Employment Law Update Spring 2009
WHAT’S NEW……
In this news update we cover the key changes for 2009. We have also included a summary of a few interesting cases that we believe you will find of interest.
FEBRUARY 1ST 2009
Annual Increase in Compensation and Redundancy Pay
As set out in our e-news in January, each year the compensation limits (e.g. unfair dismissal and statutory redundancy) are reviewed. The new rates, as of 1st February 2009 are as follows:
Maximum compensation for unfair dismissal: from £63,000.00 to £66,200.00
A “Weeks Pay” for redundancy and the basic award: from £330.00 per week to £350.00 per week.
The new maximum redundancy payment has therefore increased from £9,900 to £10,500.
What does this mean to you…? The cost of getting it wrong and making redundancies continues to increase…
APRIL 2009 – KEY CHANGES
Increase in Holiday Entitlement
From 1st April 2009 paid holiday entitlement will increase further to 5.6 weeks (28 days based on a five day week).
This can be inclusive of bank holidays. Therefore 20 days plus 8 bank holidays will meet the new minimum.
What does this mean for you…? If your current entitlement is less than 5.6 weeks (28 days), you need to increase entitlement in April and update your documentation accordingly.
Practical HR retained clients will receive further details relating to any required updates to their contracts and handbooks within the next few weeks.
Dispute Resolution – 6th April 2009
From 6 April 2009, the statutory dismissal procedure will be repealed.
Employment tribunals will decide cases on the basis of what is ‘fair and reasonable’ and a revised ACAS Code of Practice and non-statutory guidance on disciplinary and grievance procedures will establish the principles of what an employer and employee should do.
Employment tribunals will have discretionary powers to adjust awards by up to 25% if an employee or employer has acted unreasonably in not following the principles in the new ACAS Code.
As a result, employees and employers will have greater flexibility to deal with workplace discipline and grievance issues in a way which suits them best.
What does this mean for you…? Review your Employment Documentation, Contracts and Handbooks, Policies and Procedures in relation to Disciplinary and Grievances to ensure that they reflect the changes.
Practical HR retained clients will receive further guidance in the next few weeks.
Extension of Flexible Working Rights
On 6th April the Government is planning to extend the right to request flexible working for those with children up to 16 years of age (currently the request is limited to those with children under six or a disabled child under 18 or to carers).It is important to note that this remains a right to request flexible hours and employers will continue to be able to objectively justify if this is not possible on the basis of the burden of additional costs, detrimental effect on the ability to meet customer demands, quality or performance or the inability to reorganise work.
What does this mean for you…? Make sure that you always follow the statutory procedure relating to flexible working and we recommend you communicate this procedure to employees (for example: include it in your employee handbook).
SUMMARY OF KEY DATES PLUS CHANGES TO SMP AND SSP RATES:
Key Dates for the Diary…
1st February – New Compensation Limits for Unfair Dismissal and Redundancy
1st April – Minimum statutory holiday entitlement increases from 4.8 weeks to 5.6 weeks.
5th April – Weekly rates of statutory maternity, paternity and adoption leave pay will increase from £117.18 to £123.06
6th April – New SSP Rates from £75.40 to £79.15
6th April - the current statutory dispute and resolution procedures will be repealed and replaced by a new ACAS code of practice.
6th April – Extension of Flexible Working Rights to parents for children up to the age of 16yrs.
CASE LAW – RECENT CASES
Holiday Pay for Long-Term Sick Workers
A recent European Court ruling Stringer v HMRC (Jan 2009) it was held that a worker who is on sick leave for the whole of an annual leave year is entitled to a period of four weeks paid annual leave, despite the fact they are not actually at work.
The UK House of Lords will now decide weather the paid leave can be taken during that year or whether it should be carried over to another year, but either way the employee is entitled to be paid at some point.
In addition the case concluded that the right to paid annual leave is not extinguished at the end of a leave year if the worker was on sick leave for the whole of that year, or if he was absent on sick leave for part of the year and was still on sick-leave when his employer terminates his employment.
