Employment Review - October 2007
In this month’s Review we cover an important case requiring a change in the detailed requirements of collective redundancy consultation, an ECJ age discrimination case on National Retirement Ages, guidance from the Information Commissioner and what is meant by “personal data”, and the delay in the introduction of further family friendly policies. We have also included an overview of the latest Employment Tribunal statistics for the period up to 31 March 2007 which show the impact of the huge increase in equal pay claims which have arisen mainly in the public sector and which are having a significant impact on the Employment Tribunal’s ability to dispose of cases.
Need to justify redundancies
Personal data defined
Tribunal statistics
European decision on age discrimination
Extension of Family Friendly Policies
News
In the case of U K Coal Mining Ltd v NUM the Employment Appeal Tribunal has overturned previously binding authority and held that collective consultation obligations in redundancy cases extend to include consultation about the reasons for the dismissals themselves, as well as the obligation to consult over the avoidance of dismissals.
The employers in the case were appealing against the decision of the Employment Tribunal to award maximum protective awards for failing to properly consult with the Unions over mass redundancies at Ellington Colliery in Northumberland. The employers argued that the Tribunal had erred in its approach which resulted in it minimising the extent and nature of the consultation which had occurred and especially in relation to special circumstances, by fixing the appropriate length of the protective award.
The two Trades Unions submitted that the decision should be upheld on the facts, and cross appealed that, in the light of statutory changes, previous authorities (namely R v British Coal & Secretary for Trade & Industry ex parte Vardy) were no longer binding and therefore the Tribunal were wrong to take the view that there was no obligation to consult over the reason for the closure itself. The Employment Appeal Tribunal dismissed the appeal and upheld the submissions of the two Trade Unions in the cross appeal. The significance of this is that it is now important for employers to consult over the reasons for redundancy and be able to justify the grounds for declaring employees redundant. Redundancy procedures will therefore need to be reviewed in light of this important decision.
The Information Commissioner has set out his view of what “personal data” is for the purposes of the Data Protection Act in a new Guidance Note called “Determining What is Personal Data”. The definition of personal data is defined in Article 2 of the European Data Protection Directive, which is implemented into UK law by the Data Protection Act, and is determined by reference to whether information relates to an identified or identifiable individual.
In most cases it will be obvious when personal data is being processed. However, this is not always the case, and the guidance aims to take enquirers through the factors to consider when deciding whether personal data is being processed. This includes suggestions of considerations which may help a decision to be reached about the nature of the information in question, questions set out in flow charts and many scenarios and situations to illustrate circumstances when information relates to an identifiable, living individual.
If you are in any doubt as to whether any personal data falls within the scope of the Data Protection Act and the Directive, the Guidance is a useful starting point.
The Employment Tribunal and EAT statistics for the period between 1 April 2006 to 31 March 2007 have recently been released. The main points of interest are as follows:
• Compared with the previous year the total number of claims accepted has risen from 115,039 to 132,577, which is an increase of 15%.
• Equal pay claims increased from 17,268 to 44,013, which therefore accounts for the substantial increase in the number of claims submitted to the Employment Tribunal.
• Unfair dismissal claims increased from 41,832 to 44,491 (although these statistics also include unfair dismissal as a result of a TUPE transfer which was previously shown separately). Therefore equal pay claims and unfair dismissal are the most common claims.
• There was an increase of 19% in the number of cases disposed of.
• There were 972 claims for age discrimination, although it should be noted that as the age discrimination provisions only came into force on 1 October 2006 this is therefore only over a period of six months.
• The total number of claims initially rejected was 10,762, which is approximately 8% of all submitted claims. Of these approximately one third were re-submitted and subsequently accepted.
• There was a decrease of 22% in the number of cases heard at a full hearing by the EAT.
• The average compensation awarded for an unfair dismissal claim was £7,974, and the average award for costs was £2,078.88.
European decision on age discrimination
The Equal Treatment Framework Directive provides a general framework for prohibiting discrimination on the grounds of disability, religion or belief, sexual orientation or age in employment and occupation. The age strand of the Equal Treatment Framework Directive was implemented in the UK by the Employment Equality (Age) Regulations 2006 which were made law on 1 October 2006. These Regulations permit a compulsory retirement age of 65 or above to be set by employers, although any retirement ages fixed below 65 must be justified. It is these provisions that have been challenged by the campaign group “Heyday” who claim that the Regulations do not comply with the Directive. In August 2007 this was referred to the European Court of Justice.
In the Spanish case of Palacios de la Villa v Cortefiel Servicios the European Court of Justice has held that the Directive does cover national retirement ages. However, on the facts of the case, it held that the provisions of Spanish law, where workers can be compulsorily retired where they have reached normal retirement age and have completed the qualifying period to draw their retirement pension, are justified under Article 6 (1) of the Directive, namely by a legitimate aim which can include employment policy, labour markets and vocational training objectives.
The main part of the Judgment deals with the circumstances when compulsory retirement can be justified, and in particular emphasises the “margin of discretion” afforded to member States to justify inequalities based on the above legitimate aims. However, the Judgment also removes one of the main defences of the British Government in the Heyday case, namely the Recital 14 defence which states that the Directive is without prejudice to national law setting out retirement ages. However, there are significant differences between the facts of the two cases and also between the UK and Spanish laws in question. As a result legal opinion is somewhat divided as to whether the decision has damaged Heyday’s case - watch this space!
Extension of Family Friendly Policies
Following on from the increase of statutory maternity pay to 39 weeks in April, the Government intend to extend Statutory Maternity Pay, Maternity Allowance and Statutory Adoption Pay from 39 weeks to 52 weeks and to introduce Additional Paternity Leave and Pay by the end of this Parliament.
The implementation of Paternity Leave and Pay would mean that fathers have a right to take up to an additional 26 paid weeks off work in order to care for their child in its first year, as long as the mother has not used her full entitlement to paid maternity leave and has returned to work.
These changes were planned to be implemented for babies due on or after April 2009. The HMRC are now advising that they will now start planning the implementation of these provisions for babies due on or after April 2010. They have however kept their options open by stating that reliance should not be based on this timescale! In practical terms this means that employers will have to keep their eye on the current Parliament for concrete decisions on the implementation of these new policies.
We successfully represented an employer in obtaining an order for legal costs against an employee who had brought an unfair dismissal claim and eventually withdrawn that claim after the Trade Union had declined to support the Claimant.
We represented an employer in the successful mediation of a complex discrimination claim using the Tribunal’s relatively new judicial mediation process.
Freeth Cartwright LLP has lawyers who are trained mediators and we are increasingly using mediation in various forms to resolve individual and collective employment disputes.
If you want to know more…
Speak to us today and find out what we can do for you. Please contact any of the following:
David Potter, Cumberland Court, 80 Mount Street, Nottingham NG1 6HH
Tel: 0115 936 9389
Fax: 0115 859 9617
david.potter@freethcartwright.co.uk
Joanne Kay, Floor 2, West Point, Cardinal Square, 10 Nottingham Road, Derby DE1 3QT
Tel: 0845 634 1724
Fax: 0115 859 9617
joanne.kay@freethcartwright.co.uk
Julian Middleton, Imperial House, 108-110 New Walk, Leicester LE1 7EA
Tel: 0116 201 4015
Fax: 0116 275 6090
julian.middleton@freethcartwright.co.uk
Pat Jones, First Floor, St James Building, 61-95 Oxford Street, Manchester M1 6FQ
Tel: 0845 634 2561
Fax: 0845 634 2541
pat.jones@freethcartwright.co.uk