Eweida & Co: the Decision

Posted on January 15, 2013 by Darren Newman

Well the judgement is out and you can read it in full here. It’s actually quite readable as these things go.

We will be digesting the meaning and implications of the decision for some time to come. In the meantime, on a first reading, here is what I see as the main findings of the Court on the key issues before it. For the facts in each case, see my previous post

Manifestation

The Court rules that a manifestation of a belief must be ‘initimately’ linked to the religion or belief (para 82). This includes an act or worship or devotion, but is not limited to such acts. There must be a ‘sufficiently close and direct nexus’ between the act the and the belief, but the act need not be required by the belief.

On that basis the Court held that Eweida’s insistence on wearing the cross visibly was a manifestation of her religious belief (para 89) and was therefore protected by Article 9. The same was the case with Chaplin’s insistence on visibly wearing a crucifix (para 97). Ladele had not actually claimed a breach of Article 9 (her case is discussed below under Article 14) but McFarlane had relied on Article 9 and the Court held that his refusal to undertake to counsel gay couples was a manifestation of his religious beliefs and was therefore also protected under Article 9 (para 108).

Interference

The Court declined to hold that the fact that an employee can resign and go elsewhere meant that a condition imposed in employment could not be an interference in the right to manifest a belief (para 83). Rather, it took the view that the ability of the employee to resign was one factor to be taken into account when considering the overall question of proportionality.

The Court ruled that in Eweida’s case, the refusal of British Airways to allow Eweida to visibly wear the cross and stay in her post was an interference with her right to manifest her religious belief (para 91). The same was true of Chaplin (para 97). The issue was therefore whether domestic law provided them with adequate protection

In McFarlane’s case the Court seems to consider the issue of interference as being one and the same as the issue of justification but the clear implication was that his dismissal did amount to an interference.

Justification

The State enjoys a certain ‘margin of appreciation’ in deciding whether and to what extent an interference in a right is necessary. The Court’s task is to determine whether the measures taken at national level are justified in principle and proportionate (para 84).

In Eweida’s case the Court held that the law as interpreted by the domestic courts had failed to strike a fair balance (para 94).  On one side of the scales was Eweida’s right to manifest a religious belief; on the other side of the scales was British Airways’ right to project a certain corporate image. While BA’s aim was legitimate, the domestic courts had attributed too much weight to it. The cross was discreet and did not detract from a professional appearance. There was no evidence that other permitted religious symbols had any negative impact on BA’s brand or image, and the fact that the policy was subsequently changed showed that the requirement was no of crucial importance.

In Chaplin’s case, however, the Court felt that the reason for the interference in her right was ‘inherently of greater magnitude’ than in the case of Eweida (para 99). Health and safety was a field in which the domestic authorities had to be allowed a wide margin of appreciation. Hospital managers were better placed to make decisions about clinical safety than a court. On that basis the Court declined to find any violation of Article 9.

As for McFarlane, the Court held that it was relevant that he knew about the need to comply with an equality policy when he began work and said (para 109):

While the Court does not consider that an individual’s decision to enter into a contract of employment and to undertake responsibilities which he knows will have an impact on his freedom to manifest his religious belief is determinative of the question whether or not there been an interference with Article 9 rights, this is a matter to be weighed in the balance when assessing whether a fair balance was struck.

There was a wide margin of appreciation in deciding where to strike the balance between McFarlane’s rights and the need to protect the rights of others. On balance the Court held there had been no breach of Article 9.

Article 14

The Court stressed that Article 14 has no independent existence.  as it has effect solely in relation to the rights enjoyed under the Convention. However it is autonomous in the sense that it does not depend on an actual breach of a Convention right. It covered both treating people in he same situation differently, but also failing to treat people in different situations differently (para 87). Any differences in treatment had to be proportionate and the state enjoyed a margin of appreciation in determining when differences in treatment could be justified.

Alone of the four applicants, Ladele had framed her case entirely based on Article 14 rather than any breach of Article 9. The Court held that her case fell within the ambit of Article 9 so that Article 14 was applicable. The Court accepted that Islington’s designation of all registrars as civil partnership registrars had a particularly detrimental impact on her because of her religious beliefs. However Islington’s aim in doing so – the provision of a non-discriminatory service – was legitimate (para 105). Crucial in the question of proportionality was the fact that the policy aimed to protect the rights of others whose rights were also protected under the Convention. On balance the Court held that neither Islington nor the domestic courts had exceeded the margin of appreciation and Ladele’s claim under Article 14 failed (para 106).

Since there had been a violation of Article 9 in Eweida’s case the Court saw no reason to consider the impact of Article 14 (para 95). In Chaplin’s case the Court, having found justification under Article 9 held that the considerations relating to discrimination would be broadly the same, and therefore saw no reason to find any violation of Article 14. For McFarlane also the Court held that there had been no breach of Article 14

Result

Chaplin, Ladele and McFarlane all lost heir cases. Eweida won and was awarded her 2,000 Euro in compensation.

As to what all of this actually means? The lesson for employers, I think, is to just try to be reasonable and as long as you can explain why a particular policy is necessary, you’re probably fine. You should try to accommodate religious beliefs in the workplace – but we knew that already.

For lawyers, the case will be picked over for some time to come. In terms of employment law, I suspect that it may have quite an impact on how we look at indirect discrimination cases. Making a coherent whole out of Article 14 and the Equality Act 2010 may be quite a challenge, but now that we have a protected characteristic (religion or belief) that specifically engages a Convention right, the scope of Article 14 will have to be taken into account. The Court of Appeal in Eweida had held that there was no need for BA to justify its policy because Eweida had not shown that the policy caused a disadvantage to others besides herself. That view of indirect discrimination can certainly no longer stand in the context of religion or belief. Whether it can still apply in other protected characteristics is an issue the courts will have to grapple with at some point.

Posted in Uncategorized | 9 Comments

Eweida & Co – the four big issues

Posted on January 14, 2013 by Darren Newman

Tomorrow the European Court of Human Rights hands down its decision in the case of four UK applicants claiming a breach of their rights under the Convention to manifest their religious beliefs.

Yesterday I set out the bare facts of each of the cases being decided. In this post I am going to look at the key issues that are before the Court. I’m still not making any predictions!

Who is being sued?

Each of the four applicants originally brought discrimination cases against their respective employers – and lost. They now bring their claims to the European Court of Human Rights, but it is important to realise that they are no longer suing their employers. They are not appealing to the ECHR to have their cases overturned – that’s not what the Court is for. Each applicant is claiming that domestic law failed to protect their human rights.   Their claims are therefore being brought against the UK Government for failing to ensure that domestic law complied with the Convention.

