powerpoint slides to an employment law update seminar delivered by my employment law team and me to HR professionals, directors and employment agencies

1. Nick Hobden Partner E: nick.hobden@ts-p.co.uk D: 01322 623700 James Willis Senior Associate E: james.willis@ts-p.co.uk D: 01322 422540 Guest speaker Sue Threader Employment Tribunal Panel Member Date 15 September 2011 © Thomson Snell & Passmore 2011 TSP Connect Seminar Employment Law Update

2. Our subjects today TUPE and pre-pack administrations – liabilities Equality Act 2010 – one year on Retirement age Public sector equality duty for public service providers Agency Workers Regulations Collective consultation – recent cases Employment tribunals – observations on how to avoid them if you can and prepare for them if you must 2

3. James Willis Senior Associate James Willis Senior Associate E: james.willis@ts-p.co.uk D: 01322 422540 3

4. TUPE and pre-pack administrations Background: TUPE 2006 was intended to foster a ‘rescue culture’ Struggling businesses might transfer without certain employment-related liabilities Rules relating to changes to terms and conditions of employment ‘relaxed’ Distinction drawn between ‘terminal’ and ‘non-terminal’ situations 4

5. TUPE and pre-pack administrations ‘Terminal’ situations The transferor is subject to “bankruptcy or any analogous insolvency proceedings” aimed at liquidating the assets of the business TUPE will not apply to any alleged transfer Non-terminal” situations The transferor is subject to “relevant insolvency proceedings”, but not with a view to liquidation TUPE may still apply to any alleged transfer, but: some liabilities may not transfer and will be picked up by NI Fund transferee may have greater scope to vary employees’ terms and conditions 5

6. TUPE and pre-pack administrations Can a ‘pre-pack’ administration amount to a ‘terminal’ situation? Let’s get the jargon straight: Administration is typically a form of insolvency proceedings aimed at rescuing the company or facilitating the sale of the company’s assets as a going concern ‘Pre-pack’ administration is one where the sale of a company’s assets is effectively agreed before a company is put into administration, with the sale completing on or very shortly after the appointment of the administrator 6

7. TUPE and pre-pack administrations Oakland v Wellswood BIS guidance suggested administrations will always be ‘non-terminal’ Employment Appeal Tribunal disagreed and found that TUPE did not apply to this ‘pre-pack’ Court of Appeal expressed some doubt over this decision, but did not overrule it OTG v Barke Employment Appeal Tribunal reached a very different conclusion, ruling that administrations can neverhave liquidation as their intended aim Therefore TUPE should apply to ‘pre-packs’, subject to the relaxation relating to liabilities and changes to terms and conditions Conflicting EAT decisions! 7

8. TUPE and pre-pack administrations Pressure Coolers v Molloy The facts Maestro International Limited was subject to a ‘pre-pack’ administration Business was sold to Pressure Coolers at 11am At 3pm, employees were all summarily dismissed for redundancy The decision Pressure Coolers argued that all liabilities (including dismissal-related ones such as notice pay and basic award) ought to be picked up by the NI Fund EAT held that dismissal-related liabilities debts were not outstanding at the time of transfer. Therefore Pressure Coolers were liable for these Time of dismissal is critical – ‘pre-pack’ buyers beware! 8

9. Discrimination law update A brief recap on the Equality Act 2010: Most of it came into force in October 2010 Consolidation of 9 separate pieces of discrimination legislation Harmonising the various strands of discrimination law Introducing some new forms of discrimination (e.g. indirect disability discrimination and disability arising from discrimination) 9

10. Discrimination law update Some EA 2010 provisions due to come into force later: Public sector equality duty (5 April 2011) Positive action in recruitment and promotion (6 April 2011) Dual (Combined) discrimination And don’t forget the changes to age discrimination (removal of the default retirement age) 10

11. Discrimination law update Positive action in recruitment and promotion New provisions came into force in April 2011 Employers can treat a person with “protected characteristics” more favourably in connection with recruitment and promotion if: They are disadvantaged or there is low participation and The person is as qualified asother applicants Problems Can’t have a general policy Each decision must be justified - burden of proof Will anyone be brave enough? 11

12. Discrimination law update Dual (combined) discrimination A perceived gap in protection (e.g. Asian women, gay men?) Dual discrimination intended to plug gap where, because of a combination of two ‘protected characteristics’, A treats B less favourably. Coalition decided to ‘shelve’ these provisions But Ministry of Defence v Debique (EAT) and Khan v Ghafoor (ET) – has case law ‘introduced’ dual discrimination anyway? 12

13. Discrimination law update Apportioning liability for discriminatory acts Discrimination claims can be brought against employer, other employees and sometimes third parties More than one party found guilty of same discriminatory acts How is liability apportioned? London Borough of Hackney v Sivanandan EAT said where two or more parties are jointly liable, parties are jointly and severally liable for financial award Claimant can go against one or both respondents; each is liable for entire award 13

