Employment Newsletter January 2011

Dear Employer

We wish you a very happy and prosperous New Year. Make it a resolution not to find yourself at the wrong end of a Tribunal claim. This year may see age discrimination claims increasing, particularly with the removal of the default retirement age of 65: it has already started with a BBC presenter winning her claim for age discrimination (see below), while football commentators are in trouble for sexist remarks. The year promises to continue to be an “exciting” one in view of all the public sector cuts, and we hope you will not be affected.

In the meantime, if you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Changes and Cases in Employment Law

1. BBC LOSES AGEISM CLAIM
As reported widely in the press, the ex-BBC Countryfile presenter Miriam O’Reilly, has won her ageism claim against the BBC and is expected to receive around £100,000 compensation, to include lost earnings and an amount for injury to feelings. However, she lost her claim for sex discrimination.

2. HONG KONG BANK EMPLOYEE ALLOWED TO BRING CLAIM AT UK TRIBUNAL
A UK employee of a Hong Kong-based company was sent to London by the company in 2008 to a UK-based associated company. When he was dismissed he brought claims in the Employment Tribunal for unfair dismissal, discrimination on two grounds and other claims. At a Pre-Hearing Review, the Employment Tribunal decided that it had no jurisdiction to hear the claims and dismissed them. The Employment Appeal Tribunal disagreed with that decision. It held that his claims did come within the relevant legislation, including the fact that he did his work “wholly or partly in Great Britain”. Also, he was working in Great Britain at the time of his dismissal on something other than a “casual visit”. However, other legislation stated that a Tribunal in England & Wales could not hear a claim where the employer – as in this case – did not reside or carry on business in England or Wales. However, the EAT considered that it seemed wrong in principle for employees to enjoy legal protections which they could not enforce. As a result, the EAT held that a company was able to “carry on business” in England & Wales by seconding an employee to work at an establishment there, even if the supply of workers to third parties was not part of its ordinary business.

Employers should, therefore, be aware that claims could still be brought in this country even if the main employer company is abroad. [Pervez v Macquarie Bank Ltd (London Branch) December 2010].

3. REDUNDANCY SCORING AND CHALLENGE BY EMPLOYEE
Redundancy selection is often done on the basis of scoring relevant employees and then selecting the lowest scorer. A case has illustrated the extent to which the scores allocated can be challenged by a disgruntled employee. If considered by an Employment Tribunal, the Tribunal will determine whether the system adopted by the employer was fair, and was then applied without any conduct that might undermine this. In this case, a redundancy pool of three had all three employees achieving high scores, although the one who was made redundant received a slightly lower score for “flexibility”. During the consultation process he had queried how he had achieved a lower score on “flexibility” but the firm did not give a full response, other than to say that the scores given by the assessors were “reasonable and appropriate”.

The Employment Appeal Tribunal (EAT) held that a fair redundancy consultation involves the provision of adequate information on which an employee can argue and respond to the employer. With a subjective scoring category (e.g. flexibility) it is necessary for the employer to explain the scoring in order to provide adequate information. The EAT held that the employee was unfairly dismissed on the basis of unfair redundancy consultation. The EAT also said that there is no need for an employer to explain objective scores (e.g. time-keeping) but with subjective categories of scoring, a further explanation must be necessary, although not necessarily a detailed one: if, for example, the assessors note a few sentences in the “comments” box beside the scores, that will usually suffice. [Pinewood v Page 2010]

4. HARASSMENT BY THIRD PARTIES
Until 1st October 2010 when the Equality Act came into force, harassment of an employee by a third party (e.g. customers, suppliers or contractors) applied only in respect of gender or sexual harassment. However, now it also applies to age, disability, race, religion or belief, sex or gender discrimination. A definition of who is a third party extends to anyone over whom the employer does not have direct control and extends to anyone with whom the employee comes into contact during the employment. However, liability will only arise if the employer knows that the employee has been harassed on at least two occasions by a third party and then fails to take “reasonable steps” to prevent harassment.

What’s in the pipeline

1. INCREASE ON TRIBUNAL AWARDS ETC
With effect from 1st February 2011 the following changes will take place:
The maximum amount of a week’s pay for the purposes of calculating (amongst other things) statutory redundancy repayments and the basic award for unfair dismissal will increase from £380 to £400.

The maximum compensatory award for unfair dismissal claims increases from £65,300 to £68,400.

