A Brief Guide to Employment Law for Employers
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A Brief Guide to Employment Law for Employers
CONTENTS Introduction Chapter 1 Adoption Leave 2 Business Transfers 3 Dependants’ Leave 4 Discipline 5 Equality and Diversity 6 Flexible Working 7 Grievances 8 Maternity Leave 9 National Minimum Wage 10 Parental Leave 11 Paternity Leave 12 Performance Management 13 Recruitment 14 Redundancy 15 Whistleblowing 16 Working Time 2
INTRODUCTION This guide has been produced to give employers a brief introduction to employment law. It outlines the most common areas of employment law faced by employers on a day to day basis. Some of the areas outlined apply to employees and some apply to workers. Employees are defined in law as those individuals who have entered into or work under a contract of employment. A contract of employment is defined as a contract of service or apprenticeship, whether express or implied, either oral or in writing. Workers are defined in law as those individuals who have entered into or work under a contract of employment or any other contract, whether express or implied and whether oral or in writing, whereby they undertake to personally perform work or services. The definition of worker is somewhat wider than employee and employers should be aware of the different rights afforded by virtue of an individual’s status. This guide cannot, and should not, take the place of specialist advice. Should you require any further information or assistance then please contact Jonathon Stokes Telephone: 0191 389 5180 Email: jonathon.stokes@gblf.co.uk This booklet reflects the position in law as at April 2013. 3
1 Adoption Leave 4
ADOPTION LEAVE The right to adoption leave Adoption leave is available to employees who satisfy certain qualifying criteria. For adoptions within the UK, employees must have (i) been matched with a child to be placed with them by a UK adoption agency, (ii) notified the agency that they agree to the placement and the date of placement, and (iii) been continuously employed by the employer for at least 26 weeks. For adoptions from overseas, employees must have (i) received official notification from the relevant UK authority of their eligibility to adopt a child from abroad and (ii) worked for the employer for least 26 weeks by the time they have received official notification or by the time the adoption leave is due to begin whichever is the later. In all cases, employees must comply with the notification requirements. Notice of intention to take adoption leave For UK adoptions, employees must notify the employer in writing of their intention to take adoption leave and the start date no more than seven days after they are matched with a child. They must also confirm the date the child is expected to be placed for adoption. If it is not reasonably practicable for the employee to meet the seven day deadline, they should notify the employer as soon as possible. For overseas adoptions, employees must notify the employer in three stages. Stage 1: Confirm the date on which you received official notification and the date the child is expected to enter the UK either within 28 days of receiving official notification or within 28 days of completing the 26 weeks' qualifying employment. Stage 2: Give 28 days' notice of the actual date adoption leave is to start. Stage 3: Confirm the child’s entry into the date UK within 28 days of the child's date of entry. If an employee does not give the correct notice, the employer can delay the start of adoption leave until the correct notice is given. Amount of adoption leave Employees are entitled to 52 weeks adoption leave. This comprises 26 weeks ordinary adoption leave and 26 weeks additional adoption leave. Only one period of adoption leave is available per adoption arrangement, even if more than one child is placed for adoption as part of the same arrangement. If the child’s placement ends during the adoption leave period, the employee is still entitled to continue adoption leave for up to 8 weeks after the placement ends. For UK adoptions, leave can start from the date of the child’s placement or from a date up to 14 days before the expected date of placement. For overseas 5
adoptions, leave can start on the date the child enters the UK or on a date no later than 28 days after the date the child enters the UK. Employees can change the date their adoption leave starts, provided they give the employer 28 days notice in writing of the new start date. Keeping in touch days During adoption leave, and subject to agreement, employees may attend work for up to 10 days as ‘keeping in touch days’. They do not have a right to be paid for these days and neither can the employer insist an employee attends work as keeping in touch days. Any keeping in touch days worked do not extend the employee’s adoption leave. Returning to work after adoption leave Employers should assume the employee is returning to work at the end of the full 52 weeks’ leave. If an employee wishes to return to work earlier, they must give the employer 8 weeks’ notice of the date they intend to return. If not, their return to work may be postponed so as to give the employer 8 weeks’ notice, provided the notice does not end after the full leave entitlement. Employees are entitled to the benefit of their normal terms and conditions of employment during their full adoption leave, except for terms relating to wages. They are also bound by their contractual obligations. On returning to work after ordinary adoption leave, employees are entitled to return to the same job as they had before commencing leave, on the same terms and conditions. On returning to work after additional adoption leave, they can return to the same job on the same terms and conditions unless it is not reasonably practicable for the employer to allow them to do so. In such cases, the employee should be offered suitable alternative work, on terms and conditions no less favourable than they would have had if they had not been on leave. Statutory adoption pay Statutory adoption pay (SAP) is paid for 39 weeks but the eligibility criteria is different depending on whether the employee is adopting a child from within the UK or from overseas. In all cases, the employee must have average weekly earnings at or above the lower earnings limit for National Insurance contributions. 6
2 Business Transfers 7
