Two pieces of employment legislation which take effect this year are the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 and the Human Rights Act 1998. Both have implications for even the smallest businesses
Two of the biggest issues for employers at present are how to implement the changes in law affecting part-timers and those affecting the disciplinary process
Many employers rely on both full-time and part-time members of staff. Small businesses are no exception, in fact they are more likely to rely on part-time staff to create greater flexibility. Although most employers will treat their part-time staff in the same way as their full-time staff, this is not always the case. Part-time employees can, and do, find themselves effectively treated as second-class employees. All this will now have to change, following the United Kingdom's implementation of the European directive on part-time working.
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Part-time workers can no longer be treated as "second-class employees" |
Although originally the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 implementing the directive were only going to cover employees and apprentices, the Secretary of State for Trade and Industry has extended coverage to "workers". This extended coverage is in line with the Working Time Regulations 1998 and the National Minimum Wage Act 1998 and is intended to cover the self-employed who do not genuinely run their own businesses.
Part 1 of the regulations deals with the interpretation of the various terms used and defines a "worker" as: "An individual who has entered into or works under (or, where employment has ceased, worked under) either a contract of employment or any other contract where the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not, by virtue of the contract, that of a client or customer of any profession or business undertaking carried on by the individual."
The regulations only cover those individuals who are in work, not individuals looking for work. There is, therefore, nothing unlawful in discriminating against an individual looking for work on a part-time basis. Employers are free to choose a full-time candidate over a part-time candidate.
A worker is a full-time worker if he or she is paid wholly or in part by reference to the time he or she works and, having regard to custom and practice of the employer in relation to workers employed by the employer under the same type of contract, is identifiable as a full-time worker. Clearly if all staff at a particular work place work 10 hours per week, 10 hours would be the measure of full-time for that employer. A part-time worker is a worker who is not identifiable as a full-time worker.
So, it is first necessary for an employer to determine who the full-time workers are. For example, a pharmacy might have six members of staff. Four staff work 24 hours per week and two work eight hours per week. All are on the same type of contract. The staff are paid an hourly rate and are therefore paid wholly by reference to the time they work. Custom and practice show that staff have only ever worked, as a general rule, a maximum of a 24-hour week. The four staff on the 24-hour week are therefore full-time while the two working an 8-hour week are clearly not identifiable as full-time and must therefore be regarded as part-time.
Under regulation 5, a part-timer has a right not to be treated less favourably than the employer treats a comparable full-time worker as regards the terms of his contract, or by being subjected to any other detriment by any act or deliberate failure to act.
The starting point for assessing whether a part-timer is being treated less favourably, is determining who the correct comparable full-time worker should be.
The regulations assist by defining the term "comparator". A full-time worker is comparable in relation to a part-time worker if, at the time when the treatment is alleged to be less favourable to the part-time worker takes place, both workers have been employed by the same employer doing the same or similar work with similar levels of qualification, skills and experience. Both workers must be based at the same establishment or, where there is no full-time worker based at that establishment who fits the relevant criteria, the workers may be at different establishments.
Consider, for example, two pharmacies. One has three staff, two full-time and one part-time, but the part-timer is not as experienced as the two full-time members of staff.
If the second pharmacy employs a full-time member of staff on the same type of contract as the part-timer at the first pharmacy (and she has a similar level of qualification, skill and experience) then it is correct to compare that full-timer with the part-timer.
However, if the first pharmacy had had a full-time member of staff with similar experience, etc, to the part-timer, she would have been the correct comparator and it would not have been necessary to consider the terms of the staff at the second establishment.
Different rules apply for part-time workers who were previously employed on a full-time basis. A worker whose contract is either terminated or varied to make him or her part-time is compared to a full-timer on the same terms and conditions he or she was on immediately before termination or variation, whether or not such a full-timer actually exists.
Similarly, if a worker returns to work part-time after a period of absence of less than 12 months (whether the absence is due to the termination of their employment or not) to the same job or at the same level under a contract on which he works less hours per week than before the period of absence, he or she is comparable with a full-timer employed under the contract previously worked. This means that women returning to work on a part-time basis following a period of maternity leave must therefore be compared with the terms they were on before they went on maternity leave.
The pro-rata principle applies when comparing a part-timer with a full-timer, unless it is inappropriate. Therefore, if full-time staff working a five-day week receive 25 days' paid holiday a year, a part-time member of staff working three days a week should receive 15 days.
Special rules apply in relation to the payment of overtime. It is not less favourable to pay part-time workers a lower rate of overtime where the number of hours worked by the part-timer (including overtime) does not exceed the number of hours the comparable full-timer is required to work during that period, disregarding absences from work and overtime.
So, if full-time staff are paid £5.00 per hour on the basis of a 35-hour week and time above that is paid at £7.50 per hour, a part-timer who normally works 20 hours per week would not be entitled to the overtime rate of £7.50 per hour until they had worked 15 hours overtime.
So, can less favourable treatment be justified? Essentially, yes. If there is an objective reason for treating a part-timer differently then there is a defence. It is, however, for the employer to show that the less favourable treatment is: (a) to achieve a legitimate objective; (b) necessary to achieve that objective; and (c) an appropriate way to achieve the objective. Justifications based simply on the costs to the employer are unlikely to succeed.
