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Monthly update May 2009
Welcome to BusinessHR's May update.
Employment law update
Increase to statutory redundancy pay
The limit on a week's pay for the purposes of calculating
statutory redundancy pay (SRP) will be increased from £350
to £380. The maximum amount of statutory redundancy pay
will therefore also increase from £10,500 to £11,400 (20
years x 1.5 weeks x £380).
SRP was last increased in February and it would be usual for the
next increase to have been due in February 2010. The Department
for Business, Enterprise and Regulatory Reform is indicating
that the change will take effect from 1st October this year.
What is not clear yet is whether there will be an identical
increase to the statutory basic award for unfair dismissal
claims.
Equality Bill published
The long-awaited Equality Bill has now been published. This aims
to combine all of the existing legislation on discrimination into
a single statute and contains 205 clauses plus 28 Schedules.
The main features to note are summarised below. Note that as the
Bill goes through through parliamentary process some parts may
go, others could be altered and new provisions could be
introduced. The majority of the provisions are however expected
to come into force in October 2010.
Positive action in recruitment/promotion decisions
The Bill allows employers to positively discriminate during
recruitment in favour of disadvantaged groups when choosing
between candidates who are otherwise equally qualified. Such
decisions must be made on a case-by-case basis, as opposed to
having a blanket policy of positive action.
This is not going to be straightforward, as employers who use
such positive action risk discrimination claims from
unsuccessful candidates who may challenge whether candidates are
truly equal, as well as the assessments of under-representation
and disadvantage. In addition there are concerns about the
extent to which positive action is permitted under EU law.
Equal pay and pay transparency
The Bill maintains the current regime around sex discrimination
in relation to pay but attempts to clarify the law in some
respects.
Any clauses in employment contracts that seek to prevent workers
discussing their pay packages will be outlawed.
A clause allows the Secretary of State to order private sector
employers with at least 250 employees to publish information
about differences in pay between their male and female
employees. The government claims it has no plans to do this
straight away but instead will monitor whether voluntary
disclosure is sufficient; if it feels that insufficient progress
has been made then it may make publication compulsory.
Discrimination by association or perception
This reflects recent European case law by outlawing direct
discrimination or harassment if this arises from the victim's
association with someone who has a disability, or is of a
particular age, sex, sexual orientation, racial origin or
religion or belief. Discrimination on the grounds that someone
is 'perceived' to possess a protected characteristic will also be
unlawful.
Disability discrimination
An impairment currently usually only qualifies as a disability
if it affects one or more of the following:
- mobility
- manual dexterity
- physical co-ordination
- continence
- ability to lift, carry or otherwise move everyday objects
- speech, hearing or eyesight
- memory or ability to concentrate, learn or understand
- perception of the risk of physical danger.
The Bill abandons this list and relies instead on the general
requirement that an impairment is long term (12 months or more)
and has a substantial effect on a person's ability to carry out
normal day-to-day activities. Further regulation or guidance is,
however, likely.
Age discrimination by service providers
Service providers will, for the first time, be prohibited from
discriminating against customers, clients and other service
users on grounds of age, although there may be some exemptions,
eg holidays aimed at certain age groups.
Public sector equality duties
Public bodies currently have a duty to have due regard to the
need to eliminate unlawful discrimination, victimisation and
harassment and to promote equality of opportunity in the areas
of sex, disability and race. These duties will be combined and
extended to cover religion and belief, sexual orientation and
age and all of these will be incorporated into a single,
streamlined duty. The Bill also contains a new duty for some
key public bodies to pay due regard to socio-economic
disadvantage in making strategic decisions.
Diversity information when tendering
The Government Equalities Office wants public authorities to
require businesses bidding for public sector contracts to
evidence their 'diversity credentials'. The Bill gives the
Government the power to make regulations that will force public
bodies to consider equality issues in certain cases.
Recommendations by tribunals
Tribunals will have greater powers to make recommendations in
cases where unlawful discrimination has been proved. At the
moment they can recommend that an employer takes steps that will
reduce the effect of discrimination on the claimant. This will be
extended to allow them to make wide-ranging recommendations
applying across the workplace (although not in equal pay cases),
such as introducing an equal opportunities policy, re-training
staff or publicising selection criteria. The Government aims to
make tribunal judgements available and searchable on-line at
some stage in the future so that such recommendations will be
made public.
