Default retirement age

The Practical Law Company has provided a comprehensive summary of the legislative changes to employment law due to receive Royal Assent or come into force in the next few months.

The government proposes to abolish the default retirement age (DRA) of 65 on 1 October 2011, with transitional arrangements beginning on 6 April 2011. Employers giving notice of retirement after 5 April 2011 will no longer be able to rely on the DRA. The government consultation on this proposal closed on 21 October 2010 and, although BIS had advised that the government’s response to the consultation would be published “before Christmas”, it is now advising that it will be published “later on this month” (January 2011).

Bribery Act 2010

The Bribery Act 2010 received Royal Assent on 8 April 2010 and is due to come into force in April 2011.

The Act will introduce a new strict liability corporate offence of failing to prevent bribery by individuals acting on behalf of an organisation. The only defence open to employers will be to show that they have “adequate procedures” in place to prevent bribery and corruption. What should amount to “adequate measures” was subject to a government consultation on its proposed draft guidance that closed on 8 November 2010. The response to the consultation is expected to be published early in 2011, together with the final version of the guidance.

Equality Act 2010: provisions coming into force in April 2011

The majority of the provisions of the Equality Act 2010 (EqA 2010) came into force on 1 October 2010. However, the following provisions are ones that the government needed to consider further:

• The socio-economic duty on public authorities;
• Combined discrimination;
• Gender pay gap information;
• Provisions relating to positive action in recruitment and promotion;
• The public sector equality duties.

On 17 November 2010 the government confirmed that it was not now going to bring into force the section introducing a socio-economic duty for certain public bodies.

On 2 December 2010, the government published The Equality Strategy – Building a Fairer Britain which confirmed:

• Positive action in recruitment and promotion. These provisions will be brought into force in April 2011. Employers will be allowed “to apply voluntary positive action in recruitment and promotion processes when faced with two or more candidates of equal merit, to address under-representation in the workforce”.
• Gender pay reporting. The government does not at this time intend to commence, amend or repeal section 78 which could introduce mandatory gender pay reporting for some employers. Instead, the government intends to work with businesses and others to develop a voluntary scheme for gender pay reporting in the private and voluntary sectors. This will be available to all private and voluntary sector businesses, but aimed in particular at those with 150 or more employees.
• Combined discrimination. It is of note that the government’s equality strategy document does not mention the provisions relating to combined discrimination. This has led to speculation that the government does not now intend to bring those provisions into force.

Extension of flexible working

The government has announced that the right to request flexible working will be extended to parents with children under 18 from April 2011. The new right will benefit an estimated 300,000 people, and help create a fairer, family-friendly society, according to Employment Relations Minister Edward Davey. A consultation on how to extend this right to all employees and create a new system of flexible parental leave will be launched later this year.

Limits on tribunal awards to increase from 1 February 2011

The Employment Rights (Increase of Limits) Order 2010 (SI 2926/2010), was laid before Parliament on 10 December 2010. The Order sets out the increases to the limits on tribunal awards from 1 February 2011. Notably, the maximum compensatory award for unfair dismissal will rise from £65,300 to £68,400 and the maximum amount of a week’s pay, used to calculate statutory redundancy pay (among other things), will rise from £380 to £400.

New statutory payment rates from 11 April 2011

On 9 December 2010 the government announced the proposed rates of statutory benefits which are expected to apply from 11 April 2011, including:

Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay. The standard rates will increase from £124.88 to £128.73. The weekly earnings threshold for these payments will rise from £97 to £102.

Statutory Sick Pay. SSP will increase from £79.15 to £81.60, with the weekly earnings threshold also rising from £97 to £102.

Maternity allowance. This will increase from £124.88 to £128.73, with the earnings threshold remaining at £30.

Updated disability guidance

The outcome of the Office for Disability Issues’ consultation on its proposed changes to the Guidance on matters to be taken into account in determining questions relating to the definition of disability is awaited. The consultation closed on 31 October 2010. The revised Guidance takes into account the changes introduced by the Equality Act 2010 on 1 October 2010, including the removal of the list of “capacities” and the introduction of the concept of “protected characteristics”. It has also been updated to reflect recent case law developments concerning the statutory meaning of “likely” and the cumulative effect of more than one impairment. The revised Guidance is not expected to come into force until April 2011.

