Shared Parental Leave

Government Proposal to Promote Equality in Parenthood

  

The Government has published a response to its recent consultation over proposals for a new system of shared parental leave.

The idea of shared parental leave is that both parents will be able to take leave/pay and share it in a much more flexible way than the current maternity leave and additional paternity leave arrangements allow: currently the mother takes the first chunk of maternity leave then she can return to work leaving her partner to take the equivalent of the remainder of her maternity leave and pay as "Additional paternity leave".

The shared parental leave system will replace any remaining maternity leave where the couple choose to opt in to it.  Otherwise the current system of maternity leave and additional paternity leave will still apply.  Shared parental leave allows the couple to take it in whatever pattern they wish - it could be several short periods of leave with work in between; they could take it at the same time, so that both parents can spend time together with the baby; or they can alternate.

Other key elements of the shared parental leave system are: 

• Employees will have to give an indication of the shared parental leave pattern they propose to take but this will not be binding
• Employees will have to give 8 weeks' notice of each period of leave that they take
• Leave will be in one week blocks
• There will be a potential total of 52 weeks' leave and up to 39 weeks' pay for the parents to share
• The employee will only be able to give up to 3 notices of leave (including the first notification), to help minimise disruption for the employer
• Shared parental leave will have to be taken by no later than the 52nd week after the birth or adoption
• Each parent will have up to 20 Keeping In Touch (KIT) days - these are days that they can do some work, if the employer agrees, during the leave period

The details of shared parental leave will be drawn up by the Government as secondary legislation, once the Children and Families Bill receives Royal Assent.  It will become law in 2015, so watch this space! 

Do You Need to Restructure?

Redundancy - as part of growth

  

Redundancy is normally associated with a downturn in business and a reduction in staff.  However, there are some occasions when employers need to remove certain functions or tiers of management, or to fundamentally change jobs in order to better set up the business for growth.  If you feel you are hampered by your current staffing structure, why not consider how it would look if you had a blank piece of paper and were going to set up your staff from scratch.  If it looks very different to your current organisation, it may be time to consider restructuring.

It is often possible to carry out a restructure whilst retaining all or most of your staff.  However, it is also often the case that you need the staff to accept different terms of employment under the new structure.  This can sometimes create a potential redundancy situation.

As with most employee relations matters, planning is vital.  You should allow time to prepare your proposal, sense check it, and look for potential pitfalls, before embarking on a consultation process with the staff.  

Again to seek clarification and get some of those common questions answered drop us an email or call us on 0845 9000 899.

Mock Employment Tribunal - Nottingham

Get the experience of a realistic Employment Tribunal on Thursday 14 November 2013

  

We are delighted to be supporting Your HR Lawyer in their Mock Employment Tribunal on Thursday, 14th November 2013 from 9:30am to 16:00pm

It will take place at the Galleries of Justice Museum in Nottingham NG1 1HN, in the amazing historical  court room.

• Get the experience of a realistic Employment Tribunal along with details of the 'bundle' so you can follow exactly what's happening.
• Understand what an employment judge takes into account when deciding what is and is not fair.
• Know what to do to avoid tribunal claims.

Includes lunch, tribunal guidance notes, ET seminar and networking.

Click here for more information and to book

Will it be cheaper to dismiss employees?

Cap on Unfair Dismissal Compensation Award Reduced

  

Where a tribunal finds that an employee has been unfairly dismissed, they make an award of compensation to the ex-employee which the employer must pay.  There are two parts to the award:

The Basic Award - this is calculated in a similar manner to statutory redundancy payments and is linked to age, length of service and pay.

The Compensatory Award - this is calculated as the loss of earnings suffered by the ex-employee due to the unfair dismissal and may include an element for future loss of earnings (which is estimated by the tribunal taking into account the evidence provided relating to the job market, etc.)

The Compensatory Award has always had a cap which has been increased each year in line with inflation.  It is currently £74,200.  However, this has now been restricted further so that it will be limited to 52 weeks' pay or the maximum cap (£74,200), whichever is lower.  The maximum cap will continue to be increased year on year, but the 52 week restriction is unlikely to be altered.

In the vast majority of cases, therefore, compensation will be limited to a year's pay. In reality most compensation awards only amount to a few thousand pounds, so there is unlikely to be much real impact.  However, this could still be good news for employers. If you ever wish to broker a settlement agreement with a problem employee (see last months update on Confidentiality of Termination Discussions), it is useful to be able to have this 52 weeks compensation backstop in mind during negotiations.  Some employees see the headline £74,200 figure and have very unrealistic expectations in negotiations in terms of what they believe to be a reasonable settlement sum.  Whilst a year's pay is still likely to be far too high in most negotiations, it at least sets a much more realistic upper limit. 

New Provisions for Settlement Agreements and Confidential Discussions

The 29th July brought new legislation into force which provides protection to employers who want to have a frank discussion with an employee about negotiating their termination of employment under a settlement agreement (formerly known as a "compromise agreement").

Previously it was quite risky for an employer to open this sort of discussion; there was always the chance that the employee would be able to claim they had been constructively dismissed, as they could argue the employer had made it clear they wanted to get rid of them.  From now on, this sort of discussion would be inadmissible in a claim for constructive or unfair dismissal. 

As you would expect, there are rules that the employer needs to follow in order to be protected, and these have been set out in a new Code of Practice from ACAS.  The key thing is that the employer should avoid confronting the employee with a "take this offer or you will be sacked" approach! 

