There was little of direct relevance to employment law in the Queen's Speech at the opening of the new parliamentary session on 15th November 2006.
There are currently 8 employment law Bills either before Parliament or known to be at draft stage plus another 4 before the Scottish Parliament. Notes on all of these (plus notes on recently enacted employment law related Bills and other relevant Acts of Parliament) are provided from the links below. The links below also provide an archive of recent dropped and/or lapsed employment law related Bills.
Summaries of ALL cases reported in ICR 2006 parts 1 to 11 and in IRLR 2006 vol 35 nos 1 to 12 are now noted/summarised on our website as well as ALL other cases reported in ICR and IRLR since January 2000. This is in addition to summaries and/or headnotes of around 2,000 other employment cases, new and old. For most cases there are direct links to free versions of the full judgments on the internet.
The Royal Bank of Scotland has won its appeal against an employment tribunal decision that it unfairly dismissed a long serving employee (of some 20 year standing) who took sick leave because of a stress-related illness. The Tribunal had held that the dismissal was unfair simply because the illness had been caused by the employer's unreasonable behaviour. The EAT held that this was an error of law - if that were the law it would mean that in such cases employers would be obliged to retain indefinitely employees who were incapable of any useful work. The proper approach is to decide whether dismissal was or was not within the range of reasonable responses open to the employer in all the circumstances - which of course include its responsibility for the incapability.
On 6th December 2006 the High Court decided to refer questions to the European Court of Justice in connection with an application for judicial review of the Employment Equality (Age) Regulations 2006 filed by Heyday (part of the National Council on Ageing). Heyday is arguing that the regulations do not properly implement the EC Equal Treatment Framework Directive 2000/78 as they allow employers to set a mandatory retirement age (albeit of 65 or over).
New compensation limits for tribunal claims will take effect where the "appropriate date" (for example the date of dismissal) is on or after 1st February 2007. They are set out in the Employment Rights (Increase of Limits) Order 2006 . These are annual RPI linked increases. The main changes this year include an increase from £58,400 to £60,600 in the maximum an employment tribunal can award as "compensatory award", for example in unfair dismissal cases (there is no maximum in discrimination cases). There is also an increase from £290 to £310 in the maximum amount of "a week's pay" when calculating basic award of compensation for unfair dismissal and/or statutory redundancy pay. Also it is worth noting that under the Work and Families Act 2006 the government has power to make a one-off additional, "inflation-busting", increase to the limits tribunals can award.
There has been concern for some while at the way the October 2004 dispute resolution procedures are working out in practice, introducing as they do new complexities where none were intended. As ever when Governments attempt to codify common sense there is an attendant increase in arguments available for advocates to use in court or at tribunal. An Employment Lawyers' Association working party produced a report earlier in 2006 which examined the many issues involved in considerable detail. The DTI has taken note and has announced in a Press Release on 7th December that it is now undertaking a review of options for "simplifying and improving all aspects of employment dispute resolution". Recommendations are due in Spring 2007. Hopefully the current rules will then be changed to remove at least most of the complications.
An example in November 2006 of how the well-intended October 2004 statutory dispute resolution procedures have created at least as many problems as they solve underlines the urgent need for their review (see note 6 immediately above). A dismissed employee filed a disability discrimination claim with an employment tribunal after the normal time limit had expired. He argued that as he had started a statutory grievance procedure under the Employment Act 2002 (Dispute Resolution) Regulations 2004 it followed that time was automatically extended by 3 months in accordance with those regulations and that his claim was thus presented in time. When the employer pointed out that the statutory grievance procedure does not apply on dismissal (other than in constructive dismissal cases) the employee ingeniously argued that the grievance he had raised was concerned with the way in which his appeal against dismissal had been handled and was not a grievance that he had been dismissed. Both the employment tribunal and on appeal the EAT have given short shrift to this hair splitting argument (although on the particular facts they decided it was just and equitable to allow the employee an extension of time under the normal rules which apply in discrimination cases).
Under current rules anyone can give employment law advice and anyone can represent anyone at an employment tribunal hearing. This is set to change in 2007. Under rules now available in draft form it will be a criminal offence for anyone to provide such services unless they are registered with and authorised by a Regulator appointed by the Secretary of State or are exempted. Professional indemnity insurance will be a requirement, although the detail of that requirement has not yet been worked out. Practising solicitors, barristers and legal executives are amongst those exempted. The rules are not restricted to employment law matters (in particular they also cover personal injury claims) but the government has said that employment tribunal claims, and companies offering to represent parties in employment tribunal cases, will be amongst the first to be regulated.
If an employee is unfairly dismissed an important element of the compensation due to him is likely to be for loss of future earnings. The Court of Appeal has confirmed that it is right and proper, and even obligatory, for an employment tribunal when carrying out its statutory duty to assess what is a just and equitable award for loss of future earnings to make predictions based on the evidence even if that "may involve speculation". In the case in question, in November 2006, the Court of Appeal ruled that the EAT had been wrong to suggest otherwise and remitted the case back for the employment tribunal to reassess compensatory award.
When Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia joined the EU in May 2004 people from those countries were covered by the EU Freedom of Movement rules. The British government predicted that 15,000 people a year from them would come to the UK for work. However between May 2004 and June 2006 some 427,095 applications were approved and it is estimated that the figure would be nearer 600,000 if self-employed workers such as builders were included. The government is not intending to repeat this miscalculation. New Accession (Immigration and Worker Authorisation) Regulations 2006 (currently in draft) will provide a phasing in period until 31st December 2011 for full applicability of the right of people from Bulgaria and Romania to work in the UK after those countries join the EU on 1st January 2007.
The Unfair Contract Terms Act 1977 was designed to protect consumers from unfair contract terms. When it applies an unfair contract term is void. The Courts have been less than clear over the years since 1977 as to the circumstances, if any, in which an employee can claim that an unfair term in his employment contract is rendered void by the Act. The position has now been clarified. In November 2006 the Court of Appeal ruled that only in very limited circumstances can an employee claim that the 1977 Act makes void a term in his employment contract. This will only be so if and to the extent that "..... under the contract of employment, the employer supplies services or goods to the employee for his use". In that situation the employee to whom the services or goods are supplied could reasonably be regarded as a consumer of the goods or services supplied and claim the protection of the 1977 Act. Apart from that (and subject to anything which the House of Lords may say if there is a further appeal) it is now clear that an employee does not deal with an employer as a consumer and that therefore the Unfair Contract Terms Act 1977 does not apply to his employment contract.
Since 1st March 1996 employers have been under a statutory duty to consult "appropriate representatives" of employees about impending redundancies if at least 20 employees are being dismissed at one establishment within a 90 day period. Failure to do so can result in an employment tribunal making what is called a "protective award" in favour of each of the redundant employees. As this can be up to 90 days' pay each it can add up to a very significant sum. The rules on who must be consulted differ depending on whether a trade union is or is not involved. In October 2006 the TGWU won a protective award in favour of redundant employees in respect of whom it was the recognised trade union. The question then arose as to whether the award inured only for the benefit of those in respect of whom the TGWU was recognised as trade union or whether others could benefit. The EAT has decided that on a proper interpretation of the 1992 Trade Union and Labour Relations (Consolidation) Act only those in respect of whom the TGWU was the recognised trade union could benefit and that the others should have made separate claims. However, in view of the importance and difficulty of the decision, the EAT gave leave for an appeal to the Court of Appeal. In this particular case the company involved was insolvent so the DTI would have to foot any bill and the EAT recommended that the DTI should make payments to the non-TGWU employees who were now unable to benefit, noting they would now be out of time for making their own claims.