The annual rise in compensation limits which came into effect from 1st February 2009 are as follows:

• the limit for compensatory awards for unfair dismissal increased to £66,200
• the minimum basic award for unfair dismissal rose to £4,700
• a 'week's pay' for the purposes of calculating statutory redundancy pay increased to £350. The maximum statutory redundancy payment rose to £10,500.
• the daily rate for a statutory guarantee payment was increased to £21.50.

And a reminder that in April 2009, the following will increase:

• the flat rate for maternity, paternity and adoption pay will be £123.06 (currently £117.18)
• the new rate for statutory sick pay will be £79.15 (currently £75.40).

At the time of writing, it is not known what the increase in the National Minimum Wage, due in October, will be. Industry bodies, including the British Chambers of Commerce, are lobbying hard for no increase until economic conditions have significantly improved. They calculate that an increase in NMW, at the same amount as in 2008, would cost businesses £300 million and result in more job losses. The Low Pay Commission has delayed making its recommendation for two months as it would like more time to consider the current economic outlook.

For an up to date summary of key statistics, go to: /docs/legal/keystatistics.html

We've been advising clients for a long time that this was a "grey area", whilst we awaited the European Court of Justice's (EJC) decision on whether those on long-term sick leave should accrue holiday during their absence (in the specific case in question, the workers had done NO work and been absent throughout the holiday year).

The ruling - which is unlikely to be a popular one with most employers - is that employees on long-term sick (whether for the whole year or part of it) DO continue to accrue their full statutory holiday which they must be given the opportunity to take. Member States will decide whether this should be taken during the holiday year in question or carried over to another year, but either way the employee will be entitled to the paid annual leave at some point. On termination of employment, workers are entitled to a payment in lieu of annual leave they have been unable to take.

The statutory holiday entitlement, currently 4.8 weeks (ie 24 days for someone who works a five day week), increases to 5.6 weeks (28 days) in April 2009. Under the Working Time Regulations, employers cannot pay a worker in lieu of untaken holiday other than on the termination of a contract.

Many employers keep employees on long-term sick leave long after they've exhausted their entitlement to sick pay. These workers will now be entitled to receive holiday pay, even though they don't get sick pay or any other sort of pay and even though they are not doing any actual work from which they might need to take a holiday.

It will be up to each Member State to decide whether annual leave can be taken during a period of sickness - so domestic rules can either prevent the taking of or receiving payment for holiday leave whilst absent on sick leave, or permit this. Member States can also prevent the carry over of unused holiday into a subsequent holiday year provided a worker has actually had the opportunity to exercise his/her right to that leave. But a worker who is unable to take leave due to sickness absence (whether absent for the entire year or part of the year) must be allowed to carry over the leave into a subsequent leave year.

If after a number of years' absence the worker resigns or the employer terminates the employment, the ECJ's decision would also imply that payment should be made in lieu of all the holiday accrued but not taken - presumably paid at the normal salary.

The issue now has to go back to the House of Lords to apply the ECJ decision - it is not known whether they will now overturn the previous decision that paid holiday cannot be taken when on sick leave.

What is also not clear is

• whether payment in lieu of untaken leave carried over from previous leave years must be paid. The Working Time Regulations suggest that this should be lost. The ECJ implies that it should not, in which case the Regulations will need changing. Public sector workers may be able to rely on the Directive itself to claim compensation for untaken carried over leave.
• what rate of pay should be applied for pay in lieu when absence goes back many years, and also where PHI payments are involved. The ECJ ruled that pay must be calculated so that the worker is put in a position comparable to that which he/she would have been in had that right been exercised during the employment relationship - so does this mean the rate of pay applicable during that holiday year, ie before a subsequent pay rise?
• whether a capped carry over period will be introduced, after which, provided that the employee has had the opportunity to take the leave, it will be forfeit.

The cases to read, if you want full chapter and verse are Stringer and others v HM Revenue and Customs C-520/06 (formerly Commissioners of Inland Revenue v Ainsworth) and Schultz-Hoff v Deutsche Rentenversicherung Bund (C-350/06).

