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8 March 2006 |
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| Round-up of employment law developments: February 2006 This e-bulletin includes short summaries of recent developments. Please contact us if you would like more information. 1. TUPE 2006 The Government has finally published the new TUPE regulations, which come into force on 6 April 2006. The new regime should make it easier to predict whether TUPE applies to changes of contractor and introduces a new obligation on transferors to provide transferees with information about employee liabilities, which will be particularly helpful in a change of contractor situation. However, post-transfer harmonisation of terms will not become any easier and a new hybrid form of dismissal could catch both transferors and transferees out. For more detail on the changes see our briefing. Differences in skills and experience or extra duties will not necessarily prevent a part-time worker claiming the same pay and benefits as a full-time worker. Part-timers can compare themselves with full-timers on the "same type of contract" (eg, permanent employment) who perform the "same or broadly similar" work having regard to similarity of qualification, skills and experience. The House of Lords has ruled that a tribunal must assess the extent to which any differences of skill or experience actually affect the work that the two groups perform. If a large component of the work is exactly the same, the question is whether any differences are of such importance as to prevent the work being regarded overall as "broadly similar". Full-timers will almost inevitably have extra activities and this should not automatically prevent the work being regarded as "broadly similar", particularly if the work which both groups perform is the core activity of the enterprise. The part-time firefighters' claim was sent back to the tribunal to reconsider. (Matthews v Kent & Medway Fire Towns and Fire Authority, HL). Where there is a suggestion that the reason for differences between the work of a part-timer and that of a full-timer may itself be discriminatory (eg, where the part-timer is not allowed to perform certain skills-based tasks despite having the same skills and experience as the full-timer), less significance should be attached to those differences. (Birch v Leeds Metropolitan University, ET) Employers with part-time employees should check for comparable full-timers and audit the pay and benefits provided. The House of Lords has also upheld the Court of Appeal's view that, following a TUPE transfer, the 6 month time limit for part-timers bringing equal pay claims in relation to occupational pensions against a transferor runs from the transfer and not the end of the employment with the transferee. (Powerhouse Retails v Burroughs, HL)
A solicitor's without prejudice letter before action can qualify as a statutory grievance, even where the letter threatens immediate tribunal proceedings if financial compensation is not paid within 14 days. There is no requirement for a grievance to be written in a conciliatory tone or indicate willingness to seek resolution through a grievance procedure. Employers should treat as a grievance any written document (whether an email, letter or other document) from an employee (or their representative) containing a complaint and should promptly offer to hold a meeting. Training for line managers is key to avoid grievances slipping through the net and leading to a 10-50% increase in tribunal compensation. (Arnold Clark Automobiles v Stewart, EAT) An employee normally has to make a grievance about a discriminatory act no later than four months after the act (one month after the normal three month time limit), otherwise his tribunal claim will not be admitted. However, employers cannot assume they are in the clear simply because they have heard nothing for four months. The normal time limit for discrimination claims can be extended where "just and equitable" and the EAT has ruled that a grievance can be lodged up to one month after this extended time limit. The same should apply to constructive unfair dismissal claims where it is not reasonably practicable to lodge the claim within three months. (Spillett v BUPA, EAT)
An employee who discloses information which he reasonably believes demonstrates wrongdoing is protected from detriment and dismissal (which will be automatically unfair). However, the protection does not extend to action taken by the employee to show that his reasonable belief is true. An employee who told his employer that the computer system was insecure was not able to claim whistleblowing protection when he was given a written warning for hacking into the system to demonstrate its vulnerability. (Bolton School v Evans, EAT) Employees are also only protected if they make the disclosure "in good faith". The EAT has ruled that it is for the employer to show bad faith. (Bachnak v Emerging Markets Partnership (no. 2), EAT)
Where an employee's allocation of work reduced following her gender reassignment (leading to her selection for redundancy due to low billable hours), this was sufficient to shift the burden of proof to the employer to explain the work reduction. The Court of Appeal ruled that it was not enough for the employer to provide general evidence of the employee's relative lack of competence and suitability combined with market deterioration. The employer had to provide evidence of all the work projects during the relevant period and the reasons why the employee was not allocated to each. This highlights the need for employers to keep good records of the reasons for such business decisions. (EB v BA, CA) Employers should treat like cases alike when deciding disciplinary sanctions, but can rely on distinguishing features to justify departing from past practice where this is within the band of reasonable responses. It will be reasonable to regard factors such as length of service and whether the employee admitted the misconduct as distinguishing features. (Enterprise Liverpool plc v Bauress, EAT) An employee who was promoted to a new job during maternity leave was entitled to start accruing seniority in that job from the date of appointment, not from the end of her leave. The ECJ thought that it was immaterial whether the new job was with the same employer (as in this case) or a new employer. (Sarkatzis Herrero v Instituto Madrileno de la Salud, ECJ) This decision is in the same vein as an earlier ECJ ruling that any statutory maternity leave aimed at aiding the mother's physical recovery and allowing her to care for her child must count as service for service-related pay rises and benefits (Land Brandenburg v Sass, ECJ). Commentators have suggested that UK legislation may need to be amended to protect such rights during additional maternity leave. Casual employees who accept employment under a series of contracts with breaks in between may nevertheless be able to show one longer period of continuous employment (entitling them to