During 2010, employment law has certainly seen its fair share of change and uncertainty.
Equality act 2010
The topic which has dominated employment law throughout 2010 was The Equality Act 2010 (“the Act”). Its purpose was to consolidate all of the existing equality legislation, some of which dated back to 1970, into one act.
Over the years, employment law had developed in an ad hoc fashion leading to a number of anomalies in the way different types of discrimination (whether it be sex, race, disability etc) were treated. The Act aims to tie up the loose ends and introduce a more uniform way of dealing with discrimination regardless of the type of discrimination complained of.
The main provisions of the Act came into force on 01 October 2010.
As speculation continues to grow as to when and whether the remaining provisions will be implemented, chances are it is going to be an area of interest for some months to come.
Another topic which has continued to attract attention this year, coming in second, is annual leave entitlement and, in particular, the way in which this should be calculated for those absent from work due to sickness.
In 2009, there were a number of important European employment law cases which established the following:
- a worker on sick leave accrues annual leave despite not working;
- a worker on sick leave who has been unable to take annual leave must be allowed to take it following their return to work even if this means carrying it over to the next leave year; and
- a failure to pay holiday pay can amount to an unlawful deduction from wages as well as a breach of the holiday pay legislation.
These decisions were controversial as they required domestic legislation governing holidays (the WTR) to be interpreted in line with the European Court’s approach. On the one hand, the WTR state that annual leave must be taken in the year that it accrues but the European Courts, on the other hand, have encouraged leave to be carried over where it has not been possible to take it during the leave year.
This difference of opinion has caused uncertainty in the employment tribunal this year.
Some tribunals have stuck to the letter of the WTR and not allowed employees to claim for previous years’ holiday pay while others have given full effect to the European decisions and allowed employees to recover holiday pay from previous years.
In order to get some clarity, it seems that we will have to wait for a change to the WTR to make them compatible with European law. In the meantime you should consider the following:
- make sure you are familiar with the rules relating to annual leave entitlement;
- seek advice before deciding to withhold holiday payments from employees; and
- ensure that employees leaving employment are paid for holidays which they have accrued during that year.
2010 was also the year of the General Election. The results of the vote called time on the 13-year-old Labour Government and brought about the creation of a Coalition.
The unexpected coupling of Cameron and Clegg meant that initially, we were in the position of having a new Government without knowing what its policies were. The Conservatives and the Liberal Democrats had not seen eye to eye on a wide range of issues before the election and so we waited to see what stance would be taken by the Coalition on employment law issues.
We have now been given an indication of their plans in their document “Coalition -Our Programme for Government”. However, the majority of changes are not due to take effect until at least next year. We have included a summary of what to look out for at the end of this guide.
Default retirement age
A hot topic which continues to be debated regardless of who is in power is that of the default retirement age (“DRA”).
Under the current law, it is possible to retire employees at the DRA of 65 providing that the correct procedure is followed. However, in recent years it has become apparent that there are a growing number of older people who are able and willing to work beyond the DRA.
Back in 2009 the Heyday case, which challenged the DRA, was decided. In that case, a group of employees claimed that the DRA was unjustifiably discriminatory. However, after a referral to the European Court of Justice, the House of Lords disagreed with the employees and ruled that the DRA was lawful.
Following Heyday, the planned review of the DRA was brought forward from 2011 to 2010 and when the Coalition Government came to power, they confirmed that they would look at ways to phase it out.
In July 2010 a consultation paper was published which proposed transitional measures to take effect from 6 April 2011, with a view to abolishing the DRA from 1 October 2011.
The consultation has recently closed and we await the Government’s next move.
However, until there is a change in the law you should continue to:
- ensure that you have an updated policy for managing retirement and that this is followed each time an employee approaches retirement age;
- be familiar with the “right to request procedure”; and
- take time to consider the merits of each request to continue working past the intended retirement date, don’t just refuse them as a matter of course.
Despite the failure of the Heyday challenge, 2010 has seen its fair share of age discrimination claims.
One of these employment law cases challenged a German law which prevented the recruitment of firefighters over the age of 30. The European Court found this to be lawful as it could be justified as a genuine occupational requirement.
This case indicates that the tribunal may be persuaded by similar arguments especially where the occupation in question involves predominantly manual work requiring a certain level of physical fitness. Therefore, this type of justification argument may be something to bear in mind if the DRA is scrapped in the future.
