1 October 2007

NEWS

Public Perceptions of Ethnic Minority Women in the Workplace are Outdated

The Department for Work and Pensions (DWP) has claimed that the public perception of ethnic minority women in the workplace is out of touch with reality.  Read more

UK Will Opt Out of Proposed EU Laws on Illegal Workers

Ministers have said that the UK will opt out of proposed European Union laws on illegal workers.  Read more

Office Workers Dismissed for Spending Two Hours a Day on eBay

Three office workers have been dismissed by Neath Port Talbot Council in South Wales after it was discovered that they were spending up to two hours a day on eBay.  Read more

Research Reveals Britain is Turning into a Nation of Homeworkers

Research carried out by YouGov for financial services firm Zurich has revealed that the UK workforce is increasingly embracing homeworking.  Read more

Lambeth Council Serves Fines on Businesses Failing to Display No-Smoking Signs

Chelsea Motor Company and New Image Barbers have become the first two businesses to be fined for failing to display no-smoking signs on their premises.  Read more

CBI Applauds Gordon Brown's Promise to make GP Services More Accessible to Workers

Richard Lambert, director-general of the CBI, has welcomed Gordon Brown's plans for reform of GP services.  Read more

Plans to use Public Sector Contracts to Boost Remploy Factories

The Work and Pensions Secretary, Peter Hain, has pledged to urge ministers to use their powers to allocate public sector contracts to Remploy in a bid to stall the row with trade unions over the proposed closure of the loss making factories.  Read more

LEGISLATION

Legislative Changes Taking Effect on 1 October 2007:  Read more

Companies Act 2006

New provisions relating to the codification of directors duties come into force on 1 October 2007.  Although the statutory provisions replace many of the current common law and equitable duties, they are to be interpreted and applied in the same way.  The duties coming into force on 1 October are as follows:  Read more

CASES

EAT Issues Guidance on Disciplinary Investigations

The EAT has confirmed that an employer acted reasonably when it relied on the evidence if its occupational health physician and did not obtain a specialist consultant's report.  In addition, it had not been necessary to interview and take a witness statement from the person who tipped the employer off about the employee's malingering.  Read more

Equal Pay Act 1970 Applies When Comparing Pay with Lower Category Job

The Court of Appeal has confirmed that a woman can bring an equal pay claim using as her comparator a man who has been placed in a lower grade by a job evaluation study.  Read more

NEXT HR NETWORK EVENT

Our next HR Network Event will be our Workshop on Age Discrimination: new cases, new perspectives.  A full list of HR Network workshops and seminars is available here.

FEEDBACK

Please let us know what topics are of interest to you by emailing HRnetwork@pinsentmasons.com. This will help us to shape future editions of this Briefing and HR Network events.

NEWS

Public Perceptions of Ethnic Minority Women in the Workplace are Outdated

The Department for Work and Pensions (DWP) has claimed that the public perception of ethnic minority women in the workplace is out of touch with reality.

The DWP draws on an Ipsos MORI survey commissioned jointly by the DWP and the Equal Opportunities Commission (EOC), and separate studies by the DWP and the EOC.

A major misconception uncovered by the Ipsos MORI survey was the belief by 53 per cent of respondents that white British women in work were more likely than ethnic minority women in work to have a degree.  In contrast, a 2001 census revealed that:

• only 24 per cent of white British women who work have a degree;
• over half (52 per cent) of Black African working women have a degree;
• 38 per cent of Indian working women have a degree;
• 35 per cent of Pakistani working women have a degree;
• 32 per cent of Black Caribbean working women have a degree; and
• 30 per cent of Bangladeshi working women have a degree.

The research also revealed that the biggest barrier to work for ethnic minority women is the difficulty in finding suitable childcare and flexible working arrangements – the biggest hurdle encountered by women in general.  

