Monthly Archives: May 2009

Contracts that are fit for purpose

Man holding umberella to stop paperwork flooding him like rain

Feels like you are getting buried

 

Most bosses know, the paperwork between them and the people they pay is important .   But the psychological contract is just as important as the legal one. The ‘small print’ should support the both   If they are out of sync your relationships will be full of conflict.

 

The ’employment allowance’ is removing some costs associated with employment and it is time to look at which options are really appropriate for you.

 

Low commitment means low loyalty and unpleasant surprises

These ‘low emotion’ options fulfil a role, but they are unlikely to generate high value from the worker.   There can also be hidden time bombs for your budgets, since tribunals and the revenue can look behind the face of the paperwork and decide  there are employment or tax liabilities that you thought you had sidestepped.

Casual, freelance and zero hours contracts need careful management

Managers need to know when the lines of ‘worker’ and ’employee’ are blurred, and when they are at risk of being crossed.  You need to assess how appropriate these relationships are in terms of  your organisation’s own goals, and make sure these ‘low emotion’ contracts are only used appropriately.

Changing the type of people you recruit

The ‘sound bite’ generation has arguably been replaced by the ‘mini bite’ generation. Faced with the tremendous upheaval in the workplace, they may be reluctant to commit to ‘safe’ jobs, having seen long-term promises such as pension arrangements broken when they were too expensive to keep.

Maybe the dog didn’t just eat their homework but the whole economy!

They are unlikely to want to contract to spend their entire working time with one organisation. They may work part-time for several organisations at a time. These are not necessarily low skill workers, many will be knowledge workers with valuable skills to offer.

They will spend their lives being ‘TUPEd’ in and out of organisations or working as freelancers.  They may work with integrity but view their employer as one of several key customers, and not a sole source of income.

They may be ‘tribal’, and view themselves as part of an IT tribe, a legal tribe, a sales tribe, a high-flying executive tribe.  This tribe will move around geographically and virtually.  Many people will be part of several tribes at once.

Cafeteria contracts?

The old style ‘standard contract’ is  drifting so far away from how people actually work.  Getting a ‘standard’ is just going to increase the gap between the paperwork you issue and what is really going on.

In the modern workplace we have people working on teams where  each person has a different arrangements with us:-

  • our employees working next to freelancers
  • our employees working next to agency temps
  • office workers and home workers working on virtual teams
  • mobile workers who rarely visit our main workspace at all
  • outsourced workers (in the UK or globally)

Social enterprise and value driven organisations

Many organisations have values that are so important (fair trade, ecology, fair employment, etc) that they contract with their suppliers to uphold them.  Some of your clients  and funders will not work with you if you don’t have the ‘right’ policies in place.

If you are not careful you can end up with bewildering and complex documents and policies that hardly anyone reads of understands.

Keep it simple

The people we pay are not lawyers or HR policy writers.  They are ordinary people, who increasingly get their information from TV and YouTube.   They are not up for reading long and complicated documents.

Yet a simple set of clear freelance/employment contracts can set up the framework for a clear and workable relationship (and protect the business at the same time).

Why not join one of our regular free ‘KoffeeKlatch’  conversations and explore which options are right for you.  For more information  and registration click here

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy. Tel: 08452 303050 Fax: 08452 303060

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Equality v Diversity

Are all cultural beliefs of equal ‘value’, to be respected no matter what? Are some beliefs or practices just plain wrong?

Diversity is about difference and variation. It is possible for diverse things to be equally valued, but it’s a concept that is extremely hard to manage in practice.

I visited South Africa after the end of apartheid, and found myself having to pay the gardener in a house we were renting. Having given him his week’s wages, I asked him to do a particular gardening job. I am a keen gardener and could see the job needed doing. The chap (for it was a man) responded that he did not take orders from a woman. He told me that, in his culture, women were quiet and did what they were told.

