THE CALL UP OF UK RESERVISTS: YOUR EMPLOYMENT QUESTIONS ANSWERED

In the UK, approximately 46,000 people belong to the Volunteer Reserve Forces and most of these individuals are employed in some way. On 14 January 2003, Geoff Hoon, the Secretary of State for Defence, announced to the House of Commons the first call- up of Territorial Army volunteers and other Reservists since the Suez Crisis, 45 years ago. By the end of January 2003, a large number of the initial phase of 1,500 call-up notices had been sent out. Further notices are likely to follow; defence minister, Dr Lewis Moonie, has stated that the January call-up was just the first in a series of compulsory call-ups for Reservists. With British troops deployed in the Balkans, Sierra Leone and Afghanistan, it is perhaps unsurprising that the Government is calling on Reservists in this way. Employers need to know what to expect if employees are called up: how to deal with call-up; understanding the employee's employment rights during and after military service; as well as the extra employment protection afforded to Reservist employees.

As an employer, you may find Reservist employees involved in either voluntary mobilisation or compulsory mobilisation. In both circumstances, the employer should receive notification from the employee before the mobilisation occurs. A Reservist who receives notice of compulsory mobilisation should also receive a letter for his employer and it is the employee's responsibility to pass this on, to inform the employer of its statutory rights and obligations. The Ministry of Defence currently states that a Reservist's operational tour may last just three months and will not exceed 12 months.

Q. Can an employer refuse to let an employee go? Where a Reservist employee makes a request for voluntary mobilisation (where no call- up notice has been issued by the Defence Secretary), the Reservist needs to obtain his employer's consent to his mobilisation, and the employer is not obliged to give consent. If the employer refuses, the Reservist must accept that decision.

The situation is different where the Defence Secretary has issued a call-up notice; this involves compulsory mobilisation and different rules apply. A Reservist who fails to comply with a call-up notice would be guilty of absence without leave or desertion under the Reserve Forces Act 19961. An employer cannot refuse to let an employee go and if the employer (or any other person) tries to induce a Reservist to desert or be absent without leave they are also guilty of an offence.

However, the Reserve Forces Act does allow employers the right to make an application to prevent the employee from going on active service. The employer has seven days from the date on which the Reservist receives his notice of call-up to apply to an Adjudication Officer, asking for the call-up notice to be deferred or even revoked, on the basis that the loss of the employee will cause serious harm to the employer's business. With good grounds, the seven day deadline can be extended by application to the Adjudication Officer. The employer must be prepared to demonstrate that the loss that will be suffered by the absence of the employee cannot be prevented by financial assistance from the Government. Business partners and the self employed have similar rights to apply to an Adjudication Officer. Q. What is meant by "serious harm to the business"? What constitutes serious harm is described in Regulations issued in 19972. The Regulations do not provide an exhaustive definition of serious harm, but state that it may include the following: (a) loss of sales, markets, reputation, goodwill or other financial harm; (b) impairment of ability to produce goods or provide services; (c) harm to research into and development of new products, services or processes.

If, following an application from the Reservist's employer, the Adjudication Officer decides in favour of deferral or exemption for a Reservist, that decision shall cease to have effect if the Reservist's employment with that employer ceases. Upon termination of the Reservist's employment, the employer must, within seven days, notify the Adjudication Officer that the employment has ended.

Q. Is there a right of appeal for the employer? The Adjudication Officer must notify the employer of his decision within two days of his decision being made. If the employer is dissatisfied with the Adjudication Officer's decision, there is a right of appeal to an independent tribunal called the Reserve Forces Appeal Tribunal. The Adjudication Officer may also review his decision at any time up to the commencement of the hearing of the Reserve Forces Appeal Tribunal.

Q. Does the employee have the right to apply for deferral or revocation of call-up? The Reservist also has the right to apply to an Adjudication Officer for deferral or revocation of his mobilisation notice, again within seven days of receipt of the call-up papers. The Reservist may apply if (a) he or she has sole responsibility for the care of a child or disabled person and adequate arrangements for care by another person cannot be made; (b) serious disruption will result to a programme of vocational training; (c) a family owned business would suffer serious harm; (d) the Reservist has entered a new contract of employment but has not yet started work and the new employer refuses to postpone the commencement date until after the period of military service; or (e) because of some other ground which, for compassionate reasons, the Adjudication Officer should consider.

Q. If an employee is called up, do we have to continue to pay his normal salary? The employer does not have to continue to pay the Reservist his or her normal salary during the period of call-up or mobilisation. Instead, the Reservist will receive service pay from the Ministry of Defence, as a normal member of the Armed Forces.

