Wage slip-ups: employers beware

When I look back at my time as a Saturday girl at Reiss during University, I remember with fondness the substantial discount I got from their latest ranges. In return, I had to wear their clothes to work, but that was no hardship; I was now the best dressed student on campus.

It was the same for most of my friends who spent their weekends and Thursday nights working in retail – half price clothes so long as you wore them to work. And as we would collect our monthly wage slip showing a measly sum, we would give no thought about the accuracy of how that figure was reached.

"But it turns out that some of us should have paid a bit more attention to that slip." 

HM Revenue and Customs (HMRC) have recently published a report listing 115 companies in the UK who have been caught unintentionally failing to pay the national minimum wage (NMW) to their staff. 

Top of that list was the fashion retailer, Monsoon. Their policy of offering staff discounted clothes to wear for work meant that the cost was taken from their wages, taking employees below the legal threshold. From 1 October 2015 the NMW rose to £6.70 an hour for workers aged 21 and over; because wages to Monsoon staff dipped below this, the company now owes £104,508 to 1,438 workers.

"While this appears to be a genuine mistake, it is incidents like these that will not only leave the employer with a whooping bill to pay but can also cause some serious reputational damage." 

No-one wants to work for a company that doesn’t pay their staff properly, and people may not want to shop at a store that appears to be exploiting their lowly paid employees, regardless of whether it was intentional or not.

And it isn’t just fashion retailers that need to be aware. Unintentional deductions were found from other expenditure associated to the job, such as safety equipment and tools, and for meals or transport provided by the employer. As such, hair dressers, car repair shops and even a riding centre for disabled people were caught up in HMRC’s latest swoop.

To avoid mistakes like this in the future, employers should carry out a review of their staff uniform policies and benefit packages to make sure that staff are paid at least the minimum wage after these deductions. Employees also need to be aware of the new NMW for over 25s - the so-called “national living wage” - due to be implemented in April, which will see the lowest wages rise to £7.20 an hour.

It’s also advisable for employees to look at their wage slip each month and give real consideration to the breakdown of monies going into their account. 

"The Trades Union Congress estimates that at least 250,000 workers are being underpaid but that only a quarter of offenders are being caught." 

What may appear to be a perk of the job might actually be a breach of the law and employees on the lowest wages need to make sure this is not happening to them.

Posted by Elizabeth Maxwell, trainee in the employment practice group.

Elizabeth graduated from Royal Holloway, University of London in 2008 with a degree in History and Politics. She went on to study the GDL at BPP London (Waterloo) and the LPC at the University of Law (Bloomsbury), before joining B P Collins in August 2014.

Workplace stress as a disability

In my role as a trainee of the employment group, I recently attended a seminar at barristers’ chambers in London on the topic of “Stress as a Disability” within the workplace. The seminar explored employers’ responsibilities towards employees experiencing stress, which can be considered a disability under the Equality Act 2010.

Under the Act, an employee has a disability if they: 

(1) have a physical or mental impairment that,
(2) has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. 

To be considered as “long term”, the effect on the employee’s ability to carry out normal day-to-day activities must have already lasted 12 months, or be such that it will last for at least 12 months.

Stress conditions can therefore amount to “mental impairments” if they cause long-term symptoms affecting an employee’s daily life; for example, low mood, anxiety, inability to sleep, loss of appetite or inability to concentrate. 

What makes it more difficult for employers is that an employee does not need to have been diagnosed with a specific medical condition such as depression or anxiety to be “disabled” for these purposes; in some cases, it will be sufficient for the employee merely to alert their manager to some of the symptoms mentioned.

Of course, most employers want to ensure that their workforce is happy and healthy.  They also usually recognise that providing support to an employee with stress-related symptoms can prevent their condition from deteriorating (which, in turn, could help prevent that person taking a long period of sick leave and the employer having to organise cover for their role). 

"But do employers really need to go out of their way to assist employees complaining of stress?  The short answer, as you may have guessed, is yes."

Employers have a duty to make “reasonable adjustments” for employees suffering from a stress condition that could amount to a disability.  This could include reducing the employee’s workload, responsibilities and/or hours, transferring them to a different position or department, and offering them counselling.

Employers that fail to make reasonable adjustments could find themselves facing discrimination claims from disgruntled current or ex-employees.  Even worse is that compensation for discrimination claims (unlike claims for unfair dismissal) are uncapped – so employers found liable could be forced to make big pay-outs.

However, using the criteria set out in the Equality Act 2010, it can be difficult for employers to determine whether an employee complaining of stress does in fact have a disability and, if so, what steps should be taken to handle the situation effectively.  

"This is where the employment practice group comes in."

While the group does, of course, act for employers (and, indeed, employees) in discrimination claims, a large part of its work involves advising employers on day-to-day employment law matters and, in particular, how to avoid potential claims. 

