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Welcome to BusinessHR's October update.

If you need help keeping your HR documents up to date with legislation, such as the new Equality Act, why not speak to us about how we can help you? Call us on 0845 355 0877.



  • Employment law update
    • Final reminder of the increase in the National Minimum Wage (NMW)
    • Equality Act
    • Agency workers
    • Consultation:
      • on the forthcoming Bribery Act
      • on the right to request flexible working
      • on the right to request time off for training
    • Increase in fees for overseas workers
    • Tribunal statistics
    • New guide to mediation
    • Maternity leave - extension of maternity pay?
    • Some interesting cases
      • Disciplinary hearings and witness intimidation
      • Unfair dismissal
      • Discrimination and references
      • Annual leave - full-time to part-time
  • Health and safety news
    • Work-related stress - new guide
  • New on the website
  • And finally....
    • Private versus public sector pay
    • UK pensions gap
    • A new acronym!
  • BusinessHR HRCare services
  • This month's hot topic


Employment law update

Final reminder of the increase in the National Minimum Wage (NMW)

A final reminder that the NMW increased with effect from 1 October and that the adult rate now applies to all of those aged 21 and over (previously 22 and over). There is also a new rate for apprentices.

As from 1 October 2010, the rates are as follows:

  • adult rate (for those aged 21 and over): £5.93 per hour (previously £5.80 per hour)
  • youth rate (18-20): £4.92 per hour (previously £4.83 per hour)
  • rate for those aged 16 and 17: £3.64 per hour (previously £3.57 per hour)
  • apprentices under 19 or in the first year of their apprenticeship: £2.50 per hour
  • the maximum amount that can be offset where accommodation is provided is £4.61 per day (previously £4.51 per day)

For further information see: /docs/legal/minimumwage.html


Equality Act

Most of this is of course now in place and, if you've been reading our newsletters, you'll be well on top of this. We've spent the last month updating the website accordingly, and our template policies, handbook, contracts and letters are all now updated. We're just completing revisions to the advice (there are numerous references to repealed legislation which have all needed recoding!)

Basic actions to take, in respect of the changes that come into force this month, if you have not already done so, are as follows:

  • Review your equal opportunity policy and ensure that it covers all of the "protected characteristics", that discrimination by perception and association is included (this extends to all protected characteristics except marital status and civil partnership), that indirect discrimination arising from a disability is covered, as well as third party harassment. Remove any references to the laws which have been revoked/repealed. Check any other related policies which may cover discrimination (eg diversity, recruitment).
  • Ensure that any clauses in your contracts or handbooks relating to equal opportunities are updated. If you have any "gagging" clauses relating to pay in your contracts, you may wish to remove or amend these for future appointments. There is no need to reissue contracts for existing staff, as long as managers know that it will not always be appropriate to take action where pay has been discussed with colleagues; careful investigation will be needed. However, note that you can still legitimately enforce secrecy clauses in respect of disclosure of pay rates to third party organisations such as competitors.
  • Review your recruitment process, including application forms and interview questions, and ensure that any questions relating to disability or medical conditions are not asked in advance of an offer being made, other than to make suitable adjustments to permit a disabled person to participate in the recruitment process, or where questions relate to factors which are essential to the job (ie the ability to undertake lifting and handling in a warehouse role). If you feel that a pre-employment health check is essential, this is fine, provided that it happens AFTER an offer is made and accepted.
  • Ensure that managers and staff (especially those involved in recruitment) are aware of the above changes.
  • Any letters, forms etc which refer to the old legislation (Disability Discrimination Act, Race Relations Act, Sex Discrimination Act etc) will need updating.
  • Positive action in connection with recruitment/promotion is not allowed if it would discriminate against someone else. If you take any positive action, ensure that this meets the new 'proportionality' test. Traineeships that are reserved for younger candidates or people from certain minority ethnic groups may need to be reconsidered.

Any acts of discrimination that took place entirely before October will be dealt with under the old laws; continuing situations that include dates from October onwards will come under the new rules. Employees will be able to bring separate claims under both the old AND new laws if they relate to different acts of discrimination either side of the implementation date!

Also note that whilst the Act changes the way employment tribunals determine whether an employee is disabled, the new guidance has not yet been finalised.

For the future, it's certainly worth considering an equal pay audit and checking your pay and benefits to ensure that there is no unlawful discrimination. An employee may now bring an equal pay claim without the need to have a comparator (ie he/she can use a hypothetical comparator) and claims are more likely given that staff may freely discuss their salaries, if the conversation relates to ascertaining whether there may be grounds for such a claim.

