Employment team bulletin January 2013

Transcription

1 Page 1 Employment team bulletin January 2013 Alice Cave January 2013 In this bulletin, we consider some recent cases and set out the employment law changes due to come into force in Recent cases European judgments on right to manifest religion at work The European Court of Human Rights ('ECHR') issued its judgment this month in Eweida and others v United Kingdom, four cases from the UK which relate to an employee's right to manifest their religious beliefs at work. Ms Eweida, a Christian, was employed by British Airways ('BA') as a member of check-in staff. She was not permitted by BA to wear a visible cross as this was contrary to its uniform policy. Ms Eweida lost her discrimination case in the UK and challenged this decision in the ECHR, on the basis that UK law failed to uphold her right under Article 9 of the European Convention on Human Rights ('the Convention') to manifest her religion or beliefs. The ECHR found that the Court of Appeal had accorded too much weight to BA's desire to project a certain corporate image, and the fact that BA subsequently changed its uniform policy to allow employees to wear symbolic religious jewellery suggested that the issue of religious jewellery was not ultimately that important to BA. Therefore Ms Eweida's Convention rights had not been sufficiently protected under UK law. However, the ECHR rejected the complaints of the other three employees. In Chaplin v Royal Devon & Exeter NHS Foundation, Ms Chaplin, a nurse, had been prevented from wearing a cross at work on grounds of health and safety. Again, she brought proceedings for discrimination in the UK and lost her case. The ECHR found that the aim of protecting the health and safety of staff and patients was 'inherently of a greater magnitude' than BA's desire to manage its corporate image, and that managers at the hospital where Ms Chaplin worked were better placed to make decisions about clinical matters than a court. In Ladele v London Borough of Islington and McFarlane v Relate Avon Ltd the ECHR found that the UK courts were entitled to reject the Claimants' discrimination claims following their dismissals for refusing on religious grounds, to officiate at civil partnership ceremonies (Ms Ladele) and to counsel homosexual couples (Mr McFarlane). In both cases the employer's aim to provide services to the public without discrimination was found by the UK courts to outweigh the Claimant's right to manifest their religious beliefs. The ECHR found that these decisions fell within the UK's margin of appreciation in seeking to balance competing Convention rights. These judgments are a reminder of the UK's obligation to secure Convention rights for individuals, and to strike a fair balance between the competing interests of the individual and the community as a whole. Volunteers are not protected by discrimination law In X v Mid Sussex Citizens Advice Bureau the Supreme Court confirmed that a volunteer had no protection under disability discrimination law because she was not 'in employment' for the purposes of the European Equal Treatment

2 Page 2 Framework Directive, which the Disability Discrimination Act 1995 (now replaced by the Equality Act 2010) was intended to implement. The Claimant in this case volunteered with a Citizens Advice Bureau ("CAB") for a few hours a week. She signed a 'volunteer agreement', which was stated to be binding in honour only, and not a contract of employment. The CAB asked the Claimant to stop volunteering and she issued proceedings under the Disability Discrimination Act 1996, but the Employment Judge found that the Tribunal had no jurisdiction to hear her claim because she was not employed. This was upheld by the Employment Appeals Tribunal and the Court of Appeal. The Claimant, supported by the Equality and Human Rights Commission, appealed to the Supreme Court. The Supreme Court dismissed her appeal unanimously, agreeing for the most part with the views expressed by the lower courts, and confirming that only workers and employees benefit from the employment provisions of discrimination legislation. Voluntary sector organisations will welcome this decision. However, it should be noted that the judgment reaffirms the principle that a volunteer who is given a contract (and thus becomes a worker) would be protected by the legislation. Organisations which use volunteers should bear this in mind when providing documentation to volunteers. UK must give employees more legal protection against dismissal on grounds of political beliefs Under UK law, there is no specific protection for employees who are dismissed or subjected to a detriment because of their political beliefs. Employees may bring claims for unfair dismissal if they have sufficient qualifying service, and in some circumstances political beliefs may qualify for protection under the religion and belief discrimination legislation (e.g. a genuine and strongly held belief in climate change was found in a 2010 case to qualify for protection). However, cases where claimants have argued that membership of a specific political party is a protected ground have so far failed, leaving employees with no unfair dismissal rights unable to challenge a decision to dismiss them which arises from their membership of a particular political party. In Redfearn v United Kingdom the ECHR has suggested that this violates the European Convention on Human Rights. Mr Redfearn was employed by Serco Ltd as a driver, providing transport services for disabled adults and children. Most of his passengers were Asian in origin, as was Mr Redfearn's manager. In June 2004 Mr Redfearn was elected as a local councillor for the British National Party ('BNP'). At that time the BNP only allowed white people to become members, and was opposed to any form of integration between British and non-european peoples. On 30 June 2004 Mr Redfearn was summarily dismissed by Serco on the basis that continuing to employ him would present a risk to the health and safety of employees and passengers, cause considerable anxiety to passengers and their carers and jeopardise Serco's reputation, potentially endangering its contract with the Council to provide transport services. Mr Redfearn did not have sufficient length of service to bring a claim for unfair dismissal. Instead he brought a claim for race discrimination. This was ultimately rejected by the Court of Appeal, which found that Mr Redfearn was not dismissed 'on racial grounds' but because he was a member of the BNP. Mr Redfearn argued that discrimination on grounds of membership of a political party contravened various Convention rights, including Article 10 (which protects freedom of expression) and Article 11 (freedom of association). He applied to the ECHR for a declaration that UK law is not compatible with the Convention in this respect.

