A reminder that this month sees the following:

• 1 April: increase in the minimum holiday entitlement to 5.6 weeks
  Working Time (Amendment) Regulations 2007
  Note the 5.6 weeks may include bank/public holidays.
  Our hot topic this month will cover the practical ramifications of this but in the meantime see /docs/legal/stathol.html and do ensure that you inform any affected staff of the increase.

• 5 April: Increase in SMP, SAP and SPP
  SMP, SAP and SPP increase to £123.06 (from £117.18)
  See /docs/legal/keystatistics.html
  However it would seem likely that plans by the European Commission to introduce a right to full pay for women on maternity leave will be resisted by the UK.

• 6 April: Increase in SSP
  SSP increases to £79.15 (from £75.40)
  see /docs/legal/keystatistics.html

• 6 April: extension of the right to request flexible working to parents of children up to 16
  Flexible Working (Eligibility, Complaints and Remedies) (Amendment) Regulations 2009
  This is likely to enable a further 4.5 million workers to make a flexible working request. The same request procedure (and timescales) apply.
  See: /docs/legal/flexible.html and www.direct.gov.uk/en/Employment/Employees/Flexibleworking/index.htm

• 6 April: repeal of the statutory dispute resolution procedures
  The Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2008
  Our hot topic last month covered this in detail and the guidance on our website, together with the template procedures and letters have been updated. If you haven't already done so, we would suggest that you review your grievance and disciplinary procedures to ensure compliance with the ACAS Code of Practice.

• 6 April: tighter rules on enforcing the national minimum wage and penalties for failure to pay this
  Employment Act 2008 (Commencement No. 2 Transitional Provisions and Savings) Order 2008
  Arrears will be calculated at the current NMW rate and there is now an unlimited fine for underpayment of the national minimum wage or employment agency offences.
  See /docs/legal/minimumwage.html

• 6 April: unions and political party membership
  Employment Act 2008 (Commencement No. 2 Transitional Provisions and Savings) Order 2008
  Unions now have the power to expel or exclude an individual on the basis of their membership or former membership of a political party.

• 6 April: employment tribunal claims
  The Employment Tribunals Act 1996 (Tribunal Composition) Order 2009
  Allows an employment judge to sit alone to hear certain WTR claims.

• 6 April: TUPE
  Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2009
  Reflects the repeal of the statutory dispute procedures - in future the transferor is required to provide information where the ACAS Code of Practice on disciplinary and grievance procedures applies.

• 6 April: PAYE
  All employers who have 50 or more employees will be required to upload their forms online.
  HMRC has introduced new P45 forms which must be used from 6th April (the old ones will become invalid from that date). The new forms are now A4 size (rather than A5) and contain extra fields for the employee's date of birth and gender.
  See www.hmrc.gov.uk/paye/file-or-pay/fileonline/tasks/in-year.htm and www.hmrc.gov.uk/employers/updated-p45.htm

Tier four (covering students) of the points-based immigration system is now in force.

See: /docs/legal/foreignnationals.html

More details are available on the UK Border Agency website.

It would appear that unfair dismissal claims are about to reclaim their previous position of being the most frequently lodged claim at tribunals (equal pay claims overtook unfair dismissal last year).

The provisional number of unfair dismissal claims accepted from April 2008 to February 2009 rose to 47,155 (up from 40,941). Perhaps unsurprisingly, redundancy claims also increased (from 7,313 to 9,220) as did claims for a failure to inform and consult about redundancy (from 4,480 to 7,382).

Equal pay claims remain high (42,416), but were less than the previous year (62,706). The statistics suggest that 2007–08’s record figure represented a peak in the number of claims, and it is expected that this year’s total figure will be in line with the 44,000 claims submitted in 2006–07.

Fewer women lodged claims for sex discrimination in 2008–09 than in the previous two years. There was an average of around 1600 cases a month - a substantial decline from the average of 2330 in 2006–07. The success rate for claimants in sex discrimination cases remains low: around 3%.

