A busy day for employment law

Published on October 3, 2011 in Employment Law. 0 Comments Tags: , , , .

So today is a busy day for employment law announcements. The Red Tape challenge shifts its focus to employment law, the Government has published a discussion document on an employment law review and George Osborne has announced that the qualifying period for unfair dismissal will rise to two years and a system of fees will be introduced for Employment Tribunal Claimants.

Oh and the Agency Workers Regulations are in force now. That news seems rather old hat, but for the record, some of what was written in the press about their impact was utter nonsense!

Let’s look at the Red Tape Challenge first.  One limitation of the exercise is that its focus is on Regulations rather than primary legislation – but that is not the area where most of our employment law is actually found. This leads to a bizarre list of regulations dealing with ‘letting people go’ which does not include unfair dismissal law! As a result the comments are about general employment law issues rather than the specific regulations that are at the heart of what the exercise is supposed to be about. Nevertheless, some poor civil servant will have to wade through all the ill-informed ranting about non-existent employment laws in order to find the genuine and useful contributions. I plan to send my comments in separately. To make sure they stand out, I shall write them in green ink, using bold CAPITAL LETTERS.

More important, I suspect, is the publication of the wider discussion document. At first sight this seems quite woolly and vague – because frankly, it is – but the Government are clearly initiating a wide ranging debate that goes well beyond the red tape challenge. The Government is asking a very open question – what should the ‘fundamental employment protections’ be? It is not clear that the answer is that they should be pretty much the same as the ones we have now.

The Government announcement of a two year qualifying period for unfair dismissal was entirely expected. But employers groups are likely to lobby for changes to go much further than that. While to some extent the Government’s hand is tied in areas covered by European law, it is worth noting that unfair dismissal law is not based on any European Directive. If the Government wanted to achieve a fundamental change, then unfair dismissal law would be the most likely area for reform.

As for the ET fees, this is going to create a huge new administrative burden for the Tribunal system to administer. Collecting fees from upwards of 100,000 people is no mean feat – nor is refunding those fees to successful claimants. The Tribunal service is currently not set up to do this and considerable fresh resources would be needed to set the system up. Reports suggest that the initial fee will be £250 plus another £1,000 if the case goes to hearing – with higher fees if the claimant is asking for more than £30,000.

This raises so many different issues that frankly, the mind boggles. At the moment we have many more questions than answers. Follow the Twitter hashtag #ukemplaw to see some of the excellent points being made about the proposals by  lawyers and others. Extensive consultation will be needed to bring this change in and it will be hugely controversial. My bet would be that the Government will miss its scheduled introduction of the new regime by April 2013.

The next year is going to be a fascinating time for employment law watchers

News of the World and Employment Law

Published on July 11, 2011 in Uncategorized. 2 Comments

The sudden closure of the News of the World has led to a great deal of employment law comment about the litigation that News International is likely to face. From unfair dismissal claims, through the collective consultation provisions, culminating in a learned analysis of ‘stigma’ damages that may be recoverable by journalists whose professional reputation has been damaged by the ‘goings on’ at the News of the World.

It strikes me that the online employment law community cares rather more about the employment law implications of the News of the Word closure than News International does.  I don’t want to pick apart all of the online analysis. Most of it is straightforward; some of it I disagree with – but these are complicated areas of the law and it would be possible to write quite an extensive essay on each aspect of the closure and still not cover all of the possible legal angles.

For me, the significant point is that if you are a certain kind of business then the mere technicalities of employment law do not stop you from doing what you want to do. NI did not have to get permission to close the News of the World – and the fact that they are almost certainly in breach of their S.188 collective consultation requirements did not enable the NUJ, the News International Staff Association or any of the staff themselves to prevent the closure. Essentially, breaching employment law leads to an additional financial cost for the employer – but does not prevent the employer from doing what it feels needs to be done.

And what is that financial cost? There are some 200 employees who have been given notice (just a rough figure, there may be more, and I am assuming that none of those 200 are freelancers). If we assume that 200 staff will go – what is a breach of employment law going to cost? (warning; complete guesswork follows)

Let’s assume everyone gets a maximum unfair dismissal award of £68K and a statutory redundancy payment of £5k. Add to that 200 protective awards of 90 days’ pay for each of the 200 journalists. I’m going to assume an average salary of £70,000 which pus the protective award at something like £17,000 per employee.

That gives us total compensation per employee of £90,000. Multiply that by 200 and you get £18,000,000.

That is the absolute top end of what the breach of employment law (plus statutory payments) can cost. In reality there will be fewer than 200 staff actually dismissed because some will find jobs elsewhere in News International. Not every journalist will expect to be out of work long enough to notch up the full compensatory award, but even those who do will not get that much because of the ‘Polkey deduction’. NI would argue that even if they had consulted, the paper would still have closed and the redundancies would still have happened.

Journalists are likely to accept compromise agreements for considerably less than the full amount. Better to get a certain payout now rather than an uncertain payout after an exhausting legal battle. Besides most of them would rather get on with their career than spend their time fighting for compensation in the Employment Tribunal.

So the total bill will actually be much less than £18,000,000. Half that maybe?

£9,000,000 still strikes me as a lot of money. But the total turnover of the Murdoch Empire is just over $32 billion.

