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Employers Update - April 2012

In this edition, we feature age and marital discrimination, TUPE - service provision changes (again), some Budget bullet points and direct you to the HMRC’s guidance on dual contracts.

Thanks to all of you who attended our HR Exchange event on Social Media and the Law and of course to our expert speakers from Touch and Cy4or who helped make the event so successful and valuable.

The majority of the HR experts who attended recognised the need to properly address employee use of web-based social media at work as a priority for their business. As a result, we have teamed up with Cy4or - the experts in digital evidence - to produce unique combined Social Media & Forensic Readiness policy for our clients and contacts. If this is of interest to you please do get in touch.

Staying on the subject of web-based media if I may, it is a good job that we distribute Employ! by email. Having heard the news of the rising price of stamps and fuel and the threat of transport worker strikes announced in the press last week, one wonders what the chances would be of our readers receiving their copy before the Easter break if we still had to rely on snail mail.

Enjoy the sunshine, whilst it lasts!

Kind regards

Will Clayton
Head of Employment

Key Employment Team Contacts:

Will Clayton Elaine Hurn Emma Swan Leanne Eddleston
Will Clayton
Head of Employment
Email Will
0844 8000 263
  Elaine Hurn

Email Elaine
0844 8000 263
  Emma Swan
Senior Associate

Email Emma
0844 8000 263
  Leanne Eddleston

Email Leanne
0844 8000 263



In This Edition:

Employ! Email Updates

Employ! is Taylors FREE monthly employment law newsletter which keeps busy HR professionals up to date with developments in the fast-moving world of work. Sign up now to have Employ! sent to you via email each month.


Age Discrimination
Court Holds Legal a Dismissal of an Employee to Avoid Pension Payout

Another case which highlights the relative ease with which employers can justify less favourable treatment of employees on the grounds of age was released by the Court of Appeal in March. Here, the Cumbria PCT rushed through the dismissal of a redundant chief executive, without proper consultation, before he reached the age of 50 so as to avoid him becoming entitled to a pension "windfall".

The Court of Appeal was satisfied that given the "unusual" facts of the case, the chief executive's dismissal which was clearly at least in part motivated by a need to save or avoid costs, was a “proportionate means of achieving the legitimate aim” – thus absolving the Trust from liability for unlawful age discrimination.

You may think the case surprising but from where we sit, it reflects a burgeoning trend of recent case law which on balance shows the hallmarks of a more commercial approach from our judiciary to the challenges faced by employers in this recession.

Having said that, there’s no room for complacency when it comes to our employment laws. This decision is peculiar to its facts and so we would not advise any employer to follow-suit and certainly not without taking careful legal advice. The “costs plus” justification principle remains the acid test. (Woodcock v Cumbria Primary Care Trust [2012] EWCA Civ 330.)

For Better or Worse? Marriage Discrimination
EAT Separates From Own Judgments

The recent case of Hawkins v Atex Group Ltd and others involved an appeal by the wife (H) of one of the Respondent’s Chief Executive. She had for some time worked for the business as a contractor. The Chairman had told H’s husband in 2009 that he should not employ any member of his family in the business, because of concerns about perceived conflicts of interest and nepotism. Notwithstanding this, his wife became an employee of the company at the beginning of 2010, and their daughter also became an employee later the same year.

H was later dismissed on the ground that her employment was in breach of the instruction that was given and her daughter also faced the same fate. H’s claim of marriage discrimination, s3 of the Sex Discrimination Act 1975, was struck out by an Employment Judge on the basis that it had no reasonable prospect of success. Her was dismissed by the EAT, which held:

  1. Less favourable treatment on the basis that the complainant is married to a particular person falls within section 3, but only if the ground for the treatment is, specifically, that they are married, rather than only that they are in a close relationship which happens to take the form of marriage
  2. The EAT doubted aspects of its own decision in Dunn v Institute of Cemetery and Crematorium Management (UKEAT/0531/10) and
  3. On the facts of the instant case the Judge was right to find that there was no realistic prospect of A establishing that the ground of her treatment was marriage-specific in the relevant sense.

