Clarke and Son News

The Pensions Act 2008 contains provisions which will make it compulsory (from 2012 for larger employers and 2015 for smaller employers) for an employer to enrol qualifying workers aged between 22 and the state pension age who earn more than a de minimus account (currently set at £5,035 per annum) into a pension scheme and to make contributions to the scheme.

On 9 December, the Chancellor announced that there will be some concessions to the rules for new businesses and ‘micro businesses’ which will mean some employees may not have to be enrolled into a pension scheme until 2016. Details of the implementation plan are expected to be announced imminently.

Under the provisions, the employer will be required to contribute a minimum of three per cent of salary. The employee will be required to contribute a minimum of four per cent salary, up to a maximum amount.

The provisions will be phased over four years, at the end of which (from year five onwards) the combined employer and employee contribution must equal at least eight per cent of salary.

There will be substantial fines for failure to comply with the new regulations.

Clearly, there are likely to be many changes between now and the planned implementation dates, but this is a good time to start thinking through the potential impact of the new regime on your business.

For more information, please contact Paul Cowdery on Tel: 01256 320 555.

Following the Chancellor’s pre-Budget report, it is clear that the UK economy continues to struggle.  This has a knock-on effect on UK employment and can be seen particularly in the continual heightened level of redundancy in the workplace.

Where redundancies are applicable, employers may, in certain circumstances, be prepared to offer a ‘deal’ to the employee to compromise any potential claims in exchange for financial settlement.  However such a deal needs to be embodied in what is known as a Compromise Agreement, which is a specific type of Agreement, created and controlled by statute, designed to end employment relationships.

Essentially the Compromise Agreement will provide for the employee to receive a sum of money as compensation for loss of his or her job and in return the employee will agree not to pursue defined further claims against the employer arising out of the employment or its termination.

The benefit for the employer is that they will often receive more than their strict legal entitlement, such as the statutory redundancy payment. The benefit for the employer is that the Agreement represents finality and it removes the risk of an expensive Employment Tribunal claim from the employer following termination of the employment.

A crucial part of the procedure for a Compromise Agreement is that the employee must take independent legal advice from a Solicitor and the Agreement will contain a certificate from the Advisor that such advice has been given.  This is designed to prevent employees being pressured into signing Agreements which are not in their best interests or which do not provide them with adequate compensation for loss of their job.

Since taking the legal advice is essential for the Agreement to be valid the employer will invariably make a reasonable contribution to the employee’s legal costs.

If you are facing redundancy or if your employer is talking to you about a Compromise Agreement then we can advise you on your position. Contact Thomas Hunt, Employment Specialist on Tel: 01256 320 555 for further information or advice on any aspect of Employment Law.

In the current economic climate redundancies are becoming more and more common. Both employers and employees are having to go through the compulsory redundancy process and although the procedures have relaxed slightly since April they can still cause problems, particularly for employers. In some cases the employer will be prepared to offer a “deal” to the employee so that the employment relationship can end on agreed terms without the stress caused by having to follow lengthy and sometimes overly formal procedures. However such a deal needs to be embodied in what is known as a Compromise Agreement, which is a specific type of Agreement, created and controlled by statute, designed to end employment relationships.

Essentially the Compromise Agreement will provide for the employee to receive a sum of money as compensation for loss of his or her job and in return the employee will agree not to pursue any further claims against the employer arising out of the employment or its termination.

The benefit for the employer is that they will often receive more than their strict legal entitlement, such as the statutory redundancy payment. The benefit for the employer is that the Agreement represents finality and it removes the risk of an expensive Employment Tribunal claim from the employer following termination of the employment.

A crucial part of the procedure for a Compromise Agreement is that the employee must take independent legal advice from his own Solicitor and the Agreement will contain a certificate from the Advisor that such advice has been given. This is designed to prevent employees being pressured into signing Agreements which are not in their best interests or which do not provide them with adequate compensation for the loss of their job.

Since the taking of legal advice is essential for the Agreement to be valid the employer will invariably make a reasonable contribution to the employee’s legal costs.

If you are facing redundancy or if your employer is talking to you about a Compromise Agreement then we can advise you on your position. Contact Nick Bowers, Partner for further information or advice on any aspect of Employment Law.

