Employment Law Titles ~ Summer 2007


Confusion over Internet Use in the Workplace
There are many ways in which a business can be damaged if it fails to protect its data or does not have policies in place to ensure correct use of the Internet at work. However, a recent survey has revealed that British businesses are failing to take seriously the need to protect themselves and their employees from potentially damaging Internet use in the office.
More than 30 per cent of those taking part said that they do not have an acceptable use policy (AUP) for accessing the Internet at work. Of those who do, 94 per cent said they had not read it recently. Only a small percentage of AUPs cover Instant Messaging and Web mail. Furthermore, ‘blogging’ hardly registers at all as a banned Internet activity. 
Says<<CONTACT DETAILS>>,“It is important to have an Internet use policy in place and to make sure that employees understand and adhere to it. The policy should be updated to reflect current trends and make clear the penalties for failing to abide by it. We can assist you in drawing up an AUP specific to the needs of your workplace.”
Partner Note
The survey was carried out by network content technology firm Chronicle Solutions.
Data Protection Act – End of Transitional Arrangements
The Data Protection Act 1998 gives individuals the right to know what information is held about them. It provides a framework to ensure that personal data is processed properly.
Personal data is information which:
  • is about a living person and affects that person’s privacy in the sense that the information has that person as its focus or is otherwise biographical in nature; and
  • identifies a person, whether by itself or together with other information in the organisation’s possession or likely to come into its possession.
The Act applies not only to information held on computer but also to manual information, provided the paper data is organised into a ‘relevant filing system’. The latter is defined as information which is structured either by reference to the individual or to criteria relating to individuals and which is held in such a way that specific information relating to a particular individual is readily accessible.
When the Data Protection Act came into force in March 2000, a number of transitional relief arrangements were included to give data controllers time to ensure that the way they processed personal information fully complied with the Act.
One such arrangement was that between 1 March 2000 and 23 October 2001, data which was recorded manually was exempt, except for health, education or public records. A second transitional relief arrangement applies to manually recorded data created prior to 24 October 1998. This is still not bound by most of the requirements of the first five principles of the Act (see http://www.ico.gov.uk/Home/what_we_cover/data_protection/the_basics.aspx)
and individuals do not currently have a general right to go to court to correct inaccurate personal information about them if this predates 24 October 1998. However, this exemption expires at midnight on 23 October 2007.
Whether or not this change in the law will affect your business depends on the nature of the paper records you hold which predate 24 October 1998 and how these have been filed and handled.
Decisions of the courts have been somewhat inconsistent regarding exactly what constitutes ‘processing’ for the purposes of the Act and it is wise to seek legal advice if you are in any doubt.
For individual advice on compliance with data protection issues, contact <<CONTACT DETAILS>>.
For general guidance on responsibilities under the Data Protection Act and how to satisfy requests for personal data, see
Disabled Employees and Sick Pay – Update
In an important judgment in a case concerning the application of sick pay policies to disabled employees (O’Hanlon v HM Revenue and Customs), the Court of Appeal has held that a sick pay policy that did not provide unlimited full pay for a disabled employee who was absent from work for long periods was not discriminatory under the Disability Discrimination Act 1995 (DDA).
Mrs O’Hanlon had been employed by HM Revenue and Customs (HMRC) since 1985. Since 1988 she had suffered from clinical depression and it was accepted that this was a disability within the meaning of the DDA. From 2001 onwards she began to take long periods of absence from work. In the four years prior to 15 October 2002 she had a total absence of 365 days of sickness of which 320 days related to her disability.
HMRC allowed all employees six months’ full pay if they were absent from work on health grounds, followed by six months on half pay, subject normally to an overriding maximum of 12 months’ paid leave in any period of four years. After that, employees were paid the equivalent of their pension rate of pay or half pay, whichever was less.
Mrs O’Hanlon claimed in the Employment Tribunal (ET) that she was substantially disadvantaged by these rules and that the failure to pay her full pay during her absence was a failure to make a reasonable adjustment to counter that disadvantage. She also claimed that she had been the subject of unjustified disability-related discrimination. Because she was not receiving full pay she was experiencing financial hardship which placed her under additional pressure, which in turn worsened her depression.
The ET held that although the effect of the sick pay rules was to subject Mrs O’Hanlon to a substantial disadvantage within the meaning of section 4A(1) of the DDA, the adjustment she sought was not a reasonable one. The ET also found that there was no disability-related discrimination, but even if there was, it was justified.
The Employment Appeal Tribunal (EAT) found that it would be rare to find a case where the duty to make reasonable adjustments would entail paying a disabled employee who is absent from work a higher rate of sick pay than would be payable to a non-disabled absentee. This would amount to positive discrimination in favour of the disabled employee rather than prevention of discrimination against them. The DDA is intended to recognise the dignity of disabled people and to require modifications to enable them to play a full part in the world of work, not to treat them as ‘objects of charity’, which could in fact act as a positive disincentive to return to work.
In the EAT’s view, although the ET had erred in law in concluding that there was no disability discrimination when reducing the pay of someone absent from work on account of their disability, it was entitled to find that any such discrimination was justified if the normal rule in that place of employment is to reduce an employee’s pay if he or she is absent from work. There had not therefore been a breach of the DDA.
