By Darren Clayton, Doyle Clayton Solicitors, London


Spring and the Sex Discrimination Act

It is spring time again in the land of employment law and the initial crop of new laws is coming through nicely. Cultivated, often in darkness, and fertilised heavily by politicians, they are sometimes forgotten during the winter months. But already some of the more hardy perennials are beginning to show through, and we begin to wonder how we could have forgotten them.



Take the Sex Discrimination Act 1975 (Amendment) Regulations 2008, for example. This member of the discrimination family seems to have passed through the winter with little or no attention, but quietly broke the soil on 6 April, perhaps all the more quietly because it will only apply to women who have an expected week of childbirth that begins on or after 5 October 2008, which may bit of a blow for those who weren't checking the employment law cycle when considering starting a family.



Given assurances (again) that such new laws can now be expected only in April and October each year, employees may be advised to breed with greater caution. No longer is it sufficient to have regard to the child's position in the academic year, the phase of the moon and whether the child's initials accidentally spell out an embarrassing word or disease. There may now also be real financial reasons for avoiding conception between February or June. But before anyone is tempted to white-out the date on their maternity documents, we must question whether the wait would have been worth it for everyone.



A quick sojourn through the regulations can prove slow work, as they adopt the endearing but now familiar approach of: 'delete the word "if" in the third line of the second paragraph of clause 3 (a) (ii) of the act and replace it with the word "at"'.



The principle change of course comes with the new section 6A. This not only helpfully clarifies what is meant by 'remuneration' (of which a woman can be lawfully deprived while on maternity leave), but also provides that 'other' terms and conditions of employment must now be continued during additional as well as during ordinary maternity leave. Superficially this may seem a great advance. In practice, however, have many employers really discontinued a woman's life insurance/medical cover and asked for the BMW back during this unpaid window of time - especially as this applies to women who can afford to take such extra leave?



Conversely, with the exception of the brief period of compulsory maternity leave (usually two weeks), the regulations again leave the issue of entitlement to non-contractual/discretionary bonuses to case law, arguably missing an opportunity to clarify the position through legislation (see, for example, GUS Home Shopping Ltd v Green & McLaughlin [2001] IRLR 75 and Holyand v Asda Stores [2005] IRLR 438 and [2006] IRLR 468). Although it seems relatively clear that such bonuses are ordinarily to be regarded as 'remuneration' (which is not payable in respect of the period of maternity leave), it is often difficult to determine which part of such a bonus actually relates to another period (that is to say the period before maternity leave began or serves as a reward for future service - which should be paid).





Corporate manslaughter

In a different part of the garden it looks like being an interesting year for the fruits of health and safety law, with the advent of the much anticipated Corporate Manslaughter and Corporate Homicide Act 2007 on 6 April. This is a subject that will launch a thousand seminars and acres of comment in its own right, so it is perhaps sufficient to note that the act creates a new 'corporate' offence based on the common law offence of gross negligence. The offence can be committed not only by corporations but also partnerships and LLPs - so law firms must also take heed (sadly, this may finally end the time-honoured tradition of angry partners flinging telephones at trainee solicitors).



The offence is based on the obvious formula that there must be a relevant duty of care that has been breached. Those to whom a duty is owed are listed. This includes a duty to provide a safe place of work for employees and for those whose work the body is able to control or direct - and so a duty is owed to employees and probably most contractors. An organisation will itself commit this offence if the duty was breached due to the way in which the activities of the body were managed or organised as a whole. On a jury finding a gross breach of that duty, a court is able to fine the organisation without limit. It can also make a remedial order compelling the company or firm to take steps to remedy the management failure that led to death or indeed the consequence of that failure (this could include greater health and safety monitoring procedures).



Interestingly, an individual cannot be found guilty of aiding or abetting the offence, which may be of some comfort to directors, senior managers and partners - though this is presumably not to the exclusion of other health and safety offences that may have individual impact. Directors and partners must of course also remain mindful of other professional obligations.





Shareholders and employees

The Court of Appeal has also been busy in the garden working on the further development of the line of authority relating to shareholder/employees. In Neufeld v A&N Communications In Print Ltd (in liquidation) and Ors [2008] UKEAT 0177 07 1104, the court has confirmed that the approach by Patrick Elias in Clark v Clark Construction was indeed correct when considering whether a controlling shareholder can also be an employee under section 230 of the Employment Rights Act 1996. As well as the consideration of whether there is a genuine employment contract (as opposed to a sham one), the guidance could have far-reaching consequences - though it seems to be most often of interest in insolvency cases.



A point of particular interest in the case is that the relevant date to consider the status of the shareholder is the dismissal date and not the date they are alleged to have entered into a contract of employment.



So, unlike the new sex discrimination regulations, it would therefore appear that the date of conception may not of itself be determinative in benefiting from employment law when it comes to shareholders.



As always, timing can be all. This was noted recently by a client of mine who had made an appointment to see HR, to ask nervously if he could be released early from his employment contract to join a competitor. Before he could speak, the flustered HR officer told him the grave news he would be made redundant, released that day and paid more than £100,000 compensation. On this occasion, at least, we were able to process a compromise agreement swiftly and within the £250-plus-VAT budget. A happy spring is in store for him too.