PersonnelFILE November 2010

New Head of Employment strengthens team

Regional Law Firm, Brethertons LLP, has further established its commitment to providing the very best legal advice, with the recruitment of respected employment specialist, David Hodge, who joins the firm in October as its new Head of Employment.

David, who is 34, joins Brethertons  after forging a successful practice in the South West of England, most recently as a senior member of  a highly regarded (Legal 500 rated) employment team  at an Exeter based law firm.

David is an experienced litigator with an enviable record of success in employment tribunal matters, acting for both executive and business clients. With his solid understanding of commerce, David also provides pragmatic employment advice to FTSE 250 and AIM listed clients and provides expert support to SME management teams and HR professionals in diverse industry sectors from Utilities, Logistics and Construction to Education. Since 2008, David has been instructed by well-known entrepreneurs to provide valuable employment support to their businesses and investments.

David plays an active role as a member of the Employment Law Association.

David says: “This is a fabulous move for me and my family and I relish the opportunity to support business in the Midlands. Brethertons commercial team has made several key appointments in the last eighteen months and it is fantastic to be part of such a progressive and innovative team.”

Brian Auld, Partner and head of Commercial explains: “This is an important appointment for us and will enable us to provide a greater service to our commercial clients in an ever demanding marketplace.  I am delighted to welcome David on board his expertise  will prove a substantial asset to our practice.”

Brethertons has recently been recognised by winning no less than five awards for:   Best use of IT and Communications Award – Coventry Telegraph Awards, Solicitor of the Year – News on the Block Magazine, Young Professional of the Year – News on the Block Magazine, Litigation Team of the Year - Credit Today Magazine and Lifetime Achievement Award at the Rugby Business Awards. In August the firm received the coveted LEXCEL Quality Mark from the Law Society.

Brethertons receives legal industry’s Top Quality standard

Regional Law Firm Brethertons is celebrating this week after receiving national recognition of its practice management standards, having been awarded the Law Society’s Lexcel Quality Certification. 

The Lexcel practice management certification is only awarded to solicitors who meet the highest management and customer care standards.  Lexcel accredited practices undergo rigorous independent assessment every year to ensure that they meet required standards of excellence in areas such as client care, case management and risk management.

Brethertons has offices in Rugby and Banbury and is the only firm in both towns to have the Lexcel award.

Partner, Linda Jones, who managed the Lexcel assessment process for Brethertons, said: “We are thrilled to be recognised in this way.  Achieving the Lexcel standard is no mean feat. Gaining the award throughout our practice, in every department, at every level, demonstrates that we continually meet the high standards expected of the best of UK law firms.”

The independent assessors reported:“Satisfied beyond any doubt that, Brethertons LLP meet the requirements of The Law Society’s Practice Management Standards (PMS) and the Lexcel Standard Version 4.”

• “Automation of routine tasks was achieved as a matter of course, but also to harness the power of its case management systems to minimise risk.” 
• “Effective risk management is fundamental to the practice’s operation.”
• “Brethertons’ [community and social responsibility] policy is comprehensive and interview evidence demonstrated that the organisation is committed to and heavily involved in community activities.

Linda Jones confirmed: “I was particularly encouraged to learn that the Lexcel assessment team passed Brethertons after the very first assessment visit, which is quite unusual. Many firms need several attempts to reach the Lexcel standard. The award is not only good news for our staff, it is also great news for our clients and one of the highlights of 2010 our bi centennial year.”

Costs Awards in Employment Tribunal Proceedings

Costs orders are the exception, rather than the rule, in Employment Tribunal (ET) proceedings. However, where a claimant acts unreasonably in pursuing a claim, the ET can make a costs award in favour of the other party.

In Dunedin Canmore Housing Association Ltd. v Donaldson, the Employment Appeal Tribunal (EAT), when referring to the circumstances in this case and also those in Daleside Nursing Home Ltd. v Mathew, held that where a claimant does not approach the essential facts of the case honestly and reasonably, the ET has a responsibility to ‘make it clear that it is quite unacceptable to cause expense to another party by bringing proceedings on that basis’.

