Why Nick Clegg’s shared parental leave won’t work

Ministers are expected to announce a consultation today on a new system of parental leave, to allow mothers and fathers more flexibility to share time off after a baby’s birth. The proposals include allowing parents to split their leave in whatever way suits them best, including taking time off in chunks rather than in one go.

Current law gives women up to one year’s maternity leave, of which nine months is paid and three months is unpaid. Fathers are entitled to up to two weeks’ paternity leave (at £125 per week) within eight weeks of the birth.

From April 2011, the position changes. The Additional Paternity Leave Regulations 2010, introduced by the last government, provide that when a baby is born after 6 April 2011, the mother will be able to transfer the second half of her year-long maternity entitlement to the father. Some companies, eg Santander, already have such policies in place.

The new proposals - floated to take effect from 2015 - are noble, but deeply impractical.

Employers often hire maternity cover for a year. Temporary replacements do not hit the ground running; they need training up and mentoring. If a woman on maternity leave can take her leave in chunks, it will make maternity cover impossible for employers to organise. Employers will be unable to find someone to work for an unascertained period. Instead they will have to rely on agency temps for short chunks of time at inflated agency rates. And if the parent returns after a month, all the training invested in the temporary cover will be wasted as they are unlikely to still be available when the parent takes another chunk of time off a month or so later.

Further, a mother and father usually won’t work for the same organisation. It will be difficult for employers to check the truthfulness of a father’s claim that his wife has let him take half of the parental leave, and it might end with parents being able to inveigle extra time off because of the impossibility of policing the system.

Also, I fear it will have a chilling impact on recruitment practice. Many employers shy away from hiring women of childbearing age. Nick Clegg’s proposals might see employers avoiding recruitment of any person in their 20s or 30s, which would lead to an increase in the number of age discrimination claims and the burden of tribunal claims on employers.

Equality Act Compromise Agreements

[Thanks to Neil Russell of BD Laddie for telling me about this]

The furore continues. Two goliaths of the employment law world, John Bowers QC and Tom Linden QC, have provided Advices which reach precisely opposite conclusions on the thorny issue of whether certain compromise agreements can ever be valid under s147 of the Equality Act 2010. Copies of their Advices can be seen here.

The Law Society has produced a new Practice Note summarising the two views. The Practice Note gives very helpful Guidance. Definitely one worth studying.

Negligent CRB checks

[Thanks to James Medhurst of Employment Law Advocates for preparing this case summary]

The Court of Appeal has handed down its decision in Desmond v Nottinghamshire Police, which is authority for the proposition that a person cannot bring a claim in negligence against the police in respect of information provided to an employer during an enhanced Criminal Records Bureau check.

It was held that that, in accordance with the general principles in the case of Hill v Chief Constable of West Yorkshire, the police do not owe a duty of care to members of the public in this situation. Nor does the structure of the statute suggest that there should be a duty of care, as this would create a conflict with the statutory purpose of protecting vulnerable young people.

A further consideration was the availability of other remedies including judicial review, a claim for breach of Article 8 of the European Convention on Human Rights and a possible claim under the Data Protection Act.

Abolition of Default Retirement Age

Government confirms abolition of Default Retirement Age

As widely anticipated in the press, the Department for Business, Innovation & Skills has today confirmed that the default retirement age will be abolished from 1st October 2011 (with phasing in begining in April).

Basically ignoring the concerns expressed by employers during the consultation process, the government's Response to Consultation Paper says that it considers that the dismissal of older workers should be managed either by discussion or by formal performance management procedures.

However, an exemption is going to be introduced for group risk insured benefits (eg medical insurance), where there was a concern that employers would stop offering such benefits if it became too expensive to pay the premiums due to an ageing workforce. In broad terms, it will not be unlawful to discriminate on grounds of age when providing such benefits. Details will presumably follow when the draft legislation is published.

Acas has issued a flowchart showing the transitional arrangements, and a really useful 20-page guide for employers on Working without the Default Retirement Age.

Daniel Barnett

Sexual Orientation and Third Party Discrimination

[Thanks to Rosa Dickinson of St Philips Chambers for preparing this case summary]

The EAT (HHJ Peter Clark) has handed down its decision in Lisboa v Realpubs, in which it held that "less favourable treatment on grounds of sexual orientation" covers any case where sexual orientation, whether of the claimant or a third party, is an effective cause of the detriment suffered. This follows the principle from Showboat Entertainment v Owens 1983 (in the context of race).

