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July 2008 (Employment Law Bulletin)
Welcome
You can tell when summer and the media silly season is upon us when Channel 4 has blanket coverage of Big Brother fame lying around and doing nothing in particular except swearing at each other. George Orwell's Big Brother seems fairly benign in comparison.
There are, of course, also the silly season news stories, such as the recent “Cyclists to be allowed to ride wrong way up one-way streets”. Naturally, it's bad form to actually read articles of this nature, just in case there is some sort of common sense behind the headline. But it does raise the tantalising proposition of new legislation such as the ‘Cars to be allowed to drive wrong way around roundabouts (but only if it's raining) Regulations'.
Well, new initiatives are the theme we start off with in this month's bulletin, following which we take a look at some of the more interesting recent cases:
Right to Request training
The snappily named Department for Innovation, Universities and Skills (a name which has a ‘1984' resonance about it) has launched a consultation on the proposed new right for employees to request time off for training. It is intended that employees will be given a legal right to ask to have time away from work to undertake relevant training. The only requirement would be that training should help improve business performance and productivity. Employers will be required to take seriously any requests they receive. It is proposed that employers will be required to deal with requests for training by following a very similar process to the current right employees have to request flexible working. The Flexible Working Regulations were generally considered to be lacking in any bite when they were first introduced because, if the process was followed correctly, it is a fairly straight forward matter to refuse a request without penalty. However, it has become apparent that simply following the procedures does not necessarily protect employers from discrimination claims where there are refusals. It is quite possible that the right to training (if introduced) could have similar repercussions.
New Positive Discrimination Plans
The Equalities Minister, Harriet Harman, has announced the introduction of new legislation to make it legal for employers to discriminate in favour of job candidates who are females and/or ethnic minorities (i.e. positive discrimination). There was a good deal of press surrounding the new Equalities Bill, but not all of it entirely accurate. Despite the reports in many newspapers, the Minister has made it absolutely clear that there will be no obligation on employers to use positive discrimination. It will be there to use if required. Apparently, the rationale behind this legislation is to close the pay gap between men and women (women earn 40% less per hour according to Government figures). The more contentious part of the Bill is likely to be the proposal to force employers to publish details of the difference in pay between their male and female employees. It is not entirely clear at this stage how much information will need to be disclosed, but the very idea runs counter to the culture in the UK of keeping salary information confidential.
Religious Discrimination
An Employment Tribunal has awarded a Muslim woman £4,000 for injury to feelings after she was turned down for a job because she wore a headscarf. The claimant had applied for a job as a stylist in a hair dressing salon. She failed in her claim for direct discrimination. The Tribunal was satisfied that the claimant was not treated less favourably than the respondent would have treated a woman who, whether Muslim or not, and for a reason other than religious belief, wears a hair covering at all times when at work. Nevertheless, she succeeded with her indirect discrimination claim. What is interesting about this case is that it allows us some insight into how Tribunals are approaching the issue of the employers' justification defence where there is found to be indirect discrimination. The owner apparently expected her staff to reflect what was described as the “funky, urban” image of the salon. The defence that hair stylists would generally be expected to display their own hair, particularly in a salon with a trendy image, was not considered justification enough.
Handbook Policies – Contractual?
The case of Harlow v Artemis International Corporation may cause employers some concern. Artemis believed that its enhanced redundancy payment policy was discretionary because it was not in the contractual section of the staff handbook. The claimant, Harlow, believed that she was entitled to upwards of £60,000 under the enhanced policy. The High Court found in her favour. The Court concluded that, as the Handbook was available on the company intranet and posted in the same folder as the other policies, the enhanced sum was therefore contractually payable. To compound the situation, it was contained in a section headed “employee benefits and rights”. Further, the policy had been applied by Artemis in previous redundancy situations.
