In its recent second annual report on the competitiveness of the UK tax system, the Institute of Directors (IoD) has suggested that capital gains tax and inheritance tax should be merged in order to help simplify the UK tax system (much in the same way as the integration of income tax and national insurance would do.) The IoD suggests that capital gains tax should be charged on those assets held at death above a fixed and “reasonably generous” (but unspecified) threshold, and that inheritance tax could then be abolished. Its full proposals are here (see page 26.)

This is not the first time that the IoD has put forward suggestions to change the tax system – in 2007, an IoD discussion paper called for the abolition of capital gains tax and inheritance tax – and it is an idea that has been mooted by others for some time.

Following on from Spain’s possible prosecution at the hands of the European Commission for discriminating against non-residents, the Commission has now referred the Netherlands to the European Court of Justice (ECJ) for discriminatory rules on inheritance and gift duties, after it failed to amend its laws following a formal request in September 2010. Under Dutch legislation, country estates located in the Netherlands are fully or partially exempt from succession and gift duties if they are open to the public, while inheritance or gifts of country estates in other European Economic Area (EEA) States are taxed on 100 per cent of their market value. The Commission considers the difference in tax treatment to be contrary to the free movement of capital.

It is interesting, though, that UK inheritance tax laws in this area could themselves be potentially discriminatory. The UK offers a conditional exemption tax incentive (which is not limited to land in the UK) to historic houses that are open to the general public. Inheritance tax and/or capital gains tax is not paid when the qualifying property (or historic item, such as a painting or sculpture) passes to a new owner on death or is gifted. However, according to HM Revenue and Customs’ (HMRC) memorandum on ‘Capital Taxation and the National Heritage’, in order to obtain the exemption, the new owner must agree to look after the item/property, keep it in the UK if it is moveable, and allow “reasonable” public access to it. HMRC’s stipulation that public access to the property should be “reasonable” means that the relief cannot realistically be given to property or land outside the UK.

Not that the Government will be overly concerned about this.

With the EU currently threatening to sue the UK over its recently-signed tax agreement with Switzerland unless the Chancellor renegotiates it, the Government has more pressing things to worry about.

Responses are requested by 2 December 2011, and it is hoped that the code will allow broadcasters to self-assess whether advertising behaviour is discriminatory and, even if it is, whether it is justified.

The consultation document can be found here.

Inheritance and gift tax in Spain are regulated at both state level and at the level of autonomous communities (i.e. local level.) Spain has 17 autonomous communities (or “Comunidades Autonomas”) and each has a territorial basis, their own government and Parliament, and broad legislative and executive powers. This legislation grants Spanish residents a number of tax benefits that, in practice, allow them to pay much lower taxes than non-residents. Consequently, Spain has been referred to the European Court of Justice on the grounds that this practice goes against the principle of free movement of people and capital within the EU, and breaches the Treaty on the Functioning of the European Union.

This is not the first time that Spain has been in trouble over this issue. In May 2010 and February 2011, the European Commission requested Spain to amend its legislation so that it complied with EU rules on inheritance and gift tax provisions. However, although Spain “tweaked” its laws, no satisfactory amendments have yet been made.

It remains to be seen how Spain will respond to the threat of legal action, and whether it will now satisfactorily change its inheritance and gift tax laws. According to the European Commission, approximately 95 per cent of infringement cases are resolved before they reach the European Court of Justice, so we shall wait and see…

I have outlined some of the ways employers can ensure they comply with the new Act – please click here.

This article is only intended as guidance. There are many issues to consider, so employers should seek legal advice where necessary to ensure they are not contravening the Act, or inadvertently breaking other laws when implementing compliance measures.

If you would like any legal advice regarding the Bribery Act and its implications on your business, please contact me at michael.delaney@mablaw.com.

A bribe is defined in section 1 of the Act as “a financial or other advantage” offered, promised or given to “induce a person to perform improperly a relevant function of activity, or to reward a person [for doing so.]”

This definition covers many “advantages”, including gifts, hospitality and entertainment, political or charitable donations, sponsorship and publicity.

