Employment Law Titles ~ Summer 2009

ACAS Conciliated Settlements – Watch the Wording

 

When the settlement of an employment dispute between an employer and an employee is negotiated through the Advisory, Conciliation and Arbitration Service (ACAS), the terms of the settlement are formally recorded on a COT3 agreement form. The Employment Appeal Tribunal (EAT) has ruled that a COT3 agreement must contain precise language if its aim is to preclude claims arising from events that occur after it is entered into (McLean v TLC Marketing plc).

 

Ms McLean resigned from a senior management job with TLC Marketing (TLC) in May 2007 and brought Employment Tribunal (ET) proceedings alleging breaches of the Equal Pay Act 1970, unlawful sex discrimination and victimisation. In April 2008, the parties entered into a settlement with the assistance of ACAS. The terms of the COT3 agreement stated that, without any admission of liability, TLC would pay Ms McLean £28,000 and provide her with an open reference. Ms McLean agreed to accept the sum of money in full and final settlement of her ET claims against TLC and of ‘any other claim whatsoever arising out of or connected with her employment with the Respondents and its termination’.

 

However, TLC failed to pay the full amount and did not give Ms McLean the agreed reference. She went to court to recover the money due to her, after which this was paid and the reference provided.

 

Ms McLean then brought a further ET claim, alleging victimisation. She contended that she had been subjected to a detriment because TLC had failed to comply with the terms of the COT3 agreement, which she claimed was because she had brought proceedings against them under the Sex Discrimination Act 1975.

 

The ET held that the COT3 agreement removed its jurisdiction as it compromised all claims arising out of or connected with Ms McLean’s employment and its consequences.

 

Ms McLean appealed against this decision. Her argument was that the agreement she had entered into with TLC did not preclude future claims which were not contemplated by the parties at that time. It did not settle a fresh claim arising from events that took place after the agreement had been made. TLC, on the other hand, put great store on the inclusion in the agreement of the word ‘whatsoever’, which they contended indicated that the parties intended it to preclude all claims arising out of the events after as well as before the date of the agreement.

 

The EAT allowed the appeal. Whilst it is possible for a COT3 agreement to waive all claims, whether they are known about or not, language that makes it absolutely clear that this is the intention of the parties to the agreement would be required in order to achieve this result. In this case, the wording of the COT3 did not lend itself to such a construction. Ms McLean’s victimisation claim was therefore remitted to the ET for consideration on its merits.

 

Says <<CONTACT DETAILS>>, “If a COT3 agreement is intended to preclude any future claims, the language used must leave no room for doubt that this is what the parties intend. We can advise you on the wording of such agreements or on negotiating compromise agreements with employees.”

 

 

 

 

 

 

Age Discrimination and Selection for Redundancy – Update

 

In a case that will be of interest to employers considering making redundancies, the Court of Appeal has dismissed, by a two to one majority, Rolls Royce’s appeal against a decision of the High Court (Rolls Royce plc v Unite the Union).

 

Rolls Royce had contended that the length of service criterion in collective agreements relating to redundancy, entered into with the trade union, amounted to unlawful indirect age discrimination against younger employees under the Employment Equality (Age) Regulations 2006.

 

There were no issues of fact to be determined and the case was first heard in the High Court at the request of both parties. It concerned two collective agreements, regarding redeployment and redundancy, which provided for an ‘assessment matrix’ for use when selecting employees for redundancy. This was designed to enable the company and its employees to be able to restructure ‘flexibly and peaceably’. There were five measured criteria for which points were awarded, one of which was length of continuous service. Those with the fewest points overall would be selected for redundancy.

 

The Court of Appeal upheld the High Court’s decision that whilst the length of service criterion adopted did discriminate against younger employees, it could be objectively justified as a proportionate means of achieving a legitimate business aim – i.e. that if a redundancy exercise were necessary, it would be carried out ‘peaceably’ and in a way that was perceived as fair. The scheme was therefore covered by Regulation 3(1) of the Employment Equality (Age) Regulations. The Court was of the view that ‘the criterion of length of service respects the loyalty and experience of the older workforce and protects the older employees from being put onto the labour market at a time when they are particularly likely to find alternative employment hard to find’.

 

In addition, the Court found that giving points for long service as one part of a redundancy selection matrix conferred a benefit on the employee concerned as it might lead to the retention of employment which would otherwise be lost. As such, it was probable that this would be regarded as reasonably fulfilling a business need within Regulation 32(2), which simply requires the employer to justify the impact of an age related award made only to employees whose length of service exceeds five years.

