September 2008

This month we have some extremely useful tips on redundancy that I am sure all our subscribers will wish to bear in mind given the current economic climate. It is important to understand that merely because a genuine redundancy situation exists and fair and reasonable procedures are implemented in the selection procedure, it does not necessarily mean that the dismissal will necessarily be fair. The three step dismissal and disciplinary procedures apply in all redundancy dismissals where the number to be made redundant is under twenty people. Ensuring that proper consultation and scoring meetings fit in with the three step procedure is tricky and the whole exercise needs careful planning. A search for alternative employment for each person at risk of redundancy is also a crucial stage of the process. An employer is, by law, under an obligation to search for alternative employment in the business in which the employee worked and all other businesses in the same group or under the same ownership. Tribunals will often pierce the corporate veil to see if more could have been done to ensure that the employee remained in employment. My advice is to offer all types of suitable employment available to those at risk to avoid putting your business at risk.

We revisit disability discrimination this month for further analysis on two very important recent cases. Both cases sound very important when first considered but there is much discussion about whether they will be applied in employment law. Mayor and Burgesses of the London Borough of Lewisham v Malcolm (25th June 2008) is a housing case and therefore may be distinguishable on that basis bearing in mind the limited defences available to local authorities in Disability Discrimination Act cases. Coleman v Attridge Law & anor 2008 is an ECJ case that results in the inception of a form of claim that can not, at present, be litigated in the UK. We shall keep all our subscribers updated on the way the tribunals and the government decide to act on these decisions.

We're delighted to welcome Rupert Budgen to our team of employment lawyers. Rupert has a great deal of experience dealing with complex cases. Rachael Clare and Jameel Abbas have also joined our Employment Solutions team and are equally welcome.

We'll be at the CIPD conference in Harrogate from 16th to 18th September so why not come and meet the team. You might even get some free employment law advice! Further information is available here.

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.

On a personal note I hope you have all had a refreshing summer break and are rested and invigorated for the year ahead. It may well be challenging!

Regards

Will Burrows


1. Redundancy (basics)

2. Redundancy (some subtleties)

3. Flexible working - April 2009 changes

4. The End of Indirect Disability Discrimination?

5. Disability discrimination - help for carers

6. Rights during additional maternity leave

7. New regulations effective 1st October 2008

8. and finally...



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1. Redundancy (basics)

Given current economic conditions, redundancy is a hot topic.  Here are 10 basic points to bear in mind:

  1. Redundancy is about the work requirements of the employer not about the performance of any individual employee(s).
  2. The fact that an employee is dismissed by reason of redundancy does not prevent him or her bringing a tribunal claim for unfair dismissal.
  3. In general statutory redundancy pay is calculated in the same way as the basic award component of unfair dismissal compensation. Redundancy pay is set off against an unfair dismissal basic award if the dismissal is subsequently found to have been unfair (so as a general rule they cancel each other out).
  4. A minimum of two years' continuous employment is required for a person to be entitled to statutory redundancy pay (it is one year for unfair dismissal claims).
  5. Maximum amount of a week's pay which can be taken into account in calculating statutory redundancy pay is (currently) £330. 
  6. Maximum statutory redundancy pay for an individual is (currently) £9,900, achievable only by an employee aged over 61 with 20 years continuous service. Maximum unfair dismissal compensation is generally £72,900 (in some cases there is no statutory limit).
  7. Age discrimination.  Since October 2006 age limits for entitlement to redundancy pay have been removed but the age-related parts of the formula for calculating statutory redundancy pay have not been removed.
  8. The same minimum statutory dismissal procedures must be observed when a dismissal is by reason of redundancy as when dismissal is for any other reason.
  9. An employee being dismissed by reason of redundancy is entitled to notice.
  10. Special consultation rules apply if 20 or more employees are to be dismissed at one establishment within a 90 day period and employment tribunals can award very substantial "protective awards" if these consultation rules are not followed.
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2. Redundancy (some subtleties)

And here are 10 less basic points about redundancy dismissal to bear in mind:

