CLB Employment Solutions employment law

2010 statutory payment updates

The main changes for 2010 reflect the Retail Prices Index decrease of 1.4 per cent from September 2008 to September 2009. The fixed link to the RPI at a particular time of year can have unintended consequences as demonstrated by this month’s announcement that the rate to December 2009 increased by 2.4 per cent. In any event, the changes are as follows:

  • With effect from April 2010 the earnings threshold for statutory adoption, maternity, paternity and sick pay rises from £95.00 to £97.00 per week.
    Statutory adoption, maternity and paternity pay and maternity allowances all rise from £123.06 to £124.88 per week.
  • Statutory sick pay is unaltered at £79.15 per week.
  • With effect from 1 February 2010 the maximum compensatory award for unfair dismissal is reduced from £66,200 to £65,300.
  • The minimum amount of compensation resulting from unlawful exclusion or expulsion from a union falls from £7,300 to £7,200.
  • The maximum guarantee payment payable to an employee under section 31 of the Employment Rights Act 1996 (lay off payments) falls from £21.50 to £21.20.
  • The minimum basic award for certain unfair dismissals (e.g. dismissals for reasons of trade union membership or activities, health and safety duties, pension scheme trustee duties or acting as an employee representative) changes to £4,700.

As a result of the one off change made in October 2009 the limit on weekly pay for calculating redundancy payments and the unfair dismissal basic award remains at £380 and will do so until at least February 2011.

Another important change which is relevant for employers is that with effect from 6 April 2010 the maximum amount which the Information Commissioner can impose as a monetary penalty under the Data Protection Act 1998 is increased to £500,000.

Legal costs in employment and other civil cases are also due for a significant shake up following the radical proposals set out by Lord Justice Jackson in his Civil Litigation Costs Review. Notable for employers is his suggestion that costs recoverable by lawyers under no win no fee agreements in employment cases should be limited to 25% of the value of the settlement or award. There is also a suggestion that the “no costs” regime which applies (with limited exceptions) in employment tribunal proceedings may be extended to other areas of law.

CLB Employment Solutions discrimination employment law news

what to expect in 2010

Time off for training or study

In April 2010 the right to request time off work will be extended to cover training and study. The procedure is similar to a request for flexible working. Employees can make a written request to ask for time off to undertake external training or study and should indicate how this will improve their personal performance and benefit the employer’s business. Employers must take the request seriously and give careful consideration to whether the request can be granted. Employers who refuse requests will have to have a good business reason for doing so. The employee has the right to appeal against a decision to refuse a request.

Significantly, employees are not entitled to be paid for the time spent undertaking training or study and employers are not obliged to pay or contribute towards training costs.

Further information is available from the Business Link website.

Equality Act

Probably the biggest change which may (subject to the general election) come into effect in 2010 is the Equality Act which is scheduled for implementation in October 2010. This is intended to consolidate all existing equality legislation into one Act. Proposed changes include the requirement for employers with over 250 employees to publish information concerning pay differences between men and women. Other proposed changes include:

  • A single objective ‘justification’ test to replace the different tests currently used. To rely on the justification defence, the employer or service provider will have to show that its conduct is a ‘proportionate means of achieving a legitimate aim’.
  • New ways to claim for disability discrimination are to be introduced – ‘discrimination arising from disability’ and ‘indirect discrimination’. These would replace ‘disability-related discrimination’ which was very severely curtailed by the House of Lords decision in London Borough of Lewisham v Malcolm.
  • It will be easier to require service providers to make reasonable adjustments.
  • Direct discrimination or harassment based on association or perception are to be unlawful. That applies to employment, but also to other areas such as services and education. This proposal implements the European Court decision in Coleman v Attridge Law, but also goes beyond it.
  • There is to be a single equality duty on public bodies, embracing grounds such as sexual orientation and religious belief as well as race, disability and gender.
  • The Government wants there to be greater transparency, including an obligation on public authorities to report on their disability employment rate, and a strengthening of the requirement for public bodies to tackle private sector discrimination through public procurement policies.
  • The Government proposes not to broaden the definition of disability as recommended by the Disability Rights Commission, but will remove the list of ‘capacities’.
  • A tribunal will be able to make a recommendation benefiting the wider workforce, even if it is no longer relevant for the individual claimant – probably because the individual has left the employer.
  • Claims for discrimination on two combined grounds (but no more than two) are to be allowed – e.g. discrimination for being a disabled woman.
  • There are new rules to discourage employers from asking job applicants disability-related questions.

The Work and Pensions Committee has also recommended a wider definition of disability so that protection extends to everyone who has or has had an impairment without requiring the effects of that impairment to be substantial or long-term.

Consultation continues and the eminent employment barrister John Bowers QC has pointed out that as the draft legislation stands the Act “could make it unlawful for a church to require a priest or minister to be male, celibate and unmarried, or not in a civil partnership”.

Potential abolition of the default retirement age

We have reported in earlier posts about plans to increase the default retirement age to 68, 70 or even 75 but it seems that the latest thinking is that it should be removed altogether. This is what Age Concern argued for in the well-known Heyday case on the simple basis that, no matter how it is dressed up a default retirement age is, more or less by definition, age discriminatory. According to reports on 25 January this approach is now supported by the Equality Commission.

“Fit notes” in place of sick notes

In April the Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) Amendment Regulations will replace sick notes with fit notes. These will allow doctors to record whether a patient is fit or not fit for work and whether someone “may be fit for some work now”.