Given that, it does seem a little unfair of those supporting the cases to complain that the Government has opposed their claims. The UK Government takes the view that the laws on religious discrimination adequately protect the Convention rights of individuals. It would be a bit surprising if they argued anything else.

Article 9

All four applicants rely on Article 9 of the Convention – here it is:

1. Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief, and freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance

2. Freedom to manifest one’s religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or the protection of the rights and freedoms of others.

As far as I am aware no-one is arguing that the applicants were not free to hold their various beliefs; the issue is whether there has been an interference with the right to ‘manifest’ their belief in ‘worship, teaching, practice and observance’.

Manifestation

This is actually a complicated question because the case law of the ECHR has in the past taken quite a restrictive view of what counts as a ‘manifestation’ of a religious belief. In Arrowsmith v UK (a case from 1978 involving a pacifist handing out leaflets urging troops not to go to Northern Ireland) the Court held that not everything motivated or inspired by  religious belief was a manifestation of it. It had to be something that was necessary in order for the individual to practice his or her religion.

This would suggest a difficulty for Eweida and Chaplin in particular – both of whom accept that wearing a cross is not a requirement of their religion. However the Equality Commission has intervened to argue that something that is genuinely motivated by a religious belief and which ‘attains a certain level of cogency and seriousness and is not unreasonable’  should be protected. They quote more recent case law suggesting that the Court has from time to time applied this wider approach.

It is in this context that the UK Government argued that wearing a cross is not a manifestation of the applicants’ religious beliefs. That is a perfectly reasonable point for them to make once you realise that they are arguing about a technical term as it has been defined by the Court.

So the first big issue for the Court to decide is whether to take the wider view of ‘manifestation’ argued for by the Commission or the narrower view argued for by the UK Government.

Interference

Assuming the applicants clear that hurdle, the next question will be whether being dismissed (or otherwise forced out of a role) is an interference with the freedom to manifest a religious belief. After all, no-one was stopping Eweida or Chaplin from wearing a cross or crucifix, and no-one was forcing Ladele to conduct civil partnerships or McFarlane to give sexual therapy to gay couples. In each case the employee was free to walk away from the job and find more congenial employment elsewhere. If that seems harsh, remember this is human rights law we are talking about – not employment law. The issue is not whether the applicants have been treated fairly by their employer but whether their human rights have been breached.

The case law of the ECHR gives some support to the idea that there is no breach of human rights in the workplace if an employee is free to go and work elsewhere. Again the Equality Commission points to more recent cases taking a wider approach. This case is a good opportunity for the Court to supply some clarity

The second big issue then, is whether and in what circumstances a restriction imposed by an employer as part of the contract of employment can be a breach of Article 9 if the employee has voluntarily entered into such a contract and is free to leave the employment and work elsewhere.

Justification

If the Applicants make it through the first two issues, then they have one more hurdle to clear. Article 9.2 allows an interference in the right to manifest religious beliefs provided that such an interference is ‘necessary in a democratic society… [to protect] the rights and freedoms of others’. In Ladele and McFarlane the justification argument is clear – the UK will argue that the employer was seeking to avoid discrimination based on sexual orientation. In Chaplin the justification is based on health and safety and the danger presented to elderly patients by a necklace worn around a nurse’s neck. In Eweida, the justification is harder to find – that case may turn entirely on the issues of ‘manifestaton’ and ‘interference’.

The third big issue is whether, if any of the applicants have suffered an interference with their right to manifest a religious belief, whether such interference was ‘necessary in a democratic society’ .

Discrimination – Article 14

All four applicants also rely on Article 14 of the Convention:

The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.

It is well established that this Article does not provide a general free-standing right not to be discriminated against – but it does guarantee non-discrimination in the areas covered by the Convention. If the applicants can show that their situations were covered by Article 9 then they may be able to argue that the domestic courts should have upheld their indirect discrimination claims under Article 14. In both Chaplin and Eweida the claims were dismissed because the applicants failed to show that the employer’s practice caused a disadvantage to an identifiable group. It is possible that the Court will rule that a different approach is needed that focuses on the effect of the practice on an individual. The Court may also rule on the standard of justification to be applied.

The fourth big issue is whether the Applicants should have succeeded in their indirect discrimination claims, given the effect of Article 14. If the answer is yes then this has the potential to create a two-tier discrimination system with a different test applying for discrimination cases involving religion and belief and other grounds, such as sex and race, which are not covered by the Convention.

Posted in Religion in the workplace | 3 Comments

Eweida & co – the facts

Posted on January 13, 2013 by Darren Newman

So on Tuesday we will get an important ruling from the European Court of Human Rights on four UK religious discrimination cases.  Actually there are two cases and four claimants. Eweida and Chaplin are the first case, Ladele and McFarlane are the second. I have no idea what the result will be and make no predictions – but I thought it might be useful to summarise the facts in each case because its just possible that what you read in the press will not be entirely accurate!

Eweida

I’ve written at some length about the facts in Eweida here. But to summarise, Ms Eweida is a practising Coptic Christian who began working as part of the British Airways Check-in staff in 1999. The post requires the wearing of a uniform and until 2004 the uniform included, for women, a high-necked blouse. In 2004 a new uniform was introduced which included an open-necked blouse wth a Cravat which could be tied loosely around the neck or tucked in. The uniform policy stated:

“Any accessory or clothing item that the employee is required to have for mandatory religious reasons should at all times be covered up by the uniform. If however this is impossible to do given the nature of the item and the way it is to be worn, then approval is required through local management as to the suitability of the design to ensure compliance with the uniform standards, unless such approval is already contained in the uniform guidelines. … NB No other items are acceptable to be worn with the uniform. You will be required to remove any item of jewellery that does not conform to the above regulations.”

Ms Eweida wore a small silver cross around her neck which until May 2006 she kept hidden under the uniform in accordance with the policy. On 20 May she wore the cross openly but eventually agreed to cover it up after discussion with her manager. On 7 August  2006 she again came into work with the cross visible but then reluctantly agreed to comply with the uniform policy. On 20 September 2006 she refused to cover up her cross and was sent home without pay. In October she rejected an offer to work in administrative role without customer contact which would have allowed her to keep her cross on display.

From 1 February 2007 British Airways adopted a new policy allowing the display of religious symbols over the uniform. Ms Eweida returned to work from 3rd February 2007.

