11 December 2006

NEWS

Trevor Phillips Calls For Positive Discrimination

In his last speech as chairman of the Commission for Racial Equality (CRE), Trevor Phillips has called for changes in equality laws to allow positive discrimination.  Read more

Report Calls for Employers to Pledge to Train More Staff

The eagerly awaited final report from Lord Leitch (Leitch Review of Skills) which addresses the UK's long-term skills needs has been published.  Read more

Over One Third of Small Businesses Are Failing To Invest In Staff Training

A survey of over 13,000 employers by Skills for Business has shown that thirty per cent of small businesses, rising to forty per cent among the smallest employers, are failing to invest in staff training.  Read more

Data Theft Flourishing in the British Workforce

Research from Prefix IT has suggested that, although many companies are investing time and money in the prevention of data theft from external sources, the relaxed attitude towards internal security has allowed a data theft culture to develop in their workforce.  Read more

"Gap Between Entitlement and Reality When it Comes to Lunch"

A YouGov survey conducted for private health insurer PruHealth has revealed that employees are taking shorter lunch breaks than their employers realise.  Read more

Changing Work Practices to Improve Work-Life Balance is Environmentally Friendly

Work Wise UK, the national campaign to promote smarter ways of working to improve people's work-life balance, has suggested that changing working practices will help answer environmental concerns.  Read more

Tougher Penalties for Breaching National Minimum Wage Laws

An increase by 50 per cent to £9 million in the funding available to monitor breaches of the national minimum wage rules and an increase in penalties for the worst offending employers have been announced by the Treasury.  Read more

Public Sector Employers at Risk as Decision on Retirement Ages Referred to ECJ

The decision by the High Court to refer the challenge to the Age Regulations to the ECJ has major implications for public sector organisations, according to the Employers Forum on Age.  Read more

DTI Confirms Review of Statutory Dispute Resolution Procedures

DTI Secretary of State Alistair Darling has launched a "root and branch" review of Government support for resolving disputes in the workplace.  Read more

LEGISLATION

CASES

Conduct of Employee Leading to Disclosure Not Protected by Whistleblowing Laws

The Court of Appeal has upheld the principle that the protection from detriment which employees enjoy under the whistleblowing legislation only covers the disclosure itself and not the conduct of the employee leading to that disclosure.  Read more

NEXT HR NETWORK EVENT

Our next HR Network Events taking place nationally throughout January and February 2007 will be training courses entitled "Discipline & Grievance: Putting theory into practice".  For further details and a full list of all our events taking place in 2007 please click here.

NEWS

Trevor Phillips Calls For Positive Discrimination

In his last speech as chairman of the Commission for Racial Equality (CRE), Trevor Phillips has called for changes in equality laws to allow positive discrimination. 

Mr Phillips stated these changes were essential to end under-representation in certain professions.  He said: "Frankly, some areas of employment will never stop being all-white without new kinds of positive action."  "We have to consider whether, when there is a clear public need, we must allow institutions - even if temporarily – to take special measures with the aim of integrating their workforces faster than would otherwise be the case."  

Mr Phillips will now take up his role as head of the new Commission for Equality and Human Rights.  His comments are seen as important as he is also chair of the Independent Equalities Review which will be recommending future policy to the Government in the New Year.

Mr Phillips' comments have received approval.  Gloria Hyatt, a director at recruitment firm Ebony Recruitment Solutions, commented: "It is necessary and timely that we should have a change…It should be legal to recruit specific people on the basis of race and ethnicity."  However, his comments have also provoked concern.  Sasha Scott, the managing director of the consultancy company Inclusive Diversity warned: "It could lead to polarisation and resentment as people think others have been promoted because of the colour of their skin".  (Personnel Today, 5 December 2006)  Back

Report Calls for Employers to Pledge to Train More Staff

The eagerly awaited final report from Lord Leitch (Leitch Review of Skills) which addresses the UK's long-term skills needs has been published. 