The Court of Appeal judged that the EAT was right to dismiss Mrs O’Hanlon’s appeal. In its view, it would be wholly invidious for an employer to have to decide whether to increase payments to sick employees by assessing the financial hardship suffered by the employee or the stress resulting from lack of money – stress which no doubt would be equally felt by a non-disabled person absent for a similar period.
Employers will not be guilty of unlawful discrimination for applying their standard sick pay policy to disabled employees who are absent on account of their disability. For advice on all discrimination issues, please contact <<CONTACT DETAILS>>.
Discrimination on the Grounds of Religion or Belief
In December 2003, legislation was introduced to prohibit direct discrimination, indirect discrimination, victimisation and harassment in the workplace on the grounds of religion or belief. The specific wording of the Employment Equality (Religion or Belief) Regulations 2003 was that employees were protected from discrimination by reason of any ‘religion, religious belief or similar philosophical belief’. However, the Regulations did not define these terms, so exactly what was meant – particularly by the words ‘similar philosophical belief’ – was open to doubt.
In a case brought under the Regulations in 2005 (Baggs v Fudge), Mr Baggs claimed that he had suffered direct discrimination because he was not considered for the job of practice manager at a medical practice because he was an active member of the British National Party (BNP). He argued that fascism was a ‘similar philosophical belief’. However, the Employment Tribunal (ET) dismissed his claim as it did not consider that membership of the BNP qualified as a belief for the purposes of the Regulations. Although the BNP restricts its membership on ethnic grounds, members are not required to hold particular religious or philosophical beliefs.
Following debates in Parliament during the progress of the Equality Act 2006, section 77 of the Act makes changes to the wording of the Employment Equality (Religion or Belief) Regulations. These came into effect on 30 April 2007. The word ‘similar’ has been removed so that the Regulations now cover ‘any religion, religious or philosophical belief’.
In addition, the revised Regulations make it clear that a lack of religion or belief is also covered and changes have been made to protect employees from discrimination that arises because of the religion or belief of someone with whom they associate, such as a spouse or partner.
Quite where this leaves us remains to be seen. However, removing the need for claimants to prove that a philosophical belief they hold is similar in nature to a religious belief would seem to extend protection under the Regulations to those who hold a wide range of beliefs. What evidence a claimant will have to provide of his or her adherence to a particular philosophical belief and whether the belief is ‘philosophical’ is clearly going to produce a great deal of argument and the courts will have to decide on the facts of individual cases as they arise.
Contact <<CONTACT DETAILS>> for advice on any aspect of discrimination law.
Drug Policy – Recognising the Signs and What to Do
Research by Medscreen, based on drug testing carried out over the last ten years across a variety of professions, reveals that there has been a 3,000 per cent increase in the number of workers testing positive for cocaine. More than five per cent of workers tested are now failing drug tests.
Any form of substance abuse amongst staff can be costly for a business, resulting in a decrease in productivity and increased absenteeism, as well as increasing the likelihood of accidents and injuries. Failing to identify and deal with substance abuse poses an unnecessary risk for businesses.
The Law
The Misuse of Drugs Act 1971 makes it an offence for any person to permit the production, supply or use of controlled drugs or substances on their premises, unless they have been prescribed by a doctor.
Employers also have a general duty under health and safety legislation to ensure, as far as is reasonably practicable, the health and safety and welfare at work of their employees and to make sure that no one else is put at risk as a result of the work activities of an employee.
Under the Management of Health and Safety at Work Regulations employers have a duty to assess the risks to the health and safety of their employees. If you knowingly allow an employee to carry on working whilst under the influence of drugs and this puts others at risk, you could be prosecuted.
Health and safety law applies to driving in connection with work just as it does to other work activities and the risks must be managed accordingly. Drivers must not be under the influence of drugs while driving, attempting to drive or when they are in charge of a vehicle.
What to Look Out For
Possible signs of drug misuse include:
  • impaired performance such as lack of concentration, a tendency to become confused or poor judgement;
  • sudden mood changes and unpredictable behaviour;
  • poor time-keeping;
  • unusual irritability and deteriorating relationships with others;
  • lower personal standards – self-neglect;
  • increased time off work; and
  • dishonesty and theft.
There may, of course, be other reasons for such behaviour patterns but it is sensible to consider the possibility that misuse of drugs could be the cause.
What to Do
Even if you are confident that your business does not currently have a problem, drug misuse that affects the workplace is a growing threat. It is advisable to have an agreed, written policy setting out the company’s position.
Employees should be made aware of the policy and know that it applies to everyone in the company. It should form part of your overall health and safety policy. Make sure you consult with employees and with safety representatives.
The policy should include a definition of drug misuse, have clearly stated aims, name the persons responsible for carrying out the policy and give clear guidelines as to what employees must do to comply with the rules.
If an employee suffers from drug addiction, you should support them, not punish them. Offer them counselling and encourage them to seek voluntary help. Addiction could be viewed as an illness in an unfair dismissal case so disciplinary procedures may not be appropriate. The policy should contain a statement assuring employees that problems will be dealt with in confidence, subject to the provisions of the law. It should, however, be made clear that a breach of the law (for example the possession of or dealing in illegal drugs at work) will be reported to the police immediately. Make clear the circumstances in which disciplinary action will be taken.
It is important to train key staff on the signs of drug misuse and how to handle the situation sensitively.
