Employment Update

Bribery Law postponed

Implementation of the Bribery Act 2010 was due in April 2011, but has been postponed to 1st July 2011. The Ministry of Justice had promised that the Act will not come into force until 3 months after the guidance is issued. That guidance was issued today (30th March) see http://www.justice.gov.uk/guidance/bribery.htm

Additional paternity leave and pay comes into force on 3rd April 2011

Employees who are fathers, or spouses/partners of mothers, and employees who have been matched for adoption or are spouses/partners of the person taking adoption leave are entitled to take additional paternity leave of up to 26 weeks in the first year of their child’s life or in the first year after the child’s placement for adoption, and may be entitled to additional paternity pay. Additional paternity leave applies to babies born on or after 3rd April 2011, or who are matched for adoption with a person who is notified of the match on or after 3rd April 2011 and applies where the mother or adopter ‘gives up’ some or all of her additional maternity leave.

Maternity, paternity and adoption pay and SSP  increase in April 2011

The standard rates of statutory maternity, paternity and adoption pay increase from £124.88 to £128.73 per week from 3rd April 2011.

The standard rate of statutory sick pay (SSP) increases from £79.15 to£81.60 per  week from 6th April 2011.

Tax treatment of redundancy and severance payments in excess of £30,000

Currently employers are required to tax any severance payment in excess of £30,000 at the basic 20% rate of tax. Any additional tax due is currently for the recipient to declare and is therefore from the Treasury’s perspective, received some time later or is illegally evaded.   From 6th April 2011 employers they are required to tax the excess at the recipient’s marginal rate of tax, using an OT Code.  So the amount may be taxed at 20%, 40% or 50%.  It may therefore become even more attractive to use any excess over £30,000 to pay into a pension plan.  Employers and employees should consult their tax advisers.

Flexible working requests not now to be extended

Currently an employee who is a  parent of a child under the age of 17 (under 18 if child is disabled) have a statutory right to request flexible working (part time, flexible work patterns etc.) This right was to be amended in April to cover parents of all children under age 18.  In its ‘Plan for Growth’ (http://cdn.hm-treasury.gov.uk/2011budget_growth.pdf) the Government has announced that this amendment has been scrapped. No changes are planned in respect of employees who are carers.

Dual discrimination rules NOT to be enacted

The ‘Plan for Growth’ also announces that the so-called dual discrimination provisions of the Equality Act 2010 will not now be enacted. Current if, say a black woman feels she has been discriminated because of her sex and because of her race, she has to make tow claims, one of sex discrimination and one of race discrimination. The Equality Act was to have allowed her in effect to make an additional claim i.e discrimination  because she is a black woman.

Right to request training not to be extended

Currently an employee working in an organisation with 250 or more employees has a statutory right to request time-off for study or training. Also in the ‘Plan for Growth’ the Government has reversed the intention to extend this right  to employees working in organisations with fewer than 250 employees.

Retirement Age – changes from 1st October

The so-called ‘default retirement age’ (DRA) is to go from 1^st October 2011. The DRA allowed employers compulsorily and fairly to dismiss someone at age 65 or over and avoid any liability for age discrimination and unfair dismissal.

From October this will not be permitted, unless it can be ‘objective justified’, a test which the ACAS Guidelines (published on 31^st January) say ‘is not an easy one to pass and it will be necessary to provide evidence if challenged; assertions alone will not be enough’.

A careful reading of the ACAS Guidelines indicates that, unless employers tread carefully, there is likely to be a big increase in age discrimination and unfair dismissal claims, from younger as well as older employees.  The Guidelines:

• Encourage employers to discuss employee’s retirement plans with them, but emphasise that such forward-planning should not just be focussed on older employees; to do so, they imply, could constitute age discrimination.  To avoid that risk, discussions about future plans should ideally take place with all employees and only in the most general, open way without implying any pressure e.g. avoid the direct question ‘when are you retiring/leaving’?  Any perceived ‘pressure’ to resign may well constitute grounds for a discrimination claim and a constructive dismissal claim.
• Point out that even if an employee indicates that they will retire at a particular date, they can change their mind at any time up to the point at which they formally resign.  So there will be arguments about what constitutes a resignation and ‘did (s)he actually resign’.
• Emphasise the need for robust performance and capability management processes, but again the need to avoid age discrimination by being consistent across all age groups. This works both ways: don’t focus your capability assessments on just the older staff; but equally don’t tolerate lower standards from your older staff for fear of accusations of age discrimination from the younger ones. To complicate things, however, the Guidelines acknowledge that various disabilities tend to increase with age, so remind us that ‘reasonable adjustments’ (e.g. to performance standards) might need to be made for some older people!
• Permit the removal of insurance-based benefits from older people once they reach the state pension age for men (currently age 65, but from 2018 being phased up to 66 by 2020).
• Point out that contractual agreements with employees specifying a particular retirement age are perfectly permissible, but are ‘unlikely to have any legal force’ – so why have them?