Chaplin

Ms Chaplin was employed as a nurse and was employed by the Royal Devon and Exeter NHS Foundation Trust from April 1989 to July 2010. At the relevant time she worked on a geriatric ward. The Hospital’s uniform code said this:

“5.3.6 To minimise the risk of cross infection will be [sic] keep jewellery to a minimum (see 5.1.11). That is:

  • One plain smooth ring which will not hinder hand hygiene,
  • One pair of plain discreet earrings.
  • No necklaces will be worn to reduce the risk of injury when handling patients.
  • Facial piercing if present should be removed or covered.”

It also stated:

“Any member of staff who wishes to wear particular types of clothes or jewellery for religious or cultural reasons must raise this with their line manager who will not unreasonably withhold approval”.

In June 2007, new uniforms were introduced which included a V-necked tunic. Ms Chaplin wore a small crucifix on a chain around her neck and in June 2009 she was asked to remove it. She objected to doing so and discussions ensued about a potential solution. Ms Chaplin rejected a suggestion that she could wear a turtle neck T-shirt under her uniform so that the necklace would be covered up. She felt that displaying the cross to others was an essential part of her religious faith. She also refused to wear the crucifix and chain secured firmly to her identity badge rather than around her neck.

In November 2009 she was moved to a non-nursing temporary position which lasted until July 2010 when she was (apparently) made redundant. Her Tribunal claim was decided before July 2010 however and so no issues in relation to the ending of her employment arise.

Ladele

Ms Ladele is a Christian who believes that civil partnerships are contrary to God’s law.She worked for the London Borough of Islington from 1992 until 2009. In 2002 she became a registrar of births, marriages and deaths (until December 2007 she was a statutory post holder rather than an employee). According to the Council’s ‘Dignity for All’ policy:

“Islington is proud of its diversity and the council will challenge discrimination in all its forms. ‘Dignity for all’ should be the experience of Islington staff, residents and service users, regardless of the age, gender, disability, faith, race, sexuality, nationality, income or health status. …

The council will promote community cohesion and equality for all groups but will especially target discrimination based on age, disability, gender, race, religion and sexuality. …

…It is the council’s policy that everyone should be treated fairly and without discrimination. Islington aims to ensure that:

    • Staff experience fairness and equity of treatment in the workplace
    • Customers receive fair and equal access to council services
    • Staff and customers are treated with dignity and respect

The council will actively remove discriminatory barriers that can prevent people from obtaining the employment opportunities and services to which they are entitled. The council will not tolerate processes, attitudes and behaviour that amount to discrimination, including harassment, victimisation and bullying through prejudice, ignorance, thoughtlessness and stereotyping. …

All employees are expected to promote these values at all times and to work within the policy. Employees found to be in breach of this policy may face disciplinary action.”

The Civil Partnerships Act 2004 came into force on 5 December 2005. Ms Ladele had a deeply held religious objection to conducting civil partnerships. However in December 2005 Islington (though it was not required to do so) designated all of its Registrars of Births Marriages and Deaths as Civil Partnership Registrars.  Unlike some local authorities, they did not allow any of their Registrars to ‘opt-out’.

Initially, Ms Ladele was allowed to make informal ‘swapping’ arrangements with colleagues in order to avoid carrying out civil partnerships. In March 2006, however, two gay Registrars complained about her refusal.  Tensions grew in the Department. In May 2007 disciplinary proceedings were commenced against Ms Ladele on the basis that she was in breach of the Dignity for All policy. A disciplinary hearing took place on 16 August 2007. The outcome was that Ms Ladele could be excused from conducting civil partnership ceremonies but would be required to undertake straightforward signings of the register and other administrative tasks associated with civil partnerships. She refused and brought discrimination proceedings in November 2007. At the time of the Tribunal decision she was still employed by Islington, but she resigned in September 2009.

McFarlane

Mr McFarlane is a Christian who believes that homosexual activity is sinful and that he should do nothing to endorse it. He worked for Relate Avon Ltd as a counsellor from May 2003 until March 2008. He initially had concerns about counselling same-sex couples but after a discussion with his manager agreed that counselling did not involve any endorsement of the relationship.

In 2007 he began Relate’s Post-Graduate Diploma in Psycho-Sexual Therapy (PST) which is concerned with improving a couple’s sexual activity with a view to improving the overall relationship. However by late autumn 2007 there was a perception that he was unwilling to work on sexual issues with same-sex couples. Mr McFarlane was then asked to provide written confirmation that he would be willing to counsel same-sex couples in both relationship counselling and PST. He replied that he was happy to counsel same-sex couples but that his views were still evolving with respect to PST.

That was taken as a refusal to comply and disciplinary proceedings began. Mr McFarlane then stated that he would do PST work with same-sex couples if asked and that if any problems arose he would speak to his supervisor. In response to this the disciplinary proceedings were dropped. However concerns were again raised after a conversation between Mr McFarlane and his supervisor. It was felt that either he was confused about same-sex PST or was being dishonest about his views. When challenged he simply said that he had nothing to add to his previous comments. He was dismissed for gross misconduct on 18 March 2008 on the basis that he had said that he would undertake sexual counselling of same sex couples when in fact he had no intention of doing so. It was subsequently conceded that this was a wrongful dismissal in that notice should have been given.

Posted in Religion in the workplace | Tagged , , , , , , , , , | 2 Comments

Employers must justify requiring Christians to work on a Sunday (and why that wasn’t the headline in the Telegraph)

Posted on January 11, 2013 by Darren Newman

Next Tuesday the European Court of Human Rights rules on the cases of Eweida, Chaplin, Ladele and McFarlane. The case is likely to be quite complicated and I plan to read it very carefully and give it some serious thought before I write anything about it. After that of course I shall go on about it at tedious length.

Those tempted to comment on the outcome before they have read the decision in full should take note of the case of Mba v London Borough of Merton. The judgement was read out to the parties before Christmas but only made its way to the EAT website on 10th January. By that time however, a seriously misleading account of the decision had made its way into the press. Let’s look at what happened.

Mba is a pretty run-of-the-mill indirect discrimination case. It doesn’t change the law or even pretend to. It simply upholds the finding of an Employment Tribunal that there was no discrimination when an employer insisted that a devoutly Christian employee comply with her contractual obligation to work on Sundays.

In Paragraph 2 of the Decision the EAT says this:

It is no longer open to an employer to require staff to work on Sunday and thereby cause disadvantage to those who are Christian unless the employer can show that the requirement is objectively justified

So there has never been any doubt that insisting that employees work on a Sunday is potentially an act of indirect discrimination. Whether it is or not depends on whether the employer can show that the requirement is a ‘proportionate means of achieving a legitimate aim’. This is straightforward and uncontroversial.