3 Page 3 The ECHR found that there had been a violation of Mr Redfearn's rights under Article 11 and that UK law had erred in failing to provide sufficient protection against detriment on grounds of political opinion or affiliation. The ECHR noted that Article 11 applies to all associations and organisations, even those which are regarded as holding offensive views, and Mr Redfearn should have been given the opportunity to challenge the decision to dismiss him based on his membership of the BNP. The UK may appeal the ECHR's decision. If it does not, it is likely that the law will need to change to allow individuals who are dismissed because of membership of a political party to bring claims for unfair dismissal regardless of their length of service (although it is anticipated that such dismissals may still be fair if they can be justified for 'some other substantial reason'). For now, private sector employers are not affected by the ECHR's decision, but public sector bodies are required to act in a manner which is compatible with the Convention, so public sector employees who are dismissed because of their political affiliations could bring claims under the Human Rights Act 1998 even if they cannot bring claims for unfair dismissal. Dismissal of employee receiving PHI benefits not breach of implied term of employment contract The Employment Appeal Tribunal has found in Lloyd v BCQ that there was no implied term preventing the employer from dismissing an employee who was receiving permanent health insurance ('PHI') benefits. Mr Lloyd was employed by BCQ as Works Director and was provided with PHI. This was not mentioned in his employment contract, which was stated to set out the entire agreement between the parties. BCQ terminated Mr Lloyd's employment following a lengthy period of sick leave, and an agreement was reached between BCQ and the PHI provider under which the PHI provider would pay Mr Lloyd the benefits which he would otherwise receive until age 60 as a lump sum following termination of his employment. Mr Lloyd issued proceedings, including for breach of contract in relation to the PHI. He argued that it was an implied term of his employment contract that he would not be dismissed while in receipt of PHI benefits. The Employment Tribunal found that there was no implied term, and Mr Lloyd appealed to the Employment Appeal Tribunal. The EAT confirmed that there was no scope for an implied term due to the entire agreement clause in his contract, and the fact that the PHI cover was provided before that contract was put in place. Moreover, BCQ had an express contractual right to terminate Mr Lloyd's employment if he became incapable of carrying out his role: Mr Lloyd was seeking to imply a term which would have the effect of negating an express term, which was not permissible. It was also noted that Mr Lloyd suffered no financial loss, as he received a lump sum payment in respect of his outstanding entitlements under the PHI scheme. This case confirms that it is advisable to provide expressly in employment contracts that employment may be terminated in circumstances of incapacity. It may also be helpful, if the contract refers to PHI, to state that the right to dismiss by reason of incapacity applies even when the employee may be eligible to receive benefits under a PHI scheme, although the EAT in this case was not required to consider the legal effect of such wording. Enforceability of restrictive covenants in an unsigned employment contract In FW Farnsworth and another v Lacy and others, the High Court found that an employee was bound by the posttermination restrictive covenants contained in a contract of employment which was issued on his promotion even though he did not sign the contract. His acceptance of the terms of the new contract was implied as he had applied

