April 2008

Welcome to this month's newsletter. April is a busy time for employment lawyers with new legislation coming into effect (see item 8).

We also have news about positive discrimination, an employment tribunal claim which was excluded because it was 9 seconds out of time, redundancy procedure and PAYE provisions.

If you have enquiries about the items featured or require any further information then don't hesitate to contact us on 0151 239 1000, freephone 08000 320974 or by e-mail to enquiries@clbemployment.com.

Regards

Will Burrows


1. Sex Discrimination - law changes

2. Race discrimination - positive moves?

3. Age discrimination - judges and solicitors

4. Offshore workers, doctors and working time

5. Time limits

6. Redundancy consultation (multiple redundancies)

7. PAYE change

8. New cases, statutes and regulations



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1. Sex Discrimination - law changes

In March last year the High Court ruled that the British Government was "guilty" of a breach of European law in that it had not properly implemented amendments to the EC "Equal Treatment" sex discrimination Directive.  It is now putting matters right.

The EC made the amendments in question in 2002.  They had to be implemented by October 2005.  The British government made new regulations accordingly but these were challenged in the High Court as inadequate, by the Equal Opportunities Commission.  The Court ruled that in three respects the 2005 British regulations had failed to implement the EU requirements.  The Government promised to put matters right by October 2007 but failed to do so.  Changes to Sex Discrimination law effective from 6th April 2008 will now correct the position.

Specifically the High Court found that the Government had failed properly to implement three EU requirements: (i) re sexual harassment - association with sex, not causation by it, should define harassment; (ii) re pregnancy/maternity - no male comparator is needed and British rules were wrong in so far as they suggested to the contrary; and (iii) in general under EC law there must be no differences between contractual benefits during compulsory, ordinary and additional maternity leave.

New Sex Discrimination Act 1975 (Amendment) Regulations 2008 in force from 6th April 2008, make changes to Sex Discrimination law to correct the position.

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2. Race discrimination - positive moves?

British rules outlawing discrimination in employment now cover discrimination on grounds of sex, race, age, sexual orientation, disability and religion or belief. The general rule is that discrimination on any of these grounds in favour of someone is as unlawful as discrimination against someone - positive discrimination in favour of one person almost by definition involves discrimination against someone else. There are important exceptions to this general rule in disability cases and a less important one is the Sex Discrimination (Election Candidates) Act 2002 which makes it lawful to have women-only shortlists at political elections (Anne Widdecombe MP is on record as saying about that "We whine and whine and demand special treatment. If that isn't an insult to women, I don't know what is").

Now pressure is mounting for there to be exceptions in some race discrimination situations. For example, a Race Relations (Election Candidates) Bill was presented to Parliament in February 2008 which, if enacted, will allow for the creation of electoral shortlists on the grounds of ethnicity in the selection of parliamentary candidates. Separately, Trevor Phillips, the head of the new equality commission, has drawn attention to the fact that a recent "Equalities Review" proposes new rules making it compulsory for the civil service, the NHS, councils, quangos and other public sector organisations and larger private companies to show bias in favour of some minority groups when hiring workers. In particular it can be difficult for Police Forces to achieve a desirable ethnic balance unless they are allowed to positively discriminate in selection of candidates.

Positive discrimination is unlawful so any plans along these lines would appear to require a significant change to primary legislation. However it is noteworthy that in some quarters a distinction is now being drawn between "positive discrimination" (unlawful) and "positive action" (which might be lawful). The difference is that positive discrimination would allow a candidate with worse job credentials to be given preferential treatment in selection for a job. Positive action does not go that far. This is an area where we can expect to see developments over the next few months - in particular watch out for the debate in the House of Commons on the 2nd reading of the Race Relations (Election Candidates) Bill, scheduled for 13th June 2008.

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3. Age discrimination - judges and solicitors

The government has recently been found to be in breach of the anti-age discrimination laws it introduced in October 2006. Following normal practice, the Ministry of Justice required Mr Paul Hampton, a London Recorder (fee paid part-time judge) to retire when he became 65 at the end of March 2007. Although there is a special exemption in the Age Discrimination Regulations allowing employers to require employees to retire at age 65 this did not apply. Mr Hampton was not an employee - he was what is technically called an "office holder" and the special "employee" exemption was therefore irrelevant.

The Ministry of Justice claimed however that instead a general exemption from the Regulations for actions which are a "proportionate means of achieving a legitimate aim" applied. The Ministry argued that enforced retirement of judges is necessary in order to ensure a reasonable flow of new appointments. A London employment tribunal accepted that this was a "legitimate aim". However it ruled that requiring Mr Hampton to retire at 65 was not a "proportionate means" of achieving that aim and therefore the Lord Chancellor and the Ministry of Justice were "guilty" of unlawful age discrimination by requiring him to retire at what is nowadays such a young age.