Sadly, whilst the rise in employment tribunal claims may have been due in part to the dispute resolution procedures, which are now repealed, it may be that the figures won't fall back to their previous levels as there was a dramatic increase in claims in the three recent previous recessions in the mid-70s, 1981 and 1990.

See: www.employmenttribunals.gov.uk/Publications/publications.htm for the 2007-8 report.

You may recall the government considering the introduction of mandatory equal pay reviews - this was proposed in the Equality Bill, published in draft in June 2008.

Employers’ groups have since lobbied strongly against this, arguing that such a measure would impose unnecessary and unacceptable administrative burdens on businesses. The Equalities and Human Rights Commission has now said that, whilst radical reform with regard to equal pay remains one of their objectives, the current economic climate in the UK is too uncertain to accommodate the introduction of mandatory equal pay reviews by businesses. They are instead recommending that flexible working rights be further extended and that employment tribunals be allowed to consider representative actions in order to help reduce the damaging backlog currently affecting the tribunals system.

The Government has now confirmed that it will not include mandatory gender pay audits in the forthcoming Equality Bill, due to be introduced in Parliament in the Spring.

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

As from 2012 (not confirmed, but expected to be October 2012), it will be compulsory for employers to contribute to the new personal account pension scheme, which employees, workers and agency workers will automatically join when they start a new job, unless the employer provides an alternative which is as good or better.

Employers will be required to offer a qualifying workplace pension scheme to their workers and to automatically enrol all eligible workers into this scheme. (Eligible workers are those who earn above £5,035, are aged between 22 and State Pension age - currently 65 - and who are not in a qualifying scheme. If they are younger, or earn below this lower threshold, the obligation begins either on the worker's 22nd birthday, or if his/her earnings rise above the threshold.) It is estimated that this will affect over 10 million (mainly lower paid) employees in the UK.

Following a phasing in period, the minimum contribution rate will be 8% of 'qualifying earnings': workers will be required to contribute 4%; employers will be required to contribute 3%, whilst tax relief will be worth 1% (making a total contribution of 8%). 'Qualifying earnings' are based on income between £5,035-£33,540.

The 8% minimum contribution will therefore never be more than 6.8% of gross earnings, and data just published by the Department for Work and Pensions suggests it will typically be far less. This is because the median income of relevant employees is significantly lower than the cap, and a large proportion of their income is therefore ignored when calculating the statutory minimum contributions:

According to Watson Wyatt,

• for around half of those auto-enrolled, 8% of 'qualifying earnings' will be equivalent to 5.6% of gross earnings or less
• for around one in five of those auto-enrolled, 8% of qualifying earnings will be equivalent to less than 4% of gross earnings
• for around half of those auto-enrolled, the statutory minimum employer contribution will be 2.1% of gross earnings or less.

Whilst this change is three years away, it is worth starting to budget for this now.

For more details see /docs/legal/pension.html

Discrimination: disability

You may remember a recent disability case which reversed our previous thinking. Until this case (London Borough of Lewisham v Malcolm), general opinion was that in cases involving attendance or absence issues, we should NOT take absences due to disability into account. Following Malcolm the guidance changed so that whilst a disabled person may be absent because of his/her disability and may suffer a detriment because of the absence, the chief question to consider is actually whether someone not disabled, but absent, would be treated the same way.

In a further case, Stockton on Tees Borough Council v Aylott, the EAT has confirmed that employment tribunals should follow the approach set out in Malcolm. However, the judge gave a further example which is useful - you may be surprised at her final comment!

"Although [a disabled person] may not now be able to establish that they have been discriminated against for a reason related to their disability within the meaning of Section 3A(1), they may be able to establish discrimination by the employer's failure to make reasonable adjustments under Section 3A(2) and 4A. An employee who is not able to drive because of his disability who is disciplined for frequently arriving late for the night shift would not be able to establish discrimination for a reason related to his disability if a non-disabled person with a similar record of bad time-keeping would also be disciplined. However, depending on the circumstances, he could claim that his employer had discriminated against him by failing to make a reasonable adjustment by not providing him with transport."

