Employment Law Watch : Employment & Labor Lawyer & Attorney : Reed Smith Law Firm

This post was written by Joanna Whiteman and Ruth Bonino.

In this Q&A, we have attempted to cover some of your most frequently asked questions on the UK Equality Act 2010.  This is not intended to be a comprehensive guide of the new provisions, so if you would like further information, please do not hesitate to contact us.

The Equality Act 2010 has been in the press a lot recently. Should we already have taken steps to ensure that our systems are in compliance with it?

The Equality Act 2010 ("the Act") received Royal Assent in April, just before the general election and after a period of intense discussion and debate.  The new coalition government has recently announced that most of the Act's provisions are due to take effect, as planned, from October 2010. However, despite this, questions remain over the more controversial provisions, such as the socio economic duty, gender pay reporting and positive action.

Employers need to act now in order to prepare for the Act, and the action we recommend is set out at the end of this note.  As regards those provisions of the Act where a question mark remains, there is no need to jump the gun - keep a close eye on developments, but be prepared to act as soon as any announcements are made.

I've heard that the Act makes it easier for employees to show they have suffered disability discrimination. Is this true?

The Act introduces some significant changes in the law concerning disability discrimination, and the government has said that these will come into force in October.  The changes have come about because of a recent decision of the House of Lords (London Borough of Lewisham v Malcolm (2008)), which rendered the existing protections against disability-related discrimination inadequate.  The changes make it easier for people to show they are disabled and are protected by disability discrimination law.  Two new types of disability discrimination are recognised as unlawful by the Act:

• Indirect discrimination - under Section 19 of the Act, a person will be indirectly discriminated against if the employer applies a "provision, criterion or practice" that puts people sharing that person's specific disability, at a particular disadvantage. This means, for example, that a job applicant or an employee with dyslexia could claim that a rule that employees must be able to type at a certain speed disadvantages people with dyslexia. Unless the employer can justify this, it would be unlawful.
• Discrimination arising from disability - under Section 15 of the Act, an employer discriminates against a person when it treats that person less favourably, not because of the disability itself, but because of something arising "in consequence of that person's disability," such as the need to take a period of disability-related absence. For this type of discrimination to occur, the employer must know, or reasonably be expected to know, that the disabled person has a disability. This type of discrimination will be easier for an employee to show since there will be no need to make a comparison with a person who does not have a disability (as is currently the position). It will, however, be possible for an employer to defend a claim by showing that the treatment is justified as being a proportionate means of achieving a legitimate aim.

Some aspects of disability discrimination law are not changed by the Act. For example, the Act still requires employers to make reasonable adjustments for disabled employees and does not change the extent to which these are required. However, it may be necessary to review your organisation's policies to ensure that they are up to date and compliant with the current interpretation of "reasonable adjustments."  It will also be advisable to review your policies and practices to ensure that they cover the new definitions of disability discrimination referred to above.

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The Emergency Budget announced by the Chancellor yesterday contained a number of measures (such as income tax, national insurance and pensions) which will be relevant to all UK employers. Fionnuala Lynch, counsel in the Reed Smith UK tax department has produced a summary of the key measures, with particular emphasis on the proposals affecting business taxation. Please feel free to forward the paper on to anyone in your organisation who may find the paper of interest.

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The Court of Appeal has ruled that an employee subject to a contractual disciplinary procedure, who was dismissed for misconduct in breach of that procedure may, in principle, recover damages for loss of future employment prospects. The case of Edwards v Chesterfield Royal Hospital NHS Foundation Trust represents a significant departure from decades of established case law concerning the calculation of damages for wrongful dismissal. The decision (which we understand is being appealed) potentially opens the door to huge loss of earnings awards for employees who are unable to find alternative employment due to loss of reputation because of their dismissal.

What happened in this case?

Mr Edwards was employed by the Chesterfield Royal Hospital Trust (the “Trust”) as a consultant surgeon. In 2006 he was dismissed for gross professional and personal misconduct following a disciplinary hearing and had since then been unable to obtain work as a permanent consultant. Mr Edwards maintained that if the contractual disciplinary procedure to which he was subject had been followed correctly, he would never have been dismissed. He brought a High Court claim seeking damages for breach of his contract of employment in the sum of little under £4.3 million (including a loss of earnings claim for £3.8 million to cover his loss of employment income from dismissal to retirement at age 65).

