Edward Wheen and Sam Murray-Hinde from Moorhead James LLP present an employment update – from the Sport and the Law Conference 2014.

1. Employment Update
Presented by Edward Wheen, Partner
& Sam Murray-Hinde, Associate

2. VOLUNTEERS
AND THE LAW
Presented by Edward Wheen

3. Volunteers – Who are they?
A volunteer is:
 “a person engaged in an activity which involves spending
time, unpaid (except for travel and other out of pocket
expenses), doing something which aims to benefit some
third party other than or in addition to a close relative.”
The Police Act 1997 (Criminal Records) Regulations 2002

4. Volunteers – Who are they?
 Volunteering is:
“an activity that involves spending time, unpaid, doing
something that aims to benefit the environment or
individuals or groups other than (or in addition to) close
relatives.”
The Manifesto for Change / The Compact Code of Good Practice on
Volunteering

5. Volunteers – What are they not?
 Employment law gives protection to:
(1) employees;
(2) workers; and
(3) a wider class of individuals who are protected
from discrimination under the Equality Act
2010

6. Volunteers – What are they not?
 An employee is:
“an individual who has entered into or works under (or
where the employment has ceased, worked under) a
contract of employment.”
S.230(1) Employment Rights Act 1996

7. Volunteers – What are they not?
 A contract of employment is:
“a contract of service or apprenticeship, whether
express or implied, and (if it is express) whether oral or
in writing.”
S.230(2) Employment Rights Act 1996

8. Volunteers – What are they not?
 A worker is:
“an individual who works under a contract of employment
or any other contract, whether express or implied, who
undertakes to do or provide personally any work or
services for another party to the contract, where that other
party is not a client or customer of any profession or
business undertaking carried on by the individual.”
s.230(3) Employment Rights Act 1996

9. Volunteers – What are they not?
 Internships
 Work experience placements

10. The National Minimum Wage
 If found to be an employee or worker, an individual is
entitled to be paid the National Minimum Wage.
 Avoid giving any monetary payment or benefit in kind
other than reimbursement of genuine expenses.

11. How to avoid giving volunteers rights
 Avoid giving individuals a contract of employment.
 A contract can be oral or in writing.
 Constituents leading to a contract of employment:
(1) offer;
(2) acceptance;
(3) consideration;
(4) intention to create legal relations; and
(5) certainty of terms

12. How to avoid giving volunteers rights
 Avoid paying anything but genuine expenses.
 Avoid rewards and gifts, unless it is a genuine honorarium
with no obligation and of small value.
 Provide only training which is necessary for the individual to
perform their duties.
 Provision of uniform and equipment should only be that
which is required for the role.
 Avoid providing free entrance to events save where
necessary to carry out the role

13. Fixed-Term Contracts
Presented by Sam Murray-Hinde

14. Fixed-term contracts
 Popular with employers.
 Danger that employers think fixed-term
employees have no rights.
 Are they as employer-friendly as first thought?

15. Fixed-term contracts
A fixed-term contract is a contract which will
terminate:
 On the expiry of a fixed-term
 On the completion of a particular task, or
 On the occurrence or non-occurrence of any
other specific event

16. Fixed-term contracts
A fixed-term contract is typically used for:
 A specific task or project
 When funding comes from an external source
 Where demand for a post is not clear and/or a trial
period is required, or
 To provide maternity cover.

17. Fixed-term contracts
Rights of a fixed-term employee:
 Normal employment rights
 PLUS: Fixed-Term Employees (Prevention of Less
Favourable Treatment) Regulations 2002

18. Fixed-term contracts
Fixed-Term Employees (Prevention of Less Favourable
Treatment) Regulations 2002:
 Cannot be treated less favourably than comparable
permanent employee, or be subject to any other
detriment by any act or failure to act, unless such
treatment can be objectively justified

19. Fixed-term contracts
Who is a comparable permanent employee?
Someone who:
 Is not on a fixed-term contract
 Works for the same employer in the same
establishment
 Does the same or broadly similar work.

20. Fixed-term contracts
What is less favourable treatment?
 Less favourable terms and conditions of
employment (pay, bonuses, access to benefits)
 Not being given access to promotion
 Bullying or harassment
 Dismissal (to include being selected for redundancy
ahead of permanent employees).
N.B Only prohibited if treatment on the ground that
the employee is a fixed-term employee.

21. Fixed-term contracts
Can only be treated less favourably where objectively
justified.
Treatment must be:
 a proportionate means of achieving a legitimate aim.

22. Fixed-term contracts
 Fixed-term employees must be informed of any
permanent vacancies.

23. Fixed-term contracts
Beware of using successive fixed-term
contracts:
 After four years‟ continuous employment on a
series of successive fixed-term
contracts, employees are automatically
deemed to be permanent employees
UNLESS the continued use of such contracts
can be objectively justified

24. What happens on expiry?
 Potential wrongful dismissal claim if contract terminated
ahead of expiry and no break clause.
 Non-renewal of fixed-term contract amounts to a
dismissal by law.
Fixed-term contracts

25. Fixed-term contracts
Need to show potentially fair reason for dismissal:
 Capability;
 Conduct;
 Redundancy;
 Contravention of a statutory obligation;
 Some other substantial reason.