For further information see: /docs/legal/equalitybill.html


Agency workers

These regulations also took effect on 1 October. The main changes are:

  • upfront fees: these are usually made to offset the cost of producing marketing material for artists in the entertainment and modelling sectors. Agencies may no longer charge fees from would-be models (but other entertainers such as actors, musicians or extras do not have this protection).
  • suitability checks: the checks that agencies placing workers into permanent posts currently have to carry out are reduced. These include identity checks, training and qualifications. The only exception is if the person is applying for a job to work with a vulnerable person in his/her own home, in which case the checks must still be carried out. Checks for temporary staff remain the same.
  • job adverts: will no longer need to include a statement as to whether the agency is acting as an employment agency or employment business. Instead they must state whether a position is 'temporary' or 'permanent'.

For further information on agency workers, see: /docs/legal/agency.html



... on the forthcoming Bribery Act

The Government has begun consultation on its guidance on the Bribery Act, which comes into force next April. The Act introduces a corporate offence of failure to prevent bribery by anyone working on behalf of a business and the guidance will cover the procedures that commercial companies should put in place to prevent bribery.

The Act introduces four offences:

  • bribing - the offering, promising or giving of an advantage
  • being bribed - requesting, agreeing to receive or accepting an advantage
  • bribing a foreign public official
  • the "corporate offence", where a commercial organisation fails to prevent persons performing services on its behalf from committing bribery.

The guidance will be published early next year. Consultation runs until 8 November, see:

... on the right to request flexible working

The Government is still planning to consult, later this year, on extending to all employees the right to request flexible working. A government spokesman said that "Extending this right to all employees will encourage more employees and employers to benefit from the flexible working, and make making a request more commonplace, removing the stigma attached to making a request". Worth bearing in mind if you are updating/reviewing your flexible working policy.

For more information on flexible working requests, see: /docs/legal/flexible.html

... on the right to request time off for training

and finally, the Government has completed a short consultation on the proposed extension to all staff of the right to request time off for training. Views as would be expected, were opposing. The Institute of Directors described the existing rules as: "spectacularly bad policy - defective from conception to implementation. ....The only satisfactory way of addressing this problem is to repeal the legislation completely." The British Chambers of Commerce (BCC) agreed, suggesting that there is no need for employees to have a regulatory right to request time off as many employers already offer formal or informal training opportunities. However, the TUC warned that scrapping or watering down this right will adversely affect unskilled workers, as many employers do not offer any training at all. The TUC included an analysis of official figures which shows that only one in 10 unskilled workers receive regular training at work, compared to four in 10 graduate employees, while more than 10 million workers receive no training at all from their employer.

From our perspective, whilst we produced guidance and a suite of letters on the website, we've not had a single enquiry on the helpline about time off for training, which suggests to us that either employees weren't aware of it and that few requests have been made, or that all of the requests have been straightforward and resolved without the need for further help. If you were about to update your training policy to reflect the forthcoming extension of the above regulations, it may be worth holding fire!

For further information on the right to request time off for training, see: /docs/legal/training.html


Increase in fees for overseas workers

The UK Border Agency has announced proposals to increase the fees for those applying for visas or nationality applications to visit, study, work or stay in the UK. The increase that directly affects employers is that, where a sponsor is given a B rating for failing to comply with sponsorship duties, the charge for creating a sponsorship action plan in order to achieve an A rating will increase from £600 to £1000 from 1 October 2010.

For more information on work permits and employing foreign nationals, see: /docs/legal/foreignnationals.html


Tribunal statistics

The latest Employment Tribunal and EAT statistics, covering the period from April 2009 to March 2010, have now been published. Some of the key findings are:

