1. What happened on 6th April 2003
2. TUPE changes
3. Minimum Wage and Homeworkers
4. Equal Pay questionnaires
5. Discrimination
6. Criminal Records Bureau and vetting of job applicants
7. Work permit charges
8. Upper age limits
9. Race Discrimination in the home
10. Ties at work
11. Flexible Working arrangements.
12. Increases in maximum tribunal compensation awards.
13. Compensation in discrimination cases.
14. Seasonal workers and unfair dismissal or redundancy
15. Revised Working Time rules for young workers.
16. Paper boys holiday rights
17. Agency Workers and temps.
18. Equal Pay - Civil Servants.
19. Highly Skilled Immigrants Programme
20. Directors’ remuneration

1.What happened on 6th April 2003

Main changes include:-

• Parents of children aged under 6 (under 18 if disabled) will have legally enforceable rights to ensure that requests for flexible work arrangements are not rejected without good cause.
• Maternity leave for qualifying employees increases to one year (26 weeks’ paid Ordinary Maternity Leave and 26 weeks’ unpaid Additional Maternity Leave).
• Statutory maternity pay (standard rate) increases to £100 a week. The right of small employers who pay less than £40,000 in NIC’s to reclaim 104.5% of SMP will automatically be extended to more employers as the NIC threshold is increased.
• New paid paternity leave rights (two weeks) come into effect (pay at the same standard rate as SMP).
• New adoption leave rights come into effect.

2. TUPE changes

In February 2003, almost a year and a half after publication of the DTI consultation document on proposals for changes to the TUPE regulations, the government announced results of the consultation. This includes plans for a new Code of Practice designed to end the “two tier workforce” (which can come about if a local authority transfers employees to a private sector partner whose own employees have worse terms of service) and also includes plans to place draft new TUPE amendment regulations before Parliament in autumn 2003, to come into effect in spring 2004. Importantly, the TUPE announcement indicates that pension scheme rights will NOT be covered at this stage.

3. Minimum Wage and Homeworkers

There are obvious difficulties in ensuring that homeworkers are paid not less than the national minimum wage. The present “Fair estimate agreement” system is open to abuse and in February 2003 the government announced a consultation to consider improvements (consultation to end on 9th May 2003). The suggestion is that the fair estimate agreement system should be dropped and instead that employers would be required to pay homeworkers either at least the national minimum wage for all hours worked, or a “fair piece rate”.

4. Equal Pay questionnaires

6th April 2003 will see the introduction of an Equal Pay Act questionnaire system (providing for questionnaires similar to those available in other sex discrimination and in race discrimination cases).

5. Discrimination

It is normal in direct discrimination and victimisation cases for employment tribunals first to consider whether the claimant received “less favourable treatment” than the appropriate comparator and if so then to consider the “reason why”. The House of Lords has warned that this two step approach to what is essentially a single question (”did the claimant, on the proscribed ground, receive less favourable treatment than others?”) is not always appropriate.

6. Criminal Records Bureau and vetting of job applicants

The Criminal Records Bureau started operations a year ago, on 11th March 2002. Where employers have cause to believe that a job applicant may have a position where the health or safety of children and young persons is concerned the system is up and running. However the CRB has faced great problems as a result of being flooded with applications (now running at around 40,000 a week) - and that even before the system is fully operational. In the hope of streamlining the system the government announced a package of new measures, following a review which started last September.

7. Work permit charges

The Home Office has announced that fees are going to be charged for work permit applications. The new rules are to come into effect from midnight on 31st March/1st April 2003.

8. Upper age limits

As expected, an appeal has been lodged, with government backing, in the long running case in which the Stratford East employment tribunal held that the 65th birthday upper age limit for claiming unfair dismissal and for the right to claim statutory redundancy pay in British law (ERA 1996 ss.109 and 156) is unlawful. The tribunal held that the age limit has a disparate impact on men and women and amounts to indirect sex discrimination which was not justified by the government. It is understood that the case has been set down for hearing by the Employment Appeal Tribunal for late May 2003.

9.Race Discrimination in the home

A recent newspaper article (the Times Law Supplement, 4th March 2003) suggested that the government is proposing new regulations to remove the present exemption enjoyed by private householders from race discrimination laws. In fact the position is not quite so straightforward as the article might be read to suggest. The proposed new Race Relations Act 1976 (Amendment) Regulations 2003 are intended to prohibit discrimination in a private household on grounds of race, ethnic or national origins but will not prohibit discrimination on grounds of colour or nationality. Those concerned about, for example, employing an immigrant as a child minder would be well advised to take legal advice.

10. Ties at work

Some go one way, some another. Two separate employment tribunals have recently considered whether it is unlawful sex discrimination (in particular cases) for an employer to require a male employee to wear a tie at work. On the facts, one tribunal said yes and the other said no. The legal principles may be reasonably clear but these different decisions (not binding because they are at tribunal level only) show that it is not at all clear how the principles should be applied in practice in particular cases. It is understood that an appeal is to be lodged in at least one of these cases so the position should be clarified in the near future.

11. Flexible Working arrangements.

Regulations were issued at the end of 2002, taking effect from 6th April 2003, which set out the details of the new right for employees with children under 6 (or 18 if entitled to disability living allowance) to request flexible working arrangements. Many legitimate grounds for refusal are provided but if an employer wrongly refuses the employee’s request an employment tribunal will be able to order reconsideration of the request and/or award compensation subject to a maximum of 8 weeks’ pay (capped at £260 per week - viz an absolute max of £2,080). It will be automatically unfair dismissal to dismiss an employee for a reason connected with seeking to claim this new right.

