blake lapthorn employment law update 22 june 2011
DESCRIPTION
Blake Lapthorn Employment law team held an employment law update breakfast seminar at its London office on 22 June 2011.TRANSCRIPT
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Employment law update
22 June 2011
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The new legal position
No statutory Default Retirement Age (DRA) with effect from 6 April 2011. This means that:– retirement is no longer a ‘fair’ reason for dismissal– now too late to retire someone using statutory
retirement process– employers can still have a contractual retirement
age but this will need to be objectively justified which means it must be a “proportionate means of achieving a legitimate aim”
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Employer Justified Retirement Age – what does it mean?
Employers can have a company retirement age if it is objectively justifiable – known as an Employer Justified Retirement Age (EJRA)Can it be objectively justified? Look at:– Case law on retirement/age discrimination;– European Court of Justice (ECJ) cases for
guidance on legitimate aims and proportionality; and
– ACAS Guidance
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Employer Justified Retirement Age – what does it mean?
A fact-sensitive approach is likely but examples of legitimate aims include:– workforce planning– recruitment and retention of younger employees– protecting dignity of older members of the
workforceWhen deciding whether or not an EJRA is proportionate, a Tribunal is likely to consider:– why a certain age has been chosen– alternatives available– consistent application of EJRA
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Managing the workforce using an EJRA
Even if EJRA is objectively justifiable, still require the following in order to dismiss fairly:– Fair reason
Look at case law for “some other substantial reason” (SOSR) dismissals
– Fair processconsultationconsideration of any request to staygive sufficient contractual/statutory notice etc
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Potential issues when managing the workforce using an EJRA
Difficult to justify an EJRAUnhappy older workers who wish to continue to work?Age discrimination claimsUnfair dismissal claims
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Managing the workforce without an EJRA
Career progression discussionsInformal performance management– Keep records– Clear objectives– Training– Appraisals/reviews
Formal disciplinary procedure for capability– ACAS code and internal procedures– Warnings– Support/training– Time to improve– Advise if could lead to dismissal
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Potential issues when managing the workforce without an EJRA
An increase in workers wishing to work beyond 65?Inconsistency of treatmentDiscriminatory comments/approach Reluctance to manage older or longer serving employees?Inappropriate “without prejudice” discussions?Age discrimination applies to all ages, not just older workers
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Practical tips
ACAS guidance “Working without the default retirement age”Training for managers Amend contracts and policiesRecruitment considerations
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The Bribery Act 2010
HR implications
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What does the Bribery Act cover?
Prevents the giving or receiving of a financial or other advantage to encourage or reward the improper performance of functions or activitiesThe Act prohibits:– bribing – being bribed – bribing a foreign public official; and – the "commercial organisation offence" of failure to
prevent briberyIn force with effect from 1 July 2011
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Penalties for breach of the Act
Individuals face up to ten years' imprisonmentCommercial organisations (including partnerships) risk:– an unlimited fine– ban on tendering for public contracts– directors, managers and company secretaries can
also face individual liability (for consent or connivance)
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Commercial organisation offence
An organisation will automatically be guilty of an offence if an "associated person" bribes for its benefit unless it can establish that it had adequate procedures in place designed to prevent the bribery“Associated person” includes employees, workers, contractors, consultants and volunteers (plus others)Detailed guidance on procedures that can be implemented by organisations to prevent bribery published in March 2011
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Statutory defence for commercial organisations
Commercial organisation must demonstrate it had “adequate procedures” in place to prevent bribery“Adequate procedures” assessed relative to size and complexity of the business on the following six principles:1. proportionality2. top level commitment 3. risk assessment 4. due diligence 5. communication 6. monitoring and review
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What should organisations be doing about the Act?
Consider introducing (or amending if already in place):– anti-bribery/ethical conduct policy– gifts/hospitality policy– vetting policy/additional recruitment checks
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What should organisations be doing about the Act?
Consider amending:– contracts of employment– director service agreements– non-employee contracts– disciplinary policy – whistleblowing policy– expenses policy– bonus/commission schemes
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Overview
Equality Act 2010 – recent developmentsKey cases
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Equality Act 2010 (“the Act”)
Most provisions came into force October 2010Update on:– provisions which came into force this year; – guidance which came into force this year; and– provisions which will not come into force or which
may be repealed
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Positive action in recruitment and promotion
Commenced on 6 April 2011 Extended previous duty from training and/or encouragement to also cover recruitment and/or promotion VoluntaryApplies to all of the protected characteristics
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Positive action in recruitment and promotion
Means that it is not unlawful to recruit or promote a candidate who: – is of equal merit– has a protected characteristic that is under-
represented in the workforce; and– favouring a candidate is a proportionate measure to
address any disadvantage suffered by those with that protected characteristic.
