Pay Secrecy – What Can Employers Do?

 

It has been reported in the news that the Gender pay gap and the treatment of pregnant women has continued to be detrimental towards female workers and employees.

One thing the Government is trying to ensure is that the gender pay gap is reduced and this has been the Government’s intention since the 1970 Equal Pay Act was brought in.

It is now some 46 years old and yet still some employers will pay men and women different wages or put them on different contractual terms or even apply differently the terms of the Contracts to each person, whether on purpose or by accident.

What is also quite interesting is that a number of employers still seek to rely upon “pay secrecy” to try and ensure that their employees do not know what their fellow employees are paid.

It is possible for employers to require employees to keep their pay rates and terms confidential from those outside of the workplace, however the Equality Act 2010 makes it unlawful to prevent employees from having discussions to establish if there are differences in pay and contractual terms.

It should be noted that if an employer loses an Equal Pay Claim, the Employment Tribunal, since the 1 October 2014, have the power to force the employer to conduct an Equal Pay Audit and publish the results.

If such a situation does occur it is likely that the fallout for the employer will be significant and unlikely that any insurance that you have in place will cover the losses. As this type of claim is routed in Contract Law then the loss of earnings can stem back 6 years. Therefore not only will it be a blow for moral if there is an Equal Pay Claim that is successful against an employer, but also financially detrimental across the board in view of the powers the Employment Tribunal can utilise to force an employer to undertake an Equal Pay Audit which in itself, will be time consuming and costly.

The simplest way to ensure you are not caught out by this sort of situation or you are not faced with such claims, is to make sure your policies and procedures are clear, that you have an Equality Policy which operates throughout the business from top to bottom and that all contractual rates of pay are the same regardless of gender, race or any other reason.

The only reason for differentiating pay will be if the employer can establish there is a genuine factor i.e. experience, skill, qualification or similar factor, which would render the pay scales different regardless of sex.

This is a tricky area to navigate but not one that is impossible to get right and ensure you avoid being on the wrong end of an equal pay or discrimination claim.

If you require assistance or would like to discuss this further, please call one of our Employment Specialists on 01530 835041

 

Construction Site Managers Beware?

Birmingham Crown Court this July decided a case of gross negligence manslaughter and breach of health and safety.

In January 2015 a father of 2, working on a building site in Leicester, fell through an open skylight on the first floor on to the flat floor below and suffered fatal injuries to his head.

After this incident the HSE visited the site a couple of days after to undertake an investigation into the incident.

The HSE issued a prohibition notice upon the site manager to ensure that no further work should take place at height. Despite this notice the site manager allowed work to continue and he was arrested and charged with gross negligence.

The site manager was found guilty of manslaughter by gross negligence. When sentencing Mr Justice John Saunders commented: “It seems the defendant had no idea of the responsibilities he had for maintaining the safety of the site. The defendant paid no regard to health and safety requirements whatsoever.”

The sentence passed upon the site manager was 2 ½ years for gross negligence manslaughter and 8 months for the breaches of health and safety which took place on the site.

This is a real concern for any employer because those in positions of responsibility for staff must have had the relevant training to perform their role and ensure that staff are provided with a safe and secure environment to work within.

Josiah Hincks can help employers and senior manager maintain a healthy and safe work place and ensure that policies are in place to protect Companies from facing criminal charges.

For more information, please contact us on 01530 835 041 or at ahaggerty@josiahhincks.co.uk

 

National Minimum Wage Increase

As of 1 October 2016 the National Minimum Wage will have increased for 21 – 24 year olds to £6.95 per hour, for 18 – 20 year olds it will be £5.55 per hour and for under 18 years of age £4.00 per hour. The minimum wage for an apprentice will increase to £3.40 per hour.

The National Living Wage remains the same and is set to change every April. For more information please contact one of our Employment Specialists on 01530 835041 or alternatively please e-mail ahaggerty@josiahhincks.co.uk

Dress Codes, Uniforms And Religious/Philisophical Signs – Employment Law Update

Discrimination Law is one of the most difficult areas an employer can face when dealing with employees. However our local employment law solicitors can make the minefield seem like a walk in the park.

Uniforms and dress codes are often situations which pose employers with very complex equal opportunity questions.

The Court of Justice of the European Union (CJEU), has this year had two contrasting cases referred to it relating dress codes and wearing religious/philosophical signs.

In the case of Achibita –v- G4S Secure Solutions NV the Advocate General confirmed that prohibiting the wearing of a head scarf can be justified by an employer’s general policy of neutrality and where the ban applied consistently to all visible signs of religious or philosophical beliefs.

