United Kingdom

EC Boardroom Gender Diversity Proposals Back Away from Mandatory Quotas

By Madeleine Jephcott

DiversityBoardroom.jpgThe European Commission has published a scaled back proposal to increase the number of women on boards, setting a minimum objective of a 40% presence of female non-executive directors in publicly listed companies by 2020.

There is a powerful business case for addressing lack of female representation in top jobs, the reasons for which are varied and largely intractable. International interest in boardroom gender diversity has grown significantly in recent times and in October the EU Justice Commissioner signalled her intention to introduce decisive legislative action on mandatory gender quotas for corporate boards.

Reportedly, the plan was to force Europe's listed companies to reserve at least 40% of board seats for women by 2020 or face fines or other sanctions. However, stiff opposition from a number of EU member states effectively derailed those plans and the Commission has now published watered down proposals.

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Proposals on Shared Parental Leave and Flexible Working Unveiled

By Madeleine Jephcott

Family with a Baby.jpgThe UK Government has set out its plans for a new system of shared, flexible parental leave to be introduced in 2015 and confirmed that it will be extending the right to request flexible working to all employees from 2014.

These proposals originated from the Department for Business Innovation & Skills May 2011 Consultation on Modern Workplaces, which contained a number of proposals aimed at creating more flexible and family-friendly workplaces.

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"Employee-Shareholder" Status to be Introduced

By Richard Lister

StockCertificate.jpgThe UK Government is pressing ahead with plans for a new type of employment contract for "employee shareholders", with a view to implementing the scheme in April 2013.

The proposal, first announced by the Chancellor George Osborne in October, originally referred to "employee owner" status. In essence, the idea is that employees would give up certain employment rights, such as unfair dismissal and statutory redundancy pay, in return for between £2,000 and £50,000 of shares in the company which would be exempt from capital gains tax (CGT). Employers could determine the type of shares offered, including whether they carry voting rights or the right to receive dividends.

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UK Dismissal Protection for Employees with Extreme Political Views Inadequate

By Richard Lister

The European Court of Human Rights (ECHR) has ruled that the UK Government must take measures to protect employees from dismissal on grounds of their political opinions or affiliations, including extreme opinions that others might find offensive or shocking (Redfearn v United Kingdom [2012] ECHR 1878).

There have been various cases over the last couple of years about the types of belief that fall within the definition of a "philosophical belief" for the purposes of discrimination law, as now contained in the Equality Act 2010. However, this case concerned an employee who was dismissed for his membership of a particular political party.

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Collective Redundancy Consultation Obligations to be Relaxed

By Madeleine Jephcott

JobLossII.jpgThe Government is proposing to reduce the UK's 90-day minimum consultation period for large-scale redundancies.

While the rules governing collective redundancy consultation have remained relatively unchanged since they were introduced in the mid-1970s, the same cannot be said for the UK labour market. In an increasingly global and competitive market, the Government sees the existing redundancy consultation scheme as a barrier to competitiveness, flexibility and growth.

As a result, the Department for Business, Innovation and Skills (BIS) has published a consultation document suggesting some changes to the legislation. (This follows an earlier call for evidence on the operation of the rules, which closed in January this year.) The main proposals are:

  • reducing the 90-day minimum consultation period for large-scale redundancies; and
  • introducing a new Code of Practice to address a number of key issues affecting redundancy consultations.

Reducing the Consultation Period

Currently, employers must consult with trade unions or employee representatives for a minimum of 30 days before the first redundancy dismissal takes effect when proposing to dismiss between 20-99 employees, and for a minimum of 90 days when proposing to dismiss 100 or more. The EU Collective Redundancies Directive does not prescribe minimum consultation periods and the Government regards the time periods in the UK legislation as unacceptable "gold plating".

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Major Employment Tribunal Reforms on the Way

By Bethan Carney

LS Scales of JusticeII.jpgThe Government has confirmed its plans to introduce employment tribunal fees in 2013 and broadly approved the results of an independent, fundamental review of the Employment Tribunal Rules.

Charging Fees for ET Claims

Earlier this year, the Ministry of Justice conducted a public consultation on potential options for charging employment tribunal claimants fees in order to bring a claim. The response to the consultation has now been published, recommending that a regime of fees should be introduced from summer 2013.

