Questions and answers

The employment law team at Shadbolt and Co answer a range of
workplace questions

Part-timers’ rights

Q: What rights will part-time employees have once the new regulations
are in force?

The imminent introduction of the Part-Time Employees (Prevention of Less
Favourable Treatment) Regulations will impose obligations on employers to
extend equal or pro-rata terms and conditions to part-time employees. This will
give employees a statutory right not to be discriminated against on the basis
of their part-time employment status.

In a workforce where one in three employees is predicted to be part-time by
2001 the regulations will give equal rights to statistically large numbers of
women as well as men.

So who will benefit and how? In the proposed regulations, a
"part-time" employee is an individual who works under a contract of
employment and is paid wholly or in part by reference to the time he or she
works and is not identifiable as a comparable full-time employee.

To comply with the law, part-timers should receive the same hourly rate as
comparable full-timers and the same rate of overtime pay once they have worked
more than the normal full-time hours. Contractual holiday entitlement, sick and
maternity pay must also apply to part-time employees pro-rata and employers
must not discriminate over access to pension schemes. To avoid claims of less
favourable treatment, employers must extend access to all fringe benefits
albeit on a pro rata basis.

Once the regulations are in force a part-time employee will be able to bring
a claim for back pay and there is to be no qualifying period of service. With
regulations guaranteeing equal or pro-rata rates for employees on fixed-term
contracts due in July 2001, employers will need to consider the compliance
costs inherent in both sets of regulations.

Amanda Bodkin

Compromise agreements

Q: Can a compromise agreement settle all claims between employee and

Previously, a compromise agreement could settle all claims between the parties,
howsoever arising. But the case of Lunt v Merseyside Tec, 1999, ICR 17, has
changed the position.

Following a letter from the employee to the employer indicating the
complaints she intended to bring if no settlement was reached, the parties
entered into a statutory compromise agreement under which the employee’s
employment was terminated and she accepted payments "in full and final
settlement of all claims".

The employment tribunal dismissed the employee’s claim for unfair dismissal
and breach of contract because the compromise agreement was valid and binding
in those respects.

But the agreement did not cover her claims for equal pay and sex
discrimination. The EAT upheld this decision and decided that section 203 of
the Employment Rights Act 1996 had been satisfied because the agreement related
to a particular proceeding. However, section 203 did not allow an agreement
compromising potential complaints that had not yet arisen on the off-chance
that they might be raised.

The agreement also referred only to the Employment Rights Act 1996 and not
to the equivalent provisions of the Sex Discrimination Act 1975, and the EAT
seems to have held the agreement to have been invalid for this reason.

This case illustrates the importance of complying with the requirements of
section 203 and shows that it is not enough to refer to a rather speculative
"all claims" because this excludes complaints which the employee has
not yet made to the employer.

Amanda McGurran

Maternity rights

Q: What rights accrue during ordinary maternity leave and additional
maternity leave, and what remuneration is an employee entitled to?

During ordinary maternity leave an employee is entitled to the benefit of
her terms and conditions of employment, except for remuneration. Remuneration
is defined simply as wages or salary. It is not clear from the regulations
whether pay rises, bonuses and commission are payable during ordinary maternity

Case law has established that employees are entitled to the benefit of pay
increases awarded while on maternity leave. (Gillespie v Northern Health and
Social Services Board, 1996, IRLR 214). The position in relation to bonuses and
commission still remains unclear.

On additional maternity leave, the employee is entitled only to the benefit
of her employer’s implied obligation of trust and confidence and any terms and
conditions of her employment that relate to notice, compensation in the event
of redundancy or disciplinary or grievance procedures.

The employee will not therefore be entitled to benefits such as her company
car, pension or permanent health insurance while on additional maternity leave,
unless there is an agreement to the contrary with her employer.

Under the new regulations, statutory maternity pay is payable for 18 weeks –
the ordinary maternity leave period. Employees taking extra maternity leave
will not be paid beyond the 18-week period unless there is a contractual
provision to that effect or they have reached an agreement to be paid with
their employer.

Rebecca Kettell

Age discrimination

Q:  Can we recruit a candidate
who is less suitably qualified for a position who is 45 years old, rather than
a better-qualified candidate aged 58?

