There has been little case law determining the importance of an employer’s ability to pay compensation to an employee following unfair dismissal claims. However s123 of the Employment Rights Act allows the tribunal the discretion to award such sum to the employer as is “just and equitable in all the circumstances” having regard to the loss sustained by the employee. The Tribunal does not take into account whether the employer can afford to pay the compensation and the consequences of failure to pay on the employer’s workforce. We can all imagine the uproar of a workforce who don’t get paid!

 In the recent Tribunal decision of TAO Herbs and Acupuncture Limited v Mrs Y Jin His Honour Judge McMullen QC stated that the employer’s ability to pay a compensatory award is not a relevant consideration.

Emily Yeardley

In the recent case of MOD v Wallis the claimants were wives of UK armed forces personnel who were working for schools attached to the NATO headquarters where their husbands were working. When their husbands’ service ended they were dismissed. They claimed that they had been dismissed unfairly.  The EAT handed down the following propositions:

Should the situation arise that you are working in Europe and you are eligible to do so as a result of a spouse’s service with the UK armed forces, it is deemed that there is sufficient connection between the employment and the UK for you to fall under the legislation for unfair dismissal in this country.

When reading s.6 of the Sex Discrimination Act 1975 literally it would appear that the Employment Tribunal would not have the jurisdiction to consider a sex discrimination claim in Europe. However, the Equal Treatment Directive is intended to confer rights on expatriate employees and domestic rules limiting territorial scope must be displaced. Thus the Employment Tribunal does have the jurisdiction to hear a sex discrimination claim within Europe.

Katie Phillips

The ECJ has recently ruled that benefits provided to employees under salary sacrifice schemes are VATable.

Some employers offer their employees the perk of giving up part of their salary or contractual bonus (which is liable for tax and NI contributions) in exchange for a new or enhanced non cash benefit which has a full or partial exemption for tax and NI. Examples of benefits include retail voucher schemes and cycle to work schemes which allow employees the chance of purchasing a bike at a considerably lower price.

In the case of Astra Zeneca, which involved retail vouchers, the company made a claim to HMRC for a reimbursement of the input VAT which was incurred in purchasing the vouchers for their employees. HMRC rejected the claim stating that the company had to pay the VAT incurred on vouchers bought as part of their employees’ remuneration packages. This was not expected as employees are not taxable persons for the purpose of VAT.

The ECJ agreed with HMRC stating that provision of a voucher to employees as part of their salaries constitutes a supply of services effect for consideration. What’s the bet the popularity of these perks is going to considerably wane?!

Katie Phillips

Recent research has found that the gender pay gap is to remain until 2067, just a short 57 years away! The Chartered Management Institute has found that there is a 24% difference in male and female pay at senior level. The gap is considered to be worst in the Pharmaceutical and IT industries. The recent recession has also witnessed a difference in treatment between men and women, with 4.5% of the female workforce losing their jobs in comparison to 3%. The new Equality Act still has a lot of inequality to eradicate. We’ve come along way since 1975 but not far enough.  

Katie Phillips

The recent case of Aylott v Stockton on Tees Borough Council has handed down some useful advice on who is the correct comparator in a disability discrimination claim. In 2008 there was a landmark case, Lewisham Borough Council v Malcolm that changed the law in this area.  In claims for discrimination it is necessary for the claimant to specify to whom they are comparing themselves when asserting that they have been treated less favourably.

The Malcolm case changed the law stipulating that the correct comparator in cases of disability related discrimination is “someone who has behaved in the same way as the person concerned, but [who] did not suffer that person’s disability”. So if someone with a disability was off sick and they got dismissed their comparator would be someone who was also off sick but did not have a disability but no doubt would have been treated the same and dismissed. Hence no less favourable treatment and no discrimination.

This essentially made it harder to bring disability claims for direct discrimination.

The Court of Appeal in the Aylott made 3 points to reduce the unnecessary complexity:

As a result of the Malcolm case legal practitioners have focused on the failure to make reasonable adjustments, a form of positive discrimination which is also evidentially easier to demonstrate.

It is not wise or correct to carry across principles and precedents from other areas of discrimination law, such as race or gender, because disability related discrimination and the duty to make reasonable adjustments does not appear in that context.

Justification is no defence to direct discrimination on the grounds of disability. It is also no defence for a failure to comply with the duty to make reasonable adjustments. It does remain a defence to indirect discrimination cases and disability related discrimination.

