Employment Review - November 2007
In this month’s review we report on relevant areas of the Queen’s Speech; the ECJ’s decision on ending parental leave early so that maternity leave can be taken; mobility clauses in contracts of employment being exercised during redundancy; the challenge of the mandatory retirement age set in the UK (Age Regulations) and suspension of employees during the contractual disciplinary procedure.
The Queen’s Speech was delivered to Parliament on 6 November 2007
Employers should not unreasonably exercise their right to suspend under the contractual disciplinary procedure
ECJ allows a mother to end her parental leave early so she could take maternity leave
UK age regulations challenged again!
Gender pay gap is growing
A mobility clause in a contract can be exercised by an employer in a redundancy situation - but beware the procedure to be adopted!
Recent work
The Queen’s Speech was delivered to Parliament on 6 November 2007.
It highlighted a number of legislative proposals, including:
Flexible Working
The Government promised to “bring forward proposals to help people achieve a better balance between work and family life”.
The Government is keen to introduce further measures to extend flexible working rights to parents with children older than 6 years. The UK is considered to lag behind other European Union countries on flexible working according to the Equal Opportunities Commission. 14 million employees work flexibly or have done so in the last 12 months including working from home, working part time, compressed hours, flexi-time or other arrangements agreed with their employer.
According to Government figures, 91% of workplaces receiving requests in the last year for flexible working approved those requests. The 2007 Work-Life Balance Employer Survey found that 92% of employers believe that people work best when they can balance their work with other aspects of their lives.
Education and Skills Bill
The main purpose of this Bill is to raise to 18 the minimum age at which young people can leave education or training. Under the Bill, the Government is proposing “duties on employers to release young people to undertake education and training and to check whether a young person is participating before employing them”. This is likely to provoke a furious debate!
Employment Bill
The Employment Bill (previously referred to as the “Employment Simplification Bill”(!)), is intended to simplify and clarify certain aspects of employment law. The key reforms proposed are:
• Overhaul of the dispute resolution procedures;
• Straightforward and transparent enforcement and penalties regime for the national minimum wage;
• Compliance with the European Court of Human Rights (ECHR) judgement in Aslef v UK - so that trade unions can expel members on the basis of their membership of a political party.
Employers should not unreasonably exercise their right to suspend under the contractual disciplinary procedure
This case addressed the importance of an employer’s failure to follow the contractual disciplinary procedure and to have regard to the seriousness of the allegations against an employee.
This case was heard on appeal by the Employment Appeal Tribunal (”EAT”), which upheld the Employment Tribunal’s decision. Mrs Atkinson was employed by the Camden and Islington Mental Health Social Care Trust (”Camden”) as a nurse for 32 years until her resignation on 31 October 2005.
Complaints were made to her manager about how she treated two patients. The manager felt that the allegations were extremely serious and the content could amount to institutional abuse. At a meeting on 20 October Mrs Atkinson, who was neither represented by a trade union nor accompanied by a colleague, was suspended pending an investigation.
Camden’s contractual disciplinary procedure stated that:
• Suspension is not a disciplinary act, but a neutral act following an individual to be released from work on full pay while an investigation is carried out.
• At the suspension meeting the employee should have the opportunity to be represented by their trade union or accompanied by a friend or colleague “except in an emergency where the employee’s immediate removal is required”.
At an investigatory meeting on 31 October Mrs Atkinson was present with her union representative. One of the allegations was not considered to be relevant but Camden did not lift the suspension. Mrs Atkinson realised that the suspension was to continue and decided to hand in her notice stating she was “retiring” from work.
After her employment terminated Mrs Atkinson started another job. Mrs Atkinson brought a claim for constructive dismissal. The Tribunal held and the EAT upheld that:
• Camden failed to give regard to the allegations which Mrs Atkinson faced and to weigh up their seriousness in the overall picture. Camden acted unreasonably in denying Mrs Atkinson representation at her suspension meeting.
• The principal reason why Mrs Atkinson resigned was not retirement but the fact that Camden failed to lift the suspension.