Usually a wrongful dismissal claim would be limited to loss of earnings over the contractual notice period and, where there is a contractual disciplinary procedure, the period in which the procedure should have been followed. Since Mr Edwards’ claim went beyond this (to include loss of earnings to retirement), the Trust applied for an order from the Court that any damages which exceeded the loss of earnings over the notice period should be struck out. This matter was dealt with as a preliminary issue and for those purposes the Court only had to consider whether Mr Edwards had any real prospect of recovering, after trial, damages in excess of the loss of earnings over the notice period. For this purpose, it was entitled to assume that Mr Edwards would succeed in all the allegations made in his Particulars of Claim.

The issue finally ended up before the Court of Appeal, and the issue the Court had to consider was whether Mr Edwards was entitled to damages for loss of professional status in circumstances where, if the disciplinary proceedings had been conducted properly and not in breach of contract, he would not have been dismissed. The Court concluded that damages should not be limited to damages over the notice period and the time which the employer would have taken for the disciplinary procedure to be followed.

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This post was written by Suzie A. Savage.

The UK Bribery Act 2010 has far-reaching implications for any business (including US businesses) which is either registered in the UK or which has any part of its operation in the UK. The breadth and importance of this legislation means that companies and their senior officers would be well advised to familiarise themselves with the effects of this new law.

In particular, the Act provides that “Senior officers” (including non-board level managers) can "individually be held criminally liable" for a company’s bribery offences. The Act also includes extensive extra-territorial powers of prosecution similar to those found in the U.S. Foreign Corrupt Practices Act (“FCPA”) and the offences apply to acts of bribery in both the public and private sectors (unlike the FCPA).

Reed Smith has produced a Client Briefing Note which provides you with a summary of the key provisions and offers suggestions for best practices to comply with the Act. Please click here for the full Reed Smith Client Briefing - The Bribery Act 2010.

In addition to this Client Briefing, Reed Smith is running a client teleseminar "The New UK Bribery Act 2010: What Does it mean for US Companies that operate in the UK?" on Thursday, June 10, 2010 from 12:00 pm - 1:00 pm ET; 11:00 am - 12:00 pm CT; 9:00 am - 10:00 am PT; 17:00 pm - 18:00 pm British Summer Time and 18:00 pm - 19:00 pm Central European Summer time.

Please click here to register for the teleseminar.

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This post was written by Laurence G. Rees, Sara A. Begley, Eugene K. Connors, Casey S. Ryan, Carl De Cicco, Amber M. Spataro.

In our everyday lives, we've all noticed or become a part of the phenomenon of social media Facebook, Twitter, YouTube, Flickr, MySpace and more. The options offered and growth of the media have been staggering. With that growth has come new legal risks, including employment issues, quite unlike anything we've seen before. And with things happening at lightning speed, it's hard to keep up, much less react when something goes awry.

In October 2009, we published a White Paper on social media and United States law entitled Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenon. The response was unlike quite anything we'd ever seen before as clients, friends, and colleagues from around the globe asked for copies and praised the work.

This month, we've published the second edition which includes a chapter on Employment Practices that addresses employment issues arising from the use of social media in both the U.S. and Europe.

Click here for the new edition and bookmark the entry to be sure to get ongoing revisions.  You can also read the employment chapter by clicking here on our sister technology blog, Legal Bytes.

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Regulations concerning the new right to additional paternity leave (APL) came into force on 6th April 2010. Currently those eligible for ordinary statutory paternity leave are entitled to one whole week or two consecutive weeks’ paternity leave on statutory paternity pay, which is currently £124.88, to be taken within eight weeks of the expected week of childbirth (EWC). However, eligible fathers whose children are due on or after 3 April 2011 will have the right to take up to 6 months’ additional paternity leave (APL). The right will also apply to adoptions where parents are notified of a match on or after 3 April 2011 and husbands, partners or civil partners who are not the child’s father but expect to have the main responsibility (apart from the mother) for the child’s upbringing.

