1. Employment law update
   • A few key dates!
   • Increases to statutory rates
   • Changes to parental leave
   • Tribunal fees
   • Tax relief to remain for late night taxis
   • Some interesting cases
     • Working Time - timing of annual leave - Russell and ors v Transocean International Resources Ltd and ors
     • Discrimination - unfair dismissal, sex and race - Michalak v Mid Yorkshire Hospitals NHS Trust
     • Discrimination - equal pay - Secretary of State for Justice v Bowling
     • Discrimination - marital status - Dunn v Institute of Cemetery and Crematorium Management
     • Dismissal - breach of contractual policy - Edwards v Chesterfield Royal Hospital NHS Foundation Trust and Botham v Ministry of Defence
     • Employment rights- ministers of religion - The President of the Methodist Conference v Preston
     • TUPE - service provision change - Hunter v McCarrick
     • TUPE - unfair dismissal - Spaceright Europe Limited v Baillavoine

2. Health and safety news
   • Personal liability - company director fined £80,000
   • Working time - average weekly hours
   • Fit notes - are they working?
   • Contractual sick pay and benefits
3. New on the website
4. And finally....
   • A few surveys and statistics...
5. BusinessHR services
6. This month's hot topic

Just a reminder to note that:

• 24 December 2011 - as from this date, agency workers who started working for you on a placement either on or before 1 October 2011 are now entitled to receive the same rate of pay to that of your comparable employees.
• January 4 2012 - is the last date on which an employee can make a statutory request not to retire on his/her intended date of retirement under the (now abolished) statutory retirement procedure.

The changes to statutory rates have now been announced, as follows:

• From 1 February 2012
  • A "week's pay": the maximum amount used to calculate a statutory redundancy payment and the basic and additional awards for unfair dismissal will increase from £400 to £430.
  • The maximum unfair dismissal compensatory award: will increase from £68,400 to £72,300.
  • Guarantee pay: will increase from £22.20 to £23.50.

  Other (less common) rates and awards are listed on our key statistics page - see /docs/legal/keystatistics.html
  For further information see www.legislation.gov.uk/uksi/2011/3006/made

• From 6 April 2012 - proposed rate
  • Statutory sick pay: increases from £81.60 to £85.85 per week

• From 9 April 2012 - proposed rate
  • Standard rate of statutory maternity, paternity, additional paternity and adoption pay and maternity allowance: increase from £128.73 to £135.45 per week.

  These new rates will apply to employees earning more than £107 per week (previously £102 per week).

See our key statistics page: /docs/legal/keystatistics.html
See the DWP website for more information: www.dwp.gov.uk/docs/benefitrates2012.pdf

Time is running out and March 2012 will soon be here!

Under the Parental Leave Directive 2010 (which repeals and replaces the Parental Leave Directive 1996), the permitted period of parental leave following the birth or adoption of a child increases from three to four months. At least one of the four months will not be transferable between parents (ie it will be lost if not taken.)

Member states have until 8 March 2012 to bring this change into force.

See our overview on parental leave: /docs/legal/parental.html
Note that your parental leave policy will need to be updated once the full details are known!

The Ministry of Justice is currently consulting on the proposed fees payable to bring a case to employment tribunals and to the Employment Appeal Tribunal (EAT). The aim is to encourage both sides to give greater consideration to the strength of their case before commencing legal action. The Government feels that this should save time and money and suggested that tribunals cost the taxpayer a total of £84 million every year. Introducing fees will bring employment tribunals into line with the civil courts, where claimants already pay a fee to use the service.

Employment tribunals: two alternative options are suggested:

1. Option 1: three rates, depending on the type of claim and the stage of the proceedings, and a two-tier fee system:
   1. claims for unpaid wages and redundancy payments
   2. unfair dismissal claims
   3. discrimination and whistleblowing claims.
   Claims involving more than one type of complaint would attract the fee payable for the highest claim.