Katie Phillips

Some of you may be lucky enough to send someone else to the office for you if the thought of work does not take your fancy on a Monday morning but this does not necessarily help if you have an employment issue.

In the recent case of Community Dental Centres Ltd v Sultan-Darmon a dentist brought a claim for unlawful deductions. At first instance the Employment Tribunal found that the Claimant was not an employee but he was a worker. On appeal the EAT held that the fact that the Claimant had a right of substitution meant that he was not obliged to personally perform any work or services so therefore was not a worker. The claim was dismissed for lack of jurisdiction.

Employment status is a particularly ambiguous area of employment law. It often comes down to careful analysis of case law and unfortunately pot luck on how the Employment judge interprets the law on the day.  What is clear from this case however is that a right of substitution is likely to defeat a claim around whether you are an employee or a worker.

Katie Phillips

With an estimated 7 million employees failing make adequate financial provision for their retirement the government have planned to introduce a new way of enabling employees to save. The new system NEST (National Employment Savings Trust) will operate from October 2012 by making both employers and employees contribute at set rates. The government will seek to increase the contributions by building up to 3% for employers and 4% for employees from 2012 to 2017. The aim of the scheme is to provide more security and give employees the “push” that they need to make better financial provision post retirement. It will give lower earners the opportunities they may currently be denied through lack of access to a good company scheme.

For employees

For all those employees who fear they cannot afford such contributions… the government have stated that this will apply to employees who earn above a minimum and maximum salary from 22 to state pension age (currently 65 for men and rising to 65 for women). You can opt out of this scheme but this does not give you complete freedom as you will be automatically re-enrolled at regular intervals. It is the employer’s job to police this and re-enroll you. If you are already in a pension scheme that is deemed acceptable then you may well escape the clutches of NEST.

For employers

Enrolment of employees is immediate under the new law. You are not entitled to wait. The only exception to this is if you operate your own pension scheme whereby you may be entitled to a 3 month waiting period to bring staff into the pension plan. If you are a large employer with more than 1,250 staff then you will be required to effect the new scheme from October 2012, a medium sized employer (more than 50 staff) can expect this to be rolled out next followed by small employers with less than 50 staff estimated for completion in 2016.

The message: government wants us all to save for our retirement and spare them the headache.

Emily Yeardley

With the introduction of the Equality Act looming there has been much movement in this area. If not to provide guidance on the implementation of the Act to provide “gap filling” case law. An example of such is Aylott v Stockton-on-Tees Borough Council. The comparator test laid down by the House of Lords in London Borough of Lewisham v Malcolm, a housing case has been upheld by the EAT as applicable to disability-related discrimination cases pending an overhaul by the Equality Act 2010.

The EHRC have produced guidance for employers, workers, service providers and service users in a bid to provide practical examples of how the Equality Act will be implemented and to show the impact of the changes proposed. They are currently collating further guidance for students and academic institutes which will be published in September 2010.

This is the first in a series of posts on the Equality Act 2010. Please follow us if you are interested in this area.

Emily Yeardley

The following is an extract from Darkness Visible by the writer William Styron. He wrote a memoir of a major depressive episode which has resonance for many of my clients who suffer long-term depressive illness.

 “When I was first aware that I had been laid low by the disease, I felt a need, among other things, to register a strong protest against the word “depression”. Depression, most people know, used to be termed “melancholia”, a word which appears in English as early as 1303 and crops up more than once in Chaucer, who in his usage seemed to be aware of its pathological nuances.

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In the recent case of McWilliam and others v Glasgow City Council a Scottish Employment Tribunal found that the requirement for an employee to be advised on the terms and effects of a compromise agreement did not mean that they should be advised by the solicitor as to whether the proposed settlement was a good deal.

The case confirms that only a basic level of advice needs to be given by the adviser in order for the compromise agreement to be binding.

In order to validly compromise certain statutory claims specific conditions must be contained in the compromise agreement which include:

• The agreement must be in writing
• The agreement must relate to a particular complaint or particular proceedings
• The employee must have received legal advice from an independent adviser on the terms and effect of the proposed agreement and its effect on the employee pursuing any right at an Employment Tribunal
• The independent adviser must be insured covering the risk of the claim against them by the employee in respect of the advice
• The agreement must identify the adviser
• The agreement must state that the conditions regulating compromise agreements have been satisfied

If you have been offered a compromise agreement by your employer or you are an employer that regularly uses compromise agreements why not contact us for an initial consultation.

Katie Phillips