Employment Eye April 2018

Bevan Brittan's employment law report for April 2018

26/04/2018

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Jodie Sinclair

Partner

Welcome to the April 2018 edition of our employment law report: our monthly round-up of key employment law developments and what they mean for you.

 

Featured case

Bringing up baby

A failure to match enhanced maternity pay with shared parental leave pay is not discriminatory, for now – reports Tim Gooder.

Read more

Briefing

Avoiding #MeToo becoming #YouToo

In the wake of recent high profile reports of sexual harassment, Anne Palmer looks at the wider impact, and explains how to avoid this becoming an issue for you and your workforce.

Read more

News round-up

Employment news round-up, April 2018

Ashley Norman rounds up this month's employment law news in brief, including new discrimination compensation bands, parental bereavement leave, childcare vouchers, and pensions news. We also look at gender pay gap reports – what themes are emerging?

Read more

 Events and training

We are running a series of free training events in May and June 2018 on preparing for increased employment tribunal litigation.

Read more

 

Bringing up baby

A failure to match enhanced maternity pay with shared parental leave pay is not discriminatory - for now – reports Tim Gooder.

 

The background

Direct sex discrimination arises when a person is treated less favourably than another person by virtue of their sex.

In the Equality Act 2010 there is a 'carve out' for special treatment provided to women in connection with pregnancy or childbirth, which means that any such special treatment will not amount to sex discrimination against a man. Subsequent case law has clarified that any special treatment should be provided only insofar as it removes disadvantages experienced by women due to pregnancy and childbirth.

Compulsory maternity leave must be taken and lasts for two weeks in most cases. Ordinary maternity leave is 26 weeks and is available to all employees. Additional maternity leave of a further 26 weeks is also available to all employees. If eligible, a mother will be entitled to statutory maternity pay.

Shared parental leave of up to 50 weeks leave and shared parental pay of up to 37 weeks is available for both parents to share. Shared parental leave pay is set at the same rate as statutory maternity pay.

Many employers chose to pay employees more than the statutory minimum maternity pay during maternity leave periods, but chose not to mirror this uplift for shared parental leave pay.

The facts

Mr Ali was employed by Capita Customer Management Limited (Capita). Capita's female employees were entitled to enhanced maternity pay, consisting of 14 weeks' basic pay as maternity pay, followed by 25 weeks' statutory maternity pay. Transferring male employees were entitled to 2 weeks' paid ordinary paternity leave and up to 26 weeks' additional paternity leave which "may or may not be paid".

After the birth of a daughter, Mr Ali took two weeks paid leave. Unfortunately, his wife suffered from postnatal depression and, since she was advised to return to work, Mr Ali wished to take further leave in order to care for his daughter and support his wife's return to work.

On his request, Capita informed Mr Ali that he was entitled to shared parental leave but that he would only be paid statutory parental leave pay.

Mr Ali argued that he should have the same entitlement as a female employee (i.e. fourteen weeks at basic pay rather than two). Mr Ali raised a grievance, arguing that he should be entitled to the same benefits as a transferring female employee on maternity leave. When his grievance was rejected, Mr Ali issued proceedings in the employment tribunal, alleging direct and indirect sex discrimination on the basis that he should have been entitled to enhanced shared parental leave pay, to mirror the enhanced maternity pay offered to female employees.

The tribunal dismissed his claim of indirect sex discrimination, but upheld his claim of direct sex discrimination. The tribunal considered that Mr Ali could compare himself to a hypothetical female employee who was caring for a child after the two week compulsory maternity leave period.

The tribunal suggested that the 'carve out' for special treatment, mentioned above, should not apply beyond the two week compulsory maternity leave period, since both parents are now encouraged to share caring roles.

Capita appealed the decision. A charity, Working Families, intervened in the appeal.

The decision

In Capita v Ali, the Employment Appeal Tribunal (EAT) upheld Capita's appeal, noting that the purpose of maternity leave and pay is not to care for the child, but to protect the health and wellbeing of the mother. This meant that the original decision to compare Mr Ali with a woman on maternity leave was incorrect – the correct comparison would have been with a woman on shared parental leave, since the explicit purpose of shared parental leave is to provide for the care for a child. This 'hypothetical woman', with whom Mr Ali compared himself, would have been on shared parental leave, on the same terms as Mr Ali.

Although it did not make up an integral part of the judgment, the EAT agreed with Working Families' suggestion that after 26 weeks (i.e. the ordinary maternity leave period) the purpose of maternity leave may shift from physical recovery from childbirth, to broader childcare considerations.

What does this mean for me?

The EAT's decision means that it is lawful to enhance maternity pay for women but not to match that enhancement for parents taking shared parental leave.

