Employment Law Newsletter – April 2013

Welcome to our April 2013 Employment Law Newsletter, keeping you up to date with changes in employment law and informing you of recent case law developments.

Legislative Developments

Employment Tribunal Procedural Reforms

The amended employment tribunal procedural rules and new fees for issuing claims will be introduced in the coming months. There has not been an exact date announced, but we will of course keep you informed of these developments.

Employee Shareholder Contracts

Towards the end of the last year, the Government published draft legislation known as the Growth and Infrastructure Bill. The Bill provides for an exemption from capital gains tax (CGT) for shares issued to an employee in return for agreeing to take up the proposed new employment status of “employee shareholder”. If an employee agrees to become an employee shareholder then they would have to agree to forfeit certain employment rights.

The Bill is intended to boost employee engagement by removing perceived barriers around the fear of an employer being taken to an employment tribunal. In the last month, however, the House of Lords has voted to strike down the part of the Bill relating to the forfeiture of employment rights. This follows the announcement in the recent budget that it is the Government’s aim to introduce employee shareholder contracts from 1 September 2013, as the House of Lords took the view that the Bill required more work to ensure it adequately protected employees agreeing to become an employee shareholder. The Law Society has also raised concerns about proposals to offer employee ownership to workers in return for forfeiture of employment rights.

Additional flexibility for employers in the Pension Auto-Enrolment Process

The Department of Work and Pensions has published a consultation paper regarding draft regulations and proposed amendments to the technicalities of the auto-enrolment process. The intention is to simplify the current legislation and increase flexibility for employers by also proposes to include provision in the Pensions Bill 2013, which would allow employers to exclude certain categories of worker from the auto-enrolment duty. The consultation closes on 7 May 2013.

National Minimum Wage Increases

It has been announced that the UK national minimum wage for adults will increase from £6.19 per hour to £6.31 per hour when the national minimum wage rates for 2013/2014 come into effect on Tuesday 1 October 2013. This represents an increase of 1.9%.

The national minimum wage rates paid to younger workers will also be increased from 1 October 2013; the national minimum wage “youth development rate” (for workers aged 18 to 20) rises from £4.98 to £5.03 per hour and the national minimum wage youth rate (for workers aged 16 and 17) rises from £3.68 to £3.72 per hour.

Case Law Developments

Are obese employees considered disabled under discrimination law?

In the recent case of Walker v Sita Information Networking Computing Ltd, the EAT considered whether an obese employee, who suffered from a number of physical and mental conditions, was disabled under the Disability Discrimination Act 1995 (“the Act”).

The employment judge found that the employee was not disabled for the purposes of the Act, but the EAT overturned that decision on appeal and stated that the employment judge had wrongly focused on the fact that it was not possible to identify the cause of the employee’s impairment; he should have focused on the effect of those impairments.

The EAT clarified that obesity is not in itself an impairment for disability discrimination purposes. However, obesity might make it more likely that a claimant has impairments within the meaning of the legislation. The outcome is that the impairment itself should be considered rather than its cause, even if the cause of the impairment is excluded from the definition of disability.

Changes to criminal record checks

Following the Court of Appeal’s decision in R (T and others) v Chief Constable of Greater Manchester and others the Home Office has announced legislative proposals to relax the current scheme that involves checking an employee’s criminal record. The proposals seek to reduce the extent of the checks so that minor cautions and convictions will no longer be disclosed to an employer. The draft legislation has been laid before Parliament, but has not yet been published.

Interim Relief – On the balance of probabilities?

During the course of proceedings in the case of London City Airport Ltd v Chacko, the Claimant made an application for interim relief, which was granted. The Respondent sought to appeal the decision, but it was dismissed because the EAT found that the employment judge had applied the correct test at first instance.

The EAT decided that a claim for interim relief should not be decided on the balance of probabilities as to whether a Claimant will ultimately succeed in showing that dismissal was on a prohibited ground. The EAT considered the meaning of the term “likely” and confirmed that it must “be established that the employee can demonstrate a pretty good chance of success [at a final hearing]”.

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