Employment update


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Good News for Employers

March 2013: The Equality Act 2010 provisions dealing with discrimination questionnaires will be repealed by the Enterprise and Regulatory Reform Bill 2012-13 as part of the Government’s ongoing quest to reduce red tape in discrimination cases. This is despite the fact that 83% of the responses to the Government’s consultation on this issue opposed the move. As discrimination questionnaires are often used by (potential) claimants purely as a tactic to prompt an early cash settlement, most employers will welcome the change.

The Bill will also overturn the provisions in the Equality Act relating to third party harassment. This means that employers will no longer be held responsible for the harassment of employees by third parties such as customers or suppliers.

April 2013 will see another move designed to reduce the burden on employers, with the minimum collective consultation period for proposed redundancies affecting 100 or more employees at one ‘establishment’ being reduced from 90 days to 45 days. New legislation will also confirm that fixed-term employees whose contracts have reached the agreed termination date will not come within the ambit of collective consultation obligations. A new ACAS Code of Practice will also be introduced to provide additional guidance on employers’ redundancy obligations. It remains to be seen whether the new Code will clarify, or muddy yet further, the already murky collective redundancy-related waters.

April 2013 will also see the introduction of the Government’s employee-shareholder proposals under which prospective employees may elect (or be required, if they want the job) to waive certain employment rights and protections, including to claim unfair dismissal and to receive a statutory redundancy payment, in exchange for shares in their employer worth between £2,000 and £50,000. Any growth in the value of these shares will be exempt from Capital Gains Tax. As only a ‘very small number’ of respondents to the Government’s consultation on this anticipated implementing the proposals, it seems unlikely that many employees will benefit from the John Lewis-type employment model that the Government hopes to recreate more widely.

Summer: The new fees regime in Employment Tribunals will see claimants being required to pay a fee of £160 or £250 to issue a claim, and a further £230 or £950 if the claim proceeds to a final hearing. It is hoped that the introduction of such fees will reduce the number of frivolous or vexatious claims brought by unmeritorious claimants.

Finally, in the highly publicised case of Eweida & Others v The United Kingdom the European Court of Human Rights (ECHR) provided useful guidance in relation to four separate claims for indirect religious discrimination and, in particular, on the question of justification. The ECHR made it clear that the imposition of a provision, criterion or practice prohibiting the wearing of a cross at work for genuine health and safety reasons would be relatively easy to justify. Equally, in cases where there is a conflict between an individual’s religious beliefs and the rights of the wider community, as in the case of two Christians subjected to sanctions following their refusal to carry out civil ceremonies and psycho-sexual therapy for same sex couples, any provision, criterion or practice aimed at protecting the wider rights of the community will also be relatively easy to justify.

And some Good News for Employees too

There was, however, something in the Ewieda case for employees too (and, interestingly, this is where all the press focus seems to have been): The ECHR actually upheld the complaint by a British Airways employee who was prohibited from visibly wearing a cross around her neck. Although the aim of British Airways’ uniform code, namely, to protect the company’s image and promote recognition of its brand, was considered to be legitimate, the ECHR did not consider that the cross would have detracted from the employee’s professional appearance. The prohibition on visibly wearing the cross was, therefore, not proportionate.

From 1 February 2013, the maximum compensatory award for unfair dismissal increased to £74,200, up from £72,300, and the maximum limit on a week’s pay, used to calculate statutory redundancy and other payments, increased by £20 to £450. April will see weekly statutory maternity, paternity and adoption pay rise to £136.78 and statutory sick pay will rise to £86.70 per week.

From March, employees with at least one year’s continuous service will be able to take up to 18 weeks’ (up from 13 weeks’) unpaid parental leave before their child reaches the age of five.

Further family-friendly changes are also proposed, including an extension to the right for fathers to take time off. Currently, in addition to two weeks’ ordinary paternity leave, fathers can take 26 weeks’ additional paternity leave, provided certain criteria are met, including the mother’s return to work. Following the Government’s Consultation on Modern Workplaces, and with the aim of moving away from the assumption that women are the primary caregivers of newborn children, the Children and Families Bill will introduce a new system of shared parental leave. Mothers will be entitled to share all but the first two weeks of compulsory maternity leave with their partner. The shared leave can be taken consecutively or concurrently, provided the total leave taken does not exceed that which is jointly available to the couple.

An amendment to the Enterprise and Regulatory Reform Bill proposes the removal of the requirement that a “whistleblowing” worker or employee must make a protected disclosure ‘in good faith’, if they are to be protected from detriment or dismissal. Instead, tribunals would be able to reduce any compensation for detriment or dismissal arising from a protected disclosure by up to 25% if the disclosure was not made in good faith.

Finally, in the case of Geys v Société Générale, the Supreme Court has held that the employment of an employee who was told that his employment was being terminated, and marched off the premises on the same day, did not, as a matter of law, terminate either that day, or even on the later date on which a contractual payment in lieu of notice was made. Instead, it only terminated several weeks later when the employer finally made it clear that the employee’s employment had been terminated in accordance with the payment in lieu of notice clause in his contract of employment.

While the facts of this case – the Court’s decision meant that the employee was entitled to a termination payment of €12 million, instead of €7 million – are unusual, it is possible that similar arguments to the effect that an employee’s employment has not been terminated in accordance with their contract will be used to extend an employee’s period of employment for unfair dismissal or bonus purposes. The most important practical point that arises from this decision for employers is that they ensure that they spell out to a departing employee the contractual basis on which their employment is being terminated.

For further information, please contact Taj Rehal (trehal@fladgate.com) or Michael McCartney (mmccartney@fladgate.com).

Updates for HR professionals


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