Annual Employment Law Review – Key Developments


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Looking back at 2011, Case law update: Top 5 cases, What to look for in 2012, Conclusions & questions

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  • Introduce Taylor & Emmet’s Employment Department
  • DP Introduction
  • The changes are relevant to those whose baby is due on or after 3 April 2011. They will be entitled to APL if, in addition to the requirements to take OPL: They remain employed by the company until the week before the first week of their APL; The child's mother has been entitled to statutory leave (maternity leave/pay or adoption leave/pay); and The child's mother has returned to work and stopped claiming any relevant pay.To qualify for additional statutory paternity pay (ASPP) they must be an employed earner (someone pays the employer’s share of their NI contributions) they must also earn at least £102 pw (lower earnings limit for NI). The child’s mother must have returned to work and stopped claiming any relevant pay, with at least 2 weeks of their statutory pay period remaining APL must be taken as multiples of complete weeks and as one period Minimum amount of APL that can be taken is 2 weeks Maximum is 26 weeks APL Must be taken in the period beginning 20 weeks after the child's date of birth and ending 12 months after the date of birthTo take APL the following must be provided at least eight weeks before the date APL is to start:A written "leave notice" stating: The Expected Week of Childbirth; The child's date of birth; and The dates that APL is to start and finish. A signed "employee declaration" confirming that: They are either the child's father or spouse/partner/civil partner of the child's mother; Apart from the child's mother, they have/expect to have the main responsibility for the child’s upbringing; and They wish to take APL in order to care for the child. A written "mother declaration" from the child's mother stating: Her name, address and National Insurance number; The date she intends to return to work; The employees relationship with the child; That, to her knowledge, they are the only person exercising an entitlement to APL in respect of the child; and That she consents to the company processing the information she has provided.Within 28 days of receiving these documents, Employer has to write to employee to confirm the APL start and finish dates
  • The Bribery Act 2010 came into force on 1 July 2011It introduced a number of offences for which both an individual and company can be liable and face civil (unlimited fines) or criminal liability (maximum jail sentence of 10 years). Those involved in making, accepting or benefitting from the bribe are at risk of liability. Already mentioned fine/imprisonment but also - essential organisations comply with the act not only because any investigation by the authorities be time-consuming to manage, it could also have significant commercial implications. For example, organisations which rely on public sector contracts could be excluded from future public sector contracts whether they are found to have offered or accepted a “bribe” or just failed to take steps to prevent bribes taking place.
  • The change in the law leaves two options for employers (rock and a hard place):Abandon the normal retirement age – many employers have already done this, including B&Q, Sainsburys, Marks & Spencer, BT and HBOS. Employers will be left largely having to rely on capability as the fair reason to dismiss aging employees and is not as easy option as it might first appear. 2) Retain - To justify a retirement age, an employer would have to use the justification test: “proportionate means of achieving a legitimate aim”. Breaking that down, they would first have to show what the legitimate aim was and then that there are not any more proportionate ways of achieving that aim. Case law will develop over the coming years to explain which situations retirement may be a proportional means of achieving these aims.The removal of the default retirement age will certainly create increased litigation from older employees, alleging both Unfair Dismissal and age discrimination. Potentially, also other claims due to the way that issues with older workers must now be addressed as for other younger workers where perhaps for compassionate reasons, employers have avoided doing so and relied on retirement instead. Compensation for age discrimination is unlimited and therefore it pays for employers to get this right.