   Claimants would pay the first fee (suggested at between £150-£250) when they lodge a claim and then a second fee (of £250-£1,250) if the claim proceeds to a hearing. There would be no limits on the amount awarded (other than the maximums applying to certain claims). Further fees would be payable for other applications, such as a request for written reasons and a counter-claim.

   If adopted, this option could be introduced in 2013.

2. Option 2: a single fee to be paid at the outset (depending on the value of the claim), ranging from £200 to £600, but with the maximum award limited to £30,000), and with the option of an additional fee of £1,750 for those seeking awards above this amount. Multiple claims would also attract higher fees.

   This option would require primary legislation, so would not be likely to be introduced before 2014.

The consultation paper is pretty detailed and covers not only the proposed fees, but also fee remission (the fee will be waived for individuals claiming certain benefits, such as income support and job seeker's allowance, and those on low incomes - similar to the civil court system), fee refunds, discounts in the case of multiple claims and fees for other tribunal procedures, such as requesting written reasons for a judgement. A fee of £750 would be payable for judicial mediation. Tribunals would have the power to order the unsuccessful party to reimburse fees paid by the successful party, but it is not proposed that the losing party would be responsible for paying the other party's legal costs.

Employment Appeal Tribunal:

• An issue fee of £400 and hearing fee of £1,200 are proposed.

Consultation will close on 6 March 2012.
See: {HTTP://www.justice.gov.uk/consultations/et-fee- charging-regime-cp22-2011.htm}

As with all changes, there are mixed responses in the press. Employer bodies have in the main welcomed the fee proposals but some have expressed concern at the amounts that employers that lose may end up paying. Also, whilst the bulk of the fees will be paid (at least initially) by claimants, the cost of settlements is expected to rise to reflect the claimant's increased costs.

The review that abolished tax relief on luncheon vouchers (as well as other minimal tax allowances) has, however, recommended that the exemption for the use of late night taxis should be maintained.

This allows employers to pay for a taxi for employees without this being subject to tax and NICs, provided that:

• the employee is required to work later than usual, and until at least 9.00pm
• this is irregular
• public transport has either ceased or it is unreasonable to expect the employee to use it
• the number of journeys is no more than 60 times in a year.

For further information, see HMRC Booklet 480 (pages 8 and 9) - www.hmrc.gov.uk/guidance/480.pdf

Working Time - timing of annual leave - Russell and ors v Transocean International Resources Ltd and ors

What happens on oil rigs may not seem to be relevant to most of us, but the implications of this case are far wider and extend to schools, colleges, and indeed any employers that have term-time only contracts that stipulate that holidays should be taken during the school holidays when the employee would not be required to work, or "continental" shift patterns (eg 4 days on, 4 days off) or annualised hours.

We have reported on this case before, but it's now gone to the Supreme Court. The workers worked an alternating shift pattern of two weeks offshore followed by two weeks onshore. The onshore time (known as field breaks) is down time but the workers may be required to attend medical checks or training courses, although are not required to do any "work". The workers are required to take holiday when they are onshore, rather than during the 26 weeks at sea, and they argued that holidays should be time off from their actual working hours, not from their down time.

The Supreme Court upheld the Court of Session's view that the employer was entitled to insist that they take their annual leave entitlement during the onshore periods (ie when they would not be working anyway), and that this is not a breach of Regulation 13 of the Working Time Regulations 1998. Similarly, time not spent working can be a rest period even if the worker would not have been working anyway.

That is the end of this saga - as the Supreme Court refused the workers' request for a reference to the Court of Justice of the European Union and dismissed their appeal. The Court stated that the term "rest period" simply means any period which is not working time, irrespective of where the worker is and what he is doing, so long as it is a period when he is not working. Field breaks fall within that category.

For more guidance on working time and holidays, see: /docs/legal/workingtime.html and /docs/guides/holidays.html

Discrimination - unfair dismissal, sex and race - Michalak v Mid Yorkshire Hospitals NHS Trust

We had to mention this case, not only because of the extremely high level of compensation - £4.5 million - but also because of the way it was calculated and the liability awarded jointly to a number of parties.

