By Sara Khoja, Clyde & Co
Managing employee performance is a key concern for every employer. The measure of success and method for harnessing employee performance to align with business needs will vary from employer to employer as well as being dependant on industry sector. Whilst employers will seek to tailor their performance management systems to their own operations employers in KSA need to be mindful of the provisions in the Ministry of Labour and Social Affairs’ Model Work Regulations regarding performance management. The Model Work Regulations are available for employers to adopt wholesale or to adopt with modifications provided any amendments receive prior approval from the Ministry of Labour and Social Affairs. Extensive modification of the standard model is unlikely to be approved for use by an employer. Broadly the Model Work regulations provide for the following.
Appraisal System
Every employee should be assessed formally and in writing at least once a year; with the appraisal covering the following:
• The individual’s ability to perform work and their level of proficiency;
• The employee’s conduct, cooperation with colleagues, customers, and managers; and
• The individual’s punctuality.
Each employee should be given a performance marketing or ranking based on five performance gradings which are not specified but would include categories along the lines of high performance, upper intermediate, intermediate, lower intermediate, and poor.
Reward and Promotion
Perhaps surprisingly for many employers, the Model Work Regulations also seek to regulate the payment of bonus payments in that the regulations provide that an employee ranked as intermediate should be eligible for a bonus where an employer operates a bonus scheme. The amount and method for calculating any bonus is for the employer to determine and indeed, whether or not to provide any bonus scheme at all is at the employer’s discretion.
Internal promotions are also regulated by the Model Work Regulations and linked to the performance management and assessment scheme. Where a role is vacant then an employee is able to apply for it on the basis that it is a higher ranking role for which he is appropriately qualified and has achieved a performance ranking in his last appraisal of ‘upper intermediate’ and the promotion is approved by the General Manager. If there are competing internal applications for the same role, the Model Work Regulations provide that the following factors should be taken into account: which employee has achieved a higher appraisal ranking, has higher educational qualifications, experience, seniority within the organisation and the authorised (i.e. line of report) manager’s view.
Employment Termination due to Performance
Where an employee’s performance warrants review it is worth noting that the KSA Labour Law and the Model Work Regulations envisage the employer following the same process as that which applies for disciplinary matters. Whilst poor performance and misconduct are conceptually different, the procedure to document an employer’s steps to remedy them are the same under the KSA Labour Law and the Model Work Regulations. A three step process involving inviting an employee to a meeting in writing and outlining the concerns, meeting with the employee to give him an opportunity to explain the situation and make any representations he may have and finally confirming the employer’s decision in writing, should be followed. There are also time limits to take into account such as the requirement that any procedure is initiated within thirty days of the employer becoming aware of the employee’s poor performance. The Model Work Regulations contain a table providing guidance on the type of sanction applicable for various acts by an employee and, where poor performance is involved, an employer would be expected to issue written warnings identifying the skill gap and what needs to be done by the employee to address it. An employer would also be expected to provide training and support to an employee in order to improve his performance and where possible even consider moving him to a role more in line with his capabilities.
Generally, prior to considering termination by reason of poor performance an employer would be expected (depending on the surrounding circumstances) to have issued at least two written warnings over a six month period. Where a warning or sanction is issued (of whatever nature), these are valid or ‘live’ for a period of one hundred and eighty days following which they can remain on an employee’s file but they are not ‘live’ warnings upon which further action can be based.
Very often employers will wish to enter into discussions with employees to agree termination by mutual agreement and in accordance with article 74 of the KSA Labour Law. Care needs to be exercised when entering into these discussions as any conversation with an employee is ‘on the record’ and the concept of ‘without prejudice’ does not exist in KSA within the context of employee relations. Moreover, where a termination by mutual agreement is reached, this could have an impact on an employee’s ability to claim unemployment benefit from the General Organisation for Social Insurance (GOSI) under its Sanad program. GOSI will need to be notified by the employer that the employee is no longer in its employ and it will usually request a reason for the employment termination. Where the reason given is resignation or termination by mutual agreement this can potentially bar the employee from claiming unemployment benefit.
Monday, June 5, 2017
Mexico - Reform to Mexico's Labor Justice System
By Stefano Sandoval Malori, Pietro Straulino, Charles E. Engeman, Ogletree Deakins International, S.C.
On February 24, 2017, Mexico’s Official Gazette of the Federation (known as the Diario Oficial de la Federación or DOF) published a decree that reformed and added several dispositions of Articles 107 and 123 of the Mexican Federal Constitution.
The goal of the reform is to transform the labor justice system in Mexico. The reform aims to consolidate autonomy of the labor justice system, promote efficiency in the administration of justice, and increase labor productivity.
The following highlights some of the most important aspects of the reform:
1. The reform eliminates the local and federal Conciliation and Arbitration Labor Boards (las Juntas Locales y Federales de Conciliación y Arbitraje) as tripartite labor justice administration organs and creates local and federal labor courts dependent on the federation’s judicial branch or of the power of the states of the Mexican Republic.
2. The reform creates a pre-judicial conciliatory stage. Employees and employers in conflict will be required to attend this stage of the proceedings before the commencement of a labor trial that would be processed before the courts. It is worth noting that this pre-judicial conciliatory stage will take place on a date and time expeditiously appointed by the conciliation centers (see below) in accordance with the applicable law.
3. At the local level, specialized and impartial conciliation centers (Centros de Conciliación) will be established in the states of the Mexican Republic. Those centers will be in charge of conducting the compulsory pre-judicial conciliatory stage.
4. The federal order provides for the integration of a decentralized agency (un Organismo Descentralizado) which, in addition to conducting the compulsory pre-judicial conciliatory stage described above, will be in charge of: (i) registering all the collective bargaining agreements applicable within the Mexican Republic; (ii) registering all the unionized organizations or labor unions of the country; and (iii) participating in and solving all administrative labor/collective matters.
5. The following principles will be incorporated in the law: (i) representation of collective union organizations and (ii) certainty in the execution (signature), registration and storage of collective bargaining agreements.
6. The ratification of the collegiate circuit courts as jurisdictional bodies in charge of reviewing and deciding appellate claims filed against resolutions issued by the lower courts.
In order to implement the reform— which, along with its modifications, became effective on the day after it was published in the DOF, the following must take place to transition to the new justice system:
1. The Mexican Congress and the legislatures of the states of the Mexican Republic must make the necessary changes to local and federal legal bodies within one year of the reform’s effective date.
2. Until the courts, conciliation centers, and decentralized agency become operational, the labor boards and, as applicable, the Secretary of the Ministry of Labor and Social Welfare or the local labor authorities will continue to process the conflicts arising between employees and employers, as well as any other issues related to the registration of collective bargaining agreements and unionized organizations.
3. All matters pending at the time the activities of the courts, conciliation centers, and/or decentralized agency begin will be solved in accordance with the legal dispositions in effect at the time of the matter’s commencement.
4. The competent authorities and the labor boards must transfer all files and documents under their attention and shelter to the courts, the conciliation centers, and/or the decentralized agency.
On February 24, 2017, Mexico’s Official Gazette of the Federation (known as the Diario Oficial de la Federación or DOF) published a decree that reformed and added several dispositions of Articles 107 and 123 of the Mexican Federal Constitution.
The goal of the reform is to transform the labor justice system in Mexico. The reform aims to consolidate autonomy of the labor justice system, promote efficiency in the administration of justice, and increase labor productivity.
