Short summaries of each article are shown below. If you would like to view the full article, click on the underlined links. To return to the start, click on the "Go back" link.
STRATEGY, STUDENTS AND GOVERNANCE
De-regulation of governance – up to a point
The government has this month issued a Ministerial Statement and letter to all English HEI's setting out "how our proposals for deregulation of governance arrangements will mean that in future only core issues of public interest will be monitored by the Privy Council". What will this mean in practice? Our article explains. Read more.
The Race Equality Duty – a timely reminder
Since 2000, universities have been subject to a general duty to promote race equality and good race relations, and to eliminate discrimination. There are specific duties concerned with policies, impact assessments, monitoring and publication, but it is important not to forget the reason for these: which is to act on any inequalities uncovered as a result – and it is an ongoing task. Recent criticisms by the CRE have brought the issue into sharp focus again and our article offers some guidance on key areas for universities. Read more.
ESTATE Changes to the listed buildings regime – Part II Our article summarises further developments in the reform of the listed buildings regime in England, which will be to the advantage of universities owning listed buildings. Read more. FINANCE, TECHNOLOGY AND INTELLECTUAL PROPERTY Our article reports on the results of the recent survey by AURIL on use of the Lambert Model Agreements; and comments on trends for the future. Read more. HUMAN RESOURCES
Industrial Action - identifying those taking part and deducting pay
Once again academic staff unions are bringing industrial action including action short of a strike. Our article, updated from our comprehensive review of the legal issues published in 2004, reviews the legal position in this complex area and offers some guidance and practical steps. Read more. New TUPE regulations create more headaches
The government has spent five years consulting over changes to the complex law surrounding the transfer of undertakings, during which time of course the case law on the existing regulations has evolved further. The new changes are important but not good news for employers: it will be even more difficult to change or harmonise terms and conditions by agreement following a transfer, and the rights of employees to object to the transfer and bring constructive dismissal claims are also extended. Read more.
FULL ARTICLE STRATEGY, STUDENTS AND GOVERNANCE De-regulation of governance – up to a point The White Paper "The Future of Higher Education" was published in January 2003. The Higher Education Minister, Bill Rammell, has now followed up on the commitment given there to reduce unnecessary bureaucracy. Earlier this month he published a Ministerial Statement on Deregulation of Governance and an accompanying letter to heads of all English HEIs. The White Paper focussed on the role of the Privy Council in approving all changes to university statutes (and by implication, instruments and articles of government). It questioned whether the Privy Council needed to continue to approve "minor changes in the way universities go about their business" or whether this was an unnecessary burden. The specific issues discussed here concern English institutions, but those in the other administrations may find this of interest as indicative of the general direction of governance change and deregulation, and the approach of the Privy Council. Ministerial statement and letter In the three years since the White Paper, the Department for Education and Skills has been working to develop a framework to establish what might fall into the category of "minor changes" and on the other hand what "core issues of public interest" still need the protection of Privy Council approval. The Ministerial Statement picks out as key areas: "degree awarding powers and university title, powers and objects, academic freedom and governance structures, particularly the functions and constitutions of the governing body"; contrasting those with non-key areas: "provisions on membership, internal structures and detailed roles and constitution of bodies such as the Senate and Court." The statement and letter use examples from typical university charter and statutes, but the principles in broad terms will also apply to non-chartered institutions in relation to the instrument and articles of government. Model Statute on academic staff The letter to heads of HEIs gives a more detailed list of the key principles of public interest over which Privy Council control should be retained. This list includes the Model Statute, which is a surprising development, given the government's expressed commitments to move away from micro-management of the sector. The provisions of the Model Statute are not "minor" in that they tend to be of great interest to institutions concerned with managing their academic staff and issues of performance, redundancies and grievances. Nevertheless, the question could be asked why these matters are "core issues of public interest" or a concern of government's at all ; and further, why should academic staff in the chartered institutions continue to be differentiated from those in the rest of the sector by the protection of these elaborate provisions. Retaining governmental control over this crucial management provision seems to indicate a lack of trust in institutions to run themselves effectively and efficiently and in accordance with modern employment law. We expect that the Model Statute will in fact have a fairly limited shelf life. The general direction of travel seems to indicate that gradually government will detach itself from the governance of universities, eventually reducing the core areas requiring protection right back to the fundamentals of degree-awarding