The Power of “No”

JonathanGolden

In negotiating terms, “no” is possibly the most effective argument available to an employer, but as with all powerful tools, it is double edged and should be used with care.

We have noticed an increasing trend amongst employers, particularly banks, which are going through a consolidation process, to provide a fixed termination package and settlement terms.

They refuse to discuss either – regardless of the individual circumstances. It is a case of “one size fits all” and generally the size of the package is enough to encourage most affected employees to take it.

Any challenge, however reasonable, is met with a “no” and perhaps a tightening of the timescale for acceptance.

Any persistent challenge – even by a valid claimant whose circumstances demand individual consideration – is still met with a “no” because, as with insurers, the employer uses two systemic methods of dissuasion:

  1. It works on the basis that in percentage terms, very few people with good claims will want to go against the machine, and the employer will fight every case, even if they go to tribunal, just to get across the message that it will be a long and expensive process to follow a complaint through. So very few do go to hearing. Most drop out.
  2. Any discussion about the terms of a settlement document are dealt with by a very junior HR representative who has been told, on pain of death, never to agree to change any terms, and to keep religiously to a script of “this is a standard clause which we never vary”. If you push hard enough, it will go up the line, and come back – some time later, when employees are edgy – with the same answer even where the clause is clearly inappropriate or wrongly drafted. Systematic intransigence and/or incompetence is another tremendous tool.

So is this the right approach for all employers? Yes and no: it works, and so long as the package that is offered meets the statutory minimum or is modestly enhanced, pretty much everyone will accept what is on offer, and the process will have been managed cheaply by junior staff. Job done.

But treating everyone in this way tends to breed universal resentment of the organisation. And in terms of recruitment this may be damaging, as research tells us that a customer who has a good experience will typically tell 3 to 5 people, but a customer who has a poor experience will tell more than 20.

This may be apocryphal, but I get sufficient feedback from clients to know which employers are seen as having toxic employee relationships, and they are not shy of telling people what they think of their former employer. So a large employer has to balance the expediency of a one size fits all approach, and the short term financial gains this provides, against long term reputational damage when they want to recruit on the upswing.

Where the power of “no” is always counterproductive, is when a single employee is being dealt with, especially where the individual is senior and articulate or there are complicating issues.   In that situation, the “this is what you get” approach rarely works, it just inflames the situation. In fact its mirror works much better: in my view, it is vital for an employer to reach behind the politics and personalities to establish why a situation is not working, and then to explain that clearly to an employee and propose a solution. The power of persuasion, while not exactly a “yes” will almost always produce a better result than a “no”.

Treating employees as individuals and taking the care to resolve a matter firmly but fairly is not a selfless act, it stops things getting polarised, and costs less than a dispute – both in management time and fees. The departing employee is hardly likely to be a cheerleader for their former employer, but equally it may result in them adhering to their confidentiality provisions and stop them from denigrating that former employer in the market.

In my experience, in the long term, the power of persuasion will always beat the power of “no”.

 

Tips for Employers: getting your own way and how to stop making stupid mistakes

WynLewis

Varying a contract of employment should be one of the simplest tasks.  Apparently it isn’t.  It seems that there’s no limit to the number of ways to get it wrong.

Hot on the heels of my last comment on this topic in Wess v. Science Museum Group – where the employer got it right – are three more cases that focus on the same topic, but where employers seem to have ignored their basic contract law and public sector employers have wasted public funds by having their decisions proved wrong:

In Sparks v. Dept for Transport the DfT introduced a new trigger for the number of absences that sparked an official absence management process.  But the court found that the current trigger was incorporated into the employees’ contracts of employment (i.e. it wasn’t in a variable policy) so the DfT could only make changes if that change was not detrimental.  In fact the new figure would have been detrimental to the employees, so the old trigger was reinstated.

In Norman v. National Audit Office the NAO reduced paid sick leave and privilege leave by relying on a general flexibility clause and on the words “They are subject to amendment”.  The Tribunal agreed that the NAO could do this, because there had been extensive negotiations before the changes had been made.  But the EAT disagreed and said the words weren’t precise enough to cover the methodology for making any change that was then notified to employees.