The employer was transforming a formerly "gay pub" into a gastropub. While this was in and of itself unobjectionable, the methods of doing so (including asking the claimant to display a board outside saying "this is not a gay club" and asking him to seat customers who did not appear to be gay in prominent positions) amounted to less favourable treatment of gay customers.

Under the principle from Showboat Entertainment, this less favourable treatment of third parties on grounds of their sexual orientation also amounted to less favourable treatment of the claimant on that ground.

Teacher fails in claim against Police for misleading CRB check info

The Court of Appeal has, this morning in Desmond v Nottinghamshire Police, held that a teacher cannot sue the police in negligence because of misleading information provided by them in an advanced Criminal Records Bureau (‘CRB’) check.

In 2001, Vincent Desmond was arrested on suspicion of sexual assault. He was then released, because of a lack of evidence that he was the assailant. The investigating policeman, DC Kingsbury, closed the file with the words: “It is apparent Desmond is NOT responsible for the crime.”

Four years later, in 2005, the police placed a note on Mr Desmond’s CRB entry that he was arrested in 2001 on suspicion of sexual assault. The entry made no reference to the lack of evidence, nor did the police look back at the original file.

Mr Desmond subsequently failed to obtain employment as a teacher and claimed that the police force’s negligence had impeded his search. He sued them for negligence

The Court of Appeal has, today, held that the chief constable does not owe any duty to an individual to make sure that CRB information is correct, and so (irrespective of the levels of carelessness by the police) Mr Desmond’s claim for negligence failed.

The court held that the practical needs of law enforcement, including the need not to inhibit the police from taking operational decisions and forcing them to act defensively, pointed against imposing a duty on the police force to take Mr Desmond’s particular circumstances into account. The Court also held that it was undesirable for police resources to be diverted into expensive litigation. They recognised that this ‘may lead to hardship in some individual cases, but the greater public good outweighs individual hardship’ (judgment para 31).

However, Mr Hill’s opportunities for redress are not closed. He can require the CRB check to be amended under section 117 of the Police Act 1997, he can bring a claim under the Data Protection Act 1984 for processing data incorrectly, or he can bring a claim for compensation under the Human Rights Act 1998 for breach of his right to respect for privacy. He can also appeal to an ombudsman or under the Police Conduct Complaints procedure. Not all of these will result in compensation, but he should be able to have the record set straight.

Rapacious Employees and the tribunal system

The newpapers have been packed with stories about rapacious employees abusing the employment tribunal system and taking employers to the cleaners (for example, today's rant in the Daily Mail, which is riddled with inaccuracies such as asserting the burden of proof for all claims - not just discrimination claims after the burden shifts - is always on the employer, who are "presumed guilty unless they can prove their innocence, a direct contradiction of centuries of British justice". Dangerous and misleading drivel.).

But as a barrister instructed primarily by employers, I hear this view expressed a lot. Employer clients tell me the tribunal system favours employees. Employee clients tell me the opposite. But where does the truth lie?

Most employment cases are decided by a panel of three. An employment judge chairs the panel. The other two members are picked from a panel chosen by the CBI, and a panel chosen by the TUC, who - much like magistrates - are usually people in full-time jobs who sit for a few weeks a year. This ensures that the tribunal’s approach is balanced and based on practical experience of life at the coalface of industry or office life.

There is truth in the charge that the employment tribunal system is open to abuse. Serial litigants (although my experience teaches me there are probably fewer than half a dozen of these in the UK) make hopeless job applications, then lodge specious discrimination claims to extort a few thousand pounds from employers. But tribunal staff are generally wise to this (they keep seeing the same names crop up), and tribunals are often willing to make substantial cost orders against these individuals if the employer has the resolve to challenge the claim.

Likewise, some employees bring claims knowing them to be hopeless or untrue, hoping to inveigle a compromise payment out of their employer. What can be done? Probably very little, other than take it on the chin and recognise it as part of the cost of doing business, or fight the case and persuade the tribunal that the claim was misconceived (in which case, the tribunal can award costs).

But to argue this justifies the abolition of employment rights is petulant and unsophisticated. The workplace is where most of us spend most of our time, and where we invest much our self-image and self-esteem. Employers have the power to make decisions which impact fundamentally on employees’ lives, and employees are vulnerable to an employer’s unreasonable or improper use of this ability. Employment laws have arisen to strike a balance between the competing rights of the employee not to be treated unfairly, and the employer to be allowed to run its business in the way it thinks fit. Any system of laws requires an effective enforcement mechanism, which is where the employment tribunals system comes in.

Some women cry rape, knowing the allegation to be untrue, but nobody would seriously suggest abolishing rape laws. Likewise, some employees bring specious claims, knowing them to be untrue. That is not, of itself, a reason to throw out employment rights for everybody.