Continue reading our for a summary of the new provisions regarding Additional Paternity Leave.

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The subject of leave and pay has caused a number of headaches for employers over recent years. Recent cases have sought to clarify this area of the law, however, many questions remain unanswered. One of the most confusing areas relating to leave is the interaction between sick leave and annual leave. What happens when a worker is off sick and therefore does not take his/her accrued holiday? Do workers accrue annual leave whilst off sick? Read on for a summary of the recent cases which have sought to answer some of these questions.

Accrual of annual leave during sick leave

In Stringer and Others v HM Revenue & Customs, the European Court of Justice (ECJ) held, in respect of questions refered to it by the House of Lords, now the Supreme Court (HL), that:

• workers on sick leave must continue to accrue annual leave;
• it is for Member States to decide whether workers can actually take annual leave during sick leave; and
• if workers are prevented from taking annual leave during sick leave, they must be able to take it following their return to work, even if this means carrying the annual leave over into the next holiday year.

The HL has now determined how these principles should be applied in the UK. Regulation 13(9) of the Working Time Regulations 1998 (WTR) states that “leave.... may only be taken in the leave year in respect of which it is due”. The parties agreed that statutory annual leave could not therefore be carried forward to the next holiday year. The HL held that it was therefore necessary to interpret the WTR as allowing workers on long-term sick leave to take (and be paid for) annual leave whilst on sick leave.

However, this case raises as many questions as it answers. For example, what happens if the worker does not request annual leave whilst on sick leave? Does the employer have to permit annual leave to be carried forward in these circumstances, despite the WTR? Many of the points raised by the ECJ were not fully considered by the HL, and therefore the manner in which the ECJ’s decision might be interpreted under UK law remains uncertain.

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Overview

During the past year, there have been a number of cases which have impacted on the area of dismissals. We consider the major cases below:

Unfair dismissal

In order for a dismissal to be fair, an employer has to show:

1. that it has a potentially fair reason for dismissal; and
2. that the dismissal is reasonable in all the circumstances.

When assessing “reasonableness”, the Tribunal will look at the employer’s dismissal procedure to see whether it satisfies this test.

In West London Mental Health NHS Trust v Sarkar, the Employment Appeal Tribunal (EAT) held that an employer acted reasonably in dismissing an employee for gross misconduct under its formal disciplinary procedure, despite initially taking the view that the misconduct could be dealt with under an informal procedure designed to deal with less serious matters.

It was found that the employer was entitled to consider further incidents of poor conduct which occurred and justified a change in approach.

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The past 18 months has seen a significant number of TUPE related cases. The following is a summary of some of the key decisions.

The meaning of the term `activities’ (Service Provision Change)

A TUPE transfer will occur when there is a ‘service provision change’. In a first-generation outsourcing, where a client outsources an activity to a contractor for the first time, the conditions to be met in order for there to be a service provision change include a requirement that ‘activities’ cease to be carried on by the client for itself and are instead carried on by the contractor on the client’s behalf. As TUPE does not include a definition of ‘activities’, it has been for the Courts and Tribunals to consider how this issue should be approached.

In Metropolitan Resources Ltd v Churchill Dulwich Ltd, the Employment Appeal Tribunal (EAT) decided the activities carried out by the transferee must be ‘fundamentally or essentially the same’ as those that were carried out by the transferor in order for a TUPE transfer to occur. The EAT also indicated in its decision that in assessing whether the activities are similar, a more detailed rather than an ‘overview’ approach should be adopted (i.e. consideration should be given to the exact nature of the activities performed by each of the transferee and the transferor and the exact manner in which those activities are performed).

Further support for the adoption of a detailed approach can be found in the EAT’s decision in OCS Group Ltd v Jones and another. Here, the EAT decided that a contractor which provided catering services to a client by preparing hot and cold meals in on-site kitchens performed activities that were different to those of a contractor which only sold pre-prepared sandwiches and salads. The EAT rejected the ‘overview’ approach argument that the activities carried out by each of the transferee and the transferor in this case should be considered to be the provision of food or catering services and should therefore be considered to be the same.