In a more recent case (Nicolson Highlandwear Ltd. v Nicolson), the Scottish EAT confirmed that the appropriate test for making a costs award is whether or not the claimant acted unreasonably in pursuing their claim, not whether or not they succeeded in any aspect of the claim.

Gordon Nicolson, who had originally been a director of the company, was dismissed from his job as retail manager of Nicolson Highlandwear Ltd., which engaged in wholesaling, retailing and hiring out highland wear, after his employer discovered various financial irregularities and that Mr Nicolson was running his own clothing business from the company premises.

Mr Nicolson brought a claim of unfair dismissal. The company responded that he was guilty of gross misconduct and even if his dismissal was found to be unfair, he should not be awarded compensation.

The ET found that Mr Nicolson had been ‘automatically’ unfairly dismissed because his employer had failed to follow the statutory dismissal procedures in force at that time. However, because his own gross misconduct, which ‘some people might describe prima facie as amounting to fraud’, led directly to his dismissal, no compensation award was made. The ET refused the employer’s application for costs. In its view, Mr Nicolson was entitled to seek a declaration that he had been unfairly dismissed, even though he was denied compensation. Also, the fact that he had won meant that it was reasonable for him to have brought his claim, even though no compensation was awarded.

On appeal, the EAT held that the ET’s decision that Mr Nicolson did not act unreasonably by pursuing a claim in which, even if successful, he was unlikely to recover any compensation, was perverse. There was no basis for the ET’s decision that the fact that he had won his claim showed there could be little merit in the application for costs. Furthermore, the ET was wrong to find that it was open to him to pursue his claim for the purpose of obtaining a declaration that he was unfairly dismissed. When bringing a claim of unfair dismissal, the only options available to a claimant when specifying the remedy they are seeking are (a) reinstatement, (b) re-engagement and compensation or (c) compensation only. In any case, Mr Nicolson had ticked box (c).

Mr Nicolson had admitted that he had behaved dishonestly and the only conclusion open to the ET was that he had acted unreasonably in bringing the claim at all and, having brought it, by persisting with it even after it had been made clear that his employer would be relying on his fraudulent conduct to defend the claim and arguing that he should not be granted compensation. In the EAT’s view, ‘The unreasonableness was such as would have led any reasonable Employment Judge to conclude that an award of expenses ought to be made.’

Default Retirement Age to be Scrapped

The Government intends to abolish, by 1 October 2011, the Default Retirement Age (DRA) of 65 contained in the Employment Equality (Age) Regulations 2006 and has published a consultation document on how it proposes to achieve its aim.

Under the proposals, there will be a six-month transition period beginning on 6 April 2011. From this date, employers will not be able to issue any notification for compulsory retirement using the DRA procedure. Between 6 April and 1 October, only employees who were notified before 6 April and whose retirement date falls before 1 October can be compulsorily retired using the DRA.

From 1 October 2011, the DRA will be abolished and the consultation proposes relieving employers of the administrative burden of the associated statutory retirement procedures. From that date, individual employers will only be able to operate a mandatory retirement age if this can be objectively justified as a ‘proportionate means of achieving a legitimate aim’. As the consultation points out, ‘It is not easy to demonstrate that a retirement age is objectively justified, so the employer should be confident that it can be objectively justified before deciding to use a retirement age’ and an employee will still have the right to request to work beyond the employer’s mandatory retirement age where one is in operation. Where an employer chooses to have in place a mandatory retirement age and this cannot be objectively justified, it could face claims of age discrimination and/or unfair dismissal.

The Government’s proposals will impact on many employment rights, such as pension schemes and age-related benefits, and this consultation specifically seeks views on the consequences of removing the DRA with regard to insured benefits and employee share plans.

This is a radical change in employment law and we would advise you to consider its implications for your business without delay. 

