Emp Update UK 0508

06 May 2008

Sonia Parsons, Chloe Pereira, Jonathan Goldsworthy


Amendments to Sex Discrimination Legislation


The Sex Discrimination Act (“SDA”) was introduced in 1975 and, as well as providing protection from sex discrimination in the workplace, the SDA also prohibits discrimination in the provision of goods, facilities and services. The SDA has undergone a number of changes over the years to increase its scope, the latest of which aim to remedy apparent deficiencies in the law.

New legislation

The Sex Discrimination Act 1975 (Amendment) Regulations 2008 came into effect on 6 April 2008 and cover the areas of pregnancy/maternity and harassment.

There are five main changes introduced by the new legislation:

  1. The definition of discrimination on the grounds of pregnancy or maternity leave has been amended to remove the need for a formal comparator who is not pregnant or on maternity leave;
  2. Women whose expected week of childbirth begins on or after 5 October 2008 can expect the same terms and conditions of employment to apply during their additional maternity leave as apply during their period of ordinary maternity leave;
  3. A woman on compulsory maternity leave should be treated as having been at work for the purposes of any pro rata discretionary bonus apportionment;
  4. The definition of harassment has been widened by the modification of the causal link between harassment and the sex of the person being harassed; and
  5. Employers will also be held liable for failing to protect employees from harassment by third parties where the harassment is known to have occurred on at least two other occasions.

Effect on employers

The legislative changes affecting pregnant women or those on maternity leave largely codify existing case law. However, the changes afford pregnant women and those on maternity leave increased statutory protection and are likely to make it easier for such individuals to bring a claim against their employers.

It is therefore advisable for employers to review their standard terms and conditions of employment in light of these changes and make amendments to their maternity policies and procedures where necessary. In particular, many employers will need to amend their policies on benefits during additional maternity leave to ensure employees receive the same benefits as during ordinary maternity leave.

The change in the definition of “harassment” means that the discrimination need no longer be “on the grounds of” the sex of the victim; their actions will meet the definition if the unwanted conduct is “related to” their sex. Potentially this has very far-reaching consequences. The changes also allow for claims to be brought by an individual who is not necessarily subjected to the unwanted conduct themselves, but is a witness of sex discrimination and who feels the effect; their sex in bringing a claim in this case is irrelevant.

The changes to cover third party harassment will impose liability on an employer if it has knowledge of harassment of an employee by one or more third parties on at least two previous occasions and it has taken inadequate steps to prevent re-occurrence. An employer will not be liable for conduct of which they had no knowledge, for one-off incidents, for conduct beyond their control or for where all reasonably practicable steps were taken to prevent further harassment.

ICE Regulations 2004


The Information and Consultation of Employees (“ICE”) Regulations 2004 (SI 2004/3426) impose information and consultation obligations on employers of a certain size, where statutory requests have been made. From April 2007, the size of the undertaking needed to be 100 employees or more for the requirements to apply.

New legislation

On 6 April 2008, the ICE Regulations were extended to apply to undertakings with at least 50 employees.

Effect on employers

Where relevant statutory requests are made, employers will now be obliged to arrange information and consultation for even relatively small undertakings of 50 or more employees, although the government continues to encourage employers, regardless of size, to set up some form of process with their employees on a voluntary basis.


Court of Appeal judgment - An expired warning does not make earlier misconduct irrelevant to the fairness of a subsequent dismissal for similar misconduct.


In its recent decision in the case of Airbus v Webb, the Court of Appeal had to consider whether it was fair for the employer to dismiss an employee for gross misconduct when he had committed the same act (absenting himself from work without good reason) just over a year earlier. On that occasion, it had also been decided to dismiss him but that decision had been reduced on appeal to a final written warning stated to remain on his file for 12 months only.


On the occasion of his final act of misconduct, Mr Webb was not the only employee watching TV when he should have been working but he was the only one who was dismissed. The Court of Appeal confirmed that this was not disparate treatment of employees who committed the same offence, and so was not unfair for that reason. In this case it was fair that the other employees caught not working at the same time were not dismissed but only given a final written warning because it was their first offence. In the case of Mr Webb, it was repeated misconduct for which he was fairly dismissed, having received the lesser penalty of a final written warning on the previous occasion.

The Court of Appeal said that, in order to comply with s.98(4) of Employment Rights Act and decide whether the employer acted reasonably in treating the reason given as the reason for dismissal, there may be cases where an expired final warning should be taken into account and this was such a case. The dismissal was fair.

Effect on employers

The Court of Appeal stresses that employers should not now rely on expired warnings “as a matter of course”. The key point seems to be that there is a distinction between a case where the employer would not have dismissed but for the previous warning and a case where the employer is entitled to dismiss for the current offence and chooses to do so rather than issue a final written warning because it takes the previous offence (as opposed to the previous warning) into account.

