• Employment law update
  • Equality Act to go ahead in October
  • Agency workers - changes from 1 October
  • Bribery Act implementation scheduled for April 2011
  • Default retirement age to go from October 2011
  • Maternity - future extension of rights to self-employed workers
  • Large increase in tribunal claims
  • Some interesting cases
    • Disability - the requirement to make reasonable adjustments
    • Dismissal - can it be withdrawn?
    • Dismissal - effective date of termination
    • Dismissal and age discrimination - redundancy payments
    • Dismissal - damages for stigma
    • TUPE: transfer of collective agreements and failure to consult
• Health and safety news
  • Fall in number of workplace deaths
  • More absence figures
• New on the website
• And finally....
  • Have you read your own employment contract?
• BusinessHR HRCare services
• This month's hot topic

The Government Equalities Office has confirmed that the first wave of implementation of the Equality Act 2010 will go ahead as planned, on 1 October 2010. The Act brings together nine discrimination laws and around 100 pieces of ancillary legislation and aims to make it easier for employers to comply with discrimination law.

Key points to note from 1 October are as follows:

1. Direct discrimination
   The new definition of direct discrimination is "less favourable treatment because of the protected characteristic". This covers discrimination by association, so a candidate who is refused a job because he or she cares for a disabled person (but who is not disabled him/herself) would suffer from direct discrimination.

2. Disability - definition
   In order to claim disability discrimination, individuals must currently show that they have a "physical or mental impairment" that has a "substantial" and "long-term" adverse effect on their ability to carry out "normal day-to-day activities". The impairment has to affect one of the following: mobility; manual dexterity; physical coordination; continence; ability to lift, carry or otherwise move everyday objects; speech, hearing or eyesight; memory or ability to concentrate, learn or understand; and perception of the risk of physical danger. This list of capacities is removed under the Equality Act. The individual simply has to show that he/she has difficulty carrying out day-to-day activities.

3. Disability discrimination - discrimination "arising from a disability"
   When considering whether discrimination has occurred, the courts will no longer need to identify a comparator. The claimant only has to show that he/she has been treated unfavourably because of something arising "in consequence" of his or her disability; there is no requirement to establish that his or her treatment is less favourable than that experienced by a comparator without the disability. (The employer must however know, or reasonably be expected to know, that the employee has the disability in question.) Once the claimant has proved the detriment, the employer would need to show that this can be objectively justified. The example given by the Government Equalities Office is a disabled employee who, because of his or her disability, has to take more time off than other employees. Less favourable treatment because of this would be unfavourable treatment because the higher level of absence arises as a consequence of the disability. (So the previous guidance arising from London Borough of Lewisham v Malcolm will no longer apply.)

4. Disability and pre-employment health questionnaires:
   It will be unlawful for an employer, recruitment agency or consultant to ask questions (whether in writing or verbally) about an applicant's health before offering work to, or shortlisting, the applicant, other than in limited circumstances (one of which is to check a candidate can perform an "intrinsic function" of the job, for example heavy lifting). If the employer asks an unlawful question about health during the recruitment process (including the taking up of references PRIOR to making a job offer), and the applicant does not get the job, in any subsequent disability discrimination claim the burden of proof will be on the employer to show that there was no discrimination.

5. Harassment:
   Employers may be liable if their employees are harassed by persons external to their business, such as suppliers and customers (this has already been established in case law).

6. Pay secrecy:
   Provisions in employment contracts that require employees to keep their wage rates or salaries secret within the business are unenforceable where an employee wants to make a "relevant pay disclosure" (ie one with a view to finding out if there is a connection between pay and having a protected characteristic).

With regards to the parts of the Act that are not scheduled to take effect on 1 October, it is still not clear which parts will be implemented or delayed further, and if so, for how long. These include the ability to bring dual discrimination claims, the extension of public sector equality duties, rules prohibiting age discrimination by service providers and the ability to select from equally-qualified job applicants on the grounds of a protected characteristic to address under-representation.

