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Regulated by the Solicitors Regulation Authority
Partnership number: OC310963
Members: Trevor Ironmonger, Jonathan Curtis, Simon Smith
Employment law
Balancing the employment rights of different employees in a redundancy situation can be a minefield for employers.
This is highlighted by a recent case in which Eversheds, one of the UK’s largest law firms, attempted to ensure that its redundancy procedures did not discriminate against a female employee who was on maternity leave.
Eversheds needed to create a scoring system to help decide which of its employees should be made redundant. It decided on a set of criteria, one of which was a score relating to how quickly the employees had achieved payment for their work. This was assessed over a particular reference period.
However, a female employee had been on maternity leave during the reference period, and so could not be assessed. Rather than give her zero points – which would have clearly been unfair on her – they decided to award her maximum points (two points) on the basis that sex discrimination legislation prohibits employers from taking maternity into account when comparing male and female employees.
However, a male employee capable of being assessed over the reference period was properly assessed and scored only 0.5 points.
As a result, the female employee scored a total of 27.5 points. The male employee scored 27 points and was selected for redundancy.
According to the employment tribunal Eversheds got it wrong. It held that Eversheds discriminated against the male solicitor on the grounds of his sex when selecting him for redundancy. He was awarded £123,300 in compensation.
Eversheds has appealed to the Employment Appeal Tribunal, so presumably they feel the decision was wrong.
What could an employer in this situation do? Three suggestions (in what we would consider a priority order):
- Use the last possible reference period for the female employee (i.e. the twelve months before she went off on maternity leave);
- Give the female employee an “average” score based on what the other fee earners scored; or
- As a last resort, or to be totally on the safe side – even though it is a bit of a cop-out – an employer could remove that particular criteria.
Up until now a father’s right to paid paternity leave has been limited to two weeks’, however it has recently been announced that paternity leave for fathers and adoptive parents of children due on or after 3 April 2011 is set to increase to 26 weeks. These changes to the law allow families greater flexibility in how they look after their children.
The introduction of additional paternity leave comes after four years of Government consultation. However, it is likely to have a significant impact on employers.
Guidance on the new rights is likely to be created in the near future but as it stands there are several key features which a prudent employer should be aware of, and prepare for.
Who is eligible?
Generally speaking, most of the eligibility requirements for paternity leave will remain the same, therefore the employee must:
a) have been employed for a period of at least 26 weeks immediately preceding the 14th week before the expected week of childbirth;
b) be the child’s father, married to or partner of the child’s mother or adopter; and
c) expect to have parental responsibility of the child.
In addition to those requirements, under the new scheme the employee will only be able to take additional paternity leave if:
a) the mother or adopter qualified for statutory maternity leave;
b) the mother or adopter returned to work without utilising the whole of their maternity leave entitlement; and
c) the child is between 20 weeks old and one year when the paternity leave starts.
Therefore, if a mother returned to work after only 26 weeks of maternity leave, as long as the child is at least 20 weeks old the father is entitled to take up to 26 weeks paternity leave. This paternity leave does not need to be taken directly after the mother returns to work, as long as it is taken before the child reaches their first birthday.
Parents will be required to ‘self certify’ that they meet the requirements. Although there is no obligation on employers to check the eligibility status the employer may wish to carry out further checks, as may HMRC.
As with maternity leave, paternity leave must be taken in a continuous block. At the moment fathers can take either one week or two weeks leave.
Whilst on additional paternity leave the employee may be entitled to receive paternity pay, but only if the mother or adopter returns to worth without claiming all 39 weeks of their statutory maternity pay entitlement. For example, if the mother claimed 30 weeks maternity pay, the father would only be entitled to 9 weeks paternity pay, the rest of the paternity leave would be unpaid. Paternity pay is paid at the same rate as maternity pay, which as of 4 April 2010 stands at £124.88 a week or 90% of the employee’s normal weekly earnings if this is lower.
Employment and health and safety laws relating to pregnant women can be a minefield for employers to navigate, and is pretty daunting when considering the complicated and expensive litigation that can result from getting it wrong!
Fortunately, the Employment Appeals Tribunal (the ‘EAT’) has recently clarified employer obligations in respect of pregnancy and risk assessments in the case of O’Neill –v- Buckingham County Council.
Generally speaking, employers are under duty to safeguard the health and safety of all employees. As part of that duty, they must carry out a suitable and sufficient assessment of the risks that their employees are exposed to at work.
Until the O’Neill case, employers who employed women of a childbearing age (regardless of whether anyone was pregnant or had ever been pregnant), were required to carry out risk assessments to identify any risks which may be specific to expectant mothers, new mothers (i.e. someone who has given birth in the last 6 months or who is still breastfeeding) and / or their babies. Some employers felt that this was unnecessarily onerous – particularly as failure to carry out the proper pre-emptive risk assessments for pregnant women sometimes led to claims of unlawful sex discrimination.
The EAT in O’Neill made it clear that an employer will only have a duty to conduct a risk assessment for a pregnant worker when:
- The employee tells her employer she is pregnant;
- The work could involve a risk of harm to the health and safety of the pregnant employee or her baby; and
- The risk arises from either processes, working conditions or physical, chemical or biological agents in the workplace.
Therefore, the general duty to conduct a risk assessment for women of child bearing age (when they are not pregnant) has disappeared.
However, employers should also remember that duties extend not only to pregnant employees but to new mothers and their babies.
What if there is a risk?
If as a result of a risk assessment a health and safety risk to her or her baby is identified, the employer should write to the employee informing her of the risk and if it can be avoided, confirming the measures that will be taken to do so.
If the risk cannot be avoided with reasonable action then the employer should consider whether it can alter the employee’s working conditions or working hours to avoid the risk. For example, a change of location or a shorter working day may eliminate the risk. Reasonable action may include changing more than physical conditions and could, for example, include a reduction in targets for an employee who has had some pregnancy related absences.