In Hart v St Mary’s School (Colchester) Ltd  the school imposed a change to Ms Hart’s working hours that required her to spread her hours over 5 days, not 3 days.  This was done by relying on a contractual provision that required staff to work at such times as necessary for the proper performance of their duties and that working hours of part time staff were “subject to variation, depending upon the requirements of the school timetable”.  But neither of these provisions worked, and the EAT found that the school had breached Ms Hart’s contract.

So in each of these three cases, the employer lost; and should have known better.  Was this due to being inept?  Was the change a calculated try-on?  We’ll never know. But what we do know is this: 

  1. Employers who state in an employment contract that terms in a staff handbook are part of the employment contract should clarify which terms are intended to be contractual and which are not.  Generally it’s better to use a completely non-contractual staff handbook, which will be easier to vary;
  2. Employers will find it difficult to rely on a general right to vary clause; and
  3. General flexibility clauses tend to be used only to make minor administrative changes, or to vary contractual provisions with which the employer is required to comply.

When will these lessons be learned?  When will public sector employers not waste public money by having their decisions proved wrong in the tribunal system? The answer is easy:  if you want to avoid getting it wrong, come to us at Golden Leaver; we know what we’re doing.

Compensation (and shared parental things) made (slightly) easy(ier)

WynLewis

For those of you who like to know such things, these are the new rates for the main statutory payments and for the new capped amounts for compensation from 6th April 2015 onwards.

The exception – one wonders why, but let’s thank the Government anyway for this extra layer of complexity – is that the SMP, SAP and ShPP rates apply from 5th April 2015 (i.e. one day earlier).

             

SMP/SAP/ShPP:

up to £139.58 (from £138.18) per week.
MA:

up to £139.58 (from £138.18) per week.
SSP:

       

up to £88.45 (from £87.55) per week from 6 April 2015.
National Insurance:

the lower earnings limit applying to NICs, below which employees are not entitled to SSP, SMP, SPP, SAP and ShPP, will increase to £112 (from £111) per week.
Week’s Pay:

up to £475 (from £464) (maximum)
Basic Award:

up to £14,250 (from £13,920) (maximum)
Compensatory Award:

up to £78,335 (from £76,574) (maximum)

                                       
And, for those of you who are puzzled (who isn’t?) by the Byzantine rules of Shared Parental Leave and Pay, you’ll be pleased to know that BIS has published an online calculator to help work out the entitlements to time off and pay on the birth of a child, taking account of existing maternity and paternity leave rights under the new shared parental leave scheme which will apply to babies due on or after 5 April 2015.
It’s here:  https://www.gov.uk/government/news/calculate-your-leave-and-pay-when-you-have-a-child   Enjoy.

 

Too many tweets …

CarolineLeaver

.. made for a fair dismissal in the case of Game Retail Ltd v Laws – although it was the content and context of Mr Laws’ tweets that were the problem, not their number.

This was one of them:

This week I have mainly been driving to towns the arse end of nowhere… shut roads and twats in caravans = road rage and loads of fags smoked’.

“Not so bad”, you might say.  “I’ve heard worse on daytime TV”, you might also say.

And an Employment Tribunal seems to have taken a similar view, when it decided that Mr Laws’ more offensive and expletive laden tweets (28 of them) were misconduct, but not gross misconduct, so Game Retail’s decision to summarily dismiss Mr Laws fell outside the band of reasonable responses.

The Tribunal’s reasoning was:

  • The tweets were posted for private use and it had never been established that any member of the public or employee of Game Retail had access to Mr Laws’ tweets or associated him with Game Retail.
  • Game Retail’s disciplinary policy did not state that inappropriate use of social media could result in dismissal without notice.

It seems, however, that the Employment Tribunal had failed to understand how Twitter works.  The point was that, although Mr Laws’ Twitter account was a personal account, he had no privacy settings, so his tweets were visible by default, he could be seen by staff and potential customers, and 65 Game Retail stores were following Mr Laws (although whether an employer should be following a member of staff is another issue…).

As a result the Tribunal were criticised for asking the wrong question.  Instead of asking whether the tweets had offended anyone, the correct question was whether Game Retail had been entitled to reach the conclusion that the tweets might have caused offence.

The answer to that question (based on the above example of one of Mr Laws’ tweets) was “yes”.   The factual points were (i) the Tribunal had found that the tweets were offensive, (ii) a manager had reported them, and (iii) 65 stores had access to them.  Therefore, it was inconsistent for the Tribunal to conclude that the reputational risk to the business was only theoretical.

