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Employment Law Update

Welcome to our Autumn 2006 Employment Law Update.  We hope that you are finding this new addition to our service a useful resource.  As always if you would like to discuss any of the issues raised in this update please contact Kerry Curd on (01392) 423000 or kerry.curd@sleeblackwell.co.uk.  We aim to send the next update by e-mail so if you have not yet provided us with your e-mail address please do so to avoid disappointment.

25% reduction in Claims at the

Employment Tribunal

Good news and bad news for employers. The good news first: The number of claims registered at the Employment Tribunal between April 2004 and March 2006 was down to 86,181 from 115,042, the previous year.  Average compensation awards were also relatively low.  The average award for unfair dismissal being £7,303 and for sex discrimination £14,158.  However, it is estimated that due to the new statutory dismissal and grievance legislation (See Spring 2004 update) figures may soon be on the increase.  This is mainly down to the creation of an automatic unfair dismissal if an employer dismisses an employee without adhering to procedure.

The bad news is that there have recently been a number of very high awards.  In the case of Lingard v HM Prison Service, an employer was ordered to pay a staggering  £477,000 for their failure to properly manage a whistle blowing incident!

Work-Related Stress

Stress can be defined as:

 “The adverse reaction people have to excessive pressures or other types of demand placed upon them”. 

As an employer, you are under a duty to look out for employees that could be suffering from work-related stress.  This will benefit both you and the employee.  Work-related stress is now the largest cause of lost working days and it is estimated that the cost to UK employers for absences by employees suffering from work-related stress amounts to £3.7 billion a year.   

    You need to be aware of relevant UK legislation:

• The Health & Safety at Work Act 1974 requires employers to maintain the health, safety and welfare of employees by providing a safe working environment and systems and providing training and information where necessary.

• The Management of Health & Safety at Work Regulations 1999 require employers to carry out health and safety assessments where employees are at risk.  This includes assessing the risk of stress related ill health arising from work activities and implementing measures to control the risks.

It is important to consider your business practices to ensure that you comply as failure could result in a costly claim for damages.  A well-designed policy is essential. 

Interview Technique!

Practical jokes can prove expensive.  A Glasgow-based boss has landed himself with 3 years on probation and a place on the sex offenders’ register for attempting to conduct a job interview naked.   He claimed he had done so because he was bored!

Although his behaviour could be described as ‘extreme’, the case should be a warning to employers of the risk of claims from job applicants who claim they have been discriminated against on such grounds as sex, sexual orientation or religion.  Be careful what you ask and keep written evidence.

More Equality Legislation

The Department of Trade and Industry has recently commenced consultation on the draft Employment Equality (Age) Regulations - due to come into force in October 2006.  They will apply to all employees, regardless of their length of service or the size of the workforce. 

As with other forms of discrimination, there is no limit on the amount of compensation you could be ordered to pay if you lose a case in the Employment Tribunal. 

The Regulations are likely to ban age discrimination in the processes of recruitment, training, promotion and retirement.  This will affect the type of comments that can be made in job advertisements, at interview, as well as the type of practices used for training and retirement.  

They will create a new ‘duty to consider’ in compulsory retirement situations.  Employers will have to notify an employee in writing not less than 6 months before the intended retirement.  The current age limit for unfair dismissal and redundancy rights (65 years) will also be removed.

Look out for further information in our future Updates

Non Competition Clauses

If your current contracts of employment do not contain an express non- competition clause you run the risk of an employee being able to set up in direct competition with you after your employment relationship ends.  Incorporating a clause into your employees’ contracts is the only way to ensure that your business is protected. 

However, a clause will only be valid if it is deemed to be ‘reasonable’.  Furthermore, due to restrictions on a person’s ability to earn a living, courts will only enforce this type of clause if you can show that you have a legitimate business interest that requires protecting.  The clause must therefore be carefully worded if it is to offer genuine protection.

The recent case of TFSS Derivatives Ltd v Morgan provides guidance on how to safeguard non competition clauses:

 1.  The clause should be well drafted without scope of ambiguity of    meaning.               
 2.  The employer must show that they have a legitimate business    interest that requires protection in relation to the employee’s employment.
 3.   The clause should not be wider than is necessary. 

We would advise that you check your existing contracts to see whether they are sufficient to protect your business needs.

Can a mental impairment be a disability?

Under the Disability Discrimination Act 1995 a mental illness has to be a clinically recognised condition to amount to a disability.  This limitation is set to be abolished by the new Act coming into force in October 2006 (Look out for further details in our next update).

However, it seems that we do not have to wait until then. The case of Dunham v Ashford Windows has confirmed that learning difficulties can amount to an impairment.  This has had the effect of expanding the remit of the 1995 Act as now non-clinically recognised illnesses can qualify as a disability. 

It is likely that we will see an increase in the amount of disability discrimination claims that are brought so take extra care in this area.

Employment Appeal Tribunal Cases

Sexual Harassment

In the recent case of Carney v Rouf and anor the Claimant had worked as a barmaid for only 4 months and claimed she had been persistently sexually harassed by her employer and a colleague over a period of 3 months.  She succeeded with her claim and the Employment Tribunal awarded the modest sum of £1,500 on the basis that 3 months was a short period of time. 

However, on appeal the Employment Appeal Tribunal increased the Claimant’s award from £1,500 to £8,500 due to the severity of the case and ruled that the Employment Tribunal had been wrong to say that 3 months was a short period of time. 

Employers must exercise caution with both long serving and new employees.

Parental Leave

The case of South Central Trains v Rodway (reported in our Winter 2004/5 update) has been to appeal and the decision that parental leave can only be taken in blocks of one or two weeks, as opposed to odd days, was upheld.

Job Sharing

In Lisa Lax Hardys v Hanson Plc, it was decided that an employer’s refusal to permit two females to job share one full-time position amounted to indirect sex discrimination.  The Employment Appeal Tribunal upheld the decision on the basis that the employer’s decision was not objectively justifiable. 

You must ensure that you take requests for flexible working arrangements seriously and take further advice if you are unsure what you are required to do.