The Transfer of Undertakings (Protection of Employment) Regulations 2006

The case of Royden v Barnetts ­Solicitors decided in the Liverpool Employment Tribunal last week is the first involving a law firm and the Transfer of Undertakings (Protection of Employment) Regulations of 2006. For a detailed analysis it's worth reading the following article in The Lawyer: http://tinyurl.com/chm24l.

In summary however, what it means is that where professional service providers such as lawyers and accountants win a commercial contract with a corporate client, those winning the contract will need to look very closely at the existing provider of those professional services and the staff employed by that provider, because in accordance with the TUPE 2006 regulations and as ruled in this case, they will be inheriting the former provider's employees. This could be tricky particularly if the client has decided to change their professional service provider because of the former provider's employees! The cost of dealing with those employees ie re-deploying them or paying the unfair dismissal costs will more than likely land with the new service provider.

The good news is that only those former employees who spent more than 50% of their time on the client's work will qualify for the TUPE protection though if someone spends slightly less but always treats that work as a priority then they could also be caught under TUPE.

In this case, the employees claimed unfair dismissal because of the location of the new service provider being in Southport when they had previously worked in their own firm's Birkenhead office. The judge ruled in this case that there had been no appropriate consultation and that the former employees had been "affected by a service provision change" under Regulation 4(9) of the 2006 TUPE regulations and that there had been a "substantial change in working conditions to their material detriment" which meant they could claim unfair dismissal.

Regulation 4(9) of the TUPE 2006 regulations states: Subject to regulation 9 (which relates to insolvency) where a relevant transfer involves or would involve a substantial change in working conditions to the material detriment of a person whose contract of employment is or would be transferred under paragraph (1), such an employee may treat the contract of employment as having been terminated, and the employee shall be treated for any purpose as having been dismissed by the employer.

So working conditions are much softer factors such as job status, uniform, location, job description and aren't necessarily contractual.

The commercial reality now is that professional service providers such as law firms and accountants will now have to make sure they have carried out all necessary enquiries and agreed in writing/contractually with the new client how the issue of any former employees who might come under TUPE is to be handled so that they are fully aware of all upfront costs of taking on the new client.

Disclaimer: the contents of this blog are not intended form the basis of legal advice. Independent legal advice should be taken from your own solicitor for all cases.

Flexible Working Rights Extended

Well, it's finally just been announced that flexible working rights will be extended from 6th April to a further 4.5million parents and carers with children aged up to and including 16 years. This brings the number of people who will have the right to request flexible working to more than 10million.

The government has been keen to point out the following benefits of extending flexible working rights:

• the balance work and family life for parents and carers;
• businesses will have continuity when employees, like mums, take a career break and return to the same jobs;
• the working parent or carer is able to work hours which helps them to cope with their family responsibilities and circumstances.

The right to request flexible working already exists for parents and carers of children up to six years, or children with disabilities up to 18 years.

Disclaimer: the contents of this blog are not intended form the basis of legal advice. Independent legal advice should be taken from your own solicitor for all cases.

1st April 2009 New Employment Legislation

There will be a number of new pieces of legislation from April 2009. However, the extension of the right to request flexible working to parents of children up to age 16, which was expected to come into force from April, has not been announced and it sounds as though this will be put on hold during the economic downturn considering all the other pressures on business owners. Also on hold for the time being is the proposed extension to maternity leave to 12 months and additional paternity leave and pay which are all on hold until 2010.

Statutory Sick Pay and Statutory Maternity Pay have both been increased in line with the government's proposals to £79.15 and £123.06 respectively.

The annual holiday entitlement, in accordance with the Working Time (Amendment) Regulations 2007, has also been increased to 5.6weeks which is 28 days annually for a 5 day working week. This takes effect from 1 April 2009. It's important however to note that there is no statutory right to take Bank or Public Holidays paid or unpaid so this new statutory holiday entitlement would potentially include those days as well. It would be good management practice to inform employees, in writing, of their statutory holiday entitlement. See copy template letter to send to staff at the end of this article. The ability to pay workers in lieu of the extra days (i.e. those above the old entitlement of 4 weeks/ 20 days), which applied from 1 October 2007, will cease to apply from 1 April, so your employees will have to take at least 5.6 weeks’ holiday in each leave year.

