Winter Draws On

As high winds batter Scotland, and the rest of us begin to huddle under hats, scarves and coats on our way to and from work, it may be worth thinking about what employers should be doing to plan for bad weather.

Some staff will be able to work from home in the case of adverse weather conditions rather than spending hours struggling in through snowdrifts. It’s worth giving staff guidance on whether or not to come in shortly before a forecast cold snap.

If employees are able to and actually do put in a full day working from home, then they should be paid as normal. However employees are not automatically entitled to pay if unable to get to work because of bad weather. If you decide that employees will not be paid unless they actually attend work, it would be sensible to clearly communicate that to them in advance. You may alternatively give them the option of taking the day as part of their annual holiday entitlement or allow them to make up the time on another day.

Especially if sick pay is SSP only or at the discretion of the employer, some staff may struggle in to work even though they are suffering a severe cold or flu. This may result in them either not being productive whilst they are at work, or coughing and sneezing their way around the office. The interests of having a healthy workforce have to be balanced against the interests of maintaining good work attendance.

If you send staff home who are evidently unwell, then arguably you should pay them for that day’s absence regardless of your sick pay policy, though if they are unable to work, then there would be no obligation to pay. Bear in mind though that persistent short term absences, even if entirely genuine, can justify the instigation of a formal capability procedure regarding the employee’s attendance and which could ultimately result in a fair dismissal.

Wrap up warm now!

            

James Carmody

www.reculversolicitors.co.uk | www.kent-employment-solicitors.co.uk

       

Is the government's radical shake up of employment law a good idea?

Hello and welcome to this week’s employment law news from Reculver Solicitors.

       

Government Shake Up Of Employment Legislation:

Vince Cable and the government have today announced a shakeup of employment legislation. The key points of interest are:

 

·         Unfair dismissal qualifying period to increase to two years from April 2012. This will be welcomed by many employers. However there are a number of claims that can be brought with less than two (presently one) years and employers would be wise to always follow at least a basic fair procedure before dismissing.

  

·         Compulsory lodging of all claims through Acas. The idea is that the parties will be made to talk to each other and hopefully resolve their differences without recourse to legal proceedings. This has to be a good idea. However the proof of the pudding is in the eating and the 2004 regulations which obliged employees to exhaust internal grievance and disciplinary procedures before issuing proceedings were abandoned when they did not work.

  

·         Consultation on the introduction of ‘protected conversations’ with older workers on their planned retirement age and performance problems. However it appears that this will not protect against discriminatory comments by employers, and the general advice to employers is likely to be don’t say anything that you would want to avoid coming out in a Tribunal hearing.

 

·         Currently if you are making fewer than 20 redundancies, then the whole process of consultation etc can be done in as quickly as a week or 10 days. There are however longer compulsory redundancy consultation periods if making more than 20 people redundant in a 90 day period.  Apparently the government will be consulting on reducing that obligatory consultation period for larger employers. This will be welcome news for bigger employers trying to make large number of redundancies in a hurry.

 

·         Employer organisations are likely vigorously oppose the proposal to impose financial penalties against employers who breach employment rights, payable to the Exchequer. These fines will be payable at the discretion of Employment Judges, subject to a discretion exercisable by Employment Judges. It is hard to see what the point of this proposal is. If the intention is to discourage employers from breaching employment legislation in the first place, then one would think that losing a Tribunal claim was already incentive enough.

 

·         Other plans include a rapid resolution scheme to resolve simple claims within 3 months, and Judges sitting alone in unfair dismissal claims, which may result in more cases being decided in favour of employers.

 

·         The Guardian also reports that the government is thinking about the possibility of exemption from employment regulations for micro-businesses with few than 10 staff. This will be welcome news to small employers who are often worried about the implications of employing the first few staff. However it seems unlikely that all employment rights will be excluded for such micro businesses.

The main thrust of the new regulations appears to be to encourage growth in the economy. Many great government ideas founder when applying the detail in practice and it remains to be seen whether the current government will be more successful this time.

