Employment Law Newsletter Autumn 2010

In this edition of the Newsletter, we highlight some recent and forthcoming important changes in employment law. Employers should update their employment policies and procedures to take into account certain of these changes, if they have not already done so.

The Equality Act 2010 – Update

In our Spring Newsletter we gave details of the Equality Act and the parts that were expected to come into force this October. Since then, we have of course had a change of government and, while most of the Act will be brought into force on 1 October as planned, some parts have been put on hold to allow the government time to consider how best to implement them. Because of the importance of the Act, we have set out a reminder of its main provisions in this edition of the Newsletter. We will report on further developments as and when they occur.

Who Is Protected?

The Act covers nine ‘protected characteristics’: age; disability; race; religion or belief; sex; sexual orientation; gender reassignment; pregnancy and maternity; and marriage and civil partnership.

As well as a person having a protected characteristic, a claim for discrimination can be brought by a person who is ‘associated’ with somebody with the protected characteristic. For example, a man can be discriminated against by reason of pregnancy if he suffers less favourable treatment because his partner is pregnant.

Harassment by Third Parties

It is important to remember that employers can be liable under the Act if an employee is harassed by third parties such as customers if the harassment has occurred at least twice and the employer has failed to take reasonable steps to prevent it.

Health Questionnaires

Employers will be restricted in the questions that they can ask job applicants about their health, so it is important to review recruitment policies and documentation such as application forms to ensure that they are compliant with the Act.

Pay Secrecy Clauses

Clauses in employment contracts preventing employees from disclosing their pay to other employees will be unenforceable where the disclosure is made in order to ascertain whether any difference in pay may amount to discrimination.

Positive action

The provisions of the Act permitting employers to take positive action to recruit or promote one candidate over another where two or more candidates are as qualified as each other, where candidates who have a protected characteristic are under-represented or suffer a disadvantage are not coming into effect for the time being.

Combined discrimination

The part of the Act making it possible to bring a direct discrimination claim in relation to a combination of two protected characteristics is also on hold until at least April 2011.

Gender Pay Gap Information

The Act provides that large employers must report on their gender pay gap, but this provision will not be coming into effect until at least 2013.

However, for those employers who are interested in investigating and/or addressing the issue of the gender pay gap, the Equality and Human Rights Commission has published a guide to providing equal pay for small and medium sized businesses, which can be found on its website at www.equalityhumanrights.com. It estimates that it should take no more than half a day to check a 20 person business with 5 different jobs.

Default Retirement Age

As has been widely publicised in the media, the government has recently announced that it is proposing to phase out the default retirement age (DRA) of 65 and the statutory retirement procedures. It is currently proposing that, after 1 October 2011, employers will not be able to require employees to retire simply because they have reached the DRA, although they will be able to dismiss on the grounds of retirement where it is ‘objectively justified’.

The proposal, on which consultation is ongoing, is that the DRA and associated procedures will be abolished from 1 October 2011. For those employees who are due to retire before that date, the DRA will still apply, but employers must give notice of their retirement before 6 April 2011.

If these changes are brought into effect, it is likely to lead to a significant change in how both employers and employees view retirement.

Tribunal Claims Increase

The Tribunals Service reports annually on the numbers of claims brought before the Employment Tribunals and the Employment Appeals Tribunal. The latest figures cover the period from 1 April 2009 to 31 March 2010 and show an overall increase of 56% in the number of claims to the Employment Tribunal from the previous year. The increase is mainly due to multiple claims, such as equal pay, but there were 14% more single claims, with unfair dismissal and redundancy payment cases showing a marked increase, as might be expected in the current climate. Only 13% of all claims disposed of were successful at the tribunal, with 32% of them withdrawn (often after privately negotiated settlements) and 31% settled through ACAS, meaning that 24% were unsuccessful. Details of compensation awarded by the tribunals are limited and difficult to draw conclusions from, but it appears that they have increased overall from last year. For example, the median award in 2,886 claims with an unfair dismissal element is £4,903, up from £4,269.

The National Minimum Wage

The new hourly rates for the NMW from 1 October are:

• £5.93 for the standard rate
• £4.92 for the development rate (those aged between 18 and 20)
• £3.64 for the young workers rate (those aged under 18 but over the compulsory school age-except apprentices)
• £2.50 for the new apprentice rate (those ages under 19 or in the first year of an apprenticeship)

New Regulations for Employment Agencies and Employment Businesses from 1 October

These new regulations will, amongst other things, affect the way that jobs can be advertised, and the consent that is required from job applicants. Any employment agency or employment business that would like further advice on the regulations should contact us.

Knight-Webb Solicitors are specialists in employment law. We pride ourselves in providing a first-rate, cost-effective and personal service to clients. We can help you to avoid the employment law pitfalls and ensure that your procedures are up-to-date, taking into account all the recent changes in the law, including those outlined in this Newsletter. Contact Sunita Knight-Webb on 020 7207 6195 or at sunita@knightwebb.com .