Another change will be the eagerly awaited repeal of the statutory dispute resolution procedures which the Employment Act 2008 repeals in their entirety and instead introduces the new ACAS code for disciplinary and grievance procedures. Dismissals will not be automatically unfair if the new ACAS code is not complied with however the employment tribunal can still increase or decrease awards by up to 25% based on the reasonableness of complying or otherwise of the code. What should be borne in mind though is that there will be a transitional period continuing to use the current procedure and in some cases, though probably not too many, it could apply to grievances until October 2009.

Minimum Wage - Employers who are found to underpay the minimum wage will face a penalty of 50% of the underpayment for such underpayments on or after 6 April 2009. There is a minimum penalty of £100 and maximum of £5000. A discount of 50% will be given if the penalty is paid within 14 days of receiving the HMRC Notice of Underpayment and they will have to repay the arrears to the worker/s at the current rate of NMW applicable when the repayment is to be made.

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Increased holiday entitlement - template for letter to staff

Dear ___________,

Your holiday entitlement will increase from 1 April 2009, following changes to employment legislation.

Your leave year runs from [insert month] to [insert month], and for the leave year [insert month] to [insert month] [2009/10] your holiday entitlement will be ___ [days/hours] (based on ___ weeks of _ days).

For the following leave year, [insert month] to [insert month] [2010/11], your holiday entitlement will be ___ [days/hours] (based on ___ weeks of _ days).

This holiday entitlement is inclusive of any time off for bank and public holidays.

Yours,

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Disclaimer: the contents of this blog are not intended form the basis of legal advice. Independent legal advice should be taken from your own solicitor for all cases.

Retirement Law

Can employers lawfully force employees to retire at 65?

The European Court of Justice (ECJ) has sent that question back to the UK High Court in the long awaited "Heyday" case. (read the decision at http://curia.europa.eu/en/actu/communiques/cp09/aff/cp090019en.pdf)

The ECJ has ruled that it is for the national court to decide whether the UK legislation based on the EU Directive has a "legitimate aim" in terms of employment policy and labour market objectives.

The charities Age Concern and Help the Aged behind the case were hoping that the retirement age of 65 be abolished but it is now up to the UK High Court to rule on whether the government's default retirement age has a "legitimate aim".

The two charities felt that the UK had not properly implemented the EU Directive in the UK legislation (the Employment Equality (Age) Regulations 2006) because they allow forced retirement and that employers have too much scope for age rules which work against employees reaching retirement age.

For the Employees: There are a large number of cases awaiting the final decision of the High Court and if it rules that the compulsory retirement age is illegal then many older employees who have been forced to retire may be able to claim compensation from their former employers.

For the Employers: On the other hand, there are signs that the UK High Court will confirm that the UK government has properly implemented the EU Directive, and that employers can use the default retirment age of 65.


Do you think retirement should be compulsory at 65? Post your comments now.

Disclaimer: the contents of this blog are not intended form the basis of legal advice. Independent legal advice should be taken from your own solicitor for all cases.

Winners & Losers

As always, what’s good for one group is not necessarily a good thing for another. The government is looking again at their proposals to extend paid maternity leave to try and reduce regulation for employers. The review is led by Lord Mandelson after taking account of business leaders’ concerns. A government spokesman has said that, "He is not opposed to it: he just wants to look at it afresh. There has been no final decision on this yet." "It is right that we look closely at the costs to employers and the timing of new regulations. But we have a strong commitment to fairness and we will continue to help people get through this recession in a fair way."

However, the government review does not go so far as the proposal to increase rights for flexible working.

