NEWSLETTER November 2007
Welcome to another klc newsletter. The first item should be that we have moved offices. Our new address is Milford Suite, Mill Pool House, Mill Lane, Godalming, Surrey GU7 1EY. The new contact numbers are 01483 415276 to call us or 01483 428755 to send a fax. Email addresses remain unchanged.
As usual the newsletter contains the usual mix of news, new legislation and case law reports. With the BERR (formerly DTI) issuing new legislation in April and October each year there are a number of reminders for things that changed on the 1 October 2007.
And finally, we hope that it is not too early for us all here at KLC to wish you all a merry Christmas and a prosperous new year.
SMP to be extended to 52 weeks in 2010
Following the extension of statutory maternity pay (SMP) from 26 weeks to 39 weeks, in April this year, the Government had promised that they would further extend SMP to 52 weeks by the end of the current Parliament. The Government has now confirmed that the extension to SMP will take effect from April 2010. The introduction of additional paternity leave and pay is conditional upon SMP being payable for 52 weeks. Therefore employers now know employees will be able to make requests to take the unused portion of their partners’ additional maternity/adoption leave and pay from April 2010. Corporate killing law
The Corporate Manslaughter and Corporate Homicide Act has now received Royal Assent. The Act will come into force on 6 April 2008. No individual will be held liable for workplace deaths – sanctions only apply against organisations, the penalty being an unlimited fine. Prosecutions against large organisations have in the past failed because it was not possible to identify a ‘single controlling mind’ in relation to failures that led to deaths. Click here to read the Act. The Government has published a guide to the new legislation. Click here to read Understanding the Corporate Manslaughter and Corporate Homicide Act 2007.
Religious hatred unlawful
The Racial and Religious Hatred Act 2006 came into force on 1 October 2007. The legislation is designed to protect groups who may be subjected to words or behaviour that is intended to stir up religious hatred based on their religious belief (such as Muslims) or lack of religious belief (atheist). The Act although not designed for employment could have an impact for employers if managers or directors in organisations are found to have allowed some of their employees to abuse other employees. Employers may want to remind all employees of their equal opportunity policies and the serious consequences of breaching it. Click here to read the Act.
State pension age to increase to 68 by 2046
The Pensions Act 2007 has been published. The Act contains a number of measures and of most interest will be the provision that will see the state pension age increase to 68 for men and women. The increases will be phased starting in 2024 and will reach 68 in 2046. The Government is committed to reviewing the retirement age under age discrimination legislation in 2011 with two possibilities. One option is that the retirement age will increase to 70 and the other, more likely outcome, is that there will be no mandatory retirement age. Click here to read the Act.
NMW increased
The National Minimum Wage Regulations 1999 (Amendment) Regulations 2007 have been published and came into force on 1 October 2007. The Regulations contain the increases in the hourly rates for the NMW, as follows:
The Regulations also include the amendment to the accommodation offset which rose to £4.30 per day (£4.15). Click here to read the Regulations. Click here to visit the BERR website for NMW guidance.
Minimum entitlement to annual leave increases
The minimum entitlement to paid annual leave under the Working Time Regulations increased on 1 October. The minimum entitlement is now 4.8 weeks (24 days), which will be pro rata for part-time workers. The entitlement will increase to 5.6 weeks (28 days) in April 2009. Click here to visit the BERR website for holiday entitlement guidance. Click here to read the new Acas leaflet that reflects the legislative change. Click here to read the new Regulations.
Identity cards for foreign nationals
The UK Borders Act 2007 received Royal Assent on 30 October 2007. The legislation will allow for the introduction of compulsory identity cards, during 2008, for all foreign nationals. This should enable employers to more accurately check that individuals have the legal right to work in the UK. Click here to read the Act. KLC will of course remind clients when the new identity cards are actually introduced.
A few more people given right to apply for flexible working
The number of employees who have the right to request flexible working has increased slightly, since 1 October, to include those who have adopted children from overseas or a relative. Previously only adopters who had used a UK adoption agency had the right to request flexible working. In addition foster carers and those who hold a residence order will also be able to make requests. Click here to visit the BERR website for guidance on flexible working. Click here to read The Flexible Working (Eligibility, Complaints and Remedies) (Amendment) (No. 2) Regulations 2007.
EHRC takes over from EOC, CRE, DRC
Whilst the Equality Act has been in force for sometime now the Equality and Human Rights Commission (EHRC) became operational on 1 October. The Commission takes over the responsibilities of the Equal Opportunities Commission, the Commission for Racial Equality and the Disability Rights Commission. In addition the EHRC will have responsibility for the more recent areas of unlawful discrimination, sexual orientation, religion or belief and age. Whilst Acas issued guidance and the other Commissions provided support where there was an overlap these three areas did not have Commissions in place to promote equality or provide advice and guidance. It will also be the first time that a body has had a responsibility to promote human rights. It was originally proposed that the new Commission would be called the Commission for Equality and Human Rights. Click here to visit the EHRC website.
NMW to be regional?
