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The Employers Update - September 2009

Welcome to the September edition of Employ!

In this edition we take a look at further developments on holiday rights when sick, age discrimination, bonus entitlements and race discrimination.

Recent questions from our readers along with the answers are included as ever but please do keep those questions coming in by sending them to: oliver.mccann@taylors.co.uk.

Finally, Taylors would like to welcome solicitor, James Bellamy who joins the Employment Team due to expansion. James, aged 34 and a former Royal Marine, will ensure the Employment Team continues to offer a responsive, cost effective, efficient and quality service.

Oliver McCann

Tel: 0844 8000 263
Email: oliver.mccann@taylors.co.uk


In This Edition:

» Retirement at 65 lawful!
» Sickening blow!
» Age Discrimination Update
» Crash Turban!
» Bonuses – the end or just the beginning?
» Your Questions Answered

Employ! Email Updates

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Retirement at 65 lawful!

Clarity at last! The Heyday challenge to the default retirement age (“DRA”) has been kicked out by the High Court which held that it is lawful under UK law to allow employers to force employees to retire at the age of 65.

In excess of 250 age discrimination claims had been stayed pending this decision and it had been anticipated that the High Court would rule against the government and declare compulsory retirement at 65 would amount to age discrimination.

As the Heyday challenge was on the lawfulness of the Regulations the High Court had to consider the issue of lawfulness at the time they were introduced in 2006. The government’s consultation in 2006, prior to introducing the Regulations, showed support to the DRA being 65 and as such was a proportionate means of achieving a legitimate social policy aims in securing the integrity of the labour market and its competiveness. However it would appear the High Court only came to this decision due to the fact that the Government alluded to the fact that they would be reviewing the compulsory retirement age in 2010 and commented that had there been no review in 2010 it may well have found against the Government.

The High court further stated that it fails to see how a DRA of 65 can remain following the review thereby almost guaranteeing that the DRA will be increased next year following the review.

Note that employees have the right to request working beyond the DRA and further that a failure to follow statutory procedures relating to compulsory retirement may render a dismissal both unfair and discriminatory.

Sickening blow!

Employers have been dealt a further blow by yet another European decision on how the Working Time Directive relating to holiday pay should be adopted by member states.

In the recent European case of Pereda, it was held that workers who fall sick while on holiday should be allowed to reschedule their leave, even if it means rescheduling in the following year and carrying the leave over.

Here the employee suffered an accident at work a couple of weeks before his holiday leave of 4 weeks was due to commence. The injury incapacitated him for 6 weeks and so practically overlapped the entirety of his scheduled holiday leave. It was held that his employer should not have counted his absence as holiday leave but instead as sick leave.

As such those workers who claim to fall ill whilst on holiday are entitled to claim that those days do not count towards their holiday entitlement under the Working Time Regulations.

There remains incompatibility between the Working Time Regulations and various European decisions interpreting the European Directives as under UK law an employee can only carry over up to 8 days holiday in to the next calendar year. We wait to see if further amendments are made to the legislations.

For the time being employers need to review their holiday policies and sickness absence policies to:

  • Enable holidays to be carried over into the next holiday year where it has not been possible through absences from work to use such holiday entitlement (applies to illness, maternity leave, paternity leave etc)
  • Expressly state that those who fall sick whilst on holiday must comply with the Company’s sickness policy for such absence to be treated as sick leave as opposed to holiday leave i.e. reporting in procedures, self certification

Undoubtedly this judgement simply increases the likely cost of absences from work with some employees likely to abuse the decision to “claw” back holiday entitlement for another rainy day!

Ignoring viable alternatives to redundancy constituted Age Discrimination

Given the current economic climate a recent case serves as a timely reminder of the importance of following an objective and fair redundancy process.

Here an employee of a local Council was entitled to an early retirement pension if he remained in the Councils employment until his 50th birthday. The employee was temporarily seconded to another social landlord. With less than a year to go until he reached 50 the employee was informed that his secondment was to end and absent alternative employment within the council meant he would be made redundant. The Council stated that there were no other alternative vacancies and proceeded to terminate the employee’s employment by reason of redundancy 6 months before he attained the age of 50.

