| And Briefly - Current Employment Issues compiled by Olga Aikin |
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TUPE The Government has finally produced draft TUPE Regulations - but the response to the consultation exercise has been so great that they are delaying implementation until April 6 2006. There are several welcome provisions in the draft Regulations including
But even these proposals are not without their problems
The full text of the response of Olga Aikin and Yvonne Bennion to the TUPE consultation is appended to this And Briefly... AGENCY WORKERS AND VOLUNTEERS In a surprising and disturbing majority decision the Court of Appeal has said that agency temps could have an implied contract of employment with the end user ( Dacas v Brook Street Bureau [2004] IRLR 358 CA). Their decision was based on the facts , in particular that the end user, Wandsworth,
But this will be the case in most temp situations. The majority of the Court were clearly determined to find she was employed and thought the end user would be the most appropriate person. Their glib assumption that there is no problem until the temp has been working for one year, when unfair dismissal clocks in, ignores those claims which start at day one - particularly equal pay and equal value claims. There is also a problem under the new TUPE regulations. The transferor will have to decide whether they are employees and inform the transferee. If they fail to do so –or get it wrong- they could be fined up to £75,000! But the EAT has taken a completely different approach when deciding whether a volunteer is an employee. They look for a real contract and analyse its terms ( Melhiush v Redbridge CAB [2005] IRLR 419 EAT) with the result that few volunteers are employees. THE WORKING TIME REGULATIONS It looks as though the 48 hours opt out is good for another year as the UK was joined by sufficient other member states to create a blocking minority and so prevent any change. But relief at this has to be tempered by the decision in The Inland Revenue v Ainsworth [2005] IDS 781 CA. It was decided that
It is, of course, always possible to be more generous. Ainsworth is expected to be appealed to the Lords. MATERNITY The European Court have decided that maternity leave and paid leave are mutually exclusive, so the woman cannot take her holiday when she is on maternity leave (Gomez v Continental Industrias del Caucho SA [2004]) but, on the other hand, she must not be deprived of her leave, that would be discrimination. This poses a problem for employers where the end of a leave year falls during maternity leave. Under the Regulations her leave has to be taken in the year of accrual and there can be no pay in substitution of leave. But under Gomez she is still entitled to her leave. Many employers are allowing her to transfer the leave to the next year or paying her for it. Unlawful it may be but happy employees tend not to sue. The full text of the response of Olga Aikin and Yvonne Bennion to the Consultation Documement on Family Rights is appended to this And Briefly....... DISCRIMINATION There really has been a change to the burden of proof in discrimination cases. The early decisions which indicate otherwise were wrong. (Igen Ltd v Wong [2005] IRLR 258 CA). Once the tribunal, having looked at the facts and drawn appropriate inferences, has concluded that there could be discrimination it is for the employer to show, on the balance of probabilities that discrimination did not occur. Proving a negative is always difficult. Dunham v Ashford Windows [2005] EAT is the first reported case on discrimination where the mental impairment did not consist of a mental illness. Under the current provisions of the Disability Discrimination Act where a mental disability consists of a mental illness that illness must be one which is generally recognised as a clinical condition. But mental impairment is wider than that and includes conditions such as learning difficulties which are not illnesses. These do not have to be generally recognised. Of course the employee still has to be substantially affected in his normal day to day activities and this must last for 12 months. COMPROMISE AGREEMENTS In Hinton v University of East London [2005] IRLR 552 CA it was confirmed that only those statutory rights specifically particularised in the agreement itself can be compromised. Claims discussed during negotiations but not mentioned in the agreement are not compromised. The Court also insisted that the compromised claim should be clearly identified and that it was good practice to describe the allegations.. They deplored long lists of virtually every possible claim and said the compromise should be tailored to the circumstances of the case. Olga Aikin Introduction We welcome the opportunity to comment. Our answers to questions posed in the consultation document and other points are given below. We understand that views are not sought on the underlying policy issues, which have already been decided. Therefore our comments are directed towards making the regulations understandable and workable. We are responding as experienced employment law and employee relations advisers and will be pleased to answer queries on our response. Regulation 2 B Interpretation Question 1: Do you consider that draft Regulation 3 would effectively implement the Government=s decision to extend the scope of the Regulations, to give comprehensive coverage to service provision changes? If not, how should it be amended so as to achieve that aim? While we agree that the one off purchase of services for a particular event should not fall within the scope