2. Welcome to the Autumn 2013 edition of the
BHW Employment Law Newsletter.
It seems that despite Government rhetoric to leave
employment law alone, the Ministers can’t help
themselves from dabbling in the area!
We have therefore collated information on the most
important changes to help keep you up to date.
Page 3 provides a summary on the
changes which will be coming into
force in relation to the Transfer
of Undertaking (Protection of
Employment) Regulations 2006,
known as TUPE.
We have also included an article on
auto enrolment of pension schemes
to make sure you have enough time
to become compliant with the rules
in this regard, this can be found on
page 4.
Meanwhile, the controversial topic of
people’s right to express their religious
belief and how this impacts on
society is a familiar story in the media.
We have therefore included an article
on how to avoid confrontation on this
point, which can be found on page 5.
Our case round up can be found
at page 6 of this issue, where we
provides a brief update on the way
in which holiday entitlement should
be calculated and the difference
between a restrictive covenant and a
restraint of trade clause. While page
7 provides a quick update in relation
to other legislative changes.
On special request, we have also
included in this issue a meet the team
section at the back of the Newsletter.
If you have any more ideas on how
we can format the Newsletter to
make it more useful for you please do
not hesitate to contact me or one of
the team who will be happy to assist.
If you have any questions relating to
the articles featured in the Newsletter
or would like advice on a particular
query you may have, please do not
hesitate to contact me to discuss
further.
Laura Allanson
Head of Employment
0116 281 6237
laura@bhwsolicitors.com
Editor Laura Allanson.
Articles produced by Laura Allanson,
Katie Stephenson and Claire Bell.
Inside this issue
Changes to TUPE 3
Pension Auto Enrolment:
are you ready? 4
The veil and you:
What are your obligations
as an employer? 5
Case round up 6
Legislation update
& Employment Tribunal
Statistics 7
Meet the team 8
BHW Employment Law
Newsletter
2
3. 3
They say their aim is to ‘remove
unnecessary gold-plating to the
TUPE Regulations and remove unfair
legal risks to companies carrying
out transfers.’ There is currently
no implementation date for when
the provisions will come in but the
Department for Business, Innovation
& Skills (BIS) aim to have the new
Regulations before Parliament by
December 2013 and there will be
transitional and saving provisions and
improved TUPE Guidance.
This is part of a number of measures
that the Government has brought
in to increase the flexibility that
employers can exert over their work
force. The aim of these measures
is to ensure a more efficient labour
market which will enable us to
compete more effectively in Europe.
Although the changes have been
much heralded, the reforms are
not as far reaching as those initially
proposed by the Government.
However, the proposed changes
contain a number of positive
amendments for employers.
The main changes are:-
1. Collective Agreements
The transferor will be able to
renegotiate terms of a collective
agreement, one year after the
transfer. If the changes are in
relation to an economic, technical
or organisational reason, then
any changes cannot be any less
favourable to employees.
TUPE will include express
confirmation that a ‘static approach’
will apply to terms derived from
collective agreements. This provides
welcome clarification following the
Court of Justice of the European
Union (CJEU) decision to use the
‘dynamic approach’ in the case
of Alemo-Herron and Others v
Parkwood Leisure Ltd CJEU.
This case was about whether
clauses in employment contracts,
which oblige an employer to follow
determinations of a third party
in setting pay are binding on a
transferee employer. In this case
the CJEU had said the transferee
could not be bound by post-transfer
collectively agreed terms if it is unable
to be involved in the negotiating
process.
2. Redundancies
BIS have confirmed that the location
of a workforce can be within the
scope of an economic, technical
or organisational reason entailing
changes in the workforce. This
means that any genuine place
of work redundancies will not be
deemed to be automatically unfair.
Unfortunately, the Government has
decided not to allow the transferor to
rely upon the transferee’s ETO reason
in respect of pre-transfer dismissals
of employees.
3. Service Provision Changes
There will be a minor amendment to
‘service provision change’ to show
that activities must be fundamentally
or essentially the same. This reflects
the position that we had got to under
recent case law but the Government
considers that it may not be generally
appreciated that this is the position.
4. Micro- Businesses
Micro-businesses will be able
to inform and consult directly
with employees where there are
no Unions or existing employee
representatives are in place
5. Employee Liability
Information
The time limit for providing the
employee liability information will
increase from 14 to 28 days.
TUPE
The Department for Business Innovation
and Skills (BIS) has recently released their
response to the Government’s Consultation
on the Transfer of Undertakings (Protection
of Employment) Regulations 2006 (TUPE).
4. 4
The scheme has been set up to make employers provide a
scheme which then takes positive action by an employee to
opt out, to try and introduce a culture of saving.
A recent study stated that 27% of medium sized companies were
now drawing up plans to implement the scheme as those with
between 160 -250 staff will be required to have the scheme in place
by April 2014.