          

James Carmody

RECULVER SOLICITORS     

          

Tel: 0207 324 6271 | Fax: 0207 477 2276 | info@reculversolicitors.co.uk

12-16 Clerkenwell Road, London EC1M 5PQ*

www.reculversolicitors.co.uk | www.kent-employment-solicitors.co.uk

       

Regulated by the Solicitors Regulation Authority: Firm 405070 | Principal: James Carmody | Consultants: Carol Aylott, Kate Henry.

Agency Worker Regulations affect employees from 1st October 2011

New and potentially costly regulations, which you need to know about if you ever use temporary agency workers, come into force on the 1st October 2011:

Day 1 rights for all agency workers: If you use agency workers, you must ensure that they can access your facilities (such as canteen, childcare, etc) and information on your job vacancies from the first day of their assignment.

This does not mean that you have to employ them directly. However if you want to employ them directly, make sure you read the small print of your agreement with the agency first; you may be liable to charges if you do.

After 12 weeks: After 12 weeks in the same job agency workers have the right to equal treatment with permanent staff on pay and other basic working conditions. No period prior to 1st October 2011 counts towards the 12 weeks.

This means that the employer may have to pay the agency worker the same hourly rate as permanent staff, even though the employer has to pay agency fees on top. ‘Pay’ includes basic pay, overtime payments, shift allowances, holiday pay and bonuses.

In addition, pregnant agency workers who have completed the 12 week qualifying period will be entitled to paid time off for ante natal appointments.

What’s not included: The regulations do not however cover the genuinely self-employed, bonuses for loyalty or long service, occupational pensions or sick pay and financial participation schemes.

How can you avoid equal pay after 12 weeks? The bad news for the agency workers is that these regulations will encourage employers to simply get rid of them and replace them with someone else after 12 weeks’ service.

Other employers will attempt to carefully prepare job descriptions for the temporary positions so that they are substantially different from any permanent roles, enabling them to pay less.

It appears however that having a break in service (ie sending the agency worker away for a week and then re-engaging them) will only suspend and will not break the qualifying service.

Getting it wrong: It’s not just down to the agencies to ensure compliance. Breach of the Agency Workers Regulations could potentially result in a claim against the employer, who might be liable to a ‘fine’ of £5,000 per worker in the Employment Tribunal. If for example you breach the regulations with ten workers, this could theoretically cost you £50,000.

If a temporary worker asserts rights under the regulations and is dismissed as a result, he or she may be able to claim automatic unfair dismissal (for which one years service is not required)

In any case, proceed with caution, and take detailed advice.

James Carmody is a solicitor specialising in employment law in Central London EC1. http://www.reculversolicitors.co.uk/ and http://www.kent-employment-solicitors.co.uk/

Discrimination - a Common sense decision for employers?

Some employers worry about taking action to address capability issues, for fear that the staff member will claim that the treatment was discriminatory because of a ‘protected characteristic’ under the Equality Act 2010 (though we all share at least some of those protected characteristics).


However the recent decision in Community Law Clinic Solicitors Ltd v Methuen in the Employment Appeal Tribunal will be of some consolation. In that case, Mr Methuen (a 53 year old Asian lawyer) was dismissed for not meeting billing targets. His replacement was a much younger female solicitor of Afro-Caribbean origin. Mr Methuen claimed discrimination on the grounds of race, sex and age, but set out no real basis in fact for the claim other than the differences in age, race and sex between him and his replacement.

CLC applied to have the claim struck out on the basis that there was no reasonable prospect of success, and the EAT agreed (although an admittedly flimsy age claim was allowed to continue). It was wrong for Mr Methuen to effectively argue 'unless I am replaced by a man of Asian ethnic origin who is 54 years old or very close to it indeed there is a prima facie case of discrimination and the burden of proof shifts to the employer to rebut it'.

In this case CLC were saved the majority of the expense and disruption of defending the claim at a full hearing, but still had to take the matter to the EAT. The fact is though that many Tribunal Judges will be reluctant to strike out a claim before a full hearing, and this decision, though welcome, may not have wide application.

