EMPLOYMENT LAW
ADVISERS
www.klng.com
Summer 2006
On Notice
Statutory dismissal procedures
and redundancy
The Statutory Dismissal Procedures
continue to give rise to litigation (which
was, of course, the opposite of the
Government's intention in
implementing the procedures).
The Employment Appeal Tribunal
(EAT) has recently given its decision in
the case of Alexander v Bridgen
Enterprises Limited which dealt with
the application of the Statutory
Dismissal Procedures in the context of
a redundancy consultation procedure.
In this case the employer wrote to the
claimants to inform them that their jobs
were at risk and also informed them
about the redundancy selection criteria,
in general terms. However, the
employer did not give the individuals
their scores until they were told that
they had been selected for redundancy.
The Employment Tribunal initially
found for the employer and decided
that only providing the individuals'
actual criteria assessment at the
selection stage complied with the
Statutory Dismissal Procedures.
However, the EAT disagreed and ruled
that in redundancy dismissals, the Step
2 Meeting requires an explanation to
be given as to why the employer is
contemplating dismissing that
particular employee. That involves
providing information as to why there is
a redundancy situation and also why
that particular employee is being
selected. Therefore, in advance of the
Step 2 Meeting, the employer needs to
notify the employee of the individual's
scores as well as the selection criteria
used. This will allow the employee to
make representations about the
marking and the use of the criteria.
The EAT confirmed, however, that to
comply with the Statutory Dismissal
Procedures it is not necessary to
provide the individual scores and
assessment of other employees
(although failure to do so may render
the dismissal unfair under general
principles).
This case demonstrates the difficulty
caused by the Statutory Dismissal
Procedures. Before their
implementation, as long as the
selection criteria and scores were
provided at some point in the process,
an employer would have a chance of
demonstrating that the consultation
process was fair. However,
implementation of the Procedures
means that these must be provided
before what, in all other respects, is the
Step 2 Meeting.
This case also demonstrates that
employers need to take particular care
to ensure that the Statutory Dismissal
Procedures are properly "built-in" to
the redundancy consultation process to
ensure that they are complied with.
Welcome to the first edition of the
new look On Notice.
We hope you enjoy our new format
which will include regular features
such as a “cut out and keep” section
made up of easily digestible bullet
sized points on a current topic (in this
edition Age Discrimination) and an
“on notice” section where we put you
on notice of recent or impending
changes to the law.
We have retained some old favourites
from Noticeboard such as
“Eavesdropping”, where a member of
the Employment group will give
practical advice on a topical issue. In
this edition, Jackie Cuneen advises on
the retirement procedure under the
Employment Equality (Age)
Regulations 2006.
Contents
Statutory dismissal procedures
and redundancy
1
Age - no longer just a number
2
Eavesdropping - retirement
3
Be On Notice...
4
Who to contact
4
On Notice
#
#
When is discrimination
lawful?
n
where there is an objective,
proportionate business reason;
n
where benefits accrue based on
length of service of up to 5 years;
Action
n
Review/ update policies on
recruitment, promotion, training, pay
and benefits and equal
opportunities;
n
Consider whether your current
retirement age is appropriate;
n
Introduce a duty to consider
procedure to allow employees to
request to work past retirement (see
"Eavesdropping");
n
Monitor the age profile of the
organisation at regular intervals to
identify potential discrimination;
n
Train staff to ensure they are familiar
with their obligations under the
Regulations. Remember employers
can be held to be vicariously liable
for their employees' actions!
What will be unlawful?
n
n
#
n
n
Indirect Discrimination
applying a criterion, provision or
practice which disadvantages people
of a particular age. Example: making
length of service or experience a
criterion for promotion;
Harassment
subjecting an individual to unwanted
conduct that violates their dignity or
creates an intimidating, hostile or
offensive environment having regard
to all the circumstances including
the perception of the victim.
Example: jokes or stereotyping;
Victimisation
victimising someone because they
have made or intend to make a
complaint or allegation or have given
or intend to give evidence in relation
to a complaint of discrimination on
grounds of age. Example: witness in
a grievance;
Discrimination post employment
discrimination after the working
relationship has ended. Example:
references.
#
2
SUMMER 2006
n
n
n
where an individual is older than or
within 6 months of the employer's
normal retirement age;
where the discriminatory act is
necessary to comply with other
statutory requirements;
where it is a genuine occupational
requirement.
Key changes
n
The current upper age limit (65) on
unfair dismissal claims and
entitlement to a statutory
redundancy payment will be
removed;
n
There will be a national default
retirement age of 65, making
compulsory retirement below 65
unlawful unless objectively justified;
n
Employees will have the right to
request to work beyond their normal
retirement age. The employer has a
duty to consider such requests and a
retirement will constitute an
automatically unfair dismissal if the
employer does not follow a
prescribed procedure in dealing with
the request.
#
n
Direct Discrimination
treating an individual less favourably
on the basis of their age. Example:
refusing to employ someone because
of their age;
#
On 1 October 2006 the Employment
Equality (Age) Discrimination
Regulations 2006 will make it unlawful
for employers to discriminate against
employees, workers, job seekers and
trainees because of their age.
#
#
Age - no longer just a number
www.klng.com
Eavesdropping - retirement
Jackie Cuneen takes a call from a
HR Manager.
HR: I thought that employees over
retirement age were barred from
bringing unfair dismissal claims?
HR: We have an employee who is due
to retire in October, but I understand
that under the new age
discrimination law, retiring him will
be discriminatory?
JC: They were, but the age limits for
unfair dismissal and statutory
redundancy will be removed by the
Regulations.
JC: That's not quite right. The
Employment Equality (Age)
Regulations come in on 1 October
2006. The Regulations don't make
retirement unlawful. They introduce
a default national retirement age of
65. If employers operate a lower
retirement age then they will have to
provide objective business reasons
justifying the lower age otherwise it
will be unlawful.
