Employment Review - November 2008
In this issue, we look at the much anticipated Opinion of the Advocate General in the Heyday case; consider how bonus schemes can be discriminatory when they are not regularly assessed on their effectiveness; discuss how employers should be careful when wording adverts to avoid age discrimination claims; and review the Information Commissioner’s ruling that identities of Respondents in tribunal cases should be made public.
Advocate General delivers his opinion in Heyday
Carefully worded vacancies
Company’s enhanced redundancy payments considered discriminatory
Muslim employee sues Tesco for handling alcohol
EAT finds council bonus scheme did discriminate against female employee
Details of respondents to employment tribunal cases to be disclosed
Advocate General delivers his opinion in Heyday
- The Advocate General (AG), backed the current UK legislation, concluding that a national rule which permits employers to dismiss employees aged 65 or over for retirement can, in principle, be justified;
- Once the ECJ has made its ruling, providing it agrees with the AG, it will be for the High Court to consider whether retirement is in fact, objectively and reasonably justified in the context of UK law.
Background
Heyday made an application for judicial review, arguing that to compulsorily retire employees at 65 is incompatible with the European Equal Treatment directive. The High Court referred a number of questions to the European Court of Justice on the interpretation of the age provisions.
The AG concluded that there is no need for types of permissible age discrimination to be specifically listed in the legislation, as suggested by Heyday. This gives employers more scope to argue that such discrimination is legitimate.
Next steps
The AG’s opinion is a step in the right direction for employers because he has recognised that compulsory retirement is, in principle, capable of being justified. Until the ECJ makes its ruling (and there is no guarantee that it will follow the AG’s decision), the situation remains uncertain, but:
• If the ECJ adopts the AG’s Opinion, the High Court will then have to make the final ruling on whether the default retirement age can be justified. The Government will need to show that the default retirement age can be objectively and reasonably justified as an employment policy for reasons such as ensuring flexibility in the workplace and workplace planning;
• If the ECJ does not follow the AG’s Opinion and considers that the UK age regulations are contrary to the directive, the High Court will have to interpret UK law in line with the directive and ultimately this may lead to a change in the UK’s age discrimination regulations.
The Incorporated Trustees of the National Council for Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform.
• An advert stating “would suit candidates in the first five years of their career” amounted to indirect age discrimination because it was a criterion that potentially put persons over 60 at a disadvantage.
• A defence that cost had played a part in the decision to advertise for someone with around five years’ experience was rejected by the Tribunal because the Council did not put forward any evidence to show it was forced to take the discriminatory decision for costs reasons, and cost reasons alone could not justify discrimination.
Background
Ms Rainbow was employed as a teacher by Milton Keynes Council. She was 61 and had 34 years experience. Ms Rainbow reduced her hours and was given assurances from the head teacher that she would have first right of refusal for extra supply teaching.
An advert was posted which stated that the vacancy “would suit candidates in the first five years of their career”. Ms Rainbow requested an application pack but was told that she should simply send a letter of application, unlike the other candidates. She was not short listed and her rejection letter stated she had not addressed issues sufficiently in depth.
Ms Rainbow brought claims for direct and indirect age discrimination against the Council for their decision not to offer her supply teaching and in relation to the new job for which she had been rejected.
The Tribunal found that the job advert and the failure to shortlist Ms Rainbow for the teaching position constituted indirect age discrimination, but did not find that there was age discrimination when allocating supply work.
The Tribunal also stated that costs reasons must be combined with other reasons to justify discrimination and relied on the case of Cross & Ors v British Airways plc [2005] IRLR.
This is another reminder for employers to consider whether it is necessary to specify that a certain level of experience is required or desirable. If an employer does decide that it is, it will need to be able to justify why a certain level of experience is required - remember, cost alone is not enough to justify discrimination on the grounds of age!
Rainbow v Milton Keynes Council 1200104/2007.
Company’s enhanced redundancy payments considered discriminatory
• Where enhanced redundancy packages offered to employees do not mirror the statutory redundancy scheme, they will be unlawful unless they are objectively justified as “a proportionate means of achieving a legitimate aim”.
• The Tribunal held that the Company could not justify its less favourable treatment because even though implementing the enhanced redundancy payments was legitimate (that being to avoid industrial unrest), the way in which this aim had been implemented (by treating Claimants less favourably because of their age) had not been a proportionate means of achieving it.
Background
The employees worked at one site of National Starch and Chemicals Limited. The Company decided that the Warrington site should close at the end of 2006 and the employees received three weeks’ pay for each year of service they were under 40 and four weeks’ pay for each year of service they were over 40. Negotiations took place with the trade union and at that time no concerns were raised regarding the enhanced redundancy payments.
