Welcome to our November newsletter. The mood of the country is certainly difficult to gauge at the moment, with one political creed calling for strikes, another for cuts. What is certain is that it will be an interesting and challenging period for HR professionals, managers, directors and business owners over the next 24 months. Despite growth being reported in some sectors, trading conditions remain challenging and the Government's public sector restructuring agenda is going to lead to more redundancy and TUPE scenarios and possibly more private sector restructuring as the effects of the cuts are felt.
A sage lesson for businesses wanting to vary terms and conditions due to economic hardship can be found at item 4 below in the case of Bloxwich Fencing Ltd. The EAT found that because trust and confidence had broken down between employer and employee, the employee was not obliged to accept an alternative role on lower pay as the employer had breached his contract. Employers will do well to remember that once trust and confidence has been breached, it cannot be mended if the employee decides to act on the breach. It is therefore vital that all consultation relating to contractual changes is commenced in a way which will not breach trust and confidence (or any fundamental term of an employee's contract).
The royal wedding, threatened for so long, is finally upon us, and with it comes an extra bank holiday. Great news? Well, in theory, of course it is great news. However, employers will now have to look at their employees' employment terms and work out how on earth they are going to manage the extra day's holiday! Call your employment solutions employment lawyer and they will take you through the practicalities and advise you on the law.
Lord Young has been busy over the last year or so. He has attacked and recommended vast changes in health and safety law, criticised the civil law and now rounded on employment law (seemingly without realising that to change the law in any serious way we would have to pull out of the EU). He makes some interesting points on the proliferation of employment law claims and the two year qualifying period for unfair dismissal. Raising the threshold from one year to two may result in a small reduction in claims, however, it would also reduce access to justice and would incur the further wrath of the unions. Lord Young "was resigned" as a Government advisor for making somewhat injudicious remarks to a journalist regarding how well the general population is faring in this "alleged" recession. Lord Young was actually a solicitor, for one year, in 1955. This may explain his somewhat scathing views on the law; there is nothing worse than a bitter ex-lawyer. I for one wish Lord Young a well deserved retirement.
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This month's news:
1. Bribery Act
The Bribery Act 2010 introduces new criminal offences in connection with offering or receiving bribes. It also abolishes the old common law offences of "bribery and embracery". The main new offences are those of offering a bribe, accepting a bribe, bribing a foreign public official and (importantly for this employment law newsletter) a new corporate offence of failing to prevent bribery. The Act also provides for senior officers to be guilty of an offence committed by a body corporate if it was committed with their consent or connivance - turning a blind eye may have been possible for Lord Nelson two centuries ago but it is unlikely to wash under the Bribery Act 2010.
2. "Without Prejudice" negotiations
As is well known the general rule is that "without prejudice" negotiations which have previously taken place between the parties to a legal action are not admissible as evidence in Court. The reason for this, of course, is that it is in the public interest that people who are in dispute with each other should have the ability to speak entirely freely when trying to resolve the issues which are dividing them, without fear that what they say might later be used against them in court if they fail to reach a settlement. Exceptions to the general rule are few - there is for example an exception where the exclusion of what was communicated in without prejudice negotiations would act as a cloak for perjury or blackmail.
3. Corporate Manslaughter
Until April 2008 when (most of) the Corporate Manslaughter and Corporate Homicide Act 2007 came into force, a company could be convicted of corporate manslaughter only if there was evidence to find a single person guilty. For example, in the year 2000 prosecution which followed the Southall rail crash in which seven train passengers died, it was decided under the then law that a company could not be convicted of manslaughter by gross negligence in the absence of evidence establishing the guilt of an identified human individual for the same crime. Indeed it is understood that only seven small organisations had ever been convicted of that offence.
4. Pay Reductions
Especially when times are tough, employers sometimes seek to impose wage reductions or other substantial adverse changes to terms of employment of staff. Of course from an employment law point of view there is generally no problem if the employees concerned agree, however reluctantly, to accept the change(s) - which of course they may well do if the alternative is likely to be redundancy and accepting the change is the lesser of two evils.
5. Possible changes to unfair dismissal an other law following BIS review
The length of service needed to qualify for unfair dismissal rights has been changed from time to time. It started at six months when unfair dismissal was "invented" in 1971. It was increased in 1980 to one year (two years for small firms of 20 or less employees) and then to two years (for employees of any employer regardless of size) in 1985. Then in 1999 it was reduced to the current one year (although rather confusingly the two year period was left, and still continues, for the right to claim statutory redundancy pay).
6. Maternity leave changes and the EU
The Pregnant Workers Directive 92/85/EC requires EU Member States to ensure that employed pregnant women and new mothers are guaranteed income during a 14 week maternity leave period at least equivalent to that to which they would be entitled if off work sick. The European Parliament voted on 20 October 2010 in favour of plans to increase to 20 weeks this current 14 week period. A compromise "18 week" suggestion was rejected.
7. Working time, rest breaks and holidays
Statutes fixing wages and/or hours of work have existed in this country since the 14th century (the 1349 Ordinance of Labourers and the 1351 Statute of Labourers both made rules on the subject). The 1998 Working Time Regulations, as amended, are therefore just the latest set of rules. They were made only after the UK lost a legal battle with the European Commission, the latter having somewhat cheekily, after opposition from the UK in the early 1990s, switched the then proposed Working Time Directive from being introduced as a social policy measure requiring unanimity to introducing it as a health and safety measure which required only a majority vote to be enforceable on all Member States.
8. Health and safety simplification
In June 2010 the Coalition government appointed Lord Young to undertake a "review of the operation of health and safety laws and the growth of the compensation culture.". In November the Government dispensed with his services (see item 5 above) but that is another story. In any event his report, "Common Sense - Common Safety" was published in October with a foreword by the Prime Minister. While the report is interesting in itself, the foreword by David Cameron may be more significant as an indication of changes which can be expected. The major part of his foreword is as follows...
9. Errors in the Equality Act?
Has Parliament (and the law draftsman) got it wrong?
Our October newsletter was largely given over to looking at the new Equality Act. From 1 October 2010 this has replaced in one single Act the previous mish-mash of anti-discrimination Acts and Regulations enacted since 1970 so that the old Equal Pay Act, the Sex and Disability Discrimination Acts, the Race Relations Act, the age discrimination regulations and so on are all replaced. In most cases the practical effect of the changes for employers and employees will be negligible or non-existent although (as noted in last month's newsletter) there are some important conceptual changes and of course all the section and paragraph numbers are different.
This note considers a couple of anomalies which have crept in with the new wording...
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