This issue will deal with some forthcoming employment law changes, recent guidance that has been published and some significant case law developments.

Forthcoming Employment Law Changes

As a result of the Government’s recent focus on employment law reform, there will be several key employment law changes coming into force this autumn along with a few things that the Government has decided not to change after all.

Repeal of Third Party Anti-Harassment Legislation

From 1 October 2013, employees will no longer have specific protection under the Equality Act if they are harassed by a third party contractor.  As a consequence, the requirement under the Act that an employer is only liable if it knows of at least 2 other occasions of third party harassment in relation to the employee will go.

However, employers will still need to pay close attention to any allegations of third party harassment by their staff as employees are still protected from harassment by third parties by the general provisions of the Equality Act and by the principles established by case law. Therefore, the employer may still be liable if the employee can show that it failed to take necessary steps to stop the harassment. Whilst the intention of the repeal is to remove red tape and avoid the “3 strikes and the employer is liable” effect, employers could find themselves more likely to be held liable for one instance of third party harassment if they don’t deal with such allegations promptly and effectively.

From 1 October 2013, the new hourly rates for the national minimum wage will be as follows:

Standard adult rate	Workers aged 21 & over	£6.31 an hour (up 12p from £6.19)
Development rate	Workers aged 18-20	£5.03 an hour (up 5p from £4.98)
Young workers rate	Workers aged under 18 but above the compulsory school age & who are not apprentices	£3.72 an hour (up 4p from £3.68)
Apprentice rate	Those employed under a contract of apprenticeship	£2.68 an hour (up 3p from £2.65)

Employee Shareholders

This new employment status came into force on 1 September 2013 – see http://www.scullytwiss.com/employment-law-changes-summer-2013/ for details.

TUPE

Following the Government’s consultation on changes to TUPE, it has announced the following:

Service Provision Change – as a result of vocal opposition to the Government’s original intention to repeal service provision changes from triggering TUPE, the service provision change will stay put. The Government intends to amend the wording to reflect recent case law, for instance clarifying that for there to be a TUPE service provision change, the service provision must be “fundamentally or essentially the same” before and after transfer.

Employee Liability Information – again the Government had planned to repeal this requirement for the transferor to provide employee information to the transferee prior to the transfer, but 75% of respondents to its consultation were against the repeal. The Government has instead decided that the transferor will have to provide the same information, but 28 days before the transfer rather than the current 14 days.

Changes to terms and conditions – under TUPE employers are very restricted about what changes they can make to transferring employees’ terms and conditions. The basic position is that terms and conditions can only be changed in the context of a TUPE transfer if the changes aren’t connected to the transfer or are due to an “economic, technical or organisational reason (ETO) entailing changes in the workforce”. This has proved difficult to show in practice.

To assist employers, the Government is proposing to amend the regulations by:

1. stating that a change in the workplace’s location can be an ETO reason; and
2. amending the wording of the regulations generally to give employers (marginally) more flexibility in this area.

TUPE and Redundancy Collective Consultations – the Government is proposing to amend the regulations so that where the new employer/transferee has started “meaningful” consultation with the transferring employees prior to the transfer, this pre-transfer consultation can count towards the collective consultation period for redundancy purposes after the transfer.

TUPE and Collective Agreements – the Government has two proposals:

1. only collective agreements in force at the time of the transfer will bind the transferee, not those entered into after the transfer.
2. after one year, terms and conditions that stem from or incorporate collective agreements may be varied, provided that overall, the change is no less favourable to the employee.

Microbusinesses – employers with 10 or fewer employees will not have to make arrangements for the election of staff representatives where there is no recognised independent union or existing appropriate representatives. Instead they can inform and consult with the affected employees directly.

The draft regulations are due to be published in December 2013, when we will have more details on the specific changes.

Recent Guidance/Codes of Practice

Acas Code of Practice – settlement agreements

The Acas Code of Practice on settlement agreements and pre-termination discussions has now been published in final form together with Guidance and both can be accessed from this link: http://www.acas.org.uk/index.aspx?articleid=4395 – see our Summer 2013 newsletter  http://www.scullytwiss.com/employment-law-changes-summer-2013/ for further details.

Subject access requests – new code published

The Information Commissioners Office (ICO) has published a code of practice setting out practical guidance for employers dealing with data subject access requests. The code also includes a useful “ten simple steps” checklist. http://www.ico.org.uk/~/media/documents/library/Data_Protection/Detailed_specialist_guides/subject-access-code-of-practice.PDF

Significant Case Law Developments

There have been several recent court decisions that impact on day to day practice for HR managers:

When does an offer to settle become a binding settlement agreement?

In a recent case, the High Court decided that a letter from an employer’s solicitor to an employee’s solicitor setting out a settlement offer and a response from the employee’s solicitor accepting that offer amounted to a binding settlement agreement. As the words “subject to contract” had not been used in the correspondence, the employer could not introduce any other terms such as confidentiality as part of the agreement. A reference to entering into a “suitably worded settlement agreement” in the letter was not sufficient.

The key point for employers to note is that any settlement correspondence (including emails) should be clearly marked “subject to contract” (as well as “without prejudice”). Any verbal offers should be followed up in writing with these words clearly marked on the document/email. It may also be prudent to make it clear that there will be no binding agreement until all parties have signed a settlement agreement drafted by the employer. [Newbury v Sun Microsystems]

How much statutory holiday can be carried over from one year to the next?

A worker is entitled to 5.6 weeks’ annual leave (equivalent to 28 days for those who work five days a week) in each leave year.   Where a worker is prevented from taking statutory holiday due to sickness the worker is entitled to carry over the statutory holiday to the next holiday year.  Since the statutory holiday allowance was increased from 4 weeks to 5.6 weeks (primarily to ensure workers receive bank holidays/8 day equivalent in addition to 4 weeks off), it has been unclear whether the right to carry over leave applied to the entire 5.6 weeks’ annual leave or only the first 4 weeks of annual leave.

The EAT has recently decided that an employer does not have to agree to a worker carrying over the additional 1.6 weeks’ leave where a worker is prevented from taking that leave due to sickness. This decision will assist employers in dealing with the costs of long term sickness absence. [Sood Enterprises Limited v Healy]

Scully Twiss Recommendations 

• Review your equal opportunities policies in relation to third party harassment to check that they are consistent with the change in law, for example, if there is reference to 2 other occasions of harassment this is no longer the law;
• Review your processes to ensure that any allegations of third party harassment are escalated to the appropriate personnel immediately (eg HR) and dealt with promptly and effectively;
• For employers paying the National Minimum Wage, check that your employees are being (or will be from 1.10.13) paid at the increased rates;
• If you are an HR professional who is involved with negotiating exit discussions/settlement agreements, take a look at the new Acas Code of Practice on settlement agreements and pre-termination discussions;
• When making settlement offers/entering into pre termination negotiations, make sure that you label all communication “without prejudice and subject to contract”;
• If you are responsible for dealing with data subject access requests, review the new Code of Practice from the Information Commissioners Office;
• Review your employee handbooks/contracts to check that you are not providing an additional contractual right to your workers to carry over holiday beyond that required by law.

Employment Law Seminar

We will be holding an employment law seminar on 15 October 2013 to discuss many of these changes in more detail. Further details are available from our Practice Manager, Cassie Eager, at ce@scullytwiss.com