I am not debating the rights and wrongs of Zulu gardener culture, but I am seeking to explore how I am to deal with equality and diversity when diverse cultures do not offer me equality, or accept the notion of diversity.

How do I respect a culture that regards me as a second class citizen with limited rights?

What if someone holds a belief that demeans me? Should I wait until it has a practical effect on my life, and then challenge it? Should I take pre-emptive action and campaign for protection against those beliefs being activated in the real world?

For the gardener, should he be entitled to:

  1. Hold his beliefs silently, but not express them to other people?
  2. Express his beliefs within his own culture, but not outside it?
  3. Act upon his beliefs within his own village, but not when he leaves it?
  4. Act upon his beliefs because, wherever he is, that is his culture?

My exchange with the gardener was relatively trivial, but what if we apply this question more widely.

Does my freedom rest in the censorship of others? If so, how far should they be censored before my freedom is excessive? How far should I be censored? Does anyone have, or should they have, a legal or a moral right not to be offended at any time?

The Equality Bill requires the Equality Commission to square the circle of “equality or diversity” by demanding “equality and diversity” as part of its fundamental duty (see below). The Commissioners are being set an impossible task by the legislature. It would be better that the legislators were honest in calling for achievable outcomes, rather than promoting high-sounding phrases that are bound to disappoint.

 

3 Fundamental duty

The Commission shall exercise its functions under this Part with a view to the

creation of a society in which—

(a) people’s ability to achieve their potential is not limited by prejudice or

discrimination,

(b) there is respect for and protection of each individual’s human rights

c) there is respect for the dignity and worth of each individual,

(d) each individual has an equal opportunity to participate in society, and

(e) there is mutual respect between communities based on understanding

and valuing of diversity and on shared respect for equality and human

rights.

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A contracting future?

The UK arguably leads the world in the use of temporary workers, ‘atypical workers’ contracts and casual workers. But the European employment law framework struggles to keep up, and often attempts to ban or limit these relationships in favour of the more traditional employment model. Recent consultations on ‘improving’ temporary employees’ rights (http://www.berr.gov.uk/consultations/page51233.html), and removing VAT inputs on temporary staff, have deformed the UK market .

In the long run, the lack of long term mutual obligation between end client and worker that is at the heart of the British temp market may turn out to be closer to the long term model for many workplace arrangements in many sectors.

The future generation of workers will not recognise the current UK employment law framework, rooted as it is on the older “master and servant” framework of the 19th century. Whilst the 19th century model has survived, with modifications, through the 20th century, it is arguable that it will not survive in its current form as the 21st century unfolds.

The heart of the master and servant contractual tradition is rooted in the notion of mutual duties – the ‘master’ to provide safe working conditions, pay for the work, and the servant to work for the money and to serve loyally. Those concepts still operate at the heart of the contractual relationship between employer and employee.

Modern concepts of the employer-worker relationship are based on European traditions of “rights”, and modern legislation tends to focus on granting and securing workers’ “rights”. The legislators on both sides of the Channel continue to ignore protections for the employer, and “managers’ rights” continue to derive from the old common law concepts of “duties”, and good contract drafting.

Workers’ rights start before employment, and extend not only to the employed but also to “workers” – individuals who are personally obliged to provide a service. So the line between an employee and a contractor is becoming ever more blurred. And the taxation of the self employed contractor on a PAYE basis is another step reducing the independence of what once was the journeyman class . This independence has been exchanged, involuntarily, for protection from ‘discrimination’. The increasing state intervention deprives companies and individuals of options . It is no longer enough for the two to agree the individual is self employed – the state will take its own view and enforce it.

This leads to an interesting dilemma in the workplace – how to manage individuals who do not want to be employees in terms of obligations (or tax) but are nonetheless accruing workplace rights.

And “contractors” are not the only ‘conscripts’ in the employment ranks. The increasing application of TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) to changes of service contracts means that employees are finding themselves working for employers who never recruited them .