Employers should note the following:

1. A “financial or other advantage” is still a bribe even if it is given or paid after the event; and

2. Employers or other individuals can be liable even if they unwittingly give or receive a bribe.

Section 7 of the Act introduces a criminal offence for the failure of a commercial organisation to prevent bribery by an “associated person” for its benefit. The statutory definition of “associated person” is very wide, and it covers those people who perform services for, or on behalf of, the employer (e.g. employees, agents and subsidiaries.) However, other people working for the employer, such as consultants, agency workers and volunteers, will also be “associated persons” for the purposes of the Act. Consequently, an employer is potentially responsible for the actions of a wide range of individuals, some of whom it may have only minimal control over.

Breaching the Act: The penalties

* Individuals who breach the Act could be imprisoned for up to ten years; and

* Commercial organisations can face an unlimited fine and be prevented from tending for public contracts.

Preparing for the Bribery Act: The key principles for employers

In March 2011, the Government published Guidance on the Bribery Act which set out six key principles to give commercial organisations assistance in planning, implementing, monitoring and reviewing their anti-corruption and bribery policies and procedures before the Act comes into force.

1. The employer’s anti-corruption and bribery policies (and related policies) should be clear and accessible to all those people who work for them and who  fall within the definition of “associated person”;

2. The management team should establish a zero-tolerance culture regarding bribery and corruption, and ensure that all workers, and those that the company does business with, are fully aware of the company’s anti-corruption and bribery policies;

3. Employers should be fully aware of the bribery risks they face in their sector(s) and in the countries or regions in which they do business. They should carry out regular and comprehensive risk assessments;

4. Employers must take steps to ensure that they know who they are doing business with;

5. Employers should embed anti-bribery principles into their internal controls, recruitment and remuneration policies, operations, communications and training; and

6. Employers must decide who will be responsible for monitoring and reviewing their policies and procedures. They should ensure that they have effective financial and auditing controls that pick up potential and actual irregularities.

Staying on the right side of the law: The key considerations for employers for 1 July and beyond

Employers should consider the following issues to ensure that they do not contravene the Bribery Act, and should seek legal advice where necessary.

1. Recruitment: carry out additional background checks and vetting during the recruitment process (e.g. bankruptcy checks, criminal record checks and additional references);

2. Inductions: include training on the company’s anti-corruption and bribery policies and procedures for all employees and workers (e.g. agency staff, voluntary workers and independent consultants);

3. Expenses: carry our regular audits and ensure there is evidence as to how and why money was spent for each expenses claim submitted;

4. Hospitality: create a hospitality policy, including clear guidance on both the giving and receiving of gifts;

5. Disciplinary procedures: amend disciplinary policies and procedures to make it clear that any breach of the company’s anti-corruption and bribery policies (and related policies) may amount to gross misconduct. Employers may wish to (1) consider making it a specific contractual requirement that employees and other workers comply with these policies and procedures, and (2) consider whether it should be a contractual requirement for some workers to report any suspicions or knowledge they have of a breach of these policies;

6. Bonus and commission schemes: review these schemes to ensure that, as far as possible, they do not unintentionally encourage employees to ignore bribery and corruption risks. Employers should also review incentive arrangements to ensure they do not unintentionally incentivise workers to act improperly or illegally;

7. Whistleblowing: set up a comprehensive and up-to-date whistleblowing policy. All workers should be made aware of its existence, understand how it applies and be given access to a copy of it;

8. Investigating potential breaches: ensure that every incident of a suspected breach is investigated and documented. All investigations should be fair and confidential; and

9. Discrimination: ensure that any anti-corruption and bribery policies and procedures are not based on racial stereotyping of certain nationalities.

This article is intended to simply highlight the main issues and potential problems that employers may face when trying to comply with the Bribery Act. There are many issues (and pitfalls) to consider, so employers should seek legal advice where necessary to ensure that they are not contravening the Act, or inadvertently breaking other laws when implementing compliance measures.

If you would like any legal advice regarding the Bribery Act and its implications on your business, please contact me at michael.delaney@mablaw.com.

LJ Burnton also held that the legal test for dismissal on discriminatory grounds was applied correctly, and that he believed the Tribunal had found that Mr Power was dismissed on the grounds of his conduct, which included a disruptive attitude in the course of role play exercises, as well as expressing his beliefs in an unacceptable way (distributing posters and CD ROMs,) and not because of his beliefs.