• Camden had unreasonably exercised its right to suspend under the disciplinary procedure which amounted to a fundamental breach of contract.
The EAT stated that the cause of her resignation was her continuing suspension not her retirement, which was a fundamental breach of her contract and therefore Mrs Atkinson had been unfairly constructively dismissed.
Employers should therefore bear in mind that where an employee is suspended, investigations should be carried out according to the policy and as quickly and thoroughly as possible.
Camden and Islington Mental Health and Social Care Trust
ECJ allows a mother to end her parental leave early so she could take maternity leave
Refusing to let a woman change her parental leave dates so she could take maternity leave was unlawful sex discrimination and a breach of the Pregnant Workers’ Directive.
The case concerned an employee in Finland who had been granted 10 months’ parental leave and subsequently discovered she was pregnant and due to give birth part way through her parental leave.
The ECJ held that the employee should have been allowed to end her parental leave early in order to benefit from the paid maternity leave and that the failure to do so was contrary to the Equal Treatment Directive and the Pregnant Workers’ Directive.
The claim was based on the fact that the claimant was deprived of benefits of maternity leave and maternity pay by being forced to remain on parental leave for several months after giving birth.
Situations like this can also happen in the UK where a period of parental leave is agreed in advance between the employee and employer and the employee then discovers she is pregnant and her maternity leave and parental leave overlap. The ECJ’s decision confirms that the employer should agree to amend the dates of the employee’s parental leave.
Kiiski v Tam Laupunki (Case C-116/06)
UK age regulations challenged again!
On 30 October, the EAT gave its judgment in the case of Johns v Solent SD Limited, and held that the tribunal was wrong to strike out an age discrimination claim on the grounds that the Heyday case had little prospect of success, by an employee who had been retired against her will rather than stay the claim pending the outcome of the Heyday decision by the ECJ.
Johns was a case of unfair dismissal and age discrimination. Mrs Johns accepted that her dismissal was as a result of compulsory retirement (which is a potentially fair reason) and that the company had followed the correct procedure. However, the issue in Johns was whether Regulation 30 of the Employment Equality (Age) Regulations 2006, which allows employers to dismiss employees who have reached a normal retirement age, is contrary to the EC Equal Treatment Framework Directive.
The President of the Employment Tribunals (England and Wales) has issued a Direction ordering all current and future claims raising the same issue to be stayed pending the decision in Heyday. Interestingly, the Direction records that the Johns decision in the EAT is being appealed to the Court of Appeal and the Order will be reviewed when Judgment is given by the Court of Appeal.
This once again creates uncertainty on what the outcome of the ECJ’s decision on whether the mandatory retirement age set by the UK is contrary to the Directive. Continue watching this space!
Johns v Solent Limited ET/3100414/07
The Institute of Directors ‘Annual Directors’ Rewards survey analysed approximately 4000 jobs from around 1200 organisations and found that the pay gap between men and women is now 22% - up from 19% last year. The biggest gap was in the service and voluntary sectors where female pay is 26% below that of their
male counterparts. For example in the service sector, an average salary for a female director of £56,933 compared with £70,657 for a male director.
A mobility clause in a contract can be exercised by an employer in a redundancy situation - but beware the procedure to be adopted!
In this case, the Court of Appeal held that a tribunal had been wrong in asserting that an employer is not legally entitled to invoke a mobility clause when a redundancy situation might arise or has arisen on the closure of part of a business.
Where a redundancy situation is likely to arise on a closure of a business or workplace, and the employee has an express mobility clause in his contract of employment, the employer is able to invoke the mobility clause rather than treating the employee as potentially redundant, as long as it is communicated to the employee from the outset.
If, however, redundancy procedures are followed, the company cannot subsequently rely upon mobility obligations as a defence.
Home Office v Evans [2007] EWCA
Recent work
• Advised a Premier League Football Club on termination of senior employees’ contracts and subsequent compromise agreements
• Advised on trade union derecognition
• Defended a local authority in a 3 day race discrimination case
• Gave a talk to senior HR directors on the challenges they face in securing their business’s compliance with employment law.
If you want to know more…
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