Whistleblowing and collective consultation changes

Whistle blowing, collective consultation and other changes

Richard Miskella and Rebecca Peedell

What we will cover

• Changes to the collective redundancy consultation rules

• Changes to whistle-blowing law

• Pensions auto-enrolment

• Sickness absence related changes

• Other changes currently on the horizon

Collective redundancy consultation

• Changes apply to redundancies “proposed” on or after 6 April 2013

Collective redundancy consultation

On 23 April 2013, ABC Ltd proposes 120 redundancies at one establishment within a 90 day period.

What will it need to do differently under the new rules?

Collective redundancy consultation

• Consultation periodWhat has changed? What hasn’t changed?

Where 100 or more dismissals are proposed, employer must consult for a minimum of 45 days before the first dismissal takes effect

(Pre-6 April 2013 the minimum consultation period where 100 or more dismissals were proposed was 90 days)

No change to minimum consultation period where between 20 and 99 dismissals are proposed – still 30 days

No change to protective award – remains capped at 90 days’ pay

TUPE regime remains separate and unchanged by this

Collective redundancy consultation

• HR1 form

What has changed? What hasn’t changed?

Where 100 or more dismissals are proposed, notification to the Secretary of State must be made at least 45 days before the first dismissal takes effect

(Pre-6 April 2013 where 100 or more dismissals were proposed notification was required at least 90 days before the first dismissal takes effect)

No change to notification period where between 20 and 99 dismissals are proposed – still at least 30 days before first dismissal takes effect

Same penalty for failing to comply (£5,000 fine)

Collective redundancy consultation

• Fixed term contracts

What has changed? What hasn’t changed?

Fixed term contracts which have reached their agreed termination points are not covered by the collective consultation obligations

If fixed term contracts are being terminated early they are covered by the collective consultation obligations

Collective redundancy consultation

• ACAS guidance on “How to manage collective redundancies”

Sets expectations of best practiceBut it is guidance only – which means

that employers to do not have to follow it

Collective redundancy consultation

• ACAS guidance on “How to manage collective redundancies”

Contains:> 10 point checklist for handling collective

redundancies> Sample selection matrix and redundancy

procedure> Overriding themes are:

» Good quality consultation » Protecting employee wellbeing (particularly

those employees who “break the bad news”) for the benefit of employers and employees

Collective redundancy consultation

• ACAS guidance on “How to manage collective redundancies”

Meaning of “establishment”The legal test for an establishment:

> Question of fact for Tribunal – and Tribunal has considerable latitude

> The unit to which the employees are assigned> Geographical and organisational factors are

relevant> Does the unit perform specific tasks?> Does it have facilities, such as a workforce and an

organisational structure, to enable it to perform those tasks?

Collective redundancy consultation

• Practical implications of changes for employersForm and content of consultation process remains the sameAlthough the minimum consultation period for 100+ redundancies is shorter

this does not mean that consultation can start later – consultation must still begin when the proposals are at a formative stage

Unlikely to mean employers change their commercial approaches to consultation – e.g. if approach is to breach consultation obligations and pay 90 days’ pay, that is unlikely to change

Less of an imperative to keep number of proposed dismissals under 100 Implementing contractual changes via dismissal and re-engagement more

attractive?Will employees want a slice of the 45 day “saving” on pay?Will the ACAS guidance raise employee expectations about having a positive

consultation experience?

Collective redundancy consultation

FOOTNOTE

*Remember recent case of Unison v London Borough of Barnet and another where protective awards were made for failure to provide employee representatives with information about agency workers

Collective redundancy – ACTION POINTS

Review redundancy policies to reflect 45 day minimum consultation period where 100+ redundancies are proposed and changed position on fixed term contracts

Build into processes an acknowledgement of the importance of employee wellbeing

Make sure fixed term contracts have fixed expiry points

Whistle-blowing

Whistle-blowing

• Requirement for disclosures to be made “in good faith” has been removed

• However, Tribunals will have the power to reduce compensation by up to 25% if the disclosure was not made in good faith

Whistle-blowing

ABC Ltd employs Bob. Bob complains to ABC Ltd that they have breached his contract by not paying him a bonus and have understated their profits in the accounts they have filed with Companies House. Jim, one of his co-workers, finds out about this and tells other co-workers, and they all give Bob the cold shoulder.

• Does Bob have a whistle-blowing claim against ABC Ltd now?

• What about after summer 2013?

Whistle-blowing

• Breach of contract by not paying a bonusUnder current law this could be a qualifying disclosureFrom summer 2013 unlikely to be a qualifying disclosure due

to new “public interest” test

• Understated profits in accountsUnder current law this could be a qualifying disclosureFrom summer 2013 – position unclear ... but not too much of a

stretch to argue there is a public interest?

Whistle-blowing

• Is ABC Ltd liable for Jim’s actions?Under current law probably no

> NHS Manchester v Fecitt and others [2012] > Court of Appeal held that an employer cannot be liable

under whistle-blowing legislation where an employee victimises a whistle-blower colleague – this may even be the case where the employer has done nothing to stop it

From summer 2013 probably yes> a worker will have the right not to be subjected to any

detriment by any act, or any deliberate failure to act, done by another worker in the course of that other worker’s employment – subject to a reasonable steps defence

Whistle-blowing

• Are further changes expected?

• The Whistle-blowing Commission has launched a public consultation asking for views and experiences of whistle-blowing in the UK (closes June 2013)

Whistle-blowing – ACTION POINTS

Review whistle-blowing policies to reflect introduction of “in public interest” test and removal of “good faith” requirement

Amend bullying and harassment/whistle-blowing policies to expressly prohibit subjecting co-workers to bullying and harassment for making protected disclosures

Train staff on policy so that you can take advantage of the reasonable steps defence

Pension auto-enrolment

• What is it?

• See “In-Brief” in packs

Pension auto-enrolment

• Top 5 questions from clients1. What is the current auto-enrolment consultation about?

2. Which workers are in the scope of auto-enrolment?

3. Which elements of pay come within the concept of “qualifying earnings” and are qualifying earnings different to pensionable pay?

4. Are salary sacrifice mechanisms and flexible benefits schemes inducements to opt out?

5. Do I need to change employees’ contracts of employment and how do I go about doing that?

Sickness absence related changes

• Changes take effect in Spring 2014

• New Independent Assessment Service to provide expert advice for sickness absences lasting for more than four weeks

• Revisions to fit notes

Changes on the horizon

• Include:Review of impact of Agency Worker RegulationsNew ACAS Code on disciplinary and grievance proceduresNew rapid resolution scheme for simple low value claims

Thank you