Balancing Act Act

The Employment Relations Bill could have a radical impact on UK businesses. Employers will face larger payouts in tribunal cases and extra intervention by the trade unions.

The UK IT industry employs hundreds of thousands of people. Frombusinesses. Employers will face larger payouts in tribunal cases and extra intervention by the trade unions. large multi-site vendors to small local resellers, all are subject to employment law - like it or not.

During the Thatcher years, the balance of power undeniably shifted in favour of employers. The unions were crushed and employee rights severely curtailed. New Labour, to some extent, is attempting to redress the balance through its Fairness at Work white paper. But is this just another populist policy to jump out of the Millbank think-tank - one that could cost UK employers millions of pounds - or a serious attempt to re-empower the employee? What exactly is the government proposing?

A key element of the bill centres on claims of unfair dismissal and discrimination in the workplace. The white paper proposes to reduce the qualifying period of service for protection against unfair dismissal from two years to one.

As a result, employers must ensure they have effective performance management, plus appropriate probationary and appraisal systems to ascertain whether particular employees will be retained at the end of their first year of service. Companies will have to ensure that managers stick to internal procedures to show that dismissals were fair, or face the consequences.

The upper limit on compensatory awards for unfair dismissal will rise from #12,000 to #50,000.

Such a hike may be relatively small when just one employee is seeking compensation, but it starts to bite as the number of claimants increases.

Under the old scheme, maximum awards paid to five employees would have resulted in a payout for the employer of just #60,000. Under the proposed bill, that would rise to #250,000 - a difference of #190,000.

The legislation will penalise bad employers but have little impact overall, says Peter Skyte, National Secretary of the Information Technology Professionals' Association (ITPA), whose union represents more than 12,000 employees working in the IT industry. 'Sensible employers should not face any particular burden in monetary or logistical considerations,' he says. 'If anything, it will save them money. With the value of compensation available to employees at industrial tribunals rising, an effective internal mechanism to deal with potential disputes at an early stage could reduce the number and value of payouts.'

Oliver Grant-Adamson, director of human resources at Computer 2000, agrees: 'This part of the bill will not be a big problem for us. The #50,000 hike is big, but the previous figure was too low. It is a rationalisation of what you can settle on in court.'

Perhaps more importantly, these developments further alter the landscape for risk management and negotiation. For many more individuals, litigation will become a realistic option. The adoption of the European directive on working time regulations last October was also significant. More individuals will assert they are employees, rather than independent contractors or unprotected casuals.

'A significant number of our members are outsourced to companies such as IBM and EDS,' explains Skyte. 'Working time regulations now entitle all employees to three weeks' paid leave. Whereas this does not generally affect full-time employees, it is a significant bonus for contractual and part-time workers. This will increase to four weeks in October.'

Regulations to prohibit discrimination against part-timers, to prevent less favourable treatment than full-timers, will also come into force.

They will identify who is to be treated as part-time and who is full-time.

The regulations implement the European directive on part-time work.

The legislation will finally create an environment that expressly recognises part-timers' rights purely on the basis of employment status. Part-timers will also have the right to alternative positions within the organisation.

The accompanying codes of practice will aim to eliminate discrimination and facilitate the development of opportunities for part-time work and flexible working time.

One difference is that employees with fixed-term contracts will now be unable to waive unfair dismissal claims. Redundancy payments can still be excluded, but this raises real issues about non-renewal of a fixed-term contract. Employers will need to show one of five statutory reasons for dismissal of employees with one year's service or more and prove that it was fair - requiring consideration of redeployment. But this isn't the end of the story. The EC is likely to table a directive to regulate when fixed-term contracts are offered, their frequency, renewals and non-renewals, and their duration. Employers should plan for expiry in the future of fixed-term contracts, looking to dismiss fairly where there is no alternative employment.

All this may not strike fear into the hearts of employers across the country, but the prospect of greater union involvement in the workplace may have a few managing directors shifting uneasily in their seats. If the bill becomes law, employees will have the right to have trade unions recognised by their employers where the majority of employees want it - that is, where a majority of those voting and at least 40 per cent of those eligible to vote are in favour of recognition.

Skyte adds: 'Currently, the ITPA has some level of representation or presence in most large IT companies and organisations in the UK, from software and hardware companies through to consultancies and service organisations.

What this and subsequent legislation will do is open up some areas where employees have not previously been recognised. It will remove the veto that some employers have exercised - particularly with regard to union recognition.

'Employees ought to be asking employers whether they are being represented effectively. They should be asking why they do not have the same rights and recourse to law as their European counterparts. After all, many of the key players in the industry are represented throughout Europe, so why should an employee working for company X in the UK not have the same rights as an employee working for company X on the Continent?'

