Hybrid Working – how will contracts change?

‘What is it we need to change in our employment contracts and policies to reflect the new normal’

……is a question I’ve been frequently asked when recently presenting to groups of managers and directors about maximising productivity and engagement in a hybrid working environment.

I’ve not been a great enthusiast for rushing into contractual changes just because everyone’s predicting that a third of employees will quit if they can’t continue flexible working or that over a million workers at the top 50 employers will not be bought back to the office.

Balancing all this enthusiasm, I have previously commented that home working is not for every job, or for every person, and that under the pressure of Covid we have made it work but it might not be sustainable in the long term.

Add onto this the fact that many jobs cannot be done from home and its a peculiarly middle-class assumption that we all have homes that are suitable to work from.

All this plus the fact that 2.8 million homes do not have internet access, and 11.7 million people lack the necessary digital skills to work from home (Beyond Digital: Planning for a Hybrid World – House of Lords COVID-19 Committee), it’s easy to see that this is not going to work for a sizeable portion of the working population.

Nonetheless, employers are naturally keen to ensure that more permanent arrangements are properly established and that the interests of both the employer and the employee are recognised and codified.  SMEs will be able to take a more informal approach than larger organisations who will need policies to ensure consistency of application across the organisation.

What are you likely to need in terms of contracts and policies if you are keen to facilitate home/hybrid working in some form.

Firstly, assuming you are an enthusiast for home/agile/hybrid (whatever) working, the possible contractual changes you’ll want to consider are :-

  • Arrangements for trial periods, or provisions that allow home working after a successful probationary period for new colleagues.
  • Provisions for ending a home working arrangement if it is not working or business needs change.
  • A new definition of the ‘place of work’ which you have a statutory duty to define.
  • Reserving the right to require home working.
  • Defining flexibility to move home – you may want to insist that home remains within a certain distance from the Company location.
  • Clarity about hours of work. Is it the same as the past, is there some flexibility, defining any core times for availability etc.
  • Establishing responsibility to take breaks and to record hours so that there is no breach of the Working Time Directive.
  • Access to the home to recover equipment or undertake health and safety checks.
  • Requirements to attend the workplace as required from time to time, and the rules with regard to travel expenditure etc. Travel to a workplace is generally a taxable benefit if paid for by the employer, so it is probably best to make it clear that where this happens it is at the employee’s expense.
  • Equipment and insurance issues.
  • Data protection and confidentiality provisions.

Secondly, what about policy changes.  Many larger organisations have already had ‘Homeworking’ policies, and we will probably see these renamed ‘Hybrid Working’ polices.  One of the advantages of a policy is that it enables the employer to keep the content in the contract to a minimum, and have a more flexible policy in a Staff Handbook.

A policy is not mandatory, but if you are going to have one it will help you set more of a tone and define expectations which are not always possible in a contract.

Some of the content will be an expansion of the items above, other issues might include:-

  • Understanding the concept.
  • Defining the characteristics of roles that are suitable for hybrid working.
  • Outlining the personal qualities needed for successful home working.
  • The discretionary nature of any arrangements, but take care, they can’t always be changed back easily, no matter what you say in a contract or policy.
  • Suitable work area and equipment.
  • Personal commitments that may interfere with effectiveness.
  • Working from abroad.
  • How will performance be measured.
  • Health and safety responsibilities – you probably need to address lighting, display screen equipment (see this HSE Checklist), electrical testing, reporting of accidents, and the supply of a first aid kit.
  • Tax, expenses issues.
  • Rules about meeting at the employee’s home.
  • Insurance, lease or mortgage issues.
  • Lifestyle issues, mental wellbeing etc.
  • Relationship between hybrid working and permanent flexible working arrangements

Finally, don’t forget those whose role prevents home working – we are in danger of creating a two-tier workforce.

They might not be able to work from home, but are there other areas of flexibility that could be introduced – the evidence suggests that other forms of flexibility have decreased during the pandemic.  Flexitime, condensed hours, job sharing, term time working, annualised hours are some that can be applied to many roles.

 

Ken Allison | 29 June 2021 | Paradigm Partners | www.paradigmpartners.co.uk

Ken is an engaging trainer and speaker who manages to make his topics, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Ken specialises in taking the strain out of employment law related people issues through training workshops for managers, and his firm’s ‘ExecutiveHR’ service, providing telephone based support services to businesses throughout the UK.

Is #Priti #Patel a bully?

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It won’t surprise you that the question in the title is not one I am going to get into.

Firstly, just as I would be reluctant to label a child as a ‘naughty child’ just because they occasionally did something naughty, so I am reluctant to label any individual as being a ‘bully’ just because they may have displayed bullying behaviours.

Secondly, the concept of bullying means different things to different people and is somewhat difficult to define.

In a recent CIPD survey 20% of organisations reported an increase in negative conflict such as bullying and harassment in the workplace.  This is not surprising given the current covid related situation with so many people having to work in difficult circumstances.

Bullying and harassment are frequently complained of when employees are put under pressure in some way.  Their work is criticised, they are under the threat of redundancy, or their attendance is being reviewed are three typical examples.  This is not to suggest that it doesn’t also occur because some people intentionally or otherwise seek to intimidate or dominate colleagues.

In Priti Patel’s case, leaked reports in The Times suggest that she told civil servants that they were ‘f***ing useless’, and even the brief findings of the full report by Sir Alan Allan, reproduced in The Guardian, refers to ‘occasions of shouting and swearing’.

What is bullying?

The definition of bullying poses challenges, and I covered the similarities and differences between bullying and harassment in a previous blog about sexual harassment.

There are lots of different definitions of bullying (unlike harassment which has a legal definition in the Equality Act 2010), with the definition by #ACAS as the most frequently referred to

‘offensive, intimidating, malicious or insulting behaviour, an abuse or misuse of power through means that undermine, humiliate, denigrate or injure the recipient’.

The Civil Service have their own definition quoted in the report about the Home Secretary’s recent behaviour

‘intimidating or insulting behaviour that makes an individual feel uncomfortable, frightened, less respected or put down’.

Interestingly, the Civil Service guidance also makes this helpful comment

‘legitimate, reasonable and constructive criticism of a worker’s performance will not amount to bullying’.

How will I recognise it?

Helpfully, in another publication, ACAS give us a few examples which include

  • someone has spread a false rumour about you
  • someone keeps putting you down in meetings
  • your boss does not let you go on training courses but they allow everyone else to
  • your boss keeps giving you heavier workloads than everyone else
  • your team never lets you join social events

Sometimes physical intimidation can be involved such as when a boss stands or sits on their desk towering over an employee whilst addressing them, or invades their personal space.