The point is that if closing the News of the World suddenly and in a hurry is something that is seen as strategically important for the empire as a whole, then the overall cost of doing so is not that great.

For those of us in employment law, that’s a bit frustrating. We’d like to think that our expertise would be crucial to any employer looking to make such large scale redundancies.  But the fact is that when the financial stakes are this high, employment law hardly features on the list of things that senior executives are worried about.

I’m sure that lots of people will enjoy reading all of the articles about employment law and the News of the World closure – and the situation is a good way of illustrating the principles that normal employers would be keen to abide by.

When push comes to shove, however, News International has bigger things to worry about.

Darren Newman

Vince Cable and the future of the law on strikes

Published on June 6, 2011 in Employment Law. 0 Comments Tags: , , , , .

In the 18 years of the last Conservative government the law on industrial action was transformed. In a series of step-by-step reforms the government made secondary action illegal, introduced a requirement for strike ballots, independent scrutiny, and notice requirements – and wrapped the whole process in bundles of red tape.

Depending on your political point of view this was either a gross infringement of the fundamental right to strike or a much-needed dose of democracy for a union movement that had grown used to dictating economic policy by flexing its industrial muscle.

Whatever you think of these reforms however, most of them had a very clear rationale. Their stated aim was to ensure that any strike action genuinely had the support of the workforce being called upon to take part. In all the debates that took place about the reform of strike clause, I don’t remember a government minister ever suggesting that the purpose of the reform was to make taking strike action more difficult, in order to reduce the number of days lost due to industrial action. That may have been the subtext, but the reform was always put forward either as being necessary to ensure a democratic process or to give the employer an opportunity to prepare for the impact of the strike.

In a speech today, however, Vince Cable seems to have acknowledged that any further reform of strike law will be driven not by a need for improved democracy but by a more practical calculation – that if too much strike action takes place, then the Government’s job is to make taking action more difficult.

Politically of course many people may agree with this and there is a certain refreshing frankness in the Secretary of State’s approach. I, however, would prefer it if the government took a more principled stand.

A modest proposal

Any change in strike law is likely to focus on the turnout needed to make a strike ballot lawful. The CBI is suggesting, for example, that in order to support industrial action not only must the majority of those voting in the ballot vote yes, but they must account for at least 40% of those entitled to vote. This is the same threshold that applies in ballots for union recognition under the statutory recognition procedure.

I’m sure the CBI would not suggest that they are making this proposal in order to make strike action more difficult. Their proposal is specifically crafted to focus on the democratic mandate that valid strike action needs. The argument is that union members who choose not to vote in the ballot should not find themselves dragooned into taking industrial action by an active minority of their colleagues.

I think it would be interesting to test whether the CBI is genuinely concerned about the democratic mandate for action or whether it is simply using that argument in the hope of making strike action more difficult.

If we are primarily concerned with ensuring that the strike ballot attracts the largest possible turnout of potential voters, then there is an easy way to achieve that. We simply change the law to allow strike ballots to take place in the workplace rather than by post. There is no doubt that a workplace ballot is likely to achieve a much higher turnout than a postal ballot because less effort is required to cast your vote. Workplace ballots will also remove much of the red tape that currently surrounds the balloting process in terms of the maintenance of union records and the difficulty of ensuring that ballots are sent out to the right people.

The argument against this – and the reason that postal ballots were introduced in the first place – is that in a workplace ballot there is more opportunity for pressure to be put on individuals casting their vote. Any workplace ballot will therefore have to be surrounded by safeguards ensuring that there is no intimidation of this sort. The ballot could still be conducted by an independent person and be subjected to independent scrutiny. The scrutineer’s report could be required to state whether there was any evidence of intimidation or pressure being placed on employees.

The result would be a much higher turnout for strike ballots and the 40% threshold proposed by the CBI could be imposed without placing any unfair obstacles in the way of the union. Any ‘yes’ vote would, therefore, provide a strong democratic mandate for industrial action – a much stronger mandate come to that than most MPs are given when they are elected.

A bit of politics

I suspect however, that the CBI would not support this proposal – and would argue that postal ballots are a vital protection against intimidation for employees who want to vote ‘no’.

However, the real issue is a political one. In the blue corner are those who regard industrial action is fundamentally illegitimate and who want to restrict it as much as possible. In the red corner are those who believe that the right to strike should not be interfered with by government. Where you stand between those two extremes is essentially a political question. Arguments about fairness and democracy in the process are really just a cover, allowing you to support whichever political stance you instinctively feel most inclined towards. Vince Cable tacitly acknowledges this in his speech. The future of industrial action reform essentially depends on how much industrial action there is, and the level of political pressure on the LibDems within BIS, rather than any principled approach to how the law should work. The politics may be good knockabout stuff – but its unlikely to lead to wise lawmaking.

Sharon Shoesmith – My take on the Court of Appeal Decision

Published on May 31, 2011 in Employment Law. 3 Comments Tags: , , , , , .

It may well be that Sharon Shoesmith deserved to be sacked. I don’t know, because I am not an expert on child protection or the skills needed to be a Director of Children’s Services. I haven’t studied the OFSTED report into what happened on her watch. What I do know about, however, is how an employer should go about dealing with an issue like this in a fair way.  In this (rather long) post I want to look at the Appeal Court’s decision about her sacking because I think it raises some important issues about how employment law applies to very senior employees – particularly in the public sector where judicial review can be an effective way of challenging a dismissal.