  • Examples of how to justify a retirement age are based on the ACAS Guidance.UK state pension age will increase to 66 by 2016 and 70 by 2040. Recent ECJ decisions suggest this will be taken into account by tribunals when deciding if a retirement age is justified i.e. will there be a state pension for the employee to collect when they are dismissed?But, note that cost may not in itself be a legitimate aim. Woodcock v Cumbria PLC (Chief Executive – dismissal before age 50 to avoid “windfall” of retirement and pension). EAT said cost can be a factor where cost to rectify discrimination is disproportionately high. Note, not every pension is a windfall. (Here value £500,000 plus). Perhaps consider with other factors e.g. Efficiency. Await CA decision [CHECK WHAT THIS IS – DECISION TO BE MADE OCTOBER 2011)How to justify a retirement age: Can the objective be achieved in less discriminatory way? Consider the alternatives Address issue of justification with open mind: Objective, not subjective, justification Any evidence? Assertions alone are not enough Legal advice recommendedIMPLICATIONS OF DRA REMOVALRemoval of the framework for discussion about retirement. Without a retirement age to work to, there is no point of reference. Even initiating a conversation about potential retirement could be age discriminatory. Consequences: Clumsy “without prejudice” discussions “Bottleneck” created for younger employees Performance issues could be ignored and disabilities missed. Flexible working – reasonable adjustment, how do you treat others. Impact of statutory right? ACAS Guidance – workplace discussions for: Performance against agreed targets Developmental/training needs Future plans of employer Aims and aspirations of employee (retirement must be so as to help business identify training or developmental needs and/or future work requirements) – can you rely on this? Potential SOSR if take action based on it and they know about it and then change mind. Future performanceBUT guidance is not too helpful. Probably okay to ask old people – no detriment because asking only of intention. Recommend appraisals for all employees consistency of approach and questioning, prescribed structureIt is now unlawful not to recruit someone just because they are within 6 months of 65 (DRA) unless employers have retained 65 as their retirement age and they can justify this age.ACAS Code may apply including reasonableness, warnings, support, time to improve and alternatives. Size of employer is important. If retirement = SOSR, otherwise likely to be capability. Difficulties not just about consistency but issues may be related to performance due to impairments which are the product of age/potential disability. Reasonable adjustments might apply where age related illness is also disability. NB low DDA threshold so claims will be prevalent. Adverse inferences will be drawn if younger workers have been treated more leniently or in fact (as age affects everyone) more severely e.g. performance management, setting of targets, performance related pay where performance peaked then dropped.
  • The Regulations apply to workers who are employed by an agency or who work under a contact to provide services on behalf and for a temporary work agency and who are assigned to a hirer to work temporarily under their supervision and direction. E.g. a “temp” who is paid by an agency but works for another company (i.e. the hirer).The Regulations do not apply to permanent employees, fixed term employees, casual workers, self employed independent contractors or consultants, or those employees who have been placed into a permanent role by an agency.The Regulations will give agency workers new legal rights and protection and will also impose cost implications on employers that don’t comply with the Regulations. They will introduce two new types of rights for agency workers – day 1 rights and 12 week rights. It is worth noting that neither of these rights will change the agency workers status. i.e. by complying with the obligations that these Regulations impose will not on their own make an agency worker your employee.
  • Day 1 rights: will entitle agency workers, from day one of an assignment, to be given access to certain facilities that permanent employees are entitled to. These include, staff canteens, transport facilities, car parking, child care facilities, gym access/membership. The agency worked must also be notified of any job vacancy within the hirer. The Regulations don't stipulate how this must be done, it could be via general announcement or on intranet/notice board/newsletter/email.Can be justified if there is a good reason for treating less favourably e.g. An increased cost – guidance says this cant be the sole factor and should consider the extent to which some access, if not all, can be given.Note: these rights only entitle the agency worker to be treated no less favourably than a comparable worker. They do not have the right to any special treatment e.g. agency workers cannot bypass a waiting list or have any membership fees waived.12 Week rights: after a 12 week qualifying period agency workers are entitled to be on the same basic terms and conditions which they would have been entitled to if they had been employed directly by the hirer for the same job. Such as -- Pay (overtime, shift allowance and unsociable hour premium, bonus – if attributable to quality/quantity of work) – although there are some exemptions to these equal pay provisions. -- Duration of working time-- Night work -- Rest periods-- Annual leave-- Paid time off for ante natal appointmentsThey do not include:-- Occupational sick pay, notice pay or redundancy pay-- Expenses-- Long service awards or benefits-- AppraisalsResponsibility lies with the agency for providing these enhanced terms (although his liability can be reduced if the agency has taken reasonable steps to obtain info about the hirer’s terms and conditions). The increased costs will probably find their way back to the hirer’s pocket anyway as agencies will probably try to renegotiate contracts and increase their costs.The hirer can be liable to the extent that they were responsible for the failure to honour 12 week rights. E.g if they gave the agency incorrect information about basic working and employment conditions or fail to notify the agency of any changes – in this case the liability moves from the agency to the hirer.....Communication in therefore essential!The right to equal treatment is not triggered until after 12 continuous calendar weeks in substantially the same job with the same hirer.There is no minimum hours per weekA new qualifying period will start when:A new assignment starts with a different hirer;A substantially different job starts with the same hirer; or There is a break of 6 weeks (or more) between assignments.If a hirer or agency is found to have put in place measures to avoid the Regulations, in circumstances where the Regulations intend that the worker would be protected, either or both the agency and hirer can be fined by the ET up to £5,000 in addition to any compensation awarded to the worker. Example of a measure = If an agency worker has completed 2 + assignments with the same hirer for 11 weeks with a 6 week break in between them and then the agency worker is then taken on for a third assignment – the Guidance suggests this could be seen as an attempt to avoid equal treatment. There is no cap to the amount of compensation that can be awarded.
