what's in the news

In a development which may have connotations for firms in the retail motor industry, regulations were brought into force on 1st October 2011 which provide agency workers with increased employment rights.

The objective of the Agency Workers Regulations 2010 is to give agency workers the entitlement to the same basic employment and working conditions as a company’s permanent employees.

Who do the regulations apply to?

The Regulations apply to agency workers who are assigned to do temporary work for a company through temporary work agencies, they do not apply to recruitment consultancies that place individuals into permanent roles.

What rights apply from day one of an assignment?

1. Access to collective facilities

From 1 October 2011, all agency workers have had the right to be treated no less favourably than comparable permanent employees or workers in relation to ‘collective facilities and amenities’, unless the less favourable treatment can be objectively justified.

Collective facilities could include:

• Canteen or other similar facilities
• Childcare facilities
• Transport services
• Toilet or shower facilities
• Staff common room
• Food and drinks machines
• Car parking

The concept of collective facilities does not extend to any off site facilities or benefits in kind which are not provided by the company, such as subsidised access to an off site gym.

The right is to equal, not better, treatment. Agency workers should not therefore be given enhanced access rights when compared with permanent employees. For example, if there is a waiting list for access to childcare facilities an agency worker will be entitled to join the list but not to jump the queue.

2. Access to employment vacancies

From the start of their assignment, agency workers have the right to be told of any permanent vacancies of the company in order to be given the same opportunity as a comparable permanent employee to apply.

The company can inform the agency worker ‘by a general announcement in a suitable place in the hirer’s establishment’. A suitable place may be a notice board or on the company’s intranet. They must be informed as to where to find the information, which could be explained during a worker’s induction.

This provision does not curtail an employer’s freedom as to how to treat applications for jobs. Agency workers do not need to be given preferential treatment when compared with other internal candidates or external candidates when deciding who is the best person for the role.

Which rights apply after a qualifying period?

1. The right to equal treatment regarding terms and conditions

The right to equal treatment with regard to basic working and employment conditions does not apply until the agency worker has completed a qualifying period of 12 weeks.

Provided that an agency worker has worked in the same role, whether on one or more assignments, with the same company for 12 continuous weeks, they will be entitled to receive the same basic working and employment conditions as are ordinarily offered to permanent employees in relation to:

1. pay;
2. duration of working time;
3. night work;
4. rest periods;
5. rest breaks; and
6. annual leave.

If there is a break of over 6 weeks between assignments, continuity will be broken and the agency worker will have to start counting the 12 weeks again before they are entitled to the right to equal treatment regarding terms and conditions.

Specific provision is also made in the regulations in relation to pregnant and nursing mothers who must be provided with paid time off for antenatal appointments, to be paid by the temporary work agency.

Anti-avoidance provisions

The Regulations contain specific anti-avoidance provisions to prevent temporary work agencies and hirers from structuring assignments to prevent the worker from acquiring equal rights.

A prohibited structure of assignments can occur when an agency worker has:

• completed two or more assignments with the hirer; or
• completed at least one assignment with the hirer and one or more earlier assignments with hirers connected to their current hirer; or
• worked in more than two roles during an assignment with the same hirer and on at least two occasions has worked in a role that was not the ‘same role’ as the previous role.

The anti avoidance provisions will then kick in if the most likely explanation for the above scenario is that the hirer or temporary work agency intended to prevent the agency worker from being entitled to the right to equal treatment.

To decide whether there has been such a structure of assignments, the following factors will be taken into account by the Tribunal:

• Length of the assignments;
• Number of assignments with the hirer or any connected hirer;
• Number of times the agency worker has worked in a new role with the hirer; and
• The period of any break between assignments with the hirer or any connected hirer.

Tribunals can make an additional award of compensation of up to £5,000 where a hirer and/or agency are found to have breached the anti avoidance provisions.

Derogations from the equal treatment principle
(Swedish derogation agreement)

In limited circumstances a contract may be entered into between an agency and an agency worker where it is agreed that the right to equal treatment with regards to pay (only) will not apply.

However, this regulation only applies where:

• the agency worker has a permanent contract of employment with the agency; and
• the contract was entered into before the first assignment started; and
• in periods between assignments the agency pays the worker a minimum of 50% of their basic pay while on assignment, and this must not be less than the national minimum wage.

It is unusual for an agency worker to be permanently employed by an agency and to receive pay between assignments, and this is therefore likely to be rarely used.

Compensation

The compensation payable by an agency or hirer for breach of the Agency Workers Regulations 2010 is that which is ‘just and equitable’ having regard to the extent of their responsibility. The legislation states that the minimum amount awarded must be two weeks’ pay but there is no statutory cap on the maximum amount that can be awarded.

Complying with the regulations

Now that the Agency Workers Regulations are in force it will be important to consider, as soon as possible, the measures you will take to comply with, or avoid the Regulations.

You may wish to put in place a record keeping system to ensure that agency workers do not work beyond the 12 week qualifying period, for example.

It will also be important to keep in regular contact with any agencies that you use for the provision of temporary workers and ensure they are kept aware of your current standard terms and conditions.

For further information on this article, please contact Pitmans Employment Team.

1. Reasonable adjustments

The Employment Appeal Tribunal has held in Newcastle Upon Tyne Hospitals NHS Foundation Trust v Bagley, that when assessing an employer’s duty to make reasonable adjustments, it is necessary first to establish that the employee has been placed at a substantial disadvantage due to their disability, and not by some other external factor such as their personal financial circumstances. In this case it was the worker’s financial situation that made a return to part time work uneconomic for her, not her disability. That would have been the same for someone without a disability

What does this mean?
If a practice, criterion or provision at work would affect a non-disabled person in the same way as a disabled person, the disabled person is under no comparative substantial disadvantage and no duty to make reasonable adjustments to the particular practice arises.

What should employers do?
Employers who are in doubt as to their obligations to make reasonable adjustments should take specific legal advice.

2. Unsuccessful job applicants

The Court of Justice of the European Union in the case of Meister v Speech Design Carrier Systems GmbH has held that an unsuccessful job applicant is not entitled to see details of a successful applicant.