However, if such an enhancement extends beyond 26 weeks – i.e. into the period in which the purpose of the leave arguably shifts from recovery from pregnancy / childbirth, to general childcare purposes - this judgment does not provide much reassurance, due to the EAT's comments made following Working Families' arguments. It may be that after 26 weeks leave, it is valid to make a comparison between a woman on maternity leave and a man on shared parental leave and, therefore, their pay should be the same.

Employers will be reassured that, for the time being, any gender imbalance in enhanced maternity pay policies as compared to shared parental leave pay policies are lawful, at least during the first 26 weeks of leave.

However, a further EAT decision on the same point is expected later this year, in Hextall v Chief Constable of Leicestershire Police. The EAT heard this case in January 2018 and it will be interesting to see if it reaches the same conclusions.

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Avoiding #MeToo becoming #YouToo

In the wake of recent high profile reports of sexual harassment, Anne Palmer looks at the wider impact, and explains how to avoid this becoming an issue for you and your workforce.

 

Recognising sexual harassment

A key driver behind sexual harassment issues at work is a lack of understanding of what sexual harassment means and, in particular, where to draw the line between friendly workplace 'banter' and illegal harassment.

In getting to grips with this question, the legal definition of sexual harassment is a good starting point. It is described in the Equality Act 2010 as:

  • unwanted conduct
  • of a sexual nature
  • which has the purpose or effect of violating the dignity of a worker, OR
  • creating an intimidating, hostile, degrading, humiliating or offensive environment for them.

It is important to note that this definition is wide ranging: it does not just cover unwanted physical contact and it includes

  • inadvertent behaviour by the harasser
  • one-off incidents; and
  • non-verbal communication.

So, for example, if a worker is aware that a colleague is downloading pornographic content onto their computer screen at work, this could amount to sexual harassment, even if the victim is not shown the images; the fact that this behaviour is taking place may violate the victim's dignity at work.

Similarly, offensive remarks do not necessarily need to be communicated directly to a victim; in one case, a victim was found to have been harassed when a colleague told him that she had overheard a manager making an exceptionally abusive remark about his sexuality.

Where workers consent to, and actively engage in, a culture of sexualised banter at work, it may be more difficult for a claimant to establish that they have been harassed – but, even in these circumstances, sexual harassment may occur if comments go beyond what it acceptable.

That said, conduct will only amount to sexual harassment if the effect of the conduct on the victim is reasonable in all the circumstances – so, a particularly sensitive individual may struggle to complain of sexual harassment if they are unreasonably offended by a colleague's conduct.

Preventing and defending sexual harassment claims

There are a number of ways in which employers can both work towards preventing sexual harassment in the workplace, and establish a defence if an employment tribunal finds that sexual harassment has taken place.

Encouraging a culture of openness is key, where employees feel able to 'call out' bad behaviour. Some employers appoint an 'equalities champion' as a point of contact for such complaints, but this could equally be covered by an HR manager or an in-house legal representative.

A well drafted and regularly updated equalities / dignity at work policy is also important. However, this is just a starting point; it will be almost meaningless if the policy is not actively implemented and reinforced by management. In a 2015 employment tribunal case called Smith v Renrod Limited, a tribunal rejected an employer's argument that it had actively taken steps to prevent sexual harassment in the workplace: it had sent the claimant's manager on a one-day discrimination and employment rights training course and had anti-harassment and equal opportunities policies in place. However, the evidence showed that the employer encouraged unacceptable sexual behaviour in the workplace, and failed to respond to the victim's numerous complaints and formal grievance.

It is, therefore, important that the right policies and procedures are in place, but these must be actively supported and embedded in the workplace, so that employees

  • are aware of the written policies
  • feel able to raise concerns without fear of repercussions; and
  • undertake regular equalities training so that they can recognise unacceptable behaviour and understand how to deal with it.

If you can show that you have taken "all reasonable steps" to prevent sexual harassment from taking place, then you may avoid being vicariously liable for your employee's actions.

Latest developments and resources

Given the current focus on sexual harassment at work, it is timely that the Equality and Human Rights Commission (EHRC) published a report in March 2018 called 'Turning the tables: ending sexual harassment at work'. The full report can be found here and makes a wide range of recommendations on how sexual harassment may be more effectively dealt with at work. The EHRC's proposals include:

  • reinstating the (currently repealed) claim for 'third party harassment'
  • introducing a statutory code of practice, with a possible 25% uplift in compensation for non-compliance
  • a positive duty on employers to prevent harassment in the workplace
  • online publication of employers' sexual harassment policies and steps being taken to implement and evaluate it.