BUSINESS TRANSFERS Employees are protected when their employer changes by virtue of a business transfer. Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), employees retain the same terms and conditions with the new employer as they had with the former employer. The TUPE regulations apply in two situations: (i) the transfer of a business or undertaking (a business transfer); and (ii) a service provision change. A relevant transfer A business transfers occurs when there is a transfer from one person to another of an economic entity which retains its identity. An economic entity is defined as an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary. This could be the whole business or just a department within a business. The regulations do not apply where there is simply a transfer of company shares from one owner to the other. A service provision change can occur in one of three situations: (i) contracting out or outsourcing - services previously undertaken by the employer are awarded to a contractor; (ii) retendering – a contract is reassigned from one contractor to another; (iii) contracting in or insourcing - the contract ends and the service is brought back in-house. A service provision change would not occur where there is a change in supply of goods, for example a restaurant changing food suppliers, or where the contract is for a single specific event or short term task, for example a catering company being used to cater at a large corporate event. Information and consultation The TUPE regulations impose an obligation on an employer to provide certain information about the transfer to the appropriate representatives of any employee affected by the transfer. The obligation applies to both the transferring and receiving employers and affected employees include non transferring employees if their jobs might be affected by the transfer as well as those actually transferring. Appropriate representatives must be told that a transfer is to take place, the date or proposed date on which it will occur and the reason for it. Representatives must also be told about any legal, economic and social implications of the transfer and any measures that will be taken in connection with the transfer in relation to any affected employees. 8
Both the transferring and receiving employer are also required to consult with their appropriate representatives about any measures to be taken. Where the receiving employer proposes to take measures in relation to the transferring employees, he is under a duty to inform the transferring employer of those measures so that the transferring employer can consult with his appropriate representatives. The required information must be provided to the appropriate representatives “long enough” before the transfer takes place so as to enable meaningful consultation. Employers should enter into consultation with a view to seeking agreement to any intended measures and must give reasons for rejecting any representations put forward by the appropriate representatives. Appropriate representatives Where there is a recognised trade union, the appropriate representatives will be representatives of the trade union. Where there is no recognised trade union, appropriate representatives will be individuals elected by the workforce for the purposes of consultation. If there are no existing employee representatives in place then the employer must arrange elections. It is the employer’s responsibility to decide how many representatives need to be elected so that the interests of all affected employees are represented. It is also for the employer to decide whether the affected employees will be represented as one workforce or different groups. The candidates for employee representatives must be employees affected by the transfer. No employee affected by the transfer should be unreasonably excluded from standing for election and all affected employees are entitled to vote. Affected employees include those who may not be transferring but could be affected by the transfer in any event. If the affected employees refuse or fail to elect representatives, and there is no recognised trade union, the employer is require to inform and consult all affected employees on an individual basis. Rights of employee representatives Appropriate representatives have certain rights and protections to enable them to carry out their roles. They should (i) be given a reasonable amount of time off with pay during normal working hours to carry out their representative duties, (ii) have access to those employees affected by the transfer, and (iii) be provided with appropriate accommodation and facilities to enable them to carry out their role as representatives. Appropriate representatives cannot be subjected to any detriment because of their status or activities as a representative and if dismissed, their dismissal will be automatically unfair. 9
Employee liability information The transferring employer must provide to the receiving employer the following information for every transferring employee: the employee’s name; the employee’s age; the details required to be provided to the employee under section 1 of the Employment Rights Act 1996; any collective agreements which apply to the employee; any disciplinary action taken against the employee within the previous two years; any grievances raised by the employee within the previous two years; any legal action taken by the employee against the employer within the last two years; and any potential legal action that the employer reasonably believes the employee might raise. The above information should be provided to the receiving employer at least 2 weeks before the date of the transfer. 10
3 Dependant’s Leave 11
DEPENDANT’S LEAVE The right to dependant’s leave The right to dependant’s leave is granted to employees. It is intended to cover sudden, unforeseen matters and is unpaid. The purpose of dependant’s leave The purpose of dependant’s leave is to enable employees to deal with emergencies involving dependants. Emergencies could include such matters as when a dependant falls ill or has been involved in an accident, an unexpected disruption or breakdown of care arrangements for a dependant or to deal with an incident involving the employee’s child during school hours. Dependant’s leave is not for things known about in advance. Who is a dependant? A dependant is defined as the employee’s partner, child, parent or someone who lives with the employee as part of their family. For example, this could be an elderly aunt or grandparent who lives in the employee’s household. It does not include tenants or boarders living in the family home or somebody who lives in the household as an employee, for example a live-in housekeeper. In cases of illness, injury or where care arrangements break down, a dependant may also be someone who reasonably relies on the employee for assistance. This may be where the employee is the primary carer or the only person who can help in an emergency. How much leave can be taken? Employees have the right to take a reasonable period of time off work. How much time is reasonable is not set out in law and would depend on the circumstances of the case. However, anything more than two days is likely to be unreasonable. Employees must tell their line manager as soon as possible about the absence, the reason for it and how long they expect to be away from work. If they are prevented from doing so because of the nature of the emergency, they must explain the reason for the absence on their return to work. 12
4 Discipline 13