What does this mean?
Whilst an unsuccessful job applicant is not entitled to see the file of a successful applicant, an employer who refuses to make disclosure may be running risks. A tribunal could take the refusal into account in deciding if there are facts leading to a presumption of discrimination.  Such a presumption would shift the onus onto the employer to show it has not discriminated.

What should employers do?
Employers should avoid discriminating against job applicants and should be prepared to justify their decisions. If disclosure of information or documentation is requested by an unsuccessful job applicant, specific legal advice should be obtained to assess and contain the risks involved.

3. Mental ill-health in the workplace

It is estimated that one in four people will suffer a mental health problem at some point in their life and that almost one in three workers now suffer anxiety or panic attacks due to work pressures. This is estimated to cost Britain more than £30billion every year in terms of lost production, recruitment and absence.

In response to this Acas has published a guide to help employers tackle the taboo of mental ill-health at work. The step-by-step guide shows employers and managers how to spot early the signs of mental ill-health, raise awareness among managers and staff and develop a culture where employees feel comfortable discussing mental ill-health. It suggests how to approach employees who may be suffering from such a condition and how to try and help them cope with it or overcome it so they can work effectively again.

4. Transfers of employment

In the case of Gabriel v Peninsula Business Services Ltd, the Employment Appeal Tribunal has held that, in the absence of a TUPE transfer, an individual’s employment cannot transfer from one employer to another without the employee’s express or implied consent.

What does this mean?
Employees need to be informed of any change of employer and to expressly or impliedly consent to it for a transfer to take effect.

What should employers do?
Employers who wish to transfer an employee’s employment to another employer should specifically inform the employee of the transfer. Assuming that an employee will notice that the name of their employer has changed on their pay slip is insufficient.

5. Equal Pay

The Court of Appeal has held in the case of Council of the City of Sunderland v Brennan & Others that bonuses paid to groups of predominantly male employees which were initially brought in to increase productivity could no longer be justified because they were no longer linked with productivity.

What does this mean?
Bonus schemes may be non-discriminatory when first instituted, but as circumstances change over time they can lose that status and so breach equal pay legislation.

What should employers do?
Employers should review any historic bonus schemes they may operate and ensure that they can still justify any difference in pay. Legal advice should be sought in any cases of doubt.

6. Mandatory retirement ages

The Supreme Court has held that a mandatory retirement age is capable of justification and therefore not discriminatory on grounds of age if:

(1) The legitimate aim or aims of setting the age are connected to social policies, such as those related to employment policy, the labour market or vocational training. The aims must be of a public interest nature rather than for reasons particular to the employer’s situation, such as cost reduction or improving competitiveness.  The aims which the European Court has been ready to accept for this purpose so far fall within two categories –

(a) ‘inter-generational fairness’ which can mean a range of things such as facilitating access to employment by young people, enabling older people to remain in the workforce, sharing limited opportunities to work in a particular profession fairly between the generations, and promoting diversity and the interchange of  ideas between older and younger workers; and

(b) ‘dignity’, such as avoiding the need to dismiss older workers on the grounds of incapacity or underperformance, or avoiding the need for costly and divisive disputes about incapacity or underperformance, thus preserving the workers’ dignity and avoiding humiliation;

(2) The legitimate aim applies to the particular circumstances of the employment concerned (such as recruiting young people to achieve a balanced workforce unless the problem of the business concerned is retaining older workers and it has no problem recruiting young staff); and

(3)  The means chosen to achieve the aim must be shown to be both ‘appropriate and necessary’ as well as proportionate.  The means must be effective to meet the aim and there must be no other, less discriminatory, means of doing it.

What does this mean?
Employers will only be able to set the age at which their staff retire if they can prove there is a strong justification, founded on legitimate social policy aims, for doing so.

What should employers do?
The safest course is likely to be to have no set retirement age and to manage older workers.  Employers who do decide to enforce a mandatory retirement age should take specific legal advice to ensure they have good justification for having a retirement age at all and for the age chosen.

7. Age discrimination

The Supreme Court in Homer v Chief Constable of West Yorkshire Police has held that a provision, criterion or practice that puts an employee who is leaving his job due to retirement at a disadvantage is discriminatory on grounds of age.  A provision criterion or practice is a policy, procedure, condition or requirement used by the employer. It is wrong to equate an employee who is leaving due to retirement with employees leaving for other reasons.

What does this mean?
Where a provision, criterion or practice places an employee at a disadvantage by reason of their impending retirement it indirectly discriminates against the employee on grounds of age. However, it is still open for an employer to argue that such discrimination was justified. Justification in cases of indirect discrimination is wider in scope than for direct age discrimination – it is not limited to social policy objectives but can also include real need on the part of an employer’s business.

What should employers do?
Employers should avoid discriminating against older staff and those approaching retirement and ensure, with legal advice as necessary, that they should be able to justify any indirectly discriminatory provisions, criteria or practices.

For further information on this article, please contact Pitmans Employment team.

Mark Symons
Partner
T: 0118 957 0340
E: msymons@pitmans.com

1. All Change in April

By way of a reminder a number of important changes come about this month. For the first complete pay week on or after 1 April 2012, statutory maternity, paternity and adoption pay increases apply (increasing the amount payable by employers to £135.45 per week, up from £128.73 per week). On 6 April 2012 statutory sick pay increases (from £81.60 to £85.85 per week) and changes to the rates and allowances for NICS come into force. At the same time the personal allowance, for income tax, rises and the threshold at which employees pay the higher income tax rate of 40% reduces.

From 6 April 2012 HMRC will have the power to ask an employer to pay a security where there is a serious risk that it will not pay income tax or Class 1 NICs that it has deducted from an employee’s pay and employees in defined contribution pension schemes will lose the opportunity to contract out of the state additional pension.

The qualifying service period for employees to bring a claim for unfair dismissal will increase from one to two years on 6 April 2012 but only applies to employees starting with a new employer on or after that date.