Actions to start considering

Clearly until we have clarification from the House of Lords ( possibly later this year or in 2010) on the detail of whether leave can be carried forward or not, or taken whilst on sick, it is hard to rewrite exact procedures. But knowing that those on long term sick accrue leave, which must be paid at some time, it is worth starting to consider the following:

• Ensure that you discuss and agree with anyone returning from long-term sick leave how best his/her accrued leave should be taken. Similar to maternity cases, if you have an employee returning from an extended absence, you may have organised cover during the absence - you may not therefore want to have the employee return for a short period and then insist on taking a large amount of holiday.

• Ensure that you do not forget about those on long-term sick and that you manage sickness absence appropriately - we'll be advising on this in a future hot topic. It is widely expected that many employers will dismiss those on long-term sick more quickly than in the past.

• Consider the possible increased cost when managing those on long-term sick. It has been suggested that some employers, with generous sick pay entitlements, may now seek to reduce these to offset the additional holiday cost.

• Bear in mind that when dismissing a worker on long-term sick leave, you will have to ensure that they are paid in lieu for their accrued but untaken holidays.

• If you offer generous holiday entitlement in excess of the statutory minimum, you may wish to amend your contracts to specify that contractual leave over and above the statutory minimum does not accrue during sick leave.

For general advice on managing sickness due to absence or injury, see /docs/legal/absence.html

Advice on managing holidays is covered in /docs/guides/holidays.html

As from 6 April 2009 the right to request flexible working will be extended to parents of children aged 16 and under. Currently, the right is restricted to parents of children under six (or disabled children under 18), and carers of adult (18+) dependants.

Someone spotted the gap! Not all employees with dependant caring responsibilities will have the right to request flexible working - carers of dependants aged 17 who are not disabled but may need care have a problem.

We recently added to our suite of letters to help you manage flexible working requests - see /docs/lf/flex/index.html See also our legal overview on flexible working: /docs/legal/flexible.html and our guide to flexible working schemes: /docs/guides/flexible.html

6 April 2009 is the date the dispute resolution procedures will be repealed.

But they will continue to apply if, on or before 5 April 2009, the procedures were applicable and the employer has either:

• complied with step 1 or 2 of the standard procedure, or with step 1 of the modified procedure
• taken relevant disciplinary action against the employee or
• dismissed the employee.

The statutory grievance procedures will continue to apply where the action forming the basis of the grievance takes place wholly before 5 April 2009 or where the action complained of begins on or before 5 April 2009 and continues beyond that date. In the case of continuing action, the procedures will only apply to complaints made to an Employment Tribunal before 4 July 2009, with the exception of equal pay or redundancy pay claims, where the deadline is extended to 4 October 2009.

So they've not quite gone yet.

Our hot topic for March will be the new procedures - and we will be updating our template procedures and guidance accordingly.

As from 6 April 2009, an employment judge can hear claims for holiday pay and Stage 1 equal value claims alone rather than the full 3 member tribunal being required for this.

Other changes include a new rule providing for the automatic dismissal of proceedings where the parties to an ACAS settlement have confirmed in writing their understanding that the proceedings covered by the settlement will be dismissed and the claimant has withdrawn the claim.

See: www.opsi.gov.uk/si/si2008/pdf/uksi_20083240_en.pdf

It has been reported that the draft Equality Bill is being amended to require private sector employers to publish gender pay statistics (previously the draft had only required public sector employers and private firms bidding for contracts awarded by the public sector to do this).

"The Guardian" claimed that the Equalities Office is drawing up a clause that would require firms to publish the number of men and women it has in each pay band.

The Equality Bill is expected to be passed through Parliament soon.

Watch this space!

Originally scheduled for some time in 2012, it would seem that the requirement for staff to be automatically enrolled into a pension scheme with employer contributions will start to apply from October 2012.

If you've been keeping abreast of the information in our newsletters regarding the new points-based immigration system, you will be aware that in order to employ a foreign worker you must apply to the UK Border Agency (UKBA) to become a registered sponsor and you will need to prove that there is no resident worker able to do the job. Some 4875 businesses have now registered as sponsors of migrant workers.