Dr Michalak was a hospital consultant who claimed she was dismissed after an "extensive process" of sex and race discrimination. By the time she was dismissed she was suffering from chronic post-traumatic stress disorder and unable to carry out most basic day-to-day tasks. She was unlikely to be able to work again.

Her claim was successful, and her award was calculated on the basis of her future loss of earnings and loss of pension. She was in the early stages of her career and it was considered that she would have continued to work as a consultant until she was 68, reflecting the older age at which workers in the future are likely to be retiring. Her future loss of earnings was then "grossed up" to reflect the tax she will have to pay on it.

The award was made against the Mid Yorkshire Hospitals NHS Trust but also three individuals were made jointly liable: Dr Michalak's former head of department, the trust's former medical director and interim chief executive and the director of human resources.

Discrimination - equal pay - Secretary of State for Justice v Bowling

An interesting case that confirms that if a pay differential between employees was unrelated to sex at the time of their appointment, it may be enough to justify a continuing differential in subsequent years.

The two employees were recruited as Customer Service Advisers with the Prison Service within one month of each other. The female employee was appointed to level 1 of the 7-point incremental scale; the male employee was offered a higher salary, at point 3 of the scale, because of his background and experience (10 years' experience in IT support and implementing change in customer service). In both April 2009 and April 2010, both employees were moved one point further up the scale. The female employee brought an equal pay claim, as she achieved the same performance rating as her comparator, and thought that she should be paid the same.

The original tribunal felt that the original reasons for the differential ceased to be a material factor, given the performance rating, but the EAT disagreed. The justification for the differential may have been weakened by her performance, but the original cause for the difference in pay (his greater skills and experience) continued to explain the differential at the date under consideration and was not time-limited. If the original pay difference did not have anything to do with sex, then the later pay difference did not have anything to do with sex either.

For more guidance on equal pay, see: /docs/legal/equalpay.html

Discrimination - marital status - Dunn v Institute of Cemetery and Crematorium Management

Back in 1975, the Sex Discrimination Act gave employees protection against discrimination on the grounds that they were married (but did not protect those who were not!). Some of us may be aware of employers that dismissed female staff when they got married - something which seems remarkably outdated now! There haven't been many cases on marital status, so this is an interesting one. The question in this case is whether protection extends to treatment not just because the claimant was married, but because of whom she was married to.

The employee's husband worked for the same employer and was in dispute with them. The tribunal found that the treatment Mrs Dunn received was influenced by their perception of her husband. Mrs Dunn resigned after raising a number of grievances alleging sex discrimination and victimisation. The employment tribunal held that she had been unfairly dismissed, but rejected her claim of sex discrimination on the basis that the SDA did not extend to discrimination on the grounds of being married to a particular person.

The EAT however referred to previous cases (in particular Chief Constable of the Bedfordshire Constabulary v Graham, in which it upheld a claim of marital discrimination against a police inspector who was married to a Chief Superintendent in the same force and who was refused a post in the division commanded by her husband) and decided that it IS unlawful to discriminate against any individual on the ground of his/her marriage to a particular person. It held that "a person who is married or who is in a civil partnership is protected against discrimination on the ground of that relationship and on the ground of their relationship to the other partner. Any less favourable treatment which is marriage-specific is unlawful."

The Equality Act 2010 prohibits discrimination against a person with "the protected characteristic of marriage and civil partnership" so this protection will continue to apply.

So - take care not to subject an employee to any detriment on the grounds of his/her marriage to a particular person! Policies that seek to prevent couples working together may still be justified in certain circumstances, provided that the policy clearly applies to both married and unmarried couples and that any 'detriment' results from the relationship rather than the fact of the marriage.