One useful point of note from this case is that it is unlikely to be regarded as unlawfully discriminatory to dismiss an employee on the grounds that they have formed a close personal and intimate relationship with a fellow member of staff, competitor or supplier such that it gives rise to an actual or potential conflict of interest that the business feels compelled to address by dismissing the employee concerned. So long as the reason for dismissal is not on the grounds of marriage itself (which has a particular legal definition of its own) as opposed to the development of a close intimate relationship, the dismissal will not amount to discrimination.

TUPE – Service Provision Change - Another Case Highlighting That
Differences in Activities Post-Transfer Can Mean That There is no Transfer

Readers may remember that in January’s Employ! we featured two decisions which demonstrated a trend of no transfer decisions where the activities of the new contractor were materially different from and not essentially the same as those carried on by the predecessor.

Well, the trend continues with the release of the EAT’s decision in Johnson Controls –v- Atomic Energy Authority. Held:

The Employment Judge was entitled to hold there had been no service provision change where a centralised taxi booking administration service was taken back in house by the client of the service and no longer thereafter operated as a centralised service. The service as operated after the change was held to be essentially a different activity.

We are presently involved in helping a number of clients apply these principles to their arrangements for bidding and contracting for new services. Innovation in delivery and design is proven to make a real differences to liabilities and costs, helping you stay competitive and successful. If this chimes with your present or planned business needs, please do get in touch.

Dual Contracts Guidance from HMRC
Relevant for Employees from Overseas

HMRC has published guidance on Dual Contract Arrangements that are usually most relevant where foreign domiciled workers and employed in and outside of the UK. THE HMRC guidance sets out the evidence which employers will be expected to keep, and explains how the Revenue will approach the question of whether work in the UK is 'merely incidental' to employment outside the UK.

For details visit http://www.hmrc.gov.uk/menus/dual-contracts.pdf

Budget News

You may feel sure that you picked up all the potential HR and employment implications of the March Budget which we know was heavily trailed in the media, and understandably so. However, just incase the following passed you by, the Government have announced that they will:

  • "relax" Sunday trading laws for the Olympics from 22 July to 9 September 2012 inclusive;
  • "scrap or improve" 84% of health and safety legislation;
  • examine the role of employee ownership in supporting economic growth.;
  • increase the personal allowance for under-65s in 2013-14 to £9,205 (more age discrimination?!); and
  • reduce the 50% rate of income tax to 45% in April 2013.

Your Questions Answered

Q: Over the past year our business has had to reshape and make other changes to staff terms and conditions in order to adapt to and cope with the changing market. As a result, our relationship with the union has at times been put under pressure. Our workforce have on the whole been fantastic through a difficult period. However, we are concerned that some of our employees might be attracted to strike because of this and because of all the press attention given to an apparently increasing number of positive strike ballots. What action can be taken prevent a strike if faced with that possibility?

A: You are not alone. In many cases, the key to resolving the dispute lies in effective negotiation – keep talking. However, the point might still come where you have to consider legal action to prevent or delay action. The main remedy in these circumstances would be an injunction. It would be available only where the union fails to convene the strike correctly within the complicated requirements of the legislation in this area which will also usually determine whether the industrial action is “official” and so protected in law, or “unofficial” which will expose the members to dismissal and the union to claims to compensate the employer for their loss.

The law is very complex in this area and goes well beyond that which we can cover in this article . However, as a minimum, the following conditions must all be met for the union to qualify for protected and official industrial action:

  • The industrial action must be taken "in contemplation or furtherance of a trade dispute"
  • It must not be taken for a prohibited purpose, i.e. to enforce a "closed shop" or amount to secondary action or unlawful picketing.
  • The ballot must be a properly-organised postal ballot of union members. Strict conditions apply to this.
  • The union must comply with the equally strict notification requirements and send the employer:
    • notice of intention to ballot, at least seven days before the ballot;
    • a copy of the ballot paper, at least three days before the ballot;
    • notification of the result of the ballot as soon as reasonably practicable; and
    • notice of industrial action, at least seven days before it is due to start.

We recommend taking legal advice at the earliest stage as the steps you take when the industrial action is first threatened can increase your chances of identifying opportunities for successful legal challenges as well as other measures designed to avert the strike and the consequential adverse financial impact on your business.

Copyright 2006 - 2012 Taylors Solicitors

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