Trust in leaders at a record low

Employee confidence and trust in senior leaders has dropped to record lows as the economic downturn continues to erode workers’ standard of living and undermine job security, according to the CIPD’s spring 2011 Employee Outlook survey. The proportion of employees saying their standard of living has worsened in the last six months has increased to 37% from 31% in the previous quarter. Public sector employees are most likely to say their standard of living has worsened (47%) compared with 35% of workers in both the private and voluntary sectors.

Although job insecurity has edged up since the previous quarter, with 21% of employees thinking it likely they could lose their jobs as a result of the downturn compared to 20% last quarter, there is again a big difference in the sectors. Almost one in three (30%) public sector employees say it is likely they could lose their job compared to 19% of those in the private sector and 27% in the voluntary sector. In all, 21% of respondents say their organisation is planning to make redundancies, rising to 58% among public sector respondents. In all 29% of voluntary sector employees say their organisation is planning redundancies, as do 10% of those in the private sector.

Perhaps not surprisingly against this backdrop, the net proportion of employees agreeing they have confidence in their senior leaders has fallen to a record -31 from -23 for the previous quarter, while the net trust score has also fallen to -8 from -1 over the same period.

The survey also finds that job satisfaction has fallen over the last three months from +39 in the last quarter to +34 this quarter - its lowest level since the CIPD started the survey in spring 2009. Employees working in the voluntary sector remain the most satisfied (+44), followed by public sector workers (+38), with private sector staff least satisfied (+33). On top of this, the proportion of staff looking for a new job with a new employer has increased to 24% from 19% for the previous quarter. Like last quarter, respondents from the public sector are least likely to be looking for a new job and those in the voluntary sector most likely to be doing so.

Employer attitudes to CSR are crucial for employee engagement

Employer attitudes to CSR are crucial for employee engagement

Most employees want their employers to do more towards CSR (corporate social responsibility) and charitable giving, according to a survey conducted by LeapCR – and nearly two-thirds of them believe that having paid time off during working hours to commit to charitable initiatives would significantly improve employee engagement.

‘This correlation between employee engagement and CSR initiatives can’t be ignored by employers wanting to increase the productivity of their company’, said Malcolm Scovil, CEO of LeapCR. ‘If employers don’t get to grips with the expectations of employees then they face punitive recruitment costs and unsatisfactory levels of productivity from a workforce that feels its motivations are being ignored’.

Among the other key findings were that:

* 49% of employees said they were more likely to stay with an employer that encourages its workforce to donate time or raise money for charity within working hours
* 75% of employees want their employer to balance commercial success with good CSR strategies, including supporting charities
* 52% of employees believe that their employer should do more to encourage charitable giving during working hours
* 51% of employees felt that companies have a duty to commit to charitable acts and CSR
* 59% of employees of all ages said their ideal employer would consider allowing interested staff to take one (paid) day off every month to support charitable initiatives
* 15% of employees would take a significant pay cut to work for a company that has the right attitude towards charities/CSR
* 69% of Generation Y (aged 20-30) said that there were more engaged with their employer when they can undertake charitable initiatives within the workplace
* more than half (56%) of the Generation Y respondents said that senior management was ‘out of touch’ with their age group


It was also evident from the survey that UK employers are either not taking CSR seriously or failing effectively to communicate what they are doing to their staff. Just 58% of all employees know if their company has a commitment to CSR and a similar percentage (57%) felt their employer could do more in that area.

Malcolm Scovil said: “The reality is that the UK workforce passionately cares about CSR and expects their employer to share that commitment. If employers fail to meet these expectations, either through a lack of CSR initiatives or a failure to communicate what they are doing to their staff, then they will find themselves struggling to remain competitive’.

Published with kind permission of Craig Gordon, HR Bullets

Contractual notice runs from the day after it’s given (Wang v University of Keele)

Overview
Unless the contract of employment states or can be construed otherwise, contractual notice, whether or oral or written, runs from the day after notice is given.

As is often so in such cases, this case concerned whether an employee’s unfair dismissal claim had been presented within the 3-month time limit. This entailed working out his effective date of termination and this depended on what date his notice began to run.

Dr Wang received an email, which he opened and read, on 3 November 2008 giving him 3 months’ notice of termination. The covering letter, dated 3 November but which could not have been received by post until 4 November, was received a few days later, stating that he would only be paid up until 2 February 2009. Dr Wang presented his unfair dismissal claim on 2 May 2009. The employer argued that his claim was 1 day out of time, because Dr Wang knew that his last day of employment would be 2 February, the effective date of termination of employment was 2 February and therefore his claim should have been submitted by 1 May. The tribunal dismissed Dr Wang’s claim as a day out of time as it said his notice ran from 3 November to 2 February. Dr Wang appealed, arguing that even though he was aware of his dismissal on 3 November, part days did not count when calculating the notice period, so notice did not start until 4 November.