It is worth noting that a few weeks later the Government changed its practice and announced that henceforward Recorders, Deputy District Judges, Deputy High Court Judges, and Deputy Masters and Registrars should retire at their statutory retirement age of 70.

More importantly it is also worth noting that each case turns on its own facts. In another case, at about the same time as the Hampton case, a different employment tribunal, at Ashford in Kent, ruled that use of a clause in the partnership deed of a medium sized firm of solicitors requiring partners to retire at age 65 was justified. Using the clause was "a proportionate means of achieving a legitimate aim", essentially efficient long term management of the firm. The former senior partner of the firm therefore lost his claim that his enforced retirement at 65 amounted to unlawful age discrimination by his former partners.

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4. Offshore workers, doctors and working time

A recent employment tribunal case is worth noting partly because it is of considerable significance to those involved in the offshore oil and gas industry as well as being of interest to hospital doctors and partly because it has had the rare distinction of being welcomed by both the employers and the trade unions involved. Solomon himself would have been proud to have an employers' association press release saying "Oil & Gas UK welcomes Working Time Tribunal Decision" issued on the same day and in respect of the same judgment as one issued by the UNITE trade union proclaiming "Offshore workers win their right to paid leave".

As might be expected the case was complicated and technical. However the tribunal was quite clear on one important point, decided in favour of the employers, that rest time of workers on off-shore oil and gas rigs does not count as working time for the purpose of the Working Time Regulations. Although this might seem obvious in fact it is not. The European Court of Justice ruled in 2003 that all time spent by a doctor on call in a hospital is working time for the purpose of the EC Working Time Directive even if the doctor is resting. The off-shore workers claimed that it followed that all time spent by them on off-shore rigs must count as working time. The tribunal rejected that part of their claim although it agreed with those workers who had normal "2 week off-shore / 2 week on-shore" rotas that the part spent on shore did not count towards their annual holiday entitlement under the Working Time Regulations. The tribunal decision was given on 21st February. Both sides have 42 days in which to appeal so we should know very soon whether the matter will go on to the Employment Appeal Tribunal.

So far as doctors are concerned, it should be noted that the European Union is currently still wrestling with the problem thrown up by the European Court of Justice ruling noted above. That it is a very real problem was confirmed by the Employment Appeal Tribunal which, following the ECJ, held in 2006 (in MacCartney v Oversley House Management) that on-call time spent by a care-worker is "working time" even though she is allowed to sleep while on call.

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5. Time limits

It is well known that time limits are generally strictly applied in employment law cases. For example unfair dismissal claims must be presented within 3 months of the dismissal and appeals to the EAT must be filed within 42 days of the day on which the original tribunal's written reasons were sent to the parties.

Tribunals have discretion to extend time, a discretion which by statute is rather wider in discrimination cases than in most other cases. Although this should never be relied on, there are some recent indications that there may be some slight loosening of traditional rigidity in applying the rules. In spite of previous decisions suggesting the contrary, both the EAT and the Court of Appeal have recently suggested that the "overriding objective" of seeing that cases are handled justly is relevant when a tribunal is considering whether or not to exercise its discretion to allow a case to proceed if papers have been filed out of time.

In the EAT case, a claimant who spoke no English and had left matters in the hands of his insurers had various claims he made to an employment tribunal rejected as out of time. The EAT remitted the matter back for reconsideration as the tribunal had not taken the "overriding objective" properly into account when it had refused to exercise its discretion to extend time (Bleuse v MBT Transport, EAT 21.12.2007).

In the Court of Appeal case an employer was late in filing a notice of appeal to the EAT. Basic papers had been filed in time but an essential attachment was filed 33 minutes late. The EAT agreed to accept the appeal and the employee asked the Court of Appeal to overrule this. The Court of Appeal refused. It accepted that time limits should be relaxed only in rare and exceptional cases. However it said that this means it will only be in rare and exceptional cases that it is appropriate to extend time, NOT that the case itself must be a rare and exceptional one - and in doing so it specifically referred to the "overriding objective" (Jurkowska v Hlmad Ltd, CA 19.3.2008).

However none of this means that time limits should be treated lightly. Thus in October 2007 the EAT upheld an employment tribunal's refusal to accept a claim which had been submitted via the tribunal's website at 23:59:59 on the last day of the 3 month time limit. Logs showed that the form was received at 00:00:08, just 9 seconds late. The moral is clear - both employers and employees who have the misfortune to get involved in an employment tribunal case, as well as their respective advisers, must always pay great attention to time limits.