“Tie breaker" or tipping point
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Positive action in recruitment and promotion
Candidates must still be considered on the basis of their merits Positive discrimination remains unlawful in the UK Detailed guidance available at:http://www.equalities.gov.uk/pdf/Positive%20Ac tion%20in%20Recruitment%20and%20Promotio n%20Guide.pdf
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Practical tips
Continue to recruit or promote candidates on the basis of their merits If candidates are of equal merit, consider whether you wish to use the positive action provisions (remember these provisions are voluntary)If use the positive action provisions will need to demonstrate:– established a set of objective criteria in order to
determine whether candidates are of equal merit – employer does not have a policy of routinely favouring
people with protected characteristics; and– justified and proportionate
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Guidance which came into force this year
(i) Codes of PracticeCame into force on 6 April 2011Includes:– Employment Statutory Code of Practice, available at:
http://www.equalityhumanrights.com/uploaded_fil es/EqualityAct/employercode.pdf
– Statutory Code of Practice on Equal Pay, available at: http://www.equalityhumanrights.com/uploaded_fil es/EqualityAct/equalpaycode.pdf
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Codes of Practice
Provide detailed explanations of the Act and include worked examplesTribunals and courts must take the Codes into account if relevant
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Practical tips
Provide training Update policies
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Guidance which came into force this year
(ii) Quick start guide about the ban on questions about health and disability during recruitmentPublished on 6 April 2011 Available at:– http://www.equalities.gov.uk/pdf/110406%20Pre%
20Employment%20Questions.pdf
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Practical tips
These provisions came into force last year so ensure that: – recruitment policies, health questionnaires etc.
have been updated– training given to managers, etc.
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Guidance which came into force this year
(iii)Guidance on matters to be taken into account in determining questions relating to the definition of disabilityCame into force on 1 May 2011 Guidance must be taken into account by the Tribunal when determining whether a person is disabledAvailable at:– http://www.equalityhumanrights.com/uploaded_file
s/EqualityAct/odi_equality_act_guidance_may.pdf
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Guidance - Definition of Disability
Focuses in particular on the following four key questions.1. Does the person have a physical or mental
impairment? 2. Does that impairment have an adverse effect on
their ability to carry out normal day-to-day activities?
3. Is that effect substantial? 4. Is that effect long-term? Gives guidance and worked examples
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Practical tips
Guidance will be relevant to medical professionals asked to give opinions so ensure that you update precedent letters to medical or other health professionals
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Provisions of the Act which will not be brought into force or which may be repealed
Not to be brought into force– Dual discrimination provisions
Consultation as to whether to repeal– Liability on employers for harassment of their
employees by third parties over whom they have no direct control
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Fulcrum Pharma (Europe) Ltd v Bonassera and anotherFacts:
HR team made up of two employees: (1) HR Manager and (2) HR ExecutiveDiminished need for HR Manager; put at risk of redundancyHR Manager stated that HR Executive should also have been in the selection pool; employer refused Employer did consider "bumping" but did not discuss it with HR ManagerHR Manager dismissed; brought claim for unfair dismissal
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Fulcrum Pharma (Europe) Ltd v Bonassera and anotherEmployment Tribunal (“ET”) decision
Unfairly dismissedEmployer's failure to give any real consideration to the pool and to properly consult meant the HR Manager's dismissal was unfair
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Fulcrum Pharma (Europe) Ltd v Bonassera and anotherEmployment Appeal Tribunal (“EAT”) decision
Upheld finding of unfair dismissalWhen deciding whether or not a more junior employee should be included in a redundancy pool (with a view to potentially "bumping" the senior employee holding the redundant position into the more junior employee's position) employer should follow the guidelines laid down in Lionel Leventhal Ltd v North
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Lionel Leventhal Ltd v North
Whether it is unfair to dismiss for redundancy without considering alternative subordinate employment will be a matter of fact for the Tribunal and will depend on factors such as:– whether or not there is a vacancy– how different the two jobs are– the difference in remuneration between them– the relative length of service of the two employees– the qualifications of the employee in danger of
redundancy; and– other factors which may apply in the particular case
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Practical tips
This decision emphasises how important it is for an employer to consider who should be included in the selection pool and to consult about the pool as part of the processExplore early on in consultation with more senior employee whether or not he/she would accept a more junior role at a reduced status and/or salaryKeep paper trail
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Eversheds Legal Services Ltd v De Belin
Held that inflating the score of an employee on maternity leave in a redundancy selection process was sex discrimination against a male colleague
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Eversheds Legal Services Ltd v De Belin
FactsMr De Belin told that he and his female colleague (who was on maternity leave) at risk of redundancyOne of selection criteria was “lock up”Period they chose to measure “lock up” was when female colleague was on maternity leave, therefore female colleague received a hypothetical score of maximum points, whereas Mr De Belin received actual score and minimum pointsMr De Belin received lowest score; put at risk of redundancy
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Eversheds Legal Services Ltd v De Belin
Mr De Belin raised a grievance, stating that he was being discriminated against on grounds of sex Eversheds maintained that it was legally obliged to provide a high level of protection for pregnant women Mr De Belin dismissedBrought claims for:– unfair dismissal; and– sex discrimination
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Eversheds Legal Services Ltd v De Belin
ET and EAT decision