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In force from today are a number of legislative changes which will be of interest to employers. These include the new right to request time off to train and the replacement of sick notes with “fit notes”. Also expected to come into force today are various regulations relating to additional paternity leave which will affect parents of babies born or expected to be born on or after 3^rd April 2011 and parents who are notified of having been matched for adoption on or after that date. For the moment, however, they still appear in their draft form but will no doubt come into force shortly.

New right to request time off to train

From 6 April 2010 employees working for employers with 250 or more employees have a new right to request time off to train. As from 6 April 2011, the right will extend to all employees, regardless of the size of their employer. The right will be available to employees only (not to other “workers”) and is subject to a qualifying period of service of 26 weeks. Employers are required to consider all requests seriously and follow a prescribed procedure. They may only refuse a request if they think that one of a number of specified business reasons set down in section 63F(7) of the Employment Rights Act 1996 apply. An employee whose application is refused can bring a claim before an Employment Tribunal but their remedies are limited to compensation of up to eight weeks’ pay and/or an order for the employer to reconsider the application.

For more information see the Government’s business link website

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In Bateman and others v Asda Stores Ltd, the Employment Appeal Tribunal (EAT) upheld an Employment Tribunal’s decision that Asda was entitled to introduce new pay terms without its employees’ consent because it could rely on a statement in its staff handbook reserving a right to make unilateral variations to the terms of its employees’ contracts of employment.

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In the case of Parkwood Leisure Ltd v Alemo-Herron and others, the Court of Appeal has examined the effect of regulations 5 and 6 of Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE 1981) in relation to collective agreements. The Court has held that in circumstances where a contractual right to a pay increase is dependent on collectively agreed terms, the transferee of an undertaking transferred will not be bound by terms collectively agreed by third parties after the transfer. In making this decision, the Court declined to follow established UK case law and preferred instead to follow a 2006 decision of the European Court of Justice (ECJ).

Although the case involved an issue relating to the 1981 Regulations, the law as stated in it will apply to the current Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006).

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The European Court of Justice (ECJ) has ruled that the protection of patients from declining performance of dentists due to their age may be a legitimate aim justifying difference in treatment on the grounds of age. However, whilst setting a maximum practising age of 68 for German national health service dentists is potentially lawful under the EC Equal Treatment Directive, it was not justifiable because German law permitted private dentists to practice beyond 68. The age limit was justifiable, however, on a different basis, namely because it gave opportunities to younger workers to join the health service(see Petersen v Berufungsausschuss für Zähn für den Bezirk Westfalen-Lippe). In another decision, the ECJ held that a German law which restricted applications to join the fire service to those under the age of 30 could be defended as a genuine occupational requirement. (see Wolf v Stadt Frankfurt am Main)

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Equality Bill

This long awaited piece of legislation is due to hit the statute books this Spring, with many of its provisions coming into force in October. It is this year’s most significant piece of legislation so far and will affect employers in both the private and public sectors. As well as harmonising and consolidating discrimination legislation, it will also strengthen it. For example, new types of disability discrimination will redress the balance in favour of the employee following the case of London Borough of Lewisham v Malcolm. Also, the definitions of direct discrimination and harassment will be widened to cover claims based on “association” and “perception” and there will be a new type of claim for gender pay discrimination based on hypothetical comparators. Widely publicised in the press is the extension of the concept of positive action to enable employers to choose from two equally qualified candidates, the person who is from a group which is under-represented in their workforce. It will also be possible for claimants to bring “multiple” direct discrimination claims. Finally, amongst other things, proposals to make the gender pay gap more transparent include a power to issue regulations which can require large employers (250+ employees) in the private sector to report their gender pay gap. Public bodies with more than 150 employees will be required to do this from 2011.

For more information, view the Bill.

