Booming baby boomer

At the inception of the Society 60 years ago the idea of devoting an entire page of a journal to employment law and its significance would probably have been met with confusion, such was the limited nature of the subject at the time. Fast forward six decades and barely a week goes by without a new development in this area. Not only has it become a niche specialism within the law, the importance of which is sadly emphasised by the current economic downturn, it has also spawned an ever burgeoning case law which reaches into many aspects of day-to-day life.

First steps

Sixty years ago the law as it related to employment matters was almost solely that of “master and servant”, and contract law encompassed most of “employment law”. The concept of unfair dismissal had not yet been invented and employees did not enjoy any of the statutory protections that they do today.

The 1960s were to see the first steps towards a separate sphere of law devoted to employment, with the first dedicated statute, the Contracts of Employment Act 1963. The inception and development of the (then called) industrial tribunals in 1964 also indicated a growing realisation of the need to regulate the employer/employee relationship, although their initial remit was extremely limited, being confined to appeals by employers against levies imposed under the Industrial Training Act 1964. Further developments took place with the introduction of a statutory right to redundancy payments under the Redundancy Payments Act 1965.

Defining decade

It was the changes that occurred in the 1970s that have, to a large degree, defined the employment law we know today. The first of these, the Equal Pay Act 1970, has recently returned to prominence with the proliferation of litigation involving local authorities and the NHS. This was followed by the Sex Discrimination and Race Relations Acts, which introduced statutory anti-discrimination rules. However, it has been the UK’s accession into the European Union and developments in European law that have impacted most on the landscape of UK employment law.

1971 also brought the promulgation of the Industrial Relations Act which, amongst various provisions relating to general industrial relations, created the statutory concept of “unfair dismissal”. Although the 1971 Act was repealed by the succeeding Labour Government, the unfair dismissal part was re-enacted and secured its place at the heart of UK employment law.

British Home Stores v Burchell [1978] IRLR 379 was a landmark decision in the field of unfair dismissal. Its judgment, setting out the threefold test for tribunals to apply in establishing whether there had been a procedurally fair dismissal in conduct cases, still represents the basic tenets of unfair dismissal law in a misconduct context today.

The test required employers to hold a genuine belief in the employee’s guilt, have reasonable grounds for that belief based on as much investigation as is reasonable and for the decision to dismiss to fall into the band of reasonable responses of a reasonable employer.

The Transfer of Undertakings (Protection of Employment) Regulations 1981 implemented the Acquired Rights Directive (77/187/EC) and introduced the first legislative protection for employees on the transfer of an undertaking. The similarly named Regulations of 2006 repealed the 1981 Regulations and, amongst other things, attempted to incorporate some of the key European Court of Justice decisions over the previous 25 years into the wording of the revised regulations.

The equal treatment drive The 1990s saw consolidation of the law in the Employment Rights Act 1996 and the introduction of the Disability Discrimination Act 1995. The new Labour Government made its mark by implementing various manifesto promises to strengthen employment rights through the Employment Relations Act 1999, which

dealt with trade union rights, family friendly issues, agency worker rights and fixed term contracts. Labour also accepted the Social Chapter, which resulted in a raft of new employee rights including the Working Time Regulations 1998 and the National Minimum Wage Act 1998.

The first decade of the new century has seen the introduction of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, implementing a 1997 Directive designed to protect such employees against discrimination. The Equal Treatment Directive, also in 2000, resulted in a variety of new discrimination legislation, such as the Employment Equality (Religion or Belief) Regulations 2003, the Employment Equality (Sexual Orientation) Regulations 2003, and the Employment Equality (Age) Regulations 2006. Labour’s legislative reform continued with the Employment Act 2002, which brought in various provisions including the right to request flexible working, and enhanced maternity and paternity rights. The same year, the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 came into force.

In 2004, a statutory dispute resolution regime was introduced with the aim of promoting informal resolution of disputes without the need to resort to tribunals and halting an ever increasing stream of litigation. These procedures were not successful in their aims, and having been roundly criticised on all sides were repealed on 6 April of this year. It is hoped that the new ACAS Code will result in a more flexible approach which will reduce the number of claims argued on technical procedural points and achieve the original aims of the statutory procedures. Only time will tell.

Projecting ahead

Given the pace of change in employment law it would be ambitious to try and forecast the likely developments in the next 10 years, far less the next 60. Nonetheless it is possible to identify a number of areas where significant changes are anticipated. These areas are not only of interest from an academic legal perspective – they are tangible legal changes which are likely to have a real impact on the working lives of many employees in the UK.

First, following on from the increased maternity rights last April, it seems likely that maternity and paternity rights will continue to be extended, with an emphasis on providing more protection to new parents as well as enhancing flexibility in the way in which parents can use their leave, such as enabling mothers to pass some of their rights to the father. In addition the Government is currently consulting on European Commission proposals to provide a right to full pay (subject to a cap) during maternity leave, and to increase compulsory maternity leave from two to six weeks.

In a similar vein we would predict that all employees will, eventually, gain the right to request to work flexibly. At present the right to request flexible working only extends to adult carers and parents of children up to the age of 16 (18 if the child is disabled). Further, at present it is only a right to request and, whilst many employers comply with their legal obligations and consider the right to flexible working, far fewer actually grant the request. In the future we anticipate the introduction of a right for all to request flexible working hours. We also anticipate that as greater emphasis is placed by the UK workforce on the importance of work/life balance, employers will come under increasing pressure to grant such requests.

Another area that is likely to require a rethink from employers is the looming threat of the removal of the opt-out from the 48 hour working week. Although it remains competent for the time being, it is likely that the right to opt out will be curtailed further or even abolished.

An example of the issues arising from a changing and aging workforce is seen in the recent ECJ decision in Incorporated Trustees of the National Council on Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform, 5 March 2009. It has been widely reported that the ECJ has effectively backed the UK’s compulsory retirement age of 65. The reality is that, while the ECJ has concluded that the compulsory retirement age is 65 is potentially capable of justification, it will be the jobof the High Court to determine whether the provision is, in fact, an appropriate and necessary means of pursuing a legitimate aim.

Whatever the outcome of the High Court decision, it seems unlikely that a rigid compulsory retirement age can survive the test of time. There are many reasons that employees no longer wish to retire at 65, including financial considerations as a result of underperforming (or non-existent) pension funds, ever increasing life expectancy and a general desire in an increasing number of employers to take advantage of the experience of older employees.

Employment law has changed beyond recognition over the last 60 years. The impact of European law and the consequential statutory regimes now require an in-depth legal knowledge and expertise which could not have been imagined by those practising at the Society’s inception. However, given the speed with which this area of law develops, today’s practitioners may be just as unlikely to recognise the shape of employment law in another 60 years’ time.

Standing the test of time

Ready Mixed Concrete v Minister of Pensions and National Insurance [1968] 2 QB 497 is one of the oldest employment cases which is still cited today with any regularity. It identified the three conditions necessary in order to establish the existence of a contact of employment, namely mutuality of obligation, an element of control by the employer and that the provisions of the contract are consistent with it being a contract of employment. Although many variations on the standard employer/employee relationship have sprung up since then (e.g. agency workers and contractors), this basic test for establishing the relationship remains the same.