January 9, 2012

2012 Employment Law Update: Part 1

Gordons’ specialist employment law team provide a 3-part overview of some very recent important cases and the key employment legislation coming into force throughout 2012, what it all means and how employers can deal with it effectively.

Part 1 focuses on the issues of equal pay; national minimum wage; annual leave; marriage discrimination, and; discrimination and harassment.

Equal pay

The Court of Appeal has held that claims for equal pay can be brought either through an Employment Tribunal or through ‘the ordinary courts’ (the County and High Courts) and that when an ordinary court exercises its discretion to strike out a case the fact that an employee would be deprived of their right to pursue a claim is a relevant factor which should be taken into account and given considerable weight in most cases.

What does this mean?

Employees only have six months to present an equal pay claim in an Employment Tribunal but six years to bring a claim through the ordinary courts. In most cases an employee will still be able to bring an equal pay claim through the ordinary courts even though the time for presenting a claim in a tribunal has expired.

What should employers do?

Businesses who acquire employees under TUPE should obtain appropriate indemnities to protect themselves against liability for any potential equal pay claims arising in the six years prior to the acquisition of the employees.

Equal Pay

The Employment Appeal Tribunal has held that a pay differential between employees at the time of their recruitment can justify the continuing differential in subsequent years.

What does this mean?

Employers are free to pay staff who are recruited into similar roles different amounts where there is good reason for it as long as the decision is not tainted by sex. It is, therefore, permissible to pay different amounts where one of the individuals has more experience than another. Having made the decision to pay different rates there is no obligation on the employer to harmonise the levels of pay at a later date.

What should employers do?

Employers should base decisions on pay on objective grounds and be prepared to justify their decisions should the need arise.

National Minimum Wage: Live-in Domestic Staff

The Employment Appeal Tribunal has held that live-in housekeepers may be exempt from the National Minimum Wage if they live in their employer’s home and are treated as a member of their employer’s family.

What does this mean?

Domestic workers do not need to be paid the National Minimum Wage if they live in their employer’s home and are treated as a member of the family. As to whether a worker is integrated into a family there is no one factor that is decisive but particular regard will be had to the provision of accommodation and meals and the sharing of tasks and leisure activities. Other matters such as the general dignity with which the domestic worker is treated could be taken into account, as could the degree of privacy and autonomy they are afforded and the extent to which, if at all, they are exploited.

What should employers do?

Employers who employ live-in domestic staff and wish to pay them less than the National Minimum Wage should genuinely treat such workers as part of the family. Domestic workers who are exploited are unlikely to be regarded as being family members and would, therefore, be entitled to be paid the National Minimum Wage.

Annual leave

The Supreme Court has held that employers who have shutdown periods can stipulate that annual leave be taken during those periods.

What does this mean?

Employers can insist on their employees taking their paid annual leave during periods when they are not required to work. This will be relevant to off-shore workers, teachers who are required to take their annual leave during non-term time, professional footballers, Parliamentary staff, and people who work full-time during the season in the tourist industry.

What should employers do?

Employers who have shut down periods are entitled to insist on their workers taking their annual leave during those periods. However, they should handle requests for annual leave fairly and consistently.

Marriage discrimination

The Employment Appeal Tribunal has held that an employer acted unlawfully when it treated an employee less favourably, not just because she was married, but because she was married to a particular man.

What does this mean?

Employees have the right not to be discriminated against by reason of their status, not only of being married, but also of being married to a particular person. The same applies to those in a civil partnership.

What should employers do?

Employers should avoid discriminating against married employees and those in a civil partnership.

Discrimination and Harassment

The Employment Appeal Tribunal has held that a culture of tolerance of racist banter which continues after established acts of racial harassment have taken place is capable of amounting to a continuing breach of mutual trust and confidence and, therefore, giving grounds for a claim for unfair constructive dismissal even if an employee resigns some time after the original incidents.

What does this mean?

Employers have a duty to prevent harassment in the workplace and can be liable to their employees if they do not take action.

What should employers do?

Employers should take steps to prevent discrimination and harassment in the workplace. This may be by ensuring that clear written policies relating to discrimination and harassment are in place, by providing staff with training in these areas and by promoting a culture of compliance with such policies.

For further information or advice on any of the issues outlined in this e-Brief, please contact a member of the employment team.