Is your business ready for the impact of the strikes?

We have all heard about the imminent strikes by teachers and civil servants – but how many of us have considered how it might affect our own businesses? 

The first of the joint strikes has been set for the 30 June 2011 with others expected to follow over the course of the summer. The direct impact of the strikes on the public sector is undoubtedly clear but private sector businesses are also going to suffer, indirectly. Widespread school closures, caused by the teachers’ strike, will leave many parent employees with no choice but to stay at home and employers facing unavoidable staff shortages. 

With the Government failing to show any suggestion of addressing the issues at the crux of the strikes, local businesses will have no choice but to prepare. 

So, what time off do employers have to allow for childcare during the strike? 

Employers need to be aware of an employee’s right to time off for dependants. The right is designed to allow employees time off to deal with unplanned short-term events in relation to their dependants, such as school closures, and is unpaid.  If your workforce is dominated by parents or carers, it may be worth discussing with them now whether or not they foresee a problem with childcare. Some employees may prefer to use their annual holiday entitlement so that the time off is paid.  

However, employers must be aware that even if they draw their employee’s attention to the possibility of school closures, giving them time to make alternative childcare arrangements, they will still be entitled to exercise their right to time off if they are unsuccessful. Whilst the right to time off for dependants was initially envisaged to deal with ‘emergency’ scenarios, recent case law has confirmed that the provisions still apply to events that are known in advance. As the leave is unpaid, it is unlikely that employees will abuse the exercise of this right and so employers should be careful in refusing such requests and seek advice if necessary. 

As an employer, what else can I do to prepare? 

The key is to minimalise disruption to your business whilst being fair and reasonable to employees, who may be experiencing genuine difficulties with childcare. It is sensible to ascertain in advance who may have such difficulties and offer them a choice of taking paid holiday or unpaid time off for dependants.  This may mean relaxing your holiday procedures. Do, however, make clear to your staff that such increased flexibility is an isolated amendment to deal with the difficulties caused by the strike action. 

It is advisable to consider now whether your business is going to suffer from the anticipated levels of absence. It may be worth engaging temporary staff or suggesting a strike day flexible working arrangement for parent employees, such as working from home.

Abolition of the default retirement age

Just when you thought you were getting to grips with Employment Law, the Coalition Government commits to abolishing the default retirement age!

As of 6 April 2011, businesses will no longer be able to require an employee to retire simply because they have reached the age of 65.  This will, undoubtedly, be one of the biggest changes of 2011 and with the number of tribunal claims rising by 56% last year, it is no surprise that almost 50% of employers are already worried about a surge of age-related claims!  

Some are calling the abolition a ‘victory against ageism’ which will enable the retention of skill and experience, whilst reducing administrative burdens. Others believe the change to be a ‘disaster waiting to happen’, fearing it will create a complicated, less dignified system and a minefield of uncertainty for employers. The UK’s leading employers’ group, CBI, has urged the Government to delay their plans in order to allow time to simplify the law on performance management and unfair dismissal before scrapping the default retirement age.

However, the Coalition Government believe the change will encourage people to work for longer, against a background of an ageing population, benefitting the economy and easing strain on public finances. Commitment to the change was confirmed in October and it is certainly a case of ‘when’ rather than ‘if’ the abolition will take effect. At present, the phasing out remains scheduled to commence on the 6 April 2011.

So, if you have employees that turn 65 before 1 October 2011 that you wish to retire, you must give them notice under the statutory retirement process before 5 April 2011! After this, you will not be able to rely on the default retirement age and should start planning for the change!

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

12 Updates of Christmas

Well, I'm finally feeling festive! Seasonal greetings to all! 2010 has been an indisputably busy year for Employment Law and with the Coalition Government remaining focused on achieving a more flexible UK workforce and reforming the tribunal system, 2011 looks set to be rife with developments. Here are my 12 bitesize updates, one for each of the 12 days of Christmas:

