2010 Legal Round-Up

30 December 2010

Exercise Of Contractual Variation Clause

16th Feb 2010

Bateman & Others v Asda Stores Ltd EAT – 11/02/2010 EAT held that where a term in a Staff Handbook permitting unilateral amendments to pay and other conditions is incorporated into an employees’ contract, the employer can change provisions relating to pay, bonus, hours etc without express consent – provided that the change is effected in a way which does not breach the implied term of trust and confidence.

9,300 employees transferred voluntarily onto the new pay scheme – the remaining 8,300 were then transferred against their will. Asda justified its imposition of the new pay scheme by reference to provisions in its Staff Handbook. The provisions in that handbook, which provided details of pay and hours, were incorporated into the staff’s contracts of employment.

The handbook stated that Asda “reserved the right to review, revise, amend or replace the contents of this handbook, and introduce new policies from time to time reflecting the changing needs of the business…” The EAT held that Asda was plainly entitled to unilaterally amend all matters contained within the Handbook without the consent of the staff. The appeal was dismissed.

Genuine Belief In Climate Change As A Philosophical Belief Under Religion Or Belief Regs

16th Feb 2010

In Grainger plc and others v Nicholson, the EAT upheld a decision that a belief in man-made climate change and a moral duty to reduce or avoid it was capable of being a “philosophical belief” under the Employment Equality (Religion or Belief) Regulations 2003.

The EAT gave guidance on the types of belief covered, which must, in particular, concern a “weighty and substantial aspect of human life and behaviour”, and have a “similar status or cogency to a religious belief”. Tribunals were warned however to not necessarily take a claimant’s alleged belief at face value, and to question whether a belief is genuinely held.

No Constructive Dismissal Where An Employee Is Already In Breach

17th Feb 2010

The EAT (Lady Smith) has handed down its decision in Aberdeen City Council v McNeill, which is authority for the proposition that if an employee is in breach of the implied duty of trust and confidence at the time of resignation, he/she is not entitled to terminate the contract on the basis that the employer has breached that term. In particular: “As in any contract of employment, one of the essential terms of the claimant’s contract was the implied term that neither would, without reasonable and proper cause, act in a manner calculated and likely to destroy or seriously damage the relationship of trust and confidence between employer and employee (Malik v BCCI).

It follows that if the claimant was, at the time he resigned, in breach of that implied term, he was in repudiatory breach and not entitled to terminate the contract on the basis that the respondents had themselves breached that implied term.”

Right To Legal Representation At Disciplinary Hearing

18th Feb 2010

Whilst a teaching assistant at X school, G faced an allegation that he had had sexual contact with a 15 year-old boy. Following a disciplinary hearing he was dismissed and his dismissal reported to the Independent Safeguarding Authority (ISA). The ISA were to determine whether he should be placed on a ‘barred’ list of those unsuitable to work with children. G brought judicial review proceedings, challenging the decisions not to allow him legal representation at a disciplinary or appeal hearing.

The Court of Appeal in reconfirmed the decision in Kulkarni v Milton Keynes Hospital NHS Trust and provided further authority for the proposition that Article 6 ECHR supports a claimant’s argument that he should be given the opportunity to be legally represented at a disciplinary/appeal hearing where it was determinative of a right to practise a profession.

Holiday During Sickness Could Be Carried Over To Next Year

20th Feb 2010

An ET held in Shah v First West Yorkshire Limited that an employee whose pre-arranged holiday coincided with a period of sick leave should be allowed to carry over that leave entitlement to the following holiday year. The tribunal interpreted the Working Time Regulations 1998 in line with the EC Working Time Directive by reading into Reg. 13(9) (preventing carrying over of statutory holiday) words providing for holiday to be carried over where it coincided with sickness absence. This is the first tribunal decision giving effect to the ECJ’s decision in Pereda v Madrid Movilidad SA.