For further details and advice on what to do, see our guide to the Equality Act: /docs/legal/equalitybill.html

We will be amending our job application form, guidance on references, discrimination in recruitment and all of our discrimination pages in due course, and prior to 1 October.

New Regulations (The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010) will amend the Conduct of Employment Agencies and Employment Businesses Regulations 2003, with effect from 1 October 2010, as follows:

• There will be a 30 day cooling off period, during which an employment agency or employment business cannot charge a fee for producing a photograph or audio or video recording of a work-seeker. The work-seeker will also have a right to cancel or withdraw from the contract during this period.
• Agencies should get the work seeker's agreement to basic terms governing the relationship between them.
• Employment businesses (but not employment agencies) will be required to have an agreement of terms with employers (hirers).
• The rules on suitability checks that agencies carry out on work-seekers will be modified.
• Work-seekers seeking employment as a photographic or fashion model may not be charged upfront fees.
• Job adverts must state whether a position is permanent or temporary, rather than whether the services offered are those of an employment agency or an employment business.

For further details on agency workers, see our guide: /docs/legal/agency.html

The Bribery Act has now received Royal Assent and is due to come in to force in April 2011, rather than October, as originally planned.

The Bribery Act is not employment legislation as such, but has a number of implications for employers. In particular, it introduces a corporate offence of failure to prevent bribery by persons working on behalf of a business (clause 7). Senior officers will be guilty of an offence committed by a body corporate which was committed with their consent or connivance (clause 14). It will be a criminal offence to give, promise or offer a bribe and to request, agree to receive or accept a bribe either at home or abroad.

We are planning a hot topic on this subject for early in the new year, but in the meantime, if you want to prepare, you may wish to read our guide on dealing with theft and fraud, see: /docs/guides/fraud.html and to consider a business ethics policy: /docs/pol/ethics/index.html and/or a gifts and hospitality policy: /docs/pol/gifts/index.html

The Government has announced that it intends to scrap the default retirement age (which currently allows employers to compulsorily retire staff on reaching the age of 65) with effect from 1 October 2011.

The proposals include a six-month transition period which phases out the previous statutory retirement procedure (which will go entirely).

• From 6 April 2011, employers will no longer be able to issue notifications for compulsory retirement using the statutory retirement procedure.
• Between 6 April and 1 October 2011, only those who were notified before 6 April, and whose retirement date is before 1 October, can be compulsorily retired.
• After 1 October 2011, the default retirement age of 65 will no longer apply. There will be no need to go through the statutory procedure of writing to the employee 6-12 months before the intended retirement date, and no onus on the employee to comply with the procedure for making a right to request working beyond 65.
• Employers who wish to retain a compulsory retirement age may do so, but they will have to be able to justify this as a "proportionate means of achieving a legitimate aim". The Government's consultation paper admits that "it is not easy to demonstrate that a retirement age is objectively justified". Examples could include roles where a lower standard of performance could lead to significant safety risks AND there is a clear link with age. Workforce planning reasons may also be sufficient to justify retaining a compulsory retirement age.

The Government is currently consulting on the additional support that individuals and employers will need to manage without the DRA or statutory retirement procedure - this may include a code of practice on handling retirement discussions. Consultation is open until 21 October 2010. For further details see: www.bis.gov.uk/retirement-age

Whilst on this subject, we report the judgement of the Court of Appeal in Seldon v Clarkson, Wright and Jakes. You may recall that this case involved a partner who brought a claim of age discrimination after he was forced to retire at the age of 65. Because he was a partner and not an employee, the firm had to satisfy the tribunal that the treatment was justified as 'a proportionate means of achieving a legitimate aim'. The EAT agreed with the original tribunal that the retirement was a proportionate means of meeting two of the Firm's aims, those of:

• improving retention - by ensuring associates were given the opportunity of partnership after a reasonable period
• facilitating workforce planning - by having a realistic long term expectation as to when vacancies will arise.

The Firm also claimed a third aim - of limiting the need to dismiss partners through a performance management route, thus contributing to the "congenial and supportive culture" in the firm - but the EAT did not consider this could be relied upon, due to a lack of evidence that the performance of partners would worsen at age 65.

