Employment Relations Act 2004

Further provisions of the Employment Relations Act 2004 come into force today (31st December). These provisions allow trade unions to expel members who have extreme political views which conflict with the rules or objectives of the union.

Also coming into force today are changes giving tribunals greater discretion for setting compensation where an exlcusion or expulsion is unlawful.

Employment Relations Act 2004

EAT Conciliation Protocol

The EAT Conciliation Protocol has now been placed on the EAT website (see bulletin 10/12/04, below). At the time of writing, the 2004 Practice Direction, which came into force last week, is still awaited.

EAT Conciliation Protocol

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BULLETIN 10 / 12 / 04

New EAT Practice Direction
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Yesterday, the EAT handed down a new Practice Direction which came IMMEDIATELY into force (9th December 2004).

It is broadly similar to the December 2002 Practice Direction, which it replaces, but is updated to reflect the new EAT Rules of Procedure.

The main changes include:

- clarification of the documents that MUST be lodged when lodging a Notice of Appeal;

- clarification of time limits for lodging an appeal;

- refining the 'sift' procedure;

- a new section dealing with wasted cost applications against legal representatives.

The Practice Direction is not yet available on the EAT website (I have been told it is going up within the next couple of days). I will send another bulletin with the link as soon as the Practice Direction is placed on the net.

Acas to be involved in EAT appeals
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Also handed down yesterday (but not yet on the EAT website) is a new EAT Conciliation Protocol.

In cases involving allegations of bias or pure money appeals, the EAT will now consider referring the case to Acas for conciliation.

This is to run as a four month pilot project from 1st January 2005.

Again, as soon as the Protocol is published on the net, I will send another bulletin with the link.

Consulation on Definition of Disability

The Disability Discrimination Bill is currently undergoing its second reading in the House of Lords (see bulletin 6/12/04).

Whilst the Bill is mainly concerned with matters relating to issues outside the employment relationship, it involves an extension to the definition of disability to automatically cover some people with cancer, HIV and multiple sclerosis from the point of diagnosis, irrespective of whether they can establish the necessary adverse effect on their ability to carry out day-to-day activities.

The DWP has today issued a consultation paper on, amongst other things, excluding certain cancers from the scope of the extended definition. The document proposes excluding the most common cancers which are not considered to require substantial treatment and it identifies a list of the cancers to be excluded (e.g. basal cell carcinomas and Bowen's Disease);

Consultation Document (57 pages - takes a while to download)

Rolled Up Holiday Pay 3

This old chestnut is back. In a series of conjoined appeals, under the lead case Smith v Morrisroes & Sons, the Employment Appeal Tribunal has clarified earlier guidance on rolled-up holiday pay.

The law is currently set out in the Court of Appeal's decision in Caulfields v Marshalls Clay Products (see bulletins of 4/8/03 and 6/5/04). In this new case, the Employment Appeal Tribunal recognises that the 'rolled-up' holiday pay aspect need not necessarily be set out in the written contract, as terms (such as terms rolling up holiday pay) can also be incorporated through collective agreements or, importantly, through custom and practice (see para. 11).

The amended guidelines are set out in paragraph 5 of the decision.

Note that the entire issue of whether rolled-up holiday pay is permissible under the Working Time Directive is currently the subject of a reference to the ECJ in Robinson-Steele v RF Retail Services Ltd (see bulletin 17/3/04).

Smith v AJ Morrisroes & Sons

Information - Commissioners Code of Practice

The Information Commissioner has just published part 4 of the Employer's Code of Practice on Data Protection.

Part 4 deals with keeping records on workers' health. It is the final part, and follows on from:

- Part 1: Recruitment and Selection
- Part 2: Employment Records
- Part 3: Monitoring at Work

The Information Commissioner has issued the main guidance (33 pages), supplementary guidance (27 pages) and Guidance for Small Businesses (6 pages).

Information Commissioner's Codes of Practice on Employment

Clementi Report issued

Nothing to do with employment law as such, but of great importance to lawyers generally...