Crucial to this case is that Ms Shoesmith had a dual status. She was an employee of Haringey Council where she was employed as Director of Children’s Services (DCS), but she was also the holder of the statutory office of DCS under the Children Act 2004. Obviously her employment and her holding of the office are linked – she couldn’t in practice be one without the other – but they are nevertheless legally distinct. The judicial review of her dismissal was therefore ultimately concerned with the way in which the Secretary of State (Ed Balls) had removed her from her office, and also the way in which Haringey had dismissed her from her employment.

Ms Shoesmith also challenged the OFSTED report that led to her dismissal. However the Court of Appeal rejected that part of her case, holding that the report was lawful. The challenge in this area was quite technical, being based on the arrangements under which the ‘Joint Area Review’ carried out by OFSTED should have been conducted. We don’t really need to worry about this aspect of the case.

Procedure not substance

The result, however, is that the Judicial Review was about the procedures followed by Ed Balls and Haringey which led to the dismissal. Neither the High Court nor the Court of Appeal was concerned with the substance of the OFSTED report, not the wider issues of whether Ms Shoesmith was good at her job or whether she was in any way to blame for the terrible events that led to Peter Connelly’s death.  This is not unusual. Most Judicial Review cases are concerned with the procedure prior to the decision rather than the merits of the decision itself. Come to that, the same is true of unfair dismissal cases.

Looked at in that light, it is surely not surprising that the procedures followed by both Ed Balls and Haringey were held to be unfair and unlawful. Let’s look at each of them in turn.

Ed Balls

It was Ed Balls who ordered an urgent Joint Area Review to be carried out by OFSTED and set the very tight timetable for completing that. As Secretary of State he had powers under S.497A(4B) of the Education Act 1996 to make directions to Haringey regarding its children’s services and it was these powers that he used to remove Ms Shoesmith from office. He did that by an Order made on 1st December 2008. OFSTED’s report had been completed only the previous evening so by any standards this was a swift decision. Ms Shoesmith had been consulted in the preparation of the report but had not seen it or been asked for her comments on it. In any event, the report itself, in keeping with OFSTED’s normal practice, did not in make direct personal criticism of any individuals. On the morning of 1st December, however, Ed Balls met with the officials involved in preparing the report and in the course of his conversation with them they did directly criticise Ms Shoesmith as having ‘no grip’ and said that Haringey was ‘exceptionally bad’ as regards ‘management and systemic failing’.  Ms Shoesmith was given absolutely no opportunity to respond to these comments or to defend herself against any accusation that she was personally to blame for any of the failings identified by OFSTED.

It was after this meeting with officials that Ed Balls made his decision to remove Ms Shoesmith from office. He did not arrange for her to be told that that was about to happen. Nor did he allow her to make any representations to either himself or his officials. She found out about the decision when he announced it in a press conference later that day. She was telephoned by Haringey during the press conference and told that she was suspended.

Surely any impartial observer would describe that process as being unfair? Isn’t it pretty fundamental (and obvious) that before anyone is removed from office on the basis of criticisms that have been made of them they should be informed of those criticisms and given an opportunity to respond? That doesn’t require a huge delay or a complicated quasi-judicial procedure, just a common-sense pause to allow the individual to make some sort of reasoned response.

Kevin Brennan has put forward a robust defence of Ed Balls on the Labour List blog. He says this:

That is why I disagree so strongly with the Appeal Court judges who pronounced on Friday with an opposite judgement to the High Court. The Appeal Court has concluded that Ed Balls’ decision was unlawful because Sharon Shoesmith didn’t get enough of a hearing, or should have had the chance to speak to the Secretary of State before the decision was made.

The Appeal Court has now said that Ed Balls should have had a personal meeting with Sharon Shoesmith – after he received the report from the independent inspectors before making his decision. That is not the process which the law set out or what his Department’s lawyers and experts advised at the time. Nor does it make any sense.

For a start any such meeting or representation could have made no material difference to the decision Ed Balls took. Ofsted had already completed its independent report. In compiling it they talked to Sharon Shoesmith. Their conclusions made a change in leadership essential. Wider public confidence and the facts of the Baby Peter case made that change urgent.

A few points to make here. First of all, the Court may have reached a different conclusion to the High Court – Appeal Courts do that sometimes – but let’s not overstate how ‘opposite’ their decision was. The High Court judge was clearly unhappy about the procedure that had been followed but held that the circumstances that Ed Balls faced lessened his obligation to be behave fairly. The Court of Appeal have overturned that and held that although the level of procedural fairness varies with the circumstances, the circumstances in this case did not prevent a fair procedure from being followed. A fair procedure need not have taken very long – it was simply a question of giving Ms Shoesmith an opportunity to put her side of the story.

As for the ‘personal meeting’ that Mr Brennan says the Appeal Court required, it actually required no such thing – there is no suggestion that she should have had a meeting with Mr Balls himself.  If she had been allowed to put her case to the Ofsted team who made the direct and personal criticisms of her and had that case properly been considered by them, then Mr Balls would have been entitled to act on their advice.

Much is made of the urgency of the situation, but it seems to me that that was more political than practical. There was nothing to prevent a straightforward suspension while Ms Shoesmith was given a chance to consider the criticisms being made and formulate a response to them. It wouldn’t have played well with the tabloids – but surely that is not a valid consideration for a Secretary of State?

