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January 2011 Updates

Key employment law changes due in 2011

This is a brief overview of some of the changes due to happen in 2011. If you would like further advice on how these changes may affect you (including any impact on terms and conditions of employment and internal policies and procedures), please contact us.

Abolition of the default retirement age

After much speculation during 2010, the Government has now confirmed that it will be abolishing the default retirement age on a phased basis from 6 April 2011 onwards. It will be completely abolished by 1 October 2011.

From 6 April 2011, employers will not be able to issue new notifications of (compulsory) retirement. Any notifications issued before this date will still be valid, as long as:

  • They were issued to the employee before 6 April 2011.
  • The date of retirement is before 1 October 2011.
  • The requirements of the statutory retirement procedure have been met.

From 1 October, employers will not be allowed to compulsorily retire employees at the previous default age save for in very limited circumstances.

This is bound to cause practical issues for employers, particularly when considering workforce planning and ensuring that their policies and procedures are fair to all employees. ACAS has a flowchart with advice on what to do during the transitional period. This advice can be found on their website, which you can click here to view.

Changes to maternity and paternity leave provisions

Fathers of children with an expected week of birth (or placement for adoption) beginning on or after 3 April 2011 will be allowed up to 26 weeks' additional paternity leave if the mother returns to work before using her full entitlement to statutory maternity leave.

Also on 3 April 2011, the rates for statutory maternity, paternity and adoption pay will increase from £124.88 to £128.73 per week.

Right to request flexible working extension

On 6 April 2011, the right to request flexible working will be extended to parents of children under the age of 18. It currently applies to parents of children under the age of 17, or 18 if the child is disabled.

Equal treatment for agency workers

From 1 October 2011, agency workers will be entitled to equal treatment on basic employment conditions, such as pay and holidays, after they have worked in a role for 12 weeks.

Equality Act 2010

With effect from 6 April 2011:

  • Employers will be able to treat individuals with a "protected characteristic" (for example sex, religious belief or disability) more favourably during recruitment and promotion processes when faced with two or more candidates of equal merit, if the more favourable treatment is intended to address under-representation in the workforce.
  • The single public sector equality duty will be introduced. This means that those public sector organisations which are subject to the equality duty will be obliged to have due regard to the need to:
    • eliminate unlawful discrimination, harassment and victimisation;
    • advance equality of opportunity between different groups; and
    • foster good relations between different groups.

The Government Equalities Office has produced a detailed guide to the duty, which you can click here to view.

Bribery Act 2010: corporate offence introduced

In April 2011, a corporate offence of failing to prevent bribery which is committed by people working on behalf of the business will be introduced under the Bribery Act 2010.

Sexual orientation and third party discrimination

The Employment Appeal Tribunal has decided, in Lisboa v Realpubs, that "less favourable treatment on the grounds of sexual orientation" covers any case where sexual orientation, whether of the Claimant or a third party, is the cause of the detriment suffered by the Claimant.

The employer was transforming a formerly "gay pub" into a gastropub. While this was not objectionable, the methods of doing so amounted to less favourable treatment of gay customers. The Claimant was asked to display a board outside saying "this is not a gay club" and told to seat customers who did not appear to be gay in prominent positions. The Claimant eventually resigned.

This less favourable treatment of third parties on the grounds of their sexual orientation also amounted to less favourable treatment of the Claimant on that ground.

Reasonable adjustments

The Employment Appeal Tribunal has decided, in RBS v Ashton, that the test for a failure to make reasonable adjustments under the Disability Discrimination Act 1995 (now contained within the Equality Act 2010) is objective. What matters is the disadvantage suffered by the Claimant, not the reason the employer gives for, in this case, not making an adjustment.

The Claimant had her sick pay withheld under the employer's sickness absence policy. However, the policy suggested that the trigger for this would be relaxed for employees whose absences were disability-related. To that extent, disabled employees benefited when compared to non-disabled employees. The Employment Appeal Tribunal noted that, only in exceptional cases, would withholding sick pay in accordance with a sickness absence policy amount to a failure to make reasonable adjustments.

Consultation on Employment Tribunal system reform

The Government has published the much anticipated consultation on reforming access to the Employment Tribunal system, called "Resolving workplace disputes".

As expected, the Government?s proposals include increasing the minimum qualifying period for unfair dismissal claims from one year to two years, and requiring the payment of a fee in order to lodge a Tribunal claim.

The consultation period closes on 20 April 2011.

The Government has stated that its proposed changes to employment law are intended to "ensure maximum flexibility while protecting fairness and providing the competitive environment required for enterprise and growth". Perhaps the most controversial of these is the proposed increased qualifying period for unfair dismissal claims. The Government estimates that such an increase would result in between 3,700-4,700 fewer unfair dismissal claims per year. The Government believes that it would enable businesses to "feel more confident about hiring people" and create "more time for the relationship to get established and work well", and that it would not become "a charter for businesses to sack people unfairly".

The other proposals include:

  • Requiring parties to contribute towards the cost of running Employment Tribunals, and the Employment Appeal Tribunal, by paying fees. The Government intends to consult on the detail of this proposal in the spring.
  • Requiring all claims to be submitted to ACAS before a Tribunal to allow ACAS a period of up to a month to offer pre-claim conciliation. This is intended to enable potential Claimants to have a clear understanding of issues, such as how long a case might take, and what a Tribunal might award.
  • Introducing automatic financial penalties for employers who are found to have breached employment rights, on top of the ordinary compensation already payable. The penalty would generally be half the amount of the total award made to the Claimant, and would be payable to the Exchequer.
  • Extending the jurisdictions where Employment Judges can sit alone to include unfair dismissal claims where questions of fact can be analysed within a framework of law that is relatively uncomplicated or settled.
  • Removing the general requirement for tripartite panels in the Employment Appeal Tribunal, allowing more efficient use of lay member resources.
  • Reviewing the formula for the calculation of Employment Tribunal awards and statutory redundancy payment limits.

The Government has also published the much-heralded "Employers' Charter", which sets out in clear terms what employers can and can't do when managing staff.

The consultation can be viewed here.

The "Employers' Charter" can be viewed here.


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