hospitality news Winter 2008
Employment law update for HR
Steps 1, 2, 3...
At our HR Hotel Forum on 10 October 2007, we discussed the frustrations faced by hoteliers in having to comply with the statutory disciplinary, dismissal and grievance procedures and advised delegates that the three-step procedures, which were introduced by the Employment Act 2002, were under review. We are pleased to confirm that the Government introduced the Employment Bill on 6 December 2007. The Bill is expected to be approved by Parliament in 2008, but many of the changes it proposes, including the repeal of the statutory procedures, are unlikely to come into force until 2009. Section 98A of the Employment Rights Act 1996, which provides that failure to comply with the statutory procedures will render the employee’s dismissal ‘automatically unfair’ will be repealed, meaning that the question of procedural fairness in unfair dismissal law will be governed once again by the ‘Polkey’ principle. In future, hoteliers will instead be required to comply with a revised code of practice on disciplinary and grievance procedures introduced by Acas. The Bill will allow an employment tribunal judge to increase or decrease a tribunal award of compensation by up to 25% if the hotel or an employee fails to comply with the Acas Code.
Reviewing your HR budget and operational costs
With effect from 1 February 2008, employees will be entitled to an increase in their compensation in the following circumstances:
- The maximum amount of ‘a week’s pay’ for the purpose of calculating a redundancy payment, basic award for unfair dismissal and failure to allow a worker to be accompanied at a disciplinary or grievance meeting will increase from £310 to £330. This means that the maximum statutory redundancy payment or basic award for unfair dismissal will increase from £8,700 to £9,300. Breach of the statutory right of accompaniment will cost the hotel £660.
- The maximum compensatory award for unfair dismissal will increase from £58,400 to £60,600.
- If you have the contractual right to ‘lay off’ or put employees on ‘short-term’ working during a property refurbishment or temporary closure of your hotel, provided that they have two or more years of continuous service, the employees will be entitled to a statutory guarantee payment (maximum of five days’ pay over a three-month period). The limit on the amount of a statutory guarantee payment in respect of any day will increase from £18.90 to £19.60.
These new compensation limits will only apply where the employee’s termination or an event which gives rise to an entitlement to compensation or payment, occurs on or after 1 February 2007.
Increased penalties for illegal working
As of 29 February 2008, hotels and restaurants that employ illegal migrant workers face an increased fine of up to £10,000. If you employ a person without permission to work, you could face an ‘on the spot’ fine of up to £2000 per illegal worker. If you knowingly employ illegal migrant workers, it is a criminal offence and will carry a maximum two year prison sentence and/or an unlimited fine. In addition, employers will be under a responsibility to check the ongoing entitlement of a foreign worker’s right to work in the United Kingdom.
Under the new measures, employers will be able to obtain a statutory excuse from payment of a civil penalty by checking its prospective employees' documents confirming their right to take up employment without any legal restriction. To claim the statutory excuse, all employers will be required to undertake repeat document checks at least once a year for employees who have limited leave to enter or remain in the United Kingdom.
In the recent case of Kelly v University of Southampton (11.12.2007), the employee, an American, had a work permit which allowed her to work until early 2006 but for some unexplained reason her visa was set to expire a year earlier, in January 2005. When the employer realised this they felt they had no option but to suspend the employee in January 2005, without pay. A few weeks later, the employee was dismissed by her employer. Shortly after, the employee was given permission to stay indefinitely in the UK by the immigration authorities. She asked her employer to reinstate her but they refused. She then claimed unfair dismissal. The Employment Appeals Tribunal held that the employee was unfairly dismissed. It held there was no duty on the employer to check the employee's visa (which had expired) as she had a work permit which lasted beyond the visa date. It is questionable if this case is legally sound when the immigration law changes take effect in February 2008 and should therefore be viewed with extreme caution.
Action points for HR
- Always check that a non-EU worker has the right to in your business.
- Develop a standard application form which requires all applicants to confirm their right to work in the UK.
- Ensure that original documentation is provided by the job applicant for verification – do not accept photocopies.
- Do not employ anyone with the following endorsements on their passport:
‘leave to enter for 6 months. Employment prohibited’ or ‘leave to enter the UK on condition that the holder does not enter employment, paid or unpaid, and does not engage in any business or profession is given given for/until (date) ’.
- When hiring individuals on student visas, ensure that you do not exceed the number of hours they are permitted to work per week, whether for you and/or for someone else.
- Check photographs to ensure they match with the individual.
- Check expiry dates of documents eg passports.
- Retain copies of the documents you have checked for your Personnel file.
- Do not allow the applicant to start work until all necessary checks are deemed satisfactory.
- Always make any offers of employment conditional upon receipt of satisfactory pre-recruitment checks so that you have the right to terminate the offer or employment summarily if the conditions are not met.
- Remember that the employer has primary responsibility over the individual’s right to work in the UK - ‘delegating’ checks to an immigration specialist or agency will not be a defence.
- Although immigrants may be willing to undertake work for much lower wages and benefits, ensure that you comply with the national minimum wage requirements and avoid discrimination related claims in relation to their terms of employment.
If you have any queries on these changes, please contact Julian Yew or David Israel of the Employment Group.
Julian Yew
Employment