The report recommends that the Government encourages employers to sign a "pledge" to train more staff.  Lord Leitch said: "Without increased skills, we would condemn ourselves to a lingering decline in competitiveness, diminishing economic growth and a bleaker future for all.  The case for action is compelling and urgent."

The report calls for compulsory education or work-place instruction for everyone up to the age of 18.  With a recommendation that adult training is "demand-led" rather than "centrally planned", the report also calls for the money allocated to adult vocational training to be spent directly by employers rather than colleges.  An increase in the number of apprenticeships to 500,000 and an increase in spending on higher education are essential to achieving the report's recommendations.

With an overriding aim of commitment to a "compelling new vision", Lord Leitch wants the UK to become a world leader in skills by 2020.  In order to do this, the report emphasises that changes have to be made if the UK is to compete with the growing economies of China and India. 

By 2020 Lord Leitch wants 95 per cent of British adults to have basic numeracy and literacy skills.  Currently 5 million adults lack functional literacy, more than 17 million have difficulty with numbers and one in six young people leave school unable to read, write or add up properly.

Though the report acknowledges that the skills overhaul will be a costly project, the report estimates that the result will be a net financial benefit of £80 billion.

In response to the recommendations of the Leitch Report, Sir Digby Jones, the former director-general of the CBI, has been named as Britain's new "skills czar".  (The Independent, 7 December 2006; BBC News, 7 December 2006) Back

Over One Third of Small Businesses Are Failing To Invest In Staff Training

A survey of over 13,000 employers by Skills for Business has shown that thirty per cent of small businesses, rising to forty per cent among the smallest employers, are failing to invest in staff training. 

The reasons for this lack of investment are mainly the cost, potential demands for higher wages and disruption in the workplace. 

Though both China and India are currently generating lower levels of productivity than the UK, both countries are increasingly investing in skills and technology which will mean that the UK's lead is likely to be reduced or even eradicated. UK productivity levels are already nine percentage points lower than the EU average and it is predicted that a lack of investment in skills will cause this level to fall further still.

The report's findings have raised concern.  Mark Fisher, chief executive of the Sector Skills Development Agency said: "These are worrying findings for the UK economy.  SMEs have not got the resources of larger companies and feel they have less to gain from training staff.  Our research also finds that when further education colleges have experience of providing training for local employers, these partnerships tend to be almost exclusively with large companies, who can put forward enough trainees to justify the college's effort.  Most colleges are reluctant to invest time in developing relationships with SMEs who can only offer small numbers of trainees and who are seen as unlikely to be willing to pay the full cost of training in any event".  (The Independent, 5 December 2006)  Back

Data Theft Flourishing in the British Workforce

Research from Prefix IT has suggested that, although many companies are investing time and money in the prevention of data theft from external sources, the relaxed attitude towards internal security has allowed a data theft culture to develop in their workforce.

The figures produced by Prefix are worrying: 60 per cent of workers admitted to theft of confidential documents, customer databases, business contacts and sales leads whereas only 7 per cent of managers actually believe that data theft has affected their companies and 29 per cent (rising to 50 per cent in SMEs) say the issue is not recognised at board level.

The issue is further exacerbated by workers' apparent ignorance of any security measures that are in place.  73 per cent of workers are unaware of any special security measures to prevent workplace theft and 44 per cent have no knowledge of a policy explaining what can and cannot be removed from the office. 

Employers should have strict policies setting out what information belongs to the company, what can and cannot be taken home by staff and restrictions on the use of portable memory devices.

Employers should also include a confidentiality clauses in employment contracts, give periodic reminders to employees of their contractual obligations and make sure that employment contracts allow them to monitor employees' use of the company's IT facilities.  (Workplace Law, 4 December 2006)  Back

"Gap Between Entitlement and Reality When it Comes to Lunch"

A YouGov survey conducted for private health insurer PruHealth has revealed that employees are taking shorter lunch breaks than their employers realise.

PruHealth's sales director Dave Priestley commented: "There's a gap between entitlement and reality when it comes to lunch in the UK workplace."