The Council had however refused an offer from the social landlord to extend the employee’s secondment to enable him to attain the age of 50 and crystallise his pension rights. Evidence came out that the Council had stated “if he goes now we do save the pension” and that this was the final factor which persuaded the Council to proceed with redundancy.

It was held the dismissal was both unfair and age discriminatory, although the Council never attempted to raise the defence of justification i.e. saving on the pension costs was a proportionate means of achieving a legitimate aim.

If you need assistance with your redundancy process, even if to ensure it is objective, fair and non discriminatory please call our Employment Team on 0844 8000 253. The cost of making a mistake will far outweigh the cost of proactive advice.

Crash turban!

There was a recent report about a Sikh police office suing the Greater Manchester police for race discrimination and religious discrimination because he was asked to swap his turban for protective head gear in riot police training. He also alleged that he was forced to walk through fire which placed him at risk due to his beard (again required as part of his religion) and was barred from riding a bike unless he removed his turban for appropriate helmets.

The police officer stated he feared he would be forced to wear a “crash turban”, similar to that worn in the infamous scene of Only Fools and Horses where Rodney Trotter wears the crash turban! The police office is claiming £200,000.

Although this case seems a bit extreme it does reiterate the importance of uniform policies being carefully considered and applied. Usually cases of this nature are based on “indirect discrimination” i.e. a practice, criterion or policy which, although applied equally, has a disparate impact upon on another group – in this case the uniform requirements of the police, if applied strictly, hinder Sikhs from taking up such employment.

Indirect discrimination can be justified and I suspect here the police will be able to justify the protective head gear requirements to ensure as an employer it complies with its various common law and statutory obligations to safeguard its employees.

As a point of interest the Employment Act 1989 allows Sikhs working on construction sites to wear their turban and no safety helmets. If they are injured on site then any claim for injury will be assessed as to what the injury would have been if they have worn a safety helmet. If an employer imposes a requirement to wear safety helmets on the construction site then this will amount to race discrimination unless he had reasonable grounds to conclude that the employee would not wear his turban at all times. This provision only applies to construction sites which are defined as “any place where any building operations or works of engineering construction are being undertaken”.

Bonuses – the end or just the beginning?

The public outcry against the city bonus culture continues following the most recent news that city bankers of the Dresdner Kleinwort bank are suing the bank for unpaid bonuses worth £30m.....

Read the Full story in the Taylors News section of the website >>

Your questions answered

1. I operate a number of Care homes and I am currently recruiting for staff. I have seen the news recently regarding new legislation concerning vulnerable adults and children. Does this apply to me and what are my requirements?

The Safeguarding Vulnerable Groups Act 2006 is coming into force in stages and will apply to you. The first stage comes into force on the 12th October 2009 with subsequent stages in July 2010 and November 2010. By November 2010 if you are an employer working in either a “Regulated Activity” or in a “Controlled Activity” then you will have to ensure that you check the status of any potential employee before taking them on. Care homes will be a regulated activity. If you fail to do so and any individual employed is barred from working with, in your case, vulnerable adults, then it will be a criminal offence.

For the time being you can still recruit in the normal way ensuring enhanced CRB checks are carried out until the Acts full inclusion in November 2010. After this date you will need to check their status with the ISA to prevent the possibility of committing a criminal offence. If you are unsure then it is advisable to seek further legal advice. Keep an eye out for future presentations by Taylors on this important topic!

2. I run a small business and in light of the current climate I am looking at ways to reduce overheads. Some of our workload has dried up and we have a member of the team who isn't anywhere near as busy as usual and is a costly resource. I've looked into many options and feel that one way to balance overheads is to simply change their hours - i.e. from full to part time? Can I do this and if so, what do I need to do to make this happen?

Changing an employee’s contract from full time to part time cannot be done without the consent of the employee(s). Hours of work are a fundamental term of a contract and so any change has to be done by mutual agreement otherwise it would constitute a breach entitling the employee to resign and claim constructive unfair dismissal. Alternatively they could work under protest and sue for breach of contract and unlawful deduction of wages.

We have found that in the current climate employees are amenable to changing their hours of work to keep their job and avoid a redundancy situation. Consult with the employee first and see if any progress can be made on an amicable basis. Otherwise you may need to proceed along the basis that the full time position is redundant and either sub contract the work out or offer employment on a part time basis as an alternative to redundancy. Take legal advice as it is important you get the written correspondence correct.

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