In addition, the Reservist will receive a 'Reservist's standard award', to cover any shortfall in income, although the standard award is subject to a cap, depending on the Reservist's rank. The Reservist's salary for the purposes of calculating any standard award is taken from the 52 weeks of employment prior to call-up and the award may include a travel allowance for the loss of benefit of a motor vehicle provided by his employer. The bands of assistance available are as follows (based on the Army rankings referred or the equivalent in other Forces): ? the rank of Corporal or below: up to £22,500 ? Warrant officer, non-commissioned officer or, in the case of an officer, any rank below the rank of Major: up to £37,500 ? the rank of Major or Lieutenant Colonel: up to £55,500 ? the rank of Colonel or Brigadier: up to £70,000 ? the rank of Major General and above: up to £153,000 The Reservist may choose whether he continues to receive payment into a private pension scheme (with the MoD covering the employer's contributions), or receives the benefit of the Armed Forces pension scheme.

In addition to the standard award, the Reservist may receive a hardship award if he can show that he will suffer financial hardship as a result of his call-up. The details relating to salary and awards are set out in Schedule 2 to the 1997 Regulations3. Any additional benefits which are made available are likely to be introduced through further Regulations.

Q. Is the employer entitled to any compensation? The employer may also apply for a standard award of compensation; this was a change introduced by the Reserve Forces Act 1996. The employer's standard award is intended to compensate the employer for the loss of the employee over an extended period and the related costs. It is comprised of three elements: an initial replacement award, an ongoing administration award and a re-training award. (a) The initial replacement award is a lump sum for the employer's one-off costs in replacing the Reservist (advertising, interviewing, etc.); the amount is limited to the lesser of 6% of the Reservist's annual salary from that employer (based on average weekly earnings) or £2,400. (b) The ongoing administration award is intended to cover recurring costs, such as agency fees or overtime costs; the amount is limited to the lesser of 4% of the Reservist's average weekly earnings or £31, multiplied by the number of weeks of military duty. (c) The re-training award is based on the actual cost of necessary re-training for the Reservist (e.g. to regain or renew qualifications) upon returning to work after military service, up to a maximum of £2,000.

The employer may also apply for a hardship award if the call-up of the Reservist will cause financial hardship which will not be sufficiently relieved by the employer's standard award. The MoD advises that to be considered for a hardship award, the employer must have costs exceeding one and a half times the amount available under the initial replacement award and/or the ongoing administration award.

Q. How long is military service likely to last? Under normal circumstances, the maximum continuous periods of service for a Reservist are three years, 12 months and nine months; the length of the period depending upon the circumstances under which the Secretary of State for Defence makes an order authorising call-up. At present, Reservists are unlikely to be called up for a period exceeding 12 months and the MoD advises that employers should work on the assumption of an average period of seven and a half months. Whilst the three year period applies where the country is making war-like preparations; in exceptional circumstances, the three year period may be increased to five years.

Q. Does the employer have to keep open the Reservist's job? If so, for how long? The employer is required to take a Reservist back into his employment after demobilisation, no matter how long the military service has lasted. This right applies to a Reservist who was employed in the four week period prior to being called up for military service. The Reservist's right to be taken back into employment applies for six months following the end of the period of military service, although the Reservist must normally make an application within three weeks of the end of military service (see application procedure below).

The Reservist should be re-employed in the same job and on the same terms and conditions as before, or otherwise on conditions which are no less favourable than those which would have applied if there had been no call-up; this is referred to as reinstatement. Therefore, the Reservist employee should receive the benefit of any pay rise or other favourable changes to terms and conditions of employment from he would have benefited if he had remained in employment and had not been mobilised. If it is not possible for the employee to be reinstated to his old job because this is not reasonable and practicable, the employer must offer the Reservist the most favourable terms and conditions that are reasonable and practicable in the circumstances.

Unfortunately, the statutory provisions relating to re-employment of Reservists are far from clear. These can be found predominantly in the Reserve Forces (Safeguard of Employment) Act 19854. The most fundamental area of doubt is whether the Reservist's employment contract subsists throughout his or her period of military service. If it does not, the employment contract would be brought to an end when the Reservist employee leaves for military service and then revived if the Reservist chooses to be re-employed when he returns, with the reinstatement of certain employment rights. This crucial question leads on to many other issues: does the Reservist continue to accrue holiday under the Working Time Regulations during his military service; is the Reservist entitled to the benefit of any bonuses of any profit-share dividends which are awarded to employees during the period of his military service? Also, if the Reservist employee is entitled to a death-in-service benefit (e.g. life assurance) or payments under a scheme of permanent health insurance (PHI), do these benefits fall away when the Reservist is called up? Fortunately, the issue of continuity of employment for statutory employment purposes is dealt with to some extent by the legislation (see below).