2. Suitable Alternative Employment

As part of a fair redundancy process there is an obligation on employers to consider whether there are any suitable alternative vacancies for those at risk of redundancy.  The Employment Appeal Tribunal has held that an employer is not obliged to use an objective selection criteria in the context of an interview for such alternative employment.

What does this mean?
It will be difficult for employees to successfully argue that they were unfairly treated where an employer uses ‘subjective’ criteria to assess an employee’s suitability for an alternative post.

What should employers do?
However, employers should bear in mind that whilst ‘subjective’ criteria may be used when selecting staff for a new or alternative position the decision (not to select the candidate for the alternative job) should not be so unreasonable that no reasonable employer could have come to that conclusion in the circumstances.

Even when an employer thinks that affected employees may not prove suitable for an available alternative post; it is good practice not to consider external candidates until the affected employees have been ruled out following a fair process.

3. Foreign workers

The Biometric Residence Permit system has been expanded.

What does this mean?
From 29 February 2012 all non-European Economic Area nationals applying to remain in the UK for more than 6 months, including refugees and those given the right to live in the UK permanently, will have to obtain a Biometric Residence Permit.

What should employers do?
Employers should always check that their staff are allowed to work in the UK as those who employ illegal foreign workers may be imprisoned and/or fined.  From June 2012 employers will be able to check online whether a person holds a Biometric Residence Permit, though only individuals who have had to make an application will have one.

4. TUPE

The Employment Appeal Tribunal has held that a change to a work base on a TUPE transfer can give rise to a claim for constructive, automatically unfair, dismissal.

What does this mean?
Employees who transfer under TUPE transfer on their existing terms and conditions of employment. Where a transfer involves a substantial change in working conditions to an employee’s material detriment the employee is entitled to claim unfair dismissal.  Significantly changing an employee’s place of work can, as in this case, amount to a substantial change in working conditions.

What should employers do?
Businesses who are considering purchasing another business should take specific legal advice as to their liabilities under TUPE.

5. The Diamond Jubilee

Acas has published guidance for employers to help them plan for the extra bank holiday on Tuesday 5 June to mark the Queen’s Diamond Jubilee.  Acas recommends that employers plan ahead to avoid last minute leave request clashes or short-term absences and handle requests for time off as fairly and consistently as possible.

What should employers do?
There is no statutory right to bank / public holidays so employees are only entitled to take such days off if their contract of employment entitles them to do so. Employers have the right to refuse a request for statutory minimum leave under the Working Time Regulations, as long as they give notice which is at least as long as the holiday requested. Employees should handle holiday requests fairly, consistently and avoid discriminating against staff when prioritising requests for time off.

When planning for the Jubilee, employers should bear in mind that the last bank holiday in May has been moved to Monday 4 June 2012 and that most schools have moved their half-term holiday to that week. Employees who are obliged to work on a bank / public holiday will only have the right to be paid extra if their employment contract entitles them to extra pay.

6. Marriage discrimination

What does this mean?
Less favourable treatment on the basis that an employee is married to a particular person is only unlawful if the ground for the treatment is specifically that the person is married, rather than only that they are in a close relationship which happens to take the form of marriage.

What should employers do?
Employers who wish to avoid perceived conflicts of interest and nepotism can legitimately implement policies prohibiting persons who are in a close relationship from working with each other as long as the policy is not restricted to people who are married or in civil partnerships.

7. TUPE

The Employment Appeal Tribunal has held that corporate franchisees do not fall within the definition of ‘workforce’ for the purposes of TUPE Regulations.

What does this mean?
Provided the use of corporate franchisees is not a sham, the dismissal of employees who do not wish to become franchisees after the transfer may be for an economic, technical or organisational reason.

What should employers do?
Businesses who are considering purchasing another business should take specific legal advice as to their liabilities under TUPE.

8. Redundancy

The Employment Appeal Tribunal has held that a redundancy pool could consist only of one where the individual concerned was the company’s only employee in China and the company decided for business reasons to stop having an employee there. The Employment Appeal Tribunal said that selection only operates, when assessing fairness, where there is a number of similarly qualified possible targets for redundancy.

What does this mean?
It will be difficult for an employee to challenge selection for a redundancy pool even in the case of a pool of one if the employer has adopted a fair procedure to decide who goes into the pool.

What should employers do?
Employers must “genuinely apply their minds” to the pooling issue and be able to provide evidence of their reasoning and their decisions. This will make it more difficult for an employee to challenge the pool although inevitably there is likely to be a higher risk if the number of roles is the same as the number of people in the pool. Employers should always take specific legal advice before selecting employees for a redundancy pool.

9. Fixed-term contracts

The European Court of Justice has held that the conversion of a fixed-term contract into one of indefinite duration need not require the new contract to reproduce in identical terms the main clauses of the previous contract.

What does this mean?
If the employee’s tasks and functions remain the same, however, then the conversion of contracts must not involve material changes in their terms which are unfavourable to the employee.  In the UK, the Regulations concerning Fixed Term Employees generally automatically convert the contract to a permanent one after 4 years with no limit on duration. So there should not usually be a problem with terms becoming less favourable, however, if the original fixed term contract did not contain a notice period to carry over, there could be a risk of the notice provisions in the permanent terms being less favourable.

What should employers do?
Employers should always take specific legal advice before issuing or ending a fixed-term contract.

10. Apprenticeships

The Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012 come into force on 6 April.

What does this mean?
The Apprenticeships, Skills, Children & Learning Act 2009 provides that completing an apprenticeship requires a person to enter into an ‘apprenticeship agreement’. If this agreement is to take effect as a contract of service it must be in the ‘prescribed form’. However, until now no form has actually been prescribed. These Regulations prescribe the form. They generally require the agreement to contain a written statement of the particulars of employment. The agreement must also include a statement of the skill, trade or occupation for which the apprentice is being trained under the apprenticeship framework.

What should employers do?
Employers who employ apprentices will need to issue an apprenticeship agreement in the prescribed form to those apprentices who are employed under a contract of service.

For further information on this article, please contact Pitmans Employment team.

