18 December 2006

Employment law is constantly evolving through the implementation of new laws and developments in case law. In this, the last article of the year, we reflect on some of the key changes for employers and count down Buddy’s top ten employment law moments of 2006.

1) HM Revenue and Customs v Stringer & others (October 2006)

This case deserves at least a place for demonstrating how precarious case law can be. In a threat to the favourable decision of the Court of Appeal in Commissioners of Inland Revenue v Ainsworth, which held that employees on long term sick were not entitled to a wind fall payment for the 4 weeks paid statutory holiday they were unable to take, the House of Lords has now decided to refer the case to the ECJ. Employers relying on this decision should therefore proceed with caution!

2) Matthews & others v Kent and Medway Towns Fire Authority & others (March 2006)

Some rare and helpful guidance on the implementation of the Part Time Workers (Prevention of Less Favourable Treatment) Regulations. The House of Lords decided that fire fighters retained on a part-time basis could compare themselves with full time fire fighters and as a result had been unlawfully discriminated against on the grounds of their part time status. Despite the differences, the main purpose, duties and responsibilities of both jobs were the same and therefore the groups were engaged in the same or broadly similar work.

3) Hoyland v Asda Stores Ltd (April 2006)

The Scottish Court of Session held that a pro rata reduction of a bonus to reflect an employee's absence on ordinary maternity leave was not sex discrimination. Although not binding on English tribunals this will be a persuasive argument and is therefore encouraging news for employers. However, it should also be noted that a deciding factor in this case was that the bonus was regulated by the contract of employment. It is therefore unlikely to effect the treatment of discretionary loyalty bonuses where it has been held that women on maternity leave are entitled to the full payment.

4) Robinson-Steele v PD Retail Services and conjoined cases (March 2006)

The ECJ held that rolled up holiday pay is precluded by the Working Time Directive but reduced the impact of its decision by also confirming that any payments already made in respect of holidays under a rolled-up holiday pay scheme could be off set against any future claim for holiday pay. Following this decision the DTI issued new guidance confirming the arrangement as unlawful and advising employers to renegotiate contracts so that payment for statutory annual leave is made at the time when the leave is taken.

5) Transfer of Undertakings (Protection of Employment) Regulations 2006

In a narrow escape (79 -77 against a motion to revoke) the new TUPE Regulations finally came into force on 6th April 2006. As well as clarifying certain matters which had caused conflict in the tribunals under the old regime, the new regulations widened the scope to include service provision changes and made the transferee and the transferor jointly and severally liable for any failure to inform and consult with affected employees. Transferors are now obliged to give some Employee information to the transferee, or face a penalty. However, as this can be left until the last moment, the provision doesn’t go far enough for those involved in tendering for contracts.

6) O'Hanlon v HMRC (August 2006)

Employers’ concerns from earlier cases suggesting that disabled employees should continue to be paid full pay when off sick were relieved by the EAT in this case. The decision in O’Hanlon is that an employer would only very rarely be obliged, as a reasonable adjustment under the Disability Discrimination Act, to give more sick pay to a disabled employee than it would otherwise give to a non-disabled employee on sick leave. An exception would be where the absence was caused by the employer's failure to make reasonable adjustments that would have allowed the employee to stay in work.

7) Demibourne v HM Revenue & Customs (June 2006)

This case is a significant warning to employers engaging consultants and contractors. It is the responsibility of the employer to determine the employment status of a worker and to deduct PAYE and Class 1 National Insurance Contributions unless the individual is genuinely self employed. If the appropriate deductions are not made, the HRMC can recover from the employer any tax and NICs going back six years, together with interest and possibly penalties. In this case, the HMRC departed from its usual practice of off setting the amount due by any tax already paid by the individual and required the company to pay the full amount due in respect of the individual who had been incorrectly treated as a non-employee.

8) Majrowski v Guy's and St Thomas' NHS Trust (July 2006)

The House of Lords ruling provides that an employer can be vicariously liable under the Protection from Harassment Act 1997 for harassment committed by an employee in the course of employment. Therefore, in addition to unlawful harassment on discriminatory grounds, employees are now able to bring a civil court claim against the employer for any harassment that can be shown to be a course of conduct which has caused alarm or distress. Claimants are likely to use this as an additional weapon to their armoury or where there has been no unlawful discrimination, and the Claimant doesn’t have one year’s service to bring an unfair constructive dismissal claim.

9) Work and Families Act 2006

Receiving Royal Assent in June 2006 this Act makes provisions for a number of changes to family friendly initiatives, as a result of which amended regulations came into force in October to extend maternity and adoption rights, including an entitlement to statutory pay of 39 weeks. Future plans under the Act are to increase the statutory pay period to 52 weeks and introduce a right to 26 weeks paternity leave in certain circumstances.

10) Employment Equality (Age) Regulations 2006

The new right not to be discriminated against on the grounds of age came into force on 1st October 2006. Deserving first place for the biggest impact of the year these regulations required changes to recruitment practices and a review of pay and benefits which could directly or indirectly discriminate. Retirement ages below 65 had to be justified and a new duty was placed on employers to consider requests to stay on, with a prescribed procedure to be followed to ensure a fair retirement.

MERRY CHRISTMAS! Clarkslegal LLP would like to wish all members, registers users and guests of this site a Merry Christmas and we look forward to keeping you up to date with developments in the coming year.