To view the Bill, please see:
services.parliament.uk/bills/2008-09/equality.html
Increase in tribunal claims and changes to procedures
The Tribunal Service has published its annual statistics for the
period 1 April 2007 to 31 March 2008. These show a 43% increase
in the number of claims compared to the previous year (2006/07).
A number of changes have been made to the employment tribunal
Rules of Procedure from 6 April 2009. A judge will no longer
have any discretion and must issue a default judgement if a
respondent fails to present its response within the relevant
time limit, unless the judge has insufficient information in
order to do so. So the deadline for submitting a response
becomes even more crucial. There are also changes to the rules
relating to a request to an extension of time and new rules
relating to the withdrawal of proceedings.
Employers who fail to pay employment tribunal awards of
compensation to claimants will, from 1 April 2009, be added to
the Register of Judgements, Orders and Fines once enforcement
proceedings are brought against them. This should encourage
more timely payments since the Register can be searched by
members of the public (including the press) and credit reference
agencies.
Eastern European Workers - extension of the Worker Registration Scheme
The government has announced that the Worker Registration Scheme,
which had been expected to end on 30 April 2009, will continue
for another two years . This requires workers from the Czech
Republic, Estonia, Latvia, Lithuania, Slovenia, Slovakia, Poland
and Hungary to be registered with the Home Office until they have
completed 12 months' registered work.
Employers failing to ensure that their employees comply can be
fined up to £5,000.
The scheme will now end on 30 April 2011.
Some interesting cases
Discrimination - age
Leeds Teaching Hospitals NHS Trust give us a good example of the
need to train all managers on discrimination!
Linda Sturdy, aged 56, claimed that she had been assured by her
employers that she was the “preferred candidate” for a new role
in charge of breast-screening services across West Yorkshire.
However, when she informed her manager that she was only a few
years away from the retirement age of 60, the manager responded:
“I didn’t realise you were so old.”
The vacancy was subsequently filled by a less experienced
candidate and Ms Sturdy also alleged that the Trust had sought
to persuade her to accept a more junior role.
As the Trust was unable to explain its reasons for rejecting Ms
Sturdy’s application, the tribunal concluded that discrimination
had occurred. They found that Ms Sturdy had been penalised by
being forced into 'a manifestly unsuitable role and then being
threatened with dismissal for failing to accept it', that an
investigation into her case had been delayed because she had
lodged a complaint, and that her salary had been unlawfully
deducted.
Compensation will be decided at a later hearing; however, it is
thought that the award could be as high as £500,000.
Discrimination: disability
What does the word 'normal' mean, when considering whether
something is a "normal day-to-day activity" for the purposes of
the Disability Discrimination Act?
A decision of the EAT in Chief Constable of Dumfries &
Galloway Constabulary v Adams confirms that normal
activities are those found in a range of employment situations.
Specialist skills, whilst "normal" within a particular industry
(eg a skilled watchmaker using specialised tools to craft fine
objects of precision) would not be covered.
So skills required specifically of a policeman would not be a
'normal day-to-day activity'; but an activity which is common
across a range of industries (in this case specifically walking
around during night-shifts) does qualify as a 'normal day-to-day
activity'.
Discrimination: sexual harassment
In Notz Stucki v Nadine Nassar, Ms Nassar brought a claim
of both sexual harassment and unfair dismissal. Following
receipt of late night suggestive text messages from her boss,
she made a formal complaint and days later was dismissed by her
boss, without any prior warning.
Her manager tried to justify the messages as an attempt to help
her settle into her new job and life in London. However the
tribunal ruled there was a "sexual dimension" to his messages
and that his behaviour amounted to sexual harassment.
Whilst her case was brought too late to be considered under sex
discrimination laws, she successfully claimed unfair dismissal
and was awarded more than £64,000 in compensation.
TUPE - when the contract does not continue
TUPE is much more straightforward these days in that we all now
expect that service provision changes will be covered. So if
there is an organised grouping of staff, dedicated to a
particular contract, when that contract is transferred, those
staff will usually transfer with it.