So, for example, a client’s HR manager might contact us for advice about managing the return of an employee that has been signed off work for stress.  Depending on the circumstances, we might advise them to:

(1) get an assessment of the individual’s health from an Occupational Health professional; and/or
(2) arrange a return to work meeting with the employee to discuss matters including likely triggers of stress and formulate a return to work plan; and/or
(3) carry out an ongoing risk assessment of the employee.

An alternative scenario might be a client asking us for more general advice about dealing with stress in the workplace, in which case we could suggest that they introduce training to help managers identify symptoms in employees and respond appropriately. 

We could also offer to review the company’s policies, such as its sickness absence management policy, to ensure that the correct procedures are in place to deal with such situations.

Attending the seminar was a valuable experience and highlighted to me some of the specific skills that an employment lawyer must have; in particular the ability to respond to frequent changes in legislation and case law, to think creatively to assist employer clients and pre-empt potential claims as well as dealing with existing ones, and to make tactical considerations in connection with such claims.

Posted by Elisabeth Kynaston, trainee in the employment practice group.

Elisabeth Kynaston started her training contract with B P Collins in February 2014, having previously worked at a legal publishing company and a legal advice centre in East London. She graduated from Durham University with a first class honours degree in Ancient, Medieval and Modern History. Elisabeth has completed the Graduate Diploma in Law and Legal Practice Course at the University of Law, Bloomsbury, both with distinction.

Complex immigration rules made simpler with expert legal advice

The subject of immigration is rarely out of the news. Having gained first-hand experience in business immigration matters while with the top ranked B P Collins LLP employment group, I can see why.

The rules on immigration are in a constant state of flux. This year alone, we have seen the introduction of the Immigration Act 2014, changes to the Immigration Rules and changes to several of the policy guidelines, to name but a few. How does anyone keep up?

The changes reflect the Government's tougher stance on immigration as well as a shift of responsibility onto those who directly benefit from migration, for instance employers and education providers.

In most circumstances, a business that wishes to employ workers from outside of the European Economic Area ('EEA') must apply for a sponsor licence.

I have assisted with one of our business immigration matters from start to finish and soon realised that obtaining a sponsor licence is not as straight forward as it might seem at first glance.

Our client is the UK branch of a USA parent company that wished to bring an experienced employee of the USA parent company into the UK to train its employees.

Before considering an application for a sponsor licence, we reviewed our client's contracts and handbooks, advised on the suitability of different visas for its intended migrant worker and assessed whether the proposed migrant was eligible under the Points Based System ('PBS').

Each type of migrant visa requires the migrant to meet specific qualifications and remuneration in accordance with the PBS. After all, there is little point in applying for a sponsor licence if the intended migrant does not meet the requisite requirements for the Certificate of Sponsorship (CoS) or the visa application.

After obtaining the sponsor licence, we advised our client on how to assign a CoS to the USA migrant worker through the Sponsorship Management System.

As well as advising our client, we also liaised directly with the USA migrant to ensure all of her paperwork was in order in preparation for her visa application.

Any inaccuracies could have resulted in our client's sponsor licence application being rejected or the intended migrant being unsuccessful. Thankfully, it all went off without a hitch!

We also advised our client on its continuing responsibilities as a sponsor licence holder. The home office has powers to downgrade, suspend and revoke sponsor licences where they believe the employer to be in breach of the licence conditions.

As recently as 4 September 2014, UK Visa & Immigration (UKVI) has introduced further guidance on the responsibilities of those who sponsor migrant workers, with an emphasis on the repercussions of failing to meet them.

The guidelines reflect changes that were arguably already in motion. Statistics released on the www.publications.parliament.uk show a 178.4% increase in Tier 2 and Tier 5 sponsor licence suspensions from the third quarter of 2013 to the fourth quarter.

Sponsor licence holders should take heed of the recent changes and last year's statistics. It is essential that all licence holders are aware of their increased responsibility. They must have the appropriate procedural compliance checks in place to ensure they are successful in their application for a sponsor licence and to avoid their licence subsequently being downgraded, suspended or revoked.

Posted by Rebecca Mitchell, trainee in the employment practice group.

Rebecca started her training contract in September 2013 after graduating from Newcastle University with a 2:1 (BA Hons) in History. She undertook the Graduate Diploma in Law at Kaplan Law School and has recently completed the Legal Practice Course with distinction.

Hero or zero - the rise of the zero hour contract

Having spent the last 6 years enjoying lie-ins, watching daytime TV and everything else that loveable students are renowned for, I fought my way through the rigorous B P Collins trainee contract selection process and now find myself in employment, literally, as my first seat is in the Employment practice group.

Joining a new job and practice group is daunting, not only do you have to learn everyone's name and drink preferences but the quirks and processes particular to each area of law. This is made all the more challenging in an area such as Employment, where the law is so dynamic and ever changing.

