|
Employment Monthly Briefing: January 2007 NEWSNational Minimum Wage Enforcement Penalty notices will now be issued to employers who do not pay the minimum wage. Employers already have to pay back arrears they owe to the underpaid worker and now those who refuse to pay the arrears will be penalised. The DTI has published a policy document, which states that a minimum £224.70 fine will be issued if minimum wage arrears are not paid within seven days of service of an enforcement notice. Increase in Annual Leave Entitlement The DTI has issued a press release announcing an increase in minimum holiday entitlement under the Working Time Regulations from 20 days to 28 days per year. Many workers currently include the eight bank holidays as part of the current 20 day annual leave entitlement. Statutory annual leave entitlement would be increased in two stages, rising from 20 to 24 days on 1st October 2007, and from 24 to 28 days on 1st October 2008. Eight million workers will benefit from this change. RECENT CASES
Reference Guide: Compromise Agreements Palihakkara v BT plc [2006] UKEAT 0185_06_0910 An employee signed a compromise agreement which purported to settle ‘all claims past or future arising out of the termination of her employment.’ The EAT held that this was not sufficient to compromise claims which arose before the relationship was terminated. The employee was therefore free to bring proceedings in respect of those claims. The EAT also held that the compromise agreement was inadequate to compromise the employee’s claims of race discrimination. The agreement stated that it was in settlement of all claims in relation to ‘redundancy payments, unfair dismissal, discrimination on grounds of race, sex and/or disability’. However, the agreement omitted a condition required for a valid compromise under the Sex Discrimination Act 1975 and the Race Relations Act 1976, in that it did not say that all the conditions regulating the agreement had been complied with (even though they had been). The EAT held that the compromise agreement was therefore insufficient to compromise the race claim, and the employee was free to pursue her claim of race discrimination. Jealousy dismissals B v A [2007] UKEAT 0450_06_0901 In this case, a solicitor dismissed his personal assistant with whom he had been having a sexual relationship. He dismissed her when he discovered that she was seeing another man. The personal assistant brought a sex discrimination claim. The tribunal wrongly applied a ‘but for’ test, and the EAT held that a comparator should have been constructed instead. If the people involved had been male homosexuals the solicitor would, in similar circumstances, have treated his lover in exactly the same way. The EAT therefore held that this was not a case of sex discrimination – it was clear that the reason for dismissal in this case was because of jealousy. The reason for dismissal is therefore ‘inconsistent with the reason being her sex’. Modified Grievance Procedure City of Bradford v Pratt [2007] UKEAT 0391_06_0901 In this case, the EAT considered the requirements of the modified grievance procedure. Mrs Pratt was employed by the Council as a cleaner. On 15 July 2005, she wrote a letter to the Council stating that she had been subjected to unlawful sex discrimination in relation to her pay and conditions and that the letter was to be taken as a written statement of grievance. She also claimed that she had been denied equal access to additional payments enjoyed by male colleagues. The Council had argued that it had been unable to respond usefully to the letter, as there was no indication as to the type of male colleague in respect of which the grievance is said to apply. There was no indication of the type of additional payments in respect of which the claim was made. There was no indication of the type of work in comparison with which equal value was claimed. The EAT held that it was not enough for an employee to simply identify an ‘equal pay complaint’ - there must be sufficient information in the grievance letter outlining the basis for the complaint so that step one of the modified grievance procedure is fulfilled. Unlawful Deductions Coors Brewers v Adcock A2/2006/1035 About 600 employees claimed that they had not received adequate bonuses under an implied contractual promise to replicate a bonus scheme used by their predecessor employer. The tribunal ordered payment under its unlawful deduction jurisdiction and not its breach of contract jurisdiction, as this only applies to ex-employees. However, the Court of Appeal held that the claims brought by the employees were claims for unliquidated damages and that they fell outside the scope of the unlawful deduction jurisdiction. This was because a claim for unlawful deduction applies where there is a claim for a specific sum of money or an identifiable sum. As the claims related to an investigation into the level of alleged underpayment, the employees would need to bring a breach of contract claim, but as they were still employed, this would have to be done before the county court. Contract Variation and TUPE transfers Power v Regent Security Services Ltd [2007] UKEAT 0499_06_2901 An employee was employed under a contract which stated that the age of retirement was 60. The part of the business in which he was employed was transferred. He agreed with the transferee to a change in his contract which stipulated that the age of retirement was 65. The transferee sought to compel the employee to retire on his 60th birthday. The employee bought a claim for unfair dismissal. The employer sought to rely on the Daddy’s Dance Hall ([1988] IRLR 355) principle, which held that changes to contracts made as a result of TUPE transfers are void. The employer also relied on regulation 12 of the Undertakings (Protection of Employment) Regulations 1981, which treats as void any agreement which restricts or limits, inter alia, the transfer of all rights and liabilities under the employment contract. The EAT held that the contractual age of retirement had been varied to 65 and that there was no reason why that should not be enforced by the employee. The variation was for the employee’s benefit, and there was no reason why it could not be valid and effective. The EAT held that a transferee employer, cannot invoke either the case law of the ECJ or regulation 12 to escape contractual obligations he has voluntarily undertaken, even where they are the result of a variation in the contract which is by reason of the transfer. It followed therefore that the employer was not entitled to refuse to give effect to the contractually agreed retiring age of 65, and the employee was entitled to pursue his claim for unfair dismissal. This note has been prepared for general guidance only and should not be used as a substitute to obtaining legal advice. It is recommended that professional advice is sought in relation to specific cases, and practical commercial telephone advice is always available from the MLM Employment team. MLM Solicitors ©2006 |
