FGazette January 2013

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AZETTELawyers for today’s employers

JANUARY 2013 // FOCUS ON: HIRING AND RETAINING STAFF

the quarterly newsletter of Floyd Graham & Co.

AN EMPLOYER’S GUIDE TO RECRUITING AND RETAINING STAFF

RECRUITMENTIN THIS ISSUE //

CHAIRMAN'S VIEWWorkplaces. In particular, the Government

has announced its intention to extend the

right to flexible working to all employees.

On the same note, proposals have been

made for a shared system of parental

leave. Controversially, there are also

intentions to implement “employee-

owner” contracts under which, in return

for at least £2,000 worth of shares, new

employees can be required to give up

some employment rights.

Although the Government’s priority has

been to make employing people less

onerous for business owners, the general

consensus is that these measures would

not achieve this aim. To the contrary

and as a minimum, managers may have

to be re-trained and existing policies

and procedures amended to reflect the

changes in the law.

As your genuine business partner, you

can always count on Floyd Graham &

Co Solicitors to make any changes to

employment law and/or HR as pain

free as possible. In the meantime,

we will continue to update you on all

developments as and when they happen.

Make sure you take full advantage of our

employment law and HR updates via our

twitter and facebook pages as well as on

our blog and website.

As 2013 commences, we hope that you

and your businesses are feeling re-

energised and ready to face the year

ahead.

As a firm we feel positive about what 2013

could bring and with this in mind, we have

made a conscious decision to inject some

optimism into this edition of the FGazette!

You may have heard the encouraging

statistics which were published at the

end of 2012 via the CIPD Labour Market

Outlook research; these stated that

employment levels should continue to

grow steadily through the remainder of

2012.

With this in mind, the team at Floyd

Graham and Co have collated some

useful information for you about different

aspects of recruitment including how to

get the right candidate for your business.

Even if recruitment is not high on your

agenda at this time, you may welcome

some practical tips about how to improve

staff retention. That is of course on the

assumption that you want to retain your

current staff members!

During the best part of last year, we saw

several proposals being mulled over by

the Government including the remaining

elements of the Consultation on Modern

Happy New Year to all of our FGazette readers!

Lawyers for today's employersFloyd Graham & Co Solicitors

2 Deanery CourtGrange Farm

Preston DeaneryNorthants NN7 2DT

Email: [email protected]: +44 (0)1604 871143

www.floydgraham.co.uk

IN THIS ISSUE //

page 4 //RECRUITMENT DOS AND DON’TS

page 6 //RECRUITING FORHIGH PERFORMANCE

page 8 //GUIDE TO RETAININGYOUR STAFF

PAGE 10 //bRAINTEASERS

page 11 //fgC news

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legislation timetable

Pensions Act 2008: auto-enrolment Employers are required to automatically enrol “jobholders” into a pension scheme by their “staging date”. These pension arrangements will need to meet minimum standards and employers will be required to make contributions in respect of eligible workers.

Enterprise and Regulatory Reform bill 2012-2013 Provisions being made for:• A duty on the parties and ACAS to attempt pre-claim conciliation.

• Introduction of “legal officers” to determine certain proceedings with all parties’ consent by way of a so-called “rapid resolution” scheme.

• Confidentiality of negotiations before termination of employment.

• The imposition of financial penalties to be paid by losing employers into a Consolidation Fund.

• Changes to the definition of “protected disclosures” so that in relation to whistleblowing, there would be a requirement that the qualifying disclosure is made in the public interest (as opposed to personal interest).

• Renaming of “compromise agreements” to “settlement agreements”.

“EMPLOYEE-OWNER” CONTRACTS Implementation of a policy whereby employees shall be required to give up certain employee rights in return for £2,000 or more worth of shares.

Charging fees in employment tribunal & the Employment appeal tribunal Implementation of a two-stage fee charging structure, requiring claimants to pay an “issue fee” when they submit their claim or appeal, followed by a “hearing fee” prior to hearing.