Paternity leave and pay

Paternity leave and pay are due to be extended in April but the changes will not take effect until 3 April 2011. Qualifying employees can benefit from up to 26 weeks’ additional paternity leave provided that the mother returns to work at or before the end of her ordinary maternity leave period (i.e. the first 26 weeks of leave). Of course, there is no requirement that mother and father should work for the same employer.

The total statutory payment avaialbel for both parents is still a combined total of 39 weeks but the intention is to give parents more flexibility to split childcare responsilbilities.

CLB Employment Solutions

Business Link guidance for tim…

Business Link guidance for time off for training:

CLB Employment Solutions

Age discrimination 42yo v 38yo…

Age discrimination 42yo v 38yo?:

employment law unfair dismissal

selection for redundancy and applying the law to the facts

The Employment Appeal Tribunal has recently considered the problems which can arise when identifying a candidate for redundancy in C Short –v- P J Hayman & Co Limited.

Ms Short was employed as a claims manager in the employer’s travel insurance business from 1997 to 2006. Following her return from maternity leave in 2000 she worked four days per week and was paid pro rata. She tendered her resignation in July 2001 but was persuaded to stay on the basis that her salary was increased to £25,000 p.a. This salary equated to the rate payable for someone working five days per week. The employer maintained that there was an agreement that Ms Short would work four days at the office and one day from home each week. Ms Short disputed this. She raised a grievance and, on appeal, it was confirmed that she was employed to work four days per week although she was paid on the basis that she worked five days per week.

The employer lost a major contract with Age Concern in March 2007. As a result of a staffing review the employer decided that the department could be run without a claims manager. As a result, all staff in the department were advised that they were at risk of being made redundant. Ms Short was notified about three possible alternative posts. However, Ms Short was not placed in a pool of managers who were at risk of being made redundant. At the tribunal the employer maintained that this was not appropriate because, according to the tribunal, “all the other managers were running departments of a different nature such as sales or accounts, and there was no diminution in the workload of those departments and the skills required by those managers were different”.

The tribunal rejected the claim for unfair dismissal because there was a genuine redundancy situation and the employer “was justified in identifying the Claimant for potential redundancy without looking for a wider pool”, relying on the reasons given by the employer. A claim for indirect sex discrimination relating to part-time working arrangements was also dismissed.

On appeal it was contended that the tribunal had failed to spell out the legal principles it relied on and how they were applied to the facts. The relevant law is found in section 139 of the Employment Rights Act 1996 (have the requirements of the business for employees to carry out work of a particular kind ceased or diminished or are they expected to cease or diminish) and section 98(4) of the same Act (overall fairness of the decision taking into account the size and administrative resources of the employer). It is worth pointing out that these are basic issues in all unfair dismissal claims concerning redundancy. In this case, the real problem was that the tribunal had simply set out its conclusions on the facts but had not set out the relevant principles of law or explained how they applied to the facts. Nonetheless, the EAT took the view that it was clear that the tribunal had the legal principles “in mind” and that they had been applied to the facts, albeit not explicitly. As a result the tribunal was entitled to conclude that the employer no longer needed a claims manager and that the post held by Ms Short was unique. Accordingly her appeal failed.

It often appears that the odds are stacked against employers when attempting implement a fair dismissal, both in terms of the reason for terminating the employment and the procedures applied. However, this case shows that it’s often best to stick to the basics. If there is a genuine and potentially fair reason for dismissal and the employer follows, on an informed basis, what it believes to be a fair procedure then that should be sufficient. As for the tribunal, it ought to have explicitly identified and applied the relevant legal principles but failure to do so was not fatal. Incidentally, as might perhaps be expected, the decision of the EAT is a model of a well set-out judgment!

discrimination employment law procedure

42 year old Achim Beck wins age discrimination claim

In March 2009 Achim Beck brought a claim against his employer, Canadian Imperial Bank of Commerce. A German national, he maintained that he was a victim of race discrimination because the employer favoured Canadian nationals, and age discrimination because he was selected for redundancy on the basis that the employer wanted someone younger. Aged 42 he was replaced with a 38 year old. His claim for race discrimination was dismissed but he was successful in establishing age discrimination and can now expect to receive substantial compensation.

Mr Beck joined the Bank in 2007 and was dismissed on the ground of redundancy in May 2008, when he had completed less than a year’s service. Although he did not have sufficient qualifying service to claim unfair dismissal, his age discrimination was made out when the tribunal found that, when appointing head-hunters, the employer had asked for a “younger, more entrepreneurial profile”.

Mr Beck was on a base salary of £125,000 and a guaranteed bonus of £775,000. It is expected that his compensation will run into hundreds of thousands of pounds. He is thought to be one of the youngest successful age discrimination claimants.

The tribunal concluded that the processes applied by the Bank when dealing with Mr Beck were “hopelessly unfair” and that the redundancy exercise which led to his dismissal was a “sham”. The case had earlier gone to the Court of Appeal concerning the disclosure of sensitive documents by the employer and it was an internal memo which made clear the instruction to the head hunters so that it was obvious that the assertion that Mr Beck’s post was redundant demonstrated “a complete disregard for the truth”.

Perhaps the most striking aspect of the case is the age difference of only four years between Mr Beck and his replacement. Unfortunately for the Bank, once it was clear that the word “younger” was used in the context of a recruitment process (the Bank’s head of HR had advised against doing so), the writing was on the wall and six figure compensation will follow.

The case is also a prime example of the problems which can be caused when an employer seeks to legitimise a dismissal by attempting to cloak it with an ostensibly fair process. Very many employers and managers will have encountered situations in which a decision is made to dispense with the services of an employee and only then is thought given to how and supposedly why the dismissal will be achieved. In an age of emails and text messages, employers should be aware that the chance of being “found out” is much higher than ever before.