Newsletter May 2011


May was the quietest month for significant legal developments since I launched these Newsletters in February.

The most noteworthy ones, to my mind, relate to the management of discrimination risks. On the one hand, age discrimination claims are on the increase according to latest statistics, no doubt boosted by higher paid (and often older executives) using an age-based claim to overcome the limit on any unfair dismissal award they may recover. On the other hand, in the Cherfi case which I summarise below there is the suggestion that the courts may take an increasingly tolerant view of employers who use disproportionate cost as the reason for discriminatory action. If this were to take hold it would be a major advantage to employers in managing certain aspects of the workplace, such as benefit provision, and defeating claims.

I also pick up on reports by the National Union of Journalists that they have successfully supported an unpaid intern in her demands to be paid. This is an instructive reminder of the risks of using this type of labour source and of the increasing publicity this is receiving - it was covered by Andrew Marr on Radio 4 recently.

Darryl Evans
T: +44 (0)7771 725341

Reports of employment law changes are greatly exaggerated

Early in May we woke up to press reports that the government was proposing to make some significant changes to employment law: caps on discrimination awards, alterations to TUPE and reduced redundancy consultation periods. These turned out to be exaggerations, which is not surprising given that these are all areas which are subject to European law where the government's
freedom to make alterations is significantly restricted. As it turned out, the government merely announced that it will be "looking carefully at the arguments for reform" and that "legislation will not necessarily be the route to implement any change if there is a case for reform". Employers should not expect radical surgery.

Consultation on Modern Workplaces

Separately, the government has published Consultation on Modern Workplaces which contains proposals for a new system of shared flexible parental leave, an extension of the right to request flexible working, revisions to annual leave rules and the introduction of compulsory pay audits for employers found guilty of pay discrimination. The consultation will close on 8 August 2011. I will report in future Newsletters on the outcome of this consultation.

Must a Muslim employee be permitted time off to attend mosque?

This question, and similar ones related to employees of particular religious groups, can be particularly vexed for many employers. Refusing permission could amount to indirect discrimination, meaning the refusal is permissible only if it can be justified (direct discrimination is not capable of justification). This requires balancing the religious beliefs with the business needs.

G4S, the employer in the case of Cherfi v G4S Security Services Ltd (UKEAT/0379/10), decided it could put business needs first when it refused to let a security guard leave a client site on Friday lunchtimes to attend mosque. G4S was contractually obliged to its client to have a certain number of guards on site at all times and the consequence of breach could have been financial penalties for G4S, or even loss of the contract. The Employment Tribunal supported the employer's view and the Employment Appeals Tribunal (EAT) agreed: the requirement for security guards to remain on site was objectively justified as a proportionate means of achieving a legitimate aim.

Whilst this is good news for employers, it is important to appreciate that such cases are very fact specific. Here, for example, Mr Cherfi had refused a variety of alternative arrangements, such as changing his working days or using a prayer room at the client site. One suspects he did not gain much sympathy from the Tribunal as a result of being inflexible.

Of much broader significance is the comment made by the EAT that cost alone might justify an ostensibly discriminatory policy as long as the policy is proportionate. This identifies a possible relaxation of the principle that cost alone cannot justify discriminatory treatment: maybe it can do where the cost is excessive and disproportionate. There will be more cases on this issue.

Interns: a safe form of unpaid labour?

The National Union of Journalists has reported a 'first victory' in its support of claims by interns to be paid. Ms Keri Hudson has apparently won her case to be paid for work she undertook at the My Village website towards the end of 2010. The claim was presumably based on failure to pay national
minimum wage for work done and potentially for paid holiday as well.

It is important to understand that interns do not have a specific legal status in UK law. If an intern meets the legal tests of being an employee or a worker they will have the legal rights that flow from that, irrespective of whether the term 'intern' is used to describe them in the business.

The Government's guidance on the minimum wage refers to this issue. It states that if there is an obligation to perform tasks, or if the placement may lead to an offer of permanent or paid work on completion, so there is more than mere shadowing for example, the line between unpaid volunteer and
worker is likely to be crossed. Any employers with unpaid interns in their work force would do well to review what those interns are being asked to do by their managers.