Does intention matter?

Priti Patel said ‘I have never intentionally set out to upset anyone’.  Sir Alan’s report acknowledges that the bullying behaviours may not have been intentional and that the Home Secretary was ‘frustrated by the Home Office leadership’s lack of responsiveness’.  But, that’s not really the point, it’s more the effect that is important!

Unlike harassment (which is similar, but on the basis of some form of discrimination), bullying in itself can’t give rise to a claim in front of an Employment Tribunal.  In most cases bullying gives rise to a claim for constructive dismissal, and it is for the Tribunal to decide whether the behaviour complained of was so serious as to breach the implied duty of trust and confidence that should exist between an employee and their employer.

They may decide this in relation to Sir Philip Rutnam’s constructive dismissal claim against Priti Patel after he resigned in February alleging bullying and whistleblowing.

The intention of the perpetrator does not matter (it’s not an excuse).

Being the subject of bullying behaviour can make some people ill with stress/anxiety etc. and give rise to a personal injury claim, and it may even be a breach of an employer’s ‘duty of care’ in health and safety terms, particularly if nothing is done after a complaint.

What do employers need to do about bullying?

  • A clear Harassment and Bullying Policy (and the best will give examples so that employees understand the types of behaviours that are unacceptable) will be important in large organisations, but they are not everything.
  • What will be far more significant will be leaders challenging bullying behaviours, setting an example themselves, and providing guidance to individuals when unhelpful behaviours are observed. Remember, that for some people, it will be unintentional, and a quiet word will ‘nip it in the bud’.
  • Don’t forget that your responsibilities will also extend to events outside work, but that are reasonably connected to work – this could include the pub next door where everyone goes for a drink after work on Friday.
  • Either in work or connected to work in some way, don’t fall into the trap of thinking that if nobody complains I don’t have to do anything. ‘I can’t do anything unless you put it in writing’ never has been an appropriate response in this area.
  • Encourage leaders to be proactive and create an environment where people feel it is safe to raise issues and that their concerns will be treated with appropriate confidentiality.

Above all, remember that colleagues do not perform at their best in an environment where bullying is allowed or condoned.  It rarely gets the best out of people, so there is a cost to the business.

Given the outstanding Rutnam case mentioned above, we have not heard the end of this matter.

For me, it’s provided a nice opportunity to write about something other than covid related employment matters.

Stay safe.

Ken Allison | 25 November 2020 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Ken specialises in taking the strain out of employment law related people issues through training workshops for managers, and his firm’s ‘ExecutiveHR’ service, providing telephone based support services to businesses throughout the UK.

Questions for the ‘New Normal’…. 5 questions I’ve been asked in #CEO groups in the last fortnight.

During the last fortnight I’ve given my presentation, ‘The F Word’, to about 200 #CEOs of #SME businesses, most of whom have been grappling with getting their businesses fit for the future and maximising the benefit of the CJRS to conserve their cash flow as we get the country back to work.

Here are 5 of the most popular questions I have been asked.

1.  If an employee doesn’t want to carry out their role if you bring them back from furlough can you leave them on it?

Not all my answers are so long (!) but this really is an important issue at the moment.

Although not wanting to carry out their role is different from not wanting to come back to work, you can leave an employee on furlough as long as you like and as long as the scheme is available, but just remember that it looks as if from August employers will have to contribute towards the 80% wages costs.

Grappling with the ‘reluctant returners’ is one of the most difficult issues being faced by employers at the moment.  Despite the fact that ACAS say that ‘If an employee refuses to attend work without a valid reason, it could result in disciplinary action’, any action should be preceded with dialogue.

That dialogue should endeavour to address the anxieties of staff, and in particular, the steps you have taken to make the workplace safe.

I have covered what the various anxieties might be in a previous blog, and emphasised the need to be able to demonstrate that you have complied with the Governments 5 steps to a covid safe working environment:-

  • Carried out and shared the results of a covid 19 risk assessment
  • Have cleaning, handwashing and hygiene procedures
  • Helped people to work from home wherever possible
  • Taken steps to maintain 2m distance at work
  • Where not possible to maintain social distancing, done everything practical to manage the risk

Following these steps and communicating them to employees will go a long way to removing their anxieties and preventing a claim that they reasonably perceived that they were in imminent danger if they came to work, which is most likely to be their claim if action is taken against them.

Ultimately, if someone is refusing to return to work, that could lead to a dismissal, but it is a situation where you will need professional advice.

2.  We have terminated the contract of someone with less than 2 years’ service. Notice expires end June. She wants us to keep her on furlough until it runs out. Could we or should we do that?

Someone with less than two years’ service can be dismissed without a reasonable process.  That’s not to suggest that you behave unreasonably, but you do have more flexibility with these colleagues when faced with having to make redundancies, and this is probably the context of the question.

You can extend her notice if you wish to, but take care that does not lead to her accruing the two years necessary to claim unfair dismissal.  Also note that she will accrue more holidays, so require that they be taken during her notice.

3.  Can we alter the furlough agreement re holiday clause?

Yes, employers have always been able to require that holidays be taken at specific times.  Many do it at Christmas, and some have measures that ensure holidays are evenly distributed throughout the year (phased holidays).

If you have not provided for holidays in your original furlough agreement  here’s an example of something you could add:-

‘We require you to use all accrued holiday by the end of July, and if we extend your furlough further, any more holidays accrued must also be used by the new end date for furlough.  If you have any doubts about the rate of holiday accrual, please discuss this with one of us, but basically most of you will have a total holiday entitlement of 32 days including public holidays which accrue at the rate of 2.66 days per month.

You should book your holidays in the normal way, and you may want to choose dates that you definitely would prefer us not to call you back into work’.

You do not have to follow this exactly; a lot might depend on where you are in your holiday year.  Clearing at least 50% of your accrued leave might be another option.

4.  I understood employees can carry holiday over for 2 years due to Covid, is this right?

This is only partially correct.  The Government has passed legislation which allows the carry forward of annual leave where the employee has been prevented from taking it – normally carry forward of 4 weeks of the statutory 5.6 weeks holiday is not allowed.

It is only really for situations where an employee wants to take their leave in the current year, but cannot because you are, for instance, too busy.

The Government has published guidance on the topic, which includes on the rate of pay for holidays during furlough – although, frankly, they simply quote complex regulations which are rarely followed to the letter anyway.