Sir David Clementi has just published his report. It is extremely long. The key recommendations, which he urges the government to legislate upon, are:

• allowing multi-disciplinary partnerships (solicitors, barristers, accountants, management etc. all as partners)
• allowing commercial ownership of legal practices (TescoLaw). Sir David Clementi comments that "Unlike most high street solicitors, companies such as [the RAC] have nationally known brand names to protect, which may be a powerful incentive to operate in a proper manner" (Chapter F, para 22)
• a single independent body to handle all complaints, whether about barristers, solicitors or other legal service providers
• a new regulatory framework (which on the 'Model B+' basis, i.e. setting up an Oversight Regulator, the Legal Services Board, and separating regulatory from representative functions within the front-line legal bodies)
  

The Clementi Report

Age Discrimination - Retirement Proposals Published

The DTI has published its post- age discrimination retirement plans.

Main proposals:

- the default retirement age of 65 will be maintained, but with employees having a right to request to work beyond 65 which employers must seriously consider (oh please - anyone fancy some fudge?)

- the right to request will follow the model of the right to request flexible working - i.e. the employer has to give a reason for the refusal, but it cannot really be challenged on any sensible grounds in a tribunal.

- monitoring of the retirement age to see if it should be changed in five years time (err... so what has the DTI been doing for the last five years?)

- employers will be allowed to have a retirement age of under 65 if it can be objectively justified, i.e. if it is "appropriate and necessary".

Draft legislation on age discrimination is now being promised for consultation in the summer of 2005.

Full Text of the Statement to Parliament

Age Discrimination - Retirement Proposals Published

The DTI has published its post- age discrimination retirement plans.

Main proposals:

- the default retirement age of 65 will be maintained, but with employees having a right to request to work beyond 65 which employers must seriously consider (oh please - anyone fancy some fudge?)

- the right to request will follow the model of the right to request flexible working - i.e. the employer has to give a reason for the refusal, but it cannot really be challenged on any sensible grounds in a tribunal.

- monitoring of the retirement age to see if it should be changed in five years time (err... so what has the DTI been doing for the last five years?)

- employers will be allowed to have a retirement age of under 65 if it can be objectively justified, i.e. if it is "appropriate and necessary".

Draft legislation on age discrimination is now being promised for consultation in the summer of 2005.

Full Text of the Statement to Parliament

Pensions Report

The Employer TaskForce on Pensions, chaired by Sir Peter Davis, has just published its report and recommendations into the pension industry.

Note that this report was commissioned by the Department for Work and Pensions. It is a DIFFERENT report from the Pension Commission's report published a couple of months ago (see bulletin 12/10/04), in respect of which recommendations are awaited next year, and is far less controversial.

The report makes a number of recommendations to employers, employees, unions, the financial services industry and the Government.

For employers:
- To recognise they have a responsibility to help fund the pensions of their employees
- To aim to achieve over time combined contribution levels of around 10-15%, with employers ideally providing 2/3 of this
- To recognise the importance of maintaining fairness in the shift from Defined Benefit to Defined Contribution (or other) schemes

For the Government:
- To provide a stable, long term framework for UK pensions with clear guidance on who should be saving, and achieve a broad policy consensus on the way ahead
- To provide stability for medium and large employers by maintaining current levels of financial support for pensions
- To tackle the challenge of pension provision among smaller businesses by introducing a new targeted financial incentive to encourage employer contributions.

For employees:
- To take responsibility for their own pension provision and contribute to their pension schemes
- To recognise employer support for pensions as a key benefit

For unions:
- To promote awareness of the need to save for retirement among their members
- Encourage their members to join good occupational pension schemes and to make contributions

For the financial services industry:
- To work with Government to review the annuities market
- To provide better service especially to smaller businesses

The report is not yet on the internet, but should be available shortly on the Pension TaskForce's website.

Website of the Employer's TaskForce on Pensions

New EAT Practice Direction

Yesterday, the EAT handed down a new Practice Direction which came IMMEDIATELY into force (9th December 2004).

