Can your business afford not to be prepared?

1. Top Ten Tips on Avoiding Litigation
2. Self-employed or Employed? - That is the question!
3. Fact File - Compromise Agreements

The Employment Tribunals Service 2006/2007 annual report revealed that 132,577 claims were brought in the Employment Tribunal last year, in comparison with 86,181 claims in 2004/2005. This increase is something employers should not ignore, as defending claims is expensive.

The highest awards in individual cases last year were as follows: -

1. Unfair dismissal £250,470
2. Sex discrimination £64,862
3. Race discrimination £123,898
4. Disability discrimination £138,648

Top Ten Tips on avoiding Litigation

To ensure that your business is in the best position to avoid facing employment law claims follow Maitland Walker's top ten tips!

1. Ensure all employees have an Employment Contracts.
2. Ensure you have an up to date Staff Handbook, Health & Safety, Disciplinary and Grievance Procedure
3. Make all employees aware of the content and practicality of ALL policies and procedures
4. Provide training to staff to ensure that they are aware of their responsibilities and duties under the staff policies and procedures
5. Use your staff handbooks and procedures to manage your staff
6. Review any new employees' performance at the 9 month stage of employment in order to ensure that any issues are picked up and dealt with prior to the employees acquiring 1 year's service
7. Always follow Statutory Dismissal and Grievance procedures
8. Talk to your staff and deal with issues as soon as they arise
9. Always take legal advice before dismissing an employee
10. Keep up with employment law developments and review policies on an annual basis

Self-employed or Employed? - That is the question!

If your business has consultants, self-employed workers or agents then it is vital that they are treated, in the legal sense as such and not employees. Whether someone is actually an employee does simply decided by reference to their contract or what their job title is, it goes much deeper than this and the actual nature of the relationship is key to deciding the true relationship. Simply labelling someone as "self-employed" will not prevent that person acquiring rights, if in reality, they are employed.

To ensure that consultants, agents or self-employed workers are not classed as employees there are some key points to address, 2 of which (amongst others) being:-

• They should pay their own National Insurance and tax
• They should be able, to a certain extent, choose when they work and the work they do

For detailed advice to make sure that you are protecting your business against claims from this class of worker contact Nick Rowe or Laura Smith.

Fact File - Compromise Agreements

What is a Compromise Agreement?

A legally binding contract, regulated by statute, usually made between an employee and employer at the termination of employment or when a dispute needs to be resolved.

An employee will typically receive a negotiated financial sum in exchange for agreeing that they will not pursue any claim that they may have in an employment tribunal.

Compromise agreements are the only means whereby an employee can waive statutory claims, such as a claim for unfair dismissal or a claim for discrimination. The agreement will only be valid where (i) it is in writing and (ii) the employee has received independent advice from a solicitor who has professional indemnity insurance.

Why are the useful?

• They provide certainty for both parties effective way of resolving a variety of employment disputes without facing legal proceedings (and COSTS!)
• Cost effective and cheaper than litigating
• Terms will remain confidential (with a confidentiality clause)
• Good for public relations
• A reference is provided to the employee (if incorporated into the agreement)
• First £30,000 of a payment made as compensation for loss of employment is tax-free

What DON'T they cover?

An employee can still bring 3 types of claim:-

1. Claim for breach of contract - if the employer breaches the agreement, e.g. does not pay the employee the money agreed in the agreement
2. Claims in respect of personal injury are usually still allowed, although the agreement may exclude personal injury claims in respect of injuries of which the employee are already aware of at the time that the agreement is signed. This would usually be the case when the reason for termination is due to sickness absence for stress or depression.
3. Claims in respect of accrued pension rights.

Compromise Agreements can be an invaluable tool when managing your business and problematic employees - for advice on how they could work best for you please contact our Employment Law team employment team.

As this information has been prepared by Maitland Walker Solicitors as a general guide, we recommend that you seek specific professional advice before acting upon the information contained within it. No liability can be accepted by Maitland Walker for any action taken or not taken as result of this information. Maitland Walker is regulated by the Solicitors Regulation Authority.