Common areas where employers may fall foul of the Regulations are:
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Part-time workers must be given equal access to training, pension schemes and other benefits |
It is not possible to contract out of the regulations. Therefore, the fact that an employee might agree to receive less favourable terms and conditions (though the circumstances when this might be the case would be few and far between) would be irrelevant. The regulations also give part-time workers the right to receive a written statement of reasons for less favourable treatment. The employer must give the written statement, if asked, within 21 days of the request. Any statement given by the employer is admissible in evidence and if it appears to a tribunal that an employer deliberately, without reason or excuse, omitted to provide a written statement or that the statement is evasive of equivocal, it may draw such inferences as it considers to be just and equitable, including an inference that the employer has infringed the right in question.
This right does not apply where the worker has been dismissed and the employee is entitled to a written statement of reasons for dismissal under the Employment Rights Act 1996. There are also victimisation provisions penalising employers who adversely treat those seeking to enforce their rights under the provisions.
So, what can an employee do if an employer inadvertently, or purposely, breaches any of the rights afforded by the regulations? A worker can complain to an employment tribunal. The complaint must be lodged within three months of the date of the less favourable treatment or, where there have been a series of acts, within three months of the last act occurring. There is a presumption of less favourable treatment of a part-time worker (once that less favourable treatment has been established) unless the employer can show an objective justification. Where a tribunal finds in favour of the worker, it may make a declaration as to the rights of the worker and employer; order the employer to pay compensation; or recommend the employer takes reasonable action to obviate or reduce the affect on the worker.
Compensation will be such as the tribunal believes to be just and equitable having regard to the infringement and any loss attributable to the infringement. Compensation is not payable for injury to feelings. Losses can be backdated for up to two years. However, the worker is under a duty to mitigate his or her losses and, if the worker has contributed to his or her loss, the compensation may be reduced.
While employers may act fairly and promptly when disciplining full-time staff, it is often the case that part-time workers slip through the net and problems are not addressed as quickly as they should be. Disciplinary procedures need to be in place and applied equally to full-time as well as to part-time staff. Ensuring equality between the two categories of employee will not only ensure that employers do not fall foul of the Part-time Workers Regulations, but will also ensure that problems are identified quickly and, hopefully, unfair dismissal claims are avoided.
It is more essential than ever that employers have in place a disciplinary procedure, whether they have one employee or 1,000. Obviously the procedure will vary for different sized organisations, but the general principles remain the same. Employers should have regard to the Advisory Conciliation and Arbitration Service (ACAS) code of practice on disciplinary and grievance procedures (due to come into force on September 4, 2000) and also changes required by the Employment Relations Act 1999. Above all, make sure that these procedures are drafted to suit the needs of the business concerned and not a different one.
It is essential that prompt action is taken where there are areas of concern. The disciplinary process should be seen as an opportunity to address issues before they get out of hand. Informal warnings, without recourse to the disciplinary procedure, may be given but it is important that the formal disciplinary process is still gone through before dismissing an employee.
Folklore has it that one verbal and two written warnings are needed to dismiss. This is total nonsense unless the procedures say so. Procedures should be in place which enable a first offence to be treated with the severity it deserves. Where employees have appraisals, it is important that issues of performance, etc, are addressed. A common problem involves employees receiving excellent appraisals where no issues as to their performance or capabilities are discussed but then, at a later date, the employee is dismissed as a result of incapability or poor performance.
The best thing an employer can do is, whenever they are in doubt as to how to proceed - for example, if the employee raises an issue which they were not expecting - take legal advice as soon as possible. This could mean the difference between resolving the issue swiftly and relatively amicably, and a lengthy tribunal case.
An employee who has been dismissed may present a claim to the employment tribunals for unfair dismissal. Such a claim must be presented within three months of the date of the dismissal and the compensation payable, if the dismissal is found to be unfair, can now be anything up to £50,000, depending on the actual losses sustained by the employee.
However, it is not just unfair dismissal claims employers need to be wary of. The aggrieved employee may have valid claims for breach of contract, if the incorrect notice has been given and not all benefits have been paid. Employees are also, increasingly, pursuing discrimination cases if for no other reason than to add weight to their unfair dismissal claim. Employers must therefore be very careful not to inadvertently discriminate against an employee on the grounds of sex, race or disability, bearing in mind that disability does not just mean the employee has a mobility problem.
No one can deny that employment law is becoming increasingly complex. However, time and money spent on having relevant procedures in place will inevitably lead to fewer problems in the future. The areas in which employers can discriminate against employees and other workers will only increase, particularly with the introduction of the Human Rights Act 1998 later this year (see below). Employers get into the habit of treating all staff in exactly the same way now, before it is too late.
Note: Images used in this feature are for illustrative purposes only. Staff members seen may or may not be full- or part-time employees.
Professor Hibbs is partner and head of employment law at Shakespeares Solicitors, Birmingham, and visiting professor of employment law at the University of Central England, Birmingham