It is broadly similar to the December 2002 Practice Direction, which it replaces, but is updated to reflect the new EAT Rules of Procedure.

The main changes include:

- clarification of the documents that MUST be lodged when lodging a Notice of Appeal;

- clarification of time limits for lodging an appeal;

- refining the 'sift' procedure;

- a new section dealing with wasted cost applications against legal representatives.

The Practice Direction is not yet available on the EAT website (I have been told it is going up within the next couple of days). I will send another bulletin with the link as soon as the Practice Direction is placed on the net.

Acas to be involved in EAT appeals

Acas to be involved in EAT appeals Also handed down yesterday (but not yet on the EAT website) is a new EAT Conciliation Protocol.

In cases involving allegations of bias or pure money appeals, the EAT will now consider referring the case to Acas for conciliation.

This is to run as a four month pilot project from 1st January 2005.

Again, as soon as the Protocol is published on the net, I will send another bulletin with the link.

Definition of Disability

The Disability Discrimination Bill has been laid before the House of Lords.

Amongst other things of no interest to employment lawyers, it amends the Disability Discrimination Act 1995 to change the meaning of 'disability' as follows:

- abolishes the need for a mental impairment to be 'clinically well-recognised'

- deems cancer, HIV and multiple sclerosis to be disabilities, irrespective of whether there are any symptoms (subject to further exempting Regulations, not yet published).

Disability Discrimination Bill

[Thanks to Simon Jeffreys of CMS Cameron McKenna for passing me this information]

ACAS E-Learning Guides

Acas has launched two new E-Learning Guides, to add to its existing guides on Discipline & Grievance, Informing & Consulting, and Absence

Guide 4 is on contracts and written statements. It includes a useful section on how to vary terms and conditions of employment - something frequently overlooked or got wrong.

Guide 5 is on redundancy. It covers definitions of redundancy, collective and individual consultation, statutory and voluntary information, selection procedures and obligations to employees facing redundancy.

You need to register with Acas (free) to access the E-Learning Guides.

Acas E-Learning Guides

Redundancy: Failure to Consult

The Employment Appeal Tribunal has considered the position as to protective awards subsequent to the Court of Appeal's judgment in Susie Radin v GMB earlier this year. In Susie Radin, the Court of Appeal held that protective awards were punitive (rather than compensatory) in nature, and the starting point for a total failure to consult would normally be the maximum award of 90 days' pay.

In Smith v Cherry Lewis, the Respondent employer was insolvent. The receiver dismissed all 45 employees on grounds of redundancy without any consultation.

The tribunal chairman held it would not be just and equitable to give any protective award since, under the Susie Radin principles, an award would have no punitive effect on the employer since it was insolvent and the DTI fund would pay any awards.

The EAT reversed this. It held that in assessing the protective award, the tribunal should look at the employer's fault at the time of the failure to consult, not at the time of the Claim Form being lodged or tribunal case being heard. That the employer was insolvent, or that the DTI would pay any award, were irrelevant factors and should not have been taken into account.

Cox J. stated that the 'punitive' purpose to the protective award is not retributive in nature, but dissuasive (so as to discourage employers from ignoring the consultation rules). She substituted the maximum award of 90 days' pay for the Appellants.

Smith v Cherry Lewis

Annual Increase in Tribunal Limits

The annual increase in limits on various tribunal awards has just been announced. The increases take effect on 1st February 2005.

The main increases are:

- limit on a week's pay: from £270 to £280

- maximum compensatory award: from £55,000 to £56,800

The full list of increases can be found in the statutory instrument, below.

The Employment Rights (Increase in Limits) Order 2004

[Thanks to Ed McFarlane of Qdos Consulting Limited for giving me the above information]

ET1 and ET3 forms available for download

Hard (and online) copies of the new ET1 and ET3 forms are now available. These forms will be mandatory from 1st April 2005.

They replace the 'interim' forms which have been available since October.

