Posted on 7th Dec 2011 @ 10:42 AM

Employment Law Newsletter

Christmas 2011

Christmas Bonus': a thorn in the sole of every business..

"How do I fairly calculate giving out Christmas bonuses? I want to reward my full time staff, however do I also need to include my part time workers?"

Part time workers are afforded special protection in employment legislation and it is not permitted to treat them any differently from full time workers on the sole basis that they only work part time.  Part time workers have the same statutory rights as their full time counterparts, but they also have a right to the same contractual entitlements too. This does not mean that part time workers must receive the identical level of benefit as full timers, but they are entitled to receive the benefit on a pro rata basis. The pro rata principle works on the basis that the amount of bonus given to a full time employee is reduced proportionately in line with the hours worked by the part timer in comparison with the full timer. For example, if a full time employee works 40 hours a week, and a part timer works 20 hours a week, the amount of bonus given to the part timer would be half the amount of the full timer’s entitlement. Even if the provision of a bonus is not a contractual entitlement, but a matter at your entire discretion, this should still be provided on a pro rata basis.

Of course it is not required that this approach is taken; an employer can decide to give the same amount of bonus to all employees regardless of their working hours. However, to fail to give the part time employee a bonus in this situation could leave you liable to a tribunal claim. Furthermore, being secretive about your actions is likely to anger your part time staff even more because you cannot guarantee that they will not find out.

The legislation does contain an exception to providing pro rata benefits where the non-provision can be objectively justified. This means that not paying the benefit would have to be a proportionate means of meeting a legitimate aim i.e. showing that it was necessary and appropriate to meet a legitimate business objective. However, it is extremely unlikely that this would apply to your situation.  If you cannot afford a bonus for all of your staff, it would be wise to re-evaluate the giving of a bonus at all. You should not discount the contribution of these staff because, without them, your business may well be less flexible than it currently is. They may even create a more efficient contribution to your team when considered on a pro rata basis. An added element to your situation is the risk of a sex discrimination claim. It is a well known fact that women make up more of the part time workforce in the country, and if this statistic is reflected in your business, your actions would be disproportionately disadvantaging women. This is a sound basis for an indirect sex discrimination claim.

If the bonus scheme is identified as a contractual entitlement for all of your staff, and you do not then honour this entitlement, you will be deemed to have breached the contract of employment, for which an employee may make an additional claim. You should therefore consider any documentation that currently exists in relation to your bonus scheme

Agency Workers Regulations: Get ready for Christmas Eve!

What does 24th December 2011 mean for you? Last minute Christmas shopping? A run around the supermarket for sprouts and potatoes? Spending hours covered in wrapping paper and sellotape?

Whilst enjoying the festivities and the preparation for the big day, you should also spare a thought for the Agency Workers Regulations – for Christmas Eve is the first point at which the agency workers you use can reach the all important 12 week point at which become entitled to equal treatment. You should already be providing equal treatment with regard to access to collective facilities and job vacancy information.  Not every agency worker will become eligible to the 12 week rights on Christmas Eve – only those who began an assignment on or before 1st October 2011 and who have not had any kind of break between or during assignments that serves to reset or pause the accrual clock.

So what does this mean? It is important to understand exactly what equal treatment means so that you do not fall into the trap of providing a more enhanced kind of equal treatment than you actually have to.  However, first you should consider whether the Regulations apply to you at all. As the hirer, you must be a:

“person engaged in economic activity, public or private, whether or not
operating for profit, to whom individuals are supplied, to work temporarily
for and under the supervision and direction of that person”

It will be, in the majority of cases, easy to determine whether an employer meets the definition of a hirer. In certain limited cases, however, the lines may be less clearly drawn where the employer is not engaged in ‘economic activity’, for example, in certain care situations.   Assuming the Regulations do apply to you, you need to ensure that after 12 weeks, your agency workers are receiving the same basic pay and annual leave entitlements etc as your permanent staff.  However, this does not mean that you need to find a permanent member of staff with the same job title as the role undertaken by the agency worker and make sure the agency worker is paid the same. Your permanent members of staff may have been with you for a long time and have consequently built up a package of long term benefits. The agency worker is, after 12 weeks, not entitled to that same package because they do not have the length of service that your permanent staff may have. You must simply ensure that the agency worker receives the level of pay that you would offer a new permanent employee carrying out that role at the same level.

Where a pay scale exists which awards a higher level of pay in return for more experience on the job, the agency worker should be paid according to the level of experience he has. It is not a breach of the equal treatment provisions if the agency worker is paid at the bottom of the scale, and a comparable permanent employee is paid higher up the scale, if the agency worker has less experience that places him at the bottom end.Here it is important to remember that you need not find a comparable employee to prove equal treatment, only show that you are treating the agency worker as you would have treated him if you had recruited him directly.  Whatever the reason an agency worker is taken on by you, whether for a surge in demand over Christmas, or to cover maternity leave or long term sickness, you must bear in mind the effect of the Regulations.