Discrimination: race

Osborne Clarke Services, a firm of solicitors, recruited trainee solicitors through an online application process which stated that they did not accept applications from candidates who required a work permit to work in the UK.

Mr Purohit, an Indian national, applied for a training contract but was turned down on the basis the firm was unable to obtain work permits for trainee solicitor roles. Mr Purohit subsequently brought a claim for race discrimination.

The solicitors referred to the Border and Immigration Agency’s Guidance for Employers. This stated that the employer must show why the post in question could not be filled with a ‘resident worker’ (an EEA national), who is either suitably qualified or experienced or one who, with extra training, could do the job. Osborne Clarke had received 290 applications and offered 26 training contracts. On this basis, they assumed that any application for a work permit would be unsuccessful.

The tribunal rejected their arguments. It criticised the firm for failing to check with the BIA whether a work permit would be granted for trainee solicitors, particularly since they had successfully obtained work permits for qualified solicitors. The tribunal referred to the Code of Practice on Racial Equality and Employment, which makes it clear that appointments should be made on the basis of merit and issues around work permits should be left until the last stages of the recruitment process to avoid the risk of unlawful race discrimination. The additional cost and administrative inconvenience of applying for work permits was rejected as justifying the indirect discrimination suffered by Mr Purohit.

The firm lost at tribunal and appealed to the EAT, and their appeal was dismissed. They had not established that the indirect discrimination was justified.

So, rather than having a blanket policy which automatically rejects those who require permission to work in the UK, employers should check, under the new points based system, whether non-EEA nationals may qualify under the new regime in respect of any particular job. An employer who has a policy of not accepting applications from people who require a work permit is at risk of claims for indirect race discrimination.

Discrimination: age

In Baker v National Air Traffic Services Ltd, the EAT decided that an automatic ban on the recruitment of air traffic controllers over the age of 35 was directly discriminatory on the grounds of age and could not be justified.

The employer tried to justify the age limit by claiming that they sought to:

1. achieve a high success rate in training
2. ensure an adequate pool of ATCOs
3. ensure a reasonable period of service
4. ensure that existing safety processes and systems are not compromised.

The ET felt that the aim was legitimate, but the age bar was not a "proportionate means" of achieving this. Other countries don't have an age bar and NATS did not provide sufficient evidence to back up their claims - the court found that the majority of failures in relation to training happen early on where the costs are not that high in comparison to the overall training; there was no evidence as to how the bar would aid retention to ensure a reasonable period of service, and as ATCOs are continually monitored, monitoring an older worker would not be any more difficult than monitoring a younger worker - so the safety argument did not convince them either. The employer did not prove a link between older air traffic controllers and poor safety. Neither had they considered alternative ways of achieving their legitimate aim.

Disciplinary hearings: right to be accompanied

The legal right to be accompanied at a disciplinary or grievance hearing is restricted to a colleague or a trade union representative.

However, in R (on application of G) v The Governors of X School and Y City Council (2009), the claimant was employed as a music assistant at school X. The school commenced disciplinary proceedings against the claimant as a result of an abuse of trust including allegations that he had kissed a 15 year old pupil. He was then dismissed for gross misconduct.

At the hearing, the claimant asked to be represented by his lawyer. The school refused and confirmed that he was only entitled to be represented by a trade union representative or fellow worker. He therefore sought judicial review of the decision on the grounds that the refusal to allow him legal representation at the internal hearings constituted a breach of his right to a fair trial under Article 6 of the European Convention on Human Rights (ECHR).

The High Court felt that the gravity of the allegations (sexual impropriety with a person under 18 and abuse of position of trust), taken together with the impact of potentially being added to the sex-offenders register (meaning that he was deemed unsuitable to work with children again) meant that the employee was entitled to legal representation.

This case clearly is quite specific. But the implications are that if an employee is in any kind of job which is governed by a regulator, and conduct is alleged which would result in sanction by the regulator, the employee will have the right to legal representation at an internal hearing. The implications are strongest for the public sector and financial services, where certain kinds of misconduct can lead to individuals losing not only their current job but the right to undertake that kind of work for anyone.

