Employment Bulletin - November 2005

There are some interesting legal issues arising this month as well as some important forthcoming changes, particularly the Civil Partnership Act and extension of the coverage of the Disability Discrimination Act. There are also some important Court of Appeal decisions this month which are worth considering.

Age Discrimination

Last week we reported on the Government’s “Coming of Age” consultation. Age Positive, a UK Government site which aims to help employers end age discrimination, have helpfully compiled a list of 10 key facts which every business should be aware of in the run up to the implementation of the new Regulations. These can be found by clicking on the hyperlink.

Disability Discrimination to protect employees with HIV, Cancer and Multiple Sclerosis

From 5th December 2005, the Disability Discrimination Act 1995 (DDA) will cover employees who have been diagnosed with HIV, cancer or multiple sclerosis.

Contrary to prior signs which suggested that the DDA would not cover those suffering from minor forms of cancer, it was announced in the Commons recently that the regulation-making power in the DDA, which would allow employers to exclude certain cancers from the Act, will no longer be exercised.

The effect of this will be that employees suffering from all types of cancer, including those regarded as a minor cancer will also be protected by the Act in order to avoid discrimination against those individuals.

Disability Discrimination and Mental Illness

From 5th December 2005, the DDA will no longer include a requirement that a mental illness be “clinically well recognised”. The effect of this is that an employee suffering from a mental illness which is not clinically well recognised is also protected under the DDA. However an employee will still have to show that their impairment has a substantial and long term adverse effect on the employee’s ability to carry out normal day to day activities.

Ban Bullying at Work Day

The UK marked Ban Bullying at Work Day on 7th November. It is reported that bullying in the work place results in 18 million absences a year, highlighting the need for employers to adopt a firm strategy to combat bullying. Such a requirement is also important to employers to avoid claims by employees for constructive dismissal caused by bullying and the millions of pounds in compensation and costs paid out each year by employers for something which can be avoided if the correct strategy is adopted.

As previously documented in our previous bulletins, no statutory definition of bullying exists, however ACAS describes it as "regular intimidation that undermines the confidence and capability of the victim. Bullying can take the form of verbal abuse, violent gestures, physical violence, allocation of blame, 'picking on' workers unfairly, public humiliation of workers, or a more 'subtle' war of words to undermine the workers confidence."

Have you seriously considered the possibility of bullying taking place in your company? Does your company have a policy in line to address the problem should it arise? If you are unclear as to what is expected of you as an employer in order to tackle bullying in the workplace, please contact a member of our employment team with a view to arranging a breakfast, lunch or evening seminar to help your business deal with the issue effectively once and for all.

Civil Partnership Act 2004

This Act is coming in to force on 5th December 2005 and will allow same sex couples the same rights in the workplace as heterosexual married couples.

By way of brief background, the Act will allow same sex couples to form a civil partnership the same as heterosexual couples are able to. This will afford same sex couples equal rights to heterosexual couples.

Regulation 25 of the Employment Equality (Sexual Orientation) Regulations 2003 (EER) will be amended by virtue of the new Act. Regulation 25 previously stipulated that the EER would not render anything unlawful which prevented or restricted access to a benefit by reference to marital status.

The Civil Partnership Act now creates a new relationship so Regulation 25 has been amended to show that any previous benefits/restrictions in force before the Civil Partnership Act came into force cannot be retrospectively claimed. However it removes the exclusion of reference to marital status from the EER so that civil partners are now afforded protection the same as heterosexual couples.

Regulation 25 will also be amended by rendering it lawful to confer certain benefits upon civil partners and heterosexual married couples but not others such that individuals will be unable to make a claim for spouses and civil partners having certain benefits from which the individual is excluded. The amendment of Regulation 25 is basically to clarify that a civil partner is to be treated as a spouse for the purposes of the law in this area.

In the context of the workplace, the Act will have an effect on same sex couples in that they will be allowed the following:

1. Paternity leave.
2. Adoption leave
3. Statutory paternity pay
4. Statutory adoption pay.

In terms of the impact upon pensions, currently same sex couples do not have the same benefits that heterosexual spouses have under their partner’s pension scheme. The Civil Patnership Act will change this although the benefits will very much depend upon which pension scheme the employee is with and private sector schemes may not confer the same benefits as public sector and state schemes:

1. State pensions – The Social Security Contributions and Benefits Act 1992 has been substantially amended by the Civil Partnership Act in that civil partners will have the same pension rights as heterosexual married couples. However this will not be an immediate impact as the Government is yet to equalise state pensions from 2010.

2. Survivor benefits – spouse benefits will extend to civil partners on and from 5 December 2005 so the benefits will not be retrospective. However, in contracted out schemes, the benefits will need to be backdated to 1988.

3. Civil Partners will be entitled to death in service lump sum payments upon death of their civil partner.

For more detailed information on the impact of the new Act on pensions click on this hyperlink.

In terms of business strategy, it is advisable that companies change their policies with immediate effect to give same sex couples the same rights and benefits in the workplace as heterosexual couples. All company references to spouses should be amended to include civil partners. In practice such a situation may arise for example as follows:

Scenario

Premium Tea Bags is holding its prestigious Christmas party and invitations have been sent out saying “Premium Tea Bags invites you and your spouse to the annual Christmas Party at the Glitz Ballroom on 9th December at 7pm”.

Under the new Act, an employee who is a party to a civil partnership can potentially bring a claim against Premium Tea Bags for discriminating against them by not inviting their civil partners. In such a scenario it would be advisable to amend the invitation to something like “….you and your partner” or “….you and a guest”, to avoid any potential problems.