DISCIPLINE An employer is required by law to provide employees with a copy of its disciplinary rules and procedure within two months of employees starting work. The procedure should give examples of what the employer considers to be unacceptable conduct and such conduct can cover a broad spectrum of behaviour. This could range from less serious matters such as poor timekeeping, unsatisfactory attendance or unauthorised use of telephones to the most serious of misconduct such as theft, violence or downloading pornography. Investigation All allegations of misconduct should be thoroughly investigated. The investigation should be carried out by someone who is senior to the employee and in certain cases, it may be necessary to suspend the employee while the investigation is underway. Suspension should always be with pay and for the shortest amount of time possible. The suspension should be confirmed to the employee in writing and the employee should be given an indication as to how long the investigation is likely to take. Disciplinary meeting The employee should be notified of the disciplinary meeting in writing. The letter should set out the specific allegations and should provide sufficient information to enable the employee to prepare answers to the allegations. The letter should also give (i) an indication of the likely disciplinary sanction if the allegations are upheld, (ii) the details of the disciplinary meeting and (iii) inform the employee of their right to be accompanied by a union official or a work colleague of their choosing. The employee would normally be provided with copies of any written evidence such as witness statements before the disciplinary meeting. The disciplinary meeting should be held without unreasonable delay. The person chairing the meeting should, wherever possible, have had no involvement in the investigation. The employer should be represented at the disciplinary meeting by the person who carried out the investigation. The case against the employee should be explained and the employee given an opportunity to respond. Witnesses may be called to give evidence and the employee should be given a reasonable opportunity to ask questions, present evidence and call witnesses of their own. The person accompanying the employee should be allowed to address the meeting to put and sum up the employee’s case. They should also be allowed to respond in general terms on behalf of the employee but the companion does not have the right to answer questions put to the employee. If the employee’s chosen companion is unable to attend the meeting as first arranged then the employee is entitled to ask for a postponement. The employee 14
should provide the employer with alternative dates for the re-arranged meeting which are within five working days of the original date. Disciplinary sanctions The person chairing the disciplinary meeting should decide whether there has been misconduct or not. If there has, it is for the chairperson to decide what disciplinary sanction should be imposed. These can include a verbal warning, a first written warning, a final written warning or dismissal. A written warning should contain a summary of the misconduct and set out the consequences of future repetition. The warning should also set out the required improvements and the consequences of failure to improve. A copy of the written warning should be kept on the employee’s personnel file for a specified period and the warning itself should state how long that period will be. It is not necessary for an employer to always issue a verbal warning first. In cases of serious misconduct, dismissal may be the only appropriate sanction. The employee would usually be dismissed without notice. The employee should be notified of the disciplinary sanction as soon as possible. This can be at the end of the disciplinary meeting or afterwards. Either way, the decision should be confirmed in writing as soon as is reasonably practicable. If the employee is dismissed then dismissal can only be effective when the employee is actually notified of the dismissal. Appeals Employees have the right to appeal a disciplinary sanction. The right to appeal should be set out in the letter informing the employee of the disciplinary sanction. It is normal to require the employee to set out their appeal in writing within five working days of receiving written confirmation of the disciplinary sanction. If the employee chooses to appeal then an appeal meeting should be arranged as soon as is reasonably practicable. The meeting should be chaired by someone who has had no previous involvement in the disciplinary proceedings. The employee has the right to be accompanied by a trade union official or work colleague of their choosing. The companion has the right to address the appeal meeting in the same way as they have to address the disciplinary meeting. If the employee is unable to attend the appeal meeting because of the unavailability of their chosen companion then they should provide the employer with alternative dates for the meeting within five working days of the original meeting date. The outcome of the appeal can be notified to the employee at the end of the meeting or afterwards. In either event, the appeal outcome should be confirmed to the employee in writing as soon as is reasonably practicable. The decision at the appeal stage is final. 15
5 Equality and Diversity 16
EQUALITY AND DIVERSITY Equality relates to the treatment afforded to employees irrespective of their individual characteristics. It is covered by a legal framework which makes it unlawful to discriminate against an employee because of certain protected characteristics. Diversity is a broader concept than equality. It relates to recognising, respecting and valuing the differences of each employee and the contribution those differences can make to the success of the employer’s business. Protected characteristics The law outlaws discrimination on the grounds of 9 protected characteristics. These are: (i) age; (ii) disability; (iii) gender reassignment; (iv) marriage and civil partnership; (v) pregnancy and maternity; (vi) race; (vii) religion or belief; (viii) sex; (ix) sexual orientation. Forms of discrimination The law identifies a number of different forms of discrimination. (i) Direct Discrimination - less favourable treatment of a person because of a protected characteristic. (ii) Indirect Discrimination - a provision, criterion or practice applied to a person with a protected characteristic and which puts that person at a particular disadvantage when compared to persons who do not have the protected characteristic and which cannot be objectively justified. (iii) Harassment - unwanted conduct that violates a person’s dignity or creates an intimidating, hostile, degrading, humiliating or offensive working environment. 17
