Employers should beware of tough new anti-bribery laws when giving or receiving corporate gifts this Christmas.

The Bribery Act affects everyone from global businesses to individuals, prompting the Royal Mail’s recent warning to postal workers to refuse Christmas gifts worth more than £30.

Roger Spence, head of Employment law at Preston-based Harrison Drury Solicitors, commented: “This will be the first festive season to be affected by the Act, which makes it illegal to offer or receive bribes, and to fail to prevent bribery.

“Christmas is high season for corporate hospitality and giving. Despite the downturn, some businesses might be tempted to splash out to keep key customers on board, and a number of grey areas make this a risky undertaking.”

Ministry of Justice guidelines say corporate gifts that are ‘reasonable and proportionate’ will not lead to problems, but no cash levels have been stipulated. This means companies must decide for themselves on ‘appropriate standards’.

Roger Spence continued: “Clearly giving away a foreign holiday would be overstepping the mark, while sending someone a logoed memory stick would be fine. However, a case of champagne or an expensive Christmas hamper might cause problems.

“One of the main issues for businesses is to ensure they have an adequate anti-bribery procedure in place that all employees and sub-contractors should follow. An adequate procedure will represent a defence if the company is charged with failing to prevent bribery.”

Roger Spence added: “Regardless of the size of your business it is important to comply with the new rules by carrying out a risk assessment and introducing anti-bribery procedures.”

For more information on The Bribery Act, or any other employment law issue, please contact Roger Spence on 01772 258321.

Seeing one of your former employees set up a business in direct competition to yours can be a frustrating experience and one that is damaging to your interests.

If your business isn’t protected by adequate restrictive covenants, it can be disconcerting when that former employee begins approaching your clients with phone calls and e-mails, schmoozing them at networking events, even trying to entice your staff members to join their new venture.

All businesses can protect their legitimate business interests by using employment contracts to bar key employees from dealing with or soliciting work from customers and suppliers for a period of time.

Drafting restrictions on a bespoke basis

When recruiting key members of staff who will soon have a close working relationship with your customers and suppliers, it is crucially important to ensure restrictive covenants are added to their employment contracts. An audit of your existing key employees is also advisable to ensure they too are covered.

However, the mistake many companies make is using wording that is too generic. It is vitally important that such restrictions are drafted on a bespoke basis to avoid the risk of the courts determining they are too broad to be enforceable.

For example, it is unlikely that a wide geographical area will be justified and, as a general rule, a restriction for more than 6-12 months will also be difficult to defend.

Types of restrictive covenant

The standard types of restrictions which can be used by employers are:

- Non-competition covenants – restrictions on the former employee working in similar employment for a competitor;

- Non-solicitation covenants – which prevent poaching of clients, customers or suppliers of the former employer;

- Non-dealing covenants – which prevent a former employee from dealing with former clients, customers or suppliers, regardless of which party approached the other;

- Non-poaching covenants – which prevent an employee poaching former colleague.

By taking this cost-effective action, a business will gain a set period when it can focus on strengthening relationships with customers or suppliers.

Not only will restrictive covenants give some protection against employees who go on to start a direct competitor, it can also make it more problematic for existing rivals to poach employees who have an intricate knowledge of your business systems and processes.

For more information on restrictive covenants, or any other employment law matters, please contact Roger Spence on 01772 258321.

Last month’s English riots served as a reminder of the huge disruption and upheaval such unforeseen incidents can cause to businesses.

The disturbances left many business owners having to make claims to their insurers for damage to stock and premises, with some losing their businesses entirely.

This brought employee rights into the spotlight, in particular the issue of employee pay and redundancy when a business is unable to trade normally, either because of damage caused by the rioting, or early closure on police advice.

An employer, on the face of it, cannot make deductions from an employee’s wages unless there is a written term in the contract of employment that allows for deduction of wages.  Therefore, if the employee is ready and willing to work, the employer should continue to pay the employee, even if the employee is unable to work due to the damage and disruption.

However, this is dependent upon a number of issues including the status of the worker and the terms of employment contracts.

If an employee is paid a salary or a weekly wage, and has guaranteed hours of work, they will be entitled to their wages. However, a casual worker who is paid hourly for the work they do without the hours being guaranteed will not be entitled to their wages.

It is worth noting that employers may be able to exercise the right to temporarily ‘lay off’ staff without pay (or place the employee on short time working) if there is specific provision for this within the employment contract. In this scenario the employee may be entitled to a statutory guarantee payment for a maximum of five days where the employer cannot provide him with work (currently capped at a maximum of £22.20 per day). This can provide significant savings for employers but obvious difficulties for the employees involved.