Mr De Belin had been unfairly dismissed and discriminated against on grounds of his sexPregnant employees and those on maternity leave should only be treated more favourably than male colleagues to the extent that this is reasonablynecessary to remove the disadvantages occasioned by their condition In this case, there were other less sex discriminatory alternatives available, such as measuring both employees' actual performance during the period before the woman's maternity leave started
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Practical tips
When considering whether to make an employee on maternity leave redundant, assess the possible ways in which the disadvantages of a maternity absence can be mitigated, rather than automatically favouring the female employee above all other employees (ieboth women not on maternity leave and men)Go no further than what is reasonable and proportionate in the circumstances
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Kurumuth v NHS Trust, North Middlesex Hospital Trust
Fairly dismissing an employee with uncertain immigration status – held that an employer's decision to dismiss an
employee with (what the employer considered to be) uncertain immigration status was reasonable
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Kurumuth v NHS Trust, North Middlesex Hospital TrustFacts
Claimant was Mauritian passport holder Came to the UK with a work permit in 1992In 1997, she was refused further leave to remain She appealedReceived letter from the UK Border Agency (“UKBA”) dated 7 July 1997 ("the 1997 letter") which confirmed that she had lodged an appeal against the refusal and stated that she was entitled to carry on taking paid work in the UK until her appeal was determined
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Kurumuth v NHS Trust, North Middlesex Hospital Trust
Began working on a permanent basis for the Trust in 2003Used the 1997 letter as evidence of her right to work in the UKThe Trust was “tipped off” in 2006 that the Claimant was an illegal workerMade enquiries with the UKBAInformed by UKBA that the Claimant’s husband had made an application for indefinite leave to remain and named the Claimant as his dependant in 2003
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Kurumuth v NHS Trust, North Middlesex Hospital Trust
Following introduction of the Points Based System in 2008, the Trust made further enquiries regarding the Claimant’s immigration statusContacted the UKBA’s Employer’s Checking ServiceUKBA stated that it was unable to confirm that the Claimant had an outstanding application and therefore it was unable to confirm whether the Claimant had the right to work in the UK
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Kurumuth v NHS Trust, North Middlesex Hospital Trust
The Trust was concerned that it was illegally employing the Claimant, therefore it: – suspended the Claimant without pay– contacted the UKBA again; was told that the
Claimant’s husband’s visa application had been rejected – made no mention of the Claimant’s own outstanding visa application; and
– invited the Claimant to a disciplinary hearing
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Kurumuth v NHS Trust, North Middlesex Hospital Trust
Claimant requested that disciplinary hearing be postponedThe Trust agreed but wrote to the Claimant regarding the new date using the wrong postal addressProceeded with the disciplinary hearing in the Claimant’s absence and dismissed her without notice payClaimant given the right of appealClaimant lodged appeal out of time as per the Trust’s Disciplinary Procedure; the Trust refused to hear appeal
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Kurumuth v NHS Trust, North Middlesex Hospital Trust
Claimant brought claims for:– unfair dismissal; and– breach of contract for failure to pay during
suspension and notice payThe Trust subsequently conceded that it should have paid the Claimant during suspension and her notice pay
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Kurumuth v NHS Trust, North Middlesex Hospital TrustEAT decision
Immigration status was to be determined by specialist immigration courts, not the employment tribunals Upholding the ET decision, EAT held that the Claimant’s dismissal was substantively fair on the ground of “some other substantial reason” as the Trust did not receive a clear statement from the UKBA regarding the Claimant’s immigration status – the Trust had acted reasonably as had genuine belief that the Claimant was not entitled to work in the UKHowever, held that Claimant had been unfairly dismissed as no fair procedure followed, although held that even if fair procedure followed would have made no difference to the outcome, therefore Claimant only awarded basic award pursuant to Polkey
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Practical tips
Each case will turn on its own facts Employers must follow a fair procedure
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Where are we?
LegislationWorker Registration SchemeApplications to Permanently Settle in the UKTiers for FearsOn the horizon
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Legislation
Nine Statutory amendments to the Immigration Rules since June 2010
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Worker Registration Scheme
From 1 May, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia full EU nationalsRestrictions on Bulgaria and Romania still apply
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Applications to stay permanently
Change in calculation of qualifying periodMust be free of unspent convictionsChange in earnings requirements
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Tier 1 – non - employer specific
Closure of “General” - 1,000 “Exceptional Talent”visas to followAmendments and improvements for Investor and EntrepreneurClosure of Post Study Work visa from April 2012
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Tier 2 – sponsored employees
Cap – 20,700 – misleadingRestricted or Unrestricted?Inter Company Transfer now has 4 sub-categoriesMinimum salaries £20,000, £24,000 or £40,000Inter Company Transfer route now 12 months service overseasInter Company Transferees will not be able to stay permanentlyNational Qualification Framework Level 4 (Degree level) now required
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Tier 4 - students
English language requirementMaintenance requirementRestrictions on dependantsRestrictions on working and work placements
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Tier 5 – Temporary Workers
Monaco joins list for Youth Mobility Scheme –Australia, Canada, Japan & New Zealand
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On the horizon
Less than expected take up of unrestricted Certificates of SponsorshipUKBA looking at: Romanian and Bulgarian workers; Investors; Domestic Workers; Sole Representatives; post-study work ability for Students; Tier 5 and Family membersProsecutions – not enough yet!
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