Discipline & Grievances

Top of the list of things to look forward to in 2009 must be the wholesale repeal of the statutory dismissal and disciplinary procedures on 6 April 2009. Those of you who have grappled with the practical application of the procedures will no doubt welcome the removal of mandatory uplifts in compensation, the automatic unfair dismissal sanction and perhaps the most unsatisfactory aspect of the procedures, playing "spot the grievance".

The Employment Act 2008 received royal assent on 13 November last year. In addition to repealing the procedures, the Act will remove the provisions relating to procedural unfair dismissal (the so called partial Polkey reversal) and will introduce to the employment tribunals discretion to increase or reduce awards by up to 25% where either side unreasonably fails to comply with the new Advisory, Conciliation and Arbitration Service (ACAS) code of practice.

But is it all going to be plain sailing? Only time will tell but what we don't expect to see is a seamless return to the pre-October 2004 position. For instance, how will the employment tribunal exercise its discretion in applying this increase or decrease? Also, no doubt there will be difficulties arising during the transitional phase for dismissal procedures commencing/grievances arising before 6 April, but not yet concluded. The soon to be repealed procedures will no doubt continue to keep tribunals busy for some time yet! In the meantime, start studying the new ACAS Code of Practice and Guidance.

Redundancy

Top of the list of things not to look forward to in 2009 is the effects of the "credit crunch". Unfortunately, redundancy is a word we are all now getting used to hearing on the nightly news. As mentioned in part one, enhanced contractual schemes that do not "mirror" the statutory scheme need to be objectively justified and several tribunal cases at the end of 2008 have shown this is going to be difficult to do, even when the scheme has union support. The use of length of service as part of a redundancy matrix approved by the Employment Appeals Tribunal (EAT) in October as not falling foul of the age discrimination regulations, will shortly be subject to Court of Appeal scrutiny as the Rolls Royce case is being expedited.

Generally, employers need to carefully plan redundancy exercises and be mindful of their consultation obligations. Consultation must begin in "good time", but what this means continues to raise questions. This month the European Court of Justice (ECJ) will begin hearing a Finnish reference seeking clarification in a scenario where a parent company was considering a redundancy programme, but it had not taken concrete form and no decision had been made about whether redundancies would take place at a specific subsidiary company.

TUPE

Claims under TUPE 2006 will continue to work their way through the tribunal system. In particular we expect to see developments regarding service provision changes and the particular difficulties encountered when an outsourcing is reorganised and dispersed across a different number of contractors.

We also hope to get some guidance from the Scottish EAT on whether there is an obligation on a transferee to consult after the transfer has taken place concerning changes which it proposes in respect of employees who have transferred across.

How the insolvency provisions within TUPE 2006 will help promote a "rescue culture" will also no doubt be tested in the current difficult economic climate.

Public Sector Contractors

Those involved in procurement or provision of public sector services will be well aware that there has been a plethora of guidance on workforce matters published since the introduction of best value in 1999. In broad terms, this guidance seeks to secure fair treatment for the public (and non-public) sector employees who may be affected by an outsourcing. The guiding principle is that outsourced services cannot deliver best value where that is achieved on the basis of poorer terms and conditions for the front line employees providing those services. The Government is now "streamlining" the guidance. Contractors need to be aware that the "streamlining" also involves revision. For instance, contracts for NHS Independent Treatment Centres (previously excluded from the Code), will be subject to the Code when renewed.

Equality is also on the agenda. We expect to get more detail of proposals contained in the Equality Bill (see below) to streamline the public sector Equality Duties by bringing together the three existing duties in relation to race, disability and gender and also extend these to cover gender reassignment, age, sexual orientation and religion or belief. Public bodies will be required to promote equality through their purchasing functions. This is expected to have a significant impact. The public sector currently spends £160 billion every year on purchasing goods and services from the private sector and 30% of British companies are contracted by the public sector. Failure to show a commitment to equality in the workplace could result in lost contracts.

Sickness Absence

January is the time to get out the travel brochures and dream of holidays in the sun. For HR professionals, you can look forward to the next instalment in the long running saga on whether employees on long term sick leave are entitled to paid holiday leave (at the moment the Court of Appeal has said no, but how long is "long-term") and how far back claims for accrued holiday on termination can go (at the moment limited to the last leave year) continues to rumble on.