The Guidelines also cover the transitional arrangements through to 1^st October, the key points of which are:

• The minimum 6 months’ notice of retirement at 65 or above under current arrangements must be issued on or before 30^th March 2011 and only if the employee is actually 65 or over before 1^st October.
• To qualify that rule, shorter notice can be given of a retirement to take place before 1^st October, but that will only be allowed  until  5^th April 2011 and then the employee can claim compensation of up to 8 weeks’ pay – civil servants seem to love complicating things!
• Under current arrangements up to 12 months’ notice has been permissible.  If notice has already been given for retirement to take place after 1^st October 2011, that retirement can no longer be enforced against an employee’s wishes, unless it can be ‘objectively justified’ (that ‘hard test’ again).

Good luck with all that! Let me know if you need help.

Equality Act 2010

Section 149 of the Equality Act 2010 imposes a General Duty on public bodies, in the exercise of their functions, to have ‘due regard’ to the need to:

• eliminate unlawful discrimination, harassment and victimisation;
• advance equality of opportunity between different groups; and
• foster good relations between different groups

Section 153 of the Act permits Ministers to impose ‘Specific duties’.  The current consultation is about what specific duties should be imposed on English public bodies and those that undertake functions which have not been devolved.  The Scottish & Welsh government will undertake their own consultations, so it is possible that three different approaches will be implemented. The Coalition’s proposals represent a significant watering down of the previous government’s plans, which had been consulted about in 2009 and outlined in January 2010. Now public bodies will essentially only have to publish data and information about:

• The equality goals they are seeking to achieve – there will no centrally imposed goals
• How well they are meeting these goals in relation to their services and workforce

The Equality & Human Rights Commission will set some standards for data formats and for  what are called ‘standard requirements’ for particular types of public body, to allow comparison across similar bodies.

Gone are: any mandatory specific duties on Procurement processes and practices; any centrally defined priorities; any need to produce/publish action plans; a specific ‘disability reporting’ requirement on particular Secretaries of State; any duty to produce what was known as an ‘Equality Scheme’; any external assessment of public bodies.

The consultation runs to November 10^th – the plan is to implement the new regulations as from April 2011.  See the full document here

Guide to Equality Act 2010

Much of the Equality Act 2010 comes into force on 1^st October 2010. While the Act is partly a consolidation of existing anti-discrimination and equality law, there is much that is new, particularly as regards disability discrimination.  The Act also extends to most ‘protected categories’ the concepts of ‘associative discrimination’ and ‘perceptive discrimination’; as well as extending an employer’s legal liability for harassment of its staff by third parties.

To support the new provisions the Equality & Human Rights Commission (EHRC) has published on line 23 detailed Guides (all between 85 and 116 pages, although there is an element of duplication), with at least two more to come.

There are seven different guides for employers covering:

• Recruitment
• working hours, flexible working and time off
• pay and benefits
• training development, promotion and transfer
• managing workers
• dismissal, redundancy, retirement and post-leaving
• equality policies, training & monitoring

There are six separate guides for workers, covering the same topics (other than policies, training & monitoring)

There are three guides for Service Providers covering what equality means for:

• Businesses, with sections focused on 10 specific business sectors (retail, banks, hospitality etc)
• Voluntary, community, charitable and religious/belief organisations
• Associations, clubs and societies

Interestingly, there are no guides for public sector service providers (councils, NHS etc).  However, there are seven Service User guides (with two more due, covering housing and transport) providing guidance about what, as ‘customers’, we should expect from:

• Businesses
• Voluntary, community, charitable and religious/belief organisations
• Associations, clubs and societies
• Health care and social care providers
• Local councils, government departments and immigration
• Parliament, politicians and political parties
• The criminal justice system

See the ERHC website for downloadable versions of these brand new guides Guides

Contact me for a Briefing on any of the matters in the Equality Act.

Update on Default Retirement Age

On 29th July the Government announced proposals to implement the budget announcement that the default retirement age will be scrapped. From 6 April 2011, employers will no longer be able to give notice of compulsory retirement to any employee, whatever their age.   Between 6 April and 1 October, only people who were notified before 6 April and whose retirement date is before 1 October can be compulsorily retired.

After 1 October 2011, compulsory retirement will not be permitted unless a standard retirement age for  a particular group of employees can be ‘objective justified’.  Objective justification will not be easy since the presumption that older people are inherently unable to perform is problematic.

