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Employment Update - 10 January 2011


United Kingdom

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Welcome to our fortnightly round-up of what's happening in employment law.

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Compensation limits and statutory payments - on the up

Compensation limits are set to rise on 1 February 2011. The maximum compensatory award for unfair dismissal will increase from £65,300 to £68,400 and the limit on the maximum amount of a week's pay for the purposes of calculating statutory redundancy pay or the basic award for unfair dismissal will increase from £380 to £400.

Statutory payments are also set to increase from 11 April 2011. The standard weekly rates for statutory maternity pay, statutory paternity pay and statutory adoption pay will increase from £124.88 to £128.73.

The key compensation limits and statutory payments are set out here


Fee for claimants?

The British Chambers of Commerce (BCC) has released research highlighting the costs for business in the current employment tribunal system and supporting the introduction of a fee for claimants.

Dr Adam Marshall, Director of Policy and External Affairs at the BCC, said: “We urge the Government to review the current system and consider introducing a fee for claimants to discourage spurious and baseless claims." The Financial Times has reported this week that the Government is due to launch a consultation on the tribunal system this month and that Government ministers appear sympathetic to the idea of introducing a fee as a way of discouraging spurious claims. Proposals for the level of the fee vary between £30 and £500 per case.


Caste discrimination - research published

A report into caste discrimination has concluded that there is evidence to suggest that caste discrimination and harassment exists in Great Britain.

The Equality Act 2010 includes a provision that, by order of a Minister, caste may be treated as an aspect of race. The National Institute of Economic and Social Research (NIESR) was commissioned by the previous government to establish the extent of caste discrimination and harassment in Great Britain and help inform the government whether to exercise this power. NIESR's report confirms that evidence suggesting that such discrimination and harassment exists has been found.

The key findings of the report include the following:

  • caste awareness in Britain is concentrated amongst people with roots in the Indian sub-continent (who comprise five per cent of the population). It is not religion specific and is subscribed to by (and affects) members of any or no religion.
  • there is evidence suggesting that caste discrimination and harassment does occur in relation to work, the provision of services and education.
  • the caste discrimination and harassment identified was by higher castes against the lowest castes.
  • there is no clear evidence on whether the extent of caste discrimination and harassment is changing.

The report states that, to reduce caste discrimination and harassment, the Government might take educative or legislative approaches. Either would be useful in the public sector. However, non-legislative approaches are less likely to be effective in the private sector. The report also states that the provisions in the Equality Act 2010 on religious discrimination cannot cover caste discrimination and harassment as effectively as caste-specific provisions.

Ministers are now considering the findings of the report carefully and will comment on it in due course. Baroness Verma recently commented in a House of Lords debate that: "we will consider the report in the context of our equality strategy, including the enhanced public sector equality duty and our commitment to work with businesses to address the main challenges to equality. The report is a valuable guide. We have included all the people who raised the issue of caste, and the report shows where caste problems exist. However, we need to ensure that our response is reasonable and proportionate, bearing in mind that a lot of people will be affected by it if it is brought into legislation".


Dismissal for raising false discrimination allegations

The Employment Appeal Tribunal (EAT) has confirmed that an employer did not victimise an employee when it dismissed her in response to her numerous false grievances alleging discrimination. The complaints were properly and genuinely separable from the features of the complaints which led to the dismissal (such as the falseness of the allegations and the time and internal resources spent dealing with the grievances). Whilst this case will be welcomed by employers handling multiple grievances, caution should still be exercised before dismissing an employee who has raised allegations of discrimination.

Under both the former discrimination legislation and the Equality Act 2010, it is victimisation for an employer to dismiss an employee because of a protected act. Protected acts include alleging, or bringing proceedings for, discrimination. In Martin v Devonshires Solicitors, Ms Martin was employed by Devonshire Solicitors as a legal secretary. She submitted a grievance alleging that her previous employer had informed partners at Devonshires that she had brought a sex discrimination claim against them. She alleged that she suffered victimisation and harassment at Devonshires and referred to two specific incidents involving certain partners. The grievance was investigated and it was found that none of the partners were aware of Ms Martin's claim against her previous employer, no discriminatory comments were made and that Ms Martin's allegations had been made maliciously and in bad faith.