Mark Symons
Partner, Head of Employment
T: 0118 957 0340
E: msymons@pitmans.com

The Home Secretary, Theresa May, has announced proposals for a new immigration category that could prove to be a real fillip for UK culture.

The current provisions of the UK’s Points Based System (PBS) have long been criticised by creative campaigners as being an unworkable route for non-EU artists who intend to come to the UK for short-term invited visits, not least because of the burdensome obligations placed upon sponsors of such visitors. This state of affairs had been exacerbated by the fact that the immigration rules have placed an absolute prohibition on the receipt of fee payments for overseas visitors who carry out creative activities.

The solution, a new immigration route to be called Permitted Paid Engagements (PPE), is scheduled to come into effect from 6th April 2012 and will allow individual artists, entertainers and sportspersons to enter the UK to undertake pre-arranged activities (and, importantly, be paid) without the requirement of having a certificate of sponsorship or a licensed sponsor.

To qualify for entry as a PPE visitor, the individual will need to be able to show that they have a formal invitation to carry out the engagement, and that the specific activity to which that invitation refers relates to their personal area of expertise and/or qualifications. The permitted activities are:

• professional artists, entertainers or sportspersons carrying out an activity relating to their main profession. So, for instance, artists exhibiting and selling their works; authors doing book signings; entertainers giving one off or a short series of performances and sportspersons providing guest commentary in their field of sport;
• visiting to give a lecture, examining students, participating in or chairing selection panels;
• overseas designated air-pilot examiners assessing UK pilots to ensure they meet the national air regulatory requirements of those countries; and
• providing advocacy in a particular area of law as a qualified lawyer in a court or tribunal hearing, arbitration or other form of alternative dispute resolution in the UK.

An individual entering the UK via this route must be a genuine visitor, provide relevant documentary evidence to border officials in order to demonstrate that they have been invited to the UK because of their skills and expertise, and intend to leave the UK at the end of their visit.

The maximum period of time a PPE visitor can remain in the UK is one month. Individuals who are visa nationals will need to obtain prior entry clearance before travel; if successful, they will be issued with a single-entry visa for the UK. Visitors wishing to remain for longer than one month and undertake any of these activities for which they will be paid will need to apply under the relevant Tier 2 or Tier 5 category of the PBS.

For further information on this article, please contact Pitmans Business Immigration team who will be happy to discuss your UK immigration options with you.

Richard Devall
Partner
T: 0118 957 0602
E: rdevall@pitmans.com

Jamie Lynch
Solicitor
T: 0118 957 0506
E: jlynch@pitmans.com

A review commissioned by the Government has decided that employers who prioritise job applicants with top degrees from top universities are potentially discriminating against those with degrees from other universities. It has been suggested that three quarters of employers require good grades as a minimum but that this requirement goes against an employer’s duty to hire a diverse workforce.

This is all very well but given competition for jobs is at an all time high one has to ask whether it is unreasonable for employers to want to recruit the best person for the role available. It seems logical that the best person should be recruited for a role. However it is not always the case that the best person is necessarily the one with the best grades. It has long been standard practice to require a certain level of grades to apply for certain jobs but due to the current economic condition such a level has had to be raised to try and help limit the number of applications.

Of course a person may excel academically but have no social skills and so not be able to work well in the workplace. Thus going against the idea that those with the best grades are the ones best for the job Employers would do well to recognise this and look beyond academic grades.

It must also not be overlooked that there are able candidates from universities which are not able to compete with the elite. They may have achieved a top mark from a lower tier university but the stigma employers attach to their university goes against them. It is perhaps this which employers should be warned against – do not make assumptions based on someone’s university as you may miss out on the person best for the job. Not only this but it leaves employers open to a real risk of discrimination.

A person could bring a claim of indirect race discrimination if employers are only recruiting those from elite universities. If an employer has a policy not to interview applicants from certain universities then they may be indirectly discriminating on the basis of their race. Those who do not have the opportunity to attend elitist universities because of their race are clearly disadvantaged by a policy only to consider applicants from such universities. However, it would be open to the employer to seek to objectively justify such a policy. The decision on whether to employ someone should not be influenced by irrelevant factors.

An individual may have a good reason for not attending a top university or given the amount now being charged to attend university, the cost each university charges may have made the decision for them. The elite universities will be charging the maximum amount possible and so it is quite possible the normal Joe Blogs will not be able to afford this or wish to incur the debt. Likewise there will be individuals who failed to achieve top grades for various reasons but are still just as able to do the job very well. Employers should recognise this and be willing to make concessions and take this into consideration.

For further information please contact Pitmans’ Employment Team.

Mark Symons
Partner, Head of Employment
T: 0118 957 0340
E: msymons@pitmans.com

Richard Devall
Partner
T: 0118 957 0602
E: rdevall@pitmans.com

1. Misconduct

The Employment Appeal Tribunal has reminded employers of the issues they should consider before dismissing staff for misconduct. In a separate case, the Employment Appeal Tribunal has held that it is not necessary for an employee’s conduct to be ‘reprehensible’ in order for conduct to be a potentially fair reason for dismissal.

What does this mean?
Dismissal for misconduct will be fair only if (1) the employer has carried out a reasonable investigation into the alleged misconduct of the employee; (2) the employer believes, at the time of dismissal, that the employee is guilty of the misconduct alleged; (3) there were reasonable grounds for the employer having such a belief; and (4) dismissal was a reasonable response in the circumstances.

What should employers do?
Employers should always take specific legal advice before dismissing an employee whether for misconduct or for some other reason. However, employers should be aware that if they believe the employee is guilty of the misconduct their belief does not necessarily need to be correct if there were reasonable grounds for the belief and dismissal was within the range of reasonable responses.
 
2. Discrimination

A Polish female doctor who was subjected to discrimination on grounds of her sex and race has been awarded just under £4.5 million in compensation. The tribunal held the employer and three senior staff members jointly and severally liable to pay the compensation.

What does this mean?
The case serves as a reminder that in cases of discrimination there is no cap on the amount of compensation a tribunal can award and that individuals in an organisation can be found liable to pay compensation as well as the organisation itself.

