Employment Update UK November 2006

22 November 2006

Elizabeth Lang

New Legislation

Age Discrimination:
The Employment Equality (Age) Regulations 2006 came into force in the UK on 1 October 2006 (although the provisions relating to pensions will not apply until 1 December 2006). Employers must ensure that they comply with the new Regulations at every stage of the employment relationship, from recruitment to opportunities for promotion, benefits for length of service and on retirement. Failure to comply may potentially result in the employee being awarded unlimited damages in an Employment Tribunal.

Age discrimination and pensions: The pensions aspects of the Employment Equality (Age) Regulations 2006 were delayed by 2 months to give businesses, trustees and trade unions additional time to adjust and allow an informal consultation period. As a result, the Government has made amendments to the original provisions. These were announced on 10 November 2006. The provisions, set out in Schedule 2, specify those age related aspects of occupational pension schemes that will continue to be allowable without having to be objectively justified.

Maternity: Various Regulations were brought into force on 1 October 2006 under the Work and Families Act to make changes to the maternity laws. Amongst the measures brought in, all employees who are due to give birth after 1 April 2007 will benefit from increased Statutory Maternity Pay of 9 months instead of the previous 6 months, and they will be entitled to a total of one year of maternity leave. Employees will also be entitled to ‘keeping in touch’ days so that they can remain in contact with work whilst they are on maternity leave.

Collective Redundancies: The Collective Redundancies (Amendment) Regulations 2006 also came into effect on 1st October 2006. The Regulations amend TULCRA and make it clear that the Secretary of State must be notified of any proposed collective redundancies before notice is given to any of the relevant employees.

Case update

Collective redundancies enforcement of protective awards:
In Transport and General Workers Union v Brauer Coley Limited (in administration) the EAT has confirmed that only those employees who are subject of a protective award may enforce it. In this case only those employees in respect of whom the union was recognised could benefit from the award. Other employees (in respect of whom the union was not recognised) had to either claim individually or via any elected employee representatives. This was a previously undecided point and the EAT has given permission for the union to appeal to the Court of Appeal.

Religious discrimination: In Azmi v Kirklees Metropolitan Council a tribunal dismissed an employee’s claim that a management instruction not to wear a veil while she was teaching amounted to direct discrimination on the grounds of religion and belief under the Employment Equality (Religion or Belief) Regulations 2003. The employee had not established a prima facie case that she had been less favourably treated than a comparator in similar circumstances (a non-muslim employee who had covered their face). The Tribunal found that even if brought under an indirect discrimination head of claim she would not have succeeded as in this case the employer had a legitimate aim in giving the instruction and the means of achieving it were proportionate.

Without prejudice discussions admissible: In Brunel University v Vaseghi an employer accused employees of making ‘unwarranted demands for money’ in connection with their race discrimination claim. The employees claimed victimisation as they said it was the employer who initially suggested a financial settlement, in a without prejudice discussion. The EAT said that as the employer put the issue in the public domain it could not rely on the without prejudice nature of the earlier discussions. This case confirms that employers cannot assume that without prejudice conversations will not be disclosed. Especially where the subject matter relates to a discrimination claim, the importance of getting to the truth may well be found to override the importance of confidential discussion.

Time limits in discrimination claims: In Virdi v Commissioner of Police of the Metropolis and another the EAT held that the 3 month time limit for a claim for race discrimination arising from a decision not to promote, ran from the date of the decision itself, and not the date on which the decision was communicated to the employee. However, it determined on the facts of this particular case that it was just and equitable for the time limit to be extended so that the employee was entitled to proceed with his claim.

Provision in staff handbook has contractual effect: In Keeley v Fosroc the Court of Appeal decided that an enhanced redundancy provision contained within a staff handbook, which also contained many aspirational and purely procedural provisions, was incorporated into the contract of employment. The fact that the wording was in terms of ‘entitlement’ and that the enhanced provisions were used as a matter of course influenced the decision.

Is re-engagement a realistic option?: In Johnson Matthey PLC v Watters the EAT considered the factors that must be taken into account when deciding if re-engagement is a realistic option. It recognised that where an employee has successfully brought a case against his/her employer it will be difficult for the employer to swallow its pride and have the employee back, but this cannot be the determining factor if the remedy is to have any practical effect.

Personal injury caused by work-related stress: In Green v DB Services Limited and D v Intel Corporation UK Limited the High Court granted claims for personal injury for psychiatric illness resulting from harassment and work related stress. Worryingly for employers, the judge in this case suggested that even offering counselling may not be sufficient to discharge the requisite duty of care.

Company sick pay and disability discrimination: In O’Hanlon v HMRC the EAT stated that giving more sick pay to disabled employees than to non-disabled employees would rarely be an obligation required as ‘a reasonable adjustment’ under the Disability Discrimination Act, unless it could be shown that the employee’s absence from work resulted from the employer’s failure to make other reasonable adjustments.

Can employers justify pay differences based on length of service? The ECJ held in Cadman v Health and Safety Executive that employers can, as a legitimate objective, use length of service as a determinant of pay in order to reward experience. This would be the case even if the policy resulted in different salary levels for men and women who carry out work of equal value. Such a policy would not be justified if it was shown that it was not a legitimate objective to reward experience based on length of service. This case will hopefully also help employers in relation to age discrimination, where service related benefits outside the 5 year exception must be shown to fulfil a business need in order to be legitimate.

UK failure to properly implement Working Time Directive: The UK is going to have to amend the Working Time Directive after the ECJ said in Commission v United Kingdom that, whilst employers cannot force employees to take rest breaks, the DTI guidance that requires employers to give employees the opportunity to take rest breaks but does not require them to ensure that employees actually do take the break, could render the rights in the Directive meaningless.

Is a covert recording of a disciplinary hearing admissible as evidence? In Amwell View School v Dogherty an employee’s covert recording of a disciplinary hearing was held to be admissible as evidence by the EAT. Covert recordings of a disciplinary panel’s private deliberations would not be admissible however, said the EAT. Employers must therefore be careful to ensure that the statutory rules are followed in all grievance or disciplinary meetings, and that no ‘unofficial’ discussion takes place during the meeting unless it is carefully planned.

Transfer of Undertakings: TUPE 1981 states that a dismissal by reason of a transfer or a reason connected with the transfer is automatically unfair unless there is an ‘economic, technical or organisational reason entailing changes in the workforce’. The new TUPE 2006 contains very similar provisions. London Metropolitan University v Sackur confirmed that this ‘ETO’ defence requires a change in the numbers or functions of the employees.