Review your policy regularly and check that it is widely understood. If you have a staff handbook, it should contain details of the policy. Make awareness of the policy a part of the induction programme for new employees.
Where it is justified, some employers screen employees for illegal substances as part of their drug policy, particularly in safety critical industries. With the widespread advance in non-intrusive methods of testing, this is likely to become more common. However, this is a very sensitive area because of the legal issues involved and we would recommend you take advice to ensure there is no breach of your employees’ rights. Also, the results of any drug tests must be handled in accordance with the Data Protection Act 1998.
Says <<CONTACT DETAILS>>, “Introducing a drugs policy will constitute a variation of your employees’ contracts of employment so changes should be discussed with them in advance. If you would like advice on this or require assistance drawing up a policy tailored to the needs of your company, we can help.”
Employee or Self-Employed – Mutuality of Obligation
When deciding whether a worker is an employee or a self-employed person, it is necessary to examine the exact nature of the working relationship. Two important factors in deciding whether an arrangement is a contract of service or a contract for the services of a self-employed person are whether there is ‘mutuality of obligation’ – i.e. whether the work provider is obliged to provide work and whether there is a corresponding obligation on the worker to accept and carry out the work – and whether the work provider has the right to exercise a sufficient degree of control over the worker to make the relationship one of ‘master and servant’.
In the case of Parade Park Hotel v HM Revenue & Customs (HMRC), HMRC were of the view that Paul May was an employee of the proprietors of the hotel and claimed income tax and NI Contributions for the period in question. The Hotel and Mr May appealed against this decision to the Special Commissioner of Taxes.
Mr May first worked at the Parade Park Hotel when he was one of three self-employed painters and decorators hired by a building firm to work on an extension. Before the work was finished, the building firm closed down and Mr May and another man were asked to stay on until the work was complete. Mr May was subsequently offered further decorating work at the hotel and general maintenance work. At first he quoted a price for the completion of each task but was later paid at an agreed daily rate. There was no written contract governing the arrangements however. At first Mr May worked for five days a week, but later this became three days and sometimes there was no work. During this time he did work for other clients.
Mr May provided his own tools and clothes, chose which jobs he wanted to do and could decide which days he would work. The proprietor could not make him do jobs that he did not wish to do. At first Mr May was reliable but as time went on his choice of hours and whether or not he turned up when he said he would were often influenced by his acknowledged problem with alcohol.
HMRC argued that there was the necessary mutuality of obligation between Mr May and the Hotel for a contract of service to exist. He did not have the right to substitute anyone else to do the work and in reality there was an expectation that work would be given to him as evidenced by the length of time he had worked there and the regularity of the payments made to him. Furthermore, the issue was not whether mutuality of obligation existed from one job to the next but whether it existed during each individual contract. In HMRC’s view, to argue that there was no mutuality of obligation if the work provider was not obliged to offer future work and the worker was not obliged to accept it was ‘tantamount to saying that a short-term engagement could not be a contract of service’. HMRC also argued that the proprietor of the hotel did exercise control over Mr May’s work, dictating what he did, how he did it and when and where he did it.
The Special Commissioner rejected this argument. The regular pattern of payments made to Mr May did not in itself amount to evidence that he was an employee. Whilst there can be mutuality of obligation in respect of separate engagements, this was no greater in respect of each separate day on which Mr May actually worked than it was over the whole period of the working relationship. In these somewhat unusual circumstances, Mr May was not under an obligation to carry out work for the hotel but he could choose to do so. The hotel was not under an obligation to offer him work but could choose to do so. As regards control over his work, the proprietor had to accept Mr May’s refusal to do particular tasks and had no right of control over the way in which he did his work. There was therefore insufficient control for the engagement between the two parties to constitute a contract of service.
Contact <<CONTACT DETAILS>> for advice on any matter relating to contracts of employment.
Expired Disciplinary Warnings
A further case has illustrated that employers cannot place reliance on a disciplinary warning that has expired, either in disciplinary proceedings or to justify dismissal.
In Airbus UK Ltd. v Webb, the Employment Appeal Tribunal (EAT) has ruled that a Tribunal is ‘obliged, and not merely entitled, to ignore expired warnings’.
Mr Webb worked for Airbus as an aircraft fitter. In July 2004 he was dismissed for gross misconduct after he was found washing his car when he should have been working. He appealed against the decision to dismiss him and the disciplinary action was reduced to the lesser sanction of a final written warning which would remain on his record for 12 months.
Three weeks after the written warning expired, Mr Webb and four other employees were caught in the locker area, watching television, outside their normal break time. All five were found guilty of gross misconduct. Mr Webb was dismissed but the other four employees received final warnings because they had no prior disciplinary record.
Mr Webb claimed that he had been unfairly dismissed. The Employment Tribunal (ET) took into account the decision of the Scottish Court of Session in Diosynth Ltd. v Thomson in which the Court had ruled that the employee was entitled to assume that a similar warning meant what it said and that it would cease to have any effect after one year. The ET held that as Mr Webb would not have been dismissed had he not been given a previous warning, it followed that his dismissal was unfair.