HR: So what procedure do we have to
follow?
JC: The timing of the procedure will
depend upon when the employee's
normal retirement date falls and
when you give him notice of this, but
to summarise:-
n
HR: Our retirement age is 65. So we can
let him go then?
JC: No. The Regulations also give
employees the right to request to stay
on beyond normal retirement age.
Employers must give employees
advance notice of their retirement
date and have a duty to consider any
request to stay on beyond that.
n
The employee does not have the right
to stay on after their normal
retirement date just a right to request
to stay on. Employers don't have to
agree to the request and don't have
to give a reason for refusing it.
HR: So we can just refuse the request
and the employee can't bring any
claims against the company?
JC: Provided you follow the procedure
set out in the Regulations. If you
don't then the retirement will be an
unfair dismissal.
n
You must give the employee advance
notice of their normal retirement
date. You should write to them at
least 6 months but not more than 12
months beforehand and at the same
time inform the employee of their
right to request to work beyond their
retirement. The employee can make
their request up to 3 months, but not
more than 6 months, before their
normal retirement date.
You must hold a meeting with the
employee to consider their request
within a reasonable period of
receiving it. The employee has a right
to be accompanied by a colleague or
a trade union representative. You
must write to the employee
confirming your decision as soon as
possible after the meeting.
If the request is agreed then you must
provide written confirmation of the
new retirement date and any other
terms that have been agreed in
relation to their postponed
retirement. This can be by letter or by
issuing a new employment contract.
n
If the request is refused, you must
write to the employee confirming this
and their normal retirement date. As
I said there is no requirement to
provide the employee with reasons
for the decision. However, the
employee has the right to appeal.
n
The appeal meeting should be held
before a senior manager. If
unsuccessful then their normal
retirement date should be confirmed
to them. If, however, their appeal
succeeds then you should write to
them confirming the new retirement
date.
HR: Presumably when they reach their
new retirement date we can just let
them go?
JC: No, you will need to follow the same
process again before retiring the
employee on this new date.
HR: Are we too late to start this
procedure? The employee is due to
retire on 1 October 2006?
JC:There are transitional arrangements
which apply to retirements between 1
October 2006 and 31 March 2007.
Assuming that you have or will give
this employee notice of his retirement
before 1 October he should be given
notice of his retirement date which is
equivalent to his contractual notice
period or a minimum of 4 weeks'
notice. You must also write to him
informing him of his right to request
to work beyond retirement as soon as
practicable on or after 1 October
2006. He can then make his request
up to 4 weeks after his normal
retirement date. You then follow the
standard procedure we discussed.
SUMMER 2006
3
On Notice
continued from page 3
(Eavesdropping - retirement)
HR:We have another employee who is
due to retire in March 2007 - what
about her?
JC: Assuming you give her notice after 1
October 2006, but she is due to retire
before 1 April 2007 then you must
give her notice of her normal
retirement date equivalent to the
longer of either her contractual or
statutory notice and her right to
request to work beyond that date.
She can make her request up to 4
weeks following her normal
retirement date.
For all other employees due to retire
on or after 1 April 2007 you simply
follow the standard procedure in the
timescale prescribed by that
procedure.
Be On Notice that:
Fixed term employees
If you retain employees on fixed term
contracts then from 10 July 2006, when
Regulation 8 of the Fixed-Term
Employees Regulations 2002 comes into
force, any employee who has been kept
on successive fixed term contracts for 4
years or more as at that date
automatically acquires permanent
employment status unless continued
fixed term status can be justified.
Employers who seek to rely on gaps
between successive contracts to avoid
the effects of the Regulations may come
unstuck as the Regulations adopt the
normal rules on continuity of
employment relating to "temporary
cessation of work."
Transfer of Undertakings
(Protection of Employment)
Regulations 2006
HR: One final question - do employees
have to stay on to the normal
retirement age?
JC: No, employees can resign at any
time before this provided they give
proper notice.
HR: Thanks. I was hoping to go early
myself!
Since 6 April 2006 employers selling,
transferring or outsourcing part of their
business or its services have an
obligation to provide the purchaser or
outsourcing contractor with "Employee
Liability Information" about the
employees that transfer with the
business or service. They must provide
details of their contracts, grievances,
Who to Contact
disciplinaries and any actual or
prospective claims. If they fail to
provide this within the set timeframe
they could be liable for £500 per
employee.
Uplifts to compensation
awards
Employers must comply with the
statutory procedures in dealing with
disciplinaries and grievances if they are
to avoid a 50% uplift in compensation if
the matter goes to a tribunal.
In Norris & Robertson -v- Lambert &
Lambert t/a Black Bull Inn the tribunal
awarded a compensation uplift of the
maximum of 50% because there had
been a "complete failure" to apply the
statutory procedures. There had been
no attempt to set out the reason for the
employee’s dismissal in writing, to
conduct any form of meeting, or to offer
him the right to appeal.
The 50% uplift was applied to his award
for notice, loss of earnings, deductions
from wages, holiday, and injury to
feelings.
Kirkpatrick & Lockhart
For further information please contact:
Nicholson Graham LLP
Paul Callegari
pcallegari@klng.com
T: +44 (0)20 7360 8194
110 Cannon Street
Jackie Cuneen
jcuneen@klng.com
T: +44 (0)20 7360 8184
London EC4N 6AR
Lisa Goodyear
lgoodyear@klng.com
T: +44 (0)20 7360 8256
www.klng.com
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4
SUMMER 2006
© 2006 KIRKPATRICK & LOCKHART NICHOLSON GRAHAM LLP. ALL RIGHTS RESERVED.