Over the last decade, there has been a significant increase in employment legislation that has originated from both the EU and the UK.

It’s an established fact that many businesses, and small businesses in particular, find the steady stream of employment legislation extremely challenging.

For employees too, Employment Law can often be viewed as minefield of information beset with potential pitfalls - especially in the area of redundancy which, unfortunately, is an all-too-common occurrence in these changing economic times.

Whether you are a business owner, employee or former employee, there is no substitute for qualified, professional advice to give you all the facts you need under current legislation.

Areas in which our Employment Law specialists can advise our clients include:

• Redundancy, Lay-Offs and Short-Time Working
• Dismissal and Grievance Rules
• Employment Terms & Conditions
• Parental, Paternity or Maternity Leave
• Parental, Paternity or Maternity Pay
• Working Time Regulations
• Flexible Working
• Agency Workers
• Self-Employed
• National Minimum Wage
• Equal Pay and Conditions
• Health & Safety in the Workplace
• Disability Discrimination
• Age Discrimination
• Sex Discrimination
• Race Discrimination
• Employee Holiday Entitlement
• National Minimum Wage
• Employing Migrant Workers.

If you have an issue that needs to be resolved either as a business owner or as a worker, or you’re simply looking for some friendly help and advice, contact us or e-mail Nicholas Bowers direct.

The European Court of Justice has ruled that employees on long-term sick leave are entitled to take all holiday they have accrued when they return to work. Furthermore, if workers were sacked or left a firm, they must receive holiday pay equivalent to the time they were unable to take while ill. This decision goes some way to settle years of dispute over whether holiday rights accrued are lost after prolonged illness.

The ruling specifically impacts UK employers due to UK membership of the EU and the implementation of the Working Time Directive in 1998. Under the European Working Time Directive, workers have a “right to a minimum period of paid annual leave”. However, “a worker does not lose his right to paid annual leave which he has been unable to exercise because of sickness. He must be compensated for his annual leave not taken,” the ruling said.

However, the ruling has been seen as a blow for many employers. In practice, the ruling means that somebody who was away from work for two years could then be entitled to a minimum of 40 days of leave (with the addition of public holidays).

Nicholas Bowers, employment partner at Clarke & Son LLP, made the following comments:

“The decision raises a multitude of issues for employers. For an employee who never returns from long-term sick leave, the employer would be forced to make a lump sum payment on cessation of employment. This invariably creates a sizeable problem in particular for a small employer and is exacerbated further by the financial strain placed on employers in the current economic situation. This is coupled with the practicality of re-integration of the employee back into the workforce after a lengthy period of absence”

Meanwhile the business group, the CBI, described the ruling as

“a real blow to firms trying to keep jobs alive during the recession”. “Businesses themselves also suffer when staff take sick leave, and we had hoped that a compromise could have been achieved over unused holiday time,”

said the CBI’s director of HR policy, Katja Hall.

“Instead, at a time when the economy is struggling, this judgment will ensure that staff are away from the workplace for longer, and it will create a headache for HR departments, who will have to review their policies and contracts.”

If you would like advice on employment issues, please contact Nicholas Bowers or Tel: 01256 320 555

Via Personnel Today comes news of a survey of 1,100 employers conducted by employment law firm, Peninsula, found that nine in 10 respondents would discipline staff if they were legally confident.

But, eight in 10 employers also feared a wave of employment tribunal cases following an increase employee rights.

In January, business secretary John Hutton announced a clampdown on unnecessary employment tribunals by pouring millions of pounds into conciliation service Acas. The move followed news of an increase in employment tribunal cases to 115,039 in 2005-06 to 132,577 last year.

David Price, head of employee relations at Peninsula said many businesses were so convinced that employment law is weighted on the side of employees, they were afraid to tackle disciplinary issues.

He want on to explain that employers are increasingly finding it difficult to apprach the area of discipline, afraid that they will become embroiled in a long, drawn-out process resulting in an employment tribunal. He added:

Employers also need to have a clearly defined disciplinary and grievance policy, in line with the statutory code of practice

If you are a Basingstoke based Business, or in North Hampshire, and have any questions relating to empoyee issues why not visit the employer legal service section of our website or call Nick Bowers on 01256 320555.