Consultation on modern workplacesFlexible Working: The Government has announced its decision to proceed with the extension of the right to request flexible working to all employees. A statutory code will be issued to give guidance as to how this will work in practice.

Shared Parental Leave: Parents will be able to share the statutory leave and pay that is currently available to mothers.

01 October 2012 to 01 February 2014

committee stage SCHEDULED TO CONTINUE INTO JANUARY 2013

APRIL 2013

summer 2013

2014-2015

3

Recruitment also is the start of an employer/employee relationship which could be productive and harmonious, or ultimately unsuccessful. It is therefore essential that the documents regulating this relationship are put in place at the recruitment stage.

In this article, we scratch the surface of the plethora of legal issues that can arise in recruitment by setting out some key dos and don’ts:

Create a job description and person specification prior to advertising a role

The job description should cover the main purpose and aims of the job, where the job holder sits in the organisational structure and the main tasks and responsibilities of the job holder. It should however contain some flexibility to allow you to address future operational change.

The person specification should detail the experience, know-how and qualifications, skills, abilities and behavioural attributes necessary for the job.

It is essential when preparing these documents to ensure that any conditions do not discriminate against any groups of (prospective) employees. You need to be able to

demonstrate that the requirements of the role are not influenced by any unlawfully discriminatory considerations. If the job is full-time only (as opposed to part-time), consider whether this can be justified before stating it is.

ADVERTISE THE ROLE

Consider whether the role should be advertised internally or externally. Generally, it is better practice to advertise externally so that more prospective employees from a wider pool can apply for the role, reducing the risk of indirect discrimination. However, it may be appropriate to advertise the role internally if redundancies are taking place within the organisation.

4

Recruitment is the first contact employers have with prospective employees and is the first point at which they risk discrimination claims; employers should not forget that it is unnecessary for an individual to be employed to bring a tribunal claim.

DO

DO not

DO

DO not

KEY LEGAL

DOs & don’tsWHEN RECRUITING

Instruct a recruitment agency to discriminate on your behalf.For example, suggesting

to a recruitment agency that you are seeking a younger woman would amount to discrimination.

State that the job is unsuitable for disabled people (for example because

the office is upstairs). You are under an obligation to consider making reasonable adjustments for disabled employees.

include a request for personal information on the application form

Any personal information (such as age, sex, marital status race etc) should be detachable from the application form or requested separately, for equal opportunities monitoring purposes. Such information should be withheld from the people shortlisting candidates; it is difficult for a candidate to argue that they have been discriminated against on the basis of protected characteristics if during the selection process the person shortlisting was unaware of those characteristics.

SHORTLIST candidates based on objective selection criteria

A written record should be kept of the reasons for shortlisting candidates

and this could be a simple tick box/scoring process. The selection criteria should be based on the job description and person specification. This will assist the employer to defend itself against claims that the process was discriminatory.

Have more than one person shortlisting candidates to reduce the risk of one person taking an unbalanced decision about an applicant.

INTERVIEW candidates in the same way as far as possible

Ideally all candidates should be asked the same questions and notes of the questions and answers should be retained. This can assist in evidence that any decision taken was not discriminatory. Questions should not be asked about the candidates’ personal life (such as plans to have children) unless they are directly relevant to the job requirements.

Candidates should also be asked whether they require any reasonable adjustments in advance of the interview, to reduce the risk of disability discrimination claims. Candidates are under no obligation to disclose that they have a disability.

ensure appropriate contractual documentation is provided when making an offer of employment

Any offer should be in writing, set a time limit for acceptance and specify that the acceptance must be in writing. All terms the employer wishes to rely on should be detailed in the offer letter. As well as attaching the employment contract, the offer letter should state, for example, that it is subject to the candidate providing proof of their right to work in the UK and receipt of satisfactory references.

T h e e m p l o y m e n t c o n t r a c t constitutes the written terms of the subsequent relationship between employer and employee and in the event that the relationship does not conform to expectations, this contract is essential in resolving any disputes.

As a minimum, the contract should comply with the requirements of section 1 of the Employment Rights Act 1996. However, the employer should consider any additional protection it would require, given the nature of the role. This could include restrictive covenants limiting the employee’s activities following termination of employment.

