ACAS warns of employment law time bomb for small firms

Research carried out by ACAS suggests that many small businesses are risking costly employment disputes because they haven’t yet adapted to the age discrimination regulations that came into force last October.
ACAS contacted 750 SMEs and found that only 17% of them had amended their employment policies in the wake of the new legislation. This was because most of them thought the regulations didn’t apply to them or that their business already complied and so there was no need to do anything more.

Yet fewer than three in ten of those surveyed were able to give the correct answer when asked if it is still legal for a firm to have a compulsory retirement age. ACAS found that firms employing fewer than 10 people were most at risk as they were the least likely to have responded to the changes in the law. Only 6% had amended their policies.
The ACAS Chairperson Rita Donaghy said: "These results are worrying as they highlight a potential cost time bomb in smaller companies in terms of potential tribunal cases, because the age laws have not been considered. Age discrimination can affect all employees, young and old and to comply can be very simple and quick.

“We are urging businesses to act now, helping them to put in place policies that minimise the risk of prosecution and to make employment decisions on the basis of talent and skills alone."

Any firm that hasn’t already put compliance procedures in place should seek legal advice as soon as possible. In the meantime, it may be useful to recap on some of the main changes that now affect every aspect of employment from recruitment through to promotions and all the way on to retirement.

Recruitment
Firms cannot specify age limits such as ‘under 25’ when recruiting new staff. Adverts such as ‘bright, energetic, dynamic’ which imply a preferred age group are also unacceptable. This cuts both ways with the regulations offering equal protection to younger applicants. It would be unlawful, for example, discriminate against young people by setting arbitrary conditions such as insisting on at least ten years experience – a condition which by definition, people in their 20s would be unable to meet.

However, employers do not have to recruit people who are within six months of retirement age.

At work
It is unlawful to discriminate against any employee on the grounds of age. Age cannot be used as a basis for deciding on levels of pay or benefits. Benefits based on five year’s service must be seen to recognise experience or reward loyalty.

The national minimum wage bands still apply. There is no upper age limit at which employees can claim unfair dismissal and redundancies cannot be based on age or length of service. The simple process of last in first out can no longer apply.

Promotions
You cannot ignore someone for promotion simply because you consider them to be too young or too old. There has to be other objective reasons. The same applies to training, so you cannot overlook someone simply because you feel they are too old to learn new skills or won’t be around long enough to make the investment worthwhile.

Retirement
The national default retirement age is 65. Employers can oblige employees to retire at that age but it is unlawful to oblige workers to leave before then.

There is now a set process for handling retirements that must be followed. The employer must write to employees at least six months before their expected retirement date informing them that they have a right to request to remain at work. Such requests have to be considered but they don’t have to be granted. However, the employer must inform the employee in writing of the decision.

If the answer is no then the employer doesn’t have to give a reason but he does have to allow the employee to appeal.
Please contact Sally Laughton if you would more details about age regulations or any matter of employment law.

Have your say on introduction of paternity leave

The government is seeking the views of employers and employees on the introduction of new rules on paternity leave which will entitle fathers to six months at home with their children if the mother decides to return to work early.

The Work and Families Act, which came into effect in April, has already produced some key improvements for working mothers. It extends statutory maternity pay, statutory adoption pay and maternity allowance from six to nine months. It’s intended to increase that to 12 months by the end of the current parliament.

Mothers will receive 90% of their full salary for six weeks, and then a maximum of £112.75 a week for the remainder of their leave. This statutory entitlement is paid by employers who then claim it back from the Treasury.

The next phase of the Act will see much greater rights for fathers. Employment Relations Minister Jim Fitzpatrick said: "We know that people want greater flexibility to better juggle their work and family life and that fathers increasingly want to play a bigger part in the upbringing of their children."

"If a mother wants to return to work before her child's first birthday, the father will be able to take some, or all, of the second half of the child's first year as paid paternity leave. For the first time ever, this will give parents the flexibility to divide a period of paid leave between them. Parents will be able to decide how to best balance work and family commitments.”

It is estimated that between 250,000 fathers will benefit from being able to take up to 26 weeks paid paternity leave. In addition, it’s also intended that civil partners of mothers and members of adopting couples who meet the eligibility criteria should also qualify for additional paternity leave and pay.

These new provisions should be introduced by the end of this parliament and at the same time as extending maternity leave to 12 months. The earliest this could happen would be for babies due in April 2009, but this is not yet a definite date.

Now the Government is seeking views on how the administration of additional paternity leave and pay will work in practice. It particularly wants feedback on whether the father and mother should be able to self-certify themselves for the scheme. It’s thought this would make the process more straightforward for businesses and so easier to administer.

There’s also the question of how the scheme can best be made to work in practice and to what extent new official forms would provide firms with more confidence to administer the scheme effectively at the same time as encouraging employees to participate in it.