The areas under consideration are:

1. Compensation for discrimination;

2. Collective redundancy consultation periods; and

3. TUPE.

However, the announcement does not set out any proposals; it merely confirms that the Government will “look in detail at the case for reforming” these areas.

Although there is no commitment to change, the Government has provided some brief details on why the Government is looking at the areas in question.

1. Compensation awards for discrimination

Discrimination compensation is currently uncapped. Employers have “expressed concern” about (1) the high levels of compensation that are sometimes awarded, (2) the lack of certainty about what they may be required to pay out, and (3) vexatious litigants, who are encouraged to make claims against employers due to the high levels of compensation that can be awarded.

2. Collective redundancy consultation periods

Currently, if an employer wants to make more than 100 employees redundant in a 90-day period, he or she must consult on the issue at least 90 days before the first dismissal takes effect. However, employers feel that this consultation period is too long, as it (1) hinders flexibility when restructuring, and (2) forces struggling employers to keep paying employees after it has become clear that they should be dismissed.

3. Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE)

These Regulations protect employees’ terms and conditions of employment when a business is transferred from one owner to another. Despite the Government stating in November 2010 that it had no plans to reform TUPE, employers are concerned that the Regulations are (1) ‘gold-platted’ (i.e. they went further than required to do so by the EU’s Acquired Rights Directive when they were transposed into UK law), and (2) “overly bureaucratic.”

The Government’s review will begin later this year; however, it is debatable as to whether any significant reform will happen, as these three areas are governed to some degree by EU law and any changes must comply with it.

Although Bristol Crown Court had sympathy with the hotel owners’ religious beliefs, it agreed with the claims made against them and awarded damages. The court said that the owners had not been simply treating unmarried couples of heterosexual or homosexual persuasions in the same way. The guests had entered a civil partnership and discrimination law said that civil partnerships should be treated the same as marriages.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘This case is a reminder that discrimination law is not just something that businesses should be wary of in an employment context. Businesses also need to avoid discriminating against their customers.’

The past 40 years have seen the introduction of statutes and regulations addressing discrimination in the fields of sex and race, disability, sexual orientation, religion or belief and age. There has also grown up around this legislation a complex and multi-faceted body of case law. In February 2005, the Labour Government announced a Discrimination Law Review to consider the opportunities for a clearer and more streamlined discrimination law framework. In June 2007 the Government published proposals to  introduce a single Equality Act with the (rather ambitious) objectives of modernising, harmonising and simplifying the law on discrimination and making it more effective. The Equality Act 2010 received Royal Assent on 8 April 2010 after a somewhat hasty push to get the Act onto the statute books before the end of the last Parliament. The current Coalition Government has already indicated that it intends to take a different approach to the implementation of the Act than its predecessor.

The Act contains 218 sections and 28 Schedules and is accompanied by 216 pages of explanatory notes. In this article, I will try to give you an overview of the Act’s impact and key changes in the employment field alone (although the Act does affect other areas of public life).

PROTECTED CHARACTERISTICS

The Equality Act sets out a total of 9 fields where discrimination is prohibited, which it calls “Protected Characteristics”. These are:

• Sex;
• Race;
• Age;
• Sexual Orientation;
• Disability;
• Religion;
• Pregnancy and/or maternity leave;
• Marital and/or civil partnership; and
• Gender reassignment.

Broadly speaking, the Act sets out the same approach to discrimination in respect of all of the Protected Characteristics. I mention a couple of exceptions towards the end of this article.

 TYPES OF DISCRIMINATION

The types of discrimination that the Act prohibits generally mirror previous legislation but with a more harmonised approach to their definitions. These are:

direct discrimination – treating an employee less favourably because of a protected characteristic;

indirect discrimination -  applying to an employee a provision, criterion or practice (“PCP”) which puts both that employee and other employees who have that protected characteristic at a particular disadvantage when compared with employees who do not have that characteristic;

harassment – engaging in unwanted conduct related to a protected characteristic (excluding pregnancy and maternity leave or marital and civil partnership) which has the purpose or effect of violating the employee’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for the employee. There are also separate definitions of harassment relating to:

• unwanted conduct of a sexual nature or that is related to gender reassignment or sex; and
• less favourable treatment because of a rejection or refusal to submit to such unwanted conduct;

victimisation – treating an employee less favourably because they have (or the employer believes they have) made an allegation that there has been an act of discrimination or harassment, given evidence in relation to such an allegation or issued proceedings under the Act.

