Category Archives: Government proposals

Peeking inside government consultations on the horizon.

New “European Pact” for gender equality for the period 2011-2020


 

        

On 7th March 2011 the The Council of the European Union (at a meeting of the Employment, Social Policy, Health and Consumer Affairs Council) adopted a new “European Pact” for gender equality for the period 2011 -2020.  It has attracted very little attention in the media, but could have a real effect on social policy, and employment relations in the coming months.

 It urges action by the member states and the Union, by taking measures to :

eliminate gender sterotypes, ensure equal pay for equal work and promote the equal participation of women in decision-making; improve the supply of affordable and high-quality childcare services and promote flexible working arrangements; strengthen the prevention of violence against women and the protection of victims, and focus on the role of men and boys to eradicate violence.

It also reaffirms the importance of integrating the gender perspective into all policies including external actions of the EU.

 Gender equality is enshrined in the EU treaty, which states “that the Union shall promote equality between women and men, and that this aim is to be pursued in all Union’s activities”.

Many will question whether this  will be the hammer to finally break the glass ceiling.

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Shared Parental Leave – what could it mean for the City?


The advent of shared parental leave will bring about a major cultural change.  HR practitioners will no doubt be keen to learn from countries that have already successfully implemented shared parental leave schemes such as Canada, and Denmark; and this may lead to an exchange of ideas between financial institutions in the City. The proposed merger between TMX Group (which operates the Toronto Stock Exchange) and the London Stock Exchange may become a further catalyst for dialogue between HR professionals across the Atlantic on this very issue.

 HR practitioners in the City will follow the forthcoming consultations closely to see how the Government intends to introduce a system to request shared parental leave, and the grounds upon which such a request may be refused. The central issues in the City will be trying to balance a system that is flexible and fair for staff, but also sufficiently certain for business purposes.

 Challenges could include how to deal with an employee who requests to take chunks of leave (if indeed this is permitted) over a period of weeks or months, and how to cover for staff in this way.  All organisations will need to update their existing employment policies and procedures and train staff in due course.

 The Government’s research (contained in the Final Impact Assessment for additional paternity leave) provides a snap shot of some of the factors affecting take up of shared leave in other countries. In Finland, for example, it was found that overall parental leave is shared more often in families where both spouses have a high level of education and middle sized or good income – which may initially indicate that the take-up in the City will be high. However, it is likely that the level of take up will be guided by several factors, including the level of parental leave pay, and of course whether it suits the needs of employees.  Shared parental schemes are already in operation in the UK; last year Santander published plans to offer shared parental leave to staff, and details of their internal consultations may be of interest to the City HR community

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Far reaching changes to Employment Tribunals are imminent


Far reaching changes to Employment Tribunals are imminent

The launch of the “resolving workplace disputes” consultation by the Department for Business,  Innovation and Skills (BIS) is described as being the next step in the Governments comprehensive review of employment laws. In reality the consultation sketches out a roadmap to fundamentally change the current tribunal system into a more business friendly model.

Proposals include: charging fees; increasing the cap on costs awards; increasing the level of deposit awards; and removing payments for the expenses of witness. These proposals will not go down well with Claimants and Unions alike; who will no doubt view them as putting barriers in the way of access to justice.

Some of the wide-ranging consultation proposals will be welcomed with open arms, including:

  • Encouraging parties to resolve disputes earlier (through ACAS, and implicitly through mediation);
  • Making strike out powers more flexible, with “procedural safeguards to be built-in;
  • Allowing Employment Judges to be able to issue a deposit order at any stage in the proceedings;
  • Introducing a mandatory requirement for claimants to provide a statement of loss in the ET1; and,
  • Shortening tribunal hearings by taking witness statements as read.

