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2010 has come round pretty fast, and business owners are getting ready to deal with workers’ requests for time off to watch World Cup matches on TV – or even go to South Africa. Can you remember all the legal rules about holidays?

The bottom line is that workers are entitled to 28 days’ paid holiday each year (a pro-rata proportion for part-timers and temps), and entitlement starts from day one of their employment. But job contracts and policies may allow your staff to carry holiday forward in some circumstances, and new case law says sick workers have the right to carry holiday forward in some circumstances, so some employees may be entitled to more than 28 days.

Contracts or policies can limit when employees can take holiday – provided they have taken their 28 days by the end of the holiday year. For example, employers may be able to insist they take part of their holiday on bank holidays and/or during an annual summer close-down, and stop them from taking holiday during peak periods or when the firm would otherwise be short-staffed – proper, objective grounds. Think about emailing employees to remind them when you can refuse holiday requests. Some employers also set limits on how long each holiday can be – for example, that no holiday can last more than a fortnight.

Contracts or policies may set out how much notice employees must give you of their holiday plans. If not, the notice an employee gives has to be twice as long as the holiday they are asking for. So two days’ holiday requires four days’ notice.

If an employer refuses proposed holiday dates they have to do so in writing, and the length of notice of the refusal must be at least as long as the holiday requested – for example, at least two weeks before the worker’s holiday is due to start if refusing a two-week holiday.

Employers often have a system for determining priority if there are holiday clashes or if they’d otherwise be left short-staffed. This needs to be fair and non- discriminatory system, which can be as simple as ‘first come, first served’. Favouring employees with longer service could discriminate against younger employees who have not had time to build up service, and may also be sex discrimination because (on average) women have shorter periods of service than men.

That’s holidays sorted – but how do you stop workers just calling in sick on their country’s match days – a particular problem with this World Cup because South Africa and the UK are on similar time zones, so matches will be on during the working day? Answers on a World Cup ticket please!

Law Donut

The issue of workplace bullying has hit the headlines again with allegations about the Prime Minister.

As is so often the case, people’s reactions tend to be shaped by their own views. Labour loyalists are quick to describe Gordon Brown as passionate – but not a bully – while political opponents try to stir things up.

That’s not an unusual response. If an employee at work complains of bullying, there’s a tendency to make a judgement based on what we think of the individuals involved. Unfortunately, that’s completely the wrong approach.

Even if you are absolutely certain that someone is not a bully, you must investigate any allegations. Doing so helps show the employee that you take their concerns seriously. It also gives you a chance to identify where things have gone wrong and smooth over any misunderstandings.

Perhaps more importantly, failing to investigate properly lays you open to the risk that the employee makes a claim to the Employment Tribunal.

The Prime Minister’s case also raises the question of how you handle things if you too are a ‘passionate’ boss. What are employees expected to do if they think you are bullying them – and at the same time, you are the person they are expected to take their grievance to?

Make sure your business has proper disciplinary and grievance procedures. They could save everyone involved a lot of aggravation.

Chris Walker

Law Donut

As a start-up, hiring the first employee is a big step. Many regulations and laws affect the hiring, firing, and work of employees. If you employ other people you have to meet the requirements of employment law, and be responsible for paying wages, tax, National Insurance Contributions and Working Tax Credits where relevant.

Having recently set up a small business myself, I have had to consider the commotion that goes hand in hand with employing new people. In the current economic climate jobs have become a rare commodity, making it easier for employers to find good people to take on.  Recruiting was the easiest part for me. There were plenty of people who wanted the positions that I had free; the most difficult factor was selecting the best ones.

Once I chose the right people, I was then responsible for putting employment contracts in place. The Employment Rights Act 1996 stipulates exactly what must be covered, which include the obvious, such as; the name of the employer and employee, the date the employment began, rate and frequency of pay, hours of work, holiday entitlement, job title, and a description of the duties, as well as other details. Legal advice is often recommended because employment legislation changes frequently, which can have an impact on the information that must appear in the statement – I talked to a lawyer.

Once the employment contract has been sorted, and work commences, you get to the part where you then need to pay your employees – argh! It got tricky for me here; some of my employees had other jobs, but as they were students they were still under the personal allowance band, so it was important to use the correct tax code. For this I, again, decided to consult an expert, because the last thing you want is HM Revenue & Customs chasing you, or your employees.

