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Employment Writes April Edition

Introduction You may not have realised it whilst you were eating your Sunday dinner earlier this week, but Sunday 6 April was a busy day for employment law development. We summarise some of the recent and future changes to employment legislation below. This month’s edition of Employment Writes also looks in detail at the challenges faced by employers who are required to undertake criminal records checks for new recruits. We also consider in detail the new compulsory ACAS conciliation process and what this will mean for employers. We round off with a brief case review examining the recent decisions of the CA and the Scottish Court of Session. Please note that we have provided a helpful guide to the abbreviations used throughout Employment Writes on the last page of this update.

Legislation update – at a glance guide



6 April 2014

• Increase to the tribunal awards and compensation limits. The maximum compensatory award for unfair dismissal will rise from £74,200 to £76,574. The maximum amount of a week’s pay rises from £450 to £464, this figure is used to calculate redundancy payments and various awards, including the basic award of compensation for unfair dismissal. A week’s pay for statutory maternity and paternity pay purposes increases to £138.18 • Discrimination questionnaires are abolished. In their place, ACAS has published informal and non-binding guidance on how employers should deal with questions about discrimination in the workplace

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Development • The mandatory pre-claim ACAS conciliation procedure is introduced under the ERRA. From 6 May tribunal claims will have to be referred to ACAS and have an early conciliation reference number before they can be issued. A last minute amendment has been made now requiring a claimant to submit a separate Early Conciliation Form for each respondent (or, if notifying ACAS by phone, identify each respondent over the phone) where there are multiple respondents involved • Financial penalties for losing employers to be imposed by tribunals where the employer’s behaviour has aggravating features. The penalties range from £100 up to £5,000, although will be reduced by 50% if it is paid within 21 days • Statutory Sick Pay is no longer reclaimable from the government. The money saved will instead be put towards the Government’s new Health & Work service due to commence in 2015

1 May 2014

• The period in which transferors must provide employee liability information will increase from 14 to 28 days before the transfer (pursuant to the CRTUPEAR (SI 2014/16))

6 May 2014

• The ACAS early conciliation scheme becomes mandatory for most tribunal claims

30 June 2014

• The right to request flexible working will be extended to all employees. The current statutory procedure will be replaced with an employer duty to consider requests in a reasonable manner, supplemented by an ACAS statutory code of practice

31 June 2014

• Changes to the obligations to inform and consult for micro-businesses (employers with less than 10 employees) will apply to TUPE transfers that take place after 31 July 2014 (pursuant to the CRTUPEAR (SI 2014/16))

Expected 2014

• Introduction of regulations giving tribunals the power to order an employer to carry out an equal pay audit

5 April 2015

• Introduction of a new system of shared parental leave

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Hot off the press… On 2 April Jenny Willott MP, Minister for Employment Relations and Consumer Affairs announced that the Government will consider reducing the level of employment tribunal fees. She added, however, that it was too soon to judge the impact of the introduction of the fee regime system. The recently published employment tribunal statistics however demonstrate a stark reduction in employment tribunal claims. Significantly, the statistics show that: • There were 79% fewer claims received (9,801) in October to December 2013 compared to the claims received (45,710) in October to December 2012 • There were 63% fewer age discrimination claims, 58% fewer disability discrimination claims, 57% fewer race discrimination claims, 77% fewer sex discrimination claims, and 65% fewer unfair dismissal claims received in October to December 2013 compared to the claims received in October to December 2012 These latest statistics are the first full quarter of statistics since employment tribunal fees were introduced on 29 July 2013 and demonstrate the huge impact employment tribunal fees have had. Depending on the type of claim, it can now cost employees up to £1,200 to bring a claim before an employment tribunal. The High Court in The Queen on the Application of Unison v Lord Chancellor have turned down Unison’s judicial review application against the introduction of employment tribunal fees. Unison is now seeking the CA’s permission to appeal the High Court’s decision. Clearly this highly contentious issue will continue to rumble on.

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Undertaking criminal records checks – keeping within the letter of the law The legal landscape has changed significantly for employers who are required to carry out criminal record checks for new recruits. There have been a number of further recent changes to both the rules which govern what information an employee is obliged to disclose and the system which processes information held about an individual’s criminal record, the Disclosure and Barring Service (DBS). The end result is that employers are entitled to less information about the people they are employing, even where the job role involves working with children and vulnerable adults.