What should employers do?
Employers should take steps to prevent discrimination and harassment in the workplace.  This may be by ensuring that clear written policies relating to discrimination and harassment are in place, by providing staff with training in these areas and by promoting a culture of compliance with such policies.

3. Disability discrimination

The Employment Appeal Tribunal has held that in a claim for disability discrimination it is necessary for the employee to establish that he was disabled at the time when the alleged discrimination took place.

What does this mean?
A person is disabled for the purpose of employment legislation if he has a physical or mental impairment which has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities. An impairment is regarded as being substantial if it has lasted or is likely to last at least 12 months. An employee who is experiencing a substantial adverse effect on his day-to-day activities at the time of the alleged discrimination will not, therefore, be regarded as being a disabled person if his symptoms were not expected to persist for 12 months or more.

What should employers do?
Employers should bear in mind that GPs are not always aware of the legal definition of disability and even where they are it will ultimately be for a tribunal, not a GP, to decide whether a person is disabled or not. For this reason legal advice should be obtained where there is doubt as to whether a person is disabled.

4. Upcoming changes

• On 1 April statutory maternity, paternity and adoption pay is to increase to £135.45 per week.
• On 6 April the personal allowance will increase to £8,105, the threshold at which employees pay the higher income tax rate of 40% reduces to £34,371 and the lower earnings limit for primary class 1 national insurance contributions increases to £107. From that date HMRC will have the power to ask an employer to pay a security where there is a serious risk that it will not pay income tax or class 1 national insurance contributions that it has deducted from an employee’s pay.
• On 6 April statutory sick pay is to increase to £85.85 per week.

5. Pensions

From 6 April people in defined contribution pension schemes will no longer be able to contract out of the state additional pension.
 
6. Legal fee indemnities

The High Court has held that an indemnity in a compromise agreement did not oblige the employer to pay a former employee’s legal expenses associated with a criminal investigation into action alleged to have been taken by him when he was an employee.

What does this mean?
Even if the terms of an indemnity relating to the payment of legal fees are wide ranging, it  may only protect an employee from legal professional expenses arising from the ‘ordinary occupational hazards’ of the job and  not cover criminal allegations made against the employee personally.

What should employers do?
Compromise agreements and indemnities intended to cover an employee’s legal expense for addressing criminal allegations should always be explicitly drafted and legal advice should be obtained.
 
7. Overtime

The Employment Appeal Tribunal has held that a worker does not suffer a detriment where he refuses to sign a 48-hour week opt-out, and is then refused an opportunity for overtime by his employer, if the employer is found to have acted reasonably in requiring an opt out from all those working rest days to avoid breach of working time legislation.

What does this mean?
Employers can justify decisions to refuse an opportunity for overtime if the reason for the refusal is to enforce a reasonable and necessary policy designed to ensure that its employees who exercise their right not to opt out of the 48 hour week maintain that right.

What should employers do?
Employers should be prepared to justify their decisions on overtime and should ensure that they comply with their duty to take reasonable steps to ensure the 48-hour limit is complied with.
 
8. Redundancy

The Employment Appeal Tribunal has held that an employee can act reasonably in refusing an offer of suitable alternative employment even if a hypothetical reasonable employee would have accepted the employer’s offer.

What does this mean?
When considering whether a refusal of suitable alternative employment is unreasonable, it is necessary to consider whether the employee in question acted reasonably in refusing the offer. This will involve a consideration of whether the reason, given by the individual, constituted a sound and justifiable reason for turning down the offer.

What should employers do?
Employers should take specific legal advice when making staff redundant, particularly in relation to the issue of refusal of suitable alternative employment.
 
9. Redundancy

The Employment Appeal Tribunal has held that an unspecific challenge by an employee to redundancy assessment criteria did not entitle the employee to see interview notes relating to an application for an alternative position within the business prior to the decision to dismiss.

What does this mean?
An employer is under no duty to provide a copy of interview notes where an employee has not made any specific complaint or challenge to the scoring or interviewing process undertaken.

What should employers do?
Employers should  keep in mind that an employee may be entitled to obtain the notes of his/her interview on a redundancy related job application, though generally only if making such a specific challenge.

10. Vicarious liability

The Court of Appeal has ruled on two cases involving the question as to whether an employer is liable for an assault carried out by an employee on a fellow worker in response to lawful instructions. In one case, the employer was found vicariously liable where the employee  attacked his manager in response to a reasonable instruction given by his manager. It was held the attack was sufficiently related to the employment in time and space.  In the other there was no vicarious liability where the employee, was telephoned at home and asked to work an extra shift, cycled to work drunk and attacked the manager there. Although the attack happened on the Employer’s ground, the attack was unconnected to the employee’s employment.

What does this mean?
An employer will be vicariously liable for the actions of their employees where such actions are carried out in the course of their employment. For this purpose there needs to be a sufficiently close connection between the act and the employment.

What should employers do?
Employers should screen their employees’ backgrounds, ensure that they have adequate liability insurance cover in place, and clearly define their employees’ approved areas of responsibility and the scope of their work.

11. Annual leave

The Court of Justice of the European Communities has held that annual leave entitlement cannot be subject to preconditions, such as of attendance at work,  for workers who have been granted sick leave. A requirement on those workers to actually work a certain number of days before the entitlement even arises, for example, will breach the Working Time Directive.

What does this mean?
Any worker, whether he be on sick leave following an accident at work or due to any other sickness cannot have his entitlement to at least four weeks’ paid annual leave affected.

What should employers do?
Employers should ensure that all of their workers receive paid annual leave. The statutory minimum annual leave entitlement is 5.6 weeks or 28 days (pro rata for part-time workers).

12. TUPE Payments

The Court of Appeal has held that payments made under TUPE will be taxable as employment income when they are pay to employees on the transfer of a business. In this case the payments were made to compensate the employee’s for their loss of pension right and also as a way of discouraging industrial action.

What does this mean?
Employers need to be careful about paying a lump sum to their employees because if their employment is one of a number of reasons for their payment then the full amount will be taxable.