 

Says <<CONTACT DETAILS>>, “The Court of Appeal’s dismissal of Rolls Royce’s appeal makes it clear that adopting a scheme where length of service is just one of a number of criteria used to arrive at a fair selection process is likely to enable the employer to defend an age discrimination claim. However, a scheme based solely on ‘last in, first out’ is unlikely to be justifiable. We can advise you on any redundancy issue.”

BERR – New Name, New Website

 

It doesn’t seem any time at all (June 2007 in fact) since most of what used to be called the Department of Trade and Industry merged with the Better Regulation Executive to become the Department for Business, Enterprise and Regulatory Reform (BERR). At the same time, the Regional Economic Performance Unit also transferred into BERR, from the Department for Communities & Local Government.

 

On 5 June, the Government announced that BERR has now merged with the Department for Innovation, Universities and Skills (DIUS) to create the new Department for Business, Innovation and Skills (BIS), the key role of which will be to build Britain’s capabilities to compete in the global economy.

 

BIS has a new interim website at http://www.bis.gov.uk. However, the former BERR and DIUS websites will continue to operate until a permanent BIS site is ready.

 

CMI Guidance on Religion and Belief in the Workplace

 

Employees are protected from discrimination on the grounds of religion or belief under the Employment Equality (Religion or Belief) Regulations 2003. The Regulations apply to recruitment, employment and vocational training. There is no qualifying period of employment before someone can bring a claim and no statutory cap to the level of compensation that can be awarded in such cases.

 

In 2007/2008, 709 religious discrimination claims were accepted by Employment Tribunals. Some claims have received a lot of publicity, such as Eweida v British Airways plc. Miss Eweida, a practising Christian, worked for British Airways as a member of its check-in staff. She claimed that she was the victim of religious discrimination because she was not allowed to wear a necklace with a silver crucifix at work if it was visible. Ms Eweida appealed against the Employment Tribunal’s finding that she had not been the victim of indirect discrimination. The Employment Appeal Tribunal (EAT) dismissed her claim because wearing a crucifix was not a mandatory requirement of her religion.

 

In another high-profile case (Ladele v London Borough of Islington), a registrar, who refused to carry out civil partnership ceremonies because to do so would be inconsistent with her Christian beliefs, lost her claims of direct discrimination and indirect discrimination. The EAT held that she had been treated in the same way as other employees and it cannot constitute direct discrimination to treat all employees in precisely the same way. Furthermore, whilst Islington Borough Council’s policy did place Miss Ladele at a particular disadvantage compared with employees who did not share her beliefs on same-sex relationships, she lost her claim of indirect discrimination because the Council’s action was a proportionate means of achieving a legitimate aim, which was to provide its services on a non-discriminatory basis.

 

It is clear that as well as having a distinct policy aimed at eradicating discrimination in the workplace that is based on someone’s religion or belief, all employment policies need to be sensitive to the requirements of an employee’s religious beliefs and take into account the potential for conflict that can exist between discrimination laws aimed at protecting different minority groups.

 

The Chartered Management Institute (CMI) has published a leaflet that is designed to give an overview of this subject. It highlights issues that organisations and managers may wish to take into account when establishing workplace policies and procedures that seek to eliminate discrimination or perceived discrimination on the grounds of religion or belief. Employers are urged to carry out a thorough review of current policies and procedures and to make any necessary changes.

 

The CMI guidance can be found at http://www.managers.org.uk/client_files/17098%20Faith%20Workplace%20leaflet%20V5%20AW1%20seps.pdf.

Construction Workers Win Holiday Pay Victory

 

The Union of Construction, Allied Trades and Technicians (UCATT) has welcomed the Court of Appeal’s refusal to allow property developer Redrow leave to appeal against the October 2008 decision of the Employment Appeal Tribunal (EAT) in Redrow Homes (Yorkshire) Ltd. v Buckborough and another.

 

The case involved two bricklayers who were taken on at Redrow’s site at Malton, East Yorkshire. The question at issue was whether the men were workers for the purposes of Regulation 2(1) of the Working Time Regulations 1998 (WTR) or whether, as Redrow contended, they were self-employed contractors. The men claimed that they were workers and were each seeking £2,293 in holiday pay.

 

In 2004, Redrow Homes lost a similar case in the Court of Appeal. In that instance, the tradesmen had signed a ‘one size fits all’ contract, designed to cover a wide range of situations, described by the Court as a ‘menu’ of conditions, requiring the Employment Tribunal (ET) to determine which clauses the parties intended to select as being applicable to their contracts. The Court held that the ET had been entitled to find that it was the common intention of the parties that the men would undertake to do the work personally, which led to the conclusion that the men were employees, not self-employed.