The following highlights some of the most important aspects of the reform:
1. The reform eliminates the local and federal Conciliation and Arbitration Labor Boards (las Juntas Locales y Federales de Conciliación y Arbitraje) as tripartite labor justice administration organs and creates local and federal labor courts dependent on the federation’s judicial branch or of the power of the states of the Mexican Republic.
2. The reform creates a pre-judicial conciliatory stage. Employees and employers in conflict will be required to attend this stage of the proceedings before the commencement of a labor trial that would be processed before the courts. It is worth noting that this pre-judicial conciliatory stage will take place on a date and time expeditiously appointed by the conciliation centers (see below) in accordance with the applicable law.
3. At the local level, specialized and impartial conciliation centers (Centros de Conciliación) will be established in the states of the Mexican Republic. Those centers will be in charge of conducting the compulsory pre-judicial conciliatory stage.
4. The federal order provides for the integration of a decentralized agency (un Organismo Descentralizado) which, in addition to conducting the compulsory pre-judicial conciliatory stage described above, will be in charge of: (i) registering all the collective bargaining agreements applicable within the Mexican Republic; (ii) registering all the unionized organizations or labor unions of the country; and (iii) participating in and solving all administrative labor/collective matters.
5. The following principles will be incorporated in the law: (i) representation of collective union organizations and (ii) certainty in the execution (signature), registration and storage of collective bargaining agreements.
6. The ratification of the collegiate circuit courts as jurisdictional bodies in charge of reviewing and deciding appellate claims filed against resolutions issued by the lower courts.
In order to implement the reform— which, along with its modifications, became effective on the day after it was published in the DOF, the following must take place to transition to the new justice system:
1. The Mexican Congress and the legislatures of the states of the Mexican Republic must make the necessary changes to local and federal legal bodies within one year of the reform’s effective date.
2. Until the courts, conciliation centers, and decentralized agency become operational, the labor boards and, as applicable, the Secretary of the Ministry of Labor and Social Welfare or the local labor authorities will continue to process the conflicts arising between employees and employers, as well as any other issues related to the registration of collective bargaining agreements and unionized organizations.
3. All matters pending at the time the activities of the courts, conciliation centers, and/or decentralized agency begin will be solved in accordance with the legal dispositions in effect at the time of the matter’s commencement.
4. The competent authorities and the labor boards must transfer all files and documents under their attention and shelter to the courts, the conciliation centers, and/or the decentralized agency.
UK/US - Bridging the Gap: Gender Pay Gap Initiatives
By Georgina McAdam Baker McKenzie London and Emily Harbison Baker McKenzie Houston
Countries across the globe are looking to address the gender pay gap and are doing so in a variety of ways. Initially the UK introduced a scheme in 2011 for employers to publish their gender pay gap voluntarily. However, very few employers did so. Therefore, the UK recently enacted legislation that requires employers with at least 250 employees to publish details of their gender pay gap on a publicly accessible website on an annual basis.
Although the UK legislation establishes how the gender pay gap should be calculated, which employers are required to publish this information and how it should be published, employers are facing various challenges when implementing the legislation.
How specifically should the gender pay gap be calculated?
Legislation in the UK sets out specific metrics companies are to report and how to calculate them. The metrics are:
• the difference in mean and median hourly pay between men and women,
• the difference in mean and median bonuses between men and women over a 12-month period,
• the proportion of men and women who receive bonus pay in a twelve-month period,
• and the proportion of men and women in each pay quartile within the company.
The rules are complex and not always clear. Being compliant may require employers to make judgment calls on tricky issues such as whether particular payments or employees are in scope. For example, bonuses paid in April may need to be included in both the hourly pay gap and bonus pay gap (depending on exactly when they are paid), and may exacerbate the hourly pay gap figures. In addition, there are some particular challenges around certain types of payment such as sign-on and retention bonuses which will require judgment calls. There are also some anomalies, for example, financial services employers who pay role-based allowances in April will need to include them in their hourly pay gap. The timing of payments can therefore have a distorting effect.
Which employers need to publish details of their gender pay gap?
Employers with 250 or more employees on 5 April in any year must report their gender pay gap data for that year. Employees in this sense includes apprentices and anyone employed under a contract to personally do work, which includes workers and some contractors. In addition, employees can include ex pats posted overseas, if they retain a sufficient connection to Great Britain (Northern Ireland is currently excluded). Therefore, employers must consider their wider workforce and not just their employees in Great Britain. However, agency workers and individuals providing work though personal service companies are excluded. In addition, workers and contractors can be disregarded for the purposes of the gender pay gap metrics if the employer does not have the data for them and it is not reasonably practicable to obtain the data.
In a group of companies, the obligation to report applies to each company separately, based on the number of employees in the company rather than in the group as a whole. Each group company with 250 or more employees must therefore produce its own report and upload its data to the government website, even if the group voluntarily produces a consolidated version. Equally, companies with fewer than 250 employees do not have to produce a report, even if they are part of a wider group with more than 250 employees.
Depending on the group and organisational structure, this could have unintended consequences and mean peer comparisons are not entirely like for like. For example, in some groups the board may be out of scope of the calculations, if they are employed by a group company with fewer than 250 employees. Whilst we do not expect companies to change their group structure because of gender pay reporting, the rules may give an "advantage" to some groups with certain existing structures.
How must employers publish their gender pay gap?
Employers must publish their data (i.e. the metrics described above) within 12 months of 5 April 2017 on a publicly accessible website. This means that the first reports will be due by 4 April 2018. Companies therefore have a degree of flexibility over the timing of the publication, as they can publish their data any time prior to the deadline.
The guidance published by the government encourages early publication, which it says will enable employers to be seen as leaders in their sector. However, some employers will be concerned that early publishing could attract more media attention and, given that most in-scope employers will be publishing a gender pay gap, that the publicity will be negative. Employers will also need to manage multiple stakeholders and may want to ensure that their employees, senior management teams and relevant employee groups are briefed in advance of publication. In addition, the process of calculation and sign-off is not straightforward. Therefore, most companies are likely to wait to publish their data towards the end of the 12-month publication window.
The information will need to remain on the website, accessible to employees and the public, for at least three years to enable trends to be identified.
Employers must also upload their data to this national government website to enable easy comparison with other employers. At the time of writing, only 9 employers have uploaded their data.
In addition to the metrics, companies have an option to publish a narrative alongside their data when publishing on their own website. For example, to explain their analysis of the gap, any measures they are taking to reduce the gap and to put their data in context alongside their diversity and inclusion initiatives. This will help to give context to any pay gap. Multinational employers will need to think about whether their narrative is, or needs to be, consistent with what they are saying elsewhere.
Employers may also want to consider publishing additional or more detailed metrics, for example, the average hourly pay gap between employees at the same grade. This may show a much smaller pay gap, but a pay gap at this level may be more indicative of equal pay risks, so employers will need to consider this carefully. The Conservative Party manifesto states that, if they win the forthcoming general election, they will require employers to publish more data and (although the manifesto does not give any specifics) this could well involve a breakdown by grade, and possibly age.
Are there any sanctions for non-compliance?
There are no civil or criminal penalties for employers that do not publish their gender pay gap data, although the Equality and Human Rights Commission could take enforcement action against non-compliant employers. The intention seems to be that employees, unions, the media, customers and shareholders will apply sufficient pressure to non-compliant organisations.
What steps are employers taking?
Employers need to analyse their figures and their own demographics to understand the causes of any gender pay gap before developing action plans to close it. Some clients may want to do this under legal advice privilege as far as possible, and this needs careful planning. A key question is also whether there is an underlying equal pay issues and legal exposure. Where this is a concern, it should be explored on a privileged basis.
