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Unmonitored Bonus Incentive Schemes a "Sham".

FACTS The claimants were employed by Hartlepool Borough Council in a variety of roles, including minibus driver, school escort, kitchen staff, cleaners and leisure workers. The claimants' roles did not attract any type of bonus, with the exception of the kitchen staff, who received a bonus as a result of previous litigation.

Between them, the claimants compared their roles with other roles at the council, namely trade supervisor, joiner, electrician, painter, driver, labourer, gardener, road sweeper and refuse driver.

As a result of negotiations with trade unions in the 1970s, these roles, which were primarily undertaken by men, attracted incentive bonuses. The claimants brought equal pay claims, arguing that they were performing work of equal value and/or work rated equivalent to their male comparators.

The council argued that the incentive bonus schemes were performance related and in place to improve productivity. It claimed the difference in treatment was due to a genuine material factor which was not the difference in sex.

DECISION The Employment Tribunal found that the council's incentive bonus schemes were a sham. It held that the reason for the introduction of the schemes disappeared years ago, and they could no longer be held to constitute an incentive.

There was no proper monitoring of the schemes and any reviews of performance that did take place were only done in response to new systems or new technology. Performance was not measured on any basis that would improve the employees' productivity, but instead was tailored to work already done. The reason for the schemes was "tainted by sex", said the tribunal, and the claimants' claims were upheld.

The council appealed, arguing that the tribunal should not have taken into account its absence of proper monitoring as to the continued effect of the schemes. The council claimed that if it thought the schemes were achieving their objectives, then that should be enough.

The Employment Appeal Tribunal (EAT) held that the tribunal had been entitled to consider the absence of proper monitoring. The correct question to ask was: "Were the schemes intended to and do they in fact achieve productivity improvements?"

The tribunal needed to establish whether the schemes were genuine and achieved their purpose.

The EAT held that the reason for the schemes' introduction in the 1970s could not be relied upon to provide a genuine reason for the continuation of the schemes in 2004, which was when these claims were first brought, and dismissed the appeal.

IMPLICATIONS This case emphasises the importance of monitoring and properly regulating any type of pay scheme, including pay rises and overtime pay as well as bonus schemes.

It will not be enough to show that a scheme creating a difference in treatment was justified at the time of implementation - a scheme that does not start out as discriminatory could become so in the future.

Managing Sickness and Absence at Work

Short term sickness is by far the most common form of absence, accounting for on average 80%.  As an employer this can be extremely costly and you should build up a picture of the short term sickness within your company. By implementing a sickness and absence procedure all employees will be aware of what is expected of them.  Absent employees put pressure on their colleagues who have to cover their work load.

Absence from work is now costing employers over £600 per employee per year on average.

 Effective tools to manage short term absence

 Percentage of effectiveness

 Return-to-work interviews for all absence

63% 

 Disciplinary procedures for unacceptable absence

35% 

 Line management involvement with absence management system

30%

 Use of trigger mechanism to review absence

 29%

 Restricting sick pay

 23%

 Providing managers with sickness absence information

 15%

 
 Effective tools to manage long term absence

 Percentage of effectiveness

 Occupational health professional involvement

 60%

 Line management involvement with absence management           

 20%

 Rehabilitation programme

 19%

 Return-to-work interviews

 18%

 Changes to work patterns or enviroment

 17%

 Restricting sick pay

 17%

You may wish to seek access to a medical report from the employee's GP in order to assist your decision making process and to determine if their is a disability involved. This will require consent from the employee under the Access to Medical Reports Act 1988. Read more. Please contact us for further assistance.

  • Take positive steps to improve moral and create a happy working environment
  • Keep accurate records of all sickness absences and any actions to be taken
  • Provide support and information to employees on reoccurring health issues
  • Hold a return to work interview with the employee to check for ongoing problems

Consider as part of your absence policy:

  • Health and Safety
  • Flexible working
  • Job design and the working enviroment
  • Disciplinary policies and procedures
  • Review of management style
  • Training Needs Analysis

High absence levels are often caused by deeper routed problems within an organisation, measuring reasons for absence will help to identify this.

If you have problems with sickness, absenteeism or stress related issues Connect HR & Recruitment Ltd can design, implement and manage your sickness and absenteeism policy for you.

Tackling Stress - Stress is the adverse reaction people have to excessive pressures or other types of demand placed on them. There is a clear distinction between pressure, which can create a "buzz" and be a motivating factor, and stress, which can occur when this pressure becomes excessive. Have you carried out risk assessments for stress? Are you tackling stress with "The Management Standards" approach as recommended by the HSE? Free Download. Do you have staff trained to recognise the signs of stress and anxiety in your organisation?

Mental Health First Aid

One in four British adults will experience at least one diagnosable mental health problem in any one year. By training "Mental Health First Aiders" withinn the community and work place MHFA aims to tackle the prejudice and stigma traditionally associated with mental health problems, and to improve the outcomes for those affected and their families, friends, colleagues and employers. Bill Cunningham took MHFA Scotland training in 2006, and became one of the first people accredited as a trainer by CSIP when the MHFA England initiative was launched in 2007. Read more

Stand out from the crowd

National Minimum Wage Regulations 1999 (Amendment) Regulations 2008 come into force

The Regulations increase the main (adult) rate of the national minimum wage from £5.52 to £5.73 per hour. In addition, the development rate increases from £4.60 to £4.77 and rate for workers aged 16 and 17 increases from £3.40 to £3.53 per hour.