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In Ladele v The London Borough of Islington and Liberty, the Court of Appeal has confirmed the decision of the Employment Appeal Tribunal (EAT) that Ms Ladele, a Registrar of Births, Marriages and Deaths at Islington Council who held strong Christian beliefs, had not suffered discrimination on the grounds of her religion or belief when she was required by the Council to perform same sex civil partnership ceremonies. The Court made it clear that the Council had a legitimate aim to provide the full range of civil partnership services without discrimination and so was entitled to require Ms Ladele to perform the ceremonies despite her objections to doing so based on her Christian belief. Moreover, having been designated a Registrar, it was unlawful under the Equality Act (Sexual Orientation) Regulations 2007 for the Ms Ladele to refuse to perform such ceremonies.

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In Grainger plc and others v Nicholson the EAT has given guidance on what might qualify as a ‘philosophical belief’ for the purposes of the Employment Equality (Religion or Belief) Regulations 2003 (the “Regulations”). In the case, the Employment Appeal Tribunal (“EAT”) held that a belief in the existence of man-made climate change and the need to cut carbon emissions was capable of amounting to a philosophical belief which would qualify an employee holding that belief for protection from discrimination under the Regulations. However, importantly, the EAT made clear that it would be necessary for any claimant to establish that their adherence to the philosophical belief in question is genuine.

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Continue reading for an overview of what legislative changes have taken effect from the beginning of this October.

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In Pereda v Madrid Movilidad SA, the European Court of Justice ("ECJ") has decided that where a worker is sick during a period of pre-planned annual leave, annual leave must be granted to him for a different period and if he is prevented from taking it during the current holiday year, he can carry it forward to the next one. This judgment follows on from the recent and highly publicised conjoined cases of Schultz-Hoff and Stringer, which established that a worker on sick leave accrues annual leave whilst off sick but it is for Member States to decide whether a worker can take their annual leave during a period of sick leave. The upshot of these decisions appears to be that employees can choose to do what suits them best – if on long term sick leave, they can elect to take paid annual leave, but if they are sick whilst on paid annual leave, they can elect to postpone paid annual leave and take it later even if that means having to postpone it to the next holiday year. Pereda represents a very worrying development for employers as it opens the door to abuse because unscrupulous employees will be able to re-classify parts of their holiday as sick leave on their word alone.

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In an important decision concerning TUPE transfers, the Employment Appeal Tribunal (EAT) has given guidance in the case of Tapere v South London & Maudsley NHS Trust on, first, the interpretation of mobility clauses in the context of a TUPE transfer and, secondly, on Reg 4(9) TUPE, which allows a transferred employee to treat themselves as dismissed if a relevant transfer involves a substantial change in working conditions which is to the employee’s material detriment. The EAT held that "detriment" should be considered using the subjective approach which applies in discrimination law. The case will be particularly important to purchasers of businesses and transferees in outsourcing situations where transferred employees are required to move location after the transfer takes place.

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A recent decision of the Employment Appeal Tribunal in Eagles v Rugged Systems has confirmed the position as to the circumstances in which an Employment Tribunal should exercise its discretion to extend the ordinary three-month time limit for presenting a claim in the Employment Tribunal for an extra three months under the statutory dispute resolution regulations (repealed on 6^th April 2009). The decision will be of interest to employers dealing with recent claims for unfair dismissal or who are currently negotiating compromise agreements or dealing with ongoing dismissal procedures in cases where, on a time limit transitional basis, the statutory dispute resolution procedures still apply.

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The House of Lords, in the case of HM Revenue and Customs v Stringer and others has overturned the decision of the Court of Appeal in that case, ruling that claims for unpaid statutory holiday pay and accrued statutory holiday pay on termination under the Working Time Regulations 1998 (“WTRegs”) can be made as unlawful deduction from wages under the Employment Rights Act 1996 (“ERA”), as well as under the WTRegs. This will mean that workers can take advantage of the more favourable time limits which apply under the ERA, which could potentially allow them to claim unpaid holiday pay on termination of their employment going back several years, provided they bring their holiday pay claim within three months of their employer’s most recent failure to pay them holiday pay. This decision will not be welcomed by employers as it will increase the cost of both continuing to employ workers on long term sick leave, and also on termination of their employment. It also leaves unresolved a number of practical problems arising from the decision of the European Court of Justice (ECJ) earlier this year on this issue (see our blog for details of the ECJ decision). 