However, the latest decision in the case of Eougnaoui –v- Micropole SA has found that unless there is a “genuine and determining occupational requirement”, which must be limited to matters which are absolutely necessary in order for the employee to perform their job or the task in question, it would not be possible for the employer to simply put a blanket ban against the wearing of any religious/philosophical sign when setting a company uniform or dress code.

Employers looking to ensure that they have a clear and compliant policy on uniform and dress code or indeed if they have any queries or issues relating to these developments, are welcome to contact our Employment Law Solicitors on 01530 835041.

Failure To Make Reasonable Adjustments Or Continue With Reasonable Adjustments

Disability Discrimination and reasonable adjustments is a very complex area, which employers generally fall foul of.

It becomes particularly difficult when considering the importance of the word “reasonable” when making and considering an adjustment.

It has been recently considered in Employment Appeal Tribunal in G4S Cash Solutions (UK) Limited – v- Lee Powell whether the duty to make reasonable adjustments for a disabled employee extended to the employer continuing to pay an increased salary when the employee had as part of a reasonable adjustment moved from a skilled job to a non-skilled job.

The Claimant had been employed since 1997 and had a number of roles ranging from engineering roles to driving roles. His last role prior to any adjustments being made was that of SLM engineer.

The Claimant had suffered from lower back problems as a result of an injury and by 2012 he was no longer fit to carry out jobs that involved heavy lifting. As part of the employer’s attempt to make reasonable adjustments he has moved to a lesser role but the employer had agreed to protect his salary at the higher rate.

The Claimant understood this to be a permanent change; however the Respondent then informed the Claimant that the role would not be permanent and they discontinued the role for “organisation reasons”.

The Respondent later went back to the Claimant and said that it would keep the role but only if the Claimant would take a 10% pay cut. This was the only way the Respondent was willing to consider making the role permanent. As the Claimant was unwilling to accept this and the parties could not agree the Respondent decided to dismiss the Claimant.

It was held that the dismissal itself was unfair and discriminatory and that the reasonable adjustment extended to maintaining the Claimant’s former pay in his new role indefinitely.

This is a stark reminder for employers to take advice when dealing with policies and procedures involving changes to Contracts of Employment. It does not have to be costly but in the long run taking advice at an early stage on how best to deal with employment/HR issues is the most sensible and pro-active way to ensure that business is not faced with large unexpected legal bills or awards being made against it.

Our specialist employment solicitors will be more than happy to discuss your requirements or discuss this particular case further and can be contacted on 01530 835 041.

Pay Disparities Are Not Always Discriminatory

Statistical disparities in pay are not always a sign of discrimination. In one important case which proved that point, a Muslim prison chaplain who pointed out that he and his co-religionist colleagues were on average paid less than their Church of England counterparts failed to establish that he had been treated unequally.

In seeking compensation from the Home Office, the cleric’s lawyers argued that religious and race discrimination could be inferred from the difference in pay and the fact that Anglican chaplains are predominantly white. They received an average basic salary of £33,811, whereas their Muslim colleagues were paid an average of £31,847. Those arguments, however, fell on fallow ground before an Employment Tribunal and the Employment Appeal Tribunal.


In dismissing the cleric’s challenge to the latter decision, the Court of Appeal found that the pay differential was a product, not of discrimination, but of the complex system of pay scales operated by HM Prison Service. Pay rises largely depended upon length of service and the statistical difference was due to the fact that Muslim prison chaplains were not appointed to full time posts until 2002.

Industrial Espionage Claim Leads to £275,000 Payout

Employees sadly cannot always be trusted and industrial espionage is a threat which cannot be ignored. In one case, a company received £275,000 in damages and legal costs after a disloyal worker abused her position to disperse confidential and commercially sensitive information to others.

The company for which the woman worked (company A) became suspicious after she resigned at a time which appeared to be designed to cause maximum disruption. It employed specialists in computer forensics to interrogate her laptop and mobile phone and they were alleged to have uncovered extensive evidence of unlawful conduct.

Company A launched proceedings against the woman and company B, which was said to have encouraged the leaks and conspired with her in an attempt to divert away her employer’s business. After an injunction was obtained against them and a speedy trial ordered, the woman and company B consented to a settlement of the case.

Company B agreed to pay £176,000 in damages and £99,000 in legal costs. The woman made full admissions that she had breached her duties of good faith and fidelity and submitted to judgment. The damages payable by her have yet to be assessed. Proceedings against another company were blocked by the High Court on the basis that company A’s claim had been satisfied by the settlement.

