Lawful Deductions From Pay

As the recession continues to bite and many employers feel the need to run a tight ship, care should be taken that deductions from employees' wages are made lawfully to avoid expensive tribunal claims. "Wages" are defined broadly and cover any sums payable to the worker in connection with employment, including any fee, bonus, commission, holiday pay or other payment referable to the worker's employment. A deduction from a worker's wages can only be made lawfully if: the deduction is required or authorised by law, and this includes tax, national insurance and attachment of earnings; the deduction is required or authorised by the worker's contract, for example a company car clause; or  the worker has given prior written consent to the deduction, such as a season ticket loan agreement or the purchase of childcare…

How To Discipline Employees Fairly

Some employers are reluctant to address problems with employees and put up with unacceptable conduct or substandard performance, sometimes for many years, until the employee resigns and solves the problem by default. However it is possible to deal with such matters fairly, without risking costly employment tribunal claims. You should first consider whether you need to take formal action under your disciplinary procedure and carry out a thorough and reasonable investigation. Before the disciplinary hearing, the employee must be informed in writing of the case against them, told what the possible consequences will be, given copies of any evidence so they can prepare and reminded of their right to be accompanied by a work colleague or trade union representative.  At the hearing, you should explain the allegations and go through the evidence. Following the hearing…

Tupe Pitfalls

Last month, Gillian Reid explained when the TUPE rules apply. This month, Gill highlights a couple of mistakes for employers to avoid in a TUPE situation. Changing terms of employment Any changes made by the new employer to terms of employment will be void, if the reason for the change is the transfer or a reason connected with it. This makes it very difficult to harmonise terms and conditions of employment. If changes are made to an employee's contract that are to his detriment, he can resign and claim constructive dismissal. Automatic unfair dismissal Any dismissal of an employee with the necessary qualifying period of service (which is one or two years, depending on when he started work), will be automatically unfair if the reason for the dismissal was the transfer or a reason connected…

Varying Terms Of Employment

Changing terms and conditions of employment is one way of reducing payroll costs without having to make staff redundant. But, as ever, it is important to follow the correct employment procedures and look out for a number of pitfalls. Examples of changes to terms of employment include: scaling back working hours reducing the number of days of work cutting pay by a percentage. You can vary a contract of employment in two ways. The first is if the contract of employment allows you to do so and the second is with the agreement of the employee. If your contracts do not include any of these terms, you will need to obtain agreement from your employees to the changes you wish to make. This can be done in three ways: You can seek…

Tupe Regulations When They Apply

The Transfer of Undertakings (Protection of Employment) Regulations - known as "TUPE" - have been in force in various forms for over 30 years. Despite this, the law is still developing through case law. TUPE stems from a European directive and is intended to protect employees' rights where the business in which they work is transferred; and any attempt to avoid it will be void. Gillian Reid explains when TUPE applies, although some of these rules are relaxed where the business is insolvent and specialist advice should always be taken in this situation. TUPE applies to company asset sales where the whole or part of a business is transferred to a new owner. It does not apply to company share sales, where the identity of the employer stays the same. TUPE also applies to service…

Maternity Leave Part 2

Gillian Reid continues to answer some tricky questions from employers regarding employment procedures and maternity leave: What do I do about bonuses during an employee's maternity leave? This is a difficult area and the answer depends on the reason for the bonus. If it is to reward work done, payment only has to be made on a pro rata basis for the weeks when the employee was at work plus the two week compulsory maternity leave period immediately after the birth. Other types of bonus - such as a loyalty bonus or a Christmas bonus - will be payable in full. What happens if I need to make a woman on maternity leave redundant? This is permitted but an employee who is at risk of redundancy while on maternity leave has the right to be…

Maternity Leave Part I

The rules regarding maternity leave and pay are complex and employees are increasingly knowledgeable about their rights.  In addition, the rules change on a regular basis, all of which means that it is easy for employers to get it wrong.  This month and next month, we look at some common questions employers ask and provide the answers: What happens to holiday entitlement during maternity leave? Both statutory and contractual annual leave entitlement accrue during maternity leave.  A woman cannot take holiday while on maternity leave but can take it immediately before her maternity leave starts and after it ends.  If holiday cannot be taken in the current holiday year, an employee should be allowed to carry it forward to the next leave year. Can an annual pay rise wait until an employee returns from maternity…

Unlawful Deductions From Pay

Last year 71,300 claims for unauthorised deductions were brought in front of the employment tribunal, the second most common claim brought by employees. The most common examples of unlawful deductions made by employers are: Bonuses - many of the reported cases relate to the payment of bonuses.  The employment tribunals have decided that, if the amount of the unpaid bonus can be quantified, the employee can claim it as an unlawful deduction. Underpayment of commission - if the employee is paid less commission than is due, this may be an unlawful deduction. Tips - if a worker is entitled to tips (or part of a "tronc"), which are not paid, he can bring a claim. Holiday pay - a failure to pay outstanding holiday pay when the employment terminates has been held to be…

Employment Law Changes April 2012

The main change made this month was to increase the qualifying period for employees to claim unfair dismissal from one year to two years. This only applies to new employees who started work on or after 6 April, which means that it is fairly straightforward - anyone already employed before then will retain the one-year qualifying period. Employers will need to check an employee's start date carefully before dismissing him or her to establish whether they have the right to bring a claim or not. The change in the period of qualifying service also applies to the right to a written statement for the reasons for dismissal. The Government has estimated that the number of claims will drop by around 2,000 per year, saving employers around £4.7 million per year. This change was made to…

Sensitive Handling Of Sickness

The CBI estimates that the annual cost to British business of sick days is £13 billion, and the average worker takes seven sick days a year. Twelve per cent of sick days are estimated to be bogus by the CBI. Sickness is a sensitive issue which requires correct handling if you are to avoid any inference that you have been unfair or heavy-handed: on the other hand you cannot be expected to stand back and watch absenteeism decimate the work force and extinguish your profits. Absence through sickness costs businesses a huge amount of money and wastes management time, placing a burden on those employees who conscientiously soldier on. So what can be done? The most important thing is to have an appropriate policy, not a dusty piece of paper lingering in a filing cabinet…