Legislation currently under on hold or under review

Unfair dismissal qualifying period

On 1 November 2010 the government advised that it is currently considering whether to increase the period of qualifying service required for “ordinary” unfair dismissal claims from one to two years as part of its effort to support small businesses.

Additional paternity leave and pay regulations

In September 2010 the government confirmed that these regulations would remain in force “as an interim measure” in order to facilitate its plans to extend flexible working rights and encourage “shared parenting from the earliest stages of pregnancy”.

Vetting and barring scheme

Following the government’s announcement in June 2010 that the vetting and barring scheme would be “remodelled”, the government launched a major review of the scheme in October 2010. The outcome of the review is not expected until early 2011.

Immigration

In September 2010, Immigration Minister, Damian Green, confirmed an official government review into the UK’s immigration system will take place, with a view to introducing new, more effective, rules. According to Mr Green, recent plans to limit the number of non-EU economic migrants entering the UK will not go far enough in lowering net migration levels.

On 24 November 2010 the government announced the cap that will apply to certain categories of non-EU migrants from April 2011.

48-hour week for doctors

In August 2010 it was reported that the government is to review the 48-hour working week limit for doctors, set by the Working Time Directive (2003/88/EC).  A survey by the Royal College of Surgeons found that 80% of respondents felt hospitals were much less safe since the application of the 48-hour working limit to junior doctors in August 2009, and that the rules were placing patients’ lives at risk. A spokesman for the Department of Health has recognised the “clearly unsatisfactory” system currently in place, and has promised to take a robust approach to future negotiations on the maintenance of, and opt-out from, the Directive.  

Right to request time off for training

On 11 August 2010, the government launched a 12-week consultation on the future of the right to request time to. On 11 November 2010, Business Minister Mark Prisk, made a statement to the House of Commons that the right would not be extended to employees of businesses with less than 50 employees. However, on 17 November, Mr Prisk said that his earlier statement was “premature” and that the policy was “still under active consideration until final decisions can be made”.

All employers should therefore assume that the “right to request” procedure will apply to them from 6 April 2011, pending any further announcements. It already applies to those with 250 employees or more.

Employment of children

In March 2010, the Department for Children, Schools and Families published a review of child performance regulation, which recommended a number of legislative changes. In September 2010, Children’s minister, Tim Loughton, confirmed a full review of the law in this area would take place this autumn, as well as the “antiquated” legislation relating to child employment.

Agency worker regulations 2010

The future of the regulations in their current form seemed uncertain when BIS announced in July 2010 that they were under review. However, on 19 October 2010 the government announced that it will not be amending the regulations before they come into force in October 2011.

Issues due before the courts

Summarised below are some of the important employment cases due before the courts and tribunals in forthcoming months.

Can the buyer of a pre-pack business in administration avoid the automatic transfer of employees?

Uncertainty surrounding this area has continued for more than a year. In October 2009, the Court of Appeal in Oakland v Wellswood (Yorkshire) Ltd [2009] EWCA Civ 1094 held that continuity of employment was preserved by section 218 ERA when an employee of a company in administration was employed by the buyer following a pre-pack. However, the question of whether, and in what circumstances, the buyer in a pre-pack administration can avoid the automatic transfer of employees by virtue of regulation 8(7) TUPE remains uncertain.

The issue was considered by the President of the EAT in Olds v Late Editions Ltd UKEAT/0321/09 (together with three other similar cases) in October 2010 but the judgment is still awaited. For a detailed consideration of the current practical implications for transfers of insolvent businesses.

Are volunteers protected from discrimination?

A voluntary worker’s appeal in the case of X v Mid Sussex Citizens Advice Bureau and another UKEAT/0220/08  was heard by the Court of Appeal on 19 October 2010. The worker was appealing the EAT’s decision that as his volunteer arrangement with the CAB was non-contractual, he could not pursue employment claims against the CAB under the Disability Discrimination Act 1995.

Team moves

On 13 or 14 December 2010 the Court of Appeal was due to hear the appeal against the High Court decision in Tullett Prebon Plc and others v BGC Brokers LP and others [2010] EWHC 484 (QB); [2010] IRLR 648 that a group of brokers who resigned from Tullett Prebon with a view to joining a rival firm, BGC, had not been constructively dismissed. It will be interesting to see whether the Court of Appeal comments on the view expressed by the High Court that employees can rely on an employer’s fundamental breach of contract to justify their leaving employment, whether or not they resigned in response to that breach.

