2009 will be a busy year for those responsible for Human Resources as there will be significant employment law developments including the implementation of the Employment Act 2008. The Act will make a number of changes to existing employment law, specifically, the repeal of the statutory disciplinary, dismissal and grievance procedures. Set out below are some of the key HR related dates for your diaries.

February 2009

The annual increase in compensation limits took effect on 1 February 2009 and applies where the event giving rise to the entitlement to compensation occurs on or after that date. The main changes are:

• maximum compensatory award for unfair dismissal increased from £63,000 to £66,200;
• the limit on a week’s pay (for example, for calculating the statutory redundancy payment) increased from £330 to £350;
• the maximum redundancy payment and basic award increased from £9,900 to £10, 500.

April 2009

The Employment Act 2008 received Royal Assent in November 2008 and one of its key provisions is the repeal of the statutory disciplinary, dismissal and grievance procedures on 6 April 2009. Almost universally, the procedures were criticised for being too complex, carrying a high administrative burden for employers and employees with the result that the number of Employment Tribunal claims increased. There will be a new ACAS Code of Practice on Disciplinary and Grievance procedures which also comes into force on 6 April 2009. Although the Code is not compulsory or legally binding, the Act gives Employment Tribunals discretion to increase or reduce awards by up to 25% if either party unreasonably fails to comply with it. The Code consists of three main sections:

• Basic principles for dealing with discipline and grievance issues. These should be dealt with promptly with no unreasonable delay and employers should act consistently. It is essential that an appropriate investigation is carried out and any grievance or disciplinary meeting should be heard by a manager not involved in the matter giving rise to the dispute. Remember to keep accurate records of any meetings, inform employees of their right to be accompanied and of course their right of appeal;
• In relation to disciplinary issues, establish the facts of each case, inform the employee of the problem and hold a meeting with the employee to discuss it. Allow the employee to be accompanied at the meeting, then decide on the appropriate action and provide the opportunity to appeal;
• As for grievances, it is important for the employee to set out the nature of the grievance and this is best done in writing. The manager should then hold a meeting promptly with the employee to discuss the grievance and allow the employee to be accompanied at the meeting. The appropriate action then needs to be taken, bearing in mind any special circumstances which may arise, for example grievances involving allegations of bullying, harassment or whistle blowing.

Another important April development is the increase in statutory holiday entitlement. The Working Time (Amendment) Regulations 2007 provided for an increase in statutory holiday entitlement from 20 days a year to 28 days for a full time worker. This was introduced in two stages: 20 to 24 days from 1 October 2007 and 24 to 28 days from 1 April 2009. It is important that contracts of employment are reviewed to ensure they comply with this increase in statutory holiday entitlement.

Finally, there is the significant extension of the right to request flexible working to parents of children aged under 16. This was expected to come into force in April 2009 but there was some uncertainty about this because of the difficult economic climate. It was confirmed by the government on 3 December 2008 that the right will be introduced as originally planned. Managers can expect an increase in the number of flexible working requests that will be made and will also need to review contracts of employment and Staff Handbooks to ensure they provide for the extension of the right to request flexible working. 

October 2009

The Safeguarding Vulnerable Groups Act 2006 introduces a centralised vetting system for people working with children and vulnerable adults. The Act provides the legal framework to support the Independent Safeguarding Authority (ISA) scheme which will prevent those who pose a risk of harm to children or vulnerable adults from gaining access to them via their work or through voluntary activities. The government has indicated that, over the coming months and in good time before the scheme goes live on 12 October 2009, it will introduce secondary legislation and publish guidance to help organisations develop policies and procedures to utilise the ISA scheme.

Case law developments

But it’s not just legislative developments. There are some key cases too which are likely to have significant employment law implications particularly in the context of rights for carers and the issue of accruing annual leave whilst on long-term sick leave.  

Looking first of all at the case of Coleman v Attridge Law. Ms Coleman had a child who suffered from a disability and alleged that she was treated less favourably by her employer than other parents of (non-disabled) children. She brought a disability discrimination claim on the grounds of her "association" with her disabled son. In June 2008, the European Court of Justice held that the Equal Treatment Framework Directive provides protection against "associative discrimination" and the matter was referred back to the UK courts. In November 2008 at a pre-hearing review, the Employment Tribunal held that the Disability Discrimination Act 1995 is capable of being interpreted as providing protection from discrimination and harassment for people associated with a disabled person. Ms Coleman’s claims will go to a full hearing in the Employment Tribunal for it to determine the merit of her claims.

The case of Stringer and others v Her Majesty's Revenue and Customs deals with the tricky issue of whether or not annual leave continues to accrue during periods of long-term sick leave. The claimants were all previously employees of HMRC. One had requested to take annual leave during a period of sickness absence, which HMRC refused. The others were dismissed following long-term sickness absence, and they claimed payment in lieu for outstanding holiday. They all brought successful Employment Tribunal claims under the Working Time Regulations 1998. The litigation culminated, in 2006, in a stay of the proceedings and a referral by the House of Lords to the European Court of Justice. The first step in that process was the Advocate General’s Opinion (given in January 2008) which was that a worker can accrue paid annual leave while off sick but cannot take that paid annual leave during their sick leave. He added that, on termination of employment workers are entitled to compensation for annual leave which has accrued but has not been taken due to illness. This begged the question of what happens to a worker's right to annual leave if, at the end of the leave year, they remain on sick leave.

The European Court of Justice gave its judgment in January 2009. It held that the right to paid leave is not extinguished at the end of the leave year and/ or of a carry-over period where a worker had been unable to take annual leave because of sickness. This means that workers will continue to accrue annual leave while on sick leave and can take that leave on their return to work even if that is during another leave year. Whether or not annual leave can be taken during a period of sick leave is still to be determined by the House of Lords and its final decision is not expected until later this year. If employment terminates while the worker is on sick leave, he is entitled to a payment in lieu of untaken paid annual leave and the payment must be calculated taking into account the worker’s normal remuneration.

The judgment could be problematic for many employers who have members of staff on long term sick leave especially in this difficult economic climate. They could be faced with staff returning from sick leave with a significant amount of accrued paid holiday leave to take or, having to make payments in lieu of untaken holiday if employment is terminated.

These legislative and case law developments will all have significant practical implications for those involved in HR; be sure to diarise the dates listed above to avoid missing key employment law issues.

Debra Gers can be contacted by telephone on 029 2038 5487 or by email