of TUPE ( and does not now following the need for stability in the sense of the existence of a future need for the service as expressed by the ECJ in the Rygaard case [1996]) the regulation needs further clarification. '3 -(3)(ii) the client intends that the activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task;...' Question 2: Do you consider that a professional business services exception should be incorporated, as suggested at draft Regulation 3(3)(b)(ii)? If so, please state which specific services you consider should be listed in the Schedule, and in each case: There is no logical reason for excluding professional services or the provision of goods.Firstly mergers and acquisitions of one part of a professional service by another or one provider of goods by another should be covered. There is growth of multi functional and umbrella organisations, largely through mergers and acquisitions and their employees are also entitled to protection. As far as the provision of the professional service or goods isconcerned, the difficulty lies in distinguishing the loss of a client from the loss of an economic entity. The requirement for dedicated staff and for the business to be able to stand alone before the transfer will often prevent the customer or client becoming an economic entity of its own. But with large contracts for professional services or the provision of goods these requirements will be met. On balance we are not in favour of any exclusion. Question 3: Do you consider that draft Regulation 4 represents an effective implementation of the Government's decision to update and clarify Regulation 5 of the existing Regulations? Draft Regulation 4 concerns the effect of a relevant transfer on the contract of employment. Assigned employees: It would be helpful if the regulation could refer to both express and implied assignment. This should not go as far as to specify a percentage of time spent, as that is only one of the facts to be taken into account. There is also the issue of employees with poor performance and attendance records being assigned to the transferring unit to replace skilled staff. It is quite understandable that a contractor will put good staff into the unit at re-tender time to retain the contract and not want them to transfer to the new employer. But Olga Aikin has experience of staff who have been off sick for 3 months and have never worked in the unit being expressly assigned to it just before transfer. It would be helpful if the transferee could refuse to accept a transfer of an employee who had never actually worked in the unit prior to the transfer. We agree with the exclusion of temporary assignments. The problem of fixed term contracts which come to an end at the same time as the service contract needs to be considered. It is quite common for employees to be taken on for the life of the contract. In such instances the employee does not transfer to the transferee because he is not employed at the time of the transfer. His dismissal is not due to the transfer but to the expiry of his fixed term contract. He would appear to be redundant and the transferor would have to bear the cost. Or, because his contract would have been renewed if the transferor had not lost the contract, does the liability transfer to the transferee under Litster v Forth Dry Dock and Engineering Company Ltd [1989] IRLR 161? Variation of terms where a dismissal would be justified as an eto (economic, technical, organisational reason):Although there are doubts as to whether this is permitted by theDirective it is a sensible provision and worth the risk. (Foreningen AF Arbedjsldere I Danmark v Daddy's Dance Hall A/S ECJ [1988] made it quite clear that the employee could not agree to any contract change to his detriment where the change was connected with the transfer - and made no exception for eto changes.) Question 4: Do you consider that draft Regulation 7 represents an effective implementation of the Government's decision to update and clarify Regulation 8 of the existing Regulations? Question 5: Do you consider that the provisions of draft Regulation 8 effectively implement the Government's decision to take advantage of the first of the two options in Article 5.2 of the Acquired Rights Directive? and Yes. We believe so, though we are not experts in insolvency law. Question 7: Do you consider that draft Regulations 11 and 12 represent an effective implementation of the Government's decision to take advantage of the Member State option in Article 3.2 of the Acquired Rights Directive? Is the High Court the most appropriate judicial forum for considering complaints under draft Regulation 12? Regulations 11 and 12 cover employee liability information. The information under Regulation11 only goes to the transferee - so it cannot be used in the tender process. It should be specified that it does not include any employee who has refused to transfer. We are concerned about the information being given through a third party. We would like this to be restricted to information lawfully held by a third party ( eg a pay role bureau) being transferred by that third party. The information should not be transferred to the client and by the client to the new contractor. This is confidential information and also subject to the Data Protection Act. In our example the client has no need to know. It is not always clear whether an employee has a legal claim. Much employment legislation is new and needing clarification from the courts. As above, it is not always clear whether or not agency workers are employed by the end user. Following cases such as Albion v Walker (Albion