  • 236,100 claims were accepted in 2009-10, an increase of 56% on 2008-09
  • this is largely due to the rise in multiple claims (which rose by nearly 90% on 2008-09) but also partly as a result of the economic climate, which may have accounted for the increase in unfair dismissal, breach of contract and redundancy claims
  • 50,900 unfair dismissal claims were brought in 2009/10: of these, 12,200 were withdrawn, 22,400 were settled and 3,900 struck out prior to a full hearing. Only 5,200 were successful at a tribunal. The median award was £4,903 and the average award £9,120.
  • of the discrimination claims, disability claims had the highest average award (£52,087). This included the largest ever disability discrimination award of £729,347 (made to a sports writer at News of the World, who was bullied and then dismissed while on long-term sick leave for stress-related depression). Another 11 cases resulted in awards of more than £50,000.
  • the average award for sexual orientation discrimination was £20,384. The biggest award was £163,725 - this was much higher than other awards which were all less than £30,000. Most claims (40%) were settled without a hearing.
  • the average award for sex discrimination was £19,499. Whilst the number of sex discrimination claims was higher than other discrimination claims at 18,200, these claims are actually declining, with 400 fewer cases than last year and 8,700 fewer than in 2007-2008. Most claims (57%) were withdrawn.
  • the average award for race discrimination was £18,584. The highest was to an investment banker who was awarded compensation of £374,922 after claiming the French investment bank Calyon had discriminated against him on the grounds of nationality when he was not promoted and then dismissed. 5,700 claims for race discrimination were accepted and most cases were settled without a hearing or withdrawn.
  • the average award for age discrimination was only £10,931. The maximum award was £48,710, with only one other age discrimination claim being awarded more than £40,000.
  • the average award for religious discrimination was £4,886. Awards for religious discrimination claims were generally lower than in other discrimination cases, the largest being £9,500.
  • in discrimination cases, the figures for those who succeed in tribunal are low - between 2-5% - depending on the claim.
  • the Employment Appeal Tribunal (EAT) received 1,963 appeals and disposed of 1,848 - a similar figure to 2008-9.


New guide to mediation

Perhaps timely in light of the above, Acas and the TUC have launched a new guide for trade union representatives on workplace mediation. This covers what happens during mediation, the role of representatives, how to support union members, setting up mediation arrangements and how these fit with other workplace procedures and agreements.

To download either the new guide, or an alternative guide aimed at employers and developed with the CIPD, see:


Maternity leave - extension of maternity pay?

The European Parliament will vote this month on proposals to extend the paid period of maternity leave to 20 weeks on full pay. It has been estimated that, if passed, this could cost the UK £2.5 billion per year. Currently, women on maternity leave in the UK are paid six weeks' salary at 90% of their average earnings, followed by 33 weeks of statutory maternity pay at a flat rate of £124.88 per week.

We wait to see if this is passed in the current economic climate - if so, the cost would presumably be borne primarily by the government as employers are able to reclaim 92-100% of statutory maternity pay paid, depending on their level of NI contributions.


Some interesting cases

Disciplinary hearings and witness intimidation

Is it unfair for a witness to give evidence in the absence of the person whose behaviour is the subject of disciplinary action?

If the situation is handled properly, and there is a good reason for deviating from normal procedure, then the answer would seem to be "no".

The case of Owen v Rhondda Cynon Taff County Borough Council involves two refuse collectors, Mr Owen and Mr Wade. Mr Owen was dismissed following an argument with Mr Wade, when Mr Owen is alleged to have attacked Mr Wade, grabbing him by the throat, kicking him and holding him up against a car. The incident ended when a colleague and a member of the public interceded.

Mr Wade did not want his employer to take any action, but the Council decided to do so. It investigated the incident and allowed Mr Wade (who was described as a 'short, quiet, shy, timid man' with a noticeable stammer) to be accompanied at the investigatory interview by his wife. It also excluded Mr Owen (described as a 'big, strong, vocal' individual) from the part of the disciplinary hearing while Mr Wade gave his evidence and also whilst Mr Jones (a further operative) gave his evidence, due to fears that Mr Owen's presence would intimidate both men.

Mr Owen claimed the disciplinary procedure was unfair.

The tribunal disagreed. It decided:

  • the employer was fully entitled to investigate the matter, regardless of the fact that the victim had not wished them to do this.
  • it was not unreasonable to allow Mr Wade's wife to be present during the investigation, as it did not give him any undue advantage (whereas permitting him to have legal representation may have done), reduced the stress on him and was justifiable because of his nervous character and stammer.
  • refusing to allow Mr Owen to be present while Mr Wade gave his evidence was proportionate in order to establish the truth, as the employer had genuinely believed that Mr Wade's testimony would be affected by Mr Owen's presence. Mr Owen had been given the notes from the disciplinary investigations a few days before the disciplinary hearing and these did not differ significantly from the witnesses' testimony in the disciplinary hearing.
  • a sufficiently thorough and unbiased investigation had taken place and the disciplinary procedure had been substantially fair.

Unfair dismissal

Is loss the same as theft?

The Employment Appeal Tribunal does not think so! In Celebi v Scolarest Compass Group UK & Ireland Ltd, the allegations put to Mrs Celebi were that of a 'loss of £3,000'. The employer believed her to be guilty of theft, but the disciplinary hearing found her guilty of 'loss' and dismissed her.