 

In the light of this decision, Redrow sought to avoid the problem in future by redrafting the standard terms and conditions on which they offered work, introducing the following words:

 

‘For the avoidance of doubt the obligation to perform the work is not personal to the Contractor and their obligations may be performed by other labour. Further the Contractor is required to provide other labour if it is necessary to carry out the works or to maintain the rate of progress stipulated by the Company’.

 

In the 2008 case, the tradesmen had signed contracts intended only for self-employed bricklayers or a gang of bricklayers. The ET found, however, that it was never expected by either side, seriously or otherwise, that the bricklayers would seek to provide a substitute or refuse the work offered. In its view, the provisions introduced in the revised wording were a ‘sham’ and did not seriously reflect the relationship between the parties.

 

Redrow appealed and lost. In passing its judgment, the EAT described two differing contexts in which the word ‘sham’ may legitimately be used with regard to a contract. Firstly, there are the circumstances described in Snook v London and West Riding Investment Ltd, where the parties have a common intention and the documents created give rise to legal rights and obligations which neither party truly intends, in order to deceive third parties or the court. However, a contract or contractual provision may also be a sham where, in reality, neither party intends it to be effective or to constitute an effective obligation between them. The ET had made a factual determination of the parties’ intentions and its finding that the obligation provision in the contract was a sham did not contain any error of law.

 

In addition, the obligations provisions imposed on the bricklayers a duty either to provide the required labour themselves or to find someone else to do it. The men were therefore under a contract personally to execute the work and it therefore fell within Regulation 2(1) of the WTR.

 

The UCATT has hailed the decision as ‘a massive victory’ which should ‘pave the way for thousands of other construction workers to claim the holiday pay they are entitled to receive’.

 

Controlling Shareholder Can Be an Employee

 

In Secretary of State for Business, Enterprise and Regulatory Reform (BERR) v 1. Richard Neufeld and 2. Keith Howe, the Court of Appeal has confirmed that a shareholder and director of a company can also be an employee under a contract of employment with the company, even where that person has a controlling interest in, or even total control of, the company.

 

The two cases arose because of the insolvency of companies and hinged on whether or not each claimant had been an employee of the failed company. If so, he was entitled to the protection afforded by Section 182 of the Employment Rights Act 1996 (ERA) to those who are employees at the date when the employer company has become insolvent.

 

The facts of Mr Neufeld’s case were as follows. He was managing director of A & N Communications in Print Ltd. (A&N) and held 90 per cent of the shares. The company went into insolvent liquidation. He first began working for Neufeld Press Ltd. in 1982 as a member of its sales team. In 1988 he became a shareholder and one of the company’s three directors. In 2001, this undertaking was transferred to A&N. Mr Neufeld continued to work as part of the sales team, managed by the sales director, and worked a 60-hour week carrying out sales as well as management duties. He had loaned money to A&N as well as providing personal guarantees on the company’s behalf. None of the three directors had a written contract of employment.

 

The Secretary of State had refused to meet Mr Neufeld’s claim for redundancy money, notice money and holiday pay owing at the date of insolvency to be paid from the National Insurance Fund (NIF). His claim amounted to approximately £10,000.

 

Mr Neufeld brought a claim under Section 188 of the ERA and the Employment Tribunal (ET) dismissed his claim. It held that the fact that he had given personal guarantees on A&N’s behalf, had lent money to the company and had control over it showed that in reality he was not an employee of the company when it became insolvent. In the ET’s view, he was running his own business as a manager and major shareholder.

 

The Employment Appeal Tribunal (EAT) disagreed. In its view, the correct approach was to focus on the conduct of the parties in carrying out the ‘purported’ contract of employment. Other factors were only relevant in so far as they reflected upon that conduct. The EAT held that the ET judge had erred in law in taking into account irrelevant matters.

 

The Secretary of State appealed to the Court of Appeal. The appeal was heard at the same time as another case because a salient factor in each was that the claimant was a controlling shareholder and a director of the company. The Secretary of State asked the Court of Appeal to clarify the approach to be adopted by the ET in these circumstances.

 

The Court of Appeal dismissed both appeals. In giving its judgment, Rimer LJ analysed the previous case law and authorities governing this question. In the Court’s view, the correct approach is to first determine whether the putativecontract is genuine or a ‘sham’. If it is genuine, is it a contract of employment rather than, for example, a contract for services? As the critical question in such cases is whether or not the putative employee was an employee at the time of the company’s insolvency, it may be necessary to examine what has been done under the claimed contract, particularly where this is not in writing. The fact of a person’s control over the company will form a ‘backdrop’ against which the assessment of the conduct under the contract will be made, but will not ordinarily be of any special relevance in deciding whether or not that person has a valid contract of employment; nor will the fact that they have share capital invested in the company or have made loans to it or given personal guarantees on its behalf. Such considerations will ordinarily be irrelevant in determining whether or not a valid contract has been created. They show an owner acting as an owner. They do not show that the owner cannot also be an employee.