Under the system for skilled and temporary workers — known as Tiers 2 and 5 — would-be migrants also need a job offer before they may even apply for a visa, unless the job is on the UKBA's shortage occupation list. The Home Secretary has announced that employers will now be required to publicise skilled job vacancies on the Jobcentre Plus network before advertising them abroad. Jacqui Smith said "When it comes to immigration, in difficult economic times I believe we need a tough system that offers British workers the first crack of the whip for British jobs."

The government has also announced that the tighter restrictions placed on Bulgarian and Romanian migrants will currently remain in place. Workers from these EU states do not have free access to the UK labour market.

And new rules also apply to business visitors. Previously, these did not require special permission to visit the UK provided that they did not charge members of the public for services provided or goods received. They were generally allowed to attend meetings, trade fairs, conferences and negotiate and conclude contracts without restriction.

Under the new rules, there is a dedicated business visa for those who want to come to the UK on business for up to six months. Applicants must prove that they will be carrying out specific activities such as attending meetings or conferences; arranging deals, negotiating or signing trade agreement or contracts; undertaking fact-finding missions, checking details or goods or conducting site visits and promotional activities.

For a general overview of the rules regarding foreign workers, see /docs/legal/foreignnationals.html

The Independent Safeguarding Authority (ISA) is now responsible for making barring decisions on new referrals under the List 99, PoCA and PoVA barring lists concerning those working with children or vulnerable adults.

Those with a duty to refer under the above schemes should send new referrals made on or after Tuesday 20 January 2009 to the new referral address: Independent Safeguarding Authority, PO Box 181, Darlington, DL1 9FA.

In an interesting case on this subject, the House of Lords has decided that the list of banned workers is inconsistent with Article 6 of the European Convention on Human Rights, and has issued a Declaration of Incompatibility.

The case (R v Secretary of State ex p Wright & ors) concerns care workers who look after vulnerable adults or children. Under current legislation, if an employer dismisses an employee because they have harmed (or placed at risk of harm) a vulnerable person, then their name must be added to a list held by the Secretary of State and they are banned from employment by any other care provider.

Employees may be placed on this list with little, if any, enquiry (and with no right to make representations). The appeal process takes months, during which time the employee cannot work, and the majority of those who appeal do succeed in their request to be removed from the list.

The current legislation will however remain effective until amended by parliament.

For more advice on working with children and vulnerable adults, see /docs/guides/child.html

Discrimination - religion/belief

There haven't been too many cases on religion - it's interesting that this month saw two interesting ones.

The first, London Borough of Islington v Ladele, concerns a Registrar of Births, Deaths and Marriages, Lillian Ladele, who requested not to be involved in civil (same sex) partnership ceremonies as she argued that that was contrary to her faith (orthodox Christian).

Miss Ladele was disciplined following her refusal. The original tribunal found that she had been subjected to direct and indirect religious discrimination as well as harassment by other employees who had complained about her stance.

However the Employment Appeal Tribunal has overturned this and argued that employers should not be forced to compromise their commitment to equal opportunities to accommodate the wishes of an individual employee, even where those wishes are based on a strong religious conviction.

They noted that Islington had a legal duty to provide registration services for same sex marriages. They said that disciplinary action was not taken against Miss Ladele for holding her religious beliefs; but because of her refusal to carry out civil partnership ceremonies. They found that all Registrars had been subject to the same rules and that Miss Ladele was not treated any differently than anyone else.

They then considered indirect discrimination and questioned whether the council's requirement for registrars to carry out civil partnership duties was a 'proportionate means of achieving a legitimate aim'. They decided the aim was legitimate, and then looked at whether it was 'proportionate' to require all registrars to perform the full range of services. They accepted that this requirement placed Miss Ladele at a disadvantage. However they decided that the borough was entitled to say that the claimant could not pick and choose what duties she would perform in circumstances where her personal stance involved Miss Ladele herself discriminating on grounds of sexual orientation.

Miss Ladele's lawyer has requested permission to appeal, so this may not be the end of this case. She is still employed by Islington Council.

In the second case, Ahmed v Tesco Stores Limited, the employment tribunal held that a Muslim warehouse worker who was required to handle alcohol in the course of his work was not indirectly discriminated against on the grounds of his religious beliefs. Tesco had made its requirements clear (and had documented these) during the interview.

