October 2 2006 Employment Law Enews

Welcome to the latest employment law e-newsletter.

Age Discrimination Regulations now in force

As of yesterday, the Employment Equality (Age) Regulations 2006 ("the Regulations") are now in force, and discrimination on the grounds of age is no longer permitted in any shape or form!

Whilst we are sure that you are all up to date with the new provisions, some of the key points to note are set out below:

• The Regulations prevent discrimination in employment and vocational training, including in an employee's access to help and guidance, recruitment, promotion, development, termination, benefits and pay;
• The Regulations remove the upper age limit for unfair dismissal and redundancy claims by employees;
• They set a national default retirement age of 65; and
• Introduce a 'Duty to Consider' for all employers when employees request to work beyond the default retirement age of 65.

Age Audit

All employers should have undertaken an 'Age Audit' ahead of the 1 October introduction, as recommended by both the Chartered Institute of Personnel Development and the DTI. Age Audits should check that the company complies with the Regulations at all stages of the employment cycle.

The Employment Team at steeles are currently offering a fixed price Age Audit for all existing clients. For more information or for further details on the Age Discrimination Regulations generally, please contact the team at lonemp@steeleslaw.co.uk (London) or noremp@steeleslaw.co.uk (Norwich).

Contracts of Employment MAY include implied terms of "co-operation" and "anti-avoidance"

In the recent High Court case of Takacs v Barclays Services Jersey Ltd (2006) Case 05X03074 it was ruled that an employee's claim that a term should be implied into his employment contract to prevent his employer from making it difficult or impossible for him to become entitled to contractual benefits has a sufficient chance of success to allow it to go forward to a full trial.

Mr Takacs was a senior employee at Barclays Capital and claimed that his employer deliberately prevented him from achieving a target-related bonus, worth approximately £1.0 million. Mr Takacs claims that Barclays actions amounted to them not only being in breach of the implied term of trust and confidence in his employment contract (a term that has long been established as forming part of every contract of employment), but also being in breach of an implied term of "co-operation" and/or an implied "anti-avoidance term".

The facts in question were whether giving Mr Takacs notice of termination of his employment (and thus disentitling him to a bonus under the terms of the contract) constituted a breach of an implied term of co-operation, or more significantly, a breach of an implied "anti-avoidance" term. Barclays denied that the contract contained any such implied term and applied to the High Court for the claim to be struck out or for summary judgment in its favour. However, the High Court on this occasion ruled that Mr Takacs had a real prospect of success arguing this point at full trial and on that basis did not feel that an 'interlocutory' judgment would be appropriate at the preliminary stage.

Although this case has only been decided at an interlocutory level, it is the first time the possible existence of such implied terms have been legally recognised. Of course the case may settle before it goes to full trial (expected to be in late 2006 or early 2007) - which would be a shame, but in any event this 'preliminary' judgment will scare a good number of employers who may be looking for ways to avoid keeping promises to staff, especially senior staff, which they have subsequently come to regret having made.

Organised group of professional service employees transfers on loss of contract for client services

The most significant change brought in by the new TUPE Regulations that came into force in April of this year, is to remove any doubt there may previously have been that TUPE applies to all outsourcing situations. This has been done by extending the previous definition of a "relevant transfer" so that a "relevant transfer" now specifically includes "a service provision change".

The new Regulations now mean that an "organised group" of professional services employees will be automatically transferred to a different firm/employer if the client they are servicing transfers its business elsewhere, or indeed brings the work back in-house.

These changes have been used by an advertising agency who were looking to off-load staff (many of whom are high earning executives previously working on he Boots Healthcare account) after a client (Boots Healthcare) transferred its account to a different agency. Given that the rules are designed for the protection of employees it is ironic that the first use came from an employer, not an employee.

The McCann Erickson agency claims that the employment of affected staff automatically transferred the Euro RSCG agency when Euro RSCG won the Boot's account from them. If the case goes to trial it is likely to be of considerable interest as a first, somewhat bizarre, test of the consequences of the government's decision not to provide a "professional firm exemption" from the service transfer part of the new TUPE rules.

Whilst it is not clear at this stage whether McCann Erickson will be successful (although legal opinion is that on the correct interpretation of the legislation they will be), perhaps the most important point for employers to think about is the potential cost faced by the new service provider, and the reality that they probably did not factor the transfer of such employees into their original tender and may now not be able to service the account at a profit.

Employment Law Update Workshop

As you are aware, employment law is a rapidly developing area and all the indications are that the relentless pace of development is set to continue. With this in mind, we will be running a morning briefing to be held on Tuesday 7 November at the Broadway House, Tothill Street, London SW1H 9NQ.

The emphasis of this briefing is very much on the practical implications of all the changes and what they mean for you and your business. This session will review a range of topics in which there have been recent developments, including the following:

• Maternity
• Transfer of Undertakings
• Victimisation
• Excessive Workloads
• Statutory Dismissal and Grievance Procedures
• Compromise Agreements
• Bullying

The briefing has a 9.00am for 9.30am start and should conclude no later than 1.00pm. The cost is £50.00 + VAT. To reserve your place please call 020 7421 1720 or BOOK ONLINE

If you are unable to come but would like further information about the work we do, please contact the team on lonemp@steeleslaw.co.uk Apart from regular briefings, we also carry out interactive in-house sessions designed for managers and HR professionals, which can be tailor made to suit your needs.

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