  • The claimant, a teacher, had been suspended after a number of incidents of inappropriate conduct during lessons. After her suspension she received a final written warning which was based on a single allegation by 2 pupils concerning her conduct in a particular lesson. At the disciplinary hearing which considered the final warning, the claimant produced evidence which fundamentally undermined what the pupils supporting the complaint were saying, but the committee in charge of the hearing refused to allow this evidence because the claimant had not produced it 7 days before the hearing. The claimant went on to receive a final written warning. She appealed against this final written warning. The appeal was initially planned to be a review until the claimant persuaded the respondent to hear the appeal as a re-hearing because she had other evidence she wanted to bring to their attention. On the advice from her union representative, she decided not to pursue the appeal which was on offer since by doing so, she could have risked the sanction being increased from a final warning to dismissal. The claimant was again suspended following more complaints, there was a disciplinary hearing which upheld five out of the ten complaints and she was dismissed, the reason for dismissal being the five findings of misconduct coupled with the final written warning. The Tribunal upheld the dismissal, saying that the claimant had been offered an appeal by way of a complete re-hearing, which she did not take up, so the governors were entitled to proceed on the basis that there was an existing final written warning and they concluded that the decision to dismiss the claimant in the light of the subsequently found misconduct, and in the light of the final written warning, was within the range of reasonable responses.The final written warning had been issued in good faith. However, they also said that had the claimant been dismissed for the incident which triggered the final written warning alone, they would have concluded that the dismissal was unfair because of the respondent’s failure to investigate properly. The claimant’s grounds of appeal included an alleged error of law in that the Employment Tribunal had not considered the validity of the final written warning. Her failure to appeal did not imply that the allegations made against her were true – she did not appeal because of the advice given to her by her union. Therefore the ET should not have assumed that, because of the failure to appeal, the final written warning was valid. The fact of no appeal against a final written warning does not save it from invalidity. The EAT ruled that the ET had misdirected itself in its approach to the question of an appeal not being launched against the final written warning. They should not have had regard to the fact that there was no appeal against the final warning when considering whether or not the dismissal was fair. The case was remitted to the same Tribunal to consider the question of fairness or unfairness by reference to the criticisms it made of the procedural defects in the final written warning hearing, disregarding the fact that there was no appeal.
  • The Claimant who suffered from dyslexia and dyspraxia, had applied for a new position in the immigration service.  He had replied to an external advert that set out 4 key competencies (delivering results, managing external relationships, problem solving and judgment and communicating and influencing) but that advert differed, mistakenly, from an internal advert which required a further key competency (strategic awareness rather than problem solving and judgement).  The Claimant applied and set out evidence of his 4 competencies and he was given additional time for interview but was surprised when he was asked about the additional competency, never the less he did his best to try and answer it but because of his impairments he was at a substantial disadvantage in responding to the changed circumstances.  The Claimant wrote a letter of complaint and asked for a re-interview as he had been placed at a disadvantage. He stated “it would be unfair and unjust to be denied this fantastic opportunity because of that mistake.”  The Claimant’s request was refused on the basis that the Claimant’s marking indicated he would not have been appointed, even if he had successfully answered the unexpected question.  The Claimants case for bringing a claim was that “he was discriminated against because of his disability, the Respondent’s arrangements had put him at a substantial disadvantage. This disadvantage led to a detriment when he wasn’t offered the position applied. The treatment received was unfair and affected his confidence and self esteem.”   The ET struck out the claim as having no reasonable prospects of success.  On appeal, the EAT took the view that the question was not whether making the reasonable adjustment would have enabled the Claimant to get the job (which is what the ET Judge thought). There will be many adjustments which it is reasonable for an employer to take which will not necessarily mean that the disabled person will be successful, or indeed will not even remove entirely the disadvantage which the disabled person is encountering. But that does not in itself absolve the employer from the duty to take the steps.  Any candidate would be disadvantaged if they had not prepared to answer questions on a particular competency, but a person with severe dyslexia, who required to prepare for an interview in a particular way, would be at a substantial disadvantage compared to a person who was not disabled. The question was therefore, whether the Claimant had an arguable case that the Respondent ought to have made a reasonable adjustment. The ET Judge fell into error by concentrating on the proposal for re-interview. The Judge should have considered the question whether any adjustment could have been made prior to, or at, the interview to prevent the disadvantage – the employer should have, prior to the interview, read the Claimant’s application form, seen that his form did not address one of the key competencies, alerted him to the fact and given him the opportunity, prior to the interview, to address the key competency. In this way he would have been prepared for the interview in the same way as the other candidates. The EAT stated that it is not the law that an adjustment will only be reasonable if it is completely effective. The purpose of reasonable adjustments is to eliminate the practical difficulty which the PCP has caused and create a level playing field for the disabled person. If a reasonable adjustment should have been made for this purpose it is not fatal to the disabled persons case that they still would not have obtained the job.  The case is to proceed to a full hearing.