Hotel Cleaners Win Minimum Wage Claim

In its 2010 report on the National Minimum Wage (NMW), the Low Pay Commission recommended that HM Revenue and Customs (HMRC) should investigate whether contract and agency cleaners in the hotel sector are receiving their entitlement under the NMW Regulations for their hours worked. A recent case illustrates the sort of practice the measure is intended to target.

In 2009, the BBC carried out an undercover investigation into exploitation of migrant workers at two luxury hotels in London. In particular, they examined the pay of those employed by leading contract cleaning agency Hotelcare, which employs in the region of 2,000 workers at hotels in the UK. The agency cleaners were allowed just 20 minutes to clean each room. They had signed agreements stating that they would be paid the NMW hourly rate and, on average, worked more than 40 hours per week, but this was not reflected in their wages. Their payslips showed that the agency was in fact paying them according to the number of rooms cleaned each day.
 
Following the investigation, 13 room attendants have now been awarded back pay and damages after taking their case to the Employment Tribunal, claiming that they had been paid less than the NMW and that insufficient records were kept.

Says Brethertons, “The hourly NMW rate is non-negotiable. Productivity targets cannot be used to justify paying less than the legal rate and the rates apply equally to migrant workers. Employers are required to keep adequate records to show that they are paying workers at least the NMW.”

As announced last year, when the new NMW rates come into force on 1 October 2010, the adult rate is extended to 21-year-olds. The new rates are as follows:

• The adult hourly rate will increase from £5.80 to £5.93
• The development rate (which will cover workers aged 18-20 years) will increase from £4.83 to £4.92; and
• The rate for workers aged 16 and 17 will increase from £3.57 to £3.64.

In addition, an apprentice minimum wage of £2.50 per hour is introduced. The new rate will apply to those apprentices who are under 19 and those who are aged 19 and over but in the first year of their apprenticeship.

Contact us if you would like advice to ensure your pay arrangements do not breach the NMW legislation.

Obligations Under TUPE

The Employment Appeal Tribunal (EAT) has reaffirmed (Todd v Strain and others) that when there is a ‘relevant transfer’ under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), the obligation under Regulation 13.2 to inform affected employees and the obligation under Regulation 13.6 to consult ‘appropriate representatives’ are separate obligations and where there are no appropriate representatives for this consultation process, the transferor is obliged to arrange for their election by employees (Regulation 14).

Ms Todd was the owner of a care home in Glasgow. The business was sold to Care Concern (GB) Ltd., which gave rise to a relevant transfer under TUPE. 32 of the employees brought proceedings in the Employment Tribunal (ET) claiming that Ms Todd had failed to inform and consult them, had not complied with the duty to organise the election of employee representatives and that Care Concern was also jointly and severally liable for this failure by way of TUPE Regulation 15(9).

Some of the care home employees had been given limited information regarding the impending transfer but Ms Todd did not arrange for the election of appropriate representatives. She did not therefore give any information to or consult with any such representatives. Her contention was that she did not envisage taking any measures in connection with the transfer that would impact on any of the employees, so was not under any obligation to consult and the obligation to inform only arose if there was an obligation to consult.

On the facts of the case, the ET found that Ms Todd must have envisaged taking some measures that would affect the employees and was in breach of her duty to inform and consult with them. It ordered Ms Todd to pay each claimant the maximum award of 13 weeks’ pay in compensation and dismissed the claim against Care Concern.

Ms Todd appealed against the ET’s decision.

The EAT held that the obligation to inform and the obligation to consult are distinct obligations and upheld the ET’s finding of liability against Ms Todd. In its view, however, the seriousness of her failure could not be said to be at the extreme end of the scale so as to justify the maximum compensation award. She had given employees some basic information and, importantly, a reassurance that Care Concern would not be making changes in staffing or terms and conditions following the transfer. The EAT therefore substituted an award of seven weeks’ pay for each employee.

As regards joint liability, the EAT found the ET’s reasoning on this point ‘difficult to follow’. The wording of TUPE Regulation 15(9) is unequivocal and the EAT therefore found Care Concern jointly and severally liable for the compensation payable.