Failing this, the employer should offer the employee suitable and appropriate alternative work. Generally speaking, the terms and conditions should not be substantially less favourable than her current terms, although this does not necessarily mean that an employer cannot ask an employee to do a lesser paid job on a lower salary. However, employers do need to be careful in this situation – and take legal advice on the specific case before taking any action.
If no adjustments can be made and there is no suitable alternative work, then the employee should be suspended on full pay until the risk no longer exists or is reduced to an acceptable level. In most cases, this will mean that the employee will be suspended on full pay until she returns from maternity leave. If, however, the employee unreasonably refused to do suitable alternative work, then the employer should not have to pay her during the suspension.
On a practical level, as employers ought to be conducting general risk assessments for all employees anyway it would be prudent at the same time to conduct general risk assessments for employees who could become pregnant, followed by specific assessments for those who satisfy the above criteria set out in O’Neill. As ever, clearly worded internal policies on these issues will also help in letting everyone know where they stand.
For further advice or assistance with any of the issues in this article, please feel free to contact Jon Curtis on 0845 225 2635.
‘Stigma damages’ are damages claimed for personal loss of reputation. In an employment law context they usually mean that an employer’s actions have so ‘stigmatised’ the employee that the employee will find it difficult to find alternative employment and is therefore entitled to damages.
Unfair dismissal
It is extremely difficult for a Claimant in an unfair dismissal situation to successfully claim stigma damages as to do so they will need to show that the employer’s conduct was dishonest and corrupt and that this conduct has affected them finding alternative employment.
Discrimination
In the recent case of Chagger v Abbey National plc the Court of Appeal considered (amongst other things) whether the employer could be liable to pay out stigma damages if the employee could demonstrate that third party employers did not want to hire him because he had brought a discrimination claim.
Chagger v Abbey National plc - the facts
After 5 years’ service Mr Chagger was selected for redundancy by Abbey National out of a pool of two people. He successfully brought a race discrimination claim in the Employment Tribunal and received £2.7 million compensation. Discrimination cases can attract high awards of compensation as there is no limit on the amount you can recover, unlike unfair dismissal cases.
However, the tribunal ruled that Mr Chagger was not entitled to stigma damages for bringing a discrimination claim and then finding it difficult to get a job. This was on the basis that it would not be right to penalise Abbey National for the actions of other employers. The tribunal felt it would be these third party employers who would be unlawfully discriminating against (in legal speak ‘victimising’) Mr Chagger if they did not give him a job because he had raised a discrimination claim against Abbey National. The EAT agreed with the tribunal on this point.
The Court of Appeal
The Court of Appeal disagreed. It ruled that Abbey National could in fact be liable for the unfortunate stigma attached to Mr Chagger for bringing a discrimination claim. Although the third party employer may be the immediate cause of loss (i.e. not hiring Mr Chagger) this does not free the original wrongdoer (i.e. Abbey National) from liability.
Importantly, the Court noted that it is difficult for an employee to prove victimisation by a third party employer about a claim he has brought. It was recognised that such a claim could be time consuming, expensive and stressful and therefore ultimately very off-putting for Claimants to bring.
Limited scope?
Despite the above, the Court of Appeal made it clear that loss from being ‘stigmatised’ in relation to a discriminatory dismissal will not usually be considered as a separate head of loss. Instead, it will be considered when determining how long it may take a claimant to find another job and how much compensation should be awarded for loss of earnings.
For further advice or assistance with any of the issues in this article, please feel free to contact Jon Curtis on 0845 225 2635.
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Every day employees need to take emergency leave for any number of reasons such as a family bereavement or child care responsibilities.
Employment contracts may make provision for such circumstances e.g. defining when how long emergency leave can be taken and whether it will be paid or unpaid.
The law also sets out a minimum level of rights that employees have in relation to certain types of emergency leave or, as the law calls it, ‘time off for dependants’.
When can an employee take time off?
Employees are entitled to take ‘reasonable’ time off in certain situations. These situations are:
• Providing assistance if a dependant falls ill, gives birth or is injured or assaulted.
The intention is to allow an employee to deal with an immediate crisis. Therefore, if an employee’s child has a long-term illness, the law does not provide an ongoing right to time off. However, a sudden deterioration in a dependant’s illness may qualify. Also, the matter in question needs to be unforeseen. So, if an employee wishes to accompany their child to a pre-arranged hospital appointment then they should use annual leave or parental leave. Further, time off when a dependant gives birth does not include time off after the birth to care for the child.
• Making arrangements for the provision of care for a dependant who is ill or injured.
This could include taking time off to arrange a temporary carer or taking a sick child to a relative’s house. Importantly, it is time off to make arrangements so it does not encompass the employee having ongoing time off to look after the dependant themselves. Again, the time off is for unforeseen events so if an employee knows one month in advance that a carer will be unavailable then they would struggle to be able to claim time off.
• In consequence of the death of a dependant.
This includes such acts as arranging and attending a funeral. However, it is not a right to compassionate leave (for which an employee will need to look to their contract of employment or company policies).
• Dealing with unexpected disruption or termination of arrangements for the care of a dependant.
This envisages situations where a childminder might not turn up or a nursing home may unexpectedly close.
• Dealing with an unexpected incident which involves the employee's child during school hours.
This would include an employee’s child being injured at school or on a school trip or perhaps even if they were suspended from school.
What about other emergencies?
The time off for dependants is not a ‘catch all’ emergency leave so if your boiler blows up this is not covered! To take time off for these emergencies employees will need to see what circumstances their contracts allow paid or unpaid leave. Otherwise employees may need to take annual leave or unpaid leave assuming that their employer agrees.
Who is a ‘dependant’?
