UK: The Equality Act 2010: New Legislation (Labour & Employment - August 2010)

Last Updated: 18 August 2010
Article by Bird & Bird's Labour & Employment Group

The Equality Act 2010

The Equality Act 2010 received Royal Assent on 8 April 2010. The Act brings disability, sex, race and other grounds of discrimination within one piece of legislation, and also makes changes to the law. Some of the key changes are:-

  1. Protected characteristics - The forthcoming Act will consolidate each of the nine characteristics that attract protection under existing anti-discrimination laws, ( i.e.
    i) age; ii) disability; iii) gender reassignment; iv) marriage and civil partnership; v) pregnancy and maternity; vi) race; vii) religion or belief; viii) sex; and ix) sexual orientation) and present them under the united definition of "protected characteristics".
  2. Combined or multiple discrimination – Workers will be able to bring discrimination claims based upon a combination of two (but no more) protected characteristics, such as sex and race.
  3. Disability discrimination - Protection for disabled workers will be extended to cover indirect discrimination and a new right for workers not to suffer "discrimination arising from a disability" will also be introduced.
  4. Positive action - The Bill will extend the use of positive action to give employers the right to take the under-representation of a particular group into account when selecting between two equally qualified candidates.

The Bribery Act 2010

On 8 April 2010, the United Kingdom Bribery Bill 2010 was passed.  Organisations must put in place procedures to prevent employees and other associated individuals from engaging in bribery if they are to avoid penalties. The Act creates three criminal offences of bribery, where:-

  1. a person (public official, private individual or corporate entity) bribes another person;
  2. a person (public official, private individual or corporate entity) requests or receives a bribe; or
  3. a corporate entity fails to prevent bribery by a person acting on its behalf.

Offences which take place outside of the UK can still fall under the scope of the Act and no exceptions will be made because of the local custom or practice where the offence takes place.

National Minimum Wage

The Government has announced that the national minimum wage rates will rise from October 2010.  Added to this, the adult minimum wage rate has been extended to 21 year olds and a minimum wage rate for apprentices has been also been set.

From October 2010, national minimum wage rates will increase from:

  • £5.80 to £5.93 an hour for workers aged 21 and over;
  • £4.83 to £4.92 an hour for workers aged 18 to 20;
  • £3.57 to £3.64 an hour for workers aged 16 to 17.

Apprentice minimum wage - £2.50 per hour

The new rate will apply to:

  • apprentices under 19;
  • apprentices aged 19 and over, but in the first year of their apprenticeship.

Reported Case Law

Religious discrimination - disadvantage must be to an identifiable group

In the last chapter of the saga of the 'crucifix case' (Eweida v BA) the Court of Appeal has said that the claimant in a religious discrimination case will not succeed if they cannot show evidence of disadvantage to a wider group caused by the provision in question – in this case, not being allowed to wear visible jewellery with an open-necked blouse (including a crucifix). The evidence was that it was only the claimant's personal choice that was in issue in this case, since there was no evidence that wearing a crucifix was a religious requirement, so her claim failed.

The Court of Appeal in Eweida did not have to address the harder question of where the 'identifiable group' is to be found (within the employer company? in society at large?) other than to say that it may be very difficult in religious discrimination cases.

'Service provision change' on change of solicitors

In Ward Hadaway v Love and Scott and Capsticks the EAT considered whether the TUPE regulations could cause a solicitor's employment to transfer to a new firm when a client decided to change its legal advisers. TUPE can apply where 'activities cease to be carried out by a contractor on a client's behalf ... and are carried out instead by another person'.

In this case the employment tribunal had found that there had been no hand-over of 'activities' within the meaning of TUPE; the claimant firm continued to work on the cases it had already been engaged to complete but did not receive any new work.  It could not be said that the services provided by the new solicitors would have been provided by the claimant had the client not modified its legal service structure; the claimant firm had never been guaranteed work, just a place on the client's panel. The EAT agreed therefore that there was no 'service provision change' and that TUPE was not applicable.

As can be seen from this decision, much will depend on how the work is allocated and how any change of supplier is handled. The EAT commented that, in an appropriate case, a change of solicitors might, in fact, be a transfer under TUPE. This would be the case where the firm provided a dedicated team, with appropriate support systems, to deal exclusively with work from a particular client as and when required. Retirement age does not mean age discrimination

The Court of Appeal has considered the Employment Equality (Age) Discrimination Regulations 2006 for the first time in the case of Homer v Chief Constable of West Yorkshire.

The claimant, who was aged 61 and approaching retirement at 65, complained about the introduction of a requirement that employees obtain a law degree in order to be considered for promotion to a higher employment grade. The claimant did not have a law degree and would not have time to obtain one before he retired. The Court of Appeal agreed with the EAT that this did not constitute age discrimination.