Jenny Watson, Chair of the EOC, said: "The gap between the public's perceptions about the obstacles holding ethnic minority women back at work and the actual reality is startling.  While many pin the cause of Black and Asian women's employment gap on culture and lack of skills, the evidence, particularly for younger women, is pointing to something very different.  As the EOC's two-year investigation illustrated, there is a generation of increasingly well qualified and ambitious young women, the vast majority of whom tell us their families support their choices to balance a career with a family.  We need to tackle both the practical barriers they face such as help with childcare and better careers advice as well as challenging persistent and outdated stereotypes.  Only then will we deliver real change."  (DWP Press Release, 21 September 2007)  Back

UK Will Opt Out of Proposed EU Laws on Illegal Workers

Ministers have said that the UK will opt out of proposed European Union laws on illegal workers.

The CBI had warned that the bureaucratic approach of the draft directive would have a "far-reaching and damaging effect on the UK labour market" and could result in "significant costs" for both employers and taxpayers.  Businesses are, for example, concerned at the proposed imposition of a three day deadline for employers to complete checks on new staff and at proposals to make companies liable if their suppliers breach the illegal working rules.

The Home Office qualified the announcement on the opt out by saying that it may well sign up for the directive at a later stage if the government's concerns were resolved.  (Financial Times, 24 September 2007)

To see our earlier Briefing on the proposed directive click here.        Back

Office Workers Dismissed for Spending Two Hours a Day on eBay

Three office workers have been dismissed by Neath Port Talbot Council in South Wales after it was discovered that they were spending up to two hours a day on eBay.

The workers' internet habit was discovered when an IT expert was hired by the council to investigate the amount of time its staff were spending on eBay.  The Head of Financial Services at Neath Port Talbot Council, Hywel Jenkins, said: "The main reason for carrying out the investigations was the significant time officers were spending on the internet.  This highlighted an unacceptable level of usage of shopping, entertainment and BBC/Sky-related websites."

Union officials suggested that the dismissals resulted from the Council's failure to implement IT measures to prevent workers accessing sites like eBay.  Mark Fisher, a welfare officer with Unison, said: "People get very involved in eBay, Sky Sports and their favourite football teams.  It happens in many offices.  Obviously we cannot justify people spending a couple of hours of working time looking at these sites, but temptation was put in their way."

Mr Fisher emphasised the need for employers to take preventative measures.  He said: "We plan to push for the authority to make changes to its IT system to help prevent workers landing themselves in hot water.  We want firewalls installed to prevent staff accessing these sorts of websites at any time other than between the traditional lunch breaks between noon and 2pm.  We are looking at how the system can be tightened up so these people won't get dismissed." (Workplace Law, 21 September 2007)  Back

Research Reveals Britain is Turning into a Nation of Homeworkers

Research carried out by YouGov for financial services firm Zurich has revealed that the UK workforce is increasingly embracing homeworking.

The researchers polled 1,078 working adults and discovered that almost one third (30 per cent) of respondents had worked from home for an average of 15.73 hours (nearly 10 per cent of their working time) in the previous month.

One in ten of the respondents who worked from home spend more than 40 hours a month working from home, with one in 20 spending more than 80 hours working from home.

The reasons given by workers who choose to stay away from the office were:

• to avoid the daily commute to and from the office (two thirds of those polled);
• to achieve peace and quiet away from their colleagues (55 per cent); and
• the flexibility of homeworking (48 per cent).

(Workplace Law, 25 September 2007 and Personnel Today, 26 September 2007)  Back

Lambeth Council Serves Fines on Businesses Failing to Display No-Smoking Signs

Chelsea Motor Company and New Image Barbers have become the first two businesses to be fined for failing to display no-smoking signs on their premises.

Fixed penalty notices of £200 were served on the two companies by Lambeth Council in London after both organisations failed to respond to verbal and written warnings.  

As outlined in our Update on the smoking ban, employers have a legal duty to display no-smoking signs in their workplaces.  A failure to display signs in accordance with the Smoke-free Regulations will result in employers being liable to pay a £200 fine (£150 if paid within 15 days), increasing to a fine of up to £1,000 if the matter goes to court.  (Workplace Law, 26 September 2007)  Back

CBI Applauds Gordon Brown's Promise to make GP Services More Accessible to Workers

Richard Lambert, director-general of the CBI, has welcomed Gordon Brown's plans for reform of GP services.