Obviously the term ‘dependants’ is a key term. They are defined as:
• Spouse or civil partner;
• Child;
• Parent;
• Person in the same household that is not the employee’s employee, tenant, lodger or boarder, e.g. an elderly relative;
• Someone who reasonably relies on the employee for assistance in the case of illness, injury or care provisions breaking down. E.g. a relative (not covered above) living nearby that the employee looks after outside of work who falls ill or an elderly neighbour who suffers an injury and the employee was closet on hand at the time.
Is the right to paid time off?
No. The right is to unpaid time off only. Of course employers can always use their discretion in these circumstances and sometimes contracts of employment may set down the situations in which the leave will be paid. Employers should be wary when exercising discretion to avoid a right to paid time being implied as a contractual term
What is ‘reasonable’ time off?
The law only states that employees are entitled to ‘reasonable’ time off but it does not state what is ‘reasonable’. There is no maximum time limit imposed and each period of leave will have to be judged on a separate basis. So, it may be more reasonable for a single parent with no support in the area to take longer make arrangements for the care of their child than someone who has a lot of family and friends in the area who can help out.
Similarly, if an employee’s child fell ill with measles the leave would probably cover the initial care of the child, a doctor’s appointment and the period of time it took to arrange childcare – so a couple of days give or take. The leave is very unlikely to cover the few weeks the child needs to recover from the measles.
Note, when employers are considering the question of reasonableness, the impact of the absence on the business is irrelevant and must not be taken into account.
How many times can an employee take emergency time off?
The right to time off has no maximum limit. As the right is for genuine emergencies it is thought that it would not be fair to limit it to a set number of times.
What does an employee need to do?
The employee must, as a minimum:
1. Tell his employer the reason for the absence as soon as reasonably possible; and
2. Tell his employer how long he thinks they will be off (unless it is not reasonably possible).
Although, there is no continuing duty for employees to provide updates to their employers this should be done where possible as a matter of courtesy.
Employers who are suspicious of the genuineness of time off under this right can ask the employee to produce evidence if it is reasonable to do so. Employers should take extra care in such situations not to take any discriminatory action or fundamentally undermine their relationship with the employee.
Employee’s rights
An employer should not refuse time off for an employee where the situation meets the above criteria. Nor should an employer subject the employee to a detriment (i.e. victimisation) for taking the time off (detriments include taking disciplinary action, demoting, not promoting, dismissing etc.)
Of particular note, a dismissal because an employee took time off for dependants is automatically unfair. An employee does not need a year’s service to claim unfair dismissal on this basis.
An employee who has been dismissed or suffered a detriment in relation to his right to time off for dependants can bring a claim in an employment tribunal.
Employer: “I think my employees are taking advantage!”
If an employer genuinely thinks that employees are abusing the system then this should be dealt with under the business’ normal disciplinary procedures. Of course, this could be risky because taking disciplinary action against someone genuinely using their rights to time off for dependants will constitute a detriment and open the employer up to a tribunal claim. Employers should therefore proceed with caution and take specific legal advice.
For further advice or assistance with any of the issues in this article, please feel free to contact Sarah Cruice on 0845 225 2635.
When recruiting for employment positions businesses, generally speaking, are not allowed to discriminate against applicants on a number of grounds, including age.
Job advertisements may give rise to discrimination on the grounds of age if they specify, either directly or indirectly, that applicants should be of a particular age and there is no justification for this.
So, an advert which states that applicants should be aged between 18 and 21, or which states that only university graduates should apply, will give rise to claims for age discrimination by an older applicants who were not offered interviews. The applicant is said to have suffered a ‘detriment’ by not having been offered an interview or being offered the job.
But what if the job applicant had no intention of taking up the position if it was offered to them? Can they really be said to have suffered a detriment in not getting what they did not want?
These were the sort of questions that have been recently considered by the Employment Appeal Tribunal (EAT) in the case of Keane –v- Investigo and others.
The facts
Ms Keane was an experienced accountant in her late 40s. She applied for a number of jobs online (over 20) through employment agencies. The jobs were advertised as suitable for recently qualified accountants, i.e. those with limited experience. As such, Ms Keane was arguably ‘over qualified’ for the positions.
When she did not receive invitations to interviews, Ms Keane claimed that she had been discriminated against on the grounds of her age, bringing claims against 11 employment agencies.
Over half the claims were settled before they reached a tribunal hearing.
The decision
The tribunal considered the remaining claims and decided that there were no acts of age discrimination by the agencies.
Importantly, the tribunal ruled that Ms Keane was not genuinely interested in the jobs she had applied for. As she did not really want the jobs, she could not have suffered a detriment in not being asked for interviews.
Further, the tribunal found that not only was Ms Keane not really interested in the jobs, but also that she had only made the applications with a view to claiming compensation. As a result of this finding of ulterior motive, the tribunal made a costs award against her.
On appeal, the EAT considered a number of issues but agreed with the tribunal’s original decision. Therefore, Ms Keane’s age discrimination claims failed and the costs against her were upheld.
Ms Keane had brought a number of similar claims in a different employment tribunal. Some of these were again settled pre-hearing but those that were not were also dismissed.
For further advice or assistance with any of the issues in this article, please feel free to contact Jon Curtis on 0845 225 2635.
Try as we might, we can’t control the weather. But with snow and ice continuing to affect the whole of the country, businesses are losing millions of pounds through workers being unable to get to work. But who should bear the cost when employees cannot get to work?
Deducting Pay
Employers may feel they shouldn’t have to pay anyone for not working. On the other hand, employees may feel that they should be paid if they did everything they could to get in.
The law states that an employer cannot make an “unauthorised deduction” from an employee’s wages without express permission. This means that an employer cannot deduct pay without a written authority which is normally found in the form of a clause in the employment contract called a “deductions clause”.
An employer might even have a “bad weather” policy in the company handbook which confirms the employer’s right to deduct pay in such circumstances.
