Latest news and Articles

Q: We would like to introduce a change to our employees’ contracts of employment.  In particular, we want to introduce a restriction into their contracts which prevents them from soliciting our clients when they leave our company.  Are we able to do this?

When introducing a change to your employees’ contracts of employment you will need to consult with them.  The simplest way to introduce a change to their contracts and to ensure that the new terms are binding is to seek their express consent by discussing the proposal with them and asking them to sign a letter of variation confirming their agreement to the change.

As you are asking the employees to agree to a restriction on their actions following the termination of their employment with you, we would recommend that you introduce this change at the same time as a pay rise is being made or some other benefit is being given to your employees.  This would show that your employees are being given valid “consideration” for agreeing to these new obligations which is a requirement for this type of obligation to be legally binding.  If this is not possible, you might want to consider making a one-off payment to them.  If you decide not to give any “consideration” at all to your employees and they agree to the change in any event by signing a letter of variation as a deed, there is still a risk that the restriction would not be enforceable by the courts and would be useful as a deterrent only in preventing your employees from soliciting your clients.

If an employee refuses to accept the change in terms, you have a number of potential options, including:

• Allowing the employee to continue working on their existing terms and accepting that he/she is not prepared to agree to the new restriction.
• Imposing the change without the employee’s express or implied consent.  However, this option is by no means risk free, as the employee could bring a claim for breach of contract, or could even resign and bring a claim for constructive dismissal.
• Dismissing the employee (with notice) and offering re-engagement on new terms, which includes the new non-solicitation provisions.  However, again this approach has potential risks, as the employee could bring a claim for unfair dismissal depending on the circumstances.

In this case, your safest option would be to obtain each employee’s written consent to the introduction of the new restriction and to offer them some consideration for this agreement.   If you are unable to obtain their agreement, you will need to consider how important the change is to your business and whether to adopt one of the alternative options.  We strongly advise that you seek further legal advice before imposing any changes on your employees.  

Q. One of our secretaries has asked for 2 weeks unpaid time off to support their husband following a pre-planned hernia operation in which he was told he would require some care and assistance for 2 weeks after the operation.  Are we required to agree to this time off?

An employee has a statutory right to take a reasonable amount of unpaid time off work to deal with particular situations affecting their dependants.  However, the time off must be necessary and must fall within a particular category set out in the legislation.  For example, an employee will be entitled to take time off to provide assistance if a dependant falls ill or to make care arrangements for a dependant who is ill.

It is a question of fact as to whether the time off is reasonable.  The Employment Appeal Tribunal in the case of Qua v John Morrison Solicitors [2003] published some useful guidance.  It stated that “it may be in the vast majority of cases, no more than a few hours, or at most one or possibly two days would be regarded as reasonable to deal with the particular problem which has arisen.”  It very much depends on the nature of the incident and the employee’s individual circumstances, as to whether the amount of time off is reasonable or not.

Further, there is a quirk in the regime.  It does not generally apply to planned time off to care for dependants.  This means that strictly speaking the regime would not apply to your secretary, as it as it was known to her that her husband would require 2 weeks care and assistance following his operation.   

Remember that although you are not required to give this time off under the “time off for dependants regime,” you could still make alternative arrangements with your secretary.  For example, you could give her the option to take holiday or to take an extended period of unpaid time off.  Consider any internal policy you might have in relation to unpaid time off and whether your secretary may be entitled to any time off under this policy.  It is also important to take into account whether any of your other employees have been given unpaid time off in similar circumstances, as you may have created a term permitting unpaid time off which could be implied into your secretary’s and other employees’ contracts of employment through custom and practice.  

Whilst legal rights are always relevant, you also need to consider best practice and employee relations.

 Q. We are considering recruiting some volunteers to help out in our advertising company.  We would like them to work 3 days a week, 9 to 5 for a two month period.  We have been told that we do not need to pay them the National Minimum Wage as they are volunteers.  Is this correct? 

Employees and workers have certain legal rights and protections under employment and discrimination laws, including the right to be paid at least the National Minimum Wage.  Genuine volunteers on the other hand, are generally not protected in this way and have no right to the National Minimum Wage.

The legal status of an employee, worker or volunteer is not determined solely by what is written in any contract, other documentation or by the labels used within the organisation.  The tribunal and courts will look at the facts of the working relationship and will consider what actually happens in reality.

The following factors would indicate that there is an employment relationship between an individual and an employer, rather than a volunteer relationship:

• Control- e.g. if the organisation dictates the days and hours that an individual works and the work that needs to be completed by the individual;
• Mutuality of obligation- if there is an obligation on the organisation to provide work to the individual together with an obligation on the individual to accept and carry out that work;
• Personal service- there is a requirement for the individual to provide their own work and skills (rather than appoint a substitute); and
• Other factors, such as the individual being required to wear a uniform.

The definition of a worker is even wider than that of an employee and again it is essential that an intended volunteer does not fall into this category if they are to be unpaid.  An individual will be deemed to be a worker if:

• they provide the services personally and are not able to send a substitute to carry out the work;
• they are not carrying out the work as part of their own business; and
•  there is mutuality of obligation between the individual and the organisation.

You must therefore determine whether the individual is an employee or a worker (in which case they must be paid at the very least the National Minimum Wage) or a genuine volunteer (in which case, you do not need to offer any pay).

In your situation, there appears to be a high risk that if you recruit volunteers to work 3 days a week, 9 to 5 for a two month period that they would at the very least be classified as workers and maybe even employees. This is because you would be exercising control over them, requiring them to provide a personal service and there would be mutuality of obligation, as you would be expecting them to turn up and perform their work on that day.  In these circumstances, you would be obliged to pay the individuals at a rate at least equivalent to the National Minimum Wage, which is currently £6.08 per hour for those aged over 21.  Failure to do this could lead to criminal prosecution.

If you want to ensure the individuals are genuine volunteers, it is essential that they are not required to work fixed days or set hours.  You should also ensure that there is no obligation on the individuals to perform specific tasks.  If you want to pay the individuals for their expenses, you must reimburse their actual out-of-pocket expenses only.  We would also recommend that you enter into a volunteer agreement with each individual to reinforce the voluntary arrangements and to avoid creating an employment/worker relationship with the individuals.

Lucy Bloom
Solicitor

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.