HR’s recruitment role used to be confined to the recruitment of employees, and the booking of agency workers, as appropriate. As service provision becomes the mainstay of many modern organisations, HR’s role needs to change, to align more closely with procurement (for contracting out and changing contractor services), with sales and marketing (for selling contracted services and TUPEing in), and with finance (for budgeting labour and residual costs) in new ways.

HR needs to add value by adopting suitable (often multiple) methods of contracting with individuals, inducting and motivating ‘conscripts’, and supporting line management towards understanding, managing and succeeding in the new environment.

Employment law can be a useful way of looking at the issues, but only if it is overlaid with a clear understanding of commercial and organisational needs .

If you would like a free one to one chat I would be happy to organise a webinar to help you map your own organisation against these issues .

Email info@irenicon. co.uk headed MAP so we can arrange a suitable time for your free webinar. Follow me on twitter www.twitter.com/annabelkaye

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy. Tel: 08452 303050 Fax: 08452 303060

 

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Paying for other people’s mistakes – the Equality Bill

Under current UK equality laws, an employers is ‘vicariously liable’ for discrimination at work if the discriminator is in their employ (or an agent acting on their behalf).   

“Vicarious liability” is when you get to pay the penalty for something done by someone else — so you pay for what your employee did, even though you didn’t do it yourself.  

Employers often naively believe that this only applies to act they have ordered their managers to do.  The reality is almost the reverse.  Employers who have not taken ‘reasonable steps’ to prevent discrimination will find, under current UK law, that they are liable for their employees’ discriminatory actions.

 Employers are often knee deep in policies, guidance, staff handbooks and accompanying paperwork.  If documents are badly drafted (all too often the case), they will be long, hard to understand, and will contain specialist terms and broad instructions that can’t be used as a practical guide for day to day behaviour at work.

Current equality law requires the employer to train their managers avoid ‘vicarious liability’. But “equality training” is often about equality principles, and leaves individual managers quite bewildered about what they should be doing.

This fosters the mistaken believe that “black people can’t be sacked for poor performance”;  or “you can’t ask women to do lifting because they are women”.  These ‘play safe’ assumptions are not only stereotypical and wrong, but they also discriminate against other workers and create resentment in the workplace.

Under the Equality Bill, an employer’s defence to ‘vicarious liability’ claims will be that they took such steps as were reasonably practicable to prevent the employee from doing the act. If the equality training offered by an employer results directly in discriminisation against one group in favour of another, then the employer is going to create liability by the process that was supposed to avoid it.

Employers who receive equality-related grievances are going to be in more of a dilemma than they currently are. If, for example, a woman raises a sex discrimination grievance against her manager, she has the right for that grievance to be properly heard and dealt with.  But fairness of treatment also applies to the male manager, who can (and they often do) claim that a female manager would have been believed, or given the benefit of better process etc, and they were not. The ‘play safe’ option to prevent recurrence is going to be dismissal, but a knee jerk dismissal will be discriminatory against them!

The ordinary person is not skilled to make these judgements or conduct such investigations. King Solomon himself might have found the issues perplexing.

We regularly investigate and advise on such claims.  Even well-informed HR departments can rarely deal with the investigatory process, while the small business owner is sunk without a trace as s/he tries to apply common sense and logic to an Alice in Wonderland world of accusation, denial, counter accusation, with everyone claiming they are the victim of discrimination.

Employers are standing into danger if they don’t investigate claims and take appropriate action (since they won’t have taken reasonable steps to prevent discriminatory treatment), and they are standing into danger if they do investigate and take action. If they uphold a grievance claim, this inevitably starts a discrimination tribunal. If they dismiss the alleged perpetrator, they risk a tribunal claim.  And if they don’t, they run more risks of discrimination claims from the original complainant.