However when the contract is split up, resulting in no
continuity of service provision, TUPE may not apply and the case
of Clearsprings Management Ltd v Ankers and others is a
useful cautionary reminder that where TUPE does not apply, you
can be left with redundant employees.
In this case, Clearsprings was one of four contractors in the
North West region who had five-year contracts to provide
accommodation and support services to asylum seekers. When the
contracts came up for renewal, they tendered again, but were
unsuccessful. The asylum seekers covered by Clearsprings'
contract were randomly re-allocated to the three incoming
contractors.
The employment tribunal found there was an activity that
constituted a service provision change but, no single transferee
could be identified as having taken over the activity and the
tribunal could not identify a transfer date, which indicated
that the "activity" had become so fragmented as to be outside
the scope of TUPE.
On appeal, the EAT agreed. Whilst it is still possible to have
a service provision change under TUPE where a contract transfers
from one contractor to several, in this case the activities which
Clearwater had undertaken became so fragmented that no relevant
transfer took place. A factor that influenced the EAT was that
it could see no pattern of how asylum seekers were allocated to
the incoming contractors.
This case is relevant to anyone involved in
outsourcing/re-tendering exercises where there is an increase in
the number of contractors and/or a redistribution of the original
activities carried out. If the relevant activities are
sufficiently split up and fragmented, particularly if the
activities carried out by particular employees or groupings of
employees are split between different new contractors, then TUPE
may not apply.
Casual workers - are they employees?
The Court of Appeal has provided further guidance as to when a
casual worker will be considered to be an employee for the
purposes of the Health and Safety at Work etc Act 1974.
The case of R v Pola confirms that workers who are
engaged, even on a casual basis, are likely to be viewed as
'employees'.
In this case a group of Slovakian nationals were working on a
building site on a casual basis. There was no obligation on them
to turn up for work, but if they worked they would be paid a
day's wages.
The Health and Safety Executive (HSE) brought a prosecution
against Pola under s.2(1) of the Act (General duties of
employers to their employees), following an injury to one of the
men. Pola claimed that the men were not their employees.
On appeal the court found that workers engaged on a casual basis
and who are under no obligation to report for work from one day
to the next are still likely to be classified as employees for
the period when they are at work.
So - if you employ casual workers, do ensure that you extend
your normal risk assessment procedures, training, equipment and
monitoring to them in the same way as you do for your other
employees. Also note that if a sub-contractor's employees or
workers are injured, the HSE may investigate the main contractor
also under s.3 of the Act (General duties of employers and
self-employed to persons other than their employees). So it is
worth checking that your sub-contractors also are following safe
systems of work.
Can controlling shareholders be employees?
In Secretary of State for Business, Enterprise and Regulatory
Reform v Neufeld and another the Court of Appeal held that
there was no reason in principle why controlling shareholders
could not be employees (thus enabling them to claim a statutory
redundancy payment if the company becomes insolvent).
The tribunal must first consider whether the contract between
the individual and the company was genuine, and whether it was a
contract of employment. The circumstances in which any document
was created, and the conduct of the parties under the contract
will be taken into account, as will factors such as whether the
individual received a salary or directors’ fees.
Health and safety news
The 'opt-out' remains
The recent talks which aimed to remove our ability to opt-out of
the maximum 48 hour working week broke down without agreement
for the final time. This means that employees will be able to
continue to work more than 48 hours a week if they choose.
According to government figures, 3 million workers, more than
one in 10, work more than 48 hours per week. So basically the
status quo prevails and all suggestions re restricting the
ability to opt-out or putting further rules in place have also
gone.
Whilst on the subject, the final phase of introducing a maximum
working week for junior doctors is still scheduled to take place
on 1 August, when their maximum weekly hours will reduce to 48.
The British Medical Association (BMA) has warned that new figures
show that the NHS is not sufficiently prepared for the change.
The Chairman of the BMA’s Junior Doctors Committee said: "The
NHS has had 11 years to prepare for the introduction of the
48-hour week for junior doctors. The latest figures are
alarming; suggesting that one in three junior doctors is working
hours that will be illegal in just four months’ time." He said
that he was deeply concerned that there will be disruption to
patient services in August and that the quality of training for
junior doctors will be threatened.
