Blake Lapthorn Employment law update 22 June 2011


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Blake Lapthorn Employment law team held an employment law update breakfast seminar at its London office on 22 June 2011.

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Blake Lapthorn Employment law update 22 June 2011

  1. 1. Employment law update 22 June 2011
  2. 2. Removal of the Default Retirement Age Making sense of the changes Hayley Dear
  3. 3. The new legal position No statutory Default Retirement Age (DRA) with effect from 6 April 2011. This means that: – retirement is no longer a ‘fair’ reason for dismissal – now too late to retire someone using statutory retirement process – employers can still have a contractual retirement age but this will need to be objectively justified which means it must be a “proportionate means of achieving a legitimate aim”
  4. 4. Employer Justified Retirement Age – whatdoes it mean? Employers can have a company retirement age if it is objectively justifiable – known as an Employer Justified Retirement Age (EJRA) Can it be objectively justified? Look at: – Case law on retirement/age discrimination; – European Court of Justice (ECJ) cases for guidance on legitimate aims and proportionality; and – ACAS Guidance
  5. 5. Employer Justified Retirement Age – whatdoes it mean? A fact-sensitive approach is likely but examples of legitimate aims include: – workforce planning – recruitment and retention of younger employees – protecting dignity of older members of the workforce When deciding whether or not an EJRA is proportionate, a Tribunal is likely to consider: – why a certain age has been chosen – alternatives available – consistent application of EJRA
  6. 6. Managing the workforce using an EJRA Even if EJRA is objectively justifiable, still require the following in order to dismiss fairly: – Fair reason Look at case law for “some other substantial reason” (SOSR) dismissals – Fair process consultation consideration of any request to stay give sufficient contractual/statutory notice etc
  7. 7. Potential issues when managing theworkforce using an EJRA Difficult to justify an EJRA Unhappy older workers who wish to continue to work? Age discrimination claims Unfair dismissal claims
  8. 8. Managing the workforce without an EJRA Career progression discussions Informal performance management – Keep records – Clear objectives – Training – Appraisals/reviews Formal disciplinary procedure for capability – ACAS code and internal procedures – Warnings – Support/training – Time to improve – Advise if could lead to dismissal
  9. 9. Potential issues when managing theworkforce without an EJRA An increase in workers wishing to work beyond 65? Inconsistency of treatment Discriminatory comments/approach Reluctance to manage older or longer serving employees? Inappropriate “without prejudice” discussions? Age discrimination applies to all ages, not just older workers
  10. 10. Practical tips ACAS guidance “Working without the default retirement age” Training for managers Amend contracts and policies Recruitment considerations
  11. 11. The Bribery Act 2010 HR implications
  12. 12. What does the Bribery Act cover? Prevents the giving or receiving of a financial or other advantage to encourage or reward the improper performance of functions or activities The Act prohibits: – bribing – being bribed – bribing a foreign public official; and – the "commercial organisation offence" of failure to prevent bribery In force with effect from 1 July 2011
  13. 13. Penalties for breach of the Act Individuals face up to ten years imprisonment Commercial organisations (including partnerships) risk: – an unlimited fine – ban on tendering for public contracts – directors, managers and company secretaries can also face individual liability (for consent or connivance)
  14. 14. Commercial organisation offence An organisation will automatically be guilty of an offence if an "associated person" bribes for its benefit unless it can establish that it had adequate procedures in place designed to prevent the bribery “Associated person” includes employees, workers, contractors, consultants and volunteers (plus others) Detailed guidance on procedures that can be implemented by organisations to prevent bribery published in March 2011
  15. 15. Statutory defence for commercialorganisations Commercial organisation must demonstrate it had “adequate procedures” in place to prevent bribery “Adequate procedures” assessed relative to size and complexity of the business on the following six principles: 1. proportionality 2. top level commitment 3. risk assessment 4. due diligence 5. communication 6. monitoring and review
