April Employment Law Update
April is normally a very busy time for employment lawyers, as you will see from the following changes to employment law which came into effect on 6 April 2014, together with the cases below. April was also a busy month for me and included successfully representing a commercial client at a Judicial Mediation in which an agreed settlement was negotiated which saved my client over £30,000 in legal costs alone. Sometimes it is good to talk!
6 April 2014
- Abolition of discrimination questionnaires.
What does that mean now ? Acas has published good practice guidance on how employers should deal with questions regarding discrimination in the workplace after statutory discrimination questionnaires are abolished.
- Mandatory pre-claim Acas conciliation.
There is now a four-step procedure for early conciliation (EC) through Acas before an employment tribunal claim can be commenced. Transitional provisions cover the period between 6 April and 5 May 2014 during which EC will be available to prospective claimants. EC will be mandatory for claims presented on or after 6 May 2014.
- Increase to employment tribunal fees.
The Courts and Tribunals Fees (Miscellaneous Amendments) Order 2014 (SI 2014/590) will re-categorise a number of claims as “Type B” claims, which attract a higher fee. This is to remedy what the government has identified as a mistake in the original legislation which categorised certain claims incorrectly as “Type A”.
- Financial penalties for losing employers.
Tribunals now have the power to order that a losing employer pay a financial penalty in specified circumstances. This will apply in cases presented on or after 6 April 2014.
- Abolition of the Percentage Threshold Scheme.
The Percentage Threshold Scheme enables employers to reclaim Statutory Sick Pay (SSP) from HMRC, where the total SSP paid in a month exceeds 13% of their Class 1 National Insurance contributions for that month. A draft Order abolishing the scheme, as part of the government’s review of health at work, was laid before Parliament and approved by the House of Lords on 12 February 2014. It is expected to take effect on 6 April 2014.
- Abolition of SSP record-keeping obligations.
The Statutory Sick Pay (Maintenance of Records) (Revocation) Regulations 2014 (SI 2014/55) will abolish the obligation on employers to keep specified records of dates of sickness and SSP payments
- Maximum compensatory award increase.
The maximum compensatory award for unfair dismissals where the effective date of termination falls on or after 6 April 2014 will be increased to £76,574 (or 52 weeks’ gross pay, if lower).
- Increases to rates and limits.
Several statutory rates and payments will increase on 6 April 2014, including statutory sick pay, maternity pay, paternity pay, adoption pay, and the cap on “a week’s pay”.
- Increased penalty for employing illegal workers.
The maximum civil penalty which may be payable under section 15(2) of the Immigration, Asylum and Nationality Act 2006 will increase from £10,00 to £20,000 where an employer is found to have employed adults who are subject to immigration control but do not have the right to work in the UK.
- Changes to TUPE: post-transfer pension contributions.
The Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2014 come into force on 6 April 2014. From that date, transferee employers will have the option to match the transferor’s level of employee pension contributions into a defined contribution scheme, even if they are less than the current minimum of 6%. This is to avoid the situation where employees could be in a more favourable position than they would have been if they had not transferred.
- MPs added to list of “prescribed persons”.
The Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2014 amends the schedule to the Public Interest Disclosure (Prescribed Persons) Order 1999 to make members of the House of Commons (MPs) “prescribed persons” in England, Scotland and Wales to whom a whistleblower may, under certain circumstances, make a protected disclosure.
Employment Law cases round up
TUPE: employees transferred to parent company following share purchase by subsidiary
Normally a share purchase will not be a TUPE transfer, however The Employment Appeal Tribunal (EAT) has upheld a tribunal decision that employees had transferred under TUPE to a parent company following a share purchase by one of its subsidiaries.
The EAT decided that the tribunal had been entitled to find, on the facts, that the share sale triggered a co-extensive but separate transfer to the parent company. In this respect the tribunal had taken account of a statement of intent made by the parent company that employees would be moving over to it, the arrival of its integration team, and the fact that day-to-day control of the transferor’s business activities had passed to the parent company.
The EAT also upheld the tribunal’s finding that affected employees had been entitled to bring claims for failure to inform and consult in their own names. While there had been an employee representative committee, on the facts, the mandate of representatives who had served on the committee had expired some time before the share sale. The ad hoc committees that had continued thereafter had not been mandated by the affected employees to carry out TUPE consultation.
Not sure if TUPE applies ? Take specialist legal advice.
12-month non-competition restriction enforceable against financial adviser
The High Court has held that a 12-month non-competition post-termination restrictive covenant in an agreement between a financial adviser and his employer was enforceable. Under a “goodwill agreement”, the financial adviser had been paid for the goodwill in the client base he brought with him to the firm, but was prevented from working in any capacity in competition with his employer for 12 months after his employment terminated.
The court held that the non-competition restriction was enforceable because the goodwill agreement was akin to a business sale agreement into which the parties had entered with equal bargaining power. It further noted that 12-month post-termination restrictions were common within the financial services industry and were reasonable in cases such as this where there was an exceptionally strong relationship between the employee and their clients.
The court rejected the employee’s argument that the employer had failed to mitigate its loss as it had not put him on garden leave or sought injunctive relief. It concluded that a claim for breach of contract was appropriate in these circumstances where the employer did not want to cause further damage to its client relationships. It ordered the financial adviser to pay damages for the employer’s loss of profit for two years after his departure.
Christian nursery worker brings claim for religious discrimination against her former employer
A Christian nursery worker has brought a religious discrimination claim against her former employer, Newpark Childcare. Sarah Mbuyi alleges that she was dismissed from her position at a nursery in Shepherd’s Bush due to her beliefs, after she was asked whether she would be able to read books to children which featured same-sex parents, and replied that she would not be able to read them. Miss Mbuyi was also accused of harassing a lesbian co-worker with whom she had discussed her religious beliefs.
This case again highlights the conflict between the right to religious belief and the right not to be discriminated on grounds of sexual orientation.
If you need further advice on this blog, please send an email, or call me, on my mobile 07767 166705 or 01580 712718 (local office number) or 0207152 6550 (London office number).
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