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Employment Matters


Employment Tribnal Reforms



The impact of the abolition of the Default Retirement Age – Are you ready for 6 April 2011? Volunteers’ Rights


Human Resources Consultant

HR and Employment News Spring 2011

Employment Tribunal Reforms It was recently announced that the government plans to initiate fundamental reforms in the Employment Tribunal system. Employment Tribunal claims rose to 236,000 in 2010, a 56% rise from 2009, so the announcement will no doubt be welcomed by employers who may incur significant costs defending vexatious claims. David Cameron and Vince Cable, the Business Secretary, have announced the following proposed reforms: u A fee to lodge a claim. u Compulsory mediation for all tribunal claims u Increase in unfair dismissal qualifying period from one year to two

years u Employment judges to sit alone u An Employer’s Charter reminding employers of their ‘rights’

The Department for Business, Skills and Innovation and the Ministry of Justice’s Tribunal Services are conducting a consultation which is due to end on 20 April 2011. If you would like to take part in this consultation, it can be found by following the link “Resolving

In response to the announcement David Frost, Director General of

Workplace Disputes – Public Consultation” on the website

the British Chambers of Commerce, said “Employment Tribunals are

one of the top business issues and we strongly welcome the Government’s move to reform the employment tribunal system. The current system wastes business time and money, and distracts employers from growing their businesses and creating much-

We will keep you updated as to the outcome of this consultation.

Compensation and redundancy payment limits increased on 1 February 2011.

needed jobs. In particular, the introduction of a fee for claimants will help to discourage spurious and baseless claims.”

u The maximum compensatory award for unfair dismissal: £68,400. u The maximum basic award for unfair dismissal: £12,000

We anticipate that the reforms will be met by stiff opposition from Trade Unions. Bob Crow, general secretary of the Rail Maritime and Transport union, said: "With hundreds of thousands of people facing the loss of their jobs in the austerity cuts this year, it is now crystal clear that the government intends to give bosses the right to hire and fire at will.”

u The maximum ‘week’s pay’ (used to calculate the basic award

for unfair dismissal and statutory redundancy pay): £400. u The maximum statutory redundancy payment: £12,000.

For further information please contact Nick Watson –

The impact of the abolition of the Default Retirement Age – Are you ready for 6 April 2011? As you will know, there currently exists a default retirement age (DRA) of 65 and a process which enables one to retire someone at the age of 65 or over relatively risk free. Apart from transitional arrangements, from 6 April 2011 the statutory default retirement age of 65 will be abolished altogether and employers will no longer be protected from unfair dismissal claims when compulsorily retiring employees at 65. There will also be an impact on recruitment as employers will no longer be able to decline to appoint someone who is within six months of their 65th birthday on the grounds of age. then seeking to rely on that retirement age will almost certainly

Timetable for change There has been much confusion caused by drafting errors and discrepancies in the published timetables. However, the position has now been clarified so that employers can choose to give a

result in claims being brought at the Employment Tribunal. The safest option is to remove the compulsory retirement age entirely. If employers choose to remove the compulsory retirement age then they will need to consider how that is going to impact

qualifying employee a minimum of 6 months but up to a year’s

on their business and concentrate carefully on the way in which

notice which must be given by 6th April 2011. The retirement date

they manage performance throughout their workforce.

can then be extended by a further six months by agreement. If you are considering any extensions to the retirement date then please seek legal advice to make sure the dates are correct.

"All dismissals will have to be justified under the relevant provisions of the Equality Act 2010"

In a nutshell: u If you have an employee who is already 65: issue retirement

notice by 6 April 2011 and you should be able to retire under the DRA. u If you have an employee who reaches the age of 65 before 1

October 2011: issue retirement notice by 6 April 2011 and you should be able to retire under the DRA. u If you have an employee who reaches age of 65 on or after 1

October 2011: you will not be able to retire the employee under the DRA – retirement age will have to be objectively justified.