(iv) Victimisation - subjecting a person to a detriment because they have done a protected act. Protected acts are (i) bringing proceedings under the Act; (ii) giving evidence or information in connection with proceedings under the Act; (iii) doing any other thing for the purposes of or in connection with the Act; (iv) making an allegation (whether or not express) that a person has contravened the Act. (v) Failure to make Reasonable Adjustments – not taking such steps so as to prevent a disadvantage to disabled persons when compared with non- disabled persons. (vi) Discrimination by Association – less favourable treatment of a person because they are associated with a person with a protected characteristic. (vii) Discrimination by Perception – less favourable treatment of a person because of the perception of a protected characteristic. (viii) Discrimination arising from Disability - less favourable treatment of a disabled person arising from their disability. Equality and diversity – an employer’s responsibilities Employers should have in place policies and procedures to ensure that all employees are treated fairly and equally. Treatment of employees should be consistent with the employee’s aptitudes, skills and abilities and any form of discrimination should not be tolerated. Employers should consider taking positive action to address imbalances in the workforce. For example, they may seek to encourage applications for employment from a particular under-represented group. Potential applicants should be given clear and accurate information about a vacancy through job descriptions and person specifications which include only requirements that are necessary and justifiable for the effective performance of the job. No disabled applicant should be considered unsuitable or less suitable for appointment simply because they are disabled. Full consideration should be given as to whether reasonable adjustments can be made to counteract the effect of their disability upon their suitability for employment. All new employees should receive induction training within one month of starting work to give them an understanding of the employer’s organisation and its policies and practices. Regular and appropriate training should be provided to all employees to enable them to perform their jobs effectively and to ensure that they have the best opportunities for advancement. Employers should consult with their disabled employees to ensure that reasonable adjustments are made so as to enable them to work safely and effectively. Outside specialists could be consulted, where appropriate. Men and women should receive equal pay for the same work and for work rated as equivalent or of equal value. Staff facilities and services shall be equally 18
available to all employees and where, for reasons of space and cost, this cannot be achieved, reasonable alterations should be considered. Reasonable adjustments should be made to enable a disabled employee to carry out their job. This could include the provision of specialist equipment, job re- design, re-training, flexible hours, or re-deployment. Employers should ensure that all reasonable measures are taken to retain disabled employees in employment. Once an adjustment has been made, it should be reviewed at agreed intervals to assess its continuing effectiveness. All aspects of policies and procedures should be kept under constant review. Employee audits should be carried out annually to establish the composition of the work-force and action taken to address any imbalances. Any records of audits should be kept anonymously Equality and diversity – the employee’s responsibilities Whilst the responsibility for creating and monitoring a culture of equality and diversity rests with the employer, the success of any policy relies on every employee playing their part. Every employee should comply with measures that are introduced to ensure equality of opportunity and non-discrimination. They should participate in any equality and diversity training and those individuals with line management responsibility for other employees should not discriminate when applying policies and procedures. No employee should induce or attempt to induce another employee or trade unions or management to discriminate. Likewise, no employee should victimise another on the grounds that they have made complaints or provided information about discrimination or harassment and no employee should harass, abuse or intimidate another employee on any grounds. Employees must recognise that unlawful and discriminatory conduct will be considered as gross misconduct, for which the only appropriate sanction can be dismissal. 19
6 Flexible Working 20
FLEXIBLE WORKING The right to flexible working The right to flexible working is granted to employees who have been employed by their employer for 26 continuous weeks. To qualify for flexible working, the employee must: (i) have or expect to have parental responsibility of a child aged under 17 or a disabled child under 18 who receives Disability Living Allowance; or (ii) be the parent, guardian, special guardian, foster parent, private foster carer or the holder of a residence order, or the spouse, partner or civil partner of one of these and are applying to care for the child; or (iii) be the person who cares for, or expects to be caring for, an adult who is a spouse, partner, civil partner or relative or who lives at the same address as the employee. Flexible working Flexible working involves a permanent change to an employee’s normal working pattern. It could include such things as: part time hours; flexi time; annualised hours; compressed hours; job sharing; working from home. Procedure for requesting flexible working An employee can make only one application in any 12 month period. The application should be made well in advance of when the employee wants the changes to take effect and must be in writing and dated. The request should state that the application is made under the statutory right to request a flexible working pattern. It should set out the details of the flexible working pattern requested and include the date from which the employee wants the changes to start. The employee must explain what effect they believe the new working pattern would have on the employer and how any effects might be dealt 21
with. The request should state whether the employee has made a previous application, and if so, when. Within 28 days of receiving the written request, the employer must set up a meeting with the employee to explore the requested work pattern and to discuss how it might be accommodated. Within 14 days of the date of the meeting, the employer must write to the employee to either agree the new work pattern and a start date or set out clear grounds as to why the application cannot be accepted and the reasons why the grounds apply in the circumstances. The employer is allowed to refuse a flexible working request if one or more of the following grounds apply: the burden of additional costs; a detrimental effect on ability to meet customer demand; inability to re-organise work among existing staff; inability to recruit additional staff; a detrimental impact on quality; a detrimental impact on performance; insufficient work during the periods you propose to work; planned structural changes. The employee has the right to appeal a refusal of their request for flexible working. Any appeal should be submitted to the employer in writing within 14 days of the employer’s decision being notified to the employee. The employer must hold an appeal meeting within 14 days of receiving the employee’s appeal letter and must notify the employee of the outcome of their appeal within 14 days of the appeal meeting. 22