The House of Lords referred the first question to the ECJ back in 2006, and finally at the end of January 2009 we will have the ECJ opinion on this. This of course will not mark the end of the saga as once we have the ECJ opinion, the matter will need to go back to the House of Lords to apply the ECJ decisions.

A German case referred to the ECJ, and heard at the same time, also asked whether workers absent on sick leave throughout an entire leave year(s) should be able to take their annual leave for the year(s) they were off ill, on their return to work in the following leave year.

In June the ECJ will also be considering another variation on this theme. The Spanish courts have asked whether an employee who has booked holiday leave, and then unable to take it due to a short-term injury, can carry over that leave into a subsequent holiday year.

Should the ECJ confirm that leave can be carried forward, employers will need to factor in increased costs in managing those on long-term sick leave. On the face of it, this looks like it would be good news for those on long-term sick leave. However, this may in fact lead to the quicker dismissal of those on long-term leave or a reduction in generous sick pay entitlements to offset additional holiday cost.

Discrimination

Equality Bill

The government has set out its proposals for the new Equality Bill. The main thrust of the Bill is to consolidate current discrimination legislation into one Act. It will also include provision for the creation of a single public sector equality duty; extend age discrimination laws to cover those providing goods, facilities and services; widen the scope of positive action; provide for greater pay transparency; and consolidate many existing discrimination laws.

A controversial proposal has been extending positive action so that employers will be able to take into account under-representation of a particular protected group when selecting for appointment or promotion between two equally qualified candidates. However, quota systems or having an automatic policy of favouring those from under-represented groups will remain unlawful.

Is this positive action or positive discrimination? Positive action is already permitted in targeting training or encouraging job applicants from under-represented groups. The difficult question in these cases will be: are the candidates genuinely equal and is the positive action provision tightly drawn enough? At the very least, the Government is going to give the legislation draftsman a real headache to avoid facing legal challenges down the line.

While positive action caught the immediate headlines, the greater practical impact on employers is likely to be in the detailed provisions yet to come. In particular, in relation to the promotion of pay/equality transparency and consolidating of the discrimination laws.

Equal Pay

The numerous large-scale public sector equal pay claims will continue to be a feature of 2009 as public sector employers continue to search for ways of settling numerous claims with limited resources.

While the number of equal pay claims against private employers remains relatively modest, be warned that one of the aims of the Equality Bill is greater pay transparency. This will include a new ban on secrecy clauses which prevent people discussing their own pay and the Equality and Human Rights Commission conducting enquiries into the financial services sector in light of its 41.5% gender pay gap as compared to the national average of 12.6%. The government is also considering requiring private employers to disclose gender pay information in their annual accounts.

Disability

As mentioned in part one, last year the House of Lords, in a housing case, turned on its head the well-established 'comparator' test for Disability Discrimination Act purposes. The Government is now consulting on how to address the now weakened concept of disability-related discrimination in the employment context. It may be replaced with the concept of indirect discrimination as found in other strands of discrimination law. 2009 should reveal how the government plans to deal with the issue.

The full impact of the Coleman decision last year, extending the concept of associative discrimination to diability (where a non-disabled employee claims discrimination due to a related person's disability) should become more evident over the course of 2009. While associative disability discrimination is now a potential claim, it does not extend to the obligation to make reasonable adjustments, as this was not part of the referral to the ECJ. While this would be a considerable stretch of the legislation, it remains to be seen if someone will argue the point.

The "new" discriminations

2009 will continue to see case law developments on the newer discrimination areas of age, religion and sexual orientation as claims continue to make their way through the appellate courts.

We eagerly await the ECJ judgment in the 'Heyday' challenge to the default retirement age of 65 contained within the age regulations. To recap, Heyday, an off-shoot of the National Council on Ageing, brought a claim against the government for introducing a national default retirement age of 65. The UK courts quickly sent a preliminary point off to Europe for clarification.

So far, we have the Advocate General's opinion that the UK retirement provisions may be age discriminatory, but potentially capable of being justified. Assuming the ECJ follows the Advocate General's opinion, this does not address the substantive question as to whether the UK default retirement age is justifiable. Once we have ECJ judgment, the matter will still need to go back to the High Court who will need to determine whether the government can establish a legitimate aim and whether this aim can be objectively justified. One to watch for 2009 with hundreds of potential claims on hold pending its ultimate conclusion.

