Book a Risk Review
Risk Review




Risk Advisor November 2011


What's in this month's newsletter?



It’s Employment Law all the way this month . .


As mentioned in our recent newsletter Risk Advisor 09/11 , there have been a number of changes in Employment Law many of which were effective from October 2011. This is our full review of the changes and their effect on business owners. Following the Rugby World cup this months’ humour slot reveals all you need to know about the disappointment in Wales at their loss in the semi final.  

The continuing change in employment law can be difficult for employers. This is where Risk Management Advisory Services can help you. We have a team of employment specialists who can help you and ensure your employment processes and systems are kept up to date.

If you need help call RMAS on 084 321 81 673 or reply to this email.




Abolition of the Default Retirement Age


Employment lawThe Default Retirement Age (DRA) has now been removed. The phasing out of the DRA started on 6 April 2011. At this date no more compulsory notices of retirement could be issued. Between 6 April and 30 September 2011 only those who had already received a notice of retirement, and who reached the age of 65 years by 30 September 2011, could be retired through the statutory process. 


Justifying a compulsory retirement age when the DRA has disappeared
It is still possible for employers to have a compulsory retirement age if it can be objectively justified.

To have a compulsory retirement age an employer will have to show that it has a ‘legitimate aim’ and that the retirement is a ‘proportionate means of achieving that aim’. For example, it might be possible to demonstrate that the retirement age is a health and safety issue. However, to use such an argument an employer will have to provide evidence to show that an older age is linked to health and safety issues, and will have to demonstrate that retirement is a proportionate means of addressing those issues.

The definition of ‘a proportionate means of achieving that aim’ is:

  • the actions of the employer are fulfilling an aim that the employer has defined
  • the actions are required because there is no reasonable alternative to achieving the aim
  • the benefits and importance of the legitimate aim significantly outweigh any discriminatory effect.

The definition of a ‘legitimate aim’ is:

  • relating to health and safety
  • relating to the training requirements for the job
  • relating to the needs and efficiency of the business.

A cost saving alone would not be a legitimate aim (for example that an older worker has a higher salary than a younger worker and therefore there is a saving to the organisation if the older worker


Rather than having a compulsory retirement age, employers could decide retirements individually. However, the employer will still have to show that any decision to retire someone is objectively justified. If an employer does want to retire someone, it will have to follow a fair procedure under existing dismissal rules. For the dismissal to be fair there will have to be a potentially fair reason – one of the five reasons set out in the Employment Rights Act 1996 (capability, conduct, redundancy, statutory ban or some other substantial reason).


Action for Employers
Review retirement procedures

Now that the DRA has been removed employers need to ensure that they have appropriate retirement policies. Employers need to think how they will manage retirements in the workplace and help employees who want to retire to prepare for this significant change in their life.

Review any benefits related to age

Some employers provide group risk insured benefits such as income protection, sickness and accident insurance and private medical insurance for their employees. These benefits are not included in the principle of equal treatment on the grounds of age, so it is possible for these benefits to be withdrawn once an employee reaches the age of 65 years. The age at which group risk insured benefits can be withdrawn will increase in line with increases to state pension age.

Employers should make sure that employees are aware of this. Employers should also review any other benefits that relate to age, which are not exempt from the principle of equal treatment.


RMAS can help ensure you are able to comply. Call us if you need help on 084 321 81 673.


The Agency Workers Regulations 2010

The Agency Workers Regulations 2010 came into force on the 1st October 2011


calendarTheir aim is to ensure that after a 12 week qualifying period, agency workers receive the same basic working and employment conditions; including pay and holidays, as if they were employed directly by the end user client.  In addition temps will be entitled to equal access to certain workplace facilities and to information on relevant employment vacancies from the beginning of an assignment (Day 1 Rights). If you hire agency workers, you must ensure that they can access your facilities (such as canteen, childcare facilities, etc) and can access information on your job vacancies from the first day of their assignment.
After 12 weeks in the same job with the same employer: The equal treatment entitlements relate to pay and other basic working conditions (annual leave, rest breaks etc) and come into effect after an agency worker completes the 12 week qualifying period. The regulations provide that after completing the qualifying period, pregnant agency workers will now be allowed to take paid time off for ante-natal appointments during an assignment.

The change in law is not retrospective and for those agency workers already on assignment, the 12 week qualifying period will start from 1 October 2011.


Action for Employers

If you are an employer and hire temporary agency workers through a temporary work agency, you should provide your agency with up to date information on your terms and conditions so that they can ensure that an agency worker receives the correct equal treatment, as if they had been recruited directly, after 12 weeks in the same job. You are responsible for ensuring that all agency workers can access your facilities and are able to view information on your job vacancies from the first day of their assignment with you.


RMAS can help ensure you are able to comply. Call us if you need help on 084 321 81 673.



