IGNORANCE OF THE LAW IS NO EXCUSE (and may be fatal to your business!)

It is often said that ignorance of the law is no excuse but this is never more true than in the area of employment law.

Although I have spent over thirty-five years practising the law and employment law in particular, every day still presents me with questions I can not answer straight away.  Luckily, I usually know where to find the answer but how is the hard pressed owner/manager of a small or medium sized business expected to have the time or resources to do the same?  Answer – he doesn’t!

And yet, the complex strands of the law on employment matters affect every aspect of your business whether you like it or not.  Some of this law is obscure and seemingly illogical and yet it applies whether you are running a multi-national corporation or a corner shop.

Here are just a few examples:-

• If you give an employee notice to terminate their employment whilst they are on sick leave then, except in exceptional circumstances you must pay in full their normal contractual salary during that notice period even if the employee is only in receipt of Statutory Sick Pay or no pay at all at the time you give notice.

• Were you aware that you will have to pay Statutory Maternity Pay to an employee who leaves your employment before starting maternity leave if she was employed during what is called the “qualifying week” which is the 15th week before the week in which the baby is expected.  So you may have to continue paying someone for many months after they leave your employment!

• On a related subject, did you know it is illegal to allow or require a woman to work during the two week period immediately following birth – even from home?

• If you don’t provide your staff with a written statement of their terms and conditions of employment or don’t supply all the information the law requires an Employment Tribunal can award up to four weeks gross pay to each affected employee.  Having professionally written terms and conditions of employment will not only help you to comply with the law but can also protect your business – for example by preventing an ex-employee from competing with you unfairly or stealing your hard won customer base.

• If you are buying or selling a business you must provide specific information to any employees who may be affected by the transfer or any measures taken in connection with it.  You may also have to consult a trade union, elected representatives or the employees themselves.  This may even involve you having to arrange an election of representatives and ensuring that any election is fair and transparent.  Failure to comply with these obligations exposes you to a liability to pay up to 13 weeks uncapped gross pay to each affected employee.  A similar situation and penalties can arise with regard to the provision of information and consultation in redundancy situations where the law can impose similar penalties.

• You will probably know that selecting an employee for redundancy because they are pregnant will be an automatic unfair dismissal and also illegal discrimination – but did you also know that if there is a suitable alternative role available you must offer that to the employee on maternity leave in priority to anyone else even if you think the other candidates are better qualified?  Failing to offer the role will mean their dismissal on grounds of redundancy will be automatically unfair and also an act of illegal discrimination.  This could result in a reward of compensation which, in the case of discrimination, can be unlimited in amount.

• Disability Discrimination is always a thorny and perplexing topic for the average lawyer never mind the average hard pressed employer.  Logically you might think you cannot discriminate on the grounds of disability if you do not know the employee is disabled.  You would be wrong!  Indirect discrimination occurs where the employer applies a provision, criterion or practice (known as a PCP) which puts a disabled person at a particular disadvantage compared to people without that disability.  In the case of Bevan –v- Bridgend County Borough Council the employer was totally unaware of the employee’s travel phobia until after her dismissal.  Although other discrimination related claims failed the employee’s claim for indirect discrimination was successful even though she had not brought her disability to the attention of her employer.  Although the Tribunal reduced the compensation by 20% due to her failure to speak up she was still awarded over £50,000.00!

• Finally, one of the most important obligations of any employer lies in the area of the health & safety of its employees.  In this area in particular, ignorance of the law is again no excuse.  Breaches of basic health & safety legislation concerning matters such as having a written Health and Safety Policy, carrying out risk assessments and providing appropriate personal protective equipment can attract unlimited fines and up to two years in prison where cases proceed in the Higher Courts.  In extreme cases work related death might justify a case of manslaughter against individual directors or managers or corporate manslaughter against the business itself.  Corporate manslaughter convictions again attract unlimited fines whilst the maximum penalty for manslaughter is life imprisonment!  In this connection don’t forget that in appropriate cases the prosecuting authorities will consider the management chain and the role played by individual directors and managers.  They will take action against those individuals where it is revealed that the offence was committed with their consent or connivance or was attributable to negligence on their part.

In this article I have provided only a small number of examples  of the ways in which the law can trip up the ignorant but innocent employer but the scope and complexity of employment law can be truly daunting. Getting it wrong can be expensive as well as time consuming and leaving it to chance is not really a viable commercial option. In fact if I had a penny for every time a client has said “I have been in business 20 years and never had a problem until now” I would be a very rich man!

And so, how do you avoid the pitfalls and expense of ignorance?  At Thorneycroft Solicitors we pride ourselves in providing pro-active, solution drive advice and support.  For further details please contact Mark Bestley on 01625 507571 ([email protected]) or visit our website at www.thorneycroftsolicitors.co.uk 

By Mark Bestley, Head of Employment Law at Thorneycroft Solicitors Limited

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