The Equality Act comes into force on the 1st October 2010. In the run up to its introduction we will be looking at some of the interesting features of the Act. One new feature of the Equality Act is that ‘dual discrimination’ (section 14) will be made made unlawful.
For example, ‘Happy Days’ pre-school nursery are happy to employ gay nursery assistants, and are happy to employ male nursery assistants. However ‘Happy Days’ refuses to employ Bob, because he is both male and gay. Before, Happy Days might have defended a claim by Bob, by saying ‘look; we employ gay people, and we employ men!’. Now Bob can claim dual discrimination. He can say, ‘Yes, they employ men, and they employ gay people, but they do not employ gay men as care workers.
In another example Denise, a black woman is passed over for promotion to work on reception because her employer Zen Insurance thinks black women do not perform well in customer service roles. Before, Zen Insurance could have defended Denise’s claim saying ‘We have equally qualified white female and black male employees on reception, so we are not discriminatory’. Once the Act comes into force, Denise can argue that it’s because she is both black and female that she was passed over for promotion, and therefore is a victim of dual discrimination.
This idea of ‘dual discrimination is new under the Act. Some commentators question whether in practical terms it offers employees any significant new protection. However employers will need to be aware of this and refer to it in their Equal Opportunities policies
Monday, July 26, 2010
Monday, July 19, 2010
Taken To the Cleaners?
Regardless of how hopeless a Tribunal claim may be, many employers feel they are placed in an impossible lose-lose situation; because even if they successfully defend the claim, Employment Tribunals rarely make awards of costs against the employee who brought it and employers still end up out of pocket.
In the recent case of Nicolson Highlandwear Ltd v Nicolson 2010 EAT, the employee had been dismissed due to fraudulent business practice in the running of the shop he managed. Having been dismissed for gross misconduct he brought an unfair dismissal claim. The Tribunal found that although the dismissal had been procedurally unfair, the claimant’s gross misconduct had directly led to his dismissal (and so he would have been dismissed anyway).
The EAT considered whether costs should be awarded against the fraudulent employee. They held that a Claimant who lied in the tribunal and who defrauded his employer should have to pay the Respondent's costs.
Especially when the employee has been dismissed for dishonesty, the Respondent defending a claim should consider issuing a ‘costs warning’ against the claimant, saying that an application for costs would be brought if the claimant loses. However, employers should not get too excited about the prospect of recovering costs from an employee who brings a claim but is found to have lied in the course of those proceedings. Tribunals are often reluctant to make findings of dishonesty by a Claimant, costs awards remain rare and seldom cover all costs of defending a claim. Furthermore, even if an employer gets an award of costs, actually enforcing the judgement may still prove difficult, especially if the Claimant remains unemployed.
jrc@reculversolicitors.co.uk
www.reculversolicitors.co.uk
In the recent case of Nicolson Highlandwear Ltd v Nicolson 2010 EAT, the employee had been dismissed due to fraudulent business practice in the running of the shop he managed. Having been dismissed for gross misconduct he brought an unfair dismissal claim. The Tribunal found that although the dismissal had been procedurally unfair, the claimant’s gross misconduct had directly led to his dismissal (and so he would have been dismissed anyway).
The EAT considered whether costs should be awarded against the fraudulent employee. They held that a Claimant who lied in the tribunal and who defrauded his employer should have to pay the Respondent's costs.
Especially when the employee has been dismissed for dishonesty, the Respondent defending a claim should consider issuing a ‘costs warning’ against the claimant, saying that an application for costs would be brought if the claimant loses. However, employers should not get too excited about the prospect of recovering costs from an employee who brings a claim but is found to have lied in the course of those proceedings. Tribunals are often reluctant to make findings of dishonesty by a Claimant, costs awards remain rare and seldom cover all costs of defending a claim. Furthermore, even if an employer gets an award of costs, actually enforcing the judgement may still prove difficult, especially if the Claimant remains unemployed.
jrc@reculversolicitors.co.uk
www.reculversolicitors.co.uk
Sunday, July 11, 2010
The Age of Redundancy
According to the Tribunal Service’s report last week, the number of claims for unfair dismissal, breach of contract and redundancy for 2009-10 was 17% more than the previous year, probably as a result of the credit crunch. Many employers will be keen to avoid joining this unfortunate statistic when carrying out redundancies. One recurring question is whether employers who cap length of service for calculating redundancy payments are being discriminatory on the grounds of age.
In the recent case of Kraft Foods v Hastie, in order to to keep costs down, Kraft capped their generous redundancy payments at what a redundant employee would have earned if he had remained in employment until normal retirement age. This hit the 62 year old Mr Hastie in the pocket, who sued for age discrimination. The EAT held that the cap was justified as Kraft’s aim of preventing employees from receiving a 'windfall' met a legitimate & proportionate aim, which was to compensate for future loss of earnings only.