 

Says <<CONTACT DETAILS>>, “This is an important case as there were 12,000 claims on the NIF by directors in 2008 and, given the current economic situation, the number in 2009 is expected to far exceed this total. Contact us if you would like advice on any of the issues raised.”

 

Disability Discrimination – Normal Day-to-Day Activities

 

For the purposes of the Disability Discrimination Act 1995 (DDA), a person has a disability if they have a physical or mental impairment which has a substantial and long-term adverse effect on their normal day-to-day activities.

 

In Chief Constable of Dumfries and Galloway Constabulary v Adams, the Employment Appeal Tribunal (EAT) considered the meaning of ‘normal’ in this context.

 

Mr Adams was appointed as a probationer police constable in November 2005. Shortly afterwards, he was diagnosed with Myalgic Encephalomyelitis. His condition was extreme from 2am to 4am and by the end of January 2006 he was struggling to complete night shifts. He walked slowly and needed assistance to climb stairs, was sometimes unable to drive himself home and at times required help with undressing when he got home. When he worked day shifts, he was free of symptoms, but these reappeared when he was put back on night shifts. In February 2007, he was dismissed and brought a claim of disability discrimination.

 

On the question of whether or not Mr Adams was disabled for the purposes of the DDA, the Employment Tribunal (ET) found that he was. The Chief Constable of Dumfries and Galloway appealed against this finding.

 

The EAT confirmed that normal day-to-day activities are those which can be found across a range of employment situations. The ET can therefore regard as normal something that a person only does at work, if it is to be found in a range of different work situations. This would not, however, include specialist skills that may only be a day-to-day activity in a particular employment.

 

In the EAT’s view, Mr Adams’ condition did constitute a disability. Walking and climbing stairs are normal day-to-day activities. The Chief Constable had contended that in this case they were not, because the activities were being carried out between 2am and 4am (the only time they presented a problem to Mr Adams). As a policeman, he held a specialised job that required him to work at this time of night, which is not common. The EAT disagreed, being satisfied that enough people in the UK work night shifts for working those hours to be considered normal.

 

In addition, when Mr Adams’ symptoms were at their worst, this clearly had a substantial effect on him and his condition had persisted for more than 12 months.

 

The appeal was therefore dismissed and the case remitted to the ET.

 

For advice on any discrimination law matter, please contact <<CONTACT DETAILS>>.

 

Employment Tribunal Statistics – 2007/2008

 

The Tribunals Service has published statistics for the year 1 April 2007 to 31 March 2008.

 

The total number of Employment Tribunal applications rose by 43 per cent to 189,303, compared with 132,577 applications in 2006/2007. However, many of these applications were for claims under more than one jurisdiction. Looked at by jurisdiction, the total number of claims for 2007/2008 was 296,963, compared with 238,546 for 2006/2007.

 

For the first time, the highest number of claims related to equal pay. There were 62,706 equal pay claims in 2007/2008, compared with 44,013 for the previous year. In 2005/2006 the figure was 17,268.

 

There were 55,712 claims related to working time in 2007/2008, compared with 21,127 in the previous year. However, the statistics for this type of claim do tend to fluctuate, there being 35,474 claims in 2005/2006.

 

There were 40,941 unfair dismissal claims in 2007/2008, compared with 44,491 in 2006/2007.

 

Claims made under the Employment Equality (Age) Regulations 2006 are increasing as employees become more aware of their rights under this legislation. The number of claims rose from 972 in 2006/2007 to 2,949 in 2007/2008.

 

Claims shown under the category ‘other’ also rose, from 5,072 in 2006/2007 to 13,873 in 2007/2008. This was because of a significant increase in the number of claims relating to trade union membership.

 

The Tribunals Service dealt with 81,587 applications of which 33 per cent were withdrawn and 29 per cent involved settlements conciliated by the Advisory, Conciliation and Arbitration Service. 13 per cent of claims were successful.

 

Statistics on the level of compensation awarded in 2007/2008 are as follows:

 

 

 

The statistics show that there were 134 costs awards to claimants and 327 to respondents. The maximum costs award was £17,775.

 

The number of appeals disposed of by the Employment Appeal Tribunal at a full hearing was 466.