7 Grievances 23
GRIEVANCES Employees who have a grievance should raise that grievance with the person concerned in the first instance. If this does not resolve the matter, or the employee feels unable to speak to the person concerned, they should raise their grievance with a manager who is not the subject of the grievance. Grievances are normally raised in writing and should give the employer sufficient details to enable the employer to investigate the grievance. However, employers should recognise that not all employees can properly express themselves on paper and an employer should consider alternative means of submitting a grievance. The employer should arrange for the employee’s grievance to be investigated without delay. Once that investigation has been concluded, a meeting should be held with the employee to discuss the grievance. Grievance meeting The grievance meeting should be chaired by someone who has not been involved in the investigation. The employee is entitled to be accompanied by a trade union official or a work colleague of their choosing. The employee should be given an opportunity to set out their grievances and the investigating officer should explain the outcome of his investigation. The person chairing the meeting should decide on what action is appropriate. It may well be that the meeting needs to be adjourned so that further investigations can be carried out. At the end of the grievance meeting, the chairperson should decide whether the employee’s grievance is upheld, and if so, what action should be taken next. The decision should be confirmed to the employee in writing and the letter should also confirm the employee’s right to appeal that decision. Appeals If the employee chooses to appeal the outcome of the grievance meeting, they should do so in writing, setting out the reasons for their appeal. An appeal meeting should be arranged as soon as is reasonably practicable. The person chairing the meeting should have had no previous involvement in the procedure and the employee has the right to be accompanied by a trade union official or a work colleague of their choosing. If the chosen companion is unable to make the meeting then the employee must provide the employer with alternative dates for the meeting within five days of the original meeting date. The outcome of the employee’s appeal can be notified to the employee at the end of the meeting or afterwards. In either case, it should be confirmed in writing to the employee as soon as is reasonably practicable. The decision at the appeal stage is final. 24
8 Maternity Leave 25
MATERNITY LEAVE The right to maternity leave Employees are entitled to 26 weeks ordinary maternity leave irrespective of the length of service or numbers of hours worked. To qualify for ordinary maternity leave, the employee must: by the end of the 15th week before the week of expected childbirth, notify the employer of the pregnancy, the expected week of childbirth and the date on which the employee intends their ordinary maternity leave to start; produce for inspection a certificate from a registered medical practitioner or registered midwife stating the expected week of childbirth. Employees who are entitled to ordinary maternity leave are automatically entitled to a further 26 weeks additional maternity leave. Antenatal appointments Employees are entitled to take a reasonable amount of time off work in order to attend appointments for antenatal care. Employers can require those employees to produce proof of the antenatal appointment and time off should only be requested if it is not possible to arrange the antenatal outside of working hours. Attendance at authorised appointments should be paid time off work. Commencement of maternity leave Maternity leave commences on the day the employee notifies the employer of the intended start date. This can be any time after the start of the 11th week before the expected week of childbirth. The start date can be earlier provided the employee gives the employer at least 28 days notice in writing of the new start date. Likewise, the employee can delay the start of her maternity leave provided she gives the employer at least 28 days notice in writing before the original proposed start date. Continuation of terms and conditions of employment During maternity leave, an employee’s contract of employment continues. She is entitled to the benefit of the terms and conditions which would have applied if she had not been absent due to pregnancy or having given birth, expect to wages. Conversely, the employee is also bound by their obligations under the contract of employment subject to the right to take maternity leave. 26
Keeping in touch days During maternity leave, an employee may attend work for up to 10 days as ‘keeping in touch’ days. Employees do not have a right to be paid for these days but if they are paid, this may affect any maternity benefit. An employer cannot insist that an employee on maternity leave attends work as keeping in touch days and nor can the employee be subjected to any detriment if they choose not to attend. Any keeping in touch days worked will not extend the maternity leave. Returning to work after maternity leave An employer must assume that an employee is taking the full 52 weeks maternity leave unless notified otherwise. If the employee wishes to return to work before the end of her maternity leave (both ordinary and additional), she must give her employer eight weeks notice of the return to work date. If not, the employer can postpone the return to work so that eight weeks notice has been given, provided that the proposed date of return is no later than the date on which the maternity leave would otherwise have ended. On returning to work at the end of ordinary maternity leave, an employee is entitled to return to the job she was doing before the maternity leave started, on no less favourable terms. If returning to work at the end of additional maternity leave then the employee has the right to return to the job she was doing before her maternity leave, provided it is reasonably practicable for the employer to let her return to that job. If not, the employee has the right to return to another job which is both suitable and appropriate, and on no less favourable terms than the job she was doing before the maternity leave commenced. Pay during maternity leave Employees do not have the right to receive their contractual pay during maternity leave. They are entitled to receive statutory maternity pay (SMP) and in order to qualify for SMP, the employee must: be pregnant or have had the baby by the beginning of the 11th week before the expected week of childbirth; be earning more than the lower earnings limit for National Insurance payment purposes; and have given the employer notification of the pregnancy. SMP is payable for a maximum period of 39 weeks and is subject to income tax, National Insurance contributions and any other deductions which the employer can lawfully make. For the first six weeks of maternity leave, the rate of SMP is 90% of the average weekly earnings. For the remainder of the SMP qualifying period, the rate is the statutory rate or 90% of the average weekly earnings, whichever is the lesser. If 27