In the Court of Appeal, Mr Seldon's lawyers tried to argue that the Age Regulations should be interpreted so that employers can only rely on social policy aims to justify direct discrimination. The Court of Appeal did not accept this but did say that the employer's aims must be at least 'consistent with the social or labour policy of the United Kingdom which justified the Regulations'.

The Court decided that the first two aims were legitimate, and that the third aim could also be legitimate - so Mr Seldon's claim failed. There may however still be an appeal to the Supreme Court.

The EU Member States have agreed an update to the maternity leave directive. This will give standard maternity leave rights to self-employed women and the spouses or life partners of self-employed men.

Any self-employed woman or self-employed worker's spouse who is pregnant will be given "sufficient maternity allowance to cover interruptions at their work" of at least 14 weeks' maternity leave, ie the minimum paid period for normal employees. (The UK's 39 week period of paid maternity leave is currently more than the minimum.)

Member States have two years (up to four years where justified by particular difficulties) to implement the changes, and may decide whether the leave is mandatory or voluntary, and whether this social protection can also be "proportional to the participation in the activities of the self-employed worker".

The Tribunals Service's Annual Statistics Report shows an increase of 56% in the number of employment tribunal claims during the period 1 April 2009-31 March 2010.

236,100 claims were made in 2009-10. The report attributes these largely to an increase in multiple claims (where two or more people bring cases, usually against a single employer but not necessarily so, arising out of the same or very similar circumstances). An example is the 95,200 claims which related to the Working Time Directive, which includes 10,600 airline cases that are resubmitted every three months.

There was however still an increase of 14% in single claims over the year and the level of claims overall is now at its highest. 126,300 claims were for unfair dismissal, breach of contract and redundancy - 17% higher than the previous year. There was an increase in the number of claims for all forms of discrimination, other than sex, with age discrimination claims increased by the largest percentage (37%).

Whilst the number of claims resolved (withdrawn, settled, dismissed or decided) also increased, the outstanding caseload has increased by almost 40%, resulting in the number of claims heard within 26 weeks falling from 74% to 65%.

For the full report, see: www.tribunals.gov.uk/tribunals/News/news.htm

Disability - the requirement to make reasonable adjustments

The Employment Appeals Tribunal (EAT) has given some guidance on the extent of the employer's duty to make "reasonable adjustments" for a disabled employee.

In Secretary of State for Work and Pensions (Job Centre Plus) and Others v Ms J Wilson, the employee suffered from agoraphobia and panic and anxiety attacks when faced with new situations. Due to a re-organisation, she was to be re-deployed and asked to work from home instead. The Job Centre discussed alternative proposals, including providing a taxi to and from work, which Ms Wilson declined.

The EAT said that when considering reasonable adjustments, the court should:

1. firstly decide whether the reasonable adjustment would overcome the disadvantage suffered by the employee as a result of the disability
2. if so, decide whether this reasonable adjustment was practicable for the employer.

The EAT therefore asked firstly whether allowing the employee to work from home would overcome the disadvantage suffered as a result of agoraphobia. It then noted that Ms Wilson's role involved direct access to the public which could not be done at home, and also that the employer had sought non-public facing work for her, but none was available.

The EAT accepted that home working was not feasible for Ms Wilson's role, and accepted there was no other work that she could do at home. As the Job Centre had discussed all alternatives for reasonable adjustment that were practicable with her, they were therefore not in breach of their duty to make reasonable adjustments.

For more details on reasonable adjustments, see our legal overview on disability discrimination: /docs/legal/disabilitydiscrim.html

Dismissal - can it be withdrawn?

Not normally. This case seems to be an unfortunate and costly misunderstanding.

In Willoughby v C F Capital Plc, Miss Willoughby was employed as a sales account manager. During the banking crisis, C F Capital consulted with staff about moving onto a self-employed basis, Miss Willoughby met with her line manager and showed interest in this. Her manager, however, thought that she had agreed to the proposal to become self-employed and wrote to her confirming the termination of her employment with effect from 31st December 2009 and enclosing a self-employed agreement.