Tribunals already have the power to strike out hopeless cases. In practice, this is rarely used as a ‘he said / she said’ dispute is not normally the type of dispute which a tribunal can say has no reasonable chance of success. It needs a tribunal hearing to decide who is telling the truth.

And most cases are not black or white. They turn on different people’s perception of events, or questions such as whether the employer gave an employee a fair chance to improve job performance before dismissing them. Even if an employee ultimately fails to succeed in such a claim, it is quite wrong to say they should not have the opportunity of bringing a claim.

One possibility for reform, floated by former Enterprise Tzar Lord Young, is to extend the period of time an employee must work before bringing an unfair dismissal claim from one year to two years. This would reduce the number of claims, but probably not by much, as it would not stop employees framing their claim as one of discrimination or whistleblowing – neither of which require the minimum service period to succeed.

Another possibility is introducing a fee for bringing a claim, to be returned if the claim succeeds. But this is deeply unattractive. The point at which someone loses their job, plunging them into prospective impecuniosity and the Byzantine social security system, is not the point to start demanding money. In addition, since most cases settle, the reality is that this fee would end up being reimbursed by the employer as part of the settlement – thus adding to the employer’s cost.

It can cost an employer upwards of £10,000 to pay lawyers to defend a claim. But the answer is simple: why pay lawyers? When a claim is only worth a few thousand pounds, it makes no sense at all to use a lawyer’s services. Sometimes important points of principle arise, or (unusually) case involves a significant sum of money, in which case it makes business sense to hire a lawyer. But tribunals are accustomed to owner-managed companies representing themselves, just as they are accustomed to employees representing themselves. Almost all tribunal judges nowadays are courteous, helpful and will explain the procedure and the law to you. They won’t present your case for you (or, indeed, for the employee), but they will help you present it yourself.

Tribunals cannot construe terms under Part I of ERA

[Thanks to James Williams, pupil at Littleton Chambers, for providing this case summary]

The Court of Appeal has handed down its decision in Southern Cross Healthcare v Perkins and Others , confirming that Employment Tribunals have no power of contractual interpretation outside the context of breach of contract claims raised on or after the termination of employment.

The claimants are employees of the appellant who were all entitled to five days of additional holiday each year for long service, over their standard contractual entitlement. The Working Time Regulations 1998 were then amended to increase the minimum statutory annual leave allowance. Accordingly, the appellant increased holiday allowances to 28 days for any of its employees whose entitlement was less than that (including the respondents). The claimants brought proceedings in the ET arguing that they should still be entitled to their long-service uplift on top of the statutory 28-day minimum. They succeeded in the ET and the EAT.

In allowing the employer's appeal on the basis that the ET had no jurisdiction under the Employment Rights Act 1996 (in particular sections 11 and 12) to construe the holiday provisions of the claimants' contracts, Maurice Kay LJ (who delivered the judgment of the Court) applied obiter passages of the Court of Appeal's decision in Mears v Safecar Security Limited [1982] IRLR 83.

Note that the alternative remedy of a breach of contract claim was not available in the ET because the employees remained employed by the company. Accordingly, the proper forum for the claims was the County Court. If they had no longer been employed, the ET could have construed the holiday provisions under its breach of contract jurisdiction.

Equal Pay Claims in the Civil Courts

Judgment was given this morning in the High Court case of Abdulla v Birmingham City Council, in which 174 former employees of the Council assert that the failure to give them pay equal to various predominantly male groups of staff comprised a breach of their contracts of employment.

The defendant had applied to strike out the claims, on the basis that the civil courts do not have or should not exercise jurisdiction in cases involving equal pay and the equality clause - particularly where the 6 month time limit for bringing claims in Employment Tribunal had expired.

Colin Edelman QC, sitting as a Deputy Judge of the Queen's Bench Division, dismissed the application. He held that the High Court did have jurisdiction and declined to exercise any discretion to strike out claims which had been brought outside the 6 month time limit for Tribunal claims but within the 6 year limitation period for breach of contract claims.

The council was refused permission to appeal, but is entitled to renew its application to the Court of Appeal.

The judgment will be available shortly at http://www.bailii.org/ew/cases/EWHC/QB/2010/

Costs in ETs

[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

The EAT (Underhill P) has handed down its decision in Yerrakalva v Barnsley MBC, which is authority for the proposition that while there does not have to be a precise causal relationship between unreasonable conduct and the costs claimed, any award of costs must, at least broadly, reflect the effect of the conduct in question.

