Employment Law Bulletin

October 2009

NEWS

Vento Guidelines amended

The Employment Appeal Tribunal (EAT) in the recent case of Da'Bell v NSPCC UKEAT/227/09 is reported to have revised the Vento guidelines on injury to feelings compensation in line with inflation.

The Vento guidelines are used by tribunals to determine the appropriate value of an award for injury to feelings. The Court of Appeal in the Vento case set out three bands of potential award in discrimination cases which were set at £500 - £5000, £5,000 - £15,000 and £15,000 - £25,000.

To take into account inflation, the lower band is now reported to have been increased to £600 to £6,000, the middle band now stands between £6,000 and £18,000 and the higher band is £18,000 to £30,000.

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Tribunal statistics published

The Tribunals Service has recently published the final version of the Employment Tribunal and Employment Appeal Tribunal statistics for 1 April 2008 to 31 March 2009.

The statistics highlight an overall decrease in the number of claims, with the Employment Tribunals accepting 151,000 claims in 2008/9 compared to 189,000 in 2007/8. Of those submitted, there was a sharp rise in cases for redundancy pay, unfair dismissal claims and claims of breach of contract, with reductions in the number of equal pay and sex discrimination claims.

In 2008/9, the maximum compensation award in cases with unfair dismissal jurisdictions stood at £84,005 with the average award amounting to £7,959. In cases with race discrimination jurisdictions, the maximum award in 2008/9 totalled £1,353,432 and the average award stood at £32,115.

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Vetting and Barring Scheme launches

On 12 October 2009, the new Vetting and Barring Scheme was launched and introduced new criminal sanctions for non-compliance. The scheme introduced increased safeguards for checking the suitability of potential employees and volunteers to work with children.

As of 12 October 2009, the three barred lists previously in place were replaced by two lists to be administered by just one organisation, the Independent Safeguarding Authority. Those excluded by the two barred lists will now also be barred from a far wider range of jobs and will face criminal sanctions if they work or seek to undertake work with children or vulnerable adults. Employers may also face criminal sanction if they knowingly employ or engage a barred individual.

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Department for Work and Pensions publishes research report

The findings of a research report into racial discrimination in recruitment commissioned by the Department for Work and Pensions has recently been published.

The research carried out by the Ethnic Minority Employment Task Force, found significant discrimination in recruitment where the name indicated that the applicant was of an ethnic minority.

The findings of the research were compiled following the submission of a number of similar applications to actual vacancies. Of the 2,961 applications submitted, the research highlighted a 29% difference in favour of 'white British' applicants. The research indicated that an applicant with an ethnic minority name needed to send sixteen applications to receive a positive response compared to nine applications required by a white applicant.

The discrimination in recruitment demonstrated in the report was found to be more significant in the private sector than the public sector which is suggested to be as a result of the application of policies to reduce discrimination at this stage.

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LEGISLATION

New BIS Guidance on TUPE

It will be remembered that guidance on TUPE was published by the then DTI in 2006 to coincide with the publication of the TUPE Regulations 2006. This was revised by BERR in March 2007. In July 2009 the Guidance was further revised by BIS. The new version takes into account the repeal of the statutory dispute resolution procedures, information about which had to form part of the employee liability information required to be delivered under Regulation 11 of TUPE. Regulation 11 has of course now been amended so that information relating to disputes is:

“information of any -
(i) Disciplinary procedure taken against an employee;
(ii) Grievance procedure taken by an employee

Within the previous 2 years, in circumstances where a code of practice issued under part (iv) of the Trade Union and Labour Relations Act 1992 which relates exclusively or primarily to the resolution of disputes applies” (Reg 11(2)(c)).

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CASES

Heyday loses its challenge of the default retirement age

The Age Discrimination Regulations introduced on the 1st October 2006 set a default retirement age of 65 which was legally challenged by the charity Heyday, a division of Age Concern. Heyday argued that the default retirement age amounted to discrimination against older workers, in particular because the Government had no relevant consistent official policy aim and because the default retirement age of 65 was not proportionate.

After hearings before the UK Court and the European Court of Justice, the High Court has concluded that the default retirement age was not unlawful when it was introduced but, if introduced today, there would be powerful reasons why a higher default retirement age would have been adopted. The changed economic circumstances, creation of a cultural change in relation to age discrimination and retirement, ensuring that the default retirement age reflected the increase in state pension age and a longer living population are some examples.

A significantly influential factor in the outcome was a recent announcement that the Age Discrimination Regulations would be reviewed by the Government in 2010. The Court expressed its view that there was presently no basis for retaining the current default retirement age.

The 2010 review could result in the default retirement age being raised or removed. The Court presented a compelling case for change which is supported by the likes of Age Concern and The Employers Forum on Age. Age Concern points to the need for people to work longer to secure a decent retirement during the recession due to a drop in returns on savings and investments. The Employers Forum on Age supports removal of a fixed retirement age and points to a number of major organisations, particularly in retail, that have no retirement age and operate successfully on that basis. The benefits of removing a retirement age for Employers may include removal of the current retirement process and reduction in the risk of claims related to it.

For society as a whole, it could help address problems arising from an aging population and a weak current economic climate.

The 2010 review date is yet to be fixed and whilst a review does not guarantee change, the future of the retirement age in its current form looks uncertain.

Case reference: R (on the application of Age UK -v- Secretary of State for Business, Innovation and Skills and Others) [2009] EWHC 2336.

Employers may be able to access the criminal records of all staff following a landmark Court of Appeal ruling

A new ruling by the Court of Appeal means that employers might soon be able to access the criminal records of employees. The landmark ruling means that criminal records can be held on police computers for as long as is felt necessary.