Without such authorisation, employers may be at risk of claims for unlawful deductions from wages and / or constructive dismissal (although a constructive dismissal claim would probably be a bit extreme).
Deductions clauses are very common but clauses which specify that deductions can be made in the event of extreme weather are pretty rare – and employers who rely on a “general” deductions clause to deduct pay for bad weather should recognise that there is a degree of risk attached.
Employers can of course consider alternatives to deducting pay, such as home-working, or agreed holiday. It is important that staff are treated consistently to keep bad feeling (and the risk of claims) to a minimum!
If the employer decides to close the business, pay should not be deducted unless the employees are properly “laid off” using the correct procedures.
Disciplinary action
Employers who suspect employees used the snow as an excuse to take the day when they could have “made it in” could use the disciplinary procedure, but from a practical point of view it might be difficult to prove who has made a reasonable effort and who has not.
Ultimately, employers have a duty of care to their employees and should not threaten disciplinary action for failure to attend work if attempts to attend work would be dangerous for the employee. Individual circumstances will differ.
Time off for Dependents
What about where employees cannot attend work because their child’s school is closed and there is nobody else to look after the child? Employers need to be aware that employees have a statutory right to reasonable time off to look after a child in the case of an emergency, and this situation may fall within this right. Importantly however, the right is to unpaid time off. An employee should not be dismissed or subjected to any detriment (such a being disciplined) as a result of exercising their right to reasonable time off.
Using up holiday
Most employers are not aware that they have the right to require employees to take holiday when the employer wants.
However, employers must give employees the relevant notice period set out in statute (twice the length of leave to be taken). In other words to make an employee take one day’s leave the employer should give them two days’ notice. Such a power should be used reasonably, and this approach is obviously less useful for occasional and unexpected bad weather as the requisite notice could not be given. However, if an employer wants to close a business down for, say a week, due to bad weather, the employees could be required to have the latter part of this closure taken as holiday leave which will save the employer some money.
And finally…
What about those heroes who battle to work wearing snow goggles and tennis racquets tied to their shoes, whilst their colleagues sit at home next to a warm and cosy fire?
Well, all they get is a pat on the back. Those employees who think they are entitled to extra pay or a day off in lieu are sadly mistaken!
For further advice or assistance with any of the issues in this article, please feel free to contact Jon Curtis on 0845 225 2635.
Cases of swine flu are on the increase and although most cases are mild, there have been a number of related deaths in the UK. As we head towards Autumn, it is likely that the number of cases will increase. Swine flu updates are published weekly by the Health Protection Agency at http://www.hpa.gov.uk.It is likely that over the coming months, a significant percentage of the workforce will contract swine flu. This could cause major disruption to businesses. If you haven’t already done so, you should start to prepare and plan for this.
Business planning
At its height, the flu pandemic could see a large proportion of the workforce off sick.
It is also possible that healthy people might be told to stay at home, or that certain businesses, schools, nurseries etc might be ordered to close, to limit the spread of infection.
Even where businesses are not badly hit, their suppliers or customers might be, which may have knock-on effects on its own operations.
Employers who do not plan for this are leaving themselves in a vulnerable position.
The main issues for employers to consider are:
• Coping with high levels of employee absence;
• Reducing the risk of swine flu spreading within the organisation;
• Coping when a major supplier or customer is affected;
Business continuity plans should highlight key business functions and set out the minimum number of employees required to carry out those functions. Key staff should be identified. It may be necessary to consider providing training to certain employees to ensure that these key functions can be administered.
Staff should be informed in advance of any continuity plans so that they are prepared for changes in their work practices, if necessary.
If you lose business as a result of the pandemic, you may be forced to make temporary lay-offs or redundancies. Please note that lay-off is a particularly complex area of employment law and you should not make lay-offs unless you have a contractual right to. Please speak to us before making lay-offs or redundancies, as there are very strict procedural requirements for each, and if you get it wrong you can lay yourself open to expensive claims for unfair dismissal or constructive dismissal.
Employee Protection
Employers have a general duty to provide a safe place and system of working for their employees. They also have a statutory duty to ensure the health safety and welfare of employees (section 2 Health and Safety at Work etc Act 1974), which requires that the working environment is – so far as is reasonably practicable – safe and free of risks to health.
During a pandemic, to ensure compliance with these duties, you may need to look at putting specific policies in place to prevent the spread of illness amongst employees to set out what will happen in the event of significant absence. Where there is a recognised trade union or other employee representative body you should, where possible, include them in the planning process.
Examples of measures to consider are:
• Making sure that employees are informed of the symptoms of swine flu and ensuring that it is clear that any staff with symptoms stay at home;
• Keeping employees informed of current Government guidance;
• Carrying out a risk assessment to identify any factors which make you particularly susceptible to infection;
• Putting strict personal hygiene procedures into place, e.g. providing anti-bacterial hand gel dispensers in the workplace and making sure that they are adhered to;
• Making changes to working practices – e.g. allowing employees to work from home, avoiding face to face meetings;
• Avoiding business travel to high risk areas – e.g. Mexico; and
• Whether you have any employees who are at particular risk of infection and how best to deal with them.
• Youshould also consider their obligations to others, e.g. contractors, customers and clients. It is likely that the general and statutory duties in terms of health and safety will apply to contractors if they have some control over their systems of work. If you provide services to vulnerable clients (e.g. those who work with children, pregnant women, the elderly or disabled) should take particular care and carry out appropriate risk assessments.
Where you have implemented such practices, you should make it clear to employees that failure to comply may result in disciplinary action or even dismissal. You may have to consider this, for example, where an employee refuses to stay at home when symptomatic, where an employee refuses to come into work for fear of infection, where you have evidence to show that sickness absence is not genuine, or where employees do not comply with hygiene rules.
Please remember that you must comply with the ACAS Code of Practice when disciplining or dismissing employees. It is highly recommended that you speak with us before taking any disciplinary action against employees.