Many organisations are starting to look beyond the immediate concern of compliance with the legislation. Some want to analyse their data to better understand the causes of the gender pay gap in their organisation and consider what measures they could take to narrow it. These organisations are likely to look at alternative or adjusted metrics in order to track their progress, whether or not they also publish those metrics. Any deep analysis of the gender pay gap or production of alternative or adjusted metrics may take considerable resources when compared to simple compliance, and measures to target the gap will also require investment.
If a company is going to take measures to address the gender pay gap, it is important to be realistic and acknowledge what cannot be changed, at least in the short-term, as well as what can. There is a risk of an employer announcing a package of measures aimed at narrowing the gap and then finding that the gap remains the same in subsequent years. As explained above, employers need to display three years' worth of data on their websites. Some measures may be effective in the long-term but make the gender pay gap worse in the short-term. Companies should not just be thinking about a package of measures to announce in the first year of gender pay gap reporting; they need to be looking ahead to the longer-term, and monitoring the impact of measures.
What are other countries doing?
The gender pay gap is a global issue, and other countries are taking a closer look at what can be done to improve it. For example, in the United States, there are new rules on gender pay reporting from the Equal Employment Opportunity Commission (EEOC), which is the federal agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, colour, religion, sex, national origin, age, disability or genetic information. For years, the EEOC and the Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) have collected data from certain private employers and federal contractors and subcontractors about their employees on the "Employer Information Report" or the EEO-1. The EEO-1 previously collected data about the number of employees by job category and by sex and race or ethnicity. On September 29, 2016, the EEOC announced approval of a revised EEO-1, starting with the 2017 report, to now also collect summary pay data from employers, including federal contractors and subcontractors, with 100 or more employees. The EEOC expects the revised report will "assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces."
Using the revised EEO-1 report, covered employers will be required to report the total number of full and part-time employees they had during the “workforce snapshot period” in each of 12 pay bands listed for each EEO-1 job category. Notably, employers do not report individual pay or salaries. In addition, employers must tally and report the number of hours worked that year by all the employees accounted for in each pay band. Employers are required to submit EEO-1 reports annually. The EEO-1 deadline for the 2017 report is 31 March 2018. Employers will have a total of 18 months-from 30 September 2016 (2016 report deadline) to 31 March 2018 (2017 report deadline) to make the change to the revised form.
There are no penalties or fines associated with the failure to file a EEO-1 report. However, the EEOC can compel a company to file the report. Moreover, if a federal contractor fails to submit a report, it may lose its current government contract and/or be prevented from receiving future contracts.
It is worth noting that it is possible that the Trump Administration may reverse the course here. The new EEOC Acting Chair, Victoria Lipnic, previously voted against the revised EEO-1 report and recently reiterated her opinion that the purported benefits of collecting the pay data do not outweigh the costs of doing so. However, for now the new rules stand and employers should be prepared to report the new pay data information in their 2017 reports.
Countries across the globe are looking to address the gender pay gap and are doing so in a variety of ways. Initially the UK introduced a scheme in 2011 for employers to publish their gender pay gap voluntarily. However, very few employers did so. Therefore, the UK recently enacted legislation that requires employers with at least 250 employees to publish details of their gender pay gap on a publicly accessible website on an annual basis.
Although the UK legislation establishes how the gender pay gap should be calculated, which employers are required to publish this information and how it should be published, employers are facing various challenges when implementing the legislation.
How specifically should the gender pay gap be calculated?
Legislation in the UK sets out specific metrics companies are to report and how to calculate them. The metrics are:
• the difference in mean and median hourly pay between men and women,
• the difference in mean and median bonuses between men and women over a 12-month period,
• the proportion of men and women who receive bonus pay in a twelve-month period,
• and the proportion of men and women in each pay quartile within the company.
The rules are complex and not always clear. Being compliant may require employers to make judgment calls on tricky issues such as whether particular payments or employees are in scope. For example, bonuses paid in April may need to be included in both the hourly pay gap and bonus pay gap (depending on exactly when they are paid), and may exacerbate the hourly pay gap figures. In addition, there are some particular challenges around certain types of payment such as sign-on and retention bonuses which will require judgment calls. There are also some anomalies, for example, financial services employers who pay role-based allowances in April will need to include them in their hourly pay gap. The timing of payments can therefore have a distorting effect.
Which employers need to publish details of their gender pay gap?
Employers with 250 or more employees on 5 April in any year must report their gender pay gap data for that year. Employees in this sense includes apprentices and anyone employed under a contract to personally do work, which includes workers and some contractors. In addition, employees can include ex pats posted overseas, if they retain a sufficient connection to Great Britain (Northern Ireland is currently excluded). Therefore, employers must consider their wider workforce and not just their employees in Great Britain. However, agency workers and individuals providing work though personal service companies are excluded. In addition, workers and contractors can be disregarded for the purposes of the gender pay gap metrics if the employer does not have the data for them and it is not reasonably practicable to obtain the data.
In a group of companies, the obligation to report applies to each company separately, based on the number of employees in the company rather than in the group as a whole. Each group company with 250 or more employees must therefore produce its own report and upload its data to the government website, even if the group voluntarily produces a consolidated version. Equally, companies with fewer than 250 employees do not have to produce a report, even if they are part of a wider group with more than 250 employees.
Depending on the group and organisational structure, this could have unintended consequences and mean peer comparisons are not entirely like for like. For example, in some groups the board may be out of scope of the calculations, if they are employed by a group company with fewer than 250 employees. Whilst we do not expect companies to change their group structure because of gender pay reporting, the rules may give an "advantage" to some groups with certain existing structures.
How must employers publish their gender pay gap?
Employers must publish their data (i.e. the metrics described above) within 12 months of 5 April 2017 on a publicly accessible website. This means that the first reports will be due by 4 April 2018. Companies therefore have a degree of flexibility over the timing of the publication, as they can publish their data any time prior to the deadline.
The guidance published by the government encourages early publication, which it says will enable employers to be seen as leaders in their sector. However, some employers will be concerned that early publishing could attract more media attention and, given that most in-scope employers will be publishing a gender pay gap, that the publicity will be negative. Employers will also need to manage multiple stakeholders and may want to ensure that their employees, senior management teams and relevant employee groups are briefed in advance of publication. In addition, the process of calculation and sign-off is not straightforward. Therefore, most companies are likely to wait to publish their data towards the end of the 12-month publication window.
The information will need to remain on the website, accessible to employees and the public, for at least three years to enable trends to be identified.
Employers must also upload their data to this national government website to enable easy comparison with other employers. At the time of writing, only 9 employers have uploaded their data.
In addition to the metrics, companies have an option to publish a narrative alongside their data when publishing on their own website. For example, to explain their analysis of the gap, any measures they are taking to reduce the gap and to put their data in context alongside their diversity and inclusion initiatives. This will help to give context to any pay gap. Multinational employers will need to think about whether their narrative is, or needs to be, consistent with what they are saying elsewhere.
Employers may also want to consider publishing additional or more detailed metrics, for example, the average hourly pay gap between employees at the same grade. This may show a much smaller pay gap, but a pay gap at this level may be more indicative of equal pay risks, so employers will need to consider this carefully. The Conservative Party manifesto states that, if they win the forthcoming general election, they will require employers to publish more data and (although the manifesto does not give any specifics) this could well involve a breakdown by grade, and possibly age.
Are there any sanctions for non-compliance?
