Employment & Immigration Legal Updates 27/10/2009

Draft Agency Workers Regulations published for consultation

The Government has issued draft Regulations intended to implement the European Agency Workers Directive, which have now been delayed to October 2011.

Professional Support Lawyer Elizabeth Stevens comments:

Following a consultation exercise completed in July 2009, the Government has now issued draft Regulations in order to implement the Temporary Agency Work Directive (2008/104/EC). The Directive must be implemented by 5 December 2011 in the UK, and the Government intends the Regulations to come into force on 1 October 2011.

In summary, the draft Regulations provide as follows:

• An entitlement to equality of treatment for agency workers in relation to basic working and employment conditions, to which the worker would have been entitled had he or she been directly employed by the hirer, after a 12 week qualifying period.
• The agency worker must be engaged in the same role with the same hirer for 12 continuous calendar weeks. A week will count towards the qualifying period if the agency worker is engaged for any part of it. The period will restart if the worker is engaged on a new assignment with substantively different work or duties. A break of six weeks will also break continuity of service.
• The right to equality will apply only in relation to "relevant terms and conditions", meaning those relating to pay; working time; night work; rest breaks and rest periods, and annual leave. Contractual holiday in excess of the statutory entitlement to annual leave can be paid in lieu for agency workers.
• What amounts to 'pay' is defined in the draft Regulations as including any fee, bonus, commission, holiday pay or other emolument. It will include, for example, overtime payments and shift allowances. Certain payments are excluded from the definition, including occupational sick pay, pensions, share options, maternity/paternity pay, and bonuses relating to performance appraisal systems.
• Agency workers will be entitled to certain access rights from the first day of an assignment. The agency worker will have the right to be treated no less favourably than a comparable employee in relation to information about permanent vacancies, access to canteen or similar facilities, access to childcare facilities and the provision of transport services.
• Pregnant agency workers will have the right to take time off for antenatal care and to suspension on health and safety grounds.
• Primary liability for ensuring equality of treatment will lie with the agency, but in some circumstances liability will transfer and the hirer could be held liable. An agency will not be responsible for any breach if it can show it took reasonable steps to obtain relevant information from the hirer about the basic working and employment conditions in force at the hirer's establishment. In relation to the access rights (mentioned above), liability will rest exclusively with the hirer.
• Agency workers will have the right to request a written statement from the agency in relation to basic working and employment conditions in force at the hirer's establishment. If the agency does not respond within 28 days, the request can be repeated to the hirer, who likewise has 28 days to respond. A tribunal can take into account a failure to respond to a written request in determining liability for unequal treatment.
• Agency workers who consider they have been subject to less favourable treatment will be entitled to bring a claim for equal treatment at an employment tribunal. If the claim is upheld, the tribunal may order compensation, make a declaration of the worker's rights and/or recommend actions for the hirer to take.

Comment

It is important to note that the effect of these Regulations will not be to change the status of agency workers or give them full employment rights. It is likely, however, that the cost of engaging agency workers for long term assignments will increase as a result of the entitlement to equality of treatment after 12 weeks. Employers will need to review their current use of agency staff and consider whether it is still economical to use agency staff or whether it might be better to recruit temporary staff directly.

Click here for a copy of the consultation on the draft Regulations.

Length of service pay increases

The Court of Appeal has handed down an important decision in relation to pay increases based on length of service.

Employment Principal Lorna Townsend comments:

In recent years we have seen a number of high profile equal pay cases concerning service-related pay. The European Court of Justice has previously ruled that whilst incremental pay scales related to length of service are indirectly discriminatory against women, they can generally be justified as a legitimate method of rewarding experience. However, an employer may be required to justify the adoption of service-related pay increases if the worker raises serious doubts that such a pay scheme is appropriate to a particular job. This might be the case, for example, where the job is semi- or unskilled and can be mastered relatively quickly.

In the most recent case, Wilson v Health and Safety Executive, the Court of Appeal has gone further and ruled that an employer can be required to provide objective justification for the way in which it has applied a length of service criterion as well as its adoption in the first place, where the claimant has raised 'serious doubts' about its appropriateness.

The HSE operated an incremental pay scale, typically up to a period of ten years. Mrs Wilson, an HSE inspector, accepted that due to the nature of the job, performance was likely to improve with experience over the first few years of service. However, she argued that the ten year period of the incremental pay scale was too long to be justifiable, and that a five year period would be more appropriate. The Court of Appeal agreed and has now upheld Mrs Wilson's claim for equal pay.

Comment

Following this case, it remains the general rule that service-related pay schemes do not have to be objectively justified by employers. However, the case opens up the grounds on which an employee may seek to challenge such a pay scheme. If the employee can provide evidence giving rise to serious doubts about the adoption of a length of service criterion in relation to pay, or the method of applying that criterion in relation to a particular job, the employer will have to objectively justify the use of length of service in determining pay.

Click here for a copy of the judgment.

Dismissal following criminal allegations

A recent EAT decision has ruled that the dismissal of an employee against whom criminal allegations had been made, but not proven, was fair.

Legal Executive Sally Andrews comments:

In this case the employee, a bus driver, was employed in 2004 by a bus company to drive disabled children to school, under a contract between the bus company and a local authority. In 2008, it came to light that allegations of sexual abuse by the driver towards his two young nieces had been investigated by police in 2004. Notwithstanding the fact that the driver was never prosecuted in relation to the allegations, the local authority exercised its right under the contract to veto his continued employment on the school contract.

The employer bus company, who had suspended the driver, sought to persuade the local authority to change its mind but failed to do so. Since it had no alternative employment for the driver it dismissed him with immediate effect.

The employee's claim for unfair dismissal failed. The tribunal was satisfied that his dismissal was fair for some other substantial reason, namely the insistence of a third party (the local authority client). His appeal has now been dismissed by the Employment Appeal Tribunal. The employer had done everything it could to try to avoid or mitigate the injustice to the employee, but in the circumstances it was left with no choice but to dismiss him.

Comment

It may seem surprising that unproven criminal allegations could form the basis for a fair dismissal, some four years later. On the specific facts of the case, and in light of the express contractual right of the local authority to veto the employment of any individual providing the service, the dismissal was fair. It is not necessarily the case, however, that criminal allegations can give grounds for a fair dismissal and employers should tread carefully in these circumstances.

The recently introduced Vetting and Barring scheme is intended to prevent the employment of individuals regarded as unsuitable to work with children and vulnerable adults, and would apply to similar situations in the future.

Click here for a copy of the judgment.

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