Employment Update 21 January 2011
Welcome to our fortnightly round-up of what's happening in employment law.
Plans for shared parental leave
The Deputy Prime Minister, Nick Clegg, has announced that the Government will be launching a consultation "in the coming weeks" on a new flexible system of shared parental leave, which is due to be introduced in 2015.
Nick Clegg labelled the current paternity leave rules as "Edwardian" and said: "Right now, most parents simply do not have the flexibility they need. Despite the fact that fathers can request flexible working, many feel reluctant to do so. There is still a stigma attached. And, when a child is born, men are still only entitled to a paltry two weeks of paternity leave. These rules patronise women and marginalise men. They're based on a view of life in which mothers stay at home and fathers are only breadwinners."
The precise details of the new system of shared parental leave have not yet been confirmed but the key principles of the system include the following:
any new arrangement must maintain women's guaranteed right to time off in the first months after birth (paid as it is now);
the reforms must transform the opportunities for fathers to take time off to care for their children;
it must be possible for mother and fathers to share part of their leave, splitting it between them, in whatever way suits them best; and
the new system must take into account the needs of employers and it must be simple to administer.
Nick Clegg confirmed that the current Government wants to go further than the new additional paternity leave provisions (which will have effect for parents of children due on or after 3 April 2011) and outlined some of the new proposals for shared parental leave. He suggested that both parents could be off at the same time if they wanted to be and that leave could - in agreement with employers - be taken in a number of chunks rather than a single block. He also stated that "we need to work with business to make absolutely sure that, from their point of view, the new system is sustainable and affordable".
In relation to flexible working, Nick Clegg also commented that extending flexible working beyond mothers and fathers is essential in order to dispel the stigma many men, and some employers, still attach to it. He said that by extending flexible leave, for example to grandparents, or close family friends, the Government hopes to make it much more common and a cultural norm.
Removal of DRA
The Government has confirmed that it will remove the default retirement age (DRA) of 65 and will proceed with its plan to phase it out between 6 April 2011 and 1 October 2011.
The Government has published its long-awaited response to the recent consultation on the issue, alongside new ACAS guidance, which is intended to help businesses adapt to the removal of the DRA.
Further detail, included the impact on employers, is outlined in our recent newsflash.
Public sector equality duty – regulations and guidance
The Government has published its response to the public sector equality duty consultation and draft regulations setting out the specific duties and the bodies to which they apply. The new public sector equality duty is due to come into force on 6 April 2011.
The equality duty is intended to combine the three separate duties on public authorities relating to race, disability, and gender equality into a single duty, and extend it to cover age, sexual orientation, religion or belief, pregnancy and maternity, and gender reassignment. The public sector equality duty consists of a general duty and specific duties, designed to help public bodies meet the general duty.
Positive action - guidance
The GEO has published a quick start guide to help employers understand the new provisions of the Equality Act 2010 dealing with positive action in recruitment and promotion (which come into force on 6 April 2011).
The guide explains how positive action in recruitment and promotion will work and provides practical examples. It also outlines how positive action in recruitment and promotion differs from positive discrimination.
Naming employers who flout NMW laws
Following the introduction of the scheme to name employers who flout payment of the national minimum wage (NMW) on 1 January 2011, the Department of Business, Innovation and Skills (BIS) has published its Policy on HMRC Enforcement, Prosecutions and Naming Employers who flout NMW law.
The document sets out how the scheme will operate and the criteria for naming employers. If, having reviewed the evidence, BIS decides that an employer should be named, notwithstanding any representations made by the employer, the employer will be named in a press notice. BIS will not maintain a public register of employers who have failed to pay the NMW or who have been named.
Tribunal statistics – quarterly statistics
The Tribunals Service has published quarterly statistics for 1 July 2010 to 30 September 2010.
In relation to Employment Tribunals, the number of claims during the relevant period was 57,100. The statistics show that claims fell by 8% compared with the same quarter for the last year. There was a 19% fall in single claims between the second quarter of 2009-10 and that of 2010 -11 (from 19,400 to 15,600). There was a smaller fall in the number of multiple claims over the same period (from 42,700 to 41,500 claims – 3% fall).
Transferring confidential information to private email address
In a decision that will be welcomed by many employers, the High Court has confirmed that an employee was in repudiatory breach of contract when she transferred confidential information to her private email address. The High Court doubted whether possible litigation with an employer could ever justify an employee transferring or copying confidential documents and also noted that, in the absence of a specific issue, an employee would not be entitled to transfer documents to protect their own position in case a regulatory dispute might arise.
In Brandeaux Advisers (UK) Limited and others v Chadwick, Ms Chadwick was Head of Research and Business Development and undertook a compliance role. She was informed that she was to be dismissed on grounds of redundancy and, during discussions about her exit package, her employer considered that she was making threats to secure more compensation. A review of Ms Chadwick’s company email account revealed that she had sent large volumes of her employer’s confidential information to her private email address. The High Court granted the employer's without notice application for an injunction and, following a disciplinary hearing, Ms Chadwick was summarily dismissed for gross misconduct.
Ms Chadwick argued that her actions were not a breach of contract as it was an implied term that "as a matter of law and/or as a matter of reasonable necessity" she could use and disclose confidential information if fairly required for legitimate interests or to protect her legal rights or to defend herself. She also claimed that she was so entitled where use or disclosure was in the public interest (e.g. in relation to financial regulators). She also argued that, in any event, her employer could not rely on a repudiatory breach by her to dismiss her because the employer was already in repudiatory breach of contract.
The High Court noted that Ms Chadwick's purpose in transferring the information was to arm herself for the future in any disputes with her employer or the regulators. However, the High Court doubted whether possible litigation with an employer could ever justify an employee transferring or copying confidential documents which might be relevant to such a dispute. An employee should instead rely on the court’s disclosure process to obtain such information. Nor, in the absence of a specific issue, was Ms Chadwick entitled to transfer documents in case a regulatory dispute might arise. Ms Chadwick’s conduct was therefore in breach of contract.
The employer was also entitled to dismiss Ms Chadwick summarily in response to her breach of contract. Ms Chadwick's misconduct showed that she could not be relied upon to perform an important part of her duty, namely her duty as to confidential information. The result would not have been different had the employer itself been in repudiatory breach of contract itself at the time of Ms Chadwick’s breach. The relationship was continuing and it was open to the employer to accept Ms Chadwick's breach. However, the High Court noted that in some circumstances an employer’s past conduct may be relevant to the severity of an employee’s breach and whether it amounted to a repudiation of the contract.
Whilst employers will welcome this decision, caution should be exercised. If, for example, an employee wishes to use confidential information to make a report to the regulator, he or she would not be prevented from using confidential information for that purpose. However, the High Court did express doubt about whether this would entitle an employee to copy documents onto a private computer.