EFFECT OF CHANGES TO DEFINITIONS

Direct discrimination

The words, “because of” in the definition of direct discrimination above replace “on the grounds of”. This change will widen the scope of discrimination by association and discrimination by perception. This means that for all protected characteristics except marriage and civil partnership, it will be unlawful to directly discriminate because you believe an employee has a particular characteristic or because they are associated with someone who has a characteristic (eg discriminating against an employee who is not disabled but who cares for a disabled relative).

Unlike with the other protected characteristics, extending protection to those who are mistakenly believed to be disabled is a significant change to the previous position, where an employee had to demonstrate an actual disability to be protected. It will be interesting to see how tribunals deal with the new position.

Indirect discrimination

The definition of indirect discrimination has been harmonised across protected characteristics, as has the definition of objective justification, where employers can avoid liability for indirect discrimination by being able to objectively justify the relevant PCP by satisfying a tribunal that the PCP is a proportionate means of achieving a legitimate aim.

The only protected characteristic where direct discrimination may be objectively justified is age.

Harassment

The main change relating to harassment has been the extension of the third party “three strikes rule” that previously only applied to sex discrimination to all of the other protected characteristics. Under the new rules if an employee complains about three separate instances of harassment by a third party (not necessarily the same person each time) and the employer fails to take action after either of the first two incidents are brought to its attention, then by the “third strike” the employer will be vicariously liable for the harassment suffered by the employee. One other important change is that, as with direct discrimination, harassment based on association and perception will now be prohibited.

NEW CONCEPTS

Although its main aim is the harmonisation and simplification of discrimination law, the Act introduces a few new concepts. These include:

Dual characteristics

This involves employees bringing claims because they believe they have been directly discriminated against because of a combination of two protected characteristics. The Act’s explanatory notes give the example of an employer who believes that black women do not perform well in customer service roles and therefore passes over a black female employee for promotion to work on reception. If, in that situation the employer can point to a white woman and a black man, both of equivalent qualifications and experience who had been appointed to the role in question, the woman may need to be able to compare her treatment because of race and sex combined to demonstrate that she has been unlawfully discriminated against.

This is a potentially interesting development in the field of discrimination and involves a number of technical difficulties that unfortunately I don’t have the space to address. However, this part of the Act has not yet been implemented and, at the time of writing, the Coalition Government has not committed to bringing it into force by the original proposed date of April 2011.

Disability discrimination

The concept of indirect discrimination has been introduced to the field of disability discrimination for the first time. There are likely to be difficulties in identifying a particular group of disabled people with the same “characteristic” (Must they have the same degree of impairment? The same underlying cause?). In part to address this issue,  a new type of discrimination has been introduced whereby a disabled employee will be discriminated against if someone treats them unfavourably “because of something arising in consequence of their disability” (and this less favourable treatment cannot be objectively justified). This is intended to make it easier for disabled people to show that they have been treated less favourably because of their disability. I suspect that in practice that any employee who issues a claim for indirect disability discrimination will also sue for this new “discrimination arising from a disability” at the same time.

Pay secrecy, gender pay gap reporting and public sector duties

Employers are not prevented in all circumstances from having rules or policies that prevent their employees discussing their pay. However, any such rule or policy is unenforceable to the extent that it purports or seeks to prevent employees from discussing pay with their colleagues (including former colleagues) if the reason for the discussion is to allow the employees to find out whether or to what extent there is any pay imbalance that is connected with having a protected characteristic. The likely legal battleground in this area will be the issue of whether a particular conversation was for the purpose protected by the Act.

The previous Government had also intended that businesses with 250 or more employees would have to publish information relating to their employees’ pay. However, it appears that the Coalition Government does not intend to implement this part of the Act (as long as the Conservatives have their way).

At the end of November 2010, the Coalition Government also announced that it did not intend to implement a proposed wider obligation on public sector employers to make strategic decisions with due regard to the desirability of reducing the impact of socio-economic disadvantage.

