Changes to Legislation
Many new important changes to legislation are taking place this month including the introduction of the new statutory procedures for dispute resolution and changes to the Disability Discrimination Act. Significant changes are also being made to tribunal procedures of which employers should be aware.
Statutory Procedures
As featured in our last Newsletter, the new statutory dismissal, disciplinary and grievance procedures are now in force. In addition, all employers (however small) must include a reference to their disciplinary, dismissal, and grievance procedures in the employee’s written statement of terms. Prior to 1 October 2004, employers with less than 20 employees did not have to have written grievance and disciplinary procedures.
Employers are legally obliged to supply an employee with a written statement of terms within two months of the employee starting employment. The Employment Rights Act 1996 specifies certain information which must appear in the statement of terms, such as pay, hours, notice and holidays.
Often, employers will incorporate this information in the contract of employment. The disciplinary, dismissal and grievance procedures themselves do not have to be set out in full in the contract or statement, but the employee must be referred to an easily accessible document containing those procedures.
Those employers who have not amended their existing procedures to comply with the statutory procedures are advised to do so without delay. Further, any clause in an employment contract or statement of terms in respect of discipline and grievance should be amended to make an express reference to dismissal procedures as well. Employees should be notified of the changes.
Disability Discrimination
The Disability Discrimination Act 1995 (Amendment) Regulations 2003 (the “Regulations”) came into force on 1 October 2004.
The Regulations introduce a definition of harassment; remove the exemption for small employers (i.e. those with less than 15 employees) from the requirements of the Disability Discrimination Act 1995 (the “DDA”); introduce the concept of direct discrimination; and remove the justification defence for employers in respect of their obligation to make reasonable adjustments.
Reasonable Adjustments
The Regulations also extend the duty of the employer to consider reasonable adjustments. Before the Regulations came into force, where “(a) any arrangements made by or on behalf of an employer, or (b) any physical feature of the premises occupied by the employer” (s.6(1)DDA) placed the disabled person concerned at a substantial disadvantage, it was the duty of the employer to make reasonable adjustments. The relevant provisions are now contained in section 4A(1) and provide that the obligation arises in relation to a “provision, criterion or practice applied by or on behalf of an employer” as opposed to arrangements. Arguably, the new provision is wider. However, it remains to be seen whether it will make any difference in practice.
The removal of the justification defence in respect of making reasonable adjustments may seem to disadvantage an employer who genuinely cannot accommodate a disabled employee. However, in practice, especially given the recent Court of Appeal decision in Collins v Royal National Theatre Board Ltd [2004] IRLR 395, it is likely to make little difference. This is because the duty is only to make reasonable adjustments. If an adjustment is not reasonable in the first place, an employer should not have to justify failing to make it.
Direct Discrimination
Basically, direct discrimination will occur where, on the grounds of a disabled person’s disability, a person treats a disabled person less favourably than he treats or would treat a person not having that particular disability. Unsurprisingly, in the same way that an employer cannot justify direct sex or race discrimination, an employer will not be able to justify direct discrimination on the grounds of disability.
This will protect disabled employees from any adverse treatment simply because they are disabled.
Harassment
Under the amended DDA (section 3B):
“a person subjects a disabled person to harassment where, for a reason which relates to the disabled person’s disability, he engages in unwanted conduct which has the purpose or effect of (a) violating the disabled person’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for him”.
In considering whether conduct constitutes harassment, all of the circumstances will be considered, including the perception of the disabled person.
ACAS Conciliation
As part of the Government’s drive to reduce the number of tribunal applications, fixed periods of conciliation have been introduced for tribunal claims. The time limits will be strict with little or no room for discretion on the part of the ACAS conciliator.
From 1 October 2004, ACAS will only be able to help parties reach a settlement for a period of 13 weeks commencing when the claim is sent to the employer. Only if a settlement has been proposed and is under consideration by the time this 13 week period expires will ACAS be able to extend the conciliation period. It can then only be extended by two weeks. For claims relating to, among other things, breach of contract, redundancy payments, statutory rights to time off, the conciliation period will be 7 weeks and there will be no discretion to extend it. Only for claims relating to discrimination, equal pay and whistle blowing, will the conciliation period remain open-ended.
Quite how this will assist parties in reaching a settlement and reduce the burden on employment tribunals remains to be seen. Given that less than 35% of cases are currently resolved within the initial 13 week period it would be logical to conclude that more claims will end up in the Tribunal. Often, parties do not have sufficient information to make a decision as to whether to settle as documents and witness statements have not been exchanged. As an alternative, if parties wish to settle the matter outside the conciliation periods they will have to do so by way of compromise agreements which will mean the employer will incur further costs, especially where the employee is not represented.