James Carmody
RECULVER SOLICITORS

Tel: 0207 324 6271
Fax: 0207 477 2276
info@reculversolicitors.co.uk


12-16 Clerkenwell Road, London EC1M 5PQ*
www.reculversolicitors.co.uk
www.kent-employment-solicitors.co.uk  

Employment Contract

If you are starting a new business and taking on employees for the first time, it is very important to get proper employment contracts in place to protect the business and to be legally compliant. If you would like to download a free employment contract template compliant with UK law, please visit http://www.reculversolicitors.co.uk/employment_contract.htm

Twittering your way out of a job

All the world’s a-twitter nowadays it seems, if only to find out which celebrities have taken out Super Injunctions to cover up their salacious extra-curricular activities this week.


Some employers positively encourage the use of social networking sites for communication and marketing purposes, yet many people can easily forget that every twitter or posting creates a permanent and indelible record and that their flippant or drunken postings may come back to haunt them. Even on more sober sites such as LinkedIn employees may blithely post confidential material without realising that it could do damage to their employer’s business.

Even private messages sent outside working hours can land employees in trouble. In Gosden v Lifeline, Mr Gosden sent an email from his home computer to a former colleague’s home pc which contained racist and sexist material but telling the recipient to pass it on.

The email came to the attention of his employer when it was sent to an important client and Mr Gosden was duly dismissed. The Tribunal said the dismissal was fair. Even though he had a right to privacy under the Human Rights Act 1998, and even though it was a private email sent outside working hours, the Tribunal bore in mind that Mr Gosden wanted his colleague to pass it on. Furthermore the sentiments expressed were completely contrary to the charity Lifeline’s stated aims and may have brought them into disrepute.

With a twitter or Facebook posting, whatever the employee says is out there on the internet and he or she is likely to have fully waived the right to privacy under the Human Rights Act. To avoid this kind of problem arising in the first place, employers would be wise to put a policy in place setting out what social media activity is considered misconduct and to make sure all staff are aware of it.

Lies, Damn Lies and Employment References

It’s commonly known that employers may be liable in negligence if they give a reference regarding an (ex) employee which is inaccurate or misleading. It is for this reason that many employers will only give brief factual references confirming job title and dates of employment. But what if you receive an informal call about that same employee; can you let your guard down then?


In McKie v Swindon College in the High Court, Mr McKie left his job at Swindon College with an excellent reference in 2002 to take up another position. In 2008, he accepted a more senior position with the University of Bath where he would have to liaise with and visit Swindon College. The new HR director at Swindon College then sent the University a damning email stating that the College would not allow Mr McKie back onto its premises because it had safeguarding concerns in relation to its students and that Mr McKie had left the College before any formal action could be taken. Unsurprisingly, the University then sacked the hapless Mr McKie.


The High Court found that the email from the College was 'fallacious and untrue'. Back in 1994 in Spring v Guardian Assurance it was held that an employer who provides a reference in respect of a former employee is under a duty to take reasonable care in the preparation of that reference and will be liable to the employee in negligence if the reference is inaccurate and the employee suffers loss as a result.


In McKie, the Judge did not accept that the e-mail was in fact a reference, or that the College owed him a duty to take reasonable care in supplying it under the Spring v Guardian Assurance principle. However the Judge held that Mr McKie had suffered financial damage by losing his job with the University. The damage was 'eminently foreseeable'. There was a causal connection between the negligent e-mail and the damage suffered. Furthermore the relationship between Mr McKie and the College was sufficiently close to give rise to a duty of care, even though six years had passed since Mr McKie had been employed there. In the circumstances, it was fair, just and reasonable to impose a duty of care.

Employers should therefore be very careful about what they say about former employees on both a formal or an informal basis, even if the comment is given years later. Employees often have problems gathering evidence to confirm their suspicions about what a former employer may have said about them, nonetheless employers would still be wise to err on the side of caution.

Redundancy and the Pregnant Woman. Beware!