The survey found that 62 per cent of employers believed that all their staff take a full lunch break at least three times a week, whereas in reality only a third of employees manage this feat.  Furthermore, one in five workers never take their full entitlement and 45 per cent of workers do not leave the office for their lunch break.

Though the need to meet deadlines is a pressing concern among many employees, Mr Priestley was keen to impress that a full lunch break benefits both the worker and the company by re-energising and refocusing the worker and promoting healthy eating.  (Personnel Today, 4 December 2006)  Read more

Changing Work Practices to Improve Work-Life Balance is Environmentally Friendly

Work Wise UK, the national campaign to promote smarter ways of working to improve people's work-life balance, has suggested that changing working practices will help answer environmental concerns.

Work Wise UK believes that encouraging flexible working, mobile working, remote working and home working will address environmental issues by reducing the need to travel.  The Chief Executive of Work Wise UK, Phil Flaxton, said: "Working nine to five, five days a week, at a central location, coupled with the desire to travel many many miles in order to attend meetings, are working practices which are largely unnecessary considering the technology available today.  This rigid work structure, which is largely dictated by culture and nothing else, is wasteful in terms of time and resources, damaging in terms of the environmental impact, harmful in that it impacts upon stress levels and health."

Employers should also adopt travel plans which encourage employees to use alternatives to individual car travel, such as a car-sharing scheme, public transport, walking or cycling to work.  Travel plans can benefit the employer, the employee and the environment by reducing parking, congestion problems and the cost of travel.  (Workplace Law, 5 December 2006)  Back

Tougher Penalties for Breaching National Minimum Wage Laws

An increase by 50 per cent to £9 million in the funding available to monitor breaches of the national minimum wage rules and an increase in penalties for the worst offending employers have been announced by the Treasury.

The move has been welcomed by unions and small businesses which face unfair competition from rivals who gain from paying low wages.  The Federation of Small Businesses said: "The monitoring of the minimum wage need not be heavy-handed or time-consuming for small businesses but it should hit law-breaking employers hard."

Brendan Barber, general secretary of the TUC also approved the plans.  He said: "Raised penalties for persistent offenders, and criminal prosecutions in extreme cases, will send a powerful message that non-compliance will not be tolerated.  Rogue companies who pay below the legal minimum both undercut decent employers and give poverty pay to their workforces".  (Financial Times, 7 December 2006)  Back

Public Sector Employers at Risk as Decision on Retirement Ages Referred to ECJ

The decision by the High Court to refer the challenge to the Age Regulations to the ECJ has major implications for public sector organisations, according to the Employers Forum on Age. 

Whilst the decision to refer the legality of the default retirement age discrimination to the ECJ has no immediate impact on private employers, if the ECJ were to find the Regulations unlawful this could mean that private sector employers would have to manage without a retirement age within 2 years.

However, employees working for public sector employers are able to rely on the EC Directive and could therefore bring claims now arguing that a tribunal must disapply any provisions of the Regulations which are inconsistent with community law.  Whilst it is likely that any such claims would be stayed pending the ECJ decision, if the ECJ decides that the Regulations are incompatible with community law, public sector employers may face a deluge of backdated claims for age discrimination. 

Consequently, a public sector organisation needs to adopt caution when seeking to retire an employee at 65 against their will.   The EFA recommends that public sector employers consider operating without a retirement age or have a clear reason, other than age, if they wish to "retire" an employee against their will.

Employers could be waiting up to 18 months for a decision from the ECJ.

The challenge to the lawfulness of the age discrimination regulations has significant implications for employers who are "emanations of the State" (which includes employers in the public sector, nationalised industries and privatised utilities.)  This is because employees of such employers are likely to be able to rely on the EC Directive to bring claims of age discrimination.  There is a real risk that if such employers retire employees at the default retirement age they will face age discrimination claims.  Whilst these claims are likely to be stayed pending the ECJ decision,, if the challenge is ultimately successful, such claims will succeed (subject to any justification arguments).  Employers who are emanations of the State should therefore be considering whether they can separately and objectively justify any decision to "retire" an employee at the default retirement age.