In the Mba case the Tribunal held that the employer had met that test. The claimant worked at a registered children’s home which – unsurprisingly – did not close at weekends. Care had to be provided seven days a week and all employees had to take their share of working on Sundays. For two years the employer tried to work around the problem caused by Ms Mbas refusal to do so but eventually they decided that the only viable course was for her to work to her contract. She resigned and claimed constructive dismissal and discrimination.

The Tribunal considered carefully the alternatives that Ms Mba had put forward, and agreed with the employer that they were not practicable, or involved too much additional cost I’ve read the ET decision and they give careful reasons why each ‘solution’ put forward by Ms Mba was not viable.  On appeal the EAT accepted that the Tribunal had properly examined the issues and reached a conclusion that was open to it.

That’s really all there is, nothing to see here folks.

The EAT tried to stress that this was a case which turned on its own particular facts. The President of the Employment Appeal Tribunal said this:

We should make it clear at the outset of this Judgment to anyone who expects the conclusion to amount either to a ringing endorsement of an individual’s right not to be required to work on a Sunday on the one hand, or an employer’s freedom to require it on the other, that they will both be disappointed.  No such broad general issue arises.  The questions raised must be determined in the specific circumstances of this particular case alone.

Is is that clear to everyone? This case absolutely does not say that Christians have no legal protection when it comes to being required to work on Sunday. They have the same right as any other religious group not to be discriminated against.

The case was reported by the Daily Telegraph before the judgment was published with the headline: ‘Christians have no right to refuse to work on Sundays, rules judge‘. The story which follows is pretty much worthless as a description of the ruling.

For example, take this quote from the article:

A new ruling by a High Court judge – the first on the issue in nearly a decade – says that Christians have no right to decline working on Sunday as it is not a “core component” of their beliefs.

The judgment – which upholds an earlier decision – means that individual Christians do not have any protection from being fired for not working on Sundays.

This is simply wrong – and unambiguously so. Most of the rest of the article unquestioningly puts the case for Ms Mba. It is clearly based not on what the EAT said, but on what the Daily Telegraph was told at some stage by Ms Mba or her representatives.

One key assertion made in the article is that the EAT took it upon itself to judge the importance of Sundays to Christians:

Mr Justice Langstaff…upheld the lower tribunal’s ruling which said it was relevant that other Christians did not ask for Sundays off.

The fact that some Christians were prepared to work on Sundays meant it was not protected, the court said.

No it didn’t.

The Telegraph also quotes Andrea Williams, Director of Christian Concern as saying:

The court seems to be requiring a significant number of adherents of the Christian faith to observe a particular practice before the court is willing to accept and protect the practice.

Again, no. The EAT is not doing anything of the kind and anyone who actually knows about the case must surely realise that. The case was not rejected on the basis that refusing to work on Sunday is not a ‘core’ component of the Christian faith. In fact, the EAT distanced itself from the use of that term by the Employment Tribunal. What it said on this issue was simply that the fact that many Christians are willing to work on Sundays was relevant  in considering whether or not the defence of justification was made out. Since the defence is based on proportionality, the needs of the employer need to be weighed against the discriminatory effect of the practice. It is harder to justify a practice that strikes so to the core of a religious belief that it effectively excludes all adherents but the ET held that this was not that sort of case. The EAT held that there was no error of law here.

If this was a central part of the decision I’d be tempted to argue with it. After all it is not Christians generally who should be considered in this exercise, but those who share the particular religious beliefs of Ms Mba. However, it is clear that this was just an additional observation by the Tribunal. The reason Ms Mba lost was not any analysis of how many other Christians would refuse to work on a Sunday but the impact that her refusal would have on the employer and her colleagues.

In the Guardian, Joshua Rozenberg has picked up on the fact that the Telegraph article is inaccurate and was written before the judgement was available. Noting that the judgment was originally read out by Mr Justice Langstaff in the EAT he says that the Daily Telegraph reporter in question:

… has excellent shorthand and the absence of any quotes from the judgment in his scoop demonstrates that he had not been in court. Instead, he would have relied on notes of the ruling made by one the lawyers present.

Those notes proved to be accurate but they could never have been as complete as a copy of the judgment itself.

But the problem with the Telegraph’s article is not that it paints an incomplete picture – it paints a blatantly distorted and inaccurate one. I think that to assume that this is the result of a misreading of some lawyers’ notes is to take a charitable view at best.

It is sad that even the HR press was not immune to repeating the Telegraph’s line without waiting for the actual judgment  to come out.  I’m particularly disappointed in HR Magazine which ran with ‘High Court Rules that Christians can’t refuse to work on Sundays’ and said:

‘a High Court judge has ruled that Christians have no right to decline working on a Sunday as it is not a core component of the Christian faith’

Not only did they misunderstand the ruling, they even illustrated the story with a picture of a gavel resting on a big book with ‘LAW’ written on the side – that’s just unforgivable. Gavels are for auctioneers people.

And what to make of HR Zone who said: ‘News: Christians cannot refuse to work on Sundays, rules judge’? That story opens with the paragraph:

Individual Christians do not have any protection in law against being fired if they refuse to work on Sundays, a High Court judge has ruled.

Wrong. Very very wrong.

The fact is that there are certain religious discrimination stories that are being manipulated as part of what amounts to a political campaign. My objection is that this includes misrepresenting the outcome of cases to fit a particular ‘persecution’ narrative – often with the (entirely false) suggestion that the law treats other religions more favourably.  As a result, employers and employees are less well informed about discrimination law than they should be. The Telegraph and its ilk are beyond redemption, but surely those who write specifically for HR professionals can try to hold back a bit and do some reading before they regurgitate the line being peddled by a biased and unreliable press?

Lets see what happens on Tuesday.

Posted in Religion in the workplace, Uncategorized | Tagged , , , , , | 5 Comments

The Myth of Gold-Plating

Posted on January 3, 2013 by Darren Newman

Gold-plating is such a clever term – I wish I’d thought of it. In the employment law context it refers to over-implementing EU rules so that the UK law is more burdensome than it needs to be. When a set of Regulations goes further than required by the Directive then we can say that the Directive has been ‘gold-plated’.