The Pensions Regulator’s survey found that attitudes were generally
supportive of the policy with 80% of medium employers believing
‘automatic enrolment [was] a good idea for workers’. Most people
would agree with this. After all there are 7 million people in the
UK around 20% of which are not saving for a pension. We are
therefore heading for a crisis if definitive action is not taken by the
government who, one way or the other will end up footing the bill.
So who is eligible?
There are two main categories of worker for which the employer
duties apply:
Pension Auto
Enrolment:
are you ready?
The date by which your
company needs to have
auto enrolment in place for
its employees will depend on
the number of people on the
Payroll. The initiative started in
October 2012 for Companies
employing over 120,000
employees and is due to finish
in February 2018.
Whichever category your workers fall into you need to make sure you do not fall foul of the provisions, as failure
to comply could result in your receiving a hefty fine. For further advice on the subject please do not hesitate to
contact our Employment team on 0116 281 6237.
1. Jobholders
a) Eligible jobholders: Aged between 22 and state
pension age and working, or ordinarily working, in the
UK. They must have qualifying earnings payable by
the employer, in the relevant pay reference period, that
are above the earnings trigger for automatic enrolment
(currently £9,440 pro rata over the relevant pay reference
period which is usually the payment period). If these
criteria are met then the employer must automatically
enrol them into a pension scheme and pay minimum
contributions to the scheme.
b) Non-eligible jobholders: These are workers who are
not eligible for automatic enrolment but can choose to
opt in to a pension scheme and benefit from an employer
contribution. They will be aged between 16 - 75 years
old, work or ordinarily work in the UK; have qualifying
earnings payable by the employer in the relevant pay
reference period that are above the lower earnings level
for qualifying earnings (currently £5,668 pro rata over the
relevant pay reference period).
2. Entitled workers
These are called entitled workers because they are
‘entitled’ to join a pension scheme but the employer does
not have to make any contribution. They are aged between
16 and 74, are working or ordinarily working, in the UK and
do not have qualifying earnings (i.e. less than £5,668 pro
rata over the relevant pay reference period).
5. 5
In particular, the issue of wearing
a headscarf (khimar), face-veil
(niqab) or the head-to-toe garment
(jilbab) in schools, hospitals and
other public places seems to be a
particularly topical issue.
The competing rights involved were
recently highlighted by Birmingham
Metropolitan College’s U-turn on its
previous decision to ban face veils
along with hoodies and caps, on the
grounds of security.
Let’s begin by anchoring down the
principle to a situation you may
have to deal with. Let’s say you
have a receptionist who has recently
converted to Islam, one day turns
up in a jilbab. Customers have
since refused to deal with your
receptionist on the basis they
cannot see her face. As
a result you are losing
customers. What can
you do? Your employee
is likely to argue that she
is wearing the jilbab as
a public manifestation of
her religion. However, the
right to freedom of religious
expression is not absolute.
This means there are
exceptions to the rule. For
example, if you can prove that
allowing your employee to wear
the jilbab is counter to public
safety, public order, health or morals
or for the protection of the rights
and freedoms of others. As your
employee is a receptionist, none of
these exceptions are likely to apply.
Let’s consider however, a Doctor who
wears the jilbab, what is the situation
then? There is currently no national
guidance on the issue. However,
Professor Carol Baxter, Head of equality,
diversity and human rights at NHS
has said that all medical professionals
should ensure that there are no ‘barriers
to effective communication between
staff and patients.’
Hospitals could therefore argue that
removing the jilbab during working
hours is a genuine and proportionate
occupational requirement. This has led
to some Hospitals, such as Bradford
Teaching Hospitals NHS Foundation
Trust, introducing a ban on the full
face veil which has been in place
since 2009.
The issues here are complex and
highly emotive. We pride ourselves
on being a country which is known for
tolerance and religious freedom. Any
deviation from this should therefore
be approached with caution. The
practical advice is therefore to
review each situation on its own
facts. Where a compromise cannot
be reached, it is best to seek legal
advice. You could also try and be
proactive and try and prevent
the issue by having the relevant
uniform policies in place. This
is something BHW Solicitors
can draft for you, to suit your
business needs.
The veil and you: What are your
obligations as an employer?
The controversy surrounding people’s rights to manifest their religion
through dress is never too far from the spotlight of the press.
6. 6
Case round-up
Holiday entitlement
Clarification has recently been received by
the Employment Tribunal in the case of Neal v
Freightliner Ltd in relation to how to calculate
a worker’s pay while on holiday.
Workers are entitled to 5.6 weeks’ pay holiday a
year. If a worker is working regular hours this is
a fairly straightforward calculation. The difficulty
comes if the worker’s hours are not stable. This is
because the Employment Tribunal has found that an
employer should take a worker’s overtime payments
into account when calculating their holiday pay.
This means an employer needs to calculate what
the worker is entitled to under their contract of
employment and also calculate and incorporate any
non-guaranteed, voluntary overtime.
