FM Legal Update 2011

The Coalition Government came into power promising to reduce the ‘excessive’ levels of business regulation imposed by the previous Government. So how has it fared and what else is on the agenda? Sara Bean reports

During questions in the House of Commons earlier this year, Tory MP Nicholas Soames asked for a list to be made available of all the deregulatory measures the Department of Business Innovation and Skills had taken since May 2010. Business Innovation and Skills Minister Edward Davey then admitted his Department has ‘not yet revoked any signifi cant regulatory measures’.

Instead, the Government has launched a series of major reviews of employment legislation, including that of health and safety regulations, and has unveiled its Red Tape Challenge website, calling on the public, businesses and community organisations to ‘have a say on the 21,000 regulations which they see as barriers to growth and personal freedom’.

Yet, ironically, one of the most signifi cant and potentially far reaching repeals of employment law has in fact already been implemented, that of the Default Retirement Age.

End of the DRA

The Regulations repealing the Default Retirement Age (DRA) came into effect from the 5th April 2011. Between that date and 1st October 2011, only people who were notified before 6th April, and whose retirement date is before 1st October, can be compulsorily retired using the DRA. After 1st October, employers will not be able to use the DRA to compulsorily retire employees unless they can objectively justify it, for example in professions such as the police force.

The phasing out of the DRA has concerned many employers. In a survey by law firm Irwin Mitchell, over half (57%) of businesses believed its scrapping would lead to an increase in the number of tribunal claims; while a report from the London Chamber of Commerce and Industry, entitled ‘Tackling the age-old problem of retirement’, found that 57% of those surveyed are not prepared for the DRA and 26% did not feel well-informed about it.

Jayn Bond, Head of HR at Workplace Law, has heard from FMs who are worried the phasing out of the DRA will lead to them ending a relationship with an employee on a note of conflict.

She advises: “People need to prepare more and deal with performance on a regular basis, not when it gets to dire straits. Employers don’t want to have a 75 year old who won’t retire so that they’re going to have to take them down a performance route.

” Employment lawyer Jane Moorman of Howard Kennedy concurs: “Employers faced with staff who cannot simply be dismissed when they reach 65 will need to ensure managers address performance issues of their staff as and when they arise and not allow different standards for older colleagues than are applied to their younger members of staff.

“Quite apart from anything else, they face potential claims for age discrimination from younger employees who may complain that different, lower standards are being applied to older colleagues than to themselves.”

Equality Act updated

One area where the Government claims it is ‘simplifying the law and reducing the administrative burden on businesses’ is with the Equality Act. The main provisions came into force in October 2010 and brought together nine pieces of anti-discrimination legislation under a single banner. Key provisions of the Act include employment protection for disabled people, making pay secrecy ‘gagging’ clauses unenforceable and extending protection from third party harassment, giving employers responsibility to protect their staff, where possible, from harassment by customers and clients.

In April 2011, Section 159 of the Equality Act 2010 came into force, which allows positive action in recruitment and promotion. This enables employers to pick someone for a job from an under-represented group when they have the choice between two or more applicants who are ‘as qualified’ as each other.

Faced with headlines such as ‘White Men Face Jobs Ban’, Equalities Minister Lynne Featherstone said: “Positive action is absolutely not about political correctness, or red tape, or quotas. It’s about giving individual employers an extra tool they can use to help make the workplace fairer.”

Comments Stuart McBride of TLT Solicitors commented: “Essentially, subject to certain limitations, it makes it lawful for an employer to use positive action in a ‘tie-break’ situation between two candidates of equal merit. The question on employers’ minds is how will these new provisions work in practice?”

McBride advises any employer contemplating this to first consult the Government Equalities Office guidance for employers on the practical implementation of these changes.

Government consultations

As mentioned above, a number of key consultations have also been launched, which could result in some wide ranging changes in employment and health and safety legislation. These include:

Consultation on workplace disputes

This consultation, which closed in April, sought views on workplace dispute resolution, to ‘find ways to help businesses feel more confi dent about hiring people’.

The proposals include requiring all claims to be submitted to ACAS (the Advisory, Conciliation and Arbitration Service) in the first instance, rather than the Tribunals Service.

It also proposed:

• To introduce a fee for bringing an Employment Tribunal (thought to be £500), which would be refunded if the case was successful,

• To increase the qualification periods for unfair dismissal from one to two years and

• To introduce financial penalties for employers found to have breached rights.

