News & Insights

Employment bulletin April 2013

Every month the employment group considers the latest employment issues that affect both employers and employees.

Workshop – Drugs and Alcohol in the workplace – 11 April 2013

Can you say categorically that your organisation doesn’t have a drug and alcohol problem? Click pdf to view the agenda of this event.

All change this month?

In previous bulletins we have mentioned several changes to employment law which were due to come into force this month.

What’s coming in this month:

  • The consultation period for large-scale collective redundancies (where more than 100 staff are affected) will reduce from 90 days to 45 days from 6 April (see our January bulletin for more details).
  • Increases to statutory sick pay from £85.85 to £86.70 from 6 April.
  • Increases to maternity, paternity and adoption pay from £135.45 to £136.78 from 7 April.

What’s been postponed:

  • Employee-shareholder status (previously called employee-owner status) – postponed until September although that may still be optimistic given the heavy criticism the principle received in the House of Lords. Further details of how such a scheme would be taxed were however provided in the Budget.
  • Employers’ responsibility for harassment by third parties (eg customers) was due to be removed last month but that did not in fact happen. The Government have included this measure in their report on their progress on employment law reform published last month but without any indication as to when they now intend to implement it.
  • We were also expecting discrimination questionnaires to be abolished last month but they weren’t and again a revised timetable hasn’t been provided by the Government yet.
  • New tribunal rules were expected this month but they are now planned for the summer.

A weighty issue

Ian Machray discusses a recent Employment Appeal Tribunal case which considered whether obese employees are protected by disability discrimination laws. read more

Using fit notes to their full potential

When fit notes replaced sick notes 3 years ago they were intended to herald a new world of managing sickness absence more effectively by focusing on what the employee could rather than could not do. They have not lived up to all expectations and, as trailed in our February bulletin, the Department for Work and Pensions (DWP) have now issued new guidance on getting the most out of fit notes. The key points are:

  • A GP cannot issue a fit note during the first 7 days of sickness; employees should self-certify during this period. (If the employer requires a medical certificate within the first 7 days – eg when sickness immediately follows holiday – it will have to arrange and pay for its employee to be seen by a doctor.)
  • The advice contained in the fit note is about the employee’s fitness for work generally not just in relation to their current job.
  • GPs can suggest changes that would enable the employee to return to work such as a change of role/duties, hours or location of work, equipment, phased return, providing support (eg training, a mentor or an interpreter).
  • However, GPs are not typically occupational health specialists – the fit note is meant to be flexible and its interpretation may differ from business to business. GPs’ suggestions may be impractical in some businesses in which case the employee will be treated as not fit to work.
  • The fit note should form the basis of a dialogue between the employer and employee with a view to getting the employee back to work.
  • Employers are specifically told that they can allow an employee to return to work before the end of their fit note without going back to their GP provided that a suitable risk assessment has been undertaken. However, employers should be careful about relying on this advice particularly if the reason for the sickness is work-related.

The guidance can be found at

Reducing sickness absence is clearly a key initiative for the Government.  In addition to the assessment and advisory service due to be launched in 2014 (see our February bulletin for more details), the Government has announced that it will consult later this year on a new tax exemption for health-related benefits provided by employers to support an employee’s return to work.

Process without common sense is a recipe for disaster

Mention competency-based tests and most people will think of recruitment not redundancy processes.

A recent case looked at the effect of basing redundancy selection on competency tests, disciplinary and absence records. The majority of the marks were allocated to the competency tests. None of the assessors had any experience of working with the employees in the redundancy pool and no attention was paid to past performance or appraisals. The assessments produced results which surprised the managers (some very good employees having been selected for redundancy) yet despite these results the employer continued with the process and dismissed those who had been selected via the competency tests.

Unsurprisingly, the dismissals were found to be unfair. Employers have a reasonable amount of discretion when it comes to setting redundancy selection criteria but it is very unusual and, as this case shows, dangerous to ignore past appraisals and managers’ views.

While it is usually a good thing to strive to be objective during a redundancy process this decision serves to highlight that an HR-driven process is not the be-all-and-end-all. Blind faith in process had led to the employer losing touch with “common sense and fairness”. Fairness in redundancy scenarios often requires a subjective aspect to the process.

Beware of unexpected claims if you are buying an insolvent business

When administrators are appointed their first duty is to try to rescue the insolvent company as a going concern. However, often that’s not possible so they sell the business (or assets) to raise as much money as possible to pay the creditors.

One decision that administrators have to make at an early stage is whether to keep the employees or to make redundancies. Under TUPE a dismissal will be automatically unfair if the main reason for it was the transfer (eg sale of the business) or a non-permissible reason connected with the transfer. Liability for such automatically unfair pre-transfer dismissals passes to the buyer. The Court of Appeal has already established that dismissals can be connected with a subsequent transfer whether or not the buyer had been identified at the time of the dismissal. Further, making the business more attractive for sale is not a permissible reason.

Nonetheless, administrators are still making automatically unfair dismissals as a recent EAT case shows. The case gained some publicity as it concerned employees of Crystal Palace Football Club. There were negotiations to sell the club as a going concern but this took time and the administrator decided to “mothball” the club (which included making redundancies) in the hope that a sale could be achieved later. The club was duly sold 3 months later. Despite the delay the intention was always to sell the club and the redundancies were made to facilitate this purpose. Accordingly they were automatically unfair.

The clear message to buyers is to beware and ensure you ask about dismissals which have already taken place before you buy the business.

Although the Government is currently consulting on several proposed changes to TUPE, (some of which are specifically connected to the way TUPE puts buyers off buying insolvent businesses) their proposed changes would not have changed the outcome of this case.


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