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Employment Law Update

lawbookandgavelWith the financial crisis topping everyone’s conversation at the moment, controversy continues to surround redundancy, dismissal and benefits. It is therefore worthwhile keeping yourself ahead of the relevant employment law to protect your business.

This month we look at guidelines for dealing with heat of the moment resignation or dismissal, as outlined by the Employment Appeal Tribunal. We also look at case law providing guidelines when dealing with retirement procedures, redundancy and claims made by the employer for race and age discrimination.

Retirement notification procedure

The case of Todd v Sanquhar Ltd is a useful reminder that retirement procedures should be strictly followed by employers to avoid compensation claims.

Instead of being given the required 6 months' notice as defined by the Age Regulations, Mrs Todd was only given 12 weeks' notice of her retirement date. However, she later made a request to continue working beyond the normal retirement date, which was accepted, so she was not actually dismissed.

All the same, despite having suffered no actual loss, Mrs Todd still brought a claim on the basis that there was a technical breach of the retirement procedure and was awarded one week’s pay as compensation.

The Age Regulations state that where less than 6 months' notice has been given, compensation shall be awarded.  In this case, it was decided by the Tribunal that no compensation would be inappropriate, as the employer had admitted to the breach of Regulations. If Mrs Todd had not been allowed to continue working, the compensation could have been much more considerable.

Redundancy, Dismissal and Age Discrimination

In a recent case, the employer set up a contractual redundancy scheme which calculated payments according to age and length of service with the company. MacCulloch claimed that her redundancy pay was discriminatory and that she would have received a much greater benefit for her length of service if she had been older. The tribunal agreed with MacCulloch, as the scheme resulted in employees that were younger receiving lower payments than those who were older.

However, age discrimination may be reasonable where it seeks to follow legitimate aims. According to the Employment Appeal Tribunal, legitimate aims which may justify discrimination include:

  • Encouraging and rewarding loyalty
  • Providing higher payments to older workers because they are more vulnerable in the job market
  • A desire to provide a popular, generous scheme to encourage older workers to leave earlier, making way for younger workers and avoiding compulsory redundancies.

Council faces £1 million payout for unfair dismissal and age discrimination claims.

In Wooster v London Borough of Tower Hamlets, the tribunal had decided that Mr Wooster had been directly discriminated against on the grounds of age as he had been made redundant just before his 50th birthday, preventing him from receiving his enhanced pension benefits.

The tribunal also concluded that Mr Wooster had been unfairly selected for redundancy and had therefore been unfairly dismissed. It had also been discovered that the Council refused an offer made by the social landlord to fund Mr Wooster’s salary to keep him on past his 50th birthday. This offer would have enabled Mr Wooster to retire with a lump sum and allow him to take his pension under the Council’s pension scheme. The Council did come back to the social landlord and admitted that they did not want to take up the offer as it would have meant that the Council would have had to pay Mr Wooster’s pension.

And finally

We take a look discriminatory job advertisements and the risk that employers face when singling out candidates on the basis of race.

In another recent case, a vacancy had been advertised stating that the company did not employ ‘immigrants’ and gave the reasoning that their clients did not like dealing with them.

It is worth remembering that the European Court of Justice (ECJ) has ruled that discriminatory job adverts do actually amount to direct racial discrimination, and so in this case the employer was held accountable to this.

This ruling overturns previous UK case law, where a job advert fell outside the discrimination legislation meaning that a claim could not be made.

We at Ceridian Connection hope these cases have prepared you and given you a solid framework so that you know exactly what action to take if faced in similar situations in the future. Until next month ...

  • 1st November 2008
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