The 1985 Act refers to the Reservist's right to apply to the "former employer" for reinstatement in his or her old job. We suggest that the legislation envisages that the Reservist's employment contract will terminate when his military service commences. That said, it remains unclear on what basis that employment contract will come to an end. Unless this is spelled out by the employer and employee, it will be necessary to look at the facts of the individual case in order to ascertain whether the employee resigned, was dismissed, or his employment ended by mutual agreement (or even frustration). We suggest that, in order to avoid such uncertainty, employers should obtain clarification before the employee leaves, by setting down their agreement in writing. For instance, the employer and employee may decide that employment will terminate through mutual agreement at the time of call-up, but in the event that the employee chooses to return within six months following his military service, he will be re- employed on no less favourable terms, with reinstatement of certain of his statutory employment rights. This agreement should be set down in a letter or other document and signed by both parties.

In most circumstances, particularly where the Reservist is called up for a relatively short period, we would recommend that the employer agrees with the employee that the contract of employment will continue (although with the suspension of duties and salary) during the period of his military service. This will avoid many of the thorny issues that may otherwise arise. Indeed, the MoD seems to recognise the difficulty of the call-up situation for the employer and suggests that employers may wish to obtain legal advice when dealing with this.

Q. What are the procedural requirements to apply for re-employment? A Reservist who wishes to take advantage of the right of re-employment, must normally submit a written application to his (former) employer after military service has ended. The application must normally be made by the third Monday following the end of military service. This time limit may be extended if the Reservist was unwell or otherwise prevented from making the application within the specified period and, in these circumstances, the application must nevertheless be made as soon as reasonably practicable. In any event, the application should be made within the period of six months from the date of return. If the employer chooses, it may waive the requirement for the employee to make a formal application for re-employment and this waiver should be confirmed in writing.

At the time of making the application for re-employment, or within 21 days thereafter, the employee must write to the employer to notify of the date when he or she will be available for work. The availability date must be no later than 21 days from the third Monday referred to above, or in other words, the sixth Monday after the end of military service. If the employee is prevented by sickness or some other reasonable cause, he or she must notify the employer of the earliest reasonable alternative date.

An employee's application for re-employment will expire after 13 weeks and, therefore, if the application has not yet been granted, the employee must renew the application (and the renewal will last for a further 13 weeks). While an application is still current, the employee has an obligation to reinstate the employee at the first opportunity at which it is reasonably possible on or after the employee's availability date. This obligation continues for a period of six months following the end of military service, after which time it falls away.

If the Reservist claims that he has reasonable cause not to accept the offer of reinstatement from the employer, for example, if the terms and conditions offered are less favourable and this is seemingly without justification, then he must write to the employer as soon as possible setting out the grounds for refusal. If the Reservist does not do so, the employer will be deemed to have complied with his obligations under the legislation.

Q. How is continuity of employment affected? A Reservist who applies for re-employment under the 1985 Act and is re-employed within 6 months of demobilisation will be treated as though he has continuous service, in that the continuity of his employment is treated as unbroken by the period of military service. This will affect the employee's statutory employment rights, such as the right to receive a redundancy payment or to make a claim for unfair dismissal. Generally, however, the duration of the employee's military service is not counted for continuity purposes and so the period of military service is considered as a period of suspended employment. If, however, the employer agrees to treat the employee's contract of employment as continuing throughout the period of call-up, the employer would normally treat the period of military service as though it is part of the employee's employment and it would count towards continuous service. Q. What if the Reservist's job has been carried out by someone else during their absence? It will automatically be considered reasonable to reinstate the Reservist, where that job is being done by a replacement, if the replacement has the same service or less service than the Reservist, or the replacement has had longer service but his employment was of a kind that is "less permanent in character" than the Reservist's. It would not be considered reasonable or practicable to give the Reservist a job, whether the same or different to his previous job, if this can only be done by discharging someone with a longer period of service than the Reservist (counting backwards from the date when military service started). The legislation refers to the replacement employee being "discharged" and employers should consider the possibility of redeploying the replacement employee if the Reservist returns. If it seems likely from the outset that the Reservist will return to his employment at the end of his service, it may be advisable to take on a temporary employee on the understanding that the post is available only for so long as the Reservist is away on military service.

