Government attempting to boost the economy: at the price of employees?

During the past year the Coalition Government has taken several steps to boost the economy by introducing new labour market reforms. This week it emerged that there are those in Whitehall who advocate for further radical measures, hoping that this would encourage economic growth.

The Government has justified the reforms as combating unemployment, but this desired outcome is not reflected in recent numbers. Rather, new figures indicate that unemployment has increased significantly. The official numbers show that unemployment rose by 114,000 between June and August 2011, to 2.57 million.

As a result, the Government’s employment law reforms are being questioned increasingly. Ed Miliband, the opposition leader, said "A year ago ... the prime minister justified his economic policy by saying unemployment would fall this year, next year and the year after. Isn't it time he admitted his plan isn't working?"

Despite accusations of the measures being unsuccessful, the Prime Minster, David Cameron, remains convinced that his Government will be able to reduce the deficit.

This week, an unofficial report emerged from Downing Street, which advocated further significant measures. The report was prepared by Adrian Beecroft, a Conservative donor. In it, he claimed that unfair dismissal laws should be scrapped completely. He considers that although this would lead to greater insecurity among employees, it was a price worth paying for economic growth.

However, the unofficial proposal has been heavily criticised by many cross-party members, including Vince Cable, the Business Secretary. Cable said, "No evidence has been advanced that I have seen that it will improve labour market flexibility in general, or have any beneficial effect, but if anyone can produce any, we will look at it."

The Shadow Business Secretary, Chuka Umunna, thought that the leaked report showed that the Government did not have the right focus. She said, "I find it absolutely extraordinary that the government should be preoccupying itself with how it can make it easier to fire people when in that context it should be looking at how it can make it easier to hire people."

On the other hand, business advocates consider that the report’s suggestions, if implemented, would have positive outcomes. For instance, Simon Walker, Director General of the Institute of Directors, said "The IoD strongly supports radical change to employee dismissal processes and fully backs 'Compensated No Fault Dismissal' as part of a solution. Ministers would do well to act upon Mr Beecroft's suggestions, freeing up wasted time and money from litigation and ensuring it is instead channelled into job creation and business growth."

The Government is being increasingly pressured to find a solution to the UK’s financial crisis, particularly as it is being less and less attributed to the eurozone tumult. Whether increased insecurity is the solution to the problems is being increasingly questioned as the economy remains in a fragile state.

More on this story:

http://www.guardian.co.uk/politics/2011/oct/26/vince-cable-unfair-dismissal-laws
http://www.bbc.co.uk/news/business-15271800

Have you been affected by any of these issues?

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New month, new employment laws

The month of October 2011 has brought with it some important changes to employment law in the UK. Employers and employees should both be aware of these changes, so they can ensure they are up-to-date on their rights and responsibilities in the workplace.

Firstly, the Agency Workers Directive (AWD) came into force on 1 October giving agency workers more rights in the workplace.

The AWD confers certain rights to those workers who have a contract with a temporary workers agency and get sent to different employers on assignment. Temporary workers who are hired directly by their employer or through an employment agency (with whom they do not have a contract or continuing relationship after they have been hired) are not included under the AWD.

So what new rights will agency workers have under the new law? From their first day with their new employer they will be able to access all the facilities that are open and available to normal permanent employees, such as staff canteens, gyms, and childcare facilities. In addition, they will also be entitled to access job opportunities with that employer in the same way as permanent staff.

After an agency worker has been on their assignment for 12 weeks, they will be entitled to the same basic rights and working conditions as their permanent counterparts. These rights include the right to paid time off for antenatal appointments and the right to be paid the same wage.

It will be up to both the agency and the employer to ensure that temporary agency workers are being treated in accordance with the new AWD.

Secondly, 30 September saw the last time an employee could be forced to retire by an employer under the default retirement age. Although technically abolished on 6 April 2011, employers could see through a forced retirement that was already in motion, so long as the employee in question turned 65 (or the normal age of retirement within that company if higher)on or before 30 September.

The abolition of the default retirement age means that if an employer wants to retire employees at a set age, they will need to have a good reason to do so. Under employment law, a good reason to do so is known as an ‘objective justification’.

Finally, the minimum wage saw an increase of 15p from £5.93 to £6.08 per hour. The youth rate increased from £4.92 to £4.98, and the rate for workers aged 16 and 17 increased from £3.64 to £3.68. The rate for apprentices also increased, from £2.50 to £2.60.

If you would like any legal advice on October’s changes to employment law, call Job Justice today. We work with local, recommended employment law solicitors throughout the UK.

News of the World reporter claims unfair dismissal against News International

A former chief reporter at the News of the World, who has been arrested and bailed in connection to the current phone-hacking investigation, is claiming unfair dismissal against News International in an employment tribunal.

Neville Thurlbeck is expected to claim on Friday 30 September at an East London employment tribunal that his former employer dismissed him for whistleblowing.