  1. It is a criminal offence for an employer to fail to give written details of calculation of a redundancy payment to a redundant employee.
  2. An employee may be able to claim the equivalent of statutory redundancy pay from the State if his employer fails to pay it.
  3. If an employee is made redundant without being told why he was selected, it is likely that an employment tribunal would find the dismissal was unfair dismissal for that reason alone.
  4. It is a breach of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000  to select employees for redundancy by virtue of their status as part time workers, unless justifiable on objective grounds.
  5. Until October 2006 statutory redundancy pay due to an employee would be reduced or extinguished if he or she was entitled to an occupational pension starting within the 90 weeks after the redundancy. This is no longer so.
  6. If a woman's job becomes redundant while she is on maternity leave she will be treated as  automatically unfairly dismissed if the employer had a suitable available vacancy but failed to offer it to her. A "small employer exception" to this rule was ended in April 2007.
  7. Civil servants are not eligible for statutory redundancy pay but their terms of service usually give them equivalent or better rights by contract.  Local Authority staff and other public sector employees who are not civil servants are eligible for statutory redundancy pay under normal rules.
  8. In deciding whether selection of an individual for redundancy was unfair (so that the employee concerned can claim unfair dismissal) an employment tribunal must not substitute its own view for that of the employer as to what was reasonable either in respect of redundancy selection criteria or implementation of the criteria. Rather the tribunal must consider the wider question of whether the selection was one that a reasonable employer acting reasonably could have made.
  9. Where a business is closing and 20 or more employees at one establishment are being made redundant the employer's statutory obligation to consult extends to consulting about reasons for the closure.  Only in the rare situation where there is to be closure but redundancies could be avoided will consultation over the closure decision itself not be needed.
  10. If an employer provides enhanced redundancy pay (i.e. an amount greater than that calculated in accordance with the statutory formula) it is unlawful age discrimination to pay all those being made redundant an amount calculated solely by reference to length of service or to pay them a flat amount regardless of age unless this can be objectively justified. Instead the enhanced redundancy pay must be calculated by applying the different multipliers which apply for different age groups where the statutory minimum is being paid.
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3. Flexible working - April 2009 changes

Since April 2003 parents and others responsible for looking after children aged under 6 (or under 18 if the child is disabled) have had a legal right to ensure that requests for flexible working arrangements (such as part-time work or working from home) are taken seriously by their employers. An important condition is that the employee must have been employed in his job for at least 6 months to be eligible.

In April 2007 the right to request flexible working was extended to employees with responsibility for caring for (i) spouses/ partners (ii) adult relatives as defined and (iii) adults living at the same address as the employee.

There has been recent consultation about extending the right to all parents with children under the age of 16.  The government has now announced that this extension is to come into effect in April 2009.

A further change in April 2009 will be removal of the obligation on an employer (currently often not observed) to give written notice to an employee of agreement to flexible working arrangements.  The obligation to write will NOT be removed where the employer refused a flexible working request.

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4. The End of Indirect Disability Discrimination?

As reported in our July newsletter, the House of Lords has effectively turned the Disability Discrimination Act on its head in the case of Mayor and Burgesses of the London Borough of Lewisham v Malcolm [2008] UKHL 43. The decision is long and complex and therefore it deserves proper analysis. In particular, HR professionals and managers may wish to know how the ruling will change the way that they implement the DDA. There are two main points that may have practical ramifications for Companies.

  1. The comparator for a claim under DDA S.3A(1) (indirect discrimination) appears to have been changed in favour of the employer. A claim under S.3A(1) is for less favourable treatment for a reason relating to a disability. This section was designed to take account of the fact that employers needed to take positive action to ensure that disabled people could function properly in the working environment. When bringing a claim under this section, the traditional view held by the courts was that the comparator (when assessing less favourable treatment) would be someone who was not disabled and to whom the reason for the less favourable treatment did not apply. An example would be a disabled person who was dismissed because of long term absence incurred as a result of their disability being compared to a normal worker who wasn't disabled or on long term sickness leave. If the employer had treated the two differently (which inevitably would happen) then they could only rely on the defence of justification to avoid a successful claim. In Malcolm, the House of Lords has given a judgement that would make the correct comparator for our disabled person in the above example a worker who had been on a similar period of long term sickness leave, but who was not disabled. If the employer can prove that they would have treated both employees in the same way then there will be no indirect discrimination. This effectively means that there is no real way that a claim can succeed under S.3A(1) as long as the employer can show that it was the absence that caused the dismissal, not the disability itself. If the disabled employee was to claim that the real reason for the dismissal was their disability, not their absence, then the claim would be for direct discrimination under S.3A(5). The upshot of this is that employees will find it a great deal harder to bring claims of indirect discrimination. This will probably result in more claims for direct discrimination, which are a lot harder to prove but for which there is no lawful defence once the employee has proved their case, and also claims for failure to make reasonable adjustments.

