7 Employment Law Updates - quick view

Forthcoming Changes

1.Employee Shareholders
Employee shareholders in the new Growth and Infrastructure Bill

• New category of employee
• Law by April 2013
• Give up rights for ordinary UDL, SRP, time to train & right to request flexible working
• Longer notice when returning from parental leave

PROBLEMS

• Overwhelmingly coldly received and 80% of employers said it would not affect recruitment
• How will ET deal with claims where value of the shares is said to be <£2,000
• Additional rights: dividends, voting, transfer - can these be limited?
• Applied as lever in the workplace?
• For high risk takers only?

2. Whistle Blowing
Amendment to s.43B ERA

• Relates to Qualifying diclosure
• Worker must reasonably believe it to be in PI
• Parkins v Sodexho and hte problem of employees contractual rights
• Protections for whistle-blowers from bullying subject to defence of reasonable steps
• Good faith requirements to be removed with power to reduce compensation by up to 25%
• ERRB 2013
• Possible settlement by ACAS first with a certificate stating not possible or a prescribed period has expired
• New schedule to the 2004 rules
• Practice Directions from the President
• April 2013 for all

3. Changes to the EqA

• Removal of liability for harassment by third party: s.40(2)-(4)
• Abolishing of questionnaire procedure: s.138
• Repeal of ET's power to make wider recommendations: s.124(3)(b)
• Repeal of all March 2013

4. Settlement Agreements
A new s.111A ERA 1996 is intended for ordinary UDL claims by April 2013

• The new name for compromise agreements
• Past problems with 'without prejudice' negotiations and the need for a dispute for them to bite against
• Pre-termination negotiations will be inadmissible unless there has been improper behaviour  which the ET considers it just to take into account
• Statutory CoP to deal with improper behaviour
• Auto UDL, discrimination, breach of contract not covered
• Therefore, rules only apply in cases where there are no claims parallel to ordinary UDL
• Problems of hearing the evidence before declaring inadmissible - becomes then a question of weight
• Improper behavour e.g. bullying, language that is discriminatory
• Relevant to cases of poor performance where employers want to avoid lengthy performance management

5. Compensation

• Possible substitution of the current maximum figure (£72,300) with either:
• (a) specified amount with a statutory floor and ceiling based on annual median earnings, currently about £26,000 (the ceiling would be no more than 3 times the median figure), or
• (b) the lower of either a specified amount or a specified number of week's earnings which cannot be less than 52
• Reasons for this not credible (i.e. the ceiling is too high).  There has been an inflationary catch-up since 1999.
• Disproportionately affect higher earners/older workers/those out of work after 52 weeks

6. Financial Penalties
It is proposed in the Bill that, where a tribunal considers that an employer has
a). Breached an employee's right(s); and
b). The breach has 'aggravating features'
It may impose a financial penalty.
The penalty shall be not less than £100 and not more than £5,000 and is payable not to the employees but to the Secretary of State.  If paid within 21 days the penalty is effectively discounted by 50%.
The Bill is expected to receive Royal Assent in April 2013.

Comment
 In the consultation document the Government deals shortly with this and says that this is intended to deal with situations where the employer has acted with malice or negligently, nto simply inadvertently.  It must be expected, that, without further guidance (and none is specifically proposed on this), allegations of aggravating factors will become commonplace, partly no doubt as a means of imposing greater pressure in litigation but also as a result of the uncertainty of what is meant by the term.  Again it may take some time before case law offers guidance.

7. Parental Leave

2015

• Flexible parental leave will be introduced.
• Default position remains: mothers entitled to 52 weeks' maternity leave
• Elligible mothers to receive statutory maternity pay for 39 of these 52 weeks
• Paternity leave & pay will continue to last for 2 weeks for eligible fathers

Under the new system, instead of the current postioin where fathers have to wait until 20 weeks after childbirth to commence their addiitonal paternity leave, parents (if they both meet certain criteria) can now share 50 of the 52 weeks' leave (as the first 2 weeks are mandatory maternity leave).  For example, they may decide that the mother returns to work 2 weeks after giving birth and the father takes the remaining 50 weeks' leave.