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In Rolls Royce Plc v Unite the Union, the Court of Appeal has ruled that using length of service as a criterion in a redundancy selection policy can be lawful in some circumstances. Although the use of length of service amounts to indirect age discrimination, it can be objectively justified where it pursues the legitimate aim of maintaining a stable workforce during a redundancy exercise and rewarding loyalty, and is a proportionate means of achieving that aim. In this case, the means of achieving that legitimate aim were proportionate because the criterion was one of many criteria used in the selection process and the means used were consistent with principles of fairness.

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The UK Government has published the long awaited Equality Bill, the aim of which is to harmonise and consolidate discrimination legislation and also tackle inequality and discrimination which continues to persist in employment and in the provision of services. Aspects of the Bill which have attracted media attention include the new public sector duty to consider reducing socio-economic inequalities and the banning of “gagging clauses” in employment contracts so that employees can be free to talk about their pay packages. The Bill also extends the concept of positive action to enable employers to recruit or promote people who are from groups which are under-represented in their workforce. Despite concerns of commentators and employers about the difficulties employers may face, the real practical impact of some of these provisions might be low. Other proposals may however have a greater impact. Large employers should note the proposed requirement to report on their gender pay gap, and the recasting of the definition of disability related discrimination should help to redress the balance between the protection of disabled persons and providing employers with the opportunity to defend the treatment that they have given. Many aspects of the Bill fall outside the employment law field but the main issues which will affect employment law are as set out below.

http://services.parliament.uk/bills/2008-09/equality.html

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The European Court of Justice has decided that the UK's retirement age of 65 is not necessarily in breach of EU law. However, that is not the end of the matter because the case must now return to the UK Court to decide if the UK's compulsory retirement age of 65 can be justified. This will require the High Court to assess if the retirement age pursues a legitimate aim (such as social policy objectives), and whether the means to achieve such an aim, i.e. a blanket mandatory retirement age of 65, is proportionate in achieving that aim.

Click here to view the Judgement of the European Court:

curia.europa.eu/jurisp/cgi-bin/form.pl

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The European Court of Justice has ruled that workers on long term sick leave will not lose their right to holiday pay where they have been unable to take the holiday by virtue of being on sick leave. This decision is very unwelcome to employers as it will increase the cost of both continuing to employ workers on long term sick leave, and also on termination of their employment. Read on to see what we think this means for employers in practice.

Gerhard Schultz-Hoff (C-350/06) v Deutsche Rentenversicherung Bund, and Mrs C. Stringer and Others (C-520/06) v Her Majesty’s Revenue and Customs

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The Regulations bringing parts of the Employment Act 2008 into force on 6^th April 2009 also introduce transitional arrangements for the removal of the statutory dispute resolution procedures. These regulations provide for one set of arrangements for dismissal and disciplinary actions, and another for grievances. These changes will be important for all HR managers and line managers. In particular, the transitional arrangements relating to grievances may catch many employers out in the year ahead.

The Employment Act 2008 (Commencement No. 1, Transitional Provisions and Savings) Order 2008

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Regulations to amend the 2004 Employment Tribunal Rules of Procedure have been laid before Parliament and will come into effect on 6^th April 2009. These changes will be relevant to all practitioners and HR managers involved in Tribunal proceedings – take note in particular of the changes regarding making a request to extend time for filing a Response.   

The Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2008

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Some important legislative changes are planned for 2009, including the abolition of the statutory dispute resolution procedures and the extension of the right to request flexible working for parents with children under 16. Read on for a summary of these and other expected developments which may affect your business in the year ahead.

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In Oakland v Wellswood (Yorkshire) Ltd, the Employment Appeals Tribunal (EAT) decided that an employee of a business in administration was unable to have the protection afforded to employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) when the business in which he was employed was transferred and continued as a going concern with the transferee. The decision is important news for administrators and purchasers of businesses in administration because it contradicts current Government guidance on this issue.

