Employment Matters - Clarke Willmott LLP€¦ · Act in future Employment Matters. The Modern Slavery Act 2015 is a serious advance forward in terms of business accountability for

In the case of Trustees of Swansea University Pension Scheme and another v Williams, the EAT decided that it had been wrong of the Employment Tribunal was incorrect in deciding that the pension scheme rules, which, in the event of ill health retirement provided for immediate payment of a pension based on final salary and without actuarial reduction – amounted to unfavourable treatment, and it was incorrect of the Tribunal to equate ‘unfavourable treatment’ with ‘detriment’.

The facts of this case are that an employee retired through ill-health at the age of 38 because of his disabilities, Tourettes Syndrome, Obsessive Compulsive Disorder, depression and associated psychological problems. The University’s pension scheme entitled him to immediately receive a pension, without actuarial reduction, based on his final salary. In the year leading up to retirement, the employee had requested and been granted a number of reasonable adjustments to his working hours, with the end result that he was working half of his previous hours by the time he retired. His salary had been adjusted to the new hours, so the pension he received was

half of what it would have been had he taken ill health retirement when still working full time. The employee brought a claim against the University and the pension scheme Trustees, arguing that basing his pension on the final salary, rather than the salary prior to the adjustments to his working hours amounted to discrimination arising from his disability, contrary to section 15 of the Equality Act 2010.

The Employment Tribunal decided that the employee had been treated unfavourably by the rules of the pension scheme since his disability had caused him to have a lower pension than he would have done had his disability not caused him to work part time. It found that this amounted to discrimination arising in consequence of his disability.

The EAT held that the Tribunal’s conclusion that the employee had suffered unfavourable treatment was “manifestly perverse”.

Continued on page 2

Disability Discrimination: “unfavourable treatment” if different from “detriment”

Welcometo the August edition of our Employment Law Briefing

Hello again from Clarke Willmott LLP’s Employment & HR team and welcome to another edition of Employment Matters.

For further information on any of the topics in this month’s Employment Matters, please contact a member of the Employment & HR team.

As ever, we welcome your feedback and if you would like to see a particular area or topic featured in future issues, please let us know by emailing [email protected].

Kevin Jones Head of Employment & HR

ContentsDisability Discrimination: “unfavourable treatment” if different from “detriment”

I did not know that - every day is a school day!

The Modern Slavery Act 2015 – is your business and its supply chains slavery free?

Employment Tribunal fees reimbursement

Employment Matters

Employment Law Briefing August 2015

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The Employment Appeal Tribunal (EAT) has overturned an Employment Tribunal’s finding that a disabled employee suffered discrimination when he received an ill health retirement pension based on his final salary, rather than the salary he had received before his working hours were reduced in a series of reasonable adjustments.

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02 Employment Law Briefing August 2015

Disability Discrimination: “unfavourable treatment” if different from “detriment” continued

I did not know that - every day is a school day!

This month Bex Sinclair, Head of the HR Consultancy Unit, gives her top five things that employers often do not know or misunderstand:

1. Right to Work checks

It is a common misconception that you only need to check an employee’s Right to Work in the UK if they are from a country outside the UK. This is not the case and can often catch out employers. Right to Work checks must be carried out for all staff joining your organisation. Work, for the purposes of UK Visas and Immigration, means work whether paid or unpaid. It would be prudent therefore for businesses to conduct Right to Work checks for any individual engaged and even volunteers.

2. Identification documents

Contrary to popular belief, a current driving licence is not proof of an employee’s Right to Work in the UK. Neither is a copy of their P45 or their National Insurance card. The list of valid documents is published by the Home Office and is often updated so do not be caught out by this. Always complete the official Home Office official check and keep copy documents on the employee’s personnel file.

3. Statutory maternity pay (SMP) – still payable when an employee comes back to work?

If an employee returns to work having taken a period of maternity leave before the end of the SMP period, for example at 26 weeks, this can have the following affect:

• If that employee then goes off sick during at any time during the remainder of the SMP period, they will be entitled to SMP not Statutory Sick Pay.

• If that employee leaves employment and any time during the remaining SMP period they will be entitled to SMP for the remaining period. This applies even after the employee returns to work. This is because SMP entitlement is not dependant on them remaining an employee.

4. Suspending an employee

If you suspend an employee from work without a contractual right to do so (i.e. a clause in their employment contract that allows you to do this) you will very probably be breaching the employee’s contract and they will have a potential claim against you regardless of what they may have done wrong. This will almost certainly be the case if you have no written contract in place. This is another essential reason to ensure that your employment contracts are in place and kept up to date.

5. Sickness whilst on holiday

If an employee takes a pre-booked holiday but then becomes sick during that period, technically they are entitled to take that time as sick instead of holiday and then take the period of holiday again at a later stage. Employers therefore need to ensure that there is a robust sickness absence policy in place that addresses such a situation including the notification and certification requirements.

Do not get caught out by these issues. Non-compliance in most of these examples can be costly. If you are not sure whether or not you are doing the right thing, always check with our Employment and HR team first. We can check that you have the right documentation and procedures in place to ensure that you are complying with the latest legislation.

An essential point which the Employment Tribunal had overlooked was that the ill health pension was only available to employees who would retire through disability in the first place; any other employees who retired early would have to wait until the age of 67 to receive a pension.

Unfavourable treatment has the sense of placing a hurdle in front of, or creating a particular difficulty for, or disadvantaging a person. Treatment which is advantageous (in this case being able to receive pension immediately on retirement due to disability rather than waiting until 67 years) cannot be said to be “unfavourable” because it is less advantageous than it otherwise could be. The Tribunal had applied the test of less favourable treatment, comparing the employee’s position to that of other disabled employees whose retirement came on more suddenly and therefore at a time when they were still working full time. The Employment Appeal Tribunal held this was a completely flawed approach the claim.