4 Page 4 for private medical insurance ('PMI'), which was only available to him under the new contract. The new contract was binding from the date that the employee applied for the PMI. This case is potentially helpful for employers whose employees fail to sign new contracts, but only if the employees' acceptance of new terms can be implied by their actions. Clearly, it is preferable to ensure that new contracts are signed to avoid disputes as to the enforceability of any terms upon which the employer wishes to rely. Holiday and sickness absence In NHS Leeds v Larner the Court of Appeal found that an employee who was on long-term sick leave was entitled on termination of employment to payment in lieu of unused holiday from the previous leave year even though she had not asked to take her leave (she did not pursue any claim in respect of the year before that, as she had been in receipt of contractual sick pay equivalent to her usual pay). The Court found that it was clear that Mrs Larner had been prevented from using her annual leave due to sickness and that she was therefore entitled to take it later, when she was not sick. NHS Leeds was required to allow her to carry forward her unused statutory leave to the next leave year and, since she was not able to use it before her employment terminated (as she remained on sick leave), to pay her in lieu on termination. Workers are not required to ask to take leave in the year in which it accrues for this to be the case. This decision applies to all employers, whether public sector (as in this case) or private sector. Changes expected in 2013 A summary of changes due to come into effect later this year is set out below. Please note that the implementation dates are still subject to change. 1 February 2013 Tribunal compensation limits will increase: the maximum compensatory award for unfair dismissal will rise from 72,300 to 74,200; the maximum limit on a week's pay for the purposes of (among other things) statutory redundancy payments will increase from 430 to 450; and the minimum basic award for certain unfair dismissals (for example dismissals for reasons of trade union membership or activities or acting as an employee representative) will increase from 5,300 to 5,500. March 2013 The third party harassment and the discrimination questionnaire provisions in the Equality Act 2010 will be repealed. This is good news for employers, as: it will be less likely that employers will be directly liable for acts of harassment committed against their employees by third parties although employees who are subjected to harassment by third parties may still be able to bring claims against their employers under the general harassment provisions in the Equality Act or for constructive dismissal or for negligence where the employer has failed to take appropriate action to prevent the harassment occurring; and

5 Page 5 responding to questionnaires can be extremely onerous and time-consuming for employers and, in our experience, rarely results in early settlement of matters. 8 March 2013 The amount of unpaid parental leave that can be taken per child will increase from 13 weeks to 18 weeks. Parents will still only be able to take up to 4 weeks per year. 6 April 2013 Changes to the collective redundancy consultation rules: where 100 or more employees are affected, the 90-day minimum consultation period will be reduced from 90 days to 45 days; employees on fixed-term contracts which have expired can be excluded from collective redundancy consultation; and a new Acas code of practice will be introduced to provide guidance on consultation this will not have statutory force, but is intended to clarify some difficult issues (for example, the meaning of 'establishment' for the purposes of collective redundancy consultation. 6/7 April 2013 Certain statutory benefits will increase, namely: Statutory Sick Pay will increase from to per week (from 6 April); Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay and Maternity Allowance will increase from to per week (from 7 April); The earnings threshold for some of these benefits will also increase slightly. April 2013 April 2013 A new public interest requirement will be introduced in respect of whistleblowing claims: employees will no longer qualify for whistleblower protection if they make disclosures which relate to a breach of their own employment contract where this is not in the public interest. This change is intended to address a widely held perception that the current whistleblowing law, which contains no public interest requirement, can be exploited by employees who seek to make uncapped claims and/or who do not have the requisite length of service to bring a claim for unfair dismissal. The Employment Rights Act 1996 will be amended to introduce 'employee shareholder' status. Employee shareholders will forfeit some of their employment rights in exchange for shares in their employer, which on disposal will be exempt from capital gains tax. The rights which will be forfeited are: the right to claim unfair dismissal (other than automatically unfair dismissal, e.g. if the employee is dismissed for raising a health and safety issue); the right to a statutory redundancy payment; the right to make a flexible working request; and the right to request time off for study or training. Employee shareholders will also be required to give 16 weeks' notice if they wish to return early from statutory maternity, adoption or additional paternity leave (employees are only required to give eight weeks' notice).