Vulnerable Employees
Pregnant Women
There is a heightened risk of complications for pregnant women who contract swine flu. Employers have a general duty to carry out risk assessments for pregnant women. However, there are no specific obligations relating to swine flu as yet, although this may change as we head into Autumn.
If you have any pregnant employees and are concerned that their health is at risk from swine flu, you should contact us for further advice.
Underlying Medical Conditions
Most swine flu related deaths in the UK have involved people with underlying medical conditions, which may or may not constitute a disability.
Under the disability discrimination legislation, employers have a duty to make reasonable adjustments to working practices and premises for disabled employees. It may be necessary for employers to consider changing practices, for example, by allowing disabled people to work from home temporarily, in order to comply with this obligation.
Employers would be well advised to consider these types of adjustments even where the medical condition does not constitute a disability.
Remember, HIV is a recognised disability, sufferers will be particularly vulnerable, and the potential effects serious.
You may decide to collect information about individuals’ health to ascertain whether they have any underlying conditions. If so, remember that this will constitute the processing of sensitive personal data under the Data Protection Act 1998, and you must ensure that you comply with your obligations in processing it.
Time off to Care for Dependants
Employees have a statutory right to take ‘reasonable’ time off (unpaid) to care for ‘dependants’ (i.e. a spouse, civil partner, child, parent or other person who lives at the same address save for their employee, tenant or lodger). This includes where there is unexpected disruption to the arrangements for a dependant’s care.
As this is a statutory right, if time off is refused or the employee is dismissed for a reason connected to taking / requesting to take time off, the employee can bring a claim in the employment tribunal.
The right to time off is only to ‘reasonable’ time to deal with the immediate crisis. What is ‘reasonable’ is a difficult question under normal circumstances, so in these circumstances where care arrangements may be hard to come by, employer’s may have to allow more time than they might ordinarily allow.
Pay
Your obligations in terms of sick pay should be set out in the employee’s contract of employment. The statutory right to time off for dependants is unpaid, although your employee/s may have a contractual right to be paid for this.
You may decide to use your discretion and allow payment in excess of contractual / statutory entitlements. If you do, it is important that you use discretion in as consistent a way as possible to avoid claims for discrimination.
Useful Websites
For more information and guidance relating to business planning, please see the following:
www.businesslink.gov.uk
www.cabinetoffice.gov.uk
www.hse.gov.uk
www.dh.gov.uk
In the recent European Court of Justice (‘ECJ’) case of Pereda, the ECJ has ruled that a worker who is ill at the time of scheduled annual leave is entitled to take paid holiday at a later date.The Pereda case was brought by Mr Pereda, who is a Spanish specialised driver. He had 4 weeks’ holiday booked between 16th July 2007 and 15th August 2007 but an accident at work on 3rd July 2007 meant that he was off sick until 14th August 2007. When he returned to work, he asked whether he could take his holiday at a later point. His employer refused. The Spanish Courts asked the ECJ whether Mr Pereda was entitled to annual leave at a later date.
The ECJ decided that the period of sick leave should not count towards Mr Pereda’s holiday entitlement and that he was entitled to request annual leave at a later date. This is because:
• The European Working Time legislation states that workers must be given 4 weeks’ annual leave for the purposes of relaxation and leisure, and ultimately to ensure their health and safety; whereas
• The purpose of sick leave is to allow workers time to recover from being ill. It is not a time for relaxation and leisure.
In this case, Mr Pereda fell sick before the scheduled leave. It is also likely that the decision will apply to workers who fall sick during their holiday.
It is important to note that Pereda does not stop a worker taking holiday whilst on sick leave. The ECJ decision in the case of Stringer earlier this year, (which looked at the relationship between long term sickness absence and annual leave), said that a worker can choose to take paid annual leave during a period of sick leave. However, if s/he does not wish to do so, Pereda says that it must be granted at a different time.
It is currently unclear whether a worker’s right to request annual leave at a later date under Pereda is limited to 4 weeks’ (i.e. the EU minimum holiday entitlement), or whether they extend to the 5.6 weeks’ minimum holiday entitlement given under the WTR.
This decision does not sit well with current UK legislation governing working time, i.e. the Working Time Regulations (‘the WTR’). This means that the WTR may have to be amended to make them consistent with the decision in Pereda. If this is the case, the rights given to workers under Pereda may not apply to private sector workers until the WTR have been amended, although they will apply to workers in the public sector straight away. Whilst the position as to who is affected remains unclear, you should take advice if you come across this situation.
The decision may be difficult one for employers to swallow. How will they know whether a worker is genuinely sick during periods of annual leave when employees are entitled to self-certify for the first 7 days of sickness absence?
Although this could be a very real problem, employers should not panic! They should remember that they are entitled to monitor absence and any ‘patterns’ in absence. So, if a worker frequently claims that he is sick whilst on holiday, this should be investigated and where appropriate, disciplinary action may be taken.
Employers should also remember to apply the relevant sickness absence rules to any absence in these circumstances. If the employee receives only statutory sick pay (‘SSP’) during sick leave, payment for any sick days should be made only at this rate, remembering of course that the first three days of sick leave are ‘waiting days’ where no SSP is payable.
On 28th May 2009 the Government revealed proposals to replace the current MED3 ‘sick note’ with a new ‘fit note’ intended to better communication between employers, employees and doctors about sickness related absence.It has been designed to help more people remain in work and avoid any, in the words of the DWP, “drift into long term sickness” by providing advice about employees either staying in work or what employers can do to help get their employees back to work sooner.
The crucial difference compared to the current ‘sick note’ is that the new ‘fit note’ will talk about what an employee can do rather than what they cannot. In its current draft format the doctor will have an option on the form to state their patient may be “fit for some work now” if they consider that they could return to work either temporarily or permanently.