CIPD Survey Forecasts Further Redundancies

22nd Feb 2010

The latest CIPD/KPMG’s Labour Market Outlook Survey finds that around a quarter of employers are planning to have made redundancies by April 2010, resulting in an average reduction of their workforce by 6.2%. The public sector is to be particularly badly hit. The private sector is expected to perform better, although 10% of private sector companies plan to offshore in the upcoming year.

Labour Market Outlook Quarterly Survey Report, Winter 2009-10, CIPD, 15 February 2010.

Employment Tribunal Awards And Transfer To High Court

2nd Mar 2010

Not many people realise that employment tribunal awards and ACAS conciliation settlements can be transferred to the High Court for enforcement. The process has previously been somewhat involved and time consuming. In May 2009, Jack Straw announced an important new initiative by which employees with awards and settlements can have them transferred up to the High Court for enforcement. A new simpler process in transferring an award is due to go live on 1st April 2010.

The existing form N322B will be combined with the N293A into one document so that HCEOs can use the new certificate, issue the Writ of Fi-fa, then enforce the award. The award or settlement can be enforced as soon as the respondent fails to pay. The cost of the enforcement will be recoverable from the respondent. The standard rules relating to transfer up apply ­ the award must be up to six years old and be for £600 or more (if the award is for a slightly lower amount, it may still qualify once fees, costs and interest payments have been added). This provides plenty of scope for those with outstanding awards to still enforce and be paid what they are due, plus interest.

Jack Straw’s decision was influenced by research conducted by IFF Research in May 2009 on behalf of the Ministry of Justice, which showed that 39% of those interviewed had not received any payment of their award at all, and only 53% had been paid in full. The research found the cases where awards were less likely to have been paid were when the award was for a high value, for those in managerial roles, those from small businesses and cases where the employee had worked for less than two years. A significant number (18%) did not even know they could start enforcement proceedings and for those that did, concerns that it would cost too much put many off.

Anti-Blacklisting Law Comes Into Force

24th March 2010

The Employment Relations Act 1999 (Blacklists) Regulations 2010 came into force on 2 March 2010. They contain a general prohibition against any person compiling, using, selling or supplying a “prohibited list”. To be a “prohibited list”, the list must:

1) Contain details of persons who are or have been members of trade unions or persons who are taking part or have taken part in trade union activities; and
2) The list must be complied with a view to it being used by employers or employment agencies for the purposes of discrimination.

Interestingly, the Guidance states that “haphazard or unstructured collections of information” could qualify as a list, if the information is connected in some way and used for the same (prohibited) purpose. Information contained on blogs or forums could also qualify as a list and lists can be “mixed”, that is contain information about matters not related to trade union membership or activity. The Guidance makes clear that lists held outside the UK are covered and that “the Regulations cannot be evaded by placing the list offshore”.

Unite/BA Dispute Escalates

25th Mar 2010

British Airways (BA) cabin crew have voted for seven days of strikes: three days from March 20th 2010 and four days from March 27th 2010. The strike dates led BA to withdraw its offer to settle the dispute, which concerns proposed cost-cutting measures, which it said was conditional on strike dates being withheld. While the Prime Minister suggested that the threatened strike was “unjustified and deplorable”, Unite discussed offers of support from US trade union, the Teamsters. Last-minute talks at the TUC’s London headquarters failed to avert the strike.

2008 Survey Of Employment Tribunal Applications

31st Mar 2010

The 2008 Survey of Employment Tribunal Applications (SETA) aims to provide information on the characteristics of the parties in employment tribunal cases and the key features of such cases.  Previous surveys took place in 1987, 1992, 1998 and 2003.

Some interesting statistics to come out of the report are:

Just over a third of claimants presented the case themselves (34%), whilst 22% of employers presented the case themselves.
An appeal to the EAT was made in 14% of cases which involved a decision at a full tribunal hearing. Where such an appeal was made, almost 57% were by claimants and 40% were by employers.