It is commonly known that if an employer considering making redundancies treats a woman who is pregnant or who is or has recently been on maternity leave less favourably than non-pregnant colleagues, a claim of unlawful discrimination may arise. This may include a woman not being consulted because she is on maternity leave, or being scored lower because she has missed appraisals or targets while on maternity leave


However in Eversheds Legal Services Ltd v De Belin the employer bent over backwards the other way. Mr De Belin was scored lower than a female colleague on maternity leave, who was given a maximum notional score on one selection criterion. Mr De Belin scored lower overall and was made redundant. He brought a sex discrimination claim and the Tribunal awarded him a whopping £123,053 in compensation (much more than the maximum award had he merely claimed unfair dismissal). The Employment Appeal Tribunal upheld the decision that favouring a woman on maternity leave in a redundancy scoring was discrimination against a man in the same selection pool.

The employer's scoring was not proportionate and went beyond what was necessary and as a result unreasonably disadvantaged Mr De Belin. There were fairer ways of dealing with the woman’s absence such as looking at the performance of both candidates when they were last at work; in other words excluding the time during which the woman was on maternity leave, and just looking at her performance when she was around. However that too is not without its own risks. If that same woman had already been on maternity leave, she could potentially have argued that her own performance had been affected as a result, and that, if she was scored lower than her male colleague, it would be indirect discrimination against her. Employers do indeed have a difficult balance to strike when pregnant women are in the at risk pool of redundancies.

UK Law: How enforceable are discretionary bonuses?

Many people who work in the City of London or Canary Wharf in banks or other financial institutions will find that they are paid a basic salary, plus an annual bonus which may be 100% or even more of their basic pay. Sometimes such bonuses will be expressed to be ‘discretionary’, even though a minimum bonus is paid year in year out. Other times they will be expressed to be paid based on the performance of the employee and the overall performance of the business. Sometimes there will be more of a contractual commission structure in place, whereby the employee is paid a fixed percentage of income generated by that person.

Often problems with bonuses will arise when an expected bonus does not materialise, or when the employee is made redundant or otherwise resigns part way through the bonus year. In these circumstances the bank will often claim that there is no entitlement to the discretionary bonus, and any entitlement to the bonus is forfeit upon leaving. The problem is that the employee, who relies on the annual bonus as the main part of his or her annual income, is suddenly left with only the much lower basic salary. Some recent cases following the financial crisis in the City cast show conflicting approaches of the Courts when considering this difficult area:

In Small and others v Boots Co in 2009 in the Employment Appeal Tribunal (the EAT) a long standing performance related bonus was removed, and the employer argued that it could remove the bonus because it was only ever ‘discretionary’. The EAT held that it was necessary to take into account the extent to which the employer can exercise discretion. The term ‘discretionary’ may apply to whether to pay a bonus at all, its calculation, when it should be paid, and other factors. Mere use of the term ‘discretionary’ does not mean that the scheme is non contractual and the EAT held it was wrong to disregard the invariable practice of making payments over many years. In other words, if a bonus has been paid year in year out at a certain minimum level, the employee has a stronger basis on which to argue that the bonus ceases to be ‘discretionary’ and becomes a contractual right.

In Fish and another –v- Dresdner Kleinwort Ltd in 2009, Dresdner announced a Euro 400 million pool, and then sent Mr Fish a letter stating informing him of the specific bonus that he would receive. Following the banking crisis Mr Fish was made redundant, and signed a compromise agreement confirming that the bonus would be paid. Dresdner was then taken over by Commerzbank who refused to honour the payment, arguing that the extent of the financial crisis was not known at the date the compromise agreement was agreed. The Court found for Mr Fish. The compromise agreement was freely and properly entered into between Mr Fish and Dresdner.

In GX Networks Ltd v Greenland in 2010 Ms Greenland was entitled to basic pay, performance commission, plus ‘over-performance commission’ on new business exceeding her target, and which was three times the normal performance commission. The agreement however said that the sales director had the discretion to cap the quarter 4 bonus ‘by exception only’ and with HR and Finance agreement.

Ms Greenland earned over-performance commission of some 4.5 times her basic pay. The company then decided that that was much more than they had envisioned paying her, and decided to cap commission at 130%. The Court of Appeal took the view that the ‘by exception’ clause was not an unfettered discretion, and meant in exceptional circumstances. Just because Ms Greenland was exceptionally successful at sales did not give the company an excuse to cap the commission. Exceptional circumstances that might have been grounds to cap the bonus could have been misconduct by her or dire financial straights for the company. Neither such circumstance applied in this case.