  16. 16. What should organisations be doing aboutthe Act? Consider introducing (or amending if already in place): – anti-bribery/ethical conduct policy – gifts/hospitality policy – vetting policy/additional recruitment checks
  17. 17. What should organisations be doing aboutthe Act? Consider amending: – contracts of employment – director service agreements – non-employee contracts – disciplinary policy – whistleblowing policy – expenses policy – bonus/commission schemes
  18. 18. Key developments in 2010 - 2011 Michelle Lawlor
  19. 19. Overview Equality Act 2010 – recent developments Key cases
  20. 20. Equality Act 2010 (“the Act”) Most provisions came into force October 2010 Update on: – provisions which came into force this year; – guidance which came into force this year; and – provisions which will not come into force or which may be repealed
  21. 21. Positive action in recruitment and promotion Commenced on 6 April 2011 Extended previous duty from training and/or encouragement to also cover recruitment and/or promotion Voluntary Applies to all of the protected characteristics
  22. 22. Positive action in recruitment and promotion Means that it is not unlawful to recruit or promote a candidate who: – is of equal merit – has a protected characteristic that is under- represented in the workforce; and – favouring a candidate is a proportionate measure to address any disadvantage suffered by those with that protected characteristic. “Tie breaker" or tipping point
  23. 23. Positive action in recruitment and promotion Candidates must still be considered on the basis of their merits Positive discrimination remains unlawful in the UK Detailed guidance available at: tion%20in%20Recruitment%20and%20Promotio n%20Guide.pdf
  24. 24. Practical tips Continue to recruit or promote candidates on the basis of their merits If candidates are of equal merit, consider whether you wish to use the positive action provisions (remember these provisions are voluntary) If use the positive action provisions will need to demonstrate: – established a set of objective criteria in order to determine whether candidates are of equal merit – employer does not have a policy of routinely favouring people with protected characteristics; and – justified and proportionate
  25. 25. Guidance which came into force this year(i) Codes of Practice Came into force on 6 April 2011 Includes: – Employment Statutory Code of Practice, available at: es/EqualityAct/employercode.pdf – Statutory Code of Practice on Equal Pay, available at: es/EqualityAct/equalpaycode.pdf
  26. 26. Codes of Practice Provide detailed explanations of the Act and include worked examples Tribunals and courts must take the Codes into account if relevant
  27. 27. Practical tips Provide training Update policies
  28. 28. Guidance which came into force this year(ii) Quick start guide about the ban on questions about health and disability during recruitment Published on 6 April 2011 Available at: – 20Employment%20Questions.pdf
  29. 29. Practical tips These provisions came into force last year so ensure that: – recruitment policies, health questionnaires etc. have been updated – training given to managers, etc.
  30. 30. Guidance which came into force this year(iii)Guidance on matters to be taken into account in determining questions relating to the definition of disability Came into force on 1 May 2011 Guidance must be taken into account by the Tribunal when determining whether a person is disabled Available at: – s/EqualityAct/odi_equality_act_guidance_may.pdf
  31. 31. Guidance - Definition of Disability Focuses in particular on the following four key questions. 1. Does the person have a physical or mental impairment? 2. Does that impairment have an adverse effect on their ability to carry out normal day-to-day activities? 3. Is that effect substantial? 4. Is that effect long-term? Gives guidance and worked examples
  32. 32. Practical tips Guidance will be relevant to medical professionals asked to give opinions so ensure that you update precedent letters to medical or other health professionals
  33. 33. Provisions of the Act which will not bebrought into force or which may be repealed Not to be brought into force – Dual discrimination provisions Consultation as to whether to repeal – Liability on employers for harassment of their employees by third parties over whom they have no direct control