Requiring a Secretary of State to observe the basic rules of natural justice in making a decision that would effectively end someone’s career and devastate their life is just the sort of thing that Judicial Review is intended for. I don’t think that Ed Balls has anything to complain about. Nor do I see any serious point of law here that would justify an appeal to the Supreme Court. The Court of Appeal’s decision is simply common sense.

Haringey

So that brings us to Haringey.The High Court held that Haringey’s decision should not be judicially reviewed because the issue could be dealt with in an unfair dismissal claim in front of the Employment Tribunal (more on this below). The Court of Appeal overturned this decision and then looked at how Haringey had gone about dismissing Ms Shoesmith.

By a majority the Court of Appeal held that Haringey were entitled to rely on the Order made by the Secretary of State even though it was (as has now been held) illegal.  On that basis it would surely have been open to Haringey to dismiss her because it was simply impossible for her to continue to do her job. But as with any employer in this situation it would still need to act fairly – and that means following a fair procedure before making a decision.

On the afternoon of the 1st December 2008 the  Council held a press conference and announced that Ms Shoesmith had been suspended. The Council said it would follow the ‘legal process as speedily as possible’ and said words to the effect that there would be ‘no compensation package’.

Ms Shoesmith was invited to a disciplinary hearing which was held on Monday 8th December. She was dismissed with immediate effect with no payment in lieu of notice or any other form of compensation. The two bases of the decision were first of all the direction of the Secretary of State and the fact that no significant aspects of her role could be exercised by her in any other capacity than as statutory DCS; and secondly that ‘the relation of trust and confidence’ in her had been ‘fundamentally breached’ as a result of the OFSTED report.  An Appeal was held in January 2009 but was rejected.

Although the High Court judge had ruled that Haringey was not subject to judicial review he went on to say that if he was wrong in that then he would have ruled that the decision to dismiss was unlawful . The main basis of this was the uncritical acceptance on the employer’s part of the OFSTED report and the criticisms that were made in it. Haringey had also refused to disclose correspondence with OFSTED about the evidential basis of the report.

The Court of Appeal agreed with the High Court Judge on this issue. They held that there was no need for Haringey to move with such haste. There was a clear appearance that dismissal was a pre-determined outcome and that alone was enough to render the decision unfair. The Court of Appeal also pointed out that the Council was wrong to frame the issue as one justifying summary dismissal on the basis of a breach of the tem of trust and confidence on the part of Ms Shoesmith.  The issue was one of competence and capability which was much less easy to justify summary dismissal.

The issues identified by the Court of Appeal would be entirely familiar to anyone used to dealing with unfair dismissal cases. Acting in haste with a closed mind so that proper consideration is not given to what the employee is saying is a recipe for an unfair dismissal.  If you accept that the dismissal should be subject to judicial review then I think you have to accept that the decision is th right one.

Should the dismissal be subject to Judicial Review?

For me, the interesting legal point about this case is whether a council employee who is unfairly dismissed can challenge that dismissal via judicial review rather than by bringing an ET claim for unfair dismissal.

Of course, bringing a JR claim is much more complicated and expensive than an ET claim, but at least, if you win, you can recover your costs from the losing side. More importantly there is no cap on the compensation available and the Court has the power to actually reverse the dismissal decision and reinstate you.

Not every action of a public body is subject to judicial review, however. Decisions can only be challenged when the body in question is carrying out its public functions. If it is acting simply as a party to a contract then disputes about that have to be dealt with under the normal law of contract. In general, when a public body is acting in its capacity as an employer, then disputes about how it is doing that have to be dealt with under normal employment law rather than by way of judicial review.

The case is different when the employee in question holds a public position backed up by statute – as Ms Shoesmith did. The Court of Appeal held that the removal of an employee from the post of Director of Children’s Services was a public law matter which made the Council’s decision amenable to judicial review.

That is not the whole story, however. Judicial Review will also be refused if there is some other (equally convenient and effective)  way in which the offended party can obtain redress. In the High Court, Ms Shoemsith’s case against Haringey was dismissed on the basis that Ms Shoesmith could challenge the unfairness of her treatment via an unfair dismissal claim in the Employment Tribunal.

In overturning that decision the Court of Appeal held that the remedy available in the Employment Tribunal was not ‘equally convenient and effective’. They took into account the fact that compensation in the ET is capped for the purposes of unfair dismissal, costs are not recoverable and that the ET does not have the power to quash the decision to dismiss.

These are valid points, but they will apply equally to any senior office holder in a local authority or other public body. I think that the Court of Appeal’s decision marks a significant extension of the prospects for using judicial review to challenge the dismissal of senior public officials. If Haringey want to challenge the decision in the Supreme Court then this comes closest to meeting the strict criteria for launching such an appeal – there must be a question of law to be tried which is of general public importance. We’ll have to wait and see what happens next.

Compensation and Remedies

There has been speculation about just what Ms Shoesmith will get as a result of winning this case. The Court of Appeal have not given much indication of what the remedy is likely to be but Ms Shoesmith will certainly be looking for compensation based on the assertion that she has not been validly dismissed and is entitled to be paid her salary from the time of the purported dismissal to a time when she can be lawfully removed from her post. However, she is not actually seeking reinstatement as such – she recognises that she can’t go back to her role as DCS for Haringey. If that’s true, how can her dismissal be treated as a ’nullity’, giving her full compensation?