Dismissal: compensation

Compensation for unfair dismissal can reflect ongoing pension losses.

In Aegon UK v Roberts, Ms Roberts brought a successful unfair dismissal claim. She got another job straight after her dismissal which actually paid more than her previous job, but it only offered a money purchase pension scheme, not a final salary scheme. Ms Roberts was not awarded any compensation for future loss of earnings but was awarded over £37,000 in respect of her ongoing pension loss.

On appeal to the Employment Appeal Tribunal (EAT), Aegon argued that since Ms Roberts’ new remuneration package was better overall, even taking into account the less favourable pension arrangements, the tribunal should not have awarded her any compensation.

The EAT disagreed and upheld the tribunal’s decision to treat loss of earnings and pension loss differently. The tribunal was entitled to decide that the loss of the final salary pension scheme was very significant and constituted a unique type of loss.

Dismissal: when is the decision communicated?

In Gisda CYF v Miss L J Barratt, the letter informing Miss Barratt of her dismissal was delivered to her address on 30 November but not read until 4 December. This meant that the time limit for presenting a claim therefore ran from this date, not from 30 November.

In many cases, decisions to dismiss are communicated in person and then confirmed in writing. But if you propose to send a letter, it may be worth checking that the employee will be at home; that you have the employee’s correct address on file and send the letter by recorded delivery (so it has to be signed for).

Unfair dismissal: continuity of employment

In certain circumstances an employee who is laid off and then re-hired can still have continuous employment, giving him/her sufficient service to bring a claim of unfair dismissal.

This case (Da Silva Junior v Composite Mouldings and Design Ltd) is complicated as the original company (Andream Ltd) went into liquidation. Mr Da Silva had joined Andream Ltd on 11 November 2005. All employees were dismissed on 1 December 2006 by the majority shareholder, Mr Greenwood. A liquidator was then appointed on 20 December.

In early January 2007, Mr Greenwood acquired some of the assets of Andream and began trading as Composite Mouldings (which he had set up on 20 November) at the same premises, with the same machinery and the same employees. Mr Da Silva joined on 14 January 2007 but was dismissed on 17 August. He claimed unfair dismissal.

The employment judge said the six week break in his employment was "an absence on account of a temporary cessation of work" under the Employment Rights Act. But the judge then decided that by the time Mr Da Silva started work for Composite Mouldings, the two companies were no longer "associated", as required under the ERA, as Andream had gone into liquidation.

The EAT disagreed. It said that under the Insolvency Act 1986 a company in voluntary winding up remains in existence until actually dissolved. The fact that "during the liquidation, the company spoke through the liquidator" did not affect the issue of control which remained throughout with Mr Greenwood - he had dismissed Mr Da Silva, called in the liquidator and re-hired Mr Da Silva. The same owner was still in charge.

Mr Da Silva's continuity of employment was therefore preserved by the temporary cessation of work and his employment by an "associated" employer and he is able to bring his claim.

Unfair dismissal: redundancy selection

A waitress who was dismissed on grounds of redundancy claimed that the real reason for her dismissal was that she had raised health and safety issues. Maria Moon claimed she had suffered flea bites in a chalet provided by the employer (a holiday complex). She complained that the chalet had a broken shower, had damp coming through the walls and soiled mattresses. Miss Moon was told by her doctor that she had infected insect bites which were probably from rat fleas.

Following her complaints she was dismissed on the grounds that the coffee shop where she worked was overstaffed.

The tribunal decided that although there was overstaffing no-one else was seriously considered for redundancy. In the absence of proper consultation and clearly documented selection procedures, it concluded that it was far more likely that her dismissal was triggered by her having raised health and safety issues and was therefore unfair.

TUPE: inheriting staff on a service provision change

Another case involving solicitors!

In Barnetts Solicitors v Royden, Barnetts won a £1m contract from the Britannia Building Society to do their conveyancing work. 23 employees, assigned to the Britannia contract, had the right to transfer over to Barnetts.

