Employment & Immigration Legal Updates 23/11/2009

Gender pay gap narrows

A recent survey has shown that the gender pay gap has narrowed overall by just half a percent.

Professional Support Lawyer Elizabeth Stevens comments:

According to figures published by the Office of National Statistics this month, the overall pay gap has narrowed by 0.5 per cent to 22 per cent. The figures are significantly better in the public sector where the difference between men and women's pay is now 21 per cent, compared to the private sector where the difference has actually increased by 0.7 per cent to 28.8 per cent. Harriet Harman, Minister for Women and Equality, welcomed the small improvement but has expressed disappointment that the private sector is falling even further behind the public sector.

The Equality Bill is intended to make further improvements in gender pay discrimination, although it has been criticised by some for not going far enough to promote pay transparency.

Equality Bill

The Bill contains a power to require large private-sector employers (250 or more employees) to report on gender pay differences, although the Government has committed not to use this power before 2013 and only then if insufficient progress on voluntary reporting has been made. If the Conservatives win the next election they have indicated that they would not exercise this power (criticising it as a "bureaucratic nightmare") but instead would impose a mandatory equal pay audit on employers of any size who have lost an equal pay claim.

The Bill requires public bodies of 150 employees or more to report on gender pay on an annual basis from 2011, in addition to reporting the rate of employment for ethnic minorities and those with disabilities.

In August 2009 the Equality and Human Rights Commission published a consultation on gender pay reporting in the private sector, with the aim of encouraging employers to report voluntarily. A separate consultation has been carried out by the Government Equalities Office on the public sector equality duties.

The Equality Bill will also prevent employers from enforcing "secrecy clauses" in employment contracts (intended to prevent employees from comparing pay), provided employees are involved in a "relevant pay discussion". It appears that such a discussion would have to relate to the issue of whether the individual's pay is discriminatory. The Bill as currently drafted does not ban such clauses completely.

The Bill is due to have its first reading in the House of Lords before the end of the year, and is likely to be given Royal Assent in spring 2010.

Future strategy

In a further development, a new cross-Government strategy was announced on 29 October 2009 with the intention of improving gender equality in the workplace. Working Towards Equality looks at what has already been done and what more can be done to promote equality in the workplace, including improving access to quality part-time work, increasing flexible working and reducing the gender pay gap. This will form the basis of a new strategy to be published early next year. The extent to which this strategy forms the basis for any new legislation will presumably depend on who succeeds in the forthcoming General Election.

Pension benefits and age discrimination

A recent Employment Appeal Tribunal (EAT) decision has highlighted the risk of dismissing an individual in circumstances which deprived him of qualifying for enhanced early retirement benefits.

Employment solicitor Sanjeev Uppal comments:

Many employers are already aware of the risks of terminating an individual's employment close to his or her retirement age. A recent decision of the Employment Appeal Tribunal (EAT) in the case of London Borough of Tower Hamlets v Wooster UKEAT/0441/08 has highlighted the risk of dismissing an individual in circumstances which deprived him of qualifying for enhanced early retirement benefits.

Facts

Mr Wooster was originally employed in the housing department of the London Borough of Tower Hamlets. Following a restructuring exercise in 2001, he was seconded to East End Homes (EEH), a registered social landlord. The secondment was due to end in 2006 and Mr Wooster was warned that he would be made redundant, unless alternative employment could be found for him. EEH offered to fund his continued employment until he reached the age of 50 in 2007, when he would qualify for early retirement benefits under the local government pension scheme. This offer was rejected by Tower Hamlets and Mr Wooster was encouraged to apply for voluntary redundancy.

Following his dismissal, Mr Wooster brought claims for unfair dismissal and age discrimination, both of which were upheld by an employment tribunal. Tower Hamlets appealed against the tribunal's decision upholding the claim for age discrimination and the decision on remedy.

Appeal

The EAT dismissed Tower Hamlets' appeal against the finding of age discrimination. It held that the tribunal was entitled to find that the council's failure to redeploy Mr Wooster or extend his employment was motivated by a desire to terminate his employment before he became entitled to an early pension.

The EAT accepted that it would have been unlawful for Tower Hamlets to agree to an extension of his employment purely in order to reach the age of 50 and qualify for early retirement. Employers are not under any obligation to postpone an individual's dismissal to enable them to qualify for an age-related benefit. However, the actions of Tower Hamlets in failing to make sufficient efforts to redeploy Mr Wooster in accordance with their Redundancy and Redeployment Policy, together with evidence that the council was expressly seeking to avoid paying the early pension, meant that his dismissal amounted to unlawful age discrimination.

The EAT rejected the council's argument that a decision motivated by a desire to avoid the cost of paying early pension benefits was not a decision based on the grounds of age and therefore could not amount to age discrimination. On the contrary, it held that pension entitlements are inherently dependent on an individual reaching a particular age and therefore a decision made on this basis was inevitably made on the grounds of age. The EAT pointed out that less favourable treatment of an employee because he or she has reached pensionable age did not necessarily mean that such treatment amounted to unlawful age discrimination; such treatment might be capable of justification. However, the council had not pursued any arguments for justification before the tribunal.

The EAT also dismissed the council's appeal against the tribunal's decision on remedy.