  • An employee who had handed in his notice shortly before a TUPE transfer had continued to be assigned to the undertaking despite not attending the office and only doing a small amount of work from home. The Claimant appealed against a decision that his contract of employment had been transferred to the respondent under TUPE.The facts The Claimant had been employed by an insurance broker, working predominantly on their commercial insurance department and was responsible for sales. The Claimant’s contract contained a restrictive covenant preventing him from approaching clients if he left the company with a view to transferring their business to a rival. In September 2009 the Claimant handed in his resignation and that notice was due to expire on 26 October. It was agreed between the two parties that the Claimant need not attend the office during his notice period, but that he would be on call at home. The Claimant didn’t do any substantial work whilst at home, but fielded calls and finalised accounts. On 25 September the company told the Claimant of their intention to sell the commercial insurance part of the company and an agreement was made with the buyer on 2 October. After the Claimant’s employment terminated (on 26 October) he went to work for a rival company.The buyer of the commercial insurance part of the company claimed that the Claimant’s employment had been transferred to it and that it was entitled to sue the Claimant for breach of the restrictive covenant in his contract of employment.  The Claimant argued that he hadn’t been assigned to the commercial insurance department within the meaning of Reg 2 of TUPE either at all or only temporarily and, the judge failed to properly consider the notion of a temporary assignment in Reg 2(1) - There had been a failure to provide the Claimant with information or to afford him a right to object to the transfer. The Claimant’s appeal was dismissed. The judge found that on the basis of the evidence of the Claimant’s position within the commercial insurance department, that he had been assigned to the department despite doing other kinds of insurance work. The judge rejected the submission that the position had changed as a result of the Claimant’s notice on the basis of his continuing work and because it could not be right that an employee was automatically assigned on a temporary basis, thus losing the protection of the regulations, as a result of giving notice. It was held that the Claimant had been assigned to the department before he handed in his notice and there had been no change in the Claimant’s assigned position in the department before the transfer date. The Claimant had been informed of the transfer and had not objected to it. There was no legal basis for saying that the transfer of his employment had been ineffective. There was a duty under reg 13 to provide representatives of affected workers with certain information, but that was not a duty to provide information to the Claimant personally
  • The Claimant, who was disabled (HIV infected), was a volunteer with the CAB working 4-5 hrs per week. She signed a volunteer agreement described as being "binding in honour only... and not a contract of employment or legally binding“ Despite providing a range of advice work for the CAB, 25-30% of the time, the Claimant did not attend the bureau when expected to do so. The bureau did not object to this or to the Claimant changing the days on which she volunteered. Volunteering was not a prerequisite for paid employment with the CAB, and it was not guaranteed that volunteering would lead to paid employment (although CAB volunteers often went on to become paid CAB advisers)The CAB eventually asked the Claimant to stop volunteering at the CAB and, as a result, she brought a claim for disability discrimination under the DDA. The Claimant argued that the DDA should be interpreted widely to cover her by deeming her to have been "in employment", therefore giving her protection under the existing DDA. But the tribunal found that the Claimant was a volunteer, that there was no legally binding contract between her and the CAB, and that there was no obligation on the Claimant to provide services.   At a pre-hearing review the Judge held that the tribunal had no jurisdiction to hear the claim as, in the absence of a contract, the Claimant was not "in employment" for the purposes of the DDA. Also: She had not been “employed” because there was no legally binding contract between the Claimant and the CAB, and the Claimant was not obliged to provide any services; The Claimant’s volunteering arrangements were not “for the purposes of determining to whom employment should be offered”; and The Claimant wasn’t undertaking a work placement because the volunteering arrangement was not for a “limited period” and neither was it for the sole or dominant purpose of vocational training.  The Claimant appealed to the EAT, where she argued that the Equal Treatment Framework Directive had not been properly implemented by the UK government, and that as such her volunteering arrangement with the CAB did in fact fall within the scope of the directive. On this basis, part of the DDA did not comply with European law, and consequently they should be re-defined to allow the Claimant to bring a disability discrimination claim.   