In Khatri v Cooperatieve Centrale Raiffesien-Boerenleenbank BA 2010 in the Court of Appeal Mr Khatri was offered a guaranteed bonus to stay in employment to a certain date plus a Performance Related Bonus, subject to a formula based on his individual revenue generation. However it then stated ‘The bank maintains the right to review or remove this formula-linked bonus arrangement at any time.’

Subsequently Mr Khatri was put at risk of redundancy, but then offered another contract under which the Performance Related Bonus, using the formula was to be converted into a discretionary bonus, and subject to post termination restrictions. He did not sign his agreement to this and was not chased for it. Mr Khatri continued to do the same job as before. Mr Khatri was subsequently made redundant and the bank refused to pay him his Performance Related bonus, arguing that it had referred the right to withdraw the bonus ‘at any time’.

The Court found for Mr Khatri. In context the reference to changing the Performance Related Bonus really meant that the specific bonus applied for that particular year, but may be changed in the future. Furthermore Mr Khatri had not signed the new contract, and had not been chased to do so, and furthermore worked in the same capacity as before. Under the ‘Solectron Scotland v Roper’ test, Mr Khatri’s conduct, by continuing to work, was not only referable to his having accepted the new terms imposed by the employer. It would be quite wrong in these circumstances to infer that he had accepted the changes to his contract.

In Rutherford v Seymour Pierce Ltd in 2010 Mr Rutherford was entitled to a discretionary bonus. He left employment before the payment of the bonus was due having been summarily dismissed for poor performance. Was there an implied term that in order to be eligible for the award of the discretionary bonus, Mr Rutherford had to be employed and not under notice of termination as at the date of the payment? The court said no, there was no implied term that he should be in employment at the date of the award of the bonus.

Of course in this case the employer might have expressly stated that he forfeit his bonus if he left part way through the bonus year for any reason, and there would still be the question about how much discretionary bonus he should get, given the problems with his performance.

However in Locke v Candy & Candy Ltd 2011, Mr Locke was entitled to a discretionary bonus and a guaranteed bonus, but expressly subject to him being employed at the time. Mr Locke was summarily dismissed, and Candy reserved the contractual right to make a payment in lieu of his basic salary for the notice period, but not paying him the bonus. Mr Locke not unnaturally claimed he should get a payment in lieu of the guaranteed and discretionary bonus as well. The Court of Appeal found for the employer. Because the bonus clause said he had to be employed at the time, and because the company reserved the contractual right to make a payment in lieu of notice, his pay in lieu of notice did not include the bonus. Some legal commentators think that this was wrongly decided though.

In Humphreys v Norilsk Nickel International in 2010 Mr Humphreys was entitled to a Performance Bonus to be assess d by the Board depending on his individual performance levels to be decided by them. There was a performance table for Mr Humphreys, but it was unclear how they were assessed. The company posted a heavy loss and informed him that his performance was unsatisfactory and that he was not entitled to a bonus. The Court found for the company. It was up to the management board to subjectively assess the bonus. Furthermore it was up to Mr Humphrey’s to persuade the court that his performance grading was irrational, and he failed to do so. It appears that the Court was heavily influenced by the losses the company suffered.

The company would have been wiser to say that bonuses were based both on the performance of the company and of the individual, and the case could easily have gone the other way.

Conclusion:


These cases demonstrate that just because payment of a bonus is expressed to be ‘discretionary’, the employer does not have an unfettered discretion, and there are a number of factual matters which may be taken into account when reaching a decision. Employees should take careful legal advice if a bonus they thought was going to be awarded does not materialise.


James Carmody is an employment solicitor based in Central London EC1 (the City of London) specialising in English Employment Law in the UK. http://www.reculversolicitors.co.uk.htm

We also have an office in Kent where an employment solicitor can also provide expert legal advice http://www.kent-employment-solicitors.co.uk.htm (covering Canterbury, Ashford, Whitstable, Herne Bay, Sandwhich and North Kent generally)

Harassed but Happy?

