A round up of the legislative changes that will take place in 2008
It will be a relief to many working in HR that 2008 is not going to bring with it a vast amount of legislative changes to get to grips with. This will not however stop the flow of employment cases, and below we report, amongst others, on some key TUPE cases, as well as an interesting case on the issue of redundancy and mobility clauses.

For dismissals on or after 1 February, the compensation limit for unfair dismissal goes up from £60,600 to £63,000. Then in April, the final phase of the Information and Consultation of Employee Regulations 2004 comes in to force, meaning employers with 50 or more employees will be covered by the provisions.

April also sees the introduction of the Corporate Manslaughter and Corporate Homicide Act 2007 which creates a new offence of corporate manslaughter. The Safeguarding Vulnerable Groups Act 2006 is due to be implemented "during 2008", this will introduce a centralised vetting system for people working with children and vulnerable adults and was introduced following an enquiry set up after the Soham murders.

"Cherry picking" the best of old and new terms, post transfer
In Power v Regent Security Services Ltd the Court of Appeal has found that where there has been a change in terms of employment following a transfer the transferee cannot later rely on TUPE to avoid being bound by those new terms. The effect of this, which was expressly confirmed by the Court of Appeal, is that employees can "cherry pick" the most favourable terms from the new and old contracts.

This is not good news for employers especially if they have provided employees with increased benefits to compensate them for the loss of benefits under the old contract. It also leaves open the question of how to deal with this situation in future where the incoming employer wants to introduce new terms and conditions.

The EAT suggested that in these circumstances employees may have to give up benefits obtained under the varied contract if they seek to rely on their original terms but did not make any decision on this point. However, in practice, this suggestion in itself gives rise to practical difficulties both in terms of managing employee relations and the scope and practicality of introducing such conditions.
Firstly, employees are unlikely to accept an offer of new terms following a TUPE transfer if acceptance is made conditional on the requirement that they give up the benefits under the new terms if they later seek to rely on their original terms. If an employer does wish to take this approach it will need to consider very carefully the scope of any conditions relating to giving up benefits such as whether this would be retrospective to the date of the transfer and involve the employee reimbursing the employer or whether it would apply from the date of reliance on the original term. In any event, neither of these options is likely to result in employees accepting the new terms and is more likely to damage relations with the incoming employer. Another disadvantage is that it will flag up to employees the fact that they still have entitlements under their previous conditions which they might otherwise be unaware of.

Employers will therefore need to consider very carefully how to proceed. It will be a question of balancing the need to introduce new terms and managing employee relations with the transferring employees against the risks of employees relying on their original terms at some point in the future.

TUPE cannot create rights which did not exist at the time of the transfer
In Computershare Investor Services PLC v Jackson the Court of Appeal has upheld the EAT decision that TUPE cannot be used to create rights that do not exist at the time of the transfer.
This case turned on the wording of the transferee's severance scheme which provided benefits according to the date the individual "joined" the company. The individual concerned had joined the scheme after the TUPE transfer but was claiming she should have her whole service with the transferor taken into account as well in assessing her entitlement. The decision would have been different if the scheme had referred to the start of continuous employment which is preserved by TUPE. The Court of Appeal agreed that the purpose of TUPE was not to confer additional rights on the employee or improve their situation.

Employers may want to revisit the terms of any benefits and include wording to the effect that they only apply when the individual has joined the particular company.

Employees can object after TUPE transfer
Under TUPE employees have the right to object to a transfer. If they do so, their employment with the transferor is treated as terminating by operation of law with effect from the transfer date and this means that their contract of employment does not transfer to the transferee.

It had been thought that employees would have to notify their objection to a transfer before the transfer took place. However, the High Court held in New ISG Ltd v Vernon and Ors that employees who transfer under TUPE can object to the transfer after it has taken place where they are unaware of the identity of the transferee before the transfer.

This decision confirms that in very limited circumstances, an employee can still object after the transfer but the effect is that their contract of employment will not be treated as transferring across and their employment will end on the date of the transfer.

Although the circumstances in which this will happen are very narrow, where it does apply the impact can be significant on the transferee. In this particular case, the High Court found that letters of resignation after the transfer amounted to an objection under TUPE. Therefore the employees' contracts of employment did not transfer, which in turn meant that the transferee was not able to enforce the restrictive covenants contained in those contracts as it had never been the employer.

The age debate goes on...
We reported last year on the case of Johns v Solent in which the EAT stayed Mrs Johns claim pending the outcome of the Heyday case in the European Court of Justice. The President of the Employment Tribunals has now issued a practice direction ordering all current and future claims raising the same issue be stayed pending the ECJ decision.

This has led to a certain amount of uncertainty for employers in the private sector. The issue in Johns is whether the section in the Age Regulations allowing employers to dismiss employees who have reached 65 on grounds of retirement, is contrary to the EC Equal Treatment Framework Directive. The practice direction essentially means that any forced retirement could be challenged and stayed pending the Heyday decision, which is not expected until 2009. This could lead to hundreds or possibly thousands of stayed claims.

Redundancy - are mobility clauses affective?
In Home Office v Evans, the Court of Appeal found that an employer could rely on a contractual mobility clause, and thereby avoid following a redundancy procedure, provided it's intentions were clear from the start.

Here, Mr Evans was an immigration officer at Waterloo International Terminal ("WIT"). He was in a "mobile" grade and was subject to the staff handbook provision that "If your status is as a mobile member of staff you are liable to be transferred to any Civil Service post, whether in the UK or abroad". The Home Office sought to transfer Mr Evans to Heathrow when immigration control at WIT was closed. At Tribunal, the Tribunal found that Mr Evans had been unfairly constructively dismissed as they considered the mobility clauses had been invoked in order to avoid having to treat the closure as a redundancy situation, the EAT upheld the decision and the Home Office appealed to the Court of Appeal.

The Court of Appeal found that there was nothing to prevent the Home Office from invoking the mobility clause. It was legally entitled to do so and had made clear from the start of the process that it would be doing so. Earlier cases on the point had different factual scenarios as the employers were not seeking to invoke the mobility clause until much later in the process and had therefore left it too late to do so reasonably.

Is unpaid overtime for part time workers fair?
In the recent ECJ decision of Voss v Land Berlin the court found that a rule requiring employees to work more than 5 hours overtime a month in order to qualify for overtime pay was detrimental to part time workers.

In this case the Claimant was a teacher in Germany, employed on a part time basis for 23 hours per week (a full timers hours were 26.5 hours). If her total hours in a given week, including unpaid overtime, equalled 26.5 hours or less, she would not earn as much as a full time employee would earn in respect of the same working hours. This difference in pay would breach European law if it affected considerably more women than men and could not be justified. This clearly has implications for any employer that requires part time employees to do unpaid overtime as unpaid overtime would result in the part timer earning less than a full timer would earn pro rata for the same hours. On the assumption that this would adversely affect more women than men, then it would have to be objectively justified by the employer.

For more information about our Employment & Pensions Team please contact Jo Wort at joanna.wort@charlesrussell.co.uk

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