Partner loses age
discrimination claim
Capturing
the headlines as one of the first decisions under
the new age equality legislation, an employment
tribunal has confirmed that a law firm did not
discriminate unlawfully on the grounds of age when
it made changes to its pension arrangements. The
decision sheds some light on the future
interpretation of the Employment Equality (Age)
Regulations 2006, particularly in relation to the
justification defence (which unusually applies to
both direct and indirect age discrimination),
providing some guidance on the most recent
'strand' of discrimination legislation.
In
Bloxham v Freshfields Bruckhaus Deringer,
Freshfields overhauled its pension arrangements
for partners in an effort to address the
conflicting interests between different
generations of partners. In doing so, it put in
place transitional arrangements for those partners
close to retirement age. Mr Bloxham subsequently
claimed age discrimination on the basis that he
was disadvantaged by the transitional
arrangements.
The
tribunal confirmed that he had suffered direct
discrimination as he had been treated less
favourably on the grounds of age by virtue of the
transitional arrangements (which subjected him to
a 20% discount for early retirement). However, it
held that the treatment was justified and
therefore lawful. Interestingly, the Tribunal
noted that the justification test (i.e. that the
treatment was justified as a proportionate means
of achieving a legitimate aim) was not merely met
but 'comfortably passed' by Freshfields.
The
tribunal accepted Freshfields' arguments, which
included the following:
-
the
reform of the pension scheme was necessary for
the firm and finding a fair and acceptable
solution was a difficult
matter;
-
one
of the main drivers of the reform was the
unfairness of the existing arrangements to
younger partners;
-
the
solution was arrived at after many months of
work and analysis, including expert
assistance;
-
the
consultation process was extensive and adequate
and included the direct participation of Mr
Bloxham;
-
the
reforms themselves were subject to the consent
of a two-thirds majority of the partners;
and
-
no
alternative less discriminatory solution could
be conceived.
It
remains to be seen whether this decision will be
appealed. In the meantime, although it is a first
instance decision and therefore not binding on
future tribunals, the tribunal's consideration of
the above factors provides some guidance as to how
the concept of justification will be approached in
future cases.
ECJ decision in Spanish
age discrimination case
As
if one major decision on age discrimination
legislation isn't enough, along comes another! The
European Court of Justice (ECJ) has, this week,
confirmed that the Equal Treatment Framework
Directive (which prohibits discrimination on a
number of grounds, including age), does
not prohibit a law which provides
for compulsory retirement clauses in collective
agreements.
Although this case concerned
Spanish law, it has ramifications for all EU
member states. As noted in earlier
updates, Heyday is in the process of
challenging the UK's own retirement provisions.
Although this decision is unlikely to be welcomed
by Heyday, it does provide useful guidance for all
employers on whether retirement provisions are
discriminatory on the grounds of age.
In
this case, Palacios de la Villa v Cortefiel
Servicios SA, the ECJ examined a Spanish
legal provision which allows clauses in collective
agreements to provide for a contract of employment
to be terminated on the grounds that a worker has
reached the normal retirement age, providing that
he has completed the minimum pension contribution
period and satisfied the conditions laid down in
Spanish social security legislation for
entitlement to a pension.
Earlier
this year (as noted in our February
update), the Advocate General delivered an
opinion in this case, stating that the principle
of non-discrimination on the grounds of age under
the Equal Treatment Framework Directive did not
apply to national laws which set retirement ages.
The ECJ, however, did not agree with this
reasoning. It considered that the Spanish legal
provisions should be regarded as rules
relating to 'employment and working conditions,
including dismissals and pay', which
were within the scope of the
Directive. It did agree, however, with the
Advocate General that the Spanish law was
introduced in the interests of promoting
employment and takes account of the fact that the
workers are entitled to financial compensation by
way of a retirement pension. The law was therefore
objectively justified and not prohibited by the
Directive.
Step 1 letter need not
state employer is contemplating dismissal
The
Employment Appeal Tribunal (EAT) has confirmed
that it was 'implicit' in the wording of a Step 1
letter under the standard disciplinary and
dismissal procedure that the employer was
considering dismissal or some other disciplinary
action. The fact that the letter did not expressly
refer to dismissal therefore did not constitute a
breach of the statutory procedure. In
addition, the EAT confirmed that although the
statutory procedure refers to Step 1 and Step 2,
it is not a requirement that the Step 2 events
(i.e. providing information as to the basis of the
allegations before the disciplinary meeting)
should follow the Step 1 letter.
In
this case, Homeserve Emergency Services Ltd v
Dixon, the manager of two employees had
caught them red handed using a company vehicle for
private work. When confronted by the manager, both
employees admitted the offence. One of the
employees brought a claim of unfair dismissal. The
tribunal found the dismissal was automatically
fair as the company had failed to follow the
correct statutory procedure: at Step 1, the letter
did not state that dismissal was a possible
outcome of the meeting and at Step 2, the employee
was not given sufficient detail about the
allegations to enable him to put his side of the
story properly.