Pay Rise!

minimum wageIncrease in National Minimum Wage


As previously mentioned the minimum wage has increased. 
The new hourly rates are:

  • £6.08 (from £5.93) for standard rate  (workers aged 21 and over
  • £4.98 (from 4.92) for development rate ( workers aged between 18 and 20
  • £3.68 (from £3.64) for young workers rate (aged under 18 but about the compulsory school age who are not apprentices)
  • £2.60 (from £2.50) for apprentices (those under 19 years of age or aged 19 and over but in the first year of their apprenticeship)


The Future

Look out for these proposed changes


Qualifying period for Unfair Dismissal to increase from one to two years
As part of the campaign to cut red tape, the Government proposes that with effect from April 2012 the qualifying period for unfair dismissal claims is set to double from the current one year to two years.  This is good news for employers but this could lead to employees looking at other types of claims during their first two years service, such as discrimination or whistle blowing which do not require a qualifying period.  Not only are these types of cases usually more complicated and therefore more time consuming and costly to defend but the awards are uncapped unlike  unfair dismissal which is currently capped at £68,400.


Industrial Tribunal Fees?
In addition the government is also consulting on the introduction of fees to bring a tribunal claim.  The aim of this is to deter vexatious claims which are time consuming and costly for the employer and the courts.  Any changes would aim to be implemented in April 2013.


RIDDOR Regulations
It is proposed that The RIDDOR Regulations governing workplace accident reporting are to be aligned with the new fit note system.  From 6th April 2012 employers will have to report any employee absences following a work related injury after 7 consecutive days rather than the current three days.

It is clear that employment law will continue to change. If you need help keeping up to date with these changes contact RMAS on 084 321 81 673. We can provide you with a specialist to help you through the employment maze.


Recent Cases

Holidays and sickness - the ongoing saga and more

As many of you will be aware, the issue of entitlement to holiday during sick leave is an ongoing saga seeing various cases in front of different levels of court throughout Europe, such as the Stringer case and the Pereda case. Contact RMAS on 084 321 81 673 or reply to this message for more information on these cases or to receive a copy of our employment guide “Working Together”.


A further two cases this summer are throwing this topic into the spotlight again.  The first is a German case and the Advocate General of the ECJ delivered her opinion on the case which concerns the relationship between holiday rights and long term sick leave. The AG’s opinion in KHS AG v Schulte - which will guide the ECJ in reaching its final decision in the case - states that:

- EU law does not require that workers on long-term sick leave accumulate the right to paid annual leave (or payment in lieu) indefinitely; and
- A national law which extinguishes annual leave entitlement 18 months after the end of the relevant leave year is acceptable.

The ECJ's final decision is expected later this year or early in 2012.

The AG's opinion offers guidance on how the ECJ might determine the question of how long holiday rights for those on long-term sick leave may accumulate before expiration. The worker in the case in question had been on sick leave for around 6 years, and claimed back-dated holiday pay. His employer refused the claim for some earlier years on the basis of a collective agreement, which stated that entitlement to holiday pay would expire after a certain period.


The AG gave some good justification for why she considered that the accumulation of holiday rights should be time limited - for example, the health & safety objective of recuperation is to take leave as soon as possible; and it is in the worker’s interests to be speedily re-integrated back into the workforce. She also noted that any payment in lieu of holiday entitlement should only be made on termination of employment rather than as compensation for loss of holiday rights.


If the ECJ follows the AG's opinion it would allow employers to withhold payment for annual leave if not taken for a period (likely to be 18 months) after the leave year in question. However, the full impact will depend on the ECJ’s ultimate decision and how the Government and the UK courts implement it.

 In the second case the EAT has handed down its decision regarding the relationship between holiday rights and long-term sick leave.  In this latest decision (Larner v NHS Leeds), the EAT found that the right to carry forward sick leave from one holiday year to the next when the employee is absent on long-term sick leave exists even when the employee fails to make a specific request for the carry over.

This case gives force to the argument that employees should be allowed to carry forward their holiday where they are prevented from taking it even where they have not asked to do so in advance.  However, this latest case fails to explore fully the conflict between the ECJ’s position and the UK’s Working Time Regulations (‘WTR’), leaving the path wide open for future litigation.

Employers still need to tread very carefully when dealing with issues of sickness and holiday entitlement and should seek advice on particular situations.


Social networking
A teacher was found to have been unfairly dismissed for accessing a dating website during a lesson.  The process brought in other allegations and did not focus on the one allegation and that this influenced the decision to dismiss.  In addition to this the school was inconsistent with what it considered to be appropriate and inappropriate material.  An objective view should be sought and not allow personal values to colour judgements
It is impractical for most employers in this day and age to entirely ban personal internet use at work. Most employers therefore allow limited personal internet use as long as usage is not excessive and the websites visited are not inappropriate.


Bribery Act

The CPS confirmed that a former court worker is the first person to be convicted under the Bribery Act 2010 after he pleaded guilty to bribery and misconduct in public office on 14th October 2011.   The Act came into force in July 1st 2011 this case is a reminder that bribery can occur in any industry and firms cannot afford to be complacent.  It is a reminder to all staff of the consequences of accepting bribes and companies should ensure that they have a policy and procedure in place to prevent bribery.



It Makes You Think

Another of Life’s Quirks from RMAS


JokeAs great fans of Rugby Union this caught our attention and resulted in a good laugh in the RMAS office. We hope you enjoy it as well


Thank you for reading this edition of Risk Advisor. We hope you found it to be of interest. Please forward it to any of your business associates if you feel it would be of benefit to them.


We look forward to meeting you in the coming weeks and assisting you with any of your employment issues.


Please call us on 084 321 81 673 or respond to this email or email RMAS .

Please pass this message onto any of your customers, suppliers or other business colleagues if you feel this could be helpful to them.