On top of contracts and salaries, as a small business you also need to keep employment records of individuals and collective data, as well as certifying that employees work legal hours, and take breaks in line with the law.

As times goes on more HR issues can crop up which employers need to tackle without delay; common issues include maternity and paternity rights, discrimination in the workplace, or health and safety concerns. Staying up to date with the law is essential, and as a small employer it is important to protect yourself by doing so.

Charlotte Blake of Spanish Translations UK.

Law Donut

This week’s blog comes from IP barrister Jane Lambert. Offering a very personal view of how small businesses can approach their IP, she points out that getting legal protection for your invention is no magic shield – many innovators learn that the expensive way.

While IP is growing in popularity as a building block for contracts, partnerships and licences, the cost of defensive IP – including court action – is, as Jane explains, high, and she gives her own take on what action – legal or not – aspiring entrepreneurs should look at for their new invention.

Jane Lambert
Barrister NIPC

In over 30 years at the English Bar I have seen far more businesses fail because they had too much intellectual property rather than too little. That may sound counter-intuitive and almost mocking – especially if you have just settled your patent agent’s bill. So here are the facts behind such a surprising statement:

Intellectual property can be expensive. In 2005, European Patent Office research showed the average cost of getting a typical 14-page patent for six countries and renewing it for ten years cost inventors €30,530.  Even if your patent sees the light of day that’s a lot of money – but the sad reality is that most are never commercialised.  Of the few that are, only a tiny percentage cover their costs and even fewer make serious money.

Secondly, patents, copyrights, trade marks and other forms of intellectual property are essentially mechanisms which are used to bring a lawsuit.  Save for commercial bootlegging, counterfeiting and piracy, it is not a crime to infringe somebody’s intellectual property rights in the United Kingdom.  Litigation can be very expensive.  In 2003 IPAC (a government IP committee) reported that a patent infringement claim averaged £1 million in the High Court and between £150,000 and £250,000 in the Patents County Court.  Legal Aid isn’t available.  The only way that most small businesses can fund IP litigation is to take out IP indemnity insurance; the premium for reliable cover for the UK works out at around £4,000.

Thirdly, the IP protection chosen may not be the most suitable for the business.  A patent, for example, may be unnecessary for products with a short shelf life.  Unregistered design right which prohibits making articles to original designs and comes into being automatically as soon as the design is recorded in a drawing. A CAD file or other document or simply keeping the invention under wraps and relying on confidentiality may be all that a business needs in many instances.

The advice that I have given my clients for many years is to consider where they want their business to be in a period of their own choice.  It could be six months, six years, or indeed longer – or shorter.  Next, I ask them to identify their likely income streams over that period.  After that I tell them to imagine the competitive threats to those income streams.  I then get them to devise counter-measures to those threats.  Nearly always those counter-measures are commercial such as lowering prices or developing new products or services.  In only a tiny minority of cases does a client suggest some kind of legal protection (i.e. intellectual property) and in many cases that protection is one that arises automatically.  For those very few cases I always counsel the client to provide funding for enforcement either through insurance or otherwise.

Jane Lambert of NIPC.

Law Donut

As the freeze continues, many employers have been asking snow-bound staff to take a day’s holiday if they don’t show up for work. But as well as battling with staff absence and the awful weather, bosses have been surrounded by a blizzard of headlines about holiday and absence, many of which are misleading. Use this checklist to deal with any problems fairly and in line with the law:

1)   An employer cannot make someone go to work. 

2)   Employees have no general legal entitlement to be paid for days not worked. Many contracts/staff handbooks specifically say employees won’t be paid for absence except under their sickness, holiday or parental leave schemes. 

3)   Employers who keep the workplace open may ask absent employees to chose to take holiday if they want to be paid (as opposed to unpaid leave). 

4)   Employers can specify in advance that annual leave must be taken on days they chose. To do this they must specify dates in advance and give relevant notice “twice as many days in advance (of the first day of leave) as the number of days to be taken”. So even one day’s leave requires two full days’ notice. This does not usually cover shutdowns needed at short notice. 

5)   Some employers have their own rules for specifying leave dates that may override the basic rules above. 

6)   Parents taking time off to look after their children have no general right to be paid. 

7)   Some employers offer staff the chance of working additional hours to catch up on a backlog and to help employees catch up on pay. 