The phrase is used by people who want employment law to be as limited as possible. The beauty and elegance of the term is that instead of sounding like 19th century mill-owners, they can be the voice of common sense. Gold plating conjures images of pointless indulgence – of useless decoration. Regulations are supposed to be sensible functional things. Gold-plating them is just silly and we should stop doing it.

There are some fundamental problems with this approach however. Those who identify gold-plating are acting on the assumption that they know what the EU law actually requires. Take this article in the Daily Telegraph,, for example which quotes as an ‘obvious’ example of gold-plating the scope of the Agency Workers Regulations:

An obvious example of so-called “goldplating” involves an EU law that came into effect in 2011, giving temporary workers the same rights as permanent staff.

At the time, the EU directive stated that temps must be given statutory pay and holiday, but UK civil servants decided to increase the right to equal pay and holiday.

Regular readers of this blog will not be surprised to learn that the truth is a little more complicated than that. The provision of the EU directive being referred to here is this one, from Article 3(1):

(f) “basic working and employment conditions” means working and employment conditions laid down by legislation, regulations, administrative provisions, collective agreements and/or other binding general provisions in force in the user undertaking relating to:

(i) the duration of working time, overtime, breaks, rest periods, night work, holidays and public holidays;
(ii) pay.

To assume that this provision limits the Directive to statutory pay and holiday is to assume that you know precisely what the phrase ‘binding general provisions in force in the user undertaking’ means and can be absolutely certain that it does not extend to contractual terms that are ordinarily applied to employees. But that sort of assumption would be silly. I can’t predict exactly how the ECJ would interpret that provision but to claim that the Regulations contain gold-plating you have to assume that the court would adopt the most restrictive meaning possible. How likely is that?

Had the Government taken the advice of the IoD and limited the Regulations to statutory requirements, then the law would be in chaos. No-one would be able to get straightforward legal advice until the ECJ had ruled on the issue – and that would be likely to take years.

But of course no-one would listen to lobbyists who argued that we should always assume the most restrictive possible interpretation of EU law and just keep asking the European Court of Justice for a ruling whenever an issue arose. It makes sense to implement EU law with some sort of safety margin so that business knows where it stands and we can have some hope that the EU directive has been properly implemented. But of course no-one would argue that we should remove all safety margins from our legislation. Call it ‘gold-plating’, however, and we can claim that its completely unnecessary.

Having said that, actually finding gold-plating is more difficult than some lobbyists make out. I honestly struggle to think of areas of EU law relating to employment where we go clearly and unequivocally beyond what is required.

But there is one really good example.

Take this provision from the pregnant workers directive (Article 8(1))

Member States shall take the necessary measures to ensure that workers within the meaning of Article 2 are entitled to a continuous period of maternity leave of a least 14 weeks allocated before and/or after confinement in accordance with national legislation and/or practice. (my emphasis)

In the UK we give employees 52 weeks’ leave. Now if that isn’t gold-plating I don’t know what is. If Michael Fallon at the Department for Business is opposed in principle to gold-plating then he should be calling for maternity leave entitlement to be slashed. Why isn’t he?

Because the ‘gold-plating’ argument is one you only rely on when you are opposed to the law in question. It’s a lobbyist technique, not a genuine principle for legislation and deep down the Government knows that.

In the current climate we are unlikely to want to implement new employment rights that aren’t required by EU law. But if the Government decides that that is what it wants to do (like shared parental leave for example), it won’t let the fact that that is gold-plating get in the way.

Posted in EU law | Tagged , , , , | 2 Comments

A Gratuitous Top Ten List

Posted on December 17, 2012 by Darren Newman

Well look, it’s the end of the year (pretty much) and it makes sense to look back on the employment law events of 2012. I’m planning a bit of a rant about how the Beecroft report and the internal politics of the Coalition led to a series of half baked ‘reforms’ that will muddy the employment law waters for years to come, but I thought I’d start with something a bit more positive.

So here are my top ten favourite employment law cases from 2012. I don’t claim that these are the most important cases, its just a personal choice. As my day job (such as it is) is focussed on training, I have different criteria as to what constitutes a good case from many other lawyers. I’m not bothered about how useful the case is as a precedent. What I like is a good story with a moral. I want to be able to tell employers what happened and what that teaches us about how employment law works and how employers should deal with difficult situations. If I can get a laugh out of it, then so much the better.

So my top ten – in reverse order are:

10 Asociación Nacional de Grandes Empresas de Distribución (ANGED) v Federación de Asociaciones Sindicales (FASGA) and ors, (ECJ)

As well as having a catchy name, this case establishes that employees who become ill during annual leave can defer any part of the leave they miss as a result until they return. This leads to a nice routine about someone waking up in Ibeza with a bit of a headache and an upset stomach and calling their employer up to tell them they are having the day off sick.  We can then talk about what limitations (if any) the employer can impose on that.

9 NHS Leeds v Larner, (Court of Appeal)

Keeping to the annual leave theme, the Court of Appeal tells us that the default position for an employee who is off sick is that he or she is prevented for that period from taking annual leave which has to be taken when he or she returns. That can mean deferring the leave to the next leave year, irrespective of anything it says to the contrary on the Working Time Regulations.

8. Birmingham City Council v Abdulla and ors, Supreme Court

A great case to talk about to public sector clients who think that they have now dealt with their equal pay problem by negotiating settlements with their current employees. Employees who left up to six years ago will be able to bring equal pay claims in the civil courts based on the dual jurisdiction for equal pay claims set out in the Equality Act.

7.Packman t/a Packman Lucas Associates v Fauchon, EAT

You’d think that since our definition of redundancy goes back to 1965, we’d have a clear idea of what it means. This case neatly illustrates the ambiguity. Do we look at a requirement ‘for employees’ or for a reduction in the amount of ‘work of a particular kind’. We also get to talk about when it matters and how redundancy relates to dismissals arising from the introduction of new terms and conditions.

6. Crawford and anor v Suffolk Mental Health Partnership NHS Trust, Court of Appeal

An average case on a procedurally unfair dismissal makes it into the top ten because of a marvellous judicial rant from Lord Justice Elias on when suspension will amount to a breach of contract. Don’t agree with everything his Lordship says, but its a good basis for discussing what suspension is actually for and how it affects the fairness of any subsequent dismissal.

5 Salford NHS Primary Care Trust v Smith, EAT

In many ways this is just another reasonable adjustment case, but it tees up a discussion about what reasonable adjustments are actually for. Its not about doing nice things for disabled people, its about removing barriers and solving problems. The result should be a successful employee doing a job well, not the employer putting up with an arrangement that makes no commercial sense.