5

CONCLUSIONIn summary, the paper trail for the reasons for recruitment and the agreement as to the future conduct of the relationship is all important for the employer to deter/defend itself successfully against claims by (prospective) employees.

DO

DO not

DO

DO not

DO

DO not

DO

DO not

DO

DO not

DO

DO not

6

RECRUITING TO DELIVER

HIGH PERFORMANCEIn most cases an employer will have a standard recruitment process which involves selection via written application, consideration of candidate profiles against the requirements of the role and an interview. Usually, the right person is selected and the employment relationship is a success.

Types of testsPsychometric testing commonly tests aspects of personality and aptitude.

Personality tests focus on thoughts, feelings and behaviours in a variety of situations both at work and outside. These tests provide a good insight into how successful someone will be in their role and how they will fit in.

Aptitude tests measure intellectual and reasoning abilities. These tests are a good indicator as to how quickly a person will get to grips with their new role and subsequently learn and develop.

For any test to have value it must be aligned to the role in question,

measuring as closely as possible the appropriate level of the skills and

abilities contained in the person specification.

Good practice considerationsWhilst the benefits of testing can be significant, employers need to have some measures in place to ensure that the use of such testing does not expose

them to legal challenge from an unsuccessful

candidate. Risk can however be minimised by using well-

designed tests which are properly administered and validated.

However, on occasions it will dawn on an employer that they have recruited the wrong candidate. The impact can be costly and disruptive particularly where the role is business critical.

To have confidence and certainty over recruitment decisions employers are increasingly turning to psychometric testing to minimise the risk of costly mistakes.

This approach will ensure that the testing is: ● objective; ● standardised; ● reliable; ● an accurate predictor of performance;

and ● non-discriminatory.

Any decision based on a system incorporating these key points is less likely to be challenged.

It is also important not to use such testing as the sole method of assessment.

Candidates must also be advised in advance if these testing methods are to be used.

Specific legal issuesIndividuals do not need to be employed to have legal rights; such rights arise particularly in relation to discrimination as soon as a person enters the recruitment process. Two important issues are:

Record keepingIt is essential that test papers, assessment notes and records of decisions are kept on file to ensure any challenge can be responded to. The information obtained is most likely to be “personal data” and must be retained in accordance with the Data Protection Act 1998 in relation to both successful and unsuccessful candidates. Useful guidance can be found in the Information Commissioner’s Employment Practices Data Protection Code which we recommend should be followed. For example, records must not be stored for longer than the statutory period in which a claim arising

Personality tests focus on thoughts, feelings and behaviours in a variety of situations both at work and outside. These tests provide a good insight into how successful someone will be in their role and how they will fit in.

7

Disabled people are perceived to be one group at risk of being disadvantaged. The EHRC Code provides useful guidance in relation to the use of tests and assessment centres and covers issues such as what adjustments might be considered reasonable. For example, providing extra time to complete the tests, allowing a written test to be taken orally or vice versa, or providing written instructions in an accessible format.

Care should also be taken where a candidate is pregnant or where English is not the first language and the level of proficiency in English is not to be tested.

from the recruitment process may be brought unless there is a clear business reason for exceeding this period.

A word of caution. A candidate is entitled to make a data subject access request requiring details of the information that has been obtained and held about them not only in relation to testing, but recruitment generally.

DiscriminationThe Equality and Human Rights Commission (“EHRC”) has suggested that the use of testing may discriminate against particular groups of individuals who share protected characteristics. Employers therefore need to consider what adjustments may need to be made to the testing process to remove any disadvantage which may have a discriminatory effect.

Business success toolAlthough there are potential legal issues that can arise from psychometric testing; if testing is proportionate and relevant then it can be valuable, therefore minimising the risk of costly mistakes at the recruitment stage.

Psychometric testing however is not just a tool to be used during the selection and recruitment process; it has equal value during the entire employment relationship transforming the performance of both teams and individuals. For more information, please feel free to contact us.

