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I am posting some advice I have given a member of TEAM (The Employment Agents Movement), and which I have been permitted to share.

THE QUESTION:

Is there any circumstance you can give a bad reference on an employee? The last I knew it was acceptable if it was backed up by facts say there person had a punctuality problem and it was recorded and they were dismissed for poor punctuality, under those circumstances you could and should say something?

MY ANSWER:

The answer to your question is “yes”. There is no law that says that an adverse reference may not be given.

The concern with references is always that there may be some comeback against the person giving the reference, whether from an employer who receives a good reference about an employee, or from the former employee who feels aggrieved by a poor reference and its consequences. Legal action may therefore lie as a result. A reference that is factually accurate will be safer, albeit that a former employee who takes legal action is likely to argue that the person giving the reference was primarily motivated by malice. Claims made on this basis have succeeded.

Care should also be taken to avoid unlawful discrimination or negligence: there was a case a couple of years ago about a lecturer about whom there had been incorrectly said to have been “safeguarding concerns”, and whose job offer was withdrawn.  He won damages against the giver of the reference.

I expect that in practice many former employers/HR departments will prefer to give no reference rather than an unfavourable reference. This may speak for itself. Alternatively, in the circumstance you describe a simple statement of the fact of dismissal and the reason for the dismissal (without going into the facts behind those reasons) is often all that will be given.

 

This is the text of some notes I prepared to support a talk that I gave recently on this subject to the South Region of TEAM (The Employment Agents Movement).

Use of Social Media

Have policies for internet and social media use.  Good policies will cover:

  • Protecting confidential information – yours and your clients/candidates
  • protecting the good name of your business: not posting anything unprofessional or inappropriate
  • Observing laws – regulatory; harassment, discrimination, threats; defamation etc
  • not making disparaging/derogatory comments about the company, its staff or clients or candidates
  • Personal use of social media while at work: if this is permitted it should be on the basis that it does not interfere with employment responsibilities or productivity
  • Unacceptable use (viewing inappropriate sites, running a private business)
  • Monitoring of employees’ internet/social media use
  • a reminder that breaches of the policy may give rise to disciplinary action
  • a reminder that the internet does not forget

But remember that a policy is only as good as its enforcement.  Make the policy widely available.  Be consistent in its enforcement.

Who owns the contacts?

Your employee leaves. He has always been very active on LinkedIn (possibly with your encouragement) with several hundred contacts that he has built up during his time as your employee. Who owns those contacts? Can you prevent him from using them for the benefit of his new business/employer?

Type “who owns LinkedIn contacts” into your preferred search engine, and you will quickly see (a) that this is a hot topic and (b) that the courts have yet to give a definitive answer.

There has been one relevant High Court decision in recent years: Hays Specialist Recruitment (Holdings) Limited and Another v Ions and Another [2008] EWHC 745

In this case the High Court ordered pre-action disclosure in relation to a potential claim by Hays that an ex-employee had, during the course of his employment, copied and retained confidential information which he used after leaving Hays. Hays alleged that the employee had deliberately migrated details of business contacts from a confidential database to his personal LinkedIn account by uploading those contacts so that LinkedIn could invite the contacts by e-mail to join his network. The employee argued that the migration was carried out with Hays’ consent – since it had encouraged him to join LinkedIn – and that, once the business contact had accepted the invitation, the information ceased to be confidential as it could be seen by all his contacts. The High Court held that Hays had reasonable grounds for considering that it might have a claim, and ordered pre-action disclosure of certain documents.

Although this was only a preliminary hearing, as opposed to a final judgment after hearing all the evidence on both sides, it shows that the Court recognises that LinkedIn can be abused by employees who are looking to harvest their employer’s confidential information for their own use.  In this regard the principles are the same, whether the copying is into a Filofax, onto a memory stick, or to a LinkedIn account.

I was recently made aware of a similar case recently commenced in the High Court in which an interim injunction has been granted preventing use of LinkedIn contacts. My understanding is that that case is continuing. A trial will probably be several months away, that is if the case is not settled.  As I understand it, the Claimant in that case is an employment business, and its contract with the (ex) employee contained terms to the following effect.

i.        All use of online networking sites is solely for company and not personal use.

ii.        All contacts and customer lists developed during the course of employment remain the property of the employer.

iii.        All social media accounts used during the course of employment are property of the company.

iv.        An undertaking by the employee to hand over details of user names and passwords for all social media accounts on leaving the company’s employment.

Until there is a High Court decision following a complete trial, I can only give you some educated guesswork.  My own view is that provisions of this nature may be difficult to enforce in respect of a LinkedIn account created by the employee before commencing employment.  Similarly if personal and company contacts are mixed.  So, pending a definitive ruling, my recommendation is that by all means an employer should use provisions of the type described, but it really should not overlook the essential employer protection provisions of an employment contract:

  • Prohibit copying, use or disclosure of employer’s confidential business information.
  • A non-solicitation clause
  • A non-dealing clause

These last two should be no broader in effect than is necessary for the reasonable protection of the employer’s business interests.  Within that sentence lies another detailed discussion!

