EOC Equal Pay Taskforce Report

The Equal Opportunities Commissions has, this morning, published its seminal taskforce report on Equal Pay - www.eoc.org.uk

The report, which is well worth reading for anybody practising in discrimination law, highlights the following issues:

• the gap between average hourly earnings for men and women working full-time has narrowed from 31% to 18%, but the gap between hourly earnings of women working part-time and men working full-time has hardly changed at all, it being 39%.

• the averages hide a stark contrast between earnings of professional women, which are rising, and the growing number of women trapped in part time, low paid jobs.

• average hourly earnings for women in some minority ethnic groups are lower still than for white women, and disabled women have lower average hourly earnings than women who are not disabled.

• the UK has the widest gender pay gap of all EC states.


The taskforce report identifies three main causes of unequal pay:

"Women now do as well as or even better than men in terms of educational achievement; the sexes enter higher education in equal proportions, and women’s employment is catching up with men’s (69%, compared to 79%). There are complex reasons why the gap in earnings persists despite this progress, which can be broken down into three areas:.
• sex discrimination in pay systems, which accounts for 25-50% of the gender pay gap...
• women are concentrated in low paid jobs such as shop assistants, teachers, secretaries and nurses
• women still take prime responsibility for childcare, so many go into part-time jobs, which are usually badly-paid

Finally, the report makes a number of recommendations (including changes to the law, changes to the tribunal system and employer training).

The full report will be available later in the year.

Age Discrimination

The government yesterday confirmed that it would be introducing legislation to tackle age discrimination at work (although it will be the next parliament -whoever it is - that brings in the legislation).

This is pursuant to the EC Equal Treatment Framework Directive that requires all member states to prohibit age discrimination in employment by December 2006 (see bulletin 5/12/00).

An 'Age Advisory Group' was also announced yesterday, which has been set up to advise the government. The first step, after the Group's initial report, will to be embark on a wide consultation procedure to determine the scope of legislation. The government has postulated that such legislation might include outlawing internal corporate retirement ages if they are lower than the state retirement age.

Two important ECJ cases

CONTENTS
1. ECJ decision - An Employer's Right to Insist on Overtime
2. ECJ Advocate General Opinion - 13 week rule for holiday entitlement unlawful

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1. ECJ - An Employer's Right to Insist on Overtime

The ECJ this morning gave its decision in Wolfgang Lange v Georg Schunemann GmbH, a case referred by the German national courts.

Mr Lange was dismissed because he refused to work overtime. There was a dispute of fact over what had been agreed - however, the national court referred three questions to the ECJ for a ruling.

1. Are employers OBLIGED to state in the statement of terms and conditions that an employee may be required to work overtime?
Answer: Yes. Directive 91/533 sets out the employer's obligations to inform employees of the conditions applicable to the contract or employment relationship. Although a right to insist on overtime does not fall within the requirement to inform an employee of the length of their normal working week (since overtime, by definition, is not part of the normal working week), it does fall within the obligation to notify employees of "the essential elements of the contract of employment relationship", because an obligation to work overtime is an essential element of the employment relationship. NOTE: UK Law probably complies with this already under ERA 1996, s1(4)(c).
2. If the employer does NOT set out the obligation to work overtime in writing, does it nullify the obligation? In other words, is the contract does not mention overtime, is the employee in breach of contract if s/he refuses to work overtime.
Answer: No. If the employee has agreed to work overtime (eg verbally or by conduct), and for some reason it has not been reduced to writing, this does NOT render the contractual term void.
3. If the employer does not provide a written statement containing the obligation to work overtime, and is therefore in breach of the law, is the employer deemed to be obstructing the proper taking of evidence (which has consequences in German law)?
Answer: No (this isn't really relevant to UK law!)

The decision is at http://europa.eu.int/jurisp/cgi-bin/gettext.pl?lang=en&num=79989791C19990350&doc=T&ouvert=T&seance=ARRET&where=()

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2. ECJ - 13 week rule for holiday entitlement unlawful

The Advocate-General has this morning handed down his opinion in BECTU v UK.

It is common knowledge that regulation 13(7) provides that workers do not acquire the right to 4 weeks' annual paid leave until they have been working for 13 weeks.

BECTU (the Broadcastin, Entertainment, Cinematographic and Theatre Union) has 30,000 members in the broadcasting, film and theatre sector - many of whom work under very short contracts and thus do not acquire the right to paid holiday. They brought a claim in the High Court seeking a declaration that regulation 13(7) was incompatible with the Working Time Directive. They also sought clarification of whether, once the 13 week period had elapsed, that 13 weeks was to be taken into account when calculating how much paid leave the worker was entitled to.

