Employment update March 2007
DTI Review proposes abolition of statutory dispute resolution procedures
The DTI has this week announced the proposals of the review committee. It is proposed to repeal the statutory procedures. The review committee recognised the good intentions of the statutory procedures, but has concluded that they have led to "unintended consequences that outweighed their benefits".
The DTI has issued a consultation document "Resolving disputes in the workplace", inviting views on a package of measures designed to:
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Raise productivity through improved workplace relations
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Provide access to justice for employees and employers
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Reduce the cost of resolving workplace disputes
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Achieve swift workplace dispute resolution.
The consultation closes on 20 June 2007, and firm proposals are anticipated later this year.
National Minimum Wage increases
The DTI has announced that the rates for national minimum wage will be increased with effect from 1 October 2007, as follows:
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16 – 17 years £3.40
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18 – 21 years £4.60
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22 and over £5.52
Changes to Statutory Maternity Leave and Pay
The Work and Families Act 2006 makes changes to statutory maternity leave and pay, in respect of babies expected to be born on or after 1 April 2007.
The main changes are as follows:
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All women will now be entitled to 6 months Ordinary Maternity Leave and 6 months Additional Maternity Leave [AML] (previously AML only applied to women with 6 months service).
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Statutory Maternity Pay is now payable for 39 weeks. The first 6 weeks are at 90% of normal salary, and the following 33 weeks are at the rate of £112.75 per week.
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Up to 10 ‘Keeping in Touch Days’ are now allowed, permitting a woman on maternity leave to work for up to 10 days during her maternity leave without bringing her period of maternity leave to an end. ‘Keeping in Touch Days’ must be arranged by agreement – both the employer and employee have a right to refuse them.
Age discrimination – compulsory retirement age lawful
It is now six months since the Employment Equality (Age) Regulations came into force, prohibiting age discrimination in the workplace.
The campaign group Heyday has challenged the implementation of the Regulations, on the basis that the default retirement age (of 65 years) set by the Regulations is a breach of the UK's obligations under the EC Equal Treatment Framework Directive. The challenge has now been referred to the European Court of Justice [ECJ] for a ruling, which is expected during 2008.
Although the facts are slightly different, a recent case from the ECJ gives an indication of how the Regulations might be interpreted in respect of retirement ages and therefore how Heydey’s challenge might be dealt with.
In Palacios de la Villa v Cortefiel Servicios SA (Case C-411/05), the Advocate General's opinion was that Spanish laws that permit collective agreements to set compulsory retirement ages are not a breach of the Directive. This is because the Directive is stated to be "without prejudice to national provisions laying down retirement ages", and because in any event, a compulsory retirement age could be justified direct age discrimination, being a proportionate means of achieving the legitimate public interest aims of Spanish employment and labour market policies.
The Advocate General's opinion is not binding on the ECJ, but it is rare for the ECJ to reach a different conclusion. A judgment from the ECJ is expected later this year.
The first domestic UK employment tribunal decisions are also expected later this year.
FOR FURTHER INFORMATION PLEASE CONTACT: ALISON GOW