Annual employment law update


Published on

Blake Lapthorn's annual employment law update was held on 24 and 25 November 2009. The workshop covered five of the current hot HR topics:
- Stringer – how to calculate holiday entitlement during periods of long-term sick leave has been a headache for employers for many years.
- Equality Bill – new legislation will simplify existing discrimination law by consolidating it into one Act.
- Changing terms and conditions – the current economic climate is forcing many businesses to think creatively about the terms and conditions of their staff.
- Compromise agreements/constructive dismissal – compromise agreements are an effective legal tool for securing final settlement with departing employees. However, handled incorrectly, compromise agreements lead to more difficulties than they solve.

1 Comment
1 Like
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Annual employment law update

  1. 1. Annual employment law update Wednesday 24 and Thursday 25 November 2009
  2. 2. Have employers been strung up by Stringer? (Stringer & Others v HM Revenue & Customs) Lisa Wallis Solicitor
  3. 3. Working Time Regulations 1998 Regulation 13 (9) – statutory minimum annual leave entitlement (four weeks) can NOT be carried over into the next holiday year – workers can NOT be paid in lieu of annual leave, except on termination Time Limit Regulation 30 – claim must be brought within three months from the date at which the refused right would have begun to have been exercised © Blake Lapthorn 2009
  4. 4. Employment Rights Act 1996 Regulation 13 – right not to suffer unauthorised deductions Time Limit Regulation 23 – claims can be brought within three months of the last in a series of deductions © Blake Lapthorn 2009
  5. 5. Questions Ainsworth & Others v Commissioners of Inland Revenue Does a worker’s entitlement to statutory annual leave accrue whilst on long term sick leave? Can a claim for unpaid holiday be brought as a series of unlawful deductions from wages? © Blake Lapthorn 2009
  6. 6. Chronology of case Employment Tribunal Ainsworth & Others v Commissioners of Inland Revenue – held: holiday pay accrues while on sick leave Claims can be brought as an unauthorised deduction under ERA 1996 Employment Appeal Tribunal (February 2004) Ainsworth & Others v Commissioners of Inland Revenue – upheld decision of Employment Tribunal Court of Appeal (April 2005) Commissioners of Inland Revenue v Ainsworth & Others – held: holiday pay does not accrue whilst on long term sick leave House of Lords (December 2006) Stringer & Others v HM Revenue & Customs – referred case to European Court of Justice © Blake Lapthorn 2009
  7. 7. Chronology of case European Court of Justice (March 2009) Stringer & Others v HM Revenue & Customs Held: – holiday pay does accrue during sickness absence, regardless of how long the employee is off sick – there is nothing to prevent a worker from taking paid holiday while on sick leave (even if covered by a medical certificate) – opportunity must be given to take the paid leave at some point, even if that means carrying the paid leave over into the next or subsequent holiday year – it is for each EU state to determine when that leave should be taken © Blake Lapthorn 2009
  8. 8. House of Lords (June 2009) HM Revenue & Customs v Stringer & Others House of Lords Ruling 1. Annual leave does accrue and can be taken while a worker is on long term sick leave 2. Claims for unpaid holiday can be brought as a series of unlawful deduction from wages under the ERA 1996 as well as under the WTR 1998 © Blake Lapthorn 2009
  9. 9. What if a worker is on annual leave and falls sick? Pereda v Madrid Movilidad SA ECJ ruled: A worker who is on sick leave during a period of previously scheduled annual leave must have the right, on his request, to take that annual leave at another time If business interests preclude the worker from taking the rescheduled leave in the same leave year, the normal rules against carry-over must be relaxed © Blake Lapthorn 2009
  10. 10. Practical advice for employers Following Stringer Deal with requests for holiday from any worker, in the current holiday year (whether on long term sick leave or not) Amend policies to allow workers on long term sick leave to designate part of that period as paid annual leave before expiry of the relevant leave year Review any current workers on long term sick leave and discuss with them their holiday entitlement and how this will be handled Following Pereda Deal with situations involving carry-over on a case by case basis Revisit notification of sickness procedures © Blake Lapthorn 2009
  11. 11. Equality Bill Emma Drew Solicitor © Blake Lapthorn 2009
  12. 12. Equality Bill Aims – to harmonise – to strengthen Contents – employment – goods and services – public bodies Focus – employment law changes © Blake Lapthorn 2009
  13. 13. Overview Protected characteristics – age – disability – gender reassignment – marriage and civil partnership – pregnancy and maternity – race – religion or belief – sex and sexual orientation © Blake Lapthorn 2009
  14. 14. Overview (2) Direct discrimination – ‘because of’ not ‘on the grounds of’ associative discrimination perceptive discrimination dual discrimination NB: not marriage and civil partnership (or maternity and pregnancy for dual discrimination) © Blake Lapthorn 2009
  15. 15. Overview (3) Indirect discrimination – disability discrimination – gender reassignment Harassment – third party harassment Victimisation – removes need for absolute comparator © Blake Lapthorn 2009