The EAT agreed with him. The only issue for the EAT was when Dr Wang’s notice period started. It reviewed many of the cases on this subject and held that the principle in the 1987 case of West v Kneels – that when verbal notice is given, notice starts on the following day – applies equally to written notice. Part days do not count and notice does not always run from the moment it comes to the attention of the employee. The EAT could see no reason in principle for distinguishing between oral and written notice – ‘the message is the same and the difference in medium of communication seems ... insignificant’. Therefore notice did not start to run until 4 November (with dismissal taking effect on 3 February) and Dr Wang’s claim was in time. It was irrelevant that he had only been paid to and stopped work on 2 February; notice once given cannot be shortened without agreement.

The EAT pointed out that if the employer makes the dismissal date ambiguous, then the notice should be construed in favour of the recipient. It also observed (without recommending it) that written notice can include ‘methods of communication such as the SMS text message, internet based so-called instant messaging and email’.

Wang v University of Keele

Effect of Failure To Consult under TUPE and whether employee 'assigned' to undertaking transferred

Marcroft v Heartland (Midlands) Ltd
Overview
Although a failure to consult under TUPE gives rise to a claim for compensation, it cannot make the entire transfer ineffective. And a person who gave his notice shortly before the transfer continued to be ‘assigned’ to the undertaking transferred despite not attending his office and only doing a small amount of work from home.

Mr Marcroft worked for PMI Health Group (PMI), responsible for sales in the commercial insurance department. His contract contained a restrictive covenant which he is alleged to have breached by approaching clients of PMI whose accounts he had managed or about whom he had acquired knowledge while with PMI with a view to their transferring business to a rival company. In August 2009, PMI started negotiations with a view to disposing of the commercial insurance part of their business to Heartland. On 15 September Mr Marcroft gave notice of his resignation and it was agreed that his notice would expire on 26 October. On 25 September Mr Marcroft was officially informed by the directors of the proposed sale to Heartland. It was agreed that he need not attend the office to work, as there was very little work to be done in the commercial side of the business, but that he would be ‘on call’ at home, if it became necessary. There was no consultation with him about any actual or prospective transfer to Heartland or to anyone else, nor did he receive any documentation about the transfer. Between 25 September and 2 October (when PMI formally agreed to sell to Heartland), Mr Marcroft did little work other than fielding some calls and finalising some account details. At issue here was who - Heartland or PMI – benefitted from the restrictive covenant in Mr Marcroft’s contract. Heartland claimed that Mr Marcroft’s contract transferred to it by virtue of TUPE which entitled it to sue him for breach of the covenant. Mr Marcroft initially sought to rely on the TUPE transfer to Heartland but then changed his tune. He argued that TUPE did not apply, that there was no relevant transfer, that he was not employed by PMI, that he was not assigned to that part of the undertaking transferred, that he had ceased to be assigned before the date of the transfer and that PMI had deliberately breached its duty to provide him with information about the transfer, thereby by depriving him of the opportunity to object to it and rendering the transfer of his contract of employment ineffective.

The judge held that there was a relevant transfer by PMI to Heartland under TUPE, reg. 3; that Mr Marcroft was employed by the transferor PMI; that he was assigned to the business of the commercial insurance department at PMI which was transferred to Heartland; and that he had adequate opportunity to object to the transfer.

The Court of Appeal had to decide whether, at the date of the transfer, Mr Marcroft was assigned to PMI's commercial insurance undertaking ‘on a temporary basis’, in which case he would not have transferred under TUPE, or whether he was fully assigned at the date of the transfer, in which case he would be TUPE-transferred. It had no doubt that the original judge correctly decided that he was assigned and could not bring himself within the temporary assignment exclusion. The court understood why it could have been said that ‘in the fag end of his contract’, there was a temporary quality in the timescale of Mr Marcroft’s work with PMI. However, the mere fact of his handing in his notice (and the subsequently much reduced workload) did not change the nature of the work he was performing: it ‘cannot be right, in principle, that an employee is automatically assigned on a temporary basis, thereby losing the protection of TUPE, simply as a result of handing in his notice’.

On Mr Marcroft’s claim regarding the failure to inform and the denial of his right to object, the Court of Appeal said that he faced a number of insuperable problems:

* There was no conspiracy by PMI and Heartland to evade TUPE which would disentitle Heartland from saying that there was a TUPE transfer. Mr Marcroft was informed of the proposed transfer by PMI on 25 September. He did not object to the transfer either before or after 2 October 2009. On the contrary, he asserted through his solicitors in a letter of 26 November, by which time he was fully aware of the circumstances, that TUPE applied to transfer him from PMI and that Heartland had the benefit of any restrictive covenant that he was alleged to have breached.