The consensus amongst legal commentators is that whether on furlough or during a temporary period of reduced salary or hours, holiday pay should be at the ‘normal’ (100%) level for salaried staff.  There are different rules where pay varies.

5.  If an employee agrees to resign, rather than be made redundant, can they give a resignation notice to expire at the end of July, and if they do, can they withdraw it before that time or can it be enforced?

They can give you notice which is longer than required in their contract and you can refuse to allow a withdrawal of notice.  There are circumstances in which you need to take care in refusing.

For instance, if a resignation was given in haste, such as after an argument.  Then it might be reasonable to allow a withdrawal.

A resignation under pressure might also lead to an unfair dismissal claim – for instance, a situation where you put it to someone to resign or else, we will make you redundant!

These questions were also interspersed with lots of others about the challenges of managing colleagues who are working remotely.  I covered this briefly in my recent #LinkedIn blog and I intend to return to this theme in the future.

Watch this space.

Ken Allison | 28th May 2020 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Ken specialises in taking the strain out of employment law related people issues through training workshops for managers, and his firm’s ‘ExecutiveHR’ service, providing telephone based support services to businesses throughout the UK.

Nothing in this article should be relied on as a substitute for taking professional advice about your particular situation.

 

 

 

202020: 20 #employment law commitments and promises to look out for in 2020!

Few people will read all of this, but if I don’t write this blog each year, there’s bound to be someone who misses it!

This year I’ve done my best to cover all the known #employment law changes and listed them in an approximate order of importance.

So, I’ve started with those items that are likely to affect all organisations regardless of size, progressed onto to those that will predominantly impact on larger organisations, and finished with those that address very specific circumstances.

These are a mixture of matters that have already been committed to legislation (with or without implementation dates) and promises made in the Queens Speech (QS) in December 2019.

Likely to affect all employers.

1. From April 2020 all workers will be entitled to a written statement of their terms (usually given in a Contract of Employment) on or before the first day of engagement. Currently this only has to be provided within the first two months of employment.

The amount of information that is required is also being increased (although most well drafted contracts will already comply), so employers will have to review their contracts, and if you currently don’t issue them until a new employee has started, you may need to look at your approach.

2. Currently women on maternity leave that are affected by redundancy must be offered a suitable vacancy where one exists. This right effectively gives them priority over other employees.

The Government has made a QS commitment to extend this right from the point at which the employer is notified of the pregnancy until six months after the end of maternity leave.

Similar rights exist elsewhere in Europe.

3. Extended leave and pay for neonatal care to support parents with premature or sick babies.

4. As promised in the Conservative Party’s election manifesto, unpaid carers will be granted a weeks’ leave.

5. A consultation followed by legislation will make flexible working the default unless an employer has good reasons not to allow it. Another manifesto promise which we will have to wait and see how it will differ from the current right to request flexible working after 26 weeks employment.

6. Calculating holiday pay for workers whose working patterns vary can be a nightmare. Currently, pay for these types of workers should reflect their average in the previous twelve weeks. From April 2020, it will be the average of the previous 52 weeks.

7. Termination payments over £30k will not only be taxable (which they are at the moment) but will also be subject to employer’s national insurance payments.

8. The introduction of a single labour market enforcement body (QS Commitment). Proposed originally in the Taylor Review, it’s envisaged that it will be responsible for areas such as modern slavery, sick and holiday pay, and other matters related to vulnerable workers.

9. National minimum wage increases come into force on 1st April with the headline National Living Wage (for those aged 25 and over) going from £8.21 to £8.72.

10. There will probably be increases to statutory pay rates for maternity, paternity, shared parental pay, adoption and sick pay from the first Sunday in April.

Similarly, caps for Employment Tribunal compensation and redundancy pay are also likely to increase.

11. Parents who have lost a child will be allowed two weeks leave (Parents Bereavement Leave), although a firm date for the introduction of this is still awaited. This leave will be paid after 26 weeks of service.

Mostly affecting larger employers.

12. Temporary work agencies must provide work seekers with a Key Information document including information about minimum expected rates of pay, and who will pay them.

13. The ‘Swedish derogation’ which allowed employment businesses to avoid pay parity requirements providing workers remain contracted to the agency between assignments will be scrapped from April 2020.

This is likely to inflate the costs of using agency workers.

14. There has been previous consultation about a ‘National Disability Strategy’ to encourage employers to retain disabled employees and others with health conditions. Detailed proposals are promised.

15. Addressing concerns about zero hours contracts, it is proposed to introduce a right to request a more predictable contract after 26 weeks, which presumably will work a bit like the current right to request flexible working i.e. a worker can ask, and an employer can reasonably refuse.

16. Executive pay reporting came into effect from 1st January 2020. This requires companies with more than 250 employees to report on the comparison between their CEOs pay and that of employees at various levels.

From now on this information must be in their annual director’s remuneration report.

Changes affecting specific circumstances.

17. Although strike action in the UK is at an all-time low, it’s hard to believe that if you are a rail commuter in the South East or North West. Minimum Service Agreements are to be introduced to set out minimum service patterns and numbers and nature of staff that must work during a strike.

18. Off payroll working arrangements (usually referred to as IR 35) have been changed in the public sector, and from April 2020 these changes apply to larger and medium sized private sector organisations.

There may be changes to the detail of this legislation, but just this week it has been confirmed that there will not be any change to the implementation date.

The rule changes mean that payments made to individuals through personal service companies will be subject to tax deductions by the client.

Small companies are exempt. You’ll need advice, but basically turnover under £10.2 million and less than 50 employees in the tax year will qualify as small.

19. Legislation to ensure tips go to workers in full.

20. Subject to a minimum of 15, an employer has to respond to a request from 10% or more of employees who ask the employer set up an ‘information and consultation arrangement’ (normally referred to as a Works Council).

From April 2020 the percentage is being reduced to 2%.

I’ve done my best to ensure that this list is comprehensive, but as ever I look forward to comments on anything you think I have missed.

It will be interesting to look back on 2020 to see how much of it got delivered.

We shall see.

9th January 2020 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Ken specialises in taking the strain out of employment law related people issues through training workshops for managers, and his firm’s ‘ExecutiveHR’ service, providing telephone based support services to businesses throughout the UK.

Has sexual harassment in the workplace increased?

Here’s my take on one of the most covered employment related news topics this year, and answers to some key questions.

With the amount of press coverage given to the behaviour of politicians, aid workers, business leaders, film producers, and large companies such as #Google and #Uber involved with allegations in the last year, you could be forgiven for thinking that #sexualharassment in the workplace has increased.