The Advocate-General, in a very clear and forceful opinion, has stated that the 13-week qualification period is unlawful. The right to paid holiday is "an automatic and unconditional right granted to every worker.". There is no provision within the Directive to make it subject to any qualification period. The Directive "precludes national legislation under which a worker does not begin to accrue rights to the paid annual leave...until he has completed a qualifying period of employment with the same employer even if, once that qualifying period has been completed, his employment during the qualifying period is taken into account for the purpose of computing his leave entitlement."

The opinion is at http://europa.eu.int/jurisp/cgi-bin/gettext.pl?lang=en&num=79989791C19990173&doc=T&ouvert=T&seance=CONCL&where=()

Part Time Pensioners - Preston v Wolverhampton HA (House of Lords)

This afternoon the House of Lords handed down its opinion in Preston v Wolverhampton HA (see bulletins 16/5/00 for the ECJ decision, and 15/9/99 for the original reference from the House of Lords).

The House of Lords followed the ECJ ruling, in that:

(1) the 6-month time limit for bringing a claim for backdated pensions under the Equal Pay Act 1970 was lawful (under EPA 1970, s2(4), a claim must be brought within 6 months of the end of employment); but,

(2) the 2-year backdating limitation (EPA 1970, s2(5)) was not compatible with Article 119, and thus part-time pensioners would be entitled to back-date their pension claims to 8th April 1976 (the date of the ECJ's decision in Defrenne v Sabena, when it was held that Article 119 had direct effect).
And an additional point:
(1) Where there is a series of employment contracts of limited length, within a "stable employment relationship", the claim has to be presented within 6 months of the expiry of the last of those contracts - not within 6 months of each contract coming to an end. This is of importance for professions such as schoolteachers. However, when a worker works on an occasional basis under a series of contracts, but in the absence of a "stable employment relationship", she must bring a claim within 6 months of the end of each particular contract of employment.

The decision is on the internet at http://www.parliament.the-stationery-office.co.uk/pa/ld200001/ldjudgmt/jd010208/presto-1.htm

New SI: Increase in Deposits

Yesterday the government published The Employment Tribunals (Increase of Maximum Deposit) Regulations 2001.

As we had been forewarned (see bulletin 27/11/00), the power for tribunals to order an Applicant to pay a is being increased from a maximum of £150 to a maximum of £500.

The change comes into force on 23rd February 2001.

The statutory instrument is available at http://www.legislation.hmso.gov.uk/si/si2001/20010237.htm

Sellars Arenascene v Connolly - C of A

CONTENTS
1. Sellars Arenascene Ltd. v Connolly - Court of Appeal
2. Beuvale Furnishings Ltd. v Chapman - EAT

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1. Sellars Arenascene Ltd. v Connolly (CA, 2.2.01)

A decision of the Court of Appeal, handed down this morning.

Issue: Is a controlling shareholder capable of being an employee, for the purpose of the unfair dismissal legislation?

The employment tribunal held that Mr Connolly was not an employee of company X (which, following a series of TUPE transfers and a change of name, became Sellars Arenascene Ltd.) because he was the controlling shareholder. In particular, he was "an accomplished and expert entrepeneur operating a number of businesses", he "retained overall control", and he "behaved as an employee but had an interest as shareholder over and above that of employee and stood to gain if the company prospered."

The Court of Appeal, upholding the decision of the EAT, overturned the employment tribunal's finding and held that Mr Connolly was an employee.

It held that, although ultimately a question of fact, the employment tribunal was clearly wrong to regard the above factors as being inconsistent with employment. Many senior employees are accomplished and expert entrepeneurs. Many senior employees have control of a company, and many senior employees stand to gain if a company prospers. These factors were not inconsistent with employment and, the tribunal having misdirected itself, the Court of Appeal thought it appropriate to substitute its own view.



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2. Beauvale Furnishings Ltd. v Chapman

This case is unreported. The transcript can be found at http://wood.ccta.gov.uk/eat/eatjudgments.nsf.

Beauvale Furnishings Ltd. v Chapman [29.11.2000, HHJ Reid QC]
A bold decision of the EAT on illegality of contracts of employment. The parties agreed that the employee would be 'labelled' a self-employed consultant, despite being an employee in reality. This was so the employee could continue claiming legal aid in a personal matter, and could defer payment of income tax and pay the lower class 4 NI contributions. In fact the Applicant then failed to declare his income to the revenue. The EAT held that the deliberate mislabelling as 'self-employed' tainted the contract with illegality and thus prevented him claiming unfair dismissal.