  2. The employer must have known (or ought to have known) that the employee was disabled. This criterion always existed for direct discrimination – a person can not discriminate on the grounds of disability without knowing that the victim is disabled – however, the application of “knowledge” of a disability to indirect discrimination is new. Their Lordships used the well known “guide dog” example which explains the situation as it now exists very well. The example is summarised as follows:-
    A blind man who requires the use of a guide dog telephones a restaurant and books a table for 8pm. He then asks the manager if the restaurant allows dogs. The manager says no and the man cancels the reservation.
    Under the old law this would amount to indirect discrimination and the manager would have to use the defence of justification to avoid a successful claim i.e. he didn't know the man was blind and that the dog would have been a guide dog. Under the new ruling there would be no successful claim of indirect discrimination as the manager would have to have known that the man was blind, something that he did not. The discriminator must now know that the employee is disabled before the employee can claim that they have been treated less favourably for a reason relating to their disability. This will no doubt come as a welcome boon for employers, however, the Government may well legislate to clarify the position if the Tribunals begin to throw out indirect discrimination claims.
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5. Disability discrimination - help for carers

In contrast to the case noted above which appears to favour employers, another recent case (this time in the European Court) clearly favours employees.

In essence the point in dispute was "Can the working mother of a disabled child win a disability discrimination claim if her employer refused to give her the same flexibility as regards her working arrangements as given to colleagues with non-disabled children - and called her 'lazy' when she sought to take time off to care for the child?". The European Court has said "Yes, that is unlawful disability discrimination".

On the face of it, the Disability Discrimination Act 1995 gives rights to employees who suffer from a disablity.  It would need a stretched interpretation of the Act for it to be used to give healthy employees the right to take time off to care for a disabled person (the Flexible Working regulations noted above are more obviously relevant in that situation).

However as the result of the ruling by the European Court of Justice in Coleman v Attridge Law & anor 2008 the British Act will either have to be amended or be given that stretched interpretation. The ECJ has ruled that "Where an employer treats an employee who is not himself disabled less favourably than another employee is, has been or would be treated in a comparable situation, and it is established that the less favourable treatment of that employee is based on the disability of his child, whose care is provided primarily by that employee ....." the employer is in breach of EC anti-discrimination law.

The case concerned a Ms Coleman who has a disabled son, born in 2002, with specialised caring requirements. She was employed by Attridge Law, a firm of solicitors.  She requested flexible working arrangements in order to care for the boy. Attridge Law refused the request. Amongst other claims she brought before the London South employment tribunal, Ms Coleman sued Attridge Law for disability discrimination.

The tribunal referred the question of principle to the European Court which, in July 2008, handed down the ruling noted above.

The repercussions of the ECJ decision are likely to be considerable.  Although Ms Coleman's case was concerned with disability discrimination, the same principle presumably applies to discrimination by reason of religion and belief, age, or sexual orientation as they are covered by the same EC anti-discrimination law.  Thus it seems that, as a result of the European Court's ruling, British law will have to recognise that employees can bring claims against their employers if they have been discriminated against because of association with a person of a particular age, sex, religion, belief or sexual orientation as well as because they are caring for a disabled person.

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6. Rights during additional maternity leave

Entitlement to maternity leave is 52 weeks and is available as of right to all employed mothers.

Until recently there were potentially significant differences between the rights of a woman during the first 26 weeks of maternity leave ("ordinary maternity leave") and those to which she was entitled thereafter ("additional maternity leave").  Further, until recently not all women were entitled to additional maternity leave - the requirement for a woman to have been in continuous employment with the same employer for (roughly) nine months before her expected week of childbirth as a condition of entitlement was progressively removed during 2006 and early 2007

New rules were introduced in April and July 2008 which now, for most practical purposes, abolish the remaining differences between ordinary and addtional maternity leave.    These rules are the Sex Discrimination Act 1975 (Amendment) Regulations 2008 and the Maternity and Parental Leave etc. and the Paternity and Adoption Leave (Amendment) Regulations 2008 .

