Practice Management - 10 Employment Law

10.         Employment Law

Employment legislation has two functions

a)     To support the employment relationship with the contractual terms

b)     To provide an umbrella of statutory rights that operate both within / outside the contract

Know your professional + legislative obligations with regards to employing staff

Professional Obligations:

RIBA Code of professional Conduct Principle 3 – Relationships

RIBA Code of professional conduct Guidance Note 8 – Employment and Equal Opportunities

·       8.6 – members employing students must provide them with written contract, nominate an employment mentor, provide breath of experience, permit attendance at courses.

RIBA Code of Professional Conduct – Principle 3.3 Members are expected to comply with good employment practice set out in the RIBA Employment Policy which includes:

·       Promote best practice:

·       Be aware of and abide by the employment legislation and RIBA code of conduct

·       Adopt and monitor an employment policy

·       Provide employees with a written contract

·       Ensure all students know their rights and are offered opportunities for training and experience equally in the workplace

·       Review training needs or opportunities in the practice to ensure that all staff are given opportunity to develop their skills

·       Promote a health work like balance.  If overtime is excessive investigate different working methods to reduce this without detriment to the practice

·       Promote diversity at all levels

·       Promote CPD

Key Legislation:

Employment Act 2008

·       Dispute Resolution

·       National minimum wage

Employment Rights Act 1996

·       ERA section 1 (2) states that the main terms of the contract must be in writing and provided to the employee within eight weeks of the start of their employment – this is called a written statement of particulars” and confirms the main expressed terms of the employment contract

·       Split into parts. Part 5 – unfair dismissal, Part 4 – Dismissal notice, Part 4+6+7 – Paid time off, Part 8 – Types of Leave ie. Maternity, Part 10 Unfair dismissal, Part 11 redundency

·       Fair reason for dismissal covered by s98 of the Employment rights Act

Health and Safety at Work Act 1974

·       Obligation of employer to ensure health, safety and welfare of employees through guidance, approved codes of practice and regulations

Protection from Harassment Act 1997

Working Time Regulations 1998 – regulate hours of work, rest, holiday

European Working Time Directive – Restricts house of work

Equality Act 2010 – Protects people from discrimination in the workplace and wider society

Common Law – Contract Law

Zero Hour Contracts – Prevailing view is that these should be made illegal

TUPE - Transfer of Undertakings (protection of employment) regulations 2006. 

·       TUPE rules apply to organisations of all sizes and protect employees rights when the organisation or services they work for transfer to a new employer.

·       When TUPE applies, the employees of the outgoing employer automatically become employees of the incoming employer and should continue to have the same terms and conditions of employment with the incoming employer

Types of Employment Contract

A contract exists is there is Mutuality of Obligation

·       Contract of services – Employee (protected under the Employment Protection Act 1996)

·       Contract for Services – Independent Contractor (only law of Commercial contract applies) but still protected under H&S legislation and Equality Act

·       Employment status determines your level of protection under the employment legislation

·       NB: After four renewals of a fixed term contract the employee can apply for full-time status.  The employer needs to use Objective Justification is this is not given

As a minimum the written employment agreement should clearly express the terms and benefits including:

Minimum statutory requirements:

·       Normal hours of work

·       Holiday and leave entitlements

·       Amount and frequency of pay

·       Terms associated with sickness and sick pay

·       Length of notice period

·       Job title and description

·       Duration of employment

·       Disciplinary rules.

·       Obligations associated with the Pensions Schemes Act

An employment tribunal can award two to four weeks pay as a penalty for failure to provide these written particulars.

More clauses to be considered

·       Imposing a probation period

·       Restrictions on accepting other work during employment

·       Requirements to work overtime and undertake other duties

·       Confidentiality terms, making clear the types of information which may be treated as confidential to the practice.

