HR Bytes - June 2011

Welcome!

Welcome to HR Bytes for June 2011, our monthly round up of crucial HR information and important employment law developments.

There is definite discrimination theme this month, in particular the issue of when organisations can justify decisions that would otherwise amount to indirect discrimination. In two of the three cases we report, the employers successfully defended the claims, and in both those cases the employer had considered and offered alternatives to the employee, something which illustrates the importance of flexibility and consultation in these types of cases.

This month's news includes final guidance being published on the Agency Workers Regulations due to come into force in October 2011. If you are a hirer of temporary workers you may find our checklists of the new agency workers' rights and your obligations useful – please get in touch if you would like a copy.

A round-up of this month's key cases and news items follows below:

What's new this month?

Legal Developments

• Tribunal has no power to apportion liability for damages in discrimination cases.
• Indirect discrimination – refusal to allow a Muslim security guard time off to attend mosque was objectively justified.
• Employee remanded in custody was not entitled to wages.
• IR35 assessment – another taxpayer win.
• Kirpan (ceremonial dagger) ban did not discriminate against a Sikh prison officer.
• School's uniform policy prohibiting boys from wearing their hair in cornrows was indirect discrimination.

Other news

• Agency Workers Regulations: final guidance published.
• EU plans for 20 weeks' full pay maternity leave stall again.

What's coming up

• Government to review discrimination compensation, collective redundancies and TUPE.

Legal developments

Tribunal has no power to apportion liability for damages in discrimination cases

In London Borough of Hackney v Sivanandan and Ors UKEAT/0075/10, the EAT considered whether tribunals have the power to apportion liability for damages in discrimination cases where more than one party is found guilty of discrimination. The EAT concluded that Tribunals do not have the power to do this. Therefore, where an employer and employee are jointly liable for the loss caused each is liable for the entire award of compensation and it is not necessary to apportion liability between them.

http://www.bailii.org/uk/cases/UKEAT/2011/0075_10_2705.html

Refusal to allow a Muslim security guard time off to attend mosque was objectively justified

In Cherfi v G4S Security Services Ltd UKEAT/0379/10, the EAT has upheld a tribunal's decision that an employer's refusal to allow a security guard to leave a client's site on Friday lunchtimes to attend mosque did not amount to indirect religious discrimination. Balancing the employer's operational needs with the discriminatory effect on the employee, the tribunal was entitled to find that the requirement for security guards to remain on site was objectively justified as a proportionate means of achieving a legitimate aim. The EAT also noted that G4S had been reasonable and offered Mr Cherfi alternative working patterns and access to an on-site prayer room.

The case is a helpful illustration of the benefit to employers of giving genuine consideration to alternative ways of achieving its (legitimate) aims when defending indirection discrimination claims.

http://www.bailii.org/uk/cases/UKEAT/2011/0379_11_2405.html

Employee remanded in custody was not entitled to wages

In Burns v Santander UK plc UKEAT/0500/10 the EAT upheld a tribunal's decision that an employee remanded in custody pending a criminal trial (which led to conviction) was not "unavoidably" prevented from working and was not entitled to his wages. The employee could not succeed in his claim for unpaid wages whilst in custody because he did not offer any consideration for that work – as he was in prison!

The case suggests that in order for an employee to remain entitled to wages when absent from work there must be an unavoidable impediment stopping the employee from working. However, what the case does not address is whether the outcome would have different if the employee had been found innocent at trial (which could have led to a finding that the employee was in fact unavoidably prevented from working through no proven fault of his own). Ultimately, therefore, employers should remain cautious about withholding an employee's wages.

http://www.bailii.org/uk/cases/UKEAT/2011/0500_10_2303.html

IR35: another taxpayer win

In ECR Consulting Limited v HMRC [2011] UKFTT 313 (TC) the First-tier Tribunal has allowed an IT consultant's appeal against an assessment that the consultant should be treated as an employee of the client for income tax and NICs purposes. Among the reasons for the decision were that there was a valid substitution clause, the client had no real control over the consultant, and an employment contract would not have the termination clauses of the actual contracts. Surprisingly, the tribunal does not appear to have considered the agent's right to terminate its contract with the consultant on notice or pay it in lieu of notice, which would seem to suggest employment.