In general terms:

• Be sure to keep an eye on the calendar, marking the date the agency worker started an assignment with you, together with marking the 12 week point after that;
• Mark down any gaps during the assignment in which the agency worker does not work, or gaps between shorter assignments, and do not assume that the accrual period is broken. Specific advice should be taken where there are any gaps;
• Create a communication channel with the recruitment agency to ensure you tell them how much you pay your employees who are doing the same job as the agency worker will be doing, and their annual leave entitlement.

 Get the Christmas Party Right

It’s that time of year again. Love them or hate them, the invitations to office Christmas parties will be arriving soon if they haven’t already. For employers, parties pose a particular threat. Here are some tips on making sure your Christmas office party doesn’t bring New Year blues:

1. Health and Safety
It is important to carry out an assessment of all possible risks and take reasonable steps to reduce them, as you would for any work activity. Avoid rubber…well, balloons in particular. One person in 20 suffers from an allergy to latex. Also, make sure your Christmas tree is well secured. Over 1,000 people annually are injured by Christmas trees. Anything involving a naked flame is a bad idea. Check that decorations are put up safely and do not pose a fire hazard.

2. Smoking
Regrettably for smokers, the smoking ban is not suspended for the festive season.

3. Drink
Many people consider work the curse of the drinking classes, especially where the alcohol runs free. One of the biggest causes of post-festive season litigation is people letting their hair down (as they see it) and things getting out of control. Employees should be made aware that normal disciplinary procedures apply. Employers can be held responsible for employees' actions after consuming alcohol provided by the employer, so take care! By the way, the law on serving alcohol to minors is also not suspended for the festive season and many people do not drink on religious grounds. Make sure soft drinks are available.

4. Drugs
Permitting the use of controlled substances on your premises is a criminal offence; the good news is that you’ll probably only get a fine if prosecuted. Your employees probably wouldn’t come to visit you in prison anyway.

5. Mistletoe
You’d have to be brave, foolish or both to risk it.

6. Driving
An employer has a duty of care towards staff; it is probably a better investment to pay for a few taxis than a few extra pints.

7. Chit Chat and Banter
Beware of letting your good humour get the better of you! Many an employee becomes disgruntled when promises alleged to have been made at the firm’s ‘do’ are not kept. As far as banter goes, the rule has to be to make sure you step in at the point when the Olympic champion for being thin-skinned would take offence. One person’s banter is another’s ground for a discrimination claim (see following case of Davies –v- Abergavenny Mind Association). The same goes for actual behaviour. To tolerate is to condone and to condone is a dangerous policy.

 Workplace Banter

 It is inevitable that a certain level of banter between colleagues will exist in all organisations particularly at work events such as the annual Christmas Party.  Such activity can help build camaraderie between people and make the workplace a friendlier environment.  However, appreciating the point at which harmless banter becomes harassment or bullying sets a perennial challenge for employers, as attitudes and sensibilities change over time.

The Equality Act 2010 S.26(1) states that harassment occurs where ‘on grounds of sexual orientation, A engages in unwanted conduct which has the purpose or effect of (a) violating B’s dignity; or (b) creating an intimidating, hostile, degrading, humiliating or offensive environment for B.  S.26(2) adds that conduct shall be regarded as having the effect in (a) and (b) above only, if having regard to all the circumstances, including in particular the perception of B, it should reasonably be considered as having that effect. The test is S.26(2) has both objective and subjective elements to it.  The subjective part involves the tribunal looking at the effect that the conduct of the alleged harasser has on the complainant. The objective part requires the tribunal to ask itself whether it was reasonable for B to Claim that A’s conduct had that effect.

Davies –v- Abergavenny Mind Association:  D who is gay, worked as a supported housing project worker for ABA.  During preparations for an office Christmas party, one of his colleagues brought in some festive headwear.  He put it on and everyone laughed, whereupon J – another colleague commented that he ‘looked like a frigging fairy.’  D claimed that this comment amounted to harassment under the Equality Act 2010.  Although the tribunal was troubled by J’s use of the word ‘fairy’, it accepted her evidence that she was referring to a Christmas fairy and had not intended to offend.  Due to the animosity that existed between J and D, he had assumed a homophobic motivation when none was present. 

This case does not succeed in pushing the boundaries of the legislation but does highlight that engaging in any banter of a sexual nature is a risky business in the modern workplace.  What’s more surprising is that this case reached the employment tribunal– any prudent lawyer should have settled this claim pre trial to ensure his clients were not put at risk unnecessarily.

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Despite the ‘doom and gloom’ of the law, everybody at EPAS would like to wish you all a very Merry Christmas and a Prosperous New Year.  Should you have any queries regarding the contents of this Newsletter or your business please do not hesitate to contact us for specific advice tailored to the needs of your business.

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