Legal updates

This page gives some insight into recent case law or situations in Human Resources that may have an impact upon all employers. This information is sourced from the national HR press and from bulletins relating to recent case law. It is updated on a regular basis.

Dispute Resolution Consultations:

Following a wide-ranging independent review published in March 2007, the government has published its consultation paper seeking views on amendments to the dispute resolution and other employment law matters.

The matters under consultation include:

extending the definition of a 'relevant advisor' who can sign off a compromise agreement (to include CIPD members);
changing the current position on interest accruing on tribunal awards;
broader powers for tribunals to make recommendations in discrimination cases;
introducing a procedure for chairman to make decisions on the papers only, without a hearing, in certain jurisdictions (with the parties' consent);
adding Holiday Pay to the list of jurisdictions normally heard by a chairman sitting alone;
clarifying the 'withdrawal' and 'dismissal' provisions of rule 25;
revised ET1 and ET3 forms;
transitional provisions for the abolition of the statutory dismissal and grievance procedures.

The closing date for responses to the Consultation Paper is 26 September 2008.

Agency Workers (Feb 07)

In Craigie v Haringey, Bean J. declines to follow the Court of Appeal's decision in Dacas v Brook Street Bureau on the grounds he preferred to focus on the more traditional 'necessity' test for implying a contract. He upheld a tribunal's decision that there was no 'necessity' to imply a contract of employment between agency worker and end-user.

The EAT commented that the law on agency workers is unsatisfactory, but that it needs legislation to change it

Age Discrimination (Feb 07):

A controversial clause in UK age-discrimination laws that effectively allows employers to force staff to retire at 65 is compatible with European law, an adviser to Europe’s highest court suggested today.

Jan Mazak, an Advocate-General of the European Court of Justice, giving a legal opinion on the case of a Spanish worker challenging compulsory retirement, said that European law allows individual countries to pass legislation permitting mandatory retirement ages.

The case, brought by Feliz Palacios de la Villa, a 65 year-old Spanish man forced to retire from retailer Cortefiel, concerned collective employment agreements, in which groups of workers sign identical contracts.

Although today’s case concerns collective employment agreements, which are much less common in the UK than elsewhere in Europe, lawyers said that the legal opinion also applies to individual contracts and so the case is directly relevant to British workers.

James Baker, an employment lawyer at Macfarlanes, said: "This opinion will disappoint thousands of workers in the UK who are pinning their hopes on a legal challenge to the mandatory retirement age. It's a very significant decision and may prove fatal to ongoing challenges to national retirement ages."

Lawyers said the decision will come as a blow to British workers anticipating a separate European court challenge brought by Heyday, an offshoot of the charity Age Concern.

Sex Discrimination (Feb 07)

A city woman who took legal action against her employers for refusing to let her do her job part-time after giving birth settled out of court yesterday for an undisclosed sum believed to be in six figures.

Janine Funsch, 34, who was bound by a gagging clause preventing her talking about the settlement, beamed broadly as she left the Central London Employment Tribunal.

Mrs Funsch sued financial information service Bloomberg for sexual discrimination. She worked as an account manager for 11 years and said she was "happy" and "highly successful" at the company set up by New York mayor Michael Bloomberg.

However, following the birth of her daughter, who is now 18 months old, her request to work part-time when she returned from maternity leave was rejected. Two days before the tribunal she was offered a less taxing, part-time position in a different area of the business. Bloomberg claimed Mrs Funsch's clients had policies barring them from working with part-timers. She then sued under the Sex Discrimination Act 1975, arguing the requirement to work full-time had a disproportionate effect on women.

William Garnett, head of employment at Bates Wells & Braithwaite solicitors, who was representing Mrs Funsch, said before the start of the case: "Companies need to have a good reason in law if they do not offer part-time posts. Failure to do this discriminates against women because they are primarily responsible for child care and they, at times, need this option. Bloomberg has 10 part-time women in 9,610 staff."

Following a one-day hearing, the two sides reached a settlement agreement, and have 21 days to confirm it. Colleagues of Mrs Funsch said she had now left the company. Last week, Bloomberg told staff that it was reviewing its policy on part-time and flexible working.

Minimum Wage (Feb 07)

The Court of Appeal has, handed down its decision in Leisure Employment v HMRC, upholding the decision of the EAT.

In a judgment combining policy arguments with a detailed analysis largely lifted from Elias P.'s earlier decision, the Court of Appeal held that a deduction from wages of £3 per week, in respect of a payment for gas and electricity, was part of the provision of living accommodation (in respect of which the employer had already taken advantage of the maximum allowance) and, in the alternative, that the deduction was for the employer's own use and benefit.

Accordingly, the employer could not count the £3 per week towards the employees' wages. This, in turn, meant that the employer (which owns the Butlins brand) was in breach of the national minimum wage legislation.

In a (partially) dissenting judgment, Wilson LJ described this consequence of the national minimum wage legislation as "regrettable", as it would amount to a disincentive to employers who wish to help provide living accommodation to low-paid staff.