Member Article

Yet again, this year has been a busy one for employers, HR teams and their lawyers: employment law changes and decisions from the Courts have kept us all on our toes! Here is a reminder of some of the most significant cases and legal developments of 2012.

1. The unfair dismissal qualifying period increased to two years for those employed on or after 6 April 2012. The qualifying period for employees whose employment started before this date remains 12 months.

2. In April changes to employment tribunal practice were introduced. These included judges sitting alone in unfair dismissal cases (unless they decide otherwise), witness statements being "taken as read" so that witnesses no longer need to read these out aloud, increase to the limit on costs that can be awarded to £20,000 (from £10,000) and an increase in the amount of deposit a claimant with a weak case can be ordered to pay to £1,000 (from £500).

3. Equal pay claims can be bought in the civil courts as breach of contract claims up to six years (five years in Scotland) after the end of employment. This is significantly longer than the time limit for bringing such claims in the employment tribunal, which is six months. (Birmingham City Council v Abdulla)

4. Partners in Limited Liability Partnerships are not employees entitled to bring unfair dismissal claims (Tiffin v Lester Aldridge LLP) or workers entitled to bring whistleblowing claims (Clyde & Co LLP v Bates Van Winkelhof). Note however that partners and other self-employed workers are protected against discrimination under the Equality Act 2010.

5. The Supreme Court held that the justification test for direct age discrimination cases is narrower than for indirect discrimination. Legitimate aims for direct age discrimination must be of a public interest nature such as those related to vocational training or the labour market. Examples include creating inter-generational fairness or preserving the dignity of individuals. By contrast, in indirect discrimination cases an employer can still rely on an open-ended category of reasons which are specific to its own business needs (Seldon v Clarkson Wright and Jakes).

6. The "costs plus" approach in indirect discrimination claims was preserved by the Court of Appeal so that indirect discrimination will not be lawful if the reason for the provision, criterion or practice (PCP) is solely to save costs. However, costs can be considered along with other factors and it appears that the "plus" element required to justify the PCP may be rather subtle and in most cases should not be too hard to identify (Woodcock v Cumbria Primary Care Trust).

7. The long running issues around holiday entitlement during and after sick leave continued to take up judicial time in 2012. The European Court of Justice (ECJ) confirmed that a worker who falls ill during a period of annual leave must be allowed to re-schedule that leave, even if that is in a subsequent holiday year (Asociación Nacional de Grandes Empresas de Distribucinón (ANGED) v Federación de Asociaciones Sindicales (FASGA) and others). However, in other decisions the ECJ also suggested that sick workers can only carry over unused holiday for a limited period. A period of 15 months was upheld but a period of 9 months was held to be too short (KHS AG v Schulte and Neidel v Stadt Frankfurt am Main).

8. The trend in the cases this year has been for an increasingly narrow interpretation of the service change provision in TUPE. The Court of Appeal followed this trend when it ruled that for there to be a service provision change the services must be provided to the same entity both before and after any change of contractor. While this may appear to be a positive development for those looking to argue TUPE does not apply, the "old" transfer of an undertaking provision may still bite meaning that TUPE applies in any event (McCarrick v Hunter).

9. The validity of a restrictive covenant must be judged at the time it is entered into. A covenant that is void at the time it is entered into, for example because it is too wide for a junior employee, cannot subsequently become valid if that employee is promoted. The High Court ruled that an employer was not entitled to enforce such a covenant - it should have asked the employee to enter into a new employment contract or accepted the covenant afresh on their promotion - a simple acknowledgment of the existing (invalid) term was not sufficient (Patsystems v Neilly)

10. The European Court of Human Rights held that the UK was in breach of its Convention obligations by failing to provide a legal remedy against dismissal on the grounds of political opinion or affiliation. It remains to be seen how the UK Government will respond to the judgement: a change to the law in the future is possible (Redfearn v United Kingdom).