Comment

This case suggests that in some circumstances, a discriminatory dismissal in order to deprive an individual from age-related benefits might be capable of justification. However, it remains unclear exactly what circumstances would constitute a "legitimate aim", necessary to establish justification for the purposes of discrimination law. Certainly previous case law has suggested that cost-based considerations alone cannot form the basis for justifying discrimination.

Interestingly, this case was shortly followed by a decision of an employment tribunal in the case of Woodcock v Cumbria Primary Care Trust which appears to have reached the opposite conclusion on very similar facts. Both cases are now the subject of appeals, Wooster to the Court of Appeal and Woodcock to the EAT. We are unlikely to have any further clarification of this issue until the middle of next year. In the meantime, employers should exercise caution in dismissing employees in circumstances where it can be argued that the manner of the dismissal operated to deprive the individual of age-related benefits.

Click here for a copy of the judgment.

Knowledge of disability and duty to make adjustments

A recent case has clarified the circumstances in which an employer will be exempt from the duty to make adjustments, when it is not aware of the employee's disability.

Employment solicitor Tina Maxey comments:

In this case the employee was given a 12 month written warning after leaving work early one day without permission. A subsequent medical report stated that at the time of the incident, the employee was suffering from depression which caused severe headaches and meant he lost concentration and was prone to losing his temper.

An employment tribunal ruled that the employee suffered from a disability within the meaning of the Disability Discrimination Act 1995 (DDA). It held that the employee's failure to secure permission before leaving work early was a symptom of his disability and that in giving him the warning, his employer had failed to make reasonable adjustments.

The Employment Appeal Tribunal (EAT) has upheld the employer's appeal. The EAT decided that in determining whether the exemption from the duty to make reasonable adjustments applies, there were two questions to consider:

(1) Did the employer know both that the employee was disabled and that his disability was liable to put him at a substantial disadvantage compared to non-disabled people as a result of a "provision, criterion or practice" of the employer? If the answer to (1) is no:

(2) Ought the employer to have known both that the employee was disabled and that his disability was liable to put him at a substantial disadvantage?

The EAT was satisfied on the facts of the case that the respondent did not know of the claimant's disability and did not know that it was liable to have any effect on him. The EAT concluded that whilst the employer ought to have known the claimant was disabled, it could not also be said that the employer ought to have known that his depression put him at a substantial disadvantage compared with a non-disabled person in relation to any "provision, criterion or practice". On this basis, the employer was under no duty to make reasonable adjustments in relation to the disciplinary warning and the employee's claim was dismissed.

Comment

This case is a useful reminder that even when an employer knows (or ought to have known) that an employee is disabled, it doesn't necessarily follow that the employer is under a duty to make reasonable adjustments, unless the employee's disability puts them at a disadvantage in relation to other employees as a result of a "provision, criteria or practice" imposed by the employer.

However, in circumstances where the employer has enough knowledge to suggest the possibility of a disability, it should still give consideration to whether any reasonable adjustments are necessary to alleviate any disadvantage suffered by the individual.

Click here for a copy of the judgment.

Disability discrimination by association

The EAT has confirmed that the Disability Discrimination Act 1995 (DDA) is capable of being interpreted to protect people from discrimination on the basis of their association with a disabled person.

Employment legal executive Sally Andrews comments:

In July 2008 the European Court of Justice (ECJ) ruled in the case of Coleman v Attridge Law and Law (C-303/06) that the European Equal Treatment Directive (2000/78/EC) requires member states to extend protection against disability discrimination to those associated with a disabled person, as well as the disabled person themselves. The claim was being pursued by an individual who claimed she had been discriminated against by her former employer as a result of being the primary carer of her disabled son. The case returned to the employment tribunal to decide whether the DDA, as currently drafted, can be interpreted so as to give effect to this decision or whether it requires amendment.

The employment tribunal held that it was obliged to interpret the DDA, so far as possible, as applying to associative discrimination. The tribunal considered that in order to do so, it was possible to read appropriate additional words into the legislation to protect "a person associated with a disabled person". Attridge Law appealed against this decision on the grounds that the tribunal had "distorted and rewritten" the DDA.

The EAT has dismissed the appeal and the case will go back to the tribunal for a full hearing on the merits of the claim. The EAT decided that, in light of previous case law, it was possible to add words to the DDA in order to cover associative discrimination provided such words were "compatible with the underlying thrust of the legislation". Associative discrimination is already prohibited in other strands of UK discrimination law, and it can generally be presumed that Parliament intended to give full effect to EC law unless the express terms of the legislation make it impossible.

However, the EAT disagreed with the wording suggested by the tribunal and suggested instead that two additional clauses should be added to the DDA, referring to discrimination and harassment "by reason of the disability of another person".

Comment

This decision will primarily benefit those with caring responsibilities who will be protected against discrimination or harassment based on the disability of the person they care for. It does not establish any obligation on the part of employers to make reasonable adjustments for carers, who will still have to rely on the limited rights to take emergency leave for dependants or to apply for flexible working.

The Equality Bill, currently progressing through Parliament and due to come into force in October 2010, has been drafted to cover associative discrimination across all strands of discrimination as well as discrimination based on a perceived characteristic.

Click here for a copy of the judgment.

These articles copyright © 2009 Steeles Law llp. All rights reserved.