an employee does not qualify for SMP then they may be able to claim maternity benefit. Health and safety Issues An employer is required to carry out a risk assessment for all pregnant employees. If the pregnant employee’s job poses a risk to her health or that of the unborn child, the employer must make arrangements to eliminate those risks. These could include altering the employee’s working hours, altering her place of work or temporarily transferring her into a safer job. If risk elimination is not possible then the employer can suspend the employee on full pay until she is no longer at risk. The alternative arrangements may continue after the birth of the child if the employee returns to work and is still considered to be at risk. Should it be necessary to suspend a pregnant employee from work then maternity leave would ordinarily start at the beginning of the sixth week before the expected week of childbirth. Assuming they are eligible, SMP would start at the same time. 28
9 National Minimum Wage 29
NATIONAL MINIMUM WAGE Entitlement to the National Minimum Wage (NMW) Workers who ordinarily work in the United Kingdom and are over school leaving age are entitled to be paid at least the NMW. It makes no difference when the worker is paid, how they are paid, the number of hours they work or whether they work at the employer’s premises or not. Furthermore, a worker cannot agree to be paid less than the NMW and any contract which claims to show such an agreement will have no legal effect. Calculating the NMW A worker’s pay for NMW purposes is calculated over a pay reference period. This is the period of time that the worker is actually paid for. If the worker is paid weekly then the pay reference period is one week; if they are paid monthly then it is one month. The pay reference period can never be longer than one month. If an employer pays their workers at longer intervals, for example once a quarter, then the worker must still get paid the NMW each month during that quarter. For pay calculation purposes, workers are classified as either (i) time workers, (ii) salaried workers, (iii) output (piece) workers, or (iv) unmeasured workers. The method for calculating NMW pay is different for each category. For time workers: divide the amount paid in the pay reference period by the number of hours worked in the pay reference period. For salaried workers: calculate the contracted hours of work for a full year, calculate the average number of hours for each pay reference period, calculate the amount of pay in each pay reference period, divide the amount of pay for the pay reference period by the number of hours in the pay reference period. For output workers: multiply the amount paid per task or piece by the number completed in the pay reference period, divide the amount paid in the pay reference period by the number of hours worked in the pay reference period. For unmeasured workers: divide the amount paid in the pay reference period by the number of hours worked in the pay reference period. Pay that counts towards the NMW The NMW is calculated against gross pay, before the deduction of income tax and National Insurance contributions. Gross pay includes a worker’s basic pay plus other amounts such as commission, performance-related pay or bonuses. 30
Pay that counts towards the NMW may not just be the pay a worker receives during the pay reference period. It can also include pay which they earn during that period but do not receive until the next. For example, a worker is paid monthly and works overtime in July but does not get paid for that overtime in August - the overtime pay received in August will count towards the July pay when calculating whether the worker was paid the NMW in July. Pay that does not count towards the NMW Some payments will not count towards the NMW. The following should be deducted from gross pay before making any calculation: loans and advances of wages; pension payments and retirement lump sums; redundancy payments; rewards under staff suggestion schemes; premium payments, for example payments for working bank holidays; allowances, for example payments for working ‘on call’; tips, gratuities, service charges and cover charges; Deductions and payments which reduce the NMW pay Some deductions from pay or payments made to the employer are taken into account when calculating NMW pay. These include: refunds of any money spent in connection with work, for example the cost of purchasing tools or uniform; refunds of expenses incurred doing work, for example travel costs; deductions to cover the cost of items supplied by the employer which the worker needs to carry out the work, for example tools or uniform; deductions for goods and services provided by the employer to the worker, for example work to home transport. Deductions and payments which do not reduce NMW pay Certain deductions from pay or payments made to the employer are ignored when calculating NMW pay. These include: penalties for misconduct, provided the penalties are contractual; 31
paying back an advance of wages; paying back an accidental overpayment of wages; the costs of any shares or securities which the worker has chosen to buy in the firm; money the worker chooses to have deducted from their pay, for example a pension contribution or trade union subscription, as long as the deduction is not required as part of the workers work and is not for the employer's own use and benefit; payments the worker chooses to make to their employer to buy goods or services from the employer, for example wages spent on meals in the staff canteen. 32
10 Parental Leave 33
PARENTAL LEAVE The right to parental leave The right to parental leave is granted to employees who are the mother or father of a child or a person with formal parental responsibility for a child. Parents of children under the age of 5 are entitled to take unpaid time off work to care for a child. The employee must have at least 1 year’s continuous employment before they can take parental leave. If the child is adopted, an employee is entitled to take leave until the fifth anniversary of the child’s placement with them or until the child’s 18th birthday, whichever comes first. If the child is disabled, leave can be taken for children until the child’s 18th birthday. A disabled child is a child for whom disability living allowance is awarded. Parents who are separated and do not live with the child only have the right to parental leave if they retain formal parental responsibility. Foster parents do not have a right to parental leave. The employer is entitled to require the employee to provided evidence that they are the parent of the child for whom leave is requested. Such evidence would be the birth certificate or copies of the adoption papers and for a disabled child, a copy of the letter confirming entitlement to disability living allowance. The amount of leave The amount of leave is 18 weeks. Parental leave is specific to the child and not employment. The employer is therefore entitled to make enquiries of previous employers to find out how much leave, if any, an employee has already taken. Taking parental leave Employees can take parental leave as soon as the child is born or placed for adoption, provided they have completed 1 years’ continuous employment. They can take leave in blocks of one week, up to a maximum of four weeks in any one leave year. Employees must give the employer at least 21 days notice but the employer can postpone the leave for up to 6 months where the business could not cope. However, leave cannot be postponed when the employee gives notice to take leave immediately after the child is born or is placed with the family for adoption. Parents of a disabled child can take leave a day at a time or longer if needed. 34