6 Page 6 It is anticipated that few employers will offer employee shareholder status either to new joiners or to existing employees. Summer 2013 Fees will be introduced in the Employment Tribunals. Claimants will have to pay a fee to issue a claim in the Tribunal and a further fee before a hearing takes place. The amount of the fee will depend on the type of claim. For single claimant claims, the fee for issuing more straightforward and lower value claims (such as for a redundancy payment or pay in lieu of notice) will be 160 and the fee for taking such claims through to a full hearing will be 230. In respect of all other claims (including unfair dismissal, discrimination and whistleblowing claims) the issue fee will be 250 and the hearing fee will be 950. A fee remission scheme will apply to claimants who are less able to pay the fees, with eligibility for a remission based on receipt of certain benefits and on the claimant's (and their partner's) gross or disposable income. It is hoped that the introduction of fees may deter some claimants from bringing nuisance claims. Summer 2013 BIS has announced that, from summer 2013, the unfair dismissal compensatory award will be subject to a new cap of a year's pay (or 74,200, if a year's pay exceeds this). Further employment law changes expected in 2013 (or later), where no implementation date has been announced yet include the following: Mandatory pre-claim Acas conciliation BIS is currently consulting on the detail of the proposal that, before presenting claims in the Tribunal, Claimants will be required to submit details of their complaint to Acas, who will have up to a month to try to assist the parties to settle the dispute. The consultation closes on 15 February Amendments to TUPE The Government is also consulting on proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 ('TUPE'). The key proposals set out in the consultation are that: service provision changes be removed from the definition of a transfer; provisions requiring transferors to provide Employee Liability Information be repealed; restrictions on changes to terms and conditions and dismissal be re-worded to reflect more closely the wording of the Acquired Rights Directive and European case law;

7 Page 7 TUPE be amended to state that collective redundancy consultations by the transferee with the transferor's staff can commence pre-transfer; and micro businesses be permitted to inform and consult employees directly rather than through representatives. The consultation closes on 11 April consultation-on-proposed-changes-to-the-regulations1.pdf Offers of settlement agreements pre-termination of employment to be inadmissible in unfair dismissal proceedings This proposal is intended to enable employers to talk to employees about bringing the employment relationship to an end without fear that the discussion will be used against them in an Employment Tribunal if the employee brings a claim for unfair dismissal. The exemption will not apply to other types of claim (such as discrimination or whistleblowing claims) or if anything said in negotiations was 'improper, or was connected with improper behaviour' as such, employers who wish to rely on this exemption would be advised to tread carefully. This change is expected to come into force at some point this summer, by which point a new Acas code of practice on settlement agreements should be available. Flexible parental leave and flexible working In November 2012 the Government published its response to the flexible working and flexible parental leave aspects of its Consultation on Modern Workplaces. It intends to introduce draft legislation by April setting out the proposed new arrangements, which will include the following provisions: Fathers will be given the right to take unpaid leave to attend two antenatal appointments; Instead of the current maternity and paternity leave provisions, a new system of flexible parental leave will allow parents to share up to 50 weeks' leave, either consecutively or concurrently. Mothers will still be required to take two weeks' compulsory maternity leave; Mothers will still be entitled to up to 39 weeks' statutory maternity pay, but up to 37 weeks will be able to be shared between the parents; Statutory adoption leave will no longer be subject to a length of service requirement and statutory adoption pay will be made consistent with statutory maternity pay. Adopting parents will also be able to share statutory adoption leave and pay between them; Rights to flexible parental leave and pay will be extended to intended parents in surrogacy arrangements; The right to make a flexible working request will be extended to all employees with six months' service; and

8 Page 8 The current statutory flexible working procedure will be abolished, and employers will instead be subject to a duty to act reasonably. Acas will issue a code of practice and best practice guide setting out what a reasonable process requires. The changes related to flexible working are expected to come into force in 2014 and those relating to parental and adoption leave in Government's response to the annual leave aspects of the Modern Workplaces consultation Whilst the Government's response to the proposals from Consultation on Modern Workplaces which relate to flexible parental leave and flexible working has been published (see above), the response in relation to annual leave has not, but is expected later this year. It is anticipated that the response will confirm that the Working Time Regulations 1998 will be amended to give effect to recent European decisions relating to the interaction between annual leave and other types of leave (e.g. sick leave and maternity leave). It is also proposed that the Working Time Regulations be amended to permit employers to 'buy out' up to 1.6 weeks of statutory leave and/or to require employees to carry over up to 1.6 weeks' leave to the next leave year in cases of genuine business need. If you require further information on anything covered in this briefing please contact the firm on This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances. Farrer & Co LLP, January 2013