powers, university title, and other provisions which have an impact at national level on quality assurance and regulation. How to make changes – chartered institutions It is entirely optional, but chartered universities interested in deregulating their governance arrangements may now do so by moving "non-key areas" out of charter and statutes and into ordinances or regulations, with Privy Council approval for these initial changes. They will then be free to amend these provisions in future without Privy Council approval. Those interested in more fundamental changes to modernise charter and statutes should not be discouraged: the approach taken by government advisers and the Privy Council Office so far (since the white paper) has been to examine applications carefully on a case by case basis, and not to dismiss out of hand proposals for radical change. Non-chartered institutions HECs and other institutions whose constitutions include the model instrument and articles of government can follow the same approach, requesting approval to move "non-key areas" into subordinate regulations. A governance sub-group of AHUA is exploring the scope for deregulating and simplifying the instrument and articles of government of the statutory higher education corporations. Some of the provisions from the instrument and articles are considered to be outdated and unnecessarily detailed. The group is also reviewing the limitations of the powers bestowed on HECs by the Education Reform Act 1988 and considering whether reform is needed to reduce this burden and put them on a more equal footing with other HEIs. The group has consulted with DfES and a preliminary paper has been circulated to CMU, SCOP and UUK. Instrument and articles of government The articles of government of the HECs are controlled by the Privy Council and it is accepted that their scrutiny should be retained over the key principles of public interest, along the same lines as the chartered institutions; on the other hand, provisions concerning the suspension and dismissal of staff are over-detailed and in some respects incompatible with current standards of fair employment and employment law. The same approach could be taken as with the chartered institutions, with government indicating which provisions it remained interested in and which ones institutions could apply to remove from the articles. Again it would be an optional process. The Privy Council may approve changes to the instrument of government of individual institutions, subject to complying with the membership provisions. These are prescribed by statute but may be amended by order of the Secretary of State. It is argued by the group that the membership provisions, dating from the era of local authority control, are anachronistic and should be changed to reflect modern priorities. The definition of "independent" should be broadened to reflect the accepted test of the majority of Board members being external to the institution, independent in character and judgement, and having no relationships that could affect their judgement; the cap on the number of independent members should be removed; and the unnecessary and complicating distinction between independent and "lay" members should also be removed. These changes would require an order of the Secretary of State as noted above and if this was done it would come into effect for all the HECs. Powers of HECs The powers of HECs are limited to those laid down in the statutory provisions of ERA setting them up. They are obscurely drafted and often difficult to interpret. The rules of statutory interpretation are strict, and acts beyond an HEC's powers are ultra vires and risk being found void. This does cause problems in practice, and is most likely to arise in relation to major schemes and projects where a lender or other partner may question the HEC's power to enter into a particular structure. This can delay projects at a critical stage or even derail them. One possible answer would be to apply for a Regulatory Reform Order to provide HECs with a broader power to improve their flexibility. An RRO can amend primary legislation without the need for a Bill, where it is used to remove or reduce some burden – including any limit on the statutory powers of a body. Go back. nicola.hart@pinsentmasons.com The Race Equality Duty – a timely reminder Since the Race Relations Act 1976 was amended in 2000, universities have been subject to a general duty to promote race equality and good race relations, and to eliminate discrimination. The race equality duty is far-reaching and the CRE has recently criticised a university and a number of Whitehall departments for failing to meet their race equality obligations. This article therefore aims to serve as a timely reminder of the key components of the race equality duty and its impact on higher education. The law stated is applicable to universities within England and Wales. Within Scotland, the race equality duty is subject to devolved legislation, although the specific race equality duties that have been imposed by Scottish ministers are substantially the same as those in England and Wales, and as outlined below. The general duty The Race Relations Amendment Act 2000 introduced into the Race Relations Act 1976 a new positive duty to promote race equality. Public authorities are required to have regard to the general race equality duty in relation to all their functions to which race equality may be relevant. The government's stated aim was to make race equality a mainstream part of policy and decision-making within public authorities. Universities are public authorities for the purposes of the race equality legislation. The general race equality duty requires public authorities to have regard to the need to: eliminate unlawful discrimination; promote equality of opportunity; and promote good relations between persons of different racial