It probably hasn’t, but there is little doubt that there has been increased reporting as various campaigns (#MeToo, #TimesUp etc) have drawn attention to this issue.  Despite all this attention, only 30% of respondents to a recent ACAS Survey thought that sexual harassment had decreased in the last five years and only 24% thought that recent international media coverage had improved their workplace culture.

We appear to have an endemic problem which in the past has not been reported.  In their ‘Ending sexual harassment at work report’ (2018) the Equality and Human Rights Commission found that approximately 50% of respondents had not reported harassment due to fears of consequent victimisation and a feeling that senior management was ‘untouchable’.

OK, so that’s the big picture, but what are the everyday questions that key decision makers in businesses need to understand.

What is sexual harassment?

It’s a form of discrimination, and there is a statutory definition found in the Equality Act 2010.  ACAS summarises it like this:-

‘Unwanted conduct related to ‘sex’ (editor), which has the purpose or effect of violating an individual’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for that individual’.

The definition includes behaviour that might not be specifically aimed at one individual (for instance circulating offensive material of a sexual nature) and treating someone less favourably because they either accepted or rejected conduct of a sexual nature (someone gets overlooked for promotion because they rejected a sexual advance).

What is the difference between harassment and bullying?

People often claim these two things together.  There is a distinction, but it is quite a fine one!

Bullying is behaviour that has similar effects as harassment but is not on the basis of sex or any other characteristic that is protected by equality legislation.  It usually involves an abuse or misuse of power.

Bullying is not discrimination, but an aggrieved employee can resign and claim constructive dismissal, and if their health suffers, for instance because of persistent intimidation, they may well have a personal injury claim on the basis of the employer failing in their health and safety ‘duty of care’.

On the other hand, someone who suffers harassment can go to an Employment Tribunal and claim discrimination, for which compensation is uncapped.

Is it my responsibility to take action even if nobody is complaining?

Employees may be too scared to report this type of behaviour, but this does not mean you should ignore it if you know it is going on.

It will often be affecting performance, productivity, absence from work, and unnecessary staff turnover. It will be costing your business money, not to mention huge reputational risk.

The least you should do is investigate.

Do I need an anti-bullying and harassment policy?

If you have heard one of my #ceo briefings, you’ll know that I am not a great fan of solving things via a policy.  It rarely works.

Formal or informal (a quiet word) education and training and setting an example yourself, are likely to be more effective.

There is a big ‘however’ here though.

A policy (and the best will give examples so that employees understand the types of behaviours that are unacceptable) that is effectively reinforced may well prevent bullying and harassment, and if it doesn’t, it may still lead a Tribunal to conclude that an employer had taken reasonable steps to prevent these behaviours and thus not be liable.

If you are a small organisation without a policy, a Tribunal would take the size and resources of your organisation into account and is very unlikely to penalise you for not having one.

In summary, my advice would be if you have a staff handbook, then add a policy if you don’t already have one.  If you don’t have a staff handbook, don’t get one just for this reason.

Is telling someone what to do bullying or harassment?

Employees often claim bullying or harassment when they are told to do something they don’t like doing, or they are given critical feedback.

If you are asking someone to do something, and you would not ask someone of the opposite sex to do that, it may amount to harassment.  Similarly, if the manner you speak to someone is different because of their sex.

Ordinarily, just telling someone what to do or giving critical feedback is well within the expectations of an employment relationship, and I would make this clear in any policy with a statement such as:-

‘Legitimate, reasonable and constructive criticism of your performance or behaviour, or reasonable instructions given to you in the course of your employment, will not amount to bullying on their own’.

Stories of sexual misconduct have caused considerable political embarrassment this year, and it is a shame that it takes this to encourage further action, although whilst the Government is otherwise distracted (sorry Bob – Bored of Brexit – I had to mention it!) we may see nothing more than promises.

There has been talk of :-

  • creating a mandatory duty to prevent sexual harassment (which would presumably require an employer to do something about an incident even if the victim did not want it pursued),
  • a ‘code of practice’ similar to those we have for discipline or flexible working,
  • the reinstatement of protection against third party harassment (various surveys have estimated that 15 to 20% of sexual harassment has been perpetrated by customers or clients)
  • extending Employment Tribunal claim limits from 3 to 6 months for sexual harassment cases,
  • banning redundancy during pregnancy, maternity leave and for six months afterwards (in 2015 54,000 women lost their jobs as a result of pregnancy discrimination) as is already the case in Germany,
  • extending protection from sexual harassment to volunteers and interns, and
  • making ‘gagging’ clauses illegal in respect of sexual harassment.

The moral here is not to wait for legislation.

Take some of the steps outlined above.  Investigate concerns, set an example yourself, have a preventative quite word where necessary, and get and promote a policy (surprise, surprise, we can provide one if you want).

 

Ken Allison | 28 November 2018 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, on handling employment law related people issues and other HR stuff, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Through his firm’s ‘ExecutiveHR’ service, Ken also provides telephone based support services to businesses throughout the UK.

This blog is not a substitute for taking legal advice!

 

Bonuses: why pay ’em

Earlier this year Eric Daniels (the one-time CEO of the Lloyds Banking Group) successfully sued his ex-employer for an unpaid #bonus of £1.3 million worth of shares.  Litigation of this type outside the financial services sector is thankfully rare, but bonuses do often lead to disagreements, particularly when people leave.

I remain amazed how documentation is often drafted casually, if at all, and how bonus arrangements continue year after year with very little thought about their effectiveness.  If this rings bells for you – read on.

What are bonuses?

Bonuses have long been a part of the pay landscape, with very little evidence about their effectiveness as a motivator.

Wikipedia describes a bonus as ‘an extra payment for doing one’s job well’, and supporters will argue that they reinforce desired behaviours such as a focus on profitability or sales.

In reality, many bonuses are only loosely linked to individual performance, and critics will argue that unless there is a clear ‘line of sight’ between the objectives (levels of profitability, sales, effecting change etc.) and the contribution made by individuals, the prospect of a bonus will not influence behaviour in the job.

They are often little more than a deferred payment.

Detractors will also argue (following in a Maslow/Herzberg tradition) that it is the intrinsic value of the job that motivates, and quote numerous studies where reward comes well down the list of priorities as a motivator. For employees they can be unpredictable, often don’t count towards pay for the purposes of obtaining a mortgage, and they are usually non-pensionable.

On this latter point, care should now be taken to ensure that any bonus, regardless of what it says in the contract of employment, will be pensionable if the employee’s pension does not otherwise reach the upper earnings limit of £46,384 (2018/19). If you are offering a final salary pension scheme, you also need to check the scheme rules to ensure that they don’t require bonuses to be pensionable.