14. Discrimination law update Justifying discrimination Sometimes possible to ‘justify’ conduct which would otherwise be discriminatory (e.g. indirect discrimination, age discrimination) Cross v British Airways (2005) - EAT held that employer cannot justify on grounds of cost alone Woodcock v Cumbria Primary Care Trust (2011) – EAT cast doubt on Cross, finding it "hard to see the principled basis" for the decision Cherfiv G4S Security Services Ltd (2011) – EAT considered case law and sided with Woodcock. 14

15. Discrimination law update Scrapping the Default Retirement Age Law is in the process of changing Employers cannot serve any further retirement notices under the old system Some retirement notices have been served (on or before 5 April 2011) but have yet to expire – they will be allowed to proceed, as long as employee is at least 65 on 30 September 2011 It is conceivable that retirements under the ‘old’ law could continue until towards the end of next year. But take care! 15

16. Discrimination law update Lawful compulsory retirement might still be possible Firm-wide or job-specific retirement age if it is “objectively justifiable” (proportionate means of achieving a legitimate aim) Do you want to be the test case? Removing the retirement age will be the prudent course of action for most employers 16

17. Nick Hobden Partner & Head of Employment Nick Hobden Partner E: nick.hobden@ts-p.co.uk D: 01322 623700 17

18. Nick’s topics to be covered The Public Sector Equality Duty The Agency Workers Regulations 2010 Collective Consultation 18

19. The Public Sector Equality Duty In s 149 of the Equality Act 2010, in force from 5th April this year Applies to public bodies and private/voluntary bodies who perform public functions Requires affected bodies to have ‘due regard’ to the need: to eliminate discrimination, harassment, victimisation, and other similar conduct; to advance equality of opportunity between those who share a ‘protected characteristic’ and those who don’t; and to foster good relations. 19

20. Protected characteristics ‘Due regard’ means: a ‘conscious approach and state of mind’ an integral part of the decision-making process The duty covers protected characteristics: Age Disability Gender reassignment Pregnancy and maternity Race (including ethnicity, nationality, colour, or national origin) Religion or belief (including a lack of) Sex Sexual orientation Marriage / civil partnership (only in respect of eliminating discrimination) 20

21. Complying with the duty Affects all employees The duty must be fulfilled before and at the time the decision is made Delegation – public bodies expect compliance with duty Compliance is assessed by The Equality and Human Rights Commission (EHRC) 21

22. The Agency Workers Regulations 2010 Due to come into force from 1 October 2011 Covers ‘temps’ – individuals supplied by a temporary work agency under direction of hirer 22

23. Day one rights Two ‘day one’ rights: Right to be informed of relevant vacancies Access to collective facilities and amenities (on site) Objective justification NB. Provide numbers, type of work and where agency workers work to employee representatives in TUPE or collective redundancy situations 23

24. Qualification 12-week qualifying period = qualify for the same basic working conditions as would be - as if recruited directly (Comparator?) When calculating the 12-week period: A break of six weeks of more, or a move to a substantially different role = resets the clock Any break due to holiday or sickness (up to 28 weeks) = pauses the clock 24

25. The right to equal treatment ‘Basic working conditions’ = Pay Working time Overtime Holiday pay (over WTR) Rest breaks (over WTR) Bonuses linked to individual performance Time off for ante natal appointments; alternative work on maternity grounds; paid for maternity work suspension NB ordinarily included 25

26. Exclusion from pay and basic working conditions NOT occupational pensions (though note from October 2012 automatic pension enrolment) occupational sick pay (above SSP) maternity, paternity and adoption pay (above statutory SMP, SPP and SAP rights) redundancy pay (statutory and contractual) notice pay (above statutory notice) benefits in kind (such as company cars) bonuses not linked to individual performance (such as loyalty bonuses) 26

27. Enforcement and liability Right to request information from agency/hirer (day one rights and 12+ weeks rights) Worker may bring claim before Employment Tribunal for infringement/detriment Liability usually rests with agency for 12+ weeks, subject to: ‘Reasonable steps’ defence Tribunal’s power to apportion liability for compensation and possibly £5,000 anti-avoidance fine Breach of ‘day one’ rights always hirer’s responsibility 27

28. Collective consultationPhillips v Xtera Communications Ltd Case concerned the election of employee representatives There were 3 reps designated, only 3 applied No objections were received to these reps, although no vote held EAT held: No requirement for a ballot in all cases; clearly not necessary here Fairness was ensured by employer asking for objections 28

29. Lancaster University v The University & College Union University consultation procedure clearly flawed but tolerated for several years New union rep demands change, union brings a claim for a protective award EAT held: Take a “top-down” approach to liability, starting at breach then looking for mitigation Union’s tolerance for such a long period was a legitimate mitigating factor 29