The Employment Appeal Tribunal held that the lack of precision in the charge meant the dismissal was unfair. The case has been sent back to the tribunal to decide on the award, in particular whether there should be any reductions for contributory fault and on Polkey grounds.

The moral here is to ensure that clear terminology is used rather than euphemisms!

Discrimination and references

The case of Bullimore v Pothecary Witham Weld Solicitors is a useful reminder that employers do need to ensure that references given after an employee has left are not discriminatory and confirms that an employer who gives a discriminatory reference can be liable for loss of earnings, as well as injury to feelings. Following receipt of the reference, the prospective employer withdrew its job offer.

The original tribunal felt that the claim for loss of future earnings against the reference provider was too remote, but the EAT disagreed, observing that this was not an uncommon form of victimisation.

Annual leave - full-time to part-time

A common sense and fair decision! In Zentralbetriebsrat der Landeskrankenhäuser Tirols v Land Tirol, the employee reduced from full-time to part-time. The European Court of Justice said that, if the worker had not been able to take the accrued paid leave before going part-time, this should be paid at the full-time, not the part-time, rate. This is particularly relevant for those returning from maternity leave, who have accrued leave at their old, full-time rate during their absence and who then return part-time.

The argument was caused by wording in the Working Time Regulations which stipulate that payment for leave is calculated by reference to a 'week's pay' at the time the leave is taken, not when it was 'accrued'. However, we suspect that most employers will have paid the accrued leave at the full-time rate (or allowed the time to be carried forward as the full-time number of hours off).

For further guidance on managing leave, see: /docs/guides/holidays.html


Health and safety news

Work-related stress - new guide

The Chartered Institute of Personnel and Development, in conjunction with Acas and the Health & Safety Executive, has produced a new guide to work-related stress.

The guide is aimed at employers of all sizes in all sectors. It summarises employers' legal duties to prevent stress impacting on employees' health and offers help on how to set about managing the issue, questions managers need to ask themselves, management standards, checklists, and suggestions for further reading.

This can be downloaded free from the CIPD website see:


New on the website

As mentioned above, we've amended our contracts, policies and template letters to comply with the new Equality Act. We have removed any pre-employment health questions from our application form, and introduced a separate pre-employment health questionnaire, to be used as appropriate once an offer has been made and accepted. See: /docs/lf/preemphealth/index.html

We've also reviewed our health and safety section, and added new pages on asbestos and legionnella and a new permit to work form for those working in confined spaces. See: /docs/TPhasaw.html


And finally....

Private versus public sector pay

It's been widely believed for a long time that public sector workers earn significantly less than those in the private sector. However, the Office for National Statistics has knocked this misconception on its head in a report which finds that average total reward (gross pay plus employer pension contributions) for full-time employees is actually higher in the public sector than in the private sector. This is largely because 57% of private sector employees do not get a pension from their employers, whereas only 10% of public sector employees do not have an employer-funded pension. (However, the same research finds that total reward is higher for those full-time employees in the private sector who DO receive employer pension contributions.)

The report uses the latest Annual Survey of Hours and Earnings of the Office for National Statistics (which is based on a 1% sample of employee jobs taken from HMRC's PAYE records).

What it doesn't seem to have factored in are the enhanced redundancy payment scheme and lengthy contractual sick pay schemes also still prevalent in the public sector, and virtually unknown amongst small employers.


UK pensions gap

The 'pensions gap' is the difference between the income needed to live comfortably in retirement and the actual income that individuals can currently expect. A study by Aviva and Deloitte has found that the UK has the largest "pensions gap" in the whole of Europe (an estimated £318 billion annually). In order to close this, the 31 million UK adults who are due to retire between 2011 and 2051 would need to save an average of £10,300 every year.

Our hot topic this month is pensions - so watch this space!


A new acronym!

We now have a new acronym to bandy about and baffle everyone with - an EJRA!

For the uninitiated, this is an 'employer-justified retirement age'. This was coined during the consultation on the abolition of the default retirement age - to justify a compulsory retirement age, the employer must be able to show that it is a proportionate means of achieving a legitimate aim.


This month's hot topic

This month's hot topic will cover the new pension rules, which are scheduled to come into force in October 2012 but will need careful budgeting and planning for.

Note: hot topics are only sent to subscribers. If you receive our newsletters only and are interested in subscribing to our wider services, please take a look at /intro/index.html


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