Enforced Garden Leave
In the case of SG&R Valuation Services v Boudrais, the High Court has held that it may be legitimate in certain circumstances for employers to force garden leave onto senior directors, despite there being no right to do so within the contract of employment. Two directors had resigned intending to join competitors of the employer. They were placed on garden leave, but claimed that as there was no right within the employment contract for the company to do so - they had a right to work. Believing that there had been a breach of contract, they left their employment immediately to go to start work with the competitor. The employer applied for an injunction restraining the employees from doing this, and was successful. The High Court held that there was strong evidence of an intention to misappropriate confidential information and that there was evidence, on the face of it, that the directors had already done so. Garden leave could, in these circumstances, be insisted upon.
National Minimum Wage When Sleeping
In the case of Burrow Down Support Services v Rossiter, the Employment Tribunal held that an employee who worked as a night watchman, who could sleep for much of his shift using facilities provided for that purpose, was entitled to the National Minimum Wage for each hour of the shift. The employer claimed that the employee fell into the exception where an employee who is not working but is available for work is not entitled to the National Minimum Wage. The Tribunal held that the employee was actually at work for the whole shift, even when sleeping.
Pensions Bill Amendments
Yet more tinkering in Parliament to certain aspects of the forthcoming Pensions Bill.
Moral Hazard
The Government is determined to increase the powers of the Pension Regulator in relation to its ‘moral hazard' principles. These are intended to prevent employers coming up with ‘cunning plans' to avoid properly funding the pension scheme. The Regulator already is able to impose ‘Financial Directions' and ‘Contribution Notices' in certain circumstances and the new amendments are designed to allow changes to these powers by regulations.
Inducements
In addition, the Department of Work & Pensions has announced its intention to introduce legislation that will prevent employers from ‘taking any action for the sole or main purpose of inducing' an employee to opt out of being enrolled automatically into a scheme or to give up membership of a scheme. Recent developments in financial markets and the economy have been causing employers to consider various options on the future of their final salary arrangements and such inducements have become far more common than in the past. Clearly the Government is unhappy at this and with auto enrolment into Personal Accounts on the horizon, it seems that this is an attempt to pre-empt any issues in this regard. Penalties for breach will include civil penalties payable by the employer and making up the contributions which were foregone. Having said that, the Pension Regulator may need to revisit the guidance it issued last year on inducements to take transfer values which is not entirely consistent with this latest development.
Ombudsman and the PPF
There have so far been 4 unsuccessful appeals regarding the PPF Levy assessments. To this total we can now add a further two. Without going into too much boring detail in this bulletin, suffice to say that Trustees of pension schemes are fighting an uphill battle in getting their levy assessments reduced and the PPF seem to have done their homework very well indeed ensuring that they are legally watertight in their processes and procedures, and unless Trustees are on very very strong ground with their arguments and procedures, they will get short shrift from the Ombudsman.
And Finally
We finish with a news story from the USA, where the leader of the Typo Eradication Advancement League (TEAL) would like to see more regulatory control when it comes to spelling and grammar. TEAL was set up by Jeff Deck to combat grammatical errors in all areas of American life. He is so enthusiastic (or, some might say, zealous) about it that he has set out on a year-long journey across America “...to make the US a safer place for spelling”, carrying supplies of erasers, chalk and white-out fluid. Sadly, his efforts are not always appreciated. When he corrected a sign in a Seattle Market that said “beefstake tomatoes”, the stall holder shouted abuse at him and changed the spelling back. He's also been thrown out of a bar for correcting a sign that said “cake's”. When he tried to correct a shop sign in California that said “groccerry store”, the shopkeeper told him what he thought in just two words. It's not appropriate for us to repeat those words in this publication, but Jeff had his own thoughts on the incident: “some people just have no feeling for language”.
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Thomas Eggar LLP's Employment Unit consists of 14 full-time solicitors plus their dedicated support staff. The Unit is recognised as one of the leading practices in the region and has a reputation for providing clients with practical advice to find solutions to their problems - much more than just a recital of the law!
With clients ranging from small businesses to very large utility companies, listed public companies, airlines, media companies and a significant number of educational establishments, our lawyers deal with both contentious and non contentious areas of employment.
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