26. Fixed-term contracts
Considerations:
 Objectively justifiable grounds for using or renewing a
fixed-term contract?
 Non-renewal of a fixed-term contract amounts to a
dismissal by law.
 Keep a record of the expiry dates of contracts.
 Think carefully how to handle the expiry of a fixed-
term contract. Plan ahead.
 Nb. Acas Code of Practice does not apply.

27. Fixed-term contracts
 Consider including a notice period to allow for
termination before expiry date.
 Keep a record of employees‟ continuous service –
where someone attains 4 years‟ service, send a
written statement of variation.
 Audit contract terms and benefits to look for
differences to those offered to permanent staff.
 Where a contract is extended, agree the terms and
the length of the extension.

28. Pensions
auto-enrolment
Presented by Sam Murray-Hinde

29.  Pensions Act 2008 came into force on 30 June 2012.
 Imposes obligation on UK employers to automatically
enrol „eligible jobholders‟ into a pension scheme and to
pay minimum contributions into the scheme.
Pensions auto-enrolment

30. Pensions auto-enrolment
When do the new employer duties apply?
 From the relevant staging date.
 If fewer than 250 employees, the staging dates will
run from 1 April 2014 to 1 April 2017.
 Staging timetable available from the Pensions
Regulator website.
 Employers must register with the Pensions Regulator
within five months of staging date.

31. Who must be auto-enrolled?
 All eligible jobholders, unless they are already active
members of a qualifying scheme.
Pensions auto-enrolment

32. Pensions auto-enrolment
An eligible jobholder is someone who:
 Is aged at least 22, but is below state pension age;
 Earns more than the earnings trigger in a relevant pay
reference period (currently £9,440).

33. Pensions auto-enrolment
When must an eligible jobholder be auto-enrolled:
 Within six weeks of their auto-enrolment date (“the
AED”).
 The AED will be the date a new jobholder commences
employment, or the employer‟s staging date if they are
already employed.
 Can be later in some circumstances.

34. An AED can be postponed for up to three months in
relation to:
 Eligible jobholders already working for employer at
staging date;
 New workers who are eligible jobholders when they
start; and
 Existing and future workers who are initially ineligible but
who become eligible in the future.
Pensions auto-enrolment

35. What type of scheme must eligible jobholders be enrolled
into?
 An automatic enrolment scheme which meets certain
quality tests and additional criteria.
 An existing scheme which amounts to a qualifying
scheme.
 NEST.
Pensions auto-enrolment

36. Pensions auto-enrolment
On-going employer duties:
 Must not take any action that could result in jobholder
ceasing to be active member of qualifying scheme or
the scheme ceasing to be a qualifying scheme.

37. Pensions auto-enrolment
Must provide the following information to an eligible
jobholder within one month of AED:
 Their AED;
 Information about the scheme, including contact
details;
 Value of contributions due from member and
employer;
 Details of how tax relief will be given; and
 Confirmation of right to opt-out and how to do so.

38. Pensions auto-enrolment
Must provide the following information to the scheme
administrator within one month of AED:
 Personal information about the eligible jobholder;
 The AED; and
 Jobholder‟s gross earnings and value of contributions
payable by employer and member.

39. Pensions auto-enrolment
Opting-out:
 Once auto-enrolled, jobholder can opt-out of scheme
within one month of the later of the date he became
an active member and the date given the statutory
enrolment information.
 Must send valid opt-out notice to employer.
 Entitled to refund of contributions he paid, less any tax
due.

40. Pensions auto-enrolment
Re-joining:
 Where opted-out, jobholder can change mind and
apply for membership of an automatic enrolment
scheme.
 Needs to give notice to employer.
 Can only do this once in a 12 month period.

41. Pensions auto-enrolment
Workers not eligible for auto-enrolment have statutory right to
opt-in or join a scheme:
 Non-eligible jobholder: 16-74 years old with earnings
exceeding qualifying earnings threshold but below earnings
trigger; OR aged between state pension age and 74 with
qualifying earnings about the earnings trigger.
 Entitled worker: Aged 16-74, works in UK under
contract, but earns less than start of qualifying earnings
band

42. Pensions auto-enrolment
Within one month of the staging date or of them starting
work, the employer must send to a non-eligible
jobholder:
 Statement that has right to give notice and opt-in to
auto-enrolment scheme and entitled to receive
employer contributions;
 Statement that written notice must be signed; and
 Details of how to obtain further information about
pension saving.

43. Pensions auto-enrolment
Within one month of the staging date or of them starting
work, the employer must send to an entitled worker:
 Statement that worker may require employer to
arrange for him to become active member of
registered pension scheme on written notice;
 Statement that written notice must be signed; and
 How to obtain further information about pension
saving.

