Issue 89 - April 2007

Veiled Discrimination?
The Employment Appeal Tribunal has rejected an appeal from the teaching assistant who alleged that she had been discriminated against on the grounds of her religion following her suspension for failing to obey an instruction not to wear a full-face veil in the classroom (Azmi v Kirklees Metropolitan Borough Council). This followed the Tribunal, at first instance, having decided that the school's actions did not amount to either direct or indirect discrimination on the grounds of Mrs Azmi's religious belief (although issues with the way in which her complaint had been handled had led to a finding of victimisation).

This ruling is important in confirming that employers do have the right to restrict what employees wear in the workplace even if this means preventing employees from manifesting their religious beliefs. This does not mean, however that employers can impose such restrictions without careful consideration of the reasons why such restrictions are necessary. If an organisation adopts a dress code which disadvantages members of a particular religion, it will risk being found to have indirectly discriminated against employees unless it can demonstrate that the policy is a proportionate means of achieving a legitimate aim.

The sorts of considerations which a tribunal may accept as being sufficient to justify banning certain types of dress include health and safety, security or, as in Mrs Azmi's case, where it prevents an employee from doing his/her job properly. However, employers should think very carefully before imposing dress codes as they will need to provide evidence to support their policy. In the case of Mrs Azmi, the school had monitored her teaching, both with and without the full-face veil and so was able to satisfy the tribunal that requiring her not to wear the veil whilst in class was reasonably necessary (although she was allowed to wear the veil outside the classroom and generally whilst she was at work).

Changes to dispute resolution...?
At last it seems that common sense might prevail as regards to the best way to resolve disputes in the workplace. Employers (and lawyers!) over the past couple of years have struggled with the complexities of dealing with grievances and dismissal processes as a result of the statutory dispute resolution procedures which came into force in October 2004. However there is now hope (and much cheering) that these procedures may be scrapped!

The DTI has just published an independent review headed by Michael Gibbons which recommends that the entire statutory dispute resolution procedures introduced by the Employment Act 2002 should be repealed because, whilst it was recognised that the intentions behind the procedures were sound, they "had unintended consequences that outweighed their benefits". As you would expect, various other proposals have been made as to measures that would replace the procedures but many of these should not impose the same kind of burden on employers as currently exist. They do however include the provision of a telephone and internet advice line for disgruntled employees and the proposed removal of the fixed conciliation period for which ACAS will act to conciliate in Tribunal claims and increasing powers for the Tribunals to award costs to "punish" parties who fail to make efforts to resolve any disputes without recourse to litigation.

The Government has launched a consultation exercise to review the Gibbons proposals which will end on 20 June 2007 and it appears to have taken Mr Gibbons' recommendations to heart. Any employer or manager wanting to have their say can find details on how to do so on the DTI website.

TUPE - Changes to employment pre-transfer
Often, in transactions where the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") apply, the 'buyer' will want the 'seller' to carry out redundancies or other changes to employees' terms and conditions before the transfer so that they can take over a business which is staffed as they wish it to be. However, the Court of Session (the Scottish equivalent of England's Court of Appeal) in the case of Hynd v Armstrong and others has held that a transferor could not, in dismissing an employee as redundant prior to the transfer rely on the transferee's reduced need for employees to establish that the dismissal was for an economic, technical or organisational reason entailing changes in the workforce (an ETO reason).

The Court of Sessions found that in deciding to dismiss, the transferor should only have taken into account its own requirements for employees and not the fact that its employees may have been surplus to the requirements of the transferee. Because the dismissals had been connected with the transfer, they were automatically unfair under TUPE. This clearly has implications on the timing of dismissals in such circumstances and is a warning to employers involved in these sort of transactions to avoid agreeing commercial terms with a prospective 'buyer' before ensuring they will have appropriate indemnity protections in place to cover any claims which may arise.

Whilst this is a Court of Sessions decision (and therefore outside of the jurisdiction of England and Wales), the English courts tend to follow its decisions and this case is therefore likely to be seen as binding.

Budget
In what might be Gordon Brown's last budget, a number of measures were announced which will have an impact on employers and employees. A couple of points to note include:

• Self-assessment tax return filing dates
  For the tax year 2007/08 and following years, filing dates will change. For paper returns, taxpayers will have until 31 October following the end of the relevant tax year to file. The date for filing on-line will remain 31 January.
• Company Cars
  In line with the Chancellor's policy initiatives on climate change and energy efficiency, vehicle excise duty is to rise for the most polluting cars. In relation to company cars, a discount to the income tax liability of employees will be available from April 2008 if their company cars are manufactured to run on E85 fuel (an alcohol free mixture).
• Managed Service Companies ("MSCs")
  Legislation will be introduced in the Finance Bill 2007 to target tax and national insurance contributions avoidance through the use of MSCs. The legislation provides that certain payments made by MSCs to individuals that are structured as something other than employment income should nevertheless be taxed as employed income where they are paid as a reward for the individual's services.

Quickfire

• Perhaps unsurprisingly, the Employment Appeal Tribunal in the case of Gibbs (t/a Jarlands Financial Services) v Harris has confirmed that an employee cannot rely on an ET1 (tribunal claim form) as their written statement for the purposes of the statutory grievance procedures.
• The government has announced increases in the national minimum wage to take effect on 1 October 2007. The adult rate will rise to £5.52 per hour, the development rate will rise to £4.60 per hour and the rate for 16 - 17 year olds will rise to £3.40 per hour.
• With effect from 6 April 2007, the Information and Consultation Regulations 2004, which oblige employers to institute a formal information and consultation procedure, will apply to all companies with 100 or more employees.
• Under the Equality Act 2006, with effect from 6 April 2007, all public authorities in England, Wales and Scotland must comply with the 'gender equality duty'. This requires them to demonstrate that they are promoting equality for women and men and are taking steps to eliminate discrimination and sexual harassment.
• The EAT, in two separate judgments this month, have torn apart the Court of Appeal's reasoning in the case of Dacas and the other agency worker case. In both of these cases, the EAT held that agency workers were not the employees of the end user.

If you have any questions about this, or any other employment law related matter, please be in touch with any member of the team. Also, if you think that you should have received an invitation to our Early Bird seminar recently, but did not, please let us know.

Team News
We are delighted to welcome Lisa Hayward to our employment team. Lisa joins us from the London Borough of Harrow where she trained and qualified. We look forward to being able to introduce her to as many of you as possible over the coming months.

The content of this document is for general information only. As always, specific professional advice should be taken on each individual matter © Birketts Solicitors 2007. Birketts LLP is constituted as a limited liability partnership in accordance with the Limited Liability Partnerships Act 2000. Where we refer to a 'partner' of Birketts LLP, whether in this brochure or in any other correspondence or communication with you, the term 'partner' means a member of Birketts LLP, and shall not be construed as indicating that the members of Birketts LLP are carrying on business in partnership within the meaning of the Partnership Act 1890.

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