Three months is up - we can relax

Not necessarily. The EAT has decided that it may not be reasonably practicable for an unfair dismissal claim to be presented within the required time period (three months from date of dismissal) if the employee is reasonably ignorant of that limit.

In this particular case, the employee appealed against his dismissal and waited until that process had ended before looking into whether he could bring a claim. By then, three months had been and gone. Nonetheless, the EAT saw the obvious sense in the employee waiting for the outcome of the appeal
before resorting to the courts and regarded it as reasonable for someone inexperienced and ignorant of the law and procedure not to explore the practicalities of bringing a claim within time. The employee could bring his claim. Ignorance of the law is no defence? Not in this case. (John Lewis Partnership v Charman UKEAT/0079/11.)

Employer's room for manoeuvre

It is important for an employer to remember that, in an unfair dismissal case, an Employment Tribunal is not supposed to substitute its own view for that of the employer, merely to curb unreasonable behaviour. The employer usually has a lot of freedom to make its own decisions, and often the
biggest trap is failing to follow proper process, especially if that means that a particular issue is not addressed at all.

The recent case of David Cover & Sons (UKEAT/0374/10) illustrates this point. The EAT said that, when assessing the fairness of selection for redundancy, the marks awarded in the selection process should only be investigated by the Tribunal in exceptional circumstances, such as where it appeared there may be bias or obvious error.

Agency Workers Regulations guidance

The final government guidance on the Agency Worker Regulations, which I referred to in my April Newsletter, has now been published, although how final is final? Already there have been amendments to the section on pay between assignments and what constitutes "pay". The guidance remains
valuable for any employer with agency staff to help them prepare for these important new rules.

Age discrimination claims - happening at a Tribunal near you

I thought this statistic was interesting: the number of age discrimination claims increased by 164% to 2,900 in the three months to December 2010, compared to 1,100 for the same period in 2009. When the age discrimination laws came into effect in 2006 I, and many others, predicted high volumes of
claims given that every employee has an age and can compare themselves with someone of a different age. These latest figures suggest that the idea of making a claim may be catching on: presumably in many cases dismissed staff, especially higher paid executives, are relying on an age-based argument to
overcome the cap on the award they could recover where their claim is limited to unfair dismissal.

Bank holiday for the Diamond Jubilee

Tuesday 5 June 2012 will be a bank holiday to commemorate the Queen's Diamond Jubilee (and will form part of a long weekend as the late May bank holiday will be moved to Monday 4 June).

Employees do not have a statutory right to take off this or any other bank or public holiday. Their rights will be determined by the contract of employment, although of course many grant a certain number of days of holiday with bank/public holidays in addition.

Tax on legal fees - an update

I referred in my April Newsletter to a change in the rule allowing legal fees paid by an employer on termination of employment not to be a taxable benefit of the employee. This HMRC concession was formalised into an Order which sounded like good news, except it threw up a problem: was it now
limited to situations where the employee enters a compromise agreement under the Employment Rights Act 1996? That would exclude situations where that Act is not relevant, for example where the claim is only for discrimination under the Equality Act, or where there is no compromise agreement at all, for example because ACAS brokers a settlement and a COT3 form is used to document it.

HMRC has now confirmed that the exemption is not limited to agreements that compromise claims under the Employment Rights Act 1996. Rather, it applies to all agreements that satisfy the ERA compromise agreement conditions. This does seem to mean, though, that if a compromise agreement is not used the concession will not be available.

The information and any commentary contained in this newsletter are for general information purposes only and do not constitute legal or any other type of professional advice. Darryl Evans and Evans Employment Law Limited do not accept any and, to the extent permitted by law, exclude all, liability to any person for any loss which may arise from relying upon or otherwise using the information contained in this newsletter. If you have a particular query or issue you are strongly advised to obtain specific, personal advice and not to rely on the information or comments in this newsletter.

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