This made me think about how difficult it must be for employers and HR staff to keep abreast of the latest Employment Law changes and updates. One such example is the increase in the national minimum wage which has changed to £6.31 for employees aged 21 and over from 1 October 2013.

Whilst undertaking some research for an employment contract review, the recent Government discussion on 'zero hour contracts' caught my attention. These contracts leave an employee's hours to be worked deliberately undefined, allowing employers to have flexible working arrangements as they are not restrained by a term in the contract of employment. It also provides employees with the ability to pick and choose when they actually work.

Over recent months it has come to the Government's attention that these contracts are far more widely used than previously realised, with an estimated one million workers in the UK having a zero hour contract, many of which are students.

There are growing concerns that these sorts of contracts are susceptible to abuse by employers, because employees are usually put on to 'standby'. By doing so employers expect employees to be available to work even though they may not be required to and if they do not work then they do not receive payment.

It is understandable that there are benefits for both sides from such an employment relationship. This means that employers have the ability to tailor every day the number of employees working to meet particular business requirements. For example, in the run up to Christmas, retailers can ask staff to work more shifts than they might do during the summer months. This allows the business to manage their cash flow more effectively and to use their staffing resources more efficiently, which is all the more important given the tough economic environment that exists at present for retailers.

The workforce also enjoys the added benefits of these contracts. As a former student, I can completely understand the novelty of being able to pick and choose your working hours around your, ahem, 'studies'. However, students and other workers on similar contracts should be aware from the outset what their status and subsequent rights under their contracts are. Those unsure about this then they should ask their employer to clarify these for them.

Employers need to be aware of the drafting of a zero hour contract. They must ensure their staff is made fully aware of the relevant terms when they are presented with the contract, so that the employee understands the nature of the contract, their rights under it and what is expected from them.

At B P Collins, we offer a complimentary employment contract review service for businesses who might be concerned that their employment contracts are not providing the legal coverage which they would hope to achieve.

Dealing with such issues in my training contract does bring what I learnt at University to life and reassures me that those 6 years studying didn't just prepare me for making beans on toast. How to come to terms with not watching 'Countdown' everyday though is something I certainly was not prepared for.

Posted by Thomas Bird, trainee in the employment practice.

Thomas Bird started his training contract with B P Collins in September 2013. He graduated with a first class honours in International Business in 2010 before completing a Masters in Law at the University of Sheffield, attaining a commendation. Thomas worked as a paralegal within the Litigation and Dispute Resolution team for 3 months in 2012 and also gained legal experience at a well-respected firm in Leeds in 2011.

Do you really own your address book?

What happens when an employee resigns from a company to either set up on their own or to join a competitor?

Employers must be aware that knowledge and client databases built up by an employee during their employment could potentially be very damaging to their businesses future.

Employees may think they have a right to take with them any contacts built up through the course of their employment this, however, is not the case. The key point is when the relationship between the employee and client started. If it was through the course of their employment, then the employer is most likely actually the owner of the information.

In businesses where information, such as client databases, are the key to their success, employers should protect themselves by ensuring they have a very well drafted contract to prevent employees from using the potentially damaging information should they resign and move to a competitor.

Both employers and employees should carefully consider the extent of restrictions contained within their contracts and the implications of these restrictions. It is very likely that employers will have a contract drafted which prevents employees from competing should they leave the company.

The employer cannot impose unlimited restrictions on an employee as this would be thrown out if challenged through the courts. Restrictions must be considered reasonable and it is common to find a restriction within a contract preventing an employee from competing with their previous employers for three to six months after their departure. Whether the restriction will be regarded as reasonable will largely depend on the nature of the work but there are also many other factors that will need to be considered.

This blog ties in well with Simon Hall's previous post about social networking sites, especially LinkedIn. Despite being able to have a LinkedIn profile whether or not you are currently employed, if an employee has built up their contacts on LinkedIn due to a policy enforced by the employer (therefore, through the course of business), it can be argued that the employee has no right to this information upon their resignation from the company.

If an employee fails to abide by their contract and carries out an action such as contacting clients from their previous firm, there is the option to apply to the court for an injunction to prevent the employee from continuing with this act, thus enforcing the restrictive covenants within their contract.

The employment group at B P Collins can advise individuals as to the extent and implications of such restrictions within their contracts and can also assist employers in drafting a water tight contract. In the event that ex employees still attempt to use the information gathered in the course of business prior to resigning, our team can also advise in relation to injunction proceedings.

Posted by Gemma Hunter, trainee in the Employment law practice group.



Gemma started her training contract with the firm in October 2011 having studied Law and Criminolgy LLB at the University of Sheffield and the LPC at the College of Law, Bloomsbury.