April 2 2007 Employment Law Enews

Welcome to the latest edition of steeles employment law enewsletter.

DTI consults over disputes in the workplace

As we have previously reported in Enews, the Government announced a review of the dispute resolution framework in December 2006 and appointed Michael Gibbons as the independent reviewer. His report has now been published, and many will be relieved to hear that his main recommendation is for the statutory dispute resolution procedures, in force since October 2004, to be repealed.

The intended aim of the statutory procedures was to encourage employers and employees to resolve disputes in the workplace, with employment tribunals used only as a matter of last resort. The Gibbons Review has concluded that the procedures have instead had the effect of exacerbating and accelerating employment disputes, in many cases formalising disputes that could have been dealt with informally. Both large and small businesses have reported that the number of formal disputes has risen since the statutory procedures became mandatory and the complexity of the new procedures has driven users to seek legal advice at an earlier stage. In addition, the Review recognises that the statutory procedures are not appropriate for some situations in which they are mandatory, such as the expiry of a fixed term contract or redundancy.

The Review makes 17 recommendations intended to enable more disputes to be resolved in the workplace, to assist employers and employees to resolve those disputes not resolved in the workplace and to make the employment tribunal system simpler and cheaper for both users and Government.

In response to the Review, the Government has issued a new consultation paper on the detail of the recommendations. Whilst there are no firm proposals at this stage, it seems very likely the statutory procedures will be repealed and in its place will be clearer, non-prescriptive guidelines on good practice based on the existing ACAS code of practice. In addition, it is suggested that the parties would be encouraged to follow good practice by expanding the existing discretionary power of tribunals to award costs.

The DTI consultation will close on 20 June 2007, after which there is likely to be further consultation on the draft legislation needed to implement any changes. It seems unlikely, therefore, that any amendments will be made before the end of the year. We will keep you informed of any further developments.

Inventions made in the course of employment

In order for an employer to own an invention made by an employee, the Patents Act 1977 provides that the invention must be made "in the course of the normal duties of" or "specifically assigned to" the employee, and in either case it must be a reasonably expected result of the employee carrying out his duties.

In the recent case of LIFFE Administration and Investment Management v (1) Pavel Pinkava and (2) De Novo Markets Limited, the Court of Appeal has examined what an employee's "normal duties" are and the relevant considerations for determining what might be a reasonably expected result of an employee carrying out his duties, for the first time since the Patents Act came into force 30 years ago.

Dr Pinkava developed a new and ground-breaking system for exchanging credit products. He had been instructed to do so by his employer, although his invention had a much broader application (and was therefore presumably more profitable) than the original task he was assigned to do. When LIFFE decided to patent the invention, Dr Pinkava claimed ownership and refused to assign it to LIFFE. Instead, Dr Pinkava patented the invention himself and assigned it to his own company. LIFFE commenced proceedings seeking a declaration that it owned the invention. The High Court found that LIFFE was the owner of the invention on the basis it was made as a result of duties specifically assigned to Dr Pinkava, rather than in the course of his normal duties. Whilst the invention had a wider application to the task originally assigned, it was related to and flowed from it.

On appeal, the Court of Appeal decided instead that the invention was made in the course of his normal duties. It held that an employee's "normal duties" may evolve beyond those stated in his initial contract of employment and even include duties that had been "specifically assigned" to the employee, as was the case with Dr Pinkava. In determining whether an invention is a reasonably expected result of the employee's duties, the Court of Appeal decided that the qualities of the particular employee are relevant. Therefore, Dr Pinkava's abilities as an "innovative thinker" were relevant. A dissenting Judge, however, suggested that this could result, rather oddly, in the inventions of less innovative employees, who would not be expected to produce such inventions, not belonging to an employer.

Overall, however, the broad interpretation of "normal duties" in this case appears to assist employers, making it more likely that an invention will belong to the employer rather than the employee. Bearing in mind that this case involved an employer inexperienced in patenting inventions and from a sector in which patenting has only recently been possible (business methods and software), it will be interesting to see how the law in this area continues to develop.

Legislative changes taking effect in April 2007

1 April: Increase in the basic rate of statutory maternity, paternity and adoption pay from £108.85 to £112.75 per week.

2 April: Ban on smoking in public places takes effect in Wales, under the Health Act 2006. Northern Ireland will follow on 30 April.

6 April: Statutory sick pay increases from £70.05 to £72.55 per week.

The Sex Discrimination Act 1975 will be amended by the Equality Act 2006 to place a new statutory duty on all public authorities to eliminate unlawful discrimination and harassment and promote quality of opportunity between men and women (the "gender equality duty"). A new Equal Opportunities Commission gender quality duty code of practice will come into force. Certain public bodies will be required to put a gender equality scheme in place by 30 April 2007.

A number of minor technical amendments will be made to the age discrimination regulations, including one to make it clear that a dismissal in relation to the right to be accompanied to a retirement meeting will be unfair.

The threshold for employers to be covered by the requirement to inform and consult with their employees will be reduced to those with more than 100 employees (currently applies only to those with 150 employees or more).

The right to request flexible working arrangements will be extended to include carers of adults.

30 April: Regulations to provide protection against discrimination on the grounds of religion or belief and sexual orientation in the provision of goods and services will take effect.

In addition, the definition of "any religion, religious belief or similar philosophical belief" for the purposes of religious discrimination will be amended (under the Equality Act 2006) by removing the requirement for the belief to be "similar", widening the scope of what beliefs might be covered by the legislation.

Therefore whilst many employees will opt for the MGP once their employment has terminated as this is a shortened procedure, which avoids the need for a meeting, the employee must ensure that there is sufficient detail in their grievance letter to identify the basis of the grievance to allow the employer to investigate and respond to it.

This article copyright © 2007 Steeles Law llp. All rights reserved.