 

 

 

 

 

 

 

 

Enforcement of the National Minimum Wage – The New Regime

 

From 6 April 2009, changes have been made to the way the National Minimum Wage (NMW) is enforced. In addition, where HM Revenue and Customs (HMRC) discover that a worker has been paid less than the NMW, he or she is entitled to have arrears of wages repaid at current rates. These changes were brought in by the Employment Act 2008. The Act also gives HMRC compliance officers new inspection powers and strengthens the criminal regime for NMW offences.

 

If HMRC find that there has been an underpayment of the NMW, they may issue a notice of underpayment requiring the employer to repay the arrears and to pay a financial penalty to the Secretary of State. Employers can appeal to the Employment Tribunal against the notice of underpayment.

 

A penalty set at 50 per cent of the total underpayment will be charged in respect of underpayments of the NMW occurring in pay reference periods starting on or after 6 April 2009. However, there is a minimum penalty of £100 and a maximum penalty of £5,000. Employers who comply fully with the notice of underpayment within 14 days of service will receive a discount of 50 per cent on the penalty.

 

Where workers are owed arrears, the repayment must take account of the length of time that has elapsed since the underpayment. Where the rate of the NMW at the time the arrears are calculated is higher than the NMW in force at the time the underpayment occurred, the arrears will be calculated by reference to the current rate.

 

Compliance officers have the power to remove NMW records from an employer’s premises for photocopying. The compliance officer will be entitled to remove complete records but must return them within a reasonable period.

 

The Employment Act 2008 also gives HMRC the power to use the search and seize powers in the Police and Criminal Evidence Act 1984 when investigating criminal offences under the National Minimum Wage Act 1998 and makes changes to the way that criminal offences are investigated and enforced. With effect from 6 April 2009, the most serious cases can be brought to trial in the Crown Court. This means that employers who deliberately fail to pay the NMW may face harsher penalties.

 

The Government has published a document setting out its policy on HMRC enforcement and prosecutions, which can be found at http://www.berr.gov.uk/files/file50812.pdf.

 

Gay Security Guard Awarded £62,525

 

A former security guard at Heathrow Airport has been awarded £62,525 in compensation after a woman colleague was found to have harassed him on the grounds of his sexual orientation.

 

Reading Employment Tribunal (ET) heard that Allwyn Rondeau, who worked for G4S Security Services at Heathrow terminals 1 and 4, had made it clear to Lucy Chilton that he was homosexual after she told colleagues that she was attracted to him. Miss Chilton persisted in her advances towards him however. On one occasion, she was said to have ‘wobbled her breasts’ against him and then told him he ‘wouldn’t know what to do with a woman anyway’.

 

Initially, Mr Rondeau did not report the incidents. After he rejected Miss Chilton’s advances, however, she accused him of inappropriate sexual behaviour and he was ‘frogmarched’ from work, stripped of his security pass and suspended.

 

Miss Chilton’s complaint was rejected following an internal investigation. When Mr Rondeau subsequently lodged a complaint against Miss Chilton for harassment, she was not suspended from work.

 

Miss Chilton denied sexually harassing Mr Rondeau. However, the ET found him to be a credible witness whose allegations had a ‘ring of truth’. In its view, Miss Chilton had created an ‘offensive environment’ for Mr Rondeau at work. The ET found that Miss Chilton’s conduct constituted harassment on the grounds of sexual orientation and that the actions of G4S boss Brian Johnson, who was aware that Mr Rondeau was gay, amounted to less favourable treatment on grounds of sexual orientation.

 

Mr Rondeau was traumatised by these events and has been unable to return to work. He was diagnosed with depression and now rarely leaves the house.

 

The sum awarded includes compensation for loss of earnings, £12,500 for injury to feelings and £10,500 for psychiatric injury.

 

Says <<CONTACT DETAILS>>, “A YouGov poll has revealed that nearly one in five gay people claim to be bullied at work on account of their sexuality. Employers who fail to take steps to root out discriminatory behaviour of this nature run the risk of paying a heavy penalty. We can advise you on any discrimination matter.”

 

Harassment Claims Must be ‘Worth the Candle’

 

Although there is no law in the UK that specifically protects against bullying in the workplace, an employee who is bullied or victimised can bring a claim for damages against their employer, under the Protection from Harassment Act 1997 (PFHA), on the basis that the employer is vicariously liable for the actions of its employees.

 

The Civil Procedure Rules permit the striking out of a claim or allow a defendant to seek summary judgment against the claimant where it can be shown that the claim has no real prospect of success.

 

In Dowson and others v Northumbria Police, the judge’s reasons for striking out three of nine claims brought under the PFHA provide guidance on the essential elements necessary for a claim to succeed.

