Employment Update - 14 August 2009
Indirect discrimination – establishing a pool for comparison
The Court of Appeal has confirmed that a pension scheme rule which excluded retired teachers who returned to work on a part-time basis, but not those who returned on a full-time basis, constituted indirect sex discrimination. The correct pool to determine whether the rule had a disproportionate impact on women consisted of members of the pension scheme who had returned to work after retirement, rather than the entire teaching profession.
In Somerset County Council and another v Pike, Mrs Pike was one of the claimants in a test case involving a group of 74 teachers. She claimed that the rules of the Teachers' Pension Scheme were indirectly discriminatory on the grounds of sex. Under the rules, a teacher who retired and returned to teaching full-time could rejoin the pension scheme. However, a teacher who retired and returned to teaching on a part-time basis could not rejoin the pension scheme. Mrs Pike claimed that this amounted to indirect sex discrimination because it disadvantaged a substantially higher proportion of women than men.
The Employment Tribunal held that the correct pool to determine whether the rule had a disproportionate impact should contain the entire teaching profession, as they were all potentially affected by the rule. Mrs Pike appealed to the Employment Appeal Tribunal (EAT), which held that the pool should exclude pre-retirement teachers and should only consist of members of the pension scheme who had returned to work after retirement. Those who had not retired had no advantage out of the post-retirement rule favouring full-time employees: it simply did not apply to them and they could only distort the view of the pool.
The Court of Appeal upheld the EAT's decision and reasoning in relation to the narrower pool. The Court of Appeal agreed with the comments made by Baroness Hale in Rutherford and another v Secretary of State for Trade and Industry, that by adopting the entire teaching profession as the appropriate pool for comparison, the Employment Tribunal brought into the equation people who have no interest in the advantage or disadvantage in question. Although the Court of Appeal noted that there may not be a single suitable pool for every case, there was only one logical pool in this case. The case was remitted to the same Employment Tribunal to hear arguments on justification.
EHRC consults private and voluntary sector employers on gender pay gap
The Equality and Human Rights Commission (EHRC) has launched a consultation this week to identify the most appropriate way for private and voluntary sector employers with at least 250 staff to measure and report on their gender pay gap.
The EHRC believes that developing ways for employers to measure and report on their gender pay gap will be a crucial step towards reducing pay inequity by providing greater transparency. It is working closely with the business sector, including the Confederation of British Industry (CBI) and with the Trades Union Congress (TUC), to develop a consistent way to measure the gender pay difference in organisations.
The aim is to empower private and voluntary sector employers to report on a voluntary basis, but the Equality Bill does contain a reserve power which, if a future Secretary of State chose to use it, could lead to mandatory reporting if progress has not been made on a voluntary basis by 2013. Consultation closes on 28 October 2009.
FSA introduces remuneration code of practice
The Financial Services Authority (FSA) has introduced a new code that will require large banks, building societies and broker dealers in the UK to establish, implement and maintain remuneration policies consistent with effective risk management.
The new code is designed to achieve two objectives:
It is not expected that firms will enter into contracts with individuals which provide guaranteed bonuses for more than one year. It is also expected that for senior employees two-thirds of bonuses will be spread over three years. Firms are expected to provide the FSA with a remuneration policy statement by the end of October. This will have to be signed off by remuneration committees and will enable the FSA to check compliance with the code. Non-compliant firms could face enforcement action.
Increase in minimum wage for apprentices
The statutory minimum wage for apprentices rose from £80 to £95 a week on 1 August 2009. Apprentices are exempt from the National Minimum Wage so must receive at least this minimum contractual payment. The rise is expected to benefit around 26,000 apprentices.
Support needed to encourage older people back to work
The report is based on findings from the English Longitudinal Study of Ageing (ELSA), which shows that unemployed people over 50 are ten times as likely to still be out of work after two years than back in work. The TUC notes that a period of long-term unemployment for an older person increases their chances of never working again and that this is particularly the case for men. For every year of unemployment, men are 24.3 per cent less likely to find work again. The TUC has called for Government programmes to be age-proofed and customised to meet the needs of the over-50s.
Half of businesses considering redundancies
The results from 450 companies across the UK also confirm that demand remains low, with not a single business reporting that they will increase stock holdings over the next three months. 1 in 2 businesses also do not see growth returning until the first half of 2010.
Swine flu – minimal impact on business
Swine flu is currently having little impact on businesses, according to a recent survey of UK bosses.
Based on a survey of 756 members of the Institute of Directors, 85% of directors said that their business is not being hugely disrupted by swine flu. Many of the companies surveyed have issued guidance notes outlining how their business should deal with such an outbreak. Some directors expressed dismay at a small minority of employees, who appear to be taking advantage of the general guidance that has been given by the authorities.
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