1. Key employment law changes in force 1 October 2014

Employment tribunals now have the power to order an employer who has breached equal pay law to carry out an equal pay audit and publish the audit on its external website for three years. The new power will apply to claims brought on or after 1 October.  Employers will need to factor this into decisions on settlement of claims and on whether to conduct a voluntary audit.  Further detail is available here.

Employees and agency workers now have a right to take unpaid time off to accompany a pregnant woman with whom they have a "qualifying relationship" to up to two antenatal appointments (of up to 6.5 hours each).  BIS has published a guide to the new right, available here.

Employees will no longer need the statutory qualifying period to bring an unfair dismissal claim where the dismissal is connected with the employee's membership of the Reserve Forces. Provision has also been made for payments to small and medium-sized employers of reservists who are called out for service.

National minimum wage rates have increased to £6.50 per hour for workers aged 21 and over, £5.13 for workers aged 18-20, £3.79 for workers aged 16 and 17 and £2.73 for apprentices. The accommodation offset rises to £5.08 a day.

2. Territorial scope of employment law rights: employees based abroad struggle to show sufficient connection to GB 

The Court of Appeal has confirmed that the right to claim unfair dismissal only applies to employees working or based abroad if they can show sufficiently strong connections with Great Britain and British employment law such as to displace the general rule that Parliament did not intend to extend protection to employees working or based abroad. It is not relevant that the system of law available in Great Britain is better or more favourable than that available in the jurisdiction where the employee was working at the time of his dismissal. On the facts the claimant, who had moved to work in Dubai, had insufficiently strong connections with Great Britain, notwithstanding his English employment contract with a company incorporated in England and Wales. (Creditsights Ltd v Dhunna)

In a second case this month, the EAT has upheld a tribunal's decision that a US citizen employed by a US company, who was required to spend around 49% of his working time in the UK, fell outside the territorial scope of unfair dismissal and discrimination legislation (the Employment Rights Act 1996 and the Equality Act 2010). This was because the employee had not given up his base in the US, despite carrying out work in the UK and other countries. He entered into a contract with an "overwhelmingly close connection" with the US, and this contract had not been overtaken by events. The dismissal had been carried out in the US, and the employee's assignment to the UK had finished before his employment was eventually terminated. (Fuller v United Healthcare Services Inc)

The case has been criticised by commentators, particularly in giving the Equality Act a narrower territorial scope than its predecessor legislation (which gave rights to those working partly in Great Britain).  A wider interpretation might also be required by EU law where the claimant is an EU citizen.

3. Shared parental leave: new guidance, and ET ruling relevant to pay enhancement

BIS has published technical guidance on the new shared parental leave (SPL) regime applicable to babies due from 5 April 2015, available here.  A short guide is also available from Acas, here.

A key issue for employers will be the extent to which they can or should offer enhanced pay during periods of SPL. The Government has taken the view that employers can choose to enhance maternity leave benefits but not extend the same benefits to SPL, on the basis that there cannot be any (direct) sex discrimination as both female and male parents on SPL are treated alike. However, the legal position is not clear cut and in any case there remains the potential for other claims such as indirect discrimination or unlawful detriment. 

An employment tribunal recently heard a claim that an employer's enhancement of pay during maternity leave, but not additional paternity leave, was discriminatory. The tribunal concluded that the correct comparator for direct sex discrimination purposes was a woman taking additional paternity leave (as the partner of the mother), and not a mother taking maternity leave, and therefore that claim was rejected. The employer conceded that the policy disadvantaged men disproportionately and was therefore indirectly discriminatory, but the tribunal ruled that it was objectively justified in that case by the need to recruit and retain women in a male-dominated workforce. (Shuter v Ford Motor Company Ltd).

Employers intending not to extend maternity pay enhancements to those on SPL will need to carefully consider the legal risks and whether their policy can be justified, bearing in mind that cost alone does not provide sufficient justification.  Please do contact us if you require any assistance reviewing your policies or pay strategy. A copy of the HSF briefing on the SPL regime is available on request.

4. Fixed-term employees: employer not liable for less favourable treatment under terms of PHI policy

An employer's policy with an insurer provided that employees received PHI cover after a 26 week qualifying period; however, fixed-term employees were not entitled to benefit where their fixed-term contracts expired before the end of the qualifying period (even if their contract was extended).

The EAT has upheld an ET ruling that the less favourable treatment suffered by the employee was the insurer's refusal to accept his claim, and the employer was not responsible for this because the insurer was not acting as the employer's agent.  The less favourable treatment was not the employer's earlier failure to negotiate an insurance policy extending cover to this type of situation. 

Even if the employer's negotiation of the policy had been less favourable treatment, the EAT upheld the ET's ruling that this would have been justified in pursuing the legitimate aim of providing employees with PHI at no greater expense than the costs of an annual premium, given that (on the limited evidence available) other insurers' policies also adopted the same, "apparently universal" approach. (Hall v Xerox UK Ltd)

Employers who provide benefits to employees will welcome the implication that they will not necessarily be responsible for discriminatory terms in the policies offered by their insurance provider.  However, it remains prudent to investigate whether more equal treatment might be available from other providers in the market. 

5. Trade union recognition: blocking by sweetheart unions, and new guidance

  • The High Court has ruled that UK trade union recognition law is not incompatible with the European Convention of Human Rights in allowing an independent union's application to be blocked by the existence of a non-independent "sweetheart" union recognised for very limited purposes.  This is because a worker has the right to apply for the sweetheart union to be derecognised;  if this is successful, the independent union can then apply for recognition.  (R (on the application of Boots Management Services Ltd) v CAC)
  • The Government has published guidance for employers setting out the process for dealing with a trade union's request for recognition.

6. New resources: Acas guidance on bereavement and dress codes

Following the Government's decision that it was not "feasible" to introduce a new statutory right to bereavement leave, Acas has published guidance on managing bereavement in the workplace.  This sets out the statutory position, offers best practice, and includes a sample bereavement policy.  

Acas has also published a short guide on dress codes, highlighting tattoos/body piercings and religious dress as two areas where employers need to consider their approach carefully.