Annual Compensation Limits Announced

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1 Annual Compensation Limits Announced New compensation limits apply where the event giving rise to compensation or payment occurs on or after 1 February 2012 as follows: March 2012 Welcome to the legal update from the Owen White employment team. The limit on the amount of a week s pay for statutory redundancy payments and the basic award for unfair dismissal increased from 400 to 430 The maximum compensatory award for unfair dismissal increased from 68,400 to 72,300. Next article: Unfair dismissal qualifying period: increase to two years > In recent months, the government has made various announcements about possible changes to employment laws. Some of these matters are still only proposals that will be subject to further consultation. However, there are a few legislative changes that we know will come into force. We will keep you up to date in our monthly legal updates, as and when the changes are confirmed and due to come into force. If you have any questions about any of the changes and case law updates in this newsletter or if you would like any advice on any employment issues, please feel free to contact one of the employment team to see if we can help you solve the problem. Richard Keen Managing Partner

2 Unfair dismissal qualifying period: increase to two years The draft Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 has been published. In a nutshell, for all employees employed on or after 6 April 2012, the qualifying period for unfair dismissal (and requests a statement of reasons for dismissal) increases to two years. Employees whose period of continuous employment began on or before 5 April 2012 will still be subject to the one year qualifying period. What does this mean? Those employees who are currently in employment will remain subject to the one year qualifying period. If this passes into legislation unchanged then new employees who start employment after 6th April will have to serve two years before being able to bring a claim for unfair dismissal. Remember there are no time qualifications for employees bringing discrimination claims. Next article: Can an employer refuse to offer overtime to an employee if they fail to sign a 48 hour opt-out agreement? >

3 Can an employer refuse to offer overtime to an employee if they fail to sign a 48 hour opt-out agreement? Under the Working Time Regulations 1998 ( WTR ), working hours are limited to 48 hours a week unless an employee agrees in writing to opt-out. Employers must take all reasonable steps to ensure that the limits are complied with and if an employer breaches this provision, they face criminal sanctions. In the case of Arriva London South Ltd v Nicolaou (2011), the EAT has confirmed that an employer can, as a policy, refuse to offer overtime to employees if they fail to sign an opt-out agreement. The Claimant, a bus driver, had declined to opt-out of the 48 hour week average limit. The employer therefore did not consider him for overtime, justifying its decision on the basis that it had a duty to ensure that it kept to its policy of preventing the Claimant exceeding a 48 hour average working week, in line with WTR. The Claimant claimed a detriment for asserting his right to opt-out. The EAT held that Arriva s policy ensured their compliance with the WTR and therefore it was a reasonable policy to adopt. The EAT held that: It would be a strange result if this employer were to be condemned for adopting a reasonable policy designed to ensure that its employees who exercised their right not to opt out of the 48 hour week maintained that right. This is welcome news to employers who have employees working over 48 hours a week and want to ensure their compliance with the WTR. Next article: A doctor is awarded 4.5m in compensation >

4 A doctor is awarded 4.5m in compensation A doctor has been awarded 4.5 million pounds following her successful claims for unfair dismissal, sex and race discrimination in one of the largest ever discrimination payouts. Dr Eva Michalak, who worked as a consultant at Mid Yorkshire Hospitals NHS Trust, claimed she had been subjected to a sustained campaign of discrimination at the hands of three senior managers (including the HR Director). All three individuals have been made jointly liable for the award. The tribunal heard that senior staff members began a plan to get rid of Dr Michalak at a secret meeting in 2003 when she was seven months pregnant, following a complaint she had made about suffering sex discrimination. The campaign led to a "bogus" disciplinary procedure being adopted and an unjustified and lengthy suspension leading to her dismissal. Medical evidence at the tribunal concluded that Dr Michalak suffers from chronic post-traumatic stress disorder as a result of her treatment, and that she is unlikely to ever work again. According to the medical expert, Dr Michalak became unable to carry out even the most basic day-to-day tasks and that she had been suicidal. The payout was made up mostly of forecasted future loss of earnings (almost 942,000) and loss of pension (over 666,000) and included damages for injury to feelings and exemplary damages against the Trust. Dr Michalak was at the beginning of her career and it was estimated that she would have continued to work as a consultant until she was 68 (the age at which workers in future are likely to retire). What does this mean? There is no limit to awards in discrimination cases. This is reflected in this case. This case will be a wakeup call to employers who should ensure that they treat all employees fairly and avoid any form of discrimination in the workplace. Our team of employment lawyers can provide training and guidance to employers and their managers which will help employers avoid future employment claims. Please contact one of our employment lawyers should you need any assistance.

5 Feedback We are always happy to receive any feedback that you can provide to us about this newsletter, our services and any area of employment law which you would like us to cover in the future. Please feel free to telephone or your feedback to Reena Sharma on or at Contact If you would like to learn more about any of the featured article topics or discuss any other employment issues, please call Richard Keen, Lindsay Donald or Reena Sharma on or us directly. Alternatively you can learn more about Owen White by visiting our website at Back issues of the Employment E-newsletter can be accessed via our website.