The EAT decided that the ET was correct to find that the Claimant was not entitled to claim disability discrimination under the DDA. In addition, the EAT did not agree either that the government had not complied with the directive, or that the DDA needed to be rewritten to extend protection to voluntary workers without a contract. The EAT could find no express reference anywhere in the directive regarding extension of protection to unpaid voluntary workers. Therefore he declined to refer the matter to the European Court of Justice, because he felt that the answer was "entirely clear".The Claimant appealed to the Court of Appeal. The appeal was dismissed and upheld the tribunal’s decision for essentially the reasons given by the tribunal and the EAT. Implications The EAT has followed existing case law and confirmed that volunteers without a contract are not entitled to protection under current discrimination legislation. However, the EAT was clear that its decision in this case was not intended to cover all voluntary workers. Unpaid workers may be entitled to protection under UK law if they have a legally binding contract “personally to do work”, or if they are in a work experience or vocational training placement. Volunteers engaged under contracts are entitled to protection under discrimination legislation. As such, organisations that use volunteers should review their existing arrangements and consider whether contracts are used and, if so, whether that practice will continue, and what exposure they may already have for discrimination claims. If any such exposure exists then they should take steps to minimise any liability by introducing or tightening internal procedures, and most certainly taking care in terminating any volunteer arrangements.  This case, which decided that a volunteer was not covered under the DDA applies equally to the scope of the EqA.
  • In this case 24 employees, employed by Lewisham Council, transferred to CCL Limited, a private company, under TUPE. The Claimants’ contracts of employment stated that their terms and conditions would be “in accordance with collective agreements negotiated from time to time” by the National Joint Council for Local Government Services (NJC) as set out in the Green Book. Following the transfer to CCL Limited the Claimants received pay increases in line with the NJC pay settlements. In May 2004, CCL Limited was taken over by PL Limited, and the Claimants again transferred under TUPE to PL Limited. In June 2004, negotiations on a new NJC pay deal commenced to which PL Limited was not a party, nor did PL Limited recognise the negotiating trade union (UNISON) and as PL Ltd is a private sector employer, it cannot belong to the NJC or be represented by it. When a new pay increase had been agreed, the Claimants asserted that they were entitled to this pay increase. PL Limited however refused to be bound by the newly negotiated pay deal.The Claimant’s brought claims against PL Limited for unlawful deductions from wages. The ET dismissed the claims and the employees appealed to the EAT. The EAT allowed their appeal and held that the employees were entitled to benefit from the recent agreement. PL Ltd appealed to the Court of Appeal. When the case came before the Court of Appeal they overturned the EAT’s decision. The court referred to European case law of Wherhof where the ECJ held that, following the transfer of an undertaking involving employees whose contracts of employment incorporate a collective agreement, the Acquired Rights Directive (ARD) does not require a "dynamic" approach and does not preclude a "static" approach. The transferee is therefore bound by the terms in force at the date of transfer but not by subsequent collectively agreed terms to which it is not a party. The ECJ held that a "dynamic" interpretation would have meant that the transferee was bound by future collectively agreed terms to which it was not a party. The employees appealed to the Supreme CourtThe issue for the Supreme Court was whether the effect of Regulation 5(1)and (2) of TUPE (1981) is that the claimants are entitled to the benefit of increases in pay negotiated by the NJC after they were transferred into the employment of PL Ltd Reg 5(1)&(2) = provide that their contracts of employment were to have effect after the transfer as if originally made between the persons so employed and the transferee.   In Whent v T Cartledge Ltd the employees' contracts stated that their remuneration, hours and holidays would be in accordance with certain collective agreements. Following a TUPE transfer, the new employer announced that it was withdrawing from the relevant collective agreements. The EAT held that the agreements were incorporated into the employees' contracts of employment (which were protected under TUPE 1981) and so the employees were entitled to the benefit of later pay rises set by the collective agreements, even though the new employer was not party to them. This approach was adopted in a number of other domestic cases. The Supreme Court has held that there should be a reference to the ECJ to establish whether Article 3.1 of the ARD precludes national courts from interpreting regulation 5 of TUPE 1981 more generously than Article 3.1 of the ARD so as to give employees the benefit of pay rises agreed in post-transfer collective bargaining. I.e by giving "dynamic" as opposed to a "static" interpretation to regulation 5 of TUPE 1981 (now regulation 4 of TUPE 2006). The decision is significant for public sector outsourcings. Under the static model, a private sector transferee is only bound by collectively-agreed terms that apply at the date of transfer, whereas the dynamic model would give transferring employees the right to benefit from future pay rises or other changes agreed between the unions and the public sector transferor after the transfer. Pending the ECJ's ruling, the Court of Appeal's decision that TUPE only transfers static contractual terms has not been overruled.
