Legal Alert - January 2010

Legal alert

A monthly checklist of new and pending laws, regulations, codes of practice and rulings that could have an impact on your business

This month:

  • 2010 update on statutory payments for employees
  • New rules for company annual returns
  • Have your say: new guidance on the legal definition of waste and its application
  • Case law: asking a male worker to get a haircut is not sex discrimination
  • Case law: illnesses can be added together for disability discrimination purposes
  • Case law: pregnant worker not automatically entitled to risk assessment
  • Guidance on employees' right to request time off for training
  • Waste rules and guidance for portable batteries

2010 update on statutory payments for employees

Employers must keep up to date with annual changes to statutory payments that can be awarded to employees - for example, by employment tribunals. These are more complicated this year thanks to the difficult economic climate.

The maximum amount of ‘a week's pay' used to calculate the ‘basic award' for an employee who is made redundant, or who wins a claim for unfair dismissal, remains unchanged at £380 per week. This amount will not change until February 2011 at the earliest.

In cases of unfair dismissal an employment tribunal can ask an employer to pay extra compensation, to make up for an employee's loss of earnings between the dismissal and tribunal hearing and any likely future loss of earnings. For an employee who leaves or is given notice on or after 1 February 2010, the limit on the amount of this ‘compensatory award' will fall from £66,200 to £65,300, reflecting a decrease in the retail price index of 1.4 per cent for the year to September 2009.

In addition, the weekly rates for statutory adoption, maternity and paternity pay and maternity allowance are set to rise from £123.06 to £124.88 in April 2010, while the weekly rate for statutory sick pay remains unchanged at £79.15.

Operative date
• 1 February 2010; April 2010

New rules for company annual returns

New company law in force means company officers and their advisers now need to supply more information when filing annual returns for companies limited by shares at Companies House.

First, each director's country or place of residence must now be specified - for example, ‘United Kingdom'. (This does not amount to a change in the director's particulars, so it is not necessary to also file a ‘Change of Director's Details' form.)

Second, annual returns now contain a statement of capital - a ‘snapshot' of the company's share structure at the date of the return. A new requirement is to state the amount of money payable on each share over and above its nominal or face value - that is, the premium payable on it. This can be a problem if a company has issued shares at different times, with a different premium payable on each issue. If in doubt, seek professional advice.

Third, annual returns must now contain details of voting rights, dividend rights, rights on a winding up and whether any shares are redeemable (effectively, whether they can be cashed in and the share capital returned to the owners of the shares, at the option of either the company or the shareholder).

Companies House will not accept references to the company's articles or previous share issues for these details. For example, ‘please see the Articles of Association for the rights', ‘rights as set out in the Articles', ‘share rights are the same as those already in issue', ‘not applicable' and ‘pari passu' are all unacceptable wording.

  • Download updated guidance on a company's annual requirements from the Companies House website
www.companieshouse.gov.uk/about/gbhtml/gp2.shtml  

Operative date
• Immediate

Have your say: new guidance on the legal definition of waste and its application

Businesses must comply with the continually developing obligations on waste management, and will welcome the opportunity to comment on new guidance in this area.

The Department for Environment, Food and Rural Affairs (Defra) is seeking views on its draft guidance to help businesses and other organisations take the right decisions about the classification of substances as waste, particularly in the more difficult cases. The draft guidance is in three parts:

  • Part 1 is a practical guide for businesses and other organisations;
  • Part 2 explains the background to and the rationale for the draft guidance; and
  • Part 3 provides detailed guidance on the case law on the definition of waste and is intended for those with a specialist interest in the issue.

The guidance recognises that businesses take decisions about whether something is or is not waste on a day-to-day basis, for which no advice is necessary. However, the guidance aims to provide assistance in cases where the decision is more difficult (eg where the substance or object has a value or a potential use, or where the decision is about whether waste has been fully recovered or recycled and has therefore ceased to be waste).

Businesses have until 12 April 2010 to respond to the consultation.

Operative date
• 12 April 2010

Case law: asking a male worker to get a haircut is not sex discrimination

Employers will welcome a recent court decision that clarifies sex discrimination rules.

In this case, a male trainee police officer, with shoulder-length hair, was told by his employer to get his hair cut. He was threatened with disciplinary action if he did not comply, so he did. It was agreed that a female recruit with similar-length hair would not, in those circumstances, have been required to have her hair cut.

The employee brought a complaint of sex discrimination, claiming compensation for less favourable treatment. The employment tribunal found that the employer's dress code policy was ‘gender neutral', which was permitted so long as (1) it was fair for men and women and (2) it fitted with the conventions of society and the needs of that profession.

The employee's appeal to the Employment Appeal Tribunal was dismissed, on the basis that a female comparator who failed to comply with a gender-neutral dress code would have been treated in the same way as the claimant, ie she would have been required to comply with the code (as it affected her) in the same way that the claimant was required to comply with the code (as it affected him). As a result, the employee had not been treated less favourably, and his claim for sex discrimination failed.

Operative date
• Immediate

Case law: illnesses can be added together for disability discrimination purposes

Employers need to be aware that an employee who suffers two different impairments, each lasting for less than 12 months but together lasting for more than a year, is protected by the disability discrimination rules, following a recent ruling.

In this case, an employee suffered a mild myelitis (spinal inflammation) over a period of 10 months, during which time she was intermittently absent from work. Thereafter, she developed a secondary myofascial pain syndrome which, following a phased return to work and substantial periods of absence, led to her dismissal.