The form also gives doctors the ability to suggest an employee may benefit from one of four possible options, namely: a phased return to work; altered hours; amended duties; or workplace adaptations. However, these will depend on the employer agreeing to the suggestion.
On a practical level therefore if someone has mobility problems then one suggestion might be that they could do a job where they sit down and do not need to stand up.
The ‘fit note’ is currently in a 12 week consultation about its design, which ends on 19th August 2009, but the Government hopes for it to be up and running in early 2010.
Only time will tell whether the new ‘fit note’ could help to reduce the approximate 170 million working days lost each year in Britain due to sickness absence which, together with those who are unable to work because of illness, costs the economy over £100 billion every year.
What the figures tell us
Employment Tribunals claims are on the rise. The number of applications to the tribunal (ET1) has risen by 43% since the previous year and a staggering 65% on 2005/2006. It is worth noting that ET1s may include more than one claim which means in real terms the number of actual claims are up 24% on last year and 47% on 2005/06.
The biggest rise has been in equal pay claims which have increased by 42% over last years figures and now account for 21% of claims.
Although claims are on the rise as a whole, there has been an 8% drop in both unfair dismissal claims and breach of contract claims respectively.
What happens to the claims?
| Successful % |
Unsuccessful % |
Default Judgment % |
ACAS Settled % |
Withdrawn % |
Other % |
|
Unfair Dismissal |
10 | 9 | 2 | 37 | 10 | 10 |
Redundancy |
24 | 5 | 12 | 16 | 17 | 17 |
Equal Pay |
7 | 1 | 0 | 16 | 24 | 24 |
Sex Disrimination |
3 | 4 | 0 | 19 | 31 | 31 |
Race Discrimination |
3 | 15 | 0 | 37 | 14 | 14 |
Disability Discrimination |
3 | 9 | 0 | 44 | 9 | 9 |
Religious Discrimination |
2 | 14 | 0 | 38 | 13 | 13 |
Sexual Orientation Discrimination |
6 | 10 | 0 | 45 | 8 | 8 |
Age Discrimination |
3 | 8 | 1 | 45 | 9 | 9 |
Most claims never make it to Hearing
It is worth noting that 75% of claims are disposed of without a hearing: 33% of claims are withdrawn, 29% are settled by ACAS, 11% of claims are struck out (not at a Hearing) and a further 2% dismissed at the Preliminary Hearing stage.
Claimants are getting wise to getting help
Only 17% of claimants were unrepresented at hearing compared with 24% the year before.
Trade union representation is on the rise
The percentage of claimants represented by a trade union has more than doubled over the previous year with 15% of claimants now having trade union representation at hearing.
Success doesn’t equal compensation
Only 67% claimants who have their claim upheld are awarded compensation and less than 1% are reinstated. 29% receive no award at all and in the remaining upheld cases the parties are left to determine the remedy.
Beware getting redundancies wrong
Although representing less than 2% of accepted the claims, redundancy pay claims are the most successful with 24% of claimants succeeding at Tribunal.
Discrimination is costly
Discrimination claims are the most costly to respondents with compensation for disability and race discrimination tipping the scales with average awards of £19,523 and £14,566 respectively.
Costs
The average costs award (i.e. the losing party having to pay towards the winner’s costs) last year was £2,095. Employment Tribunals are more likely to award costs to respondents than claimants who were ordered to pay 71% of last year’s costs awards.
On 1st February in each year, there is an inflation linked increase in the statutory maximum limits on many awards made by employment tribunals. The government has recently published the increases which will take place as from 1st February 2009. Full details are in the Employment Rights (Increase of Limits) Order 2008, made on 24th November 2008. The increases apply where the "appropriate date", generally the date of the event which triggers the claim (eg a dismissal), falls on or after 1st February 2009.
The two main changes coming into effect from 1st February 2009 are:
an increase from £330 to £350 in the limit on a week's pay which can be taken into account when calculating statutory redundancy pay or the "basic award" component of unfair dismissal compensation and which applies to government guarantee arrangements for employees where an employer becomes insolvent.
an increase in the maximum "compensatory award" component of unfair dismissal compensation from £63,000 to £66,200.
The result is that the absolute maximum statutory redundancy payment increases from £9,900 to £10,500 and the absolute maximum unfair dismissal award in "ordinary" cases increases from £72,900 to £76,700
In some unfair dismissal cases, generally those where dismissal is for a reason which makes it automatically unfair, there is no statutory limit on the amount an employment tribunal can award. This is also true of discrimination cases - again there is then no statutory limit on the amount an employment tribunal can award.
The Daily Telegraph reported on 8th November that it had obtained figues showing that the amount awarded in employment tribunals "rose past £32 million last year". No doubt next year there will be a further increase.
Associative discrimination now unlawful
An employment tribunal has held that, at least in some circumstances, the Disability Discrimination Act 1995 (DDA) provides protection to fully fit employees. How can this be? The answer is that this happens if a non-disabled employee is discriminated against by their employer for fulfilling caring responsibilities they owe to someone who is disabled.
Sharon Coleman worked as a legal secretary with a firm of solicitors, Attridge Law. She has a disabled son born in 2002. Her request to her employer for flexible working arrangements in order to care for the boy was turned down. She then accepted voluntary redundancy and made a disability discrimination claim against her now former employer (and, although irrelevant for purposes of this note, a claim of unfair constructive dismissal). She has now won the right to bring the DDA claim.
The main relevant provision in the DDA provides that "A person directly discriminates against a disabled person if, on the ground of the disabled person's disability, he treats the disabled person less favourably than he treats or would treat a person not having that particular disability whose relevant circumstances, including his abilities, are the same as, or not materially different from, those of the disabled person".