Mr Thurlbeck is the Neville in the ‘for Neville’ email that is a key part of the investigation into the illegal phone hacking that took place at the News of the World, the newspaper which closed in July 2011 after 168 years of circulation because of the scandal.

The ‘for Neville’ email supposedly shows how the practice of phone hacking was not limited to a single ‘rogue reporter’ at the News of the World, as both the paper and News International had claimed in their defence.

Dismissing an employee for making a public interest disclosure, or ‘blowing the whistle’ as it’s more commonly known, is an automatically unfair reason for dismissal.

Blowing the whistle means reporting wrong doing in the workplace to the employer and being protected from dismissal under employment law for doing so. Employment contracts and employee handbooks should be consulted by an employee before blowing the whistle, as the employer may have specific procedures in place that must be followed if their employment rights are to be protected.

If the employment tribunal finds that the paper dismissed Mr Thurlbeck for unfair dismissal, he will be entitled to compensation.

Job Justice works with specialist employment law solicitors throughout the UK who can assist you, whether you are the employer or employee, if you need legal advice about whistleblowing. Contact us today and we can put you in touch with an employment solicitor who is right for you.

Microsoft and the ‘glass ceiling’

Questions surrounding Microsoft UK and its support of women in the workplace have been raised following a revelation that it paid one of its former senior female managers ‘more than £1million’ after she was beaten to a top position by a male colleague.

Natalie Ayres worked for Microsoft UK for 15 years before reaching the post of general manager of the Small–Medium Enterprises and Partners Group. She was widely thought to be the best candidate for the role of managing director of Microsoft UK, which would become available in the summer of 2006.

However, the position was instead filled by Gordon Frazer, the general manager at Microsoft South Africa.

It has been alleged that he was given the job before the married mother had completed the interview process.

Ayres then left the company at the end of 2006 under a compromise agreement that reportedly included a seven-figure sum.

A compromise agreement is an agreement between an employer and employee that is reached on the termination of the employee’s employment. They typically offer the employee a sum of money in return for the agreement to not pursue a potential claim against the employer. They are not only used where there is a definite claim, but can be used when the employee or employer has not behaved in exact accordance with the employment contract.

A compromise agreement also usually contains a confidentiality clause that prevents the employee from discussing their employment, their former employer, and the contents of the compromise agreement.

It must be signed by an independent employment solicitor on behalf of the employee to ensure they have received legal advice and are not signing an unfair agreement to give up their rights to a legal claim.

Ayres departure, compromise agreement in hand, caused anger amongst some of her colleagues. They felt she had been unfairly treated by Microsoft and that there was a ‘glass ceiling’ for females within the company that prevented them from rising above a certain level of management.

One source called the higher echelons of the company a “boys’ club” and said: “The only way to progress beyond a certain point is to become a male in female clothing”.

The revelations come less than a month after the details of a sexual harassment claim have been made public in a £10million High Court battle between Microsoft and an employee.

A Microsoft spokesman said: “Microsoft does not comment about individual employees, current or former. However, Microsoft places great importance on the core values of diversity and inclusiveness, which is just one of many reasons why it is consistently ranked as one of the top 50 work places in the UK.”

Job Justice works with employment solicitors throughout the UK. If you are facing a sex discrimination claim from an employee, or would like to make a claim against your employer, get in touch today. We will find the right employment solicitor for your needs.

Council unfairly dismissed worker to avoid pension costs

Bristol Employment Tribunal has found that Tewkesbury Borough Council dismissed worker Christopher Walsh unfairly on the grounds of age discrimination, after it dismissed him months before his fiftieth birthday.

The Employment Tribunal found the Council did not want to incur £90,000 in pension costs once Mr Walsh turned 50 in December 2009. The Council therefore refused to extend his employment under transitional provisions.

Mr Walsh was initially told he faced redundancy from his position in March 2010 when five leisure centres which he managed were to be transferred to external control. However, his job looked less secure earlier than that in September 2009 when a colleague was appointed to handle the transfer process between the Council and the company taking over control of the five centres.

However, Mr Walsh provided support to the colleague because of his expertise in the area. It was suggested by his legal team in the Tribunal that he should have been retained until the transfer was completed because of his expertise in this area.

However, in a meeting between the Council’s interim chief executive and a HR consultant for the transfer to discuss the possibility of an extension of Mr Walsh’s employment, the HR consultant asked for a calculation of Mr Walsh’s pension.

Mr Walsh told the Employment Tribunal that he was then told his dismissal was because the Council did not want to incur the cost of his pension.

The Council argued that he was dismissed because his role was redundant but the Tribunal found with Mr Walsh had been discriminated against because of his age and that he had been unfairly dismissed. He is claiming £250,000 in compensation.