 The more controversial aspects of the consultation include:

  •  Introducing “fee charging mechanisms”. This is not set out in any detail however, the consultation includes the example of “where claimants lodge claims (and respondents choose to counter-claim), and/or for parties in claims that proceed to full hearing”. It does not seem to be envisaged that any fee will be charged when a Respondent submits its ET3.
  • Extending the qualifying period for unfair dismissal claims from the current one year to two years. The Government estimates that this will reduce the level of claims by 3,700 – 4,700 a year.
  • Introducing Legal Officers to deal with case management. The consultation seeks views on the “qualifications, skills, competences and experience we should seek in a legal officer”. 

 Lawyers and HR practitioners should note that the consultation also seeks views on the type of interlocutory work (which the consultation considers “could be undertaken by any competent person”) that might be delegated, so clearly this proposal will be expanded.  Under the proposal Legal Officers could be: experienced administrative officers; qualified lawyers employed as registrars or legal assistants; or a ‘junior’ rank of judge or judicial officer.

  • Introducing a rule whereby either party can make a formal settlement offer to the other party, or parties, as part of formal employment tribunal proceedings, “backed by a scheme of penalties and rewards”. The consultation proposes a system similar to the “Scottish Courts’ judicial tender model” (see how many English practitioners put that search term into Google!), and not a Part 36 model.
  • Removing payment of witness expenses. The Governments argument is that this will lead to a reduction in the duration of some hearings, as “only witnesses that are strictly necessary will be called”. Surely it is simply intended to save Government money. It is unlikely to be the main consideration for witnesses I would suggest that a greater deterrent to witnesses attending a tribunal hearing would be the necessity to take time off work to give their evidence.
  • Increasing the current cap on the level of costs that may be awarded from £10,000 to £20,000. The consultation emphasises that “it is not our intention to move towards a general costs-recovery policy”.
  • Reviewing the formula for calculating employment tribunal awards and statutory redundancy payment limits.
  • Increasing the current level of the deposit which may be ordered from the current maximum of £500 to £1000.
  • Extending the jurisdictions where judges can sit alone, allowing “more efficient use of lay member resource” – (it is noteworthy that this is not defined).  Subject to discretion, unfair dismissal cases to normally be heard by an employment judge sitting alone.

This may lead to a two tier level of tribunal judges, and does little to address the reality that many unfair dismissal claims often feature as just one strand of several claims. The annual statistics published by Tribunal Service show that for 2009-10 the average number of jurisdictional complaints per claim was 1.7. Could this be the beginning of the end for lay members?

  • Proposing that claimants submit key details of their dispute (using what will amount to a shortened version of the ET1 claim form) to ACAS within the relevant time limit.

It is proposed that ACAS will have no role in determining whether the claim is in time or not; they will, however, date-stamp the form on receipt, and that will then allow the Tribunal to decide whether to accept or reject the claim.  This dual process is likely to confuse many businesses.

The consultation envisages that the clock (for the relevant time limit) will stop once the claim is received by ACAS and that there will then be a statutory period of time (they propose 1 calendar month) for ACAS to attempt to conciliate the dispute.

Resolving disputes

The amount of claims lodged at the Employment Tribunal for the period 1 April 2009 – 31 March 2010 show that there has been a 56% increase in claims from 151,000 for the period 2008/2009 to 236,100 claims in 2009/2010; although it should be noted that those figures include multiple claims.

The role of ACAS

The aspiration in the consultation to urge employers and employees to work together to resolve workplace disagreements should be welcomed. Work place mediation will most likely be an area of real growth. The role of ACAS should rightly be heralded as a successful way of resolving disputes, as 70,600 claims were ACAS conciliated last year. 

The Government intends to give all potential claimants with access to pre-claim conciliation by ACAS – free of charge to all those who want it; and for ACAS to give claimants with information about what they can expect from a Tribunal, including the time involved and what a tribunal might award.

The key issue will be whether ACAS has adequate resources to deal with a likely surge in demand. Perhaps the proposed tribunal fees will pay for the service to be expanded? In my own busy employment practice it is increasingly clear to me that ACAS case workers have an almost insurmountable level of cases to deal with.

Philip Henson. Partner, Bargate Murray, and accredited mediator specialising in work place mediation.