PS. You are Fired!
Rather than using the Lord Sugar boardroom routine, it seems that some employers prefer to dismiss employees by post. Here are two cases from this year highlighting some pitfalls of dismissing employees by letter.
In the first case, the Supreme Court found that the termination of employment will take effect from the date on which the letter was opened and read by the employee, not the date on which it was delivered by recorded delivery.
In the second case, the employer sent a letter terminating the employee’s contract of employment by mistake. Although they later tried to retract this, the EAT decided that the employee was entitled to consider herself as dismissed and make a claim for unfair dismissal.
These cases highlight the importance to employers of:
- communicating dismissals to an employee’s face to face wherever possible;
- where there is no choice but to dismiss an employee by letter send by recorded delivery and check that the employee has understood the contents either with a follow-up telephone call or by requiring them to return a confirmation slip to you; and
- checking letters which are sent out to employees as it will be very difficult to retract something which is clearly confirmed in writing- Act in haste repent at leisure!
Disciplinary v grievance
It is an all too common occurrence for employers that when they suspend an employee or put them under investigation for misconduct the employee will lodge a grievance. Employees would argue that the fairest thing to do in this situation would be for the grievance to be heard first before continuing with the disciplinary process whilst in many cases this will just add further delays.
A case giving some useful guidance on this point this year concerned an employer who dismissed 2 employees prior to their grievance appeals having been heard. The EAT found that it would only be in the rarest cases that the employer would need to have completed the entire grievance process before dismissing an employee.
However, this case should not be a green light for employers to ignore grievances altogether. We recommend that you think about the following when faced with this situation:
- Has the employee had an opportunity for their grievance to be heard? (In the above case the first stage of the grievance had already taken place before the employees were dismissed);
- Would the employee be given an opportunity to raise any points in the grievance which could not be discussed during the disciplinary hearing? (The EAT were persuaded in the above case by the fact that had the employees taken the time to attend the disciplinary meeting they would have been able to raise all of the issues which would have been dealt with in a subsequent grievance appeal);
- If in doubt about whether to continue with a disciplinary procedure seek legal advice as to the best course of action.
Time off for training
A new right was introduced in April for employees to request time off work to undertake study or training. At present this only applies to businesses with 250 or more employees but is due to be rolled out to all employers from 6 April 2011.
The legislation sets out clearly the way that such a request should be dealt with and failure to do things properly can result in a tribunal awarding up to 8 weeks pay and an order to reconsider the application. If you have not already done so we recommend reviewing your training policies to make sure that they comply with your obligations under the new rules.
April 2010 saw the replacement of the 60-year-old sick note system with “fit notes”. The intention was to encourage employees to go back to work sooner following a period of illness by providing GP’s with an opportunity to suggest adjustments which could be made to facilitate this.
Adjustments may include a phased return to work, alternative hours and workplace adaption.
Employers are still advised to seek a specialist medical report where they suspect that the illness may amount to a disability.
There was some concern prior to the introduction of fit notes that GP’s would be ill-equipped to have sole responsibility for issuing the notes. However, there has been little news about fit notes since their introduction and so it remains to be seen whether these concerns were justified.
Employment law changes to look out for in 2011
As 2010 draws to an end what should you expect from 2011?
There is likely to be some announcement from the Government about the DRA and the approach they intend to take on this issue. Keep an eye on your contracts of employment and policies, to make sure that they comply with any change to the law.
“Family Friendly” policies
If the Conservative and Liberal Democrat’s pre-election promises are anything to go by, it is likely that 2011 will also see the introduction of more family “friendly policies”.
One of the changes that have already been announced is the proposed extension of the right to request flexible working to parents of all children up to the age of 18 from April 2011.
The Government has also confirmed that a consultation will be launched to explore the possibility of extending the right to request flexible working to all employees.
Shared parental leave
Parents of babies due after 3 April 2011, or adopted after this date, will have the option to share their parental leave. In practice, this means that fathers will be given the opportunity to take up to 26 weeks of additional paternity leave once the mother or partner returns to work.
The qualifying period for unfair dismissal
The Government have been exploring the possibility of increasing this from 1 year to 2 as an attempt to help small businesses. No decisions have been announced yet but this is something to keep an eye out for.
If there is anything in this employment law update which you would like to discuss further then please do not hesitate to contact our Employment & HR team on 01332 226 149.