UK: Changes to Employment Law in 2005

Last Updated: 23 December 2005
Article by James Libson and Joanna Blackburn

As is our tradition at this time of year, this month we are looking back on some of the bigger developments in the employment arena over the last 12 months.

All change in discrimination laws

Changes to the Sex Discrimination Act came into force on 1 October and included new definitions of indirect sex discrimination and harassment, both of which are likely to make it easier to bring claims under these headings. There is now also extended protection for employees working for British employers abroad.

The Disability Discrimination Act has also been amended, with the changes coming into force on 5 December. It is now no longer necessary to show that a mental impairment is a clinically well-recognised illness to qualify as a disability. This is expected to make it easier to bring disability discrimination claims for psychiatric illnesses (though the employee must still show that the impairment has a substantial and long-term effect on his ability to carry out normal day-to-day activities). The Disability Discrimination Act has also been extended to automatically cover HIV, cancer and MS. This means that these conditions will be automatically treated as disabilities for the purposes of the Act.

The introduction of civil partnerships, also on 5 December, will have a knock on effect on discrimination laws, as well as in other areas. The Sex Discrimination Act has been amended to include civil partners in the prohibition on discrimination on grounds of marital status, and civil partners will be able to rely on the Employment Equality (Sexual Orientation) Regulations for protection against less favourable treatment as compared with heterosexual employees who are married. The Civil Partnership Act will also have an effect on pensions, employee benefits, paternity and adoption leave, and flexible working requests.

2005 was also the year in which the draft Employment Equality (Age) Regulations (the "Age Regulations") were published. The Age Regulations have been one of our favourite topics this year, despite the fact that they are not expected to come into force until October next year. The reason is that as the Age Regulations are likely to have wide ranging consequences for employers and force a change in the culture of many workplaces, it is imperative that employers start preparing as early as possible. You will be hearing more from us about the Age Regulations next year.

Information and consultation

The Consultation and Information of Employees Regulations came into force on 6 April. The Regulations require employers with more than 150 employees to set up works councils to inform and consult employees on a number of business issues. However, the requirement only applies once 10 per cent of the workforce has made a request to that effect. Therefore, though the Regulations could potentially have a huge impact on the way in which many UK workplaces operate, they are likely to continue to be overlooked by many employers until such time that a request for a works council is received from employees. The Regulations will be gradually extended to apply to all businesses with 50 or more employees by April 2008.

Statutory disciplinary, dismissal and grievance procedures

In 2005 we also saw the first cases on the new statutory procedures that were introduced last year. Many employers have changed their internal procedures to ensure that the statutory procedures are followed before carrying out any dismissals. However, the cases show that many others have yet to follow suit and that their failures have provided employees with easy arguments of automatic unfair dismissal and an uplift in compensation.

However, most of the reported cases have been concerned with the statutory grievance procedures and what constitutes a grievance under the new laws. The gist of these cases is that almost any complaint in writing by an employee (and even by a solicitor on his behalf) can constitute a grievance and thus trigger obligations for the employer under the new procedures. The lesson for employers: treat every complaint with caution and if it is not clear whether it is intended as a grievance, ask the employee.

New caps

The new limits on statutory awards were announced last week and will apply to dismissals taking effect on or after 1 February 2006. The statutory cap for unfair dismissal will be increased from £56,800 to £58,400. At the same time, the cap on a week's pay for the purposes of calculating the basic award for unfair dismissal and redundancy payments will increase from £280 to £290.

This article is only intended as a general statement and no action should be taken in reliance on it without specific legal advice.

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