  34. 34. Fulcrum Pharma (Europe) Ltd v Bonasseraand anotherFacts: HR team made up of two employees: (1) HR Manager and (2) HR Executive Diminished need for HR Manager; put at risk of redundancy HR Manager stated that HR Executive should also have been in the selection pool; employer refused Employer did consider "bumping" but did not discuss it with HR Manager HR Manager dismissed; brought claim for unfair dismissal
  35. 35. Fulcrum Pharma (Europe) Ltd v Bonasseraand anotherEmployment Tribunal (“ET”) decision Unfairly dismissed Employers failure to give any real consideration to the pool and to properly consult meant the HR Managers dismissal was unfair
  36. 36. Fulcrum Pharma (Europe) Ltd v Bonasseraand anotherEmployment Appeal Tribunal (“EAT”) decision Upheld finding of unfair dismissal When deciding whether or not a more junior employee should be included in a redundancy pool (with a view to potentially "bumping" the senior employee holding the redundant position into the more junior employees position) employer should follow the guidelines laid down in Lionel Leventhal Ltd v North
  37. 37. Lionel Leventhal Ltd v North Whether it is unfair to dismiss for redundancy without considering alternative subordinate employment will be a matter of fact for the Tribunal and will depend on factors such as: – whether or not there is a vacancy – how different the two jobs are – the difference in remuneration between them – the relative length of service of the two employees – the qualifications of the employee in danger of redundancy; and – other factors which may apply in the particular case
  38. 38. Practical tips This decision emphasises how important it is for an employer to consider who should be included in the selection pool and to consult about the pool as part of the process Explore early on in consultation with more senior employee whether or not he/she would accept a more junior role at a reduced status and/or salary Keep paper trail
  39. 39. Eversheds Legal Services Ltd v De Belin Held that inflating the score of an employee on maternity leave in a redundancy selection process was sex discrimination against a male colleague
  40. 40. Eversheds Legal Services Ltd v De BelinFacts Mr De Belin told that he and his female colleague (who was on maternity leave) at risk of redundancy One of selection criteria was “lock up” Period they chose to measure “lock up” was when female colleague was on maternity leave, therefore female colleague received a hypothetical score of maximum points, whereas Mr De Belin received actual score and minimum points Mr De Belin received lowest score; put at risk of redundancy
  41. 41. Eversheds Legal Services Ltd v De Belin Mr De Belin raised a grievance, stating that he was being discriminated against on grounds of sex Eversheds maintained that it was legally obliged to provide a high level of protection for pregnant women Mr De Belin dismissed Brought claims for: – unfair dismissal; and – sex discrimination
  42. 42. Eversheds Legal Services Ltd v De BelinET and EAT decision Mr De Belin had been unfairly dismissed and discriminated against on grounds of his sex Pregnant employees and those on maternity leave should only be treated more favourably than male colleagues to the extent that this is reasonably necessary to remove the disadvantages occasioned by their condition In this case, there were other less sex discriminatory alternatives available, such as measuring both employees actual performance during the period before the womans maternity leave started
  43. 43. Practical tips When considering whether to make an employee on maternity leave redundant, assess the possible ways in which the disadvantages of a maternity absence can be mitigated, rather than automatically favouring the female employee above all other employees (ie both women not on maternity leave and men) Go no further than what is reasonable and proportionate in the circumstances
  44. 44. Kurumuth v NHS Trust, North MiddlesexHospital Trust Fairly dismissing an employee with uncertain immigration status – held that an employers decision to dismiss an employee with (what the employer considered to be) uncertain immigration status was reasonable
  45. 45. Kurumuth v NHS Trust, North MiddlesexHospital TrustFacts Claimant was Mauritian passport holder Came to the UK with a work permit in 1992 In 1997, she was refused further leave to remain She appealed Received letter from the UK Border Agency (“UKBA”) dated 7 July 1997 ("the 1997 letter") which confirmed that she had lodged an appeal against the refusal and stated that she was entitled to carry on taking paid work in the UK until her appeal was determined