For further information on the High Court's referral to the ECJ see our Update circulated last week.  (Employers Forum on Age Press Release, 6 December 2006)  Back

DTI Confirms Review of Statutory Dispute Resolution Procedures

DTI Secretary of State Alistair Darling has launched a "root and branch" review of Government support for resolving disputes in the workplace. 

Acknowledging the deficiencies in the present system, Mr Darling said: "We must make the employment disputes system work better, both for business and employees."

On the aims of the review Mr Darling said: "By reducing the number of disputes, and resolving those that do happen more quickly, we can raise the UK's productivity and ensure better employer relations.  We can also cut the cost of dealing with disputes, which can be substantial.  At the same time, we are determined to protect the rights of employees and ensure that they have access to justice."

Michael Gibbons has been asked by Mr Darling to review the options for change.  The review will involve business representatives, unions and other interested parties and will build on the evidence collated by the DTI about the effect of the previous changes to the dispute resolution system.  Mr Gibbons has agreed to make recommendations for change to the Secretary of State in Spring 2007.   (DTI Press Release, 7 December 2006)  Back

LEGISLATION

CASES

Conduct of Employee Leading to Disclosure Not Protected by Whistleblowing Laws

The Court of Appeal has upheld the principle that the protection from detriment which employees enjoy under the whistleblowing legislation only covers the disclosure itself and not the conduct of the employee leading to that disclosure.

Back in March this year, we reported the EAT decision of Bolton School v Evans. Mr Evans, a teacher, had hacked in to the school's computer system in order to demonstrate deficiencies in the security of the school's IT system.  Mr Evans subsequently informed the Headmaster at the school of his actions in order that the Headmaster may initiate a change to the school's IT security.  Following this, Mr Evans was asked to attend a disciplinary hearing and received a written warning.  Mr Evans then resigned and claimed constructive unfair dismissal on the basis that he had suffered a detriment as a result of making a protected disclosure.

The EAT (overturning the Tribunal's finding) held that the whistleblowing legislation only protects the disclosure itself but not other conduct of the employee, even if in some way connected with the disclosure. The Court of Appeal has upheld the decision of the EAT.

On behalf of Mr Evans, it was argued that that the whole course of conduct should be regarded as a disclosure, so the hacking was part of the disclosure.  As Mr Evans was given a disciplinary warning because of the hacking, this automatically meant that he had been dismissed for making a protected disclosure.

The Court of Appeal rejected this argument.  An act of disclosure does not include the whole course of conduct of the employee leading up to that disclosure. The meaning of "disclosure" should not be given any special meaning – disclosure consists purely of the act of communicating information.  It is only if the employee is treated less favourably for making the disclosure that he is protected.

Here Mr Evans was disciplined for hacking into the computer and not for informing the headmaster that he had done so.  That was the reason or principal reason for dismissal and not the fact that he had made a protected disclosure.  Indeed, no disciplinary action was taken when he first raised his concerns with his employer.  Disciplinary action was only taken when he hacked into the computer.

The Court of Appeal agreed with the EAT's findings that the school did not discipline Mr Evans for expressing his views about the failings of the school's IT security system. Mr Evans had been given a warning as a result of his misconduct in hacking into the school's IT system. The two actions were mutually exclusive. An employee's whole course of conduct should not be regarded as a continuing act of disclosure. Therefore, Mr Evans' conduct of hacking into the school's IT system did not amount to a protected disclosure.  The Court of Appeal said that whilst tribunals should look with care at arguments that a dismissal was because of acts related to the disclosure rather than because of the disclosure itself, in this case there was no reason to attribute ulterior motives to the employer.

Bolton School v Evans  Back

© Pinsent Masons 2006

This bulletin is not intended to be a definitive analysis of legislative or other changes and professional advice should be taken before any course of action is pursued.

Should you have any questions please contact your usual Pinsent Masons advisor, your local office (see below) or hrnetwork@pinsentmasons.com

National Head of Employment

Chris Booth