More generally, 2009 will no doubt see further case law development around the issue of justification of age discriminatory practices, particulary in the context of redundancy schemes.

2009 will also see the continued clash of religious and sexual orientation discrimination rights with the Christian registrar who refused to perform same-sex unions vowing to continue her legal battle.

Family Friendly

From 6 April 2009 the right to request flexible working will be extended to parents of children aged 16 and under. Currently, the right is restricted to parents of children under six (or disabled children under 18), and carers of adult (18+) dependants. So all employees with dependant caring responsibilities will have the right to request flexible working? Not quite. For some strange reason the government has excluded carers of dependants aged 17 who are not disabled but may need care!

In 2009 we should get more detail of European proposals to increase the period of compulsory maternity leave to six weeks. This will impact employer bonus schemes. While employers generally can reduce pro rata a contractual bonus for absence due to maternity leave, this is not the case for the period of compulsory maternity leave (currently two weeks in the UK). In June we should also have the outcome of the European Commission's (rather appropriate) nine months review of parental leave.

However, for 2009, what is not happening is of more interest. The plans to extend statutory maternity pay to 52 weeks and introduce additional paid paternity leave effectively allowing both parents to share the maternity leave period have been delayed. The earliest possible is now April 2010, but don't hold your breath!

Agency Workers & Working Time

As mentioned in Part 1, the UK has finally agreed to the new Temporary Workers Directive (TWD), subject to a 12 week qualifying period applying in the UK. The Directive will provide agency workers with the right to equal treatment in basic working and employment conditions with employees of the end-user.

The government recently announced that it hopes to introduce the measures into UK law during the current Parliamentary session. However, the government is coming under increasing pressure to delay introduction until 2011.

The ending of the deadlock over the TWD, was possible due to a political agreement also being reached by the Council of Ministers over the future of the Working Time Directive (WTD). Under this agreement, the UK would be allowed to keep the 48 hour working week opt-out, subject to some significant new conditions, most notably an overall cap of 60 hours and no opt-outs permitted during the first four weeks of employment. Also, a new category of inactive on-call time would be introduced.

While the European Parliament accepted the political agreement in relation to the TWD allowing its smooth passage into European law, the WTD revision is having a very bumpy ride.

The European Parliament has rejected the agreement struck by the Council and is continuing to push for the ending of the opt-out in the next three years. It is important to remember that the final decision on the future of the opt-out does not rest with the Members of the European Parliament (MEPs). The matter will now go to the next stage of the European legislative process which requires the agreement of the Council.

From the stance taken by the Council and Commission to date and the concessions already made over the TWD, it seems unlikely that the Commission and Council will simply accept the MEPs' position and agree an end to the opt-out. Either a revised agreement will be reached, or deadlock will ensue which will simply preserve the status quo. The new Czech President of the EU has pledged to seek a compromise. No doubt the Commission, who thought they finally cracked years of deadlock, will not relish having again to chip away at the stalemate.

Cyberspace

Another trend for 2009 is likely to be the featuring of social networking sites in employment disputes. The increasing popularity of these sites is inevitably creating issues for HR managers such as use of these sites at work and the extent to which employees' online activities can be taken into account by employers. Issues may include: disgruntled employees publishing damaging comments; confidential contact lists being disclosed; Facebook entries contradicting sickness claims and cyber-bullying.

And finally 2009 numbers to know…

Tribunal Awards: From 1 February the annual increase in tribunal award limits apply including:

  • a week's pay - £350
  • maximum basic award/stat redundancy payment - £10,500
  • maximum compensatory award - £66,200

Note: The new rates apply where the 'appropriate date' occurs on or after 1 February (e.g. for unfair dismissal the EDT) and not the date of the corresponding tribunal hearing.

Holidays: from 1 April, the final staged increase in statutory holiday entitlement up to 5.6 weeks (being 28 days for someone working a five or more days a week) comes into force. The transitional provisions allowing "buy out" of the statutory days above 4.0 weeks also comes to an end.

Statutory Maternity Pay: From 5 April, the standard rates of statutory maternity, paternity and adoption pay increases to £123.06 per week.

Statutory Sick Pay: From 6 April, the standard rate of statutory sick pay increases to £79.15.