Reality bites: 10 ways employment law is flouted

Employers and employees often fail to follow the strict legal requirements of employment law. There are many reasons why this happens: struggling with the minefield of difficult and complex legislation is high on the list. Some employers are tempted by the opportunity to take what they see as a bit of a chance, while others take a more considered attitude to legislation that simply does not work for them in practice or has little financial consequence. Commercial business rationale may also demand such an approach. Here are 10 examples of common lapses:

Statement of employment particulars

By Section 1 of the Employment Rights Act 1996 (as amended), the employer is required to provide a written statement of the basic terms of employment, but there is no independent award for an employer’s failure to provide the statement. A claim of between two and four weeks’ pay may only be made when it is attached to another action, such as unfair dismissal. Employee representative bodies, including many of the mainstream unions, have seen this as a weak tool to ensure that uncertainties in contract terms are not exploited by the more unscrupulous employers.

Breach of the notice period

Mitigation of loss is said to be the bane of employees. Those who have been wrongfully dismissed must still provide evidence that they have made all reasonable efforts to mitigate their loss before they receive their compensation. However, this applies equally to employers. If an employee walks out on their contract, it is the employer who must prove any loss and deal with the difficult evidential burden of showing how it sought to mitigate the loss.

Confidential information

The recent case of Penwell Publishing Ltd v Isles has highlighted the difficulties faced by those who wrongly assume that contacts kept on the employer’s computer system belong to them. The law seeks to balance the free market against reasonable protections for the employer. When staff leave and join competitors or set up in competition, whether because of ignorance of the law or being tempted to take a risk, it is not unusual to see highly contentious battles commence.

With increasingly sophisticated IT solutions now available to track and trace where data is stored and utilised, employers appear to be gaining the upper hand in unearthing such actions. However, litigation can be a pyrrhic victory for the employer which has had to expend significant time and costs before the matter is concluded, even if it does recover some of those costs back.

Covert surveillance

The provisions and guidance of the Data Protection Act regarding covert surveillance is another example of where ignorance of the law and/or the temptation to take a chance can simply be too much for an employer. Even with the risk that they may not be able to use the evidence in an employment tribunal, the greater availability of agencies which will undertake this type of work provides the employer with the enticement of a quick solution to the problem.

To uncover fraud or other such activities, the legal balancing act of the employee’s right not to be spied on as against uncovering that crucial piece of evidence that provides what has been suspected can entice the employer to move away from any strict legal approach in the hope that this will be sufficient to end the relationship without recourse to the courts.

Sensitive personal data

Among the voluminous data protection legislation and guidance are the sections dealing with sensitive personal information and how and when such data can be processed.

Medical information is the most common problem area. Using such information for processing statutory sick pay, for example is lawful, but when that information is then being used for other considerations – for example, disciplinary measures – unwittingly, the employer can fall foul of the law by not having the specific consent of the employee to utilise the data for that purpose.

Some argue it is just not practical to obtain such permissions across a wider workforce and certainly simplification of both the guidance and the legislation would help immensely in this area.

Age discrimination

This landmark legislation, which came into force last year, seeks to protect employees from being discriminated against on the grounds of their age. However, for older workers there is nothing to stop an employer retiring an employee over the age of 65, provided that employer follows the correct and simple retirement procedure. Age Concern has argued that this procedure is so basic that there is no real means of examining the true reasons for the retirement – thus circumventing the main reason for the legislation.

Working Time Regulations – holidays

The Working Time Regulations provide that an individual is not allowed to carry over statutory holiday from one holiday year to the next. However, there is nothing in practice to stop an employer from allowing an employee, on an ex-gratia basis, extra holiday in the following year. Similar considerations apply to paying workers for holidays accrued but not taken at the end of the holiday year. Practical considerations can, therefore, take precedence in these situations.

Transfer of Undertaking Regulations

This next example is in the top 10 because the law simply has not developed enough for any employer to have clear understanding of the ambit of the service provision changes. A year-and-a-half down the line, employers are still very uncertain about when these provisions take effect.

The classic outsourcing or re-tendering of a service provider is straightforward. However, there are many different levels on which a supplier or other external third party may be engaged by a business. Whenever such relations are ended and a new party is engaged or the service comes back in-house, the requirements to provide information and consult on the transfer of the business may take effect. Again, unwittingly, employers and employees alike can often miss the application of this wide-ranging legislation.

Working Time Regulations – rolled-up holiday pay

The practice of rolling up holiday pay, particularly for casual workers and those who do not have regular patterns of work, was held to be unlawful by the European Court of Justice last year. The UK government did not amend the Working Time Regulations but changed its guidance (which has no statutory force) to state that employers are now required to pay for annual leave when that leave is actually taken. Although it is not entirely clear whether rolled-up payments already made can be set off against the individual’s entitlement, the reality is that many employers have chosen to continue to roll up holiday pay because it is administratively much easier and also because that is what many casual workers want.

Compromise agreements

The ability to compromise a potential employment claim is the all-embracing panacea for some employers who wish to ignore the rules and pay the price. Sadly for them, the Hinton v University of East London case (2005) means that employers now have to identify specific claims they are settling rather than relying on a general sweep up of all claims. Nevertheless, it still can provide quick solutions for those who look to flout the law but are willing to pay for their misdemeanours.

Comments are closed.