Ms Martin subsequently went on sick leave, suffering with stress-related symptoms. During this period, Ms Martin raised a number of grievances alleging discrimination or victimisation. Devonshires obtained a report from an occupational health consultant and learned for the first time that Ms Martin had a history of mental ill-health. A further report from a consultant psychiatrist stated that Ms Martin suffered from a recurrent depressive illness with psychotic episodes, during which she experienced paranoid delusions. The psychiatrist believed that the incidents that Ms Martin alleged to have occurred were probably auditory hallucinations and that the risk of relapse was likely.

Devonshires advised Ms Martin that it was considering terminating her employment due to the breakdown in trust and confidence. Following a meeting between the senior partner and Ms Martin, she was given notice of dismissal with immediate effect. The reasons for dismissal included that if she returned to work, she would inevitably encounter the partners against whom she had made serious, and untrue, allegations. Devonshires also noted that a substantial amount of time and internal resources had been spent dealing with the eight grievances Ms Martin had raised in seven months. If she remained in employment, this would be likely to continue and have a further adverse impact on the business.

Ms Martin subsequently brought claims for sex and disability discrimination (including victimisation) and unfair dismissal. The Employment Tribunal dismissed all her claims. In relation to her victimisation claim, the Employment Tribunal held that the correct approach was to form a proper view of what were the operative reasons for the employer's actions. The Employment Tribunal may have to examine what it was about a particular grievance, or the way in which it was advanced, or the circumstances surrounding it, which formed part of the employer's reasons, in order to discern whether or not the fact that the grievance alleged unlawful discrimination played any material part in the employer's reasons. In this case, there were several things about Ms Martin's behaviour in relation to the grievance and about the nature of those grievances that contributed to Devonshires' decision to dismissal, all of which owed nothing to the fact that the grievances raised specific allegations of sex or disability discrimination.

The EAT upheld the Employment Tribunal's decision. It noted that there will in principle be cases where an employer has dismissed an employee (or subjected him to some other detriment) in response to a protected act (e.g. a complaint of discrimination) but where he can, as a matter of common sense and common justice, say that the reason for dismissal was not the complaint as such but some feature of it which can properly be treated as separable. The EAT gave the example of an employee who makes, in good faith, a complaint of discrimination but couches it in terms of violence. In such cases, it is not contrary to the policy of the anti-victimisation provisions for the employer to say "I am taking action against you not because you have complained of discrimination but because of the way in which you did it".

In this case, it was a combination of inter-related features and consequences of Ms Martin's complaint which were properly and genuinely separable from the making of the complaint itself. These included the falseness of the allegations, the fact the Ms Martin was unable to accept that they were false and the risk of further disruptive and unmanageable conduct as a result of her mental illness. The distinction made by the Employment Tribunal was therefore legitimate. However, as noted above, employers should exercise caution when dismissing an employee in such circumstances. The EAT also noted that employees who bring complaints often do so in ways that are, viewed objectively, unreasonable. It would be contrary to the policy of anti-victimisation provisions if employers were able to take steps against employees simply because in making a complaint, they had used "intemperate language" or made "inaccurate statements". An employer who objects to "ordinary unreasonable behaviour" should be treated as objecting to the complaint itself.


Flexible working extended from April 2011

Regulations extending the right to request flexible working to parents of children aged under 18 have now been laid before Parliament and will come into force on 6 April 2011.

Currently, only parents of children aged under 17, or parents of disabled children aged under 18, have the right to request flexible working. Following the publication of the business plan for the Department for Business, Innovation and Skills last November, the Government is also due to publish a consultation shortly on extending the right to request flexible working to all employees (alongside proposals for "shared parental leave").


Private Members' Bill for addtional bank holiday

A Private Members' Bill calling for an additional bank holiday has received its first reading in the House of Commons.

Nadhim Zahawi MP is supporting the St George's Day and St David's Day Bill 2010-11, which would designate St George's Day (England) and St David's Day (Wales) or their nearest working days as annual public holidays, with effect from 2012.

TUC General Secretary Brendan Barber has backed the Bill, saying that "Over the next two years, people across the UK will be celebrating the extra bank holidays for the royal wedding and the Queen's diamond jubilee. But in 2013 we are set to go back to having just eight public holidays a year - among the lowest number in Europe. This country can easily afford a new bank holiday. The government should make a ninth bank holiday a permanent fixture in the calendar from 2013 onwards."



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