Airbus appealed against the ET’s decision and lost. However, the EAT confessed to having some difficulty in deciding whether or not the ET is obliged to ignore past warnings that have expired, but judged on balance that it is. The EAT went on to suggest that although the ACAS Code of Practice on Disciplinary and Grievance Procedures suggests that final warnings should normally expire after 12 months, this need not always be the case. A longer time limit might be appropriate if the nature of the misconduct justifies it.
It is important to ensure that the time limits for disciplinary warnings fit the particular circumstances and that your policies and procedures allow you to issue an extended warning where this is deemed necessary. Contact <<CONTACT DETAILS>> for advice.
Extra Annual Holidays
The Government has published the Working Time (Amendment) Regulations 2007, which will increase the minimum annual holiday entitlement from 20 days a year to 28 days. This will be accomplished in two stages, being increased to 24 days from October 2007 and to 28 days from April 2009, not October 2008 as was originally planned.
As a transitional measure, payment in lieu of the additional holiday entitlement (the additional 8 days) will be allowed to continue until 1 April 2009. This is a temporary measure intended to help employers to implement the new arrangements.
In order to provide an incentive for early compliance with the Regulations, employers that already meet the full requirements of the Regulations as at 1 October 2007 (giving the equivalent of 28 days’ holiday, without payment in lieu and where any carryover of leave is only to the following year) will be regarded as being outside of the Regulations, as long as they continue to meet those requirements.
It is estimated that the measure will benefit up 3.5 million women and 2.5 million men. Part-time workers will be entitled to the extra holidays pro-rata.
The Working Time (Amendment) Regulations 2007 can be found at http://www.opsi.gov.uk/si/si2007/draft/20077376.htm.
Government to Amend Sex Discrimination Laws
Following a successful challenge in the High Court, in which the Equal Opportunities Commission (EOC) argued that the UK’s sex discrimination laws do not fully implement the EU Equal Treatment Directive with regard to pregnancy discrimination and sexual harassment, the Government has said that it will change the law to clarify the rights and responsibilities of both employers and employees in this area.
The EOC claimed that the definition of harassment in the Employment Equality (Sex Discrimination) Regulations 2005 is too narrow and gives no apparent protection to women workers who are harassed by customers or clients during the course of their work. Mr Justice Burton held that women are entitled to protection from unwanted conduct relating to their sex and an employer is liable for harassment if he or she knows of its continuing existence but fails to take steps to prevent it. According to the EOC, this is a particular problem in the hotel and catering industry.
The Court also held that women must be protected by legislation if they are denied certain benefits during maternity leave, such as being consulted about organisational changes.
Some employers continue to flout sex discrimination legislation, particularly with regard to the treatment of pregnant employees. In a recent case, a woman was suspended from her job as financial manager of a bar after she told the owners that she was pregnant. Her employers said that if she kept the baby she was likely to lose her job. She returned to work after her suspension but resigned a few weeks later after she was subjected to a campaign of harassment and verbal abuse by her employers. The Employment Tribunal found that she had been constructively, wrongfully and unfairly dismissed and awarded her more than £8,000 in compensation.
The promised changes to the sex discrimination laws will have a particular impact on employers with employees in public facing roles. We can advise you to ensure you have effective policies and procedures in place to deal promptly with any instances of unwanted conduct relating to sex and behaviour which violates an employee’s dignity.
Prevention of Illegal Working – New Penalties
Following the recent split of the Home Office, which saw responsibility for prisons, probation and sentencing transferred to a new Justice Ministry, a new executive agency of the Home Office, the Border and Immigration Agency, has been created. It assumes the responsibilities of the Immigration and Nationality Directorate for managing immigration control in the UK. The Border and Immigration Agency has published a consultation on the implementation of new powers to prevent illegal migrant working in the UK.
The consultation document outlines the Government’s key strategy for preventing illegal working, which includes the introduction of biometric visas for non-European Economic Area foreign nationals. Under regulations made under the Immigration, Asylum and Nationality Act 2006, rogue employers face a prison sentence and/or an unlimited fine if they are found knowingly employing illegal workers. Civil penalties will also be levied on businesses which have been negligent in carrying out checks on workers. The level at which these fines will be set and how they will be imposed forms part of the consultation, which can be found at http://www.ind.homeoffice.gov.uk/6353/6356/17715/consultation
It is proposed that the new measures will take effect early in 2008.
For advice on any immigration matter, please contact <<CONTACT DETAILS>>.
Timetable for Introduction of Points Based System
The Government has announced that its new points based immigration scheme will be phased in from early 2008.  
The new system will consist of a five-tier framework. For each tier, applicants will need sufficient points to obtain entry or leave to remain in the UK. Points will be awarded to reflect aptitude, experience, age and also the level of need in any given market sector, the intention being to allow the UK to respond flexibly to changes in the labour market. All but the most highly skilled immigrants will require a sponsor (normally their employer) who will be responsible for ensuring that a migrant worker complies with the rules of their entry to the UK and returns home at the end of their stay.
The timetable for implementation is as follows:
  • Tier 1 of the system, which caters for highly skilled migrants such as scientists and entrepreneurs, will be launched at the beginning of 2008;
  • Tier 2, which will cover skilled workers with a job offer, and Tier 5, for youth mobility and temporary workers, will become operational in the third quarter of 2008; and
  • Tier 4, for students, will follow at the beginning of 2009.