How popular are they?

The CIPD Reward Survey reveals a steady reduction in the number of employers using bonus schemes of one sort or another.  Overall 48% of employers used them (43% of SMEs) in 2017, although the decline is probably largely due to the capping of bonuses in the financial services since the 2008/9 crash.

The figures illustrated below show the decline and also that, outside of financial services (Rest of Economy), bonus payments make up about 5% of total pay compared to 20% in financial services (used with permission).

What are the different types of bonuses?

Very often bonuses are related to profitability or sales, meaning that they are only paid if the organisation can afford it, and managers can (within limits – see later comments) exercise some discretion over pay outs.

Typically, bonuses relate to individual, team or overall organisational performance (in the latter case usually profit) and can be ‘tiered’ to reflect different levels of achievement.  At one time there were tax incentives for schemes that paid all employees a bonus based on profitability, which was thought to encourage an overall focus on the purpose of the enterprise being to make a profit.

In Eric Daniel’s case some of the bonus apparently related to the successful integration of HBOS into the Lloyds Group – sometimes known as a ‘project bonus’.

Commission is a type of bonus usually contractually paid on a regular basis in relation to individual sales performance.

Bonuses are often paid in cash, but in the US, non-cash incentives such as a holiday for the top sales person, or retail vouchers play a prominent part in reward, and share options are often used for senior executives, such as in the Eric Daniels case.

What are the legal implications?

Despite the unlikelihood of litigation (outside of the financial sector), here are five tips for ensuring that things go smoothly.

1. Be clear about the the contractual/discretionary nature of the bonus.  Outside the financial services sector, contractual bonuses are rare, although they may sometimes be given when an employee joins you, and you guarantee a level of bonus for the first year.  The most common bonus arrangements reserve some level of discretion on behalf of the employer, either to award a bonus at all, or to award subject to agreed performance criteria.

2. Avoid acting in an inconsistent manner. Employee’s should be able to trust their employer, and tribunals/courts will be unsympathetic to random or perverse decision making regarding the payment of bonuses, even if discretion has been reserved in the contract.  Discretion is not unfettered.

Also, unless you reserve the right, you cannot withhold bonuses for other reasons such as the employee being subject to disciplinary action or because you cannot afford it.  In instances where substantial bonuses relate to financial performance, companies can reserve the right to clawback payments in the event of it needing to restate its accounts or discovering material wrong doing on the part of the employee.

3. Regularly review bonus schemes so that an employee can’t argue that a particular payment has become contractually binding.  Business priorities change over time, and bonuses should reflect changing priorities.  The best way to achieve this contractually is to give a right to participate in a discretionary scheme which the Board may vary from time to time.

4. Be clear about what happens on termination (the most frequent cause of arguments!).  Commonly, well drafted bonus provisions make it clear that there will be no right to a bonus if the individual has left or is under notice at the time the bonus is payable.  Note, the normal payment date may be different from the, for instance, end of the financial year to which it relates (sometimes referred to as the ‘due’ date).

There is an argument that if someone has earnt a bonus, they should be paid it, but this is a moral or motivational issue, rather than a legal one.

There is certainly the possibility of unintended consequences when it comes to this type of non-payment clause.  It can lead to ‘team moves’ where groups of employees leave together as soon as they have received their bonus, and to less effort and interest when someone is working their notice without needing to maintain performance levels previously motivated by the prospect of a bonus payment.

5. Make sure you are fair towards employees on long term leave.  This is a complex area, which some employers (although unusually) try to overcome by having an ‘active service’ clause which says that you have to be in service (i.e. not on maternity, parental, long term sick leave etc.) at the time the bonus is payable.  The law is not exactly decisive on these types of issues, but generally an employee should not have their bonus affected by being on sick leave (it could give rise to a disability discrimination claim), but it is broadly accepted that bonuses can be ‘pro rated’ for women on maternity leave (and probably men on Shared Parental Leave).  Unless you have stated it clearly in the contract, you should take advice about this.

6. Watch oral promises, they may be binding.  Whilst Tribunals accept that promises made under the influence of alcohol at the office Christmas party cannot be relied on, other promises where they are quantifiable and clearly intended to be binding will be enforceable.

You may not have the €400 million bonus pool exposure that Dresdner Kleinwort had when they were found to have orally promised that amount to employees in 2008, and then tried to rein in the promise by introducing a ‘material adverse change’ clause that had not existed before. In the SME sector agreements are often made orally, so take care.

If you currently operate a bonus system, you are unlikely to achieve much by removing it, but you might want to review it to ensure that it is fit for purpose.  You may conclude that it is merely a deferred payment, but you may also see opportunities to align it more effectively to the strategic goals of the company.

At the very least, you might want to ensure that bonus terms are clear and unambiguous.

Ken Allison | 03 October 2018 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, on handling employment law related people issues and other HR stuff, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Through his firm’s ‘ExecutiveHR’ service, Ken also provides telephone-based support services to businesses throughout the UK.

This blog is not a substitute for taking legal advice!

 

Is #Carrie Gracie a 21st Century Dagenham Lady?

In the same month (June 2018) as the 50th anniversary of the ‘Dagenham Ladies’ strike, the BBC gives £280,000 (according to The Telegraph) back pay to Carrie Gracie following her complaints about #equal pay.

On the same day as the #BBC publishes it’s 2018 list of top earners I take a look at what this case was really about, and what can be learnt from it.

In 1968, a strike by sewing machinists in the Ford plant in Dagenham, became a focal point that led to an intervention by the then Employment Minister, Barbara Castle.  Many credit this with leading to the Equal Pay Act 1970.

Fifty years on, we still have a national gender pay gap of 18.4% (worth noting that the BBC reported less than half the national average at 9%), we see the first publishing of gender pay gap reports by companies with more than 250 employees, and there is a major row between female presenters and BBC management.

What does the law say?

The right to equal pay is now enshrined in the Equality Act 2010 (and supported by a Statutory Code) and has the effect of incorporating into every contract of employment the right to the same terms and conditions as a comparator of the opposite sex in the same organisation providing they are doing ‘equal work’.  ‘Equal work’ means ‘the same or broadly similar’ (like work), work rated as equivalent by a job evaluation process, or, work of equal value in terms of the demands made such as the effort, skill and decision making involved.

Is it always unlawful for people to be paid differently for equal work?

No. There can be many reasons why differentials exist, the key is that they must not be to do with a gender difference.  For example, differences may exist because of past performance, length of service, geographical location, or even because of a genuine mistake.