Gordon Brown has been linked with proposals that suggest the minimum wage should be adjusted regionally rather than nationally. Various reports have suggested that the single wage rate does not reflect the real cost of living across the country. The proposed changes would see the rate for London and the South East increase to £6.90 per hour whilst those in the North East, Northern Ireland and Wales would see rates fall to £4.78, £4.95 and £4.84 per hour respectively. The NMW is currently £5.52 since 1 October 2007. A Labour spokesman has moved to distance the Prime Minister from the reports suggesting that any planning is at a preliminary stage. Unions and MPs in affected areas are likely to reject the suggestion and consequently the proposal may see London and the South East receiving an increase whilst other areas are maintained at their current level, rather than any regions actually facing any reduction. Mayor of London, Ken Livingstone, has advocated a London minimum wage for many years and since April 2007 has recommended a rate of £7.20 per hour.
Tribunal claims increase again
The Employment Tribunal Service (ETS) has published Employment Tribunal and Employment Appeal Tribunal Statistics for 2006/07. The report highlights the number of claims under various jurisdictions and the average amount of awards. The key findings are as follows:
Click here to read the full statistics.
The ETS is now part of the Tribunals Service (TS) which itself is part of the Ministry of Justice. The TS produces an annual report, which concentrates on whether the relevant tribunal has met its performance and budgetary targets. This is different in format from the old ETS report that data now complied in the above statistics. Click here to read the TS Annual Report and Accounts 2006/07.
ACAS annual report
The ACAS Annual Report 2006 – 2007 had to be reissued due to an error in numbers which had suggested a significant drop in tribunal claims. Claims for 2006/07 were 105,177 not as originally reported 84,039 – the figure for 2005/06 was 109,712. Claims for unfair dismissal make up the majority of disputes 44,397 and equal pay claims have risen significantly to 27,497 (14,147). Click here to read the revised ACAS report.
Minor amendment to Data Protection Act
The Data Protection Act 1998 came into full force on 24 October 2007 with the last transitional relief period expiring at midnight on 23 October. The changes apply solely to manual records that were created prior to 24 October 1998 when the Act came into force and have not been ‘processed’ subsequently, i.e. dormant files. The change means that employees could ask for access to these files and require the employee to amend inaccurate information or delete excessive records. Employee files created prior to 1998 but that have continued to be current and used from time to time would not have been exempted anyway. This is probably merely a technical change that will have little impact for the majority of employers. Click here to visit the Information Commissioners website for guidance for organisations.
Case reports
Age discrimination can be justified – mandatory retirement age
Palacios de la Villa v Cortefiel Servicios SA- the European Court of Justice (ECJ) have handed down a crucial decision in a case concerning mandatory retirement ages that will determine the outcome of Heyday's challenge in the ECJ over the Government's setting of a mandatory retirement age of 65. The ECJ have held that the EU Equal Treatment Framework Directive does not prevent member states from setting mandatory retirement ages. Although holding that a general mandatory retirement age did fall within the scope of what the Directive prohibited, the ECJ considered that a mandatory retirement age was a proportionate means of promoting employment opportunities and reducing unemployment, and therefore justified.
Reasonable adjustment for promotion board test
Paterson v Commissioner of Police of the Metropolis – the Employment Appeal Tribunal (EAT) has held that when assessing whether or not someone is disabled the consideration should not be a comparison with what the average person can do but what the individual’s potential would be without the disadvantage. P joined the police in 1983 and by 1999 had been promoted to chief inspector. In 2004 P discovered that he was dyslexic and an educational psychologist recommend that he be given an additional 25% of time to complete assessments that form part of the testing structure for police promotion. P argued that the additional time was inadequate and complained of disability discrimination. The Employment Tribunal (ET) held that when compared with the average population norm P was not disabled. On appeal the EAT held that he was disabled as the ET had used the wrong test.
Note: KLC would recommend all clients work proactively to reasonably assist both disabled candidates to enter employment and to retain those employees who become disabled during their employment.
Redundancy: when to start consultation
UK Coal Mining Ltd v (1) National Union of Mineworkers and (2) The British Association of Colliery Management - the Employment Appeal Tribunal (EAT) has handed down a landmark decision regarding an employer’s obligations to collectively consult over proposed redundancies. This decision also represents a major step towards European consultation practices where worker representatives are involved in consultation about the reasons for redundancies and closures. The EAT has stated that employers have a duty to consult over the reason for making redundancies as well as the fact of the redundancies themselves. In this case, the EAT set out that where closure and dismissals are inextricably interlinked the duty to consult over the reasons for the closure arises. This decision is particularly significant because until now UK courts had consistently held that there was no obligation for an employer to consult over the reason for the redundancies, even though this limited the opportunity for meaningful consultation about ways of avoiding the redundancies. In practical terms this means that an employer who would previously have presented the decision that a site be closed as a fait accompli and then gone on to consult about the potential dismissals arising from this closure, will now have to commence consultation about the potential closure itself since at the stage he is proposing to close the site, he is proposing redundancies. In their decision the EAT expressed the view that in the context of a closure, the cases where an employer planned a closure but believed redundancies would nonetheless be avoided would be exceptional. Voluntary redundancy is dismissal: collective consultation
Optare Group Ltd v Transport and General Workers Union – the EAT has upheld the decision of the ET that where an employer makes 17 compulsory redundancies and accepts 3 voluntary redundancies that they are obliged to comply with the requirement to collectively consult. OG Ltd announced that they would be making no more than 19 redundancies and as agreed locally with the union had a quick consultation process. At the same time OG Ltd asked if there were any volunteers for redundancy. The selection process identified 17 employees for compulsory redundancy and OG Ltd accepted all 3 volunteers. At this point the TGWU complained that OG Ltd had failed to consult in compliance with the Trade Union and Labour Relations Consolidation Act 1992. OG Ltd argued that the three volunteers did not count. The ET and the EAT held that the volunteers only put themselves forward because OG Ltd were proposing to make redundancies and therefore cannot be held to be ‘mutual agreement’ to terminate and would be considered dismissals therefore triggering the requirement to collectively consult.