11 Paternity Leave 35
PATERNITY LEAVE Ordinary Paternity Leave The right to ordinary paternity leave is granted to employees who satisfy the following conditions: are the biological father of the child or the mother’s husband or partner (including same-sex relationships); where the child is adopted, be married to or be the partner of the child’s adopter (including same-sex relationships) or be the child's joint adopter but not taking statutory adoption leave; have or expect to have responsibility for the child’s upbringing and if not the child’s father, the main responsibility apart from the mother; have worked continuously for the employer for 26 weeks prior to either (i) the 15th week before the expected week of childbirth, (ii) the end of the week the adopter of a child is matched with the child if adopting within the UK, or (iii) the end of the week the adopter of a child is notified of adoption if adopting from overseas. An employee is entitled to two weeks ordinary paternity leave. They can either take one week or two consecutive weeks but cannot take odd days. An employee can decide whether to take just one week or a fortnight but they cannot take two separate weeks. Taking ordinary paternity leave Employees should supply a completed SC3 or SC4 form as evidence of their entitlement to paternity leave. Form SC3 applies for births and SC4 for adoptions. Employees must notify their employer of the expected date of childbirth. If adopting a child within the UK, they must confirm when the child is expected to be placed for adoption and the date on which the adopter was notified they had been matched for adoption. Notification must be at least 15 weeks before the expected week of childbirth or within seven days of being told by the adoption agency that the adopter has been matched with a child. The employee must also tell the employer the date of the birth or the actual date of adoption. If adopting from overseas, employees must notify the employer in three stages: Stage 1: Confirm the date on which the other or main adopter received official notification and the date the child is expected to enter the UK. Stage 2: Give 28 days' notice of the actual date you want your ordinary paternity leave to start. 36
Stage 3: Confirm the date the child entered the UK within 28 days of the child's date of entry. In all cases, the employee must confirm whether they want one or two weeks' ordinary paternity leave and when they want their leave to start. The start date can be changed providing the employee gives at least 28 days’ notice. Leave must be completed within eight weeks of the actual date of birth. If the child is born early, leave must be taken within the period from the actual date of birth up to eight weeks after the expected week of childbirth. If adopting within the UK, leave must be completed within eight weeks of placement. If adopting from overseas, leave must be completed within 8 weeks of the date the child enters the UK. Only one period of leave is available irrespective of whether more than one child is born as a result of the same pregnancy or placed for adoption as part of the same arrangement. Continuation of terms and conditions of employment Employees are entitled to the benefit of their normal terms and conditions of employment during paternity leave except for terms relating to wages. Employees have the right to statutory paternity pay (SPP) if their average weekly earnings are above the lower earnings limit for National Insurance contributions and they comply with certain notification requirements. SPP will be paid for either one or two consecutive weeks and the rate of SPP will be the same as the standard rate of Statutory Maternity Pay. Employees returning to work after paternity leave are entitled to return to the same job they had before starting the paternity leave. Additional Paternity Leave In order to qualify for additional paternity leave, employees must be taking the time off to care for a child who was born or placed for adoption on or after 3 April 2011. In the case of a birth, the child's mother must have been entitled to Statutory Maternity Leave, Statutory Maternity Pay or Maternity Allowance. In the case of an adoption, the child’s adopter must have been entitled to Statutory Adoption Leave or Statutory Adoption Pay. In all cases, the mother or adopter must have returned to work and stopped claiming any relevant statutory pay. Additional paternity leave is for a minimum of 2 weeks and a maximum of 26 weeks. It can be taken any time between 20 weeks and one year after the child is born or placed for adoption. 37
Taking additional paternity leave Employees should give the employer at least eight weeks’ notice in writing of their intention to take additional paternity leave. They can do so by providing a completed form SC7 (births), SC8 (UK adoptions) or SC9 (overseas adoptions). The child's mother or the adopter must also sign a declaration stating: their name, address and National Insurance number; they were entitled to Statutory Maternity Leave or Statutory Adoption Leave and either Statutory Maternity Pay, Maternity Allowance or Statutory Adoption Pay if the employee is applying for Additional Statutory Paternity Pay. they have given notice of their intention to return to work and the date they intend to return to work; the start date of their Maternity Allowance, Statutory Maternity Pay or Statutory Adoption Pay period if the employee is applying for Additional Statutory Paternity Pay; the employee is the only person taking additional paternity leave in respect of the child; and that they consent to the Company processing the information given in the declaration. The declaration must also state that the employee is either; the father of the child, the mother's spouse or partner or civil partner (including same- sex relationships), jointly adopting the child with their spouse or partner (including same-sex relationships), or the spouse or civil partner or partner (including same-sex relationships) of an overseas adopter. If an employee wishes to change the date of leave or decides not to take leave, they must give the employer at least six weeks’ notice. If the employee wants to return to work before the end of their additional paternity leave, they must give the employer at least six weeks' notice of the new return date. If they do not give this notice, the employer can insist they do not return to work until either the end of the six week notice period or the original return date, whichever is earlier. Keeping in Touch Days Employees may attend work for up to 10 days as ‘keeping in touch days’ during additional paternity leave. They do not have a right to be paid for these days and 38