What are the risks?

Equal pay claims are complex, and for this reason they are usually brought before a Tribunal on a collective basis by Trade Unions, or by highly paid individuals such as broadcasters. A Tribunal has the power to award up to six years back pay.

The effect of these judgements can be huge.  Currently before the courts are claims against major retailers such as Tesco, Morrisons and Asda, where employees on check-out tills are claiming equal pay on the basis of their work (largely done by women) being equal to the work in distribution warehouses (largely done by men).  In one of these (Tesco) the award may be the largest ever claim at £4billion.

Was Carrie Gracie’s case really about equal pay?

In her open letter to the BBC, Carrie Gracie says:-

“The BBC belongs to you, the licence fee payer. I believe you have a right to know that it is breaking equality law and resisting pressure for a fair and transparent pay structure.”

The BBC may have been resistant to transparency, but I’m not sure that it was breaking equality law.  Carrie claimed that two male international editors were being paid at least 50% more than the two women editors (Katya Adler is the other women whose salary has now also been adjusted according to today’s BBC 2018 top pay list).

Now, the BBC may well have had a reason for these differentials which was not to do with gender.  It could, for instance, have argued that John Sopel occupied the top international job as the Washington editor, and Jeremy Bowen effectively worked in a war zone.  In other words, there were other differences largely to do with geography or political significance.

The real reason why this case has been settled, and we may never know the detail, may be more to do with Carrie’s understanding that when she accepted the job in China, she had secured pay parity with these other male editors.   Her argument may really have been a contractual claim that she did not get what she was promised, and when the BBC published figures in 2017, all was revealed.  With some justification she may well have a case that the lack of transparency masked a wider approach which rewarded men more highly than women without justification, but the crux in her case may still be that she was promised something she did not get.

Is a promise like that, even if only verbal, enforceable?

Yes it most probably is.  An oral promise that she would be paid the same as others, particularly if it was given in the context of a recruitment discussion, could amount to a contractual undertaking.  A Court may well uphold it provided it was satisfied that the fact that it was said is not contested (the BBC admitted it), that it was clearly quantifiable, and intended to be a binding undertaking.

What can be learnt from this situation?

  • Be careful about oral promises.  They can be as equally binding as the written word.
  • Have a look at the pay differentials in your organisation.  If people are doing equal work, can the differences be explained by factors which are not due to gender differences.
  • Having an overall gender pay gap (see ACAS Guidance) may not be unlawful but may be indicative of other structural issues that need attention.  For instance, is their unconscious bias towards men when making senior appointments.  Some organisations are attempting to overcome this by banning single sex selection panels.
  • If you are nervous about employees finding out about what each other are paid, ask yourself why.  It may well be because you can’t justify it.  Worth remembering pay secrecy clauses, which were very common in the financial services sector, are now, effectively, unlawful.
  • Review how you handle issues that affect the career progression of women, such as returning from maternity leave and flexible working.

Carrie Gracie is undoubtedly passionate about the issue of equal pay.  She insisted on it when she took the job, resigned when she found out that promises had not been honoured, and is donating her back pay to the Fawcett Society (an organisation that campaigns for women’s rights).

On top of all that (I think!) she is a great journalist, but, is she a 21st Century Dagenham lady?  Yes and no!  She is clearly passionate about the same issues, but her actual circumstances were probably more about a failure to honour a contractual undertaking than they were about equal pay.

Essentially, Carrie appears to have been compensated for the failure on the part of the BBC to honour a contractual undertaking that she would be paid the same as someone else, this does not mean that the BBC was breaking equality law, as it may have been able to justify the difference in pay.

In their statement on the matter, the BBC said:-

The BBC acknowledges that Carrie was told she would be paid in line with the North America Editor when she took the role of China Editor, and she accepted the role on that understanding……..The BBC acknowledges the specific circumstances relating to Carrie’s appointment, apologises for underpaying Carrie, and has now put this right. 

Despite these specific circumstances, it has been acknowledged by others including Clare Balding, that she has been fighting the cause for all women.  With only 2 women in the top 20 earners in today’s list, there’s still quite a way to go.

 

If you have enjoyed this blog, and would like to read another recent one, go to http://bit.ly/10documentsyouneed

Ken Allison | 11th July 2018 | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, on handling employment law related people issues and other HR stuff, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Through his firm’s ‘ExecutiveHR’ service, Ken also provides telephone based support services to businesses throughout the UK.

This blog is not a substitute for taking legal advice!

If you know all about #GDPR, you probably don’t need to read this article!

Like me, you have probably been plagued over the last six months with offers of reports, consultancy services, webinars and conferences about the apocalyptic effects of GDPR (General Data Protection Regulations) and the prospect of €20 million fines.

I’m no expert on this (that’s a disclaimer!), but the truth is, there is nobody who knows all the answers yet, if they ever will.

There are still differing opinions about the impact of these regulations which stem from the EU and will be implemented (by 25 May 2018) into UK law when the Data Protection Bill finally passes through parliament.

The purpose of this blog is to set out the essentials that need to be carried out in a typical SME organisation (large organisations are probably well on with all this) in regard to the use of employee data.  The same principles will apply to other personal data, for instance on customers or clients, about which you may need more specialist advice.

There is lots of ground I won’t cover, but if you want an overview, this is my favourite from the European Commission, and if you want more detail, perhaps you are an HR professional responsible for this stuff, try this 35 minute webinar.

The underlying message is that data protection needs to become proactive, and to help you do this, here are three ‘musts’ and two ‘shoulds’:-

  1. A ‘privacy statement’ ‘must’ be given to employees whenever you collect data.

    At the moment you probably rely on a data processing statement in your contract of employment. This will not be sufficient under the GDPR which requires you to tell data subjects about the lawful basis for using the data (with employee data this is usually for compliance, performance of a contract or because of your legitimate business interests – which you must outline), your retention policy, and their rights in relation to their personal data. etc.

    You can provide this notice via your website, intranet or Staff Handbook, but as many organisations already do with Health and Safety, it is advisable to make specific reference to it when collecting personal data and obtain evidence that it has been read.

    You may also want a shorter version for use when recruiting.

  2. Responding appropriately. You ‘must’ keep a record of any personal data protection breach, including its effects and remedial action you have taken.  Even the loss of a mobile phone or laptop could amount to a breach.

    It may need recording.  It will need reporting to the Information Commissioner within 72 hours if it’s likely to cause a risk to the rights and freedoms of individuals, and where the risk is regarded as ‘high’, individuals must be told.