groups. The general duty applies to all functions undertaken by a university which have implications for race equality. Arguably this should be taken to mean all services delivered by the university - at the very least the duty would apply to all dealings that the university has with its students and staff. A statutory code of practice, enforced by the CRE, sets down the practices that public authorities are expected to adopt, as a minimum, in order to comply with the general duty. In addition the CRE has produced specific guidance for further and higher education institutions which is available on the CRE website. The specific duties To assist public authorities in implementing the general duty, a number of specified duties were established under the Race Relations Act 1976 (Statutory Duties) Order 2001, coming into effect on 31 May 2002 (or in the case of Scotland, 30 November 2002). For universities, these specific duties could be summarised as being to:
We expect by now every university will have published its race equality policy and will be keeping it under active review. The race equality policy must make it clear what arrangements the university has in place for undertaking race equality impact assessments and monitoring, and how the results of these assessments will be published. The monitoring and assessment duties must not be overlooked: earlier this month the CRE found that a London university had failed to meet its statutory race equality duties for this reason. Investigating a complaint against the university brought by Natfhe in respect of a staff performance-related pay scheme, the CRE criticised the university's failure to keep records to evidence whether or not any assessment had ever been done on the impact of its policy on staff from different racial groups. In addition, the CRE has this week criticised central government for failing to take the race equality duty seriously. A number of Whitehall departments have failed to undertake even one race equality impact assessment over a twelve-month period; the CRE has stated that it is "perilously close" to commencing enforcement action for these failings. Assess, monitor, publish - and act In respect of students, the Code requires that within universities, impact assessments of university policies are directed towards identifying differential impact between groups of students in terms of student recruitment and achievement, teaching and assessment, drop-out rates, access to careers and other opportunities. Specific policies that should be subject to a periodic impact assessment would include student recruitment processes and the university's marking criteria. In respect of staff, impact assessments should focus on differences between groups of staff in terms of grade and position, job security, career development and other opportunities. Universities' obligations to monitor the recruitment and attainment of staff and students by racial group are also expanded upon within the Code. All stages of the student admissions process should be monitored and student achievement should be monitored both within the university and in respect of work placements. In respect of staff, monitoring should be undertaken in relation to all aspects of staff recruitment and selection and in respect of career progress, training and development. Data on claims of bullying and harassment made by both staff and student should also be collected. If differences between racial groups are discovered as part of this exercise, the university should consider whether or not these can be justified on non-racial grounds, and should consider whether any changes to university policy are needed to redress inequalities. Where contractors will be performing a core service for the university, steps should be taken to ensure that contractors will uphold the race equality duty on behalf of the university. This will usually entail requiring contractors to complete a questionnaire on their race relations credentials as part of the selection process, and making compliance with race relations legislation a specific condition of contracts that are awarded. Universities should be particularly careful where they are effectively contracting part of the students' education to a third party, such as a work placement provider. There have been instances of students claiming that they have been subject to race discrimination while undertaking a work placement, and in such scenarios a university may find itself in difficulties if it cannot demonstrate that it has taken active steps to assess and monitor a placement provider's commitment to race equality. Race equality: an ongoing obligation It is important to remember that the reason for undertaking race equality impact assessments and monitoring is to act upon any inequalities that are uncovered; promoting race equality is intended within the legislation to be an ongoing task. With the recent CRE interventions and the establishment of a new Commission for Equality and Human Rights in 2007, the spotlight on race equality shines brighter than ever; universities must assume that their commitment to race equality will be subject to an increasing level of public scrutiny. Go back. sian.stroud@pinsentmasons.com ESTATES
The availability of consultation with local planning authorities on listing applications can only improve the current application process, which is often surrounded by uncertainty and delay. In the past, listed buildings consent applications have been based on insufficient understanding of the special interest of the building. In addition, local authorities have been unable to determine in advance whether work will need consent, which has led to unnecessary applications. The introduction of optional partnerships between owners, local authorities, English Heritage and other interested parties will help applications to run more smoothly and efficiently.