There are no civil or criminal penalties for employers that do not publish their gender pay gap data, although the Equality and Human Rights Commission could take enforcement action against non-compliant employers. The intention seems to be that employees, unions, the media, customers and shareholders will apply sufficient pressure to non-compliant organisations.
What steps are employers taking?
Employers need to analyse their figures and their own demographics to understand the causes of any gender pay gap before developing action plans to close it. Some clients may want to do this under legal advice privilege as far as possible, and this needs careful planning. A key question is also whether there is an underlying equal pay issues and legal exposure. Where this is a concern, it should be explored on a privileged basis.
Many organisations are starting to look beyond the immediate concern of compliance with the legislation. Some want to analyse their data to better understand the causes of the gender pay gap in their organisation and consider what measures they could take to narrow it. These organisations are likely to look at alternative or adjusted metrics in order to track their progress, whether or not they also publish those metrics. Any deep analysis of the gender pay gap or production of alternative or adjusted metrics may take considerable resources when compared to simple compliance, and measures to target the gap will also require investment.
If a company is going to take measures to address the gender pay gap, it is important to be realistic and acknowledge what cannot be changed, at least in the short-term, as well as what can. There is a risk of an employer announcing a package of measures aimed at narrowing the gap and then finding that the gap remains the same in subsequent years. As explained above, employers need to display three years' worth of data on their websites. Some measures may be effective in the long-term but make the gender pay gap worse in the short-term. Companies should not just be thinking about a package of measures to announce in the first year of gender pay gap reporting; they need to be looking ahead to the longer-term, and monitoring the impact of measures.
What are other countries doing?
The gender pay gap is a global issue, and other countries are taking a closer look at what can be done to improve it. For example, in the United States, there are new rules on gender pay reporting from the Equal Employment Opportunity Commission (EEOC), which is the federal agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, colour, religion, sex, national origin, age, disability or genetic information. For years, the EEOC and the Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) have collected data from certain private employers and federal contractors and subcontractors about their employees on the "Employer Information Report" or the EEO-1. The EEO-1 previously collected data about the number of employees by job category and by sex and race or ethnicity. On September 29, 2016, the EEOC announced approval of a revised EEO-1, starting with the 2017 report, to now also collect summary pay data from employers, including federal contractors and subcontractors, with 100 or more employees. The EEOC expects the revised report will "assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces."
Using the revised EEO-1 report, covered employers will be required to report the total number of full and part-time employees they had during the “workforce snapshot period” in each of 12 pay bands listed for each EEO-1 job category. Notably, employers do not report individual pay or salaries. In addition, employers must tally and report the number of hours worked that year by all the employees accounted for in each pay band. Employers are required to submit EEO-1 reports annually. The EEO-1 deadline for the 2017 report is 31 March 2018. Employers will have a total of 18 months-from 30 September 2016 (2016 report deadline) to 31 March 2018 (2017 report deadline) to make the change to the revised form.
There are no penalties or fines associated with the failure to file a EEO-1 report. However, the EEOC can compel a company to file the report. Moreover, if a federal contractor fails to submit a report, it may lose its current government contract and/or be prevented from receiving future contracts.
It is worth noting that it is possible that the Trump Administration may reverse the course here. The new EEOC Acting Chair, Victoria Lipnic, previously voted against the revised EEO-1 report and recently reiterated her opinion that the purported benefits of collecting the pay data do not outweigh the costs of doing so. However, for now the new rules stand and employers should be prepared to report the new pay data information in their 2017 reports.
Friday, February 10, 2017
Spring 2017 Edition
Dear all
Belated happy new year (the Year of the Rooster in China)!
Welcome to the Spring 2017 edition of the newsletter. Many thanks to all of our contributors, and please let me know if you are interested in submitting an article for a future edition.
Helen Colquhoun
Withers
(qualified in Hong Kong, England & Wales, New York)
Belated happy new year (the Year of the Rooster in China)!
Welcome to the Spring 2017 edition of the newsletter. Many thanks to all of our contributors, and please let me know if you are interested in submitting an article for a future edition.
Helen Colquhoun
Withers
(qualified in Hong Kong, England & Wales, New York)
Canada - Good Grief! Is that my Supervisor on the Picket Line?
By Theodore Goloff, Robinson Sheppard Shapiro
A recent decision of the Tribunal administratif du travail in Quebec could usher in a whole new reality in Quebec labour law: first line supervisors having the right to collective bargaining and the right to strike!
1. Tectonic changes have been occurring in the labour relations in the past twelve months with little or no attention being paid by employers in Quebec. In January 2015, the Supreme Court had reversed the position that it took thirty years ago, and declared that not only was substantive collective bargaining a Charter-protected right, but that the right to strike was equally Charter-protected. Those rights could only be restricted by legislation when there is an overarching and urgent societal interest to do so, provided that the means chosen was the least intrusive that could achieve the goal.
2. These fundamental changes have recently been used by the Tribunal administratif du travail (“TAT”) to produce another tectonic change in one of the pillars of Quebec labour relations - the statutory exclusion of first-line supervisors from any possibility of unionization. Indeed, the December 7, 2016 declaration by the TAT in Association des cadres de la Société des Casinos du Québec et Société des casinos du Québec inc., 2016 QCTAT 6870, that Section 1(l)(1) of the Quebec Labour Code, defining an “employee” as excluding:
“a person who, in the opinion of the Tribunal, is employed as manager, superintendent, foreman or representative of the employer in his relations with his employees…”;
is inoperative, at least in that case, because it denies that employer’s first line supervisors of these fundamental Charter-protected rights as recognized by the Supreme Court, fogs the distinction between management and labour, and will, unless overturned, create rather than settle conflict. While the direct effect of the decision right now only applies to the employers involved, its application will, no doubt, be progressively widened to include all first-line supervisors who do not in fact exercise some degree of substantive managerial authority.
BACKGROUND
3. Traditionally, first-line supervisors were considered representatives of management who could not be placed into situations of divided loyalties or potential conflicts of interest. Since they represented management themselves, they could not and should not be open to any possibility of unionization or collective bargaining, rights that were legislatively created. Until viewed as Charter-protected rights, the state would be free to limit such legislatively created rights exclusively to those to whom they were intended to apply. Given the responsibilities that a union member has towards his fellow union brothers it was felt from the inception of the first labour relations statute in 1941, right through to the latest amendments to the Labour Code in 2015, that allowing supervisors to organize would create impossible conflicts of interest. The landscape and environment has now changed!
WHY EMPLOYERS SHOULD TAKE NOTICE
4. Fundamentally, if this decision is allowed to stand and is widely applied, serious questions will arise as to how small- and medium-size firms can operate efficiently. Think of the impact that decisions that first-line supervisors if they are truly management representatives, make or supposedly make every day, decisions that bind employers. These include evaluation of probationary employees, evaluation of employees to be laid off or let go in the event of downsizing, assignment of overtime, selection of employees for promotion, assignment to and balancing of shifts, evaluation of employees for periodic salary advancement, recognition, documentation and decision regarding conduct requiring discipline, evaluation and effective treatment of employee complaints and grievances quickly and effectively as they arise, and a host of other vital decisions that impact the bottom line. All of these form part of what should be part and parcel of the role of a first-line supervisor. Some have said that such supervisors are the lynchpin between executive-level management and the shop floor. Scripture recognizes the impossibility of having a foot in two opposing camps in the parable “He who is not for me is against me”. In a sense, the exclusion provided by Art. 1(l) of the Labour Code of foremen, supervisors and other representatives of managements in their dealings with employees mirror the parable.