    You must also respond appropriately to subject access requests (SARs), the right to be forgotten, and requests for corrections or restrictions etc.

  3. You ‘must’ make sure you have adequate contracts with third party data processors (pay bureau and recruitment consultants being two of the most common). You will want assurances that they only process data you provide to them on written instructions, that staff involved with your data are subject to confidentiality agreements, and that they have adequate technical arrangements to ensure compliance.

    Sample contract clauses have been promised by the Information Commissioner’s Office (ICO).

  4. Underlying much of the GDPR, is a new data protection principle of ‘Accountability’. Can you demonstrate that you take appropriate steps to protect the personal data of employees and comply with the requirements of the regulations.

    You are going to have difficulty demonstrating this if you have don’t even know what personal data you use.  You ‘should’ carry out a personal data audit to help you demonstrate compliance.

    You will probably want to record what, where it comes from, who handles it, where it is stored, and two technical points, what is the lawful basis for using each item and how long do you keep it (retention).

    An audit is not compulsory, but without it you’ll have trouble doing some of the other things you have to do.  A couple of sides of A4 may well do this for many SMEs, and it should enable you to identify risks which can be mitigated.

  5. You ‘should’ appoint a responsible person (it might be you!) or know where you can go for advice when you need it. If your core business involves data processing, or you are involved in large scale processing of the special categories of data, then you must appoint a Data Protection Officer.

    If this is not the case, you may find it useful to have one person responsible for data protection issues, with a key role to educate and train other staff, but this will not be a requirement for many small businesses.

Is that all there is to it?  No, but an audit, a well drafted privacy statement, and regular Board level reviews and staff training/communication are likely to ensure that most SMEs who are only processing employee personal data will be able to show compliance with the 6 + 1 (Accountability) GDPR data processing principles.

Yes, there is much more including how you deal with transferring data outside the EU, responding to records of criminal convictions, automated decision making, personal data relating to children etc.  These are unlikely to be issues for most small businesses, so complex policies and procedures are probably not necessary.

If you want to sort all this out yourself, there is a self-assessment tool available on the Information Commissioner’s website, although as you might expect, it’s stronger on questions than it is on answers.

You may have also noticed (!) that there are plenty of consultants like ourselves, ready to assist.

Finally, what about those €20 million fines we mentioned at the beginning, and nearly every other communication about the GDPR has headlined?  There have been very few data protection convictions to date, and the evidence is that the ICO is not seeking to be over zealous in the future either.

So, this is not an issue to be driven by the prospect of fines or criminal convictions.  Its far more positive to see it as an opportunity to review systems and assure yourself that the data you are collecting is necessary.

We live in an age where people are becoming increasingly conscious about the security of their personal data and taking these matters seriously will increase employee confidence and enhance your employee brand.

 

Ken Allison | 05 March 2018 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, on handling employment law related people issues and other HR stuff, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Through his firm’s ‘ExecutiveHR’ service, Ken also provides telephone based support services to businesses throughout the UK.

This blog is not a substitute for taking legal advice!

 

How useful is graphology in recruitment, and how to improve your hiring success rate?

In a recent survey published by The Academy for Chief Executives respondents indicated that recruiting, retaining and developing of quality people was the No 1 concern for SME leaders in 2018, beating even the uncertainty of #BREXIT!

This struck me, as the suggestion is that most SME’s pay attention to compliance issues, and other aspects of managing people often take second place – see People Skills: building ambition and HR capability in small UK firms.

Compliance is my area of expertise, and you may have heard me presenting, training or writing about employment law related topics, but this is not because I think it is the most important part of people management.

So, I thought I’d write about recruitment for a change, because this is probably the most important area where a few simple steps can significantly improve an organisation’s performance at getting the right people the first time.

Recruiting staff is an expensive and risky process, and is the area that professional HR advice can often make significant improvements producing an immediate return on investment.

Three questions that will help you improve your recruitment processes.

Firstly, do you know whether you recruit well or not?  Put another way, is there a problem you need to solve?

If recruitment activity is taking a lot of your time, it can be caused by:-

  • speed of growth,
  • skills shortages in your sector or geographical area,
  • reward package,
  • approach to learning and development – you’re not developing people enough,
  • ‘time to fill’ – your process is just too slow and people go elsewhere (in a 2016 survey 41% of respondents said this had lost them candidates in the previous 12 months), or
  • the lack of clarity about the people characteristics you want.

There is a measure which will help you understand how you are doing compared to others.  In 2016 (link for CIPD members only), the median rate for labour turnover was 16.5% – Number of leavers p.a. / average number of employees X 100.

The median figure relates to 8 people leaving each year in a 50-people organisation and other evidence suggests that most of these leave within their first year.

This median figure has risen in the last few years, and may not be reliable as a long-term indicator.  My own guidance is that if turnover exceeds 10% p.a., you need to understand why.

Secondly, do you understand clearly what you are looking for?  Getting this right is the number 1 thing that can help you reduce turnover.

It’s very hard to undo a mistake we make in recruitment.

Many of us get recruitment wrong because we don’t know what we are looking for, so we make our recruitment decisions in the first 30 seconds of an interview, and spend the rest of our time trying to justify our initial impression.

The traditional way of defining what you are looking for is the ‘Person Specification’, often detailing the skills, knowledge, experience and other attributes that a candidate needsDon’t go overboard on experience, as it often is not a good indicator of future performance – it’s their skill you should be looking at, not how many years they have done it!

A decent ‘Person Spec’ will work wonders, and if you don’t already do them, take a look at my guide at http://bit.ly/personspecs .

Another way of defining what you are looking for is to think about the behaviours that you would expect a successful candidate to exhibit.  I often ask managers to think of the best performer in a role that they have seen.

Imagine if they were watching a video of them at work, what would they observe them doing.  This is the start of designing what is called ‘competency based’ assessment or interviewing.

Thirdly, having defined what you want, take a look at the design of your recruitment process.

There are estimates that suggest that the average (even well structured) interview is only 50% reliable at predicting future performance.

You can significantly improve this by using the competency based techniques described above, and you can pick up my guide on how to turn the video observations into interview questions at http://bit.ly/competencybasedinterviewing .  Don’t worry, it’s free and you won’t have to leave me an email address!

Also, take a look at this great collection of competency based questions I saw recently on LinkedIn

Try and think about building in other processes.

A client rang me to for some psychometric profiling, after being frustrated at losing two new Marketing Managers in a 6-month period.  The problem appeared to be simply that the new people were just not fitting in to a family business with 50 employees.