See our guide to personal relationships at work - /docs/guides/personal.html
For a template policy on personal relationships at work, see: /docs/pol/personal/index.html

Dismissal - breach of contractual policy - Edwards v Chesterfield Royal Hospital NHS Foundation Trust and Botham v Ministry of Defence

We've long advised strongly that disciplinary procedures should be non-contractual in order to avoid potential breach of contract claims if they are not followed to the letter, but contractual procedures are still common, particularly in the public sector.

So - an interesting decision by the Supreme Court - who has confirmed that a separate claim for breach of contract cannot be brought in respect of the manner of a dismissal. (Note that this was not a majority decision and clearly followed a lot of debate!)

Edwards was a hospital consultant, dismissed for alleged personal and professional misconduct. He claimed that the Trust had not adhered to its own contractually binding procedure and that, had it done so, he would not have been dismissed. Botham was a youth worker dismissed summarily for misconduct, also allegedly in breach of contract.

Unlike unfair dismissal claims, breach of contract claims are not limited by a cap, and the claimant normally seeks damages (ie compensation that would restore him to the financial position in which he would have been, had the contract been performed properly). In both cases, the dismissals resulted in neither man being able to secure comparable employment in his field and their loss of earnings and earnings potential were therefore substantial.

The Supreme Court first considered whether express contractual terms, such as a disciplinary procedure, constitute the manner of dismissal and found that they do. The Court also acknowledged that disciplinary procedures, even those expressly incorporated into contracts of employment, are not ordinary contractual terms, as a breach of them gives grounds for a claim in its own right (ie unfair dismissal).

The Supreme Court then looked at whether the particular claims of both Edwards and Botham were in fact about the manner of their respective dismissals or were a breach of an entirely separate contractual right. In both cases, it concluded that the claims related to their dismissal and not to anything said or done by their respective employers prior to dismissal which could be said to be independent of it.

The Supreme Court concluded that the statutory protection for unfair dismissal is intended to cover all matters connected with the dismissal process. So damages for loss suffered as a result of a breach of procedure are not recoverable, unless they relate to a separate, free-standing issue preceding and independent of the dismissal. (Note however, this decision does not affect an employee's right to seek an injunction to compel an employer to comply with a contractual procedure!)

So some relief for employers with contractual disciplinary procedures! But we can still never over-emphasise the importance of following a fair dismissal procedure, particularly where this may preclude future employment opportunities.

For more guidance on discipline, see: /docs/legal/discipline.html For a template disciplinary procedure, see: /docs/pol/discipline/index.html

Employment rights - ministers of religion - The President of the Methodist Conference v Preston

It has always been a tricky question of whether the clergy are entitled to employment rights or not and traditionally vicars, priests, and ministers have been considered to be self-employed office-holders unable to bring cases at tribunal. But it now seems that things are all moving in the same direction - irrespective of the religion.

A Church of England vicar, the Reverend Mark Sharpe, is now bringing a claim in the employment tribunal that he was an employee and is entitled to claim constructive unfair dismissal. He resigned in September 2009 because of alleged harassment. He claims that his dog was poisoned, glass was smashed on his drive, his tyres slashed, his phone lines cut, and excrement smeared on his car. He claims that because the diocese and Bishop of Worcester did nothing to help prevent this, he was forced to resign, raising a claim of constructive unfair dismissal. At an early stage in the claim the diocese said that Rev Sharpe was a "worker", but they have now withdrawn this.

And a further development relates to a Methodist minister. The Church had claimed that ministers were not ordinary employees but "stewards in the house of God" and that making the Methodist authorities submit to the power of employment tribunals amounted to an unjustified interference with its right to religious freedom. The Employment Appeal Tribunal (EAT) had already ruled that Mrs Preston is an employee with the same right to claim damages for unfair dismissal enjoyed by any other worker. The Court of Appeal upheld this and ruled that a Methodist minister was employed by the Church and not by 'God' and therefore was protected by employment legislation and could bring a claim to an employment tribunal for unfair/constructive dismissal. The Court confirmed that nothing in the spiritual nature of the appointment prevents the existence of an employment contract - so the case should be determined on the facts as in any other case. The Rev Dr Martyn Atkins, general secretary of the Methodist Church in Britain, said: "The call to Methodist ministry cannot be treated as just another job - it is based on a lifetime calling, expressed through a covenant relationship with the church." Methodist Church leaders said they would challenge the decision and would seek a ruling from the Supreme Court.