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The UK’s ability to opt out of the 48 hour working week is now in peril following the European Parliament vote this week to have it scrapped. The UK’s opt out of this element of the Working Time Directive (in other words employees in the UK being able to agree to opt out of the limit) was agreed in the 1990s but has been under threat now for a number of years. The vote will come as a great disappointment to UK businesses bearing in mind that earlier this year the UK agreed to the Temporary Agency Directive provided it could keep the Working Time Directive opt out. Keeping the opt out was, however, dependent on being accompanied by a number of conditions which guarantee the protection of health and safety of workers. The European Parliament was not convinced that keeping the opt out does not undermine health and safety. 

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The Secretary of State has approved the new draft ACAS Code of Practice on discipline and grievances following public consultation. The new draft Code has been revised to take into account the changes proposed to be made to workplace dispute resolution procedures by the Employment Act 2008, which received Royal Assent on 13^th November.

In the consultation, which ended in July this year, the draft Code was criticised for being too vague, which it was suggested, could have led to increased litigation. The revised Code has addressed some of these concerns by adding more detail, but this may have the effect of restricting flexibility and leave employers open to challenge when mistakes or omissions are made.   Employers should now think about what changes are needed to disciplinary and dismissal, capability, performance and grievance policies in time for 6 April 2009 when the Code is likely to come into force.

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After many years of political wrangling, the European Parliament has finally approved a Directive giving new rights to temporary agency workers. The Directive must now be implemented into each Member State’s national laws within three years.

Press release of the European Parliament. 

The Directive should be accessible via this link as soon as it is available in its approved form.

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The Court of Appeal in the case of Dickins v O2 has given guidance which will assist employers in understanding the steps to take to avoid liability for stress at work claims. The case is important because the Court of Appeal has made it clear that in cases of severe stress it is not enough for an employer to provide access to a confidential counselling helpline or to refer an employee to an occupational health professional. It is likely that a more interventionist approach to managing stress is required of managers and HR professionals following this case.

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The Deputy Information Commissioner has recently ordered the Department for Business, Enterprise and Regulatory Reform (BERR) to disclose names and addresses of the respondents to all Employment Tribunal claims lodged since October 2004. The Information Commissioner considers that, on balance, the public interest was best served by disclosing the information. This effect of this order is that anyone can now make a similar application under the Freedom of Information Act and have access to all respondents’ names and addresses in Tribunal proceedings. Whether in the “information age”, this will have any adverse impact on businesses, as was argued by BERR, remains to be seen. 

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The Advocate General of the European Court of Justice has rejected the claim by Heyday (an offshoot of Age Concern) that UK law, which entitles employers to retire employees compulsorily at or after reaching 65, is contrary to EU law.  In 2007, Heyday brought a claim in the High Court against the UK Government that the national default retirement age of 65 under the Employment and Equality (Age) Regulations 2006 was incompatible with the EU Law. The High Court referred certain questions regarding the lawfulness or otherwise of the Age Regulations to the European Court of Justice (ECJ). Before the ECJ can give its judgement, the Advocate General must give a preliminary legal opinion which is usually (but not invariably) followed by the ECJ. The AG’s opinion is therefore significant because it is more than likely to be followed.  Click here for a link to the opinion:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62007C0388:EN:HTML

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Continue reading for an overview of what legislative changes to expect and prepare for this coming October.

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In the case of Tradition Securities & Futures SA v X & Y, the Employment Appeal Tribunal clarified the Employment Tribunals’ jurisdiction in sex discrimination cases.

Whilst this case relates to sex discrimination, its implications are relevant to other types of discrimination as well and will be of interest to large multi-national organisations whose employees work in various jurisdictions throughout their employment.

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The High Court decision of Tullett Prebon Group Ltd v Ghaleb El Hajjali will be of interest to all employers who recruit highly specialised senior employees. The decision considers the enforceability of a liquidated damages “no show” clause, and how damages should be calculated where an employee changes his mind about joining a prospective employer, after signing an employment contract containing such a clause.
 

