The Employment Relations Act, arising from the Fairness at Work white paper, is due to come into force later this year. It enhances the legal rights of employees and other groups of workers, and increases the risk and potential cost of mismanaging employee relations. How should managers prepare for it?
One of the Fairness at Work provisions has already been introduced through secondary legislation. On 1 June the qualifying period for bringing unfair dismissal claims was reduced from two years' continuous service to one.
Unless an employee is summarily dismissed, their notice period will count towards continuity of service. This will curtail employers' scope to avoid the full rigour of disciplinary and other procedures when dismissing staff who have limited continuous service.
The new legislation will also prohibit the inclusion of clauses in fixed- term contracts that exclude the employee's right to complain of unfair dismissal. As the non-renewal of a fixed-term contract is technically a dismissal, this will further increase the pool of potential claimants, creating a particular problem for the NHS, where many appointments are subject to time-limited funding. Justifying the non-renewal of fixed-term contracts will depend on whether the limited funding is clearly documented when the appointment is made.
Compensation limit rise
The compensation limit for unfair dismissal claims is to be increased from£12,000 to£50,000. This will create a greater incentive for senior employees (such as consultants, directors and managers) to bring such claims.
When compensation limits for discrimination claims were removed, claimants' expectations of the levels of settlements were raised, contributing to an increase in cases going all the way to an employment tribunal. This pattern is now likely to be repeated with unfair dismissals.
With more employees eligible to bring unfair dismissal claims, and larger sums of money at stake, the importance of adopting sound disciplinary, performance and redundancy procedures and adhering to them in all cases cannot be overemphasised.
New representation rights
The act gives employees a right to be accompanied at all internal disciplinary and grievance hearings by a union representative or fellow worker. This includes hearings at which an oral warning may be given. But there is no right to legal representation at such hearings. Employment policies should be reviewed to reflect this.
Rights to all workers
The act will also allow the government to extend individual employment rights to 'workers' rather than 'employees'. As the definition of 'worker' is intended to cover 'all workers other than the genuinely self-employed' it is likely to include staff working for a nursing or other bank.1 It may also apply to honorary appointees, volunteers and agency staff. NHS employers should carry out an audit to identify 'workers' who do not currently benefit from the same rights as employees, and ensure that in future these workers are afforded those rights.
There are a number of new provisions designed to give employees increased rights to time off for family reasons.
Parents can take up to 13 weeks' unpaid leave during a child's first five years. For women, this right is in addition to maternity leave.
However, the fact that the leave is unpaid may soften the blow for employers. They can also postpone the taking of leave in certain circumstances - for example, with a senior employee who will be difficult to replace temporarily.
Employees will also be able to take unpaid leave for 'urgent domestic incidents'.
NHS employers will need to revise contracts, policies and procedures to incorporate these new rights and must ensure managers are trained in applying the new policies.
The changes brought about by the act will increase the burden on NHS employers. But by preparing now (see checklist above), trusts and health authorities can reduce future costs.
1 Department of Trade and Industry. Explanatory Notes to the Employment Relations Bill, 22 April 1999.
Andrew Rowland is a solicitorspecialising in NHS employment law at Capsticks
Managers' checklist: preparing for the new act
Review current contracts, policies and procedures.
Draft new policies dealing with parental leave and time off for urgent domestic incidents.
Devise a programme of management training
Ensure human resources involvement in disciplinary and grievance issues at an early stage.
Extend employment rights to bank staff and other categories of worker.
Seek legal advice where appropriate.