Challenges ahead for employers

1 December 2002



The Government's promises a thorough review of UK employment laws, but employers already face substantial challenges as laws already on the books are enforced says Robin Rhodes


The Government has recently undertaken to conduct a thorough review of our employment laws and in particular the Employment Relations Act 1999. This will, no doubt add to the rafts of legislation promised for 2003 to 2006

But the most substantial legal challenge for employers in the near future will be the introduction of legislation already on the statute book.

The Employment Act 2002, given assent in July this year, already has some provisions in effect with a rolling programme to introduce others between now and the end of 2003. Its scope is sufficiently large to warrant a series of articles - this being the first.

One of the Act's major concerns is "family-friendly" rights to improve parents' ability to strike a better "work-life balance", introducing or upgrading the provisions for maternity, paternity and adoption leave with the new rights to come into effect on or after 6 April 2003.

There are still some fine details to be resolved in finalising the regulations for these measures but to the Government's considerable credit, leaflets summarising all the topics are carried on the DTI website (www.dti.gov.uk). Model documents will be produced to assist both employees and employers handling these matters in practice. There has also clearly been a major attempt to simplify existing regulations and to achieve consistency of application across the different elements.

Paternity leave

The subject of paternity leave has been trailed for some time and the right to two weeks' paid leave at the time of a child's birth is already widely known. Naturally, the regulations are detailed but, in summary, an employee with 26 weeks' continuous service who completes the appropriate notice and evidence requirements will be entitled to two weeks' leave, paid at the rate of £100, or 90% of that employee's weekly earnings, whichever is the lower.

In most cases, the leave must be taken within 56 days of the date of the child's birth and an employee will be entitled to all contractual benefits, except wages or salary, and will have the right to return to the same job - very similar to maternity leave.

Finally, it will clearly be possible for some parents to take both paternity leave and parental leave (the latter still unpaid) and regulations will specify the different types and combinations of such leave.

Adoption provisions

Almost identical provisions have been made to allow paternity (check) leave for parents adopting children, and this will have a separate model document. During consultation the introduction of adoption leave was universally approved and again the government has tried to provide rights and benefits which match those of maternity leave.

As proof of entitlement, a new certificate will be required from the adoption agency, (equivalent to form MATB1 required by maternity regulations) and ordinary adoption leave and additional adoption leave will mirror the rights and obligations of the maternity provisions.

Statutory adoption pay is presently expected to be 26 weeks at £100, or 90% of the employee's weekly earnings, whichever is the lower, matching paternity pay and the 2003 levels of the lower rate of maternity pay.

Ending confusion

The message that "everybody is bewildered by the existing system of maternity pay and leave, which is quite incomprehensibly complicated" seems at last to have been understood and the various different qualifying service requirements in the present regulations have been consolidated on one date.

In future all employees, regardless of service, will be entitled to take 26 weeks' ordinary maternity leave, with entitlement to statutory maternity pay. Those with 26 weeks' qualifying service can take 26 weeks' unpaid additional maternity leave.

Notification of intention to take maternity leave has been put back to the 15th week before the expected birth, giving employers more notice. The employer is then required to confirm in writing the start date of the leave and the expected date of return.

This requirement alone should remove many of the present difficulties and misunderstandings.

Flexible working

The existing provisions for unpaid parental leave are unaltered, but a new set of regulations, relating to flexible working will present employers with a considerable challenge, despite the excellent basic summary guide describing the scheme (again found on www.dti.gov.uk).

Employees with 26 weeks' continuous service and who are parents of children under six, or disabled children under 18, will have the right to request a flexible working arrangement (principally relating to hours of work, starting and finishing times and so on). The employee must make a formal written application specifying in some detail the nature of that request (including what effect the employee considers the change will have on the employer and how, in his/her opinion, any such effect may be dealt with).

Having received this, the employer must follow a prescribed procedure, with prescribed time limits to respond to the request.

The draft regulations give numerous grounds on which an employer might refuse (you can be sure "It's not a part-time job" will not do). However, if the internal procedure, including a mandatory appeal, fails to satisfy the employee, they can apply to an employment tribunal, which can order the company to reconsider the application and can award of compensation.

One highly sensitive area yet to be finalised in these flexible working regulations is whether the employee can request a "companion" during procedures.

Most companies usually volunteer the presence of a colleague in such meetings these days, but the potential presence of a trade union official often causes considerable apprehension.

The Government considers the ACAS binding arbitration scheme to be preferable to an employment tribunal complaint in such cases, as the matters to be decided are usually those of fact rather than law

Grounds for refusal

It is worth pointing out that refusing a request to work part time, for example from a mother returning from maternity leave, may already present a difficult potential problem of sex discrimination under existing laws, and one which may have unlimited compensation as a remedy. Again, it is worth noting that the government estimates that these new flexible working rights will lead to 4,000 additional tribunal complaints in the first yea

Equal pay

Another set of provisions which is likely to have a major impact is the introduction of Equal Pay Questionnaires. Such questionnaires already exist for sex, race and disability discrimination and they enable an employee to obtain important information about relevant issues.

In the case of equal pay, a questionnaire would give the employee details of matters such as pay schemes and job grading schemes, and the way in which skills and experience are rewarded in a company's pay system.

The forms to be used will be prescribed and both the questions and their answers (or lack of them) will be admissible as evidence before an employment tribunal in an equal pay complaint. The regulations are expected to be complete before the end of 2002, for implementation early in 2003.

No one in the industry should underestimate the importance of this legislation, and the likely impact it will have over the next few years. So make sure you have made progress to eliminate any potential problems as a key part of your next pay review.

Fixed-term contracts

One piece of the Employment Act 2002, already in force is that outlawing of less favourable treatment to employees with fixed-term contracts. Introduced with effect from 1 October 2002 these regulations are succinctly summarised in a DTI leaflet (PL 513, available on the web).

The use of such contracts has declined substantially since they first became subject to legislation thus removing many of their perceived benefits.

These new regulations remove the right to include a waiver of redundancy rights, and include pensions as an area for comparison. But perhaps the most significant change is to remove exclusions that denied employees with short term contracts of 13 weeks or less certain rights - for example statutory sick pay and statutory guarantee pay.

Union learning reps

The Act brings a new provision for union learning representatives. This recognises that whilst shop stewards are entitled to paid time off to perform certain duties, union learning representatives, whose main function is to advise union members about their training, educational and developmental needs, have no such clear entitlement.

It is anticipated that there will be amendments to the "Code of Practice on time off for trade union duties and activities" to cater for this additional form of union representation, defining both paid and unpaid time off. Only employers with trade union recognition agreements are affected by these provisions.

Economic forecasts for 2003 vary but many predict tough times. If these more gloomy forecasts prove correct, many employers and employees may find the introduction of this large and complex set of employment rights a worrying distraction - even with the support of the Government's excellent leaflets.



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