Employment Update - 15 January 2010

Codes of Practice for the Equality Bill - consultation Over the past few months, lawyers from the Employment and Pensions Group at Field Fisher Waterhouse have been working with the Equality and Human Rights Commission (EHRC) to draft the new Employment and Equal Pay Codes of Practice to accompany the Equality Bill. Both Codes, together with a further Code on services, public functions and associations, have been published for public consultation this week.   The Equality Bill is currently being considered in the House of Lords. As reported in previous Employment Updates, the Bill is one of the most significant developments in employment law over recent years. It is intended to consolidate and harmonise more than 30 years of inconsistent developments in anti-discrimination law and also contains some new and more radical measures. The new Employment Code will replace the three existing codes on race, sex and disability discrimination in employment and will be extended to cover age, gender reassignment, religion or belief and sexual orientation. It will become the key document that forms the link between the Equality Bill and employers, employees, advisers and Employment Tribunals.   The public consultation is an essential part of the drafting process. If you would like to respond to the consultation, which closes on 2 April 2010, please click here.  The intention is to ensure that the final Codes are available to support the Equality Bill once it becomes law. As the Bill is still progressing through Parliament, the Codes will also be subject to revisions when the Bill is amended. The EHRC is also producing non-statutory guidance (also covering employment, equal pay and services, public functions and associations). Consultation on these guides will start on 25 January and close on 16 April 2010.

Age limits – ECJ guidance The European Court of Justice (ECJ) has handed down two judgments, considering German law, which both shed some light on whether age limits can be justified under the Equal Treatment Framework Directive.   Article 4 - genuine occupational requirement   In the first case of Wolf v Stadt Frankfurt am Main, Mr Wolf applied for an intermediate career post in the fire service, which involved fire-fighting and rescuing people. He was informed that his application could not be considered, because he was over the maximum recruitment age of 30, as set out in local legislation. The ECJ considered Article 4 of the Directive, which deals with occupational requirements. This provides that no discrimination will occur where there is a difference of treatment based on a characteristic related to age where, by reason of the nature of the particular occupational activities or the context in which they are carried out, the characteristic constitutes a genuine and determining occupational requirement, provided that the objective is legitimate and the requirement is proportionate. The ECJ noted that, from the evidence provided by the Government, the possession of "high physical capacities" may be regarded as a genuine and determining occupational requirement for carrying out the tasks of those in the intermediate career post in the fire service. The unchallenged evidence from the Government also indicated, for example, that very few people over 45 would have sufficient physical capacity to carry out fire-fighting activities. The genuine and determining occupational requirement to possess high physical capacity was therefore related to age. The Government's aim of setting the maximum recruitment age at 30 was to ensure the operational capacity and proper functioning of the professional fire service. The ECJ considered this aim to be a legitimate objective under the Directive. The ECJ also confirmed that the maximum recruitment age of 30 was proportionate. Recruitment at an older age would mean that too many fire fighters could not be assigned to the most physically demanding duties and also could not be assigned to those duties for a sufficiently long period. The maximum recruitment age of 30 was therefore lawful.   Article 6 - justification   In the second case of Petersen v Berufungsausschuss für Zahnärzte für den Bezirk Westfalen-Lippe, the ECJ considered whether a German law which set a maximum age limit of 68 for panel dentists practising within the German national health service could be justified. In this case, the ECJ considered Article 6 of the Directive. This allows Member States to provide that differences of treatment on grounds of age shall not constitute discrimination if, within the context of national law, they are objectively and reasonably justified by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, and if the means of achieving that aim are appropriate and necessary. The ECJ considered the different aims discussed in the German courts. Article 2(5) of the Directive, for example, provides that the Directive is without prejudice to measures laid down by national law which are necessary for the protection of health. The ECJ found that a Member State may legitimately consider it necessary to set an age limit for the practice of a medical profession such as dentistry in order to protect the health of patients. However, where the sole aim is to protect the health of patients against the decline in performance of dentists, the maximum age limit could not be considered proportionate where the age limit, as in this case, does not apply to dentists working outside the national health system. In relation to the aim of promoting the access of young people to the dentistry profession in the national health system, the ECJ confirmed that this could be a legitimate aim under Article 6. Setting an age limit may be appropriate and necessary for achieving this aim if there were an excessive number of panel dentists or a latent risk of this occurring. The ECJ confirmed that it is for the national court to identify the aim pursued by the age limit. The court could then consider whether the aim was legitimate and whether the measure was appropriate and necessary. Both ECJ judgments provide useful guidance on the lawfulness of setting age limits. In particular, Wolf raises some key questions, notably about the broad interpretation of Article 4 and genuine occupational requirements and the finding that the maximum recruitment age could be justified under this provision.