The staff worked in Birkenhead but, post-transfer, would have been required to work at an office in either Southport, Bradford or Manchester. Southport was the only location the staff were (reluctantly) prepared to consider but they instead resigned and claimed constructive dismissal on the grounds that the transfer breached their contracts.

The employment judge ruled that Barnetts had failed to consult with the 23 staff "affected by a service provision change". The employees had been subject to a "substantial change in working conditions to their material detriment".

The employees won their case of unfair dismissal and also claimed awards for failure to consult.

The conciliation process has now started in Brussels to try to resolve the differences between the European Parliament and the Council of Ministers over our current ability to opt-out from the Working Time Directive. Whilst it may be that the right to opt-out will remain, it is likely that further rules will be introduced (eg no right to opt out in first month of employment, cap on 60 hours per week, rules on "on-call" time).

Watch this space!

Given that this month includes Depression Awareness Week (21-26 April), the announcement by the HSE of a new website aimed at preventing work-related stress seems timely. This includes updated advice and guidance, tools to help prevent stress at work, a self-assessment questionnaire for managers and case studies.

In 2008, 13.5m days were lost due to work-related stress.

See: our guide to stress /docs/guides/stress.html and the new HSE site: www.hse.gov.uk/stress/index.htm

It's official: night shifts are bad for you! It has been recognised for some time that night workers may suffer from disturbed sleep, fatigue, digestive problems and a greater risk of accidents at work. But employees who develop cancer after working night shifts could now have grounds for legal action against their employers.

The Danish government is the first to award payments to women who have developed breast cancer after working night shifts for prolonged periods. The International Agency for Research on Cancer (IARC), part of the World Health Organisation, studies and ranks cancer risks. Their findings (which looked at 40,000 workers) suggest that the incidence of breast cancer among women who had worked night shifts for more than 30 years was 36% higher than among those who had not. The researchers suggested that this could be due to low levels of the hormone melatonin among night-shift workers.

"Category One" risks are known carcinogens such as asbestos; night working is now just one step below that as a probable cause of cancer.

No new additions to the website this month - we have been busy reviewing and updating all of our guidance on discipline, grievances, dismissal (including redundancy, absence, expiry of fixed-term contracts), employment tribunals, holidays, flexible working - plus all associated template policies, letters and forms!

If you haven't reviewed your grievance and disciplinary procedures we would strongly advise you to do so.

Premium users can do this by viewing the comparison between the latest version they created and our current template - all changes are highlighted for them. See: /intro/premiumservice.html

The number of people searching for second jobs within the hotel, hospitality and catering industry has increased dramatically over the past 6 months. A recruitment company received over 400 applications in response to its advert for 20 breakfast waiters at a major London hotel - six times as many as this time last year. The job paid only the minimum wage and almost two-thirds of the applications were already in work of some kind. The company also reported an increase in applicants from the UK - from 21% of all applications to 37%; yet another indication of how the credit crunch is affecting job applications.

Don't forget that all hours worked come under the 48 hour maximum unless an employee has opted out - so do check if your employees are undertaking outside work, and if so, inform them that if they are to work more than 48 hours a week on average, in total, they will need to sign an opt out agreement.

See: /docs/lf/optout/index.html

Insecurity:

The Treasury is now predicting that unemployment will reach 3 million this year. It is already at its highest level since 1997. Unsurprisingly more and more workers are growing increasingly concerned over the security of their jobs. A poll of 5,000 workers by Jobsite.co.uk, found that one in five workers (19%) are concerned about being made redundant from their current position; 12% are reluctant to move jobs as a result of recession fears but 16% (largely those with short service) are looking to change jobs before they face redundancy.

BUPA has reported an increase of around 183% in the number of people fearing redundancy since September 2008. They have also experienced an increase of 41% in the number of calls to their counselling helpline about stress at work.

