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News

Phasing out of default retirement age confirmed
Despite strong objections from employers groups including the Confederation of British Industry (CBI) the government has confirmed that it will phase out the default retirement age (DRA) from 6 April 2011, with the DRA coming to an end on 1 October 2011. It has also published its Response to the consultation on this issue.

The CBI had urged the government to delay the phasing out of the default retirement age until it had addressed the "huge uncertainty" and "legislative void" that would result from the move. Predicting an increase in the risk of tribunal claims, the CBI claims retirement rules will lack clarity.

Click here to view the full Response.

Nick Clegg outlines plans for new parental leave rules
Nick Clegg has this week outlined plans to go ahead this April with changes to allow couples to share maternity leave. He has also stated that the government would consult on a "proper" system of shared parental leave to be introduced in 2015.

In respect of parents of a baby due on or after 3 April 2011 the right to Additional Paternity Leave (APL) comes into force. The right is applicable to an employee who is the child's biological father or the spouse or partner (of either sex) of the child's mother or adopter. The statutory minimum entitlement will be to one period of APL lasting between 2 and 26 weeks (in multiples of complete weeks). The period of APL must be taken within a "window" that starts 20 weeks after the child's date of birth or placement for adoption and ends 12 months after.

Recent comments have indicated however that the government looks to extend this even further and may consult on plans to extend the right to ask for flexible hours to grandparents and close family friends.

Government encouraged to introduce fees for Employment Tribunal Claims
Business groups including The British Chambers of Commerce (BCC) are urging the government to introduce fees for pursuing a claim in an Employment Tribunal in order to curtail the rapid rise in claims. The BCC has reported that it is typically cheaper for employers to settle a case, rather than defend themselves at a tribunal, resulting in three-fifths of cases being settled often to avoid this expense. The BCC has suggested a tribunal application fee of £30; although the Institute of Directors argues that up to £500 would be a bigger deterrent. We understand that the introduction of a fee (or deposit), which would be returned if the claimant wins the case, will be considered in the government's consultation on reforming the tribunal system later this month.

According to the British Chambers of Commerce, it typically costs employers £8,500 to defend themselves at a tribunal. Settlements, on the other hand, average £5,400. Three-fifths of cases are settled, often because employers see that as cheaper even if they think the case has no merit.

Union Groups including the Trades Union Congress (TUC) disagree that charging a fee is the way to resolve the problem of rising Tribunal claims stating that "charging a fee would put off genuine claimants".

Improving diversity in boardrooms
The CBI has made submissions in relation to the review into the lack of female representation in boardrooms. As part of its proposals, the UK Corporate Governance Code would be amended to require all listed companies to run diversity schemes on a "comply or explain" basis. This would take into account the size of the company and the number of female staff, and set diversity targets for them to reach accordingly. Any company failing to meet its target would have to explain why it had not done so. According to the CBI, a similar scheme is to be introduced in Australia next year, resulting in a sharp rise in the number of women at board level.

The CBI's submission makes a strong business case for gender diversity, including the benefits of having a wide range of views round the table for good governance and in helping to attract more women to work for the company.

The business group also highlights the declining total number of board directorships, which has further reduced the opportunities for women. Noting that currently female appointments are predominantly made in non-executive roles, the CBI argues that further progress needs to be made to ensure women are appointed to both executive and non-executive roles.

Legislation

New compensation limits come into force on 1 February 2011
The limits on certain Employment Tribunal awards and other amounts payable under employment legislation will increase from 1 February 2011.

The main changes are:

• the limit on the amount of a week's pay for the purposes of calculating, among other things, statutory redundancy payments and the basic award for unfair dismissal will increase from £380 to £400
• the maximum compensatory award for unfair dismissal rises from £65,300 £68,400
• guarantee pay increases from the rate of £21.20 a day to £22.20 a day.

The new rates apply where the event giving rise to compensation or payment occurs on or after 1 February 2011. For example, in the case of unfair dismissal the rates apply to all dismissals where the effective date of termination falls on or after this date. Where the dismissal or relevant event falls before 1 February, the old limits will still apply, irrespective of the date on which compensation is awarded.

New statutory payment rates for 2011 announced
At the end of 2010, Steve Webb, the Minister of State, Department for Work and Pensions, announced the proposed rates of statutory benefits which are expected to apply from 11 April 2011.

The standard rates for Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay will increase from £124.88 to £128.73. The weekly earnings threshold for these payments will rise from £97 to £102.

Statutory Sick Pay will increase from £79.15 to £81.60, with the weekly earnings threshold also rising from £97 to £102.

Maternity allowance will increase from £124.88 to £128.73, with the earnings threshold remaining at £30.

Flexible working for carers of children under 18: Regulations published
The Regulations allowing an eligible employee to request flexible working to care for any child under 18 years of age come into force on 6th April 2011. Currently, the right to request flexible working is available in respect of a child under 17 (or under 18 if the child is disabled).

When it came to power, the coalition government stated its intention to extend the right to request flexible working to all employees. A consultation on how to do this and on the creation of a new system of flexible parental leave is awaited (see Nick Clegg article in News section above).  

Case-law

Equal pay claims in the civil courts
In a case which is likely to lead to a significant number of equal pay claims being made, the High Court has held that individuals can pursue their former employers in the civil courts, where the strict six-month tribunal time limit for an equal pay claim does not apply.

It is not unusual for individuals to find out after their employment has ended or after they have transferred to a new employer under TUPE that former colleagues in similar roles have been successful with equal pay claims or have received equal pay settlements. At this point, the individuals might realise that they had valid equal pay complaints against their former employer, but that it is too late to issue tribunal proceedings.