What should employers do?
Employers should ensure that where payments are made to their employees for various reasons, they apportion an amount to each reason. Tax and national insurance contributions can then be calculated accordingly.

For further information on this article, please contact Pitmans Employment team.

Mark Symons
Partner, Head of Employment
T: +44 (0) 118 957 0340
E: msymons@pitmans.com

1. Annual leave

The Supreme Court has held that employers who have shutdown periods can stipulate that annual leave be taken during those periods.

What does this mean?
Employers can insist on their employees taking their paid annual leave during periods when they are not required to work. This will be relevant to off-shore workers, teachers who are required to take their annual leave during non-term time, professional footballers, Parliamentary staff, and people who work full-time during the season in the tourist industry.

What should employers do?
Employers who have shut down periods are entitled to insist on their workers taking their annual leave during those periods. However, they should handle requests for annual leave fairly and consistently.

2. Marriage discrimination

The Employment Appeal Tribunal has held that an employer acted unlawfully when it treated an employee less favourably, not just because she was married, but because she was married to a particular man.

What does this mean?
Employees have the right not to be discriminated against by reason of their status, not only of being married, but also of being married to a particular person. The same applies to those in a civil partnership.

What should employers do?
Employers should avoid discriminating against married employees and those in a civil partnership.

3. Discrimination and Harassment

The Employment Appeal Tribunal has held that a culture of tolerance of racist banter which continues after established acts of racial harassment have taken place is capable of amounting to a continuing breach of mutual trust and confidence and, therefore, giving grounds for a claim for unfair constructive dismissal even if an employee resigns some time after the original incidents.

What does this mean?
Employers have a duty to prevent harassment in the workplace and can be liable to their employees if they do not take action.

What should employers do?
Employers should take steps to prevent discrimination and harassment in the workplace.  This may be by ensuring that clear written policies relating to discrimination and harassment are in place, by providing staff with training in these areas and by promoting a culture of compliance with such policies.

4. Bulgarian and Romanian workers

Restrictions on the rights of Bulgarian and Romanian workers to work in the UK have been extended until 31 December 2013.

What does this mean?
Bulgarian and Romanian nationals have no automatic right to work in the UK despite their countries being members of the EU. Those seeking to work in the UK are in most cases required to apply, before commencing work, for an ‘accession worker authorisation document’ and to work in accordance with the conditions in that document.

What should employers do?
Employers who wish to employ Bulgarian and Romanian workers should continue to comply with requirements such as work permits and, if necessary, take legal advice before doing so.

5. Equal pay

The Court of Appeal has held that claims for equal pay can be brought either through an Employment Tribunal or through ‘the ordinary courts’ (the County and High Courts) and that when an ordinary court exercises its discretion to strike out a case the fact that an employee would be deprived of their right to pursue a claim is a relevant factor which should be taken into account and given considerable weight in most cases.

What does this mean?
Employees only have six months to present an equal pay claim in an Employment Tribunal but six years to bring a claim through the ordinary courts. In most cases an employee will still be able to bring an equal pay claim through the ordinary courts even though the time for presenting a claim in a tribunal has expired.

What should employers do?
Businesses who acquire employees under TUPE should obtain appropriate indemnities to protect themselves against liability for any potential equal pay claims arising in the six years prior to the acquisition of the employees.

6. Equal Pay
The Employment Appeal Tribunal has held that a pay differential between employees at the time of their recruitment can justify the continuing differential in subsequent years.

What does this mean?
Employers are free to pay staff who are recruited into similar roles different amounts where there is good reason for it as long as the decision is not tainted by sex. It is, therefore, permissible to pay different amounts where one of the individuals has more experience than another. Having made the decision to pay different rates there is no obligation on the employer to harmonise the levels of pay at a later date.

What should employers do?
Employers should base decisions on pay on objective grounds and be prepared to justify their decisions should the need arise.

7 . National Minimum Wage: Live-in Domestic Staff

The Employment Appeal Tribunal has held that live-in housekeepers  may be  exempt from the National Minimum Wage  if  they live in their employer’s home and are treated as a member of their employer’s family.

What does this mean?
Domestic workers do not need to be paid the National Minimum Wage if they live in their employer’s home and are treated as a member of the family. As to whether a worker is integrated into a family there is no one factor that is decisive but particular regard will be had to the provision of accommodation and meals and the sharing of tasks and leisure activities. Other matters such as the general dignity with which the domestic worker is treated could be taken into account, as could the degree of privacy and autonomy they are afforded and the extent to which, if at all, they are exploited.

What should employers do?
Employers who employ live-in domestic staff and wish to pay them less than the National Minimum Wage should genuinely treat such workers as part of the family. Domestic workers who are exploited are unlikely to be regarded as being family members and would, therefore, be entitled to be paid the National Minimum Wage.

8. TUPE

The Court of Appeal has held that a transfer on an administration cannot be caught by TUPE rules, unlike on insolvency proceedings. As such administrations will not be “insolvency proceedings” for the purposes of the exemption to TUPE.

What does this mean?
Businesses who purchase companies who have been placed into administration will take on the liability under TUPE for the company’s employees. Employees will transfer under TUPE and  will be protected from transfer- connected dismissals.

What should employers do?
Businesses who are considering purchasing a company in administration should be aware of their potential liabilities in relation to staff and take specific legal advice where necessary.

9. TUPE
The Employment Appeal Tribunal has held that for there to be a service provision change under TUPE, the activities carried out by different providers before and after the transfer must be for the same client.

What does this mean?
There will be no service provision change where there is not only a change in contractors, but also a change of client.

What should employers do?
Businesses  who are considering selling should be aware that a change of client may mean TUPE rules do not apply and take specific legal advice as to their liabilities where necessary.

10. TUPE
The Employment Appeal Tribunal has held that there can be no service provision change under TUPE where the activities carried out by the subsequent contractor for the client are not fundamentally the same as those carried out by the first contractor.