  • Over the past 18 months, the Government has been conducting an Employment Law Review to ensure that domestic legislation is: fit for purpose; allows businesses to trade in a difficult climate; and balances the rights of employees against the rights of their employers.  On 10 November 2011, in a speech on exporting and growth, David Cameron confirmed that the government is to consult on the introduction of “protected conversations”, as he put it “so a boss and employee feel able to sit down together and have a frank conversation at either’s request”. Nick Clegg previously suggested that such a conversation could concern performance or retirement. Nor will they extend to protect discriminatory acts.At the beginning of October 2011 George Osborne announced that the Unfair Dismissal qualifying period will rise from one to two years with effect from 6 April 2012.  Perhaps unsurprising given that last year the amount of Tribunal claims submitted increased by 56% to an unprecedented 236,000 claims which has led to the Tribunal system struggling to cope. The government have indicated that if the qualifying period for unfair dismissal claims increase from one to two years it would save businesses around £6 million per year and would result in a reduction of 2,000 claims per year.Claims relating to asserting a statutory right or discrimination cases can be brought by an employee with less than 1 years service. Potentially this change in legislation could see an increase in vexatious or misconceived claims being brought by unscrupulous employees to enable them to bring unfair dismissal claims through the back door. There has been no confirmation on whether there will be any transitional provisions and what effect the potential change in legislation will have on claims that have already been lodged.  The fees are to be refunded if the Claimant wins, and forfeited if they lose. But, the fees to be waived for those with no money. We await to see whether this is confirmed as if the test for a fee-waiver is simply being on income support, then most ex-employees will automatically qualify for the waiver (but those still in a job will not). It is also interesting to see that issue fee of £250 (and hearing fee of £1,000) is substantially greater than the small claims issue fee showing that the government are trying to deter people from bringing employment claims. There has also been talk in the news about:A rapid resolution scheme to enable simple ET cases to be settled within 3 monthsThe EqA to be amended to settle discrimination claims under a compromise agreementEmployment Judges to sit alone in unfair dismissal cases  
  • Consideration is planned in the new year on some aspects of the employment law review, particularly collective redundancy and TUPE. Redundancy is likely to focus on a single, short consultation period, to replace the 30 to 90 day current structure; more guidance on when consultation starts and ends; when notice can be given and end and the overlap between collective and individual consultation.TUPE exercise is likely to address issues such as whether we need a separate category of transaction for change of service provider, post-transfer change or harmonisation of terms and transfers offshore.In relation to informing and consulting, both consultations might tackle the thorny issues arising out of the situation whereby there is a redundancy exercise as part of a transfer, where there will be two connected but distinct obligations to inform and consult.