The Claimants subsequently brought claims under the Age Regulations, alleging that they had been less favourably treated than older employees of the Company who had been made redundant. The Company accepted that the Claimants had been treated less favourably than older employees, but argued that the treatment was lawful and justified as it was a proportionate means of achieving a legitimate aim.
Although the Company sought to rely on the labour market disadvantage suffered by older workers to justify the age-based enhancements redundancy scheme, it did not specifically demonstrate that this had been in its objective at the time the scheme was implemented.
Although this is only a first instance decision from the Employment Tribunal, it serves as a useful reminder to employers who operate enhanced redundancy schemes. If your enhanced scheme does not mirror the age banding and pay differentials of the statutory scheme then you will need to ensure that you can justify why your scheme operates the way it does and also ensure that the reason for any differential treatment based on age is documented to avoid evidential issues in the future.
Galt and others v National Starch and Chemical Limited ET/2101804/07.
Muslim employee sues Tesco for handling alcohol
A Muslim forklift driver who claims he did not know Tesco sold alcohol when he accepted employment with them has brought claims for religious discrimination, victimisation and harassment on the basis that he was made to handle alcoholic drinks as part of his job.
Background Mr Ahmed worked in the depot for eight months before resigning. He claims he was forced to leave because handling alcohol was against his strict Islamic beliefs and that he was victimised when he asked Tesco to give him another role.Tesco argued that it was reasonable to expect Mr Ahmed to be aware of what they did, that he was made aware at the outset what the job would entail and that whilst working he sent out mixed messages, suggesting he was allowed to handle Budweiser.
Mr Ahmed claimed he had never visited a Tesco store and was not aware that it sold alcohol. However, he admitted having shopped at Sainsbury’s, Lidl and Asda and noticed alcohol was being sold.
Sainsbury’s was last year faced with a similar problem with Muslim checkout staff refusing to sell alcohol on religious grounds. Sainsbury’s resolved the issues by finding alternative jobs for these employees. Sainsbury’s stated that at the application stage they ask their employees if they have any issues handling products and they try to accommodate requirements depending on the needs of the particular store.
The Tribunal has yet to give its verdict in this case, but it will be reported in a future review. Companies should, at the application stage, try to establish whether there are any culturally sensitive issues e.g. personal appearance, dress codes, practices or products in the workplace facing its employees and, where possible, seek to resolve these issues. Companies which adopt this approach will be less likely to be held to have acted unreasonably if an employee subsequently complains.
EAT finds council bonus scheme did discriminate against female employee
• EAT has found that a bonus scheme supposedly designed to encourage productivity in jobs predominantly held by male workers was a sham and discriminated against female workers because the effectiveness of the scheme had diminished and there was no evidence that it encouraged productivity;
• It concluded there was no “genuine material factor” defence available under the Equal Pay Act 1970. Background
The Claimants were female employees of Hartlepool Council who worked in various jobs ranging from scheme co-ordinators in the housing department to care assistants and cleaners. They compared their jobs with those of a trade supervisor, joiner, electrician, road sweeper and refuse driver, which were all predominantly held by men. As a result of negotiations in the 1970s with the unions, these men received incentive bonuses which the Claimants did not receive.
The Claimants brought equal pay claims, arguing that these male employees were doing work of equal value and they should also have been receiving the incentive bonuses. The Council argued that the incentive bonus scheme was related to productivity and, as such, the difference in treatment was genuinely due to a material factor which was not the difference of sex.
The Tribunal held that the bonus scheme was a sham and it had not been regularly reviewed or assessed for continued effectiveness. This is a warning to employers that they must conduct regular reviews on their bonus or incentive schemes to ensure they continue to achieve their objectives. If the schemes do not, then employers will find it difficult to defend equal pay claims relying upon a ‘genuine material factor’ defence under the Equal Pay Act.
Hartlepool Borough Council and others v Dolphin and others UKEAT/007/08
Details of respondents to employment tribunal cases to be disclosed
• The Information Commissioner’s Office, which promotes public access to official information and protects personal information, has ruled that the identity of Respondents to Employment Tribunal proceedings must be made public under the Freedom of Information Act.
• The Information Commissioner considered arguments from BERR which is against publication on the basis that: it could damage Respondents’ reputations; leave them open to direct marketing by organisations and decrease the chances of settling early if their identities were disclosed; but the Information Commissioner decided that any prejudice to Respondents was minimal and that the public interest arguments were weak.
The identity of Respondents will now be routinely published. Interestingly however, identities of Claimants will not be disclosed as there are greater protections available for individuals!
This update is only a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist advice should be sought from a member of the Freeth Cartwright Employment Team in relation to any queries that may arise.If you want to know more…
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