 

The claims centred largely on the conduct of one officer and arose out of an alleged clash between his personality and policing methods and those of the team of officers he took over. Some, but not all, of the particulars of harassment described by the officers appeared to arise tangentially rather than directly in that they concerned the senior officer’s approach to routine police work rather than acts or statements aimed directly at his junior officers.

 

The judge identified the principles that are relevant when scrutinising claims of harassment to see whether or not they are ‘worth the candle’:

 

 

 

 

 

 

In this case, the three claims were struck out because they did not satisfy the necessary requirements.

 

Says <<CONTACT DETAILS>>, “Unlike in discrimination claims, the statutory defence that they took all reasonable steps to prevent the harassment is not available to employers when a claim is made under the PFHA. It is important to take positive action to eliminate employee behaviour of a kind that could cause distress and anxiety to others in the workplace and any incidence of bullying or harassment must be dealt with at once, to the satisfaction of the alleged victim.”

 

Immigration – Publication of Offending Employer Details

 

The Immigration, Asylum and Nationality Act 2006 introduced a tough new civil penalty system for employers. The revised penalty scheme sits alongside a new criminal offence of knowingly employing an illegal migrant worker (section 21 of the Act). This is for use in more serious cases where rogue employers knowingly and deliberately use illegal migrant workers, often for personal financial gain. This offence carries a maximum two year custodial sentence and/or an unlimited fine.

 

The UK Border Agency (UKBA) now publishes the details of employers who have been found to be liable for the payment of a civil penalty for employing illegal migrant workers and those convicted of an offence under section 21 of the Act. The information can be found on the UKBA’s website and is updated on a monthly basis. See http://www.ukba.homeoffice.gov.uk/sitecontent/documents/employersandsponsors/listemployerspenalties/.

 

The information includes details of employers:

 

 

In addition, the Home Office Press Office releases the information to local media organisations, such as local newspapers and broadcast news media.

 

The UKBA does not publish details of those employers whose case is still subject to investigation, objection, appeal or where operations are ongoing.

 

Local Immigration Teams work with a range of other local agencies to target businesses that flout the law. To date, a particular target would appear to be the catering industry.

 

Guidance for employers on preventing illegal working can be found on the UKBA website at http://www.ukba.homeoffice.gov.uk/employers/preventingillegalworking/.

 

Immigration and TUPE – Guidance on Notification Requirements

 

Since 27 November 2008, workers from outside the European Economic Area (EEA) or Switzerland who wish to work in the UK have been subject to the points-based system of immigration.

 

To qualify, most immigrant workers need a job offer from a licensed employer and must be able to demonstrate that they have the requisite number of points. Also, unless the job in question is on the shortage occupation list, licensed sponsors have to prove that they cannot fill skilled posts with resident workers and must demonstrate that the job vacancy has been advertised in the UK. This is referred to as the ‘resident labour market test’. See http://www.ukba.homeoffice.gov.uk/employers/points/sponsoringmigrants/employingmigrants/residentlabourmarkettest/ for further information.

 

The UK Border Agency (UKBA) has issued revised guidance on an employer’s obligation to notify the UKBA when a migrant worker from outside the EEA is transferred to a new employer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

 

If a business or a part of a business where sponsored migrants work or study transfers from one organisation to another, along with its employees or students, the new owner will need a sponsor licence. This applies, for example, when the assets of an organisation are bought and its employees transfer to the new organisation under TUPE. 

 

If a licensed sponsor is involved in a takeover they must inform the UKBA, using the sponsorship management system. See http://www.ukba.homeoffice.gov.uk/employers/points/sponsoringmigrants/sms/.

 

If an organisation that is not a registered sponsor is taken over by a company that is a registered sponsor, the existing sponsor must notify the UKBA about the takeover within 28 calendar days of it happening.

 

If an organisation that is a registered sponsor is taken over by a company that is not a registered sponsor, then the existing sponsor must inform the UKBA about the takeover within 28 calendar days of it happening and the new organisation must apply for a sponsor licence within 28 calendar days of the takeover. If it does not, the UKBA is likely to reduce to 60 calendar days the period during which all the sponsored migrants who have transferred to the new organisation are permitted to stay in the UK. This is intended to give them time to find a new sponsor because they will no longer be working for or studying with a licensed sponsor.

 

If one registered sponsor organisation is taken over by another, the sponsor organisation which has been taken over must notify the UKBA about the change, identifying who has taken over responsibility for its respective migrants, within 28 calendar days of the transfer taking place. The new sponsor organisation must also tell the UKBA about the change within 28 calendar days of it happening, including details of all the migrants for whom it has assumed responsibility.

 

Contact <<CONTACT DETAILS>> for advice on any immigration issue.