58% of cases were settled (39% through Acas and 19% privately). 12% of claimants were successful at tribunal and 8% were unsuccessful. 15% of cases were withdrawn. The remaining 8% of cases were dismissed or disposed of or had another outcome.

36% of claimants said that the case had caused them stress and depression. These were the most common non-financial negative effects mentioned by claimants.

The full report can be found here.

Planes, Trains And TULR(C)A

1st April 2010

Mrs Justice Sharp, a High Court judge, has granted an injunction blocking next week’s train strike. The judge granted an injunction applied for by Network Rail, which had questioned the legal validity of the ballot. The decision means that signallers will not be able to go on strike from 6am on Tuesday, April 6, to midnight on Friday, April 9.

Charles Bear QC said there were serious inaccuracies in the RMT ballot, in which 54 per cent of signallers polled backed the strike. NR accused the union of failing to comply with the Trade Union and Labour Relations Act of 1992

He was reported by the Telegraph to have told the court:

  • there were flaws in 143 of the 828 workplaces identified by the union, relating to between 14-17 of the total.
  • 23 signal boxes were left out of ballot, while votes were taken from 11 others which no longer existed.
  • 67 signal boxes there the ballot was extended to more people than employed at the time by Network Rail.
  • That the majority in favour of a strike was 224, while up to 245 votes were incorrect. It could not be argued that inaccuracies on such a scale were unlikely to affect the result.

Bob Crow, called the judgment an “attack on the whole trade union movement” which twisted anti-union laws “even further in favour of the bosses”.

Treasury Select Committee Highlights Lack Of Diversity

16th Apr 2010

A new Treasury Select Committee report titled “Women in the City” found that women are in the minority at senior levels of financial institutions. ­ FTSE 100 banks have only 9% female boards and 1-2% women executive directors.

It has been suggested by Professor Charles Goodhart that

“greater female representation at senior levels would have made the banking crisis less likely.”

The report places the responsibility for change on the City and not just the introduction of a quota system. The report urges the City to demonstrate that it is committed to improving the representation of women at senior levels within the industry. It is clear however that the pressure for regulatory change will intensify should the industry fail to act. The Minister for Women and Equality stated she was working with the CBI.

“to develop a pledge, so each company will pledge to increase the number of women it has at the top level and ensure that there is more equality of opportunity within their company”.

Furthermore, the Government Equalities Office called for the requirements in terms of the selection of new directors to the board to be reinforced to ensure there is no bias against underrepresented applicants.

To read the full report, click here.

Reasonable Adjustments Or Suitable Alternatives?

27th May 2010

PC Jelic’s original role on the Community Service Desk had evolved to include more face-to-face contact with the public and due to his disability (Chronic Anxiety Disorder), PC Jelic struggled to fulfill this role. PC Jelic was medically retired by the Chief Constable on these grounds, with no investigation into any alternatives.

The Employment Appeal Tribunal has ruled that swapping disabled employee PC Jelic’s role with another (non-disabled) employee was a reasonable adjustment that should have been made (under the Disability Discrimination Act 1995). Several alternatives would have been possible, including swapping the role with PC Franklin’s (subject to his opinion) ­ the non-facing role PC Jelic first had. PC Franklin had no restrictions on his capability to perform a public facing role.

In normal circumstances, the Tribunal accepts the medical retirement and consequent reemployment of an employee in a new role as reasonable adjustment. However, in the case of PC Jelic, the Tribunal ruled that the medical retirement was decided before adequate investigation into alternatives was made and indeed the alternative of swapping PC Jelic’s role with PC Franklin’s was ruled the more reasonable adjustment.

