New business regulations come into effect

The arrival of April marks one of the year’s two common commencement dates and, with it, a raft of changes to business rules and regulations.

To help employers work out their responsibilities, here is a quick summary of the more significant new and amended regulations, the biggest perhaps involving workplace disputes.

New rules on dealing with disputes at work

The regulations that govern how employers handle discipline, dismissal and grievance issues in the workplace change as from 6 April 2009. The new system is designed to be more straightforward and flexible and fair, the aim of which is to help employers resolve disputes before they reach the point of an expensive employment tribunal.

The existing legal procedures for dealing with discipline, dismissal and grievance issues at work are dropped.

Instead, they are replaced with a revised Acas Code of Practice. This expects employers and employees to follow the ‘fair and reasonable’ procedures for dealing with disputes as set out in the new code. The code does not apply to redundancy dismissals.

Revised Acas code

Essentially, the Acas code is based on principles that treat everyone fairly and that are transparent. These principles need to be observed in disputes.

For example, issues should be raised and dealt with promptly. Meetings and decisions should not be delayed unreasonably. Employers should always behave consistently. The facts of a particular case should be established through any necessary investigations.

Employees should be told of any problem in writing and provided with an opportunity to set out their case before any decisions are made. Employees should also be allowed to bring someone with them to formal disciplinary or grievance meetings, and they should be entitled to appeal against any formal decision that’s made.

In instances of grievances only, the employee should explain the cause of the grievance to the employer at a meeting which both the employer and employee must make every effort to attend.

The employer should decide what is an appropriate course of action and tell the employee about this in writing. If the problem is not resolved, the employee should be allowed to take the grievance further.

Grievances

The code defines grievances as concerns, problems or complaints that employees raise with their employers. The word ‘grievance’ does not need to be used in the complaint.

When the complaint is presented in writing, it is probable it will qualify as a grievance, which means it should be treated it as such. The complaint should be acknowledged, and the employee invited to a formal meeting.

Disciplinaries

The code defines disciplinary situations as those that include misconduct and/or poor performance on the part of the employee. If a business has a procedure in place for dealing with the performances of its employees, this can be used; but the principles of ‘fairness’ set out in the code need to be observed.

Employment tribunals

Unlike the old system, the revised code is not mandatory. This means that failing to observe the code does not necessarily make a person or business liable. In other words, employers no longer face the prospect of automatically losing a tribunal claim for failing to follow the procedures to the letter. The main emphasis now is that the process of disciplining a member of staff or attempting to solve a dispute or grievance is fair.

However, employment tribunals will take the code into account when considering cases. The tribunal will examine whether any failure to follow the code was unreasonable; but it will also look at specific factors such as the size and resources of the business. Should the tribunal judge that the failure to follow the code, by the employer or the employee, was unreasonable, it may increase or reduce any awards by 25 per cent.

Employment disputes in 2009

With the change in regulation, employers may want to know how they should deal with disputes that straddle the 6 April dateline. If the trigger event occurs on or after 6 April 2009, they should follow the new procedures. If the trigger event occurs on or before 5 April 2009, they should follow the old procedures.

More information on whether the new or old system applies can be found at www.berr.gov.uk/resolvingdisputes

Preparing for the new legislation

If your procedures for dealing with grievance, dismissal and disciplinary issues already comply with the pre-6 April 2009 laws, it may not be necessary to change them to comply with the new code.

However, it does give you the chance to review procedures to make them easier to understand and apply. For example, a more relaxed and informal approach to dealing with problems at work could be drawn up.

The Acas Helpline, on 08457 47 47 47, is open 8am-8pm Monday to Friday and 9am-1pm on Saturdays. A copy of the new code can be downloaded at www.acas.org.uk/dgcode2009

This is, of course, only a brief outline of the new rules, and any employer who is unsure about the effects on their employment policies should seek professional advice.

Holiday leave

As from 1 April, employees are entitled to an extra 0.8 weeks’ paid leave, or a total of 5.6 weeks (or 28 days) for anyone working a five-day week. The minimum entitlement is now capped at 28 days.

In other words, full-time employees have an extra four days holiday a year, taking the total entitlement to paid leave to 28 days including bank holidays, or from 16 days to 20 days not including bank holidays. Public holidays can be counted towards the statutory holiday entitlement provided they are given as paid leave.

Leave years

For any worker whose current or next leave year begins before 1 April 2009, their holiday entitlement is based on the number of months in the leave year that follows after 1 April. Supposing an employee’s leave year goes from 1 January 2009 to 31 December 2009. Their entitlement has increased by 0.8 weeks for the remainder of their leave year, as from 1 April. In this case, they get nine months of the extra leave, equivalent to 0.6 weeks, that is: (0.8/12) x 9 = 0.6.

Part-time workers

In the case of part time workers, their leave needs to be calculated on a pro-rata basis. This is done by multiplying the number of days worked per week by the new annual leave entitlement. So someone working for three days a week will now get 3 x 5.6 = 16.8 days paid leave each year, but, of course, calculated for the remainder of the leave year after 1 April.

Employees who start with an employer at some point through the firm’s leave year are entitled to paid leave that is proportionate to the remaining part of the leave year.

Since the extra holiday entitlement is treated as an increase in benefits, employers don’t need to offer new contracts. But staff do need to be told through a letter or in writing about the extra leave.

Payment in lieu

Up until now, workers have been allowed to be paid in lieu of statutory holiday, even though they must take a minimum of four weeks holiday a year. That has changed. As from 1 April, employers cannot replace statutory leave with payment in lieu even should a worker ask for it.

Carrying forward statutory holiday entitlement from one leave year to the next is also not allowed.

Payment in lieu and carrying forward holiday is still permitted for leave over and above statutory holiday. And the new entitlement is only a minimum, which means that employers can offer employees more holiday than the 5.6 weeks.

Enforcement of the minimum wage

As from 6 April, there is a new penalty for employers who pay workers below the national minimum wage and a new method of working out arrears owing to those employees.

Employers who do not pay the minimum wage could be faced with an automatic fine of up to £5,000, while serious offenders could receive an unlimited fine.

HM Revenue and Customs compliance officers get extra powers to carry out their investigations into breaches of the law on the national minimum wage.

The new method of calculating arrears means that employers have to pay any past wages owing to underpaid workers at the current minimum wage rates, not the rates when the workers were underpaid, if these are higher.

Any employer who underpays after 6 April 2009 will also be subject to a fine of 50 per cent of the total amount underpaid; the fine has a minimum level of £100 and a maximum of £5,000.

Flexible working

As from 6 April, parents with children aged up to 16 have the right to request flexible working. All carers and parents of children aged up to six, or children with disabilities aged up to 18, and employees who care for certain adults, already have the right to request flexible working. Employers have a duty to consider requests for flexible working seriously.

Trade unions

The 2008 Employment Act means that trade unions can expel someone on the grounds of political party membership.

Health and safety

Premises that produce less than 500 kilograms of hazardous waste in any 12-month period will not have to be notified to the Environment Agency.