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The case of Sodexo Ltd v (1) Gutridge and others (2) North Tees and Hartlepool NHS Foundation Trust considers a transferee’s liability for equal pay claims made by transferred employees following a TUPE transfer. In this case, the Employment Appeal Tribunal (EAT) holds that following a TUPE transfer, claims for equal pay relating to discrimination in pay by the transferor must be made (against the transferee) within 6 months of the transfer. Claims for equal pay arising as a result of discrimination in pay by the transferee can, however, be brought within 6 months from the end of employment with the transferee. Significantly for transferees, where the transferring employees are in receipt of unequal pay at the time of the transfer, as compared to chosen pre-transfer comparators, they will remain entitled to the same pay as the comparator, even if the comparator is not transferred to the transferee.

In practice this means that after a TUPE transfer, transferees are at a continuing risk of significant claims of up to 6 years arrears of pay, even though they are ignorant of the fact that they are paying their employees less than they should because the persons with whom the employees are comparing their pay (the comparators) are not employed by the transferee. 

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In the eagerly awaited case of Coleman v Attridge Law & Steve Law, the European Court of Justice (ECJ) has ruled that the EC Equal Treatment Directive (‘the Directive’) prohibits direct discrimination and harassment by association. This ruling will have wide-reaching consequences for employers.

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In addition to the Equality Bill which we reported on last week, recent developments include secondary legislation under the Employment Bill, draft regulations relating to terms and conditions of employment during maternity leave, draft guidance for the revised new ACAS code, EU proposals on working time, and new consultations on carers and the right to request training during employment. Read on for a brief overview of these proposals, as well as links to the relevant documentation for further reading. 

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The Government has published its White Paper, Framework for a Fairer Future – The Equality Bill, setting out its proposals for a Bill to be published in the next Parliamentary session.

Many of the White Paper’s proposals fall outside the employment law field. The main issues which will affect employment law are set out below.

Click to view the White Paper

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In the case of Mayor and Burgesses of the London Borough of Lewisham v Malcolm, the House of Lords has made potentially major changes to the law on disability-related discrimination. Although the case concerns issues to do with housing, the Lords’ decision will make it more difficult for employees to bring certain DDA claims. Particularly noteworthy is that the House of Lords concluded that the well-established ‘comparator’ test for DDA purposes, laid down by the Court of Appeal in the 1999 Clark v Novacold case, is incorrect.

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In Kimberley Group Housing Ltd v Hambley and ors and Angel Services (UK) Ltd v Hambley and ors, the Employment Appeal Tribunal (EAT) has overturned an Employment Tribunal’s finding that where a service provision contract is performed by one company and is taken over by two companies, the liability for transferred employees should be apportioned between the two companies.

This is an important case, as it is the first guidance to be given by the EAT on the effect of service provision changes under TUPE.

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The Scottish Court of Session in the case of Cannop & Others –v- The Highland Council has confirmed that where the employee’s Employment Tribunal claim follows on from a grievance previously communicated, there does need to be a necessary relationship between the grievance and the complaint pleaded in the ET1 Tribunal claim form, so that the grievance underlying the ET1 is essentially the same as the grievance earlier communicated. In respect equal pay claims, the Court declined to comment on the Employment Appeal Tribunal’s decision that the relevant grievance must refer to the comparators which are subsequently cited in the ET1.

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In this edition of Human Capital we give you a brief update of some recently announced or proposed developments in employment law.

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On 2 May 2008, ACAS published a new draft Code of practice on discipline and grievances for public consultation. The Code has been revised to take into account the changes proposed to be made to workplace dispute resolution by the Employment Bill, currently before Parliament, and in particular the forthcoming abolition of the statutory dispute resolution procedures.

Consultation Paper and draft Code of Practice

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In Towergate London Market Ltd v Harris the Court of Appeal held that a claimant was entitled to a three-month time extension to bring her unfair dismissal claim, since she had reasonable grounds to believe that a dismissal procedure was ongoing upon the expiry of the original time limit. The Court reached this conclusion despite the fact that the claimant had not appealed internally against her dismissal under any formal process, but rather had raised a post-employment 'grievance' with her employer.

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What’s coming up in employment law this April?

Continue reading for an overview of what legislative changes to expect and prepare for this coming April.

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