* There is no legal basis for saying that the transfer of his contract was ineffective. There is a duty (under TUPE, reg. 13) to provide the representatives of the affected workers with certain information (which does not, however, include the right to object). It is not an obligation to provide the information to Mr Marcroft personally. But even if such a duty could somehow be spelled out of that regulation, the duty rested with the PMI, not Heartland since they were not his employer. The remedy for breach of the reg. 13 duty is a claim in the tribunal by union or employee representatives, not an avoidance of the transfer that has taken place.

* Compliance with reg. 13 is not a precondition to an effective transfer of a contract of employment. If it were, there would be no point in TUPE conferring the right to object, since the transferor employer in the position of PMI could always prevent a transfer by the simple device of not providing the employee’s representative with information in compliance with reg. 13. Such a construction would undermine the protective purpose of TUPE.

* There is no basis in fact or law for the suggested implied term in the contract of employment that would render the transfer of it ineffective unless the employee has been provided with information by the employer about the transfer.

Published with kind permission of Craig Gordon, HR Bullets.

Compromise Agreements - McWilliam v Glasgow City Council

Compromise agreements Friday, 15 April 2011
McWilliam v Glasgow City Council

Overview
The EAT in Scotland has held that compromise agreements entered into by Glasgow City Council to settle equal pay claims prevented the women affected from pursuing those claims, even though their solicitors had not advised whether or not the settlements on offer were a ‘good deal’. There is no obligation on advisers to comment on the potential value of a claim or assess the likelihood of its success – all that is required is that the employee is advised what the terms of the compromise agreement are and what they mean.

Glasgow City Council were faced with many thousands of equal pay claims and arranged for local lawyers to advise its female staff about their rights under equal pay law. The council then offered compromise agreements to these staff on the basis that the solicitors would act for these employees (not the council) in giving legal advice. The solicitors held a series of mass presentations to advise the female staff about compromise agreements, and offered one-to-one sessions with individuals on their own contracts so that, if they wanted to, they could sign compromise agreements (which stated that they would not bring equal pay claims covering a specified period). The lawyers specifically emphasised that:

* they could not advise on whether or not the deal offered was a good one for the employee concerned
* the employees could not bring a tribunal claim if they concluded a compromise agreement, and
* the employees did not have to sign the agreements that day, and if they were unsure, they shouldn’t sign


The applicable law (at the time) was s. 77 of the Sex Discrimination Act which set out the criteria which must be met for a compromise agreement to be used as a valid and effective means of waiving claims. In particular, it specified that the compromise agreement must relate to a ‘particular complaint’ and that the employee must receive ‘advice’ from a ‘relevant independent adviser as to the terms and effect’ of the agreement before it is entered into.

Ms McWilliam and some of her co-workers did try to bring equal pay claims against the council and the Glasgow tribunal had to decide whether it could hear their claims. This turned on the efficacy of the compromise agreements. The tribunal (ETS 132316/07) unequivocally upheld the validity of the compromise agreements. Ms McWilliam appealed to the EAT and lost.

The EAT held that:

* The term ‘particular complaint’ does not mean that a tribunal complaint has to be lodged before that complaint can be waived under a compromise agreement. What’s more, the complaint does not even need to have been articulated by the employee before the agreement is entered into. What matters, said the EAT, is that both parties know to which particular complaint the compromise agreement relates (i.e. both parties are aware that particular matter cannot be litigated in future) – there doesn’t need to have been a history of dialogue or communication about the complaint.

* The advice offered was ‘independent’ - the fact that the lawyers’ fees were paid by Glasgow Council was standard practice and in no way altered the fact that they were acting for the employees. Also, the fact that the lawyers had met with the council to discuss the logistics for the mass advice sessions was irrelevant.

* When giving advice to an employee on the terms and effect of the compromise agreement, the independent adviser does not need to offer a view as to whether or not the deal on offer is a good one or whether or not the employee should accept the offer given his or her particular circumstances. All that is required is that the employee is advised what the terms of the compromise agreement are and what they mean (e.g. the scope of the claims, what claims are being compromised, how any payment would be treated for tax purposes, etc.).


While this case related to the statutory requirements in the ‘old’ Sex Discrimination Act, these requirements are replicated in other statutory provisions on compromise agreements, e.g. the Equality Act 2010. They are also much the same as those in the Employment Rights Act 1996.

Re-published with kind permission of HRBullets.co.uk