UK: Shake Up In Legal Rules For Employers

Last Updated: 17 May 2007
Article by Tony McPhillips

Tony McPhillips, head of Robert Muckle’s employment group looks back at the developments in employment law during 2006 and forward to issues likely to be of challenge to employers in the future.

This April will be an extremely busy month for employers with some important legal changes coming into force. There are notable changes in relation to the gender equality duty for public sector employees, the increase of the statutory maternity pay entitlement to 39 weeks and the introduction of a new right for carers to request flexible working. This summer will also see a smoking ban brought into effect in the workplace from 1 July and further consultation on the increase of paid holiday entitlement from 20 to 28 days under the Working Time Regulations. The first staged increase to 24 days is due to take place this autumn. There will also be extensive consideration of the recommendations of the Gibbons report to revoke the universally criticised statutory and disciplinary procedures and a fresh look at the alternative resolution of employment claims.

Taking a moment to look back, 2006 was a busy year. It started with employers getting to grips with the new Transfer of Employment (Protection of Employment) Regulations 2006 (TUPE). In contracting out terms the new service related definition of a transfer appears to have led to greater certainty and less posturing by transferees attempting to avoid TUPE applying to the transfer – this must be a good thing for all concerned, particularly affected employees. However, the legislation is still cumbersome and employers still face significant difficulties when attempting to make workplace changes after transfers and uncertainty when buying insolvent businesses.

Much of last summer was spent preparing for the introduction of the new age discrimination legislation in October 2006. As with much recent legislation, it appears that the law is taking some time to bed down and the flood of claims that many expected has not yet materialised. Long term, however, there is no doubt that will change and this will be a fertile area for claims. One part of the legislation heavily criticised by employee interest groups has been the imposition of the national default retirement age of 65 and the compulsory retirement process which effectively allows employers not to continue providing work for employees beyond 65. This is currently subject to challenge in the European Court of Justice (ECJ) by Heyday which claims that having a specified default retirement age does not properly implement the European directive into UK law. However, comments made by the advocate-general (which are often followed by the ECJ) in another similar case involving Spain’s implementation of the European directive, may mean that Heyday’s challenge is not successful.

Over twenty years we have seen themes or trends develop that push key employment issues to the top of the agenda. Often it is simply a case of putting the spotlight on existing legislation to dramatic effect. This is what is currently happening on equality and diversity issues. This is where the future challenges lie for all employers. We live in the "hot spot" for equal pay claims in the country. Yet it has taken over 30 years for that legislation to have the effect that was intended. Recent requirements for public sector employers to implement equality schemes in terms of race (2002), disability (December 2006) and now gender (with effect from 6 April 2007) may have been overlooked by private sector employers who adopt an ‘out of sight, out of mind’ approach. However, all employers must understand these changes and the effects that they will have, either directly or indirectly, on them.

The equality schemes require public authorities to eliminate unlawful discrimination and harassment and promote equality in terms of race, disability and gender. Public Authorities (which include government departments, councils, LEAs, state school governing bodies, police authorities and NHS trusts amongst others) are required to take race, disability and gender issues into account in relation to all aspects of their decision-making. As a result, there will be a domino effect on those who supply, advise and contract with the authority being directly affected as tendering and procurement processes must also include consideration of the equality duties. This in turn means that providers will also be asked to demonstrate their commitment to promoting good equality and diversity policies and practices. In order to meet the challenges of equality and diversity as part of any procurement process head on, many service providers are already expanding their own diversity initiatives to require their suppliers (such as IT and telecoms) to also conform with these policies.

This highlights the need for all employers to think outside their immediate area and consider changes occurring around them. With our increasingly diverse working population, employers who succeed in training, retention and development of employees (which clearly has an effect on the bottom line) will be better able to meet the challenges of a modern competitive market.

Tony McPhillips is head of the employment group at Robert Muckle LLP.

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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