These new ET1 and ET3 forms have been available for electronic submission for a few weeks on the ETS website, but neither downloadable nor hard copies have been available.

Now they are! The ET1 is 9 pages long; the ET3 a meagre 5 pages.

[Thanks to Andrew Cohen of W Davies & Son for telling me about this]

Download forms from ETS website

Combined Equality and Human Rights Commission

The DTI has, this morning, announced changes to its plans for a single Combined Equality and Human Rights Commission ('CEHR'), which is intended to incorporate / replace bodies such as the EOC, CRE and DRC from 2008/09.

These changes are being made in response to widespread consultation which took place over the summer.

The main changes include that the CEHR will:

• have freedom to set its own priorities over which equality cases it supports: there will be no statutory criteria;
• be able to bring certain proceedings in its own name (without reference to the Secretary of State)
• be able to conduct inquiries into named bodies or sectors;
• publish a regular 'state of the nation' report.
  

DTI Press Release 18/11/04 @ 11.45am

5th edition of Ogden Tables published

The Government's Actuarial Department has, last week, published the 5th edition of the Ogden tables.

The tables are widely used in personal injury cases. The EAT recently reminded us that they are generally inappropriate in employment tribunals (see bulletin 9/11/04), although I have never really understood the difference in principle between calculating long-term PI damages - where these tables are always used - and long-term employment damages.

However, the EAT acknowledges the use of the Ogden tables when calculating pension losses.

The discount rate was set by the Lord Chanceller in July 2001 as 2.5% (under the Damages Act 1996, which gives power to prescribe the discount rate in personal injury cases). This rate is also usually adopted in employment tribunals, although the Damages Act 1996 does not actually oblige tribunal's to adopt the Lord Chancellor's prescribed rate.

View the Ogden tables 5th edtn. (656k, Adobe Acrobat needed)

[Thanks to Horwath Clark Whitehill, forensic accounts, for notifying me of the new edition of the Ogden tables]

Visit Horwath Clark Whitehill website

ACAS E-Learning Guide - Absence at Work

Acas has published the third in its series of E-learning guides. The new guide, Managing Absence, follows on from their earlier E-learning guides on Information and Consulting, and Discipline and Grievance.

The guides are in a series of small 'units', such as 'What is absence and what is the cost?', 'How do you handle long-term absence' and 'How do you handle short-term absence'. Some of the units have a short quiz at the end.

These guides are a good first-reference point for employers, HR professionals and advisors, but are probably a little basic for specialist employment lawyers.

You need to register with the Acas website to access the guides. Registration is free.

Acas E-Learning Guides

Long Term loss of Earnings

The Employment Appeal Tribunal has produced another decision, following on the footsteps of Dunnachie (no. 3) last year, warning tribunals against using the Ogden tables when calculating future losses.

Burton P. repeats his warning about using a 'broad-brush' Ogden table approach to future losses, particularly where the Claimant "is as young as 31 or 32" (para. 17.1).

He also made it clear that his warning against an Ogden table based approach applies to discrimination cases as well as unfair dismissal cases (Dunnachie being an unfair dismissal case).

This is another useful decision for Respondents who are resisting substantial long-term loss of earnings claims.

Birmingham City Council v Jaddoo

Intention to Vary Contract

The EAT has upheld an employment tribunal's decision that a conversation between the Claimant and his manager at the office Christmas dance did not amount to an enforceable promise to increase pay.

At the end of the company's annual dinner-dance, the manager promised the employee a substantial pay rise over the followign two years.

Two years later, although he did receive a substantial pay rise, it was not quite as large as the one he had been promised two years before. He resigned and claimed constructive dismissal.

The EAT held that the original promise was not contractually enforceable, as there was no intention to create legal relations. The tribunal had been right to take into account that the conversation took place during a social event when spouses attended, and was made during the "convival spirit of the evening".

Accordingly the Claimant failed in his constructive dismissal claim.

This case is worth reading - particularly the rather amusing opening paragraph.

Judge v Crown Leisure Ltd.