Peripatetic Workers and Pensions Auto-Enrolment – High Court Rules

All businesses should by now be well aware that they are, or shortly will be, required to automatically enrol their workers in an approved pension scheme. However, in a ruling which will be required reading for employers, the High Court has given important guidance on how the new rules must be applied to peripatetic employees who spend much of their working lives outside Britain.

Cruise ShipA company which employed crew on board a fleet of Bermuda-registered cruise ships argued that its seafarer employees, who spend most of their time outside British territorial waters, should be exempted from the automatic enrolment scheme. It was submitted that such employees do not work, or ordinarily work, in Britain within the meaning of Section 1(1)(a) of the Pensions Act 2008.

The seafarers lived on board the vessels during tours of duty lasting up to six months and enjoyed relatively short periods of shore leave. A Guernsey-based company handled the company’s payroll, and although many of them resided in the UK and were paid in sterling, that did not apply to all of them. However, the Pensions Regulator disagreed with the company’s interpretation of the Act.

Ruling on the dispute, the Court acknowledged that it was possible to interpret the words ‘ordinarily works’ as connoting the place where workers spend the majority of their working time. However, that would not be a reasonable or fair test to apply to peripatetic workers, including those who go on frequent business trips abroad.

The Court found that a broader interpretation, giving many such workers a right to automatic enrolment, was more likely to reflect the will of Parliament. What mattered was the location of a seafarer’s ‘base’, and that could usually be determined by identifying the country in which tours of duty began and ended.

The Court found that seafarers who work from a British base ‘ordinarily work’ in this country even if they spend most of their time outside British waters. The same applied to those who live in Britain and whose voyages habitually begin and end in this country. However, those who reside in Britain but whose tours of duty usually start and terminate elsewhere fell outside the statutory definition.

Housing Provider Prevails in Chief Executive Pension Row

In a decision of interest to pension advisers and public employers, the High Court has ruled that a social housing provider which dispensed with its chief executive’s services did so because it was dissatisfied with his performance and not for reasons of business efficiency.

The provider, an arm’s length company which was wholly owned by a local authority, made a severance payment of more than £200,000 to the 52-year-old executive on his departure. However, it refused to grant him early retirement or to pay him a full pension.

He complained to a deputy pensions ombudsman, who found that he was entitled to be paid an unreduced pension by virtue of the Local Government Pension Scheme (Benefits, Membership and Contributions) Regulations 2007. That was on the basis that the company had decided that he should leave his post in its own interest and on grounds of business efficiency.

In overturning that decision, the Court noted that the company’s sole shareholder, the local authority, had threatened to withdraw its funding if the executive was not replaced. The evidence was all one way that his employment was ended due to serious doubts about his personal performance. His departure was not required due to any systemic or structural change in the way the company ran its business and it could not sensibly be said that business efficiency was a primary ground for his removal.

Reasonable Adjustments for Disability – Appeal Court Guidance

Every responsible employer knows that reasonable adjustments have to be made for disabled workers. However, in a guideline decision involving a civil servant suffering from post-viral fatigue syndrome, the Court of Appeal has ruled that that duty is not without limit.

Due to her condition, which it was agreed amounted to a disability, the woman had been absent from work for a period of 62 days. The government department in which she worked had a policy for dealing with absenteeism and she was issued with a written improvement warning and told that she could face disciplinary sanctions.

She sought to persuade the department that the period of absence should not be counted against her and that the written warning should be withdrawn. She also said that the policy should be modified to enable her to have longer periods of sick leave in the future before she would face the threat of disciplinary action.

Following a grievance procedure, however, the department refused to comply with either of those requests. The woman’s disability discrimination complaint was rejected by an Employment Tribunal, and subsequently by the Employment Appeal Tribunal (EAT), on the basis that the department could not reasonably have been expected to make either of the adjustments sought.

In ruling on her challenge to the EAT’s decision, the Court of Appeal found that both tribunals had erred in finding that the duty to make reasonable adjustments was not engaged simply because the absenteeism policy applied to all the department’s employees. There was clear evidence that the terms of the policy had placed the woman at a substantial disadvantage.

Dismissing her appeal, however, the Court found that employers are entitled to say, after a pattern of illness absence, that they should not be expected to have to accommodate an employee’s absences any longer. Although the woman was in no sense culpable for her absence, the department’s refusal to make the adjustments requested was, in the circumstances, reasonable.

In sounding a warning note to employers, however, the Court noted that the right to reasonable adjustments is just one of the protections afforded to disabled workers. Those who take disproportionate decisions to dismiss employees for disability-related absences could still be held liable for discrimination or unfair dismissal.