“Emergency Budget” Implications On Employment

23rd Jun 2010

The “emergency budget” presented on 22nd June 2010 contained the following measures affecting employment:

1) The personal allowance, for income tax purposes, will be raised by £1,000 to £7,475 in April 2011;
2) The employer National Insurance threshold will rise by £21 per week above indexation from April 2011;
3) From 2011 the majority of benefits will be up-rated in line with the Consumer Price Index rather than the Retail Prices Index, (helping save over £6 billion a year by the end of the Parliament);
4) A two-year pay freeze in the public sector other than those who earn less than £21,000 who will receive a flat rise of £250 in both years;
5) A review of fairness in public pay ­ the aim of which is to ensure that those at the top of organisations are paid no more than 20 times the salaries of those at the bottom; and
6) Despite the commitment in the coalition agreement that the Default Retirement Age would be phased out, there is only a commitment to a consultation on whether to phase it out.

Mr Osborne predicted the UK economy will grow by 1.2% this year and 2.3% next year, and rise further to 2.9% in 2013. But he warned by 2014 and 2015 growth would dip again to 2.7%. He added unemployment would peak at 8.1% this year.

It Pays To Get Expert Employment Law Advice In The Current Economic Climate

16th Aug 2010

Legal developments can present a number of potential pitfalls for employers.

Expert employment law advice is a cost-effective way for companies to minimise their financial exposure as it helps to anticipate and deal with employment related issues that may arise.

A recent example is that disciplinary hearings ­ and the policies and procedures that surround them ­ need to be treated more cautiously than may previously have been the case.

Changes have arisen following the replacement of the statutory disciplinary and grievance procedures with the Acas Code of Practice in April 2009 and have been highlighted in recent cases.
Relatively innocent breaches in a contractual disciplinary procedure can have far-reaching implications and result in substantial costs for an employer.

Director and Partner at Kervin & Barnes Solicitors, Gareth Kervin, says: “Unfortunately, employers often come to us after a disciplinary process has concluded or even following receipt of a tribunal claim. Although a claim can be dealt with, early employment law advice can often help a company avoid claims arising. At Kervin & Barnes Solicitors, we aim to be proactive rather than reactive advisors, and always seek to give early employment law guidance to prevent potential claims against our clients.”

He added “However, we recognise that this cannot always be the case and both employers and employees alike come to us to help them resolve their employment disputes.”

Director and Partner at Kervin & Barnes Solicitors, Gareth Kervin said: “My best advice would be to seek employment legal advice as soon as a dispute arises. That way, it can be dealt with in a controlled manner that brings minimal stress to both the employer and the employee.”

Kervin & Barnes Solicitors continue to help companies avoid reputational damage, the loss of costly management time and assist with the smooth running of daily operations.

As a result Kervin & Barnes Solicitors have many high profile clients including Elizabeth Arden, Danone and P&O Ferrymasters.

P&O Ferrymasters’ Group Human Resources Manager, Matthew Went, said: “P&O Ferrymasters have been using the services of Kervin & Barnes for some considerable time. The added value comes from the insightful and pragmatic advice that has been given to the contentious matters that have arisen. The responsiveness and ability to offer practical solutions to mitigate risk and/or achieve organisational aims separates Kervin & Barnes from the competition.”

One aspect of an employment solicitor’s role is to advise companies on drafting employee contracts, handbooks and individual policies.

Tailored employment law advice from a specialist firm such as Kervin & Barnes Solicitors will guide employers through the disciplinary procedures and options available.

Furthermore employers can be advised on the best way to manage the employee’s expectations, which can help dissuade the employee from bringing a claim against the employer.

Fairness may require an employer to allow representation by a lawyer at disciplinary hearings and an employment solicitor can offer guidance as to whether this will be necessary.

Understandably, some employers are reluctant to allow lawyers to participate in disciplinary issues, fearing that the whole process will become more formal and legalistic.

However, it allows the employer to hear the points that might later be made by the employee in a Tribunal.

If you require employment law advice or wish to find out more about Kervin & Barnes Solicitors, please contact our specialist London team today.

Equality Act 2010 Comes Into Force Today

1st Oct 2010

Today, 1st October 2010, the Equality Act 2010 comes into force.

