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Esther Martin Anna Birtwistle Susanne Foster Bettina Bender CM Murray LLP

Employment Law – Hot Topics. Esther Martin Anna Birtwistle Susanne Foster Bettina Bender CM Murray LLP. 08 February 2011. CM Murray LLP: Specialists in Employment and Partnership Law. CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law.

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Esther Martin Anna Birtwistle Susanne Foster Bettina Bender CM Murray LLP

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  1. Employment Law – Hot Topics Esther Martin Anna Birtwistle Susanne Foster Bettina Bender CM Murray LLP 08 February 2011 CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  2. The Equality Act 2010 ______________________ Esther Martin CM Murray LLP CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  3. Protected Characteristics • Age • Disability • Gender reassignment • Marriage and civil partnership • Race • Religion or philosophical belief • Sex • Sexual orientation • Pregnancy and maternity CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  4. Direct Discrimination “A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.” s13(1) • Perception • Association CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  5. Indirect Discrimination “A person (A) discriminates against another (B) if A applies a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B’s.” s19(1) • Includes disability / gender reassignment • PCP ‘puts, or would put … at a particular disadvantage’ s19(2) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  6. Harassment “An employer (A) must not, in relation to employment by A, harass a person (B) – (a) who is an employee of A’s; (b) who has applied to A for employment.” s40 • Harassment must be related to a protected characteristic, but not necessarily that of the victim • Third party harassment CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  7. Victimisation “A person (A) victimises another person (B) if A subjects B to a detriment because: (a) B does a protected act, or (b) A believes that B has done, or may do, a protected act.” s27 • No comparator required CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  8. Pay secrecy clauses Clauses designed to prohibit or restrict ‘relevant pay disclosures’ are unenforceable… …if the discussion about pay is with a view to finding out whether there is a connection between pay and having (or not having) a protected characteristic. s77 CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  9. Disability Discrimination Discrimination arising from a disability • A person (A) discriminates against a disabled person (B) if – • A treats B unfavourably because of something arising in consequence of B’s disability, and • A cannot show that the treatment is a proportionate means of achieving a legitimate aim • Subsection (1) does not apply if A shows that A did not know, and could not reasonably have been expected to know, that B had the disability. s15 • No comparator required CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  10. Pre-employment health questionnaires A potential employer must not ask about the health of an applicant before offering work s60 • Burden of proof reversed if a disability discrimination claim is lodged • Conditional offer can still be made • Exceptions CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  11. Exceptions – when discrimination may be lawful • Occupational Requirement Schedule 9 • General Positive Action S158 • Disability / Pregnancy / Age s13(3)/ S13(6)(b)/ Schedule 9 CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  12. Sections not yet in force • Combined Discrimination s14 • Gender Pay Gap Information s78 • Positive Action (recruitment and promotion) s159 CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  13. Practical considerations for employers • Ensure all appropriate personnel are trained on relevant changes in discrimination law regarding employees, potential employees and ex-employees • Audit standard employee documentation where necessary (e.g. contracts, staff handbooks, compromise agreements) • Review policies (e.g. diversity, equal opportunities, anti-bullying and harassment) • Ensure effective complaints procedures are in place CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  14. Default Retirement Age ______________________ Anna Birtwistle CM Murray LLP CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  15. Default Retirement Age WHAT ISN’T CHANGING? Objective justification: Employers may still operate a compulsory retirement age except that from April 2011 they will need to objectively justify it (as they have up to now for retirement ages below 65) WHAT IS CHANGING? Employers will no longer be able to use the DRA of 65 to maintain a compulsory retirement policy for their workforce: • Up to6 April 2011: Transitional arrangements • From6 April 2011: No new notifications of retirement on basis of DRA to be issued • 1 October 2011: DRA and statutory “duty to consider”retirement procedures will be abolished CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  16. Option 1: Having a Compulsory Retirement Age • Legitimate aim • Workforce planning/succession • Facilitating the recruitment and retention of younger employees • “Collegiality” • Increased costs e.g. pensions and benefits (Seldon v Clarkson, Wright & Jakes and another) • Proportionate - Balancing act - Why that cut off point? - Criterion other than age? - Consistency? - Evidence European Cases (Wolf, Peterson, Rosenbladt) v UK Cases (Martin, Hampton, Baker) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  17. Option 2: Removing the Compulsory Retirement Age • Follow a fair procedure and rely on one of the 5 other potentially fair reasons for dismissal: • Conduct • Capability/Qualifications • Redundancy • Statutory restriction • “Some Other Substantial Reason” • Change in corporate culture • Adequate Performance Procedures • Using appraisal process to discuss future plans • Recruitment CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  18. Option 1: Retaining an EJRA Document how the Company has come to its decision Identify business needs and legitimate aim Compile evidence to show why that age has been decided upon and why other criterion cannot be