The system of sponsorship by employers and educational institutions is also being introduced as part of the new system at the beginning of 2008.
The Government intends that low-skilled jobs should be filled by domestic workers from the expanded EU, wherever possible. A new Migration Advisory Committee will give advice on where in the economy there are labour shortages which can sensibly be filled by migration from outside the European Economic Area (EEA). If and when the Government agrees to establish a scheme for low skilled workers from outside the EEA to come to the UK, it will be set up under Tier 3 of the points based system. 
In Brief
Additional Paternity Leave Consultation
The Government has published a consultation paper on its proposals for the administration of the extension of Additional Paternity Leave and Pay.

Additional Paternity Leave and Pay will enable working fathers to take up to 26 weeks’ Additional Paternity Leave, some of which can be paid if the mother of the child has returned to work. This new provision will be available during the second six months of the child’s life.  
The consultation can be found at http://www.dti.gov.uk/consultations/page39405.html. The closing date for responses is 3 August 2007.
In Brief
EOC Guidance on Managing Pregnant Women and Parenthood
Following a two-year investigation into pregnancy discrimination, the Equal Opportunities Commission (EOC) has launched a web-based toolkit to assist employers in managing pregnancy, maternity and parenthood in the workplace. This gives guidance on the rights and responsibilities of employers and employees and contains practical advice and examples.
The toolkit is available at http://www.eoc.org.uk/default.aspx?page=19177.
In Brief
Revised ACAS Guides

The Advisory, Conciliation and Arbitration Service (ACAS) has updated its website guidance on annual leave and maternity leave.
The guidance on annual leave can be found at http://www.acas.org.uk/index.aspx?articleid=1109 and the guidance on maternity leave can be found at
Landmark Adoption Ruling
A recent case at the Employment Tribunal (ET) is a reminder to employers that women who are planning to adopt a child have similar rights as regards protection from unfavourable treatment as employees who are pregnant.
Anna Coulombeau joined Enterprise Rent-A-Car (UK) Ltd. in 2004. She was enthusiastic about her job, received excellent appraisal reports and was promoted to the position of manager. In autumn 2005, she started attending courses to prepare for adopting a child. Shortly after this, she was summoned to two disciplinary hearings and was sacked for gross misconduct. Her appeal to the company against this decision was turned down.
Ms Coulombeau brought a claim for unfair dismissal and sex discrimination. The ET heard that her manager was unhappy because she would be taking time off work for adoption leave. She had been dismissed for making minor mistakes whereas male colleagues had only been reprimanded for making the same errors. The ET held that Ms Coulombeau’s dismissal had been orchestrated and upheld her claims.
Adoption leave is available so that someone who adopts can take paid time off work to care for the child. An employee qualifies for adoption leave if they have worked for the employer for 26 continuous weeks. An employee who is entitled to adoption leave will also normally be entitled to statutory adoption pay for the first 39 weeks where the child was placed for adoption on or after 1 April 2007. Paternity leave and pay may be available to that person’s partner.
Further information can be found at http://www.dti.gov.uk/employment/workandfamilies/adoption-leave/page16608.html.
Monitoring of Employee’s Communications a Breach of Human Rights
A college employee has been awarded 3,000 Euros in damages plus legal costs after the European Court of Human Rights ruled (Copland v UK) that the monitoring of her telephone, email and Internet use was a breach of her right to a private life and correspondence under the European Convention on Human Rights (ECHR).
Lynette Copland started working for Carmarthenshire College in 1991. In 1995, she began working closely with the newly appointed Deputy Principal (DP).
In 1998, Ms Copland became aware that the DP had contacted another campus of the College to make enquiries about a visit she had made there with a male colleague. She also discovered that her telephone, email and Internet use were being monitored, at the DP’s instigation, and believed that he, or those acting on his behalf, had contacted people whom she had telephoned in order to identify who they were and what was the purpose of the call.
At this time, the College did not have a policy regarding the monitoring of electronic communications.
Ms Copland alleged that the monitoring activity occurred over a long period. She was the only employee being monitored and the extent of the activity amounted to an interference with her right to respect for private life and correspondence under article 8 of the ECHR. Her case was against the Government because it was directly responsible for the actions of the College as it is a publicly funded body.
The Government contended that the monitoring was justified. It said that it had only occurred over a short period of time and merely consisted of the analysis of automatically generated information to determine the level of private use of College facilities. It also argued that its action had a basis in domestic law as the College was authorised, as a statutory body, to do anything ‘necessary and expedient’ to provide further and higher education.
In examining the scope of ‘private life’, the Court ruled that, in accordance with case law, this covered personal telephone calls made from work. Logically, it therefore followed that personal emails and information derived from tracking Ms Copland’s personal Internet use would also be covered. As no warning had been given that the monitoring would take place, it was reasonable for her to expect that her personal communications would be private. Accordingly, the Court ruled that the collection and storage of personal information did amount to an interference with her right to respect for her private life and correspondence within the meaning or article 8 and rejected the Government’s claim that it had taken place ‘in accordance with the law’.
The Court went on to note that the Regulation of Investigatory Powers Act 2000 does set out provisions regulating the circumstances in which employers can monitor employee communications, but the Act was not in force at the relevant time.