Changes include:

  • Pre-employment health questionnaires are potentially discriminatory unless they are for the purpose of assessing a potential employee’s intrinsic ability to carry out the job, are in alignment with diversity policies or for establishing whether the potential employee requires assistance to attend an interview (caution: knowledge of health issues may trigger a duty by the employer to make reasonable adjustments).
  • Disability Related Discrimination is now referred to as “discrimination arising from disability” (S15) in order , among other things, to counter recent difficulties in identifying comparators.
  • Previous strands of discrimination including age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation are now referred to as “protected characteristics”; with the intent that they are protected by (largely) universal “prohibited acts” are.
  • Harassment by third parties has been extended to all “protected characteristics” other than pregnancy/maternity and marriage/civil partnership.
  • Associative discrimination is given a clear statutory footing.
  • Pay secrecy clauses are potentially unenforceable.

Changes that aren’t currently in force but could be in the future are:

  • The right to combine two protected characteristics and bring an additional ‘dual discrimination’ claim, which, if at all, is likely to be brought into force from April 2011.
  • The requirement that an employer with more than 250 employees publishes information regarding their gender pay gap likely to be brought into force in April 2013.
  • Stipulations allowing positive action in recruitment and promotion by employers in favour of members of under-represented groups. 

Click here to read more (overview of the Equality Act 2010).

Biggest Developments Ever Seen In Discrimination Law Come Into Force Today

1st October 2010

The Equality Act 2010 comes into force today, 1st October 2010.

The Act will replace the current framework including: Disability Discrimination Act, Sex Discrimination Act, Equal Pay Act, Race Relations Act and Age Discrimination Act.

Although mainly relevant to employment, the Act also deals with discrimination in relation to goods and services, public procurement etc.

In relation to employment, the Act aims to codify, deal with issues raised by case law, extend protection and simplify current anti-discrimination law and may mean employers need to seek employment law advice from discrimination lawyers to avoid potential pitfalls.

Gareth Kervin, Director, Partner and discrimination lawyer at Kervin & Barnes Solicitors (a niche employment law firm in Mayfair, London), says “Human resources teams will need to be aware of the extensions and additional provisions within the Equality Act 2010 to help, among other things, avoid a discrimination claim against them.”

He added “Potential penalties include litigation and an investigation by the Equality and Human Rights Commission (EHRC) but expert discrimination lawyers can help companies avoid these consequences.”

The framework of the Equality Act 2010 includes: the Equality Act, schedules to the Act, explanatory notes, guides, Codes of Practice (EHRC drafted) and implementation and transition arrangements.

Excluded from today’s implementation is the right to combine two protected characteristics and bring a ‘dual discrimination’ claim, which, if at all, is likely to be brought into force from April 2011.

Also currently excluded is the requirement that an employer with more than 250 employees publishes information regarding their gender pay gap.

The final exclusion involves stipulations allowing positive action in recruitment and promotion by employers in favour of members of under-represented groups.

The Government is still deliberating the above and it is not yet clear if or indeed when these will be brought into force.

Overview of the changes the Equality Act 2010 brings

The protected characteristics of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation remain largely unchanged.

Prohibited conduct includes direct discrimination, indirect discrimination, discrimination arising from a disability, duty to make reasonable adjustments, (combined discrimination), pregnancy and maternity discrimination, harassment and victimisation.

Other than pregnancy and maternity discrimination, a real or hypothetical comparator, who does not share the protected characteristic, is required.

Previously with age, sex, disability, gender reassignment, the complainant needed to have a protected characteristic. However, the Act introduces association and perception.

Therefore a complainant only need be associated with a person who has a protected characteristic, or be perceived to possess a protected characteristic, making a discrimination lawyer’s advice essential to guide employers through best practice.

Under S60 (disability discrimination) is it now potentially unlawful to ask an applicant about their health and if the employer does ask, the burden shifts to them to prove whether the response was not relied upon to the individuals detriment.

Gareth Kervin, Director, Partner and discrimination lawyer at Kervin & Barnes Solicitors commented “During the recruitment process, questions about access needs such as a wheelchair ramp are acceptable but generally all medical issues should be dealt with at the end of the process.