Automotive Ltd v Walker and others [2002] EWCA Civ 946 CA) redundancy and other policies which are not referred to in the contract may, by custom, be contractual. So Regulation 11 places an enormous burden on the transferor. He will not always know whether employees are likely to bring a claim eg a stress claim It will require him to take legal advice, and given the penalty many advisers will refuse. The caveat emptor rule should not be changed to this extent. The transferor should only have to : 1. Identify the transferring staff It would be more equitable, as far as claims are concerned, to adopt joint and several liability. In that way liability for events prior to the transfer can always be made the transferor's liability - unless he is insolvent in which case the employee can claim against the transferee. If the unlawful events (eg harassment) continue after the transfer then each will bear responsibility in accordance with fault. Where the transferor has insurance cover the insurance company can be called upon to pay up. We think that claims should go to the High Court, that the transferee should have to show that the transferor either deliberately or negligently failed to disc lose the information, that the penalty should not exceed the loss suffered by the transferee. It should be damages, not a penalty. Question 8: Do you consider that draft Regulation 16 represents an effective implementation of the Government's decision to make the transferor and transferee jointly and severally liability for any ELCI liabilities that transfer, in cases where the transferor is a public sector employer not subject to, or exempt from, the requirement to effect ELCI insurance? © Copyright Olga Aikin CBE and Yvonne Perry June 2005 London
Introduction We welcome the opportunity to contribute comments. Our answers to some of the questions posed in the consultation document are given below. We are responding as experienced employment law and employee relations advisers and will be pleased to answer queries on our response. We have advocated and supported strong maternity and parental provisions from the outset. However, we are now concerned that the Government has not recognised the very real practical difficulties small firms face in covering maternity leaves successfully. The failure to appreciate their predicament is at odds with the Government's intent to encourage entrepreneurs and may well have the effect of discouraging small firms from recruiting young women. Q1 In changing the qualification requirements for maternity leave, which of the stated options is preferable? We prefer Option 1: extend entitlement to Additional Maternity leave (AML) to all women who qualify for Ordinary Maternity Leave (OML) and take this view in light of the Government's stated intention (Para. 2.5 and 2.29) to increase paid maternity leave. Option 3 (abolish AML and extend OML to 12 months with different rights of return dependent on the period of leave taken) would be messy and we doubt that women would understand their rights more easily. Right to return after AML for small employers We do not support removing the exemption for very small firms. Holding a job open for such a long period is extremely difficult and often impractical for them. Unlike large employers they do not have the staff turnover which would enable them to recruit permanent rather than replacement staff and they may not be able to meet the cost of temporary agency workers. It would be better to retain the exemption but redraft it to ensure that small firms do not fall foul of unfair dismissal and Sex Discrimination Act law. We are also concerned about the potential effect of recent agency case judgments which have decided that the end user or hirer is in fact the employer of the agency worker. This will impose liability for maternity pay/leave if the agency replacement becomes pregnant and add to the difficulty small firms may have coping as a result (Dacas v. Brook Street Bureau (UK) Ltd. and Cable and Wireless v. Muscat). Longer term Para 2.29 Extend paid maternity and adoption Q2 Are there other measures the Government should introduce to make the system of maternity and adoption leave and pay simpler to understand and administer for employers and employees? Consolidation of the law would be helpful, to include some clarification on sex discrimination and maternity, and preferably all in one statute. Q3 What should be the guiding principles for setting the level of flat rate payments, including the percentage of earnings covered for those parents who receive less than the flat rate? The essential principle is that a person should have sufficient money to sustain themselves. Determining the level needs to be consistent with Statutory Sick Pay and the National Minimum Wage. Q4 Should mothers have to confirm their date of return from leave? Two separate issues are involved and this is not made clear in the consultation. 1. How much notice should the employee give if intending to return early? Mothers should have to give advance notice of their return and to confirm this two months before the date of return. 