Employers are advised to take care over any interference with regard to employees’ permitted private use of workplace communication systems. Employees should be notified if their communications are to be monitored and the employer must have a sound basis for doing so. Such monitoring must also comply with the principles of the Data Protection Act 1998.
Contact <<CONTACT DETAILS>> for advice on any aspect of workplace electronic communications policies.
National Minimum Wage – Fair Payment of Arrears
In the year 2005/06, the Government recovered over £3.2 million on behalf of over 25,000 workers who had been paid less than the minimum wage by their employers. Under the current system, unscrupulous employers are only penalised if they fail to comply with an enforcement notice issued by HM Revenue and Customs (HMRC). The worker is entitled to arrears based on the difference between the remuneration they received and the national minimum wage rate which applied at the time.
The Low Pay Commission has expressed its concern that even when arrears are paid to workers, they can still be worse off in real terms. The Government is keen to introduce a more effective penalty regime to deter non-compliance and has issued a consultation to this end. The options put forward are to:
  1. Make no change to the current system for reimbursing arrears; or
  2. Pay interest on any arrears; or
  3. Charge all arrears at the current national minimum wage rate; or
  4. Calculate arrears in the present way then apply an uplift payable by the employer.
The consultation closes on 8 August 2007 and can be found at http://www.dti.gov.uk/files/file39439.pdf.
The Government has announced the increases in the national minimum wage rates which will apply from October 2007.

The adult national minimum wage will rise from £5.35 to £5.52 an hour. The minimum rate for 18- to 21-year-olds will increase from £4.45 to £4.60 an hour and for 16- to 17-year-olds the rate will be £3.40 an hour instead of £3.30.

The next sector targeted for special attention by HMRC compliance units will be hotels, widening out next year to other areas of the hospitality industry.
National Minimum Wage – New Guidance on Accommodation Offset
Under national minimum wage legislation, the provision of accommodation by the employer is the only benefit in kind that can count towards a worker’s national minimum wage pay. The Department of Trade and Industry (DTI) has issued new guidance on the national minimum wage accommodation offset.
The accommodation offset is calculated at a rate of £4.15 per day (rising to £4.30 from 1 October 2007) for each day that the employer makes the accommodation available to the worker in a pay reference period, up to a maximum of £29.05 per week (£30.10 from 1 October 2007).
Where accommodation is provided free of charge, the notional value of the accommodation offset counts towards national minimum wage pay, so a worker’s contractual pay can be less than the minimum wage. Where the employer charges the worker for the accommodation, either by making a deduction from the worker’s pay or accepting a payment from the worker, the worker’s national minimum wage pay will only be affected if the employer charges more than the accommodation offset. Any amount charged which is over and above the level of the offset will reduce the worker’s pay for the purposes of the national minimum wage.
The accommodation offset provisions apply whenever the employer provides accommodation, regardless of whether the worker can choose whether or not to occupy it. One of the aims of the provisions is to ensure that employers do not avoid paying the national minimum wage by levying excess charges for any accommodation provided. In order to catch a wide variety of circumstances, the employer is considered as providing the accommodation in all the following situations, whether or not it is let by the employer or a third party, where:
  • the accommodation is provided in connection with the worker’s contract of employment; or
  • a worker’s continued employment is dependent upon occupying particular accommodation; or
  • a worker’s occupation of accommodation is dependent upon remaining in a particular job.
Where the provision of accommodation by the employer and the worker’s employment are not dependent upon each other, the employer may be considered to be providing accommodation where:
  • the employer is the worker’s landlord either because he owns the property or because he is subletting the property; or
  • the employer and the landlord are part of the same group of companies or are companies trading in association; or
  • the employer’s and the landlord’s businesses have the same owner or have business partners, directors or shareholders in common; or
  • the employer or an owner, business partner, shareholder or director of the employer’s business receives payment and/or some other benefit from the third party acting as landlord to the workers.
It should be noted that different arrangements apply to agricultural workers.
The DTI guidance includes examples of different wage calculations, depending on a variety of scenarios, explains how to treat absences from work and contains a section on Frequently Asked Questions. It can be downloaded at http://www.dti.gov.uk/files/file38769.pdf.
Contact <<CONTACT DETAILS>> if you would like advice to ensure your pay arrangements do not breach the national minimum wage legislation.
Non-Competition Clause Upheld
Non-competition clauses in employment contracts, which seek to prevent ex-employees from competing with their former employers for a specified period, have traditionally been a difficult area of law. The courts have struck down many such clauses in the past. However, a properly worded and well considered non-competition clause can prove effective, as an insurance broker has found.
Huw Thomas was the managing director of an insurance brokerage, Farr plc. He left his former firm and brought a claim for constructive dismissal. He also requested that the non-competition clause in his contract of employment be ruled unenforceable because it was an unreasonable restraint of trade. The High Court disagreed, holding that the clause was enforceable. Mr Thomas appealed against this decision.
The Court of Appeal held that Mr Thomas’s role was such that he would have come into possession of information which was capable of being protected by the clause (i.e. ‘trade secrets’). The fact that it was extremely difficult to ascertain precisely what information he had acquired in his former employment that might be properly regarded as confidential did not invalidate the clause.
Where an employee is in possession of critical business information, which you are entitled to require to be kept confidential after he or she has ceased to work for you, putting a non-competition clause in the contract of employment has much to commend it.