Under these proposals, employers who want to continue to compulsorily retire people at an age of 65 or over could legally do so up to October 2011 provided that the give the requisite minimum 6 month’s notice before 1st April 2011.

I’m not clear what the position is where employers have agreed to a person’s request to continue working beyond retirement age – no doubt many employers will now give notice of retirement before April 2011.

There is a period of consultation about these proposals through to 21st October, so there is no definite change to the law; but it is most unlikely that the substance will change.

Default Retirement Age to Go

The Government has confirmed that the default retirement age will be phased out from April 2011.  Currently employers can fairly dismiss/retire employees at age 65 or over, provided they follow certain procedures and allow the employee to request to stay on. No detail has been given as to how it will be phased out but at some point it seems that employers will no longer be able to force someone to retire.  This will have big implications for:

• managing older staff who employers feel are no longer capable of performing their role (although in principle it ought to be no different to managing incapability of younger people)
• pension schemes which have actuarial assumption based on contributions to and benefits being taken from fixed ages
• staff who, under current rules, have been allowed to work on beyond age 65 – will employers now dismiss them before April 2011?

Protecting Children and Vulnerable Adults

Voluntary registration with the Independent Safeguarding Authority for new employees and job-movers who work with children and vulnerable adults was due to start on 26 July. However, registration under the vetting and barring scheme has been put on hold while the system is “fundamentally remodelled” by the new government. The Home Office’s press release stated: ‘The scope of the remodelling process – to be coordinated by the Home Office in partnership with Department of Health and Department for Education – is currently being finalised and will be announced shortly’.  This announcement does not immediately change the current system  of CRB checks for people working with children and vulnerable adults and of The Safeguarding Authority assessing those reported to it for possible inclusion on a banned list. But it does signal a halt to it’s extension to various voluntary activities and a possible abandonment of individual registration.

A remodelling of the whole system is  long overdue.  Of course, in the light of various well-reported atrocities against children and older people, it is always going to be difficult to get the balance right between  protecting vulnerable groups and the rights of individuals. My own feeling  is that the likes of Head Teachers and Care Home owners/managers have been placed firmly between a ‘rock and a hard place’ and the current culture leads many of them to be highly conservative. I have seen several cases of teachers or care workers suspended, dismissed and arrested on the basis  of  vague and/or unsubstantiated allegations.   In several cases there have been criminal charges levied (ultimately dropped). But arguably the worst impact was to have been reported to the Safeguarding Authority – while being assessed they have not been able to work in their profession i.e. guilty until proven innocent. This assessment seems to take an inordinate length of time (possibly because the Authority has so many cases to deal with?), placing the individuals in limbo. Two of the cases I have seen have won their claims for unfair dismissal and will probably go on the resume their careers; one other didn’t.  However what struck me was that , even had the allegations been true, there was no evidence that the individuals represented a fundamental risk to children or vulnerable adults.

Protecting vulnerable groups is a priority, but then so is protecting individuals from arbitrary justice. Hopefully the Government’s ‘remodelling’ will aim to the get the balance right rather than being just be an exercise in saving money.

Matching staff hours to customer demand

Are fixed contractual working hours a thing of the past? Are staff paid for just turning up, irrespective of whether they are actually serving customers?

A two-centre dental practice I know agreed with his dental nurses and receptionists to change their contracts from a fixed, 37.5-hour week and fixed salary to ‘zero-hour’ contracts and payment for hours actually worked. At the same time, dental nurses are not paired with  specific dentists so giving greater flexibility and cover. Initially agreed as alternative to redundancy in 2009, following  a distinct downturn in demand, staff are now back to working much the same average working week, only more flexibly. Detailed working hours are planned & agreed  on a weekly basis and on an outline basis a month in advance, based on: actual appointments, availability of the self-employed dentists & hygienists, holiday commitments and other staff absence.

Despite some initial reservations, the staff  love it – they get actively involved in planning their working week, can negotiate with colleagues when they need some time off in the coming weeks and as part of the deal they got an increased hourly rate. Still being paid monthly they find that any weekly pay variations tend to be ironed out anyway.

The Practice gains from making its staffing costs variable, matching its payroll costs to revenue streams, being protected from any further downturn in demand. Staff also tend to match their holidays to those of the dentists/hygienists. But the real unexpected benefits are:

• to build their hours back up to ‘normal’ and boost their pay, staff have naturally become more proactive in ensuring that patients re-book for regular check-ups and in ‘selling’  added-value services like hygienists and dental insurance
• a few of the less flexible staff have left of their own accord; and their replacements are actually attracted to the job by its flexibility – they see the risks but focus on the upside i.e. the Practice now employs people who seem to have a more ‘glass-half-full’ attitude rather than a half-empty one