44. Pensions auto-enrolment
Re-enrolment:
 Every three years, employer must auto-enrol all
eligible jobholders who were initially auto-enrolled but
opted out. The requirement to provide the statutory
information applies.

45. Pensions auto-enrolment
Prohibited conduct:
 Cannot contract out of, limit or exclude any of the new
duties.
 Unlawful to ask job applicants if intend to opt-out.
 Unlawful to offer financial incentives for opting-out.

46. Pensions auto-enrolment
Obliged to retain records for six years of:
 Details of auto-enrolment scheme used,
 Name, NI number, DOB and AED of all jobholders
auto-enrolled, together with corresponding details for
non-eligible jobholders and entitled workers who have
opted-in;
 All opt-out, opt-in and joining notices received.
 Evidence of jobholders‟ earnings and contributions;
 Dates on which employer contributions paid; and
 Where postponements used, records of these.

47. Pensions auto-enrolment
Penalties for non-compliance:
 No action for breach of employer‟s statutory duty.
 Regulator can intervene and has power to issue
formal compliance notice.
 Where breach not remedied, can impose fixed
penalties starting at £400.
 For serious or persistent breaches, can impose
escalating penalties.

48. OTHER UPDATES:
EMPLOYMENT TRIBUNAL
– FEES & PRE-CLAIM
CONCILIATION
Presented by Edward Wheen

49. EMPLOYMENT TRIBUNAL FEES
INTRODUCED ON 29 JULY 2013
 Type A Claims (e.g. unlawful deduction of wages
etc.) issue fee £160; hearing fee £230
 Type B Claims (e.g. unfair dismissal, discrimination
etc.) issue fee £250; hearing fee £950

50. Level of fees
 Type A Claims (e.g. unlawful deduction of wages
etc.) issue fee £160; hearing fee £230
 Type B Claims (e.g. unfair dismissal, discrimination
etc.) issue fee £250; hearing fee £950

51. Remission
 Fees waived for those who have less than £3,000 in
disposable assets (including partner‟s assets) and a gross
income of less than £1,245 per month (for a couple without
children).
 Other criteria for individuals, and those with children.
 Possibility of part-remission for those who are just above
these criteria
 There will many who do not qualify for remission, or part-
remission, but will nonetheless be unable to afford the fees.

52. Claims down
 Ministry of Justice published statistics for October-
December 2013 show Employment Tribunal claims
down by 79% on the same period in 2012....
and
 75% lower than June-September 2013 quarter (during
which the fees were introduced)

53. Change?
 Application by Unison for Judicial Review failed, in
essence, because of the absence of reliable evidence of
the impact of the fees on access to justice......
 The High Court expressed the hope that the Lord
Chancellor would amend the scheme if reliable figures were
to show such an impact, to save the parties returning to
Court.
 Now that there are reliable figures, will he do so?

54. ACAS early conciliation
 From 6 April 2014 prospective Claimants will be
required to notify ACAS of the problem before issuing
an Employment Tribunal claim.
 If a Claimant fails to do so, the claim will be rejected.

55. ACAS early conciliation
 The conciliation period is 4 weeks, but can be
extended to 6 weeks.
 The clock stops for the purposes of time limits (e.g. 3
months for most ET claims) whilst conciliation takes
place.

56. Will it work?
 24,000 disputes were dealt with under pre-claim
conciliation procedures in 2012 and 75% did not go on
to become ET claims.
 Evidence of success? How many ET claims would
there have been without ACAS involvement?!

57. Will it work? Cont’d…
 It is clear, however, that ACAS has a better chance of success
with simple disputes (e.g. breach of contract or monetary
disputes) than with the more complex claims (e.g. unfair
dismissal or discrimination claims).
 Although Employment Tribunal fees are payable by the
Claimant, a losing Respondent will normally be ordered to
reimburse these to the Claimant. As a result, it is in the interests
of both parties to give pre-claim conciliation a chance.

58. Will it work? Cont’d…
 However, it will not usually be commercially sensible for
employers to invest too much time and money in this
process since (a) the claim may not be brought
(particularly in view of the fees payable and (b) it may
be used by some as an attempt to test the strength of
the other party‟s case.
 There is no penalty for declining to engage in early
conciliation. However, it is a factor which may be taken
into account by an Employment Tribunal when considering
an application for costs after Judgment has been given.

59. Conclusion
 There will be fewer Employment Tribunal claims. Even if the
rules change, fees are unlikely to be entirely removed and this
will inevitably deter some Claimants.
 There will, however, be more contact from ACAS before
claims are issued, and employers will need to consider
whether to try to negotiate a settlement at that stage, or take
the risk that an Employment Tribunal claim will follow. Legal
advice on the prospects, at that stage, will assist in assessing
the level of risk, and the likely award if the claim were to be
brought.