James Carmody of Reculver Solicitors considers a decision in the UK Employment Appeals Tribunal that holds that if you are harassed at work you may not have protection if you took part in that ‘banter’ yourself


It’s normally fairly safe to assume that employees don’t enjoy being harassed by colleagues at work. However that is not always the case where someone has taken part in ‘banter’ of a similar nature, even if they do so in a misguided attempt to fit in.

In Thomas Sanderson Blinds v English (No.2) Mr English complained of homophobic 'banter’ and sexual innuendo by his colleagues under the 2003 Regulations (now replaced by the Equality Act 2010). The Court of Appeal held that someone who suffers anti-gay banter at work, even though his colleagues know him not to be gay, was still protected by the Regulations.

The case was then kicked back to the original Tribunal, which upheld a claim about only one incident of harassment: an article about Mr English in the in-house magazine which prompted him to complain. This was ‘a tipping point’, and beyond what he felt to be an acceptable level of personal attack and insult. The tribunal rejected all allegations of harassment prior to that because Mr English had participated in banter and name-calling, had written similarly offensive articles himself and was apparently good friends with his ‘tormentors’. In the circumstances the conduct had not violated his dignity or created an intimidating, hostile, degrading, humiliating or offensive environment for him. On appeal (again) the EAT held that in such a case the victim must reasonably feel his dignity to have been violated or an adverse environment created to succeed in a claim.

Jokey cultures at work can easily degenerate into harassment, in which the victim at first tries to play along in order to try and fit in and been seen as a good sport. Employees may find it harder to prove such claims following this decision. Employers and managers should be alert to prevent that kind of culture arising, and give clear guidance in their Equal Opportunities/Harassment policy to help victims in that situation.

James Carmody is an employment solicitor at Reculver Solicitors based in Central London EC1 and covering the City of London and Canary Wharf. For more information see our pages on discrimination at http://www.reculversolicitors.co.uk/discriminationclaims.htm  or for our Kent office covering Canterbury, Ashford, Whitstable, Sandwich & Herne Bay at http://www.kent-employment-solicitors.co.uk/discriminationclaims.htm  

Boring but important. Tax on Severance Payments

It is commonly known that when making a redundancy or severance payment, up to £30,000 can be paid free of tax. If any payment which does not fall within the £30,000 exemption is made after the termination date and after the issue of the P45, the employer currently only has to deduct tax at the basic rate (currently 20%) under the BR Tax Code regardless of the level of earnings of the employee.

However after the 6th April 2011 under the Income Tax (Pay As You Earn) (Amendment) Regulations 2011 the full 20%, 40% or 50% (as applicable) must be deducted (using the '0T' tax code). The practical impact of this change is that, as a general rule, employers should make all termination payments before issuing the P45.

www.reculversolicitors.co.uk & www.kent-employment-solicitors.co.uk

Getting Pensioned Off

The abolition of the compulsory retirement age is a hot topic at present, and we will be writing again soon on that subject. On a related issue, it is also worth bearing in mind the proposed changes to the Stakeholder Pension system. At present if you employ five or more staff, you are obliged to have a stakeholder pension scheme in place to offer staff. The employer does not have to make any contributions to the stakeholder pension scheme however, and take-up has consequently been low.


However from October 2012 the new National Employment Savings Trust (NEST) scheme will be introduced in stages. NEST will be a national, low charge, workplace pension scheme any employer can use to comply with their duties imposed by the new pension regulations and has apparently been set up to help millions of people who currently don’t have access to a workplace pension, and who presumably don’t yet have a nest egg (apologies for the weak pun).

NEST will:

• Be a trust-based occupational pension scheme.
• Be run by NEST Corporation which will have a legal duty to act in the interests of scheme members.
• Be one of the qualifying pension schemes employers can use to fulfil their new duties under the pension reforms.
• Have online access & be easy to administer.
• Allow employers to hand over their administration to a third party if they wish.
• Belong to the individual, meaning employers will not have to look after the pots of ex-workers. This also means several different employers can contribute to the same member’s pot over their working life.