The Case

Judgment in the case of Chief Constable of Humberside Police and Others v Information Commissioner, Secretary of State for Home Department Intervening, The Times, 22 October 2009, was given on the 19th October 2009.

This appeal was brought by Chief Constables of Humberside, Staffordshire, Northumbria, West Midlands and Greater Manchester Police against a decision made by the Information Tribunal in 2007.

The case in 2007 was a test case brought by five people whose minor convictions showed up in records checks after they applied for jobs. In one case, the complainant had been found guilty of stealing a 99p packet of meat and fined £15 when he was still a child in 1984. Another case concerned a £25 fine for a theft more than 25 years ago, while a third was over a caution for a minor assault as a child under 14. Their complaint focused on the retention of information regarding convictions, and the fact that disclosure of such information may follow. The five won the case and enforcement notices were issued against five chief constables to compel the deletion of the convictions from police computers.

The above appeal was allowed and the Court of Appeal ruled that criminal records can be held on police computers for 'as long as they feel necessary'. Lord Justice Waller concluded that, 'If the police say rationally and reasonably that convictions, however old or minor, have a value in the work they do, that should, in effect, be the end of the matter'.

Implications

If records can be held on police computers, they can be shared with the Criminal Records Bureau, which retains the right to show them to employers or potential employers. This means that employers will have greater access to more detailed records for prospective employees. Such information will go back much further than it has previously done so. However, it will not affect the type of information available to them, and the same rules will apply in relation to spent convictions.

The impact upon employers is unlikely to be significant, but they should continue to act reasonably in their response to information obtained regarding older convictions.

Practitioners have warned that an increase in exceptions to the Rehabilitation of Offenders Act and employment vetting could mean that minor indiscretions in people's youth could potentially go on to affect them for years to come.

A decision not to employ someone based upon the fact that they have a conviction may not be a reasonable one, and this will be particularly relevant when information regarding older convictions become available. Employers should continue to consider how old a conviction is, and how relevant it is in relation to a particular job role.

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EAT considers service provision change

The application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) has recently been considered by the EAT in the case of OCS Group UK Limited v Jones and Ciliza UKEAT/0038/09.

OCS Group Limited operated a number of service contracts at the BMW car plant at Cowley. One such contract provided for a restaurant and deli bar facility supported by four 'satellites' and a general shop. Mrs Jones and Miss Ciliza, the Claimants in this case, were employed as chef/supervisors in the satellites. The contract was not successful and was ultimately taken over by MIS in August 2007. The question therefore arising was whether TUPE applied.

Regulation 3(1)(b)(ii) provides that TUPE will apply to a service provision change where activities cease to be carried out by a contractor on a client's behalf and are carried out instead by another person (a subsequent contractor) on the client's behalf. It is also necessary to establish that there was an organised grouping of employees which had as its principal purpose the carrying out of the activities concerned on behalf of the client, that the client intends those activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task and that the activities concerned do not consist mainly or wholly of the supply of goods for the client's use.

The specific question in this case related to the activities carried out before the change of contract and thereafter. The tribunal at first instance held that TUPE was not engaged on the basis that no service provision change had occurred as 'the operation had changed from the provision of a full service canteen service where the Claimants were chefs to them becoming sales assistants in a kiosk'. The tribunal's decision was appealed.

The EAT held that the first question to be answered required the tribunal to define the activities being carried out by the first contractor. In finding that the activity to be a 'full catering service', the EAT held that the tribunal had been entitled to find that there were substantial differences in the new contract. The EAT found no fault in the tribunal's approach. That the contract later reverted and the operation of a hot food regime subsequently resumed was not found to be an attempt to avoid the implications of TUPE. The appeal was therefore dismissed. The narrow definition of the contract activities applied by the tribunal resulted in there having been no service provision change and TUPE did not, therefore, apply.

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EUROPEAN ROUNDUP

Collective consultation guidance from the ECJ

The question of when the obligation arises to commence collective consultation with employees has been the subject of much debate. In the UK, this obligation is framed as arising when an employer 'proposes' to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. The EC Directive dealing with collective redundancies, which the UK legislation sought to implement, provides that, where an employer is 'contemplating' collective redundancies, consultation shall begin in good time.

The European Court of Justice (ECJ) has recently handed down guidance on this issue following a referral from the Supreme Court of Finland in the case of Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers Oy C-44/08.

The ECJ, in considering when the obligation to consult arises, noted in agreement with the UK Government that, should the duty to consult occur prematurely, this could lead to results that would be contrary to the aim of the Directive by creating employee uncertainty and reducing employer flexibility. On this basis, the ECJ held that the consultation procedure should be commenced by an employer 'once a strategic or commercial decision compelling him to contemplate or plan for collective redundancies has been taken'. The ECJ did, however, highlight that commencement of consultation is not dependent upon the provision of all the necessary information which must be supplied to workers' representatives under the Directive and cannot therefore be delayed on this basis.

As the employer in question in this case was a subsidiary company, the ECJ was also required to consider whether the obligation arises when the parent company contemplates collective redundancies and whether the affected subsidiary needs to be identified in order to trigger the start of consultation. In this regard, the ECJ ruled that, whether or not collective redundancies are contemplated by a parent company or the undertaking which employs the workers concerned, it is always the undertaking which employs the workers which is obliged to commence consultation and it is not therefore possible to start consultation until the subsidiary has been identified. This may consequently lead to a delay between the obligation arising and the consultation being able to commence.

Although UK legislation in this area has often been regarded as defective in failing to implement the Directive properly, the ECJ ruling lends support to the approach adopted by the UK Government. Employers must continue to remain mindful of their statutory obligations and ensure the minimum periods of collective consultation are complied with.

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