It is worth noting also that this does not provide any protection if the employee were to claim under discrimination legislation or if they claimed unfair dismissal in a number of special cases (e.g. in relation to whistle blowing). 

Are Employee Shareholders an Attractive Proposition?

The Growth and Infrastructure Act becomes Law

The new employment status of Employee Shareholder received Royal Assent on 25th April 2013 and it is expected that the section related to Employee Shareholders will become law from 1st September 2013.

In simple terms an Employee Shareholder agreement is reached where the employer gives the individual shares to the value of £2,000 or more and the Employee Shareholder in return gives up certain employment rights:
• the right to claim "ordinary" unfair dismissal
• the right to a redundancy payment
• the right to request flexible working (in most circumstances)
• the right to request time off for studying and training

Also, the Employee Shareholder will need to give longer notice in relation to certain entitlements (e.g to return early from maternity leave).

There were a few late changes after the House of Lords raised some concerns, so that there are additional rules relating to the Employee Shareholder status:
• the individual must receive independent legal advice, paid for by the employer, prior to entering into an Employee Shareholder agreement
• there will be a 7 day "cooling off" period after the advice is received and before the agreement has legal effect
• the employer must provide a written statement specifying what rights the individual is relinquishing by entering the agreement and setting out details about the shares that they will receive
• existing employees will be considered to have been unfairly dismissed if the reason for dismissal is their refusal to convert to Employee Shareholder status and they will also be protected from suffering any other type of detriment
• the first £2,000 of shares will be free from income tax or national insurance contributions liability

This is a very significant change to employment laws and employers should give serious consideration to whether or not this is an attractive proposition.  It seems likely that in most cases it will not be attractive, as most employers tend not to unfairly dismiss staff and try to avoid redundancies.

However, it is possible that some employers - particularly new ventures with initial high growth and risk - may be attracted.  They could see this as meaning staff will be more likely to be committed to growth through their share ownership, and some risks will be ameliorated if they will be able to take swift action to fire staff if necessary without worrying about unfair dismissal or redundancy payments.

A summer of change for employment law?

Government reforms start to take effect

We have already seen an increase in parental leave from 13 to 18 weeks, and the compulsory auto-enrolment of employees into employers' pension schemes continues to roll out to smaller employers.  On top of that there is a long list of further changes anticipated:

From 25th June

Dismissal for political opinions or affiliation - an employee no longer needs to have any qualifying period of service to be able to claim unfair dismissal where the reason for dismissal is their political opinions or affiliation.

Whistleblowing - employees can no longer rely on the protection of whistleblowing legislation unless their disclosure is made in the public interest.  This should put a stop to the use of whistleblowing to support unfair dismissal claims where the "disclosure" is related to the employee's own contract or something which only affects them individually.

From 29th July

Tribunal fees - claimants will only be able to submit a tribunal claim if they pay a fee at the same time.  Fees will be £160 for more basic claims (e.g. for unpaid wages) and £250 for other claims (e.g. unfair dismissal or discrimination).  They will also need to pay a further fee (£230 or £950) if the claim proceeds to a full hearing.  There is a process for remission of fees in some circumstances, where the claimant is a very low earner.

Tribunal process - the claim form and the employer's response form will both be subject to scrutiny by the tribunal on receipt, and either may be struck out where the tribunal believe the claim or response to be without merit.  It will be even more important now that employers take advice before submitting a response to a claim.

Later in the Summer (dates to be confirmed)

There are a number of other measures to follow, including the legal protection of conversations with employees during employment to promote a severance agreement; renaming of compromise agreements to settlement agreements; a cap on unfair dismissal compensation payments of 12 months' pay; the new employee shareholder status which is expected from 1st September (reported in last month's newsletter); and changes to TUPE (the legislation protecting employees when an undertaking is transferred between employers).

Employers consider extending smoking policies to include e-cigarettes

The recent emergence of electronic cigarettes or e-cigarettes in society has caused some confusion and consternation for airlines, pubs, restaurants and others.  E-cigarettes look like real cigarettes and give off water vapour, which can look like smoke. They atomise a liquid containing nicotine, which means that the "smoker" gets a nicotine hit in a way quite similar to conventional smoking.

E-cigarettes are not covered under the smoking ban, so anyone using one is not breaking the law and neither are the owners of pubs and restaurants if they permit their use on the premises.  However, there is a perception problem with them and some organisations have decided to ban their use because they are worried about other customers thinking that people are actually smoking.  Some airlines have also banned their use.

So should employers ban their use at work?  This will depend on the type of workplace and whether you believe the benefits of permitting their use outweigh any negativity. For instance, if your staff drive company branded vehicles you may wish to ban their use in the vehicles in order to maintain a positive public perception of your company - if a member of the public sees one of your drivers puffing on an e-cigarette they may well think it is real.

In an office environment, which may not be open to the public, the issue will be the impact on other staff.  For instance, some smokers and those who have recently quit report that seeing people use e-cigarettes increases their own cravings.  Also the BMA have questioned whether the use of e-cigarettes does actually help people to stop smoking in a briefing on the matter. 

They advise other nicotine replacement therapies (such as patches) should be used in preference.  So the use of e-cigarettes cannot really be justified under any workplace effort to support people who wish to stop smoking.

Please contact us if you would like some help formulating a policy for the use of e-cigarettes.