Employment Newsletter
On 1 December 2003 the Employment Equality (Sexual Orientation) Regulations 2003 came into force. The Regulations seek to protect employees from discrimination on the basis of their sexual orientation, or perceived orientation. In the case of R -v- Secretary of State for Trade and Industry ex parte Amicus, the High Court had to consider a legal challenge brought by a number of Trade Unions who argued that the Regulations failed to fully implement the UK Government’s obligations under the Equal Treatment Framework Directive upon which the Regulations are based. The Trade Unions were unsuccessful and the High Court held that the Regulations did comply with the Equal Treatment Framework Directive. The case, however, is of interest because the High Court offered some guidance of the provisions of Regulation 7(2) and 7(3).
Under Regulation 7(2) discrimination in employment is not unlawful if, having regard to the nature of the employment or the context in which it is carried out, being of a particular sexual orientation is a “genuine and determining occupational requirement”. This is normally known as a GOR. In all cases the GOR must be proportionate.
Regulation 7(3) states that a GOR may apply where it is “for the purposes of an organised religion”. This means that an employer may apply a requirement as to sexual orientation to “comply with the doctrines of the religion” or “because of the nature of the employment and the context in which it is carried out, so as to avoid conflicting with the strongly held religious convictions of a significant number of the religions followers”.
This has led some commentators to suggest that an evangelical school could refuse to employ a gay class teacher who was responsible for the pastoral care of pupils under the GOR exception. The High Court, however, drew a distinction between employment for the purposes of an “organised religion” which it felt was narrower than a “religious organisation”. The High Court suggested that employment of a teacher in a faith school was likely to fall within the latter, but not the former and so would not be within the scope of Regulation 7(3).
Comment
The clarification by the High Court is of great assistance. The High Court have effectively taken the view that the phrasing of “organised religion” in Regulation 7(3) must be construed extremely narrowly.
In order to take advantage of the GOR under Regulation 7(3), an organisation will need to establish that the requirement is necessary to comply with a religious doctrine as opposed to the fact that the employment is merely carried out in a place where there is an organised religion.
Maternity Pay
The recent case of Alabaster –v- Woolwich plc helps to clarify the issue of pay rises and SMP.
Under the Statutory Maternity Pay (General) Regulations 1986 for the first 10 weeks of maternity leave an employee is entitled to 90% of their normal weekly earnings. In order to calculate the “normal weekly earnings”, the employer must look at the average earnings over the previous 8 weeks. In Alabaster -v- Woolwich plc the issue arose as to how the calculation was undertaken if the employee received a pay rise outside the 8 week calculation period but before they left work on maternity leave. The ECJ held that the Statutory Maternity Pay (General) Regulations 1986 failed to fully implement European law and therefore in preparing the calculation the pay rise should be taken into account.
Comment
The Department for Work and Pensions have indicated that they will now amend the Regulations to take into account all pay rises that fall between the start of the 8 week calculation period and the end of maternity leave must be considered when calculating the entitlement to SMP.
Holiday Leave and Maternity Leave
The case of Gomez -v- Continental Industrias del Caucho SA is an interesting example of the ECJ’s approach to the thorny issue of the inter relationship between maternity and holiday leave. The facts were relatively simple. G worked for a Spanish company. G was entitled to 30 days annual leave. The company had an agreement with the Unions that all staff would take part of their annual leave in two fixed periods when the factory shut down. The problem arose because G took maternity leave which coincided with part of the shut down period. The question that arose was whether G was required to take her holiday leave during part of her maternity leave. The ECJ held that it was for the woman to choose when she wanted to take her annual leave and this occurred even where the period of maternity leave conflicted with the general period of annual leave fixed for the entire workforce by a collective agreement.
Comment
This is potentially quite a troubling decision. Whilst everyone accepts that a pregnant woman should be treated no less favourably than another employee, the ECJ appears to have suggested that a pregnant woman actually enjoys better rights. The ECJ has also not addressed the issue as regards any un-taken annual leave. Can an employee effectively carry over annual leave which they have not taken into the following leave year? Many contracts contain a condition against the same. In addition the Working Time Regulations also preclude the carrying forward of annual leave.
Holiday Pay
The calculation of holiday pay under the Working Time Regulations 1998 is complex as the Regulations themselves in turn refer to the Employment Rights Act 1996 and the concept of “a weeks pay”.
Under the Employment Rights Act 1996 a weeks pay, where an employee’s normal working hours do not vary is the weekly amount payable under the contract in force at the relevant time. If the employee doesn’t have normal working hours, then there is a formula which provides for an average over the previous 12 weeks. What happens about overtime?
In Bamsey and Others -v- Albion Engineering & Manufacturing plc, the Court of Appeal had to decide how the Regulations worked in practice. S worked under a contract which provided for a basic 39 hour week, together with substantial compulsory, but not guaranteed overtime. In practice S usually worked up to 58 hours per week. When S came to take his holiday his pay was based on his 39 hour week. This was considerably less than the earnings S had accumulated 12 weeks prior to his holidays. The Court of Appeal appeared to have been influenced by the fact that the purpose of the Working Time Regulations was to encourage workers to take full leave. It was not meant to encourage workers to work exceptionally long hours of compulsory overtime just before their holiday in order to increase their holiday pay.
It follows therefore that overtime must only be taken into account when calculating holiday pay under the Working Time Regulations if it is both compulsory and guaranteed by the employer.
Restrictive Covenants
The case of CAFS Limited -v- Pollard is a useful reminder of some basic principles in relation to restrictive covenants (clauses in the contract which restrict the employee’s right to work elsewhere following the termination of employment). The Court emphasised that clauses in restraint of trade were, on the face of matters, invalid and would be treated with suspicion, particularly bearing in mind the inequality of bargaining power between the employer and the employee. The onus was heavily upon the employer to justify the restraint of trade and in each case the Court would assess individually each clause against the facts and scope of the individual’s contract of employment. The primary objective of restrictive clauses was to protect confidential information. It was generally against the public interest to stop an employee competing against his former employer.
Cross-examination of Witnesses
This is a perennial problem for an employer when faced with a challenge from staff’s side seeking cross-examination of witnesses. The case of Ramsey -v- Walkers Snack Foods Limited built up by existing case law and has clarified the position which is as follows:-
- There is no obligation in law for an employer to produce witnesses for cross-examination. This is particularly true in the case of complaints from third parties over whom the employer has no control, such as members of the public, patients in hospital, customers of the company etc. Whilst there is no obligation in law to call members of staff of the employer, it is usually wiser to do so given that evidence that has been tested under cross-examination is likely to be regarded with greater favour by an Employment Tribunal.
- Witness statements can be submitted and anonymised provided the employer considers the potential detriment this will cause to the employee balanced against the reasons why the staff wish to remain anonymous. A genuine well founded fear of harassment or victimisation might well justify anonymising statements.
If you would like further information please do not hesitate
to contact Kevin McKernan, Head of Employment Unit at Crutes Law Firm.
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