Positive action

Before the Act, training could be provided to under-represented groups to encourage the take up of jobs in a particular area. Positive discrimination (for instance promoting an employee because they have a protected characteristic) was unlawful. The Act has not radically changed this position, but it is now permitted (but not compulsory) to take under-representation of particular groups into account when selecting between two equally-qualified candidates for recruitment or promotion.

Health Questionnaires

Businesses are prohibited from asking about the health of job applicants before either making a job offer or creating a pool for selection. Employees can’t enforce this right directly but must ask the Equality and Human Rights Commission to take action on their behalf. However, employers can ask about health for the purpose of determining if reasonable adjustments are necessary and (more controversially) to establish if the employee can carry out “a function that is intrinsic to carry out the work concerned”. Precisely to what extent this allows employers to make such enquiries is not clear. For now at least, I would certainly recommend erring on the side of caution.

Tribunals’ enforcement powers

When a discrimination claim is successful, employment tribunals will now have the power to make recommendation as to what steps the business should take to reduce the adverse effect of the discrimination on the claimant or any other person. It will be interesting to see the extent to which tribunals choose to exercise this new power and whether such recommendations will have any practical effect. Perhaps crucially, tribunals have no enforcement powers if an employer doesn’t implement their recommendations.

CONCLUSION

For such a substantial piece of legislation, there is not likely to be much of an immediate impact on the way that most employers conduct their business (except probably in the case of health-related questions during recruitment). Perhaps this is not surprising given that the Act is intended mainly to simplify and streamline existing law. Ironically, in respect of the new grounds for disability discrimination and (if introduced) the new dual discrimination claims, at least in the near future are likely to lead to more complication in tribunal claims.

This article first appeared in the January – March 2011 edition of the Milton Keynes and North Bucks Chamber of Commerce’s Vision Magazine

In coming to this decision the tribunals were following what is fast becoming the orthodox approach in religious discrimination claims. Similar judgments have previously been given in the cases of: 

 1. a committed Christian social worker, whose dismissal was not discriminatory because it was based not on his beliefs but because of his breach of his employer’s prohibition on the over-promotion by social workers of their religious beliefs (Chondol v Liverpool City Council);

 2. a registrar of births marriages and deaths who was not discriminated against when she was disciplined for refusing on the grounds of her religious objections to conduct civil partnership ceremonies between same-sex partners because the disciplinary action was not taken because of her religious beliefs but because of her refusal to carry out a legitimate duty (Islington Borough Council v Ladele); and

 3.  a relationship counsellor whose dismissal for refusing to provide psycho-sexual counselling to same-sex couples was not discriminatory because it was not based on his beliefs that same-sax relationships were sinful but because he was refusing to comply with his employers equal opportunities policy in doing so (Macfarlane v Relate Avon Limited).

 In the second and third of these cases, the key point was that the EAT considered that a person who acted the way that Mrs Ladele or Mr Macfarlane had for a reason completely unconnected with their religious beliefs would have been treated exactly the same way by their respective employers. It could not therefore be said that they had been discriminated against on the grounds of their religion.

Alan Power was employed by Greater Manchester Police as a trainer of special constables from 6 to 24 October 2008. During that period, two complaints were received from police officers in separate forces about his disruptive and unhelpful attitude. The Manchester force also discovered a CD-ROM and posters relating to psychics and spiritualism which Mr Power had provided to other police forces before the investigation began. His dismissal letter referred to information which had come to light regarding “previous work with Neighbouring Forces and your current work in the psychic field”. Mr Power brought a claim against the Manchester force alleging that he was discriminated against on the grounds of his religious or philosophical beliefs.

Mr Power sought protection in respect of his beliefs as a Spiritualist, ie the belief in the existence of God, that there is life after death and that the dead could be contacted through mediums or psychics. Mr Power asserted that this was both a religious and a philosophical belief.  On 12 November 2010 the EAT gave judgment on the preliminary issue of whether belief in spiritualism and the philosophical belief in life after death and psychic powers falls within the scope of the Employment Equality (Religion or Belief) Regulations 2003. The EAT agreed with the original tribunal, which was satisfied that Mr Power’s beliefs met the test of having sufficient cogency, seriousness, cohesion and importance and are worthy of respect in a democratic society. Some of the relevant factors influencing that decision included: the fact that Mr Power was the member of, and regularly attended, a Spiritualist Church;  he produced records showing that the first Spiritualist Church was established in 1853; and the 2001 census found that Spiritualists were the eighth largest faith group in Britain with 32,404 adherents (although, without wishing to make any serious point about it,  I notice that the same census recorded a total of 390,000 who claimed to adhere to the religion of “Jedi Knight”!).

