Latest employment legislation – August 2010

Latest employment legislation.

August 2010

Default Retirement Age Scrapped

Under proposals announced by the Government on 29th July, the default retirement age (DRA) will be scrapped on 1st October 2011. Currently employers can force staff to retire at the age of 65 regardless of their circumstances.

The Government is consulting on the issue with proposals that allow for a six-month transition from the existing Regulations – from 6th April 2011, employers will not be able to issue any notifications for compulsory retirement using the DRA procedure. Between 6th April and 1st October, only people who were notified before 6th April and whose retirement date is before 1st October 2011 can be compulsorily retired. After 1st October 2011, employers will not be able to use the DRA to compulsorily retire employees; if they wish to use retirement ages they will have to be able to demonstrate that these are objectively justified. Examples might include fire officers and air traffic controllers.

Whilst this proposal removes a significant piece of discrimination, it does present practical difficulties for employers. The planned consultation may address the possibility of guidance for employees and employers or a more formal code of practice on handling retirement discussions as well as the potential consequences for insured benefits such as PHI schemes and medical insurance as well as employee share plans.

Minimum Wage Increase – October 2010

The minimum wage increases in October 2010 as follows:

• Workers aged 21 and older – increase from £5.80 to £5.93 per hour
• Workers aged between 18 and 20 – increase from £4.83 to £4.92 per hour
• Workers aged between 16 and 17 – increase from £3.57 to £3.64 per hour   For the first time, apprentices will be protected with a minimum wage. For contracted apprentices aged under 19 or are aged over 19 but in the first year of their apprenticeship, the national minimum wage will be £2.50 per hour with effect from October 2010.

The daily offset for workers provided with living accommodation by an employer will increase from £4.51 to £4.61 per day.

Tribunal Claims Highest Level Ever

The Tribunals Service statistics for 2009/10 show that the number of claims received by employment tribunals rose by 56% from 2008/09, bringing the number of employment tribunal claims to its highest level ever. There was an increase in the number of claims for redundancy pay (up 76%), unfair dismissal (up 9%) and breach of contract (up 29%). 
Figures for the period April 2009 to 31 March 2010 show that 236,100 claims were registered with employment tribunals in 2009/10, compared with 151,000 in the previous year. The increase in the number of claims lodged can partly be explained by the recession, but also by a significant increase in the number of multiple claims submitted. Multiple claims are cases where a number of individuals bring claims relating to the same circumstances.
There were increases in the number of discrimination cases brought relating to all types of discrimination, except sex discrimination which was down 2%. Sex discrimination remains the most common type of discrimination complaint with 18,200 cases brought in 2009/10. Disability discrimination claims rose by 14% to 7,500. Racial discrimination claims rose 14% to 5,700. Age discrimination claims rose by 37% to 5,200. Religion / belief claims rose 20% to 1,000 and sexual orientation rose by 18% up to 710. 

Pre-employment Health Questionnaires to Stop

The Government has confirmed that the first wave of the Act Equality Act will be implemented in October. This includes the abolition of pre-employment health questions, a provision designed to reduce disability discrimination in the recruitment process. Employers will only be able to ask health questions upon job offer.

The Act will prohibit employers from asking candidates pre-employment health questions other than in limited circumstances, one of which is to check a candidate can perform an “intrinsic function” of the job, for example heavy lifting.

There is also some concern that questions about a candidate’s previous sickness record may also fall foul of the law. The penalties for employers include investigation by the Equality and Human Rights Commission and the reversal of the burden of proof, means that employers will be assumed to have discriminated, unless it can show there was another reason for non-selection.