Guaranteed pay increases from £21.20 a day to £22.20 a day.

The minimum basic award in cases where the dismissal was unfair because of health and safety, employee representative, trade union or occupational pension trustee reasons will increase from £4700 to £5000.

The new rates apply where the event giving rise to compensation or payment occurs on or after 1st February 2011. If the dismissal or other relevant event falls before that date, the old limits will still apply, irrespective of the date on which compensation is awarded.

2 OTHER CHANGES FROM APRIL 2011
The following further changes will take place from 11th April 2011:

Statutory Maternity, Paternity & Adoption Pay, and Maternity Allowance, will increase from £124.88 to £128.73

Statutory Sick Pay (SSP) will increase from £79.15 to £81.60

3 REJECTION OF PLANS FOR EXTENDED PAID MATERNITY LEAVE
The EU Employment Council has rejected the European Parliament’s proposal to legislate for 20 weeks of maternity leave at full pay (which no doubt will be good news to many employers). They express concerns regarding the cost implications to extending paid maternity leave. A proposal has been made as a compromise, to extend the minimum length of maternity leave from the current 14 weeks to 18 weeks. Consultation continues.

The Employer Traps and Other Tips

1. PREPARATIONS FOR ABOLITION OF DEFAULT RETIREMENT AGE
As advised in an earlier ezine, the current default retirement age of 65 is being phased out with effect from 1st October 2011. Further to the points that we have already advised, practical changes that you might like to start considering are any documents that you may have where a normal retirement age is referred to. Such documents can include share incentive schemes, articles of association and shareholder agreements. These documents may all need to be amended, as your existing standard contracts might. Also, pension scheme retirement ages may need to be aligned.

2. Employment Contracts
Still not done any? Make 2011 the year when you rectify all those unlawful omissions and minimise their reasons for complaining.

Intellectual Property Department Launched by Breeze & Wyles Solicitors LLP today

Due to increasing demand Breeze & Wyles Solicitors LLP has formally launched its Intellectual Property and Information Technology Department today. Foscussing on SME businesses with a strong web/e-commerce presence, the department can offer in addition fixed price IP/IT Audits.

Speaking today, Brendan O'Brien, Director and Head of Business Services said:

"Its is rare to see a firm of our size able to provide real Intellectual Property and Information Technology advice to our clients. From a recent survey of our clients it is clear that few understand the meaning of Intellectual Property and the relevance of it to their businesses. We aim to provide an affordable solution that provides prevention rather than a cure."

If this article interests you please contact me on 01992 558411 or by e mail at: brendan.obrien@breezeandwyles.co.uk

Workplace dispute reforms proposed by Government

The Government has today announced the next steps in its comprehensive review of employment laws.

New plans to improve the way in which workplace disputes are resolved have been published alongside an “Employer’s Charter” – the measures are designed to give businesses more confidence to take on workers and support growth.

Tribunal claims rose to 236,000 last year – a record figure and a rise of 56 per cent on 2009 – and business has to spend almost £4,000 on average to defend itself against a claim. Concerns have been raised by businesses that the system has become too costly, takes too much time, places unnecessary strains on small businesses and that it is too easy to make unmerited or vexatious claims.

Prime Minister David Cameron said:

"A critical element of the Government's growth strategy is to create the conditions which allow businesses, especially smaller businesses, to flourish and expand, by reducing regulation and maintaining a flexible and dynamic labour market.

“Today's announcements on reforms to employment law are among the first conclusions of our government-wide growth review, and highlight our determination to ensure that employment law is no longer seen as a barrier to growth, while making sure that employees and employers are treated fairly.

“Giving businesses the confidence to take on somebody new will be a real boost to the economy, and help generate the sustainable growth we need."

Business Secretary Vince Cable said:

“Disputes in the workplace cost time and money, can affect morale, reduce productivity and hold back businesses. We often hear that knife-edge decisions about whether to hire new staff can be swung by concerns about ending up in an employment tribunal if things don’t work out. Today’s proposals address these concerns and should help give employers more confidence.”

“But let’s be clear – resolving disputes earlier is also in the interests of workers. No one wants to spend month after month worrying about a claim – we need to make what can be an extremely stressful time in people’s lives as short as possible.”

“In the business world there is also a common misconception that employment protections are all one-way - towards the employee. The Charter we are publishing today tackles this myth by setting out clearly some of the most important rights that employers already have in the workplace.”