  • From 1 October 2012, new laws are due to start coming into force requiring all employers in Great Britain to automatically enrol eligible "jobholders" in a pension scheme. You’ll be able to use your own existing occupational pension schemes or personal pension scheme if it meets statutory quality requirements. Otherwise, you will have to enrol jobholders in the National Employment Savings Trust (NEST), a central scheme to be set up by the governmentThe Pensions Act 2008 provides that employers must enrol automatically all eligible employees not already participating in a workplace pension scheme into the employer's pension scheme or the new personal accounts scheme under the National Employment Savings Trust pension scheme. The threshold for automatic enrolment is aligned with the personal allowance for income tax. Employers are not required automatically to enrol individuals employed for under 12 weeks. The date on which employers are required to comply with auto-enrolment is called the “staging date” and this is based on the number of people on your PAYE scheme, and the PAYE scheme reference number. Employers with more than 50 employees will be the first to have to comply. With the largest companies being first. Eligible job holders – who you need to enrol are, employees, aged between 22 and state pension ages and earn at least £7,475 (although this amount has not been confirmed yet).It is best for employers to start thinking about this upcoming requirement and having an idea of when their staging date will be, however, the pensions regulator will write to all employers 12 months before their staging date to inform them of the date.
  • Annual Employment Law Review – Key Developments

    1. 1. Annual Employment Law Review – Key Developments David Poddington, Partner Jenny Arrowsmith, Associate Tom Draper, Solicitor 8 December 2011
    2. 2. Outline  Looking back at 2011  Case law update: Top 5 cases  What to look for in 2012  Conclusions & questions
    3. 3. Paternity Leave Changes  Additional Paternity Leave  Applies to parents of babies born (and adoptive parents notified of a match) on or after 3 April 2011.  Gives fathers the right to take up to 26 weeks paternity leave, if:  they remain employed by the employer until the week before the first week of their APL;  the child’s mother has been entitled to statutory leave; and  the mother (or primary adopter) has returned to work early and has stopped claiming the relevant pay.  APL must be taken as multiples of complete weeks and as one period.  The minimum amount of APL that can be taken is 2 weeks.  The maximum amount of APL that can be taken is 26 weeks.  APL must be taken in the period beginning 20 weeks after the child's date of birth and ending 12 months after the child’s date of birth.
    4. 4. Bribery Act 2010  Came into force on 1 July 2011  Introduced a new offence to prohibit someone obtaining or retaining a business advantage through “bribery”  Liability of non compliance for both individuals and company  Civil liability – unlimited fines  Criminal liability – maximum jail sentence of 10 years  Defence: if organisation has “adequate procedures” in place  Risk assessments – regular and comprehensive to assess exposure risks to bribery  Top down commitment – establish a culture acknowledging that bribery is never accepted  Due diligence – policies and procedures covering all parties to the business relationship  Clear, practical and accessible policies and procedures - communicated to all in organisation  Effective implementation – ensure policies are embedded throughout the organisation  Monitoring and review – to ensure compliance and identify any issues
    5. 5. Default Retirement Age (DRA)  The DRA was abolished on 1 October 2011  For an employer to dismiss an employee fairly on the grounds of retirement they must have issued notice of retirement on or before 5 April 2011 and the employee must have reached 65 on or before 30 September 2011.  The choices for employers now are either to:  Abandon a retirement age – face up to the prospect of performance management of older employees, including very old employees, and the risk of claims as a result; or  Retain a retirement age – unless it can be justified, any compulsory retirement age will be age discrimination and an unfair dismissal. N.B Case law on justifying retirement ages now eagerly anticipated..........
    6. 6. DRA  How to justify a retirement age:  Workforce planning;  Health and safety;  Physical fitness;  Having an age balanced workforce;  Consider the alternatives (less discriminatory ways)  Objective, not subjective, justification  Evidence – assertions alone are not enough  Implications of DRA removal  “Workplace discussions” under ACAS Guidance  Need a potential fair reason for dismissal  Consider alternatives, e.g. Compressed hours, job sharing, redeployment  Recruitment of older employees becomes more likely  Need for consistent management of all employees  Flexible working requests.  Facilitating recruitment and retention of younger employees;  Managing congenial working environment; and  Cost.
    7. 7. Agency Workers Regulations 2010  The Regulations came into force on 1 October 2011  The Regulations apply to workers employed or engaged by an agency and:  Assigned to a hirer to provide a service or who work under a contact to provide services;  Work on behalf and for an agency; and  Assigned to a hirer to work temporarily under the hirers supervision and direction.  The Regulations do not apply to:  self-employed independent contractors;  consultants; and  employees placed into permanent employment via an agency.