The measures have been criticised by the Federation of Small Business which says many firms are already drowning in red tape and it is not helpful to families to provide them with benefits that could cost parents their jobs. The Federation’s national chairman, Carol Undy, said: “Small businesses are often in the vanguard of new family-friendly policies as the workers and the boss are usually in the same room. They can therefore work out ways of working to suit the work/life balance much more easily than in a large business.

“However, when the Government gets involved in this equation it can create antagonism that was not present before. What was once a good-natured compromise becomes a confrontation.

“Family-friendly policies are no doubt done with the best of intentions but implementation must be done carefully - with the needs of employers fully considered - if the economic well-being of the country is not to be put at risk. Restricting small business growth will cost jobs and that will benefit no-one.”

It’s not only firms who are concerned. Many fathers may be put off taking their full entitlement for fear of damaging their career prospects by appearing not to be sufficiently committed to work.

Some may even fear being subjected to undue pressure by their bosses not to take the full time owing to them.

It would be unwise for any business to take such an approach, however, or place any obstacle in the way of parents wanting to take their full entitlement. Any suggestion of undue pressure could result in costly and time-consuming compensation claims.

It is imperative that firms should understand the legislation and implement it fully. In the meantime, however, they do have the chance to raise their concerns during the DTI’s consultation process.

Sally Laughton is a member of the Andersons Solicitors Employment Team. Sally can be contacted on 0115 988 6736 or by emailing slaughton@andersonssolicitors.co.uk.

How to prepare for the smoking ban

The new smoking regulations which come into force in England on July 1st will transform the workplace for millions of people.

The government estimates that 99% of offices, shops and factories will become effectively smoke free bringing enormous health benefits for all employees. While the advantages of a smoke free working environment might be desirable, employers need to make sure they implement the new regulations properly to avoid any difficulties.

The smoking ban covers virtually all enclosed public places but not open spaces or private homes. Employers will have to display signs saying “No Smoking Allowed”. Failure to do so could result in fines of up to £1000. However, it won’t be enough simply to put up the signs. The ban must be enforced or employers could be fined up to £2500. Fines will issued by the local authority rather than the police.

Smoking in company vehicles will also be banned if they are used to transport the public or if they are used by more than one employee. Smoke-free company vehicles will have to display no-smoking signs.

Firms that haven’t already done so should draw up a smoking policy to ensure both staff and customers comply with the regulations. A good way to begin is by starting a consultation process with employees. A task group could be set up involving a cross section of management, staff and possibly trade unions representatives.

Both smokers and non-smokers should be involved as this will give everyone ownership of the policy which should make it easier for people to accept.

A document should be drawn up that outlines why a smoking policy is needed and stating that it complies with the regulations. It should also be pointed out that the policy applies across the board both to management, staff and also customers. Some staff may see this as an incentive to stop smoking so you may wish to include information about where they can get help to do so.

Make sure to include the names of the people responsible for introducing and enforcing the policy. There will also need to be information about where people can smoke. This will have to be outside the building which may raise issues about the image of your firm. It may not look good to have people standing around outside your offices smoking. There could also be concerns about litter in terms of where they put cigarette ends or matches. The regulations mean that you will not be able to supply ashtrays inside the building.

Employers might find it useful to know that there is no legal obligation for them to provide facilities for smokers. However, if you do provide a shelter outside you will need to ensure that it is not “substantially enclosed” or it will fall foul of the regulations. It’s left to your discretion but providing some sort of arrangement may be good for staff relations and also help smokers accept the policy more readily.

You will need to decide whether you are prepared to allowed time for smoking breaks outside the building. You don’t have to provide such breaks and doing so could lead to resentment and complaints from non-smokers who feel that their colleagues who smoke are effectively getting extra time off work. Again, if a wide cross section of the workforce is involved in setting up the policy it should help to ensure that workable compromise is reached that is acceptable to everyone.

The policy will also need to clearly set out the consequences for employees if they are caught smoking or fail to comply with the regulations in any way.

The other issue you may want to address is how to deal with customers who start smoking on the premises. Staff should be told to draw the customer’s attention to the no-smoking signs and ask them to stop. It might be necessary to explain to the customer that it is an offence for them to continue smoking and your firm could be fined you don’t prevent them doing so. If they still refuse, then they should be asked to go to the designated smoking area outside, if there is one, or else simply be asked to leave the premises as you are unable to serve them.

Copies of the policy should be made available throughout the workplace and preferably incorporated into the firm’s overall employment manual.

The ban came into effect in Wales on April 2nd and Northern Ireland on April 30th this year.

Sally Laughton is an Employment Law specialist at Andersons Solicitors in Nottingham and can be contacted by telephoning 0115 988 6736 or emailing slaughton@andersonssolicitors.co.uk.