Employ at your peril
Article Date: Nov 03 2005
Legalised blackmail?
Condemned by Forum of Private Business spokesman Rex Garratt as ‘legalised blackmail’, the directive joins an array of measures in force against discrimination on the grounds of sex, physical disability, religious belief and sexual orientation. And next October, discrimination on the grounds of age becomes illegal.
Tomlinson and Jo Evans, her colleague at Lewis Silkin, argue the impending new anti-ageism rules ‘will shake things up in the way the Sex Discrimination Act did in the 1970s’. With many client companies in the media and advertising, sectors that have placed a premium on youth, they can see momentous upheavals ahead.
Employers’ organisations, such as the Confederation of British Industry, are complaining loudly against Government proposals to remove the exemption of even the smallest firms (employing fewer than five people). In some cases, says Guinan, it would still be possible for a small, start-up company to avoid complying with, say, the anti-disability discrimination rules, if it could show the cost of altering its premises and facilities would be prohibitive.
Sometimes anti-discrimination rules can have unexpected ramifications. For example, if a woman asks to move from full-time to part-time employment and
is refused, she could claim sexual discrimination, though, lawyers suggest, the company might get off the hook if it could prove that before hiring her it had advertised the position as a potential job-share and received no applications.
If a disappointed job candidate threatens to take you to an employment tribunal alleging discrimination, it would help to have your reasons for not hiring him or
her ready in advance. You may be asked to show notes taken at the time of interview.
Many employers, even in small companies, feel they need staff handbooks to cover these issues. As one consultant puts it, ‘these rules can have a big effect on the culture of an owner-managed business; gone are the days when you could sort these things out down at the pub.’
One form of discrimination does remain open to you: nepotism. ‘Appointing your relatives is still OK,’ says Guinan. ‘It is part of the proprietor’s prerogative.’
Dismissal dangers
Sacking staff who prove unsuitable has become no less fraught with danger for those who omit to follow the right procedures, vexatious as they may be. You can dismiss an employee within 12 months of hiring simply by saying, ‘sorry, it hasn’t worked out’ or, ‘your work is not satisfactory.’ That is, unless you fall foul either of the discrimination rules or if the employee in question can claim you are firing him or her for complaining about a possible violation of Government edicts on health and safety at work.
After one year, you have to go through a formal procedure of writing to the employee, setting out your reasons for wanting to fire him or her and then arranging a meeting to explain these reasons. The employee could still then seek to appeal to an employment tribunal.
Redundancy risks
Getting rid of staff via redundancy can be a difficult and dicey process. An employee of at least two years’ standing is normally entitled to redundancy payments covering a maximum of 20 years, calculated by a multiple of the employee’s weekly wage and an age factor, all capped at £290 a week.
Some companies can afford better redundancy schemes and can offer these to employees as a favour to short-circuit the formal procedure — but not as an entitlement. One adviser speaks of a blue-chip client with a ‘very generous’ redundancy policy whose details are kept firmly under lock and key ‘so that no one can prove it exists’.
Whether redundancies are forced upon you by a downturn or fundamental change in your business, you are still obliged to go through long, time-consuming statutory consultation procedures.
Cases before the Employment Tribunal alleging failure to give adequate warning of dismissals and redundancies are frequent. The tribunal can award up to £25,000 and the courts can award more.
Another hot potato is ‘constructive dismissal’, where an employee can quit and accuse you of either making life needlessly tough or alternatively sidelining his or her efforts. This is one area where the employer’s lot has been somewhat eased by a requirement that the employee must raise his or her grievance first in writing with the employer before complaining to the Employment Tribunal.
Even hotter potatoes can be cases where you have to sack someone who has been passing key confidential information about your company, its contracts, clients, finances and/or intellectual property to commercial rivals or other unauthorised recipients. Departing staff members bound by ‘restrictive covenants’ not to divulge sensitive information gained during their employment may nevertheless seek to sell it to rivals. Most companies, especially large ones, insist they would not buy this information, except from a company’s owner. But, warn advisers, if these issues come to court, it can be hard to persuade judges that restrictive covenants are not the same as restrictive practices.