The EAT had said that the operation of the requirement against him was an inevitable consequence of age but not a consequence of age discrimination. The Court of Appeal accepted that both the loss of status and pay could strengthen a claim of age discrimination. However, in this case, although it might seem to be unfair to the claimant because he was close to retirement age, the employer's practice was lawful.

When can settlement negotiations be referred to in tribunal?

In Woodward v Santander the EAT considered the rules that apply to 'without prejudice' communications. The general rule is that any communication made 'without prejudice', that is to say in an effort to settle a claim, cannot be referred to in a court or tribunal.

In this case, the claimant had settled earlier claims against her ex-employer under the terms of a compromise agreement. She now brought a fresh claim of victimisation due to an alleged failure to provide her with suitable references. She wished to refer in her witness statement to 'without prejudice' discussions that took place prior to the settlement of her earlier claims, in which the employer had refused to provide her with a favourable reference as one of the settlement terms. She argued that the general rule could be waived as in the case of Mezzoterro v BNP Paribas on the basis of 'unambiguous impropriety' on the part of the employer.

In Mezzoterro, the claimant returning from maternity leave had sought a meeting to raise a grievance. The employer's representative asked if the meeting could be 'without prejudice' but then went on to suggest that she should leave her employment.

The tribunal held that this was improper conduct because there was no existing dispute as to the termination of her contract and the employer's remarks could not be construed as a genuine attempt at compromise. It was just a cynical abuse of the 'without prejudice' rule in order to hide discriminatory behaviour. It could therefore be referred to in tribunal and, indeed, form the basis of her claim of sex discrimination. That was not the case here and there was no reason to widen the circumstances in which the rule could be overridden.

Effect of conditional resignation

It is sometimes unclear when a contract of employment has come to an end. However, the 'effective date of termination' matters because unfair dismissal claims must be brought within three months of that date. In the recent case of Heaven v Whitbread Group plc, the claimant wrote to his employer on 29 August: 'I tender my resignation... [but] this is dependent on two factors... [that I get] one month's money and a glowing reference'.

On 31 August, the employer wrote back, saying, in effect, that it could not accept a conditional resignation and it was for the claimant to decide whether he wished to stay on or go. On 3 September, the claimant emailed back that he had 'no alternative but to resign' and confirmed that his resignation was effective from 29 August. Because a conditional resignation is ineffective to terminate a contract of employment, the EAT confirmed that the contract was in fact terminated on 3 September, despite what the claimant himself said in his resignation letter.

Where no 'choice of law' clause in employment contract

In Chunilal v Merrill Lync, a UK national originally based in London but who had lived and worked in Hong Kong since 2003, wanted to claim a discretionary bonus from his employer, a company registered in the US state of Delaware. The issue was whether he could bring his claim in the UK High Court.

Generally, contract disputes must be decided in accordance with the law chosen by the parties to the contract. In the absence of any agreement on this point, demonstrated by the terms of the contract or the circumstances of the case, an employment contract will be governed 'by the law of the country in which the employee habitually carries out his work'.

In this case, there was nothing written into the contract. The High Court decided that the contract had been 'made' in New York. The claimant had flown to New York to negotiate the terms of his contract and then returned to London. A legally binding contract was concluded when his faxed acceptance was received in New York. The fact that he had previously worked for the same employer in London, that his new contract was termed a 'secondment' and that it was stated in the contract that, in the event of termination, 'UK termination conditions would apply', did not alter the fact the he was employed to work in Hong Kong. His claim should be brought in the Hong Kong court.

Employers operating internationally should be aware that, unless they include a 'choice of law' clause in relevant employment contracts, any disputes will ultimately be resolved in the local courts where the employee 'habitually carries out his work'.

In this case, the employee was sent to Hong Kong on a three-year 'secondment' which was subsequently extended. Employers should be aware that they should keep all employee contracts under review as an employee's status may change without this being reflected in the contract documentation.

W and another v Ministry of Defence

It was held in this case that a Tribunal had jurisdiction to hear claims of unfair dismissal and sex discrimination brought by women employed at the NATO headquarters in Belgium.

The women were employed by the Ministry of Defence in a school and a library and were dismissed when their husbands stopped being members of the army. They subsequently brought claims for unfair dismissal and sex discrimination.

In relation to unfair dismissal, the claimants' employment was deemed so closely connected to England that their claims would fall under the scope of the ERA. This is because they had qualified for employment only as a direct result of their spouses being posted to NATO with the British military and not on the basis of any aspect of their work.

In relation to sex discrimination, the EAT emphasised the notion that English courts have a duty to interpret domestic legislation, so far as possible, to give effect to EU rights. This is the case even where this requires the court to depart from the natural meaning of the statutory language.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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