EAT judgment - A dismissal may be automatically unfair as being transfer-related even if, at the time of the dismissal, no transfer has yet taken place.


Regulation 7 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 states that an employee shall be treated as having been unfairly dismissed if the sole or principal reason for the dismissal is the transfer itself or a reason connected with the transfer that is not an economic, technical or organisational reason entailing changes in the workforce.


The recent EAT judgment in the case of CAB Automotive Ltd v Blake and others; Singh and others and RDS Automotive Interiors Ltd (in administration) concerned a business that was making car interiors for MG Rover when it collapsed in April 2005.

This presented the company with an immediate financial crisis. An administrator was appointed who said that his role was 'to tidy up the business to sell it to somebody else'.

Many employees were made redundant and it was only shortly afterwards that a transfer plan evolved whereby the business (which was ongoing) was transferred to a new company. The employees who had been made redundant claimed that their dismissals were automatically unfair under the TUPE Regulations as being transfer-related and that the new company (the transferee of the business) was liable to pay them compensation.

The EAT has upheld part of the Employment Tribunal decision that dismissals may be TUPE-related and thus automatically unfair under Regulation 7 even if, at the time of the dismissals, no buyer for the undertaking has yet been identified.

However, the transferee’s appeal was not wholly unsuccessful because the EAT found that the Employment Tribunal was wrong on two other issues:

  • Although it found that the dismissals were 'connected with' the subsequent transfer, it did not say that the transfer was the REASON FOR the dismissals; and
  • The Tribunal said that, once it had found that the administrator's intention was to 'engage in dismissals as a cost-cutting exercise with a view to a possible sale', then there was no possibility that the dismissals could have been for an ETO reason. This was wrong.

The EAT confirms that a Tribunal faced with this issue must decide the following questions (and in this order):

  1. Were the dismissals transfer-related?
  2. If so, was the transfer (even if no buyer yet identified) the sole or principal reason for the dismissals?
  3. If so, was there an ETO reason for the dismissals? If so they are potentially fair. If not, they are automatically unfair.

Effect on employers

A dismissal made with a view to a sale of a business as a going concern may be transfer-related (and thus automatically unfair) even if at the time of the dismissal no transfer has taken place.

There is an exception under TUPE Regulation 7(2) and (3) for dismissals made for an ETO reason which may be fair. In order to assess properly whether a dismissal may be transfer-related and/or whether this exception applies, it is important to obtain expert advice at the earliest possible stage.

ECJ judgment - dismissal of female worker for receiving IVF treatment can amount to sex discrimination


In Mayr v Bäckerei und Konditorei Gerhard Flöckner, the ECJ held that women undergoing in vitro fertilization treatment (“IVF”), who have had their ova fertilized but not yet implanted, are not "pregnant", and thus are not protected from dismissal by the EC Pregnant Workers Directive (92/85). However, the dismissal of a woman, if related to her IVF treatment, will amount to discrimination on the ground of sex contrary to the EC Equal Treatment Directive (76/207), since only women receive IVF.


The ECJ took a purposive approach when determining that the prohibition on the dismissal of pregnant workers in the Pregnant Workers Directive is to avoid the potentially harmful physical and mental effects on pregnant workers. Therefore, the protection should start from the earliest possible date in a pregnancy. Even if that protection begins from the transfer of the ova into the uterus, the Directive could not apply to a worker in the claimant's situation. However, ECJ case law is clear that (since only women become pregnant), the dismissal of a female worker for being pregnant, or for a reason primarily based on their pregnancy, amounts to direct sex discrimination. In the ECJ's view, similar logic applies with regard to IVF, which also "directly affects only women".

Effect on employers

This presents a significant shift in the law. Until now, case law has indicated that dismissals or less favourable treatment relating to IVF treatment are not discriminatory on the grounds of sex. It is worth employers remembering to treat this subject with caution as it is likely that there will be more cases tested in this area in the future.

EAT judgment - Statutory grievance procedures: collective grievances


Regulation 9 of the Employment Act 2002 (Dispute Resolution) Regulations 2004 exempts employees who are identified in a written grievance submitted by appropriate representatives from the requirement to submit their own written grievance (set out in section 32 of the Employment Act 2002).


In Alitalia Airport SPA v Akrif and others the EAT considered the effect of Regulation 9. The EAT ruled that a Tribunal had erred when it held that Regulation 9 also exempted such employees from the requirement to wait for 28 days before presenting a claim to a tribunal.

