Tuesday, March 16, 2010

Local Authority Golden Handshakes Under Fire

The Audit Commission has strongly criticised large pay-offs made to departing highly-paid executives by local authorities.

The report ("By Mutual Agreement") says that good quality people have been permitted to leave with substantial termination payments when they should have been retained. Conversely under-performing employees have been paid significant termination payments when they should have been sacked.

Given that the maximum Compensatory Award at an Employment Tribunal for Unfair Dismissal is £65,300.00 in the absence of any basis for alleging discrimination there should not be any reason for payments well into six figures unless the executive was employed on terms which provided for a very lengthy period of notice.

The Court of Appeal is currently dealing with an appeal by a former Chief Executive of an NHS Trust against a High Court decision that the six-figure termination payment she was due to receive was so far beyond her legal entitlement as to be ultra vires.

With public finances likely to be tight for the foreseeable future expect to see further scrutiny of this issue in the Courts.

There is a link to the Report at http://www.audit-commission.gov.uk/nationalstudies/localgov/mutualagreement/Pages/default.aspx



Thursday, March 11, 2010

Ignorance is not Bliss for Small Employers

Research for the Department of Business, Innovation and Skills has revealed that only 32% of small businesses interviewed felt "confident" in their understanding of employment law.

Astonishingly 34% felt that employment law obligations were "not relevant" to their business and 25% said that they did not keep up to speed with legislative changes.

28% said that they were "vaguely aware" of their legal obligations.

Employment law is a complex and constantly changing area of law where the costs of getting things wrong (because you are only "vaguely aware" of legislation where fine details can make a big difference) can be huge. The law changes at least twice a year (on 1st April and 1st October) and failing to keep on top of changes in the rules about discipline and grievance, discrimination and family friendly rights can be catastrophic.

The best advice - keep up to date with developments, have your Policies and Procedures "health checked" by an employment law expert at least once a year and seek specialist assistance where you are not sure.

There is a link to the BIS news release at http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=411448&SubjectId=2

Mobile Big Brother Is Watching You

Researchers in Japan have designed a mobile phone which would allow employers to monitor employees every move. The device designed by KDDI Corporation can differentiate between different types of movement.

It would allow an employer to tell whether an employee has been sat at their desk working or walking around talking to colleagues and can even tell whether a cleaner has been scrubbing away at a work surface or standing around reading a magazine.

With advances in technology the issue of monitoring in the workplace has become an increasingly "hot topic." Keeping tabs on, for example, emails and internet use at work can raise issues of privacy and Data Protection.

As a matter of English law monitoring in the workplace which is done openly (for example through having an IT policy which makes clear that computers are provided for work purposes only and anything produced on them is the property of the employer and can be viewed by an overseer accordingly) is likely to be lawful. Anything which is done covertly is more problematic although if it is necessary to prevent serious consequences such as the commission of a crime even this can be allowed.

On the other side, Tribunals have tended to be receptive to evidence which has been covertly recorded by employees if it is relevant (although their disapproval of the method of evidence gathering may be expressed through an Order for costs against the employee) but they have in reported cases drawn the line at attempts to introduce into evidence covert recordings of secret deliberations at discipline and grievance hearings.

Friday, March 05, 2010

Guilty Until Proven Innocent

The Employment Appeal Tribunal has upheld an Employment Tribunal's decision that a public authority could fairly dismiss an employee against whom unproven allegations of child abuse had been made.

The Claimant had been the subject of allegations in Cambodia which had to all intents and purposes resulted in his acquittal. Police in the UK visited his employer and in effect alleged that there were strong grounds for believing in his guilt. Despite his strenuous denials he was dismissed.

The Tribunal and the EAT were impressed with the fact that the employer did not simply uncritically accept the Police allegations and felt that they had acted as a reasonable employer.

The case is a useful reminder that the legal test of a fair misconduct dismissal is genuine belief by the employer in the employee's guilt, based on reasonable grounds after a fair investigation. The actual guilt or innocence of the employee is not the issue.

Interestingly the case also suggests that the employer was entitled to dismiss the Claimant in view of his lack of candour about the fact the allegations had been made in the first place - an illustration of the width of the "range of reasonable responses" open to an employer and the latitude the Tribunals will give them.

As an aside the case also raised some novel issues about the EAT's powers to restrict reporting which might lead to the identification of those involved. The EAT decided that it had the power to impose such restrictions to guarantee the Claimant's right to respect for his family life under Article 8 of the European Convention on Human Rights.

The case is reported at:-

http://www.employmentappeals.gov.uk/Public/Upload/09_0206rjfhSMmainjudgmentWEBVERSIONOMITTINGCLOSEDSECTION.doc