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Filed under Ch ch ch changes, Costs, Discrimination in the work place, Employment Tribunal Focus, Government proposals, Legislative Changes, Mediation, Politics, Trade Unions

Naming – but is it really shaming?


New BIS guidance on naming employers who flout the National Minimum Wage law

Following the recommendations of the Low Pay Commission, on 1 October last year the Department for Business, Innovation and Skills (BIS) trumpeted a scheme to name employers who flout National Minimum Wage (NMW) law, and BIS has recently published that policy which came into effect on 1 January 2011.

The objective of the “naming scheme” is ostensibly to raise awareness of NMW enforcement and deter employers who may otherwise be tempted to flout NMW law. Although there are many holes in the scheme (some of which are referred to below), solicitors should still be aware of the possible consequences if one of their clients were to flout the NMW laws.

Some practitioners may be surprised that BIS is not going to maintain an actual public register of employers who have failed to pay the NMW, or even maintain a register of those companies that have been named. Instead employers will be named in a press notice.

BIS will not name an employer where they are persuaded that there is a real risk of personal harm to an individual, or their family, or where BIS consider that factors drawn to their attention by the employer (or others) outweigh the public interest in naming the employer. Furthermore, employers will not be named whilst prosecution proceedings are in hand, or are being considered; as such some may view the new policy as being the lightest level of light touch supervision.

As solicitors may be instructed to make representations to BIS on behalf of their clients they should consider the “illustrative”, non exhaustive list, of the circumstances in which BIS will name an employer.  These include situations where the employer:

  • Knowingly or deliberately failed to comply with their NMW obligations, and,
  • Refused or neglected to answer questions put to them by a NMW compliance officer, or to provide information or produce documents.

Civil and Criminal enforcement of the NMW

The BIS scheme includes guidance on how the Government intends to operate the civil and criminal enforcement of the NMW. The Secretary of State has appointed HMRC to act as enforcement officers for the purposes of the NMW, and in the agricultural sector, agricultural wages officers in the Department of the Environment, Food and Rural Affairs enforce the NMW whilst enforcing the agricultural minimum wage.

Enforcement procedure

HMRC enforcement is initiated either by a complaint from workers or third parties, or as a result of risk profiling and includes targeted enforcement of key low paying sectors. How risk profiles are arrived at is not made clear in the guidance.

The NMW Act 1998 makes provision for criminal proceedings to be brought for offences under section 31 of that Act. The offences cover a range of possible non-compliant behaviour as  summarised below:

Section of NMW Offence
31(1) Employer refuses or wilfully neglects to pay NMW.The guidance indicates that the number of workers involved would normally exceed five and there would normally be at least one previous instance of a failure to pay by the same employer which required action in either the civil courts or the employment tribunal to enforce payment.
31(2) Person fails to keep or preserve NMW records.
31(3) Person knowingly causes or allows false entry in NMW records.
31(4) Person produces or furnishes false NMW records or information.
31(5)(a) Person delays or obstructs NMW compliance officer.
31(5)(b) Person refuses or neglects to answer any questions, furnish information or produce documents when required to do so.

 HMRC and BIS will operate a policy of selective and exemplary criminal investigations to bolster our overall enforcement strategy. “Selective” means that HMRC will investigate only the most serious cases; “exemplary” means that HMRC will investigate cases across the whole range of available offences and in a range of trade sectors.

The guidance indicates that the more extensive and substantial the alleged arrears, the more likely it is that HMRC will wish to investigate with a view to prosecution by CPS.

A copy of the BIS policy can be found at:

http://www.bis.gov.uk/assets/biscore/employment-matters/docs/n/11-529-national-minimum-wage-enforcement-prosecutions

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The probable winners and losers under the coalition


The general election may seem like a distant memory to many ( except perhaps the student population), as 2010 draws to a rather frozen close lets take another look at the coalition document and who are predicted to be the winners and losers.  

The document reiterates the mantras of Freedom, Fairness and Responsibility. But what could the coalition mean for your business; and what future trends can be predicted from the coalition document?