Those employers who cap redundancy payments based on (say) no more than 12 years service (even if the employee has worked 20 years and is not near retirement) could not rely on that argument. However they generally avoid legal challenges by making payments subject to compromise agreements: Employees seldom turn down reasonably generous payments to chance their arm in the Tribunal.
James Carmody
RECULVER SOLICITORS
Tel: 0207 324 6271 | info@reculversolicitors.co.uk | 12-16 Clerkenwell Road, London EC1M 5PQ*
www.reculversolicitors.co.uk
In the recent case of Kraft Foods v Hastie, in order to to keep costs down, Kraft capped their generous redundancy payments at what a redundant employee would have earned if he had remained in employment until normal retirement age. This hit the 62 year old Mr Hastie in the pocket, who sued for age discrimination. The EAT held that the cap was justified as Kraft’s aim of preventing employees from receiving a 'windfall' met a legitimate & proportionate aim, which was to compensate for future loss of earnings only.
Those employers who cap redundancy payments based on (say) no more than 12 years service (even if the employee has worked 20 years and is not near retirement) could not rely on that argument. However they generally avoid legal challenges by making payments subject to compromise agreements: Employees seldom turn down reasonably generous payments to chance their arm in the Tribunal.
James Carmody
RECULVER SOLICITORS
Tel: 0207 324 6271 | info@reculversolicitors.co.uk | 12-16 Clerkenwell Road, London EC1M 5PQ*
www.reculversolicitors.co.uk
Monday, July 5, 2010
Crippling Redundancy Costs?
According to press reports this morning, unions are warning of strikes after the government confirmed plans to change public sector redundancy payments, despite having lost a recent legal battle to reduce redundancy payments. Will other employers be in a similar fix if it’s been their custom & practice to pay generous enhanced redundancy payments in the past?
Statutory redundancy pay is actually relatively modest for the majority of employees; and amounts to a weeks pay to a maximum of £380 x full years worked (if employed for over 2 years), with a multiplier of 1.5 for years worked over the age of 41. For a redundancy pay calculator, see http://www.direct.gov.uk/redundancy.dsb. Some employers do forget that on top of that statutory redundancy payment, employees also have the statutory right to a weeks notice per full years worked to a maximum of 12 weeks (or payment in lieu). In other words, someone’s contract may say they are only entitled to 4 weeks notice, but if they have been employed for 12 years, the maximum statutory notice entitlement will apply.
In Harlow v Artemis Internation Corp Ltd HC back in 2008 it was held that a provision in a staff handbook term was an express term of the contract of employment. This had the effect that the employee was legally entitled to enhanced redundancy pay even though the right to it was set out in the staff handbook rather than in his formal contract of employment. As it had become custom and practice for Artemis to compensate redundant employees in accordance with its enhanced redundancy policy from time to time meant that this custom and practice could also have been treated as an implied contractual term if it had not already been an express term.
It’s generally unwise therefore to have enhanced redundancy terms set out in the handbook, or indeed any document circulated to staff. If you do use a formula to calculate enhanced redundancy on one occasion, it’s worth making clear that this may be amended or withdrawn at your discretion. The more rigidly you apply an enhanced redundancy formula over the years, the more vulnerable you will be to the argument that it amounts to a contractual term by custom & practice.
James Carmody http://www.reculversolicitors.co.uk/
Statutory redundancy pay is actually relatively modest for the majority of employees; and amounts to a weeks pay to a maximum of £380 x full years worked (if employed for over 2 years), with a multiplier of 1.5 for years worked over the age of 41. For a redundancy pay calculator, see http://www.direct.gov.uk/redundancy.dsb. Some employers do forget that on top of that statutory redundancy payment, employees also have the statutory right to a weeks notice per full years worked to a maximum of 12 weeks (or payment in lieu). In other words, someone’s contract may say they are only entitled to 4 weeks notice, but if they have been employed for 12 years, the maximum statutory notice entitlement will apply.
In Harlow v Artemis Internation Corp Ltd HC back in 2008 it was held that a provision in a staff handbook term was an express term of the contract of employment. This had the effect that the employee was legally entitled to enhanced redundancy pay even though the right to it was set out in the staff handbook rather than in his formal contract of employment. As it had become custom and practice for Artemis to compensate redundant employees in accordance with its enhanced redundancy policy from time to time meant that this custom and practice could also have been treated as an implied contractual term if it had not already been an express term.
It’s generally unwise therefore to have enhanced redundancy terms set out in the handbook, or indeed any document circulated to staff. If you do use a formula to calculate enhanced redundancy on one occasion, it’s worth making clear that this may be amended or withdrawn at your discretion. The more rigidly you apply an enhanced redundancy formula over the years, the more vulnerable you will be to the argument that it amounts to a contractual term by custom & practice.
James Carmody http://www.reculversolicitors.co.uk/
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