Employment and the Law
3 June 2009
Employment and the Law - Recent Developments by Louise Fernandes-Owen
Louise Fernandes-Owen of Field Fisher Waterhouse LLP examines the latest key employment law developments.
Equality Bill – the highlights
The long-awaited Equality Bill has been published. It has two key purposes: to harmonise discrimination law and to strengthen the law to support progress on equality. A number of key changes have been proposed, including the following:
Gender pay gap
The Bill will outlaw pay secrecy clauses, making it unlawful to stop employees discussing their pay with their colleagues. It also contains a power to require private sector employers with 250 or more employees to report on their gender pay gap. The intention is to use this power from 2013 if sufficient progress on reporting is not made by then. The Bill will also include powers which require public authorities to report on equality issues.
Socio-economic disadvantage
The Bill will introduce a new duty on certain public authorities to tackle the unequal outcomes arising from socio-economic disadvantage. The duty will apply only to the broad, strategic decisions made by public authorities and is intended to be "light touch", to enable public bodies to assess how relevant the duty is to them and how they are going to meet it.
Equality duty
A new streamlined public sector equality duty is due to replace the race, disability and gender equality duties. The equality duty will also be extended to cover all discrimination strands, including gender reassignment.
Positive action
Employers, where they feel it is appropriate, will be able to take under-representation into account when selecting for appointment or promotion between two equally qualified candidates. However, making decisions irrespective of merit (i.e. quotas) or having an automatic policy of favouring those from under-represented groups will remain unlawful.
Redundancy selection and length of service
The Court of Appeal has confirmed, by a majority, that using length of service in redundancy selection criteria is lawful.
In Rolls Royce plc v Unite the Union, Rolls Royce had two collective agreements with the union which set out its approach to redundancy situations. Both agreements outlined a redundancy selection matrix where points were awarded based on a number of factors, including achievement of objectives; self motivation and expertise/knowledge. Each employee would also receive one point per year of continuous service. Rolls Royce and the union asked the High Court to determine whether the length of service criterion complied with the Employment Equality (Age) Regulations 2006.
The High Court held that although the criterion was discriminatory on the grounds of age, it was objectively justified. On appeal, the Court of Appeal agreed with the High Court and dismissed the appeal.
The Court of Appeal made a declaration that the use of length of service as a criterion in a redundancy selection process was indirectly discriminatory but it was justified as it was a proportionate means of achieving a legitimate aim. The legitimate aim was the reward of loyalty and the overall desirability of achieving a stable workforce in the context of a fair redundancy selection process. It considered it proportionate to use length of service as it was only one of a substantial number of criteria used to measure employee suitability for redundancy and was not determinative. The length of service criterion was entirely consistent with the overarching concept of fairness.
The Court of Appeal also expressed the provisional view that awarding points for length of service was capable of constituting a "benefit" within the meaning of regulation 32. This regulation broadly provides that an employer may treat workers differently by reference to length of service in relation to the "award of any benefit" and, where length of service exceeds five years, requires that it must reasonably appear to the employer that the way in which it uses the criterion of length of service fulfils a business need. The Court noted that length of service could objectively be seen to reasonably fulfil a business need of the company, of having a loyal and stable workforce.
Agency Workers Directive
The Department for Business, Enterprise and Regulatory Reform has published a consultation paper on the implementation of the Agency Workers Directive.
The consultation, which closes on 31 July 2009, seeks views on:
• who should be covered by the Directive
• the implementation of the 12-week qualifying period previously agreed by the CBI and TUC
• the definition of pay
• how equal treatment should be established
• who should be liable for compliance with obligations under the Directive
• the means of dispute resolution
Louise Fernandes-Owen is the Professional Support Lawyer in the Employment and Pensions Group at Field Fisher Waterhouse LLP and can be contacted at louise.fernandes-owen@ffw.com
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