 The 36 page document is a thumb nail sketch of what the leaders hope to achieve over the next 5 years. It is divided up into 31 parts, covering sectors from Banking to Universities. The declaration in the foreword that “difficult decisions will have to be made in the months and years ahead” is a subtle indication of looming job cuts. As you read through the document you may get the impression that it has borrowed some ideas from across the Atlantic such as directly elected police chiefs, and measures to “enhance customer service in the private and public sectors” for example.

 Private vs. Public sector

 The document drives the aspiration that the private sector be freed from the burdens of administrative red tape and also indicates that the public sector will feel the brunt of the austerity cuts. The most evident victims of the cuts will be government quangos; the Ministry of Defence; the Civil Service Compensation Scheme; and possibly public sector pensions. At the same time the coalition intends to give public sector workers a new right to form employee-owned cooperatives. 

 As can be expected in the current economic maelstrom there is an obvious focus on trying to also raise extra funds for the depleted coffers by cracking down on white collar crime, tackling tax avoidance, and reviewing taxation of non-domiciled individuals.

 The probable winners under the coalition

  • Bank of England – More powers to be given to the Bank of England to control macro-prudential regulation.
  • Charities – A range of measures will be taken to encourage charitable giving and philanthropy. It is implicit that this will include tax relief.
  • Children’s hospices – £10 million per annum beyond 2011 promised from Department of Health budget to support children’s hospices.
  • China and India – The coalition is to establish a new ‘special relationship’ with India and seek ‘closer engagement’ with China.
  • Family Mediators – A comprehensive review to be carried out to increase the use of mediation when couples break up.
  • Farming – “Home on the Farm” schemes to encourage farmers to covert existing buildings into affordable housing; reduction of regulatory burden on farmers by moving to a ‘risk based’ system of regulation;  extra support for hill farmers; development of a national tree planting scheme, and a free vote will be allowed on proposals to repeal the Hunting Act.  Perhaps the most ground breaking proposal is the desire to “ensure that food procured by government departments, and eventually the whole public sector, meets British standards of production wherever this can be achieved without increasing the overall cost”.
  • Green Banking – A green investment bank to be created; individuals to be able to invest in infrastructure needed to support the new green economy; floor prices to be introduced for carbon, and efforts to be made towards persuading the EU to move towards full auctioning of ETS permits.
  • Green Energy – Extension of protection of support to ‘off-grid’ energy consumers’; creation of an off shore energy grid to support a new generation of offshore wind power; mandate a national recharging network for electric and plug in hybrid vehicles; encourage marine energy; work towards ‘zero waste’ economy encouraging Councils “to pay people to recycle”, and support for sustainable travel initiatives.
  • Health Care – guarantee that health care spending increases “in real terms” each year of the Parliament;  aim to ensure that Military personnel’s rest and recuperation leave can be maximised; extra support for the mental health needs of veterans, and injured personnel are to be treated in dedicated military wards.
  • Minorities – Promotion of equal pay and “range of measures” to be taken to end discrimination in the work place; improved community relations and opportunities to be promoted for Black, Asian and Minority Ethnic (BAME) communities by providing internships for under represented minorities in every Whitehall department, creation of a national mentoring scheme for BAME people who want to start a business; “Look to promoting gender equality on board of listed companies[1]; Push for unequivocal support for gay rights and for UK civil partnerships to be recognised internationally.
  • Post Office – Post offices to be allowed to offer a wide range of services; possible creation of a Post Office Bank, and Post office Card account holders to benefit from “direct debit discounts”.
  • Private Security – Alternative forms of secure, treatment based accommodation for mentally ill and drug offenders to be explored.
  • Pubs/Live Music venues – Red tape to be cut to encourage the performance of more live music.
  • Railways – longer rail franchises to be granted to give operators incentives to invest in better services, better stations, longer trains and better rolling stock.
  • Regulatory– The Freedom of Information Act is to be extended to provide greater transparency; CCTV to be further regulated; ban on the use of the powers in the Regulation of Investigatory Powers Act (RIPA) by Councils unless signed off by a magistrate for stopping serious crime; and a new ‘right to data’ to be created.
  • Policing – The coalition intends to reduce “time wasting bureaucracy” and introduce better technology to make policing more effective; and a free vote is to be brought forward on the proposal to repeal the Hunting Act. If revoked this would remove the soaring financial burden of storage costs of seized animals and hunting equipment.
  • Public sector whistleblowers – New protections for public sector whistleblowers to be introduced, although the proposal contains not even a morsel of detail.
  • SME’s – Proposals to be developed to ensure the flow of credit to “viable SME’s”;  red tape to be cut; introducing a “one in one out” rule where “no new regulation is brought in without other regulation [sic] being cut by a greater amount[2]; Promote small business procurement by introducing an “aspiration” (this is notably not a ‘target’) that a quarter of government contracts should be awarded to SME’s; government tenders to be published in full, on line, and free of charge; IR 35 to be reviewed and replaced with simpler measures to prevent avoidance; simplification of the rules and regulations relating to pensions, and work towards auto enrolling; the time it takes to set up new enterprises is to be cut by reducing the number of forms needed to register, moving towards a “one-click” registration model.
  • Teaching – Teachers to be given anonymity when accused by pupils; reform of league tables; more powers to teachers and heads to ensure discipline in the classroom.
  • Turkey – The Coalition supports further enlargement of the EU.
  • UK Tourism – UK Tourism is to be given a boost by recognising the important part it plays in the economy.

