employees are entitled to the basic minimum holiday entitlement of 5.6 weeks each year, but how and when this is taken is decided by the employer and employee’. That said, an employee's contract may specify that that they are entitled to not work on public holidays or to earn extra pay for working those days. If the employer breaches the contract in regard to public holidays, Themistocleous warns that an employee could bring a claim against them. There is only one solution in her mind: ‘Ensure that the employer's position on public holidays is consistent between employees and, where possible, see that the position is set out in the employment contract’.
With many workers having families, it is not unreasonable for some employers to think that employees with children have the right to work part-time or on a flexible basis. According to Themistocleous, the actuality is quite different. ‘Employers can think that, because employees with 26 weeks' service have the statutory right to request flexible or part-time working, they must accept requests. However, no employee has the right to flexible or part-time working, regardless of their status as a parent’. As a result, she says that an employer can reject the request for certain defined reasons, including ‘the burden of additional costs, detrimental impact on the quality or performance of the business or the inability to recruit additional staff or reorganise work’. Nevertheless, she would advise employers to carefully consider any request for flexible or part-time working, and, ‘if they must deny the request, ensure it can be justified by one of the prescribed reasons’. Her logic is based on the right of an employee who is wrongly denied flexible or part-time working to bring a claim to make the employer reconsider the request and/or pay up to 8 weeks' wages in compensation.
Themistocleous adds that there is change afoot here: ‘Last summer, Tulip Siddiq introduced a private member's bill that seeks to give all employees, from day one, the right to request flexible working. It's unlikely that the bill will pass. However, the Government ran a consultation on its own proposals to do the same; it closed in December and the response is awaited.’ As before, it is a right to request—not a right to have—flexible working
The third myth that Themistocleous tackles is the view that an employer is not allowed to give an employee a bad reference. While it is possible that employers believe this myth to be true because it can seem easier and less risky than giving a bad reference, there is nothing in the law that states that an employer must give a reference for an employee. However, as Themistocleous advises, ‘where the employer does give a reference, it should not be untrue or inaccurate. That said, there is no law preventing an employer from giving a negative, but factually faithful, reference in appropriate circumstances’. Yet, employers must tread carefully, she says: ‘If an employer gives a misleadingly positive reference, the recipient of the reference can bring a claim against the employer for negligent misstatement’. Alternatively, ‘if an employer gives a misleadingly negative reference, the ex-employee may bring a claim for defamation’. To reduce risks, some employers have a policy of only confirming the employee's dates of employment and position with the company, which sidesteps the issue altogether. However, this can also have a negative impact on those employees who deserve a glowing reference.
The last myth that Themistocleous has seen cause trouble for employers is the belief that employees who are pregnant or on maternity leave cannot be dismissed. The root of this particular myth may lie in the stance that some employers take, as they are conscious of not discriminating against pregnant employees or employees on maternity leave. Critically, for Themistocleous, no employee is immune from dismissal. However, she says that ‘employers must be careful not to dismiss employees because of their pregnancy, pregnancy-related illness or maternity leave. Such dismissals and redundancies are likely to be automatically unfair and discriminatory, which may lead to high compensation for loss of earnings and injury to feelings’. The only path open to employers is to follow their disciplinary process for these employees in the same way as for any other employee, but with consideration as to whether and to what extent the pregnancy has impacted their conduct or performance.
In summary
The very fact that employment lawyers invariably have long, and storied, careers indicates one thing—that employers and employees often fall foul of some often complex rules and procedures. While workplace disputes will never be eradicated, a proper understanding of the law will be of greater help than an understanding of myths.