The term “unfavourable” was deliberately chosen by Parliament for the Equality Act. The Employment Tribunal was wrong to equate it with the term “detriment”, which appears elsewhere in the Equality Act in relation to other forms of disability, discrimination.

The employee’s claim has been returned to the Employment Tribunal for a complete new hearing.

Key points to note

This case highlights the fact that the tests for whether an employee has been discriminated against are not the same for each different form of disability discrimination claim that can be pursued. If an employee alleges that they are being discriminated against at work, please do not hesitate to contact us.

Employment and HR legislation seems to change so quickly that you can often find that you encounter something new every day when managing staffing issues!

The Modern Slavery Act 2015 – is your business and its supply chains slavery free?

Who must comply?

Commercial organisations over a certain size who supply goods or services and carry on business or part of a business in the UK must, in due course, comply with the reporting requirement. A commercial organisation can be either a body corporate or a partnership (wherever it is incorporated or formed). However, it appears that a physical presence in the UK is not necessary.

At present it is not possible to predict the number of businesses who will be affected by this new law. This is primarily because it is not yet known what the relevant size threshold will be. The Government’s consultation into the size threshold closed in May 2015 and it is expected that the outcome of that consultation will be published shortly. The Secretary of State will then make further legislation specifying the size threshold, by reference to an organisation’s worldwide turnover. Therefore, this means for an organisation carrying on all or part of its business in the UK, the total turnover of its entire business (including its subsidiaries) will be taken into account. The legislation is aimed at large organisations: the consultation document set out a range of possible thresholds from £36 million up to £1 billion. If the threshold is £36 million, some 12,000 UK companies will be affected.

When?

The government has stated that section 54 will not commence until a date in October 2015 once it has fully considered the results of its consultation.

What steps can be taken now?

Larger organisations, who are likely to meet the (as yet unspecified) turnover threshold, may want to start to take steps towards compliance. Initial steps may include:

• auditing present processes and procedures within the business and its suppliers;

• considering what policies the business and its suppliers have in place to deal with anti-slavery and anti-human trafficking;

• ensuring that senior management are fully aware of their obligations, for example, by providing training on the business’ anti-slavery and anti-human trafficking policies;

• amend the business’ disciplinary rules or policies to make it clear that breach of their anti-slavery and anti-human trafficking policy and related procedures may amount to gross misconduct;

• reviewing terms of relevant commercial contracts with suppliers;

• undertaking a risk analysis of existing and future supply chains taking in account the business sector and the countries/regions it operates in;

• considering what procurement practices and future checks may be necessary to ensure ongoing compliance;

• reflecting upon the level of reporting and the disclosure the business will make in its statement; and

• assessing the reputational issues involved.

We will of course keep you updated on any developments in relation to the Act in future Employment Matters.

The Modern Slavery Act 2015 is a serious advance forward in terms of business accountability for its operations. The Act introduces a requirement for certain businesses to report on the steps it has taken to ensure that there is no slavery and human trafficking in any part of its own business or its supply chains. This new obligation can be found at Part 6, Section 54 (Transparency in Supply Chains etc) of the Act.

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03 Employment Law Briefing August 2015

Key contacts Kevin Jones Partner 0845 209 1140* / 0117 305 6140 [email protected]

Sharon Latham Partner 0845 209 1332* / 0117 305 6332 [email protected]

Emma Hamnett Partner 0845 209 1878* / 0117 305 687 [email protected]

Marc Long Partner 0845 209 1581* / 0117 305 6581 [email protected]

Kate Gardner Partner 0845 209 1420* / 0117 305 6420 [email protected]

Bex Sinclair Head of HR Consultancy Unit 0845 209 1831* / 0117 305 6831 [email protected]

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04 Employment Law Briefing August 2015

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Clarke Willmott LLP is a limited liability partnership registered in England and Wales with registration number OC344818. Authorised and regulated by the Solicitors Regulation Authority (SRA number: 510689), whose rules can be found at www.sra.org.uk/handbook. Its registered office is 138 Edmund Street, Birmingham, West Midlands, B3 2ES. Any reference to a ‘partner’ is to a member of Clarke Willmott LLP or an employee who is a lawyer with equivalent standing and qualifications and is not a reference to a partner in a partnership. The articles in this briefing are not intended to be definitive statements of the law but instead provide general guidance.

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Yes, said the Employment Appeal Tribunal (EAT) in Ibarz v University of Sheffield.

It is already understood that, where an Appellant succeeds at the EAT, the respondent – their former employer - would usually be required to reimburse their issue fee and hearing fee.

That said, the EAT had previously ruled (in the case of Goldwater v Sellafield) that that would not be the case if the issue and hearing fees had been paid by a third party on their behalf, such as by the employee’s trade union or insurer. In that case, the employer would not be required to reimburse the employee.

However, the EAT has now said that the previous decision in Goldwater was wrong. It has been noted that it would go against public policy not to award reimbursement of fees where the appellant wins at court simply because the fees would go to a third party.

The Judge has therefore now ruled in Ibarz that the EAT does have power under the Employment Tribunal Rules to order the respondent to pay the issue fee and hearing fee, even where those fees were not paid personally by the appellant.

Employment Tribunal fees reimbursement

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Can an employer be ordered to reimburse Employment Appeal Tribunal fees to a successful employee Appellant, even where those fees were not paid personally by the employee?

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