This potentially means that a worker may recover
several years of underpayments as a breach of
contract claim. Before you panic, remember that
Employment Tribunal claims currently incur an
issue and hearing fee. In the majority of cases it is
therefore unlikely to be proportionate for a worker to
bring a claim for holiday pay alone. In addition the
decision is in the process of being appealed to the
Employment Appeal Tribunal.
Restrictive covenant or restraint of trade?
Is a restrictive covenant that prohibits a former
employee from approaching his ex-employer’s
customers to solicit business from them for
six months post-termination, if the former
employer could still do business with them an
unreasonable restraint of trade?
No, says the Court of Appeal in Coppage v Safety
Net Services.
The Appellant was a former key employee of the
Respondent security company in Birmingham. He
was made redundant and worked in competition with
his former employer. The former employer sued the
ex-employee for damages and won. The Appellant
appealed unsuccessfully.
The key question was whether or not the restrictive
covenant was unenforceable as an unreasonable
restraint of trade. The Court of Appeal held that the
restraint period of six months was a powerful factor
in the overall reasonableness of the clause. While
acknowledging that these cases are highly sensitive
to the facts, Sir Bernard Rix noted that the purpose of
the restrictive covenant was to place a key employee
who was the ‘face’ of a business ‘out of bounds’ for
a strictly limited period, to counter the diversion of
customers who would have been realistically available
to the former employee through his employment.
Employers should be reminded that restrictive
covenants must be carefully drafted and will only be
found to be reasonable if they are intended to protect a
legitimate business interest.
7. 77
The National Minimum Wage has increased
as follows:
• the adult rate increased by 12p to
£6.31 an hour
• the rate for 18-20 year olds increased by
5p to £5.03 an hour
• the rate for 16-17 year olds increased by
4p to £3.72 an hour
• the apprentice rate increased by 3p
to £2.68 an hour
• the accommodation offset increased from
the £4.82 to £4.91
Third party harassment provisions have
been repealed. This means that the rules
that previously made an employer liable if an
employee was harassed by a third party (such
as a client or supplier) no longer apply.
Shareholder votes on executive pay -
Shareholders will have a binding vote on the
reward levels of senior executives every three
years. Under the new rules directors who sign
off high remuneration payments, which have
not been approved by shareholders, will be
personally liable for the payout unless they
can demonstrate they acted in an honest and
reasonable way.
Auto-enrolment staging date - It is one year
since employers started auto-enrolling staff
into pension schemes and from 1st October
companies with between 800 and 1,249
employees need to enroll anyone who does not
already have a pension into a workplace scheme.
Legislation update
Employment Tribunal Statistics
The first indications of the impact of fees are
coming through. The Ministry of Justice has
published the statistics for the number of
employment tribunal claims received between
July and September 2013.The normal monthly
‘average’ is 17,000 claims received each month.
In June 2013 there were 25,000 receipts, and
a further 17,000 in July. This is more than likely
due to people lodging their ET1s before fees were
introduced on 29th July 2013.
In August 2013 there were 7,000 receipts. In
September 2013, there were 14,000 - hardly
different from the historic monthly average of
17,000 and inevitably still affected by those
issued pre-July. However, the statistics do
suggest a substantial drop in the number of
single, as opposed to multiple, claims lodged in
September 2013.
A note of caution: these figures do not include ET1s
lodged in August 2013/September 2013 which
are still sitting in the Leicester processing centre,
awaiting payment of fees or a decision about
remission. So the true number of ET1s lodged in
August 2013/September 2013 will be higher.
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Tel 0116 289 7000 Fax 0116 281 6229
Email info@bhwsolicitors.com Web www.bhwsolicitors.com/employment
The content of our Newsletter is provided for general information purposes only and does not constitute legal or other professional advice.
This firm is authorised and regulated by the Solicitors Regulation Authority - SRA number 383490
We have developed the BHW Employer Support
and Protection Schemes to support and protect
employers of all sizes with their employment
needs. If you would like more information on the
schemes please contact Laura Allanson on
0116 281 6237 or email laura@bhwsolicitors.com
or Katie Stephenson on 0116 281 6227 or
email katies@bhwsolicitors.com
Meet the team
Laura Allanson is an Associate Solicitor and heads up
the Employment department.
She has over 11 years’ experience of dealing with contentious and non-
contentious employment matters. Laura joined BHW after 10 years with
the National Farmers Union (NFU) and has a wealth of agricultural and
horticultural knowledge. Laura has a real ability to ensure that her client’s
problems are resolved in a cost-effective and timely manner.
Katie Stephenson is a Solicitor in the Employment
department with an enviable track record in getting
the right solution for her clients.
Having previously trained as a Barrister, she has a thorough
understanding of all aspects of employment law.
Claire Bell is a Solicitor in the Dispute Resolution
and Employment departments and is involved with
varied employment and dispute resolution work.
Claire completed a 13 month secondment with the Amateur
Swimming Association and gained extensive experience of sports law
during her time there.
