On Notice

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On Notice
May 2008
Authors:
Paul Callegari
+44.20.7360.8194
paul.callegari@klgates.com
Noel Deans
+44.20.7360.8187
noel.deans@klgates.com
www.klgates.com
Age discrimination cases are now starting to make their way through the Tribunal system and
in this month’s edition of On Notice we report on two such cases. Although both decisions
are from the Employment Tribunal, and so not binding on other cases, they do show how
Tribunals are applying the new law. We also summarise potentially significant changes to the
Sex Discrimination Act 1975 and highlight a case at ECJ level regarding whether a public
statement made by an employer that it would not consider job applicants of a particular
nationality can constitute race discrimination. Finally, we cover changes to the legislation
dealing with the duty on employers to consult on changes to pension schemes.
Jackie Cuneen
+44.20.7360.8184
jackie.cuneen@klgates.com
Lisa Goodyear
+44.20.7360.8256
lisa.goodyear@klgates.com
Susannah Jarvis
+44.20.7360.8271
susannah.jarvis@klgates.com
Danny Tsang
+44.20.7360.8144
danny.tsang@klgates.com
Louise Waldron
+44.20.7360.8250
louise.waldron@klgates.com
K&L Gates comprises approximately 1,500
lawyers in 25 offices located in North
America, Europe and Asia, and represents
capital markets participants, entrepreneurs,
growth and middle market companies,
leading FORTUNE 100 and FTSE 100
global corporations and public sector
entities. For more information, please visit
www.klgates.com.
Discriminated against for being too young
In Wilkinson v Springwell the Newcastle-upon-Tyne Employment Tribunal decided that the
employer had breached the Employment Equality (Age) Regulations 2006 in dismissing the
employee on the basis that she was too young for the job.
Miss Wilkinson was aged 18 at the time of her dismissal. She had been employed as an
office administrator. During her probationary period the employer told her that she was not
fulfilling all of her duties and that her performance needed to improve. At the same time,
the employer asked another office administrator, who was older than her, to take on some
of her work load. Miss Wilkinson was then dismissed and alleged that she had been told by
her manager that she was too young for the job. The employer denied that it had dismissed
Miss Wilkinson on the basis of her age, but claimed it was due to her ability to do the job
(capability).
The Tribunal found that the employer had made a stereotypical assumption that there was
a link between Miss Wilkinson’s age, her experience and her ability to do her job. Her
age was the predominant reason for her dismissal. The Tribunal also took into account the
employer’s failure to complete an age discrimination questionnaire.
This case serves as a reminder that employers need to be able to demonstrate that a dismissal
is truly related to an individual’s performance or ability to do the job. An employer cannot
simply say that an employee’s age and experience show whether or not he or she is capable
of doing the job, there must be actual evidence of poor performance.
For more information on this case, please contact Paul Callegari.
Age-related flexible benefits packages
Swann v GHL Insurance Services UK Ltd, a majority decision of the South London
Employment Tribunal, is a significant decision for employers who provide their employees
with funds to purchase items from flexible benefits packages. This case also serves as an
example of what might, in practice, constitute the “objective justification” defence to an
age discrimination claim.
GHL Insurance Services UK Ltd provided its employees with a flexible benefits fund with
which to purchase items from a flexible benefits package. This included an option to join a
private health insurance scheme, where the premiums were calculated according to age and
gender. Mrs Swann (who was 51 when she brought her claim) was a part-time employee.
She brought a claim for age discrimination because her premiums under the optional private
health insurance scheme were higher than those for an equivalent younger employee.
On Notice
The Tribunal rejected her claim. It decided that the
relevant act by the employer was providing the flexible
fund to the employees, not providing the option to join
the private health scheme. The act of providing the fund
was “age-neutral” since the employees all received the
same fund to invest as they saw fit (purchase of the
health insurance was just one of a range of benefits).
There was therefore no discrimination and this alone
dealt with Mrs Swann’s case.
The definition of harassment is changed so as to remove
the need for a link to be made between harassment and
the sex of the person being harassed. This significantly
widens the scope of the definition. Claims may now
be made by someone who is not herself the subject or
intended victim of the unwanted conduct, but the effect
of which nonetheless violates her dignity or creates
an intimidating, hostile, degrading, humiliating or
offensive environment for her.
However, the Tribunal went on to say that had the
employee simply been offered the option of purchasing
the private health insurance alone that, by contrast,
would have been discriminatory on grounds of age
since older employees would have had to pay more.