4. HM Land Registry v Benson and ors, EAT

A nice case on the justification of indirect discrimination in which older workers are effectively excluded from a generous voluntary redundancy package because they are too expensive to let go. We get to talk about cost and justification, but also look at balancing the discriminatory effect of the treatment against the employer’s business need.  We can also look at the effect on morale when voluntary redundancy schemes are massively over-subscribed.

3. Smith v Trafford Housing Trust (High Court)

A late entry into the top ten that was so much fun I wrote about it here. The case ticks many zeitgeisty boxes – religion, harassment, social media – but also covers compensation for breach of contract and how the imposition of a completely new job description can amount to an express dismissal.

2. Leach v Office of Communications, Court of Appeal

A serious case involving an employee being dismissed for unproven allegations of child abuse based on disclosures made by the police. I cant remember a case which better illustrates that unfair dismissal is not about whether a dismissal is fair on the employee but whether the employer has behaved reasonably – and the two aren’t always the same thing. That can lead to an interesting discussion about risk management and how to deal with anonymous complaints that are potentially very serious

1. London Ltd (formerly Travel London Ltd) v Musse and ors; CentreWest London Buses Ltd v Musse and ors, (EAT)

I don’t know why people think TUPE is boring. This case is brilliant because there was basically nothing the new employer could do to avoid constructively dismissing the employees. The case raises some important issues about constructive dismissal in a TUPE context, and the fact that TUPE has not yet developed a way of coping with changes in location. It’s also fun to see how folk from outside London react to an employee being moved to a depot six miles away – ‘what’s the problem?’ I have to explain that in London six miles is an expedition of Marco Polo proportions – especially if you have to cross the river!

OK so this is my list and hopelessly subjective. I’m sure I’ve missed out loads of really important decisions. Is there any other area of law that reliably provides so much case law to draw upon? Does anyone make their living doing land law updates?

Employers often complain about new regulations. But the fact is that even if the Government did nothing to change employment law for the next five years (and I think that’s an option they should seriously consider) we would still have plenty of new stuff to get to grips with.

Now, onto my Beecroft rant…

Posted in case law | 6 Comments

Facebook, Gay Marriage and Religion (but that’s not the interesting bit)

Posted on November 19, 2012 by Darren Newman

Employers often worry about the negative publicity associated with an Employment Tribunal case – often needlessly. It is unlikely that the nation’s press will choose to highlight a failure to follow a fair disciplinary procedure, or a redundancy decision where the selection criteria are poorly defined. To really get the press going the case needs to be about something that chimes with the things they like to write about anyway.

At the moment the Zeitgeist favours anything to do with social media, sexual orientation and the idea that Christians are being persecuted. So the case of Smith v Trafford Housing Trust was always going to get some coverage.

This is the case in which a manager was demoted and had his pay cut as a result of comments he made on Facebook about gay marriage (actually about civil partnership ceremonies in church – but close enough). You can read about it all over the place and for once the story has not been exaggerated.  The employer really did treat Mr Smith’s moderate expression of a commonly held religious viewpoint as gross misconduct for which he deserved to be dismissed. Merely demoting him instead was intended as an act of clemency.

What on earth was Trafford Housing Trust thinking? I hate myself for saying this, but this really is political correctness gone mad. Surely Mr Smith’s employers could not have thought that they were entitled to police his every utterance on any topic that linked in with their policies on equality and harassment? It is baffling to me that at no point in the extensive investigation and disciplinary process did anyone in Trafford Housing just step back and say ‘hang on, aren’t we getting this a bit out of proportion?’ All that was needed was a modicum of common sense. Perhaps a quiet word with Mr Smith to ask him to either delete his comments or remove the references to Trafford Housing Trust in his Facebook profile. I have absolutely no sympathy with them and would be quite happy for the full force of employment law to be visited upon them.

It seems, however, that the full force of the law in this case appears to be compensation of just under £100. That was the aspect of the case that most intrigued me. The real issue in the case is this: If your employer demotes you and cuts your pay without any just cause – what do you do?

The real issue: demotion as dismissal

The first answer that springs to mind is to say that the demotion is a breach of contract and that you can accordingly resign and claim a constructive dismissal. But constructive dismissal is a very blunt instrument. You have to be prepared to walk away from your job and gamble that you will recover your lost earnings some months later in the Employment Tribunal. That’s always a risky strategy and not many employees can afford to do it.

Another option is to protest against the demotion and cut in salary and reserve your right to seek damages. By affirming the contract in this way you lose the right to claim constructive dismissal – but you have not ‘waived the breach’ and can still take legal action.

That is what Mr Smith did. He brought his case in the county court – the Employment Tribunal has no jurisdiction to hear breach of contract cases unless the employment relationship has ended – and was it was then transferred to the High Court.

However, once the High Court had ruled that Mr Smith had not committed misconduct (a very well written analysis that is well worth reading) it went on to hold that his demotion was, in fact, a dismissal. Because it was done without notice, it was a wrongful dismissal  – but compensation for breach was therefore limited to the notice period. Mr Smith’s pay cut was being phased in by the employer so that over the course of his 12 week notice period he lost less than £100.

If you are wondering how it could be held that Mr Smith was dismissed when on the face of it he quite obviously wasn’t, you need to know about the case of Hogg v Dover College (for those with law reports, that’s [1990] ICR 39). In Hogg the EAT held that the imposition of a wholly new set of terms and conditions  amounts to the termination of the old contract and the offer of a new one. In other words, unilaterally changing somebody’s job can amount to an express dismissal. This is usually of help to the employee who can claim unfair dismissal despite not resigning. However in this case it was the employer who argued (after losing the point on their right to demote him) that the demotion was in fact a dismissal meaning that there was no ongoing breach of contract.

It does seem rather cheeky of Trafford Housing to rely on Hogg.  If Mr Smith had claimed unfair dismissal (it seems he missed the 3-month deadline) the employer would certainly have argued that Hogg v Dover College did not apply and that he was not dismissed. All the same, they are entitled to put forward whatever argument helps defend the case they are faced with.

I would like to see this ruling challenged however. It seems to me that Hogg v Dover College should not apply when an employer is purporting to exercise a contractual right to change an employee’s role – as they were in this case – rather than just imposing a new contract out of the Blue which is what happened in Hogg. It seems wrong that the consequence of the change being – on close examination – a breach of contract should be that the contract was therefore terminated with the result that compensation for breach is limited to the notice period. If the employer has purported to rely on the terms of the contract then doing so should be treated as a breach rather than a dismissal. Provided the employee clearly reserves his or her position then the loss of wages can be recovered as an unlawful deductions claim in the ET.