Under the new rules, a woman's rights during additional maternity leave are upgraded to be the same as her rights during ordinary maternity leave and only minor differences continue (for example in regard to the notice which a woman must give if she intends to return to work early). The new rules apply if the woman's expected week of childbirth begins on or after 5th October 2008 and so are already operating.

The overall result is that for most practical purposes the distinction between "ordinary" and "additional" maternity leave is now of academic interest only. Employers must make sure that their maternity leave policies are adjusted accordingly.

For clarity, we should point out that the Statutory Maternity Pay rules do not (yet) mirror the rules for maternity leave.  SMP is, of course, a state benefit, albeit paid by employers through the normal payroll, funded by adjustments to their liability to pay national insurance contributions. The period for which SMP is payable was increased from 26 to 39 weeks in April 2007 and the government is on record as hoping to extend it to 52 weeks by 2010.  If and when this is achieved the SMP period will be aligned with maternity leave. Perhaps by then the now rather artificial distinction between ordinary and additional maternity leave will be removed. 

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7. New regulations effective 1st October 2008

As a general rule, the government tries to ensure that new employment law related regulations come into force on 6th April and 1st October in each year. The following employment law related regulations announced by the beginning of September come into force on 1st October 2008 (see also notes above on "Rights during additional maternity leave"):-

  • The National Minimum Wage Regulations 1999 (Amendment) Regulations 2008, SI 2008/1894
  • The Employers' Liability (Compulsory Insurance) (Amendment) Regulations 2008, SI 2008/1765
  • The Mesothelioma Lump Sum Payments (Claims and Reconsiderations) Regulations 2008, SI 2008/1595
  • The Mesothelioma Lump Sum Payments (Conditions and Amounts) Regulations 2008, SI 2008/1963
  • The Social Security (Recovery of Benefits) (Lump Sum Payments) Regulations 2008, SI 2008/1596
  • The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008, SI 2008/1050
  • The Personal and Occupational Pension Schemes (Amendment) Regulations 2008, SI 2008/1979
  • The Armed Forces Act 2006 (Commencement No. 3) Order 2008, SI 2008/1650
  • The Police Authority Regulations 2008, SI 2008/630 in so far as they revoke the Police Authorities (Selection Panel) Regulations 1994
  • The Metropolitan Police Authority Regulations 2008, SI 2008/631 apply in respect of appointments of members of the Metropolitan Police Authority taking effect on or after 1st October 2008
  • The Companies Act 2006 (Commencement No. 6, Saving and Commencement Nos. 3 and 5 (Amendment)) Order 2008, SI 2008/674

The first two listed above will be relevant for almost all employers. As previously advised the government has announced that the adult minimum wage rate will rise from £5.52 to £5.73 an hour in October. The youth rate for those aged 18 to 21 will be increased from £4.60 to £4.77. The government has also said that the rate for workers aged 16-17 years who have ceased to be of school age increases from £3.40 to £3.53.

As of 1 October 2008, employers will be allowed to display their employers' liability certificate in an electronic format, so long as it remains readily accessible by all employees. In addition, the requirement for employers to retain copies of their certificates for 40 years will be removed. These changes come under the Employers' Liability (Compulsory Insurance) (Amendment) Regulations 2008.

The other Regulations listed will not apply to most employers but if you think that they may affect you and you want more information please get in touch.

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8. and finally...

For an unusual slant on the law against sexual harassment at work a recent report in the Daily Telegraph would be hard to beat.  The article concerns a case brought by a 22-year-old female advertising executive from St Petersburg.

She is quoted as telling the Russian judge that her middle aged male employer "always demanded that female workers signalled to him with their eyes that they desperately wanted to be laid on the boardroom table as soon as he gave the word. I didn't realise at first that he wasn't speaking metaphorically".

According to the article the judge ruled: "If we had no sexual harassment we would have no children". The article says that only two women have won sexual harassment cases in Russia since the collapse of the Soviet Union, one in 1993 and the other in 1997. This case did not add to the number.

An example best not relied on in the UK!


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

Rupert Budgen
Direct dial: 0151 239 1059
e-mail: rupertbudgen@canter-law.co.uk

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

Sean Carty
Direct dial: 0151 239 1138
e-mail: seancarty@canter-law.co.uk

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

For sales and client services enquiries please contact:

Jameel Abbas
Direct dial: 0151 239 1017
e-mail: jameelabbas@canter-law.co.uk

use our extensive resources on the CLB Employment Solutions website.

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