Ashfords Solicitors - Employment Update December 2007

LOOKING FORWARD...

Statutory procedures to be scrapped

The new Employment Bill was read in the House of Lords on 6 December 2007. This bill is likely to implement major changes in employment law.

Key changes include the abolition of the statutory procedures, uplifted compensation if the employer fails to follow the Code of Practice, and a variety of measures to encourage the early resolution of disputes. The bill also includes tougher penalties on employers who flout the National Minimum Wage Regulations.

It is anticipated that the Government will bring the new legislation into force in April 2009. Watch this space for further announcements.

The key changes to be introduced by the Employment Bill are as follows:

Dispute Resolution

· Repeal of the statutory dismissal and grievance procedures;

· Repeal of section 98A of the Employment Rights Act 1996. The law will revert back to the pre-2004 Polkey v. AE Dayton Services Limited [1987] decision. This means that when an employee is dismissed without use of a fair procedure the tribunal will be able to take into account the likelihood of the dismissal having taken place anyway;

· Tribunals will have discretion to increase awards by up to 25% if employers fail to comply with the relevant statutory code;

· The laws relating to ACAS's powers of conciliation will be amended, and the set periods for conciliation will be removed;

· The tribunals' power to determine cases without a hearing will be amended;

· Tribunals will be permitted to award compensation for financial loss in certain types of monetary claims.

National Minimum Wage

· The bill seeks to Change offences under the National Minimum Wage Act to "each way offences" meaning that they will be able to be tried in a Crown Court or a Magistrates Court. The effect of this will be to increase the maximum penalty for paying staff less than the national minimum wage from £5,000 to an unlimited fine as the most serious cases of non-compliance will be tried in a Crown Court, which will have the power to impose an unlimited penalty

· New inspection powers will be introduced;

· New methods of fairer methods of calculating arrears will be introduced.

Pensions Bill 2007/2008

The Pensions Bill was also read in Parliament on 5 December 2007.

The bill will completely overhaul the UK state pension system and is in response to a three-year study into the UK pensions crisis. The state pension age will rise from 65 to 68 by 2046, if the bill is passed.

The most substantial change for employers will be the duty to automatically enrol all employees aged over 22 years who earn more than £5,000 a year into a "personal account scheme" or a "qualifying scheme" of their own, unless the employee already has their own "qualifying scheme".

Once in force, employers shall be required to make compulsory contributions to the pension schemes.

New name for chairman of employment tribunals

From December 1 2007 employment tribunal Chairman shall have the new title of "Employment Judge" by virtue of the Tribunals, Courts and Enforcement Act 2007.

LOOKING BACK...

April 2007

Statutory Maternity Pay, Paternity Pay and Adoption rates increased to £112.75 from £108.85 per week (or 90% of average earnings if less).

There were also changes to maternity and adoption rights, including an increase in Statutory Maternity Pay for a 9 month period where expected week of childbirth fell after 1 April 2007.

Statutory Sick Payrates increased from £70.05 to £72.55 per week.

Smoking ban in Wales in enclosed or substantially enclosed public spaces and workplaces introduced.

July 2007

Smoking ban in Englandin enclosed or substantially enclosed public spaces and workplaces introduced.

October 2007

Increase to the National Minimum Wage, Standard Rate for workers aged 22 and over increased to £5.52 from £5.35, Development Rate for workers aged 18 to 21 increased to £4.60 from £4.45, Young Workers Rate for workers under 18 but above compulsory school age increased to £3.40 from £3.30.

Increase to holiday under the Working Time (Amendment) Regulations 2007. Full-time workers are now entitled to an additional 4 days' paid holiday per year, increasing from 20 days (including statutory and public holidays) to 24 days.

MONTHLY ROUND UP

Reasonable practicability of submitting unfair dismissal claims

In the recent case of Royal Bank of Scotland v Bevan the EAT decided that where an employer had concluded the appeal process on the same day as the last day for submission of a claim for unfair dismissal, the tribunal had been correct in ruling that it had not been reasonably practicable for the employee in question to present their claim to the employment tribunal within the three month time limit.

Mr Bevan ("the Claimant") was employed by The Royal Bank of Scotland ("the Respondent"). On 12 January 2007 the Respondent dismissed the Claimant following allegations of gross misconduct. The Claimant appealed to the Respondent regarding his dismissal, and his appeal was held on 8 March 2007. The Claimant received a letter from the respondent which was delivered at 7pm on 11 April 2007 which stated that his appeal had been unsuccessful and that his dismissal was effective.

The deadline for submission of his claim was 3 months from the effective date of termination of his employment. This was by 12pm on 11 April the same day as he received delivery of the notification letter from the Respondent that his appeal had been refused. The following day the Claimant contacted his Solicitor who then submitted a claim for unfair dismissal which was received by the tribunal on the 18 April 2007 (7 days after the expiry of the deadline for submission of the claim).

