New legislation

Since the dates 1 October and 6 April were adopted as the two days for the introduction of new employment legislation, employers have had to cope with simultaneous and far-reaching reforms. But 1 October sees little in the way of major changes – more tinkering at the margins of employment law.

However, organisations should not become complacent. Not all legislation is introduced on these two dates – December 2005 sees important changes to disability discrimination laws. Even more importantly, employers should already be looking ahead to the big events of next year – TUPE reform and age discrimination.

Sex Discrimination Act

Of the changes taking effect in October (see box), the one with the most impact is the amendment of the Sex Discrimination Act 1975 to bring it in line with the EU Equal Treatment Directive. A revised definition of indirect discrimination removes the requirement to show that treatment complained about is to the detriment of a considerably larger proportion of women than of men. The new test asks whether the treatment puts or would put women at a particular disadvantage when compared with men. The claimant must then show that she suffers that disadvantage rather than that the practice is to her detriment.

The new definition expressly adopts the European Court of Justice’s test for objective justification. The employer can only justify indirect discrimination by showing that the treatment is a proportionate means of achieving a legitimate aim.

These changes are largely cosmetic. The new test of ‘particular disadvantage’ will probably still be addressed, in practice, by looking at the statistical impact of the employer’s practices on men and women. Arguably, the threshold for establishing disadvantage is lowered and a wider range of social and economic, rather than statistical, evidence may be used. But whether the new definition has any real practical impact – ie, that action currently lawful would become unlawful – remains to be seen.

The key point for employers is that the test of objective justification is difficult to satisfy. It is not enough to show a good business reason for the practice in question – the measure must be a proportionate means of achieving that aim. Tribunals will consider whether the aim can be achieved in other ways which would impact the disadvantaged group less severely.

Another change is the introduction of specific offences of discrimination on the grounds of pregnancy or maternity leave and of harassment. These changes are again more about tidying up the legislation, not radical reform. Since the Act has, to date, contained no such express provisions, the definition of direct discrimination on the grounds of sex has needed to be liberally interpreted to cover such offences. The new wording is clearer and simpler.

The definition of harassment expressly covers harassment of a sexual nature and harassment which is not sexual but is on the grounds of gender, ie, that a man would not be treated in the same way as a woman. Both types adopt the familiar concept of unwanted conduct which has the purpose or effect of violating the victim’s dignity or creating a hostile, degrading, offensive or intimidating environment.

Industrial action

October also sees changes to the law on industrial action, delayed from April 2005. These simplify the content of the statutory information which unions must give to employers before ballots on industrial action and before industrial action begins – the current requirement to provide ‘such information in the union’s possession as would help the employer to make plans and bring information to the attention of employees’ is replaced with a requirement to provide a list of the categories of employee to which the employees concerned belong, a list of their workplaces and the numbers of employees by workplace and category. The revised requirements are easier to understand (and for unions to comply with), but the impact on employers is not substantial.

Tribunal claim and response forms

It will be mandatory to use the new tribunal claim and response forms from 1 October. It is crucial that employers or their representatives complete the forms in full, otherwise the response will be rejected, with the risk that a revised response may be submitted out of time.

Definition of disability

December sees a far more important change to the definition of disability in the Disability Discrimination Act (DDA). Cancer, HIV and multiple sclerosis will automatically count as disabilities, with no requirement to show an adverse impact on the ability to carry out normal day-to-day activities. More controversially, mental impairments can be disabilities even where they are not clinically well-recognised illnesses.

As a result, stress, anxiety and depression could trigger the increased protection of the DDA and the employer’s obligation to make reasonable adjustments. The condition must, of course, have a substantial long-term effect on day-to day-activities, but employers will need to be very careful about how they treat staff claiming such conditions.

The best advice remains to act quickly in identifying the likely prognosis of the condition, the causes of any work-related stress or the impact of the condition on the employee’s ability to work and to consider what adjustments might reasonably be made.

TUPE reform

TUPE (Transfer of Undertakings (Protection of Employment) regulations) reform should have been the big change this October. The new rules have been postponed until April 2006 to allow the government to consider the large response to its consultation exercise. A final draft of the regulations is expected this autumn and employers should look at this for any important changes. While most legal changes bring new problems, this delay is probably something employers will regret.

The new rules will introduce clarity to an area riddled with uncertainty and confusion. New rules on the application of TUPE to outsourcings are likely to solve the perennial guessing game of ‘TUPE or not TUPE?’ – where a dedicated workforce is assigned to the contract, TUPE will apply. Contractors, client organisations, staff and unions will at last have a decent idea of where they stand.

Furthermore, transferors will for the first time have a statutory duty to provide the transferee with workforce information and can be sued in the High Court if this is not provided or is inaccurate. This will have little impact in cases where there is a transfer agreement between the two parties. But on contractor changeovers, this rule may have real teeth – many incoming contractors struggle to get meaningful information from a disgruntled outgoing contractor.

Although the new rules will not apply until 6 April 2006, they will apply to transfers taking place on or after that date. Projects or business transfers already in the pipeline, but completing after 1 April, will also be subject to the new legislation. In effect, new TUPE has already arrived.

Age discrimination

Age discrimination is the big event next year. The draft regulations have only just been published and consultation ends in October. Employers must use the period before October 2006 to thoroughly audit their employment practices and contracts. Age-specific provisions and even indirectly age-related provisions – length of service, experience and qualifications – will either have to be justified by the complex defences in the new rules or removed.

Retirement dismissals

Employers need to urgently prepare for the proposed law on retirement dismissals. Employers will be able to compulsorily retire staff at 65 or over, and those dismissals will be fair provided that a specific procedure is followed. The employer must notify the employee of the intended retirement date between 12 and six months before dismissal and advise the employee of the right to request to continue working beyond that notified date. Where a request is made, a meeting must take place, the request must be considered in good faith and the employee can appeal against the decision.

If all of this is done correctly, the dismissal will be fair – the tribunal will not consider reasonableness or the reason for rejecting the request. But if the procedure is not followed the dismissal is automatically unfair.

There are no transitional provisions in the regulations. An employee who is forced to retire on 1 October 2005 can claim automatic unfair dismissal if the new procedure is not followed. The window for notifying these employees of retirement is rapidly approaching and employers need to put a procedure in place to deal with these cases.

Implementation dates can create a false sense of security. Next year’s employment law is already with us. Employers must face that future now.

Chris Mordue is partner and head of the Leeds employment group at Pinsent Masons

What’s new in October

  • Amendments to the Sex Discrimination Act 1975 under the Employment Equality (Sex Discrimination) Regulations 2005 including a new definition of indirect discrimination, specific provisions covering pregnancy and maternity discrimination and new definitions of sexual harassment
  • New tribunal claim and response forms become mandatory under the Employment Tribunals (Rules of Procedure) Regulations 2005
  • Changes to the minimum wage – the rate is increased to 5.05 per hour and the development rate to 4.25
  • Changes to the rules on union notices to employers before industrial action ballots and industrial action (section 266A and 234A of the Trade Union and Labour Consolidation) Act 1992 amended by the Employment Relations Act 2004)

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