Going forward Employers who have a compulsory retirement age in their contracts will need to consider the situation carefully. Doing nothing and

Employers may decide to retain a set retirement date e.g. 65. However, every such termination will be a dismissal and a potentially unfair one. Employers will need to justify that the fixed retirement age is a proportionate means of achieving a legitimate aim. The Government made it very clear in their consultation that it considered that the ‘justification’ argument is not an easy one to pass. Therefore, employers will need to consider their justification very carefully and if you do adopt a contractual retirement age you will need to keep it under review.

For more information regarding what may amount to justification to retain a fixed retirement age and generally please contact Nick Watson –

Volunteers’ Rights Whilst we are sure that you would want to treat your volunteers

only if they have a legally-binding contract "personally to do work",

and voluntary workers fairly, you may find the following case to

or if they are in a work experience or vocational training placement.

be of interest: X v Mid Sussex Citizens Advice Bureau. In this case the Court of Appeal decided that certain voluntary workers are not protected under the Disability Discrimination Act 1995 or the EU Equal Treatment Framework Directive. Although this case was decided under the Disability Discrimination Act 1995,

We suggest that organisations and volunteers alike check any documentation that details the arrangements between them.

"certain voluntary workers are not protected under the Disability Discrimination Act 1995 or the EU Equal Treatment Framework Directive"

which has since been replaced by the Equality Act 2010, its conclusions apply equally to the new Act. The claimant in this case was an unpaid voluntary adviser at the Citizens Advice Bureau (CAB). When she commenced work she was given a volunteer agreement which was described as being ‘binding in honour only, not a contract of employment or legally binding’. When the CAB asked X to cease attending as a volunteer she suspected that it was because of her disability and brought a claim of disability discrimination. The Tribunal found that X was not in 'employment', since she had no employment contract and was not obliged to provide any services. X argued that the voluntary post was a “stepping stone” to future employment and was a means of the CAB deciding whether or not to offer full time employment. The tribunal judge accepted that the voluntary work experience was relevant to obtaining paid employment but as volunteers at the CAB were not given preferential treatment in applying for paid jobs it was not an arrangement for recruiting for paid work. Therefore, the court held that she was not protected by the Disability Discrimination Act 1995. X appealed to the EAT, which upheld the tribunal’s decision. The EAT rejected X’s further argument that she fell within the concept of 'occupation' in the Directive; deciding that 'occupation' refers to

This judgment will be welcomed by charities and other not for

professions, qualifications and areas of work, and does not include

profit sector bodies that may have been concerned about the extra

unpaid work. X appealed further to the Court of Appeal which

burden that enhanced rights for volunteers would bring.

rejected the appeal on all grounds.

If you would like advice on the status of voluntary workers, volunteers and their associated rights please contact Nick Watson –

Even though the volunteer in this case was not covered, some unpaid workers may be entitled to protection under UK law, but

Human Resources Consultant We are pleased to welcome Victoria Blake as part of the employment

u Grievances

team. Victoria is a very experienced HR professional available to

u Exit Interviews

offer a wide range of HR advice to support clients’ current and

u Redundancies

future business objectives. Her expertise, combined with the support


of the solicitors and partners in the legal team, provide you with

u Disciplinary and Capability Issues

a one-stop-shop to manage your HR responsibilities efficiently and

u Equality Impact Assessments

you can rest assured that we will work sensitively and within the ethos of your organisation.

If you would like to discuss how we can assist you with your HR requirements then please contact our HR Consultant Victoria Blake on 01225 326759 or email her at

u Recruitment and selection u Appraisals u Employee Handbooks u Absence Management

Your Contacts Nick Watson Partner


Peter Woodhouse Partner email:

Stone King LLP 13 Queen Square Bath BA1 2HJ Tel. 01225 337599 Fax. 01225 335437 16 St John’s Lane London EC1M 4BS Tel. 020 7796 1007 Fax. 020 7796 1017 Wellington House East Road Cambridge CB1 1BH Tel. 01223 451070 Fax. 01223 451100 New Hall Market Place Melksham Wiltshire SN12 6EX Tel. 01225 337599 Fax. 01225 335437 email:

© Stone King LLP 2011

Employment Matters deals with some current legal topics. It should not be used as an alternative to specific legal advice on the individual circumstances of a particular problem. Stone King LLP - registered limited liability partnership no OC315280, registered office 13 Queen Square, Bath BA1 2HJ