In disciplinary and grievance hearings, where the request is 'reasonable' - that is, where an employee makes a harassment claim as opposed to a complaint about the carpet colour - a worker will have the right to be accompanied by a co-worker or trade union official, even where a trade union is not recognised. This gives unions an opportunity to make their presence felt. If the representative is unavailable, an alternative time must be fixed as proposed by the worker, within five days of the time originally set. 'Worker' is widely defined as not just an employee, but anyone who is not genuinely self-employed. Refusing representation can lead to claims for up to two weeks' pay and a dismissal for seeking such representation will be automatically unfair irrespective of length of service. Furthermore, the employee has the right not to be subjected to detrimental treatment for exercising this right. Employers should revisit their disciplinary and grievance procedures and make allowances for the possibility of a delay to allow for this.

The ITPA has been involved in consultation on redundancies, changes in working patterns, pension and pay negotiations. Additionally, a trade union or unions seeking recognition for collective bargaining, for a bargaining unit of workers, will in future be able to make a request to the Central Arbitration Committee (CAC), which is being revived from the 70s.

This request must be after a request to the employer has been rejected or ignored. The employer must employ more than 20 workers when the request is made or averaged over the past 13 weeks. Once an application is before the CAC, if there is no agreement, the committee must decide which is the appropriate bargaining unit, using the following factors - the unit being compatible with effective management; the employer's and the union's view; existing national and local bargaining arrangements; avoiding fragmented bargaining units within an undertaking; the characteristics of workers within the proposed unit and other relevant employees; and the location of workers.

Having chosen the bargaining unit, the CAC must then decide whether the union is likely to have the support of the majority of the workers in the bargaining unit. If a majority are members of the union, the CAC must automatically award recognition except in certain circumstances. Otherwise, the CAC can only proceed with an application through a ballot, and only then if at least 10 per cent of the workers are union members and there is factual evidence that a majority would be likely to favour recognition for collective bargaining.

The ballot will be independent, by post or at the workplace, with the costs shared between the employer and the union. The union must have access to the workers, to inform them of the ballot's object and seek support. The employer must also give the CAC the workers' home addresses to enable the union to forward information. Provided a majority of the workers voting and 40 per cent or more of the bargaining unit are in favour, recognition will be granted.

Once recognition is granted, the parties will negotiate to agree a method by which to conduct collective bargaining. Failing agreement, the CAC must specify a method. Either way, an agreement reached or specified will have legal effect and the only remedy available will be specific performance.

The employer or union can be forced to comply with the prescribed method of collective bargaining, which will clearly have a dramatic impact on the balance of power in collective negotiations.

An employee campaigning for recognition will be protected against detrimental treatment. Dismissal for campaigning will be automatically unfair irrespective of length of service, and redundancy selection for such an issue will also be unfair.

Employers must adopt a strategy for requests for compulsory recognition and/or compulsory collective agreements, such as favouring an internal and possibly pre-emptive form of workforce representation or acceding to requests for recognition. If recognition is to be granted, there are questions of appropriate bargaining units and/or whether to allow a multiplicity of unions to be recognised or to seek a single union agreement. In the latter case, they must establish whether a 'sweetheart' deal is either possible or appropriate.

Those dismissed for taking part in official industrial action in the first eight weeks of action may in the future complain of unfair dismissal.

It will also be unfair if the worker ceased industrial action after eight weeks and returned to work, or if the worker has not ceased industrial action but the employer has failed to follow an appropriate procedure for resolution of the dispute. The latter includes procedure in a collective agreement. Employers should revisit any existing dispute resolution procedure in their current recognition agreements.

The bill amends the law on industrial action ballots and notice. The union's notice to the employer should still identify the number, workplace and category of employees concerned, but it need not give names. No longer do strikers have to be readily ascertainable. The union must give information to help the employer make plans and bring information to the attention of employees. An employer must be ready with requests and to deal with the uncertainty that follows. Also, the requirement of industrial action within 28 days of the ballot can be extended for eight weeks if agreed by both sides.

The legislation prohibits discrimination by acts or omission on grounds of trade union membership, non-membership or activities. Individual contracts are still permitted, but forcing them on employees risks complaints of detrimental treatment or automatically unfair dismissal irrespective of length of service. The bill also prohibits the blacklisting of trade unionists.

The final string of the bill concerns maternity rights. It will extend 'ordinary maternity leave' after a year's service to 18 weeks, to align it with maternity pay. The employee may choose when that begins. There will be a compulsory maternity leave of not less than two weeks. Employees will have a right to 'additional maternity leave' and to parental leave.

