October 1 2007 Employment Law Enews

Welcome to the latest edition of steeles Employment Enews

Equal Pay - What's New?

Issues surrounding equal pay have dominated the news recently.

In our last edition of E-News, we reported that a significant reason for the increase in Employment Tribunal cases was attributable to the 155% increase in equal pay claims, the majority of which relate to claims that have been brought against Local Authorities and the NHS.

Since then, it has been reported that the Chair of the Equal Opportunities Commission (EOC) is urging Ministers to introduce a three year moratorium on equal pay claims while companies conduct internal pay audits.

Meanwhile, the Conservative Party wants to give Employment Tribunals, the power to order firms that are found to have discriminated on grounds of pay to undertake formal pay audits.

The Confederation of British Industry (CBI) has condemned the Tories' proposal, arguing that the move would "do little to tackle the underlying causes of the pay gap."

According to a recent report from the EOC, the full-time gender pay gap for hourly earnings remains at 17% and the part-time pay gap, nearly 40%, has barely shifted in a generation. At the current rate of change, it would take more than two decades to close the gap.

Case development

Redcar v Cleveland Borough Council - this is a recent case in which the Court of Appeal confirmed that a woman bringing a claim for like - work could compare herself against a comparator from a lower grade, receiving lower pay.

In a nutshell, the case arises in the context of the large number of equal pay claims brought by female employees of the Council. It is part of a network of cases in which women employed by local authorities, many of them in the north east, are claiming equal pay with male comparators. Women employed in manual jobs such as caterers and care workers are seeking parity with male comparators such as road sweepers, gardeners and refuse collectors (who are placed in lower grades). The Employment Tribunal, in part of a long decision dated 13 December 2005, which covered many issues of which this was only one, held that it was permissible for a Claimant to rely on a comparator who was placed in a lower grade. The EAT upheld that position.

The case for the Council was that where a proposed comparator has been placed in a lower grade, a claimant is not employed on work "rated as equivalent" with his.

In its decision, the Court took the bold step of implying additional wording into section 1(5) of the Equal Pay Act 1970 to make this point clear. The Court's decision was that Section 1(5) of the Equal Pay Act needs to be amended in the following way:

"A woman is to be regarded as employed on work rated as equivalent with that of any man if, but only if, her job and their job have been given an equal value or her job has been given a higher value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision), on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value, or her job would have been given a higher value, but for the evaluation being made on a system setting different values for men and women on the same demand under any heading."

Changes to legislation coming into effect today

Minimum wage to increase by 3%

This is the first year, since the National Minimum Wage was introduced, in April 1999 that the Low Pay Commission has recommended an increase in line with inflation rather than above it.

The Chairman of the Low pay Commission stated that their "cautious approach this year should not be taken as a signal that the minimum wage is too high. After four years of substantial increase, this year the evidence pointed to the need for moderation. Next year that might change, or the need for caution might be even stronger."

The minimum hourly rate from 1 October 2007 will be:

• 5.52 for workers aged over 22, a rise of 17p;
• 4.60 for workers aged 18-21, a rise of 15p;
• 3.40 for workers aged 16-17, a rise of 10p.

Holiday Entitlements

From the 1 October 2007, all workers will be entitled to a minimum of 4.8 weeks paid holiday (which equates to 24 days for full time workers). The minimum can include the 8 bank and public holidays.

The following changes will apply to those employers that do not provide 24 days' holiday, as of 1 October 2007:

• All workers will be entitled to the equivalent of 4.8 weeks' annual leave regardless of length of service;
• The holiday entitlement for part-time workers needs to be calculated on a pro-rata basis (4.8 times their usual working week), regardless of whether or not they usually work on bank holidays;
• Partial days' holiday need not be rounded up to the nearest full day;
• The increase should be calculated proportionally depending on when the leave year starts. Due to concerns raised by employers about the difficulties in calculating workers' increased holiday entitlement during the transitional period, DEBRR have published a Ready Reckoner table on their website at:
  http://www.dti.gov.uk/employment/holidays/page40455.html.
• Some or all of the additional holiday may be carried over to the following leave year by mutual agreement of the employer and worker;
• Payment in lieu of the additional holiday entitlement (the additional 0.8 weeks) will be permitted until 1 April 2009 and after this date, payment in lieu will only be allowed on termination of employment.

Equality Act 2006

A new Commission for Equality and Human Rights ("CEHR") will be created from October 2007 to bring together the Commission for Racial Equality, the Disability Rights Commission and the Equal Opportunities Commission.

The CEHR will take on all the powers of the existing Commissions as well as new powers to enforce legislation more effectively and promote equality for all, including powers to take on human rights cases.

The CEHR state that the benefits of a single commission are, that:

• It will be a single point of contact for individuals, businesses and the voluntary and public sectors;
• It will benefit those who are facing several types of discrimination and;
• It will help businesses by promoting awareness of equality issues, which may prevent costly court and tribunal cases.

Racial and Religious Hatred Act 2006

The Racial and Religious Hatred Act 2006 will com into force on 1 October 2007. The Act extends the crime of incitement to commit racial hatred to cover religious hatred.

The offence applies to the use of words or behaviour which are threatening and intended to stir up religious hatred against a group of people defined by reference to their religious belief or lack of belief.

This removes the previous anomaly, whereby the legislation prohibiting the incitement of racial hatred protected Sikhs and Jews, because they were included in the definition of a racial group, but not Muslims, Hindus, Rastafarians or Christians or other religions which did not fall under the definition.

The offence is not limited to individuals; a company will also be guilty under this Act if "it is shown that the offence was committed with the consent or connivance of a director, manager, secretary or other similar officer". If found guilty of this offence, the officer of the company involved, as well as the company can be punished which can be either a fine or a prison sentence of up to seven years.

Flexible Working (Eligibility, Complaints and Remedies) (Amendment) (No 2) Regulations 2007

The Regulations extend the definition of 'adopter' to those who are adopting a child, whether domestically or inter-country, where the child has not been placed with the adopters by a UK adoption agency. They also include definitions of 'adoption agency', 'private foster carer' and 'residence order'.

In addition, the Regulations add: private foster carers and the spouse, partner and civil partner of a private foster carer, to the list of people who are entitled to request flexible working to care for a child.

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