Employment Matters Bite Size May 2010

Legislation

Equality Bill approved by House of Commons and receives Royal Assent

The Government’s long awaited shake up of discrimination law, The Equality Act, has been approved by the House of Commons and received Royal Assent on 8 April 2010.  The main provisions are expected to come into force in October 2010. The Act is intended to strengthen and standardise the existing discrimination legislation in relation to the “protected characteristics”, namely, sex, race, disability, sexual orientation, religion or belief, age, marriage and civil partnerships.

The Act introduces a number of changes to discrimination legislation including harmonising the definitions of direct and indirect discrimination across each protected characteristic. The Act also establishes a single objective justification test in order to provide a consistent approach to defending discrimination claims. 

Most notably, the Act makes considerable changes to disability discrimination legislation removing the concept of ‘disability related’ discrimination and replacing it with indirect discrimination which prohibits a person discriminating against a disabled person “because of something arising in consequence of…the disability”.  The new provision seeks to reverse the House of Lords decision in Lewisham v Malcolm which substantially limited the scope of claiming for less favourable treatment on the grounds of disability. 

The Act also seeks to tackle discrimination by association by replacing the current definition of direct discrimination ‘on the grounds of’ with ‘because of’.  This amendment addresses the situation where a person associated with someone who possesses a protected characteristic is discriminated against as a consequence of their relationship with that person.  The amendments reflect a wider application of the European Court of Justice’s decision in Coleman v Attridge to insert words into the Disability Discrimination Act 1995 to cater for discrimination by association. 

Potential employers will also be prevented from making pre-employment enquiries about a candidate’s health or disabilities under the Act unless they are related to an intrinsic function of the role concerned.  However, employers will be permitted to make enquiries at the job-offer stage.

Crucially, the Act tackles the Government’s concerns in relation to equal pay and contains the power for Government to issue secondary legislation to require public bodies with 150 or more employees to publish their gender pay gap from April 2011.  There is a similar provision in relation to private sector employers with 250 employees, however there is some debate as to whether a Conservative government would utilise this power.

From April 2011, employees will also have the right to bring a claim for dual discrimination rather than making two separate claims in relation to two protected characteristics.  So for example, a gay woman may be able to bring a claim for discrimination because of her sexual orientation and her gender.  It should be noted however that dual discrimination claims can only be brought in relation to direct discrimination claims.

The Government shakes up corruption legislation

The Government’s overhaul of anti-corruption legislation, The Bribery Act 2010, also received Royal Assent on 8 April 2010.  The Act is generally perceived to be a response to the allegations of bribery made against BAE Systems and the subsequent intervention by the then Attorney-General, Lord Goldsmith, which halted the Serious Fraud Office’s investigation into the matter.  The case caused widespread damage to the reputation of the UK and the Government therefore responded with the Bribery Bill which aimed to bring the UK into line with the Organisation of Economic Co-operation and Development Bribery Convention, of which the UK is a ratifying member.

The Act sets out four main offences of paying or receiving bribes, bribing foreign officials and the failure of commercial organisations to prevent bribery.  

In order for an organisation to be convicted of the offence of failure to prevent bribery, a person associated with a relevant commercial organisation must intend to obtain or retain a business advantage by paying or receiving bribes.  ‘Person’ is widely defined and can be an employee, agent or any external third party.  In essence, the Act requires organisations to implement robust anti-corruption policies since it is a defence if the organisation can show that it had adequate procedures in place designed to prevent bribery. The offence is far reaching and will apply to companies and partnerships incorporated under any law in the UK and which carry on business anywhere in the UK or abroad.  The provision also catches any other body corporate or partnership which carries on business, or part of a business in any part of the UK.  If found guilty, a commercial organisation could receive an unlimited fine and any individual involved could be prosecuted and liable to serve a prison sentence of up to ten years.

The Act requires the Government to provide guidance on what constitutes adequate procedures in relation to the corporate defence prior to the offence coming into force in October 2010.  Organisations should ensure that internal controls and training are updated and consider implementing an anti-corruption procedure. 

The Coroners and Justice Act 2009

The Coroners and Justice Act 2009 received Royal Assent in November 2009 with the main provisions coming into force on 1 February 2010.  The Act makes amendments to the Data Protection Act 1998 (“DPA”) providing wider powers for the Information Commissioner in relation to the enforcement of the DPA regime. 

Under the DPA, public and private sector employers are responsible for complying with the DPA in relation to the way in which they hold and maintain personal data.  The Act provides the Information Commissioner with powers to serve a public sector data controller with an assessment notice to check whether the organisation is complying with its duties under the DPA.  The Act confers further powers to enter and inspect any premises which are the subject of an assessment notice if the organisation has failed to comply with a requirement imposed by the Information Commissioner.  The powers do not yet extend to private sector data controllers.

The Act also introduces an offence of holding a person in slavery or servitude or requiring another person to perform forced or compulsory labour.  If convicted, the person could face imprisonment of up to 14 years.  Previously such offences have been prosecuted under immigration or criminal legislation, however the European Court of Human Rights held in Siliadin v France (2006) 43 EHRR 16 that Member States have a positive obligation to penalise practices that contravene the European Convention on Human Rights, Article 4, which states that 'No one shall be held in slavery or servitude'; and 'No one shall be required to perform forced or compulsory labour'.   The section came into force on 6 April 2010.

Damages-Based Agreements Regulations 2010

The Coroners and Justice Act 2009 paved the way for the Damages-Based Agreements Regulations 2010, which came into force on 6 April 2010.  The Regulations cover matters involving contingency fee agreements which are agreements whereby the representative charges a percentage of the money recovered. 

Contingency fee agreements must meet certain requirements to ensure they are enforceable and to enable recovery for the representative.  These include practical information the representative must provide to his client prior to making the agreement, the formalities of the contents of the agreement and also the terms and conditions of the agreement.  Perhaps most importantly, the Regulations have put a cap on the contingency fee of 35 per cent (inclusive of VAT).