5. This basic tenet of Quebec labour relations has now been thrust aside ostensibly on the basis that unionization collective bargaining and the right to strike, now recognized as fundamental, human rights that are Charter-based and Charter-protected, at least for those that are really and truly “employees”, and not the true persona of the “employer”. How severely operations will be impacted remains to be seen. Much will depend in each case on whether and how effectively and completely first-line supervisors are true management decision makers. In very large organizations, such as la Société des casinos du Québec inc., first-line supervisors have seen their managerial role diluted, with decisions being made further up the line. Constant erosion of even minimally independent authority of first-line supervisors in the name of consolidation of power higher up the line and/or “standardization” in large organizations has blurred the boundaries between who is management and who is labour. The possible impact of the TAT’s decision on such large organizations is far less drastic than on small- and medium-sized employers because they, unlike small organizations, have multiple layers of supervisors. Small- or medium-sized employers simply don’t have that luxury! How successful will unionized supervisors be in protecting management rights and efficient operations without costly additional independent supervision present? Will they themselves, as the supervisors of the Société des Casinos, seek union certification?
EFFECTS ON CONTINUING OPERATIONS DURING A STRIKE
6. Quebec’s “anti-scab” legislation (Sections 109.1 et al. of the Labour Code) provides that management employees hired before notice to bargain are about the only persons who might continue all operations during a lawful strike by unionized employees. Other unionized employees who are not themselves on strike, are allowed to continue working doing only their own jobs. Up to now, persons who were considered as being covered by Section 1(l)(1), as above, could do any and all work in the place and stead of striking employees. If the decision of the TAT is allowed to stand, what little opportunity management may have in carrying on business during a strike might disappear, effectively, only executives could be doing the work of the bargaining unit on strike.
CONCLUSIONS
7. The TAT’s decision was based on the labour relations of a very complex large employer where the true managerial authority of the supervisors involved had been eroded over the years.
8. The problematic effects of the decision might be reduced for an employer to truly empower first-line supervisors with real decisional authority so that their role as the embodiment of the employer is unmistakable. In any case, wouldn’t that lead to effective “hands on” management? Empowering such folks no doubt requires both training and their “buying into” managerial goals and procedures. It requires the confidence of their superiors that they will exercise discretion properly. Take for instance discipline. It’s not sufficient to tell supervisors that they have to document instances of problematic conduct. For them, to truly do so regularly and apply rules of conduct consistently and accurately and fully requires that they understand why all of this is necessary and the process of progressive and constructive discipline. They have to self-identify with the reasonability of all of this and its importance for running the business efficiently. Being a good line operator does not itself equate to being a good supervisor.
9. If employers continue to dilute the responsibilities of first-line supervisors, they can expect results much like in Société des casinos. If they strengthen their supervisors’ authority and training, they will have a fair to middling shot at avoiding seeing these folks unionize, assuming of course that the TAT’s decision withstands the inevitable and likely appeals process.
A recent decision of the Tribunal administratif du travail in Quebec could usher in a whole new reality in Quebec labour law: first line supervisors having the right to collective bargaining and the right to strike!
1. Tectonic changes have been occurring in the labour relations in the past twelve months with little or no attention being paid by employers in Quebec. In January 2015, the Supreme Court had reversed the position that it took thirty years ago, and declared that not only was substantive collective bargaining a Charter-protected right, but that the right to strike was equally Charter-protected. Those rights could only be restricted by legislation when there is an overarching and urgent societal interest to do so, provided that the means chosen was the least intrusive that could achieve the goal.
2. These fundamental changes have recently been used by the Tribunal administratif du travail (“TAT”) to produce another tectonic change in one of the pillars of Quebec labour relations - the statutory exclusion of first-line supervisors from any possibility of unionization. Indeed, the December 7, 2016 declaration by the TAT in Association des cadres de la Société des Casinos du Québec et Société des casinos du Québec inc., 2016 QCTAT 6870, that Section 1(l)(1) of the Quebec Labour Code, defining an “employee” as excluding:
“a person who, in the opinion of the Tribunal, is employed as manager, superintendent, foreman or representative of the employer in his relations with his employees…”;
is inoperative, at least in that case, because it denies that employer’s first line supervisors of these fundamental Charter-protected rights as recognized by the Supreme Court, fogs the distinction between management and labour, and will, unless overturned, create rather than settle conflict. While the direct effect of the decision right now only applies to the employers involved, its application will, no doubt, be progressively widened to include all first-line supervisors who do not in fact exercise some degree of substantive managerial authority.
BACKGROUND
3. Traditionally, first-line supervisors were considered representatives of management who could not be placed into situations of divided loyalties or potential conflicts of interest. Since they represented management themselves, they could not and should not be open to any possibility of unionization or collective bargaining, rights that were legislatively created. Until viewed as Charter-protected rights, the state would be free to limit such legislatively created rights exclusively to those to whom they were intended to apply. Given the responsibilities that a union member has towards his fellow union brothers it was felt from the inception of the first labour relations statute in 1941, right through to the latest amendments to the Labour Code in 2015, that allowing supervisors to organize would create impossible conflicts of interest. The landscape and environment has now changed!
WHY EMPLOYERS SHOULD TAKE NOTICE
4. Fundamentally, if this decision is allowed to stand and is widely applied, serious questions will arise as to how small- and medium-size firms can operate efficiently. Think of the impact that decisions that first-line supervisors if they are truly management representatives, make or supposedly make every day, decisions that bind employers. These include evaluation of probationary employees, evaluation of employees to be laid off or let go in the event of downsizing, assignment of overtime, selection of employees for promotion, assignment to and balancing of shifts, evaluation of employees for periodic salary advancement, recognition, documentation and decision regarding conduct requiring discipline, evaluation and effective treatment of employee complaints and grievances quickly and effectively as they arise, and a host of other vital decisions that impact the bottom line. All of these form part of what should be part and parcel of the role of a first-line supervisor. Some have said that such supervisors are the lynchpin between executive-level management and the shop floor. Scripture recognizes the impossibility of having a foot in two opposing camps in the parable “He who is not for me is against me”. In a sense, the exclusion provided by Art. 1(l) of the Labour Code of foremen, supervisors and other representatives of managements in their dealings with employees mirror the parable.
5. This basic tenet of Quebec labour relations has now been thrust aside ostensibly on the basis that unionization collective bargaining and the right to strike, now recognized as fundamental, human rights that are Charter-based and Charter-protected, at least for those that are really and truly “employees”, and not the true persona of the “employer”. How severely operations will be impacted remains to be seen. Much will depend in each case on whether and how effectively and completely first-line supervisors are true management decision makers. In very large organizations, such as la Société des casinos du Québec inc., first-line supervisors have seen their managerial role diluted, with decisions being made further up the line. Constant erosion of even minimally independent authority of first-line supervisors in the name of consolidation of power higher up the line and/or “standardization” in large organizations has blurred the boundaries between who is management and who is labour. The possible impact of the TAT’s decision on such large organizations is far less drastic than on small- and medium-sized employers because they, unlike small organizations, have multiple layers of supervisors. Small- or medium-sized employers simply don’t have that luxury! How successful will unionized supervisors be in protecting management rights and efficient operations without costly additional independent supervision present? Will they themselves, as the supervisors of the Société des Casinos, seek union certification?