The Government wants to enable workplace disputes to be resolved as early and as easily as possible. The key proposals set out in a consultation published today are:

Giving businesses greater confidence to hire new staff by increasing the qualifying period for employees to be able to bring a claim for unfair dismissal from one to two years - this will also ultimately reduce the number of disputes that go to Employment Tribunals;

Encouraging parties to resolve disputes between themselves as early as possible – requiring all claims to be lodged with Acas (Advisory, Conciliation and Arbitration Service) in the first instance to allow pre-claim conciliation to be offered. This also includes introducing settlement offers to encourage parties to make reasonable offers of settlement to avoid Tribunal hearings and encouraging parties to consider other forms of early dispute resolution such as mediation;

Speeding up the tribunal process – extending the jurisdictions where judges would sit alone to include unfair dismissal, introducing the use of legal officers to deal with certain case management functions and taking witness statements as read. This will result in Employment Tribunal resources being used more efficiently and allow cases to be listed and heard more quickly, saving time and cost; and

Tackling weak and vexatious claims – providing the Employment Tribunals with a range of more flexible case management powers so that weaker cases can be dealt with in a way that does not mean disproportionate costs for employers.

There is also a commitment for the Ministry of Justice to consult separately on introducing fees for Employment Tribunal cases and appeals, to ensure that users contribute towards the cost of running the system.

Justice Secretary Kenneth Clarke said:

"It's in everyone's interests - employers, employees and taxpayers - to have a dispute resolution system that is efficient, simple to use and supports the employment relationship.

"We have heard clear calls from users for reform to the Employment Tribunal system, particularly the need to ensure robust powers and procedures are in place to deal with claims more efficiently, more effectively and - importantly - more proportionately.

"So I will be working closely with colleagues across Government to get this package of proposals implemented as quickly as possible, and I will also be consulting separately later in the year on the detail of introducing fees for Employment Tribunal cases, to ensure that people who use the system contribute towards its cost."

The consultation document also includes proposals to:

Increase the provision of information – aimed at reducing speculative claims, this would require more information on the nature of the claim being made and to include a statement of loss. It will help parties to decide whether to agree a settlement offer or proceed to a Tribunal hearing;
Withdraw the payment of expenses - encouraging parties to either settle earlier or reduce the number of witnesses they call; and,

Introduce financial penalties for employers found to have breached rights – aimed at encouraging greater compliance from employers and thus a reduction in the number of Tribunal cases.

The intention of the Charter is to raise awareness and give clarity amongst employers on what they can and can’t do when managing their staff and covers a wide range of employment law issues.

The employment law review is taking a comprehensive look at employment legislation across government. In the next few months, we will consider the requirements on employers when they take on staff to ensure that it is as simple and straightforward as possible. As part of this, we intend to publish a model contract for employers shortly.

900 Staff to be axed by CAB

It has been announced today that the Citizens' Advice Bureau is to cut 900 jobs as the government reduces its support of the charity that runs the CAB. This is in line with the cuts being made across all Whitehall spending.

It is likely that the services offered by the CAB will be drastically reduced as the CAB looks to focus on its core services. In essence the CAB redundancies will affect the debt advice element of the service at a crucial time for those needing that advice.

The future looks extremely bleak for the service as there is no announcements around the future of CAB funding.

Government announces package of measures to enhance consumer protection in the mortgage market

The Financial Secretary to the Treasury, Mark Hoban, today announced a package of measures intended to enhance consumer protection in the mortgage market. These measures will:

transfer the regulation of new and existing second charge residential mortgages from the Office of Fair Trading (OFT) to the Financial Services Authority (FSA), to ensure consistent standards of consumer protection and simplify the regulatory environment for lenders and borrowers;

ensure consumer protections are maintained when a mortgage book is sold by a mortgage lender to an unregulated firm; and

extend the current regulation of the sale and rent back market to all providers, to ensure appropriate protection for consumers.

Mark Hoban, Financial Secretary to the Treasury:

“The Government believes that this package of measures will enhance protection for consumers in the mortgage market. Giving the FSA responsibility for the whole residential mortgage market will simplify the mortgage regulation landscape for consumers and lenders. This will ensure that existing second charge mortgage borrowers who fall into arrears or face repossession on both first and second charge mortgages benefit from being regulated by a single organisation, maximising consumer protection and ensuring a more coordinated approach between lenders.

