View more on these topics

Reading the rights act

If you are an IFA with no employees, no casual staff, no homeworkers and no agency staff then this article will be of no relevance to you.

If, however, you do have anybody who could be said to be “working” for you, you may want to read on.

Monday, September 4, 2000 may not have struck you as a red letter day for employees&#39 rights but the Government has swung the balance of power away from employers and towards employees.

Employing staff is increasingly becoming a minefield and the Government has placed a new and rather large mine in it. Beware, because ignorance is no defence and falling foul of this mine will be expensive and embarrassing.

Courtesy of sections 10-15 of the Employment Relations Act 1999 employees now have the statutory right to be accompanied at a disciplinary or grievance hearing.

The reasoning behind this new right is to prevent employers intimidating employees at disciplinary and grievance hearings – as if.

It also gives the Government credibility with the trades union movement which sees the new right as a good way of spreading its influence in the workplace.

As with any legislation, the devil is in the detail but the key points that employers need to be aware of are:

The disciplinary/grievance process is now more “consultative” than ever before. The days of the employer calling the shots and dictating the pace have gone.

The legislation is phrased in terms of “worker” as opposed to “employee”. The significance of this is that, from a legal perspective, worker has a broader meaning than employee. In practical terms, this means that agency, casual and homeworkers will all benefit from the right.

A disciplinary hearing is one which will result in a formal warning or other action. It may be that you ask a member of staff to see you for an informal chat which you then want to escalate to a formal warning. Prior to giving the warning, you would need to stop and formally convene a “disciplinary” hearing where the worker has the right to be accompanied.

A “grievance” hearing is unhelpfully not defined in the legislation but the new Acas disciplinary code interprets it as being a meeting where the matter in question is one of a “legal duty arising from statute or common law”. Bearing in mind the consequences of getting it wrong, the practical solution is to let “workers” with a grievance be accompanied.

The representative themselves can be either a trade union official or a fellow worker. They have the right to address the meeting and confer with the worker during the hearing. The representative is not allowed to answer questions on behalf of the worker but presumably this can be easily circumvented by the representative calling “time out” and conferring with the worker whenever a difficult question is asked.

The representative should be given “reasonable time off” (paid) to familiarise himself/ herself with the case and to confer with the worker as well as attend the hearing itself.

The time and place for the hearing should be mutually agreed. There is a right of postponement if the chosen companion cannot attend although the worker must propose an alternative date within the following five working days.

What are the consequences of ignoringthis new right?

The worker has yet another right to go to an employment tribunal. There are now over 70 causes of action against an employer at an employment tribunal. If the claim is upheld, the worker will receive two weeks&#39 pay, subject to a maximum of £460.

The aggravation and management time in attending the tribunal will cost you much more than £460.

More important, failing to allow the worker his right to be accompanied will reflect very badly on the employer at any tribunal claim for unfair dismissal. Even the most confident IFA will start feeling deeply uncomfortable when subject to the cross-examination of even a half-decent lawyer on this point.

If a worker can show that he or she was dismissed for asserting or trying to assert their right to be accompanied, then the dismissal will be automatically unfair. The normal qualifying period of one year will not apply.

What should you doto protect yourorganisation?

Make sure anyone who may be involved in dealing with a disciplinary or grievance hearing knows about the new rules.

Remember, if they get it wrong, the organisation will be vicariously liable for the error.

In our experience with advising IFAs, problems regularly occur when dealing with under performing staff. You should have clear procedures on how to deal with staff who are not meeting targets and these procedures should incorporate the new rules.

Apply the rules correctly. If in doubt, seek advice.

You will need to amend your disciplinary/grievance policies so they reflect the change.

Review your employment contracts, particularly in respect of probationary periods. It must be made absolutely clear that the employment can be terminated at the end of the probationary period without the necessity of incurring the disciplinary procedure.

In the absence of a disciplinary hearing, the right to be accompanied does not arise.

The overriding thing for IFA firms to remember is that the right to be accompanied is now legally binding.

For most firms which treat disciplinary or grievance hearings sensibly and compassionately, it is not really a culture change so much as pro- cedural clarity. But for those who operate a hire and fire culture, the new right will come as an unwelcome and expensive shock.

Recommended

Brave NU world as CGU is consigned to the history books

Consolidation among fund managers can be a messy business. In the past year, few UK fund management groups have escaped the shake-up arising from merger and acquisition, with many emerging gravely wounded from the resulting restructure.Scottish Widows&#39 merger with Hill Samuel Asset Management earlier this year resulted in the departure of many of its key […]

Friendly fire

Eagle Star – Eagle Star Series IV Personal PensionType: Stakeholder-compatible personal pension plan with unit-linked and with-profits funds.Minimum premium: Annual £750, monthly £75, single £5,000.Minimum-maximum ages: 18-75.Fund links: Threadneedle funds – secure, managed, property, managed income, cautious managed, long dated gilts, UK corporate bond, UK money securities, UK preference & fixed income, sterling bond, balanced […]

Motivation marketing

To compete in the retail financial services marketplace, you need to have at least £5m to spend on marketing activities – each year, every year.You haven&#39t got £5m? But you want to grow your business, don&#39t you? You want to persuade people they will get a better deal if they consult you rather than the […]

Long arm of the law

The Government may be accused of being ineffectual and lacking in substance but, as IFAs know only too well, some of its initiatives can have far-reaching implications.The new Competition Act could allow smaller IFAs to sue big firms which get better commission from providers, while the Human Rights Act is set to change the Financial […]

Retirement - thumbnail

Pension freedoms: stop the scams

At the beginning of 2015, we highlighted that the new pension freedoms that come fully online on 6 April also represent a very attractive opportunity for the criminal fraternity to scam savers out of some, or all, of their accumulated retirement savings.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com