The sad thing is that thousands of ordinary managers are afraid to deal openly with problem staff if they belong to a ‘protected group’, whilst real bullies who subject their staff or colleagues to appalling rudeness, mockery and cruelty in the workplace all too often go unchallenged and unrebuked.

This long, wordy, and complex piece of legislation will only reinforce the problem.

 

 

74 Employers’ and principals’ liability

(1) Anything done by a person in the course of his employment shall be treated for

the purposes of this Part as done by the employer as well as by the person.

(2) Anything done by a person as agent for another shall be treated for the

purposes of this Part as done by the principal as well as by the agent.

(3) It is immaterial for the purposes of this section whether an employer or

principal knows about or approves of an act.

(4) In proceedings under this Part against a person in respect of an act alleged to

have been done by his employee it shall be a defence for the employer to

provide that he took such steps as were reasonably practicable to prevent the

employee—

(a) from doing the act, or

(b) from doing acts of that kind in the course of his employment.

(5) Subsections (1) and (2) shall not apply to the commission of an offence under

section 56.

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Characteristics and discrimination

A word that has changed its meaning over time is discrimination. Before it was used in an ‘equality’ context it was a good thing to be a person of discrimination. A person who exercised discrimination was someone who used clearness of judgement and perception to chose between what was of value and what was not.

To that extent it is arguably the moral and political duty of every man, woman and child in the country to discriminate at all times, particularly when making important decisions.

This idea of discrimination has been overtaken by the more recent notion of unfair prejudice. So, if someone says to me, “you have discriminated against me” they do not mean I have used my powers of judgement and reason to conclude they are not up to the job, but the exact opposite. This is an allegation of bigotry, prejudice and unfairness.

The very frontier of the discrimination issue lies where the older meaning becomes the new. If I exercise my discerning judgement properly in taking decisions that affect other people – such as recruitment, I would not normally be exercising my judgement properly if I took into account irrelevant factors (or failed to take into account relevant ones).

The law does not permit me to decide for myself which characteristics I may include. Existing discrimination law requires me to disregard certain facts about an individual in the workplace.

I may not discriminate:

 – on the grounds of age, but I may compulsorily retire someone because of their age
 – against someone who is disabled, but I may refuse to hire able bodied people
 – against someone undergoing gender reassignment, but I may prefer to recruit those who are undergoing it
 – against married/civil partnered individuals but I can refuse to hire single people
 – in relation to pregnancy and maternity but I am not obliged to give men equivalent terms
 – on religious grounds or philosophical belief ……
 – on grounds of sex or sexual orientation

These characteristic are going to be known in the Equality Bill as ‘protected characteristics’. (See below). Despite the publicity about the Equality Bill, it does not seem likely that all individuals are to be equally protected. The Bill itself separates out these groups and deals with them in different ways at various stages.

We are a long way from all ‘characteristics’ being equal. In fact, in moving towards what was once known as positive discrimination, we are moving towards a notion that some characteristics will entitle an individual to more support/training/resources than others.

In reality this has always been so. Once the most advantaged group in the UK was plainly the older, white, male, heterosexual, property owning Anglican. This group historically were entitled to own property, take public office, vote and conduct a sex life without going to jail, decades/centuries before other groups.

Things have moved on and the old no longer command automatic respect because of their years, it is not necessary to hold a particular religion to be an MP or JP as it once was, though it is still necessary in order to inherit the Crown of England. It is also necessary to be male.

New groups vie for preference and advantage – naturally so. Competition for resource is at the very heart of survival. Now these protected characteristics will not only give individuals redress if they are the victims of prejudice but also give them some special legal consideration

When I was a child I was taught to give up my seat to the elderly, disabled, pregnant women on buses – on the grounds they needed the seat more than me. Now I see children with their parents sit sullenly on seats while senior citizens on zimmer frames struggle to hold their balance on a London bus.

Perhaps what was once the instinctive politeness in response to need really does need to be replaced by a legal framework. A law to make us all polite to each other and give up our seats, or place in the queue to those who need it more than us.