unfair dismissal rights). Although they will not be able to establish an "umbrella" contract where neither party is obliged to offer or accept a fresh contract, they may be able to show that the breaks are caused by "temporary cessations of work", in which case continuity of service will not be broken. (Cornwall County Council v Prater, CA) An employer can fend off a request to set up an information and consultation mechanism under the Information and Consultation of Employees Regulations 2004 if it has a "pre-existing agreement" with enough employee support. An agreement will only qualify if it contains sufficient detail on how information and consultation is to take place; simply stating that a body will be "a forum for discussion and/or consultation" on matters not covered by national bargaining was insufficient. (Stewart v Moray Council, CAC) Employers who take on "modern apprentices" may face claims for damages far greater than from ordinary employees if they terminate the contracts early. Damages could include lost wages for the entire remainder of the contract and compensation for loss of training and prospects. The grounds for dismissal are also more limited than for an employee. The fact that some training is provided by a third party rather than the employer does not prevent the relationship being an apprenticeship. (Flett v Matheson, CA) In a ministerial statement to Parliament the Government has confirmed that it will keep the existing three age bands for calculating statutory redundancy pay when age discrimination legislation comes into effect in October 2006. It has concluded that, as older workers take longer to find replacement jobs, the age bands are justified under EU law to promote employment policy. The lower and upper age limits of 18 and 65 and the taper at the age of 64 will be removed. The Government did not comment on whether the same applies to unfair dismissal basic awards (currently calculated in the same way as statutory redundancy pay). It also failed to confirm whether it will amend the draft age regulations to allow employers to use the same age bands for enhanced contractual redundancy pay. There are press reports that the final version of the regulations may be published this week.
The Equality Act 2006 received Royal Assent on 16 February 2006. It will establish a Commission for Equality and Human Rights to replace the existing equality commissions in 2007 (although the Commission for Racial Equality will only be replaced in 2009). The Act also amends religion/belief discrimination law to make clear that absence of a particular religion or belief is protected, and introduces a duty on public bodies to promote gender equality, expected to come into force in April 2007. The EOC is consulting until 15 May 2006 on a code of practice designed to help public bodies meet their obligations under the new gender equality duty. The Women and Work Commission has published its report, Shaping a fairer future, setting out 40 recommendations to tackle the gender pay gap. The Commission failed to reach agreement on any proposed legislative changes, such as making equal pay reviews compulsory or introducing statutory equality representatives – these are simply recommended as best practice. A voluntary 'light-touch' equality check is to be designed to help employers identify problem areas. The report suggests that public sector procuring authorities should require best practice from contractors. It also recommends that current guidance on the equal pay questionnaire is amended to clarify that data protection concerns do not justify an employer refusing to provide pay information without a tribunal order. Proposals such as allowing class actions or hypothetical comparators in equal pay claims were left to be considered more fully by the Discrimination Law Review (due to publish a Green Paper in late Spring 2006). The report recommends that the Commission reconvene in a year to receive a report on progress. Tessa Jowell will chair a Cabinet sub-committee tasked with producing an action plan to implement the recommendations, while the Trade and Industry Secretary will work with employers to develop programmes to remove barriers.
The DTI has published a consultation document seeking views on its proposals to give fathers up to 26 weeks' additional paternity leave and pay (to be taken when the child is between 20 and 52 weeks old) if the mother returns to work before using up her statutory entitlement. The DTI intends to implement this change at the same time as extending paid maternity leave to 12 months, "by the end of this Parliament". Views are sought on the eligibility criteria including length of service, the restrictions on when leave can be taken, the rights to return and terms and conditions during leave, and the administration of the scheme. Consultation ends on 31 May 2006. The Home Office has published details of its proposed new points-based entry clearance system for non-EU workers, which represents a radical change from the current system for UK employers (where the employer applies in the UK for a work permit for an individual). There will be a five tier system covering workers, entrepreneurs and students and applicants for initial entry clearance to the UK or further leave to remain will receive points based on factors such as skills, experience, age and also the level of need in any given sector. Only highly skilled workers will not require a specific job offer. For other workers employers will be asked to 'sponsor' an applicant and confirm he has the ability to do the particular job. Sponsors will need to be approved and graded by the Home Office; workers joining employers with a good compliance record will receive extra points. Sponsor employers will also have responsibilities to inform the Home Office if the applicant fails to turn up for their first day of work, is absent for any prolonged time, or if their employment is being terminated. It will be harder for low skilled and unskilled workers to obtain leave and they will not be able to apply for permanent residence at a later stage. The new system will be introduced in phases, tier by tier. The Safeguarding Vulnerable Groups Bill will introduce a new vetting system for people working with children and vulnerable adults from 2007 and will enable employers to check online whether a prospective employee is barred. Employers face fines of up to £5,000 or 5 years' imprisonment for failure to properly vet employees; employees and directors can also be guilty of an offence.
If you are unable to view this email in its original HTML format please use the following link in your web browser: http://www.herbertsmith.com/Publications/emp_Feb06 The content of this article does not constitute legal advice and should not be relied on as such. Specific advice should be sought about your specific circumstances. Herbert Smith LLP, Gleiss Lutz and Stibbe are three independent firms that have a formal alliance. © Herbert Smith LLP 2006
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