1. Government urged to delay planned changes to the retirement age for a year!  From April 2011, employers will no longer be allowed to dismiss staff just because they have reached 65. However, the UK’s leading employers’ group, CBI, have warned that the huge uncertainty caused by this change will lead to a surge in unfair dismissal claims. The law, they say, must be simplified before the default retirement age is scrapped!
2. Dismissal for unacceptable manifestation of spiritualist beliefs is not discriminatory! For example, the EAT held that dismissal for the distribution of spiritualist posters and CD-ROMs at work was insufficient to be directly discriminatory. The dismissal was for the unacceptable manifestation of beliefs in the workplace, not for holding those protected beliefs. [Power v Greater Manchester Police Authority UKEAT/0087/10]
3. The unfair dismissal compensation limit will be raised in February 2011! The cap on unfair dismissal compensation will be raised in February to £68,400, allowing Tribunals to award a higher maximum than the current £65,300 limit! The week pay cap of £380.00 is also being raised to £400.00.
4. Pension disputes can be compromised! Whilst the Pensions Act 1995 renders any agreement to surrender a pension entitlement or right to a future pension ‘unenforceable’, the Court of Appeal has held that if acting in good faith to settle a genuine dispute over whether such rights exist, a compromise agreement should be enforceable! [IMG (UK) Limited v Peter German and HR Trustees Limited [2010]]
5. 20 weeks of maternity leave at full pay?! A large majority of EU Employment Council ministers have rejected the European Parliament’s proposal for 20 weeks of maternity leave at full pay. The Council hopes to agree its position in 2011.
6. Reinstating an employee that has resigned before diagnosis might be a ‘reasonable adjustment’! Failing to reinstate a police officer who had resigned from the force whilst depressed was a breach of the duty to make reasonable adjustments under the Disability Discrimination Act 1995, the EAT has held! [Hinsley v Chief Constable of West Mercia Constabulary UKEAT/0200/10]
7. Positive action in recruitment and promotion soon to be allowed! On 2 December, the Government published its report ‘Equality Strategy – Building a Fairer Britain’ confirming that the sections of the Equality Act 2010 allowing positive action in recruitment and promotion will be implemented.
8. A ‘no detriment pension guarantee’ will pass to a new employer alongside a TUPE transfer! Although a pension guarantee is excluded from transferring under TUPE, such pension rights and liabilities could still transfer under contract law in some circumstances, even over 20 years later! [Whitney v Monster Worldwide Ltd [2010] EWCA Civ 1312]
9. An Individual cannot bring a discrimination claim based on an advertisement for a job he has no interest in taking! Nevertheless, a genuine deterred applicant will still have a claim, and in such a case the tribunal will have the difficult task of assessing whether or not that was the case.
10. Asking agency workers to apply to a line manager before taking annual leave is not sufficient to imply a contract of employment! Such practice is simply not sufficient to justify the implication of a contract [Tilson v Alstom Transport [2010] EWCA Civ 1308]
11. Whistle blowing detriment claim will succeed unless disclosure played ‘no part whatsoever’ in reasons for treatment! An employer will not be liable if it can show that the detriment was "in no sense whatsoever" on the grounds of the protected disclosure. [Fecitt and others v NHS Manchester UKEAT/0150/10.]
12. Voluntary Schemes for gender pay gap reporting in the private sector! Employers with more than 250 employees will not have to publish gender pay data, as previously proposed under the Equality Act 2010. Instead, they will be asked to do so on a voluntary basis from April 2011.

 

Wishing you all a Merry Christmas and a Happy New Year! 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Compromising pension disputes

Driven by the public policy of encouraging settlement of disputes, the Court of Appeal has handed down its long awaited judgment in IMG (UK) Limited v Peter German and HR Trustees Limited 2010, confirming that section 91 of the Pensions Act 1995 is not a complete bar to compromising disputes over pension rights. 

Section 91 provides that any agreement to surrender a pension entitlement or right to a future pension under an occupational pension scheme is unenforceable. However, the Court of Appeal has held that the section is limited in scope to rights and entitlements to future benefits and does not extend to disputes over whether those rights actually exist!

This seems like a logical decision and will allow many trustees and employers to breathe a sigh of relief. If compromise was not allowed then, if certainty were to be achieved, every case would have to be taken to the Court or Ombudsman for a ruling. 

The Court did, however, go out of its way to make clear that the ruling only applies to compromises of genuine disputes in good faith and does not open the ‘back door’ to surrender agreements. For this reason, there are still likely to be instances where such agreements are not effective, for example, where there is no genuine dispute! 

IMG (UK) Limited v Peter German and HR Trustees Limited 2010

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Do you trust your employees?

I hope so because the Court of Appeal has recently reaffirmed that an employer is vicariously liable for the theft of a third party’s goods by one of its employees!

‘What?!’ I hear you cry - How can employers be expected to control dishonest actions of employees when, if they had any knowledge that such employees were dishonest, they wouldn’t employ them in the first place! Well, if they are doing it while they are at work….you are at risk.

In this particular case, the theft was from a container to which access was restricted to ‘authorised employees’ only and as such was held to have been done ‘in the course of employment’.

The Court of Appeal rejected the employers argument that the employment had merely provided him with the opportunity to steal and that the act of theft itself was outside the course of employment.

The Court said that it was appropriate to consider whether the act of theft could fairly be regarded as ‘a risk reasonably incidental to the purpose for which the employee was employed’. Therefore, there has to be a sufficiently close connection to make it fair and just that the employer be held vicariously liable.

So, even if a dishonest act appears wholly unconnected to the employees work the employer may still be held liable if, when the act is considered in the context and circumstances in which it was done, it may be seen as incidental to and within the scope of their employment! So beware!

Brink's Global Services Inc and others v Igrox Ltd [2010] EWCA Civ 1207 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Compromising discrimination: An Equality Act loophole?