What does this mean?
There will only be a service provision change where the activities carried out by an organised grouping of employees remain fundamentally the same. In Enterprise Management Services Ltd v Connect-Up Ltd and the Claimants, a company entered into a framework agreement with the Council which gave them preferred bidder status amongst certain schools. The result was that the Company ended up providing services to the local schools in the area. The contract came to an end and another company was awarded the contract. The crucial difference being that this contact excluded service cover in relation to a matter which had accounted for 15% of the work carried out by the original company. This company also lost 40% of the schools which the original company had provided services to. The EAT held that there were significant differences between the activities and so there was no transfer under TUPE.

What should employers do?
Businesses should be aware that TUPE may not apply where any service provided after transfer is fundamentally different from the one provided before transfer. If in doubt, specific legal advice should be sought.

11. TUPE

The Court of Appeal has held that a particular transfer does not need to be in contemplation at the time that a dismissal is effected in order for the dismissal to be caught by  TUPE.

What does this mean?
Dismissal of staff by an administrator in order to achieve a sale of a company at a future date is sufficient for TUPE to apply and such dismissals will be automatically unfair as they will be for a reason connected with the transfer.

What should employers do?
Businesses who are considering purchasing another business from an administrator should take specific legal advice as to their liabilities under TUPE and consider what indemnities to seek.

12. Employment Tribunal Awards Increase

From 1 February 2012 the limits for employment tribunal awards will increase. The maximum compensatory award for unfair dismissal will rise to £72,300. The maximum basic award for unfair dismissal will increase to £12,900 and the maximum week’s pay for basic award and redundancy pay purposes will rise to £430.

For further information on this article, please contact Pitmans Employment team.

Mark Symons
Partner, Head of Employment
T: +44 (0)118 957 0340
E: msymons@pitmans.com

1. Amendments to the Agency Workers Regulations

The Agency Workers Regulations 2010, which are due to come into force on 1 October, have been amended by the Agency Workers (Amendment) Regulations 2011.

The amendments correct a number of drafting errors by widening the definition of an ‘agency worker’; changing the circumstances in which an agency worker will not be entitled to be paid the same as other staff recruited directly by a hirer; and by changing the circumstances in which an agency will be liable for any failure on the part of a hirer to comply with their obligation to provide the same basic working and employment conditions to agency workers as they do to the staff they recruit directly.

2. Employed or Self-Employed?

The Supreme Court has held that when deciding whether a person is employed or self-employed, the terms of any written agreement can be disregarded if they do not reflect what the parties have really agreed. 

What does this mean?
Employers who try to circumvent employment law will not be able to rely on written contracts which state that their workers are self-employed if such contracts do not reflect the reality of the situation. This is the case even if Revenue and Customs have already agreed that such workers are ‘self-employed’.

What should employers do?
There are some basic questions, the answers to which will ‘indicate’ whether or not a worker is employed or self-employed but this method is not conclusive. Therefore, businesses who are in doubt as to the status of their workers should take legal advice.

3. The National Minimum Wage

The Employment Appeals Tribunal has held that when an employee is required to sleep on their employer’s premises, the time spent sleeping does not count as ‘work’ for the purpose of the National Minimum Wage Act 1998.

4. Equal pay

The Court of Appeal has held that in a claim for equal pay an employee is entitled to receive equal terms.
 
What does this mean?
When deciding an equal pay claim the Employment Tribunal will compare each individual term of the employment contracts which relates to remuneration. The fact that a female employee may be paid more than a male comparator overall, when all elements are totalled, is not relevant.

What should employers do?
Employers should ensure that female and male employees receive comparable pay in terms of basic and overtime pay unless there is a genuine material reason for a difference.

5. Religious discrimination

High profile cases relating to the religious discrimination of Christian workers are heading towards the European Court of Human Rights. The cases relate to i) the wearing of a cross on a necklace while at work, ii) the insistence that a Christian employee officiate at civil partnerships notwithstanding her wishing not to do so on religious grounds, and iii) the dismissal of a Christian relationship counsellor for refusing, on religious grounds, to provide help and counselling to same-sex couples.

What should employers do?
Rulings already made by the UK and European courts in relation to religious discrimination of Christians have created a body of contradictory and confusing case law. The Equality & Human Rights Commission (EHRC) submits a report in reference to these cases this month, but until the law in this area is clarified there is little that employers can do other than ‘play safe’ and seek legal advice before making decisions that may upset staff with religious beliefs.

6. Dress codes

In the context of sex discrimination, the law relating to dress codes is well established in general terms. Where staff are required to wear uniforms it is allowable for an employer to insist that male and female staff wear different uniforms.

There have been recent reports in the news that a sales assistant has been effectively forced to leave her job because she refused to abide by a dress code that required all female shop assistants to wear make-up. It is not yet known whether she will bring a tribunal claim, but if she does, the decision of the tribunal is likely to be of interest to many, particularly employers in the retail and hospitality sectors.

What should employers do?
Employers should ensure that when setting dress codes they take into account sex discrimination law. Employers should also bear in mind that other forms of discrimination may arise, for example on grounds of religion, race or transgender. Discrimination may also arise by reason of age where an employee is required to dress inappropriately or by reason of disability.

7. Preventing harassment in the workplace

The Employment Appeals Tribunal has held that an employer who seeks to rely on the defence that it took reasonable steps to prevent the sexual harassment of one of its employees by another employee will only succeed if it can demonstrate that it took reasonable steps to prevent such conduct prior to the incident complained of.

What should employers do?
Employers should take reasonable steps to prevent harassment in the workplace.  This may be by ensuring that clear written policies relating to sexual discrimination and harassment are in place, by providing staff with training in these areas and by promoting a culture of compliance with such policies.

Simply taking steps after the event to prevent the recurrence of harassment is not sufficient.

8. Termination date in the case of summary dismissal during a notice period

The Employment Appeals Tribunal has held that where an employee is summarily dismissed (with immediate effect) during their notice period, the effective date of termination is brought forward from the date on which the notice is due to expire to the date on which the employee is summarily dismissed.

