Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
Apri 2011

Welcome to the April edition of the Canter Levin & Berg Employment Solutions newsletter.

It's a wide ranging report this month, covering issues such as the Bribery Act, the tax treatment of compromise agreement settlement payments, a strange and perhaps unintended anomaly concerning additional paternity leave and the latest (and in my view remarkable) development concerning discrimination relating to a "belief system".

No doubt most business owners and managers would think that they have nothing to do with bribery. News reports on the topic tend to concern "brown envelopes", typically in connection with international defence contracts. However, the guidance notes which have been issued (see item 1) make it clear that all business owners and those in senior management positions can incur personal criminal liability. Even small businesses should have procedures in place to ensure that bribery is avoided since this will be a key element in avoiding prosecution. So, should you cancel all your forthcoming hospitality events? The answer seems to be "no" as long as you are able to show, if called on to do so, that there is no intention to encourage people to act in bad faith. This will undoubtedly be a fertile area for new case law once the legislation comes into effect in July.

The CBI has produced an interesting report (item 9) which includes scathing but regrettably justifiable criticism of the employment tribunals system. If you have experience of dealing with tribunals (or expect that you may have to deal with a tribunal claim) the report makes for informative and salutary reading. The idea that having to deal with a tribunal claim is all stacked one way is clearly no longer an urban myth.

Finally, although it may be hard to comprehend, believing that the BBC has a "higher purpose" is, according to a recent tribunal decision, one which is capable of protection under discrimination legislation. Regular readers will know that the legal approach to protection of religion and belief systems is one of my favourite topics and this latest contribution (item 10) is a stark example of how far employment law can be taken in practice (perhaps unintentionally).

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Will Burrows

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This month's news:

1. Bribery Act

The Bribery Act 2010 was passed just over a year ago, on 8 April 2010 as one of the final pieces of legislation enacted by the last Labour government. The incoming coalition government originally intended to bring the Act into force on 1 October 2010 but postponed this until April 2011 - and then again postponed commencement of the Act following a consultation and representations from business until three months after publication of guidance on how the Act should be applied.

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2. termination of employment status, or termination of employment contract, or both? A conundrum.

Strange as it might sound, it is possible for one's status as an employee to end in circumstances that do not terminate one's contract of employment. This was the thorny issue in Société Générale London Branch v Geys, decided by the Court of Appeal on 30 March 2011.

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3. SMP and other April benefit increases

The main employment related National Insurance and similar benefits for 2011/2012 (starting at various dates in April 2011) are as noted in this link (see the Social Security Benefits Up-rating Order 2011). Equivalent details for earlier years going back as far as 1939 are available on a website maintained by the Institute for Fiscal Studies (click the link for full information).

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4. compromise agreements

For many years it has been the practice of the Inland Revenue, now HMRC, to publish "extra-statutory concessions". These effectively correct errors in and omission from legislation which would result in tax being collected where it would be inappropriate.

The practice has always been of questionable legitimacy. For HMRC to have discretion, even via published "extra statutory concessions", to decide that tax should not be payable when the law says it should does not fit well with contemporary ideas of law enforcement.

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5. Equality Act 2010 - new April provisions

As is well known, the Equality Act 2010 replaced the vast majority of British anti-discrimination laws with one single statute on 1 October 2010. Not all parts of the Act came into force on 1 October 2010 and (as previously reported) 6 April 2011 was the start date for three significant related items:

  1. Positive action (Equality Act 2010 s.159)
  2. Public Authority duties (Equality Act s.149)
  3. Codes of Practice issued by the Equality and Human Rights Commission

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6. March 2010 Budget and employment law

A government "Plan for Growth" document was issued along with the Budget on 23 March 2011. From an employment law angle the following items are of most significance:

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7. tax on termination payments

Amendments to the PAYE Regulations in effect from 6 April 2011 mean that the perfectly legal "trick" of deducting only basic rate PAYE from termination payments made to departing (or more accurately recently departed) employees who are higher rate tax payers will no longer work

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8. additional paternity leave

It is now well known that where parents of a child born on or after 3 April 2011 are both working, once the mother goes back to work the father (provided he has "clocked up" at least 26 weeks' continuous employment with the employer) can then take up to 26 weeks of "additional paternity leave".

What may be less well known, or at least not generally understood, is that the right to additional paternity leave is NOT the same, and does not have the same effect as, a right to share between them as they choose the normal 52 weeks' maternity leave available to mothers.

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9. CBI attacks Employment Tribunals and sets out compelling case for reform

The Government is currently carrying out a consultation on workplace dispute reforms and on Friday 15 April the CBI added its substantial contribution to the debate in the form of its report: "Settling the matter: Building a more effective and efficient tribunal system".

The report criticises the current "slow, legalistic and antagonistic" process so derided in particular by owners of SMEs who regard it as stacked against them from the outset.

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10. and finally...yet more on what constitutes a "philosophical belief" in the context of discrimination

I have written on numerous occasions about the sometimes odd and unexpected practical applications of the Religion and Belief Regulations (now incorporated within the Equality Act).

This month has seen another and some would say rather tenuous interpretation of what constitutes a protected philosophical belief. Mr Devan Maistry worked for the BBC and presented complaints to an employment tribunal alleging discrimination based on his age and his belief that "public service broadcasting has the higher purpose of promoting cultural interchange and social cohesion".

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