Experience has taught us that the worst position for an employer to be in is to be unprepared. If your employment law strategy and desired outcome is defined in advance you will achieve better results. We provide the strategy and support employers. We offer solutions rather than advice. We find this is what our clients need.
We are always happy to discuss your concerns and provide estimates for work. So please do call us.
Reasons for working with us
We are boutique and operate a lean business generating savings. Employment law is core business for us. In real life this means:
- We are up to-date with employment law and HR practices and know what we are doing.
- We can review employment agreements, negotiate and settle disputes. We will second guess the likely response from an employee enabling you to plan.
- We cover all the areas you will need. If the matter turns into litigation we have the expertise to field that. If the problem surrounds a director or shareholder we can deal with that.
- Experience builds a commercial awareness and knowledge in how to apply our skills successfully to get the job done.
Support for employers
Based on the most common problems we find employers face and come to us for help with we have prepared a short overview covering:
- Conducting a disciplinary hearing
- Dealing with departing employees
- Running employment litigation
- Managing a corporate transaction
- Dealing with absences and illnesses
Conducting a disciplinary hearing
Disciplinary procedures are disruptive, time consuming and drain valuable resources. What’s more, Employment Tribunals can increase compensation by up to 25% for an employer’s unreasonable failure to follow the ACAS code.
In many cases the employer will need to undertake or at least commence a disciplinary as a part of the dismissal process to reduce risk and cost.
What typically goes wrong for an employer at a disciplinary hearing
To help employers we explain below the areas where we see they slip up.
Lack of awareness of the disciplinary procedure
Employers do need to educate their work force and let all staff know where they can find the disciplinary procedure.
Poor execution of a disciplinary matter
Thoroughly, fairly and swiftly investigate. Employers cannot make a disciplinary decision without first investigating. Even if the employee has attended an investigatory interview, always hold a disciplinary hearing once all the evidence is available, and allow the employee to put their side of the story (including calling witnesses unless this is unreasonable), before making any decision.
Hiding behind suspension
The decision to suspend and for how long is a judgement call which we assist employers with. What is right depends upon the case. Even if the employment contract is silent, employers can still suspend.
However, employers can only suspend for as long as is absolutely necessary to conduct the review. The requirement of reasonableness forms part of any employment relationship.
Failing to demonstrate fairness
Employers are expected to be fair and balanced. The ACAS Code leaves many questions unanswered. Often judgement is required and employers owe employees a duty of good faith.
We work with employers to not only guide them on fairness in a particular case, but also to ensure they can demonstrate fairness if challenged. Many unfair dismissal claims arise because the employee feels he was not dealt with fairly.
Employers do need to communicate. We consider carefully the timing, the detail provided to the employee, and the evidence. Errors could be used against the employer. Employers must always keep written records, including minutes of meetings. Electronic communications are perfectly acceptable.
Employee refuses to attend the meeting
Often employees are unable or unwilling to attend without good reason. An employer can easily trip up. Then the employer can be held to account for not following a proper procedure or not setting reasonable timescales.
There is a duty to be proportionate and this overrides reasonableness. The difficulty with employment law cases is that the legal fees can easily exceed the compensation awarded in court. Costs can never be overlooked. Quick and decisive action by an employer may be the best solution.
Usually, employers must decide whether the conduct falls short of gross misconduct or is sufficiently grave to justify instant dismissal. Often, this is not an easy decision. We work to achieve the outcome desired.
Sometimes, the dispute is best resolved using mediation. Mediation is surprisingly successful in many cases. If an employee requests a mediation care is needed before rejecting the idea. We use our skill in responding delicately. If the matter proceeds to court, mediation will be part of the court process.
We support employers involved in mediation with employees or directors in a number of way such as:
- Our accredited mediator John Deane can act as an independent mediator;
- We will prepare the evidence and advise on the tactics;
- We attend meetings to support employers.
We work with employers who are concerned that a departing employee may present problems.
- If there is a risk of an employment law claim from the employee we draft the settlement agreement.
- If the employer is worried that the ex-employee may be setting up in competition we can review the safeguards in place and suggest solutions if the existing safeguards are not adequate.
- We can support on announcements and references and timing.
Problem if the employee is also a shareholder
A contract for shares is separate from a contract of employment. One of the benefits of the separate legal functions is that it is possible to disclaim liability for losses on share and option rights arising on dismissal even if the dismissal is a breach of contract.
Review of the articles and shareholders’ agreement
Unless the articles or shareholders’ agreement provide otherwise, the general rule is that termination of the directorship or employment does not cause the shares to be forfeited. In most cases the employer will want to take control of shares held by a departing director or employee. Issues we work through for employers include:
- What can be done if there are no express provisions in the articles or shareholders’ agreement forcing the sale of shares on departure of a director.
- In private companies what is the value of the shares of the departing director. We review the rights of minority shareholders as that forms part of the equation.
- Can agreement be reached for a company buy back of shares which is often an attractive option.
Review of share plan documentation
For those companies with employee share plans in place problems can arise over the exercise of discretion. We do provide guidance on how to classify good and bad leavers for example and how to deal with vesting.
In some cases, decisions relating to whether a departing director is treated as a good leaver or a bad leaver can bring about conclusion of a settlement agreement. For that reason, the terms attaching to any shares rights do benefit from review and consideration.
Deadlocked private companies
In many cases, there is no shareholders’ agreement in place meaning the parties have to rely on the Companies Act. Under the Companies Act there needs to be at least a 51% shareholder vote to remove a director. Obviously with a 50:50 deadlock the requisite shareholder majority cannot be furnished. Under the Companies Act no shareholder can be forced to sell his shares. Therefore at both director level and at shareholder level progress is blocked.