Regulations may specify that an employee may choose the date on which additional maternity leave ends.

The contract of employment will continue during 'ordinary maternity leave' except for remuneration - it will include all benefits and burdens of the terms and conditions of employment, matters 'connected' with the employment aside from the contract, and with seniority, pension rights and similar rights to continue as if not absent. This is the same for additional maternity leave returners, except that regulations will specify what happens to seniority pension rights and similar rights. Hopefully, there will be no difference, since this would undermine the aim of simplification. Employers should begin to address the changes in their current handbooks and maternity policies.

Christine Wright, personnel manager at Datrontech, says the company welcomes the changes to the law: 'When there is a new arrival in the family, fathers should be included as much as they can.' This would create inconvenience and extra costs in covering the time off but, says Wright: 'It is important to look after people well.'

She adds that a happy employee is likely to have more commitment to the company.

After a period of service - almost certainly one year - all employees will be entitled to three months' parental leave with a right to return.

The contract of employment will continue, except for remuneration. Regulations will set out whether seniority rights, pension rights and similar rights continue; whether there is an obligation to offer alternative employment; whether parental leave can be taken in whole or in part; when an employer can postpone it; whether an entitlement can be transferred; and whether parental leave can be achieved by varying working hours or practices of the employee. There will also be three months' parental leave for adoptive parents.

There is a new right to a 'reasonable amount' of time off for 'domestic incidents', where reasonable, for all employees, regardless of length of service. 'Domestic incidents' are those in the employee's home or that affect a family member or dependant.

C200's Grant-Adamson adds: 'Parental leave is going to be harder to manage, but we have always been supportive to the family if a child is ill. We have a young staff and are responsive to family crises. The fear is that some people may make a claim for time off when in fact they are on a jolly with the boys. This would be difficult to prove, but we don't see it as a big problem.

Regulations will specify factors to be taken into account - whether it is reasonable to take time off, the amount of time that it is reasonable to take, limits that can be set by employers, notice to be given and the consequence of failure to give notice. If time off is refused by a company, an employee can be awarded compensation.

While unions have traditionally been associated with heavy industry, the highest union participation is from working professionals. The ITPA has seen a steady rise in membership over the past year and as the threat of recession rears its ugly head, the need for further job security will intensify. Many employers will have to adapt to accommodate these changes.

COLLECTIVE RIGHTS

Existing voluntary trade union recognition

Employers that have more than 20 workers with existing voluntary recognition agreements should not be complacent. Unions can apply to the CAC to specify a method of collective bargaining for the bargaining unit. Thus, unions can seek the more draconian effect of a new legally binding recognition, with a procedure that can be specifically enforced.

Collective consultation on training

Training is not covered by trade union recognition. Instead, employers must inform and consult recognised trade unions about training at least every six months, giving unions enough information two weeks beforehand.

An employer must respond to written representations at the meeting within four weeks. For failure to comply, a tribunal can award up to two weeks' pay for each employee affected. Employers must set up consultation arrangements if they are not already in place.

EMPLOYEES ON THEIR BOSSES - ITPA SURVEY RESULTS

The Information Technology Professionals Association (ITPA) is an autonomous section of MSF (the Manufacturing Science Finance union) established to look after the interests of its 12,000 members who are IT professionals.

Last year, the ITPA published the results of its survey of employer performance.

The findings were presented in the form of league tables of employer performance broken down into five categories - pay and conditions, job satisfaction and treatment, career and skills development, work, health and lifestyle, and employee representation.

Employees were asked to rate their employer on a scale of one to five, in which one is poor and five is excellent.

Peter Skyte, national secretary of the ITPA, says: 'Employers have for some time assessed the performance of their employees, but this is the first time a trade union has attempted to benchmark the performance of employers. By turning the tables in this way and highlighting examples of good and bad employer performance, we aim to empower and assist MSF representatives in negotiations with their employer.'

                    Pay &      Job     Career      Work,  Employee
                    cond-   satis-   & skills   health &   repres-    Over-
                   itions  faction  dvlopment  lifestyle  entation      all
 CSC                 2.48     2.44       2.15       2.77      2.35     2.44
 (Computer
 Sciences)
 Digital             1.97     2.20       2.01       1.74      1.64     1.91
 (before Compaq
 takeover)
 EDS                 2.83     2.81       2.63       2.86      2.99     2.82
 IBM                 2.98     2.86       2.90       3.49      3.03     3.05
 ICL                 2.83     2.90       2.52       3.32      2.29     2.77
 NCR                 2.74     2.81       2.55       2.70      2.82     2.72
 Average             2.76     2.76       2.48       2.92      2.72     2.73