An employment tribunal rejected the employee's disability discrimination claim, as it ruled that there were two periods when the employee was ill and found carrying out day-to-day activities difficult, but neither lasted, or could have been ‘likely' to last, for at least 12 months; therefore, the impairment was not ‘long term', as required by the law.

However, the Employment Appeal Tribunal overturned the tribunal decision, saying that the effect of a health problem which has developed from a previous illness should form part of the process of deciding whether the effect of the original illness or disability has lasted, or is likely to last, for at least a year. As a result, the effect of the two different impairments over two periods, amounting together to at least 12 months, did constitute a substantial and long-term adverse effect for the purposes of the disability discrimination rules.

Operative date
• Immediate

Case law: pregnant worker not automatically entitled to risk assessment

Employers will welcome guidance on when a risk assessment should be carried out for a pregnant worker, given in a recent ruling.

In this complex case, a teacher was involved in internal disciplinary proceedings with her employer. She notified the employer of her pregnancy, and was then either on sick leave or on school holidays for all but five weeks, until she went on maternity leave.

After her daughter was born, the employee resigned and started proceedings for constructive dismissal and sex discrimination, citing in particular the employer's failure to carry out a risk assessment after she had told them that she was pregnant. The employment tribunal rejected her claim on this issue, and the Employment Appeal Tribunal, confirming the tribunal's decision, gave helpful guidelines on the pre-conditions that need to be met to trigger the obligation to carry out a risk assessment of a pregnant worker, namely:

  • that the employee notifies the employer that she is pregnant in writing
  • the work is of a kind which could involve a risk of harm or danger to the health and safety of a new or expectant mother or to that of her baby
  • the risk arises from defined processes or working conditions or physical (eg biological or chemical) substances in the workplace.

Even in circumstances where the automatic entitlement is not triggered, employers are advised to carry out a risk assessment for any employee who notifies them that she is pregnant.

Operative date
• Immediate

Territories
• England, Wales and Scotland

Guidance on employees' right to request time off for training

Employers will welcome new guidance on the upcoming legal right of employees to ask for time off for training, although smaller businesses have longer to prepare for introduction of the new law.

The right to request time to train was included in the Apprenticeships, Skills, Children and Learning Act, which received Royal Assent in November 2009. The introduction of the right will be phased in, and will be made available to employees in organisations with 250 or more employees from April 2010, before being extended to all employees from April 2011.

Guidance for employers is available on the Business Link website, with guidance for employees on the DirectGov website.

The new right closely follows the model used for agreeing requests under the flexible working arrangements. Employers are required to consider any requests for time off to train, and to respond within a set timeframe. Requests can be turned down when there is a good business reason to do so, including where the employer does not believe the training will help improve business performance.

Operative date
• April 2010; April 2011

Waste rules and guidance for portable batteries

New rules are in force for businesses that distribute, sell, recycle or export batteries or products that contain them. Most rules apply now, but some will apply from February 2010. All batteries - industrial (eg for barcode readers in shops), car batteries, and portable (PC batteries, AAs etc, including rechargeable and single-use batteries) are subject to new rules, but below are the regulations for the largest group, businesses that use or produce portable batteries.

If you place portable batteries, or products that contain them, onto the UK market for the first time (i.e. you have not bought them from another UK supplier), you may be a ‘producer', and have legal obligations. Different obligations apply to ‘large' and ‘small' producers.

A large producer is defined as someone that places over one tonne of portable batteries on the UK market each year. Large producers will have obligations to pay towards the collection, treatment and recycling of waste portable batteries and must join a Battery Compliance Scheme (BCS) who will carry this out on their behalf.

Large producers must also keep a record of the weight of portable batteries they have placed on the market, and should supply this information to their Battery Compliance Scheme from January 2010.

A small producer is defined as a firm that places one tonne or less of portable batteries on the UK market each year. Small producers must:

  • register with the Environment Agency within 28 days of placing batteries on the market in the UK
  • report the total amount in tonnes of portable batteries they have placed on the market by 31 January each year
  • pay an annual charge of £30 to the Environment Agency.

Small businesses have no collection, treatment or recycling obligations.

In most cases a business will know beforehand if it will be above or below the one-tonne a year threshold. However, some only find out during the compliance year that the firm will overshoot that threshold. In this case, the business must join a BCS within 28 days of exceeding the threshold and will then have collection, treatment and recycling obligations.

Businesses which supply portable batteries to end-users (the public or other businesses) are considered ‘distributors' of portable batteries, and may also have obligations.

From 1 February 2010, distributors who supply over 32kg of portable batteries per year in an individual store, online, via mail order or telesales, will need to take back used batteries from the public free of charge. Distributors must:

  • provide the take-back facility free of charge to the public (that is, not require them to purchase goods from in order to return used portable batteries)
  • provide information to end-users about the take-back facility
  • accept all types of portable batteries - not just the ones they supply.

Distributors will not have these obligations if the batteries they supply are only in equipment containing batteries and they do not also supply batteries separately, or they supply less than 32kg of portable batteries a year.

Operative date
• January 2010

Next month in Small Business Update

  • Organising a teambuilding day
  • Selling to the over 50s
  • Avoiding common complaints
  • Carrying out a salary review
  • Q&A: Online copyright infringement
  • Action List: How to spruce up your premises
  • 10 ways to... Improve email newsletter open rates
  • Is this your problem... My staff are sneaking off early

 

 


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