In his opening speech to the Labour Party Conference in Bournemouth, Mr Brown pledged to make it easier for workers to see family doctors.  He told delegates at the conference that the government would:

• take steps to enable workers to access GP services both near their homes and their workplaces;
• introduce family-friendly GP hours; and
• expand walk-in centres and medical services at pharmacies and improve the service provided by NHS Direct.

The Prime Minister's pledge followed last week's call by the CBI for a "real and fundamental reform" of GP services for the benefit of employees and businesses.  Mr Lambert said: "I thought what Gordon Brown said about GPs was good.  It followed roughly what we said last week so I welcome it."  (Personnel Today, 25 September 2007)

To see last weeks Briefing on the CBI's call for a reform of GP services click here.    Back

Plans to use Public Sector Contracts to Boost Remploy Factories

The Work and Pensions Secretary, Peter Hain, has pledged to urge ministers to use their powers to allocate public sector contracts to Remploy in a bid to stall the row with trade unions over the proposed closure of the loss making factories.

As reported in our earlier Briefing Remploy, the government-funded agency which helps disabled people find employment, announced plans to close or merge half of its factories despite objections by unions.  The GMB union has reacted positively to Mr Hain's pledge at the Labour conference and will put on hold its plans to call for strike action.

The announcement by Mr Hain followed pressure from the unions for the government to use European procurement rules allowing governments to reserve some state contracts for supported factories for disabled workers. 

Mr Hain told delegates at the Labour conference: "Both unions and [Remploy] management agree that winning more public procurement is crucial, using European procurement rules to bring reliable, good-quality public contracts into supported factories and businesses.  I have also made clear to Remploy management that no factory closures will take place without the agreement of Government ministers."  (The Times, 26 September 2007) Back

Companies Act 2006

New provisions relating to the codification of directors duties come into force on 1 October 2007.  Although the statutory provisions replace many of the current common law and equitable duties, they are to be interpreted and applied in the same way.  The duties coming into force on 1 October are as follows:

Duty to act within powers (section 171 CA 2006) - this codifies the existing common law duty requiring directors to act within the company's constitution and to exercise those powers for a proper purpose. 

• Duty to promote the success of the company (section 172 CA 2006) - this essentially replaces the existing fiduciary duty to act in the best interests of the company as a whole.  In exercising this duty a director must have regard to the likely long term consequences of any decision; the interests of the company's employees; the need to foster business relationships with suppliers, customers and others; the impact of the company's operations on the community and the environment; the desirability of maintaining a reputation for high standards of business conduct; and the need to act fairly as between the members of the company.
• Duty to exercise independent judgment (section 173 CA 2006) – this requires a director to use his own judgment and not to act in accordance with the wishes of the particular section or group of shareholders who may have appointed him. 
• Duty to exercise reasonable care, skill and diligence (section 174 CA 2006) – in performing this duty, a director is judged according to an objective test of what may reasonably be expected of someone in his position and by a subjective standard of his own actual experience and knowledge.  Back

LEGISLATION

Legislative Changes Taking Effect on 1 October 2007: 

• Racial and Religious Hatred Act 2006  - creates new offence of stirring up hatred against persons on religious grounds.
• Working Time (Amendment) Regulations 2007 - increase statutory annual leave entitlement from 20 to 24 days.
• National Minimum Wage Regulations 1999 (Amendment) Regulations 2007 - increase the rate of the national minimum wage from £5.35 to £5.52 per hour.  For workers aged between 18 and 21 it will rise from £4.45 to £4.60; and for workers below 18 who have ceased to be of compulsory school age, it will rise from £3.30 to £3.40.

• The new Commission for Equality and Human Rights (CEHR), established under the Equality Act 2006 will take over the responsibilities of the Equal Opportunities Commission, the Commission for Racial Equality and the Disability Rights Commission.  The CEHR will also assume responsibility for promoting equality and human rights and will combat unlawful discrimination on grounds of sexual orientation, religion or belief and age.  Back

CASES

EAT Issues Guidance on Disciplinary Investigations

The EAT has confirmed that an employer acted reasonably when it relied on the evidence if its occupational health physician and did not obtain a specialist consultant's report.  In addition, it had not been necessary to interview and take a witness statement from the person who tipped the employer off about the employee's malingering. 

