James Hazel

By James Hazel James Hazel

— James Hazel is the youngest partner at McKinnells Solicitors in Lincoln. He is the head of the employment and dispute resolution department.

We recently saw the rare phenomenon of a banker turning down a wad of cash by way of a bonus. This seemed to cause controversy for a variety of reasons, not least of which because the sum of money involved, being only 60% of what might have been doled out, was more than most people earn in a lifetime.

A lot of fuss was made about Stephen Hester’s contractual entitlement to a bonus and those few who were brave enough to defend RBS’s decision have pointed out that the bonus entitlement derives from Mr Hester’s contract of employment with RBS and his prerogative to turn it down is just that: a prerogative.

Much has, unsurprisingly, been written about the plight of those of us who aren’t entitled to a million pounds worth of shares each year on top of our million pound salaries, and this turns out to be rather a lot of people. But on the opposite side of this issue is the poor employer who (unlike RBS) is contractually obliged to hand out bonuses to employees when it simply cannot afford to do so.

I find it’s a relatively common issue for many businesses and it’s a recipe that fuses the messy worlds of commercial reality and employee rights (both moral and legal) whilst being marinated in political, social and economic sensitivity. Crucially, the question I get asked a lot is: can I remove my staffs’ bonus scheme to make my business viable?

Essentially, provided you follow a few rules, then the answer is yes, but it’s not recommended for the faint hearted. Importantly though, you don’t have to show that a decision that involves the removal of someone’s bonus is necessary for the business’ survival, just that it is a reasonable decision enacted in a reasonable way.

Ask yourself:

• Are you making a sound, business decision?
• Have you consulted properly with staff?
• Have you approached the issue in a reasonable and open-minded way?
• Is the pain shared equally?
• Are you as the business owner also taking a hit?
• Have you tried to negotiate with staff or involved unions where applicable?

The first step in all of this is to consult with a solicitor experienced in this area who can guide you and your business through the many considerations. Removing costly bonus schemes is not an easy ride, but in many circumstances it’s more preferable than redundancies during difficult times.

James is the head of McKinnells Solicitors Lincoln's employment and dispute resolution department and the firm’s youngest partner. He prides himself on his ability to achieve his clients’ goals efficiently and delivers honest and practical advice in an understandable and jargon free way.

By James Hazel James Hazel

— James Hazel is the youngest partner at McKinnells Solicitors in Lincoln. He is the head of the employment and dispute resolution department.

The New Year brings with it a plethora of new rules and regulations for employers to have to get their heads round and I wonder when the constant tinkering with our already far too complicated legal system will cease.

Hopefully, sexual harassment claims against those of you brave enough to employ staff have been kept down to a minimum following my last rant and there is just sufficient mental capacity left to assimilate the latest changes to employment law.

One of the most important is the increase to the qualifying period for unfair dismissal from one to two years, which is likely to be implemented in April, although I haven’t had absolute confirmation of that yet.

Now before you pass this off as far too dry a subject, consider this: who cares? Last year, 47,900 claims for unfair dismissal laboriously slogged their way through the tribunal system but only a comparatively small number of those related to claimants who had been employed for more than a year but less than two years.

Really my aim is to point out that the increase in qualifying period won’t make as much difference as everyone thinks because there are so many exceptions to the rule anyway. Take whistleblowing for instance. An employee dismissed because he raised a complaint about something his employer may or may not have done doesn’t need a full year’s service, or even two, to bring his claim. Likewise a claim based on health and safety grounds, or discrimination, or for trade union activities, or asserting a statutory right (the, “hey, you haven’t paid me this week” claim).

The list goes on, but that’s law for you: exceptions for rules and rules for exceptions.

In fact, an employee dismissed in the first year of employment isn’t even entitled to know the reasons for his dismissal, unless they are pregnant. Soon, that’ll be two years but that isn’t a license for an employer to treat his staff whimsically just because they haven’t been there long enough to technically qualify for unfair dismissal rights. There are too many other weapons in the employee armoury.

James is the head of McKinnells Solicitors Lincoln's employment and dispute resolution department and the firm’s youngest partner. He prides himself on his ability to achieve his clients’ goals efficiently and delivers honest and practical advice in an understandable and jargon free way.