On a literal interpretation of section 147 of the Equality Act 2010, it appears that a solicitor can no longer execute a Compromise Agreement settling a discrimination claim. The section, as it is currently drafted, appears to say that a lawyer acting for an employee cannot be an ‘independent adviser’ for the purposes of advising on a compromise agreement under the Equality Act. This effectively precludes any lawyer from qualifying as an ‘independent legal adviser’ as soon as they are consulted by an employee. This is a ludicrous result.

Presumably, this ambiguity has been created by a simple drafting error but a grey area arises nonetheless. The Law Society has requested that the Home Secretary and Government Equalities Office look into the issue and provide clarity, as a matter of urgency.

Whilst many have insisted that the law remains unchanged, caution is undoubtedly required. Whilst awaiting any authority on the point, it would be prudent for all such agreements to be dealt with by ACAS by way of COT3 Agreement. Alternatively, solicitors should be advising their clients of the theoretical loophole and the scope for an attempt to avoid the agreement.

In practice, I suspect the risk is minimal. Any court asked to order that the money be returned to an employer on the basis of section 147 would be very reluctant to make that finding. In addition, any employee bringing a tribunal claim on that basis would be likely to have their claim struck out under rule 18(5) as being an abuse of process. 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Comment on the Equality Act 2010

So, October 2010 harboured the first round of ‘Equality Act’ implementation…..but what does this ultimately mean for businesses?

The Equality & Human Rights Commission, politicians, NGO’s, and academics have worked tirelessly on the 238 pages and 218 sections of the Act for many years. Their goal was to achieve a comprehensive piece of equality legislation, bringing cohesion to the numerous strands of anti-discrimination laws that had accrued since the 1970’s. So were they successful?

It has already been judiciously recognised that the Equality Act does indeed provide uniformity of the law and commitment to such uniformity has become, essentially, a policy driver.  We have, it seems, finally reached agreement on the development of equality law.  For example, no longer do we face contentious arguments as to the merits of interference with the market for labour in order to assist women to overcome prejudice. Instead, we disagree on the best method of closing the gender pay gap.

However, this shift to a focus on ‘detail’ rather than ‘aim’ does not remove controversy or uncertainty. Changes to and the use of equality law is driven as much by economics as it is by what it aims to achieve and as we are all more than aware, economics are unfortunately far from stable. As Government priorities are forced to remain variable in a global recession, so too will the implementation of the remainder of the Act. Will a more radical approach become necessary?

Keep an eye on forthcoming blogs for the answers to all of these questions. 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Phasing out of the default retirement age

Employers will soon only be able to retire employees by satisfying an objective justification test for direct age discrimination. With this in mind, many employers should consider revising their policies and procedures now.

From 1 October 2011, employers will not be able to rely on the default retirement age to justify a dismissal. Employers will be unable to issue new notifications of retirement using the default retirement age from 6 April 2011. 

Compulsory retirement will be direct age discrimination. However, employers can objectively justify the difference in treatment on the grounds of age if they can prove that it is necessary to meet a legitimate employment policy, labour market or vocational training objective and demonstrate that compulsory retirement is an appropriate and necessary means of achieving that objective. 

Alternatively, employers can ensure that a fair dismissal procedure is followed under the ordinary unfair dismissal rules, relying on one of potentially fair reasons for dismissal (capability, conduct, illegality, redundancy or some other substantial reason). Thus, if an older employee is under-performing, they should be dealt with in the same manner as any other under-performing employee with a focus on performance as opposed to age. 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Proposal to increase Unfair Dismissal qualifying period to two years

You may have heard the rumour over the weekend that the government is actively considering increasing the qualifying period for unfair dismissal, from one year to two years. Lord Young confirmed, on this morning's Radio 4 ‘Today’ programme, that this is indeed the case.  

This is, potentially, good news for employers. Theoretically, it means that businesses will have an extra year to dismiss employees unreasonably. In practice however, employers will still have to be cautious as there will remain the risk of allegations for discrimination, whistleblowing and other exempt unfair dismissal claims, for which no qualifying period is required!

It is likely that there will be a consultation period on this change and no timetable for a decision has been announced…Watch this space!

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Redundancy pool selection

(Fulcrum Pharma (Europe) Ltd v Bonassera and another UKEAT/0198/10)

The Employment Appeals Tribunal has held that it is wrong for an employer to automatically decide that a pool, selected for redundancy, should only include the employee holding the position that it has decided to remove from its structure. In some circumstances, it will be appropriate to include more junior employees in the pool too!

Employers should consider the following factors: 

• How different the two jobs are.
• The difference in remuneration between them.
• The relative length of service of the two employees.
• The qualifications of the employee in danger of redundancy.
• Whether or not there is a vacancy.
• Any other factors applying to the particular case.

The EAT commented that "a starting off point may be to determine within the consultation process whether the more senior employee would be prepared to consider the more junior role at the reduced salary"

The case illustrates that while employers have a fairly wide discretion with regards to who they include in the pool, if they cannot show they have given the issue proper consideration, any dismissal that follows may be unfair.

Read the case here