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National Minimum Wage rise announced

The DTI has announced that the National Minimum Wage rates are due to rise from 1 October 2007.

For workers aged 22 and over, the rate will increase from £5.35 per hour to £5.52. For workers aged 18-21, the rate will rise from £4.45 to £4.60 and for workers aged 16-17, the rate will rise from £3.30 to £3.40.

The new rates are in line with the recommendations made by the Low Pay Commission in its 2007 report and more than a million workers are due to benefit from the rise.

Definition of worker - EAT guidance

The Employment Appeal Tribunal (EAT) has provided some useful guidance on the correct approach to be taken when considering whether someone is a worker for the purposes of the National Minimum Wage Act 1998 (the Act).

The statutory definition of a worker under the Act includes those employed under a contract of employment but also extends to a wider group of individuals. There are three elements to the wider definition. First, there must be a contract to perform work or services. Second, there must be an obligation to perform the work or services personally. Third, the individual will not be a worker if he performs the work or services in the course of running a profession or business and the other party is a client or customer.

In James v Redcats (Brands) Ltd, Mrs James worked as a courier for Redcats and was sent parcels in order to deliver them to private addresses, using her own vehicle. Her pay was determined by the number of parcels she was sent for delivery and she was entitled to find someone else to deliver the parcels if she was unable to do it herself due to holiday or sickness. Mrs James claimed that she was a worker for the purposes of the Act, and therefore was entitled to the national minimum wage.

The EAT provided the following guidance to tribunals considering the definition of a worker:

• The key question is whether an individual is contractually obliged to perform the work personally (as opposed to just choosing to do so). The EAT held that Mrs James was obliged to perform the work personally. The fact that she could send a substitute if she was unable to perform the work due to holiday or sickness did not affect this. It is only if a worker can decide not to work and send a substitute when they are unwilling to work that there will be no obligation to perform the work personally.
• Tribunals considering whether an individual is contracting with the other party as a customer of a business must seek to determine whether the essence of the relationship is that of a worker or of somebody who is employed, albeit in a small way, in a business undertaking. It drew on cases which have analysed the definition of "employment" in discrimination legislation and looked to the "dominant purpose" of the contract. The EAT thought it may be appropriate to consider whether the obligation for personal service is the dominant feature of the contractual arrangements or not. If it is, then the contract will lie in the employment field (and the individual will be an employee or worker). If it is not - if, for example, the dominant feature of the contract is a particular outcome or objective and the obligation to provide personal service is an incidental or secondary consideration - the contract will lie in the business field.

The same definition of worker applies under the Working Time Regulations 1998 and the Employment Rights Act 1996 and therefore the guidance in this case will apply equally to that legislation.

Agency workers and implied contracts

In Craigie v London Borough of Haringey, the EAT examined a topic that has arisen frequently in recent months; the status of agency workers.

Mr Craigie, an agency worker, brought a claim for unfair dismissal and breach of contract against the "end-user", the council. The EAT upheld the tribunal's decision that there was no implied contract of employment between him and the end user, finding that there was no need to imply such a contract.

This case is a further example of the law on agency workers returning to normal following the decisions of the Court of Appeal in Dacas v Brook Street and Cable & Wireless v Muscat. By way of a quick recap: the issues at stake are the rights of an agency worker and the obligations of an "end user" in a tripartite arrangement where the end user contracts with an agency for the supply of the worker. The paper relationship in such situations typically provides only two sides to the triangle. There is a contract between the end user and the agency, a separate contract between the agency and the worker (which usually states that the contract is not an employment contract) but no written contract between the worker and the end user.

Problems arise for worker and end user when the relationship comes to an end: if the worker can establish an implied contract of employment with the end user, the end user could be liable for employment claims such as unfair dismissal. The problem is even more acute following the introduction of the statutory dismissal procedures, as the end user is unlikely to have followed a statutory procedure applying only to employees when terminating a contract with an agency for the supply of a worker: so if the worker can establish an implied employment contract s/he is likely to be able to claim that the dismissal is automatically unfair with any compensation subject to an uplift of between 10% and 50%.

Dacas and Muscat were basically cases in favour of implying a contract with the end user. James v Greenwich Council and now Craigie are cases which see the pendulum swing back in favour of only implying such a contract in extreme cases. Both James and Craigie make the point that not all agency relationships have as their objective the defeat of the rights of workers and that agencies provide benefits such as flexibility and tax advantages. They also point out the end users are paying for a service and wrapped up in the fee they pay is not only the remuneration of the worker but also the profit of the agency. Where the agency arrangements are genuine and the actual relationship is consistent with them, James and Craigie found that it was not necessary to imply any other contract and that the length of time that the relationship had been ongoing did not in itself justify such implication.

For end users, this shift in the case law is welcome, not least because it provides more certainty over the status of temporary workers taken on through agencies and less risk where such arrangements are terminated. For the workers themselves, however, there is now less prospect of success in trying to claim employment rights against an end user, potentially leaving agency workers with no legal protection against arbitrary termination. Both James and Craigie call for a review of the situation with the possible introduction of new legislation - so watch this space!