“The measures on mortgage books and sale and rent back have been introduced to address a genuine gap in the regulatory architecture, and will ensure consumers will be better protected in the mortgage market.”

The statutory instruments will be published later in 2011. In advance of this, the Government expects the FSA to begin work immediately to implement these measures.

Courts refuse to help law breakers use loophole

Councils get go ahead to use powerful weapon in planning permission enforcement

Individuals who try to bend the rules on planning permission have been dealt a blow following the outcome of a recent case in the Court of Appeal.
The case of Trim v North Dorset District Council highlights the need to take immediate action when a planning authority seeks to enforce conditions in a planning permission, even if the breach complained of started more than ten years earlier. Failure to do so could mean that the property is blighted, with a breach of condition notice hanging over it.
Mr Trim lived in a house that had been built without proper planning permission. In 1996 an enforcement notice was served by the local council, and eventually, in 1997, retrospective planning permission was granted on condition that the house was used solely in connection with equestrian facilities.
Eleven years later, North Dorset District Council considered that this condition had not been complied with and in 2008 served a breach of condition notice on Mr Trim, who then invited the Council to prosecute him for the breach - but the Council refused to do so.
Because the breach of condition notice would be noticed by any prospective purchaser of the property, making his house less valuable, Mr Trim felt he had to do something even if the Council refused to prosecute him. As a result, in December 2009 he applied to the Court for a declaration that the breach of condition notice had been served more than ten years after the alleged breach, that the Council was therefore barred by lapse of time from taking enforcement action, and that he was not obliged to comply with it.
The Council asked the Court to strike out the claim on the ground that it was an abuse of the legal process because public law actions or decisions can only be challenged by a procedure known as judicial review. The High Court rejected the Council’s claim, but the Court of Appeal disagreed with much of the reasoning of the High Court judge and found in favour of the Council.
The Courts, said Lord Justice Cornwarth, have no duty to assist the law-breaker to bring himself within the law. Once the Council had served the breach of condition notice Mr Trim should have taken the correct steps and, said the judge, “if he did not do so, he had to accept the subsequent uncertainty affecting his property. The limbo was entirely of his own making.”
Said Hannah Collins planning law expert with Hertford solicitors Breeze and Wyles: “The important point about this case is that Mr Trim was slow to react to the breach of condition notice and the courts refused to help him out. An application for judicial review must be made promptly, and at the latest within three months of the act or decision to be reviewed.
“Mr Trim’s delay meant that the correct course of action was barred and the Court of Appeal refused to allow him to try a different approach. The judgement concerns anyone whose property might not be strictly compliant with the planning rules because it means that, even after the time for enforcing planning regulations has passed, local authorities have a powerful weapon at their disposal and, if they use that weapon, failure to take advice immediately could result in your property being blighted. ”

CML welcomes DCLG's proposals for social housing reform

On 17 January 2011, the Council of Mortgage Lenders (CML) released its response to the consultation by the Department for Communities and Local Government (DCLG) on proposals for social housing reform. The main points of CML's submission are as follows:

- The CML welcomes the move to give greater flexibility to registered housing providers ("providers") to provide a range of tenancies and rents subject to appropriate parameters. This has the potential to release additional capacity to develop new homes whilst allowing them to respond to market conditions.

- Care must be taken to ensure that the key risks for providers of housing benefit changes and effective working with local authority partners are managed proactively. Local delivery must be supported by clear leadership and oversight by government to enable the affordable rent model to be successful across the housing market.

- The changes to social housing within the paper, taken together with the planning system changes in the Localism Bill, can inspire innovation and locally driven solutions. This will only translate into actual delivery if there is central coordination and support alongside local control and decision making.

- The paper stresses that much better use must be made of existing social housing—an enormously valuable national asset. For housing association providers alone, this includes using their assets to lever in significant private finance. We would be happy to engage in discussions on how this can be maximised including exploring other vehicles that could provide a route to private investment to providers such as Arms Length Management Organisations (ALMOs).

- The proposals on tenure flexibility have the potential to create opportunities but will also mean a complex landscape for social housing in the future. The new arrangements for regulation laid out in the Localism Bill must recognise that how providers exercise the tenancy flexibility will have an impact on business plans, on longer term viability and be a clear indicator of the quality of governance. How will these links be made in a regulatory approach that is proactive on governance and viability but reactive in relation to services received by consumers?