2. Should the employer have the right to require the employee to confirm intention to return (whether early or at the end of leave is immaterial) and if so should she lose her right to return if she says "no" or fails to reply without good reason? We think she should, but not before the 4th month of leave. Q5 Should we extend the notice period for early return? If so, what should the new notice period be? The notice period for early return should be extended to two months. Three months as suggested in Option 3 would be hard on the mother. Q6 Are there other steps the Government could take to ease the Clarification would be helpful on what happens if the mother does not comply with the initial notification requirements of intention to take leave and date of commencement. Q7 How can dialogue and communication between employers and mothers be improved before and during maternity leave? We support the second option proposed: to spell out in the law that an employer can make reasonable contact with an employee during maternity leave. Guidance needs to explain what is reasonable. We recognise that some women find this intrusive, but it is key to their successful re-entry that they are kept in the picture, not just about major change, but normal progress and opportunities for their own development or promotion. The notes of regular team briefings and continued access to the company intranet where possible are useful. We suggest that new mothers respond most positively to other women who have had children and experienced maternity leave and return. Manager and mother will benefit if such staff are involved in helping to keep in touch with women on maternity leave. Q10 How much statutory maternity leave and pay should mothers be entitled to transfer to fathers? Mothers should be able to transfer some of their additional leave to the father, or OML and AML post six months when paid maternity leave is increased as the Government intends. Q12 How much notice should the mother and father provide their employers when transferring leave and pay? The mother should provide two months notice. She is returning from leave, so the period should be the same as for early return. The father should give the same period of notice to his employer B and the same period if he is to return early. There should be no facility for the father to transfer leave back to the mother. Once the mother has returned she should no longer be entitled to maternity leave. Q13 Are there any other issues the Government needs to consider when designing the right to transfer maternity leave and pay? The definition of 'father' should be the one used for paternity leave, rather than the one for parental leave. The Inland Revenue compliance check as in Para 4.33 will be appropriate. Self- certification alone is not enough. Q19 How should the impact of the flexible working law influence the way we consider extending its scope to carers and parents of older children? The evidence the Government has produced of take-up amongst this group of carers indicates that other carers would benefit (Para 5.5-5.7). Q20 What is the case for extending the law to carers of adults? Many adults now find themselves in work and with caring responsibilities for (often elderly) relatives. In earlier generations, these responsibilities were less apparent because more women were at home and people did not live so long. There is considerable expense for employers in losing experienced staff who cannot reconcile their caring responsibilities with their jobs. Carer employees face having to take less well paid and interesting work elsewhere, or leaving work altogether. Such responsibilities often arise when the carer is in middle age, just the point when the employment market is difficult for them. There is plenty of evidence that the morale and well-being of the elderly, sick and disabled is sustained by as much independence as possible, by being with friends and family and in their own homes, surrounded by the familiar. Extending the law opens up more opportunities for this to happen, enables the carer to continue to enjoy their work and pay, lessens the chance of the carer becoming overwhelmed by the caring and retains the carer's skills and experience for the employer and the economy. Undoubtedly, carers relieve health and social services of responsibilities and costs that would otherwise fall on the state. Extending the law would be tangible evidence that their contribution is recognised and is likely to be even more necessary as the costs of providing public services continue to rise. Caring should include home nursing, cleaning, food shopping, accompanying to medical appointments for sick and disabled adults. Q22 and 23 What is the case for extending the law to parents of older children? When might we do this? What would be the age cut-off? There are many valid and visible societal arguments for helping parents to cope better with the needs of children in formative and teen-age years. The existing law has the effect of an arbitrary and all too early cut off point. The law should be extended to carers of adults and to parents of older children at the same time in the forthcoming planned legislation. We suggest that the new law should cover carers of any dependent relative, including brother or sister and parents of children between 6 and 18. Employers need the extension of flexible working to contribute to fair flexible working policies and practices that are not seen as favouring some employees at the expense of others. Caring responsibilities are not the only legitimate reasons for asking to work flexibly. We suggest that all employees should have a legal entitlement to have their requests to change the terms of their contracts for domestic or personal reasons considered fully and fairly by the employer. We first made this proposal in our 2001 paper on modernising employment contracts for the former Industrial Society (now The Work Foundation) in the context of building in flexibility to deal with change. © Copyright Olga Aikin CBE and Yvonne Perry (Bennion) May 2005 London.
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