Adding that “Most discrimination lawyers would agree that questions such as ‘how many days sickness absence have you had in the last year?’ should be avoided prior to offer.

Furthermore, he said “Any monitoring forms should be kept apart from the main application form and application forms should concentrate on information that is relevant to a person’s ability to do the specifics of the job in question.

Gareth Kervin (expert discrimination lawyer at Kervin & Barnes Solicitors) advised “Employers can medically screen after a job offer but if an issue is identified, a duty to make reasonable adjustments may be triggered, so HR must be prepared for that knowledge.

He maintains that “A review of application forms and the recruitment process is advisable.”

Disability Related Discrimination is now referred to as “discrimination arising from disability” (S15) in order to, among other things, counter recent difficulties in identifying comparators.

Indirect discrimination is often found in a group situation and occurs when a provision, criterion or practice (PCP) is applied to one person (B) by another (A).

This PCP puts persons who share B’s characteristic at a disadvantage, compared to persons without this characteristic. If the PCP is not a proportionate means of achieving a legitimate aim, indirect discrimination also occurs.

Under the Act, harassment protection is extended to colour and nationality and must violate a person’s dignity or create an intimidating, hostile, degrading, humiliating or offensive environment i.e. association and perception are included.

The Act extends to cover victimisation for seeking, making or receiving a “relevant pay disclosure” i.e. a disclosure to establish if there is a connection between pay and having/not having a protected characteristic.

Under the Act, it is unlawful to instruct, cause or induce someone to discriminate against, harass or victimise someone else, or attempt to do so (complaints can be made whether or not the instruction was carried out).

Experienced discrimination lawyer, Gareth Kervin, said “I would suggest reassessing equality and diversity policies to establish whether there is need for a separate harassment policy, policy/provisions on pay discussion between employees, family leave/dependants policies, sick leave policy and the whether a carers policy would be appropriate.”

For more discrimination law advice relating to the Equality Act 2010 or advice on any other employment related issues, contact Kervin & Barnes Solicitors on +44 (0)203 178 5361, or if you’d prefer, click here to contact us by another method.

Retirement rage and maternity misery?

5th Oct 2010

In the last week, we have seen a number of measures proposed and adopted which have caused more than a few Gallic shrugs and even some raised eyebrows elsewhere in Europe.

Nobody can have failed to spot the outrage in France in the lead up to last week’s Senate approval of the pension reform bill which will raise the retirement age there from 60 to 62. In the same week, increases in the State pension age in the UK were brought forward so that within the next decade, both men and women will have to work until 66 before drawing their State pension and that is anticipated to rise even further, to 68 by the year 2046.

At the same time, consultation has closed into the removal of a “default” or “normal” retirement age in the UK. From April 2011 it is likely that the legislation will be changed to remove an employer’s ability to “retire” its employees at 65, although there are transitional arrangements for the period between April and October 2011 if the retirement process has already begun.

It was thought likely that the retirement age would be raised gradually in line with the pension age, but the Government has moved faster than anticipated by simply proposing to do away with it altogether. It has yet to confirm how employers will be permitted to address the rising cost of providing insured benefits such as life assurance and critical illness cover, and the fact that income protection policies historically have paid out “until retirement”. There is also a question around the leaver provisions in share option schemes, which have generally classed those who leave through retirement as “good leavers” and those who leave voluntarily as “bad leavers”. It may be harder to distinguish between them once the retirement age is abolished.

In the brave new world without a default retirement age, employers will still be able to justify it “objectively” ­ but the Government points out that this will be a high hurdle to overcome and the likelihood is that most employers will fall short.

And while the spending cuts were being announced in the UK Parliament, in Brussels MEPs were voting to increase paid maternity leave by a substantial margin. Instead of an entitlement to six weeks at 90% of pay, women would be entitled to 20 weeks at full pay. Estimates suggest that this would cost the UK around £2.5 billion a year ­ effectively wiping out the benefits of the new banking levy. But would it? Women’s employment rates are understood to drop by more than 12% when they have children, and in countries where maternity leave provisions are more generous, female employment rates are higher ­ something seen as critical for economic sustainability.