Alternatively, there may be a redundancy situation that means the employment can be ended by reason of redundancy. There must be a genuine redundancy situation; the most likely is the closure of the business.

If a business has been destroyed or damaged by an unforeseen event then it will probably have to close, either permanently or temporarily, to carry out necessary repairs. A business which closes temporarily can still make people redundant, but the issue of whether temporary closure is a genuine redundancy situation is a question of fact. Case law on this matter suggests that four weeks for refurbishment is not enough to establish a genuine redundancy situation.

If an employer does decide to make people redundant due to business closure then it must first consider any alternative work available within the business, especially if the business operates from a number of sites. The employer must follow a fair procedure and is obliged to ensure the correct redundancy payments are made.

If you would like further advice on this matter, or any other employment law issue, please contact Roger Spence at Harrison Drury on 01772 258321.

A number of changes are coming into force on October 1 2011 when the Agency Workers Regulations 2010 is implemented. The regulations are intended to offer better treatment to agency workers and offer a form of equal treatment in line with permanent members of staff.

The new regulations will apply to all ‘temp agencies’ who supply temporary staff to businesses.

The agency worker will, after a qualifying period, be entitled to equal “basic working and employment conditions”. Basic conditions are restricted to pay, working time, night work, rest periods, rest breaks and annual leave. However, they will only apply if they would have been ordinarily included in the contract had the person been recruited permanently.

The qualifying period is 12 continuous calendar weeks in the same role for the same business. There are anti-avoidance provisions in place to prevent businesses moving workers to marginally different roles before the twelve weeks expires.

Under the new Agency Workers Regulations there are a number of rights that agency workers will be entitled to from the first day of service. These include access to facilities and amenities such as canteen and car parking. Agency workers must also be given information on permanent vacant posts available within the business from day one.

Breach of the regulations may result in the temp agency and the hirer being taken to an employment tribunal by the worker and an award of compensation and damages made against them.

If you have any questions about agency workers regulations, or any other employment law matter, contact Roger Spence at Harrison Drury 01772 258321.

Social media, such as Facebook, Twitter, LinkedIn and blogs have become an excellent new tool for businesses to market their products and services.

Many businesses now use social media to engage with customers and it is now commonplace for individual employees within businesses to log onto social networking sites at least once a day.

However, in recent months there have been a number of high profile cases where employees have been the subject of disciplinary investigation due to inappropriate comments on, or general misuse of, social networking sites. This throws up a number of employment law issues.

A civil servant was suspended in June for posting inappropriate comments about government ministers on Twitter using the name @nakedCservant. In a separate case, a Vodafone employee posted an obscene message on the company’s official Twitter site that resulted in his immediate suspension pending an investigation.

These examples illustrate potential issues which can arise regarding firms’ own social media channels and potential problems that businesses may face when individuals set up their own sites.

While businesses cannot prevent their employees from using social media in their own time, they can look to put safeguards in place by issuing a social media policy which can form part of the staff handbook. The policy can clarify to members of staff what they can and cannot do with regards to social media both at work and in their own time.

The policy can also cover what they are permitted to say about the business and other employees. Typically it can include confirmation that any posts or tweets that bring the business into disrepute will be viewed as a serious disciplinary offence and may result in dismissal.

If you wish to discuss how to implement a social media policy, or require assistance on any other employment law matter, please contact Roger Spence at Harrison Drury on 01772 258321.

One of the main issues for commercial organisations is to ensure they have an adequate anti-bribery procedure in place that all employees and associates should follow. This procedure, if adequate, will provide a defence to the company if it is charged with failing to prevent bribery.

The guidance sets out six guiding principles commercial organisations should follow in order to prevent persons associated with them from committing bribery. These are:

•    Proportionate procedures
•    Top-level commitment
•    Risk assessment
•    Due diligence
•    Communication
•    Monitoring and review

It is stressed in the guidance that the principles are not prescriptive and that the individual organisations will require different procedures dependent upon the risk of potential bribery that the individual company faces.

For example, a small commercial organisation with five employees based in one office may feel the risk of bribery is quite small and it is adequate for a team meeting to discuss the new procedures, followed up by a written note of the procedures.

On the other hand, a large commercial organisation which carries out work in foreign jurisdictions will require much more robust measures, involving detailed procedures which can be viewed by all employees and associates, typically available within the staff handbook.