The case concerned an employee who was dismissed for misconduct.  He was on sick leave with back pain, but was in fact well enough to return to work.  The employer received a "tip off" informing them that the employee may not be unfit for work.  Rather than interviewing and taking a statement from the informant, the employer proceeded to gather video evidence which suggested he was capable of returning to work.  It then sought medical advice from its occupational health physician on the video evidence.

Two questions arose in this case.  First, whether the employer had an obligation to take a statement from the person who tipped them off.  The EAT held it did not – whatever the informant said did not form part of the investigation and was not relied on by the employer in reaching the decision to dismiss.  It merely triggered the investigation.  The employer had carried out its own investigations into the matter and this was sufficient.  In such circumstances, it was not necessary to consider the informant's motives for reporting the malingering.

• The second issue was whether there was any obligation to seek a report from a "specialist back doctor".  The claimant argued that the employer should have sought expert medical evidence and that it was not sufficient to rely on the evidence of a general practitioner.  The employer argued that GPs and occupational health physicians deal with back problems on a daily basis and indeed the employee's own GP had signed him off work and never referred him to a consultant.  The EAT agreed that the employer had acted reasonably in relying on the evidence of an occupational health physician who was a general practitioner and it had not been necessary to seek the advice of a "specialist back doctor". 

The EAT considered that the circumstances of an internal disciplinary investigation are different from a forensic examination of an allegation of malingering in the context of a personal injuries claim – in such a case evidence from a specialist consultant would probably be necessary.  Whilst, in the context of a disciplinary investigation, some employers might have sought a consultant's view, particularly where they did not have the assistance of an external occupational health physician, this was not a necessary requirement.  The EAT may, however, have come to a different conclusion if the employee had been suffering form a medical condition of a kind less frequently encountered by GPs and occupational health physicians.  In such a case, it is likely to be necessary to obtain specialist advice. 

Corus UK Ltd v Mainwaring  Back

Equal Pay Act 1970 Applies When Comparing Pay with Lower Category Job

The Court of Appeal has confirmed that a woman can bring an equal pay claim using as her comparator a man who has been placed in a lower grade by a job evaluation study.

The claimants, around 1,400 female employees, were seeking parity with their male counterparts.  Many of the women were employed as care workers or caterers and wanted to compare their work with male employees who were road sweepers and refuse collectors.  Although the road sweeper and refuse collector roles were graded lower in the job evaluation study, they were paid more. 

The CA had to consider whether the women could compare their jobs to jobs graded lower in the job evaluation study in circumstances where the relevant provision of the Equal Pay Act provides for equal pay where the woman's work is rated as equivalent to the man's.  The employer argued they could not be rated as equivalent if the job evaluation study put them in different grades.

The Court of Appeal held that the women could compare themselves with men in a lower grade. The purpose of the Equal Pay Act was to implement the European Community principle of equal pay for equal work or work of equal value.  In order to give effect to this, the Court held that s.1(5) of the Equal Pay Act (which sets out the circumstances in which a woman is to be regarded as employed on work rated as equivalent to that of a man) should now be read as including both the situation where the jobs have been given the same value under a job evaluation study and where the woman's job has been given a higher value. 

Under the Equal Pay Act, a woman is entitled to equal pay where she is employed on like work, work rated as equivalent or work of equal value to that of a man.   In a previous decision (SITA UK Ltd v Hope), the EAT held that an employee was engaged in like work with a male comparator, even though she did more work than the comparator and she could therefore bring a like work claim.  Although the decision in Redcar related to a work rated as equivalent claim, the CA confirmed that the same principles applied equally to an equal value claim and a like work claim.

Redcar and Cleveland Borough Council v Bainbridge and others   Back

© Pinsent Masons 2007

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