That’s the aspect of  Mr Smith’s case that I find interesting. I suppose I can’t really complain that it’s not the feature that the press chose to focus on. After all, it’s not as if the title of this post is ‘Interesting Application of Hogg v Dover College’ – who would read it if it was?

Posted in Breach of Contract, Religion in the workplace, Unfair Dismissal | Tagged , , , , , , , | 6 Comments

How much for doing the ‘honourable’ thing?

Posted on November 12, 2012 by Darren Newman

In most cases an employee who resigns doesn’t get any sort of pay off at all. You give notice (or not) and when the notice ends the most you can expect to receive is pay for holiday accrued but not taken plus any outstanding commission or bonus that may be provided for in your contract.

So why is George Entwistle special? It has emerged that the shortest-serving Director-General of the BBC has walked away with a year’s salary of £450,000 which should go some way to cushioning what must nevertheless be a considerable blow.

There is an interesting explanation of the payment from Lord Patten in a letter he has sent to the Culture Media and Sport Committee. In it he says that on Saturday Mr Entwistle asked if ‘suitable terms’ could be reached for his resignation. Negotiations with his lawyers followed as a result of which the payment of one year’s salary was agreed. Had he simply given six months notice as provided for in his contract he would obviously have received just half that sum.  However, had he been dismissed he would have (probably) been entitled to the full year.

I’m not criticising the deal. Getting rid of your top executive –  within hours of him becoming a liability – for just a year’s basic pay strikes me as fair enough. Nor should we criticise Mr Entwistle for negotiating an exit on favourable terms; I’d have done the same myself.

But this wasn’t really a resignation was it? It was an agreed termination – an exit by mutual consent. Nothing wrong with that, of course, but I do wish it hadn’t been presented as though Mr Entwistle were some sort of Captain Oates figure. I don’t think there is anything wrong with what he did, but I don’t think he should be scoring extra points for ‘doing the honourable thing’. That would have meant genuinely resigning without notice, or accepting a payment in lieu of the 6 months notice he was supposed to give.

What Mr Entwistle has done is ‘a deal’ – but I suppose if he had come out to face the press on Saturday night said ‘I have decided to negotiate a favourable termination package’ it wouldn’t have sounded quite so noble.

 

 

Posted in Entwistle, Resignation | Tagged , , , , | Leave a comment

Rights for shares: Responding to the Consultation

Posted on October 29, 2012 by Darren Newman

Well so far the Chancellor’s new wheeze of letting employees sign away key employment rights in return for some shares in their employer’s business shows no sign of going away. A consultation has been published by BIS and Clause 23 of the new Growth and Infrastructure Bill sets out the new right – albeit in rather sketchy terms.

The Consultation document follows the pattern of recent Government consultations in that it doesn’t ask open ended questions about whether the proposal is a good idea or not. Rather, it asks very specific questions about how the new law should be implemented. Am I the only one who thinks it a bit odd to be looking at a first consultation on a brand new employment law proposal when the legislation has already been drafted and it due to be debated before Parliament (second reading – 30 October)?

So I think I’ll pass on responding to the consultation. In any event, Governments don’t really pay attention to the responses to consultations, they only hear what they want to hear (Michael Reed’s post on this is pretty compelling). So instead of answering the Government’s rather loaded questions, I’d like to ask a few of my own

1. How voluntary is this going to be?

We were told that although employers would be able to offer only ‘owner-employee’ status to new recruits, this would be an entirely voluntary matter for existing employees. Clause 23 of the Bill says that the employer and employee need only ‘agree’ that the employee should be an employee-owner and that shares should be allotted in consideration of that agreement.

There seems to be no provision to protect an employee who is offered employee-ownership but does not want to accept it. For the agreement to be truly voluntary the employee needs to have a right to refuse the employer’s offer, with protection against unfair dismissal and detriment equivalent to the protection given to an employee refusing to sign an opt-out from the 48 hour week. Are these provisions to be introduced at a later stage in the Bill’s progress? Why is this issue not mentioned in the consultation?

If this protection is not provided then the ‘voluntary’ tag will be meaningless. an employer would be able to insist on employee-ownership as a condition of the employee accepting a pay-rise, or a promotion – or may even be able to enforce the status through dismissal and re-engagement,as though this were just any old change in terms and conditions.

2. How will the shares be valued?

The Bill currently does not mention the right for the employer to buy back the shares, nor does it give any mechanism for valuing them. However it is clear that the £2,000 to £50,000 brackets are entirely nominal. What will the real value of the shares be?

In the consultation the Government asks whether the buy-back should be at full market value ‘or some other level (e.g. a fraction of market value)’. Really? The Government is  prepared to contemplate a right to buy back shares at a fraction of their market value? The Government also asks ‘What would the administrative and cost impact be for a company if an independent valuation was required?’ If? Is the Government seriously considering allowing an employer to conduct its own assessment?

The suspicion is that the ownership of shares will be a much less valuable benefit than it looks on paper and that this could mislead employees about what they will receive in return for giving up their rights. This issue goes to the absolute heart of the proposal, and as yet there is no hint as to how it will work. Surely this is the sort of thing you work out before deciding that the proposal is a good idea?

3. What if the employee is a ‘bad leaver’?

Company share schemes often provide differently for employees who are dismissed for misconduct or who resign without notice. Will the new scheme allow this? Surely an employee who is dismissed for misconduct but who has given up any right to claim unfair dismissal could not be treated as a bad leaver with the result that he or she loses out in the valuation of the shares? That would make a mockery of the whole scheme. So far the draft is silent on this and the consultation document does not refer to the issue.

4. What happens if the employer does not pay the right price to buy back the shares?

So imagine an employee being sacked and told that because he or she is an employee-owner there is no right to claim unfair dismissal. The employer is entitled to buy back the shares but either chooses not to, or offers a mere pittance below the level dictated by the statutory scheme. What does the employee do? Does the claim lie in the civil courts to enforce the sale of the shares at the right price? That is a complicated and difficult thing to expect an employee to do. The better approach would be to say that the status of an employee in those circumstances reverts to that of an ordinary employee who can claim unfair dismissal. But if that happens then the Tribunal may as a preliminary point be asked to determine whether the correct price was paid for the shares – which doesn’t seem ideal.

Disputes about the value of shares and how that impacts on employment rights could be a real problem. Nothing in the Bill or the consultation document indicates that the Government has addressed its mind to the issue.