Somehow I suspect the sullen children will grow up to sue everyone for unfair discrimination and their ‘rights’ while those who really need us to put them before us in the queue struggle on.

The protected characteristics

The following characteristics are protected characteristics.

age;
disability;
gender reassignment;
marriage and civil partnership;
pregnancy and maternity;
race;
religion or belief;
sex;
sexual orientation.

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What is Equality?

Equality is a word that started out as a mathematical expression before finding its way in to the political world.

It seems to have moved into the legal world being used in the context of ‘equality before the law’ – justice being theoretically applied to all regardless of rank, gender, race, status etc. This is linked to the idea that justice is blind and to the ideal that law is for everyone and irrelevant personal characteristics are not seen by the law.

The idea of blind justice ran parallel to acts of parliament discriminating against women (who until the end of the 19th century did not own property in their own right when they got married and did not get the vote until the 20th century), homosexuals (whose behaviour in the UK was criminalised until the mid 20th century), dissenting religions, who could not hold public office in the UK without becoming Anglicans, ……..and so much more.

The rhetoric of equality and the reality of equality in the UK have always been out of step.

Now the notion of equality has moved into the world of public service and employment. The new ‘Equality’ is moving towards “all things need to be made equal in order for justice to be applied” This introduces the notion of positive discrimination. Despite press reports to the contrary positive sex discrimination in recruitment has never been lawful in the UK and all women shortlists are no more lawful than all men shortlists as the law currently stands.

Will the Equality Bill in its final format change that?

The clause I was looking at is set out below: The definition of equality here is equality between individuals. This is not the ordinary English definition of the word, which is how UK statutes are traditionally interpreted. The EU tradition is to look at the intent of the people who passed the directive that is being implemented. If we look to Europe it is arguable that the intent of the legislature is equality of treatment rather than equality of outcome. Many of the relevant directives contain the words ‘equal treatment’ .

“The Commission for Equality and Human Rights will:

(a) promote understanding of the importance of equality and diversity,

(b) encourage good practice in relation to equality and diversity,

(c) promote equality of opportunity,

(d) promote awareness and understanding of rights under the equality

enactments,

(e) enforce the equality enactments,

(f) work towards the elimination of unlawful discrimination, and

(g) work towards the elimination of unlawful harassment.

 

“diversity” means the fact that individuals are different,

“equality” means equality between individuals, and

“unlawful” is to be construed in accordance with section 36.”

 


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Agency workers’ rights to change

The Department for Business, Enterprise and Regulatory Reform (BERR) have released their consultation documents on changes to agency workers rights. It can be found at http://www.berr.gov.uk/consultations/page51233.html and comments can be returned online or by post. Responses are due by June 2009.

Agency workers can be employed (by the agency), self employed, or employed via their own shell companies. As with all workers, it is possible for them to be employed for tax purposes and not for unfair dismissal purposes or vice versa.

The rights of agency employees are broadly the same as other employees. The principle difference being that they often have non working weeks when they are not on paid holiday or sick leave and this tends to mean they are not building up long service. Despite press reports, temporary workers accrue service and redundancy and notice rights as other workers do. The key difference is that their service may be fragmented by gaps between bookings.

The CBI/TUC agreement of May 2008 was that temps should get equal pay, rest times and leave (compared to permanent workers). There is no general right to equal pay in UK law. There is a right to equal pay by gender, but if two men (with no other discrimination issues) are doing the same job, there is no legal reason why they should be paid the same. If everyone is on minimum wage and statutory holiday and breaks, they will be equal anyway, but if the client employer pays more than this, the agency will have to factor this in when a booking goes over 12 weeks.

This may lead to an automatic end to bookings of more than 12 weeks and an increase in the data exchanged between client and agency before a longer booking is agreed. The consultation document seeks views on how far this should include self employed workers.

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