6 May 2008

The latest credit crunch may be posing more than just a financial risk to your organisation. According to recent surveys, the number of employees taking on a second job or working additional paid hours for their employer in order to manage their own personal finances is increasing. Therefore, the chances of your employees exceeding the maximum weekly limit on working time, and posing a health and safety risk, could be greater than you think. As one employer found out to its cost, this situation needs to be managed correctly.  

Back in December, the Bank of England reported that 9% of people in the UK required a supplementary income to make ends meet. Last month, a survey by Bradford and Bingley revealed how first time buyers were being forced to work harder by as much as an extra 12 hours a week on average in order to get on the property ladder. At the same time, another study carried out by AXA revealed that the credit crunch is also affecting households with an annual income of £30,000 or more; 15% of whom admitted that they will either be getting a second job, or sending an unemployed partner out to work, to keep up with mortgage repayments.

Under the Working Time Regulations 1998 (WTR) a worker's average working time, calculated over a reference period normally of 17 weeks, must not exceed 48 hours per week. This includes all overtime and time spent working for other employers. An employer must take all reasonable steps to ensure that this limit is complied with or they could face an unlimited fine.  There is an exception where the worker has agreed, in writing, to opt out of the weekly limit on working time.  That said, even if a worker has agreed to opt out, the employer may still be liable if they require, or knowingly permit, a worker to work excessively long hours, if this creates a reasonably foreseeable risk to the worker’s own health and safety or the health and safety of others.

In Havering PCT v Bidwell (2007) the Employment Appeal Tribunal acknowledged that a dismissal for a first offence of working excessive hours, which posed a health and safety risk, was potentially fair but agreed with the tribunal’s finding that in this particular case the dismissal was unfair. Miss Bidwell was employed by the Trust as a nurse for 37.5 hours per week. She was not precluded under her contract from working for other employers provided any such work did not hinder or conflict with the interests of her work with the Trust. An express term of her contract pointed out the 48 hour weekly limit imposed by the WTR.  It also advised her of the need to opt out if she wished to work in excess of this. Miss Bidwell did not opt out, despite the fact that she undertook waking night shifts for a private nursing home.  This meant she regularly worked between 78 - 109 hours a week and had on occasion worked continuously for 27 hours. The Trust suspended Miss Bidwell when it learned of her activities and, following a disciplinary hearing, she was dismissed for gross misconduct for breach of the Trust’s policies on working time and health and safety.

The tribunal hearing on the subsequent unfair dismissal claim found that, although the Trust had a fair reason to dismiss, namely on grounds of conduct, it had acted outside the employer’s band of reasonable responses. Miss Bidwell was therefore awarded compensation for unfair dismissal of £39,000, after taking into account a 30% reduction for contributory fault. In reaching its decision, now upheld by the EAT, the tribunal took into account a number of factors, which serve as a useful reminder for employers who may find themselves in a similar situation.

The six mitigating factors identified were:

• Length of service - The Trust put too little weight on the Claimant’s length of service of 16 years.
• Employment record - The Claimant had a good disciplinary record. In particular, she had no previous warning in relation to working excessive hours. The fact that an employer has an express right to dismiss for a first offence for gross misconduct does not mean that it is always reasonable to exercise it.
• Inaction on the part of the employer - The Trust had failed to put in place a system to prevent employees working excessive hours and had not monitored the hours worked.
• No harm done - The Claimant was dismissed not because of what had happened, but rather for creating a risk that something might happen. That is not to say that dismissal would only have been fair if some actual harm had been shown to have occurred or to have been imminent.  However, the case for dismissal would have been stronger if her performance had in fact been found to be adversely affected, and more so if an injury had actually happened.
• Likelihood of continuing – As the basis for the dismissal was the risk created, a relevant factor was whether the conduct giving rise to that risk was likely to continue. On the facts of this case, the Trust would have had good reason to suppose that the employee, had she remained in employment, would not have worked excessively in future. She had stated in the disciplinary proceedings that the personal circumstances which had led to her working excessive hours no longer applied and, furthermore, at the time of her internal appeal, she was working roughly in compliance with the WTR.
• Assessment of risk –Whether the risk was sufficiently great to justify dismissal required an adequate risk assessment. The Trust had failed to carry this out by simply applying a blanket rule that any risk was unacceptable.  It perceived the risk to be substantial rather than by trying, however approximately, to assess the degree of risk. In doing so it had overlooked the fact that the excessive hours worked by the Claimant had not affected her performance to the extent that might be expected and might not therefore have created a “substantial” risk to heath and safety.

The Trust was criticised for its policies and procedures, which lacked any firm guidance on outside employment. As a minimum, employers must keep a list of all workers who have opted out and, for those who have not, must keep a record of the actual hours worked, going back at least two years. Employers must actively monitor working hours and should periodically remind employees of their obligation to report work undertaken for another employer to ensure these hours are also taken into account. Fail to do so, and you could pay a high price for those earning extra pay.