8)   Many employers are paying people who attended work on the basis of a full day even if they arrived late or went early (though not all are obliged to do so). 

9)   The legal maximum for a working week – 48 hours – is set as an average, not an absolute ceiling, so workers can work longer hours occasionally to get things back to normal. 

 Annabel Kaye of Irenicon Ltd.

Law Donut

Green is not my colour

As I was browsing for a new console this week, the shop assistant came up to me and asked if I was planning to make my purchase “eco-conscious”. 

 “I just want to play games on it!” was my response. As a consumer, am I all that bothered about the carbon footprint of my PS3? I’m far too busy deciding whether to buy FIFA 10 or PES. (Think I’m going with the latter). 

But it got me thinking about how small businesses manage the current drive to be ‘green’. With daily to-do-lists stretching longer than your average motorway tailback, do owner-managers really have time to commit to the environment, especially when customers need serving and cashflow looking after?  

I’m not against going green – who could be, really. Many companies see an upside from being environmentally friendly, and we all benefit from a spot of simple recycling. Increasing environmental regulation, however, adds yet more pressure to small firms who are already overrun with red tape.  

Is there a better way to help small businesses achieve environmental harmony without burdening them with yet more legislation?  

The Law Donut has some excellent (and simple) advice on how your business can meet environmental obligations.

Law Donut

Recently, an accident on a construction site in which a worker died has resulted in an £80,000 fine for the company involved, who admitted two breaches of the Health & Safety Act. The worker who died had been hit on the head while operating a digger he’d not been trained to use

While this is an extreme case, all businesses should be aware of their health and safety responsibilities both towards their employees and anyone working in, around or visiting their premises. 

A thorough risk assessment, including a fire risk assessment, is the most effective way of improving your firm’s health and safety. If you employ five or more people, you must have a written policy in place, of which all employees are aware, and you must display the poster ‘Health and safety law: what you should know’, available from HSE books, or distribute the leaflet. 

Find a guide to health and safety on the Law Donut as well as plenty of other useful health and safety information, including how to carry out a risk assessment and 27 health and safety FAQs.

The Health & Safety Executive website also has guidance and resources for small businesses.

Law Donut

Radio 4’s Today programme recently offered us the thought that our problem with the UK ’s workforce is that too many employment laws are driven by high-falutin’ ideology rather than evidence they achieve what we want.

I don’t care what each new bit of legislation says, or why it was dreamed up, as long as it actually delivers what we want it to. At the moment, some of our HR laws don’t.

Take maternity rights as an example. I’m a liberal, so I believe that (a) the best candidate should get the job and (b) for most jobs, sex is irrelevant. That’s better for business, better for women and better for society in general. So I agree with the Government that our laws should put women and men on an equal footing.

Maybe maternity rights that give mothers a significant period of leave, some of it paid, and then give them the right to their job back, are achieving that. If, as the Government proposes, increasing the mums’ period of paid leave will achieve more equality, three cheers – go for it!

But are these new policies really achieving that? I hear stories that employers sometimes reject a female applicant for a job, or fail to promote a woman when, on merit, she is the best person for the job. Bosses keep the reasons under wraps but actually it’s because she is young, in a relationship, and may go off and have babies.

I hear that, if we look at how women fare in the UK workplace compared to some other countries, many other places are more meritocratic than we are. I also hear that in some of those countries women have fewer maternity rights.

Does that mean that the fewer rights women have, the more likely they are to be treated better when it comes to recruitment and promotion? Or would we find that those countries are actually more meritocratic because social norms are different there, their country’s richer than ours, or because the demographics in that country mean women are bound to do better in the workplace? I, for one, don’t know.

My big worry is that our politicians don’t know either. My even bigger worry is that – policy evaluations notwithstanding – they don’t seem to want to find out. Instead, they seem hung up on the belief that to make people more equal, you just keep giving some of them more rights. Faced with possible evidence that this may be counter-productive – that, say, giving women more rights may not actually benefit them, or their employers – they don’t stop and reflect enough. They just plough on – and maybe move the goalposts so it doesn’t look so obvious that it isn’t working.

Maternity rights seem a ripe candidate for a proper, rigorous evidence-based approach. Ideas anyone?

Law Donut

One topic has dominated conversation in homes, workplaces and pubs recently – the snow.