Contact <<CONTACT DETAILS>> if you would like advice on drafting a non-competition clause specific to the needs of your business.
Overworked Driver Wins Damages from Employer
A kitchen fitter, who was paralysed in an accident on the M1 after he lost control of the van he was driving, has been awarded substantial damages against his employer.
Michael Eyres was employed by a Bradford based company, Atkinsons Kitchens and Bedrooms Ltd. He was often required to work long hours.
On the day of the accident, Mr Eyres arrived at the factory at 3.30 am. At 4 am he and managing director Craig Atkinson set off to fit a kitchen in Wiltshire. Mr Atkinson drove but Mr Eyres did not sleep during the journey. The two men then proceeded to Devon to complete another job. It was 7 pm before they commenced the drive back to Bradford. Mr Eyres was content to drive even though he had not had any sleep all day and told Mr Atkinson that he was ‘knackered’.
On the journey home, Mr Eyres had conversations on his mobile phone and also made and received several text messages, although there was no clear evidence of such activity in the 20 minutes or so prior to the accident at 10.15 pm. There was, however, evidence that he had been driving at an average speed of 83.5 mph.
Mr Eyres had been awake continuously for around 19 hours when the accident happened. He braked suddenly and lost control of the van, which rolled twice before coming to a halt on the central reservation. He was not wearing a seatbelt and was thrown out of the vehicle and broke his back.
A witness saw no obvious signs from his driving that he had actually fallen asleep although expert evidence suggested that his lack of rest could have induced a momentary episode of ‘micro sleep’. Mr Eyres claimed to have no clear memory of events leading up to the accident.
Mr Eyres claimed that his employer was liable in negligence and/or for statutory breach of duty because it permitted him to drive after working excessively long hours without a proper break.
The issue before the High Court was whether the accident was caused by tiredness and falling asleep or by use of the mobile phone. The judge concluded that mobile phone use was the more probable explanation. The Court of Appeal overturned this decision however, finding that Mr Eyres had shown, on a balance of probabilities, that tiredness was the cause of the accident.
The damages awarded were reduced by a third on account of contributory negligence because Mr Eyres was not wearing his seatbelt at the time of the accident and must have realised that he was at risk of falling asleep.
Employers who insist on employees working long hours without a break may well put them at increased risk and could find themselves held liable for any resulting stress or injury. In addition, it is now an offence to cause or permit a driver to use a hand-held phone while driving so their use whilst driving on company business should be banned and any breach of this rule made a disciplinary offence.
If you would like advice on how health and safety law affects your business, please contact <<CONTACT DETAILS>>.
Religious Discrimination – Support Teacher Loses Appeal
Under the Employment Equality (Religion or Belief) Regulations 2003, direct discrimination occurs when one person is treated less favourably than another, in a comparable situation, because of his or her religious beliefs. Indirect discrimination occurs when a ‘provision, criterion or practice’ is applied which puts those who hold a particular religious belief at a disadvantage compared with other people and where this cannot be shown to be a proportionate means of achieving a legitimate aim.
The Employment Appeal Tribunal (EAT) has ruled (Azmi v Kirklees Metropolitan Borough Council) that a school’s decision to suspend a Muslim support teacher, because she refused to comply with an instruction to remove her veil when working with children in the presence of a male teacher, was not direct discrimination on the grounds of religion or belief. A support teacher not of the Muslim faith who obscured her face for whatever reason and who refused to remove the covering would also have been suspended as the covering meant that the children could not read facial expressions and was a barrier to learning. Nor was there evidence of any motivation to discriminate on the grounds of religion or belief.
With regard to the support teacher’s claim of indirect discrimination, the EAT upheld the view of the Employment Tribunal (ET) that there was potentially indirect discrimination in this case but the Council, as the employer, had established that this was justified in the circumstances. Evidence was put before the ET from education experts who had observed her teaching. This pointed to the ‘stark difference’ between the support teacher’s performance when she was wearing the veil and when she was not. The adoption of the provision, criterion or practice in this case was therefore a proportionate means of achieving a legitimate aim.
It is important for employers to understand the requirements of an employee’s religion in order to ensure that employment policies and practices do not discriminate against or negatively impact on any individual member of staff when there is no justification for so doing. We can advise you on this and other issues such as company dress codes, working time, bereavement and company leave policies, to ensure that these comply with the law. Contact <<CONTACT DETAILS>> for advice.
Sex Discrimination – Unlawful Victimisation
Claims for equal pay under the 1970 Equal Pay Act (EPA) have been much in the news lately with many women who have previously been paid less than their male counterparts seeking awards for back pay from local authorities.
Under Section 4 of the Sex Discrimination Act 1975 (SDA), it is unlawful victimisation for an employer to treat a person less favourably because they have brought proceedings against them under the SDA or the EPA.
The House of Lords has ruled (St Helens Metropolitan Borough Council v Derbyshire & Ors) that intimidating letters sent to employees to persuade them to drop proceedings and to settle an equal pay claim can amount to unlawful victimisation.
The equal pay claims were brought against St Helens Council by 39 women on the catering staff in its school meals service. Originally, 510 female employees had brought claims but the majority settled out of court. The remaining 39 took their claim to the Employment Tribunal (ET) and won.
