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Employment Law

Legal guidance - compliance - software

23 JUL 2012

July 2012

This month hrlaw@trowers.com reports on annual leave which is interrupted by sick leave, and subjective redundancy selection criteria. In addition, hrlaw@trowers.com reports on the demise of the concept of "compensated no-fault dismissals", on the Government proposals to increase the use of "settlement agreements" and on a proposal to impose mandatory pay audits on employers who lose equal pay claims.

1 Case Law round-up

1.1 Important cases

Alemo-Herron v Parkwood Leisure Ltd

British Airways v Mak

Compass Group UK and Ireland v Odepe

Eweida v UK and Chaplin v Royal Devon/Exeter NHS Trust Hospital; Ladele v London Borough of Islington and McFarlane v Relate Avon Limited

Kulikaoskas v Macduff Shellfish

RMT v United Kingdom

X v Mid-Sussex Citizen's Advice Bureau

1.2 Annual leave and sickness

The Court of Justice of the European Union (CJEU) has held in the case of Asociación Nacional de Grandes Empresas de Distribución (ANGED) v Federación de Asociaciones Sindicales and others that the EU Working Directive requires that a worker who is sick during paid annual leave is able to interrupt the annual leave and take it at a later date. This is irrespective of whether the sickness started during or before the annual leave.

1.3 Effective date of termination

The EAT has held in the case of Hawes & Curtis v Arfan and Mirza that a tribunal is entitled to take into account an otherwise unsuccessful internal appeal that purports to change the effective date of termination (EDT).

1.4 Subjective redundancy selection criteria

The Employment Appeal Tribunal (EAT) has held in the case of Mitchells of Lancaster (Brewers) Ltd v Tattersall that subjective redundancy selection criteria, involving a degree of judgement, are not unfair.

1.5 Withdrawal of union's legal support

The EAT has held in the case of University and College Union v Croad that it is not unlawful victimisation for a trade union to refuse to fund litigation by a member against her employer for disability discrimination if that employee also brings (or intends to bring) similar proceedings against the trade union.

1.6 Re-disciplining for the same offence

The EAT has held in the case of Christou & Ward v Haringey that an employer can put an employee through a second disciplinary procedure for the same offence in exceptional circumstances (in this case on the grounds that the original disciplinary procedure didn't impose a serious enough sanction).

1.7 TUPE and the assignment of a lease of commercial premises

The EAT has held in the case of LOM Management v Sweeney that the assignment of a lease of commercial premises will not automatically amount to a TUPE transfer unless it can be shown that a transfer of an economic entity retaining its identity has taken place.

1.8 Age discrimination and service related grading

The CJEU has held in the case of Tyrolean Airways Tiroler Luftfahrt GmbH v Betriebsrat Bord that an employer's refusal to take into account service with other group companies, when assessing if an employee had the length of service necessary for promotion, was not age discrimination.

1.9 Ill-health early retirement under the Local Government Pension Scheme

The Pensions Ombudsman has upheld a complaint by Mrs Taylor-Colclough, a teaching assistant employed by Nottinghamshire County Council whose application for an ill-health pension under the Local Government Pension Scheme (the LGPS) at 35 was rejected on the grounds that there were untried treatments that might help her return to work.

1.10 Fiduciary duties and employees

The Court of Appeal has held in the case of Ranson v Customer Systems plc that an employee who met his employer's clients with a view to securing work for a business he had set up after his resignation was not in breach of contract.

2 News

2.1 Government desire to increase the use of "settlement" agreements

The Business Secretary, Vince Cable, announced at the Enterprise and Regulatory Reform Bill's second reading on 11 June that he will make amendments at Committee Stage to increase the use of settlement agreements (currently known as compromise agreements). He stated that these amendments would "ensure that the offer of a settlement cannot be used against an employer in an unfair dismissal case".

2.2 "Compensated no-fault dismissal" will not be implemented

During the course of the Enterprise and Regulatory Reform Bill's Second Reading debate, Mr Cable insisted that the Government does not intend to pursue the "compensated no-fault dismissal" proposals.

2.3 Mandatory pay audits for employers who lose equal pay claims

The proposal for imposing mandatory pay audits on employers as a means of tackling the gender pay gap was included in last year's "Modern Workplaces" consultation.

2.4 Remit of Low Pay Commission published

The Government has announced the Low Pay Commission's (LPC) remit for its 2013 Report.

2.5 Acas guidance on managing staff issues during the Olympics

Advisory, Conciliation and Arbitration Service (Acas) has published guidance, "Quick tips for employers on managing during the games" to help employers minimise disruption and manage staff expectations during the Olympic Games.

2.6 Executive remuneration

On 20 June Vince Cable announced the Government's proposals on directors' remuneration. The Government states that it believes the reforms will enable shareholders to challenge excessive pay whilst avoiding the imposition of unnecessary regulatory burdens.

2.7 Proposals to amend the LGPS

The Local Government Association and trade unions have announced the outcome of negotiations on proposals to change the Local Government Pension Scheme (LGPS) with effect from 1 April 2014.

2.8 HMRC confirms salary sacrifice and auto-enrolment are compatible

HMRC has published updated salary sacrifice guidance which includes a new section on auto-enrolment. The guidance confirms that salary sacrifice arrangements will be able to meet the requirements of the auto-enrolment legislation.

  • 3 Legislation

3.1 Forthcoming Legislation

Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995

Parental Leave Directive 2010/18/EU

Pensions Act 2008

Education and Skills Act 2008

Pensions Act 2011

Protection of Freedoms Act 2012

Enterprise and Regulatory Reform Bill

3.2 Consultation on collective redundancy reform

The Government has issued a consultation on collective redundancies. It proposes shortening the 90-day consultation period for collective redundancies to either 30 or 45 days and issuing a new non-statutory code of practice.

3.3 Unfair dismissal claims and inadmissible discussions

The Government has published an amendment to the Enterprise and Regulatory Reform Bill which would prevent employment tribunals hearing claims of unfair dismissal from taking into account any settlement offer made as part of an offer from the employer that an employee's employment terminates on agreed terms.

3.4 Auto-enrolment Update

There have been various developments recently in respect of auto-enrolment.

Key contacts

Emma Burrows Partner

T: +44 (0)20 7423 8347

E: eburrows@trowers.com

Rebecca McGuirk Partner

T: +44 (0)121 214 8821

E: rmcguirk@trowers.com

Helen Cookson Senior Associate

T: +44 (0)161 838 2081

E: hcookson@trowers.com

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© Trowers & Hamlins LLP 2012

Trowers & Hamlins LLP is a limited liability partnership registered in England and Wales with registered number OC 337852 whose registered office is at 3 Bunhill Row, London EC1Y 8YZ. Trowers & Hamlins LLP is authorised and regulated by the Solicitors Regulation Authority. The word "partner" is used to refer to a member of Trowers & Hamlins LLP or an employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Trowers & Hamlins LLP's affiliated undertakings. A list of the members of Trowers & Hamlins LLP together with those non-members who are designated as partners is open to inspection at the registered office.

Trowers & Hamlins LLP has taken all reasonable precautions to ensure that information contained in this document is accurate, but stresses that the content is not intended to be legally comprehensive. Trowers & Hamlins LLP recommends that no action be taken on matters covered in this document without taking full legal advice.

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