The probable losers under the coalition

  • Aviation – Third runway at Heathrow to be cancelled; permission for additional runways at Gatwick and Stansted to be refused and air passenger duties to be replaced by a per-flight duty.
  • Banking – A banking levy to be introduced; “unacceptable bonuses” to be targeted; an independent commission to be established to investigate the separation of retail and investment banking, with an initial reporting time frame of one year.
  • Betting and Gaming – Cash from dormant betting accounts to be used to improve local sports facilities and support sports clubs[3].
  • Dentistry – A new dentistry contract to be introduced to focus on achieving good dental health and increasing access to NHS dentistry.
  • Food retail – Introduction of honesty in food labelling.
  • Health care – GP contract to be renegotiated; patients to be given right to chose to register with the GP they want without being restricted by where they live; foreign healthcare professionals to be stopped working in the NHS unless they have passed ‘robust language and competence tests’; cost of NHS administration to be cut by a third.
  • HIP’s Advisors – HIPs to be scrapped, but energy performance certificates to be retained.
  • Ofgem – To be instructed to establish a security guarantee of energy supplies.
  • Lobbyists – Lobbying activities for the National Lottery to be banned; and a statutory register of lobbyists to be introduced.
  • Immigration Lawyers – Introduction of annual limit on the number of non-EU economic migrants (to live and work); and new measures to be introduced to minimise abuse of the immigration system, via the student visa route.
  • Rail Industry – Network Rail to be made “more accountable to its customers”, and a commitment to fair pricing for rail travel.
  • Retail/Restaurants and pubs – Maximum fine for selling alcohol to those underage doubled to £20,000; Councils and Police to be allowed to shut down permanently any “shop or bar” found to be persistently selling alcohol to children; the Licensing Act is to be overhauled to give local authorities and the Police stronger powers to remove licences from, or refuse to grant licenses to, premises that are causing problems.
  • Policing – The coalition promises a “full review of the terms and conditions for police officer employment”. Reading between the lines this might indicate that sick leave and overtime provisions are to be reviewed.
  • Public sector workers – Full on line disclosure of all central government spending and contracts over £25,000; Councils to publish contracts and tender documents in full.  
  • The Church of England – There is no mention of Christianity within the coalition document. The Equalities section does refer to “religion” but only in the context of too many people being held back because of their “gender, race, religion or sexuality”
  • Water Industry – The Cave and Walker reviews to be examined to reform the Water industry to ensure efficient use of water and the protection of poorer households

[1] This vague statement does little to address the chronic lack of women in UK board rooms. My hope is that it acts as a catalyst to the debate of how the imbalance can be addressed. It does not specifically spell out a need for quotas, which some commentators had predicted.