The Appeal Court did not answer this question and in the absence of agreement on remedy, the case will have to go back to the High Court for compensation to be assessed. It seems to be accepted in this case that any compensation will be payable by Haringey rather than the Secretary of State, though to be honest, I don’t see why that should be.

When it comes to the compensation that Haringey must pay, however, I almost hope that the case is not settled.  I’d like to see how compensation is awarded and whether the judge makes the equivalent of a ‘Polkey deduction’ to reflect the chances that Haringey would still have dismissed her even if they had behaved reasonably. This is certainly the approach that a Tribunal would take in an unfair dismissal claim. Indeed, if the Tribunal was convinced that a fair dismissal was inevitable then compensation could be limited to the time it would have taken to conduct a fair investigation and follow a fair disciplinary process. That could be as little as a few weeks’ pay.

The extent to which the High Court is prepared to take an approach similar to that which would be followed by an Employment Tribunal may be crucial for future cases in weighing up the benefits of seeking judicial review rather than just unfair dismissal.

Fairly dismissing Sharon Shoesmith

In reality, it is almost impossible to see any circumstances in which Haringey could have kept Sharon Shoesmith in her job – or even found her some alternative post. She had been removed from office by the Secretary of State and her role was the subject of highly critical press coverage. If a basically fair procedure had been followed then Haringey would surely have been entitled to dismiss her under the heading of ‘some other substantial reason’. She would, of course, have been entitled to notice in the absence of clear evidence that she had committed a specific and fundamental breach of contract amounting to gross misconduct.

In saying that a fair dismissal was possible I’m in no way commenting on her performance or competence in the role. That would be an entirely separate issue and Haringey would not, I think, have to prove any actual wrongdoing or negligence to justify dismissal. The fact of her removal from office and the public attention she was receiving would, I think, have been enough. Remember that in an unfair dismissal we look at whether the employer has behaved reasonably – not whether he result is a ‘fair’ one for the employee.

I would even go further and say that a fair dismissal would have been possible even without the order of the Secretary of State removing her from her office. I think that the seriousness of what had happened and the criticisms made in the OFSTED report would have been enough to justify dismissal on their own. The Appeal Court was dismissive of the notion that accountability means that ‘heads must roll’ but I have to say I have some sympathy for that approach. If you are the Director of Children’s Services and an inquiry into the death of a child highlights serious failings in your own department then I think that it is probably right that you should go. That may be harsh – but it is one of the reasons that the job is quite well paid. If Haringey had listened carefully to what Ms Shoesmith had to say, and critically examined the OFSTED findings, then I think it would have been very hard to criticise them if they had still decided that she should leave. If they had acted more in sorrow than in anger they wouldn’t be in the position they are now in.

Creating a Modern Workplace – The Government’s consultation

Published on May 16, 2011 in Employment Law. 1 Comment Tags: , , , , , .

I suspect that lots of employers will, to say the least, have concerns about the Government’s consultation on Creating a Modern Workplace. It certainly does seem odd that the Government can present itself as the scourge of red tape, determined to reduce the burden of employment law but within days produce a set of proposals that the last Labour government simply would not have dared to put in front of the business community.

Now a lot of what the Gvernment has produced in relation to employment law I have found to be ill thought out and superficial. The red tape challenge is frankly a mess and the employer’s charter was a joke. But this is something different. In this consultation document we have what strikes me is a well thought out set of proposals which have the potential to completely transform the way in which family leave works in the UK. It seems to me to be a genuinely new, radical and progressive approach. Following a basic period of 18 weeks’ maternity leave the options for employees and employers open out. The mother’s partner is guaranteed at least four weeks’ paternity leave and the remaining leave period can be shared between the parents on an equal basis. The parents can, if they choose, decide to take leave concurrently, giving them some serious time to spend together with their baby. The option would also be available of taking the leave on a flexible basis – in a series of blocks or even on the basis of reduced working hours over an extended period. However, the employer would have to agree to the leave been taken on such a flexible basis – and employees would have the right to take leave in a continuous block if they so chose.

Most employers considering this will immediately think of the administrative burden that will be presented – but I don’t necessarily see that the burden would be any greater than under the current system. It would just be different. This is a major and serious reform and I don’t think we should get in its way just because we’re used to doing things differently.

When the new system is bedded in – and it won’t be introduced until April 2015 at the earliest – it seems to me that there are considerable benefits for employers as well as for employees in this sort of flexibility. There would be a much more realistic prospect that a woman going on maternity leave would be absent for less than a year. Employers with predominantly male workforces might well see a rise in the amount of leave being taken, but employers with a predominantly female workforce would almost certainly see a reduction. There will be swings and roundabouts – winners and losers. Overall, however, employers would be in a stronger position to talk to their employees about the best way in which they can balance their work and family life when they have a child.

