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April 2012 Updates

Employment law changes

April of each year always brings with it some key legal changes. The main ones to take note of for 2012 are:

On 1 April

  • The weekly rate of statutory maternity, paternity and adoption pay increased from £128.73 to £135.45.
  • As you may know, from October 2012 employers will be required to automatically enrol eligible jobholders into a qualifying workplace pension scheme. You will need to check how many people were in your PAYE scheme as at 1 April to determine your "staging date" (the date from which you must auto-enrol employees). Companies with large numbers of staff will need to start this process sooner than smaller companies.

On 6 April

  • The weekly rate of statutory sick pay increased from £81.60 to £85.85.
  • The lower earnings limit for primary Class 1 national insurance contributions increased from £102 to £107.
  • The income tax personal allowance increased to £8,105.
  • The threshold at which employees pay the higher income tax rate of 40% was reduced to £34,371.
  • The maximum amounts of deposit and costs orders increased with the aim of reflecting more accurately the cost to employers of defending tribunal claims. The maximum deposit that a Tribunal may order a party to pay (where it determines that the party has little reasonable prospect of success), doubled from £500 to £1,000. The maximum costs order that a Tribunal may award in favour of a legally represented party also doubled from £10,000 to £20,000.
  • Tribunals have been given a new power to direct that the parties to a dispute are responsible for paying witnesses' expenses.
  • Employment judges will hear unfair dismissal cases alone (i.e. where there are no other claims brought).
  • To speed up tribunal hearings, witness statements will be taken "as read", i.e. the witness will not have to read the statement aloud and will go straight to questions from their Counsel (examination in chief) and the opposing Counsel (cross examination).
  • The qualifying period for making an unfair dismissal claim increased from one to two years. This change will not be applied retrospectively; it will only apply to employees who started their job on or after 6 April 2012.
  • The qualifying period for the right to receive a written statement of reasons for dismissal (if requested) also increases from one to two years.
  • Section 147 of the Equality Act 2010 has been amended to confirm that an employee's representative can be an "independent adviser" for the purpose of a compromise agreement. This clarifies the confusion which arose when the Equality Act first came into force, which seemed to suggest that an employee's representative would not be considered to be "independent" and could not therefore "sign off on" a compromise agreement.

If you would like to receive any further advice on any of the above changes, please do not hesitate to contact us on 01245 460 200. Full contact details can be found using the links below.

Are pupillages indirectly discriminatory?

In a very unusual case, Iteshi v The General Council of The Bar, the Employment Appeal Tribunal decided that the requirement by the Bar Council that pupils should be paid for their pupillage is not racially discriminatory to Black Africans.

The Claimant, who was a Black African from Nigeria, qualified as a Barrister in England. Like many others, he was unable to find a place in Chambers to complete his pupillage. Rules introduced by the Bar in 2003 made it obligatory for Chambers to pay pupils. The Claimant was unable to obtain a paid pupillage and although he was willing to accept unpaid pupillage, no Chambers was allowed to offer him this.

The Claimant originally tried to bring judicial review proceedings against the Bar Council but was refused leave. He then brought Employment Tribunal proceedings, which were unsuccessful. He then appealed to the Employment Appeal Tribunal.

His complaint was that requiring pupillages to be paid was indirectly discriminatory to Black Africans. The Employment Appeal Tribunal noted that the rule had been specifically introduced in order to help Black and Minority Ethnic (BME) pupils obtain pupillages.

They found that the number of BME pupils had in fact increased since the rule was introduced. The Claimant failed to produce any evidence that the rule affected prospective Black African pupils more than others. His failure to obtain a pupillage was not discriminatory.

TUPE

The Employment Appeal Tribunal has set out useful guidance in Argyll Coastal Services Ltd v Stirling & others on the right approach to deciding whether there has been a service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") regulations.

They made the following helpful comments:

  • 'An organised grouping of employees' suggests fewer employees than the transferor's entire workforce, who are deliberately organised for the purpose of carrying out the activities required by the particular client contract and who work as a team.
  • 'Situated in Great Britain' means just that, although part of the organised grouping may work outside Great Britain.
  • 'Principal purpose' should have its logical meaning (i.e. it need not be 'sole purpose', but it should be the main one).

When looking at the 'activities' carried out, consideration should be given to what it was that the client requires, rather than simply listing the activities. There should be a distinction between the 'activities' and other matters which may sit alongside those activities, but are not the activity itself (e.g. providing maintenance services at a property).

Effective date of termination

In Horwood v Lincoln County Council the Employment Appeal Tribunal has clarified the proper way to determine an employee's effective date of termination. If an employee resigns on one date, with immediate effect (for example, by providing a clear letter of resignation), this is the effective date of termination.

In this case, having received the Claimant's letter of resignation, the Respondent subsequently informed the Claimant that her resignation was to be taken as commencing on a later date.

The Employment Appeal Tribunal noted that the law does not allow the effective date of termination to be based on uncertainties (such as whether the letter would have been read on the date of receipt or not). The Respondent could not alter the effective date of termination so that it became a later date. The effective date of termination was, therefore, the date of the employee's clear resignation (i.e. the date of the Claimant's letter).

Costs in the Employment Tribunal

The recent case of Doyle v North West London Hospitals NHS Trust has highlighted that an Employment Tribunal should consider the potential paying party's ability to pay costs, in advance of making a costs order, even if the issue is not raised by or on behalf of that party.

The Tribunal's power to award costs is set out in the Employment Tribunal Rules of Procedure. It is one that Tribunal's do not use often, given the potential consequences to a Claimant and because such orders may discourage people who are bringing legitimate claims.

In this case, the Claimant's claims were struck out. The Employment Tribunal made an order that the Claimant should pay the Respondent's costs. These were substantial and estimated at around £60,000. The Tribunal did not consider the Claimant's ability to pay this amount and the issue was not raised by the Claimant's legal representative.

The Employment Appeal Tribunal agreed that a costs award was, in principle, appropriate. However, on the facts of the case, and given the large sum of money involved, the Employment Appeal Tribunal concluded that the Tribunal had made a mistake by not enquiring as to the Claimant's ability to pay such an amount before deciding on the costs application.

The case was referred back to the same Employment Tribunal to make enquiries into the Claimant's means and to consider what an appropriate costs order would be.

Email: info@stewartlaw.co.uk


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