What does this mean for you…? Identify any staff currently on long term sick leave that this may be applicable to. Amend any documentation, contracts of employment that state holiday entitlement will not be paid for those employees on long term sickness as this will no longer be the case.
Age Discrimination £100,000
A serial litigant who brought 22 separate claims for age discrimination has been found to be a vexatious litigant - after being awarded over £100,000 in out of court settlements. The applicant made claims after being rejected for positions and claiming this was due to her age.
Some claims were rejected by the Employment Tribunal when the companies explained and demonstrated she was not adequately qualified and had shown no interest in other positions (Daily Mail Nov 26 2008).
What does this mean for you…? This case demonstrates how employers can be vulnerable even at the application stage; and how important it is to be able to demonstrate why you have selected or rejected someone. You should review your documentation surrounding recruitment.
Retirement Age: ECJ Rule on Heyday
The ECJ on 5th March 2009 handed down its decision in the Heyday appeal. Heyday (a branch of Age Concern) contended that 'forced retirement' at age 65, permissible under the Employment Equality (Age Discrimination) Regulations 2006, is inconsistent with the EU Equal Treatment Framework Directive.
Heyday contended that 'forced retirement' at age 65 is inconsistent with the EU Equal Treatment Framework Directive.
In summary, the ECJ decided:-
A retirement age of 65 is, in theory, capable of being justified as being a proportionate means of achieving a legitimate aim. It is for the UK courts to decide whether that test is met.
UK legislation does not breach the Equal Treatment Framework Directive by failing to set out, expressly, a list of permissible 'legitimate aims'.
So, the case will go back to the High Court to decide whether the ability to lawfully dismiss on grounds of retirement at age 65 is a proportionate means of achieving a legitimate aim.
What does this mean for you…? There will not be clarity on this matter until the case is reheard by the High Court.
English v Thomas Sanderson Ltd
Mr English brought a claim under the Employment Equality (Sexual Orientation) Regulations 2003 after he alleged that he had been subject to sexual innuendo by his colleagues suggesting he was homosexual.
English was a heterosexual and married man and accepted that his colleagues knew this and did not actually believe him to be homosexual.
The Employment Tribunal concluded that the legislation did not protect a man who is not gay and whose colleagues do not believe him to be gay. The EAT agreed with the tribunal. However the Court of Appeal concluded that English was repeatedly taunted as being gay and it did not matter if he was in fact gay. The Mockery created a degrading and hostile environment and it did so on the grounds of sexual orientation.
What does this mean for you…? The case illustrates how sexual innuendo can be offensive to individuals even when the subject of such banter may not be true or believed to be true! Employers can be liable in these situations and should not condone behaviour of this kind.
OTHER NEWS – WHAT’S COMING UP…
Agency Workers Directive Now Passed
Following six years of disagreement the European Agency Workers Directive was passed in October 2008.
When passed into UK law it will allow agency workers to be entitled to the same treatment as permanent staff with regards to their basic working and employment conditions after being with that employer just 12 weeks.
The UK government plans to introduce draft legislation in 2009 and could be brought into force as early as 2010.
What does this mean for you…? Review your agency staff and how you use temps in your business. Check costs with the Agencies you use.
Increase In Claims
A recent survey revealed a concerning trend in the number of claims to employment tribunals. The survey found that 39% of employers have faced at least one tribunal claim in the last 12 months. The number of claims received by tribunals increased from 132,600 in 2006-2007 to 189,300 in 2007-2008. And 44% of employers believe weak or vexatious claims have increased in the past year.
What does this mean for you…? Here at Practical HR we would agree that claims are on the increase – partly due to the economic climate which means individuals that may be dismissed are unable to find alternative employment. It has never been more important to make sure policies and procedures are in place and that any issues that arise are dealt with correctly.
CONCLUSION
We hope our update has given you an overview of the key changes and what to expect for 2009.
If you would like any further information about any of the matters raised in this update, please do not hesitate to contact us.