 

I have previously posted about the need for employers to go about disciplinary processes in a manner that is fair and open-minded (see, for example, this post).

The same applies to all other processes that are likely to have an effect on the employment of members of staff. This includes redundancy selection processes.

I am reminded of this having read a newspaper report of an ongoing Employment Tribunal case in which Mr Tony Shiret is claiming that he was the victim of a redundancy selection process by Credit Suisse in which he was preselected without any consultation and which was weighted against him and inherently unfair. Mr Shiret is claiming unfair dismissal through age discrimination. The tribunal case is presently continuing, and so we do not know the outcome.

However, may I please encourage readers of this blog not to go about things in a way that can give rise to any suggestion that the outcome of the particular process has been decided in advance. I would really prefer my clients not to have written internal e-mails such as written by one Credit Suisse executive to another saying

Can we offer Tony retirement? He’s 55 this year.

That will take some explaining; it may be that there is an explanation, but this e-mail has certainly given Mr Shiret’s lawyers something to get their teeth into.

Joining a winning team

January 3rd, 2013

 

We’re delighted to announce that, with effect from 1 January 2013, Graeme Quar & Co has been appointed legal advisers to the South Region of The Employment Agencies Movement (TEAM).

TEAM is a nationwide network set up to help small and medium-sized recruitment firms compete effectively in a market dominated by large corporate agencies. TEAM members retain their autonomy and independence, but benefit from being part of a larger ‘corporate’ structure with national reach and negotiating power. In particular, they have access to specialist services they may find it difficult or impossible to maintain in-house – including legal services.

As legal advisers to TEAM’s South Region, we’ll provide members with specialist employment and recruitment law advice, a legal helpline, and access to a wide range of standard documents, such as Terms of Business and Employment Contracts.

This appointment, which we earned following a formal pitch, is a huge step up for us, and a ringing vote of confidence in our skills, expertise and service. It’s a very exciting moment. You can find out more about TEAM here.

Often I find myself explaining that the “unfair” in unfair dismissal relates above all else to the employer’s processes leading to the decision to terminate an employee’s employment.  Understanding this enables employers to take steps which can increase the chances of defeating an employee’s claim.

This morning I read a very recent Employment Appeal Tribunal decision, Ministry of Justice v Parry UKEAT/0068/12/ZT.  My eye was caught by paragraph 10, in which Mr Justice Langstaff, President of the Employment Appeal Tribunal, succinctly reminds us of the analysis that an Employment Tribunal should carry out in determining whether an employee has been unfairly dismissed for misconduct:

Surprisingly for a conduct dismissal, the analysis by the Tribunal did not address in turn the issues to which case law has established a Tribunal should pay regard: whether the employer had a genuine belief that the employee was guilty of the misconduct alleged; whether that was based on reasonable grounds; after a reasonable investigation; and whether the decision to dismiss was within the range of reasonable responses open to an employer in respect of the misconduct. 

That paragraph contains the legal analysis in a nutshell,especially following dismissal for gross misconduct.

It is a common misconception that an Employment Tribunal looks at whether the employer “got it right” in terms of whether the employee did or did not do whatever it was that he was dismissed for. That is not what the Tribunal does.   Only in the most exceptional cases will a Tribunal go behind the employer’s decision in that respect.

What a Tribunal wants to see is whether the employer followed reasonable and fair investigation and disciplinary processes.   If at all possible (and this may be difficult for the smaller employers) the investigation should be carried out by someone other than the person making the decision at the disciplinary meeting. The investigation should be as thorough as is necessary in the circumstances.  The person conducting the investigation should do so with an open mind: it is possible that when the evidence has been gathered he may conclude that proceeding to a disciplinary meeting is not appropriate or justified.

If it is decided that there should be a disciplinary meeting, then the employee must be given advance notice of the meeting and the evidence gathered in the investigation should be disclosed to him to give him an opportunity to consider it.  These may be documents , statements of people involved, etc.

The purpose of the disciplinary meeting is to enable the decision maker and the employee to hear the evidence against the employee. The employee should have the opportunity to ask questions; to call his own witnesses who may contradict facts or show them in a different light; and to provide an explanation.

The decision maker should not give his decision immediately at the conclusion of the disciplinary meeting. He should take some time to consider, even if it is a case of asking the employee to wait for a few minutes while he thinks about what he has heard.

If an employer is able to show that he has conducted fair investigation and disciplinary processes, then he is well on the way to successfully defending the unfair dismissal claim. Going back to what Mr Justice Langstaff said, the question then becomes whether the employer had a genuine belief that the employee was guilty of the misconduct alleged. If the decision maker can demonstrate that he came to the disciplinary meeting with an open mind and that he reached his decision after considering the evidence at the disciplinary hearing , then he will be likely to be able to satisfy the Tribunal in this regard. It is only in the most exceptional cases that the Employment Tribunal will go behind the question of the decision maker’s belief in the employee’s guilt. The Tribunal will only do this in cases where, having regard to the evidence, the decision that the employee was guilty of the misconduct staggers belief. The word used is “perverse”.