Deadlocks are obviously bad for business. Deadlocks are a common problem we deal with. The very nature of a 50/50 shareholder dispute requires specialist knowledge. The only way to resolve the problems is via negotiation and if that fails, litigation.
50/50 shareholder exit routes
There are a variety of exit routes for a 50% shareholder to consider. Popular exits include:
1.Agreeing a share buy back followed by termination of employment and or directorship – it is possible to agree staged payments.
2.Agreeing a share purchase from the departing 50% shareholder and termination of employment and/or directorship – funding has to be considered.
3.Issuing a petition for the winding up of the company and a cessation of its trade, often where the company is profitable and the 50% shareholder wishes to exit with surplus funds returned before the dispute escalates.
4.Demerger or spin off between the shareholders – splitting the business up can be the best solution.
5.Applying to the court on the basis that the other shareholder’s conduct is both unfair and prejudicial to the other. This is often the case where the other shareholder embarks on conduct with the intent to damage the value of the company. Other instances include where the other shareholder persistently refuses to vote a dividend in the hope that the aggrieved shareholder will exit on unfavourable terms. There are a myriad of facts that can lead to a shareholder petitioning the court. Some will be successful, we can advise.
Running employment litigation
We can run cases for you through any court and in particular the Employment Tribunal. Very few of our cases reach a court or Tribunal as we find ways to resolve the issues. The English legal system will penalise anyone who has not tried very hard to resolve disputes before applying to court.
It is the threat that an employer is serious and the precision with which we set matters up to prepare for court which encourages settlement in many cases.
Judicial mediation at an Employment Tribunal
Mediation is part of the Employment Tribunal process and is used to keep cases out of court. Our experience in managing mediation hearings covers preparing employers for judicial mediation at an Employment Tribunal.
Management of corporate transactions
If you are a buyer or a seller of a business involving employees there will be employment law aspects to deal with.
When you transfer employees to another company or business unit you will need to comply with the legal requirements for TUPE transfers. There can be issues to resolve following a business re-structuring such as planned redundancies.
Protecting confidential information
The purchaser may be uncomfortable if there is a risk that ex-employees will misuse confidential information. Any such risk can jeopardise a sale or push the sale price down. We often deal with cases where the employment documentation does not adequately address these issues. There may be solutions we can find.
Shares held by employees
If shares in the purchaser are offered as part of the corporate transaction we can deal with the issues arising. If your employees hold shares or options in the business being sold, we can deal with those aspects.
Dealing with sickness and absences
Management of sick employees remains one of the more difficult aspects of employment law for employers. It is an area where employers can trip up if not well advised. You need to follow a plan which we can help you with.
Short term and/or repeated absences from work
We are regularly asked whether persistent short term absences can legitimately result in dismissal. The answer is yes, if management staff follow the correct procedure. You will need to consider:
- Reviewing employment contracts, policies & procedures including disciplinary, ensuring that you are complying with them.
- Seeking the employee’s co-operation for access to his or her medical records, in a repeated absence situation. Alternatively, liaising with his or her GP. You may also try to obtain the employee’s co-operation for an Occupational Health assessment by a consultant which you retain.
- Reviewing the nature, length and effect of the absences, and the employee’s past performance.
- Considering whether dismissal is justified as being fair and reasonable in all the circumstances? Dismissal should be the last resort and not the first option.
- Determining whether the employee qualifies to claim unfair dismissal in terms of length of continuous service.
If the employer can establish that absences are being claimed due to sickness but in reality the employee is not ill, there may be grounds for a dismissal based on gross misconduct.
Long term absence
Greater care is required with long term sickness. There are additional management procedures to deal with:
- Maintaining regular contact without harassing the employee.
- If the employee’s condition improves, discussing the possibility of their return to work.
- If they can return, considering offering them suitable alternative employment, if appropriate.
- Requesting information from the employee’s doctor. The request should be through the employee who may or may not co-operate. Take into account what the medical practitioner says.
- Determining whether the employee has a disability, which is subject to Equality legislation, and what reasonable adjustments should be made.
- Devising contingency plans.
Determining if an employee is disabled for employment law purposes
An individual who has been absent from work by reason of illness may be protected by disability discrimination law.
The role of an employer in working out if an employee is disabled for employment law purposes requires special consideration and protection. This is to avoid disability discrimination claims, especially in light of all the expense and management time a disability discrimination act claim brings.
Disability discrimination law
A person is disabled for discrimination law purposes if they have a physical or mental impairment, and the impairment has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities.
In some cases it may be obvious whether the employee is disabled. In other cases it may be necessary or prudent to obtain a medical report in order to make this assessment. The employer may have to consider the extent of any reasonable adjustments required.
Difficulties in reaching a conclusion
A difficulty often faced by an employer in handling disability sickness is that the Equality Act does not include an exhaustive list of which illnesses are covered. Another difficulty is that what may be a reasonable adjustment for one employer is not for another as the decision is very fact specific.
Obtaining medical records
In situations where it is difficult to reach a conclusion, we assist employers in trying to obtain an employee’s medical records. The ability for employers to access employee’s medical records is governed by the Access to Medical Reports Act.
The employee must be notified that the employer wishes to obtain their medical records and that they intend to apply to their doctor for this purpose. Contained within the notification must be full details of the employee’s right under the Access to Medical Reports Act.
Only once the employee has given their written consent can an employer approach the doctor, with this written consent, to request access to the requisite report or records.