Although not binding, the Employment Tribunal’s decision should be heeded by the public sector in this time of collective redundancy necessitated by the Coalition Government’s far-reaching austerity cuts. The decision allows genuine redundancies of employees if their job no longer exists; however, it warns that the redundancy should not be manipulated to provide a benefit for the employer, such as moving it forward by a few months to avoid incurring pension costs.

Job Justice works with recommended employment solicitors throughout the UK. If you are facing redundancy, or if you want to instigate redundancies, and you require legal advice, call free today on 0800 533 5799 and let us find the right solicitor for you.

Agency Workers Directive could be diluted by Government after legal advice

The controversial European directive on agency workers' employment rights could be watered down  by the Government after the Prime Minister’s office took independent legal advice on the effects of the new laws, which are due to come into effect on 1 October 2011.

The Agency Workers Directive will give over one million workers employment rights that they currently don’t enjoy. A worker who has been in a position for twelve weeks will be entitled to the same rights regarding pay, holiday and maternity leave as a permanent employee.

Critics of the European legislation say it will cost British businesses £2 billion a year. Small employers are expected to pay out an extra £2,493 per year, and larger employers are expected to pay out an extra £73,188 per year. Some businesses may simply stop hiring agency staff as a result of the extra costs they could incur.

The extra costs to business and the possible effects on the rate of employment have caused considerable concern in Downing Street, so much so that Steve Hilton, the Prime Minister’s director of policy, secretly hired outside legal counsel from Martin Howe QC, according to the Telegraph.

The legal advice concluded that the Government does have options in regard to the Agency Workers Directive.

The UK’s instrument implementing the directive, the Agency Workers Regulations, had been ‘gold plated’ by the Business Secretary’s department according to the legal advice. This means the Government can dilute the regulations to ease their effect on businesses and delay their implementation.

The ‘gold plating’ occurred despite the coalition’s pledge to not implement regulations that would hinder growth and business.

Another option would be to introduce new legislation that would override the European directive. Thirdly, the Government could ignore the directive entirely. This final option could cost the Government dearly in expensive fines from Europe.

Although the Government does have options, it appears none are solid, as they would require gaining approval from the Liberal Democrats and appeasing the trade unions.

The Telegraph suggests that the Business Secretary, Vince Cable, is in the Government’s bad books, especially as it is extremely unusual for the Government to seek external legal advice rather than relying on its own lawyers in Whitehall.

Let’s not forget – although businesses may suffer from the implementation of the Agency Workers Directive, if it is watered down or delayed, over one million agency workers will miss out on some of the basic employment rights enjoyed by employees throughout Europe.

For legal advice on the new regulations and their implementation, contact Job Justice today. We work with excellent employment solicitors throughout the UK who can advise you on this matter, and any other employment-law related issues.

Andy Coulson paid hundreds of thousands of pounds from News International under compromise agreement

Andy Coulson, former editor at the News of the World and media advisor to David Cameron, has received several hundred thousands of pounds from News International as part of a compromise agreement that was made when he resigned in January 2007.

Coulson, who has been arrested by the police investigating allegations of phone hacking involving the News of the World, received payments from News International while he was working as the Conservative Party’s Director of Communications during 2007.

This financial link has raised further questions about Coulson’s impartiality, and further questions about the Prime Minister’s judgement for having hired him in the first place.

Coulson left the News of the World in January 2007 after Clive Goodman, the paper’s royal editor, was arrested and jailed for phone hacking. He started his new job with the Conservative Party in July 2007, on a salary of £275,000. He continued to receive payments from News International until the end of that year.

According to the BBC’s business editor, Robert Peston, the compromise agreement allowed Coulson to receive his full entitlement under the two-year contract with News International. The remainder was paid in instalments until the end of 2007.

In addition, it is reported that the compromise agreement allowed Coulson to keep his company car and enjoy work benefits, for example health care, for three years after his resignation.

A compromise agreement is a contractual agreement between an employer and an employee that is drawn up when the employee’s employment is to be terminated. Under the agreement, the employee is given a financial settlement in return for agreeing not to pursue an action against their employer, such as unfair dismissal.

The employee must have independent legal advice from an employment solicitor to ensure they are not giving up their right to legal action without suitable compensation. The employment solicitor must also sign the agreement.

Usually a compromise agreement will also include a confidentiality clause that prevents one or both parties from discussing the existence of the agreement or what’s in it. This may be the reason why senior Conservative party members have allegedly said none of the Party managers knew that Coulson was receiving money from News International when he was taken on as communications director.

Coulson was arrested in July 2011 when more evidence of criminality at the News of the World came to light. He had resigned as the Prime Minister’s communications advisor in January 2011.

He has maintained that he did not know anything about phone hacking activity while he was at the News of the World; however, a letter from Goodman that was written in March 2007 and disclosed last month by the parliamentary committee in charge of the phone hacking inquiry, stated that phone hacking was routinely discussed in the News of the World’s editorial conference.

For more advice on compromise agreements, you can call Job Justice free today. We work with recommended employment solicitors throughout the UK.