If they are unsuccessful, then the assumption is that ALL employment law will apply to members of the clergy.

For more information on employment status, see: /docs/legal/employeestatus.html

TUPE - service provision change - Hunter v McCarrick

This case confirms that, for there to be a service provision change under TUPE, the activities carried out by different providers before and after the transfer must be carried out for the same client.

Mr Hunter's employer provided property services. The company that owned the properties became the subject of a winding up petition, and the receivers who assumed control of the properties appointed a new contractor.

A service provision change arises where the activities cease to be carried out on a client's behalf and are instead carried by a subsequent contractor on the client's behalf. The EAT confirmed that that had to be read as meaning the same client. There could be no service provision change when not only was there a change in contractors, but also a change of client.

TUPE - unfair dismissal - Spaceright Europe Limited v Baillavoine

We've previous covered this case which has now gone to the Court of Appeal which has confirmed that a transfer does not need to be contemplated at the time that a dismissal is effected in order for the dismissal to be caught by TUPE.

Mr Baillavoine was the Managing Director of Ultralon Limited when it went into administration. The administrators, who intended to sell the business as a going concern, dismissed a number of employees including Mr Baillavoine, and then subsequently sold the business to Spaceright Europe Limited. The tribunal held that Mr Baillavoine's dismissal was automatically unfair because it took place in order to achieve a sale at a future date. The EAT upheld that reasoning as did the Court of Appeal, which also dismissed a further potential reason for appeal by declaring that the dismissal was not for an ETO reason as an ETO defence is not available where an employee is dismissed in order to make the business of a company a more attractive proposition to prospective transferees of a going concern.

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

A construction company and its managing director have been sentenced after an employee died when a 50-tonne crane toppled over while moving a steel column in March 2007.

The HSE prosecuted both the employer, Siteweld Construction Ltd, and its managing director, Benjamin Lee, for failing to make sure the work was planned and carried out safely.

The crane had been used to lift a six-tonne steel column when it was nearly 18 metres away, well outside its safe lifting capacity for that distance. The crane had not been properly maintained and the external alarm could not be heard by those working nearby. The override switches were also faulty, including the switch that prevented the crane lifting loads beyond its capacity.

• Benjamin Lee was fined £80,000 and ordered to pay £18,478 in prosecution costs
• Siteweld Construction Ltd received a nominal fine of £50 with no costs as it has ceased trading
• the crane hire firm, Bryn Thomas Crane Hire Ltd, and the crane's operator, Frederick Scott, were also prosecuted for health and safety failings and sentenced separately.

Despite the fact that many of us feel that we are working longer hours to cope with ever-increasing workloads and leaner workforces, figures released by the Office for National Statistics (ONS) showed that employees are, on average, working nearly two hours less per week than in 1992 - a fall of 4.7% over the last 19 years.

Apparently we now work an average of 36.3 hours per week. The ONS has suggested that the decrease may be attributed to the higher proportion of people now employed in the services sector, where hours tend to be shorter than say in manufacturing or construction.

However, the summary statistic may be misleading! 27% of all employment in the UK is now part-time; if these workers are excluded from the data, we still have one of the longest working weeks in Europe at 42.7 hours (the average for Europe is 41.6 hours).

What's more, the ONS found that managers and senior officials worked the longest total hours of any major occupational group - but also the most unpaid overtime. The UK's full-time managers and senior officials work 7.6 unpaid hours per week, so a total of 46.2 hours. Likewise, professionals worked 36.6 paid hours, but 43.4 hours in total. (Manufacturing operatives had average weeks of 44.2 hours but had little gap between paid and actual working hours.)