Following a part-heard PHR the claimant withdrew her claim. The ET found that she had lied during the PHR on two occasions and on the basis of those lies awarded costs against her.

The EAT, allowing the appeal, held that although such behaviour was unreasonable conduct, it was necessary for the Judge to take into account "the nature, gravity and effect" of that conduct in deciding:

1. whether to make an award; and if so
2. what the amount should be (per Mummery LJ in McPherson v BNP Paribas [2004] ICR 1398), which the ET failed to do.

The EAT distinguished the line of cases that followed Daleside Nursing Home Ltd. v Matthew (UKEAT/0519/08) because the effect of the lies in this case had not been to establish that the claim was misconceived from the start.

Obiter: there should be no general rule to the effect that withdrawal of a claim constitutes, or is tantamount to, an acknowledgment that the claim was misconceived.

Annual Compensation Limit Increases

From 1st February 2011, the new maximum compensatory award for unfair dismissal increases to £68,400 (currently £65,300). The new maximum for a week's pay increases from £380 to £400. Thus the maximum unfair dismissal award (basic plus compensatory) is £80,400.

http://www.legislation.gov.uk/uksi/2010/2926/schedules/made

Bonuses and Pay in Lieu of Notice

[Thanks to Lionel Stride of Temple Garden Chambers for preparing this case summary]

The Court of Appeal has handed down its decision in Locke v Candy & Candy, upholding a decision that, where a bonus clause stipulated that an employee had to be "employed by the company in order to receive the bonus", he was not entitled to any bonus when summarily dismissed under the terms of a PILON (payment in lieu of notice) clause 10 days before it became due.

The Claimant, having been given 6 months payment in lieu of notice in accordance with the notice provisions in his contract, sought to recover a guaranteed annual bonus of £160,000, which only became payable after 12 months employment. He had been dismissed with immediate effect around 10 days short of 12 months under a laconic PILON clause permitting the Defendant simply "to make a payment in lieu of notice". The issue was whether this payment should include a bonus that he would still have received had he been asked to work his notice and/or put on gardening leave rather than being summarily dismissed. By a majority of 2:1 (with Jackson LJ dissenting), the CA held that the contract had to be constructed 'holistically'. Accordingly, as the PILON clause dealt only with termination and not quantification, the bonus clause (and its restricted operation) had to be applied when calculating the value of the payment.

Reading Witness Statement Aloud in Tribunals

The President of the Employment Appeal Tribunal, Underhill P., has given guidance on the practice of reading witness statements aloud in tribunals.

The full guidance (which is expressly stated to be guidance, not mandatory), can be read at paragraph 16 here. In summary, he states:-

• very often, reading witness statements aloud "achieves nothing of value" and "wastes the time of the Tribunal and the parties"
  
  
• but sometimes, it might be helpful to read a particular statement – or section of a statement – aloud if it requires further elucidation. Examples are technical passages in statements, or statements drafted by unrepresented litigants which require clarifying
  
  
• if both parties are represented, the lawyers should normally be able to agree whether to take statements as read – albeit it ultimately remains a decision for the tribunal.

He also suggests that those regions where reading statements aloud is standard practice should reconsider whether it remains desirable to keep that practice as standard.

Minimum Wage and ‘On Call’ Time

[Thanks to Laura Daniels, pupil at 3 Serjeants' Inn, for preparing this case summary]

The EAT gave its decision in South Manchester Abbeyfield Society v Hopkins & Ors regarding payment for time spent on call.

The Appellants employed the Respondents as housekeepers in sheltered accommodation. The housekeepers were required to spend time on call, during which they were provided with private accommodation to use.

Reversing the decision of the ET, the EAT held that not all of the hours spent on call could be taken into account for the purposes of a claim in contract under the National Minimum Wage Act; under the National Minimum Wage Regulations 15(1A) and 16(1A) the Respondents could only claim for such hours that they were awake for the purpose of working. However, a claim might have existed - were it not outside the limitation period - in respect of statutory compensation for breach of rest-break or maximum working week regulations.

The case was remitted to the ET for a freshly constituted panel to consider how long the Respondents spent awake for the purpose of working, to decide whether a payment was due under the national minimum wage.

The EAT also held that the ET had exceeded its jurisdiction by awarding £25,000 net of tax and NI, as its total jurisdiction was limited to £25,000.

Strike Outs

[Thanks to James Medhurst of Employment Law Advocates for preparing this case summary]

The decision of the EAT in Balls v Downham Market School is an interesting case about strike-out. The Claimant's wife was also employed by the Respondent. She pleaded guilty to stealing from it. The police did not bring any charges against the Claimant, but he was also dismissed on suspicion of complicity with the crimes of his wife.

