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31 March 2006 |
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| Round-up of employment law developments: March 2006 This e-bulletin includes short summaries of recent developments. Please contact us if you would like more information. 1. Age discrimination The final version of the age discrimination regulations was published on 9 March and approved by Parliament on 30 March. The regulations come into force on 1 October 2006. Changes to the last draft include simplification of the procedure for considering a request to continue working past retirement age and of the fair retirement provisions. It is now easier for employers to dismiss fairly for retirement provided they follow the correct procedure. There are also special arrangements for retirements due in the six months between 1 October 2006 and 31 March 2007. The exemption for service-related benefits has been simplified and a specific exemption for enhanced redundancy schemes included, although this is quite prescriptive so some schemes may not fall within it. We have produced an updated briefing, available here, which provides more detail on the regulations, the changes from the last draft and the steps you should be taking now to prepare. Acas is expected to publish guidance on the regulations towards the end of April and in the meantime has published on its website an age checklist for employers. Age Positive Week (8 to 12 May) will include events and activities to raise awareness of ageism – details are available here. It has been suggested by some commentators that the ECJ has in effect already made age discrimination illegal. In Mangold v Helm the ECJ ruled that national courts must set aside any provision of national law which conflicts with the EU Directive prohibiting age discrimination agreed in 2000, even before the period for implementation of the Directive has expired (later this year). Some take the view that the decision goes further than disapplying conflicting law and requires courts to actively protect employees from age discrimination, although this is probably going too far. The House of Lords may give its view on the issue when it gives its judgment in the case of Rutherford (concerning the legality of the current upper age limit on unfair dismissal) in a couple of months.
An agency worker can be an implied employee of an end-user client. The Court of Appeal has ruled that tribunals should always consider this as a possibility and in some cases will find that it applies. However, in the Court's opinion, there will also be many cases where the worker will not be deemed the end-user's employee, but rather an independent contractor or the agency's employee. In this case it was accepted that the individual had previously been an employee of the end-user. The imposition of an agency through which the services were provided and payment made did not change that relationship, but merely changed the payment arrangements. The facts in this case were unusual and the decision does not mean that all agency workers will be held to be employees of the end-user. The Court confirmed that it must be necessary to imply an employment contract to give business reality to the relationship. (Cable & Wireless v Muscat, CA) End-users wishing to minimise the risks could limit their use of agency workers to short-term assignments and/or seek an indemnity from the agency to cover any employment claims they face.
The ECJ has ruled that it is unlawful for employers to roll up employees' holiday pay into weekly wages while at work, rather than providing pay when holiday is taken. However, provided the holiday element is added on top of normal wages and is transparent, any amounts paid with wages before the holiday can be set off against the liability to pay during the holiday. The Court did not make clear whether holiday pay paid with wages after the holiday can be set off. The Court also commented that Member States should ensure the practice of rolled-up pay is stopped, so the Government may now be forced to amend the law to prohibit it. Until then, employers using such arrangements need to weigh the risk of claims against the administrative cost of compliance. (Robinson-Steele v PD Retail Services, ECJ) Employees obliged to stay at or close to a particular location while on–call are working for the purposes of the Working Time Regulations and National Minimum Wage Regulations, even where that location is employer-provided accommodation and they are asleep or resting. A resident care home manager was entitled to be paid the minimum wage for the entire on-call period and to take rest breaks from being on-call (ie, time guaranteed not to be interrupted by a call to perform some task). The employer in this case did not seek to rely on the provision for employees performing jobs that require continuity of service, who need not be given the usual rest breaks if they are given an equivalent period of compensatory rest later. (MacCartney v Oversely House Management, EAT) No consensus has yet been reached on EU Commission proposals to exclude inactive time from the definition of 'working time' in the Working Time Directive.
According to the ECJ Advocate-General, the DTI's guidance on minimum daily and weekly rest breaks under the Working Time Regulations is unlawful in stating that employers must ensure such breaks can be taken by employees but not that they are in fact taken. If the ECJ agrees, employers may need to start taking a more proactive approach to ensure employees take their breaks. (Commission v United Kingdom, ECJ)
A grievance does not need to be formulated in any unduly legalistic or technical manner, but must give enough information so that the employer can be expected to appreciate that the relevant grievance is being raised. An asthmatic employee's written complaint about working conditions damaging his general health constituted a grievance about constructive dismissal but not about disability discrimination, as the employee had not identified any failures to make adjustments or alleged that he was treated less favourably than others. The disability discrimination claim was therefore not admitted. (Canary Wharf v Edebi, EAT) From 1 October 2006 the national minimum wage is to rise to £5.35 an hour for adults, £4.45 an hour for workers aged 18- 21 and £3.30 an hour for workers aged 16-17. The offset for employer-provided accommodation will increase to £4.15 per day. The Government has also announced that salary sacrifice schemes, including those for childcare vouchers, will not count towards the minimum wage. This follows recommendations from the Low Pay Commission, which has confirmed that in future it will not be recommending above-inflationary increases as a matter of course. Further information is available here.
The statutory guidance on the definition of disability has been revised to reflect recent changes in the law. The new version will come into force on 1 May 2006 and is available here. The Home Office has published changes to immigration rules with effect from 3 April 2006. These will affect applicants for leave to remain and indefinite leave to remain (or settlement) in the UK. Details of the changes are available here. The DTI is consulting on a proposed minor amendment to collective redundancy law, to bring UK legislation in line with the ECJ decision in Junk v Kühnel (see our e-bulletin Dec04/Jan05). Employers will be obliged to notify the Secretary of State before any notice of redundancy has been issued and at least 30 (or 90) days before the first dismissal takes effect. Consultation closes on 9 June 2006 and it is intended to bring the change into force in either October 2006 or April 2007. The consultation paper is available here.
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_March06 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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