In this issue we shall look at what you need to do if you need to reduce your employees hours or lay them off for a period of time. What are your alternatives? Do read the sections on ‘Lay Offs’ and ‘Short Time Working’.

Do you employ workers from overseas? Or are you intending to? In Feruary 2008, the laws on ‘illegal working’ and the potential fines and penalties for employers changed. If you want to make sure that you are checking the right documentation from your employees, at the right intervals, do read our section on the new illegal working fines.

Contents

Lay Offs

Short Time Working

New illegal working fines from February 2008

How Morgen HR might be able to help you.

 Lay Offs

When employees are not provided with work by their employer, and the situation is expected to be temporary, they are regarded as laid off.

Where the lay-off amounts to dismissal (see below *), the employees may have an entitlement to redundancy pay or, subject to certain conditions, they may be able to complain of unfair dismissal to an employment tribunal.

There is a general right at common law to tell most employees not to turn up for work but there is no general right not to pay them because work is not available.

Employers are able to lay off employees where there is an express contractual right agreed between employer and employee. Alternatively, there may be an agreement covering the issue between the company and the union, or a national agreement for the industry which the employer follows. Such an agreement has contractual force only if it is incorporated into the individual employee's contract of employment ( we do not have this written into your contracts).

The right of an employer to lay off may also be implied if it can be shown (by clear evidence) that it has been established over a long period by custom and practice.

However, both parties may agree to alter the contract terms so that the lay-off is not a unilateral act by the employer but by mutual agreement (e.g. where the only alternative is redundancy). This will not necessarily mean that the employee has agreed to a variation in the employment contract giving the employer the power to lay off unilaterally without pay in the future.

Employees can be laid off without pay where there is a specific term in their contract allowing the employer to do so.

When employees are laid off, they may be entitled to a statutory guarantee payment from the employer. Payment is limited to a maximum of five days in any period of three months and the daily amount is subject to an upper limit which is reviewed annually (currently £20.40). On days on which a guarantee payment is not payable, employees may be able to claim Jobseekers Allowance and should contact their local Jobcentre about eligibility.

*If there is no contractual right to lay off without pay but the employer does so, he or she will be acting in breach of contract. The employee may:

• choose to accept the breach of contract and treat the contract as continuing, while claiming a statutory guarantee payment.

• sue for damages for breach of contract in the civil court or, in certain circumstances, at an employment tribunal.

• claim before an employment tribunal that there has been an unlawful deduction of wages under Part II of the Employment Rights Act 1996.

• claim that the employer's action amounted to a dismissal (constructive or otherwise), giving rise to a potential claim of unfair dismissal and/or, if eligible, redundancy pay.

Short-time working

Short-time working occurs when employees are laid off for a number of contractual days each week, or for a number of hours during a working day.

As in the case of a lay-off, the employer must have an express or implied power in order lawfully to reduce the amount of pay. Normal practice would be for the workforce to agree to short-time working as an alternative to redundancies.

Where there are no express or implied rights to short-time working, employees may claim that the employer's action amounted to a dismissal (constructive or otherwise) and complain to an employment tribunal of unfair dismissal. They may also sue for loss of wages in a civil court or, in certain circumstances, in an employment tribunal or claim that the employer has made an unlawful deduction of wages under Part II of the Employment Rights Act 1996 (to an employment tribunal only).

Employees placed on short-time working may be able to claim Jobseekers Allowance for the balance of the hours they do not work.

If an employee is either laid off (that is, receives no wages) or put on short-time working (that is, receives less than half a week's pay) for four consecutive weeks - or for six weeks in a period of 13 weeks - because of a shortage of work, the employee can give the employer written notice that he or she intends to claim a redundancy payment.

New illegal working fines from February 2008

The government has announced that employers will be liable for fines of up to £10,000 for employing illegal workers and will face prosecution under a new criminal offence of knowingly employing illegal workers from February 2008.

The new rules will provide that, in order to be excused from liability for a civil penalty, employers will have to carry out specified document checks at the point of recruitment and make subsequent checks at specified intervals for migrant employees who have limited leave to enter or remain in the UK. The level of the fine will depend on the nature of checks that the employer has undertaken. The new criminal offence will apply only where employers deliberately and criminally employ illegal migrant workers.

The government has published codes of practice on how employers can avoid a civil penalty for employing illegal workers and how the level of any penalty will be determined.

The measures are part of a package of immigration reforms that also include the introduction of a new points-based immigration system, which is being phased in during 2008.

Documentation acceptable as proof of right to work in the UK - acceptable single documents

Under the Asylum and Immigration Act 1996 and the Immigration (Restrictions on Employment) Order 2004, in order to establish that an individual has the right to work in the UK, an employer must check and copy or record one of the original documents in the list below. A UK passport describing the holder as a British citizen of the UK and Colonies who has the right of abode in the UK.

• A passport containing a certificate of entitlement issued by or on behalf of the UK Government certifying that the holder has the right of abode in the UK.

• A passport or national identity card issued by a state that is party to the European Economic Area Agreement, or any other agreement forming part of the Communities Treaties that confers rights of entry to or residence in the UK, describing the holder as a national of a state that is party to that agreement.

• A UK residence permit issued to a national of a state that is a party to the European Economic Area Agreement, or any other agreement forming part of the Communities Treaties that confirms that the holder has rights of entry to, or residence in, the UK.

• A passport or other travel document or a residence document issued by the Home Office and endorsed to show that the holder has a current right of residence in the UK as the family member of a named national of a state that is party to the European Economic Area Agreement, or any other agreement forming part of the Communities Treaties that confers rights of entry to or residence in the UK, and who is resident in the UK.

• A passport or other travel document endorsed to show that the holder is exempt from immigration control, has indefinite leave to enter or remain in the UK, or has no time limit on his or her stay.

• A passport or other travel document endorsed to show that the holder has current leave to enter or remain in the UK and is permitted to take the employment in question, provided that it does not require the issue of a work permit.

• A registration card that indicates that the holder is entitled to take employment in the UK.

Alternatively, the employer can check and copy or record two documents from specified combinations - see below.

Morgen HR – Can we help you?

Morgen HR was established to help small and medium sized businesses navigate the minefield of employment law and everyday HR challenges.

All directors are professionally qualified members of the Chartered Institute of Personnel and Development (CIPD) combined with relevant HR generalist experience over many years.

We work with our clients to develop and implement practical solutions in human resources, for example:
      
• assess areas of non-compliance or weakness
• develop your confidence and knowledge in dealing with employment and human resource issues
• raise awareness of employment legislation, its implementation and
• impact on your business
• improve employee relations
• motivate employees and raise performance
• improve personal and business performance
• proactively manage your employees and grow your business

Does any of this sound like you? Would you like to speak to us, confidentially and without obligation to see if we can help? Do call me, Helen Lawrence, today on 01993 880109 or E-mail me Helen@morgenhr.co.uk

Helen Lawrence – Managing Director – Morgen HR

www.morgenhr.co.uk