While this proposal is a long way from being passed into legislation, and will be met with strong resistance from the UK, Belgium, Germany and Spain among others, it might yet become part of the shifting sands of employment law that could change the working landscape as we currently know it.

Potential Increase of Unfair Dismissal Qualifying Period to Two Years

1st Nov 2010

As it stands, the qualifying period for unfair dismissal claims is at least 2 year’s continuous service. However, over the weekend, it was leaked that the government are considering proposals to increase this period to two year’s continuous service.

Confirmed this morning by various newspapers and radio stations, David Cameron plans to pitch this doubling of the qualifying period as part of a “pro-business” crusade to increase UK competitiveness and reform the economy. A time frame for the decision has not yet been given.

The government has yet to comment on the leak.

If the change takes place, it would reverse the reduction of the qualifying period by the previous Labour government in 1999 as part of the Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order of 1999, SI 1999/1436.

At first glance, the change is beneficial for businesses but unfavourable for employees as it, theoretically, gives employers an extra year to unfairly dismiss an employee. However, claims for discrimination or unfair dismissal with no qualifying period can still be brought. These claims are often more costly to defend and thus, which party will benefit the most is yet to be determined.

Since 1971 (when it was introduced as 6 months), the qualifying period has changed several times. In 1980 it was increased to one year for firms with less than 20 employees (2 years for those with more) and in 1985 to two years for all firms.

Agency worker almost got the best of both worlds

26th Nov 2010

A significant EAT decision ­which could have enabled contractors who are caught under IR35 legislation to also claim employment rights ­ has been overruled by the Court of Appeal.

IR35 legislation states that all income a contractor receives from an agency or client should be taxed like an employee (income tax and NIC’s) if the contractor is treated like a regular employee (i.e. filling a permanent position).  This is in order to prevent these so called disguised employees effectively avoiding employee tax payments.

The EAT ruled in Alstom Transport -v- Andrew Tilson that Mr Tilson (who worked for Alstom Transport through recruitment company Morson International) had the right to claim unfair dismissal, even though he was not “employed directly” by Alstom Transport.

Mr Tilson:

  • Was completely integrated into Alstom Transport’s business;
  • Was subject to a large degree of control from Alstom Transport relating to his daily work;
  • Had to have any holiday leave authorized by Altrom Transport and;
  • Was offered a full time employed job but he declined with the argument that without it he would benefit from a higher income.

On termination of Mr Tilson’s engagement with Alstom Transport, he claimed unfair dismissal (a right not ordinarily available to contractors, only to employees). The ET decision looked behind the contractual arrangement and held it was merely a disguise for employment.

However, on appeal, the decision was overturned (Court of Appeal) on the grounds that as there was no formal contract between Alstom Transport and Mr Tilson and that fatally he had declined an offer of employment with Alstom. The CA held that it was incorrect for the EAT to imply a contract between Mr Tilson and Alstom Transport, even if the terms of the inferred contract would mirror a contract of employment.  Mr Tilson was not an employee and therefore did not have the right to claim unfair dismissal.

Positive Discrimination or Positive Action?

8th Dec 2010

In April 2011, S.159 of the Equality Act 2010 i.e. positive action in recruitment and promotion provisions will be brought into force. The Government has made it clear that this will not lead to ‘quotas’ or giving somebody a job because they are from an ethnic minority.

Some of the likely aims of the strategy include:

  • Develop measures to promote more women onto the boards of listed companies;
  • Take action where there is evidence of discrimination e.g. equal pay. Further details to be set out in a consultation document;
  • Improve careers advice for females, ethnic minorities, disabled people and other disadvantaged groups;
  • Set a target for new appointments to public boards to be 50% women. This is to be achieved by the end of the current Parliament.