Under the proposals, claimants would have to pay fees to in two stages - firstly to issue the claim and secondly to proceed to a tribunal hearing. The amount of the fees will depend upon the type of claim:

  • Level 1 (straightforward claims such as deduction from wages or redundancy pay) will cost £160 to issue and a further £230 for a hearing.
  • Level 2 (more complicated claims such as unfair dismissal, equal pay or discrimination) will have a £250 issue fee and then cost £950 to bring to a hearing.

Claims with multiple claimants will cost more: the fee for proceedings with two to 10 claimants would be twice the individual claim fee. This would increase to four times the individual fee for between 11 and 200 claimants, and six times the individual fee for over 200 claimants.

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Changes to Key UK Equality Provisions Expected Soon

By Carolyn Soakell

DiversityV.jpgThe Government is consulting on some significant revisions to the Equality Act 2010, including abolishing the discrimination questionnaire procedure and the rules on third-party harassment.

The Equality Act 2010, which brought together all UK discrimination laws in one place, was developed under the previous Labour Government and has been in force since October 2010. However, the Conservative/Liberal Democrat Coalition Government which came to power that year decided not to implement certain parts of the Act, including the provisions allowing a claim for discrimination based on a combination of protected characteristics (e.g. sex and race). It also put on hold the requirement for larger companies to report on their gender pay gap.

Now it looks like the Government is planning some substantive changes to discrimination protection under the Act. The aim of the proposed reforms is said to be reducing "bureaucracy" in equality law. But while these changes will no doubt be welcomed by many employers, on a closer look they may not be as helpful as they first appear.

Third-Party Harassment

The first major change is a proposal to abolish the rules on third-party harassment. Employers are currently liable for harassment of their employees by third parties, such as clients and contractors, if they know an employee has already been harassed twice before and fail to take reasonable steps to prevent a third incident. This is known as the "three strikes" rule.

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Substantial Banker Bonus Claim Upheld

By Colin Leckey

WrappedEurosII.jpgThe High Court has upheld a claim by 104 investment bankers for unpaid bonuses totalling EUR 52 million (Attrill and others v Dresdner Kleinwort and Commerzbank). The claim was based on verbal promises as to the size of a bonus pool which were found to have contractual effect.

The judgment, though lengthy, is at heart a straightforward breach of contract claim. It is very fact-specific, and care should be taken not to read too much into its broader implications.

Nevertheless, it serves as a salutary warning to staff involved in the annual compensation process in banks and other financial services institutions - from the CEO and the board down - of the need to exercise caution in the nature and content of communications about bonus pools and individual awards. Failure to do so may mean that binding commitments, later regretted, come into effect.

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Tags: Bonus

UK Employment Law Reforms - Latest Developments

By Madeleine Jephcott

Changes SignII.jpgIn the weeks since our previous review, in April, of recent and forthcoming legal changes affecting UK workplaces, the detail of some of the Government's reform plans has become a little clearer and some novel proposals have emerged.

The Queen's Speech

The Queen's Speech on 9 May 2012 heralded two bills that will overhaul significant aspects of employment law - the Children and Families Bill and the Enterprise and Regulatory Reform Bill.

The Children and Families Bill - not yet published - will include some of the reforms mooted in last year's Modern Workplaces consultation, although possibly not all of them. The Government's formal response to the consultation is expected shortly. The most significant proposals were:

  • A new system of flexible parental leave, designed to give parents more choice about sharing childcare responsibilities in the early stages of as child's life. In outline, the scheme is likely to entail the mother taking 18 weeks' leave at or around the birth, with the remainder of the current 52-week maternity leave period being reclassified as "parental leave" to be taken flexibly by either parent.
  • Extending the right to request flexible working to all workers who have been employed for 26 weeks, irrespective of the reason for the request. This would be based on the existing system for requesting flexible working for children/adult carers, retaining the current list of eight business reasons for employers turning down a request.
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New Rulings on Justifying Age Discrimination

By Richard Lister

BusinesspeopleII.jpgIn three recent cases, the UK's appellate courts have considered important aspects of the legal requirements for justifying discrimination on grounds of age.

Firstly, the Supreme Court's decision in Seldon v Clarkson Wright and Jakes [2012] UKSC 16 focused on the circumstances in which employers can justify a mandatory contractual retirement age. This is an instance of direct discrimination on grounds of age. The judgment will make it relatively difficult for employers to justify compulsory retirement. In particular, the Court made clear that the justification test for direct age discrimination is narrower than for indirect discrimination. Employers must be able to point to a "social policy" objective and not merely focus on their own business situation. Continue Reading...