Employees and Ownership

Annual Increase in Compensation Limits

The annual increase in compensation limits for dismissals and other trigger events occurring after 1st February 2009 have increased to:

compensatory award: £63,000 to £66,200;
a ‘week’s pay’: £330 to £350;
maximum redundancy payment: £9,900 to £10,500
Repeal of the statutory dismissal and disciplinary procedures

The Employment Act 2008 received royal assent on 13 November last year. The effect of this legislation is that from 6 April 2009 the statutory dismissal and disciplinary procedures will be repealed. The practical implications of this change will be welcomed by most. The removal of mandatory uplifts in compensation and the automatic unfair dismissal sanction will have a positive impact on employers. In addition to repealing the procedures, the Act will remove the provisions relating to procedural unfair dismissal and will introduce to the Employment Tribunal’s discretion to increase or reduce awards by up to 25% where either side unreasonably fails to comply with the new Advisory, Conciliation and Arbitration Service (ACAS) code of practice. Transitional concerns are anticipated, particularly for dismissal procedures commencing/grievances arising before 6 April, but not yet concluded. How the Tribunals exercise its discretion in applying the increase or decrease is another change, the effect of which we will have to wait and see.

Disability Discrimination – Reasonable Adjustments…?

The Disability Discrimination Act 1995 provides that an employer is exempt from the duty to make reasonable adjustments if he did not know, and could not reasonably be expected to know, that someone is likely to be placed at a substantial disadvantage by a disability. This defence is often used by prospective employers defending allegations of failure to make reasonable adjustments when (not) offering a job. In Eastern & Coastal Kent PCT v Grey, the EAT has held that this requires each, not merely one, of the following four limbs to be satisfied, namely that the perspective employer:-

does not know that the disabled person has a disability;
does not know that the disabled person is likely to be at a substantial disadvantage compared with persons who are not disabled;
could not reasonably be expected to know that the disabled person had a disability; and
could not reasonably be expected to know that the disabled person is likely to be placed at a substantial disadvantage in comparison with persons who are not disabled.
Care Workers – POVA List Unlawful
The House of Lords has handed down a decision impacting on those advising or working in the care sector. The case concerned care workers who look after vulnerable adults or children. Under current legislation, if an employer dismisses the employee because they have harmed (or placed at risk of harm) a vulnerable person, then their name must be included on a list held by the Secretary of State and they are banned from employment by any other care provider. The difficulty comes with the fact that people get placed on this list with little, if any, enquiry (and with no right to make representations). The appeal process is long and drawn out, during which time the employee cannot work, and the majority of those who appeal succeed in their request to be removed from the list. The House of Lords has held that the list is inconsistent with Article 6 of the European Convention on Human Rights, and has issued a Declaration of Incompatibility. The consequence of such a declaration is that the legislation remains effective until amended by parliament (s4(6) of the Human Rights Act 1998), but this is something that Employers in this sector should be aware of.

Sickness Absence

In cold, rainy January our minds turn to sunshine and Holidays. However, calculating holiday entitlement can be a headache for HR professionals. Difficulties arise when employees are on long term sick leave are whether they are entitled to paid holiday leave – as the law stands the answer is “no”. Another relevant question is how long is “long-term” and how far back can claims for accrued holiday on termination go, these are all questions that will be set to challenge the calculations of holiday entitlement. The House of Lords referred the first question to the ECJ back in 2006 and finally at the end of next month we will have the ECJ opinion on this. Although this will not mark the end of the saga as once we have the ECJ opinion, the matter will need to go back to the House of Lords to apply the ECJ decisions. A number of European cases in the ECJ have concerned similar questions in respect of holiday entitlement. For example, whether workers absent on sick leave throughout an entire leave year(s) should be able to take their annual leave for the year(s) they were off ill, on their return to work in the following leave year and whether an employee who has booked holiday leave, and then unable to take it due to a short-term injury, can carry over that leave into a subsequent holiday year. Should the ECJ confirm that leave can be carried forward, employers will need to factor in the associated costs in managing those on long-term sick leave. On the face of it, this looks like it would be good news for those on long-term sick leave. However, this may in fact lead to the quicker dismissal of those on long-term leave or a reduction in generous sick pay entitlements to offset additional holiday cost.

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