Plans to abolish retirement age Harriet Harman, Minister for Women and Equality, has suggested that the default retirement age is arbitrary and may be abolished by the Government. Since the Employment Equality (Age) Regulations 2006 came into force, the default retirement age of 65, which enables employers to dismiss employees aged 65 or over by reason of retirement, has been the subject of the long-running Heyday litigation. As reported last year, the Government also brought forward its review of the default retirement age from 2011 to 2010.   In an interview with the Daily Mail, Harman indicated that the Government is proposing a "massive public policy change" and that older people may be given the right to request flexible hours. Harman commented that "we do want people, if they want to, to be able to stay working for longer and flexible working is a way that enables them to do that. They could say they have decided they want to work three days a week and it would then be down to the employer to demonstrate why the business couldn't cope with that." Employers are likely to be concerned by Harman's announcement, as the default retirement age assists with workforce planning. However, the Federation of Small Businesses (FSB) is calling on the Government to scrap the default retirement age, in light of its recent research which shows that 60 per cent of small businesses do not think the Government should set a default retirement age. The FSB is also pressing for a provision in the law to protect employers that need to retire staff because of ill health, threatening their levels of performance.

Enquiry into flexible working Flexible working can benefit small and medium sized enterprises (SMEs), according to the recent report, Flexible Working: Challenges for Business, from the All-Party Parliamentary Small Business Group (APPSBG), supported by ACCA (the Association of Chartered Certified Accountants) and sponsored by the Federation of Small Businesses (FSB). The report notes that there are many advantages of flexible working for both the employer and the employee, including increasing staff morale and loyalty, reducing staff turnover and absenteeism as well as decreasing overhead costs. However, there are also a number of challenges, especially for smaller businesses, including the administrative and financial strain of dealing with the growing numbers of applications. The report makes 12 recommendations covering the challenges faced by SMEs in relation to flexible working. These include: ensuring any extension of the right to request is on a voluntary basis. SMEs need a transition period to check their suitability for the scheme and to try out new working models in practice.  challenging the perception that flexible working is an arrangement for parents and carers only, as it can cause resentment in the workplace among other employees. publicising and explaining the fact that the request for flexible working can be refused on the basis of business needs, to reduce the concerns of business owners and to improve understanding on the part of employees.

Snow joke – cost of employee absenteeism The Forum of Private Business (FPB) has warned that the cost of a single day of employee absenteeism because of the freezing winter conditions could be at least £230 million. According to a recent YouGov poll, up to 124 million working hours have also been lost in a single week because of the adverse weather conditions. According to the FPB's recent 'cost of compliance' survey, small business employers in the UK spend a total of £391 million per year on absence control and management so, whether or not the bad weather continues over the coming weeks, the cost to employers has been significant.

Crackdown on employers who refuse to pay NMW  A new team within HM Revenue and Customs will work on the most high profile and complicated National Minimum Wage cases faced by HMRC, particularly in areas where employers are using migrant labour to undercut competitors by paying below the minimum wage.   The team is funded from a £70 million Government fund and will comprise trained specialist officers who will provide a rapid response to cases across the UK to ensure that everyone entitled to the National Minimum Wage receives it.

Extra bank holiday in 2012 The Government has announced an extra bank holiday in 2012 to celebrate the Queen's Diamond Jubilee. The bank holiday will involve moving the late May Bank Holiday to Monday 4 June and adding an extra day's bank holiday on Tuesday 5 June.