It’s continued to fall and, while it’s beautiful to look at, it’s equally as disruptive.

Commuters on the roads and rails have suffered as accidents, closures and delays become a common occurrence. The biggest headache, though, is for small-business owners who have been left short-staffed by employees who have not been able to make it in to work.  

With the arctic conditions set to continue, it may be prudent for firms without any existing procedures to consider introducing contingency plans in the event of more extreme weather.  

After the blizzard that hit the UK last February, many employers did introduce plans, embracing technology to enable employees to work flexibly, from home, and on the move.

These firms will have reaped the benefit of their policies over the last few weeks. 

If you do allow your employees to work from home in extreme weather, or you are thinking about it, you must be aware of your responsibilities for the health and safety of the home working environment. The Law Donut also has a great collection of FAQs on home working which should answer any additional questions you may have. 

Right, that’s enough from me. I’m off to build a snowman.

Law Donut

Snow stopped play?

As the big freeze descends over the UK this week, managers must handle pay and working hours if bad weather stops staff turning up. 

Many individuals struggle bravely in to work when it snows, while others stay at home. Some work from home, whilst others have no option but to take care of their children as schools close. Some workplaces close due to bad weather, and others remain open, if not fully staffed.  

Who is entitled to be paid and for what? 

The UK has a remarkably flexible labour market, and the answer depends on what type of contract you have got with your staff, and whether you keep the workplace open. There is no general right for employees who don’t turn up for work to be paid, and if you open your workplace and they do not turn up, you may not be obliged to pay. Many employers do pay more than they are required to, but it is important to know when you are choosing to pay more, and when you have to pay. 

Workplace remained open (hourly paid workers) 

If the workplace remains open as usual, and the employees fail to make it in to work due to travel difficulties, they are not automatically entitled to be paid for their absence. If they turn up late and they decide to go home early, they are entitled to be paid for the hours they actually work.

If you send the employee home early, this has the same effect as closing the workplace for part of the day (see below).

Employees can ask you to allow them to take the day(s) as paid leave. You are not obliged to authorise paid leave retrospectively but if you do so, make sure the holiday records are kept properly up to date. You cannot decide to make this a day’s leave without the employee’s consent.

Employees who have to take the day off to take care of their children when local schools shut are entitled to dependants’ leave, which is unpaid. They are only entitled to be paid for the time off if their contract, or one of your firm’s policies, says they are.

Workplace shut 

You are only entitled to withhold pay for a lay-off period (when the workplace is closed) if your contract with the employee gives you that right. Check your contracts carefully.

If your contracts do provide for ”unpaid layoffs”, employees are still entitled to guaranteed pay at the appropriate rate for the first five days’ lay-off in any three-month period. For these purposes a day’s lay-off is a day when less than 50 per cent of ordinary work was provided. Employees are entitled to half their normal basic pay subject to a maximum of £21.50 per day. 

Working at home 

Many employers have working systems that mean employees could work from home – either as part of their normal working-from-home routine, or on an emergency basis. These individuals are working and should be paid for their time.   

Salaried staff 

There is an historic tradition in the UK (fading fast) that distinguishes between staff on annual or monthly salaries, and those on an hourly rate – the old “white collar-blue collar” divide. Traditionally, salaried staff are not paid by the hour, do not receive overtime when they work more hours, nor receive a deduction when they work less.

These staff are viewed as being paid for service, rather than for the particular work performed. This group of individuals is generally entitled to pay unless the contract provides otherwise. You should check your contracts carefully.   This applies even if no work is actually performed or where the employee is prevented from working due to factors beyond their control, as long as the employee remains ready and willing to serve the employer. Ready and willing would normally mean making an effort to get to work where it is safe to do so. Locally based staff who could have made it in would not be automatically entitled to pay if they did not turn up.

Many organisations no longer feel comfortable about having a two-tier contract system, and increasingly have one single status contract that applies to all. So it’s possible your hourly paid staff may be in the same contractual position as salaried staff. A lot depends on what your contracts say. 

Annual hours and flexi-hours contracts 

Check the terms of your contracts – it may be that time not worked does not count for payment, and missed work will have to be performed at another time.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.  

Tel: 08452 303050 
Fax: 08452 303060 
Website : www.irenicon.co.uk

You can follow Annabel on twitter – http://twitter.com/AnnabelKaye.

Law Donut

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