It remains to be seen which, if any, of these proposals will be taken up by the government. It may be that the proposals are superseded by the Women and Equalities Committee's Sexual harassment in the workplace inquiry. The Inquiry is currently in the process of hearing evidence – most recently it heard from Zelda Perkins, former assistant to Harvey Weinstein. It is not yet known when the Inquiry will produce its report.

In the meantime, employers should note that Acas has produced new guidance on preventing and dealing with sexual harassment in the workplace. The guidance is available here and describes how sexual harassment is defined and how allegations of sexual harassment should be handled.

In a related development, the use of Non Disclosure Agreements (NDAs) has attracted criticism in the wake of the recent sexual harassment revelations, particularly those relating to the President's Club dinner and Harvey Weinstein. Although NDAs are still lawful, their use should be carefully considered and it may be necessary to clarify what disclosures are not prohibited by the NDA – for example, complaints to a regulatory authority, complaints about serious misconduct or reporting criminal behaviour to a law enforcement agency. In the context of HR practice, the use of non-disclosure / confidentiality clauses is most likely to arise in the context of Settlement Agreements and other settlement terms. In this scenario, it must be made clear that any agreement does not prevent the individual from making a statutory 'protected disclosure' (whistleblowing) under the Public Interest Disclosure Act 1996.

Further information and training

As we have highlighted in this briefing, effective workforce training is a key line of defence to an employment tribunal claim alleging sexual harassment. Bevan Brittan offers a full range of training on equalities and combatting sexual harassment in the workplace – our sessions are practical and interactive and can be tailored to suit HR teams briefing managers, or can be provided for managers direct. Please do contact me, or your usual Bevan Brittan contact, if you would like a quote for a training session, or if you require any other advice in relation to the issues set out in this briefing.

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Employment news round-up, April 2018

Ashley Norman rounds up this month's employment law news in brief, including new discrimination compensation bands, parental bereavement leave, childcare vouchers, and pensions news. We also look at gender pay gap reports – what themes are emerging?

 

Discrimination compensation costs increasing

Employment tribunals have been issued with new guidance on the levels of compensation which should be awarded for discrimination claims lodged on or after 6 April 2018. The new 'Vento' bands for discrimination compensation are:

  • a lower band of £900 to £8,600 (less serious cases);
  • a middle band of £8,600 to £25,700 (cases that do not merit an award in the upper band); and
  • an upper band of £25,700 to £42,900 (the most serious cases), with the most exceptional cases capable of exceeding £42,900.

Please note that this is guidance only and is not binding, but tribunals must have regard to it when making awards of compensation for discrimination claims.

Various other statutory rates increased this month (as we reported last month), including an increase to the maximum compensatory award for unfair dismissal, to £83,682.

 

Parental bereavement leave and pay moves a step closer

The government has launched a consultation on the introduction of parental bereavement leave and pay. This reform will give employees who lose a child below the age of 18 (including a still birth after 24 weeks) the right to at least two weeks leave and at least two weeks statutory bereavement pay. Employees taking this leave will be protected from detriment, redundancy and dismissal. The government's consultation is seeking views on a range of issues, including what should be included in the definition of "parent" and the patterns in which the proposed leave might be available, e.g. a single block of leave, non-consecutive blocks of days and when leave should be taken.

The consultation is open until 11.45pm on 8 June 2018 and the full consultation documents can be accessed here.

 

ICO guidance – legitimate interests

Ahead of the introduction of the General Data Protection Regulation next month, the Information Commissioner's Office (ICO) has published detailed guidance on the use of 'legitimate interests' as a basis for processing personal data. The guidance is available here and should be referred to by organisations when determining whether they can use legitimate interests as a lawful basis for processing data.

 

Extension to childcare voucher schemes

As we have previously reported, the salary sacrifice childcare voucher scheme is being closed down, to be replaced by the new 'tax free childcare scheme'. The childcare voucher scheme was due to close to new entrants from April 2018, but this deadline has now been extended by six months, to 4 October 2018.

 

Gender pay gap reporting

The first round of gender pay gap reports have now been published and, as expected, most employers (78%) are showing a gap between average pay for male and female employees. According to reports in the press, around 1500 reports are yet to published their gender pay data and the Equalities and Human Rights Commission has said that it will contacting defaulting employers. Only 8% of employers are showing no gender pay gap at all. Employers showing large gender pay gaps included Ryanair (71.8%), Karen Millen (49%) and Royal Bank of Scotland (36.5%).

The finance sector had the largest reported gender pay gap of 35.6%, with the accommodation and food services sectors reporting the smallest pay gap, at an average median gender pay gap of 1%.

