UK: Top 5 Employment Law Developments Of 2009

Last Updated: 22 December 2009
Article by John Macmillan and Karen McGill
  1. Farewell To The statutory DDPs And GPs. From 6 April 2009 the statutory dispute resolution procedures to deal with discipline and grievance were repealed with a new ACAS Code of Practice and accompanying guidance introduced. One of the most notable changes from the statutory procedures is that the new Code is not legally binding and a failure to comply will not result in an automatically unfair dismissal. However, where the Employment tribunal does consider there to be an unreasonable failure to comply, compensation can be adjusted by up to 25%. The guidance accompanying the Code provides the basic procedural practices and standards required when dealing with disciplinary and grievance issues. Employers should closely follow this guidance to avoid any finding of unfair dismissal on procedural grounds.
  2. Happy Holidays? A decision was reached in HM Revenue and Customs v Stringer with important implications for employers. The principal finding was that workers continue to accrue statutory holiday whilst on sick leave. It was also suggested that annual leave accrued by a sick worker could not be extinguished at the end of the leave year and must be permitted to be carried over into the next year, in direct contravention of the Working Time Regulations 1998. Further, it was ruled that claims to enforce entitlement to holiday pay could be pursued under the Employment Rights Act 1996 as an unlawful deduction from wages, meaning claimants can now go back to the last in a series of deductions, potentially over several years. A further unwelcome holiday pay development for employers was the case of Pereda v Madrid Movilidad, which provided that employees who fall sufficiently ill before/whilst on holiday are entitled to insist that "missed" holiday be 'reinstated' and taken at a later date.
  3. Belief In Climate Change.  In Nicholson v Grainger plc the employment appeal tribunal found the claimant's belief in climate change could amount to a philosophical belief for the purposes of the Employment Equality (Religion or Belief) Regulations 2003. The tribunal held the claimants strong belief that a cut in carbon emissions was necessary to avoid catastrophic climate change was sufficiently cogent to qualify as a philosophical belief. It should be noted that the tribunal's decision has only got the claimant over the first hurdle and he still faces the most difficult task of proving his dismissal was a direct result of his beliefs. Employers will certainly hope that such findings are rare given the potential for a wide range of views to be brought within the Regulations' scope, from animal rights activism or vegetarianism to political beliefs such as Communism.
  4. Age. The Heyday challenge to the statutory default retirement age of 65 was finally concluded. The High Court ruled that the default retirement age was justified by the legitimate aim of social policy concerns and was implemented in a proportionate manner. Central to the decision was the Government announcement that it was bringing forward its proposed review of the default retirement age to 2010. Despite the Heyday decision, employers should therefore prepare themselves for an increase in the default retirement age following next years review.

    Given the economic climate, it is perhaps unsurprising that we have seen cases concerning redundancies and in particular, selection criteria.  For example, the case of Rolls Royce Plc v Unite found that whilst the inclusion of a length of service criterion was indirectly discriminatory, it was a proportionate means of achieving a legitimate aim. This was because the collective agreements setting out the applicable criteria enabled the redundancies to be carried out fairly, rewarded employee loyalty and helped achieve a stable workforce. This decision should, however, be treated with caution as it involved a particular set of circumstances, most notably the negotiated collective agreements, and the combination of length of service with a range of other criteria.
  5. Compensation.  In Aegon UK Corporate Services Ltd v Roberts the Court of Appeal ruled that pension loss could not be considered distinctly from loss of earnings. Roberts was dismissed by reason of redundancy and brought a successful claim for unfair dismissal. The tribunal initially awarded compensation due to continuing pension loss (from moving to a money purchase scheme from a final salary arrangement) even though there was no overall loss of earnings. On appeal, it was successfully argued that a higher overall remuneration package would offset any pension losses and that earnings and pension loss could not be considered separately with different considerations applied to each.

The MacRoberts Employment Group would like to wish you a Merry Christmas and a Happy New Year!


The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.

© MacRoberts 2009

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