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Debunking employment myths

Assumptions can be very dangerous. While there's a chance that a decision made on a hunch might be correct, there's also the risk that it’ll be found wanting and in, today’s litigious workplace, employees can make mistakes appear very expensive. This is especially so since July 2017, when employees reacquired the right to bring a claim against their employer without cost.

With the law being a quagmire ready to trap all who dare to ignore it, we sought advice from two lawyers – Walker Morris LLP director Lucy Gordon and Chloe Themistocleous, senior associate at Eversheds Sutherland – for their views on the most frequent mistakes and how employers can reduce the chance of an employment dispute. Here's their list…

DISMISSAL

Top of Lucy Gordon’s list of urban myths for debunking is the concept that an employee can be dismissed with less than two years’ service without following a process or giving a reason.

"Having less service doesn’t mean that you can dismiss with impunity," she says. "Employees with any length of service can bring claims for discrimination on the grounds of a protected characteristic such as race or sex, or for unfair dismissal."

To mitigate risk, Ms Gordon advises undertaking risk assessments before carrying out dismissals to avoid facing claims for "potentially uncapped compensation". Employers should follow the ACAS Code of Practice and clearly identify a fair reason for every dismissal. 

DISABILITY

Next is the notion that if an employee doesn't tell their employer that they have a disability, the employer can’t be found to have discriminated against them.

But employers who think that if they have not been told about an employee's disability, they don't need to consider making reasonable adjustments or worry about a disability-related dismissal claim, should think again. "Employers are expected to look out for signs that could indicate that someone has a disability, and to make reasonable enquiries about an employee’s health," says Ms Gordon. The legal test is, simply, whether an employer knew or could reasonably be expected to know that the employee had a disability. 

Frequent or long-term sickness absence, a change in mood or performance, or consistently making errors are all indicators of health conditions that could amount to a disability. "Employers should be alert and sensitively make enquiries with employees to see if there are any underlying issues," says Ms Gordon.

Where an employee is disabled, there is a positive duty on employers to consider whether reasonable adjustments are required. Failures relating to disability can be very costly as claims for compensation are potentially uncapped.

TUPE TRANSFERS

Third on the list is the view that after a transfer, where a business is bought by another, employers have to wait two years before they can harmonise terms and conditions of employment. 

"This myth," Ms Gordon explains, "seems to stem from a mistaken belief that after two years, the transfer will not be considered to be the reason for any changes because of the passage of time. 

"The truth is that any variations to contractual terms are void if the transfer itself is the reason for the change. This can have important consequences for employers."

In outline, if changes are void, even where employees consented to them and less favourable terms were offset with more beneficial provisions, they can cherry pick the most favourable to them from the original and new contracts.

Employers should follow the ACAS Code of Practice and clearly identify a fair reason for every dismissal

To drive the point home, Ms Gordon talks of employers who have sought to buy out, say, more generous holiday entitlement with a small increase to salary. "They've often ended up paying for both benefits," she says.

The answer in her mind is to only make changes – with employee consent – where the reason for the changes is related to the transfer, but "the sole or principal reason for the change is economic, technical or organisational."

FIXED-TERM CONTRACTS

The last myth is the belief that there is no need to follow a process or give a reason when not renewing a fixed-term contract.

This, says Ms Gordon, is wrong. "Most fixed-term contracts provide that they will terminate automatically on a set date, or on conclusion of a project, without the need for further notice to the employee," she says. "Many employers assume that they can let these contracts expire without the need to follow any process or give any reason to the employee."

However, Ms Gordon warns that the non-renewal of a fixed-term contract amounts to a dismissal. Therefore, if the employee has two or more years' service, or if the reason for the non-renewal is discriminatory, "the employee may be able to bring a claim for compensation if there isn't a fair reason for the dismissal and a fair process was not followed."

To prevent claims, Ms Gordon suggests employers give thought as to why the contract is not being renewed. "If the role has ceased, there is likely to be a redundancy situation," she says. "Equally, if the contract is cover for maternity or sickness absence, it is possible to include wording that confirms that the contract will come to an end when the original employee returns."

WRITTEN CONTRACTS

Top of Chloe Themistocleous’ list of most troublesome myths is the thorny matter of employment contracts and, in particular, the view that if there is no written contract between employer and employee, there is no contract at all. "In fact, the contractual relationship can be based on what the employer and employee have said to each other and their subsequent course of conduct," she says. 

Worryingly for employers, where they have failed to provide clear terms when they were able and obliged by law to do so, employment tribunals often find in favour of the employee. "Employers should be careful to provide a written contract, signed by both the employee and a representative of the employer, when each new employee starts work," says Ms Themistocleous. 

Not having a contract can lead to a dispute about the terms as well as a claim for up to four weeks' pay for failure to provide written terms.

PUBLIC HOLIDAYS

Next comes the understanding that employees have a right to have the day off on a public holiday and, if they do work, they must be paid more for it. The truth, says Ms Themistocleous, is that there is actually no statutory right to time off, paid or otherwise, on any public holiday. "Employees are entitled to the basic minimum holiday entitlement of 5.6 weeks each year, but how and when this is taken is up to the employer and employee," she explains. 

Employers must be careful not to dismiss employees because of their pregnancy, pregnancy-related illness or maternity leave

That said, an employee's contract may specify that they are entitled to take public holidays off or to extra pay for working those days. And if the employer breaches the contract with regard to public holidays, Ms Themistocleous warns that an employee could bring a claim against them. There is only one solution in her mind: "Ensure that the employer's position on public holidays is consistent between employees and, where possible, see that the position is set out in the employment contract."

REFERENCES

The third myth that Ms Themistocleous tackles is the view that an employer is not allowed to give an employee a bad reference.

While it's possible that employers believe this myth to be true because it can seem easier and less risky than giving a bad reference, there is nothing in law that states that an employer must give a reference for an employee. However, as Ms Themistocleous advises, "where the employer does give a reference, it should not be untrue or inaccurate. That said, there is no law preventing an employer from giving a negative, but factually faithful, reference in appropriate circumstances." 

Employers must tread carefully, she says: "If an employer gives a misleadingly positive reference, the recipient can bring a claim against the employer for negligent misstatement." Alternatively, "if an employer gives a misleadingly negative reference, the ex-employee may bring a claim for defamation."

To reduce risks, some employers have a policy of only confirming the employee’s dates of employment and position with the company, which sidesteps the issue altogether. But this can also have a negative impact on those employees who deserve a glowing reference. 

PREGNANCY

The last myth that concerns Ms Themistocleous is the belief that employees who are pregnant or on maternity leave cannot be dismissed.

The roots of this particular myth may lie in the stance that some employers take as they are conscious of not discriminating against pregnant employees or employees on maternity leave. Critically for Ms Themistocleous, no employee is immune from dismissal. However, she says: "Employers must be careful not to dismiss employees because of their pregnancy, pregnancy-related illness or maternity leave. Such dismissals and redundancies are likely to be automatically unfair and discriminatory, which may lead to high compensation for loss of earnings and injury to feelings." 

The only path open to employers is to follow their disciplinary process for these employees in the same way as for any other employee, but with consideration as to whether and to what extent the pregnancy has impacted their conduct or performance.

AND FINALLY...

The very fact that employment lawyers invariably have long and storied careers indicates one thing – that employers and employees often fall foul of sometimes complex rules and procedures. 

While workplace disputes will never be eradicated, a proper understanding of the law will be of greater help than a belief in the prevailing myths.




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