Less hours, more risk?

28 January 2008

The statutory right to request flexible working has already been extended to carers of adults and is expected to cover parents of older children in the near future. As the demand for part time work increases, a growing number of employers will need to comply with the Part Time Workers (Prevention of Less Favourable Treatment) Regulations (“the Regulations”), which were introduced in 2000 to provide protection to those working less than full time.

Over a quarter of the working population are in part time employment but surprisingly there have been relatively few reported cases under the Regulations. One possible reason for this could be the narrow drafting of the Regulations, which make it difficult for part timers to identify a suitable comparator and/or to prove that the reason for the less favourable treatment is on grounds of their part time status.

Although the Regulations protect both employees and workers, in order to bring a claim a full time comparator who is engaged on the same type of contract must be identified. In practice this means that both the Claimant and the comparator must fall into one of the following categories:

Employees employed under a contract of employment
Employees under a contract of apprenticeship
Workers who are not employees
Any other description of worker that it is reasonable for the employer to treat differently from other workers on the ground that workers of that description have a different type of contract

For example, in Wippel v Peek & Cloppenburg GmbH & Co KG (2005) the European Court of Justice held that a part-time worker engaged on a casual basis, who was paid only for the hours when she was required to work and who could refuse work if she wished, could not compare herself with her full-time colleagues. As the comparators were required to work a fixed number of hours a week for a fixed salary, and did not have the option of refusing work, they were not employed under the same type of contract.

Possibly the most notable decision in this area, is the case of the retained fire-fighters in Matthews & others v Kent and Medway Towns Fire Authority & others (2006) which established the principle that it is necessary to consider the similarities between the contracts of full and part-timers, and not simply concentrate on the differences. In this case the similarities in the job description, ranking structure and disciplinary rules meant that the part-time fire fighters could be considered as employed under the same type of contract as the full-time fire fighters.

However, as well as being engaged on the same contract, the comparator must also be doing work which is the same or broadly similar. In the above case, although the retained fire-fighters won the right to compare themselves with full time fire–fighters, the House of Lords remitted the case back to the employment tribunal to consider this second point and to hear arguments on whether the retained fire-fighters were treated less favourably in breach of the Regulations. The tribunal met for 3 days in March 2007, reconvened for 5 days in November 2007 and concluded the hearing earlier this month. Thus, the 7 year battle to achieve the same rights as full time fire-fighters to membership of the pension scheme, sick pay and additional responsibility payments may well be over when the decision is announced in the spring.

To be successful, the less favourable treatment identified must be “on grounds of” the part time status. Furthermore, it is not sufficient that the part time status is one of a number of factors for the less favourable treatment. It must be the sole reason. In McMenemy v Capita Business Services Ltd (2007) the Company operated a policy of only giving paid time off on a bank holiday if it fell on a day when the employee would normally be working. As McMenemy worked part-time Wednesday to Friday his entitlement to paid bank holidays was less than he would have received had the Company applied the pro rata principle. The tribunal accepted that this amounted to less favourable treatment but went on to find that that the reason for less favourable treatment was not on the ground of his part time status but because he did not work Mondays. An important distinction in this case, was the fact that the employer operated 7 days a week and therefore it was possible to construct a full time comparator who did not work on Mondays, who would also not have been entitled to paid bank holiday under the Company’s policy. This decision was upheld by the EAT and the Court of Session.

Even if the less favourable treatment is found to be on the grounds of part time status it will not necessarily be unlawful. It is open for the employer to demonstrate that the treatment is objectively justified as a proportionate means of achieving a legitimate aim. Factors that might establish objective justification include market forces, skills shortages, geographical differences, costs and resources and the nature of the individual’s position. Employers should review their practices to ensure that, wherever possible, pay and benefits are awarded to part timers on a pro-rata basis. Where benefits are not easily pro-rated, for example health insurance, gym membership or company cars, employers will need to decide if it is possible to pay a pro-rota cash amount in lieu of the benefit or establish objective justification for not offering the same terms.

A tribunal can order the employer to pay compensation for treating a part-time worker less favourably than a full-time worker. The amount of compensation will be what is considered “just and equitable” in the circumstances. In relation to an injury to feelings award, this is not included where a dismissal was discriminatory. However, it is arguable that it could be awarded in relation to claims for detriment i.e. victimisation falling short of dismissal.

Despite this, and the apparent difficulties workers are faced with when presenting a claim, employers should not underestimate the risk. As the majority of part time workers are women, unfavourable treatment may amount to indirect discrimination and a claim under the Sex Discrimination Act. Where there is discriminatory impact on contractual terms and conditions a claim may be brought under the Equal Pay Act, where arrears of pay or damages can be backdated for up to 6 years!