The decision illustrates the difficulty in deriving a clear set of principles from the case law in this area. It is relatively easy to state in general terms the pointers towards employment status, but their precise scope appears to be frustratingly impossible to pin down.

http://www.bailii.org/uk/cases/UKFTT/TC/2011/TC01174.html

Kirpan ban did not discriminate against Sikh prison officer

In Dhinsa v Serco and another ET/1315002/09 an employment tribunal has held that a ban on prison officers carrying knives did not amount to indirect race or religious discrimination against a Sikh prison officer who wished to wear a kirpan (a ceremonial dagger), one of the five "articles of faith" worn by Amritdhari (or "initiated") Sikhs.

The ban did not amount to indirect race discrimination, because fewer than 10% of Sikhs are Amritdhari and so the ban did not have a sufficient impact on the Sikh ethnic group as a whole. It put Amritdhari Sikhs at a particular disadvantage because of their belief, and therefore was potentially indirect religion or belief discrimination against those with that belief. However, the ban was justified by the legitimate aim of maintaining safety and security within prisons, and was proportionate.

Again, as in Cherfi above, the tribunal noted the employer's reasonableness in offering alternative solutions, such as offering to allow the Claimant to carry a replica dagger or to work in a different location where the ban might be temporarily disapplied pending a review.

School's uniform policy prohibiting boys from wearing their hair in cornrow was discriminatory (High Court)

In G v Head Teacher and Governors of St Gregory's Catholic Science College [2011] EWHC 1452 (Admin) the High Court held that the school's uniform policy prohibiting boys from wearing their hair in cornrows was unlawful and resulted in indirect racial discrimination. However, the claimant's sex discrimination claim failed.

The decision is an interesting one, given that the court held that family and social customs can form part of ethnicity, and that cultural, family and social conditions are what often bring a person of a given ethnicity within the scope of the race discrimination legislation.

Those responsible for dress code policies should now re-examine their hair and clothing policies for potential discrimination and be aware that they cannot apply the policy rigidly, but must consider making exceptions, not only for those of religious beliefs, but for those employees who contend that a cultural or family practice means they cannot conform to a policy.

http://www.bailii.org/ew/cases/EWHC/Admin/2011/1452.html

Other News

Agency Workers Regulations: final guidance published

On 6 May 2011, BIS published the final Agency Workers Regulations 2010 guidance, following a brief consultation on an earlier draft published in April. The final guidance departs from the earlier draft in several noteworthy respects. These include:

• The suggestion that it is not necessary for an agency worker to cite a comparator for the purposes of establishing equal treatment in respect of basic working and employment conditions (the guidance states that it is possible to identify those conditions without a comparator).
• Clearer explanation of circumstances in which a bonus can be said to be referable to individual performance and therefore included in the concept of pay for the purposes of entitlement to equal treatment.
• The approach to the use of pay between assignments as a derogation from the equal treatment provisions, in particular the circumstances in which reliance on the derogation will be considered to be a means of avoiding the requirements of the Regulations.

In preparation of these changes, if as a hirer of temporary workers, you would like further guidance on your obligations come 1 October 2011, please contact a member of our team.

EU plans for 20 weeks' full pay maternity leave stall again

The progress of proposals to amend the Pregnant Workers Directive, which include extending the right to maternity leave to 20 weeks on full pay, has stalled, with concerns being expressed once again by the UK and by 13 other Member States, at a meeting of the EU's Employment, Social Policy, Health and Consumer Affairs Council on 17 June 2011. So it is a matter of watching this space!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.