Miss Willoughby took legal advice. Despite the fact that her manager offered to rectify the situation by returning her to employee status, she was entitled to still consider that she had been dismissed and therefore brought a claim for unfair and wrongful dismissal.

C F Capital argued that they had not terminated the relationship.

The original tribunal agreed with them and said that whilst the original letter confirmed dismissal, this had not been effective as it had been withdrawn as soon as practicable in an attempt to rectify the situation. The EAT disagreed! It said that it is up to the employee to choose whether to treat the employment as at an end or not. If the words which led to the dismissal or resignation were unambiguous, then the only exception would be if there were something that indicated the contrary (eg a 'heat of the moment' dismissal which was quickly retracted).

Miss Willoughby was entitled to take the letter confirming her dismissal at face value. The EAT therefore found that Miss Willoughby had been dismissed and allowed her appeal. Her claims of unfair and wrongful dismissal will be heard by a different tribunal.

Dismissal - effective date of termination

Another case which looks at the effective date of termination - important as the time deadline for bringing a claim runs from this date.

In Wedgewood v Minstergate Hull Ltd, Mr Wedgewood was given notice of dismissal on grounds of redundancy and told that his employment would end on 1st December 2008. He subsequently asked to leave early, as he had completed all of the outstanding work. Minstergate agreed to this and confirmed in writing that he would continue to be paid up until the end of his notice period, but did not have to attend work after 26th November other than for a handover meeting.

Whilst Minstergate could have agreed to vary the effective date of termination before it had taken place, this was not what had happened. They could have agreed to his request for an earlier termination date and paid him only until his last working day, or they could have ended the employment earlier and paid in lieu - but they did not. They released Mr Wedgewood from his obligation to attend work, but confirmed that he would continue to be paid up until December 1st. So the EAT confirmed that his effective date of termination had not changed and his claim for unfair dismissal could be heard.

See our guide to notice periods for more information on this subject: /docs/legal/notice.html

Dismissal and age discrimination - redundancy payments

Is a cap on redundancy pay an act of indirect age discrimination?

Mr Hastie, who worked for Kraft Foods, was made redundant at the age of 62. Under their contractual redundancy scheme, his redundancy payment was calculated at 3.5 weeks' actual pay for each year of service, but this was capped at £76,560 - this being what he would have earned if he had worked until his retirement age of 65. (Without the cap, he would have received about £90,000.)

Mr Hastie brought a claim of indirect discrimination on grounds of age. Had he been younger, his redundancy pay would not have been capped.

He won the employment tribunal but on appeal, the EAT said that any discriminatory effect was justified, since Kraft Foods' aim was to give appropriate payments to employees to compensate them for future loss of earnings and the cap was a "proportionate means of achieving a legitimate aim" of avoiding a windfall for employees made redundant close to retirement.

Whilst on the subject of capped redundancy pay, the Government has announced it will introduce legislation to cap public sector compulsory redundancy payments at 12 months' pay and voluntary exits at 15 months' pay.

For more guidance on age discrimination, see: /docs/legal/agediscrimination.html

Dismissal - damages for stigma

In Brown v J & J Baxter (t/a Careham Hall) the EAT has confirmed that in order to successfully claim stigma damages, the employee must prove that his/her difficulty in finding new employment is due to the (unfair) dismissal.

Ms Brown was automatically unfairly dismissed for gross misconduct. She was a care home worker and there were allegations that she was rough with the residents. Her employer reported the dismissal under the PoVA (Protection of Vulnerable Adults) scheme. She gained another job, but was dismissed from this by her new employer for failing to disclose the investigation that followed the PoVA referral. Ms Brown claimed that the reference provided by her previous employer prevented her from gaining alternative work and that she should be compensated for this.

The tribunal, and subsequently the EAT, concluded that even if she had not been unfairly dismissed, her employer would still have given her an unfavourable reference. Unlike in the case of Chagger v Abbey National PLC and Anor, it could not be said that the difficulties experienced in obtaining new employment were because of the unfair dismissal.