Lastly, there is the question whether dismissal was within the range of reasonable responses. Obviously the answer will depend on the circumstances, not least the seriousness of the misconduct and the previous employment history of this employee. A note of caution: if the employer is relying on the fact that the employee has had previous warnings, when dismissing for what might otherwise be a relatively minor infraction,  it is important that the decision maker was aware of the history of warnings and had that history in mind.

In conclusion if an employer is able to show that:

  • he followed fair investigation and disciplinary processes;
  • leading to a decision taken on the evidence and with an open mind that the employee was guilty of the misconduct alleged;
  • and with an appropriate outcome;

then he is likely to be able to defeat an unfair dismissal claim, even if the employee can now cast some doubt on the question of his guilt of the alleged misconduct. As I said at the beginning, the word “unfair” in unfair dismissal relates to the procedures operated by the employer leading to the decision to dismiss.

These are the questions that those advising employees ask and go through. If, as an employer, you operate procedures which satisfy these tests, then it is likely that an employee’s adviser will warn that the chances of success are not high. This can be important if the ex-employee has legal expenses insurance or is trying to persuade a solicitorlawyer to represent him on a no-win no-fee basis (sharing a percentage of the winnings). In either case, the insurer or the solicitor will only take on the case if the odds of winning are good enough.

 

This blog post necessarily contains a brief summary of the legal principles and should not be treated as legal advice in any specific case. Please contact me if you wish to discuss any specific situation.

 

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Useful link:

The ACAS Code of practice – Disciplinary and grievance procedures: http://www.acas.org.uk/index.aspx?articleid=2174

Governments of different parties like to play around with the length of time an employee must have been employed before he or she has the right to bring an Employment Tribunal claim for unfair dismissal.  Conservative governments prefer a 2 year period, Labour prefers 1 year.

As I write this, the present qualifying period is 1 year.  However, with effect from 6 April 2012, the qualifying period will increase to 2 years.

It is important to note that this change will only affect those employees whose employment commences on or after 6 April 2012.  For those whose employment commenced/commences on or before 5 April 2012, the qualifying period will remain 1 year.

One of the first questions I ask a client, be it employer or employee, is length of service.  This change will make it more complicated. Until April 2014 I will need more precise information.  I will need to know the exact start date, as I will need to know whether I am dealing with employment which commenced before or after 6 April 2012.

The statutory limits on sums that Employment Tribunals may award are reviewed annually, with effect from 1 February. The increases this year reflect an increase in the Retail Prices Index of 5.6% in the year to September 2011. They will apply to dismissals taking place on or after 1 February 2012.

The maximum limit on a week’s pay, which is relevant for the calculation of the statutory redundancy payments and basic awards on the dismissal increases to £430 (from £400).

The maximum compensatory award for unfair dismissal will increase to £72,300 (from £68,400).

 

Pensions may not be the most exciting subject, but they are important, sufficiently important for public sector workers to be pursuing a national campaign of industrial action. But that is not what this blog is about.

Starting 1 October 2012 changes to the law enacted in the Pensions Act 2008 and the Pensions Act 2011 will come into force requiring all employers in Great Britain to enrol employees automatically into a pension scheme (in fact the legislative scheme uses the word “jobholder” rather than employee).

Implementation will be phased over a four year period, commencing with the larger employers (see the timeline on the Pension Regulator’s website: www.tpr.gov.uk/staging ). The Pensions Regulator states that for businesses with fewer than 50 employees auto-enrolment will not apply until after the end of the current Parliament, which presumably means after May 2015.

What is auto-enrolment?
Under auto-enrolment, employers will be obliged to enrol eligible jobholders in a pension scheme, into which the employer must contribute at least 3% of the jobholder’s earnings. Employers must either use their own qualifying pension scheme or the National Employment Savings Trust (NEST). Jobholders will have to contribute 5% of earnings, but this is to be phased in over 5 years.

Which employees are eligible?
Auto-enrolment will apply to all jobholders between the ages of 22 and state pension age. Jobholders include permanent and temporary employees as well as agency workers. They must earn at least £8,105 a year (this is the same amount as the personal allowance for Income Tax).

When will this apply to my company?
Please look at the timeline linked to above. In addition, we understand that the Pensions Regulator will be contacting companies six months before the “staging date” on which they must implement auto-enrolment. Nevertheless it may be sensible to begin planning now, and in particular to begin thinking about whether to set up your own qualifying pension scheme or to use NEST. We can recommend specialist pension advisers.

There is of course a lot of detail. Jobholders may opt out, but employers should take care as they may not induce jobholders to opt out of scheme membership and they may not make offers of employment conditional on opting out.

The Pensions Regulator will be responsible for ensuring compliance with the auto-enrolment scheme. Defaulting employers will face regulatory sanctions including compliance notices and penalties that will be determined on a sliding scale according to the size of the employer. The largest defaulting employers may face penalties of £10,000 per day! If it is considered that there has been a “wilful” failure to comply, then the individuals responsible may face criminal charges.