In Brief

 

Consultation on Implementing the ‘Agency Workers Directive’

The Government is seeking views on the implementation into UK law of Directive 2008/104/EC on temporary agency work, usually referred to as the ‘Agency Workers Directive’. This affords agency workers equal treatment with regard to basic employment and working conditions as if they had been recruited directly by the end user. The qualifying period for the right to equal treatment in the UK will be 12 weeks’ employment. 

The consultation document can be found at http://www.berr.gov.uk/consultations/page51233.html. The closing date for responses is 31 July 2009.

 

 

 

In Brief

 

Employers Who Fail to Pay Tribunal Awards to be ‘Named and Shamed’

 

The Government has announced that the names of employers and individuals who fail to pay Tribunal awards are to be added to the public Register of Judgments, Orders and Fines, once enforcement proceedings have been brought against them in the County Court.

 

The move is intended to reduce the time that successful claimants have to wait before receiving payment of the amount awarded to them. As the Register can be searched by members of the public, banks and credit reference agencies, it is hoped that this move will provide defaulters with an incentive to settle on time.

 

In Brief

 

No Immediate Review of the Default Retirement Age

 

Opponents of the mandatory retirement age of 65, contained in the Employment Equality (Age) Regulations 2006, are disappointed that the new Equality Bill does not contain measures to abolish it. However, the Government has confirmed that it will undertake an evidence based review of the default retirement age in 2011. This will allow time to see how the Regulations are working and help businesses plan in the knowledge that there will not be an imminent change. If the review concludes that a default retirement age is no longer necessary, the Government will take action to remove it.

 

In Brief

 

Redundancy Pay

 

In his April Budget, the Chancellor of the Exchequer announced that the Government intended to increase from £350 to £380 the maximum amount of a week’s pay used when calculating statutory redundancy pay. The change will take place from 1 October 2009.

 

The one-off increase will apply to a week’s pay for calculating various tribunal awards.

 

New Minimum Wage Rates Announced

 

The Government has announced new National Minimum Wage (NMW) rates that will apply from 1 October 2009.

 

For workers aged 22 and over, the rate will increase from £5.73 to £5.80 an hour. The rate for 18- to 21-year-olds will rise from £4.77 to £4.83 and for 16- and 17-year-olds the rate will increase from £3.53 an hour to £3.57.

 

The accommodation offset will rise from £4.46 per day to £4.51 from 1 October 2009.

 

In addition to the rate changes, the Government has accepted the recommendation of the Low Pay Commission (LPC) that the adult rate of the NMW should be extended to 21-year-olds. This will be implemented from October 2010.

 

The LPC has also recommended that information on employers who have shown a wilful disregard for NMW legislation should be publicly available. The Government has committed itself to developing proposals to achieve this, taking into account the practical issues involved.

 

The Government will also consider the LPC’s proposal that a minimum wage be introduced for apprentices and will respond in full to this when it sets the LPC’s remit for 2010.

 

The former Department for Business, Enterprise and Regulatory Reform (now the Department for Business, Innovation and Skills) has already announced that the NMW Regulations are to be changed so that tips and service charges can no longer be used to make up staff salaries to the minimum legal level. This change will take effect in October 2009.

 

Part-Time Workers – No Hypothetical Comparators

 

The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (PTWR) established a minimum standard of fairness for part-timers so that they cannot be treated less favourably than comparable full-time co-workers, unless the treatment is justified on objective grounds. A comparable full-time worker must work in the same establishment as the part-timer, be engaged in broadly similar work and work under the same type of contract.

 

In Carl v University of Sheffield, the Employment Appeal Tribunal (EAT) considered the following questions:

 

 

Mrs Carl was a part-time teacher in the Journalism Department at Sheffield University. She complained that she had been treated less favourably than a named comparator, Ms McClelland, who was a full-time teacher in the Sociological Studies Department, or than a hypothetical comparator, should the Employment Tribunal (ET) decide that Ms McClelland was not a true comparator.

 

In the event, the ET did decide that Ms McClelland was not a true comparator. She had more academic qualifications and her role was quite different from that of Mrs Carl. Her contribution was both vocational and academic, whereas Mrs Carl’s teaching was purely vocational. The ET did, however, accept the hypothetical comparator. It dismissed Mrs Carl’s claim, however, because in its view Regulation 5(2) of the PTWR, which provides that the right to no less favourable treatment applies only if the treatment ‘is on the ground that the worker is a part-time worker’ should be taken to mean solely because they are part time, in order to reflect the wording of the European Directive which the PTWR implement in UK law.

 

Sheffield University appealed against the decision that a person making a claim under the PTWR can rely on a hypothetical comparator and Mrs Carl appealed against the finding that a claimant must show that the treatment was solely on the ground of her part-time status.