At first instance the tribunal held that it had not been reasonably practicable for the Claimant to submit his claim before the deadline. The Respondent appealed, the EAT commented that:

· The letter advising of the dismissal of the Claimant's appeal arrived after business hours when the claimant was unable to take legal advice;

· There was only a very limited time for him to prepare his application;

· The claim submitted by his solicitors had been made within a reasonable time after the expiry of the time limit.

As a result the EAT held that the tribunal had been correct in its decision and it subsequently dismissed the Respondent's appeal. The EAT further commented that in cases concerning whether or not it was 'reasonably practicable' for an employee to submit a claim within the relevant time limit it shall be a question of fact in each case.

Age discrimination: Claimant "too young" to perform job.

The majority of age discrimination claims relate to employees who are discriminated against for being too old to perform their job. However in the recent case of Thomas v Eight Members Club and Killip, Miss Thomas brought a claim for discrimination following being dismissed from her employment in a nightclub on grounds that she was "too young".

The Employment (Equality) Age Regulations 2006 prohibits discrimination on the grounds of age whether this is discrimination based upon an employees' youth or old age.

Miss Thomas ("the Claimant") was aged 19 when she commenced employment in the Eight Members Club ("the Respondent") in April 2007. The Claimant was later dismissed in July 2007 and was advised by Mr Killip that she was too young to perform her job.

The Claimant complained to the owner of the club and submitted a grievance. The Claimant subsequently brought a claim for unfair dismissal and age discrimination.

The Claimant did not have a full year's service so her unfair dismissal claim was dismissed. However, she was awarded compensation of £1650 (including a 10% uplift) for injury to feelings caused by Mr Killip's statement that she was too young to perform her job. The Employment Tribunal found that the Respondent and Mr Killip were jointly and severally liable for this award.

Constructive dismissal: Sex discrimination

In the recent case of Shaw v CCL Ltd the EAT held that direct and indirect sex discrimination amounted to a fundamental breach of contract which entitled the employee to resign and bring a claim for constructive unfair dismissal.

The case concerned an application made by Mrs Shaw ("the Claimant") to work flexible hours. Her employer CCL Ltd ("the Respondent") refused her request and she later resigned on the basis that the refusal of her request was unreasonable. The Claimant also lodged a claim for discrimination on the grounds of sex.

In accordance with Section 80 (f) of the Employment Rights Act 1996 certain categories of employees are entitled to apply to work flexible hours. Employers are obliged to consider all requests, but do not have to accept them if they are able to rely on one of the reasons outlined in Section 80 (g) of the Employment Rights Act.

In this case the Claimant went on maternity leave. Whilst she was away on leave she contacted the Respondent by email to request if she could return to work on a part-time basis. The Respondent rejected her application and the Claimant appealed against the Respondent's decision. Her appeal was later refused. The Claimant resigned, and claimed constructive dismissal, she argued that her employer's refusal was unreasonable and therefore she had no alternative but to resign from her job. She also added a claim for sex discrimination.

At first instance the Tribunal had ruled that the Claimant's resignation was a result of the rejection of her application to work flexible hours, and since there was no obligation on the Respondent to accept her request, rejecting it did not breach Mrs Shaw's contract of employment.

The Tribunal found in favour of the Claimant's claim for direct discrimination, and indirect discrimination which could not be justified. The Claimant appealed on the point of constructive dismissal.

The EAT subsequently upheld the appeal, stating that the breach of a statute could be a fundamental breach of contract capable of supporting a claim for constructive dismissal.

Employees exceeding forty-eight hour working week on the increase.

According to new TUC statistics published on 28 November 2007, more than one in eight of the workforce now work more than forty-eight hours a week. The figures for London are even higher with one in six employees working forty-eight hours or more per week.

The Working Time Regulations protect employees who have not "opted out" by limiting weekly hours worked to forty-eight hours per week averaged over a seventeen week reference period. The TUC states that lack of enforcement means that some employers are flouting the rules as they know that they can breach the law with little risk of any repercussions.

According to the statistics published, the most striking increase in the amount of people working in excess of forty-eight hours was present in the South East where figures increased by 28,000 to rising up to 525,000 people working forty-eight hours plus a week. This trend was also present in London where the number of employees working forty-eight hours or more increased by 25,000 to 481,000 people.

The largest percentage increase in the share of the workforce working forty-eight hours or more was in Wales which has experienced an increase of 1.3%

Rather interestingly (and perhaps surprisingly) the South West and East Midlands, have actually experienced a decrease in employees working over forty-eight hours a week!

Key Contacts

Downloads

Employment Update December 2007

Introduction