Regardless of the size of your business it is imperative to ensure compliance with the new statutory rules by undertaking a risk assessment and introducing anti-bribery procedures by no later than 1 July 2011.

For further assistance on this matter please contact Roger Spence at Harrison Drury Solicitors on 01772 258321.

This issue has been the subject of much debate in recent days following the very public sacking of Andy Gray by Sky television.

Many people view office banter as a bit of fun which is good for morale. However, banter can easily cross the line and become unacceptable harassment. In that case the employer is obliged to deal with the matter as a disciplinary issue. Read my Q&A for more details.

What’s the legal position?

Employees who have been the subject of ‘banter’ from colleagues or superiors may complain about it, before going on to indicate this is because the individual just doesn’t like him/her or, that they have never got on, perhaps due to a clash of personalities.  In those circumstances the individual will have no legal claim.

However, if the employee is able to point to workplace ‘banter’ which is linked to his or her sex, race, age, disability, sexual orientation or religious/belief, the employer will have a problem.

What legislation does this fall under?

The Equality Act 2010 prohibits harassment on the grounds of race, sex, disability, age, sexual orientation and religion/belief. The legal definition of harassment is: “Unwanted conduct that violates a person’s dignity or creates an intimidating hostile, degrading, humiliating or offensive environment”. Essentially, the legislation provides a means for the employee to bring formal tribunal complaints arising out of harassment.

What about breach of contract?

In every employment contract there is a mutual (unwritten) obligation on both employer and employee to maintain trust and confidence. A failure by an employer to deal with an incident of harassment may give rise to a breach of the implied contractual duty to maintain trust and confidence. If that is the case, the employee victim may resign and then pursue a claim for constructive dismissal (and harassment) in the employment tribunal.

What’s my liability as the employer?

Most alarmingly, the employer will be held liable where an employee harasses a fellow employee on one of the grounds mentioned above. This liability attaches to the employer even where he knows nothing of it. Although it depends on whether the harassment took place during the course of the harasser’s employment, the employer may even be held liable for harassment which takes place off the employer’s premises.

To defend a claim for harassment it is of key importance for the employer to be able to argue that, even if the harassment took place during the course of the harasser’s employment, the employer took all reasonable steps to prevent the harasser doing it. Whether liability should be imposed is essentially a question of fact for the employment tribunal hearing the case.

What should I do to reduce the prospect of claims by employees?

There are a number of things you can do:

1. Ensure your existing conduct rules, grievance policy and equal opportunities policy are in date, that they have been issued to your employees and they have had the opportunity to absorb their contents.

2. Introduce compulsory regular training programmes in these areas and retain clear records of who attended.

3. If your business later faces a claim arising out of bullying or harassment, your training records will ensure you can show that employees have received adequate training in these areas and that you have taken all reasonable steps to teach your employees about what is acceptable behaviour.  This will provide some scope to argue the business should not be held liable for the acts of the perpetrator who alone should be held responsible for his acts.

5. Provide training for your managers and stress they must be alert to the substantial risks posed to your business.

6. Act promptly to rigorously investigate incidents of harassment and discipline offenders. Take legal advice at an early stage to minimise the risk of successful claims by the victim or the offender (where disciplinary action is taken).

If you would like to discuss this or any other employment law matters, please contact Roger Spence at Harrison Drury on 01772 208072.

Written by Roger Spence, head of employment law and partner

Harrison Drury has recently launched a new service called HR Compass which aims to protect businesses against increased employment claims.

Why have we done this?

The facts speak for themselves. In September 2010, new statistics revealed the number of employment tribunal claims in the first quarter of this financial year rose by 24 per cent. In these difficult economic times, businesses require concise and practical advice on how best to deal with employment issues which may include redundancy programmes, disciplinary action or long term sickness absence.  However, due to recent legislation and increased awareness of their rights, employees are more likely to pursue claims against their employers than ever before.

How our scheme works

HR Compass comprises three core components that have been designed to offer seamless financial and business continuity protection.

They include:
- The audit (health check)
- Expert advice (ongoing support and dialogue)
- Insurance policy (financial security)

The latter insurance component covers our legal fees, settlements and any compensation awards made again your business. This radically minimises your exposure to unexpected financial loss and caps all your employment law and HR costs giving you peace of mind that employment disputes (which happen to all businesses) won’t have a catastrophic impact on your business.

The price of HR Compass varies according to the size of the business but it is a fixed annual cost and can be spread over instalments.