  46. 46. Kurumuth v NHS Trust, North MiddlesexHospital Trust Began working on a permanent basis for the Trust in 2003 Used the 1997 letter as evidence of her right to work in the UK The Trust was “tipped off” in 2006 that the Claimant was an illegal worker Made enquiries with the UKBA Informed by UKBA that the Claimant’s husband had made an application for indefinite leave to remain and named the Claimant as his dependant in 2003
  47. 47. Kurumuth v NHS Trust, North MiddlesexHospital Trust Following introduction of the Points Based System in 2008, the Trust made further enquiries regarding the Claimant’s immigration status Contacted the UKBA’s Employer’s Checking Service UKBA stated that it was unable to confirm that the Claimant had an outstanding application and therefore it was unable to confirm whether the Claimant had the right to work in the UK
  48. 48. Kurumuth v NHS Trust, North MiddlesexHospital Trust The Trust was concerned that it was illegally employing the Claimant, therefore it: – suspended the Claimant without pay – contacted the UKBA again; was told that the Claimant’s husband’s visa application had been rejected – made no mention of the Claimant’s own outstanding visa application; and – invited the Claimant to a disciplinary hearing
  49. 49. Kurumuth v NHS Trust, North MiddlesexHospital Trust Claimant requested that disciplinary hearing be postponed The Trust agreed but wrote to the Claimant regarding the new date using the wrong postal address Proceeded with the disciplinary hearing in the Claimant’s absence and dismissed her without notice pay Claimant given the right of appeal Claimant lodged appeal out of time as per the Trust’s Disciplinary Procedure; the Trust refused to hear appeal
  50. 50. Kurumuth v NHS Trust, North MiddlesexHospital Trust Claimant brought claims for: – unfair dismissal; and – breach of contract for failure to pay during suspension and notice pay The Trust subsequently conceded that it should have paid the Claimant during suspension and her notice pay
  51. 51. Kurumuth v NHS Trust, North MiddlesexHospital TrustEAT decision Immigration status was to be determined by specialist immigration courts, not the employment tribunals Upholding the ET decision, EAT held that the Claimant’s dismissal was substantively fair on the ground of “some other substantial reason” as the Trust did not receive a clear statement from the UKBA regarding the Claimant’s immigration status – the Trust had acted reasonably as had genuine belief that the Claimant was not entitled to work in the UK However, held that Claimant had been unfairly dismissed as no fair procedure followed, although held that even if fair procedure followed would have made no difference to the outcome, therefore Claimant only awarded basic award pursuant to Polkey
  52. 52. Practical tips Each case will turn on its own facts Employers must follow a fair procedure
  53. 53. Immigration updateWhat employers need to know Gavin Jones
  54. 54. Where are we? Legislation Worker Registration Scheme Applications to Permanently Settle in the UK Tiers for Fears On the horizon
  55. 55. Legislation Nine Statutory amendments to the Immigration Rules since June 2010
  56. 56. Worker Registration Scheme From 1 May, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia full EU nationals Restrictions on Bulgaria and Romania still apply
  57. 57. Applications to stay permanently Change in calculation of qualifying period Must be free of unspent convictions Change in earnings requirements
  58. 58. Tier 1 – non - employer specific Closure of “General” - 1,000 “Exceptional Talent” visas to follow Amendments and improvements for Investor and Entrepreneur Closure of Post Study Work visa from April 2012
  59. 59. Tier 2 – sponsored employees Cap – 20,700 – misleading Restricted or Unrestricted? Inter Company Transfer now has 4 sub-categories Minimum salaries £20,000, £24,000 or £40,000 Inter Company Transfer route now 12 months service overseas Inter Company Transferees will not be able to stay permanently National Qualification Framework Level 4 (Degree level) now required
  60. 60. Tier 4 - students English language requirement Maintenance requirement Restrictions on dependants Restrictions on working and work placements
  61. 61. Tier 5 – Temporary Workers Monaco joins list for Youth Mobility Scheme – Australia, Canada, Japan & New Zealand
  62. 62. On the horizon Less than expected take up of unrestricted Certificates of Sponsorship UKBA looking at: Romanian and Bulgarian workers; Investors; Domestic Workers; Sole Representatives; post-study work ability for Students; Tier 5 and Family members Prosecutions – not enough yet!