Unfair dismissal claims were brought by both the Claimant and his wife, and were ordered to be heard together by the tribunal against the wishes of the Claimant. Both cases were struck out but the appeal of the claimant was allowed because the tribunal had treated the claims in the same way although their circumstances were different. It had allowed the merits of the wife's case to cloud its view of the Claimant's case.

On appeal, the EAT stated that, in considering a strike-out application, a tribunal should have regard to documents in the tribunal file even where specific matters are not raised verbally. In this case, the opposition of the Claimant to joining the claims would have alerted the tribunal to the fact that they could not be treated as one and the same.

An appeal was also allowed against a finding that the claimant had failed to pursue his claim where the claim had been stayed and he had not responded to "a number of singularly unhelpful, apparently enigmatic letters from the Tribunal which he was then criticised for not dealing with" (para 60, where the EAT is deeply critical of the tribunal). It was held that it should have been obvious that he was asking for the stay to be lifted.

Causation in Whistleblowing Cases

[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

The EAT has handed down its decision in Fecitt & ors v NHS Manchester, dealing with causation in whistleblowing cases.

The Claimants made protected disclosures which led to a breakdown of relationships with their colleagues. As a result of the "dysfunctional situation" at work because of the breakdown of relations, the Claimants were subjected to significant detriments by their coworkers, two of them were transferred out by managers and one had all working hours withdrawn (thus was effectively dismissed).

The employment tribunal held that there must be a direct causal connection between the protected disclosures and the detriments. They found that the detriments were a result of the dysfunctional situation rather than "on the ground that" (s.47B ERA) the Claimants had made protected disclosures. In other words, they viewed the breakdown of relations as an intervening act which broke the chain of causation.

The EAT, allowing the appeal, held that once less favourable treatment amounting to a detriment has been shown to have occurred following a protected disclosure, the employer has to prove that the treatment was "in no sense whatsoever on the ground of the protected disclosure", ie a more favourable approach to causation for employees.

Agency Worker not 'Employee'

[Thanks to Emma Price of Temple Garden Chambers for preparing this case summary]

The Court of Appeal has handed down its Judgment in the case of Tilson v Alstom Transport, which is authority for the proposition that a significant degree of integration of an agency worker into an organisation is not inconsistent with an agency relationship in which there is no contract between worker and end user.

The Court of Appeal also held that:

• the need to apply to a line manager before taking annual leave is not sufficient to justify the implication of a contract;
  
• there is no need to imply a contract between the agency worker and end user where there has been a breach of a clause of the contract between the agency and a third party providing services to the end user that relates to the agency worker;
  
• where the parties would have acted in exactly the same way if there had been no contract, that is fatal to the implication of a contract, The Aramis [1989] 1 Lloyd's Re 213 applied and, on the facts, the agency worker had declined to enter into a contractual working relationship with the end user.

Fixed Share Equity Partner is not an 'employee'

[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

In Tiffin v Lester Aldridge LLP, the Claimant was a fixed share partner within an LLP. When compared to the Equity Partners there was a substantial disparity between what the Claimant earned, the profits he received, his financial contribution, his involvement in the management of the LLP, and his voting rights. Dspite these differences, the EAT held that the ET had not erred in finding that the Claimant was a partner and not an employee.

Silber J stated that, there is no statutory provision or authority which states that for a person to be a partner s/he has to have a certain minimum number or certain minimum types of rights to vote or to participate in management decisions. Nor are there any which specify that the share of profit of a person or his or her contribution must reach a certain level before s/he can be regarded as a partner.

The fact that the Claimant had those rights and duties as well as a number of others, particularly the entitlement to a residue of the firm if it was wound up, meant that there was enough evidence for the ET to arrive at the conclusion it did and their decision could not be considered to be perverse.

Correction: Government abandons Socio-Economic Duty

Correction: A number of very worthy people have pointed out the announcement related to the socio-ecoomic duty on public authorities, not the equality duty. Sorry for the error.

The government is dropping the proposed socio-economic duty on public sector bodies, which would have required all public sector bodies to consider tackling wide socio-economic problems whenever taking an important decision.

More details on the BBC website.

Government abandons Equality Duty

The government is dropping the proposed Equality Duty on public sector bodies, which would have required (amongst other things) public sector employers to publish workforce data concerning the six core protected characterists.

This controversial element in the Equality Act 2010 was originally intended by the previous government to be implemented in April 2011, but plans were suspended pending a decision by the government on whether it would be implemented at all. Theresa May will announce later today that it will not be brought into force.

More details on the BBC website.