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Labour Law

Employment Law – Four Traps to avoid

Employment law is a complicated area for employers, and failing to be aware of the correct procedures could end in a costly employment tribunal claim. This could be expensive both financially as regards legal costs and any award made, and in terms of working time lost and morale levels. Here are four key employment law areas that all employers should be aware of.

1. Collective Redundancies.

If a minimum of 20 employees are going to be made redundant at a single establishment within 90 days, according to the Trade Union and Labour Relations (Consolidation) Act 1992, employers must consult with any representatives of the employees. Failure to do so can lead to a protective award requiring the employer to pay each affected employee up to 90 days’ pay. Employers that are thinking making redundancies of between 20-99 employees must start the consultation process a minimum of 30 days prior to making any decision to terminate employees’ contracts. If more than 100 redundancies are proposed, this period increases to 90 days. Genuine efforts to consult must be made – merely keeping employees informed does not fulfil this duty.

In addition, in these circumstances notification must be made to the Secretary of State of the proposed redundancies at least 30 days or 90 days before giving notice to terminate an employee’s contract.

Restructuring a business, even where staff may not actually leave your employment, carries with it potential risks. If fundamental changes are made to employees’ jobs, care must always be taken. If you propose to retain an employee on what is in reality a different contract of employment, this is a proposal to terminate the existing one.

2. Employees on Fixed-term Contracts.

The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 give those employees who have fixed-term contracts the right to equally favourable treatment as comparable permanent employees, especially regarding terms of their contracts, unless there is a good reason for them to be treated differently. Furthermore, the Regulations aim to prevent successive fixed-term contracts when a worker is actually a permanent member of the workforce. To discourage this practice, a fixed-term contract is normally automatically converted into a contract of indefinite duration once an employee has completed four years’ continuous employment under two or more fixed-term contracts. Service before 10 July 2002 does not count towards the period of four years’ continuous employment so the first date on which fixed-term contracts could be converted to indefinite contracts was 10 July 2006. If an employee is dismissed because they have tried to enforce their rights under the legislation, it is automatically classed as unfair dismissal.

3. TUPE.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply to any size of business and protect the employment rights of employees when their employer changes as a result of the ‘relevant transfer’ of a business or a part of one. When a business is sold and the TUPE Regulations apply, both the transferer and the transferee have a duty to inform and consult with the appropriate representatives of any affected employees with a view to seeking their agreement to the proposed measures.

When a business or business unit is being transferred, with its employees, it is essential to take advice at the planning stage.

4. Whistleblowing.

The public Interest Disclosure Act 1998 (PIDA) – commonly called the ‘Whistleblowing’ Act – gives workers legal protection when disclosing information relating to crimes, breaches of a legal obligation, miscarriages of justice, dangers to health and safety or the environment and to the concealing of evidence relating to any of these. It is automatically unfair dismissal to dismiss an employee for making a ‘protected disclosure’, in good faith, to someone to whom they are entitled to make it, or to penalise them for doing so. The protection afforded continues to apply after the termination of the whistleblower’s employment.

Any employer faced with any of these issues should, unless they are absolutely sure of their legal position, seek expert advice from a specialist employment law solicitor.