 

[2] A commitment to reduce the multitude of red tape may be welcomed by SME’s. Although who decides which regulations will be cut is not clear.  It could be the public as there is also a declaration that the public will be given the opportunity to challenge the worst regulations. Although the structure is not in any way clear.

[3] The mechanism for this is not explained.

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Equality Strategy – An aspiration, or just vague and voluntary?


In “Equality Strategy – Building a fairer Britain” published this month the Home Secretary and Minister for Women and Equalities, Theresa May, declares that “Equality is at the heart of the Coalition Government”.  The strategy marks a turning point in the equality regime reflecting that the word ‘equality’ has been misused and misunderstood and has come to mean political correctness, social engineering, form filling and box ticking. The new strategy moves away from legislation, and increased regulation, which is “not a panacea” and has “produced diminishing returns”. 

 The message is that legislation is only part of the approach, and that a “voluntary approach”, specifically on gender pay reporting (with an emphasis on companies with 150 or more employees in the private and voluntary sector) will need to be developed; which the strategy notes that they expect and want to work.  Annual reviews will be carried out to consider the number of companies releasing information, and its quality, under the voluntary approach to assess its success and to review whether alternatives are required; including using a mandatory approach through section 78 of the Equality Act 2010. In the interim section 78 will not be commenced, amended or repealed.  

 The strategy focuses on two principles of equality: equal treatment and equal opportunity.

 The Government intends to lead by example by:

  • Promoting transparency and good practice in the public sector. The new specific duties made to support the public sector Equality Duty will require large public bodies to be transparent about the make-up of their employees.
  • Improving careers advice for girls, women, ethnic minorities, disabled people and others who can be disadvantaged by occupational segregation, to help ensure that they are aware of the options open to them;
  • Setting a new “aspiration” that 50 per cent of all new appointments to public boards will be women by the end of the current Parliament;
  • Publishing research exploring the barriers that employers face in establishing lesbian, gay, bisexual and transgender friendly workplaces;
  • Extending the right to request flexible working to all employees – promoting flexible working as sensible business practice rather than special treatment.

 I expect that this strategy is only part 1 of a swathe of fundamental changes to the equality regime, and employment practices, that we can anticipate from the Coalition Government:

  • The strategy refers to a future consultation which will set out the Government’s approach to how they will take “strong action” where there is evidence of discrimination against women on pay.
  • Lord Davies is currently undertaking a review into the lack of female representation on corporate and business boards and a report is expected early next year;
  • The Government is to look at how the new Universal Credit can support non-traditional work patterns such as ‘mini jobs’ as the first step back into work.
  • Phasing out the Default Retirement Age, and a full public consultation on exceptions to the ban on age discrimination. 

The voluntary schemes may create something of a headache for solicitors and HR professionals. There are some ambiguities – such as the comment that the Government will work with regulators and business trade organisations to “shine a light on those who are promoting equality well and those who are not doing well”. Does this mean that those who do well are to be rewarded, or those who do not follow the, supposedly, voluntary scheme will be punished?

There is an ambiguous commitment from April 2011, to allow employers, on a permissive basis, to apply “voluntary positive action” in recruitment and promotion processes when faced with two or more candidates of equal merit, to address under-representation in the workforce.  The strategy document is however keen to point out that voluntary positive action does not mean ‘quotas’, and that “positive discrimination is not acceptable and is unlawful”. The immediate concerns for solicitors are that many clients may make decisions to address perceived imbalances in the work place without taking legal advice about possible discrimination claims. Clear Government guidance will be required.  

Please follow this link to read the Equality Strategy – http://www.equalities.gov.uk/pdf/GEO%20Equality%20Strategy%20tagged%20version.pdf

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