Studies show that employers place unwarranted emphasis on age in the
recruitment process. There is, however, at present no law against age
discrimination in the UK. The matter is currently under consideration by the
Government and in June 1999 the Department for Education and Employment issued
a code of practice, "Age Diversity in Employment". The code covers
good practice in all aspects of the employment cycle, from recruitment to

Unlike the Acas code of practice on disciplinary practice and procedures on
employment, the code does not have statutory backing. There is no legal
obligation on employment tribunals to place emphasis on the code in determining
cases referred to it. But it is believed that its provisions will be taken into
account by tribunals in appropriate cases in considering whether an employer
has acted fairly.

The Government’s plans are that the code will be fully evaluated by February
2001, at which point the Government will be able to decide whether to implement
legislation outlawing age discrimination. Under the Treaty of Amsterdam, the
Government may in any event be forced to take action. The treaty allows the
European Commission to put forward proposals to counter discrimination on a
wide range of grounds including age discrimination. If a new directive is
passed dealing with age discrimination, the Government will be obliged to
implement legislation.

Rebecca Kettel


Q:  I understand the
definition of redundancy has widened. What practical effect will this have in the

The case of Murray v Foyle Meats, 1999, IRLR 5628L, did away with the
contract test – looking at what work the employee was required to perform under
his contract – and the geographical test – looking at the place the employee
actually works – in considering whether an employee is redundant. The simple
question to be asked is if the dismissal be attributable to a diminution in the
employer’s need for employees to do work of a particular kind, that is not the
kind carried out by a particular employee.

This is a much broader common sense approach and gives much more flexibility
to employers wishing to restructure their business. It allows employers to make
employees redundant in one area while increasing staff in another, without the
risk of a claim for unfair dismissal.

It also endorses the concept of "bumped redundancies", where an
employee may be redundant but because of, say, his long service, the employer
wishes to retain his services and give him another employee’s job. The employee
whose job is given to the redundant employee may have to be dismissed to make

Previously, it would have been open for an employee to challenge the
employer in such circumstances as the bumped employee’s dismissal was not
wholly attributable to the diminution in the requirement for an employee to do
work of a particular kind – there would be no diminution in the work carried
out by the bumped employee.

Rebecca Kettell

Human rights

Q:  What effect will the Human
Rights Act 1998 have on an employee’s right to privacy at work?

The Human Rights Act 1998 will come into force on 2 October 2000. The Act
confers the right on everyone to "respect for his private and family life,
his home and his correspondence". Activities carried out at work come
within the definition of "private life" (Niemetz v Germany, 1992).

The protection afforded by the Act covers interception of telephone calls at
work (Halford v UK, 1997) and is likely also to cover monitoring of e-mails at
work. This does not place an absolute prohibition on an employer to monitor
e-mails or telephone calls but an employer should make clear to employees that
he may be monitoring e-mails and telephone calls. As a matter of good practice,
where e-mail is in use, there should be a formal policy governing its use at

The rights granted under the Act give rise only to a right of privacy
against a "public authority". The right will not therefore be
directly enforceable against a private employer. But courts and tribunals, as
public authorities, must have regard to the Act in determining claims. Therefore,
the provisions will be indirectly enforceable against private employers as the
tribunals will be bound to find against employers if rights under the Act have
not been recognised.

The Act provides a defence for public authorities where it is
"necessary… for the protection of the rights and freedom of others",
which is open to wide interpretation.

Kate Matthews

Transfer of employees

Q: On a change of contractor providing services, will the liability
for an accident suffered by an employee at work transfer from the old
contractor to the new one, and whose insurers should pick up the cost?

Under the Tupe regulations, all the previous employer’s duties and
liabilities under the employment contract are transferred to the new employer.
In Bernadone v Pall Mall Services Group, 1999, B suffered an accident at work
while employed at a hospital by Pall Mall. B claimed damages for personal
injuries. Before he issued proceedings, Pall Mall’s business was transferred
under Tupe to an NHS trust.

B and the trust contended that if B’s claim was proved, Pall Mall and its
insurers should pay the claim.

The judge held that Pall Mall’s liability to B transferred to the trust and
that the right of Pall Mall to an indemnity from its insurers was also
transferred to the trust under Tupe.

While the first conclusion by the High Court must be right, the second
raises some interesting problems, as there is no contractual relationship
between the new employer and the old employer’s insurers.

Further, in contracting-out situations, there is no contractual nexus
between the old employer and the new, and it will not be possible for these
matters to be dealt with by the usual indemnities involved in Tupe sales of
businesses. There will clearly be further case law to come on this point.

Helen J Boddy

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