IN THE NEWS THIS WEEK:
* IR35 rules do not breach convention or EU law
* New employment tribunal legislation
* Proposal for new fixed-time work regulations
* Calls for mandatory pay reviews are rejected
* Refusal to work from home was unlawful indirect discrimination
IR35 RULES DO NOT BREACH CONVENTION OR EC LAW
You may recall from our previous bulletin details of the Professional
Contractors Group (PCG) challenge against the Inland Revenue (IR) under
the IR35 rules. The intention of IR35 is to eliminate tax avoidance by
small companies and individuals working in the UK knowledge-based contract
industry.
The PCG claimed on behalf of it members that a right to enjoy the benefit
of a shareholding in a service company was a right of property and by
virtue of the IR35 rules this enjoyment was interfered with by rendering
it more expensive and/or uncertain in its impact.
In addition, the PCG claimed IR35 rules breached European law by creating
an unlawful hindrance to free movement of workers, freedom of
establishment and freedom to provide services.
The Court rejected these arguments and found in favour of the IR upholding
the legality of the IR35 rules. The justification for the rules was
proved on the facts which is to combat tax avoidance and/or reducing tax
revenue.
NEW EMPLOYMENT TRIBUNAL LEGISLATION
As we have reported in previous bulletins the Secretary of State for Trade
and Industry has proposed new regulations to strengthen and streamline the
Employment Tribunal's powers and a new scheme by ACAS to arbitrate claims
of unfair dismissal.
These regulations have now been published and will come into effect for
cases the tribunal decides after 18th April 2001. The main provisions of
the regulations are as follows:-
* a new regulation setting out an overriding objective to enable
tribunals to deal with cases justly. This includes, as far as
practicable: ensuring the parties are dealt with equally, saving expense,
acting in proportion with the complexity of the case, and dealing with
cases fairly and expeditiously.
* Consolidation and simplification of the directions, relating in
particular to evidence.
* The maximum amount of deposit, which may be imposed following a
pre-hearing review, has been increased from £150 to £500.
* The unreasonable conduct of a party's representative may be taken
into account when awarding costs against that party.
* A substantial increase in the maximum amount of costs that a
tribunal may award on an assessment of costs from £500 to £10,000. This
recognises the real costs involved in proceedings before Employment
Tribunals.
* The potential a tribunal has to strike out a claim or notice of
appearance because it is "frivolous" has now been replaced by
"misconceived" and "unreasonable".
The
scheme is intended for unfair dismissal claims, that
do not achieve a settlement and otherwise would go to a full tribunal
hearing. The scheme is expected to be launched in late May 2001. Visit
the web site for further details:
http://www.acas.org.uk/
PROPOSAL FOR NEW FIXED-TIME WORK REGULATIONS
The Department of Trade and Industry (DTI) has launched a 12-week
consultation on its proposals for implementing the EC Directive on
fixed-term work. The Directive has the broad aim of preventing fixed-term
employees from being less favourably treated than similar permanent
employees.
It also limits the scope for using a series of successive contracts to
employ the same person, and to improve access to training and to
information on permanent jobs for fixed-terms employees.
The consultation period is due to end at the beginning of June. Visit
http://www.dti.gov.uk/er/fixed/index.htm
for further details.
CALLS FOR MANDATORY PAY REVIEWS ARE REJECTED
The Equal Opportunities Commission (EOC), through its Equal Pay Task
Force, has recommended that the Government amend the Equal Pay Act 1970 to
require Employers to carry out regular mandatory equal pay reviews.
The Minister for Employment has ruled out any amendment to the Act and has
said, "the Government is very interested in the idea of promoting and
encouraging employers to carry out voluntary pay reviews".
REFUSAL TO WORK FROM HOME WAS UNLAWFUL INDIRECT DISCRIMINATION
The Employment Appeal Tribunal has held that an employer's refusal to
grant a woman's request to work from home to resolve childcare
difficulties was similar to a refusal to grant a woman's request to work
part-time. The employer by requiring the woman to work from the office
unlawfully discriminated against her. The employer by refusing to accede
to the woman's request to work from home and suggesting as an alternative
that the woman take two weeks' unpaid leave then return to work full-time
acted unlawfully.
Indirect discrimination occurs when a requirement or condition applies
equally to both sexes but the proportion of one sex who can comply with
that requirement is considerably smaller than the other sex.
The proportion of woman who can comply with the requirement or condition
to work full time is considerably less than men because more woman have
primary responsibilities for childcare than men. The requirement or
condition had a detrimental effect on the woman, which her employers
failed to objectively justify.
* This bulletin is intended for general guidance only and should not
be relied upon without detailed legal advice on your specific
circumstances.
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