Employment Law Update: Recent Government Announcements (Official & Leaked!)

The Government has issued draft regulations for consultation (until 15^th April) making two amendments to the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. The changes are to come into force on 30^th June 2002.

Under the Regulations, it is unlawful to treat a part-time worker less favourably than a comparable full-time worker, unless the difference in treatment is objectively justified. Currently part-timer workers must compare themselves to full-timers employed under the same type of contract, and fixed-term contracts are treated as of a different type from permanent contracts. This means that a part-time fixed-term worker must be compared with a full-time fixed-term worker, rather than a full-time permanent contract worker.

The Regulations will be amended so that, in determining whether someone is a comparable worker, it will be irrelevant whether his contract is fixed-term or permanent. A fixed-term part-time worker will be able to compare himself with a permanent full-time worker and a permanent part-time worker will be able to compare himself with a fixed-term full-time worker (although, in some circumstances, whether the comparator is fixed-term or permanent may be relevant in showing objective justification for the difference in treatment).

The second change is to remove Regulation 8(8), which provides that, where an employment tribunal has upheld a complaint from a part-timer for equal access to an occupational pension scheme, the tribunal may only award compensation in respect of loss going back up to a maximum of two years. The equivalent two year backdating limit in the Equal Pay Act 1970 was held to be contrary to EU law in the House of Lords' judgment in Preston v Wolverhampton Health Authority, and Regulation 8(8) will therefore be deleted.

It would therefore be prudent for employers to carry out a review of the terms and conditions they offer to workers on different sorts of contracts (and to consider whether any differences can be justified) prior to this Summer, when the above changes and the Fixed Term Workers Regulations (still in draft – see e-bulletin dated 22 January 2002) will come into force.

A Whitehall policy document leaked to the newspapers apparently suggests that the Government may tone down its proposals for the amendment of TUPE (see e-bulletin dated 25^th October 2001). It appears that the proposal to require transferees to provide some form of comparable pension scheme where the transferor provided an occupational pension scheme may be dropped. Further, the suggestion that, where public services have been outsourced, the contractor should not be permitted to recruit new staff on worse terms and conditions than the public sector employees it has acquired may be watered down. Instead the Government may adopt the CBI's proposal for a voluntary code of practice seeking to ensure that new recruits be given "fair and reasonable" terms. Obviously it will be good news for employers if this revised policy is adopted by the Government, as both original proposals involved considerable potential cost for employers.

A draft EU directive has also been leaked to the press, apparently setting out proposals to give agency workers rights to the same remuneration (possibly including pay, pensions, holiday and other benefits) as permanent employees doing comparable jobs. This would mean that agency workers employed by the agency to work in a business could claim the same terms and conditions as permanent workers employed directly by the business. The Government has expressed concern over the proposal, while the CBI are reported to want the Commission to change the draft Directive so it is based on comparisons between one agency worker and another agency worker, rather than being based on a comparison between the rights of an agency worker and those of permanent employees of user companies. Unions have welcomed the possibility of legislation in this area. Publication of the draft directive was expected in February but has been delayed.

• Publication of Part 1 of the Employment Practices Data Protection Code (on employment records) has slipped again. The Information Commissioner has stated that it is now due to be published mid-March.
• The DTI has published an extensive report following a survey of tribunal users in 1998. The report includes interesting statistics as to the profile of tribunal applicants and the outcome and impact of tribunal cases. The report is available on the DTI website at www.dti.gov.uk/er/emar/etsurvey98.pdf.
• The Government has indicated that it wishes to retain the working time opt-out beyond 2003 (when the EU is due to review it) and encourage a voluntary approach to cut over-working.
• The Government has announced a review into the role of non-executive directors, to consider how to deliver stronger, more independent and more active non-executives drawn from a wider talent pool.

© Herbert Smith 2002

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