Having established that his beliefs fell within the definition of a religious or philosophical belief that is protected by the Regulations, Mr Power then had to persuade the tribunals that he had been discriminated against on that basis. The outcome of that part of the claim is covered in my next blog (http://www.mablaw.com/2010/12/psychics-in-the-police-part-ii/)

Technical standards are usually agreed by businesses that have an interest in co-operating so that they can all benefit from the greater good, and this is usually on the basis of an agreement that any patents involved would be licensed on fair, reasonable and non-discriminatory terms. For the greater good in this case, it must be hoped that the parties will stop fighting and will settle their differences long before the US District Court for the Western District of Washington has to rule.

So what should employers be aware of this month?

The Equality Act 2010

The Equality Act 2010 is a hugely important piece of employment legislation and most of it will come into force on 1 October 2010. It consolidates existing UK discrimination legislation concerning sex, race, disability, sexual orientation, religion or belief and age. From 1 October:

1 The definition of “direct discrimination” is amended so that people are protected if they suffer discrimination because they are perceived to have, or are associated with someone who has, a protected characteristic. This will give, for example, new protection to carers.

NB: the protected characteristics under the Act are age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion and belief (or lack of religion or belief); sex; and sexual orientation.

2. The definition of “victimisation” is amended so that claimants only need to show that they have suffered a detriment. There is no longer a need to compare the treatment of a victimisation complainant with that of a person who has not made or supported a complaint;

3. The definition of ‘disability’ is amended so that claimants are no longer restricted to a set list of day-to-day activities that they must show they are unable to do;

4. The definition of ‘gender reassignment’ is amended, thereby removing the requirement for medical assessment;

5. Protection from indirect discrimination is extended to disability;

6. Employees’ protection from third party harassment will be extended to all protected characteristics;

7. A new concept of ‘discrimination arising from disability’ is created to restore the protection from “disability-related discrimination”, lost as a result of the Malcolm ruling;

8. Employers cannot ask job applicants any questions about disability or health (except in specified circumstances);

9. Pay secrecy clauses are no longer enforceable by employers where an employee wants to make a relevant pay disclosure in order to establish if there is a difference in pay due to gender;

10. Although positive discrimination is not permitted, employers may base the selection of a successful candidate on a protected characteristic if there is a ‘tie- break’ with another candidate; and

11. Employment tribunals are able to make recommendations to benefit the whole workforce, not just the claimant.

Increase in the national minimum wage

The main rate of the national minimum wage, which applies to workers aged 21-years old or older, rises from £5.80 per hour to £5.93 per hour, and the development rate from £4.83 per hour to £4.92 per hour. The rate for workers aged 16 to 17 years old increases from £3.57 to £3.64 per hour.

A new apprentice rate of £2.50 per hour will apply to apprentices who are under 19 years old, or those who are aged 19 and over but in the first year of their apprenticeship. The per day value of the accommodation offset increases from £4.51 to £4.61.

Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010

The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2010 amend the Conduct of Employment Agencies and Employment Businesses Regulations 2003 and will, amongst other things:

1. Require job advertisements to specify whether the position is temporary or permanent. However, job advertisements will no longer have to state whether the organisation is acting as an employment agency or an employment business;

2. Restructure the existing regulations on obtaining job-seekers’ consent to terms before providing services;

3. Modify the suitability checks that employment businesses and employment agencies must carry out on job-seekers; and

4. Introduce a 30-day cooling off period for performers in the entertainment industry (e.g. actors, dancers and singers) so that the job-seeker will have a right to cancel or withdraw from the contract.