Tesco successfully argued that it was not possible to maintain the supply of alcohol to its stores without requiring employees in Mr Ahmed's role to carry it. They did not argue that Muslims in general were not disadvantaged by the requirement, despite the fact that 20 out of 120 workers on Mr Ahmed's shift were Muslim and had not complained.

For more general guidance on discrimination on grounds of religion, see /docs/legal/beliefdiscrim.html

Discrimination - equal pay and length of service

We reported previously (2006) on the case of Cadman v Health & Safety Executive which concerned pay grades based on length of service. In this case the European Court of Justice (ECJ) held that if the nature of the job was such that a different pay grade could be justified based on length of service, a tribunal could not then question the application of such criteria for equal pay purposes. However where a woman provides evidence capable of raising serious doubts about the appropriateness of length of service criteria, specific justification will be necessary.

In Wilson v Health and Safety Executive the Employment Appeal Tribunal looked at this issue again.

Mrs Wilson, an HSE inspector, was paid less than her three male colleagues - who did the same job and were rated as equivalent in a job evaluation study. The men had longer service and pay increments were awarded over a 10 year period - the HSE argued that greater experience was more valuable to them.

Mrs Wilson accepted that performance was likely to improve with experience for the first few years, but argued that the 10 year period was too long to be justifiable. The tribunal found the length of service criterion did disadvantage female employees (who tend to have shorter service than male colleagues due to childcare commitments) and agreed with Mrs Wilson, but they dismissed her claim because they believed that the outcome of the Cadman case meant that if a length of service criteria could be justified no further action could be taken.

Mrs Wilson appealed and her appeal was upheld. The EAT saw no reason to limit the test and said that 'serious doubts' could also apply to the time period during which a length of service criterion affects pay.

If you have incremental pay scales based on employees' length of service (which used to be very common in the public sector), do ensure that you can justify the relationship between pay and length of service so as not to fall foul of the Equal Pay Act. Age discrimination should also be considered when applying length of service criteria particularly for service beyond five years.

For guidance on equal pay audits, see /docs/guides/payaudit.html

Disability discrimination - lack of knowledge of disability

In Eastern & Coastal Kent PCT v Grey, the EAT advised that each (not just one) of the following four points need to apply for an employer to be exempt from the duty to make reasonable adjustments for a disabled person: the employer

• does not know that the disabled person has a disability
• does not know that the disabled person is likely to be at a substantial disadvantage compared with persons who are not disabled
• could not reasonably be expected to know that the disabled person had a disability and
• could not reasonably be expected to know that the disabled person is likely to be placed at a substantial disadvantage in comparison with persons who are not disabled.

For general guidance on disability discrimination, see /docs/legal/disabilitydiscrim.html

A further reminder - do check those cvs!

In times of recession where jobs are harder to come by, it can be expected that candidates may be more willing to be economical with the truth when selling themselves, may omit key information - and may even lie.

So note that a senior NHS director has been jailed for exaggerating his qualifications in his job application.

Lee Whitehead was appointed Director of Planning and Modernisation at Stoke-on-Trent Primary Care Trust (PCT). He resigned from his £78,000-a-year job six months after being appointed, following suspicions raised by a co-worker and when he was unable to provide proof of his qualifications. He had falsely claimed that, in addition to being a member of the British Psychological Society (BPS), he had a first-class Bachelors degree, a Masters degree and a doctorate. (He actually only had a second-class BSc in Psychology and was not a member of the BPS.)

Even though his post did not require the Masters degree, a PhD or membership of the BPS, the court awarded a 12-week prison sentence after Mr Whitehead pleaded guilty to "obtaining a pecuniary advantage by deception and making a false instrument".

He had made the same claims on applications going back to June 2003.

And another case on the same topic. This is a High Court case in which the former general manager of Cheltenham Borough Council is being sued for nearly £1 million after allegations that she failed to disclose that she suffered from depression on her cv.

We can only urge you to take up full references and to check qualifications where these are essential for the job (and driving licences if the person drives on business).

We offer three template reference requests on the website - for employers, school/university and personal referees - see /docs/lf/reference/index.html

Resignations and the right to withdraw

In Ali v Birmingham City Council, Mr Ali resigned in the heat of the moment. He was given a 30-minute cooling off period after which he reconfirmed his intention to resign. When he tried to withdraw his resignation four days later this was refused.