This provision was added (as s.3A(5)) in 2004. It was designed to give effect to a then recent EU Directive. The European Court subsequently held that this directive requires Member States to ensure that people in the position of Ms Coleman are protected against discrimination. The London South employment tribunal, hearing Ms Coleman's case, was in a difficult position. It had to decide whether it could stretch the meaning of the wording introduced in 2004 to comply with the Directive or give the wording its natural meaning. While the wording is not exactly a model of clarity it is at least clear that if given its natural meaning Ms Coleman's claim would fail - and also that the British Government would be obliged to change the wording yet again.
In the event, after considering rules established over several years on how UK law should be interpreted in the light of EU law, the tribunal decided it could and should interpolate additional words into the provision noted above to make sure it complied with EU law. The tribunal agreed with Ms Coleman's barrister that the wording could and should be read as providing that:
"A person directly discriminates against a disabled person or a person associated with a disabled person if, on the ground of the disabled person's disability, he treats the disabled person or a person associated with the disabled person less favourably than he treats or would treat a person not having that particular disability or association (as the case may be) whose relevant circumstances, including his abilities, are the same as, or not materially different from, those of the disabled person or the person associated with the disabled person".
Thus what is sometimes referred to as "associative discrimination" has now been held to be unlawful in the UK.
Although this case was concerned only with disability discrimination, the same principle is likely to apply to discrimination by reason of religion and belief, age, or sexual orientation all of which are covered by the same Equal Treatment Framework Directive 2000/78/EC.
Getting redundancy wrong!
Getting redundancy wrong Redundancy is a hot topic in the present economic climate; and as the downturn kicks in, it is getting hotter. Ensuring that redundancy dismissals are fair is a complex business and getting it wrong can lead to expensive employment tribunal claims and the wrong kind of publicity. In the recent case of EZEC Limited v Gregory the company had operated what, on the face of it, seemed to be a fair procedure, but the employee succeeded in bringing an unfair dismissal claim, so where did it go wrong?
EZEC had decided that 4 employees from a pool of 14 were to be made redundant. Following the correct procedure, EZEC identified criteria upon which the employees would be ranked, with the four lowest scoring employees to be made redundant. In this case the criteria identified were: length of service, absence, sickness days, sickness occasions, discipline, performance, commitment and attitude, skill base and team working. The company’s first mistake was to fail to consult with the employees about the selection criteria before operating them.
The first five criteria were “objective” in nature and were correctly scored using information from personnel files such as sickness absence records. The remaining criteria were “subjective” which meant the manager who did the scoring was relying on his own opinion when scoring – always a dangerous situation. Whilst the use of subjective criteria is not fatal in itself, the manager’s mistake was not to refer to any marking guidelines or company documentation, or to talk to any other managers before completing the scoring. Inevitably the scores he came up with were open to question; and in the case of Ms Gregory, the fact that the scores could not be adequately explained actually made her selection unfair. The company’s final error was to reject Ms Gregory’s appeal without any attempt to find out if the scoring had been fair.
The failure to consult about the selection criteria and marking process, the failure to correctly score the subjective criteria and the failure of the appeal process to rectify these shortcomings all combined to make Ms Gregory’s dismissal unfair.
Everybody understands that redundancies are a sign of the times. But redundancy procedures must still be fair if employers are to avoid Employment Tribunal claims – particularly in times when there are fewer job opportunities available and redundant ex-employees may be more likely to scrutinise procedures looking for flaws upon which to base a claim.
Post-termination restrictive covenants limit the freedom of individuals to do the work they want in the way they want. Unsurprisingly therefore the starting point from which a court will begin if asked to enforce such a covenant is to refuse to do so. On the other hand a court will not take kindly to an individual breaking an agreement freely entered into. The result, in practice, is generally a balancing act - the court will generally agree to enforce a post-termination restrictive covenant if in all the circumstances it would be reasonable for it to do so but not otherwise.
There are generally four different types of restrictive covenant, forbidding respectively:
1. solicitation of the employer's customers/clients;
2. dealing with the employer's customers/clients;
3. solicitation of the employer's continuing employees;
4. competition.
In considering whether such covenants are reasonable and enforceable the courts take into account matters such as duration; whether the restriction covers only persons with whom the employee had direct contact; geographical area; whether only specified activities are covered; whether the covenants are individual covenants which can be separated from each other or whether they stand or fall as a whole; and current business practice generally. The more limited the restriction the more likely it is to be enforceable.
As one would expect, there is much relevant case law and much scope for argument by skilful advocates. In a recent high profile case the UBS finance house won a temporary injunction to prevent former employees from poaching its clients and staff . They were setting up a "wealth management" company called Vestra in competition with UBS's wealth management division. The judge took a dim view of what was going on saying "It is in my judgment an unlawful conspiracy dressed up as lawful competition" and granted a temporary injunction in favour of UBS.
This was a good example of what is sometimes called a "springboard" or "head start" injunction - these being catchy names given to injunctions which an employer can sometimes obtain to prevent an employee or former employee using confidential information belonging to the employer as a springboard to launch a new business.
Garden (or gardening) leave is relevant here. An employee who continues to receive normal salary but is told not to report for duty is said to be on "garden leave". Typically this happens if the employer needs to protect himself against competition or poaching of customers/clients/staff by a senior employee who has given notice or is to be dismissed. Restrictive covenants can be unreliable and difficult to enforce against ex-employees so it may be attractive for the employer to send the employee home on "garden leave".
However there are risks for the employer. Even if the employee's contract specifically provides for "garden leave" the employee may, depending on the circumstances, be able to argue that an attempt to keep him at home without work amounts to constructive dismissal. He could then argue that his employment contract had been wrongfully terminated by the employer and therefore that he was immediately released from all obligations under the contract. The employer might thus have scored an unpleasant own goal by sending the employee home on garden leave - the employee, no longer bound by the contract, could be automatically released from any post-termination restrictive covenants it might contain.