Consequently Mr Laws’ dismissal was fair – which will be welcome news for those employers who invest considerable time and money in reputational management and CSR, and who will prefer not to have those efforts undermined by careless tweeting.

So is Facebook the same?  Interestingly, Mr Laws’ case was decided differently to a previous High Court ‘Facebook’ case (Smith v Trafford Housing Trust) in which an employer had not been entitled to characterise the posting of views about gay marriage on an employee’s Facebook wall as misconduct.   This may be because Twitter has a more public nature than Facebook, making dismissals relating to offensive tweets easier to defend for employers than a similar Facebook status.

This case is a reminder that businesses should review their social media policies and ensure that Twitter is included and that their staff understand what is acceptable and what will be misconduct.

A word of warning – if any business believes that Twitter isn’t relevant, consider this: in Q1 of 2007, 400,000 tweets were posted, whereas in 2012 over 100 million users were posting some 340 million tweets per day.  If you are an employer or an employee don’t get caught out…

Collective Redundancies and the Ghost of Woolworths

WynLewis

Finally we have (almost) official confirmation that the 20+ trigger for collective redundancies isn’t relevant until the number of redundancies at individual sites each meets that threshold.

But as the Ghost of Woolworths exits stage left (no doubt muttering “Collective redundancies – to consult, or not to consult: that is the question”) – is the farce over?

Possibly not…  So it may just be sensible to summarise what an employer needs to know when deciding whether to inform and consult individually or collectively:

The legal bit:  if you’re contemplating 20 or more redundancies at one establishment (think of it as a “unit”) over a 90-day period, you have to inform and consult collectively (with employee representatives) for at least 30 (and sometimes 45) days before the first redundancy takes effect.

The facts:  six or so years ago, Woolworths went into administration and closed all its UK stores.  There wasn’t any consultation and about 25,000 staff brought claims for protective awards (for failure to consult).  The Employment Tribunal followed the one establishment test and found that staff who worked at shops with 20 or more staff should get an award, but that staff who worked at smaller shops shouldn’t.  But the Employment Appeal Tribunal (“EAT”) weighed in and applied the 20+ test to the entire undertaking (i.e. it lumped all of the Woolworths shops together).  This meant that all of the staff should get a protective award.  This has caused major problems for multi-site employers, who had previously treated each site separately under the one establishment test and had only consulted collectively where they had 20 or more staff at risk of redundancy at each individual site.

The fly in the ointment:   the effect of the EAT in the Woolworths case disregarding the one establishment test and replacing it with a one undertaking test was that the 20+ threshold was triggered even if you had lots of units (shops, in the Woolworths case) with fewer than 20 redundancies at each of them, but your overall business exceeded the 20+ redundancy threshold.

The consequences:  since then, many redundancies that might not have involved any collective consultation (and so could have been carried out quickly on a small scale) were “collectivised” and caused employers to incur a lot more risk and worry, as well as (possibly) pay their employees less redundancy pay, due to the need for a contingency to deal with the cost of external advisers and potential claims by those same employees and their representatives.

The commentaries:  many people thought that the EAT was correct and that the UK had failed to implement the relevant EU legislation properly; others thought it was curiously impractical.

It’s all over now:  it may now be time to ring out the bells.  Why?  Because the Advocate-General (“A-G”) of the European Court of Justice (“ECJ”) has opined that:

The UK can now limit the need to consult collectively on redundancies to cases in which the proposed job losses are at the same site (i.e. the place where people actually work) rather than look at the overall number of proposed redundancies.

Hurrah:  well, maybe…  But there are at least three further flies in the A-G’s ointment:

  1. there’s still scope to argue about the meaning of “establishment”:  what if (say) Prèt à Manger or Costa Coffee operates several stores, but in one shopping centre?  Would each store be treated separately, or would they be lumped together and have to be regarded as one establishment?
  2. the opinion of the A-G is limited to the UK, so the ECJ may come to a different conclusion if it decides similar issues that come to it from other countries.
  3. there’s also a risk that the ECJ itself, which isn’t bound to follow the opinion of the A-G, may go its own way (not for the first time) and not follow the A-G’s opinion.

Watch this space.  Many a drama involves a character leaving through one door and re-entering through another; the Ghost of Woolworths may well do the same.