The ONS based its conclusions on data drawn from the Annual Survey of Hours and Earnings, which examines paid hours, and the Labour Force Survey, which collects total hours worked.

The Chartered Institute of Personnel and Development's absence management survey has revealed that 52% of organisations considered that the fit note has prompted line managers to have conversations about health issues with their staff; however only 11% said that the fit notes had reduced absence. Just under a third said that the fit note helps line managers to deal with absence more effectively.

For more information on fit notes, see: /docs/legal/fitnotes.html For guidance on managing absence, see: /docs/legal/absence.html

A number of our clients have made some reduction to their (previously extremely generous) sick pay schemes as a result of cost-cutting during the recession. So it is interesting to read that a survey for Unum and Personnel Today conducted by Reed Business Insight found that 81% of employers still provide some sick pay above the statutory entitlement.

The research revealed the percentage of employers continuing to provide the following benefits:

• death-in-service benefit or life insurance - 79%
• childcare vouchers - 70%
• private medical insurance - 61%
• bonus schemes - 55%
• car allowance - 34%

Only 10% of employees are covered by income protection.

December is traditionally quieter on the helpline, which has given us the opportunity to add more new pages to the website as follows:

• a guide to preventing and managing industrial action - /docs/guides/action.html - and a guide to salary sacrifice - /docs/guides/sacrifice.html
• some letters and a form for paternity leave - /docs/lf/paternity/index.html
• a template letter lifting paid suspension - /docs/lf/suspension/index.html
• a page of links to useful calculators for statutory rates - /docs/legal/calculators.html
• finally, an employee guide to appraisal - this is tailored to fit with our appraisal review form and appraisal form - /docs/lf/reviewpreparation/index.html

As we move into 2012, we sincerely hope that things will improve!

• Too much legislation? 53% of the employers surveyed in the 2011 Chamber of Commerce Workforce Survey found health and safety regulations extremely burdensome (24%) or fairly burdensome (29%); 53% felt the new provisions giving fathers additional paternity leave was detrimental to the business and 32% felt the same about the right to request flexible working.
• Recruitment - the Manpower Employment Outlook Survey found that four-fifths of employers intend to either not hire or to cut back on staff during the first quarter of 2012. Employers in the east of the country were more optimistic than those in the West. The finance and business services sector has moved from being the most optimistic hirer at the start of 2011 to one of the most pessimistic, with employers' hiring intentions producing a net score +15 for the second quarter of 2011, falling to 0% for the first three months of the new year. Employers in the utilities sector were the most optimistic - we guess we'll always need them!
• Employment rates - the ONS reports the total number of people in employment in the three months to October fell by 63,000 compared with three months earlier, to 29.11 million. This was largely due to 67,000 job losses in the public sector. The jobless rate was 8.3%, also up from three months ago and youth unemployment rose again reaching its highest level since records began in 1992, at 1.027 million.
• Pay - total pay (including bonuses) rose by 2% over the year, with both the private and public sectors showing lower pay growth.
• Pensions - the annual survey by the National Association of Pension Funds sees a continuation of the trend for businesses to close final salary pension schemes to existing staff. 23% of schemes are now closed for accrual by existing members as well as being shut to new joiners (up from 17% in 2010, and just 3% in 2008). 30% of employers with schemes that are open for accrual say they plan to close them in the next five years and move staff to a defined contribution plan. Only 19% of private sector defined benefit schemes are now open to new joiners, compared with 88% ten years ago.

We wish you and your business every success in 2012 and look forward to keeping you updated and assisting with your HR queries. One thing we are pretty certain of - 2012 looks like being a very busy year for employment law and there will be sufficient changes to keep us occupied!

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 broader range of services:

This month's hot topic will be our usual annual review - so a review of 2011 and preview to 2012!

Note: hot topics are only sent to subscribers. If you receive our newsletters only and are interested in subscribing to our wider services, please take a look at /intro/index.html