Having defined more clearly what we were looking for, we designed a simple intervention to allow us to observe how candidates were likely to fit in.  This involved organising a Q&A session with all the candidates and the marketing team over lunch before the interviews.

The best way to assess future performance is to organise a workplace simulation, and this is precisely what the Q&A session was (sometimes they are called ‘job auditions’).  An opportunity to observe the candidates doing what they would have to do to succeed at the job.

This was a low-cost intervention.  Others, such as, psychometrics, there personal interests, or the views of referees, may be useful, but the evidence is that length of experience is a less reliable indicator of future performance than graphology (much favoured by the French!).

In 2016, the median cost of recruiting a senior manager was estimated to be about £6000, but since this includes internal promotions, the real cost for many is likely to be double that.

At this level of investment, it is obvious to see how spending time being clearer about what you are looking for and designing your selection process around that, could help you get the right people first time, and reduce the very expensive cost of people who leave in the first year.

 

Ken Allison | 19 September 2017 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, on handling employment law related people issues and other HR stuff, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Through his firm’s ‘ExecutiveHR’ service, Ken also provides telephone based support services to businesses throughout the UK.

Why would Mark Sampson go to an Employment Tribunal?

The papers last weekend predicted that Mark Sampson, the recently departed Manager of the England Women’s’ Football team would go to an #Employment #Tribunal and claim either unfair dismissal (The Telegraph) or wrongful dismissal (The Times).

FA Arbitration rules may mean that talk of a Tribunal is completely misplaced, but what’s the story so far, what does it tell us about handling this type of situation, and what sort of case would Sampson have in front of a Tribunal.

Firstly, the story as it appears in the press seems to be that Sampson was recently accused of making racist remarks to two players, Drew Spence (how many times had she been arrested) and Eli Aluka (a reference to her relatives not bringing Ebola with them from Nigeria).

Sampson denies these allegations, and was twice cleared by an investigation instigated by the FA.

Dramatically, last Wednesday (20th Sept 2017) Sampson’s employment was terminated, and a third investigation into the racist remarks was launched. The sacking was as a result of a re-examination of an earlier investigation into an incident whilst Sampson was at the Bristol Academy between 2009 and 2013.

This was despite this previous investigation concluding that Sampson did not pose a risk (and only recommended he attend a course) the FA said

“it is our judgement that it (the report) revealed clear evidence of inappropriate and unacceptable behaviour by a coach” (FA Statement).

Secondly, let’s look at how this has been handled.

Football does not have a good record on these types of issues. In 2014 Richard Scudamore (Chief Executive of the Premier League) drew the wrath of politicians as a result of sexist remarks made in emails, and last year we saw both Chelsea FC and Jose Mourinho in front of an Employment Tribunal over the constructive dismissal of their first team doctor.

On Monday 26th September 2017 the FA made a further statement backing their Chief executive (Martin Glenn), but questions about the procedure are clearly being asked. Several FA officials are likely to have to face parliamentary scrutiny in October.

It is reported that Sampson was sacked with a £20k pay off, and we probably will never know if this is true. He could well have concluded a deal covered by a settlement agreement committing both parties to respect confidentiality, or he may have been sacked pending negotiations of a settlement.

There are four issues to think about when in this situation.

1. It would probably have been reasonable for the FA to have taken the Bristol report into consideration if it was concluding that there had been racist remarks or other related behaviours, but to sack on the basis of an old incident, when no action was taken at the time, is unlikely to get across the required threshold of reasonableness at a Tribunal.

2. There may be an angle that Sampson should have declared the Bristol incident at his interview, but after an exceptional record in terms of results, it would probably be hard to sustain this as a fair reason for dismissal.

3. The FA could have met with Sampson when their attention was drawn to the old report, and opened negotiations about a settlement agreement as an alternative to a third investigation possibly concluding that he be sacked for gross misconduct. Indeed, this may well be what happened – the FA Statement (see above for link) does say

‘we have acted quickly to agree a termination of Sampson’s contract’ (notice the word ‘agree’ – does that mean the FA Board agreed, or that they agreed with Sampson!)

They clearly had substantial reputational issues which would have legitimised this approach, although the danger of white washing allegations would obviously be present.

4. They may have felt that the PR surrounding this case was severe enough to dismiss without a reasonable procedure or a settlement agreement. This is the ‘fire and be damned’ or the ‘walk to the car park’ approach.

They will have been advised about the risks and decided to sack Sampson and negotiate from there.

Thirdly, what are Sampson’s possible claims?

If he was just sacked for gross misconduct because of the Bristol incident, then this could give rise to an unfair dismissal claim, but compensation will be limited to about £80k. He was reputed to be on up to £150k, so £80k does not look very attractive. Many of us would also lose some of that compensation in lawyer’s fees (say £15 to £20k for a two-day Tribunal) but he may have the benefit of representation costs covered by a professional body.

He may also have a claim for wrongful dismissal if, for instance, the FA were in breach of a contractual disciplinary procedure, or did not give him his contractual notice. For this, his compensation would be capped at £25k in a Tribunal.

He apparently had two years to run on his contract, so there may be other contractual breaches which he could choose to pursue in a High Court, which would overcome the £25k cap in a Tribunal.

What’s he likely to do?

The FA and Sampson’s lawyers are probably talking.

If settlement negotiations have not already started or even concluded, Sampson has 3 months to go to an Employment Tribunal and six years to a High Court. He may well feel that his career in football in the UK is finished, and therefore the FA has much more to lose from protracted Tribunal or Court action.

So, if behind the scenes negotiations don’t go in his favour, litigation could proceed as a tactic for extracting more out of the FA, because of the potential for negative PR, than he would otherwise get from a Tribunal or Court.

It is likely to be a test of nerves, unless his lawyers can come up with something else such as discrimination. This would open the possibility of a claim for lifetime loss of earnings.

Perhaps, something to do with a Welshman managing an England team, but that’s another story!

My own view – it won’t get to Court, but I said that about the aforementioned Chelsea affair and it ran for two days in a Tribunal before they settled!

Ken Allison | 27 September 2017 | Paradigm Partners | www.paradigmpartners.co.uk

Ken Allison is an engaging trainer and speaker who manages to make his topics, on handling employment law related people issues and other HR stuff, highly interactive, challenging, entertaining, and above all, relevant to the 21st Century executive. Ken uses his understanding of managing businesses to show managers what they ‘can do’ rather than what they ‘cannot do’.

Through his firm’s ‘ExecutiveHR’ service, Ken also provides telephone based support services to businesses throughout the UK.

This blog is not a substitute for taking legal advice!