Laughter in chambers

The EAT has recently addressed the issue of bias in the tribunal.

In Forbes Robertson v Hendrie, a tribunal chairman sat alone to hear an employer's application for review of a default judgment. The chairman was accompanied by Mr Hearn, who was training to be a lay tribunal member and had attended to observe the proceedings. When the chairman retired to his chambers to consider his decision, Mr Hearn went with him.

During the deliberations, the employer and his witnesses heard laughter coming from the chambers. The employer alleged that his case was not taken seriously and that the presence of Mr Hearn influenced the chairman against him. The EAT, however, held that a fair minded and informed observer, having considered the facts, would not conclude that there was a real possibility of bias or other impropriety, and it upheld the chairman's decision to refuse the employer's application for review.

Equalities Review's Final Report - warnings for the future

The Equalities Review has published its final report warning that despite the significant progress achieved over the past 60 years, certain kinds of inequality and discrimination are set to remain at intolerable levels.

The report states that unless efforts are drastically stepped up, at the current rate of change, the gender pay gap will not be closed until 2085, the ethnic employment gap will not be closed until 2105 and the employment penalties facing disabled people may never be eliminated.

The Chair of the Equalities Review Panel, Trevor Phillips, said "This report is entirely about one of the - if not the - most cherished aspirations of the British people: to live in a society that is fair and free, and which provides for each individual to realise his or her potential to the fullest. At root, this is what we should mean by an equal society...If we do not create a new framework to tackle existing, entrenched and emerging inequalities we risk losing the momentum built up by three generations."

The report proposes ten steps to greater equality, including:

Guidance on gender equality duty for public authorities

The Equal Opportunities Commission (EOC) has published guidance to enable public authorities to implement the forthcoming gender equality duty.

The duty comes into force in April this year and requires public authorities to promote gender equality and eliminate sex discrimination. The guidance published by the EOC is non-statutory and offers practical advice to public authorities on meeting the duty. The guidance supplements the Code of Practice, which was launched by the EOC earlier this year.

EOC launches judicial review proceedings

The EOC has lodged judicial review proceedings against the Government in relation to the way the Government implemented the 2002 European Equal Treatment Amendment Directive in the form of the Employment Equality (Sex Discrimination) Regulations 2005.

The EOC believes that under these regulations, women may not enjoy the full protection against sexual harassment and pregnancy discrimination as is required by the Directive, and that they could lose aspects of existing maternity rights already established by UK case law. The EOC also believes that the lack of clarity in relation to the scope of the regulations may lead to confusion for both employers and employees about their respective legal rights and obligations, leading to costly litigation.

Guidance on age discrimination for employers

The Chartered Institute of Personnel and Development (CIPD) and the TUC have produced a guide aimed at helping employers to understand the new age equality legislation.

The guide, entitled "Developing a new mindset on age and retirement", is for both employers and trade union representatives and is intended to provide guidance on key concerns, including the confusion surrounding the sending of age-related birthday cards in the workplace and running graduate recruitment schemes.

Joint DRC/HSC statement on health and safety management and disability

The Disability Rights Commission (DRC) and the Health and Safety Commission (HSC) have issued a joint statement on the overarching principles of health and safety and disability.

The statement emphasises that health and safety law and its implementation is in the interests of all employees, whether disabled or non-disabled, and of the employer. Legislation applicable to each area should work together to increase the employability and retention of disabled people, with a positive and sensible approach to risk management, encouraging the inclusion of disabled people in the workplace.

UK workplaces need to be safer

The main problem facing union safety representatives is the difficulty of getting employers to act on safety concerns, according to a recent survey published by the TUC.

Over one third (35%) of representatives questioned said this was their top concern and 90% rated it as a top three concern. The same proportion said they also had difficulty getting time off for training and to undertake crucial workplace safety functions. The TUC comments that union safety representatives are able to spot dangerous areas of the workplace and identify ways of working which can make staff ill, and are therefore able to reduce the numbers of days lost to UK businesses. They should therefore receive adequate support from employers to address all safety concerns.

UK workers least likely in Europe to take health-related leave

UK workers are the least likely in Europe to complain about the effect of their work on the health, according to the recently published Fourth European Working Conditions Survey.

The survey examined working conditions in over 30 countries across Europe and shows that British workers are less likely to take leave as a result of a work-related illness and are well below the EU average. Interestingly, the survey also demonstrates that British workers are more likely to be subjected to threats and violence at work than any other country, apart from the Netherlands.

Seven-month itch for new recruits

78% of employees regard the seventh month after starting a new job as a crucial milestone, according to research carried out by Office Angels recruitment consultancy.

Of the 1,400 employees surveyed, more than three-quarters (77%) claimed that they look towards their manager for inspiration in the early days of a working relationship, and 66% want to be mentored in the first year of their career. More than half (54%) also believed their employer had "oversold" their job to encourage them to take it, and an optimistic 22% said if a pay rise has not been mentioned in their first seven working months it may prompt itchy feet.

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