  16. 16. Disability discrimination ‘Normal day to day activities’ – eight functions removed Associated discrimination ‘Discrimination arising from disability’ Indirect discrimination © Blake Lapthorn 2009
  17. 17. Equal pay and positive action Equal pay – ‘genuine material factor’ defence – secrecy clauses – publication of pay differences Positive action – recruitment and promotion © Blake Lapthorn 2009
  18. 18. Progress of Equality Bill House of Commons House of Lords Royal Assent - Spring 2010 Majority in force - Autumn 2010 Public duties - Spring 2011 © Blake Lapthorn 2009
  19. 19. Disability discrimination and sickness absence Tony Cooper Partner
  20. 20. Definition of disability Physical/mental impairment Substantial adverse effect Long term Normal day to day activities © Blake Lapthorn 2009
  21. 21. Direct discrimination On grounds of disability Less favourable treatment than non-disabled with same relevant circumstances/abilities No justification © Blake Lapthorn 2009
  22. 22. Disability related discrimination For a reason related to disability Less favourable treatment than treats others to whom reason does not apply Employer cannot show treatment is justified © Blake Lapthorn 2009
  23. 23. Duty to make reasonable adjustments Provision criteria or practice or physical feature of premises Places disabled person at substantial disadvantage Duty to take reasonable steps to prevent No justification © Blake Lapthorn 2009
  24. 24. Harassment For a reason related to disability Engages in unwanted conduct Violation of dignity Creates an intimidating, hostile, degrading, humiliating or offensive environment © Blake Lapthorn 2009
  25. 25. Victimisation Less favourable treatment because; – brought proceedings – given evidence/information in proceedings – alleged contravention of DDA – other reason relating to DDA rights © Blake Lapthorn 2009
  26. 26. Scope Wide definition of employment Advertisements Applicants/ex-employees Associative discrimination © Blake Lapthorn 2009
  27. 27. Employment Tribunals No service requirement Unlimited compensation – loss – injury to feelings – personal injury © Blake Lapthorn 2009
  28. 28. Long term sickness Individual consultation Medical opinion Alternative employment Reasonable adjustments? Can we wait? © Blake Lapthorn 2009
  29. 29. When can an employer dismiss? Need for work to be done Availability of other labour Cost Likelihood of return Capability upon return Conflicting medical opinions Reasonable adjustments? © Blake Lapthorn 2009
  30. 30. Intermittent absence Unrelated – individual consultation – warnings of consequences and timescale Related – individual consultation – medical consultation – warnings of consequences and timescale © Blake Lapthorn 2009
  31. 31. Intermittent absence (2) Absence not misconduct Procedural fairness Investigation Consultation Warnings Reasonable adjustments Alternative employment Avoid undue haste © Blake Lapthorn 2009
  32. 32. Changing terms and conditions Lynda Smedley Senior solicitor
  33. 33. Identify nature of term Contractual or non-contractual? If non-contractual – no further issue as non-binding – can be varied by employer at any time without need for employee consent If contractual – is it a fundamental or non fundamental term would breach go to root of contract and be incompatible with continuance of employment relationship? answer will dictate remedies available to employee and therefore approach by employer © Blake Lapthorn 2009
  34. 34. Does contract authorise change General flexibility clause – not carte blanche – only minor and non fundamental terms Express flexibility clause – contractual right to make change – operation of clause subject to implied terms © Blake Lapthorn 2009
  35. 35. Incorporated terms Statutory Collective Other points to consider Discrimination effect Terms inherited under TUPE © Blake Lapthorn 2009
  36. 36. Routes to variation Where non contractual provisions or authorised by contract – notify – explain – implement – take careful note of objections © Blake Lapthorn 2009
  37. 37. Routes to variation (2) Where contractual provisions and not authorised by contract – consent required – so ask! – if yes, celebrate and implement before anyone changes their mind – confirm in writing © Blake Lapthorn 2009
  38. 38. If no agreement… Review stage – are managers aware of potential cost? – has it been balanced against the potential benefit? – are managers aware that implementing change without employees’ agreement could require collective consultation? – do managers accept that implementing change without employees’ agreement could lead to dismissals? © Blake Lapthorn 2009
  39. 39. If still want to proceed… Two potential routes Unilaterally impose changes Termination of employment and offer of re-engagement on new terms © Blake Lapthorn 2009
  40. 40. Unilaterally imposing change Always breach of contract Always gives employee right to a remedy No defence for employer to show had sound business reasons or acted reasonably in circumstances Employee who rejects change can: work on new terms (whilst making rejection of them clear) and bring claim for breach of contract where practical continue to work on old terms and refuse to work on new where fundamental breach, resign and claim that been constructively dismissed © Blake Lapthorn 2009
  41. 41. Terminate employment and offer re-engagement on new terms Not wrongful dismissal Potentially unfair dismissal Need to show: – potentially fair reason; and – that acted reasonably in dismissing on those grounds – some other substantial reason – sound business reason © Blake Lapthorn 2009