The EAT upheld the original tribunal's decision that he had resigned and therefore could not claim unfair dismissal - a delay of four days was too long.

We advise that you always write to confirm your acceptance of your employees' resignations and to cover all administrative points - use our template letter - see /docs/lf/resig/index.html

A reminder that as from 16 January, the Health and Safety Offences Act has made imprisonment an option for many health and safety offences.

The Act also raised the maximum penalties which lower courts can impose from £5000 to £20,000, increased the range of offences for which an individual may be imprisoned and makes certain offences, which were previously only dealt with in the lower courts, able to be tried in both lower and higher courts.

The British Safety Council is warning businesses that reducing costs by cutting back on health and safety training could endanger lives and cost companies dearly. Research conducted by them found that two out of three employers have had little or no health and safety training. Less than half of those surveyed had arranged a safety audit or had a health and safety management system in place.

Claims cost an average of £30,000 and also can severely damage reputation. Employers pay out £7.8bn each year for accidents and injuries at work.

Given the above also, do read our health and safety guidance - /docs/TPhasaw.html And if you need specialist advice, our partners Bradleys Environmental, will be only too happy to quote for this.

A busy month. We've added the following to the website:

• an extended range of TUPE letters, a letter inviting a pregnant employee to a meeting to prepare her risk assessment and explaining the process, letters acknowledging a speculative application and accepting a volunteer for redundancy - see /docs/TPdocuments.html
• an extended leave policy - see /docs/TPcontract.html
• DOs and DON'Ts for managers on grievances (available to premium users only) see /docs/TPdocuments.html
• Drivers Handbook (available to premium users only) - see /docs/pol/driver/index.html

Our premium service offers a wider range of more specialist documents, but also allows clients to generate policies on our website and store these - when they then come to update them, a website tool runs a comparison and shows them the differences between their customised version and our most recently updated one - making updating policies easy and quick. We are also working on offering word-processing versions of letters so that the format can be easily changed to suit your company style and this will be offered as part of the premium package, which costs just £100 more per annum.

For more information see /intro/premiumservice.html

Unsurprisingly, the combination of the credit crunch plus worries about job security is having a negative effect on many people. A study conducted by Onepoll found that:

• 92% of employees are experiencing stress in the workplace
• 31% fear redundancy
• 44% of workers were losing sleep through stress
• 32% were becoming over-emotional for the same reason
• 15% were drinking to help them cope.

The fear of increased workloads and worrying about redundancy are the top two stress factors, with 34% and 31% feeling these are their biggest fears for the coming year. 24% admitted to taking time off work due to stress.

The Roffey Park Institute also found that 2/3 of the managers they surveyed claimed to be under more pressure at work because of the economic climate.

The TUC reported that an estimated 5.24 million people put in a record £26.9 billion-worth of unpaid overtime last year. They attribute this to feelings of job insecurity. Their safety representatives' survey also found that overwork and stress were by far the most frequently identified hazards. 60% of safety reps identified overwork or stress as a concern.

Take a look at our guide to stress: /docs/guides/stress.html and do keep an eye on vulnerable employees.

Unemployment is now 1.86 million according to the latest government figures - an unemployment rate of 6%.

The CIPD is predicting job losses to total 600,000 in 2009. The magazine Personnel Today has developed a redundancy tracker giving an idea of how many redundancies there have been across the UK. It lists major firms that have made employees redundant or gone into administration, resulting in confirmed UK job losses. The figures are based on stories reported on Personneltoday.com and by national media since September 2008.

Total employees made redundant since September 2008: 89,443 (as at 29.1.09)

If you want to be depressed, go to www.personneltoday.com/articles/2009/01/13/48935/redundancy-tracker-and-uk-job-losses.html

The CIPD's "Barometer survey" confirms that employees are realistic about their likely pay increases in 2009. Of the 2,604 staff surveyed:

• 28% expected no increase
• 26% expected a smaller increase than 2008
• 23% expected the same increase as 2008
• 11% expected a higher increase than 2008
• 2% expected a pay cut

See www.cipd.co.uk/surveys