The 2 sides of the argument are as follows:

For the Employers: The British Chambers of Commerce, Director General, David Frost said, "It is right that we look closely at the costs to employers and the timing of new regulations," said a spokesman. "But we have a strong commitment to fairness and we will continue to help people get through this recession in a fair way." "The cumulative cost of regulation on business now stands at £66bn. A moratorium on harmful extra legislation would be good news in difficult times." The Institute of Directors said the extension of paid maternity leave from nine months to 12 months could load £600m of costs on to companies already struggling during the downturn.

For the Employees: Brendan Barber, general secretary of the Trades Union Congress, said there would be a backlash if ministers backtracked on new rights for working mothers expected to come into force in April next year.

Harriet Harman, the equalities minister is keen to go ahead with a number of policies that could impose red tape and costs on companies. Jon Cruddas, her backbench ally, said there would be "deep unease across the party" if such "progressive" policies were abandoned because of the economic downturn.

Lord Mandelson told a meeting of the economic development ministerial committee last week that he wants to identify which legislation is unnecessary in the current economic climate and so could be put on hold or axed. For example, the government may rule out proposed equality law which would have imposed equal pay audits on companies. They may also do away with the allowing councils to ban alcohol promotions.

What’s your view? - do post your comments.

A Step in Time

The Employment Appeal Tribunal has held, in Zimmer v Brezan, that a step 1 dismissal letter must state that the employer is considering dismissal. If it does not, then any resulting dismissal will be automatically unfair.

Mr Brezan was automatically unfairly dismissed because the statutory dismissal and disciplinary procedure was not followed. This was because there had been a failure to comply with step 1 as the invitation to a disciplinary meeting did not mention that there was a potential risk of dismissal as a result of the meeting.

The EAT held that even though the words of the statutory dismissal procedure did not expressly require the employer to state, in writing, that it was contemplating dismissing the employee, it was desirable to interpret the statutory procedure to include such a requirement so that its purpose is achieved.

The EAT took the view that unless the employee is on notice at the first stage that there is a risk of dismissal, the purpose of the step 1 letter in a dismissal case cannot be properly achieved. The employee should be given some idea of what the employer might be considering as a result of the meeting.

The requirement for the current “three step process” where a dismissal procedure has yet to start will be repealed taking effect from 6 April 2009. However, the three step process must be followed through by an employer if they have sent a dismissal letter by 5 April 2009. These transitional provisions are intended to allow the employee recourse if the dismissal process is underway during the changeover in statutory requirements.

From 6 April 2009 new ACAS guidelines will apply.

Ability to Proceed

A landmark ruling from the Court of Appeal means that Peter Matuszowicz, a disabled man, has been allowed to continue with his case even though it is being made outside the three-month time limit.

Mr Matuszowicz, whose right arm was amputated above the elbow, began work as a teacher at Hull Prison in September 2003 but struggled with the heavy doors of the Prison.

He was transferred to Everthorpe Prison in July 2005, where the problem persisted. After October that year, he was transferred to lighter duties, and from December 2005he was on gardening leave. In August 2006, Mr Matuszowicz transferred to Manchester City College.

On 4 October 2006, he presented a grievance under the Disability Discrimination Act 1995 to employers, Kingston upon Hull City Council. His grievance was based on several grounds, including the failure to transfer him to suitable employment. The council claimed he was making his point too late.

At a pre-hearing review, an Employment Tribunal found the complaint about failing to transfer him was not out of time, but that decision was reversed by the Appeal Tribunal in January 2008. The Court of Appeal has ruled that the onus was on the claimant to decide when something should have been done about an omission, and to bring a claim within three months of that date, so Mr Matuszowicz will be able to continue with his case.

Rachel Dineley, Employment Partner at lawyers Beachcroft LLP, comments:

“Where the employer has not deliberately omitted to take action, the employer is to be treated as having done so, in the absence of evidence to the contrary. This means an employer can still be accused of discrimination, even if they were not ‘actively’ being discriminatory / doing anything inconsistent. An employee should not, in effect, be penalised for his employer's failure to act.”