EFFECTS ON CONTINUING OPERATIONS DURING A STRIKE
6. Quebec’s “anti-scab” legislation (Sections 109.1 et al. of the Labour Code) provides that management employees hired before notice to bargain are about the only persons who might continue all operations during a lawful strike by unionized employees. Other unionized employees who are not themselves on strike, are allowed to continue working doing only their own jobs. Up to now, persons who were considered as being covered by Section 1(l)(1), as above, could do any and all work in the place and stead of striking employees. If the decision of the TAT is allowed to stand, what little opportunity management may have in carrying on business during a strike might disappear, effectively, only executives could be doing the work of the bargaining unit on strike.
CONCLUSIONS
7. The TAT’s decision was based on the labour relations of a very complex large employer where the true managerial authority of the supervisors involved had been eroded over the years.
8. The problematic effects of the decision might be reduced for an employer to truly empower first-line supervisors with real decisional authority so that their role as the embodiment of the employer is unmistakable. In any case, wouldn’t that lead to effective “hands on” management? Empowering such folks no doubt requires both training and their “buying into” managerial goals and procedures. It requires the confidence of their superiors that they will exercise discretion properly. Take for instance discipline. It’s not sufficient to tell supervisors that they have to document instances of problematic conduct. For them, to truly do so regularly and apply rules of conduct consistently and accurately and fully requires that they understand why all of this is necessary and the process of progressive and constructive discipline. They have to self-identify with the reasonability of all of this and its importance for running the business efficiently. Being a good line operator does not itself equate to being a good supervisor.
9. If employers continue to dilute the responsibilities of first-line supervisors, they can expect results much like in Société des casinos. If they strengthen their supervisors’ authority and training, they will have a fair to middling shot at avoiding seeing these folks unionize, assuming of course that the TAT’s decision withstands the inevitable and likely appeals process.
France - The French Employee's 'Right to Disconnect'
By Roselyn Sands and Nicolas Etcheparre, EY Société d’avocats
As usual, French labor and employment law continues to be at the heart of French legislative activity with numerous changes in the past months. Yet one topic has attracted the most media attention and has been one of the most recent trending subjects: the “right to disconnect” from mobile devices outside of working hours.
This new “right to disconnect” is applicable since January 1, 2017. Essentially, it requires employers and employee unions to engage in collective bargaining to negotiate the conditions under which employees will be entitled to disconnect from their mobile devices outside of working.
The main purpose of this law is to ensure that working hours are complied with, and to protect the health and safety of employees, by allowing them to actually rest in between work days, on weekends and during holidays.
What is the right to disconnect?
One of the main issues brought by this law is that it does not specify what needs to be understood as the right to “disconnect”. When asked to provide a specific definition the Government explained that the right to disconnect was, for instance, “the right for an employee to not answer emails outside of working hours”, and that in fact, this new right would “allow companies to manage this issue and adapt to new and more modern way of working”.
French legal doctrine has defined this right as the right for employees “to not always be reachable, for uninterrupted periods of time, for professional reasons. This right entitles employees to be temporarily disconnected from the digital tools that allow them to be reachable for professional reasons (e.g. smartphones, emails, internet)”
To ensure that this new right is complied with, employers will have to implement measures allowing employees to be disconnected outside of working hours. Such measures could include technical limitations, such as smartphones that no longer receive emails after working hours, or managerial seminars, aiming to empower employees to not feel pressured to answer work related requests outside of working hours.
Therefore, the right to disconnect needs to be understood as an obligation which is shared by both the employer, who needs to ensure that employees are afforded the right to disconnect, and by the employees, who must make use of the right they are afforded.
New obligations for employees: the “must dos”
This new right appears in two different sections of the French labor code.
It appears first as a subject that must be discussed by employers on a yearly basis with the employee unions elected in the company during the “Négociation Annuelle Obligatoire” (Yearly Mandatory Negotiation).
The law specifies that the employer and the unions must discuss, in good faith, the conditions under which this new right will be afforded to employees and what measures will be taken to ensure that it is complied with. If both parties cannot find an agreement, employers must implement a unilateral plan aiming to train and sensitize employees to “reasonable use of digital tools”.
The new law does not provide for a specific sanction if no agreement is reached and no plan is implemented. However, in cases where employees make claims for unpaid and unreported overtime related to their working after hours through digital tools, judges will be more likely to penalize an employer who has failed to implement such a plan.
The right to disconnect appears second in the section related to employees working under a fixed number of days scheme (managers and above types) as they are the employees most likely to suffer from “hyper-connectivity”.
Under the new law, the fixed number of days scheme must now specify the conditions under which employees will be entitled to disconnect from their work. Failure to do would render the scheme null, and such employees would therefore be considered to work only 35 hours per week, with overtime pay for each additional hour worked.
Some food for thought on “nice-to-haves” best practices
There is no “one shoe fits all” solution regarding this new obligation/right. The manner in which employees are entitled to benefit from their right to disconnect will depend on several factors, such as the type, size and international exposure of the company. Good practices on this matter would therefore require a two stepped approach.
First companies should run an internal diagnostic on the following issues that should be treated by a potential plan:
- Does the company already have a policy on the use of digital tools? Has a plan already been implemented?
- How are employees equipped (e.g. smartphone and / or laptop, Bring Your Own Device (BYOD))?
- Do employees have a large autonomy in working time? Do they use their holidays or do they end the year with untaken holidays?
- Does the company have special data protection needs (e.g. confidentiality, industrial secrets)?
- Can the company cease all activity / electronic communications over a certain period of time? Are employees required to be constantly reachable?
- Is the company’s activity oriented towards countries whose time zone is very different?
Then, based on this initial diagnostic, employers may consider three approaches.
- Radical and unilateral actions,: closing of email servers, blocking of emails during certain periods (nights and weekends for example);
- Driving policy: internal regulations, policies enacted in the company authorizing employees not to respond to solicitations during certain periods
- Culture change actions: trainings of employees, managers, good practices (e.g. avoid replying to all the recipients of an e-mail when it is not obligatory, affix a specific mention in the subject of the mail when the Response may be postponed).
Conclusion
Although the right to disconnect seems like a strange topic for legislation, all the media has taken interest in this and appear to agree that it is a novel and very important measure to protect employees.
This right to disconnect must be viewed as a means to lead a necessary dialogue on digital tools as they continue to invade employees’ lives and blur the line between working time and non-working time.
Non-compliance with this legislation exposes companies to wage and hour risks, in particular with regards to overtime, but also to health and safety risks, in particular in cases where employees can prove that due to excessive connectivity they suffer from undue stress and emotional complications.
As usual, French labor and employment law continues to be at the heart of French legislative activity with numerous changes in the past months. Yet one topic has attracted the most media attention and has been one of the most recent trending subjects: the “right to disconnect” from mobile devices outside of working hours.
This new “right to disconnect” is applicable since January 1, 2017. Essentially, it requires employers and employee unions to engage in collective bargaining to negotiate the conditions under which employees will be entitled to disconnect from their mobile devices outside of working.
The main purpose of this law is to ensure that working hours are complied with, and to protect the health and safety of employees, by allowing them to actually rest in between work days, on weekends and during holidays.
What is the right to disconnect?
One of the main issues brought by this law is that it does not specify what needs to be understood as the right to “disconnect”. When asked to provide a specific definition the Government explained that the right to disconnect was, for instance, “the right for an employee to not answer emails outside of working hours”, and that in fact, this new right would “allow companies to manage this issue and adapt to new and more modern way of working”.
