Considering ill-health retirement prior to dismissal

The Employment Appeal Tribunal (EAT) has confirmed that where an employer provides an enhanced pension for ill health retirement, it will be expected, prior to dismissing an employee for long-term sickness, to take reasonable steps to check whether that employee is entitled to the benefit of ill health retirement. This is in addition to (i) the general requirement, which derives from unfair dismissal case law, that an employer takes reasonable steps to consult such an employee to find out the nature and prognosis for his medical condition and to consider alternative employment; and (ii) the general requirement to make reasonable adjustments to accommodate disability.

In First West Yorkshire Limited t/a First Leeds v Haigh, after the employee suffered a suspected stroke, the question of whether the employee's condition was permanent, and would therefore entitle him to ill health retirement on the grounds of permanent incapacity, was never answered. Whilst the employer's occupational health adviser had provided a report, he had written to a specialist for an up-to-date opinion. The EAT confirmed that the employer should have waited for that opinion. Without it, there was no clear evidence either way as to whether the employee was entitled to ill health retirement. There was therefore no justification for the employer's actions when it subsequently forced the employee to choose between dismissal and forgoing any right to an enhanced pension.

The EAT's decision was based, in part, on the employer's sickness policy which expressly stated that it would consider retirement along with termination on medical grounds. The EAT noted that good industrial practice would require nothing less in a case where an employee on long-term sick leave may be entitled to an enhanced retirement pension on the grounds of ill health. It also noted that if an employer could proceed to dismiss a sick employee who might be entitled to an enhanced retirement pension without considering that question, substantial injustice might occur.

This case highlights the importance of ensuring that all appropriate medical advice is obtained when dealing with employees on long-term sick leave, including any potential qualification for ill health retirement or other benefits. Obtaining medical opinions and reports may often be time-consuming and subject to delay. However, it is vital to chase down and consider all available options before taking any key decisions when managing sickness absence. 

Protective award - start at 90 days' pay

An employer proposing to dismiss as redundant 20 or more employees at one establishment within 90 days or less has a statutory obligation to consult appropriate representatives of those employees. The consultation period is a minimum of 30 days; 90 days if 100 or more employees are going to be dismissed. If the employer fails to consult, each relevant employee can be awarded a "protective award" of up to 90 days' pay.

In Hutchins v Permacelle Finesse Ltd (in administration), the Tribunal originally made a protective award of 30 days, linking the protected period for the award and the relevant minimum consultation period, which in this case was 30 days. However, the EAT has confirmed that this was an error of law and that the starting point for the protective award is 90 days (and the Tribunal should then work downwards to take account of any mitigating circumstances). In this case, there had been a complete failure to consult and no mitigating circumstances. The EAT therefore increased the protective award to the maximum 90 days' pay. 

TUPE can apply to offshoring

In a decision addressing a previously untested issue in UK case law, the EAT has recently confirmed that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) do apply to the transfer of an undertaking from the UK to a non-EU entity where the business does not remain in the UK after the transfer.

The EAT was persuaded that the wording of both TUPE and the Acquired Rights Directive (which is implemented in the UK by TUPE) is precise and clarifies that TUPE applies to  transfers of undertakings situated immediately before the transfer in the UK. It stated that a purposeful approach also requires that employees should be protected even if the transfer is across borders outside the EU.

The application of TUPE to "service provision changes" (e.g. outsourcing, re-tendering or insourcing of services), which was introduced by TUPE in 2006, was also considered to reinforce the EAT's decision. The only limitation in this instance is that there should be an organised group of employees situated in Great Britain immediately before the service provision change. The EAT considered that this provision is clearly aimed at the modern outsourcing of service provision, whether inside or outside the EU.

The EAT confirmed therefore that there is no limitation which renders TUPE inapplicable where, after the transfer or service provision change, the business is situated outside the UK or the EU.  Although the EAT did accept that the enforcement of an employee's rights in such circumstances may present a problem, it concluded that TUPE has the potential to apply to a transfer from the UK to a non-EU entity in the event that, upon transfer, the undertaking does not remain in the UK.

Compensation rates on the up from 1 February 2008

The Employment Rights (Increase of Limits) Order 2007 has been published, increasing   compensation limits for a variety of tribunal awards and other statutory payments from 1 February 2008. The key changes are listed below:

• Maximum basic award for unfair dismissal/statutory redundancy payment: increasing from £9,300 to £9,900
  
  
• Maximum compensatory award for unfair dismissal: increasing from £60,600 to £63,000
  
  
• Maximum limit on a week's pay: increasing from £310 to £330

All aboard for national minimum wage

The Government has launched a new campaign to boost awareness of the national minimum wage (NMW) and help expose cases of underpayment.

The three-month nationwide campaign was launched this week with the unveiling of a 'minimum wage information tour bus'.  The '£5.52: Are you on board?' bus will travel to more than 30 towns and cities across the UK, providing free help and information to members of the public, in addition to access to online and telephone support. It is estimated that 1 million people in the UK currently earn the national minimum wage, which increased in October last year to £5.52 for people aged 22 and over, £4.60 for 18 to 21 year olds and £3.40 for 16-17 year olds.

The Minister for Employment Relations, Pat McFadden said:

"Every worker should earn a fair wage for a fair day's work. We want to make sure workers know their rights and employers know their responsibilities.

"The national minimum wage remains one of the most important new rights introduced by this Government. Employers who don't pay the minimum wage are not only cheating workers, they're undercutting honest businesses. This information campaign will help provide those most at risk of underpayment with the advice and support they need to take action where necessary."

Age discrimination due to become most common form of discrimination

According to reports of a recent survey commissioned by Croner, age discrimination is fast becoming the most common form of discrimination, despite only coming into force in October 2006.

A survey of just under 2,000 people found that:

• 11 per cent of respondents believe they had been discriminated against because of their age
  
  
• Age discrimination is experienced by almost equal numbers of men and women (11 per cent compared with 10 per cent)
  
  
• Only 3 per cent of respondents felt they have been discriminated against because of their race or disability 
  
  
• Only 2 per cent of employees felt they were discriminated against because of their sexual orientation or religion or belief

Commission supports anti-homophobic hate crime legislation 

The Equality and Human Rights Commission has announced that it will support the Government's proposals to make incitement of hatred on the grounds of sexual orientation a criminal offence.

Trevor Phillips, Chair of the Equality and Human Rights Commission, said:

"Incitement of homophobic hatred goes beyond mere criticism or what some consider offensive.  It's about stopping the vile words that prompt violence...It's essential we balance freedom of speech against any need for anti-incitement legislation. Having looked at the Government's proposals we think they have struck the right balance, the Commission is persuaded the proposals are fair and needed."

New book - Promoting Equality and Diversity: A Practitioner's Guide

Richard Kenyon, employment partner at Field Fisher Waterhouse, has co-authored a new book entitled Promoting Equality and Diversity: A Practitioner's Guide.

The book explains the fundamental changes in the approach to achieving equality and diversity that are occurring as a result of recent legislation. It provides a clear and practical explanation of both good practice and the legislation behind the new more proactive approach.

The book is aimed at HR professionals involved in the management of equality and diversity issues as well as barristers and solicitors advising on equality issues in private practice and in-house within private companies, law centres or public authorities.

A short film that accompanies the book can be viewed on YouTube at http://www.myspace.com/equalityanddiversity.

The book, written by Richard and Henrietta Hill of Doughty Street Chambers, has been published by Oxford University Press. 10 per cent of the proceeds of the book go to the Stephen Lawrence Charitable Trust.

If you purchase this book before 31 January 2008, you are entitled to a 20% discount. Please contact us for an order form.