the employer cannot insist the employee actually attends work. Any keeping in touch days worked do not extend additional paternity leave. Continuation of employment terms Employees are entitled to the benefit of their normal terms and conditions of employment, except for terms relating to wages or salary, throughout additional paternity leave. They are also entitled to return to the same job they had before starting leave. If during additional paternity leave it is not practicable for the employer to employ the employee due to redundancy, the employee is entitled to be offered a suitable vacancy as an alternative to redundancy. This alternative job must be offered on terms no less favourable than the employee’s existing terms and conditions but could be with a successor or associated employer. If an employee becomes no longer eligible for additional paternity leave, for example because their partner has not returned to work as planned, they must tell the employer as soon as possible. If they do not give at least six weeks' notice of the change in eligibility and it is not practical for the employer to accommodate the change, the employer can insist the employee takes a period of unpaid leave. This unpaid leave would start on the date the additional paternity leave was due to start and would end either six weeks after the employee gives notice they were no longer eligible or the date the leave was due to end, whichever is earlier. Additional statutory paternity pay Employees may be entitled to receive Additional Statutory Paternity Pay (ASPP) if they take additional paternity leave during their partner's 39 week statutory pay or allowance period. To qualify for ASPP, employees must earn at least the lower earnings limit for National Insurance contributions and the mother or adopter must have returned to work and stopped claiming statutory pay or allowance. There must also be at least two weeks of unexpired statutory pay or allowance period remaining. If employees do not qualify for ASPP, they have the right to take unpaid additional paternity leave. Furthermore, any leave taken after the end of 39 week statutory pay or allowance period will be unpaid. 39
12 Performance Management 40
PERFORMANCE MANAGEMENT Employers should recognise that during employment, an employee’s capability to carry out their duties may deteriorate. This can be for a number of reasons, the most common being either the job changes and the employee fails to keep pace with the changes or the employee changes and can no longer cope with the work. Employers should also recognise the difference between capability issues and a deliberate or careless failure on the part of an employee to perform to the standards of which they are capable. In such cases, this would be a disciplinary matter rather than capability. Appraisals Performance appraisals are normally carried out once per year. The purposes of such appraisals are to: discuss achievements during the previous 12 months; identify any shortfalls in achieving objectives and establish the reasons why; agree any changes to objectives and actions required to improve performance and/or enable the employee to achieve your full job potential; consider any future training, development and career needs; discuss opportunities for advancement or alternative work. It is important that the employee contributes to the appraisal process so as to make it a worthwhile exercise. The meeting should therefore be an open forum where ideas and opinions can be exchanged and agreed conclusions reached. A written record of the appraisal should be made and the completed appraisal form should be viewed as a working document. It should be referred to and reviewed during the year by both the employee and their line manager. Training and support Most performance issues can be dealt with through training and support. The employer should discuss with the employee the required work standards and the level of performance expected. Discussions should identify areas of concern, establish the likely causes of poor performance and identify any training or supervision needs. Targets for improvement should be set and a timescale for review agreed. 41
The employer should always be alive to the issue of whether the unsatisfactory performance is related to a disability. If so, the employer is under a duty to consider any reasonable adjustments that could be made to the job so as to assist the employee in improving their performance. Formal action In cases where training and support does not lead to a satisfactory improvement in performance, or where performance issues are more serious, the employer may want to adopt a more formal procedure. The employer should notify the employee in writing of concerns regarding their performance. The employee should then be invited to a capability meeting to discuss those concerns. The meeting would normally be chaired by the employee’s line manager. The purposes of the capability meeting are to: set out the standards the employee has not met; establish the likely causes of poor performance; allow the employee to explain the poor performance and to ask any relevant questions; discuss measures to improve performance; set targets for improvement and a timescale for a review; establish whether there is any reasonable likelihood of the required performance standards being met within a reasonable time, if dismissal is being considered, discuss whether there is any practical alternative to dismissal such as re-deployment either at the same or a lower grade. The employee should be given the opportunity to respond to the employer’s concerns and put forward their reasons for the poor performance. In the first instance, an employee would normally be given a written warning. The written warning should set out the areas in which the employee has not met the required performance standards, the targets for improvement, a timescale for review and the likely consequences of failing to improve to the required standards within the review period. A copy of the warning would be kept on the employee’s personnel file for a specified period, subject to satisfactory performance. If at the end of the review period, the employer is satisfied with the employee’s performance then no further action will be taken. If the employer is not satisfied then a further capability hearing should be held. If there has been a substantial but insufficient improvement, the review period could be extended. 42
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