Public sector pay:

The Office for National Statistics (ONS) has produced figures which highlight the degree to which public sector pay and employment has remained immune to the impact of the recession. At the same time the government has confirmed that NHS staff and police officers will receive their previously agreed pay awards in full. This is despite the fact that the Retail Prices Index, which is used to set public sector pay, has fallen to zero. Under the agreement, nurses continue to receive pay rises under "long-term deals", which will lead to a 2.4% increase in 2009-10, with a further 2.25% boost the following year. It is expected that teachers will get an additional 2.3% both this year and next, while police officers' pay will increase by 2.6% in 2009-10, with another 2.55% rise in 2010-11.

The pay deals were agreed before the recession set in but the government now faces mounting calls from the private sector – where many have been forced to introduce pay freezes – for the awards to be re-evaluated.

Shorter working hours or pay cuts:

A survey by law firm Pinsent Masons LLP found that 55% of employers have implemented alternatives to redundancy in a bid to protect jobs, with a further 32% considering this. Alternatives included pay freezes or reductions (including bonuses), lay-offs, short time working, early retirement, corporate restructuring such as outsourcing. Large firms mentioned in the press recently include Thomson Airways (whose pilots have agreed to take a 5% pay cut), accountants KPMG (where 85% of staff have opted for either a four-day week or a three month sabbatical if necessary) and BT, which has imposed a pay freeze across all of its staff, including its chief executive.

We've also found that our clients are showing much more interest in avoiding redundancies - and that staff are more willing to consider things which would have been rejected out of hand previously.

Do bear in mind that unless your contracts permit this, any "across the board" cuts in pay, hours or benefits will have to be agreed by staff.

A majority vote is insufficient to impose pay cuts, reduced benefits or shorter working hours on all employees. Without an express contractual right it is important that employees individually agree before any detrimental change is imposed. If some do not accept the change and you impose it you run a risk of claims for unlawful deductions from wages, breach of contract and constructive unfair dismissal. Any employees who refuse to consent to a change have the right to remain on their contracted terms.

In practice, if the majority agree to lower pay to avoid redundancies it would not be acceptable to have a few fellow workers doing the same job for more. Apart from any potential legal issues this is likely to cause considerable ill-feeling.

On the basis of a reasonable business case, after consultation you could dismiss them and offer immediate re-engagement to start after they have worked their notice. The terms of the new contract would be those already agreed by the others. The dismissal would be for 'some other substantial reason'. However you will have to ensure that your actions are seen as reasonable (and, if commenced prior to 6 April this year, that you have complied with the statutory dismissal procedure) as there is the potential for the employees to reject the offers of re-engagement and bring claims for unfair dismissal.

The fact that the large majority had accepted, and the current economic situation, will help your case.

Age discrimination in selection criteria:

If you are facing redundancy situations for the first time, do be aware that you do need to follow the correct procedures, and there are a few new pitfalls to consider.

Many employers still think that LIFO (last in, first out) is an obvious selection criteria, but do be aware that this should only be used as one of a number of criteria and not the sole one. Research by UK law firm Dundas & Wilson found that less than a third of British businesses consider age discrimination to be a major issue in redundancies and many seem unaware that LIFO is potentially age discriminatory.

Redundancy came close to the bottom of the pile among the issues businesses had already tackled following the introduction of the age discrimination laws in 2006 and less than half had considered the impact of the legislation on redundancy procedures.

Severe action:

Things may be bad but we've not heard of a UK equivalent to this French situation.

Apparently workers at a Sony plant in South West France held two of their managers hostage! The managers were held for 18 hours but have now been released.

The plant is shutting down with the loss of 311 jobs. Workers were told they would be dismissed and given one month's salary for every year worked, but nothing for years worked after the age of 55. They were unhappy with this: workers at other Sony plants which had closed recently had received better terms and the French workers wanted the same - especially for over 55s.

The press reports also gave information on French benefits and it is interesting to see how they differ from ours. The minimum redundancy payment in France for employees with more than two years' service is 20% of a month's salary per year of service up to 10 years, plus an additional two fifteenths (0.133%) of a month's salary per year of service after 10 years. Unemployment benefit ranges from 57% to 75% of the claimant's last salary, but is capped at €6,366.80 a month.