    8. 8. Entitlements  Day 1 rights:  Agency workers must be given access to certain facilities and be provided with information on job vacancies, as they would if they were employed by the hirer directly  It is the hirer’s responsibility to provide such access  12 week rights:  Agency workers are entitled to the same basic terms and conditions which they would have been entitled to if they had been employed direct by the hirer for the same job  It is primarily the agency’s responsibility to provide these rights Alternatives / Exemptions  Change agency workers or employ them directly  Increase the use of casual labour - zero hour contacts  The Swedish Derogation  Managed Service Contracts
    9. 9. Case law update 2011 Davies v Sandwell Metropolitan Borough Council (EAT)  Employers proposing to dismiss an employee who is on a final written warning should not assume that the warning will be treated as valid by an Employment Tribunal simply because the employee did not appeal against it at the time. Implications  Ensure that a fair procedure is followed at all stages.  Review previous warnings before dismissal.
    10. 10. Case law update 2011 Noor v Foreign & Commonwealth Office (EAT)  Adjustments to an interview process should still be made even if it would not have guaranteed that the employee would get the job. Implications  Although the purpose of a reasonable adjustment is to prevent a disabled person from being at a substantial disadvantage, an adjustment does not have to be completely effective to be “reasonable”  Consider adjustments prior and at interviews to remove disadvantage at that stage, including enabling applicants to be as prepared as other candidates.
    11. 11. Case law update 2011 Marcroft v Heartland (Midlands) Ltd (Court of Appeal)  An employee who had handed in his notice shortly before a TUPE transfer had continued to be assigned to the undertaking despite not attending the office and only doing a small amount of work from home. Implications  TUPE transfers the employment of those who have resigned from transfer at date of transfer but have not yet left.  There is a duty (under TUPE) to provide representatives of affected employees with certain information, but this duty does not extend to notify individual workers personally.
    12. 12. Case law update 2011 X v Mid Sussex Citizens Advice Bureau and others (Court of Appeal)  Volunteers engaged under contracts “personally to do work”, or in a work experience or vocational training placement may be entitled to protection under UK discrimination legislation. Implications  Organisations using volunteers should review existing arrangements and consider whether contracts are used and, if so, whether that practice will continue, and what exposure they may already have for discrimination claims.  If any exposure to discrimination claims exists then steps should be taken to minimise liability and care should be taken when terminating any volunteer arrangements.
    13. 13. Case law update 2011 Alemo-Herron v Parkwood Leisure Ltd (Supreme Court)  TUPE transferred employees may still be entitled, post-transfer, to pay increases negotiated under industry wide collective bargaining arrangements, even though their new employer is not a party to collective agreement. Implications  This case could be regarded as bad news by private and third sector service providers involved in public sector outsourcing.  ECJ referral has been made.
    14. 14. What to look for in 2012 Tribunal reform  Employer and employee protected conversations  Compulsory lodging claims with ACAS before an ET claim can be lodged  The qualifying period for unfair dismissal to be increased from one year to two years with effect from 1 April 2012.  Fees are to be introduced for Tribunal claims  £250 when lodging a claim?  £1,000 payable by the Claimant when the hearing is listed?  Higher fees if the claim is worth over £30,000? Implications  Less ET claims? Less vexatious claims?  More discrimination or statutory right claims?
    15. 15. What to look for in 2012 Collective Redundancy & TUPE Consultations  Redundancy Consultation  Single, short consultation period to replace the 30 to 90 day current structure;  More guidance on when consultation starts and ends and when notice can be given and end; and  The overlap between collective and individual consultation.  TUPE Consultation is likely to address issues such as:  Is a separate category need for change of service provider, post-transfer change or harmonisation of terms and transfers offshore;  In relation to informing and consulting – clarity on where there is a redundancy exercise as part of a transfer, where there will be two connected but distinct obligations to inform and consult.
    16. 16. What to look for in 2012 Auto-enrolment and new employer pension duties – October 2012  Four year staging process.  Employers must automatically enrol eligible jobholders in a pension scheme.  Employer’s own occupational pension scheme;  Personal pension scheme; or  National Employment Savings Trust (NEST).  Staging date determined by number of people on PAYE scheme and reference number.  Compulsory employer/employee contributions  Eligible jobholder:  An employee;  Between the age of 22 and state pension age; and  Earning at least £7,475 per year.  The Pensions Regulator will write to employers 12 months before their staging date to confirm the date that they are required to comply with auto-enrolment.
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