In multiple claims against Birmingham City Council the High Court has held that a group of 174 equal pay claims, which would be out of time in the employment tribunal, can proceed as breach of contract claims in the High Court.

While acknowledging that its decision could lead to 'forum shopping', the Court pointed out that it has necessary powers to prevent abuse. It could, for example, deal with costs in the same way as a tribunal and/or stay the claim while the substantive issues are sent to a tribunal for determination.

To read the full decision click here.

Dismissal for manifestation of beliefs in
an unacceptable manner is not discriminatory
We reported in our October update that the EAT had upheld a Tribunal's decision that a belief in the afterlife, spiritualism and the ability to contact the dead using mediums was capable of being a religious or philosophical belief under the Employment Equality (Religion or Belief) Regulations 2003.

This went back to the Employment Tribunal to hear the merits of the unfair dismissal case which has now been heard, again reaching the EAT who have held that the employee, dismissed by the police, was not discriminated against on the grounds of his belief in spiritualism. Although one of the reasons for the employee's dismissal was that he had distributed spiritualist posters and CDs at work, this was not sufficient to render the dismissal directly discriminatory. The employee was not dismissed because he held the protected beliefs, but because he had manifested those beliefs at work in an unacceptable manner.

To read the full decision click here.

Working Time Regulations vs. Detriment
A recent case on the Working Time Regulations which will be of interest to many including in the oil and gas sector is Arriva London South Ltd v Nicolaou UKEAT/0280/10.

The Employment Rights Act 1996 (ERA) protects an employee from being subjected to a detriment by their employer for refusing to forgo a right conferred by the Working Time Regulations 1998 (WTR) including that an employee's working time shall not exceed an average of 48 hours a week, unless they have given their prior consent to this in writing.

The EAT has held that an employer's policy of not making overtime available to those who had not opted out of the 48-hour average weekly limit on working time could be viewed as an attempt to ensure compliance with the Working Time Regulations 1998, and this was relevant to whether the employer had subjected an employee to a detriment, contrary to the Employment Rights Act 1996.

The claimant in the case regularly used to work overtime on rest days. When asked to sign an opt-out of the 48-hour average weekly limit on working time, he declined to do so and was then refused overtime going forward. He claimed that denying him the opportunity to work overtime subjected him to a detriment for having exercised his rights under the WTR. A tribunal found that there was clearly a detriment and that, but for the opt-out, the overtime would have been available to him.

Overturning the decision of the employment tribunal and remitting the case back to an employment tribunal, the EAT held that the tribunal had failed to consider the relevance of the employer's obligation under the WTR. This case highlights the tension between the rights conferred by the ERA and the WTR and we will report again once the decision on the case as remitted is out.

To read the full case report  click here.

Podcast

Our latest podcast is available now and covers the following topics:

Fit notes
It's the time of year where you may find that absence levels increase as the cold weather forces people indoors whether though genuine illness or not. You will recall that 2010 saw an overhaul of the "sick note" with the "fit note" which allows a doctor to indicate whether an employee is fit for some work and suggest changes that could be made by the employer to an employee's work environment or job role to help facilitate a return to work. As a reminder about how this system works why not listen to our podcast on the issue where Alison Weatherhead, an associate in the Employment outlines some of the issues employers have encountered since the introduction of the fit notes.

Working abroad
In our globalised culture, the territorial coverage of UK statutory employment rights is repeatedly being tested. It is not the case that any employees anywhere in the world can rely on UK employment law - there are limits. But what those limits are has vexed the courts in recent years.

In the second part of our podcast Claire Scott, an associate in the Employment Team discusses the employment issues of doing business abroad including the challenges which may crop up when putting arrangements in place for expatriate employees.

To listen to our latest podcast, click here.

Seminars

Breakfast seminars
Our next round of quarterly seminars is being planned for March. Look out for further details in the next edition, or sign up to register to receive Employment Seminar invites.

Debt recovery services

Wasted training costs? Get them back!
Are you sick of spending lots of money on training employees, only for them to take that knowledge elsewhere? If your contracts provide for training costs to be repaid on termination of employment, then such sums can be recovered inexpensively. Our Debt Unit works on a fixed fee basis and can help you with this. For more information, please contact our Debt Recovery Manager, Sue Morrin.

And finally...

In our November update we reported on the claim by former Countryfile presenter Miriam O'Reillys against the BBC for age and sex discrimination. The tribunal has now found that O'Reilly, 53, was dropped because of her age and victimised by management who blamed her for newspaper stories criticising the corporation for dropping middle-aged women presenters.

It has been reported that the BBC is now likely to face a six-figure damages payout. It is the first time an age discrimination case has been upheld against the corporation, which apologised to O'Reilly and promised an immediate overhaul of how it recruits and appoints its presenters.

...but who says it's all doom and gloom?
A recent survey published by the HR Network Scotland magazine, carried out by YouGov suggests that almost 72% of workers feel motivated on a Monday morning when preparing to go to work. A small minority (14%) admit to feeling tired or de-motivated with even less (6%) disinterested in going into the office.

With reports of increasing Tribunal claims and a general discontent across UK workforces it may surprise our readers to hear that 80% of British workers are satisfied with the quality of the workplace, with the main complaints being about the length of commute with 26% wishing that they worked somewhere closer to home.

What is unclear is whether or not the survey promised anonymity...!

Contact us

If you think your organisation may be affected by any of the above, or if you have any other questions, please contact:

Amanda Jones
Partner and Head of Department
0131 228 7134
amanda.jones@mms.co.uk

This briefing is written as a general guide only. It is not intended to contain definitive legal advice which should be sought as appropriate in relation to any particular matter.