A new era

The Employment Relations Bill is subject to processing through Parliament but represents the Government’s settled intention—employers need to adopt claims avoidance steps and an appropriate strategy for requests for compulsory trade union recognition.

The Government will: * Reduce the qualifying period of service for protection against unfair dismissal down to one year—employers must address performance management, and probationary and appraisal systems to deal with retention decisions before the year is up.

* Raise the maximum limit on a compensatory award for unfair dismissal to £50 000. This raises the stakes in claims avoidance; employers must stick to internal procedures to show dismissals were fair.

This alters the risk management balance, and litigation becomes an option for many more employees. More individuals may assert they are employees, not unprotected contractors.

In disciplinary and grievance hearings, a worker will have a right to be accompanied by a co-worker or a trade union official—even if no trade union is recognised. If the representative is unavailable an alternative time must be fixed within five days. “Worker” means all but the genuinely self-employed. Refusing representation can lead to claims for up to two weeks’ pay; unfair dismissal or compensation for detrimental treatment. Employers should revisit their disciplinary and grievance procedures, building for the possibility of delay.

Employees with fixed term contracts will be unable to waive unfair dismissal claims. Redundancy payments can still be excluded, but employers will need to show a permitted reason for dismissing those with over one year’s service, and that it was fair—thus considering redeployment. Also, the European Commission proposes regulating when fixed term contracts are offered, their frequency, renewals and non-renewals, and their duration. Employers should plan for the future expiry of fixed term contracts, looking to dismiss fairly where there is no alternative employment.

The Bill will prohibit discrimination against part-timers, preventing less favourable treatment than full-timers, to implement the European Part-Time Directive. Part-timers will have the right to alternative positions. Codes of Practice will aim to eliminate discrimination and facilitate the development of opportunities for part-time workers.

The Government will consider extending employment rights to all who actually work for another, not just under a contract of employment .

Essentially, the Bill allows a trade union to be recognised where the majority of employees wishes it. A trade union seeking recognition for collective bargaining—dealing with pay, terms and conditions, work allocation, union issues and negotiation procedure—for a bargaining unit of workers, may make a request to the Central Arbitration Committee (CAC). This is if the employer has over 20 workers and rejects a request for recognition.

The CAC must first decide the appropriate bargaining unit. Then the CAC must decide whether the union has the support of the majority of the workers. If the majority are unionised, the CAC must automatically award recognition except in certain circumstances. Otherwise, the CAC will proceed with an application with a ballot, provided at least 10% of the workers are union members and evidence shows a majority would favour recognition. Provided a majority of those voting and 40% or more of the bargaining unit are in favour, recognition will be granted.

Once recognition is granted, if the parties do not agree, the CAC must specify a method for conducting collective bargaining. Such an agreement will have legal effect: thus, the employer or the union can be forced to comply with the prescribed method of collective bargaining. This dramatically impacts on the collective negotiations.

De-recognition mirrors recognition. New applications will only be allowed after three years. An employee campaigning for recognition will be protected against detrimental treatment, any dismissal for campaigning will be automatically unfair and redundancy selection on that ground will also be unfair.

Employers must adopt a strategy for recognition requests. For instance, favouring an internal and pre-emptive form of workforce representation, or conceding recognition, judging appropriate bargaining units, and whether to allow a multiplicity of unions to be recognised or to seek a single union agreement.

Strikers dismissed in the first eight weeks of action may complain of unfair dismissal—and where they ceased action after the first eight weeks and returned to work, or if they have not ceased action but the employer failed to follow an appropriate procedure to resolve the dispute, including a collective agreement procedure.

The Bill amends the law on strike ballots and notice. The union’s notice to the employer need no longer give names, only information helping the employer to make plans and bring information to the attention of employees. An employer must prepare requests, and to deal with the uncertainty that follows.

The Bill prohibits discrimination by acts or omission on grounds of trade union membership, non-membership or activities—outlawing different remuneration structures due to membership of a trade union. Imposing individual contracts risks complaints of detrimental treatment or automatically unfair dismissal. It also prohibits the blacklisting of trade unionists.

Employers with over 20 workers with existing voluntary recognition agreements should not be complacent. Unions can then apply for the CAC to specify a method of collective bargaining for the bargaining unit. Thus, unions can seek a new legally binding recognition and procedure.

Training is not covered by recognition. Employers must instead consult with recognised trade unions, every six months, giving unions enough information two weeks beforehand, and responding to representations within four weeks. For failure to comply, a tribunal can award up to two weeks’ pay for each employee. If not in place, employers must set up consultation arrangements.

The Bill will extend “ordinary maternity leave” after a year’s service to 18 weeks. An employee may choose when that begins. Employees will have a right to “additional maternity leave” and to parental leave after a period to be prescribed. Regulations may specify that an employee may choose the date on which additional maternity leave ends.

The employment contract will continue during maternity leave except for remuneration—all benefits and burdens of the terms and conditions, other matters “connected” with the employment, and seniority, pension and similar rights will continue as if not absent.

Employers should address the necessary changes in their current handbooks and maternity policies.

All employees after one year’s service will be entitled to three months’ parental leave, with a right to return. The employment will continue, except for remuneration. Regulations will deal with seniority, pension and similar rights; obligations to offer alternative employment, whether leave is taken in whole or in part, an employer’s power to postpone, whether an entitlement can be transferred, and whether parental leave can be by varying working hours or practices.

There is a new right to a “reasonable amount” of time off for “domestic incidents”, for all employees regardless of length of service. “Domestic incidents” are those in the employee’s home or affecting a family member or dependent.

Regulations will specify when it is reasonable to take time off, the amount of time that is reasonable limits by employers, notice to be given and if not the consequences. An employee refused time off can be awarded compensation.

Employers must check their contracts, procedures and policies to assess what action will be required, and whether these will need changing. Staff representation must also be addressed.

• Jonathan Exten-Wright is a partner in the employment department of national law firm Dibb Lupton Alsop.