French legal doctrine has defined this right as the right for employees “to not always be reachable, for uninterrupted periods of time, for professional reasons. This right entitles employees to be temporarily disconnected from the digital tools that allow them to be reachable for professional reasons (e.g. smartphones, emails, internet)”
To ensure that this new right is complied with, employers will have to implement measures allowing employees to be disconnected outside of working hours. Such measures could include technical limitations, such as smartphones that no longer receive emails after working hours, or managerial seminars, aiming to empower employees to not feel pressured to answer work related requests outside of working hours.
Therefore, the right to disconnect needs to be understood as an obligation which is shared by both the employer, who needs to ensure that employees are afforded the right to disconnect, and by the employees, who must make use of the right they are afforded.
New obligations for employees: the “must dos”
This new right appears in two different sections of the French labor code.
It appears first as a subject that must be discussed by employers on a yearly basis with the employee unions elected in the company during the “Négociation Annuelle Obligatoire” (Yearly Mandatory Negotiation).
The law specifies that the employer and the unions must discuss, in good faith, the conditions under which this new right will be afforded to employees and what measures will be taken to ensure that it is complied with. If both parties cannot find an agreement, employers must implement a unilateral plan aiming to train and sensitize employees to “reasonable use of digital tools”.
The new law does not provide for a specific sanction if no agreement is reached and no plan is implemented. However, in cases where employees make claims for unpaid and unreported overtime related to their working after hours through digital tools, judges will be more likely to penalize an employer who has failed to implement such a plan.
The right to disconnect appears second in the section related to employees working under a fixed number of days scheme (managers and above types) as they are the employees most likely to suffer from “hyper-connectivity”.
Under the new law, the fixed number of days scheme must now specify the conditions under which employees will be entitled to disconnect from their work. Failure to do would render the scheme null, and such employees would therefore be considered to work only 35 hours per week, with overtime pay for each additional hour worked.
Some food for thought on “nice-to-haves” best practices
There is no “one shoe fits all” solution regarding this new obligation/right. The manner in which employees are entitled to benefit from their right to disconnect will depend on several factors, such as the type, size and international exposure of the company. Good practices on this matter would therefore require a two stepped approach.
First companies should run an internal diagnostic on the following issues that should be treated by a potential plan:
- Does the company already have a policy on the use of digital tools? Has a plan already been implemented?
- How are employees equipped (e.g. smartphone and / or laptop, Bring Your Own Device (BYOD))?
- Do employees have a large autonomy in working time? Do they use their holidays or do they end the year with untaken holidays?
- Does the company have special data protection needs (e.g. confidentiality, industrial secrets)?
- Can the company cease all activity / electronic communications over a certain period of time? Are employees required to be constantly reachable?
- Is the company’s activity oriented towards countries whose time zone is very different?
Then, based on this initial diagnostic, employers may consider three approaches.
- Radical and unilateral actions,: closing of email servers, blocking of emails during certain periods (nights and weekends for example);
- Driving policy: internal regulations, policies enacted in the company authorizing employees not to respond to solicitations during certain periods
- Culture change actions: trainings of employees, managers, good practices (e.g. avoid replying to all the recipients of an e-mail when it is not obligatory, affix a specific mention in the subject of the mail when the Response may be postponed).
Conclusion
Although the right to disconnect seems like a strange topic for legislation, all the media has taken interest in this and appear to agree that it is a novel and very important measure to protect employees.
This right to disconnect must be viewed as a means to lead a necessary dialogue on digital tools as they continue to invade employees’ lives and blur the line between working time and non-working time.
Non-compliance with this legislation exposes companies to wage and hour risks, in particular with regards to overtime, but also to health and safety risks, in particular in cases where employees can prove that due to excessive connectivity they suffer from undue stress and emotional complications.
Ireland - Recent Developments in Whistleblowing Law
BY DEIRDRE LYNCH, SENIOR ASSOCIATE, BYRNEWALLACE, DUBLIN, IRELAND
“The world is a dangerous place, not because of those who do evil, but
because of those who look on and do nothing.” - Albert Einstein
Ireland recently introduced significant statutory protections for workers who make protected disclosures in relation to perceived wrongdoing in the workplace. One of the protections available is protection from penalisation for making a protected disclosure. The concept of penalisation is defined very broadly in Irish law as “any act or omission that affects a worker to the worker’s detriment” and includes suspension, lay-off, dismissal, loss of opportunity for promotion, intimidation, harassment and a range of other forms of unfair treatment. A complaint of penalisation may be made to the relevant adjudicatory body within six months of the relevant act. A maximum of five years' gross remuneration may be awarded as compensation for penalisation, with a potential reduction of up to 25% where an investigation of a relevant wrongdoing was not the sole or main motivation for making the disclosure.
An interesting decision was delivered by the Irish Labour Court late last year in the case of Aidan & Henrietta McGrath Partnership v Anna Monaghan. The case illustrates the circumstances in which an employer may be found to have penalised an employee for making a protected disclosure.
Here, the complainant, Anna Monaghan, was employed by a nursing home as a care assistant from 17 August 2010 to 5 December 2014. Her daughter also worked as a care assistant in the same nursing home. Ms Monaghan claimed that she made a “protected disclosure”, as defined, in the legislation and that she was penalised for doing so, in the form of two periods of suspension, one paid and one unpaid.
By way of factual background, on 30 March 2014, Ms Monaghan raised a number of issues with the matron of the nursing home, including difficulties with a named supervisor regarding her daughter’s working hours and concerns regarding the treatment of patients. She requested a meeting of care staff to discuss these matters which the matron agreed to. However, before this meeting could take place, Ms Monaghan organised a meeting of care assistants, without the matron’s knowledge, during which Ms Monaghan notified her colleagues that she had disclosed her concerns to the relevant regulatory body.
In April 2014 Ms Monaghan was called to an appraisal meeting during which the issues she had raised with the matron were discussed as well as her concerns regarding the care of residents and alleged abuse by a supervisor. Following this meeting, she was asked to commit her concerns to writing, which she did by letter dated 5 May 2016. In accordance with the required protocol for receipt of complaints, the nursing home informed the regulator of the concerns raised and of the fact that they were being investigated. The named supervisor who was alleged to have abused patients was suspended.
Following the investigation, a draft report issued which held that the allegations were unfounded. It was also noted that several staff members had alleged that Ms Monaghan was motivated by malice in making her complaints. The draft report stated that Ms Monaghan should be suspended and that the allegations of malice should be dealt with in a separate investigation. Ms Monaghan was suspended with pay.
In August 2014, all employees of the nursing home were requested to complete regulatory forms. Ms Monaghan failed to complete the necessary forms and she was issued with two reminder letters. By November 2014, Ms Monaghan had still not completed the forms and as such, was placed on suspension pending the outcome of a disciplinary meeting to be held on 14 November. It is not clear from the judgment what unfolded after this, but the judgment does state that Ms Monaghan’s employment ended on 5 December 2014.
Ms Monaghan claimed that she was subjected to penalisation in the form of intimidation, bullying, alienation, harassment, victimisation and suspension following the making of protected disclosures.
The Labour Court was satisfied that the Complainant made a protected disclosure during the appraisal meeting in April 2014 when she raised her concerns in relation to patient safety. The Court further noted that under Irish legislation the motivation for making a disclosure is irrelevant to whether the disclosure is a protected disclosure.