To qualify, each parent must meet the criteria.  These are proposed to be the same as those for ordinary paternity leave - 26 weeks' continuous employment by the 15th week before the due date.

Alternatively, parents can pick and choose specified blocks of parental leave of no less than one full week over that 50 week period.  They can take the leave separately or, similar to Scandanavian countries, they can take time off at the same time.  The leave will be paid at the usual statutory rate (or more if the employer offers enhanced payments).

2013

• The current right to unpaid parental leave will remain, but will increase from 13 to 18 weeks to comply with European requirements.
• Child's age limit for parents to take such leave will increase from 5 to 18 years old

Carl Fender
Regency Chambers
March 2013

THE 2012 FRAUD AND EXAGGERATION IN PERSONAL INJURY CLAIMS CONFERENCE - Paula Thomas, Barrister at Regency Chambers

THE 2012 FRAUD AND EXAGGERATION IN PERSONAL INJURY CLAIMS CONFERENCE

On 24^th May 2012 I attended the Fraud and Exaggeration in Personal Injury Claims Conference in Leeds. Yes, such is the scale of the problem in the UK that an entire conference was dedicated to this topic and this is only personal injury linked to motor accident claims. Overall a good conference and even for those professionals who have little to do with personal injury claims or motor insurance, it was informative. The Conference boasted a pool of guest speakers including the Right Honourable Jack Straw MP, Nick Starling, Director of Association of British Insurers (ABI); the Assistant Chief Constable of West Yorkshire; Dr Michael Powers QC as well as other notable professionals.

The topics included the extent of fraud and exaggeration; the role and duty of medical legal experts; contempt proceedings and prosecution; medical evidence in fraud cases; how Claimant’s solicitors should respond; costs consequences and sanctions.

Most people may consider this problem has very little to do with them, how wrong they are. Just to place things in context, there are over 133,000 fraudulent claims detected each year, with a saving of £100 million. In spite of this, fraud in this area is on the increase, in 2011 there was a 32% increase in the number of reported ‘induced’ collisions; a 6% increase in the number of ‘staged’ collisions; and the number of identified ‘fraud rings’ increased by 32%. Britain is reported to have a culture of “Crash for Cash,” The UK is known as the ‘Whiplash Capital of Europe’ indeed, in France only 3% of bodily injury is linked to cervical trauma; Spain 30%; Germany 47% compare any of these to the UK boasting 76%.  The average policy holder pays an extra £50 per annum on their insurance premium to compensate for these errant activities.

Just to give an example of a ‘staged’ claim: you may be following a vehicle, generally an ageing car or van, onto a roundabout or slip road. This vehicle, which often has no brake lights, brakes hard and you cannot avoid slamming into it.  Another example may involve two other cars. One is in front of you and another one may veer into its path, the car in front of you brakes hard and you crash into it. The net result a bogus claim is submitted on the blameless motorist's insurers.

So what is the Government doing about it? Since January 2007 there has been criminal legislation under the Fraud Act 2006, to prosecute the same, but as to how effective this has been in prosecuting this kind of fraud is a matter for a separate article. In respect of civil sanctions, CPR rule 32.14, governing ‘false statements,’ has been used with some success to bring to task perpetrators (South Wales Fire & Rescue v Smith; Edward Neil, Acromas Insurance Company Limited v Graham Jeffrey Loveday [2011] EWHC 2324) and of course there is always the tort of deceit and exemplary damages. All is not lost even if fraud is discovered after the case has been settled; there can be a retrial (Hussain & Anor v Sarkar CA 2010). Where Claimants have exaggerated or been fraudulent there are of course costs implications, with Defendants seeking to strike out claims under CPR 3.4(2) on the grounds of collateral dishonesty, Shah v Ul Haq [2009] EWCA Civ 542.