used Consultation Exercise? Option 2: No Retirement Age Adequate Performance Procedures and appraisals in place Consider flexible working arrangements Ensure line managers know how to deal with long term sickness absence Next Steps/Issues to Consider • For all companies: • Amendments to contracts of employment, staff handbook, pensions and share schemes (good leaver/bad leaver status) • Training Requirements • Provision of benefits CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  19. Team Moves ______________________ Susanne Foster CM Murray LLP CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  20. Team Moves What is a team move? Why are team moves of concern? CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  21. Key Points Breach of express and implied contractual terms (e.g. no involvement in any other business, avoiding any conflict of interest etc) Directors, certain senior employees and partners are fiduciaries to their employer/firm – very high standard applies Substantial liability for breach of fiduciary duties – account for profits etc Risk of liability for new employer (and recruiters) when facilitating a team move CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  22. Duties whilst a Director, Senior Employee or Partner Duties of loyalty and good faith (implied and express) Essentially the duty is to place your employer’s or firm’s interests before your own, including not to place oneself in position of conflict with co/firm not to make secret profit from your position render full information of all commercial opportunities and threats to business (including own misconduct) accountable to company/firm for any benefit received not compete, and if so, account for all profits CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  23. Key Challenges Confidential information Speaking to clients/customers about move Speaking to staff about move Diverting business opportunities Duty to tell employer about material changes CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  24. Garden Leave What is garden leave? Can be more effective than restrictive covenants Excluded from the office/market Prevented from speaking to clients/colleagues Additional restrictions e.g. re announcements Generally requires express provision, subject to reasonableness CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  25. Restrictive Covenants To protect legitimate business interests (e.g. trade connections and stability of workforce etc) Non-competition Non-solicit (customers, suppliers and staff etc) Non-dealing (customers and suppliers etc) Typically 3 – 12 months in employment context; 1 – 2 years in partnerships (separate body of case law in partnership context) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  26. Breach of Duties/Restrictions Rights, powers and remedies for (old) employer or firm, could include: summary dismissal or lock out of market by placing team move individuals on garden leave injunctive relief compensation full account to firm of profits unlawfully earned as a result of breach of fiduciary duties CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  27. Liability for New Employer Procuring and inducing breach of contract Conspiracy and/or unlawful interference with business or breach of confidence Account as potential trustee (fiduciary) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  28. City Employee Team Moves UBS Wealth Management (UK) Ltd v Vestra (2008) - 75 employees defected from UBS to Vestra, effectively stripping UBS of key desks and personnel UBS alleged defections were orchestrated by a former senior UBS manager and senior managers still employed at UBS UBS applied for springboard injunction, pending full trial, to prevent Vestra from taking an unfair advantage of alleged breaches by former UBS staff Held: Court granted UBS’ request for injunction pending trial, prohibiting inc: Vestra from soliciting any existing employee to leave UBS; Vestra from encouraging any client to transfer business; and Former UBS employees from servicing transferred UBS clients in breach of restrictions CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  29. UBS Wealth Management (UK) Ltd v Vestra (2008) (cont’d) “inherently unlikely” on evidence available that poaching raid coordinated solely by former manager, without breach of contract by senior managers Senior managers should have disclosed the planned poaching raids to UBS (especially as party to them in breach of duties of loyalty and fidelity) Former manager was entitled to start up a new business, recruit former colleagues and attract former clients of UBS (once restrictions expired), but was not permitted to encourage UBS senior employees to recruit others from UBS (this was unlawful conspiracy) It did not matter that UBS employees may have left UBS in any event “secret plotting to go together en masse” was objectionable as unlawful CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  30. Other cases Tullett Prebon Plc and Ors V BGC Brokers LP and Ors (2010) Lonmar Global Risks Limited v West and Ors (2010) City Employee Team Moves (cont’d) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  31. Team Moves Hard to do without risk of breaches & liability particularly for the team but also the new employer Typical issues: Requests to disclose confidential client/business information Speaking to colleagues Speaking to clients and customers Risk of procuring and inducing if new employer (or recruiter) encourage breaches CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  32. Strategies & Tactics to seek to reduce risk if taking on a Team • Advise team members to comply with duties and obligations • Focus on lead team member and team/client loyalty • If transfer must be as a team from the outset, keep team as small and as tight as possible • Involve recruitment consultants: • to conduct and evidence research of team members and clients; and • approach and interview team members without lead team members’ input or involvement • Consider length of notice, garden leave & restrictive covenants CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  33. Strategies & Tactics to seek to reduce risk if taking on a Team • Consider existing business’ financial resources to service clients/customers • Consider handling of previous