HMO QUARTERLY EMPLOYMENT BULLETIN
June 2008

SIXTY SECOND ROUND UP OF CHANGES WITH EFFECT FROM APRIL 2008

Benefit in kind : fuel
If you provide private fuel for an employee the benefit in kind is worked out by multiplying a lump sum by a percentage based on carbon dioxide emission. The lump sum has increased to £16,900.

Employed/self-employed status : tax
In a previous bulletin we referred to the double jeopardy that you could face if you treated a worker as self-employed but the Revenue subsequently took the view that he was employed. This inequity has now been addressed with new PAYE regulations which allow credit for any tax and NIC paid by the employee under self assessment to be set against liability due when assessing an employer for PAYE (SI 2008/782).

Increase to statutory annual entitlement
Remember a worker whose annual leave year begins after 1 April 2008 but before the 1 April 2009 is entitled to 4.8 weeks statutory leave (normally 24 days) as well as a proportion of a further additional 0.8 weeks, depending on what proportion of his leave year is after the 1 April 2009 (SI 2007/2079).

Increase to statutory sick pay
With effect from the 6 April has been increased to £75.40 (SI 2008/632).

Increase in statutory maternity pay, adoption pay and paternity pay
Increased to £117.18 (SI 2008/632).

Information and consultation with workers
If your business now has at least 100 employees it will be caught by the Information and Consultation of Employees Regulations 2004 (see separate fact sheet on our website)

RECENT CASES AND OTHER CHANGES

Changing contractual terms of employment
In the recent Employment Appeal Tribunal (“EAT”) case of Robinson v Tescom Corporation the tribunal considered the options open to an employee whose employer attempts to impose a change in his contract terms without consent.

The EAT summarised the four options open to an employee in such a situation.

The employee may :

1. accept the change;

2. refuse to agree and let the employer decide what steps to take following this response to the request;

3. if the change is fundamental, resign and claim constructive dismissal; or

4. continue to work under protest and claim damages for breach of contract.
 
In this case the employee responded to proposals to change his terms and conditions by writing to say that he wanted to reserve his right to claim damages for breach of contract while working under protest to the new terms. He  then refused to comply with the new contract and continued to work to his original terms and conditions. As a consequence he was dismissed for misconduct.

The EAT held that the employee was fairly dismissed, he declined to work at all under the new terms and so his employer could dismiss him for refusal to work under the new contract.

Bullying
In the case of Conn v City of Sunderland the Court of Appeal has clarified the extent of civil liability for employers (and employees) for harassment under the Protection from Harassment Act 1997,

Here an employee complained of incidents of verbal abuse and intimidation by a foreman at his place of work. The County Court found two of these allegations to be proved and held that they amounted to harassment under the Act. In the first incident the foreman became angry and threatened to damage the windows of the room the pair were in and to report the employee to the personnel department. On the second occasion the foreman was abusive and threatened violence against the employee.

The decision was overturned by the Court of Appeal. It considered that the conduct of the foreman in the first incident was not sufficient to be deemed oppressive and unreasonable, the standard required for liability under the leading case House of Lords case of Majrowski. Whilst the conduct on the second occasion did fall within that definition the claim could not succeed, because the 1997 Act requires a “course of conduct” i.e. at least two instances.

The Court also suggested that the conduct needed to demonstrate harassment will vary according to the circumstances i.e. what might be acceptable in an factory environment or on a construction site may not be acceptable in an office environment.
 
Disability discrimination
As an employer you need to know whether you are dealing with an employee or a potential employee who may be subject to the Disability Discrimination Act. It has recently been confirmed that in making this assessment you have to decide whether at the time that you make the assessment there is a likelihood of a recurrence of a condition which brings the person before you within the terms of the Disability Discrimination Act.

In Richmond Adult Community College v McDougall the Court of Appeal (considering the definition of long term impairment) decided that where that impairment, for example, mental illness, stops having a substantial adverse effect upon a person’s ability to carry out normal day to day activities it is still to be treated as a long term impairment if the adverse effect ie the illness is likely to recur in the future.

The Court emphasised that the assessment has to be made at the date of the alleged act of discrimination and that subsequent events that is whether the illness did or did not reoccur in fact, cannot be taken into account. This is a truly difficult call with potentially expensive consequences.  

Changes to the Sex Discrimination Act
Changes to the Sex Discrimination Act have been brought in by the Sex Discrimination Act 1975 (Amendment) Regulations

Harassment related to sex

This is a new concept and covers two types of situation

1. Where a man or woman is subject to less favourable treatment which is not on account of their sex, but related to his or her sex. An example would be where a female manager enters a male toilet to chastise a male occupant.(There has been a “reported” case on these facts!) The male has not received this treatment because of his sex; but his sex is relevant as to whether this conduct has violated his dignity.

2. Harassment related to the sex of a person other than the recipient. This change enables claims to be brought by someone who was not subject to unwanted conduct but who has witnessed it and found that  it has made their work environment intimidating

Liability for third-party harassment

An employer will now be liable for harassment if there is a failure to take reasonable practical steps to protect employees from harassment by third parties, eg customers or visitors, where it is known that such harassment has occurred on at least two other occasions. A caveat is that there will not be liability for conduct beyond the employer’s control.

Corporate manslaughter
The Corporate Manslaughter and Corporate Homicide Act 2007 came into effect from 6 April 2008. It replaces the rarely used common law offence of gross negligence manslaughter in so far as it applied to companies and other organisations (including partnerships) within the Act.

A company will be guilty of the new offence if the way in which its activities are managed or organised by its senior management are a gross breach of the duty of care owed to employees, the public or other individuals and these failings have resulted in a person's death.

The new law is distinct from the previous common law offence in that it focuses on the way in which an organisation’s activities are managed or organised. It is not reliant on one individual being found guilty of gross negligence. The courts will now be able to consider the wider corporate picture, looking collectively at the actions or the failings of the company's senior management making a prosecution easier and more likely.

Statutory grievance procedure
The statutory grievance and disciplinary procedures are still with us until (it is anticipated) April 2009. The recent case, Ward v University of Essex, highlighted how informal a grievance might be to invoke the statutory grievance procedure. In this case the employer wrote to the employee with complaints about the employee’s conduct. In response the employee made comments criticising the employer. These, the EAT found, were sufficient to trigger the requirement for the employer to follow the statutory grievance procedure.

Nigel Pepper, Partner      Patrick Nelson, Solicitor
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Telephone: 01785 211411

This article is for the purpose of general awareness only and the law may have changed since it was originally published. It does not constitute legal or professional advice and readers should not act on the basis of the information included. Readers should take appropriate advice upon their own particular circumstances..