The EAT also held that union representatives who lodged a collective grievance could subsequently add further individuals to the grievance. Where union members served questionnaires prepared by their union which demonstrated that they shared the grievance previously lodged by their union representatives, it could be implied that the union representatives had lodged the original grievance on their behalf (notwithstanding that they were not originally identified in it).

Effect on employers

Employers should therefore be wary about making assumptions concerning the employees who are raising a particular grievance. It is safest to assume the entire group of individuals is included if “readily identifiable to the employer” from the documentation available.

Court of Appeal judgment – TUPE: motives of the decision-maker determine the reason for dismissal


In Dynamex Friction Ltd and another v Amicus and others, the Court of Appeal found that a tribunal had failed to explain adequately its conclusion that employees were dismissed for an economic reason rather than a reason connected with the transfer. Although this case was decided under TUPE 1981, the same principles would arise under TUPE 2006.


In this case, the administrator had carried out the dismissals and his reasons for the dismissals were found by the Tribunal to be economic and not transfer-related. The fact that the eventual transferee may have "stage-managed" the dismissals was immaterial, as this had not affected the administrator's decision.

The Court of Appeal overturned the EAT's decision that the tribunal had properly addressed the principal issue of the case and found that only the reasons of the person who took the decision to dismiss must be taken into account when determining the reason for dismissal. However, one judge did favour a more liberal interpretation of the TUPE Regulations, which permitted all objective circumstances to be taken into account when deciding the reason for dismissal.

Effect on employers

Whilst this case provides some relief for eventual transferees who have tried to influence the process, by restricting the reasons for the dismissal assessed by the tribunal to those of the decision maker, it increases the burden on the employer taking such decisions to show that its decision and process is fair and not affected by other influences.

Business immigration: Immigration under the new Points-Based System

On 29 February 2008, the Government began what is arguably the largest single overhaul of the UK’s immigration system in over 30 years. This will see all existing routes of entry to the UK (including work permits) phased out and replaced by a five Tier, Points-Based System (“PBS”).

Key changes under the PBS will include:

1. Tiers

Anyone wanting to come to the UK to work or study will need to demonstrate that they meet the requirements of one of the five Tiers.

Tier 1 relates to highly skilled individuals who can obtain points for factors including academic qualifications, previous earnings and age and effectively replaces the HSMP (amongst other immigration categories). The Tier 1 general category is already in place for Indian nationals and those in the UK who wish to “switch” to highly skilled status. The worldwide roll-out is scheduled for later this year.

Tier 2 effectively replaces the current work permit scheme and will cover skilled workers who have an offer of employment from a UK company. Individuals can be awarded points based on various factors including qualifications, future salary and evidence that the recruiter cannot fill the position from the EEA labour market. The Tier is expected to go live in the third quarter of 2008.

Tier 3 will cover low-skilled workers. This Tier will be “activated” dependent on demand from a particular sector although the intention is that these workers can, in the main, be sourced from the European labour market.

Tier 4 will apply to students who wish study at a recognised institution and is expected to be rolled-out by April 2009.

Tier 5 will replace various youth mobility and temporary workers schemes and should be rolled out in tandem with Tier 2.

2. English Language Requirement

Under the PBS the Border & Immigration Agency (“BIA”) will require that migrants coming to the UK have minimum English language skills. Applicants must demonstrate English language competency by passing an approved English test, holding a Bachelors degree taught in English or being a resident of one of 17 “Majority English-Speaking Countries”.

3. Sponsorship

Under the PBS in order to recruit migrant workers who qualify under Tiers 2-5 the prospective employer must be registered with the BIA as a sponsor. Sponsorship is designed to provide evidence that the migrant has a genuine job in the UK and ensure that a particular body is responsible for that migrant during their time in the UK.

Once registered, companies will be able to select authorised users to issue Certificates of Sponsorship without having to first obtain BIA approval. Individuals will then use the certificate (an electronic reference number) to complete their overseas application.

Sponsoring employers will be subject to increased reporting obligations and other duties and will given an “A” or “B” rating following a BIA assessment. This will be shown on a public register. Where an employer is given a “B” rating, it will also be given a time-limited action plan to address the BIA’s concerns.

What this means for you

Companies which employ (or which will employ) non-EEA nationals should ensure that sponsorship applications are made in good time and that key personnel are clear on what their obligations and liabilities under the PBS are. Companies should also be aware of their various responsibilities in relation to employing migrant workers as penalties for non-compliance with the PBS could result in downgrading/loss of sponsorship licence.

Furthermore, new civil and criminal penalties introduced as part of the Government’s wider immigration strategy on 29 February 2008 mean that employers of those without permission to work in the UK will face fines of up to £10,000 for each unauthorised worker. Also, businesses knowingly employing individuals without permission to work in the UK can be prosecuted for a criminal offence resulting in unlimited fines and/or imprisonment.