Changes to ‘spent’ convictions The Rehabilitation of Offenders Act 1974 protects ex-offenders who have not re-offended from being denied access to jobs, purely because of their criminal past. If the ex-offender had not re-offended for a specified period of time he is considered to be rehabilitated and is rewarded by being able to present himself as if he has a clear record. His conviction is considered ‘spent’. An employee would not have to reveal this information to their employer even if there is a contractual requirement to disclose such information. There are some exceptions to this depending on the type of job being applied for, for example people working with children and vulnerable adults, those employed to uphold the law, certain regulated occupations or professional roles such as doctors or lawyers. Where an exception applies, both spent and unspent convictions must be disclosed. From 10 March 2014 a number of changes have been introduced to relax the rules governing spent convictions so that an ex-offender is deemed to be rehabilitated more quickly. Unless an ‘exception’ applies, a person cannot be subjected to prejudice (such as refusal to hire or promote) or be dismissed on the ground that they have failed to disclose the existence of a spent conviction. Where an exception applies, the employer may also request certification of an employee’s criminal history through the DBS by means of a standard or enhanced DBS certificate.

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Disclosure and Barring Service Following the merger in December 2012 of the Criminal Records Bureau and the Independent Safeguarding Authority, the newly created DBS has been responsible for making checks on criminal records as well as maintaining a register of individuals who, on account of their previous behaviour or criminal conduct, are barred from certain jobs and roles in society. The DBS was set up to balance the conflicting interests of, on the one hand, increasing protection for vulnerable people, young and old, and on the other hand, making the process of obtaining DBS information cheaper, simpler and easier to understand. Access to the DBS checking service is only available to registered employers who are entitled by law to ask an individual to reveal their full criminal history, including spent convictions – also known as asking ‘an exempted question’. An exempted question applies when the individual will be working in specific occupations or specified positions. These are covered by the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975. The DBS checks provide three levels of checks – basic, standard and enhanced or enhanced with list checks. Standard covers a person’s convictions, spent and unspent; their cautions, spent and unspent; and any police reprimands and warnings. The enhanced check covers the standard checks plus any relevant police information and certain further information where the individual has applied to work in a higher risk role. The top level check covers all the above checks plus a further check against the barred list. In summer 2013, the DBS launched a series of changes to the system designed to enhance its efficiency for the public, these include the introduction of ‘filtering’ and the availability of an ‘online system’.

Filtering The CA in the case of R (T and others) v Chief Constable of Greater Manchester and others [2013] held that the blanket disclosure of all convictions and cautions was unlawful. It decided that the current scheme could unjustifiably interfere with an individual’s right to respect for private life under Article 8 of the European Convention on Human Rights.

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The Government has now legislated to introduce a new filtering process to prevent this blanket disclosure of all convictions and cautions. This means that the DBS certificate is modified to remove certain information, so that the information provided is lawful whilst remaining simple to use for individuals and employers. A number of categories of convictions will now be removed from certificates. For example, an adult conviction will be removed if it is more than 11 years old, it was the person’s only offence and it did not result in a custodial sentence. An adult caution will be removed after six years have elapsed since the date of the caution. Certain serious offences will not however be affected by filtering including those of a sexual or violent nature. However, on 20 March 2014 the Information Commissioner’s Office (ICO) ruled that the DBS had breached the Data Protection Act 1998 by failing to update its application form to reflect the new rules. The form continued to include the question “Have you ever been convicted of a criminal offence or received a caution, reprimand or warning?” It did not make clear that there was no requirement to disclose minor and historic offences. In light of the ICO’s findings, the DBS has updated its form. The DBS has also issued guidance to employers on what to include on job application forms when asking about criminal history.

