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August 2010 Updates

Legislation on 'one-in, one-out' basis from September 2010

From 1 September 2010, the Government will be introducing a "one-in, one-out" approach to legislation. What this means is that, where ministers wish to introduce a new piece of legislation which leads to costs for employers (and businesses in general), they must identify a current piece of legislation which has an equivalent cost and rescind it.

This will not, however, apply to legislation that relates to emergencies or is aimed at addressing systemic financial risk.

To coincide with this new approach, the Government has launched the "Your Freedom" website (at, to encourage people to nominate legislation that they feel should be removed or, at the very least, changed.

Employee benefits

The European Court of Justice has ruled that the majority of employee benefits provided under salary sacrifice schemes are subject to VAT. Salary sacrifice schemes are hugely popular, including "cycle to work" schemes, which allow employees to buy bikes at a substantial discount.

This ruling is likely to lead to employers dropping their salary sacrifice schemes.

Employer's ability to pay compensatory awards

In a recent judgment, the Employment Appeal Tribunal has stated, with no exception, that the employer's ability to pay an unfair dismissal compensatory award is not a relevant consideration when deciding the amount to be awarded. The sum awarded must be "just and equitable in all the circumstances, having regard to the loss sustained by the complainant."

Employment status

The Employment Appeal Tribunal has confirmed, in Community Dental Centres Ltd v Sultan-Darmon, that where someone is able, under the terms of a contract, to appoint someone else to carry out the work instead of them, this means they won't be considered to be an employee.

In this particular case, the Claimant, a dentist, brought an unlawful deductions of wages claim against his practice. The Employment Appeal Tribunal held that the Claimant's contractual ability to ask someone else to carry out the work on his behalf meant that he could not be an employee. This was because he was not obliged to "perform personally any work or services". Accordingly, his claim failed.

Disability discrimination

The Court of Appeal's decision in Aylott v Stockton on Tees Borough Council provides useful guidance in relation to disability discrimination claims.

The decision confirmed that the correct comparator in cases of disability-related discrimination is "someone who had behaved in the same way as the person concerned, but who did not suffer from that person's disability".

The Court of Appeal also confirmed that it is never possible to legally justify direct disability discrimination or a failure to make reasonable adjustments for someone who has a disability.


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SRA number 404293