·       Obligations for the employee to comply with confidentiality obligations own by the employer to the client (under RIBA SFA/99)

·       Intellectual property terms

·       Restrictive coventants

·       Working time regulations 1998 regulates hours of work, rest breaks, holidays and is closely associated with Health and Safety duties.

·       Basic rights are to not work more than 48 hours a week on average in total

·       11 hours of rest between working days

·       Employer has a statutory obligation to mitigate issues associated with the health and safety of its employees

Implement Standards through practice policy:

Project management Policy

·       Accurate resource forecasting and planning

·       Accurate time keeping

Handbook:

·       Handbooks can incorporate some contractual terms of a contract of employment or can contain pure polies

·       Ensure that all employees have access to a copy of the handbook and it is best practice to consult with affected staff before introducing new or changed policies.

Some of the essential things to include in handbook:

·       Disciplinary and grievance procedure

·       Family friendly policies ie. Maternity, emergency parental leave

·       Holiday leave and pay

·       Equal opportunities

·       Pay and benefits

·       Establish, implement and review proper health and safety statements and practices

Optional extras

·       Organisation chart

·       Internet + email policy

·       Training

·       Performance management + appraisals

·       Harassment and bullying

When producing a policy handbook its Important to consider current employment legislation for example the Equality Act and Protection from Harassment Act and how it affects the companies policies and procedures.

·       Use a format that is easy to update – available on intranet perhaps

·       Consult managers and staff when drafting new policies and procedures

·       Get content checked from legal perspective

Practice questions:

Key risks associated with not having an employment contract in place

As one of the biggest assets to an architectural practice is its employees, the importance of a written agreement expressing the terms of the practices relationship with their works should not be underestimated.  Although a mere offer and acceptance of employment (in what ever form) is all that is needed to create a contractual obligation, without a written contract, signed to signify acceptance of the terms of employment, both the employee and employer has no certainty as to the employment terms. 

Under section 1 of the Employment Rights Act 1996, the employer must provide the employee with written particulars of the contractual terms no later than two months after commencement of employment.  However it is best practice for a formal contract covering all the terms at the outset.

As a minimum the written employment agreement should clearly express the terms and benefits including:

Minimum statutory requirements:

·       Normal hours of work

·       Holiday and leave entitlements

·       Amount and frequency of pay

·       Terms associated with sickness and sick pay

·       Length of notice period

·       Job title and description

·       Duration of employment

·       Disciplinary rules.

·       Obligations associated with the Pensions Schemes Act

An employment tribunal can award two to four weeks pay as a penalty for failure to provide these written particulars.

More clauses to be considered

·       Imposing a probation period

·       Restrictions on accepting other work during employment

·       Requirements to work overtime and undertake other duties

·       Confidentiality terms, making clear the types of information which may be treated as confidential to the practice.

·       Obligations for the employee to comply with confidentiality obligations own by the employer to the client (under RIBA SFA/99)

·       Intellectual property terms

·       Restrictive covenants

·       Working time regulations 1998 regulates hours of work, rest breaks, holidays and is closely associated with Health and Safety duties.

·       Basic rights are to not work more than 48 hours a week on average in total

·       11 hours of rest between working days

·       Employer has a statutory obligation to mitigate issues associated with the health and safety of its employees

How would you ensure that employment issues are avoided in the future?

·       Provide employees with a contract of employment at the outset, expressing the terms and conditions of employment

·       A written contract could have provided certainty as to the employment relationship and could satisfy Section 1 of the ERA statement of terms

·       A probationary period could have provided a valid period in which to monitor performance, and a contractually agreed short notice period during probation

·       Use of gardening leave clause could give breathing space to mitigate risk of stealing clients

·       Clear remuneration package drafted to prevent uncertainty as to the bonus agreement

·       Clear drafting as to the notice period prevents arguments to the length of notice.

·       Implement a resourcing forecast / plan to allow for organisation of staff resources in effective way.  Identify where if there is a demand to increase resources through recruitment or where resources can be reorganised to better meet the needs of the current projects.