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Employment Law Update

contract_gavelIt's almost the start of another year! Before you get ready to put 2008 behind you, we have some influential case law to sift through for December, which will help you prepare the New Year on the right foot.

This month, we take a closer look at how the redundancy and age discrimination claims are being resolved by the Courts. Plus, case law which addresses the management of workplace stress and more.

'Last in - first out' redundancy

Redundancy policies based on the premise of ‘last in – first out’ was something that had been frequently encountered in some industries, that is, until the arrival of age discrimination.

In a recent case that had been brought to the courts, an employer argued that they did not have to strictly follow the criteria that had been agreed with the union when selecting employees for redundancy. Instead, the employer in question favoured the view to award points to their staff based on length of service, which was not part of the agreed redundancy selection process.

The union argued that this was not feasible as using ‘length of service’ as a deciding factor amounts to age discrimination, therefore singling out younger employees. The High Court came to a decision that if the employer were to use ‘length of service’ as the only criteria for selection, then this would indeed make the redundancy unlawful. However, in this case it was just one element of a wider set of redundancy selection criteria.

The Court also outlined that, as the criterion served a justifiable aim of the employer - to reward the loyalty and experience of longer serving employees, and to protect older employees from being put onto the labour market at a time when they are particularly vulnerable - this would not make the whole criteria unlawful.

Age-related enhanced redundancy payments

The next case also covers the hot topic of redundancy and age discrimination, but with reference to age-related enhanced redundancy payments, which pay out more to older/longer serving employees.

Here, the employee claimed that her redundancy was discriminatory and that she would have received much more for her length of service if she had been older. It was brought to light that the formula that had been used to calculate the entitlement gave rise to wide variations. At the time, the employee was 36 years old and had been working with her company for 7 years. According to the company’s scheme, her payments amounted to 55 percent of her gross annual salary. In comparison, an employee who carried out 10 years' service with the same company and who is 50 years old would receive 175 percent of their salary.

The employee claimed that the scheme unlawfully discriminated against her on grounds of age. Similarly to the case above, the tribunal agreed that although the scheme was both directly and indirectly age discriminatory, the scheme was justified as it was designed to reward loyalty and to protect older employees, who are more likely to be more vulnerable in the job market.

However, upon further investigation, the EAT (Employment Appeals Tribunal) said that the tribunal had failed to justify whether the degree of difference in the benefits available according to length of service was reasonably necessary to meet the scheme's objectives. For this reason, case was referred back to the Tribunal to resolve this point.

Workplace stress and compensation claims

During stressful times, especially with the recession holding a firm grip on our finances, we at Connection felt that it is appropriate, now more than ever, to hand down some important judgement on workplace stress and compensation claims.

An employee who was placed under great stress through overwork decided to notify her line managers that she was ‘at the end of her tether’. Despite being given relative warning of the stress she was under, her employer did nothing meaningful to address her problems. She later visited her GP who signed her off sick with stress, only to later find out that her company had terminated her contract.

The Court said that it was satisfactory that the employee had let the company know about the stress she was facing beforehand, as she had also been coming into work late and also told her manager that she was worried that she might become ill if things do not improve.

In the end, the Court ruled that the employer should have sent the employee home and also arranged for an urgent investigation by occupational health, even if she had not been signed off sick by her GP.

And finally ... Compensatory rest breaks

According to the working time regulations, an employee is entitled to a twenty-minute rest break, which is to be taken during the first six hours of work. In situations where an employee has been working for longer than six hours, there is no entitlement to further breaks. The EAT has recently seen a case, very relevant to this area, whereby an employee had worked more than 12 hours and requested a rest break.

The EAT ruled that the employee is only entitled to one rest break for however long worked in excess of 6 hours. The EAT also stated that, if a rest break cannot be taken within the first 6 hours of work, an equivalent compensatory rest break must be given.

  • 1st December 2008
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