In view of the paucity of decided case law on what constitutes penalisation in this area, the Court considered case law from health and safety legislation which protects individuals from being penalised for raising health and safety concerns. The Court noted that in order to make out a complaint of penalisation it is necessary for a complainant to establish that the penalisation of which he or she complains was imposed “for” having made a protected disclosure. “Thus the penalisation must have been incurred because of, or in retaliation for, the making of a protected disclosure. This suggests that where there is more than one causal factor in the chain of events leading to the penalisation complained of the making of the protected disclosure must be an operative cause in the sense that “but for” the Complainant having made the protected disclosure he or she would not have suffered the penalisation. This involves a consideration of the motive or reasons which influenced the decision maker in imposing the action in question.”
The Court held that there was insufficient evidence to support Ms Monaghan’s complaints that she was intimidated, bullied, alienated, harassed or victimised for making a protected disclosure. The Court then reviewed the two periods of suspension to assess whether penalisation had taken place.
In respect of the first period of suspension, the Court had to consider whether or not Ms Monaghan would have been placed on suspension then had it not been for the protected disclosure made to her employer in April. It looked at the motives which influenced the employer in suspending the employee at that time and found that the suspension was influenced by the complaints made by the employee prior to and in the course of the investigation. It was also influenced by what it termed the “undue haste which the suspension was effected without giving the Complainant an opportunity to comment on the report (having been invited to do so) and before the final report was issued”.
In relation to the second period of suspension, the Court found that this was wholly unrelated to the protected disclosure made and that in suspending her, the employer was not motivated by Ms Monaghan having made the protected disclosure. Rather this suspension was directly related to her continued failure to furnish the employer with various signed forms.
The Court awarded Ms. Monaghan €17,500 compensation as a result of the detriment suffered for having made a protected disclosure.
This case serves to remind employers that the workplace is a “dangerous place” at times; however, that said, it also makes clear that employees who blow the whistle on wrongdoing do not thereby immunise themselves from being subjected to investigation/disciplinary action for reasons unrelated to the making of the disclosure, albeit that it will be essential for employers to exercise caution in relation to any such action to reduce the risk of a successful claim of penalisation.
“The world is a dangerous place, not because of those who do evil, but
because of those who look on and do nothing.” - Albert Einstein
Ireland recently introduced significant statutory protections for workers who make protected disclosures in relation to perceived wrongdoing in the workplace. One of the protections available is protection from penalisation for making a protected disclosure. The concept of penalisation is defined very broadly in Irish law as “any act or omission that affects a worker to the worker’s detriment” and includes suspension, lay-off, dismissal, loss of opportunity for promotion, intimidation, harassment and a range of other forms of unfair treatment. A complaint of penalisation may be made to the relevant adjudicatory body within six months of the relevant act. A maximum of five years' gross remuneration may be awarded as compensation for penalisation, with a potential reduction of up to 25% where an investigation of a relevant wrongdoing was not the sole or main motivation for making the disclosure.
An interesting decision was delivered by the Irish Labour Court late last year in the case of Aidan & Henrietta McGrath Partnership v Anna Monaghan. The case illustrates the circumstances in which an employer may be found to have penalised an employee for making a protected disclosure.
Here, the complainant, Anna Monaghan, was employed by a nursing home as a care assistant from 17 August 2010 to 5 December 2014. Her daughter also worked as a care assistant in the same nursing home. Ms Monaghan claimed that she made a “protected disclosure”, as defined, in the legislation and that she was penalised for doing so, in the form of two periods of suspension, one paid and one unpaid.
By way of factual background, on 30 March 2014, Ms Monaghan raised a number of issues with the matron of the nursing home, including difficulties with a named supervisor regarding her daughter’s working hours and concerns regarding the treatment of patients. She requested a meeting of care staff to discuss these matters which the matron agreed to. However, before this meeting could take place, Ms Monaghan organised a meeting of care assistants, without the matron’s knowledge, during which Ms Monaghan notified her colleagues that she had disclosed her concerns to the relevant regulatory body.
In April 2014 Ms Monaghan was called to an appraisal meeting during which the issues she had raised with the matron were discussed as well as her concerns regarding the care of residents and alleged abuse by a supervisor. Following this meeting, she was asked to commit her concerns to writing, which she did by letter dated 5 May 2016. In accordance with the required protocol for receipt of complaints, the nursing home informed the regulator of the concerns raised and of the fact that they were being investigated. The named supervisor who was alleged to have abused patients was suspended.
Following the investigation, a draft report issued which held that the allegations were unfounded. It was also noted that several staff members had alleged that Ms Monaghan was motivated by malice in making her complaints. The draft report stated that Ms Monaghan should be suspended and that the allegations of malice should be dealt with in a separate investigation. Ms Monaghan was suspended with pay.
In August 2014, all employees of the nursing home were requested to complete regulatory forms. Ms Monaghan failed to complete the necessary forms and she was issued with two reminder letters. By November 2014, Ms Monaghan had still not completed the forms and as such, was placed on suspension pending the outcome of a disciplinary meeting to be held on 14 November. It is not clear from the judgment what unfolded after this, but the judgment does state that Ms Monaghan’s employment ended on 5 December 2014.
Ms Monaghan claimed that she was subjected to penalisation in the form of intimidation, bullying, alienation, harassment, victimisation and suspension following the making of protected disclosures.
The Labour Court was satisfied that the Complainant made a protected disclosure during the appraisal meeting in April 2014 when she raised her concerns in relation to patient safety. The Court further noted that under Irish legislation the motivation for making a disclosure is irrelevant to whether the disclosure is a protected disclosure.
In view of the paucity of decided case law on what constitutes penalisation in this area, the Court considered case law from health and safety legislation which protects individuals from being penalised for raising health and safety concerns. The Court noted that in order to make out a complaint of penalisation it is necessary for a complainant to establish that the penalisation of which he or she complains was imposed “for” having made a protected disclosure. “Thus the penalisation must have been incurred because of, or in retaliation for, the making of a protected disclosure. This suggests that where there is more than one causal factor in the chain of events leading to the penalisation complained of the making of the protected disclosure must be an operative cause in the sense that “but for” the Complainant having made the protected disclosure he or she would not have suffered the penalisation. This involves a consideration of the motive or reasons which influenced the decision maker in imposing the action in question.”
The Court held that there was insufficient evidence to support Ms Monaghan’s complaints that she was intimidated, bullied, alienated, harassed or victimised for making a protected disclosure. The Court then reviewed the two periods of suspension to assess whether penalisation had taken place.
In respect of the first period of suspension, the Court had to consider whether or not Ms Monaghan would have been placed on suspension then had it not been for the protected disclosure made to her employer in April. It looked at the motives which influenced the employer in suspending the employee at that time and found that the suspension was influenced by the complaints made by the employee prior to and in the course of the investigation. It was also influenced by what it termed the “undue haste which the suspension was effected without giving the Complainant an opportunity to comment on the report (having been invited to do so) and before the final report was issued”.
In relation to the second period of suspension, the Court found that this was wholly unrelated to the protected disclosure made and that in suspending her, the employer was not motivated by Ms Monaghan having made the protected disclosure. Rather this suspension was directly related to her continued failure to furnish the employer with various signed forms.
The Court awarded Ms. Monaghan €17,500 compensation as a result of the detriment suffered for having made a protected disclosure.
This case serves to remind employers that the workplace is a “dangerous place” at times; however, that said, it also makes clear that employees who blow the whistle on wrongdoing do not thereby immunise themselves from being subjected to investigation/disciplinary action for reasons unrelated to the making of the disclosure, albeit that it will be essential for employers to exercise caution in relation to any such action to reduce the risk of a successful claim of penalisation.
Subscribe to:
Posts (Atom)