In terms of the way forward, the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which amongst other things makes payment or receipt of referral fees by lawyers, claims management companies and insurers illegal, although the detailed provisions will need to be made by the relevant regulators, (the Solicitors Regulatory Authority, the Bar Council, Claims Management Regulator and Financial Services Authority).  There are now specialist agencies, in particular the Insurance Fraud Enforcement Department (IFED) run by the City of London Police, a bespoke police unit of 35 staff funded by the ABI. They will investigate fraud in England and Wales.  In the next 3 years there will be an insurance fraud register. Currently specialist data mining software is used to identify links and of course social media sites have had their part to play in detecting fraud, these include FaceBook, Twitter, LinkedIn: hi5; Netlog; Tagger; YouTube, MySpace; g+; and bebo, and noteworthy successes include Locke v Stuart & AXA Corporate Solutions , 2011.

Outside of the legal process, what advice can the innocent victim take on board from all of this? The response is ‘avoidance.’ The Insurance Fraud Bureau has produced a useful leaflet which I consider all motorists should read. As well as this advice, I would suggest always keep your distance from the car in front, not just at roundabouts and slip roads but on all occasions. Keep an eye on the vehicle in front, sometimes the occupants may turn to look at you or may even make a gesture just before the trap is sprung. http://www.insurancefraudbureau.org/files/misc_pdfs/consumer_advice_-_crash_for_cash_scams.pdf

On closing I would just like to say, keep yourself safe on the road and be aware that for some people this is just a business and it may end up costing you more than just an increase in your premiums!

LAPSO Bill amendments - by Nigel Sleight

It would seem that the furore around the passage of the Health Bill through the House of Lords has prompted the Government to be more pro-active and concessionary in relation to the proposed Legal Aid changes which go back before the Lords next week. Today the Ministry of Justice has announced that two amendments to the Bill have been tabled - one being to adopt the ACPO definition of domestic violence - this is theory should ensure that legal aid will be available for people to cover any family proceedings relating to injunctions, children and finances that may include emotional, psychological and financial abuse as well as the more obvious phsycial as well.

I say in theory though - as whilst the proposed change is a step in the right direction it will make little practical difference until the gateways (the trigger for a person to be eligible for legal aid) are susbtantially widened and less onerous in their evidential requirement(s). The very fact that someone is/has suffered from domestic violence makes it less likely for example that they may have reported the matter to the police. Often the applications that the court has to deal with are on an emergency basis - this will be very difficult if the gateways remain as they are drafted. One way in which funding can be obtained is if the intended recipient can show that they have obtained a finding of fact from a court against the alleged perpetrator. This of course is a question of chicken and egg - as if they require legal aid due to their vulnerable position how on earth are they have meant to have already paid for or represented themselves at a hearing to obtain findings of abuse against the perpetrator.

One can only hope (big doubtful sigh!) that further reflection on the proposals will occur in the coming weeks.

Postponement of Legal Aid Changes - Nigel Sleight, Barrister at Regency Chambers

In a quietly released Ministerial Statement today Ken Clarke, Lord Chancellor has announced the
postponement of the proposed Legal Aid reforms currently going through the House of Lords until April 2013 at the earliest. If approved by the Upper House (or amended) the proposed reforms were due to be implemented in October 2012, part of the reasoning appears to be in light of the new business structures which legal firms can now enter into, competitive price tendering and giving firms more time to adjust.

This announcement may give some modicum of relief to those practitioners at the sharp end of practice - however it is just a delay at this stage. It can only be hoped that a longer period of time for reflection on the impact of the proposals may help persuade the Government of an alternative course. The reduction in fees of 10% will still be implemented as planned next year.

Read the full ministerial statement here:

http://www.parliament.uk/documents/commons-vote-office/9.Justice-LegalAidReform.pdf

Protected Conversations - Carl Fender - Barrister at Regency Chambers

Is the Government's alternative to compensated no-fault dismissals really worth the candle? Having decided to drop this idea, the alternative of 'protected conversations' is to be put out for consultation. The CBI supports the proposal. The idea amounts to 'without prejudice' discussions about an employee's performance in the workplace, and preventing what has been said being used against the employer in, for instance, a constructive dismissal claim. This proposal is just one of several ideas being considered to free our employment laws of so-called red tape.