A GUIDE TORETAININGYOURSTAFF

8

Based on these statistics, it would appear that employers are doing most things right to keep their staff content. However, in reality retention does not always equate to a happy workforce. On the contrary, it could be a direct response to the poor economy i.e., staff have no other option but to stay in their current jobs whether they are happy or not and whether or not they are giving their best to their employer. In addition, there are employees who simply do not see career progression as a priority and others

who do not want to move due to the existing benefits that they receive courtesy of their employer which they would not get elsewhere.

Whatever the reason for these successful retention rates, there is no getting around that generally, business owners aspire to have good staff retention rates. It is seen as imperative to organisational survival and success; it decreases employee turnover, thereby decreasing training costs, recruitment costs and loss of talent and organisational knowledge.

According to an analysis of ExpertHR's annual labour rates and costs survey, the number of employees resigning is at its lowest level in 5 years. During 2011, an average of 9.3% of staff voluntarily left their jobs while in 2007, this figure was 17.8%.

START

finish

9

AT THE START OF THE JOURNEY...When looking at improving staff retention, employers should initially look at their recruitment processes and procedures. Poor recruitment and selection decisions can lead to short-term hires. Employers should also be careful not to over-promise at the recruitment stages so as to raise an employee’s expectations too high, leading to inevitable disappointment. Our other articles within this edition of the FGazette on recruitment and psychometric testing can assist employers in making the right decisions.

DURING THE JOURNEY... We would also recommend that line managers are made accountable for staff turnover in their teams; reward managers for keeping people by creating an objective to this effect within their appraisals. Employers should also ensure that line managers are suitably trained to deal with their subordinates and that their training is kept up-to-date.

Employee engagement is also considered a crucial part of retention; the Chartered Institute of Personnel and Development described it as going “beyond job satisfaction and [being] not simply motivation. Engagement is something the employee has to offer: it cannot be ‘required’ as part of the employee contract.”

In this day and age, tools to engage and retain staff are more likely to be basic and of little or no cost; quite simply, businesses cannot afford to offer attractive financial packages to persuade employees that they are on to a good thing by staying. There are therefore a few simple things that business can do to increase employee engagement, satisfaction and retention including:

EVEN WHEN THERE IS NO TURNING bACK... We recommend that employers should always conduct an exit interview with their departing staff. To achieve the best results from exit interviews, it is advisable that line managers do not conduct the meetings. Instead, it should be an impartial member of staff who has had no real involvement with the day-to-day employment of the departing employee. The information provided at these interviews may not always be welcome but it could stop the business making the same mistake twice and identify areas for improvement.

Giving employees meaningful feedback on a regular basis and allow them the opportunity to feedback on their views without repercussions.

• Ensure employee appraisals and/or one-to-one meetings occur at least once every 6 months.

• Keep appraisals short yet as functional as possible. Nothing said to the employee should come as a surprise.

• Obtain feedback from the employee’s line manager and/or others who work closely with the employee.

• Ensure that there is an audit trail of the appraisal; keep notes of the meetings and ask the employee to sign them off to confirm his/her agreement of what was said and agreed.

Rewarding, recognising and appreciating your employees in a fair and consistent way.

• Your employees talk! Rewarding one employee and not another without justification can put the business at risk of claims for discrimination and/or unfair treatment.

Being clear about goals and expectations. • Provide the employee with achievable and measureable

objectives from the outset.

• We recommend using evidence-based objectives so that there is little room for disagreement as the evidence will show whether or not the objective(s) have been achieved.

Giving employees opportunities for growth and development. • Employees need to feel as though they have a future with the business and a path to follow

which will enable them to develop their knowledge, skills and abilities.

EMPLOYMENT LAW QUIZCheck your level

of employment law knowledge with our quick quiz on RECRUITMENT

bRAINTEASERSAnswers: 1b, 2d, 3b, 4d. Congratulations if you answered 3 or 4 questions correctly! You appear to have a good understanding of employment law. If you answered less than 3 correctly, please do give us a call to discuss any areas of uncertainty.