Note: KLC has previously reported on decisions indicating that tribunals may award the maximum penalty – 90 days pay per affected employee – for any failure to consult.
When does probation finish?
One of the questions we are often asked at klc is about probationary periods. The case below underlines the problems employers face when they do not act in accordance with a contractual probationary clause.
Przybylska v Modus Telecom Ltd – the Employment Appeal Tribunal (EAT) has held that where a probationary period expires it cannot be said to be continuing simply because the employee would be expecting a review meeting. P was employed on a contract containing a three-month probation clause, which included the express right to extend the period. The clause included that a review would be conducted to determine success or failure in relation to the employee’s performance. MD Ltd argued that they could not conduct the review because P was absent on holiday and her three-month probation period expired on a bank holiday (2 January 2006). P failed her assessment, which eventually took place on 19 January, and was dismissed at the end of January and paid one week’s notice, as provided for in the probation clause. P complained that she should have been paid three months’ notice as her probationary period had expired. The EAT held that a term could not be implied to allow MD Ltd to argue that the probationary period was extended until the review was completed as they could have exercised the express clause allowing for an extension of the probation period or alternatively conducted the review prior to P’s prearranged Christmas and New Year leave. As the probation period had been completed the revised notice period of three months applied.
When defending discrimination claims employers sometimes refer to the behaviour of the employee, suggesting that because of that behaviour discrimination could not have occurred.
Racial banter no defence for managers remark
Queenscourt Ltd v Nyateka – the EAT has held that an employee can still pursue a claim of race discrimination even if they themselves engage in racial banter with colleagues. N was a team leader in a Kentucky Fried Chicken restaurant. Black staff members would refer to each other as ‘nigger’ or ‘Paki’ and female staff referred to each other as ‘bitch’. The white restaurant manager did not participate in this banter. The manager failed to invite N, of Zimbabwean origin, to a management meeting. When challenged by N he told her, “maybe I am being racist to a black woman”. An Employment Tribunal (ET) upheld N’s complaint of race discrimination. Q Ltd appealed arguing that in an environment where staff addressed each other as ‘nigger’ and ‘Paki’, what the white manager had said could not be considered to be racial harassment. The EAT rejected the argument and upheld the decision of the ET that what had been said was discriminatory.
Disability: timescale includes up to date of the hearing
Ms E Dougall v Richmond Adult Community College – the EAT has held that the test for whether or not someone is considered disabled includes time after the disputed incident up to the date of the hearing. D was offered employment by RACC subject to receipt of satisfactory medical clearance. RACC withdrew the offer of employment as D had had a mental health episode resulting in her being sectioned under the Mental Health Act. RACC had argued that D was not disabled because her condition had not lasted for 12-months and there was no indication that it would recur. Following the withdrawal of the offer it was necessary for D to be sectioned again. The EAT held that the tribunal should not try and speculate on what may happen when they in fact know what has happened. As the requirement to be sectioned again had occurred between the withdrawal of the offer and the hearing the ET was aware that the condition had recurred and additionally had lasted in excess of 12 months.
Note: D was not considered disabled because she had been sectioned but because having been sectioned due to the severity of her condition it was not possible for her to pursue normal day-to-day activities.
Statutory dismissal procedures, again – appeal
Aptuit (Edinburgh) Ltd v Mrs I Kennedy – the EAT has provided further guidance on the application of the statutory dismissal procedures. K was dismissed but not notified in writing of her right of appeal. The ET decided that the failure to confirm the right of appeal in writing was a breach of the statutory dismissal procedures and that K’s dismissal was automatically unfair and increased her compensation by 40% due to A’s breach. A appealed the decision to the EAT on the grounds that they had told K that she could appeal. The EAT held that it was sufficient that A had verbally communicated the right of appeal to K. A further appealed the decision to increase the compensation awarded to K. The EAT held that the ET was not entitled to take into account the size of the employer, the general lack of consultation or that A’s treatment of K was ‘shoddy’. The EAT ruled that ETs should only have regard to the failure of the employer to follow the statutory procedures.
Note: KLC would recommend that all clients confirm the right of appeal in writing rather than rely on verbal notification.
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