The online system An online system was introduced so that individuals could, for a nominal fee of £13 (or free for a volunteer), manage their online DBS profile. DBS will continually update the individual’s profile. The individual can then choose to join the update service. The changes were hailed as solving the criticisms of the previous CRB and ISA schemes where delays were caused as parties waited for the printing and posting of paper certificates. The new DBS certificates are portable so that individuals can bring their certificates with them if they move to a new job, assuming the level of checking required and the activity remains the same. Employers have raised concerns about the new system as DBS now send the certificate directly to the individual and not the employer. This is meant to allow an

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“The DBS checks provide three levels of checks – basic, standard and enhanced or enhanced with list checks.”

individual the opportunity to challenge any incorrect information before the new employer sees the DBS certificate. However, the delay in an employer having sight of the certificate adds uncertainty to the recruitment process, especially when the check is only done once the best candidate has been identified. A registered employer can only ask the DBS for a copy of the DBS certificate if all of the following apply: • The individual has subscribed to the Update Service • The employer has carried out an online status check which revealed a change to the DBS certificate • As a result of this change being revealed, the individual has applied for a new DBS check • The DBS issued the new certificate to the individual at least 28 days ago • The individual has not shown the new certificate to their employer If the individual has disputed the content of the new certificate, the DBS will not issue a copy to the employer until 28 days after the dispute is resolved. A further criticism is that whilst the barred list is updated in real time and can be checked online, the information recorded in the enhanced check is only updated every nine months, which could clearly expose an employer to risk. The new system and the changes to the rules about disclosure are difficult to navigate. Employers should be cautious when asking candidates for information about previous convictions and when deciding how to treat that information if a conviction is revealed. They should also build in additional time to the recruitment process where a DBS check is required.

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Are you ready to conciliate? ACAS early conciliation is now up and running, and covers almost all employment disputes (see its new web pages at: Any individual intending to present a tribunal claim from 6 May must first engage with ACAS in the early conciliation process. One of the stated aims of the new ACAS procedure is to reduce the cost of dealing with employment tribunal claims for businesses. Since 2009, ACAS have offered a Pre-Claim Conciliation Service and whilst it was not widely used, it was reported that the service had been successful in 78% of workplace disputes. ‘Early conciliation’ is a new four-step procedure whereby an employee (or exemployee) must contact ACAS prior to being able to present a tribunal claim. They can do this by telephone or online. The first stage is dealt with by an Early Conciliation Support Officer (ECSO) who will obtain outline contact details, but will not seek specific details about the alleged legal complaints. The ECSO will make contact with the employer and invite both parties to use ACAS to conciliate, or settle, the dispute. It is not mandatory for either party to agree to conciliation. It is however mandatory for the employee to contact ACAS (unless the employer does so first) before they can issue a tribunal claim. If both parties agree, the matter will be passed to an ACAS officer who will have a period of one calendar month (extendable by a further two weeks at the discretion of ACAS) to negotiate a settlement. If either party refuses to participate in early conciliation, conciliation fails or conciliation is ongoing at the end of the extended period, ACAS will issue a certificate to both parties. This certificate will contain the unique number which the employee must quote on their claim form before presenting the claim to the tribunal.

Stop the clock When an employee contacts ACAS, the employee will benefit from a stop the clock feature. This means that the time period for submitting a tribunal claim, traditionally three months from the date of dismissal or the date of a discriminatory act, will be suspended for the period of early conciliation. The

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“One of the stated aims of the new ACAS procedure is to reduce the cost of dealing with employment tribunal claims for businesses.”

employee’s period for submitting a claim will only run again when the certificate is issued by ACAS. Further, if the three month period expires during the period of early conciliation, then the employee is granted an extra month after the expiry of early conciliation to present the claim. Therefore, if early conciliation is started at the end of the limitation period, and early conciliation is extended by a further two weeks then the employee may successfully present a tribunal claim five and a half months after their dismissal or the act of discrimination. This relatively complicated calculation will no doubt give rise to plenty of additional preliminary hearings to determine out of time issues. It is possible for employers to initiate the conciliation process before an employee does so. ACAS will then make contact with the employee to discuss early conciliation. The employee is under no obligation to engage in the conciliation process. If the employer takes the first step, the stop the clock feature does not kick in. However, even where the employee decides not to engage in this process, there is nothing preventing the employee from subsequently contacting ACAS under the early conciliation process on the same issue, a move which would then serve to stop the clock. There are a number of concerns to flag to employers. Foremost the early conciliation forms (now appearing on the ACAS website) only record minimal information. For example, they do not record the name of a specific contact at the employer, they only ask for a telephone number. This could mean that the first contact from ACAS could be received by any number of people at the employer. It will therefore be important to ensure that any staff who are likely to be the first point of contact (including reception or switchboard) are trained to know what to do if a call from ACAS is received. Employees wishing to bring proceedings against multiple respondents are now required to issue multiple forms. This may in turn lead to different limitation periods for different respondents, depending upon how stop the clock operates for each claim. A respondent would be well advised to find out if they are involved in a potential multiple respondent claim. Clearly if a deal can be done then it would be prudent to ensure that all claims are settled as against all parties. Employers wishing to engage in conciliation and who feel that a deal can be reached must carefully negotiate the settlement. This is for a number of reasons.