What does this mean?
Summarily dismissing an employee who is serving a notice period will in some cases prevent an employee from accruing one year’s service, which is a prerequisite for an unfair dismissal claim. However, summary dismissal in such circumstances may be viewed as victimisation and thereby give rise to a claim of ‘automatic’ unfair dismissal for which no minimum length of service is required.

What should employers do?
Employers should always take specific legal advice before dismissing an employee.

For more information on this article, please contact Pitmans Employment team.

Angela Shields
Director
T: +44 (0)118 957 0450
E: ashields@pitmans.com

Mark Symons
Partner
T: +44 (0)118 957 0340
E: msymons@pitmans.com

At Pitmans we strive to keep you abreast of the latest developments in Immigration law that affect your business. In this update, Richard Devall and Jamie Lynch consider:

• Tier 1: The (General) category closes as the UK opens its doors to (Exceptional talent)

• Tier 2: Cap placed on (General) category whilst (Intra-company transfer) category undergoes a makeover

• Settlement: Government commences consultation on limiting individuals’ right to remain in the UK

Changes to Tier 1

Tier 1 of the points-based system is for high-value migrants, and currently contains 5 subcategories:

• (Exceptional talent)
• (Entrepreneur)
• (Investor)
• (Post-study work)
• (General)

The Tier 1 (General) category allowed highly skilled migrants to look for work or self-employment opportunities in the UK. Successful applicants under Tier 1 (General) were entitled to seek employment in the UK without a sponsor, and could take up self-employment and business opportunities here. However, as part of its drive to reduce new migration, the Government has now shut down this route to applicants who are outside the UK, and to individuals who are already within the UK under most other immigration categories.

Where one door opens another (albeit rather more limited) door opens. On 9 August 2011 the Tier 1 (Exceptional talent) category went operational allowing migrants who are internationally recognised as world-leading or potentially world-leading talent in the fields of science and the arts to ply their trade in the UK. Not satisfied with setting the bar at the level of “world-leading”, the Government have signalled their intention to further curtail the scope of this category by limiting the number of applications that can be made.

To police this limitation, every initial application must include an endorsement from a ‘designated competent body’; the Royal Society, the Arts Council of England, the British Academy and the Royal Academy of Engineering. There will be a limit of 1,000 endorsements between 9 August 2011 and 5 April 2012.

Changes to Tier 2

Tier 2 of the points-based system is intended to be utilised by skilled workers who have a job offer from an employer who is willing to sponsor them. Tier 2 comprises four categories:

• (General)
• (Intra-company transfer)
• (Minister of religion)
• (Sportsperson)

Effective from 6 April 2011, there will be a new immigration cap limiting entry clearances issued to Tier 2 (General) migrants.  The cap will be implemented by restricting the number of Certificates of Sponsorship that are issued to 20,700 in the year from 6 April 2011 to 5 April 2012. The cap does not apply to migrants earning £150,000 or more, or to those who are applying under the Tier 2 (General) category from within the UK.

The Tier 2 (Intra-company transfer) category allows skilled workers to move from an overseas branch of their employer to a UK-based office. There is currently no cap in place to restrict the amount of Certificates of Sponsorship that are issued under this category. 

Recent changes mean that the Tier 2 (Intra-company transfer) is further broken down into the following brackets:

• Short-term staff
• Long-term staff
• Skills transfer
• Graduate trainee

Those entering the UK as short-term staff may be granted permission to stay for a maximum of 12 months following which they will be expected to return home. Such individuals will not be able to apply to re-enter the UK under Tier 2 (Intra-company transfer) until a further 12 months have elapsed from the expiry of their previous leave to remain.

Long-term staff may be granted an initial period of stay of up to 3 years and 1 month. This period can be extended up to a maximum of 5 years, after which the migrant will be required to leave the UK. Again, once a long-term staff migrant’s leave to remain has expired, they will not be able to re-apply in the Tier 2 (Intra-company transfer) category for at least 12 months.

Business and individuals need to be aware that since 6 April 2010 it has not been possible for migrants entering the UK under Tier 2 (Intra-company transfer) to qualify for settlement (otherwise known as indefinite leave to remain).

Changes to Settlement

Under proposals announced by the Government in June 2011, the automatic right for migrants coming to work in the UK on a temporary basis to claim settlement will cease. Damian Green, the Immigration Minister, explained that the proposals were: ‘aimed at breaking the link between temporary and permanent migration.’ Mr Green added: ‘a small number of exceptional migrants will be able to stay permanently but for the majority, coming here to work will not lead automatically to settlement in the UK.’

Under the present settlement regime, many workers are allowed to apply to stay here permanently. In 2010, 84,000 people who entered the UK for employment were granted settlement. This compares to less than 10,000 who qualified for employment related settlement in 1997. The Government believes that their proposed changes are necessary to bring immigration down to “sustainable” levels.

The key proposals under consideration during the consultation period are as follows:

• re-branding Tier 2 as temporary, ending the assumption that settlement will be available for those who enter on this route;
• allowing certain categories of Tier 2 migrant, for example those earning over £150,000 or occupations of a specific economic or social value to the UK, to retain an automatic route to settlement;
• creating a new category into which, after three years in the UK, the most exceptional Tier 2 migrants may switch and go on to apply for settlement;
• allowing Tier 2 migrants who do not switch into a settlement route to stay for a maximum of five years with the expectation that they and any dependants will leave at the end of that time;
• introducing an English language requirement for adult dependants of Tier 2 migrants applying to switch into a route to settlement;
• restricting the maximum period of leave for Tier 5 Temporary Workers to 12 months; and
• closing or reforming routes for overseas domestic workers.

The Government has publicly committed itself to reforming all routes of entry to the UK in order to bring immigration levels under control and we anticipate that the changes outlined above are just the start of the impending overhaul of the immigration system. If you have any concerns about how these changes will affect your business then we are at hand to provide you with clear, practical guidance to ensure you can continue to achieve your business immigration goals.

Richard Devall
Partner
DD:  +44 (0) 118 957 0602
rdevall@pitmans.com

Jamie Lynch
Solicitor
DD:  +44 (0) 118 957 0506
jlynch@pitmans.com