Wright, Johnston & Mackenzie Solicitors

New Regulations for Additional Paternity Leave

The Additional Paternity Leave Regulations 2010 came into force on 6th April 2010.

These Regulations allow new mothers the right to transfer the second 6 months of their 12 months maternity leave entitlement to the father, if the mother has returned to work. The leave cannot start until at least 20 weeks after the birth.

This gives parents the option of dividing a period of paid leave entitlement between them. If this leave is taken during the mother’s 39-week maternity pay period it will be paid leave, paid at the same rate as Statutory Maternity Pay which increases to £124.88 in April 2010.

Parents will be required to self certify by providing details of their eligibility to their employer. Employers and HMRC will both be able to carry out further checks of entitlement if necessary.

The Regulations specify that additional paternity leave will be for a maximum of 26 weeks and a minimum of 2 weeks and will only have effect in relation to children whose expected week of birth begins on or after 3rd April 2011.

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National Minimum Wage Increase

National Minimum Wage rates are set to rise in October 2010 as follows:

• For workers aged 21 and over – from £5.80 to £5.93 an hour
• For workers aged 18 to 20 – from £4.83 to £4.92 an hour
• For workers aged 16 to 17 – from £3.57 to £3.64 an hour

From 1st October 2010, those aged 21 qualify for the full adult rate of National Minimum Wage. Currently, the qualifying age for the adult rate is 22.

The Government has introduced an apprentice minimum wage of £2.50 per hour.

The new rate will apply to:

• Apprentices under 19; and
• Apprentices aged 19 and over, but in the first year of their apprenticeship.

According to the 2010 Budget report, National Minimum Wage rates have risen by over 22% since a NMW was introduced in 1999.

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Right to request time off for training

From 6th April 2010, employees in businesses with 250 or more people will have the right to request time off work for study or training under new provisions in the Employment Rights Act 1996 introduced by the Apprenticeships, Skills, Children and Learning Act 2009.

All employees with 26 weeks continuous service in all businesses (regardless of the number of staff) will have the right to make a request for time off for study or training.

The right is to request for time off to study or train.  The time off must be for training or study that will help the employee to be more productive and effective at work, and which helps their employer to improve productivity and business performance.

The employer does not have to grant the request for time off. However, employers must be seen to take the request seriously, and can only refuse the request for specified business reasons, such as the additional costs to the employer.

Employees will have the right to bring a claim to the Employment Tribunal if the employer fails to comply with the procedural requirements and timescales set out in the provisions.

Employers should take particular care in compliance if they decide to refuse a request because an Employment Tribunal can award compensation of up to 8 weeks pay and order the employer to reconsider the request.

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Equality Bill

The Equality Bill has almost completed its passage through Parliament. When it becomes law the Bill will pull together disability, sex, race and other discrimination law into one piece of legislation.

As well as bringing together different strands of equality law, such as disability, race and sex discrimination, the Bill makes numerous changes to current law. There are some notable new employment related provisions in the Bill such as regulations that:

• Require employers to review gender pay differences within their organisations and to publish the results
• Make statutory provision for disability discrimination by association unlawful
• Give Employment Tribunals the power, when handing down judgements, to make recommendations for the collective benefit of employees

Some of the main changes within the Bill concern disability discrimination. The Government wants there to be greater transparency, including an obligation on public authorities to report on their disability employment rate. 

A single objective ‘justification’ test to replace the different tests currently used will be introduced. To rely on the justification defence, the employer will have to show that its conduct is a ‘proportionate means of achieving a legitimate aim’, and higher thresholds will be set. In other words, employers will not find it as easy to justify less favourable treatment.  ‘Proportionality’ will be a harder test to meet that the previous ‘reasonable opinion’ criterion.

The Government anticipates that most of the Bill will come into force in October 2010, but some parts may be delayed until Spring 2011. However, further changes may still be required depending on the outcome of the General Election.

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Pay in lieu of holidays

In Beijing Ton Ren Tang (UK) Ltd v Wang, the Employment Appeal Tribunal (EAT) held that an employee was entitled to a payment in lieu of all untaken holidays on termination of her employment, including her holiday entitlement from previous years.

In this case, Ms Wang did not have a written contract of employment. The EAT decided that the verbally-agreed terms provided that she would be entitled to 30 days annual leave and would be paid in lieu of any untaken holiday (including leave from previous leave years) at the end of her employment. Ms Wang was employed from 2001 to 2008 and, over the course of her employment, she had forgone 131.5 days annual leave. The EAT awarded her payment in lieu of all of those days.

Practical Implications - This decision was based, to a large extent, on the particular facts of the case, including the fact that Ms Wang did not have a written contract of employment and had not been allowed to take a holiday for three years.  However, it may open the door for other employees to argue that a contractual clause, which simply gives a right to receive payment in lieu of unused holidays on termination, should be interpreted to include outstanding holidays from previous leave years. 

To avoid this, you should review your employment contracts and make sure they are clear on this point.  If you have not received our Employment Alert on this please let us know.

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Summary Dismissal: Failure to obey instructions - Dunn v AAH Ltd

Where an employee has undermined the trust and confidence at the heart of a contract of employment, an employer should no longer be required to retain that employee in his employment.  The employee should accept that the contract for employment has been repudiated and so the contract is terminated.