- Mortgage finance continues to be constrained with funding and regulatory challenges affecting lenders' access to and cost of funding. There is not likely to be a speedy return to previous high lending levels. Meeting expectations for mortgage finance particularly for groups such as first time buyers and shared owners will be difficult—there is a role for government in helping raise awareness of the need to avoid unnecessary variation and complexity.

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As more snow drives in, employers need to check the small print

Companies hoping for a return to full production after December’s severe weather and Christmas look set to be disappointed with the first snowfall of January working its way across the country. As the chill continues, employers are being encouraged to act quickly to formulate or review their policy on absence due to severe weather, and to make sure that staff are aware of the company’s policy.

This time last year, hundreds of millions of working hours were lost due to the weather conditions and 2011 is forecast to be as bad, if not worse. Employers whose output is drastically cut by staff absence may feel that it is only fair to refuse to pay staff who fail to make it to work; as it is the employee’s responsibility to get to their place of work.

But an employer cannot always dock an employee’s wages on the grounds of absence as it depends on the circumstances.

A healthy employee who lives fifteen minutes walk from the workplace hears reports of traffic chaos on the radio one morning. The trains are at a standstill and the Police are asking drivers to stay off the roads. The employee decides to use this as an excuse to spend the day at home. This is a disciplinary matter and he will not be entitled to pay.

An employee who lives twenty miles from work hears the same story on the radio. He cannot get to work by train and to drive to work would be to go against official advice. The employer cannot reasonably expect him to travel to work and so different criteria apply; how he is treated will depend on his employment contract and the company’s severe weather policy. There are various ways in which these could treat the matter.

The staff manual should encourage employees to consider alternative ways of getting to work, or, if there are none, it should encourage employees to work from home where this is possible. It should also remind employees of the terms of the employment contract.

The contract might stipulate that the employee’s enforced absence will be treated as unpaid time off work. This would have to be clearly set out in the contract of employment because otherwise it would be probably treated as an unauthorised deduction from the employee’s pay.

Or the absence could be treated as holiday. Again, this would need to be clearly set out in the employment contract because employers cannot unilaterally force employees to take holiday at a certain time.

Thirdly, the contract might say that the absence will be paid, but the employee must make up the time later.

Another problem which often arises is for parents of school age children when bad weather forces school closures. So what if the local school announces one morning that it has to close for the day, and employees have to stay at home to look after the kids? Again, company policy should be set out in the employment contract or staff manual. They might, for example, say that the employee can either take the time off as annual leave or as unpaid time off for a dependant.
Said Jane Dismore, employment expert with Breeze & Wyles Solicitors LLP : “Having a clear policy that all employees are well aware of will avoid disputes and reduce avoidable absenteeism. Employers should always get advice on changes to the employment contract and to company policy in order to make sure that the provisions are watertight and enforceable.”

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Making the most of your family in the New Year!

It will come as no surprise to anyone that January is a difficult time for relationships. As the sparkle of Christmas fades away and the reality of post Christmas debts and the return to work sets in, it is often relationships that bear the strain of this.

The family solicitors at Breeze & Wyles have therefore put together some tips for how to combat the new year blues and enjoy your family. So, while thinking about your new years’ resolutions, why not consider the following:

Prioritise your family

The new year is often a time for people to reflect on life and where their priorities are and is a great time to choose to prioritise your family. It’s easy to take a few simple steps to show both yourself and your family that they’re your priority. Consider leaving the office a little earlier each evening or decide not to check your emails on a Saturday/Sunday.

Set aside time

In the busy-ness of life free time just doesn’t happen on its own, so you need to make it happen. Set aside time in your diary to see your family and make sure it’s an immovable date in your agenda. Consider putting in a ‘date night’ with your partner, or a ‘family day’ to spend time with the kids.

Get some help

If you and your partner are having problems you don’t have to try and work out the solutions on your own. It might help to talk to a friend or family member but sometimes speaking to someone impartial can be more beneficial. Why not consider seeing a relationship counsellor. Often getting some objective advice from a third party can be just what’s needed to help gain some perspective on your situation.

Take some advice

If you have come to the sad conclusion that your relationship is at an end then consider taking some advice. Friends or work colleagues might provide emotional support but as there as so many misconceptions regarding relationship breakdown, particularly in relation to children and financial matters, your emotional network might not provide the correct answers to these questions. We offer an initial appointment, with no obligation to return to us, tailored to provide you with advice specific to your situation, and will consider with you the most amicable way to provide a resolution.