Shortly before the hearing, the Council sent two letters – one to all the catering staff and another just to the individuals pursuing the claim. The letters pointed out the cost to the Council of meeting the claim should it lose the case and implied that unless the women agreed to the settlement offer already accepted by the other female employees there would have to be redundancies and it was likely that the school meals service would have to be withdrawn from all pupils other than those entitled by law to free meals.
The claimants felt that the letters were putting them under pressure to settle the claim and were intimidating and calculated to turn other members of staff against them. They therefore brought a claim for unlawful victimisation contrary to the SDA.
The women won their claim. The ET found as a fact that the letters caused distress to at least some of them and were responsible for bad feeling towards them. The Employment Appeal Tribunal rejected an appeal by the Council. However, the Court of Appeal held that the mere fact that an employer's objective is to compromise the proceedings is not sufficient to make conduct in pursuit of that objective discriminatory. In its view, it was not unlawful victimisation to write pointing out the consequences of a successful action, provided the employer’s action was an ‘honest and reasonable’ response in order to protect its interests and provided the letter wasn’t sent until after the claim had formally commenced.
The House of Lords judged that the Council had subjected the women to a detriment because it had gone further than was reasonable when attempting to protect its interests in the ongoing litigation and had done so because the applicants had brought equal pay claims against the Council. In circumstances such as this, an employer’s conduct should be viewed from the standpoint of the employees. Employers must avoid doing anything to put undue pressure on an employee to drop a claim. The sort of indirect pressure found in this case is just as likely to deter an employee from enforcing a claim as is a direct threat.
Says <<CONTACT DETAILS>>, “In this case the Council could have negotiated with the women’s legal representatives and there was no need to send a letter to the catering staff who had already settled their claim. Employers seeking to reach a settlement with employees in discrimination claims should take care their communications cannot be perceived as an indirect threat. Any action taken must be reasonable and honest in the circumstances to protect legitimate litigation interests.”
The two letters sent by St Helens Metropolitan Borough Council can be found as an appendix at http://www.bailii.org/ew/cases/EWCA/Civ/2005/977.html.
The Employment Status of Agency Workers
The private recruitment industry has grown significantly in recent years and there are now an estimated one million temporaryand contract workers.
The exact employment status of an agency worker is important when it comes to determining his or her employment law rights. A person must be an employee – i.e. work under a contract of employment – to have the right not to be unfairly dismissed.
Questions often arise in cases where an agency worker has been dismissed as to whether they were self-employed, employed by the agency or whether the end-user is their employer. In each case, the Employment Tribunal (ET) has to examine the business reality of the arrangements between those involved.
In a case in 2004 (Brook Street Bureau (UK) Ltd. v Dacas), the ET found that neither the Council where Mrs Dacas worked as a cleaner nor the employment agency was Mrs Dacas’s employer. The Employment Appeal Tribunal (EAT) said that the conclusion that nobody was her employer was ‘simply not credible’. The Court of Appeal went on to suggest that in this case there was probably an implied contract between Mrs Dacas and the Council.
Subsequent judgments have cast doubt on this reasoning. In James v Greenwich Council, the EAT said that, in the absence of any contradictory evidence, the mere passage of time does not of itself establish any mutual undertaking of legal obligations between a worker and the end-user.
In a recent case before the EAT (Astbury v Gist Ltd.), HHJ Clark criticised the EAT’s comments in Brook Street Bureau (UK) Ltd. v Dacas.In his view, if Parliament had intended someone in Mrs Dacas’s position to enjoy ordinary unfair dismissal protection, it could have extended that protection to contract workers. It had not done so and to do so would require a change in the legislation.
In Craigie v London Borough of Haringey, in examining whether Mr Craigie, who had worked as a temporary Estates Services Officer for over a year before his services were dispensed with, had an implied contract of service with the Council, the EAT ruled that he was neither an employee of the Council nor of the employment agency, Aptus Personnel Support Staff Ltd., through which he worked. Mr Justice Bean said that “the state of the law regarding the status of long term agency workers is, in my view, far from satisfactory, but it will need legislation to change it.”
Getting a worker’s employment status wrong can prove costly. Contact <<CONTACT DETAILS>> if you would like advice on your temporary or permanent staff agreements.
The Equality Act (Sexual Orientation) Regulations
For some time now, discrimination on grounds of sexual orientation has been prohibited in relation to employment and vocational training. The Equality Act (Sexual Orientation) Regulations 2007, which came into force on 30 April 2007, now provide protection for individuals from discrimination on the grounds of sexual orientation in the provision of goods, facilities, services, education, the disposal and management of premises and the exercise of public functions.
Sexual orientation is defined as an individual’s sexual orientation towards people of the same sex, people of the opposite sex or people of both sexes. Protection therefore applies to everyone – lesbians, gay men, heterosexuals or bisexuals.
The Regulations prohibit direct and indirect discrimination and cover:
  • victimisation – less favourable treatment of an individual because they have complained of discrimination under the Regulations;
  • discriminatory advertisements – publishing an advertisement, or causing an advertisement to be published, which indicates an intention to discriminate unlawfully under the Regulations;
  • instructions to discriminate – instructing someone to discriminate or causing them to discriminate unlawfully under the Regulations, for example by offering a financial inducement;
  • discriminatory practices – adopting or maintaining a practice likely to result in unlawful discrimination under the Regulatio

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