If you have any questions or concerns about how this new legislation will affect you or your business, or require legal advice, please contact Adam Fuge at adam.fuge@mablaw.com, or Michael Delaney at michael.delaney@mablaw.com

Section 149 of the Equality Act 2010, which received Royal Assent in April, states that public authorities subject to the general equality duty must have regard to the need to (1) eliminate unlawful discrimination, harassment and victimisation; (2) advance equality of opportunity between different groups; and (3) foster good relations between different groups. Section 153 gives ministers the power to impose specific duties through regulations.

The consultation paper proposes the following:

1. Regulations on the specific duties designed to help public bodies meet the requirements of the general equality duty; and

2. The public bodies that will be subject to the general and specific duties.

The specific duties

The Government proposes the following specific equality duties:

1. Transparency. Public bodies will be required to publish equality data relating to their workforces and the services that they provide;

2. Workforce transparency. Public bodies with 150 or more employees will be required to publish, at least annually, data on equality in their workforces (e.g. the gender pay gap; the proportion of staff from ethnic minorities; and the proportion of disabled employees in the organisation);

3. Transparency in public service provision. Public bodies will be required to publish, at least annually, data setting out how they are promoting equality. This will enable citizens to compare public bodies’ equality performance and, where possible, choose between providers; and

4. Transparency about impact on equality. Public bodies will be required to set equality outcome objectives which are specific, relevant and measurable. These objectives will also enable the public to see whether a public body is meeting its own standards and achieving all that it sets out to. Public bodies should review their approach at least every four years.

Which public bodies will be subject to the equality duties?

The consultation paper states two ways that a public body can become subject to the equality duties:

• By being listed in Schedule 19 to the Equality Act 2010; and
• By carrying out public functions.

NB: Annex 5 of the consultation paper proposes adding further public bodies to those listed in Schedule 19. However, some of these bodies will only be subject to the general duty in relation to their public functions.

What happens next?

Responses to the consultation must be made by 10 November 2010, with the Government aiming to publish the results approximately three months later. The Government then proposes to bring the general and specific equality duties into force through regulations in April 2011; however, public bodies will be given a further year before they have to publish their equality objectives and state whether they are being met. Guidance explaining the general and specific duties, and what public bodies will need to do, will be published by the Equality and Human Rights Commission before the regulations come into force.

Our employment team will be closely monitoring the situation, and we will summarise the Government’s response in due course. In the meantime, if you have any concerns or questions about this or anything employment-related, please contact Adam Fuge at adam.fuge@mablaw.com, or Michael Delaney at michael.delaney@mablaw.com.

In the case of The City of Edinburgh Council v Dickson, the disciplinary allegation against Mr Dickson, a community working and development worker at a High School in Edinburgh, was that he had been seen by a number of adults and children viewing “seriously pornographic” material on a computer at the school.  His defence to the allegation was that he had no memory of any such incident and could only assume that his conduct and the lack of memory of it were both caused by a hypoglycaemic episode relating to his type-1 diabetic condition. Both the manager making the initial decision and the councillor who dealt with the appeal did not believe Mr Dickson’s explanation and he was dismissed for gross misconduct.

Mr Dickson issued claims for unfair dismissal and disability discrimination. Both claims were successful at the tribunal. When the Council appealed, the EAT overturned the disability discrimination decision, holding that the fact that Mr Dickson was a diabetic did not influence the way that the Council reached its decision to dismiss at all.

However, the unfair dismissal finding was upheld. The main reason for this is that the Council “failed to engage” in the explanation offered by Mr Dickson at all. In other words, the Council decided that Mr Dickson was lying without taking proper steps to understand the evidence that was available about his medical condition. Both the tribunal and the EAT were less than impressed that the the manager conducting the disciplinary meeting seemed to have relied on (incorrect) advice provided by the Council’s HR adviser, second-hand from the adviser’s wife (who happened to be a pharmacist) that a hypoglycaemic episode could not result in out of character behaviour or memory loss.

The striking thing for me about this case is that with a little more care the employer could have reached exactly the same conclusion and not been liable for unfair dismissal. The reason why is explained in the EAT’s judgment, “[I]t was in principle plainly open to [the Council] to disbelieve [Mr Dickson's] explanation… Thus, if it were shown that [the Council] had engaged with the Claimant’s defence but had reached a considered view that it should be rejected, it is hard to see how that conclusion could be said not to have been open to it… [The Council] had simply not taken the defence seriously”.