Right to representation at disciplinary hearings

In April 2011 the Supreme Court is due to consider the Court of Appeal’s ruling in R (on the application of G) v X School and others [2010] IRLR 222 that a teaching assistant was entitled to legal representation during disciplinary proceedings for sexual misconduct with a child, as Article 6 of the European Convention on Human Rights (right to a fair trial) was engaged which, given the seriousness of the charge and its likely effect in ending his career, included the right to legal representation.

Key recent developments

Employment status

On 5 October 2010 the Court of Appeal heard the individual’s appeal in Tilson v Alstom Transport [2010] EWCA Civ 1308 against an EAT finding that he was self-employed rather than an employee. The Court of Appeal upheld the EAT’s decision that Mr Tilson was not an employee, following the established legal principle that a contract of employment should only be implied where this is necessary to give business reality to the relationship and this is not necessary on the facts of the case.

Age discrimination: cost justification

In Woodcock v Cumbria Primary Care Trust UKEAT/0489/09 the EAT considered whether an employer could justify dismissing an employee early to avoid the cost of paying him an enhanced pension. Since Cross and others v British Airways plc UKEAT/0572/04/TM  it has generally been accepted that cost alone cannot be a legitimate aim to justify discrimination, but can be put into the balance with other factors.

In Woodcock the EAT decided that the Trust’s discrimination on the grounds of age was justifiable, because preventing Mr Woodcock from receiving the “windfall” of an enhanced pension was more than merely a costs-based legitimate aim. Interestingly, the EAT further commented, on an obiter basis, that it doubted the rule in Cross v British Airways that cost alone can never amount to objective justification in a discrimination case. It made obiter comments that it should be possible to justify a discriminatory state of affairs if the cost of rectifying it is disproportionate in comparison to the discriminatory effect.

This case contrasts with the EAT decision last year in London Borough of Tower Hamlets v Wooster [2009] IRLR 980 that a council had directly discriminated against an employee on grounds of his age when he was dismissed to avoid him remaining in employment until he reached 50, when he would have become entitled to enhanced early retirement terms.

Equality Act 2010

The majority of the Act’s provisions came into force on 1 October 2010. On 17 November 2010 the government confirmed that it would not now bring into force section 1 which would have introduced a socio-economic duty for certain public bodies.

The final draft versions of the EHRC employment and equal pay codes were laid before Parliament on 12 October 2010 and should shortly be brought into effect by Order. The EHRC has also published a suite of guidance documents for employers, workers, service providers, service users and education providers.

Disability discrimination aspects

The Equality Act (Disability) Regulations 2010 (SI 2010/2128), which replicate and consolidate the numerous regulations that previously supported the Disability Discrimination Act 1995, came into force on 1 October 2010. The only changes of note to employment practitioners are the new categories of persons with a visual impairment deemed to have a disability under the draft regulations.

National minimum wage: 1 October increases

From 1 October 2010 the new hourly rates are:

• Standard (adult) rate (workers aged over 21): £5.93 (rising from £5.80).
• Development rate (workers aged between 18 and 20): £4.92 (rising from £4.83).
• Young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices): £3.64 (rising from £3.57).
• The Government has extended the adult standard rate to 21-year-olds from October 2010 (the qualifying date up until that date is 22). There will be a new minimum wage for apprentices of £2.50 per hour for apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship. All other apprentices already receive the national minimum wage (NMW) depending on their age.

Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010

These regulations amend the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and came into force on 1 October 2010. Points to note are that the regulations:

• Re-structure the existing regulations on obtaining work-seekers’ consent to terms before providing services.
• Modify the suitability checks that employment businesses and employment agencies must carry out on work-seekers.
• Provide that advertisements for jobs no longer have to state whether the advertiser is an employment agency or an employment business, but will now need to state whether the position advertised is permanent or temporary.
• Introduce a 30-day cooling-off period applicable to performers (such as actors, dancers, singers and models) during which the work-seeker will have a right to cancel or withdraw from the contract with immediate effect.

New procedure to enforce COT3 settlements

From 1 October 2010 a new streamlined process to allow enforcement of un-honoured settlements contained in Acas COT3 forms has been introduced. Employees are now able to instruct a High Court Enforcement Officer to issue proceedings for a Writ of Fieri Facias on their behalf, and to undertake enforcement of the writ in a similar way to the current procedure for enforcing a tribunal judgment. A new court form, N471A, has been introduced for this purpose

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