Employers could be held liable for the suicides of ex-employees after a landmark ruling by the House of Lords.

Law Lords ruled unanimously that the widow of a man who killed himself six years after a workplace accident should be compensated by his former employers. The decision upheld a previous judgment in 2006 that the company was responsible for the death of a former employee.

In 1996, Thomas Corr was hit on the head by a metal panel as a result of defective machinery. He later suffered from depression, headaches and mood swings. He committed suicide in May 2002.

In the original case, his employer, car manufacturer IBC Vehicles, admitted liability for the workplace accident, but denied that it was responsible for the suicide.

A deputy judge in the High Court awarded his widow £82,520 after finding IBC could not be held responsible for Corr taking his own life. Corr’s widow then appealed that decision and the Court of Appeal found IBC Vehicles was responsible his suicide. IBC subsequently appealed to the House of Lords which confirmed that the company was liable.

Ref. Personnel Today

Employers in the UK will need to tighten up their discrimination and flexible working policies following a landmark disability decision at the European Court of Justice.

This will almost certainly to give rise to new rights for millions of workers in the UK, legal experts have warned. (Personnel Today)

An advocate-general at the Court confirmed last week that Sharon Coleman suffered ‘discrimination by association’ as a carer for her four-year old disabled son, claiming she was forced to quit her job after she requested time off to look after him.

The opinion, likely to be approved by the ECJ later this year, could mean that the millions of workers who care for disabled people will be able to claim unlimited discrimination damages if their employer treats them worse than non-carers in businesses through the UK.

This could pave the way for discrimination claims on the grounds of association with people of different ages, religions, or sexual orientation.

Nick Thomas, senior associate at law firm Jones Day, warned that Employers will need to review their harassment or discrimination policies to ensure they are broad enough to prevent people not only from making comments about the [minority] individual, but about anybody associated with them.

Read more at Personnel Today

“An employment relationship, rather like a marriage, can breakdown and when it does it can be difficult for the employer and employee to ‘patch things up’ and move on.”

Says Nicholas Bowers, Partner and Employment law specialist at Clarke & Son LLP.

“If that is the case then it is often better for both parties to reach an amicable settlement rather than go through the stress and expense of Employment Tribunal proceedings.”

The Government recognised this situation some years ago and introduced the concept of what are known as Compromise Agreements, which are now regulated by fairly extensive legislation designed to protect the employee’s interests.

In basic terms a Compromise Agreement provides for the termination of the employment contract on agreed terms. Often the employee will receive a generous compensation payment for loss of his or her job. The amount of that compensation will depend on a number of factors, one of which is the likelihood of the employee bringing successful proceedings in the Employment Tribunal for compensation for unfair dismissal. In return the Compromise Agreement will provide that the compensation payment is in full and final settlement of all the employee’s claims against the employer, including not only unfair dismissal but all other potential claims available to the employee.

Given the extensive potential claims being ‘given away’ by the employee an important part of the Compromise Agreement procedure is that the employee has to be given advice on the Agreement by an independent legal advisor, not connected in any way to the employer. Invariably the employer will make a substantial contribution to the employee’s legal costs incurred in taking independent advice.

So, the first time that many employees encounter a Compromise Agreement is when they are faced with redundancy or dismissal and are often in a distressed state of mind. This can be made worse by having to go and see a solicitor or legal advisor for the first time to go through the agreement with them and explain its legal effect if they agree to sign.

However, most solicitors that they see will be experienced in employment law and will appreciate the clients concerns and anxieties and will be familiar with the potential problems. They will also be able to advise clearly whether the Compromise Agreement offered is in the client’s best interests or whether a better deal can be negotiated.

Making staff redundant has just become much tougher for UK companies after a landmark ruling moved the UK closer to continental-style employment laws, reports Personnel Today.

A decision by the Employment Appeal Tribunal last week significantly changed employers’ obligations when consulting with staff representatives over collective redundancies.

Legal experts warned that employers will now be forced to involve unions and staff in the decision-making process when they plan to close businesses and make multiple redundancies.

UK employers have not previously needed to consult with unions about the reason for closing a workplace.

The judgment also means unions could demand access to critical business information to challenge the rationale for closures. Firms could be liable for millions of pounds in compensation if they fail to follow proper procedures.