January 23 2006 Employment Law ENEWS

Welcome to the latest edition of employment law enews

Mutuality of Obligation

The nature of some work makes it difficult to ascertain whether a worker is actually an 'employee' for the purposes of claiming the protection of employment law.

A worker can validly be an employee and enjoy all the applicable legal benefits despite having no written terms of employment, if mutuality of obligation can be established between the two parties.

The recent Employment Appeal Tribunal (EAT) decision in Younis v TransGlobal UKEAT/0504/05 has provided an example of where a mutual obligation can exist between two parties despite there being no obligation on the 'employee' to carry out any work for the 'employer'.

Mr Younis was engaged on a monthly retainer to generate sales for a three year period and in addition received commission for the sales he generated. During this period it was understood between the parties that Mr Younis would work for other organisations. There was no direct contractual obligation on Mr Younis to actually do any work for the employer!

The EAT, in overturning the Employment Tribunal's decision acknowledged that the usual question when determining a mutuality of obligation was whether the employer is under an obligation to provide work, and the worker obliged to do it when provided. However, the EAT considered that in this case the existence of the three year period was sufficient to create mutuality of obligation despite the fact that there was no obligation for the employee to do any work, entitling Younis to bring a claim for unfair dismissal.

Data Protection Act 1998 and Employee References

The Information Commissioner's Office (ICO) has recently produced a guide to provide clarification for employers as to how the Data Protection Act applies to employee references.

In general terms individuals have a right to a copy of information held about them and a refusal to do so may be in breach of the Act. However, if there is confidential information contained in a reference, an exemption under the Act may prevent an employer from making disclosure.

The ICO has recommended that in most circumstances, when asked by a person to reveal the information contained in a reference, it should be disclosed, or at least a substantial part of it. This may even be the case where the referee refuses consent, particularly where the content of the reference has had a significant impact on the individual, such as preventing them from taking up alternative employment.

In the rare event of a threat of violence or intimidation by the individual towards the referee it is reasonable to withhold the reference. However, in such cases it may be possible to conceal the identity of the referee, although in reality the individual may have an idea of who has written the reference.

If it is not reasonable in all of the circumstances to provide the information contained in a reference it may be helpful to provide a summary of the content of the reference to the individual.

There is no obligation on an employer to provide a reference but it is best practice for companies to have a policy on giving references to ensure a consistent approach. The policy should state who can give references, in what circumstances, and requirements for access to them. All members of staff should be made aware of the policy.

A copy of the ICO's guide can be found by clicking on the following link: www.informationcommissioner.gov.uk.

Work and Families Bill - Update

Further to the steeles enews issued on 2 November 2005, it appears that employers are now voicing concerns about a 'hidden' clause contained in the proposed Work and Families Bill.

The Bill, which is due to come into force in April 2007, will amongst other things see longer periods of maternity and paternity leave, more flexible working for adult carers and the exclusion of bank holidays from employees' statutory minimum holiday entitlement.

Employers are now concerned that the Bill proposes to give the government complete free rein to impose an unlimited increase in statutory redundancy pay (SRP).

Clause 14 of the Bill allows the secretary of state to increase the weekly limit which applies in relation to SRP, presently capped at £280. Unlike the current position, there is no requirement that this increase be made in response to changes in the retail prices index. In accordance with trade union requests there are concerns that the weekly limit could be as much as doubled.

The Bill went through the report stage and third reading on Wednesday 18 January 2006 in the House of Commons and, therefore, is likely to be implemented as it stands.

Top 10 Employment Law Issues of 2005

The past year has seen numerous changes in employment law. These changes have wide implications for all employers and will require them to update their current policies and practices.

We know how difficult it can be for you, as an employer, to keep abreast of all the developments in employment law. With this is in mind, the next of our successful series of employment law seminars will cover the most important developments in employment law in 2005 and give you an insight into what is to come in 2006.

We will review the following areas:

• Disability Discrimination
• Sex Discrimination
• Statutory Dismissal and Grievance Procedures
• Stress
• Harassment
• Compromise Agreements
• Transfer of Undertakings
• Agency Temporary Workers
• Age Discrimination
• Religion or Belief and Sexual Orientation Discrimination

This seminar is taking place in both London and Norwich.

The Norwich briefing takes place over breakfast on Wednesday 1 February at Norwich City Football Club. The seminar has a 7.45 for 8.00am start and should conclude no later than 10.00am. To reserve your place please book online

The London seminar takes place on Tuesday 14 February at Broadway House, Tothill Street, SW1H 9NQ. It has a 9.00 for 9.30am start and should conclude no later than 1.00pm. To reserve your place please book online

This article copyright © 2006 Steeles Law. All rights reserved.