A review of the formula for calculating Employment Tribunal awards and statutory redundancy payment limits was also suggested.

Although the feedback so far suggests the reforms would be welcomed by employers if it makes it more difficult for employees to submit or pursue weak claims, the Employment Lawyers Association, which represents the majority of British employment lawyers, has warned that many of the proposals could either backfire or prove unworkable in practice.

Modern workplaces consultation

This is an ongoing consultation on plans to introduce a new system of flexible parental leave from 2015, extending the right to request flexible working to all and forcing companies found guilty of gender pay discrimination to undergo compulsory gender pay audits.

Under the proposals, once the early weeks of maternity and paternity leave have ended, parents will be able to share the overall leave allowance between them. Unlike the current system, this leave could be taken in a number of different blocks and both parents could take leave at the same time.

The consultation also includes proposals to extend the right to request flexible working to all workers who have been with their employer for 26 weeks. The Government will consider publishing a statutory Code of Practice for businesses and will propose that employers should be allowed to take into account employees’ individual circumstances when considering conflicting requests.

Consultation on RIDDOR change

Changes to the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 1995 were recommended in Lord Young’s report on health and safety published last year, which contained a proposal to increase the threshold for reporting workplace injuries to seven days.

Consultation on the CRC scheme

The results of the Government’s consultation proposing further changes to the Carbon Reduction Commitment (CRC) scheme have yet to be published. If the changes are implemented, participants won’t need to register for phase two, the trading phase, until 2013.

Consultation on reporting of GHG emissions

The Department for Environment, Food and Rural Affairs (DEFRA) has launched a consultation on whether regulations should be introduced to make it mandatory for some UK companies to report on their greenhouse gas (GHG) emissions or whether the Government should continue to encourage measuring and reporting of GHG emissions on a voluntary basis.

Air quality consultation

A consultation on a package of updated draft air quality plans that aim to meet the EU limit values for nitrogen Dioxide (NO2) in England will form the basis of the UK notification to the European Commission for additional time to comply with the NO2 limit values.

Review of health and safety legislation

Another recommendation of Lord Young’s report, to consolidate current health and safety legislation into a single set of regulations, has led the Government to launch a review of all existing health and safety law with a view to scrapping measures that are not needed.

Chaired by Professor Ragnar Löfstedt, the review will consider the opportunity for combining, simplifying or reducing the approximately 200 statutory instruments that are owned by the Health and Safety Executive. The findings, to be published in autumn 2011 will be used, the Government has reiterated, to ‘ease the burdens on business’.

Environmental law

A couple of key pieces of environmental legislation came into force in recent months, which directly affect facilities managers. And, warns Colin Malcolm, Principal Consultant, Environment at Workplace Law, a series of consultations illustrate a commitment at both UK and European levels to use legislative powers to move business towards more sustainable practices.

Waste Regulations 2011

The long awaited revised EU Waste Framework Directive was finally implemented into UK legislation by the Waste (England and Wales) Regulations 2011, and came into force on 29 March 2011.

The new regulations will affect all types of businesses that deal with waste. The Regulations implement the revised EU Waste Framework Directive 2008/98, which sets requirements for the collection, transport, recovery and disposal of waste.

They require businesses to confirm that they have applied the waste management hierarchy when transferring waste and include a declaration on their waste transfer note or consignment note.

Civil sanctions

From 4 January 2011, the Environment Agency has been able to use new enforcement powers, known as civil sanctions, against companies that flout environmental laws.

Civil sanctions can be used against a business committing certain environmental offences, as an alternative to prosecution and criminal penalties of fines and imprisonment. They allow the Environment Agency (and other regulators) to take action that is proportionate to the offence and the offender, and reflect the fact that most offences committed by businesses are unintentional.

Explains Colin Malcolm: “The idea is that the existing criminal sanctions and the civil sanctions will work side by side, resulting in more options for the regulatory authorities in terms of proportionate enforcement. If a business is deliberately causing pollution, the guidance suggests criminal sanctions will still be the best route for the regulators.”

When it comes to whole area of environmental law, don’t expect any attempt at consolidation. What we expect to see is a continuing emphasis on legal compliance. Colin Malcolm sums up the situation for FMs: “Because of this, the facilities management sector needs to ensure that a clear understanding of current and future environmental law is maintained, and that this is translated into a robust and auditable compliance strategy in all aspects of their work.” So, as always, it’s a busy time for FMs.

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