Failing to do so may result in claims being brought against you by same sex civil partners for not being given the same rights as heterosexual couples.

It might also be worth considering providing all employees with a notice of the forthcoming Act so that they are aware of the changes and sensitive to them. Beware however of such a notice being a catalyst for improper and discriminatory discussion amongst employees which may have a negative impact upon employees who are civil partners.

If you need assistance in adopting such policies, amending your existing policies and general advice about the implications of the Act, please contact a member of our employment team who can assist you.

Smoking in Scotland

First in Ireland, now Scotland is following suit. 6am on 26 March 2006 will mark the end of smoking in public enclosed spaces including work places in Scotland.

If you are based in Scotland or have offices in Scotland, please note that these bans will be in force from the above date.

Case Law

Jan Gryf-Lowczowski v Hinchinbrooke Healthcare NHS Trust (2005)

When a contract becomes incapable of being performed due to an unforeseen event, it is said to be “frustrated” in that it comes to an end. This doctrine can be applied to employment contracts and if applied succesfully, a contract can come to an end without there being a dismissal.

This claim is about a consultant surgeon who brought a claim against an NHS Trust. Having had concerns about the consultant’s performance, the NCAA (National Clinical Assessment Authority) suggested a re-skilling programme also known as a re-skilling placement at another NHS trust. This was to be completed before the consultant continued his employment with the Respondent Trust.

The consultant himself found a re-skilling placement at another Trust and before commencing this placement, the consultant was asked to attend a meeting with the chief executive of the Respondent Trust in order to review his future employment. At this meeting, the consultant Claimant was told that his contract of employment with the Trust had been frustrated as a result of him being unable to fulfil the duties required under the contract.

The Claimant brought a claim against the Respondent Trust on the basis that the performance of his contract was possible so long as he was able to attend a re-skilling placement, which he had arranged.

It was held that the Claimant’s employment contract had not become incapable of performance as there was still a possibility that the Claimant would find an alternative re-skilling placement therefore it was not impossible for him to fulfil the duties required by his employment contract. This case highlights that the doctrine of frustration can be difficult to apply in many employment cases.

Sharp v Caledonia Group Services Ltd (2005)

Employees can bring a claim against an employer for failing to be paid an equal salary for work which the employee considers is equal in value to work done by a colleague of the opposite sex or for doing the same job as that colleague. In order to defend such a claim, the employer must show that the difference in pay is due to a genuine material factor and not the sex of the employee, for example an employer could justify variation in pay of equal value by explaining the difference being due to geographical changes.

As a result of this case determined by the Employment Appeals Tribunal (EAT) in relation to equal pay, the genuine material factor defence now requires justification by objective criteria. The genuine material factor defence must show a factor upon which the employer wishes to rely (e.g. lack of qualifications), must be material and must be relevant to the issue of equal pay and genuine.

Contrary to the way in which such cases are dealt with domestically, the European Court of Justice requires that a difference in pay must be objectively justified. As a result of this case, the EAT took on the European approach and now objective justification is required and it is no longer enough for the genuine material factor to be unrelated to gender.

This case may be appealed to the Court of Appeal. We will keep you updated when we hear anything further.

Smith v Churchill’s Stairlifts (2005)

This Court of Appeal case provides new guidance on the correct approach to claims under the Disability Discrimination Act 1995 (DDA) as follows:

1. Section 4(1) of the DDA refers to it being unlawful for an employer to discriminate against a disabled employee by way of “arrangements” made for the purposes of determining to whom they should offer employment. These arrangements should not be of a nature which would put the disabled person at a substantial disadvantage.

The Court of Appeal’s guidance on the correct interpretation of an “arrangement” must be interpreted with the employer’s belief in the Claimant’s ability to fulfil the requirements of the job.

2. When determining whether or not a disabled person is at a disadvantage, they must be compared to others who fulfil the conditions for the job, not just people in general.

3. The EAT said that the justification test for determining whether or not a failure to make reasonable adjustments is justified is different to that for deciding whether or not an employer has treated a disabled employee less favourably.

Windsor Recruitment v Silverwood

“Some other substantial reason” or SOSR can be used by employers as a defence to claims against unfair dismissal. For example, an employer wishes to reorganise its business which will result in dismissals even though there is not a redundancy situation. The employer is likely to be able to successfully defend the claim as the reason is an SOSR i.e. a genuine business reason. An SOSR is basically some other reason which justifies dismissal but is not covered by other specified fair reasons such as redundancy, legal prohibition, conduct and capability

This case arises out of a situation in which the Respondents wished to impose restrictive covenants on its workforce to prevent them from competing after they left the company’s employment. Those employees who chose not to agree to the restrictive covenants were dismissed.

The Employment Tribunal found that despite there being good reason for there to be restrictive covenants imposed, the covenants themselves were too wide and therefore they were not enforceable. As a result, the dismissals were held to be unfair in the absence of “some other substantial reason”.

The EAT disagreed and stated that “some other substantial reason” was satisfied by the fact that the employees had refused to accept the restrictive covenants. This is not however the case where the restrictive covenant is in fact a cover up in a situation where the employer secretly wishes to get rid of the employee.

In assessing a case like this the Tribunal needs to consider the nature of the covenant for example in this case they were considered to be too wide. The nature of covenants will be looked at in terms of fairness as a whole as opposed to particularly in the context of dismissal issues.

Hone v Time Regulations (1998)

In this case the Court of Appeal have held that the court is right to take into account whether or not an employee has worked more than the maximum 48 hour working week when determining whether psychiatric injury was reasonably foreseeable.

More legal updates next month in our Christmas Bulletin special.

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