The background to the claim is that Ms Eweida was a devout practicing Christian, who had worked part-time on BA’s check-in desk since 1999. In 2004 BA changed its uniform from a high-necked blouse to a uniform that incorporated an open collar, but forbade the wearing of any jewellery around the neck. In 2006 Ms Eweida twice wore a small cross on a chain around her neck and, when challenged, removed it. The third time she wore the cross, she refused to remove it and was sent home. She remained at home on unpaid leave from 20 September 2006 until 3 February 2007 after BA changed its policy to allow the wearing of a faith or charity symbol. She is still employed by BA.

Ms Eweida issued various claims against BA alleging harassment and both direct and indirect discrimination on the grounds of her religion. These included a claim that not allowing her to wear the cross around her neck was indirectly discriminatory of her as a Christian because it was a “provision, criterion or practice” (“PCP”) which although it was applied equally to all BA staff, put persons of Ms Eweida’s religion or belief at a particular disadvantage. None of those claims were upheld either at the initial Employment Tribunal or at the Employment Appeal Tribunal.

The only ground of appeal pursued by Ms Eweida in the Court of Appeal was that the Employment Appeal Tribunal had been wrong to find that in order for her indirect discrimination claim to succeed, Ms Eweida was required to show that she was part of a group of people within the BA workforce who were disadvantaged because their religion or belief made it harder to comply with the PCP applied by BA. Ms Eweida’s argument was that it should be enough to show that she alone suffered that disadvantage on the grounds of her religion.

In refusing to uphold her appeal, the Court put significant weight on the tribunal’s findings that the detriment which Ms Eweida complained of was suffered by her alone and her complaint arose from a personal objection neither arising from any doctrine of faith, nor interfering with her observance of it and never raised by any other BA employee. The Court also held that there must be some element of disadvantage to a group (even a potentially small one) in order for there to be indirect discrimination.

The case provides useful guidance to employers on an issue which has been the subject of numerous cases in the tribunals since religious discrimination laws were introduced in 2003,  though there will no doubt be further litigation in relation to dresscodes and appearance in the context of employment.  Lord Justice Sedley was at pains to point out that this case was not about whether BA had adopted an anti-Christian dress code, treated other religions more favourably or harassed Ms Eweida because of her beliefs. It will be interesting to see if that is how the case is presented in the wider news media.

For those who want a little more detail, the Court of Appeal’s judgment is available at http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2010/80.html&query=eweida&method=boolean.

The Equality Bill, which will harmonise and strengthen discrimination law, is expected to receive Royal Assent in April 2010, with the majority of its provisions coming into force in October 2010. The Bill includes proposals to make gender pay discrimination more transparent; widen the definitions of direct discrimination and harassment to cover claims based on “association” and “perception”; and allow employers to choose between two “equally-qualified” candidates by selecting one from an under-represented minority.

 “Fit” notes

The Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) Amendment Regulations 2010 are expected to introduce new “fit notes” in April 2010, which will replace “sick notes”. The new notes will give employers more information on an employee’s medical condition, as they allow GPs to state if the patient is fit for work, for some work or for no work at all.

The Apprenticeships, Skills, Children and Learning Act 2009

The Apprenticeships, Skills, Children and Learning Act 2009, which introduces a new apprenticeship structure and a new right for employees to request time off work to undertake study or training, will come into force on 6 April 2010 for employers with 250 or more employees.

Additional paternity leave and pay

The Government intends to introduce additional paternity leave, some of which will be transferable from the mother to the father, for parents of babies born on or after 3 April 2011. Businesses must ensure that their policies are updated by mid-2010 to take account of this change. Even if there is a change of government at the next election, the Conservative party has said that it is committed to extending paternity provisions.

Default retirement age consultation

The Government has brought forward its review of the default retirement age from 2011 to 2010. It has launched a consultation on the issue and has asked businesses and individuals for evidence on the default retirement age by 1 February 2010.

Blacklisting of trade union members

The Government plans to bring revised regulations into effect “in early 2010”, which, subject to parliamentary approval, will prevent workers from being “blacklisted” as a result of their union membership or activities.