 

The EAT held that when a claim is made under the PTWR, comparison must be made with an actual full-time worker, not a hypothetical comparator. It then went on to consider conflicting authorities regarding whether or not it is necessary for part-time status to be the sole ground for the less favourable treatment and judged that it need not. In the EAT’s view, part-time work must be the effective and predominant cause of the less favourable treatment complained of but it need not be the only cause.

 

The EAT also found that the ET had been entitled to conclude that there was no true comparison between the jobs of Mrs Carl and Ms McClelland.

 

If you would like advice on any contractual matter, please contact <<CONTACT DETAILS>>.

 

Printer with Kidney Disease Receives Settlement

 

A recent case sounds a warning bell for employers who fail to take seriously their responsibilities under the Control of Substances Hazardous to Health Regulations 2002 (COSHH). It concerned a printer who was exposed to a chemical linked with kidney disease.

 

David Owenson worked for Polestar Greaves, a printing company in Scarborough, first as a maintenance engineer and later as a printer. During that time he was exposed to a hazardous solvent called toluene, which was used in the ink. Part of his job was to repair the printer and solvent filter bank, which meant that he was often exposed to chemical fumes. These made him feel dizzy and caused his eyes to smart.

 

In 2000, Mr Owenson began to feel unwell and, after visiting his GP, was referred to a kidney specialist. The specialist advised him that it was safe to continue working with toluene.

 

A year later, however, after consulting lawyers, Mr Owenson saw another kidney specialist, who was an expert in damage caused by toluene. This specialist advised him that the exposure to toluene had significantly impaired his kidney function and should be minimised in future.

 

When a claim was brought against them, Mr Owenson’s employers argued that even though he had periodically been exposed to excessive amounts of toluene, this had not contributed to his kidney disease. Despite this, after a legal battle, they agreed to pay him a substantial undisclosed amount in compensation.

 

Injuries caused by noxious substances at work are not uncommon. Dangerous fumes can cause a wide variety of diseases including damage to the internal organs, bladder cancer and lung disease.

 

A brief guide to the COSHH Regulations can be found at http://www.hse.gov.uk/pubns/indg136.pdf. The Health and Safety Executive also offers a range of free leaflets providing advice and guidance on using chemicals or other hazardous substances at work. These can be found at

http://www.hse.gov.uk/coshh/.

 

 

Racial Harassment – Ill Judged Remarks

 

In Richmond Pharmacology v Dhaliwal, the Employment Appeal Tribunal (EAT) upheld the decision of the Employment Tribunal (ET) that a remark made by a senior manager to a female employee of Indian ethnic origin, referring to the probability that after the employee had left the company they would ‘bump into each other in future, unless you are married off in India’, violated her dignity and constituted unlawful harassment within the meaning of Section 3A of the Race Relations Act 1976 (RRA).

 

Miss Dhaliwal had worked for Richmond Pharmacology for five years and held a senior position as a Project Manager. Until she resigned, giving one month’s notice, she had a good working relationship with her managers. However, an agreement had been reached some time previously that Miss Dhaliwal would give two months’ notice if she wished to leave, but the agreement had never been formally incorporated into her contract.

 

Given her senior position, Miss Dhaliwal’s resignation caused the company real problems, which put a strain on her relationship with Dr Ulrike Lorch, the Medical Director of the company. Against that background, a short meeting took place between the two, at which Dr Lorch said that Miss Dhaliwal’s work had deteriorated and that she should make sure that she worked out her notice in a professional way. It was in that context that the remark about them seeing each other in future was made.

 

Miss Dhaliwal was upset by the remark and brought proceedings in the ET, which found in her favour and awarded her compensation of £1,000 for injury to feelings. Richmond Pharmacology appealed to the EAT.

 

The EAT noted that Dr Lorch’s reference to a marriage in India did not come out of the blue. Miss Dhaliwal had, on more than one occasion, referred to the possibility of getting married and giving up work and had said that her parents wanted to see her married. She had also recently told Dr Lorch that she would shortly be visiting India. The ET had found that whilst Dr Lorch’s remark was not intended to violate Miss Dhaliwal’s dignity, this was its effect and her words therefore constituted unwanted conduct under the RRA.

 

In the EAT’s view, the ET was entitled to find that Dr Lorch’s remark constituted harassment within the RRA. The phrase ‘married off’ evoked the stereotype of forced marriage and could reasonably be perceived as a violation of Miss Dhaliwal’s dignity. The EAT accepted, however, that the facts may have been ‘close to the borderline’, as was indicated by the size of the compensation award.

 

In handing down its judgment, the EAT clarified the ele