Conclusion There is little doubt that this much needed overhaul of the Listed Buildings Regime will be a huge advantage to universities. Whilst the Principles of Selection are less than bold, the new decision-making process with its emphasis on openness and clarity will greatly assist the efficiency and fairness of the listing process. Go back. katherine.moule@pinsentmasons.com FINANCE, TECHNOLOGY AND INTELLECTUAL PROPERTY AURIL (the Association for University Research and Industry Links) recently issued a press release in respect of its survey regarding the Lambert Model Agreements (the "Agreements"). Regular readers will recall that we previously discussed the Lambert Review and these Agreements early last year. However, by way of reminder, the Lambert Review reported in December 2003 on UK business and university interactions and considered how such relationships could be expanded upon and improved. The Review recognised that universities and businesses were spending a great deal of time and effort in seeking to reach agreement on contractual terms and in particular those relating to intellectual property (“IP”) ownership/exploitation. With a view to reducing the length of time spent in such negotiations, one outcome of the Review was the creation of five "model agreements" to act as a starting point for negotiations. Details, and copies, of the Agreements and guidance notes may be found at www.dti.gov.uk/lambertagreements. In summary, however, the model contracts range from, at one extreme, an agreement under which the University owns the arising IP and the Sponsor receives only a limited non-exclusive licence (version 1), through to an agreement whereby the Sponsor owns the arising IP and the University does not have even the right to publish the project results (version 5). The AURIL survey, which coincides with the first anniversary of the Agreements, has sought feedback from a wide range of educational establishments on their experiences of the Agreements to date and found that the majority of respondents felt that the Agreements had proven to be both informative and useful. Key findings from the survey included that:
It would appear from the survey's findings that the experience of using the Agreements has, broadly speaking, been a positive one. Going forward it is expected that use of the Agreements, at least as a starting point for negotiations, is likely to increase and it is therefore important that those involved in technology transfer and commercialisation offices within Universities familiarise themselves with both the Agreements and the accompanying guidance notes. We have considerable experience of working with the Agreements and if you should have any comments or queries relating to the Agreements, or would like to use elements of the Agreements in your own standard form contracts, then we would be happy to hear from you. Go back. ian.mckie@pinsentmasons.com HUMAN RESOURCES
The AUT and NATFHE have announced strike action and action short of a strike following their recent industrial action ballot. The action proposed is a one day strike on 7 March 2006 followed by continuous action short of a strike commencing from 8 March. The latter is expected to take the form of a boycott of assessment activity, staff appraisals, and a refusal to provide cover for absent staff or to honour established call-out arrangements.
strike) and the related problem of identifying who is taking industrial action. This is a summary of a more detailed advice note which is available on request. Identifying those participation in industrial action
Deductions of pay
The quantum merit approach does raise the difficult question of how much can be legitimately withheld (although the courts have adopted something of a rough and ready approach in the employer's favour). The aim would be to deduct a sum which is fair. This may be dependent on establishing the precise extent of the non performance of duties and trying to reflect this as a proportion of the working day or working week. In the HE context, this is unlikely to be a straightforward process. The position of each member of staff would also have to be considered separately, adding to the administrative burden of this approach.
What action can the individual employee take in response to deductions from wages?
If an individual wishes to dispute the right of the university to deduct wages or to challenge any part of the payment made by the employer, his/her only remedy is by means of an action for breach of contract in the county court or High Court. As discussed above, the issues in any such claims would be whether the employer had clearly refused to accept the partial performance of work by employees participating in the industrial action, whether the employee was in fact participating in that action, and whether the amount deducted from wages was correct. Summary In summary, it is recommended that universities facing industrial action take the following steps:
Any university wishing to make a partial deduction should seek specific legal advice on the steps necessary to notify staff of this proposal, how to approach quantification of the deductions and how to identify those taking part in action short of a strike. Go back. chris.mordue@pinsentmasons.com New TUPE regulations create more headaches
The law governing employment rights on transfers of undertakings receives a major shake-up on 6 April 2006, when the new TUPE Regulations come into force throughout the UK. The final draft of the Regulations was officially published on 15 February, a mere five years since the government first began consultation over changes to the existing law. There are a number of important changes, most significantly that employers will find it even more difficult to change or harmonise terms and conditions by agreement following a transfer than under the current law. The rights of employees to object to the transfer and bring constructive dismissal claims against transferor institutions are also dramatically extended. The basics The purpose of TUPE is to protect the rights of employees when the business in which they work (or a part of that business) transfers from their employer to another legal entity. While the TUPE regulations are notoriously complex, their effect is relatively straightforward. Essentially, staff in the transferring undertaking are entitled to become employees of the transferee organisation and to transfer on their existing employment contracts (save for terms relating to occupational pension schemes). All employment related liabilities also transfer to the transferee, for example liability for harassment or discrimination during employment with the transferor. The receiving institution therefore inherits a workforce, the costs of employing those staff going forward or the costs and risks of redundancy and restructuring going forward and liability for any breaches of employment obligations by the transferor. Both transferor and transferee have obligations to inform and consult staff