On The Agenda - Employment Issues For 2009
Newspaper headlines are telling us daily about the effects of the credit crunch on the labour market, with more job losses forecast as the country continues in recession. But in terms of changes in employment law, what does 2009 hold? We take a look at the likely agenda for employment issues in the coming year.DISABILITY DISCRIMINATION
Following a House of Lords ruling last year which overturned the well-established 'comparator' test under the Disability Discrimination Act 1995, the Government is consulting on how to address the changed concept of disability-related discrimination in the employment context. In November 2008, the Office for Disability Issues (ODI), a cross-departmental government body, issued a consultation paper, Improving Protection from Disability Discrimination, seeking views on its proposal to replace disability-related discrimination with indirect disability discrimination. The proposals are intended to form part of the forthcoming Equality Bill, due to be introduced into Parliament later in 2009
EQUALITY BILL
The Equality Bill was announced in the Queen's Speech on 3 December 2008 and is being used to strengthen protection, advance equality and simplify the law.
The following are some key proposals from an employment law perspective:
- bringing together 9 different pieces of legislation into a single Act;
- simplifying the definition of disability discrimination;
- banning clauses which prevent employees discussing their own pay;
- extending the scope of positive action, by enabling employers to take into account under-representation of disadvantaged groups when selecting between equally qualified candidates;
- creating a single new Equality Duty on public bodies to tackle discrimination, promote equality of opportunity and encourage good community relations;
- ensuring public bodies report on equality issues such as gender pay and ethnic minority and disability employment in their organisations;
- strengthening enforcement, for example by widening powers of Employment Tribunals to make recommendations in discrimination cases.
FAMILY FRIENDLY RIGHTS
Flexible working - From 6 April 2009 the right to request flexible working will be extended to parents of children aged 6 to 16 which, it is estimated, will enable an extra 4.5 million people to access arrangements such as part-time working or amended hours.
Maternity leave - In 2009 details are expected of European proposals to increase the period of compulsory maternity leave to six weeks.
HEALTH & SAFETY
The Health and Safety (Offences) Act 2008 came into effect on 16 January 2009. The new Act will increase penalties and provide courts with greater sentencing powers for those who break health and safety law. There are no new duties on employers or businesses and the Health and Safety Executive is not changing its approach to how it enforces health and safety law. But in terms of sentencing powers, the effect of the Act is to:
- raise the maximum fine which may be imposed in the lower courts to £20,000 for most health and safety offences;
- make imprisonment an option for more health and safety offences in both the lower and higher courts;
- make certain offences, which are currently triable only in the lower courts, triable in either the lower or higher courts.
Therefore, the risk of higher fines and the possibility of imprisonment is all the greater for individuals following a breach of health and safety law. Whilst the new penalties in the Act are not retrospective and the Act will not apply to offences committed before it came into force, there is an even greater incentive for employers to ensure compliance with health and safety legislation. In practical terms, policies and procedures should be re-evaluated and it might therefore be prudent to arrange for a legal and/or other specialist audit to make sure that procedures are in compliance with the law.
NATIONAL MINIMUM WAGE
The Government is consulting in order to review the current ways for which tips are used in payment of the National Minimum Wage. Currently, under the NMW Regulations, payments of tips and gratuities made to workers under the employer's payroll, count towards the NMW. Therefore, in practice, this means that some workers may be receiving the NMW made up from customer tips, rather than from payment of wages by the employer. The consultation aims to review this practice and also consider how to raise consumer awareness about the treatment and distribution of tips in businesses.
Current NMW rates are as follows:
Workers aged 22 and over: £5.73 per hour
Workers 18-21: £4.77 per hour
Workers 16-17: £3.53 per hour
SICKNESS ABSENCE
Following references by the House of Lords and from a case before the German courts, the ECJ recently decided that the question of whether a worker is entitled to take holiday during a period of sick leave is a matter for national law to determine.
The Court also decided that if a worker on sick leave is prevented from taking annual leave, national law must enable the worker to take their holiday at a later date, even after the end of the leave year.
Under the Working Time Regulations, accrued annual leave must be paid in lieu on termination. The Court ruled that regardless of whether the employee has been on sick leave for the whole or part of the leave year, entitlement to such leave continues to accrue during that period and therefore employers must still pay in lieu of untaken holiday on termination of employment.
The ECJ's ruling has no direct effect for private sector workers and so employers will have to take a view as to the likely outcome when the House of Lords is asked to interpret the Working Time Regulations in the light of the ECJ's ruling. Key issues will be:
- whether the House of Lords uphold the Court of Appeal's ruling that the WTR do not allow holiday to be taken during sick leave. (The ECJ held that this was a question for national law, not EU community law.)
- whether the WTR can be interpreted to give effect to the sick worker's right to carry over unused holiday into another leave year.
- whether the WTR can be interpreted to give effect to the ECJ's ruling on payments in lieu on termination. The WTR clearly allow this in respect of untaken leave for the leave year in which termination takes place. However, the question of carried-over leave again presents a different issue for consideration.
If the House of Lords decide that the WTR are incompatible with EU law, the Government will be obliged to introduce amending legislation.
WORKPLACE DISPUTE RESOLUTION CHANGES
On 6 April 2009 the Employment Act 2002 (Dispute Resolution) Regulations 2004 will be repealed and will be replaced by a new framework based on the provisions of the Employment Act 2008.
The 2008 Act provides for the complete repeal of the current statutory dispute procedures and for the repeal of the existing law relating to the role of the statutory procedure in unfair dismissal. The current mandatory "three-step" processes for disciplinary and dismissal procedures undertaken by an employer and the statutory procedure for grievances raised by an employee will both be repealed.
Instead, Employment Tribunals will consider the procedure that has been followed by the parties in dealing with the disciplinary matter or grievance. A revised statutory ACAS Code of Practice will set out the principles of what an employer and employee should do to achieve a reasonable standard of behaviour. The ACAS Code will be supported by guidance prepared by ACAS to help employers and employees understand the Code and how to reflect it in their procedures and behaviour.
Tribunals will have to consider whether a failure to follow the ACAS Code was unreasonable and will have discretion to adjust compensation awards up or down between 0 and 25% in relation to either party. We shall have to wait and see how Tribunals decide to exercise their discretion when it comes to increasing or reducing awards, the kind of factors which affect their decisions and what weight should be given to each of those relevant factors.
Employees will not have to submit a grievance before proceeding with a Tribunal claim and employers will no longer need to consider whether a written communication raised by an employee constitutes a statutory grievance. However, it will still be necessary for employers to be responsive to grievances as case law makes clear that a failure to address employee grievances can give rise to a breach of the implied duty of trust and confidence which forms part of every employment contract.
| VITAL STATISTICS FOR 2009 |
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Employment Tribunal Awards From 1 February the annual increase in tribunal award limits apply including:
Note: The new rates apply where the 'appropriate date' occurs on or after 1 February 2009 and not the date of the corresponding tribunal hearing. Holidays: from 1 April 2009, the final staged increase in statutory holiday entitlement up to 5.6 weeks (being 28 days for someone working five days a week) comes into force. The transitional provisions allowing "buy out" of the statutory days above 4.0 weeks also comes to an end. Statutory Maternity Pay: From 5 April 2009, the standard rates of statutory maternity, paternity and adoption pay increases to £123.06 per week. Statutory Sick Pay: From 6 April 2009, the standard weekly rate of statutory sick pay increases to £79.15. |
To find out more, please contact:
Mark Shulman, Partner
Tel: 0207 674 0566