This article was written for International Resource Journal
This employment and health and safety update:
- provides practical tips on reducing the risk of Employment Tribunal claims when making redundancies;
- recommends how to prepare for a Health and Safety investigation; and
- provides some welcome news for employers regarding off-shore workers’ holiday entitlements.
Practical tips on reducing the risk of tribunal claims when making redundancies
The first half of 2009 has seen many oil and gas companies tightening their belts by making redundancies and putting development projects on hold in light of weakening demand caused by the economic downturn and the correspondingly low oil price. Exploration and production companies have been hit, with companies such as BP reportedly continuing the large scale redundancy programme it started late last year, and contractors that provide the sector with products and services, such as Bristow Helicopters, one of the largest helicopter operators serving the North Sea, and Schlumberger, the world’s largest oilfield services company, have also seen demand fall and have had to make their own redundancies and cost savings. Whilst certain tax changes announced in the UK Budget in April aim to encourage investment in the North Sea, in these turbulent times many companies in the sector will be wanting to continue to manage their cost base carefully.
Redundancies are often a key part of any cost-management drive but they entail a number of legal pitfalls for the unwary and the related financial liabilities can significantly erode potential cost savings. However, the risks can be reduced by following these tips when carrying out a redundancy exercise:
- Take the time to plan and follow due process. A little time spent planning and taking advice at the outset can save a lot of time later on. If you do not want to follow due process, be prepared to “buy out” claims early and ask employees to sign compromise agreements.
- Consider tweaking your plans, for example by staggering redundancies to avoid falling into the onerous collective consultation regime (which applies where employers propose making 20 or more redundancies in a 90 day period).
- Be able to justify redundancy decisions with objective reasons which are properly thought through and not arbitrary. Having strong documentary evidence supporting decisions can be helpful as it can be disclosed to an employee early on in a dispute and help them or their lawyer realise that any potential claim is weak.
- Keep a good paper trail relating to redundancy decisions. Having properly completed appraisals can help back up redundancy selection decisions so do not shy away from delivering difficult messages in appraisals about performance. If your defence to a claim does not stack up with the written evidence this can leave you exposed to an inference being drawn by a Tribunal that the treatment of an employee is tainted by discrimination.
- Be as transparent as you can. If employees feel you are hiding things from them they are more likely to be suspicious of your motives.
- Ensure fair and even handed treatment. Do not forget that you have a duty to maintain trust and confidence with employees which entails being reasonable, even handed and honest with them.
- Create the right environment during the redundancy process for resolving disputes. Do not let issues that crop up during the process fester; deal with them as early as you can.
- Ensure that you are seen to keep an open mind at all times. If an employee believes they are being treated fairly and listened to they are more likely to accept the situation and move on rather than litigate.
Recommended steps to prepare for a Health and Safety investigation
The sad news in April of the helicopter which crashed into the North Sea killing 16 workers from BP was a reminder of the dangers that running off-shore oil operations entails. As Peter Sutherland, Chairman of BP, commented afterwards “The accident is a tragic reminder of why it is that we have an absolute and relentless focus on safety”.
In the current climate, when businesses are looking to control costs, directors and managers need to continue to be mindful of their health and safety obligations. The Health & Safety Executive (HSE) has the power to prosecute not only companies but also individual directors/managers in their personal capacities if it has reason to believe that a Health and Safety breach was committed with a person’s consent, connivance, or as a result of their negligence. Successful prosecutions can result in fines and even imprisonment for the individuals concerned.
The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 imposes a legal obligation on the ‘responsible person’ (the person in charge of the type of work being undertaken at the time of the incident) to report any injuries (fatal, major or otherwise reportable under the HSE guidelines), diseases or dangerous occurrences to the HSE. Records of such incidents must be kept for three years. A death, major injury or a dangerous occurrence must be reported without delay, followed by an accident report form within ten days of the incident. Any other injury that lasts over three days must be reported within ten days by completing an accident report form.
We recommend the following practical steps when facing an investigation from the HSE:
- In the case of death or major injury (e.g. amputation), be aware that the HSE requires that the site of the incident is not disturbed for three days without the investigator’s permission.
- Obtain legal advice as soon as you are notified that an investigation is to be carried out.
- If possible, preserve any evidence from the incident and ensure it is not tampered with until the investigator has had an opportunity to inspect it.
- It is highly likely the investigator will want to visit the site of the accident. It is also recommended that all witnesses (and if possible, the injured parties) to the incident can be contacted if required by the investigator.
- If applicable, ensure any internal policies (or similar) that show reasonable practicable precautions were in place to prevent the incident are available for inspection.
- Mitigate the severity of any potential penalty by implementing procedures and policies to prevent recurrence of the incident.
- If the investigator has grounds to believe there has been a Health and Safety breach, he/she may invite a representative of the company and/or any person he suspects has participated in that breach to an interview. You have a right to refuse to attend the interview, however non-attendance is likely to be used against you if the matter reaches court.
- Any interview will probably be conducted under the Police and Criminal Evidence Act 1984 and the associated Codes. Such an interview will generally be carried out under caution and will be tape recorded. You have a right to be accompanied by your solicitor.
Holiday entitlements of off-shore workers
Finally, some good news: employers in the off-shore oil industry have breathed a sigh of relief following a decision from the Employment Appeal Tribunal (EAT) published this spring about the holiday entitlements of their employees that work off shore.
The case (Craig & Others v Transocean International Resources Limited) was a test case for a large number of similar cases. It concerned hundreds of employees who worked on oil rigs on a rota basis of two weeks of working off-shore followed by two weeks of “field break” at home. During field breaks the individuals did not have to work but sometimes had to attend medical appointments or training courses. The individuals asked to take annual leave during the time they were scheduled to be working off-shore. Their requests were turned down and the individuals brought Tribunal claims, arguing that the field breaks were simply “compensatory rest” as required by the Working Time Regulations, not annual leave.
The EAT decided that time spent on field breaks could constitute annual leave. It noted that the employees were not obliged to work and nor were they “on call”; rather it was a genuine rest period which could be viewed as annual leave. The decision assumed that work-related medical appointments and training courses would not eat into the field break time to such an extent that the individuals ended up with less time off than their minimum annual leave entitlement under the Working Time Regulations (now 28 days a year – though bank holidays can be included). The EAT likened the situation to that of teachers and professional football players who do not have work to do at certain times of the year and made the point that, if the off-shore employees were correct in their argument, then such teachers and footballers could not be regarded as being on annual leave during those times which would not make any sense at all.