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Foremost, verbal agreements made through ACAS will be binding. Secondly, ACAS will be reluctant to settle on a ‘full and final basis on all and any claims’ and will look to settle only the dispute in question. This puts an employer at risk, as the employee may try to pursue other issues at tribunal which they have not brought to the employer’s attention (the form does not require the employee to specify details of the dispute). Early conciliation will require an employer to assess the risks of a dispute and their appetite for settlement at a much earlier stage. This may be a cultural change for employers who have previously ignored problems in the hope that they would disappear. No doubt for many employers it will still be a waiting game to see if the employee pays the issue fee or can successfully navigate the stop the clock feature, before deciding whether to settle the matter. However, a word of warning, an employer who ignores early conciliation may find themselves at risk financially should the claim be successful at tribunal in addition to the usual compensation awarded to claimants. For claims presented from 6 April 2014, tribunals will have new powers to fine employers who lose at tribunal where their behaviour has an ‘aggravating feature’. The tribunal has power to order a payment up to 50% of the compensation (subject to a minimum of £100 and a maximum of £5,000). The penalty will be paid to HM Government but can be reduced by 50% if the employer pays within 21 days. Whilst there is no definition as to what constitutes an ‘aggravating feature’ or any indication that failure to conciliate will fall within this category, it is clearly a possibility that the courts may use financial penalties to encourage early dispute resolution.

Plexus Law are offering training for employers on the new ACAS pre-claim conciliation process. If you think this may be of benefit to your organisation, please contact: Charlotte Cooper Plexus Law T: 0844 245 5161 E:

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“...assess the risks of a dispute and their appetite for settlement...”

Is it? Isn’t it? Is post-termination victimisation unlawful? Following the conflicting decisions of the Employment Appeal Tribunal, the CA has confirmed in Jessemey v Rowstock Ltd 2014 EWCA CIV 185 that posttermination victimisation is unlawful. This is despite the fact that the EqA 2010 states exactly the contrary. Readers are reminded that the EAT had previously decided that Mr Jessemey was not protected by the EqA 2010 for the post-employment victimisation he suffered when his former employer provided him with a negative reference. However, just two months later a differently constituted EAT in the case of Onu v Akwiwu, held that the EqA 2010 did protect Ms Onu from the post-employment victimisation that she suffered by her former employer. The problem was that the EqA 2010 does not correctly reflect the pre2010 position and clearly contains a drafting error. Section 108 states that former employees are protected from post-employment discrimination and harassment. The EqA 2010 however makes no mention of any protection against post-employment victimisation, in fact the wording of section 108(7) states that ‘conduct is not a contravention on this section in so far as it also amounts to victimisation of B by A’. So how did the CA uphold Mr Jessemey’s claim and get around the wording in Section 108(7) of the EqA 2010? The CA applied a number of ingenious interpretations of the EqA 2010 to enable it to find in favour of Mr Jessemey. Firstly, the court announced that section 108(7) had to be read in the context of the time that it was drafted and consequently the wording of the EqA 2010 in section 108(7) must have been an unintentional drafting error. The court also relied on the fact that when the EqA 2010 was drafted, postemployment victimisation had been unlawful since 2003. As the purpose of the EqA 2010 was to consolidate all existing discrimination legislation, the court suggested that the Government could not have intended to remove existing legal protections when enacting the EqA 2010. Further the court pointed to the Government’s explanatory notes which accompany the EqA 2010. The court noted that the explanatory notes indicated that the existing legal protections

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pre-2010 should have continued with the act. Finally as the protection from post-termination victimisation was created in 2003, and the EqA 2010 would have to match any obligations under EU law, there was no reason why the act would not offer the same protection as EU law. The court permitted itself to interpret the EqA 2010 so that it was compatible with the UK’s obligations under EU law to outlaw post-termination victimisation. The judgment stated that to do so ‘represents what the draftsman intended’ for the EqA 2010.