In Dunn v AAH Ltd, Mr Dunn had precise, important risk management responsibilities and specific duties to report on problems of risk within the company’s operations to group headquarters in Germany.

He failed to advise his employer of a major problem emerging with a supplier. The problem concerned a substantial letter of credit and probably involved serious fraud. This neglect meant that he had denied the group headquarters the opportunity to assess the risk for themselves.  Because the employee had undermined the trust and confidence at the heart of the contract, the employer was entitled to dismiss the employee for gross misconduct.

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Loss of holidays

In Lyons v Mitie Security, the EAT held that an employee’s right to annual leave is not absolute.

Under The Working Time Regulations, if an employee wishes to take days of annual leave, the employee is required to give the employer twice as many days notice in advance of the proposed annual leave. Notice requirements may also be included in contracts of employment.

In this case, the employee requested annual leave towards the end of the leave year without giving enough notice.

Subject to an employer not acting in an unreasonable, capricious or unfair manner, the EAT were satisfied that, if an employee fails to comply with notice requirements, then an employee may lose his right to annual leave at the end of the leave year.

Practical Implications - If an employee does not comply with notice provisions and, for example, requested leave does not fit with the staffing patterns of the business, an employer is not legally obliged to permit an employee to take all of his paid leave within the leave year, and as a result the employee may lose his annual leave.

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Variation of Contracts of Employment

The EAT’s decision in Bateman v Asda Stores suggests that a contractual right to vary terms and conditions of employment can allow an employer to make unilateral changes to contractual terms.

In this case, the company varied the pay structure of 8,700 employees.

The EAT held that a condition in the company’s handbook, which reserved the right of the company to introduce new policies, entitled the company to change the employment contracts in relation to pay without the employees’ consent.

In coming to this decision, the EAT pointed out that provisions like the one in this case will always be scrutinised carefully and clear language is essential if one party is to successfully reserve the right to vary a contract.  In addition, the EAT stressed that, in exercising such a right, a party must not act so unreasonably, so arbitrarily or capriciously as to amount to a breach of the implied trust and confidence. For example, the EAT recognised that if a change to contractual conditions was introduced without notice or consultation, this may damage mutual trust and confidence.

Practical Implications - If you want to reserve a right to vary terms and conditions of employment, then we can ensure that the wording is clear and, therefore, has more chance of being enforceable.  Alternatively, if your contracts already include such a right and you want to enforce it, we can assist you with the procedures you should follow.

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Whistleblowing cases

As well as their more traditional role, Employment Tribunals also look at complaints where claimants believe that they have suffered a detriment at work, or have been dismissed, for making a protected disclosure in the workplace - often referred to as “whistleblowing”.

Currently Tribunals only deal with the employment aspects in whistleblowing cases. They do not make any assessment of, or take any action on, the issue underlying the allegation. For example, if an employee made a disclosure alleging corruption in the workplace, the tribunal would not forward information about that allegation to another authority.

The Department for Business, Innovation and Skills has put forward a proposal that tribunals should be given the power to pass on these allegations to a prescribed regulator and, as a result, for claims (or amended claims) arising on or after 6 April 2010, a number of changes will be put into place:

• The tribunal claim form (ET1) is to be amended so that claimants will be invited to tick a box, indicating whether their claim includes allegations of a protected disclosure (whistleblowing) and, if so, that they wish the tribunal to refer the allegations on;
• Where this box is ticked and the tribunal identifies a protected disclosure, the information will be passed on to one or more relevant authorities on a prescribed list;
• The Tribunal Rules of Procedure 2004, will be amended to allow for such disclosure of otherwise privileged information;
• Both parties to the tribunal proceedings will be contacted in writing by the tribunal to confirm that a relevant authority has been contacted and that a copy of the ET1 (or relevant extracts) has been disclosed.

Practical Implications - During the consultation phase of this proposal, some individuals were concerned that empowering the Employment Tribunal Service to forward details to other authorities would give claimants improper bargaining power.

The Employment Lawyers’ Association suggested that claimants could use this power as “leverage to get a higher financial settlement than they would otherwise expect” in return for not pursuing a serious allegation.  Time will tell as to whether this will happen.

In the meantime, you should remember that employees who have made a disclosure are protected against dismissal and detrimental treatment under the whistleblowing legislation.

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Legal Representation at Disciplinary Hearings

The decision of the EAT in G v X School provides that an employee should be afforded an opportunity to be legally represented at any disciplinary/appeal proceedings if the outcome of the proceedings will determine whether he or she can continue to practice his or her profession.

In this case, a teacher was subject to a disciplinary hearing in relation to allegations that had been made about his relationship with a pupil. The School advised the teacher that he was entitled to be accompanied at the hearing by a colleague or a trade union representative and that they would not permit a legal representative to attend.

The EAT held that the teacher was entitled to be legally represented at the disciplinary and appeal hearings on the basis that (1) the right to practice a profession is a ‘civil right’ and (2) the outcome of the disciplinary proceedings could determine his right to practice that profession.

Practical Implications - If the outcome of disciplinary proceedings may determine the general right of an employee to work in a particular field or fields, as opposed to determining only whether his current employment will end, then the employee should be allowed the opportunity to have legal representation present.

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