Says Brethertons,  “Failure to comply with the TUPE provisions can be very expensive for businesses. When a business or business unit is being transferred, with its employees, it is essential to take advice at the beginning of the process in order to avoid the potential pitfalls.”

Recruitment Policies and the Equality Act

In order to protect job applicants with a disability from discrimination during the recruitment process, Section 60 of the Equality Act 2010 prohibits the use of questionnaires on an applicant’s general health and related issues prior to a job offer being made. This includes prohibiting the use of such questionnaires before selecting a pool of applicants from whom the successful candidate will be chosen.

The measure, which comes into force on 1 October 2010, does not prevent employers from asking job applicants any questions about their health but stipulates that they will only be allowed to do so for the purpose of:

• deciding whether they need to make any reasonable adjustments to enable an applicant to participate in the selection process
• deciding whether a job applicant can carry out a function that is essential (‘intrinsic’) to the work concerned
• monitoring diversity amongst those applying for jobs;
• taking positive action to assist disabled applicants; and
• establishing whether the applicant has a disability where this is a genuine requirement of the job.

It will be important to make clear why a particular question is being asked and how the information will be used.

Once a person has been offered a job, whether this is an unconditional or a conditional offer, the employer is permitted to ask appropriate health-related questions and require a medical assessment where this is normal practice for all applicants.

If a candidate thinks a prospective employer has acted unlawfully by asking questions that are prohibited, he or she can make a complaint to the Equality and Human Rights Commission (EHRC). The EHRC will have the power to investigate and take enforcement action where necessary. A serious breach could result in a fine of up to £5,000.

If an employer uses a pre-employment health questionnaire, a disabled job applicant who is unsuccessful may bring a claim of disability discrimination, using the questionnaire as evidence in support of his or her claim. It will then be up to the employer to prove that there was a non-discriminatory reason for not offering that person the job.

ACAS has published a quick start guide for employers on changes introduced by the Equality Act 2010. This can be found at http://www.acas.org.uk/CHttpHandler.ashx?id=2833&p=0.

Right to Request Training Under Review

As part of its review of legislation, in order to reduce any unnecessary burden of regulation on businesses, the Government has carried out a consultation on the right of employees to request time to undergo training.

The right was introduced by the Employee Study and Training (Eligibility, Complaints and Remedies) Regulations 2010. It is currently available to employees in organisations with 250 or more employees but is due to be extended to all employees from April 2011.

Employees’ requests can be to undertake accredited training programmes that will lead to a qualification or for unaccredited training that will assist them to develop specific skills relevant to their job, workplace or business.

Employers are required to consider any requests and respond within a set timeframe. A request may be turned down if there is a good business reason for doing so, which includes where the employer does not believe the training will help improve business performance.

The Department for Business, Innovation and Skills is reviewing the effectiveness of the right in improving training opportunities for employees, in order to determine whether the Regulations should be abolished completely, whether the right should apply only to employees of large organisations as it does now or whether it should be extended to employees of smaller businesses as currently planned.

This consultation, which can be found at http://www.bis.gov.uk/assets/biscore/further-education-skills/docs/t/10-1107-time-to-train-consultation.pdf, closed on 15 September. The matter will now be considered by the Reducing Regulation Committee, the Cabinet ‘Star Chamber’ tasked with reducing regulation that is stifling business growth.

In Brief: The Equality Act 2010 – Changes

The Equality Act 2010 replaces nine major pieces of discrimination legislation and other ancillary measures that have been introduced over the last forty years to protect people from unfairness and discrimination on grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. These are now called ‘protected characteristics’.

The Act extends some protections to characteristics that were not previously covered and also strengthens some aspects of equality law. The core provisions of the Act come into force on 1 October 2010.

The Arbitration, Conciliation and Advisory Service (ACAS) has produced a table showing ‘what’s new and what’s changed: at a glance’, which can be found at http://www.acas.org.uk/CHttpHandler.ashx?id=2840&p=0.