1. a job advertisement states that a candidate must have at least 10 years’ experience. Which one of the following is true? a) A candidate could bring an age discrimination claim on this basis and there is nothing the employer could do to defend it after specifying the 10 years' experience requirement. b) A candidate could bring an age discrimination claim on this basis but the employer may be able to defend it by showing that they had an objective reason for requiring 10 years' experience. c) There would have been no risk of a discrimination claim if the employer had stated that the candidate must have 2 years' paid work experience in a 5 year period. d) There is no risk for the employer of making such a statement in an advertisement.

3. Which one of the following statements is false?

a) A candidate who has never been employed can bring a claim in an employment tribunal against an employer.

b) If a candidate has not been employed and brings a discrimination claim, the most they can claim by way of compensation is £72,300.

c) An employer who has kept a paper trail of the reasons why a candidate has not been appointed is generally more likely to succeed in an employment tribunal than an employer who relies on oral evidence.

d) An employer instructs a recruitment agency to send only male candidates for interview, as it already employs a lot of women. A female candidate could bring a claim for sex discrimination on this basis

2. Which one of the following statements is true? a) An employee is obliged to disclose that they are pregnant before accepting a job offer. b) A disabled employee must inform their employer of their disability as soon as they commence employment. c) An employer is always entitled to ask questions about an employee's health before they commence employment. d) An employer should ensure that any personal details (such as age and sex) about candidates is kept separately and not seen by those carrying out shortlisting.

4. Which one of the following statements is true in relation to making an offer of employment?

a) It is not necessary to put an offer of employment in writing until the employee has completed their probationary period.

b) An employer can always rely on the terms of an employment contract, even if the employee does not sign it.

c) If there are two candidates, one who is white British and one who is from an ethnic minority, the Equality Act 2010 means that an employer can choose to offer the role to the candidate from an ethnic minority because it has no ethnic minority employees, even if the white British candidate is a slightly better match for the criteria for the role.

d) If an employer wants to have the right to withdraw an offer of employment after it has seen the candidate's references, it should include this in the offer letter.

HAVE YOU GOT THEM RIGHT? answers below

10

cycle 4 cynthia RAISES £1,300!

A survey from the Chartered Institute of Personnel and Development has found that

62% of employees who are not

contributing to a workplace

pension would stay opted in

when they are auto-enrolled.

The conclusion is that by 2018,

the number of people saving

into a scheme will rise from

52% to 82%.

On 23rd September 2012 the FG & Co team took part in Cycle 4 Cynthia for the second year running. Needless to say a fantastic effort was made by all who took part and we are delighted to announce

that the total funds raised are £1,300!

All sponsorship money pledged goes to two fantastic charities – the Friends of Cynthia Spencer

Hospice and Macmillan Cancer Support.

FGC NEWs

EMPLOYMENT LAW STATS!

62% 82%

52%11

WOULD OPT TOSTAY WHEN

AUTO-ENROLLED

NUMbER OF PEOPLE SAVING INTO A SCHEME

TO RISE

SEE WHAT WE’VE bEEN UP TO AT FLOYD GRAHAM & CO H.Q.

As a dedicated employment law and HR practice, Floyd Graham & Co Ltd provides the whole spectrum of HR and employment law services. The Spotlight feature gives us the opportunity to give you an insight into a particular service in each publication. In this edition of the FGazette, we would like to introduce you to the bespoke appraisal systems that we can offer..

u Are you looking to get the best from your employees?

u Are you looking to increase productivity and standards within your business?

u Say "goodbye" to lengthy and pointless review meetings which add no value to your business's productivity!

u Say "hello" to a tailored appraisal system which drives optimum performance which also provides an audit trail for the business in the event that formal performance management becomes necessary.

We can work with you to create a bespoke appraisal system that really works for your business!

We would be delighted to discuss how we can assist you.

To arrange a visiT or for more informaTion, please conTacT us on [email protected] or 01604 871148visiT us online: www.floydgraham.co.uk

SPOTLIGHT ON OUR SERVICES

Lawyers for today's employersFloyd Graham & Co Ltd

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