This is just the first stage in the consultation and there’s a long way to go yet. Details will have to be worked out and the regulations will be complicated. Again, that’s not an argument against reform because the current regulations on maternity and parental leave are complicated also – we’ve simply grown used to them, as we will grow used to the new regime. But if this reform comes off, I genuinely think it will be a major step forward for gender equality. Childbirth will no longer bring with it an assumption that the mother will be away from work for a whole year and there will be a much greater prospect for shared parenting. If the career penalty of having children is reduced, or shared more evenly between men and women, then surely that is a good thing? Changes to society and family structures don’t happen overnight – but the law can play a genuine and helpful role in nudging them along.

Flexible working

In the same consultation document, the government proposes to extend the right to request flexible working to all employees who have completed the qualifying period of 26 weeks. A request will no longer have to be based on the caring responsibilities of the employee concerned.

In what I think is a stunningly good idea, the government is also proposing to remove the prescriptive and bureaucratic procedure for making a request and replace it with a set of principles in a code of practice on dealing with requests reasonably. Apart from that, the general scope of the right will not change. An issue to watch here is, of course, just what gets included in the code of practice. At the moment, the right to request flexible working is all about the procedure and has very little to do with the substance of the actual decision. Provided the employer can fit the reason for refusal into the extensive list of reasons provided in the regulations then there is no requirement that the decision itself should be a reasonable one (though this is where indirect sex discrimination comes in). My sense is that the government does not propose to alter this. However a code of practice on the reasonable handling of requests could easily require an employer to give reasonable consideration to the request itself. That would be a major change to the current regime and employers should pay close attention when the contents of the code of practice being discussed and consulted upon.

Working Time and Holidays

This consultation also puts forward some very sensible proposals for changing the way in which annual leave is taken when the employee is off sick or is taking an extended period of family related leave. Essentially, the Government proposes that there should be much more flexibility in allowing an employer to defer leave into the following holiday year when an extended period of absence has made taking the leave in the current year impracticable. The Government also proposes to draw a much clearer distinction between the normal four weeks annual leave and the additional 1.6 weeks leave that nominally covers bank holidays. These changes are driven by decisions in the European Court of Justice, but it does seem to me (at first reading) that the Government has found an effective way of ensuring that the Working Time Directive is complied with, while maintaining an appropriate level of flexibility for employers.

Equal Pay Audits

After finding so much that I agree with and welcome,  it frankly comes as something of a relief to say that the final proposal, relating to equal pay audits, strikes me as a very bad idea. The idea is that if an employer is found liable for sex discrimination in relation to pay – whether by way of a sex discrimination claim or an equal pay claim – then the tribunal should order the employer to carry out an equal pay audit. The fundamental problem, it seems to me, is that this proposal takes no account of how mammoth a project an equal pay audit can be – particularly for large employers. When the consultation describes an equal pay audit it correctly identifies one of the key stages as identifying which men and women are employed on equal work – that is ‘like work’, work that has been rated as equivalent, or work of equal value. The consultation document describes this step as if it were a straightforward exercise. However working out which men and women are employed on equal work is a hugely complicated, controversial and ultimately subjective undertaking.  It can have huge implications for an organisation if that process leads to unexpected results and potentially massive equal pay liabilities – ask local government or the NHS. Of course I’m not against the proper evaluation of work. But the fact is that ordering a full equal pay audit on the basis of one successful discrimination claim is completely disproportionate. Frankly no employer would be foolish enough to allow a discrimination or equal pay claim to run its full course if the consequence without drastic. This proposal would simply result in employers throwing money at sex discrimination claims in order to make them go away. That’s just the sort of situation that the government is trying to avoid in its proposed reform of employment tribunal system.

It’s worth bearing in mind that this proposal equal pay actually comes from the Conservative party manifesto of 2010. The Liberal Democrats’ proposal was for a general requirement for equal pay audits for employers of a particular size. On this last issue, therefore, it clear that the Conservatives are getting their way – But I’m not sure we can say that for the rest of the proposals set out in this consultation. It will certainly be interesting to see how Conservative backbenchers and the business lobby respond to this initiative and whether the proposals currently being put forward survive the scrutiny that they are about to receive.

Government Guidance on the Agency Workers Regulations

Published on April 4, 2011 in Uncategorized. 0 Comments

At the end of last week the Government published draft guidance on the Agency Workers Regulations 2010. For a two week period, everyone is being asked to suggest ways in which the guidance can be improved and I’d urge everyone to take a look at it and see if it makes sense to them.

On this issue I am less of a detached and cynical observer of Government publications than usual. For the past few months I have been part of a group that the officials at the Department for Business have been working with to help draft the guidance and make it as user friendly and accurate as possible. A number of us – some independent like myself; others representing either temporary work agencies, hirers, trade unions or employers bodies have been meeting regularly at the Department to discuss particular aspects of the Regulations and make suggestions as to how the guidance can most helpfully explain how the Regulations work.

This has been a fascinating process and I want to pay tribute to the BIS officials who have worked so hard to produce the draft that was published last week. These are complicated and controversial Regulations and the meetings often reflected that, with lots of lively (always good humoured) debate and disagreement. Usually we were working with an initial draft produced by the Department which we would then pick apart and criticise, making suggestions for how it could be improved, or re-written. I know from my own experience that it can be pretty dispiriting to work hard drafting something and then have it casually pulled to pieces by others, but if the officials were frustrated by the process, they didn’t show it. All constructive suggestions were welcomed, and the guidance was re-drafted (often more than once) to take account of them.