The Employment Act 2008 received Royal Assent on 13th November 2008
The main part of the Act is of enormous practical significance for employers and employees who get into arguments with each other. It is a further and significant stage in the quest which has been ongoing since the early 1970's for a sensible and proportionate way of enabling employers and employees to settle disputes, typified most recently by the 2004 dispute resolution regulations.
Since October 2004, as a precondition of an employment tribunal having jurisdiction in any particular case, employers and employees have been required to show that they have followed compulsory statutory dispute resolution procedures. These procedures are basically designed to help bring about out of court settlement wherever possible. While wonderful in theory, in practice, largely by reason of being compulsory, these procedures led to all sorts of difficulty - as Mr Justice Elias, the president of the EAT, put it in a recent case, ".... even the most desiccated Chancery lawyer conjured up by the imagination of a Charles Dickens" would be surprised at arguments spawned by the 2004 dispute resolution rules.
The 2008 Act abolishes the well intentioned but impractical 2004 compulsory rules. Instead, from April 2009, there will be a new semi-voluntary ACAS Code of Practice, again designed to help settle disputes out of court. It will be semi-voluntary because if an employer or employee fails to observe it and the matter goes before an employment tribunal, the tribunal will in most cases have discretion to increase or decrease monetary awards by up to 25%.
Not everyone will be happy with the passing of the compulsory 2004 rules. Smaller companies in particular have sometimes found it helpful to have the "tick box" system they encouraged. However if the new rules lead to greated emphasis on fairness rather than on ticking boxes and desiccated legal argument, their introduction is surely to be welcomed.
Other significant matters covered by the Employment Act 2008 are:
increasing National Minimum Wage enforcement powers (in sections 8 to 14);
strengthening the Employment Agencies Act 1973 (in sections 15 to 17); and
enabling trade unions to refuse membership to individuals who belong to a political party if membership of that party is contrary to the rules of the union (in sections 18 and 19).
It is worth noting that when originally proposed in July 2007, what is now the Employment Act 2008 was to have been called the "Employment Simplification Act". It did not take long for Ministers to realise that the only simplification they could offer was to shorten the title.
One effect of the Employment Equality (Age) Regulations 2006 is that enforced retirement of an employee on age grounds is generally unfair dismissal. However an exemption allows enforced retirement of employees at age 65 or over, subject to specified procedures being followed.
As an aside it is worth noting that a partner in a partnership is not an "employee". The starting off point in the context of a business partnership is thus that requiring a partner to retire on age grounds is always unlawful - it will only be lawful if it can be "objectively justified".
Campaigners on behalf of the elderly have argued strongly that it is wrong that employers should be able to require an employee to retire simply on grounds of age. As Parliament is supreme and Parliament has legislated to allow enforced retirement at age 65 the only avenue open to the campaigners has been to argue that the British rules contravene EU law. So in July 2006, even before the British regulations came into force, the National Council on Ageing, which runs the Age Concern charity but for this purpose is operating under the banner "Heyday", announced that it would take the British government to court.
It did so. This led to the High Court in England referring specific questions to the European Court of Justice in July 2007. The processes of the ECJ involve an official known as the Advocate General providing a formal "opinion" to the Court before a decision is reached. In September 2008 the Advocate General gave his opinion in this case. Usually, but certainly not always, the ECJ judges follow the recommendation of the Advocate General.
The Advocate General's opinion here is essentially that there is no fundamental objection in EU law to a Member State allowing employers to require employees to retire at a specific age provided this can be objectively justified as "a proportionate means of meeting a legitimate aim". There was insufficient information made available for the Advocate General to form a view on whether the British "compulsory retirement at age 65" provision could be justified so it follows that this question would have to be remitted back to the national courts to decide.
This is clearly a set back to the campaigners but not a knock out blow.
A decision by the judges of the European Court of Justice is expected by the end of 2008. If the ECJ follows the recommendation of its Advocate General, presumably the campaigners will try to persuade a British court that conditions in the UK are such that allowing an enforced retirement age of 65 is not a proportionate means to achieve a legitimate aim. So the position may not be finally resolved for some time yet.
From a practical point of view, any employee who is required to retire against his will at age 65 or over would be well advised to consider making a claim to avoid falling foul of the time limit rules, usually 3 months from enforced retirement. All such claims are currently stayed pending the decision of the European Court of Justice (under the terms of a practice direction issued by the President of the Employment Tribunals) but as a general rule only claims which were formally lodged within normal time limits will be able to go ahead if the eventual outcome of the case is that the campaigners win.
As from 1st October 2008 the hourly National Minimum Wage rate is increased as follows:-
1. adult rate for those aged 22 or more the increase is from £5.52 to £5.73;
2. for 18-21 year olds the increase is from £4.60 to £4.77;
3. for 16-17 year olds the increase is from £3.40 to £3.53.
When setting these rates the Government specifically rejected a recommendation from the Low Pay Commission that the age for entitlement to adult rate NMW should be reduced from 22 to 21. We understand that union pressure combined with threats to reduce funding to the Labour Party later led to a change of party policy in this respect. It is therefore probable that the age for entitlement to the adult rate will be reduced to 21 when the next increase in NMW takes place (likely to be October 2009), assuming the present government is still then in power.
Apprentices aged 16-18 and those aged 19 and over in their first year as an apprentice are not entitled to the National Minimum Wage. However in 2005 the Learning and Skills Council introduced a requirement that employers pay apprentices a minimum of at least £80 per week and the government announced in September that this minimum will be increased to £95 a week in 2009. As the average wage paid to apprentices is stated to be £170 week this is unlikely to have much effect in practice.
Special rules govern the minimum wage payable to agricultural workers. For this purpose agricultural workers are graded into 6 separate grades. In England and Wales the minimum wage for a standard (grade 2) agricultural worker is £6.26 per hour from 1st October 2008 (previously £6.00).