Our HR Compass brochure can be downloaded here.

If you would like us to provide a proposal and a quote, please call me on 01254 258321 or on roger.spence@harrison-drury.com

In HD news articles:
Welcome to our enewsletter, In HD, issue one
Remove the burden and risk of employment claims
Case study: contract guards against unfair competition
Don’t let boardroom disputes become a turf war
Delivering results: testimonial

A client in the North West automotive sector approached us after a disgruntled employee resigned and set up in competition, while also pursuing a legal claim for constructive dismissal.

How your key players can become arch rivals

The former employee’s lawyers were threatening to go to an Employment Tribunal following allegations he had been unfairly treated in a number of ways, which included the level of bonus payment awarded to him.

Although our client had a robust defence, the prospect of having to defend an Employment Tribunal claim represented a major management headache. However, the former employee had signed a post-termination restrictive covenant, drafted several years earlier which barred him from competitive activity for a specific period.

Why restrictive covenants are crucial for safeguarding a business

We countered the move to bring a constructive dismissal claim by threatening to seek an injunction at the High Court to enforce the post termination restriction. Almost immediately, the other side hoisted the white flag.

Not only did the ex-employee drop his constructive dismissal claim, but also agreed to sign binding and enforceable undertakings that he would immediately cease trading and would respect the post termination restrictions.

The restrictive covenant was so tightly drafted in favour of our client that the issue was settled quickly and efficiently, avoiding the need for an expensive and time-consuming Employment Tribunal.

Vital steps you should take

All businesses can protect their legitimate business interests by barring key employees from dealing with or soliciting work from customers and suppliers for a period of time. This can be done within the employment contract. However, it is vitally important that such restrictions are drafted on a bespoke basis to avoid the risk of the courts determining they are too broad to be enforceable.

When recruiting key members of staff who will soon have the ear of your customers and suppliers, it is crucially important to ensure restrictive covenants are added to their employment contracts. An audit of your existing key employees is also highly advisable to ensure that they too are covered.

By taking this cost-effective action, a business will gain a set period when it can focus on strengthening relationships with customers or suppliers who might be tempted to move to a competitor or a new business set up by an ex-employee.

If you require advice on post termination please call Roger Spence on 01254 258321 or email roger.spence@harrison-drury.com

In HD news articles:
Welcome to our enewsletter, In HD, issue one
Remove the burden and risk of employment claims
Case study: contract guards against unfair competition
Don’t let boardroom disputes become a turf war
Delivering results: testimonial

A case that hinged on whether a woman who became redundant while on maternity leave should have been offered an alternative job underscores the importance of a cautious approach from employers.

The Employment Appeal Tribunal (EAT) ruled in the case of Simpson and others v Endsleigh Insurance Services that the employer was not obliged to offer a vacancy in Gloucestershire to an employee whose job in London became redundant during her maternity leave.

How maternity leave affects redundancy

Maternity leave rules stipulate that if an employee is made redundant during maternity leave, the employer must offer her any suitable vacancy, ahead of anyone else. A dismissal in breach of the regulations is automatically unfair.

While Ms Simpson was on maternity leave, her employer relocated most of its work from London, where she had been based, to call centres elsewhere in the UK.

Ms Simpson was informed of vacancies at the other call centres, but did not express any interest and was dismissed by reason of redundancy. She started proceedings for automatic unfair dismissal, claiming she should have been offered a job in Cheltenham ahead of all others.

Why you shouldn’t count on getting lucky

Crucial to the EAT’s deliberations was that Ms Simpson had known about the vacancies but chose not to apply for any job. The EAT confirmed that the employer was only obliged to offer the role to Ms Simpson if it was suitable. However, it was up to the employer – which knew Ms Simpson had shown no interest in the vacancies – to decide whether or not a vacancy was suitable.

From the employer’s point of view, it was lucky that the EAT found Ms Simpson would not have relocated from London to Gloucestershire.

What does this mean for my company?

Employers facing similar situations are well-advised to discuss vacancies specifically with the employee on maternity leave to establish what she is willing to consider. Employers who fail to do this run the risk that the employee may be willing to consider a move to another location. If that is the case, the employee is likely to succeed with a claim if she has not been offered the position.

Steps you should take

Employers should adopt a cautious approach to redundancy situations involving staff on maternity leave and take professional advice on the redundancy consultation process.

If you would like to discuss this or any other employment law matter, please contact Roger Spence on 01772 208072, or at roger.spence@harrison-drury.com