12. Increases in maximum tribunal compensation awards.

As previously noted, new increased limits on maximum tribunal awards (applicable where the “triggering event” eg dismissal occurs on or after 1st February 2003) are effected by the Employment Rights (Increase of Limits) (No. 2) Order 2002, (SI 2002/2927). There has been no cap on awards in discrimination cases for some time but normal absolute maximum unfair dismissal award is increased from February 2003 from £60,100 to £61,300 (ie 30 X £260 max basic award plus £53,500 max compensatory award).

13. Compensation in discrimination cases.

In an important ruling on 20th December 2002 the Court of Appeal considered how compensation should be assessed in discrimination cases. In a particularly significant part of the judgment the Court of Appeal said that only in the most exceptional case should the “injury to feelings” element of an award exceed £25,000 and identified three broad bands of compensation for injury to feelings as follows:

• a top band between £15,000 and £25,000 in the most serious cases
• middle band of between £5,000 and £15,000 for other serious cases; and
• lower band of between £500 and £5,000 for less serious cases.

14. Seasonal workers and unfair dismissal or redundancy

An employee must normally complete a year’s continuous employment to qualify for unfair dismissal rights or two years to qualify for statutory redundancy pay. When foot and mouth disease led to cancellation of the Royal Highland Show in 2001, various employees were dismissed. One of these, a Ms Reed, had worked for the Show organisers for some seven years for about a third of the year every year and she claimed statutory redundancy pay. She lost her claim both before an employment tribunal and on appeal to the EAT on the basis that she could not show sufficient continuous employment as during the time when she was not working there was no “mutuality of obligation” between her and the Show organisers. This is a difficult area of law where each case needs to be carefully considered with expert advisers on its own particular facts. While not making new law, the case in point is a good example of how the rules should be applied in relation to seasonal workers.

15. Revised Working Time rules for young workers.

Amendments to the Working Time Regulations 1998 apply from 6th April 2003 and affect the working hours of anyone who counts as a “young worker” (basically those who are over compulsory school age but are not yet 18). In general, the new rules will ensure that their working time is limited to 40 hours a week, eight hours in any one day and night working will be prohibited between 10pm - 6am or 11pm - 7am. The changes are effected by the Working Time (Amendment) Regulations 2002, SI 2002/3128, implementing EC Directive 94/33/EC on “The protection of Young People at Work” so far as not previously implemented in the UK.

16. Paper boys holiday rights

The amendments to the Working Time Regulations 1998 noted immediately above apply to young workers over compulsory school age (basically those between 16 and 18). The EAT overruled the Leeds employment tribunal and held in January 2003 that the paid holiday provisions of the Working Time Regulations do not apply at all to those who are even younger than that, such as many newspaper delivery boys and girls. The EAT held that their position is governed instead by the Children and Young Persons Act 1933, the effect of which is that in each year they must have at least two consecutive weeks without work during school holidays.

17. Agency Workers and temps.

An important amendment has been made by the European Parliament to the title of the draft directive on temporary agency work. The new name makes it clearer that the directive will not apply to temporary workers as such or indeed to any worker introduced by an employment agency to an employer who then employs the worker direct. It will apply only to workers who are employees of an agency which then provides their services to clients of the agency. In other words the directive will apply in the UK to employees of agencies which are “employment businesses” as defined in the Employment Agencies Act 1973 and will not cover workers who are introduced to client employers by employment agencies. The DTI have issued a revised Regulatory Impact Assessment which includes a calculation that the prospective annual cost to British business of implementing the Agency Workers Directive, if it is enacted, would be at least #500 million.

18. Equal Pay - Civil Servants.

An employment tribunal held in January 2003 that civil servants who make a claim under the Equal Pay Act 1970 can take as comparator any civil servant of the opposite sex doing like work or work of equal value, whether he/she works in the same agency or department or in a completely different department. This is on the basis that ultimately a single source, the Treasury, controls the terms and conditions of employment of all of them. Although this is “only” a tribunal decision (and as such does not set a formal precedent) the potential extensive application and enormous cost implications to the government will mean that thousands of civil servants may now wish to consider taking advice on their rights.

19. Highly Skilled Immigrants Programme

An indefinite extension of the “Highly Skilled Immigrants’ Programme”, with a new application form applying from 28th January 2003, has been announced by the Home Office. Under the prorgamme potential immigrants with high qualifications can score “points” (eg 30 points for a PhD) and if their total is high enough (over 75 points) some of the normal immigration rules are waived. In particular they can come to the UK to look for work without a specific job being already arranged.

20. Directors’ remuneration

For financial years ending on or after 31st December 2002, the Directors’ Remuneration Report Regulations 2002 SI 2002/1986 start to bite. For listed companies these regulations provide new rules which replace the normal rules under Companies Act 1985 sch 6, requiring companies to include information concerning directors’ remuneration by way of notes to their accounts. It is also relevant here that the government has shown little support for the Company Directors’ Performance and Compensation Bill introduced in the House of Commons by Archie Norman MP, essentially designed to ensure that under performing directors of failing companies cannot insist on their full contractual entitlements to pay in lieu of notice if shareholders force them to quit.