team moves – exits and arrivals • Ensure recruitment/appointment is not subject to team transfer • Use of PR – new employer not usually restricted; but individual team members may be • Remember that all documents and emails etc are disclosable unless privileged CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  34. Family Friendly Rights ______________________ Anna Birtwistle CM Murray LLP CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  35. Key Changes to Family Friendly Rights • Paternity Leave • Extension to the Right to Request Flexible Working CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  36. Maternity leave OML: 26 weeks AML: 26 weeks Statutory Maternity Pay for 39 weeks: 1st six weeks paid at “earnings related rate” (90% of her average earnings) Remaining 33 weeks paid at “prescribed rate” (currently £124.88, from April 2011 £128.73) Ordinary Paternity Leave: Since 2003 eligible fathers have been entitled to up to two consecutive weeks’ paternity leave and pay Statutory Paternity Pay: lesser of the “prescribed rate” and 90% of the employee’s weekly earnings Additional Paternity Leave Current Regime CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  37. Additional Paternity Leave Regulations 2010 • Applies to babies born/adopted on or after 3 April 2011 • Mother must have returned to work without using up all of her OML/AML • The earliest APL can be taken is 20 weeks from the date of birth/date of adoption • Minimum 2 weeks up to a maximum of 26 weeks • Eligibility requirements • Additional Statutory Paternity Pay CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  38. How this works in practice… 30 weeks 22 weeks 9 weeks Total leave: 52 weeks Total statutory pay: 39 weeks CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  39. Practicalities • Eligibility requirements • Timing and notice • Evidence of entitlement • Effect on contract of employment • Things to consider: • KIT days • Pension Contributions • Enhanced company schemes • What next? CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  40. Flexible Working • 2003: Right to request introduced and applied to carers of children under 6 • 2009: Right was extended to apply to children up to and including the age 16 What’s changing? • From April 2011 this right will be extended to parents of children up to and including the age of 18 What next? • Coalition government has stated intention to extend the right to request to all employees regardless of whether they have children CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  41. The Right to Request • Right to request: It does NOT create a right to work flexibly! • Typical requests • Who can make a request • Mother, father, adoptive parent, guardian, foster parent and spouse, civil partner or partner of the same • Adult carers • Employees only • No request in preceding 12 months CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  42. Statutory Procedure • Request procedure • 28 days • 14 days • Right to be accompanied • 8 Grounds of refusal: • Burden of additional costs • Detrimental effect on ability to meet customer demand • Inability to reorganise work amongst existing staff • Inability to recruit additional staff • Detrimental impact upon performance • Insufficiency of work during periods employee proposes to work • Planned structural changes • Recourse to ET limited • Failure to correct procedure • Refusal outside of 8 statutory grounds • Rejection based on incorrect facts • Compensation: 8 weeks pay CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  43. The Agency Workers Regulations 2010 ____________________ Esther Martin CM Murray LLP CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  44. THE AGENCY WORKERS REGULATIONS 2010 • European Legislation: Temporary Agency Workers Directive 2008/104/EC • Due to come into force 1 October 2011 • Coalition has confirmed no further amendments will be made CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  45. Who will the regulations apply to? • “workers with a contract of employment or employment relationship with a temporary work agency who are assigned to user undertakings to work temporarily under their supervision and direction” Article 1.1 – Temporary Agency Workers Directive CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  46. Twelve week qualifying period “To complete the qualifying period the agency worker must work in the same role with the same hirer for 12 continuous calendar weeks, during one or more assignments.” Regulation 7(2) • Continuity can be broken or suspended in certain specific circumstances CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  47. Anti-avoidance provisions • The Regulations contain a non-exhaustive list of factors to be taken into account in determining whether a structure of assignments is intended to deprive the agency worker of rights. Regulation 9(5) • Additional award of up to £5,000 where a hirer and/or agency are found to have breached the anti-avoidance provisions. Regulation 18(14) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  48. Agency Worker Rights An agency worker (A) is entitled to: “… the same basic working and employment conditions as A would have been entitled to for doing the same job had A been recruited by the hirer – • Other than by using the services of a temporary work agency; and • At the time the qualifying period commenced.” Regulation 5(1) CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  49. Regulations only apply to “basic working and employment conditions” • Pay • Duration of working time • Length of night work • Rest periods • Rest breaks • Annual leave • Comparator required • Terms must be ‘ordinarily included’ CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

  50. Pregnant women and nursing mothers • Subject to the 12 week qualifying period • Agency workers are entitled to: • reasonable time off during working hours to attend ante-natal appointments • payment from employment agency during her absence • She may lodge a tribunal claim if a request is unreasonably refused • Duty to make reasonable adjustments on hirers CM Murray LLP: Specialists in Employment and Partnership Law CM Murray LLP: Specialists in Employment, Partnership and Business Immigration Law

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