Employment Law Update

1. Employment Law Update John Hallam, Director of HR 27th January 2006

2. Issues • Fixed term contracts – legal status / June 06 / termination / objective justification / redundancy / consultation / termination / statutory dismissal procedures • Age Discrimination – what’s in store?

3. Fixed Term Issues – Relevant Law • Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 • Employment Act 2002 (Dispute Resolution) Regulations 2004 • Trade Union & Labour Relations Act 1992

4. Can Fixed Term Workers Be Treated Differently? • Principle is that there should not be ‘less favourable treatment’ when compared with a permanent employee unless it can be justified on ‘objective grounds’. • Two approaches to less favourable treatment • Term by term approach • Package approach

5. Fire FightersMatthews v Kent & Medway Towns Fire Authority EAT/0698/02 The issue related to the differences between Fire Fighters and Retained Fire Fighters. EAT found: • Contractual working patterns were different • There were more differences than similarities • It was reasonable to treat the two groups separately Implications for sessional academics?

6. Fixed Term Workers – Features / Rights (1) • Non-Discrimination / no less favourable treatment • Right to written reasons / responses to allegations of less favourable treatment within 21 days • Same statutory employment protection rights as permanent staff (subject to qualifying periods) • Terminate on a specified date or on completion of a specified future event • Pregnancy protected (Webb v EMC Cargo (UK) Ltd, ECJ 1995 ICR 1021 • Reason for fixed term employment should be in writing and clear to the employee (written statement) • Continuity / gaps…….(umm….?!)…(statutory presumption for continuity) • Initially if contract for one month & then works for three months or more – permanent

7. Fixed Term workers – Features / rights (2) • Expiry of a FTC is a dismissal (i.e. right to claim unfair dismissal subject to requisite qualifying period) • Eligible for redundancy payment after two years • Right to full term of the FTC unless there is a notice period • Right to receive information about available vacancies ‘which the employee has a reasonable opportunity of reading’. • Right to be treated aspermanent from 10 July 2006 if more than 4 years service (from 10/07/02) unless there is objective justification for extension of FTC • Right to receive written confirmation / reasons within 21 days if requested if FTC extended beyond 4 years

8. Objective Justification A FTC may be objectively justified if it: • Is to achieve a legitimate business objective • Is necessary to achieve that objective • Is an appropriate way to achieve that objective [DTI Guidance PL512]

9. Termination of FTC’s • A non-renewal of a FTC is a dismissal in law and may also be a redundancy. • If redundancy, then statutory consultation requirements apply • If dismissal, then statutory dismissal process must be followed • Statutory dismissal procedure does not need to be followed when collective redundancy consultation applies but will be required in cases of less than 20

10. FTC’s and Redundancy -Consultation Requirements • TULCRA 1992 s. 188 imposes duty to consult employee representatives if 20 or more staff are to be dismissed as redundant at one establishment within a period of 90 days or less. • 90 days consultation if 100 or more employees or 30 days otherwise … and in any event ‘in good time’ • Purpose is to ‘avoid, reduce and mitigate.’

11. Statutory Dismissal Procedure Three step procedure: • A written statement setting out the rationale for the proposed decision • A meeting with statutory right to be accompanied followed by confirmation of decision (in writing) • Right to appeal followed by confirmation of decision (in writing)

12. Statutory Dismissal - Pitfalls • Failure to follow correct procedure can result in an automatically unfair dismissal • Maximum basic compensation for unfair dismissal is £58,400 wef 1/2/06 • Compensation may be increased by between 10% and 50% at discretion of ET

13. Age Discrimination Draft Employment Equality (Age) Regulations 2006 From 1st October 2006 it will be unlawful to treat people differently on grounds of age unless this can be objectively justified as being necessary and appropriate. Age discrimination law will be unique in relation to other discrimination law in that the principle of justification will be applicable to both direct and indirect discrimination

14. Key Provisions • National default retirement age of 65 – lower retirement ages only permitted if objectively justifiable. • New procedure for compulsory retirement requiring of employer a ‘duty to consider’ between 6 and 12 months prior to retirement. • Right for employee to request extension to work beyond date intended by employer. • Age restrictions on unfair dismissal and redundancy removed. • Limited exemptions e.g. Occupational pension schemes and up to 5 years allowed for qualification for certain other pay or benefits but beyond 5 years will have to be objectively justified.

15. Who is covered? • All employees • Unpaid workers but not unpaid volunteers • Self employed • Agency workers

16. Implications – Recruitment and Selection Length of experience? Requiring a certain qualification? Access to training? Employment agencies?

17. Implications – Service Related Pay and Benefits Exemptions • Where the benefit reflects higher level of experience or is to reward loyalty or increase motivation • Any length of service requirement of 5 years or less • Any length of service requirement that mirrors a statutory benefit e.g. maternity

18. Implications – Retirement 1 • Default retirement age of 65 • Employer duty to consider / employee right to request extension / obligation on employer to inform of right – no qualifying period • Compulsory retirement will constitute age discrimination / dismissal (but may be justified) • Unfair dismissal rules will apply • Law will distinguish between retirement age and pension age – two are separate • If employer and employee agree retirement date – no duty to consider (but what about changes of mind?) • If employer and employee do not agree about retirement date after age 65, duty to consider procedure will have to be followed with need to establish fair (legal) reason for dismissal (i.e. conduct, capability, legal right, redundancy, SOSR).

19. Implications – Retirement 2 • Failure to follow duty to consider process – compensation of up to 8 weeks pay • Failure to inform of right to request extension to work – dismissal automatically unfair

20. Implications - Pensions • Age Regulations will allow certain age related criteria in the operation of OPS’s e.g. the use of minimum and maximum ages for admission

21. Reviews • Draft Regulations? • Age Regulation provisions will be reviewed in 2011 to assess impact and effectiveness. • Case law as it develops.