In short the whole process has left me very impressed with the skills and patience of the civil servants involved and with the knowledge, experience and professionalism of my colleagues on the working group. It was a pleasure to work with them all and I’ve learnt a lot from the exercise. I’m sure the guidance can be improved further, and that’s what this final consultation is about, but I wouldn’t want anyone to think that it had been produced in some ivory tower by a detached civil servant speaking from on high.  An awful lot of work has been put into this guidance and if it doesn’t do the job then a lot of us have to share the blame for that.

Finally, it is worth emphasising that this is just guidance. Ultimately what matters is not what the guidance says but what the Regulations mean. Lots of stakeholders will have a particular view as to how the Regulations should be interpreted and will be disappointed or annoyed if the guidance is not sufficiently clear on that point. There are certainly areas where the guidance glosses over a difficult issue or is vague on a specific point. That is unavoidable where the Regulations themselves are difficult or vague. In the end, it is impossible to give coherent guidance on a fundamentally incoherent legal provision and the Regulations contain a couple of those. Guidance can’t solve that problem. On balance though, I hope that people will welcome the guidance that has been produced, and the process that led to it.

Darren Newman

Ranting about Positive Action

Published on March 28, 2011 in Uncategorized. 0 Comments

I have no political objection to positive action, but I do think that the provision being brought in on April 2011 is badly drafted and that employers should not touch it with a bargepole. If you want to hear me ranting about just how badly drafted S.159 is you can listen to the latest XpertHR podcast (no subscription required). Enjoy

Darren Newman

Discrimination, Reasonable Adjustments and Twitter

Published on March 16, 2011 in Uncategorized. 5 Comments

I’ve spent the last couple of weeks studiously keeping out of an employment law argument. That’s not like me at all, but this one involves Duncan Bannatyne and I already have that T-shirt.

Now that the row seems to have run its course, however, I did just want to make a couple of comments about what happened because I think it has something important to say about what discrimination is and our attitudes towards it.

You can read all about the row here, but in brief it centers on the reporting by XpertHR* of an employment tribunal case: Williams v Bannatyne Fitness Ltd. This is not an important case (except to those directly involved). It’s merely an illustration, an opportunity to see how employment law gets applied by the tribunals in practice, as opposed to the more rarefied atmosphere of the Employment Appeal Tribunal or the Court of Appeal.

In this case the tribunal found that while the claimant had not been victimised and that the refusal to offer him any further hours of work was for genuine economic reasons rather than for any reason connected with his disability or his complaints, the employer had failed to make a number of reasonable adjustments in the way they handled his grievances and also failed to make an adjustment in the location of his pigeon hole.

The XpertHR report was a straightforward explanation of the facts of the case and the conclusions of the employment tribunal. I’ve looked at both the report and the tribunal decision itself and there are absolutely no grounds for complaint in the drafting of the report. It’s absolutely accurate.

There has been a bit more of a debate however about the headline to the report and the Tweet that linked to it. These stated ‘Bannatyne Fitness club discriminated against Thalidomide victim’. It’s been suggested that that is an inflammatory and even an unfair way of describing what happened.

I can see why some people would say so – but I disagree. First of all from a strictly literal and legal standpoint the phrase is technically correct. A failure to make reasonable adjustments is defined as discrimination in the Disability Discrimination Act 1995 (S.3A(2)) which applied in this case and in the Equality Act 2010 (S.21(2)) which will apply in any future cases. So the tribunal did find that Bannatyne Fitness Ltd had discriminated against a Thalidomide victim. That’s a fact. The tribunal may be wrong, of course, but until that is established on an appeal, XpertHR are entitled to report the tribunal’s findings. That’s what they do, after all, and the tribunal decision is a matter of public record.

The reaction of some people has been to say: ‘yes, but not really’. They point out that Bannatyne Fitness actually won on what may be regarded as the main aspects of the case. There was no victimisation, and the refusal to give him further work was not linked to disability. The suggestion is that the issues they actually lost on were minor – mere technicalities. The ‘real’ allegation of discrimination did not succeed, and the Tweet, and the headline to the article are therefore misleading.

It is certainly true that the claimant did not succeed in the part of his case to which the greatest amount of financial loss would have been attached – and may have come away from the case feeling disappointed with the outcome. The employer, on the other hand, might well have seen the outcome as a qualified win – which would no doubt explain their anger at the way in which XpertHR drew attention to the failure to make reasonable adjustments and came right out and labeled it as discrimination.

But it is! Reasonable adjustments are not some technicality, they are at the heart of what disability discrimination is all about. Refusing to move a pigeon hole so that someone who has no arms can reach it may sound like a minor matter, but that does not mean that it was minor or trivial to the individual affected. The same is true of the failures in relation to the handling of his grievance. The failures may have been a mere oversight, and there is no reason to believe that they were motivated by any sort of malice or hostility – but that is not the point. Discrimination is not about malice or hostility, it is about less favourable treatment and, in the case of disability, it is about making adjustments. If you fail in that then you are discriminating. That may be the sort of error that any employer can fall into – but that is why it is a good idea to report the finding – to help employers avoid making that sort of mistake.

As for the headline and the Tweet, well yes it is provocative to phrase things in that way. But I think it’s justified. Employers need to understand the importance of these issues and that even a simple oversight or a lack of common sense can lead to discrimination. Discrimination is not confined to the bad guys. Good employers can discriminate too if they are not careful. A lack of hostility to a group is no guarantee that you will not inadvertently discriminate and I think the headline ‘Bannatyne Fitness club discriminated against Thalidomide victim’ can help shock us into being more aware of that.