The big difference however is that minimum employer contributions will be required. Minimum contributions will be phased in starting from 2012, as follows:

• Oct 2012 to Sep 2016: 1% by employers and 1% by employees (including tax relief)
• Oct 2016 to Sep 2017: 2% by employers and 3% by employees (including tax relief)
• Oct 2017 onwards: 3% by employers and 5% by employees (including tax relief)

For many employers that don’t currently provide pension schemes, this will be a big and unwelcome additional cost, and which they may recoup by not making incremental pay increases in those years. For more information please see http://www.nestfacts.co.uk/. However the more people that get adequate pension cover in place, the more that will actually be in a position to retire when they reach the age of 65.

James Carmody is a solicitor based in Central London specialising in Employment Law.
http://www.reculversolicitors.co.uk/
http://www.kent-employment-solicitors.co.uk/  

Will you still need me, will you still want me, when I'm sixty five?

For many employers, the answer to the question (almost) posed in the Beatles’ song is that employers will soon not be able to retire employees at the age of sixty five whether they think they need them or not. As you know, the government has announced that the Default Retirement Age (DRA) of sixty five is to be phased out between the 6 April 2011 and the 30 September 2011. The draft Employment Equality (Repeal of Retirement Age) Regulations 2011 have now been published.

After the 6 April the dismissal of older workers will have to be managed either by discussion and agreement or by formal performance management or other fair procedures. Under the current DRA procedures employers must give between 6 and 12 months’ notice of retirement. Retirements notified on or before 5 April 2011 can continue through to completion provided that the following conditions are met:
· the DRA procedure is followed correctly (including any request by the employee to stay on being given serious consideration by the employer)

· the person retiring reaches 65 or the normal retirement age (if this is higher) before 1 October 2011. Therefore an employee must be 65 by the 30 September if they are to be retired using the DRA.

Employers will not be able to issue notifications of retirement using the DRA after 5 April 2011. Reports that the transitional provisions will continue until April 2012 do not appear to be supported by the ACAS website or the draft regulations. The draft regs seem to imply that employees who are already over 65 are not covered by the transitional provisions, but hopefully that anomaly will be ironed out before they come into force.

In theory, Employers will still be able to impose a retirement age if it is a proportionate means of achieving a legitimate aim. However this is unlikely to be any help for the vast majority of employers (air traffic controllers and policemen being examples of exceptions).

The abolition of the DRA is likely to have a major impact on many employers, particularly when employees do not have adequate pensions in place and may need to continue working for financial reasons. Currently, employers may put up with under-performing members of staff because they will be retiring in a year or two anyway. That will no longer be an option. ‘Performance managing’ someone out because of their age is of course unlawful, so employers will need to demonstrate that they apply fair and consistent performance policies regardless of age. Selection for redundancy on the basis of age is also likely to be discriminatory.

Hopefully in the vast majority of cases it will still be possible to agree with the employee when they wish to leave, and ACAS suggests that for all employees, workplace discussions may involve informal talks about where they see themselves in the next few years and how they see their contribution to the organization. However the abolition of the default retirement age may well bring about more conflict for employers of older workers that the current regime successfully avoids.

Matron Really!

There are some newspapers that love to publish examples of ‘political correctness gone mad’, and the employer’s decision in Bowater v NW London Hospitals NHS Trust might be thought to justify the phrase. Ms Bowater, a staff nurse, volunteered to help restrain a patient who was having a fit and who happened to be naked. She ended up straddling him, at which point she uttered words which would do credit to any Carry On film, saying ‘it’s been a few months since I’ve been in this position’.

Six weeks later the unfortunate Ms Bowater was dismissed for gross misconduct. She had a spotless disciplinary record, and no member of the public, nor the patient, knew what she had said. The Employment Tribunal said that she had been unfairly dismissed, commenting that a ‘large proportion of the population’ would have considered her words to be merely humorous.