Corporate manslaughter
The first prosecution under the Corporate Manslaughter and
Homicide Act 2007 has been reported.
A Gloucestershire-based company, Cotswold Geotechnical Holdings
Ltd, has been charged with a 'gross breach' of duty in
connection with the death of a junior employee who died when a
pit collapsed on him in September 2008. A director of the
company, Peter Eaton, has also been charged with gross
negligence manslaughter and a separate health and safety
offence.
Mr Eaton will appear at Stroud Magistrates Court on 17 June to
face charges both as an individual and on behalf of the company.
Changes to health and safety law
As from April 2009 employers will no longer have to register the
factories, offices and shops in which their employees work with
the relevant health and safety authority.
A new health and safety law poster has also been introduced
which sets out what employers and workers must do, and what to
do if there is a problem. There is also a leaflet that
employers can give to workers, instead of displaying the poster.
Employers can continue to use their existing versions of the
poster until 5 April 2014, as long as they are readable and up
to date.
The new documents can be ordered from HSE Books (tel: 01787
881165) and there is also an MP3 version on the HSE Talking
Leaflets website (see:
www.hse.gov.uk/pubns/tlindex.htm).
New on the website
We've added a further handout to our "Do's and Don'ts" section -
this time on dismissal - see
/docs/TPdocuments.html
And finally....
How much does it cost to bribe your employees?
Researchers from Infosecurity Europe surveyed 600 commuters and,
according to their press release, a third of those surveyed
(37%) admitted that they would hand over their company's secrets
for the right price.
The following percentages of the 37% of workers who would
download and hand over sensitive company information to a
stranger would do this for the following amounts:
- 63% for at least £1M
- 10% if their mortgage was paid off
- 5% for a holiday
- 5% for a new job
- 4% for getting rid of their credit card debt
- 2% for a free slap up meal!
When asked to give credit card information, account details or
security codes, employees were harder to tempt and 80% wouldn't
provide this information at any price. Of the 20% who would:
- 68% would only do it for £1M
- 15% for paying off their credit cards
- 7% if their mortgage was paid off.
The types of information that the workers had access to included
customer databases, business plans, accounting systems, HR
databases and IT admin passwords.
Hopefully these weren't your workers! Do bear in mind that in
the current economic climate, where many employees have friends
and family who have lost their jobs or may be facing pay freezes
or cuts, employees are more likely to be tempted than previously.
Ensure that your systems are sufficiently robust to minimise
such risks. Read our guide to managing theft and fraud
(see: /docs/guides/fraud.html) and
also review your data protection procedures and monitoring.
How not to make redundancies....
We're not sure where this originated from before it started being
forwarded around the world by email (think it was a local paper
in Singapore) so can't credit this, but thought it was worth
sharing further!
"A fire alarm rang at 4 pm when almost all shift employees are
in office (approx 5000). As usual entire office was evacuated
within 3 mins & every employee gathered outside office. 10 mins
passed................... 5 more mins passed ...................
5 more mins passed.
Then a Security Officer started an announcement:
"Dear Employees - With melting heart I am making this
announcement that for many of you it will be a last evacuation
drill. Due to the recession we are laying off almost 50% of
employees. Whilst moving in if your ID card does not work, then
you are among those laid off & all your belongings will be
couriered to you tomorrow. We have followed this approach as we
didn't want to fill email box with layoff mails and goodbye mails
in thousands & also to avoid any fight inside office. Hope you
have nice career ahead. Please move in & try your luck."
If you need advice on how to manage a redundancy programme,
please do take a look at all of the guidance on our website!
See: /docs/TPend.html
Swine flu
With 230 possible swine flu cases being investigated in the UK
and the government's chief medical adviser warning that Britain
will see "many, many more cases" of swine flu it is worth
checking you have an contingency plan.
Whilst there may be a limited chance of this affecting your
employees, if it does and you are unprepared, the impact could
be costly and affect the health of your employees, to whom
you have a duty of care. A pandemic could escalate quickly and
last for many months.
If you don't have any form of crisis management plan in place,
please see our crisis and contingency planning advice for tips:
/docs/guides/crisis.html and also keep
updated on World Health Organisation advice.
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