A dismissal may be necessary to make room for the Reservist and, in these circumstances employers should bear in mind the law of unfair dismissal. A dismissed employee may have a remedy against the employer, depending on the facts and circumstances. The employer might wish to argue that the replacement employee's dismissal was for "some other substantial reason", but the business reason for the dismissal and the basis for the choice of employee would need to be made clear. In addition, a fair process would need to be followed.

Q. What if the job has changed or the workforce has been re-organised while the Reservist was away? The 1985 Act provides that, where it is not "reasonable and practicable" to offer the Reservist the same occupation on the same terms and conditions, the Reservist should be offered "the most favourable occupation on the most favourable terms and conditions which are reasonable and practicable". This would apply to a situation where there have been redundancies or some other form of re-organisation within the workplace, or the Reservist's job no longer exists in its previous form. Employers should be aware of the extent of their obligation to re-employ the Reservist as best they can.

Q. What happens if redundancies occur whilst the employee is away on military service? The treatment of the Reservist employee will depend on whether he is considered to have continuing employment throughout the period of military service. If his employment continues, the Reservist must be treated like any other employee during any redundancy selection exercise, although obviously the employee cannot be involved in any form of individual consultation and employers should take care to ensure that the employee is not penalised for his absence on military service. An employee who is selected for redundancy whilst he is away on military service, will still have the Reservist's usual right to apply for re-employment upon his return from military service.

If, on the other hand, the Reservist is treated as though his employment terminated when he left for call-up, and redundancies subsequently take place, the Reservist should not be included in any pools for redundancy or otherwise affected. Regardless of any re-organisation or redundancies, upon his return from military service, the employee has the right to apply for and be considered for reinstatement or re-employment. Q. Can a Reservist be dismissed following re-employment, or is he protected? In addition to the Reservist employee's usual common law and statutory employment rights, he is entitled to the benefit of a protected period following re-employment. The length of the protected period depends upon the employee's service prior to call-up. If the period of prior service with the employer was less than 13 weeks, the protected period is a minimum of 13 weeks; if prior service was between 13 and 51 weeks, the protected period is at least 26 weeks; and if prior service was 52 weeks or more, the protected period is 52 weeks. The protected period means that the employee must not be dismissed, nor should terms and conditions of employment be altered to his or her detriment during this time, unless it becomes unreasonable and impracticable to continue to employ the employee on the same terms.

Q. What remedies does a Reservist have? Where an employer fails to reinstate or otherwise re-employ a Reservist employee, or the Reservist has written to complain that an offer of reinstatement is not satisfactory, or the Reservist has been reinstated but dismissed before the end of the protected period, then that Reservist employee can make an application to a Reinstatement Committee (also governed by the Armed Forces legislation). The Committee can order reinstatement or compensation or both. The award of compensation may be up to the amount of the employee's outstanding remuneration for the protected period.

The employee may make a further appeal to an "umpire" who sits with 2 lay assessors; their decision is final. If the employer fails to comply with an order of the Reinstatement Committee or the umpire, this is a criminal offence. As a consequence of committing this criminal offence, the employer may incur a fine of up to £1,000 and may receive an order for payment of compensation to the employee, which is recoverable a civil debt.

Q. Can employers simply dismiss a Reservist to save bother? The 1985 Act makes it a criminal offence to dismiss a Reservist between notification of call-out and actual mobilisation, where that is solely or mainly because of the risk that the Reservist may be called out for military duties. Therefore, an employer which feels that it may just be easier to dismiss the employee because mobilisation seems imminent will commit an offence in doing so. In addition to a possible fine, the Reservist would also be entitled to compensation from the employer. Employers should note, however, that the protection only extends to Reservists who are employed and not to Reservists who are applying for jobs.

If you require further information, you may wish to look at the MoD website http://www.sabre.mod.uk or, alternatively, you may contact the writer, Sarah Allen or another member of the Employment team via our London switchboard on +44 (0)207 403 2900.

1 Section 96 Reserve Forces Act 1996 2 the Reserve Forces (Call-Out and Recall) (Exemptions etc.) Regulations 1997 (SI 1997/307) 3 Schedule 2 to the Reserve Forces (Call-Out and Recall) (Financial Assistance etc.) Regulations 1997 4 the Reserve Forces (Safeguard of Employment) Act 1985, as amended by the Reserve Forces Act 1996