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Employment Law Newsletter - February 2013


All change!

After all the talk, false or slow starts and 'calls for evidence', the mooted changes in employment legislation have started to firm up.

The Order amending the collective consultation rules for any large-scale redundancy proposal 'made' from 6th April onwards has been published. It reduces the minimum timescale on dismissal exercises involving more than 100 redundancies to 45 days. And it excludes from the headcount (for both 20+ and 100+ exercises) those on fixed-term contracts, unless the proposal would entail dismissal before the term expires.

Then there are 'employee shareholders' - you know, the people who (it is assumed) will give up substantial employment protections from April in return for shares in their employers' businesses worth at least £2,000 (with exemption from capital gains tax on up to £50,000 worth). The draft legislation is making its way through the House of Lords, where, despite receiving much criticism, it has not incorporated ideas such as requirements for written agreement and legal advice or a block on the withdrawal of benefits for refusing a job offered only as an employee shareholder.

The Children and Families Bill has just started its progress through Parliament. It will lay the ground for shared parental leave (and pay) at any time after a mother's completion of the two weeks' compulsory maternity leave. Once a mother ends her maternity leave, the remaining 'balance' of her 52-week entitlement will be available for sharing with her partner - whether concurrently, with the partner taking the entire balance, or on an alternating basis. When shared parental leave does come in, the less flexible additional paternity leave will be abolished. The Bill also creates new rights for fathers, partners and adopters to attend ante-natal and adoption appointments and extends the right to request flexible working to all employees.

On 'ending the employment relationship', the outcome of the recent consultation exercise is that the Government is moving forward with a new code of practice, supporting guidance and optional templates on settlement agreements. For unfair dismissal, there will be a second cap on the compensatory award of 12 months' pay - if that amount is less than the current overall maximum of £74,200.

For TUPE, the Government's recently published consultation document goes farther than we and others predicted. Alongside changes to some wordings 'to reflect more closely...the Directive [and/or] ECJ decisions', it contemplates removing the discrete 'service provision change' definition and the specific requirement for the transferor to supply Employee Liability Information. Even more interestingly, it suggests that appropriate pre-transfer consultation by the transferee on post-transfer redundancies could count under the large-scale redundancy consultation rules. It also seeks views on limiting to 12 months the ability of transferred employees to benefit from post-transfer changes negotiated under a collective agreement applicable to their pre-transfer employment (under current legislation, this question is the subject of a longstanding referral to the ECJ in Parkwood v Alemo-Herron - see our July 2011 issue). And it solicits opinions on a transferee's being able to justify pre-transfer dismissals effected under the transferor's 'economic, technical or organisational' reason.

All that and there's more for another day - watch this space!


The danger of detail

In Piper v Maidstone & Tunbridge NHS Trust, the EAT held that an employee's dismissal for gross misconduct was still live and he could claim unfair dismissal, even though he had appealed and his employer had substituted a final written warning. This was because the employer's appeal procedure made the imposition of a lesser penalty subject to the employee's consent. The message is simple - don't make yourself a hostage to fortune. Leave any reference to consent out and treat consent as implicit from the fact of an appeal; then the dismissal will be automatically expunged if a less serious sanction is applied after the appeal hearing.


It's not a simple counting-up - disability and impaired activities

In Aderemi v London & South East Railway, Mr Aderemi's job involved standing or walking for large portions of each nine-hour shift. He developed a major back problem which prevented his doing this, so he was dismissed. His claim that he was disabled succeeded before the EAT. Although there were many 'normal day-to-day activities' that he was still able to perform satisfactorily despite his condition, the employment tribunal was mistaken to focus on that fact. His capacity to do other activities, both at work and in life generally, were significantly impaired - and that was what mattered.


Reap what you sow

Around the turn of the year, two banks were reported to be linking significant elements of senior investment managers' bonus arrangements to aspects of recent scandals in the sector. For Credit Suisse, part of a bonus will be paid in bonds whose value depends on the performance of assets to which the bank is exposed - the 'toxic loan' becomes a 'toxic bonus'. For Barclays, the approach will be to use adherence to a new 'culture and ethos' as a criterion for reward, alongside the meeting of financial targets.

Make no mistake about it, there's something in it for the banks themselves (Credit Suisse's previous scheme of this type reduced its payment of cash or share-based bonuses by almost $1.5 billion). And, whatever scoring mechanism is attached to it, the qualitative emphasis of the 'culture and ethos' standard could result in discrepancies and disarray in its operation. But at least the 'signals', both internally and externally, are right, trying to strike an appropriate balance between driving business growth and protecting investors. Albeit in less dramatic, high-profile circumstances, do your bonus arrangements need a review to ensure they are measuring and reflecting the right behaviours as well as outcomes?


Redundancy payments and age discrimination

In June 2012, we featured the Supreme Court's decision in Seldon v Clarkson, Wright & Jakes. It established that 'direct' age discrimination can only be justified by reference to public interest/policy considerations. We suggested that such considerations might not be difficult to find in deserving or appropriate cases. Now, in Lockwood v DWP, the EAT has illustrated the point in the context of superficially discriminatory redundancy payments (an area where the courts have already demonstrated some wariness of disturbing things too much). Ms Lockwood, in her mid-twenties, received considerably less than a colleague some ten years older with the same amount of service (eight years). Her claim of age discrimination was rejected. Not only did the respondent have a clear policy of making higher payments for older leavers to give them increased financial security (the true objective justification point), but there was a material difference between Ms Lockwood and her comparator - which meant the two were not even properly 'comparable' in the first place! This was that older people face relatively greater difficulties on losing work. It might sound like two ways of saying pretty much the same thing (it is), but the decision serves to emphasise the caution with which both age discrimination generally and supposedly discriminatory schemes in particular are being approached.

If you would like to discuss this or any other issue facing your organisation please speak to your usual contact at Collinson Grant or Richard Hendry on 0161 703 5600

Although care has been taken in the preparation of this Newsletter, Collinson Grant cannot accept responsibility for errors, omissions or advice given. Readers should note that only Acts of Parliament and Statutory Instruments have the force of law and only the courts can authoritatively interpret the law.