Darren Newman

*Since this is a bit of a contentious issue and in the interests of full disclosure, I should make it clear that I am a consultant editor for XpertHR. I’m not employed by them but I do have a close relationship with them and am naturally well-disposed towards their work. Nobody tells me what to think write or say, however, and this post reflects my personal view.

Retirement – As You Were

Published on March 1, 2011 in Uncategorized. 3 Comments

It appears that we can breathe a sigh of relief over the abolition of the Default Retirement Age. Tonight the Government has published a new draft set of Regulations which corrects the problem that was identified in the previous version.

Under the new transitional provisions the notification of retirement must be given before the commencement date of the Regulations (which still appears to be 6th April) and the employee must have ‘attained the age limit or will attain it before 1st October 2011′.

This means that there is no longer a provision preventing the retirement of employees who are already 65 by 6th April. As a result, valid notifications of retirement that have already been given will remain valid provided the employee is 65 by the end of September. There is more to the transitional provisions than that. For example, it is now clear that if the employer gives a one year notification on 5th April 2011 it can still agree an extension of the retirement date by up to six further months. That would put the last possible actual date of retirement as 4th (or maybe 5th) of October 2012. But let’s not worry about that too much just now. Frankly, if as an employer you have that sort of thing in mind, you should be taking very careful legal advice from someone who is very good at counting days on a calendar.  The main thing is:

Emergency over. Everything is (basically) fine. Move along now

PS kudos to Employment Law Clinic for being the first (I could find) to publish the Regs online

Abolition of Default Retirement Age – important update

Published on February 17, 2011 in Uncategorized. 5 Comments

The Regulations abolishing the default retirement age have now been laid before Parliament and they have an unexpected sting in the tail.

The way in which the transitional provisions have been drafted means that while it is still possible to force through the retirement of someone who reaches the age of 65 between 6th April and 30th September 2011, it will not be safe to retire someone who has already reached the age of 65 by the 6th April. (for a detailed explanation of this, see below).

Some employers may have already given a notice of an intended date of retirement to employees who are over the age of 65 and which takes effect after 5th April this year. As the Regulations currently stand, these retirements will leave the employer exposed to claims for age discrimination and unfair dismissal.

This is completely unexpected and may well be an error. There may also be time for the position to be corrected. Failing that however, it may be necessary to rethink current notices of retirement that have been issued. Bringing retirements forward to before 6th April is a potentially risky strategy and should only be done after taking full legal advice.

For those interested in just how this problem arises, here comes the legal stuff…

How the transitional provisions work

The Regulations come into force on 6th April 2011. From that time there is no longer any exception for retirement in the Equality Act; the statutory procedure for requesting a deferral of retirement is abolished; and the unfair dismissal provisions allowing for a fair dismissal by reason of retirement will also go.

That means that unless the transitional provisions apply, any dismissal which takes effect from the 6th April onwards and which is based on the fact that the employee is 65 or older will be a pretty clear case of age discrimination and unfair dismissal unless the employer can show that the policy of retirement is objectively justified (usually, it won’t be).

So it’s vital to know when the transitional provisions will apply. These are set out in Regulation 5. This says that the provisions on retirement will only continue to apply ‘in relation to the employment of a person’ if two conditions are met.

The first condition is that notification of retirement has been given in accordance with the Age Regulations before 6 April 2011. There’s no problem with that – that’s what we expected.

However the second condition which must be met is that ‘the person will attain the age limit during the period that begins with [6 April 2011] and ends with 30 September 2011’ (Reg 5(1)(b)) The ‘age limit’ is the age of 65, or the normal retirement age, whichever is the higher (let’s just assume we’re talking about hitting the age of 65 to keep things simple).

Do you see the problem?

The transitional provisions do not say ‘and has attained the age limit by 30th September’, they say ‘the person will attain the age limit during the period that begins with [6th April] and ends with 30th September’.

That means that an employee who is already 65 by the 6th April will not come within the transitional provisions! They have already attained the age limit and will not therefore ‘attain’ it between 6th April and 30thSeptember.

If they are not within the transitional provisions and are dismissed on or after 6th April, they will be able to sue for age discrimination and unfair dismissal – even if they have already gone through a full notification procedure. The date that matters is the date they are dismissed, not the date on which they were notified of the retirement.

This is of course a technical argument, but when you are interpreting legislation, technical arguments count. The provision is baffling and defies common sense, but it seems to me to be entirely clear. If the Regulations are not amended before being passed by Parliament, then employees who are already 65 or over will be protected against any retirement from 6th April onwards, even if they have already been given notice by their employer.

This is going to cause a lot of employers a serious problem. There are many employees who in recent years have had their retirement deferred and employers may have expected (as I did!) that they would be able to retire those individuals provided they gave them notice before the end of March and their employment ended by 30th September. Now that we have the Regulations, we can see that that is not right. Some serious (and urgent) rethinking is in order.

You can follow the ongoing debate on Twitter by using the hashtag #ukemplaw

UPDATE: For an excellent analysis of the background to this problem and some of its implications go to the Mrs Markleham blog