The
EAT disagreed with both findings, as outlined
above. It should be noted that this decision is
fact-specific and perhaps understandable, given
that the employee was caught in the act by his
manager and the Step 1 letter notified the
employee that his manager would present the facts
surrounding the allegations at the meeting.
However, employers should avoid relying on
'implicit' compliance with the statutory
procedures and ensure that the risk of dismissal
is explicit in all Step 1 letters.
Disability discrimination
- failure to discuss redeployment did not
constitute a failure to a make reasonable
adjustment
The
EAT has once again confirmed that a failure to
discuss options for alternative work with a
disabled employee on long-term sickness absence is
not itself a failure to make
reasonable adjustments under the Disability
Discrimination Act 1995.
In
Scottish and Southern Energy plc v
Mackay, the EAT followed the earlier
authority of Tarbuck v Sainsbury's
Supermarkets update, which noted that an
employer does not have a separate and distinct
duty to consult a disabled employee in relation to
its duty to make reasonable adjustments.
"Associative" disability
discrimination in the ECJ
As
previously
reported, a case has been referred to the ECJ
to ask whether the prohibition of disability
discrimination under the Equal Treatment Framework
Directive covers discrimination against a
non-disabled person on the grounds of their
association with a disabled person.
In
Attridge Law and anor v Coleman, Ms
Coleman, who is the primary carer for her disabled
son, claimed that she had suffered disability
discrimination at work due to her son's disability
(e.g. she claims that she was subject to unfair
treatment when she requested time off to care for
her son).
The
ECJ heard Coleman's claim for discrimination
'because of her association with disability' last
week. It has now been reported that a decision has
been delayed until January 2008.
Maternity/additional
paternity leave and pay - delay until April
2010
As
noted in earlier updates, the Government had
intended to extend Statutory Maternity Pay,
Maternity Allowance and Statutory Adoption Pay
from 39 weeks to 52 weeks and to introduce
Additional Paternity Leave and Pay by the end of
this Parliament.
These
plans have now been put back. HM Revenue &
Customs has stated that it has, up to now, been
planning on the basis of implementation for babies
due on or after April 2009 and that it "will now
start planning implementation for babies due on or
after April 2010" (although, once again, no firm
timing decisions have been taken).
Pensions and flexible
retirement
On
1 October 2007, the Department for Work and
Pensions (DWP) published a consultation document
on flexible retirement and pension provision,
seeking comments on a number of questions that
have come to light since the pensions provisions
of the anti-age discrimination regulations came
into force on 1 December 2006.
The
DWP acknowledges that employers and bodies from
the pensions industry have raised concerns over
two main areas:
-
The
relationship between the regulations and the
increasing wish among employers to allow
employees flexibility in their work as they near
retirement.
-
The
provision of death benefits under a pension
scheme beyond the scheme's normal retirement age
(NRA).
The
DWP is aware that, in the absence of further
guidance, there is uncertainty in the pensions
industry and amongst employers over what could
constitute age discrimination in relation to
flexible retirement and pension provision. It is
aiming to understand employers' practices in this
area, and is seeking clarification of employers'
views on the interaction of a scheme's NRA, the
state default retirement age and any earlier age,
before the scheme's NRA, at which pension scheme
members may begin to draw their pension.
In
relation to the issue of death benefits, the DWP
highlights its policy intention on insurance, i.e.
that such cover should be provided for pension
scheme members where they continue in employment
after NRA. However, it has requested
employers' comments on this and on objective
justification if employers cease to provide cover
in such circumstances. The consultation will close
on 7 December 2007.
Agency workers'
entitlement to SSP
According
to HM Revenue & Customs, the DWP will be
taking steps to amend the Fixed-term Employees
(Prevention of Less Favourable Treatment)
Regulations 2002, in order to restore the
Government's policy intention that agency workers
with contracts of less than 3 months should not be
excluded from entitlement to Statutory Sick Pay.
HM Revenue & Customs have stated that
preparatory work to amend the Regulations will
take place during the coming months.
Lower data protection
awareness amongst small businesses
Small
businesses have a much lower awareness of the
principles of the Data Protection Act than larger
organisations, according to new research
commissioned by the Information Commissioner's
Office (ICO).
To
help small businesses understand their obligations
under the Act the Information Commissioner has
launched additional guidance aimed
specifically at the sector. The guidance provides
a basic training framework to help staff
understand their data protection requirements,
such as keeping personal information secure,
disclosing customer information over the telephone
and handling requests from individuals for their
personal
information.