One does wonder if what is driving reform of our employment laws is more perception than reality. Employers are quoted as being fearful of expensive and time-consuming litigation as a result of dismissing poorly-performing staff. The existing legislation around dismissals for capability is couched in terms of reasonableness. Employers running their businesses efficiently should be able to demonstrate whether or not employees are meeting required standards in performance. The raising of the qualifying period for bringing an unfair dismissal claim to 2 years should be enough reassurance for employers if they feel our present laws disincentivise recruitment.

Although the detail of any proposed legislation has yet to be finalised, one can see much satellite litigation resulting from what is/is not a 'protected conversation'. Reducing claims to the tribunal is another aim of the raft of reforms that are going through or are under consultation. Will the number of claims being presented reduce because of this particular proposal? An impact assessment already sees a reduction because of the raising of the qualifying period. Others see litigants using discrimination or automatic unfair dismissal grounds where they are time barred. It is certainly arguable that whilst 'protected conversations' might provide some immunity to employers in respect of particular occasions when discussions occurred, they are unlikely to encourage conciliation or loyalty. An employee who has had the Riot Act read to them, and who knows they cannot immediately resign, is hardly likely to feel valued or incentivised to work. 

The Law of unintended consequences - Nigel Sleight - Barrister at Regency Chambers

The Law of unintended consequences

Last week I was involved in a very difficult final hearing involving parents arguing about residence...my client was represented the other side in person. During the hearing a number of things became clear as to the effects of the planned cuts to Legal Aid. Some of course are the more obvious which have been well documented e.g. Increasing the length of court hearings but a number of other things became clear:

1. Neither side would be eligible for Legal Aid in the case yet equally neither would have been able to afford any kind of expert assessment which happened to be vital in this case to help understand the needs of the child. What does the court do in those circumstances?

2. A way around for the problem above is for the court to appoint more Guardians under R16.4 and for the experts to be paid for on the legal aid certificate of the child - thus just transferring costs not saving them and meaning the appointment of more Guardians to try and assist the courts between parents.

3. Those cases that will in the future not have the assistance of legal representation are also likely to result in more professionals involved in cases e.g. Social workers - being called to give evidence as it will be less likely the parents (for very obvious and natural reasons) will be able to do without their evidence as they feel they will have to explore every issue so they do not feel disadvantaged - not necessarily upon what the key issues in case may be.

I'm sure there are many more.....

Change to qualifying period for unfair dismissal claims - Carl Fender - Barrister at Regency Chambers

As part of the Government's drive to cut red tape for business and encourage growth in the economy, there is to be a rise in the qualifying period for brining a claim for unfair dismissal.  It is currently 1 year, a period the employee must have worked continuoulsy for by the effective date of termination.  From the 6th April 2012, that period will return to 2 years, the level it was until 1999 when New Labour lowered it to its current position.  The new legislation will amend the law as stated in s.108 of the Employment Rights Act 1996.  There are no proposals to alter the right to claim automatic unfair dismissal on other protected grounds, where there is no qualifying period.

The qualifying period has changed over the years since its inception in 1971.  It was initially 6 months, reaching 2 years in 1985.  It has been the subject of litigation as well because previous rules on qualifying thresholds for part-time workers were found to be indirectly discriminatory against female workers.  However, a challenge to the earlier 2 year period in R v Secretary of State for Employment ex p. Seymour-Smith, after a legal journey all the way to the House of Lords, then Luxembourg and back, ultimately failed.

It could be said that this is not really about cutting red tape per se. The rule was simple to apply whatever the length of the qualifying period.  Encouraging employers to take on more employees by deregulating the early phase of employment as well as reducing the number of claims presented to the Employment Tribunal is what this proposal is all about.  This is just one of a number of proposals, each of which have their own time-scale.  There are proposals in respect of introducing a basic fee structure for tribunal claims, for example, as well as other measures to speed up the tribunal process.  The Government's consultation document, published in January 2011 sets them out.  Arguments against implementation are partly based on a battle of statistics.  There are also fears that disqualified claimants will simply re-locate their claims within the discrimination legisltation.  Whatever the opposition, the Government is intent on driving through business friendly measures to stimulate the economy.