Friday 28 December 2001

IR35 Decision - Court of Appeal

The Court of Appeal has handed down its decision in the IR35 case, Professional Contractors' Group v Inland Revenue.

In 1999, the government decided to prevent individuals, who would otherwise be classified as employees, from obtaining the financial advantages of self-employment by setting up one-man service companies and hiring out their services. This decision became known as 'IR35', the number of the Inland Revenue circular setting out the changes (which were enacted in three tranches, coming into effect on 6th April 2000).

The Professional Contractors' Group brought an application for judicial review, challenging the legislation as being contrary to European Law. On 2nd April 2001, Burton J. dismissed the application, holding the IR35 legislation to be lawful (see bulletin of that date).

The Professional Contractors' Group appealed.


The Court of Appeal upheld Burton J.'s decision, holding the IR35 legislation to be lawful. It rejected arguments that the legislation was anti-competitive or inhibited freedom of movement, and refused to refer the matter to the ECJ.

Of interest is Robert Walker LJ's comments about the confusing distinction between employment and self-employment, and his floating the possibility of recognising a middle status reflecting the "no-man's land between Schedule D and Schedule E, rather than insisting on the gulf which exists in theory (but, not always, in practice)..." (decision, para 54).

The full decision can be seen here.

Thursday 27 December 2001

Miriki v General Council of the Bar

The Court of Appeal has handed down its decision in Miriki v General Council of the Bar (21st December 2001).

Mrs Miriki was employed by the Bar Council. She was off work during a period when her department within the Bar Council was being reorganised, due to a combination of maternity leave and contracting malaria whilst on holiday in Nigeria. The Bar Council were unable to contact her during the consultation period, and eventually informed her of her redundancy during a meeting when she returned.

She claimed unfair dismissal and race discrimination. The employment tribunal held the dismissal had been fair, on grounds of redundancy, and dismissed the race claim. The EAT overturned the decision. It permitted various grounds to be argued at the substantive appeal which were wider than those permitted at the preliminary hearing. The Bar Council appealed.

The Court of Appeal held it was inappropriate for the EAT to allow arguments on wider grounds than those permitted at a preliminary hearing, subject to the EAT's case management powers to make limited departures from those grounds (which did not happen). The proper course for an Applicant who wished to raise further grounds was to appeal to the Court of Appeal.

Whilst obiter, of significant importance is the Court of Appeal's further departure from the House of Lord's controversial decision in Anya v University of Oxford (which provided that employment tribunals have to consider all allegations of race discrimination raised by Applicants, no matter how historical or peripheral, because they might be material to a decision whether to draw an inference of race discrimination). The Court of Appeal stated:

"Anya was a very different case...Each case must be decided in the light of its own particular circumstances. It cannot be right that in every case the tribunal must make express findings of every pirce of circumstantial evidence, however peripheral, merely because the applicant chooses to make it the subject of complaint."

The full decision can be seen here.

Thursday 13 December 2001

Discrimination Legislation

The government has, today, published its consultation document on legislation required to comply with the EC Equal Treatment Framework Directive. This requires the UK to introduce legislation prohibiting discrimination on grounds of age, religion or belief, and sexual orientation within the fields of employment and training.

It will also require the extension of some of the provisions of the Race Relations Act 1976 and the Disability Discrimination Act 1995 - the most important one being the removal of the 15-employee 'small employer' exemption.

The government is also considering introducing a single 'Equality Commission' (to replace the EOC, CRE and DRC).

The government summary very kindly points out that the cost of the new legislation will only be £157 per employer, whereas the benefits could amount to up to £567million.

The consultation period finishes at the end of March 2002.

For further information, and a copy of the consultation paper, click here.

Wednesday 12 December 2001

Sex Discrimination (Amendment) Bill 2001

The Sex Discrimination (Amendment) Bill 2001 was laid before the House of Lords earlier today.

If enacted, it will extend anti-discrimination legislation in connection with the provision of goods and services to private member clubs, but it will continue to permit wholly single-sex clubs.

It will also permit discrimination in sporting activities where a prize of over £1,000 is offered (ie a similar prize need not be offered to competitors of the other gender).

The Bill can be seen here.

Tuesday 4 December 2001

Dignity at Work Bill 2001

The Dignity at Work Bill 2001 has been introduced in the House of Lords.

It provides that all employees "shall have a right to dignity at work", and that a dignity clause shall be implied into all contracts of employment.

It prohibits harassment, bullying and any conduct which causes the employee "to be alarmed or distressed", including:
• behaviour on more than one occasion which is offensive or abusive;
• unjustified criticism on more than one occasion;
• punishment imposed without reasonable justification; or,
• changes in the duties or responsibilities of the employee to the employee's detriment without reasonable justification.
The right applies to contract workers as well as employees.

The Bill provides for complaints to be brought before an employment tribunal. The tribunal can make a declaration, a recommendation or order compensation (including damages for injury to feelings).

There is a statutory defence that can be made out if:
• the employer has in force a 'Dignity at Work Policy' and has taken reasonable steps to enforce it;
• the acts complained of are repudiated by the person in charge of the policy within 3 days of complaint ('repudiated' is not defined, but it is stated to include a repudiation in writing to the employee and to any other employees who witnessed or knew of the act complained of); and,
• the employer takes all steps reasonably necessary to remedy any loss suffered by the complainant.
The Bill will also amend section 95(1)(c) of the Employment Rights Act 1996 (the section defining constructive dismissal), to provide that breach of the implied dignity clause can amount to constructive dismissal.

The Bill can be seen here. I am offering odds on the Bill failing to be enacted due to lack of parliamentary time!

Monday 3 December 2001

Launch of Age Positive Website

The government has launched an Age Positive website to provide practical help for employers and individuals, as part of a major publicity drive in the run-up to the new anti- age discrimination laws that must be introduced by December 2006.

The website has a 'Games' section, which allows you to test whether you are guilty of age stereotyping!

The government has also published its assessment of the voluntary Code of Practice on Age Diversity in Employment. According to the government statistics:
• 25% of older people believe that they have been discriminated against;
• 90% of people believe that employers discriminate on grounds of age;
• about 30% of employers are aware of the Code of Practice;
• the use of age as a criterion in recruitment has reduced to 13%

A copy of the full press release is available here.