It should be noted, of course, that the figures being reported relate to average pay; rather than (as has been implied by press reports) employers paying men more than women for undertaking the same role. Many employers who have reported a disparity in their average pay differentials have taken the opportunity to provide a narrative alongside their figures, explaining any specific reasons for the difference (such as being a traditionally male dominated industry) and setting out any action being taken to address their pay gap.

 

Pensions news

Teachers' Pension Scheme – amendment to pay same benefits to same-sex couples

You may remember a couple of months ago we reported on the Walker v Innospec case. The Supreme Court ruled that a same sex spouse or civil partner should be treated in the same way as a spouse of the opposite sex. 

As expected, in the light of the judgment, the Department for Education has announced that the rules of the Teachers' Pension Scheme will be changed, so that survivors' benefits will be equalised for same sex and opposite sex couples.   Although there has not been a central government announcement on how other schemes should deal with the decision in Innospec, employers in both the public and private sectors should check that their own pension schemes' comply with the ruling.  Please see our July 2017 update for more information on the Innospec decision.

Another auto-enrolment criminal prosecution by the Pensions Regulator

It was always likely, as auto-enrolment became more established, that there would be more cases of employers not complying with their duties.  The latest instance of the Pensions Regulator flexing its muscles related to a slightly different alleged offence: Workchain Limited is accused of logging into its HR system masquerading as employees, and opting them out of auto-enrolment.  The Regulator is prosecuting the company and its employees with unauthorised access to a computer program under section 1(1) of the Computer Misuse Act 1990.  Previously the Regulator has used its powers under the Pensions Act 2008 and related legislation, so this is another route open to the Regulator as it seeks to enforce compliance.  Penalties can be up to two years' imprisonment or a £5,000 fine.

Nortel – not every scheme that enters a Pension Protection Fund assessment period transfers to it

We have reported on a number of high-profile corporate failures over the past few months which have left pension schemes, and their members, facing a transfer into the Pension Protection Fund.

But that transfer is not inevitable.  Part of the PPF assessment process to establish whether the pension scheme, although not perhaps able to fund all of the pension promises made, can still fund benefits above the capped levels that the PPF provides (basically 90% of the promised benefits for anyone under normal retirement age, full benefits for anyone over normal retirement age, but in both cases normally subject to total caps and restrictions in increases for inflation).  If the scheme can do this, it is better both for members, who will receive more of their promised benefits, and for the PPF, who do not have to take on the burden of paying benefits, and indeed managing and investing the assets that will be transferred to it.

This is what has happened to the UK pension scheme of Nortel.  The insolvency of the UK business and its impact on the UK scheme was part of a much wider international process.  Following some extremely complex international litigation, the UK schemes have now benefited from a significant cash injection from the funds released by Nortel's international liquidation.  In total, the scheme expects to receive more than £1.2 billion.  If so, it is now sufficiently well-funded that it will be able to go to the market and secure benefits for members greater than they would have received from the PPF.

This process has taken several years, and in situation like this, it is not possible to complete the PPF assessment in the expected two years. It was important to wait until the wider situation was clearer to understand if the scheme could avoid transfer to the PPF.  Now the position is clear, the trustees will wind up the scheme and secure better benefits for its members.

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Events and training

Limbering up for increasing employment tribunal claims    

The statistics speak for themselves: steep rises in employment tribunal claims are being logged, as the fallout from the abolition of fees becomes apparent. Now is, therefore, the time to brush up on your dispute resolution and employment tribunal management skills and knowledge.

We are running a series of free training sessions, which will take a look at the full range of issues around dealing with increased litigation risk, from preventing claims getting off the ground, through to strategies for dealing with claims that go through to a full hearing. We will cover 'tips and traps', and will include practical questions for delegate discussion. 

Key topics

  • Dealing with retrospective claims and fee refunds.
  • Reputational risks – new public portal for tribunal decisions.
  • Without prejudice rules / protected conversations.
  • Acas Early Conciliation and COT3 agreements.
  • Analysing merits and litigation risk – fight or settle?
  • Disclosure obligations and avoiding disclosure traps.
  • Witness statements and giving evidence.

This event will be of interest to anyone involved in employee relations and managing employment tribunal claims, including HR professionals and in-house legal advisers.

The training will take place over the course of a morning on the following dates and at the following locations.

Tuesday 22 May 2018 London

Wednesday 6 June Leeds and Bristol

Wednesday 13 June Birmingham

Please click here for further information and booking details.

 

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If you would like to discuss any of these topics, or any other aspect of Employment Law, please contact Head of Employment, Jodie Sinclair.

This article may contain information of general interest about current legal issues, but does not give legal advice.

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