Tribunal Procedures – Time is of the Essence
Employers should also be aware that changes have been made to how applications are dealt with by employment tribunals. As well as there being new forms to complete, time limits are also changing. From 1 October 2004, employers will have 28 days (rather than the current 21 days) to respond to a claim being made by an employee. However, the time starts to run from the time the application is sent out to the employer by the tribunal rather than from when it is received by the employer. Moreover, if the employer does not respond within the 28 day time frame, the tribunal will award the employee a judgment in default and may also decide the amount of compensation without a hearing. The circumstances in which a judgment in default can be set aside will be limited. Therefore, it is imperative that if you are in the unfortunate position of receiving a claim that it is dealt with quickly.
National Minimum Wage
By way of reminder, new Regulations on the National Minimum Wage came into force on 1 October 2004. Briefly, the rate for adult workers (those aged over 21) is increased to £4.85 per hour and for workers aged between 18 and 21 the rate is increased to £4.10 per hour. In addition, those workers who have reached the compulsory school leaving age but are below the age of 18 now benefit from the national minimum wage. However, the applicable rate is £3.00 per hour.
Working Time Regulations – End of the Opt-Out?
The European Commission has issued its proposal for amending the Working Time Directive in respect of the ‘opt out’ of the maximum working week.
Currently, under the Working Time Regulations 1998 (which were introduced to implement to the Working Time Directive) the maximum working week is restricted to an average of 48 hours per week. However, a worker can ‘opt out’ of the maximum week provided they are allowed to ‘opt back in’ on notice.
However, under the proposals Member States will only be able to use the opt-out if it is expressly allowed under a collective agreement and if the individual worker consents. Further, the proposals would prevent an employee giving consent at the same time the contract of employment is signed or during any probationary period. In addition, the consent would only be valid for one year, after which is could be renewed.
This would have a significant impact on how employers currently deal with the ‘opt-out’. It is usual, and currently advisable, to contain working time opt-outs in the contract of employment where there is a risk that the worker may regularly work in excess of 48 hours.
Further, the Commission has proposed introducing new definitions of “on-call time” and “inactive part of on-call time”. This will be particularly relevant to NHS Trusts and those employers who employ wardens (for sheltered housing etc). Currently, if an employee is required to be on-call on the employer’s premises the time spent will be regarded as “working time”. This is the case even if the employee is actually asleep for part or all of this period. This causes difficulty as the time will count towards the 48 hour week (where there is no opt out) and also impacts on the provisions for compensatory rest. Basically, a worker is entitled to 11 hours consecutive rest in any 24 hour period. If a worker is not given this rest, he or she is entitled to compensatory rest “immediately” after the period worked. This means that a doctor who has been on-call in a hospital, but who has not actually been called-out, is still entitled to compensatory rest.
The new proposals would change this so that any time that the worker is on call but not carrying out duties will not count towards working time.
Back Door Closes for Age Discrimination
In the midst of all the recent changes to legislation, the Court of Appeal has recently handed down its judgment in Rutherford and anor v Secretary of State for Trade and Industry which concerned a challenge to certain provisions of the Employment Rights Act 1996. The Court of Appeal has confirmed that the statutory age limit for bringing claims for unfair dismissal and/or redundancy payments does not discriminate against men.
Under the Employment Rights Act 1996, employees can only bring a claim for unfair dismissal or a statutory redundancy payment if they are below the normal retirement age. Basically, the ‘normal retirement age’ for unfair dismissal is the normal retiring age in that undertaking for an employee holding his position, or the age of 65 (if there is no such age). The definition is slightly different in respect of a redundancy payment. To be eligible for a redundancy payment the employee must be below the normal retiring age in the business for an employee holding his position, provided that age is less than 65. Where there is no such ‘normal retiring age’, the default age of 65 will apply. Therefore, in order to claim a redundancy payment, an employee must be below the age of 65 even if the employer imposes a higher retirement age.
Mr Rutherford was made redundant by his employer at the age of 67. Mr Bentley, who was employed by a different employer, was made redundant at the age of 73. Both employers became insolvent before the Tribunal proceedings took place which meant that, if the applicants were successful, the Department of Trade and Industry would become responsible for the redundancy payments. Mr Rutherford and Mr Bentley brought claims in the employment tribunal alleging that the upper age limit for redundancy payments was indirect sex discrimination as more men than women would work beyond the age of 65.
The tribunal held that the upper age limit in the legislation did have a disparate impact on men compared with women. In reaching this decision, they confined the relevant pool of employees to those aged between 55 and 74. They also rejected the Government’s arguments in respect of objective justification (the defence to indirect sex discrimination). However, the Employment Appeal Tribunal held that the appropriate pool for comparison was the entire workforce (i.e. those aged between 16 and 79). On this basis they found there was no disparate impact on men. This was confirmed by the Court of Appeal.
Therefore, employees over the normal retirement age will not be entitled to a redundancy payment. However, employers should be aware that new legislation making it unlawful to discriminate on the grounds of age should be introduced by 2006. How this will impact on mandatory retirement ages remains uncertain.
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