affected by the transfer via their representatives. Mergers and transfers of departments Universities encounter TUPE in a number of contexts. The most obvious is on the merger of academic institutions, where one institution is absorbed into another or both institutions are disestablished and transfer to a newly created institution. TUPE can also apply to the transfer of departments or academic provision between institutions, a point confirmed recently by the EAT in Skittrall v UCL and other (2005). That case concerned the transfer of podiatric education and training, and the associated funding from the Department of Health, from UCL to University of East London. Even the transfer of research funding and teams can count as the transfer of an undertaking, depending on the facts of the case. Finally, TUPE applies in outsourcing situations where universities contract out services to external providers or where one contractor replaces another when the service is retendered (with the transfer occurring directly between the contractors). Contracting out – new test introduced One dominant issue in case law under TUPE in recent years has been the lack of certainty over the application of TUPE to contracting out or contractor change-over situations. The prevailing trend is for tribunals to find that TUPE applies, even where there is no transfer of assets and even if the new service provider fails to take on the employees of the outgoing contractor. That position is reinforced under the new Regulations by rules which create a new and additional test for the application of TUPE to service provision changes. The existing test – whether there is an undertaking to start with and whether it has been transferred – continues to apply but even if that test is not satisfied, TUPE will apply if the outgoing service provider had an organised grouping of employees whose principal purpose was to provide the service. The effect is to make certain that TUPE will apply on an initial contracting out, on a change of contractor or when a service is brought in-house. This new test may have implications for universities beyond the outsourcing context. It may for example make it more likely that TUPE will apply when research teams transfer between institutions taking funded projects with them, at least where there is a dedicated research team that works more or less exclusively on the project or group of projects in question. Changes to terms and conditions – uncertainty increases Another issue of immense practical importance is when transferees can lawfully agree new terms and conditions with transferring employees. Most transferees will wish to make some changes to the contracts of transferring staff, typically to bring these in line with those of the existing workforce. Normally employers would seek to agree these changes with the staff concerned. Case law has made this more difficult in the TUPE context, since ECJ decisions establish that the right to transfer on existing terms and conditions means that employees cannot agree any detrimental change to their contracts if the transfer is the reason for the change. The effect is that the employee's agreement is worthless and at any stage in the future the employee can resurrect any more favourable term of the old contract while also keeping any improved terms. This means that employers either take the risk of a void agreement or change contracts by termination and re-engagement, which is likely to result in an automatically unfair dismissal due to special rules which apply in TUPE cases. There has been much uncertainty over this rule and the circumstances in which variations by agreement will be valid. the Government promised to give greater clarity. Instead – and apparently inadvertently – they have made the position much worse for employers. Variations will be unlawful if they are for reasons connected with the transfer unless the employer can show "an economic, technical or organisational reason entailing changes in the workforce". This requirement is not in the existing case law and will permit changes only where there is a change in the numbers of employees or in their job functions. The result is that most of the changes which transferees will want to make – eg to contractual procedures and policies, holiday pay, sick pay etc – will be incapable of being validly agreed with the employee, unless for example they are contained in collective agreements. Any harmonisation process will be deemed to be connected with the transfer. Institutions will need to take advice on how changes can be effected by other means while reducing the risk of unfair dismissal liabilities. The case of Humphrey v Oxford University established that where the transferee threatened to change the contract of a transferring employee, that employee could refuse to transfer, resign and claim constructive dismissal against the transferor. This appears very unfair, as the transferor is not responsible for the threatened breach of contract. Under the new Regulations, this right is extended to apply to any "substantial change in working conditions" which is to the employee's material detriment. A breach of contract is not required. In the Skittrall case (above) this was the factor which led to the dispute – the employees were claiming that changes to course content, work location and the transfer to an institution of lesser academic prestige entitled them to claim constructive dismissal. Those arguments will be stronger under the new TUPE Regulations. Other changes involve both transferor and transferee being jointly and severally liable for a failure to consult (reversing the current rule that liability for breach by the transferor passes to the transferee) and a new obligation on the transferor to provide basic workforce information to the transferee. Breach of this latter obligation carries a minimum penalty of £500 per employee unless the tribunal consider it just and equitable to award a lesser amount. However, the key problems for universities will be the risks of constructive dismissal claims and the greater difficulty of changing contracts by agreement after a TUPE transfer. Go back. christopher.mordue@pinsentmasons.com We welcome your feedback, criticism and suggestions If you have any comments, or if you would like further advice or assistance with any of the issues covered in this briefing, or for information about Pinsent Masons' National Universities Team, please contact Nicola Hart, Head of Education at Pinsent Masons. Email: nicola.hart@pinsentmasons.com Tel: 0121-260 4050
While our Universities Legal Briefing is copyright, you are welcome to copy or forward it to colleagues within the institution, and to quote from it as long as the source is acknowledged. This briefing does not constitute legal advice. Specific legal advice should be taken before acting on any of the topics covered.
LONDON BIRMINGHAM BRISTOL EDINBURGH GLASGOW LEEDS MANCHESTER BRUSSELS DUBAI HONG KONG SHANGHAI T 0845 300 32 32 www.pinsentmasons.com |