5. What about TUPE?

If an employee-owner is TUPE’d across to a new employer, will he or she be entitled to shares in the new employer, or will he or she merely become an ordinary employee? Someone needs to work this out, and I’m glad it won’t be me. On a technical point, since an automatically unfair dismissal under TUPE is not created under an ‘Act’ it won’t be a right that employee-owners have (see Clause 23 – New S.205A(4) Employment Rights act 1996). Unless there is an amendment, an employer would be free to dismiss an employee-owner prior to a TUPE transfer – unless of course the courts decide that that would be in breach of the Directive. I look forward to seeing how this issue plays out in the Court of Appeal, Supreme Court and European Court of Justice in the coming years.

6. What happened to simplifying employment law?

Any Government which chooses to introduce a brand new employment status based on share ownership loses all right to complain that employment law is becoming too complicated and legalistic. Even if most employers end up ignoring employee-ownership because it is just too tricky or costly, it will still mean an extra chapter in every employment law textbook. Add to this the extra complications introduced by the Enterprise and Regulatory Reform Bill and any claim the Government makes about simplifying employment law simply becomes laughable.

7. When will this actually happen?

I still say that there is no way this can be in place in time for April 2013. The Growth and Infrastructure Bill is just starting its Parliamentary progress and the provisions on owner-employees will – surely! – need to be fleshed out and amended before Royal Assent Employers and employees will also need guidance on the new status and how and when it applies. April next year is far too early.

My Response to the Consultation

On second thoughts I think I will respond to the Government consultation – though I won’t be answering their specific questions. My response is this:

Don’t do it, its a bad idea

Do you think they’ll listen?

Posted in Uncategorized | 5 Comments

Trading rights for shares – the latest big idea

Posted on October 8, 2012 by Darren Newman

So the latest Government proposal on employment law is to create a brand-new employment status of  ‘owner-employee’ – someone who has fewer employment rights than other employees but who has been given a bunch of shares to make up for it. As @HRBullets helpfully points out, the reaction to the proposal has been mixed at best – even from the employer lobby. But who knows? This might be the next big thing. let’s at least take a look at what is being proposed.

Here is what the Chancellor said in his speech. For the sake of space I’ve put it all into one paragraph, instead of the 12 paragraphs set out in the text:

So today we set out proposals for a radical change to employment law. I want to thank Adrian Beecroft for the work he has done in this area. This idea is particularly suited to new businesses starting up; and small and medium sized firms. It’s a voluntary three way deal. You the company: give your employees shares in the business. You the employee: replace your old rights of unfair dismissal and redundancy with new rights of ownership. And what will the Government do? We’ll charge no capital gains tax at all on the profit you make on your shares. Zero percent capital gains tax for these new employee-owners. Get shares and become owners of the company you work for. Owners, workers, and the taxman, all in it together. Workers of the world unite.

Leaving aside the truly dreadful prose style, this is obviously a rather sketchy outline of the proposal. There is more detail in the BIS / HM Treasury press release which rather alters what the Chancellor is saying. 

  • Osborne says the scheme will be best suited to small and medium sized companies, but the press release makes it clear it  will apply to companies of any size.
  • Osborne says it is a voluntary three way deal, but the press release makes it clear that employers can insist on new hires accepting the arrangement.
  • Osborne does not mention that the CGT exemption will only apply to between £2,000 and £50,000 worth of shares

And what ‘rights of ownership’ will the employee gain in return for giving up unfair dismissal and redundancy rights? If this scheme comes into operation the vast majority of employees will receive a financial benefit. Its not as though they’ll be able to control the pay of the Chief Executive or anything.

Oh and it isn’t just unfair dismissal and redundancy rights they’ll lose. Also sacrificed will be   their right to request flexible working or make a training request (Nooooo! Anything but my right to make a training request – have some pity!!). 

Finally, ‘owner-employees’ on maternity leave will have to give ’16 weeks’ notice of a firm date of return from maternity leave, instead of the usual 8′ (ANORAK NOTE: actually women on maternity leave only have to give 8 weeks’ notice if they are returning early; if they are returning at the end of their maternity leave they don’t need to give any notice at all actually.).  

The big question is: is this ‘a thing’ or not? Is this a genuine shift in how employment law works or is it just one of those meaningless Conference announcements that dies a slow death in consultation or ends up withering away on the statute book with no-one paying it any attention?

The suspicion is that even though you can dress this proposal up as a benefit for employees – sorry ‘owner-employees’ – the reality is that it allows employers to buy out an employee’s rights at a bargain basement price. Suppose I want to recruit an employee without the risk of incurring unfair dismissal liability further down the line. I issue the new employee with £2,000 worth of ‘shares’ in the business. As a  result he becomes an ‘owner-employee’ and four years later I sack him without good reason and buy back his shares for £2,000. A price well worth paying, I might think, to avoid the need for an expensive compromise agreement. 

Could that happen? Well, it depends. It depends on how the scheme is written and what safeguards it contains. In particular it depends on how the future value of shares issued to the employee is calculated and what provisions exist dealing with when and how the employee can cash the benefit in.

If there are no proper safeguards then this will certainly amount to ‘compensated no fault dismissal’ by the back door as the New Statesman warns. If proper safeguards are in place, then this will be a highly complex but limited tax break of interest to just a small number of employers and employees and we can safely ignore it.

The press release includes the following in its ‘Notes to Editors’ section:

2. The Government consultation on the owner-employee contract will include the details of restrictions on forfeiture provisions to ensure that if an owner-employee leaves or is dismissed, the company is not able simply to take the shares back but is able to buy them back at a reasonable price.

This is the absolute crux of the proposed scheme – and as yet we have no details of it whatsoever. We will just have to wait and see what the consultation says – apparently it is due out this month. 

So I don’t know whether this will turn into a ‘thing’ or not. But one thing I do know with absolute and piercing certainty: these contracts will not be ready for use by April 2013 as the press release claims. No way. Absolutely not. The only way that could happen is if the Government hurriedly inserted something into the later stages of the Enterprise And Regulatory Reform Bill, allowing no time for full consultation, careful drafting or proper Parliamentary scrutiny. That would produce a badly drafted law full of loopholes, not properly integrated with other employment rights (TUPE will be fun), and resulting in years of wrangling in the courts and tribunals. There is just no way a Government would let that happen just to make it look as if they were…

Oh.

 

Posted in Beecroft, Enterprise and Regulatory Reform Bill, Owner-employees, Unfair Dismissal | Tagged , , , , , | 4 Comments