Nevertheless, the Tribunal said, the employer would
have been able to rely on the justification defence, in
that the discrimination would have been objectively
justified. The premiums were quite legitimately arrived
at by reference to actuarial assessments of risk. Further,
the employer’s aim was to improve its recruitment
and retention of staff and the employer had taken
professional advice and canvassed its employees’
views on how to offer the most suitable scheme.
It is now unlawful for an employer to fail to take
reasonably practicable steps to protect employees from
harassment by third parties where such harassment
is known to have occurred on at least two other
occasions.
For more information on this case, please contact Noel
Deans.
Changes to Sex Discrimination Act 1975 relating
to pregnancy and maternity leave discrimination
and harassment
The Sex Discrimination Act 1975 (Amendment)
Regulations 2008 came into force on 6 April 2008.
These make some important amendments to the Sex
Discrimination Act 1975 in order to implement properly
the Equal Treatment Amendment Directive. In March
2007 the High Court decided (in EOC v Secretary of
State for Trade and Industry) that the Government’s
previous attempt to implement the Directive had failed
in certain respects. The main changes are as follows.
The definition of discrimination on grounds of
pregnancy or maternity leave is changed so as to
remove the need for a pregnant employee (or an
employee on maternity leave) to compare her treatment
to that received by a comparator who is not pregnant
(or on maternity leave).
Finally, changes have also been introduced aimed
at ensuring women may claim benefits such as a
company car, life assurance and medical cover during
periods of additional maternity leave. However, the
choice of words in the regulations has resulted in an
unforeseen, but potentially significant consequence,
in that it may be arguable that these regulations will
require employers to pay pension contributions and
provide pension benefits for periods of maternity leave
where the individual is not actually receiving statutory
maternity pay.
For more information on these changes, please contact
Jackie Cuneen or Louise Waldron.
Advocate-General’s Opinion on whether a public
statement of intent regarding recruitment can itself
constitute direct race discrimination
The A-G has given his Opinion in the case of Centrum
voor Gelijkheid van Kansen en voor Racismebestrijding
v Firma Feryn. The A-G’s Opinion (which is usually
followed by the ECJ) stated that a public statement by
an employer of a discriminatory recruitment policy
constitutes direct discrimination under the Race
Directive.
The director of a Belgian door-fitting firm had stated in
newspaper interviews that he would not recruit workers
of Moroccan origin. The Belgian equivalent of the
EOC began proceedings against the company seeking
a declaration that it had breached discrimination
legislation. The Belgian court held that the statement
by the director did not constitute actual discrimination.
April 2008 | 2
On Notice
Rather, it was evidence of potential discrimination
which could be used if a person of Moroccan origin
applied for and failed to get a post with the company.
The matter was referred to the ECJ for a preliminary
ruling. The A-G disagreed with the Belgian court’s
decision and stated that such an interpretation –
requiring an individual victim of discrimination to be
identified – would risk undermining the effectiveness
of the principle of equal treatment. It may be that, on
reading such a statement, workers of Moroccan origin
would be deterred from applying for employment. The
statement itself constitutes direct discrimination. The
ECJ is expected to give its ruling on this matter later
in the year.
For more information on this case, please contact Lisa
Goodyear.
Extension of duty on employers to consult on
changes to pensions
As of 6 April 2008 the requirements of the Occupational
and Personal Pension Schemes (Consultation
by Employers and Miscellaneous Amendment)
Regulations 2006 have been extended to employers
with at least 50 employees. These employers will now
be required to consult with employees before making
certain changes to their occupational or personal
pension schemes.
For personal pension schemes, these changes include
ceasing, reducing or increasing by certain specified
levels any employer contributions payable under direct
payment arrangements.
For occupational pension schemes, the changes
include increasing the age at which benefits become
payable to members under the scheme, preventing
new members from being admitted, and introducing
member contributions where no such contributions
were previously payable.
Any such company currently considering changes
to pension benefits should take advice as to whether
the contemplated changes fall within the ambit of
the regulations before implementing that change. In
particular, the minimum 60 day consultation period
would have to be incorporated into the timetable for
change.
For more information on these changes, please contact
Danny Tsang or Louise Waldron.
K&L Gates comprises approximately 1,500 lawyers in 25 offices located in North America, Europe and Asia, and represents capital markets
participants, entrepreneurs, growth and middle market companies, leading FORTUNE 100 and FTSE 100 global corporations and public sector
entities. For more information, visit www.klgates.com.
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April 2008 | 3
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