  42. 42. Factors when assessing reasonableness to dismiss Employer’s motives for introducing change Employees’ reasons for rejecting Whether reasonable warning given Whether change and full effect explained Whether impact assessment undertaken and alternatives considered Had employer responded reasonably to objections and made concessions where possible Had there been a reasonable and genuine consultation process © Blake Lapthorn 2009
  43. 43. Procedure Ascertain nature of consultation – if 20 or more employees collective consultation under TULRCA – individual if less Commence consultation Consult with a view to reaching agreement Listen to the feedback Consider whether the changes can be varied Need to show genuine and reasonable consultation process © Blake Lapthorn 2009
  44. 44. Set a deadline for acceptance If agreement not reached at end of process: Follow individual dismissal process – invitation to meeting warn could result in notice of dismissal and offer to re- engage on new terms at end of notice period – hold meeting – write to serve notice of termination of employment and offer of re-engagement on new terms – Right of appeal © Blake Lapthorn 2009
  45. 45. Compromise Agreements: avoiding the pitfalls Linda Wilson Solicitor
  46. 46. Introduction What is a Compromise Agreement Risks of constructive unfair dismissal Without Prejudice discussions © Blake Lapthorn 2009
  47. 47. Compromise Agreements Difference between statutory rights and contractual rights Employees can agree to give up their contractual rights Normally employees cannot contract out of their statutory rights A Compromise Agreement is needed in order for an employee to give up their statutory rights © Blake Lapthorn 2009
  48. 48. Compromise Agreements Careful drafting is vital for a Compromise Agreement to be valid and enforceable It must relate to the particular complaint Include certain statutory requirements Other drafting pitfalls include: – tax issues – restrictive Covenants – bonuses due after termination – shares/share Options © Blake Lapthorn 2009
  49. 49. Compromise Agreements Lunt v Merseyside Tec Ltd 1999 EAT – sex discrimination claim not covered Palihakkara v BT plc 2007 EAT – only covered claims arising out of her termination of employment not claims which arose during her employment © Blake Lapthorn 2009
  50. 50. Compromise Agreements Need to carefully manage the negotiation of a Compromise Agreement Set deadlines! Do not forget about the ongoing procedures Is the employee to remain in the workplace? Protect company interests and other employees Take legal advice to help assess the possible financial/tax implications of offering a Compromise Agreement © Blake Lapthorn 2009
  51. 51. Kirklees Metropolitan Council v Radecki 2009 CA During Compromise Agreement negotiations R was removed from payroll on 31 October 2006. R was unaware at the time CA held: Date of dismissal was 31 October Stopping pay amounts to a fundamental breach of contract The employee does not need to be aware of such a repudiatory breach © Blake Lapthorn 2009
  52. 52. Avoiding a Constructive Unfair Dismissal claim The implied duty of trust and confidence is incorporated into every employee’s contract of employment Suggesting a Compromise Agreement to an employee could be a breach of that implied duty of trust and confidence A fundamental breach of the implied duty of trust and confidence entitles an employee to resign and claim constructive unfair dismissal © Blake Lapthorn 2009
  53. 53. Avoiding a Constructive Unfair Dismissal claim Advisable to only offer a Compromise Agreement once disciplinary procedures have been commenced Keep discussions/correspondence separate to any ongoing procedure or ‘open’ discussions © Blake Lapthorn 2009
  54. 54. Avoiding a Constructive Unfair Dismissal claim Billington v Michael Hunter and Sons 2003 EAT – B given written warning with regard to her performance – at further informal meeting to discuss performance concerns B was invited to resign on favourable terms – held: this was a ‘vote of no confidence’ and B did have a potential claim for constructive unfair dismissal © Blake Lapthorn 2009
  55. 55. Without Prejudice discussions Legal advice privilege means employers can seek legal advice without the content being admissible in a Court or Tribunal – no need to state Without Prejudice Without Prejudice is intended to give legal privilege to communication between parties where there is a dispute Based on public policy argument of allowing parties to speak freely in order to settle disputes BUT there must be genuine Without Prejudice discussions which means they must: – have the purpose of settling a dispute – not fall under the umbrella of ‘unambiguous impropriety’ Do not waive the protection of Without Prejudice discussions © Blake Lapthorn 2009
  56. 56. BNP Paribas v Mezzotero 2004 EAT M raised a grievance on returning from maternity leave. At the grievance meeting BNP said it was Without Prejudice and it was best if her employment terminated. M claimed direct sex discrimination and victimisation. EAT held: without Prejudice protection did not apply because: – there was no existing dispute – the discriminatory conduct of BNP amounted to unambiguous impropriety © Blake Lapthorn 2009
  57. 57. Blake Lapthorn is an English law firm regulated by the Solicitors Regulation Authority under SRA number 448793 whose rules can be accessed via This presentation is protected by copyright and is not a substitute for detailed advice on specific transactions and problems and should not be taken as providing legal advice on any of the topics discussed. A full list of our partners is available on our website at or at any one of our offices If you have questions on this presentation or on other related topics, please contact: © Blake Lapthorn 2009