Lessons learnt The outcome of the CA’s decision provides welcome clarity to a wholly unsatisfactory situation. However the judgment relies on a convoluted method of analysis to reach what appears to be a purposive interpretation of the Act. This may raise disquiet amongst practitioners who would prefer a clear and orthodox interpretation of the EqA 2010, which is clearly crying out for urgent amendment.

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“...the judgment relies on a convoluted method of analysis...”

Females at LLP can compare their pay with council employees The recent case of Glasgow City Council & Ors v Unison Claimants & Ors [2014] CHIS 27 serves as an important reminder of the need for employers to be alive to their equal pay obligations, particularly when involved in the outsourcing of services. The case stems from a decision by Glasgow City Council to transfer leisure and recreational services, and with it those employees, to two distinct arms length external organisations. Parking and care services were outsourced to two limited liability partnerships (LLPs), respectively City Parking (Glasgow) LLP (Parking) and Cordia (Services) LLP (Cordia), who were set up to carry out the functions formerly conducted by the council. The council maintained close control over the LLPs. However, the LLPs were responsible for setting their employees’ terms and conditions and changes to those terms did not require the council’s approval. A number of female employees of Parking and Cordia sought to compare their terms and conditions of employment with male employees at the council for the purposes of bringing equal pay claims. The claims were presented under the EqA 1970 (although this has now been superseded by the EqA 2010). The EqA 1970 effectively includes an equality clause into every contract of employment.

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For the equality clause to operate, the female employee must be employed on like work, or work rated as equivalent to that of a man or work of equal value to a man who is “in the same employment”. Under the act, a man will be treated as being in the same employment with a woman if they are: “employed by her employer or any associated employer at the same establishment or establishments in Great Britain which include that one and at which common terms and conditions of employment are observed either generally or for employees of the relevant classes.” The question was therefore whether the council was an ‘associated employer’ of the LLPs and therefore whether the females employed by the LLPs could compare their pay to men employed by the council. At first instance, the employment tribunal held: • On its construction of the EqA 1970 the two LLPs were not ‘associated employers’ since an LLP was not a “company” within the meaning of the Equal Pay Act • The employees of those LLPs were not ‘in the same employment’ as the council employees • Glasgow City Council was not the single source of terms and conditions, despite the close control which it maintained over each of its operations; it was not the body responsible for differences in pay. The employees appealed to the EAT, which allowed the appeal on the basis that it concluded that the council and the LLPs were ‘associated employers’ under section 1(6) of the EqA 1970, meaning the claimants and their comparators were in the ’same employment’ for equal pay purposes. The council and the LLPs appealed to the Court of Session, who rejected the appeal and confirmed that the council should be treated as an associated employer with the LLPs, adding: • The Companies Act 2006 expressly recognises that the word “company” might require a different meaning than “a company formed and registered under this Act” • An LLP could amount to a “company” for the purposes of section 1(6)

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“For the equality clause to operate, the female employee must be employed on like work, or work rated as equivalent to that of a man or work of equal value...”

Owing to the control exercised by the council over the LLPs, men employed by the council were in the ‘same employment’ with women employed by the LLPs and therefore, subject to satisfying the other aspects of the EqA 1970, the female employees could compare their pay with the council employed men.

Lessons learnt This case is a useful reminder of how the “associated employer” concept in relation to equal pay claims needs to be taken into account when setting up and running arm’s length service provision arrangements and the potential difficulties this may cause when seeking to avoid or defend any subsequent claims. Whilst, on the face of it, setting up an arm’s length organisation may be an efficient means of benefitting from funding arrangements, amongst other things, the court will go behind the structure to examine the reality of where the decision-making power lies and will not allow such structures to be used for anti-avoidance purposes. As this case demonstrates, the issue of what constitutes an “associated employer” for the purposes of an equal pay claim is one which will be asked more and more frequently.

Key to abbreviations CA: Court of Appeal CRTUPEAR: Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 EAT: Employment Appeal Tribunal EqA 2010: Equality Act 2010 EqA 1970: Equal Pay Act 1970 ECJ: European Court of Justice ERRA: Enterprise and Regulatory Reform Act 2013 TUPE: Transfer of Undertakings (Protection of Employment) Regulations 2006

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Employment Writes - Issue 7 - April 2014  
Employment Writes - Issue 7 - April 2014  

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