However the EAT held that the dismissal was fair, and that it was irrelevant what a ‘large proportion of the population’ might have thought. The Court of Appeal has now restored the Tribunal’s finding of unfair dismissal and said that the Tribunal had correctly applied the ‘band of reasonable responses’ test. The Trust had accepted that the comment was intended to be humorous, and the Tribunal had been aware of the context. The Tribunal had not impermissibly substituted its own view of a dismissal for that of the employer.

www.reculversolicitors.co.uk
www.kent-employment-solicitors.co.uk

1st February 2011 Changes

 As a reminder, don’t forget that from the 1st February:

• The cap on a week’s pay for the purposes of calculating statutory redundancy pay will go up from £380 to £400 gross per week
• The maximum compensatory award for unfair dismissal will rise from £65,300 to £68,400
• The minimum basic awards for dismissals related to health and safety, employee representative, trade union, or occupational pension trustee reasons will increase from £4,700 to £5,000.

Reasonable Adjustments: A Headache for Employers?

Under the Equality Act 2010 (replacing the Disability Discrimination Act 1995 (DDA)), employers with disabled employees must make reasonable adjustments to facilitate those disabled workers in their roles. ‘Disability’ can cover a number of conditions as diverse as backache and migraines, as in the case of Royal Bank of Scotland v Ashton EAT Dec 2010.

Mrs Ashton had a lot of time off on full pay due to migraines and eventually RBS stopped her sick pay in line with their sick pay policy and gave her a warning. She claimed that this amounted to disability discrimination and failure to make reasonable adjustments. The Employment Appeal Tribunal held that the "reasonableness" of RBS's actions was irrelevant. ‘What matters is whether there was an application of the policy which caused a disadvantage which was substantial in comparison with persons who were not disabled’.

A non-disabled employee might also have had his sick pay stopped due to long term sickness absence. The financial hardship to each would be the same. If anything, Mrs Ashton was probably given more paid time off than had she not been disabled.

The EAT concluded that there was absolutely no case to argue that there had been discrimination or a failure to make reasonable adjustments and Ms Ashton's original claims were dismissed. When considering whether reasonable adjustments were made in a disability discrimination case, a tribunal:
(i) must identify the disadvantage that has been suffered and;
(ii) must judge the reasonableness of adjustment by its result, not the employer’s thought process behind it.

Whilst this case offers some assurance to employers that they are not expected to offer employees open-ended sick pay just because they are off sick due to a disability, it is worth remembering that the Ashton case was decided under the DDA and not the Equality Act 2010, and so caution must be used when applying the principle.

Fines & Fees in the Employment Tribunal?

The government announced its proposals to shake up the Employment Tribunal last week. Some employers see the proposed changes as a lifeline to help combat claims with little merit. However it’s not all good news for businesses. Consultation will go on till the 20th April 2011. Currently the proposals include:

• The minimum qualifying period for unfair dismissal claims to increase to 2 years (from one year at present). The idea is that employers will feel much more comfortable about hiring staff, knowing that they can dismiss them reasonably safely in the initial period. However there would still be a range of claims which can be brought with no qualifying service.
• Claimants will have to pay a fee for lodging claims. Whether those fees would discourage ‘have-a-go’ claimants remains to be seen. Employee groups are likely to argue that Claimants on benefits should be exempt.
• All claims will have to be submitted to ACAS for a month of pre-claim conciliation before proceeding. The new proposals for compulsory ACAS involvement seem sensible, but again how effective that will be in reducing claims is open to question.
• Automatic financial penalties for employers found to have breached employment rights, on top of the ordinary compensation already payable, probably ½ the total award made to the claimant, and payable to the Exchequer. This would be very unwelcome news for employers, who may feel they are already in a lose-lose situation when defending Tribunal claims, and would be likely to force them to settle claims unless the issues are very clear indeed.
• Employment judges to sit alone (rather than in a panel of three) in more cases including unfair dismissal claims where the facts or law are relatively uncomplicated. However many claims are anything but straightforward and claimants would still be likely to press for a full panel where possible.
• Reviewing the level of Tribunal awards. This seems unlikely to have the effect of significantly reducing payments to claimants though.

We will update you when the consultation ends.