For more information on stigma damages, see: /docs/legal/tribunals.html

TUPE: transfer of collective agreements and failure to consult

This case concerned an enhanced redundancy pay scheme for voluntary redundancy, which was in place at the time of transfer but subsequently removed, but the principles apply generally.

In Worrall v Wilmott Dixon Partnership, the EAT has confirmed:

• firstly, that to incorporate a term of a Collective Agreement into a contract, the term must be brought to the employees' notice or agreed. The fact that the term was in an available document, such as a handbook, is not sufficient.
• on a TUPE transfer, an incorporated Collective Agreement is frozen at the time of the transfer, so transferred employees cannot benefit from future changes to the original Agreement. However, if legislation affects the original Agreement (in this case the age discrimination regulations prompted the removal of the enhancement), then it also affects the transferred Agreement.

A separate case, Nationwide Building Society v Benn, deals with the failure to consult - but again the principles apply generally. In this case, the EAT said that a tribunal that was dealing with an unfair dismissal claim should not have taken into account a breach of the consultation requirements where the claimant had not raised this. Where employee representatives have been elected, a claim for failure to consult can only be brought by the elected representatives.

For more information on TUPE transfers, see: /docs/legal/tupe.html

The HSE has released provisional figures which show a fall in the number of workplace deaths last year - from 178 in 2008-9 to 151 in 2009-2010. The overall trend is also down - the average number of deaths for the past five years was 220.

Figures from the EEF and Unum show a fall in the average absence rates in the manufacturing industry, with 44% of employees not taking any time off sick in 2009. The average employee absence in 2009 was 5.6 days.

According to the report, 41% of companies saw a decrease in short-term sickness absence over the year, and 32% saw a decrease in long-term sickness absence over the past two years.

However, a survey by Aon Consulting found that UK workers take more than 35 million sick days each year for personal reasons, rather than genuine illness. "Personal reasons" included looking after a family member, letting repairmen into the home and grieving over a dead relative. The survey - of over 7500 European workers - found that workers in other European countries were much less likely to take time off for these reasons.

For guidance on managing absence, see: /docs/legal/absence.html

We've added last month's hot topic on identifying and developing leadership skills to the training and development section of the website, see: /docs/guides/leadership.html and a new night worker assessment form, see: /docs/lf/nightworker/index.html

Given the amount of time and effort employers spend in getting clear, unambiguous and fair wording in their employment contracts, it's a shame to learn that Which? Legal Service found that 26% of workers only skim-read their contracts, while 6% admitted to not reading them at all!

The survey of 4,000 people found only three in 10 employees received a contract before starting their job, and 9% did not get a contract until they had been in post for six months or more. 12% of employed adults do not have a contract at all.

Note that ALL employees whose employment will last for one month or more must by law be given at least a statement of their main terms and conditions within two months of joining you. Failure to do this may result in a penalty of up to four weeks' pay if a tribunal claim is brought. But a robust contract goes further than basic legal compliance, protects both the employee and the employer by clarifying the terms of the agreement for both parties and can provide a degree of flexibility for the employer. Our helpline is often asked "can we do xxx?" - to which the first response is inevitably "what do your contracts say?"

We would always recommend that contracts are issued PRIOR to a new employee joining you - that way any queries or concerns can be resolved in advance, and if signed on or before the date of joining, you are clear what has been committed to.

See our contracts and policies section: /docs/TPcontract.html

Finding it difficult to keep abreast of all of the above changes?

Why not let us help you? We can review your contracts, handbook and HR policies, advise on any suggested additions and update them for you - and then keep them updated. Take a look at our HRCare range of services: www.businesshr.com

We are looking to expand further and need people to assist us with our business development on a regional basis. As this would be on a self-employed, commission basis, we are therefore looking for people who already have an established business base, good networking skills and a knowledge of HR or business consulting and who feel they could help us grow our business.

If you are interested, call our MD, David Lennan, on 07736 775767 for an informal chat, or email him at david.lennan@businesshr.com.

This month's hot topic will cover managing conflict.

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