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6. Redundancy consultation (multiple redundancies)

When 20 or more employees are to be dismissed as redundant at one establishment within a 90 day period the employer must follow special consultation rules (set out in Trade Union and Labour Relations Consolidation Act 1992 s.188). Failure to comply with the rules can lead to a costly "protective award" of up to 90 days' pay for each of the individuals concerned.

In a case last year the Leeds employment tribunal found that an employer had breached this rule even though only 17 employees were dismissed as redundant (Optare Group Ltd v TGWU). The trouble was that three others had accepted voluntary redundancy. If those three were included in the head count for s.188 purposes then  the special consultation rules were triggered. The  tribunal found against the employer, essentially because the three who had accepted voluntary redundancy had only done so because they knew that otherwise they would have been made compulsorily redundant.

The employer lost an appeal to the EAT which agreed with the original tribunal. Under the wording of s.188 the obligation to consult arises where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a 90 day period and in this case there had been such a proposal. The fact that only 17 of the employees were actually dismissed in circumstances where the other 3 accepted voluntary redundancy made no difference. While clearly right in law, this decision may be a little surprising to some who might well wonder what would have happened if instead of allowing the three to accept voluntary redundancy  the employer had found them other jobs.

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7. PAYE change

Presumably it was a mistake, but PAYE regulations in force until 5th April 2008 enabled HMRC to charge double income tax in some circumstances. The position was rectified with effect from 6th April 2008 by the Income Tax (Pay As You Earn) (Amendment) Regulations 2008.

This double tax "reverse loophole" was established in a case before the Special Commissioners in 2005. A Mr Bone, who was employed by Demibourne Ltd to do general maintenance work at the Frensham Pond Hotel, retired when he reached 65. Demibourne then took him on as a self-employed contractor albeit doing essentially the same work as before. He sent in invoices and he paid income tax as a self-employed person on the monies he received. HMRC then claimed that he had never ceased to be an employee and therefore that Demibourne was in breach of the PAYE regulations - they had failed to deduct tax from payments made to Mr Bone. Happily the regulations gave HMRC a discretion to allow Demibourne to offset tax paid by Mr Bone against the PAYE liability. But that was a discretion only - in strict law it seems HMRC was entitled to the tax paid by Mr Bone as well as claiming unpaid PAYE from Demibourne Ltd.

Although the facts of the Demibourne case may be a little unusual, the general circumstances are not at all uncommon, especially in the construction industry where it is not always clear whether an individual is genuinely self-employed or is in fact an employee.

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8. New cases, statutes and regulations

In December 2003 the DTI announced that it would introduce domestic employment regulations for which it has responsibility on two dates each year: April 6th (the start of the tax year) and October 1st (the annual date on which the minimum wage is revised). This year there are 25 new sets of employment related regulations coming into force on 6th April (as well as another dozen which came into force on 1st April). Details are available on our website.

Amongst the April 2008 changes are the Sex Discrimination Act changes noted at (1) above and increases in Statutory Maternity Pay (from 112.75 to 117.18 per week) and in Statutory Sick Pay (from 72.55 to 75.40 per week), all with effect from 6th April 2008. It should also be noted that as from 6th April 2008 the Information and Consultation of Employees Regulations 2004 apply to undertakings with 50+ employees and that increases in the National Minimum Wage to take effect from 1st October 2008 have recently been announced (the adult rate will increase to 5.73, the development rate to 4.77 and the rate for 16-17 year olds to 3.53).


advice service

Call free on 08000 320974, e-mail enquiries@clbemployment.com or contact one of our employment lawyers:

Will Burrows
Direct dial: 0151 239 1010
e-mail: williamburrows@canter-law.co.uk

John Booth
Direct dial: 0151 239 1124
e-mail:johnbooth@canter-law.co.uk

Misbah Sadiq (currently on maternity leave)
Direct dial: 0151 239 1138
e-mail: misbahsadiq@canter-law.co.uk

Penny Craxton
Direct dial: 0151 239 1047
e-mail: penelopcraxton@canter-law.co.uk

Kath Kelly
Direct dial: 0151 239 1079
e-mail: katharinekelly@canter-law.co.uk

Martin Malone
Direct dial: 0151 239 1003
e-mail: martinmalone@canter-law.co.uk

use our extensive resources on the CLB Employment Solutions website.

service enquiries

If you have any enquiries about using the service or if you are interested in subscribing, please contact Will Burrows on 0151 239 1010 or e-mail willburrows@canter-law.co.uk.

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