Update: employment

The school report: at the end of year one of the coalition government, we have a number of new laws and even more things promised or threatened, depending on your outlook. The Equality Act 2010 was implemented for all but the most radical provisions relating to social inequality and dual discrimination.

The gender pay reporting duty is still to come, possibly in 2013. The Act came into force largely as planned by the previous administration, in October 2010 and April 2011 including the new general equality duties for specified public bodies which came into force in April. These require the specified bodies to have 'due regard' to the need to eliminate discrimination, advance equality and foster good relations in developing policies or delivering services.

So did the tie-breaker provisions that permit a form of positive discrimination in recruitment, although it is too early to see what impact they will have. A policy review paper signalled a distinct change of emphasis towards localism (the new buzz concept) while deploring central prescriptivity in relation to the specific duties that will be required of public bodies. The period for comment on the draft regulations ended on 21 April and we await the details of the new duties, though some may be implemented as early as July.

Retirement age

In a move which has left many commentators bewildered, not least by its lack of regard to the factual context or potential impact on youth employment, the general justification for retirement at 65 was abolished in April and retirement was removed as a potentially fair reason for dismissal, together with the procedure for seeking extension of employment after age 65.

By an exquisite irony, we have now been told by the EAT in Bailey v R and R Plant (Peterborough Ltd) that the employer's retirement notice under the old provision was supposed to be quite specific and careful about the procedural rights of the employee who wanted to requested an extension of employment. Where an employer has given valid notice to retire by 5 April, the old rules will continue to apply potentially until October 2012.

Some employers are considering how they can implement their own retirement age regime (the employer justified retirement age) to fit in with their requirements for job mobility, succession planning and the like. In spring 2012, the Supreme Court will have an opportunity for the first time to consider justification under the old retirement age provisions and also the impact on pre-retirement policies in the conjoined cases of Seldon v Clarkson Wright Jakes (the Kent lawyer who sued his own firm) and Homer v West Yorkshire Police (the police officer who didn't have time to get a degree before retiring). Their decision will inevitably be pored over for its impact on such EJRA schemes and, if they delineate justification fairly narrowly, will provide a further ironic coda on the decision to abolish the old rules.

Paternity rights

New paternity leave and pay rights came into force in April such that fathers will now have the right to up to six months paternity leave, some of it paid, the right to return to their old job and the right not to suffer detriment for exercising their right to paternity leave. Fathers can only take paternity leave after the child is 20 weeks old and only if the mother returns to work. There are detailed notification requirements intended to make sure that the system works, especially where the parents are not both working for the same employer.

Given the 20 weeks lead in, we will be looking to see whether new fathers will start to take their extended paternity leave from August onwards, so next autumn could herald the start of an era of shared early parenting. It will be interesting to see if this change of approach has an impact on the workplace disadvantage currently experienced by mothers of small children. And the government has commendably decided to have a root and branch review of parental leave rights as part of its modern workplaces review (see below).

Agency workers

In October, the new Agency Worker Regulations will come into force enacting the EU directive that came into force in 2008 at the latest possible date. Employment agencies will face a range of obligations and potential liabilities which may well be reflected in the costs of supplying a temp. But employers using temps will also face many new obligations. Some are immediate, so there is no qualifying period for access to general benefits such as work-based facilities, transport or childcare: if employed staff gets these then agency staff are entitled to them as well from day one.

Similarly, the right to equal access to job vacancies arises as soon as the temp is engaged, which could potentially impact on preferential redeployment of employed staff facing redundancy. Otherwise the regulations forbid differential terms and conditions of employment, including pay, for agency staff where they have worked for the same employer for 12 weeks or more. And there are anti-avoidance provisions to ensure that the length of employment is not artificially limited to below 12 weeks.

The DBIS has just published the second version of its 50-plus page guidance booklet intended to provide easy-to-read and follow help for employers and agencies to determine key concepts such as working conditions, how to calculate the 12 weeks, etc. For employers that make significant use of temps, these regulations will have a big and potentially unexpected impact.

Modern workplaces review

The government is also consulting extensively on employment law reform with quite an ambitious plan of potential changes. At present it is reviewing the tribunal system and how best to resolve workplace disputes and the working of the Equality and Human Rights Commission which is facing a large budget cut. Just recently it has announced a review of the 'modern workplace'.

The first of the reviews is intended to make businesses and social enterprises more confident about employing people. So the aim is to achieve the holy grail of earlier workplace resolution of disputes, avoidance of the need to go to tribunal and also making tribunals cheaper and more effective by, for example, weeding out weak claims. This consultation is the one where they are toying with changes such as the idea of increasing the service requirement for unfair dismissal claims from one to two years. The consultation period closed in April and, if they follow their own guidelines, we should have a first response before the summer recess at the end of July. The consultation about the EHRC closes on 15 June. The intention is to take away some of its functions and to make it a 'valued and respected national institution'¦ a strong, modern equality regulator'.

Finally, the modern workplaces consultation, which closes in August, covers a mixed bag. First, they are consulting about introducing a completely new regime of parental leave and rights to replace maternity leave after 18 weeks and all other current parental leave provisions. The view is that we have an inflexible and 'gendered' set of rights that do not work well and the proposals involve very significant changes to equalise the rights '“ some will feel long overdue and which the previous government had also espoused.

The only reason they are excluding the first 18 weeks of maternity leave is probably so as not to fall foul of EU directives. There is a separate strand of proposals on flexible working signalling the intention to make this type of working a norm, and also a review of holidays and sick leave under the Working Time Regulations to deal with the anomalies of recent case law. They propose some changes to gender pay equality law.

These consist of messages about greater transparency and also the idea that employers that have been found guilty of gender pay inequality should be required to do more, such as carrying out equal pay audits. There is no proposal for a radical reform of the underlying law as such, although there is reference to further research on this much-researched issue.

So, after a quiet start where they continued the implementation of the Equality Act in much the same terms as the previous government, the coalition signals a clear intention to make its mark on employment and equality law and practice with some radical proposals a few of which may be on the statute book by the end of the year, or at least in draft legislation.

Court appearances

If the government is being super-active, the judges continue to make law in intriguing ways. The Court of Appeal has now given its judgment in the long-running case of R v Ofsted and others ex p Shoesmith [2011] EWCA Civ 642, the removal from office and then summary dismissal of the director of children's services in Haringey after the court case of the death of Baby P.

They have dismissed the case against Ofsted: the report was not unfair and in any case was not directed against any individuals. They have allowed the case against the secretary of state. His publicly announced decision to remove Shoesmith from her office without giving her any opportunity to see or comment on the Ofsted report and still less on private remarks made to him by the inspectors was clearly unfair.

They have also, and most interestingly for employment lawyers, upheld the case against Haringey.

Here, the main point is in the judgment of Lord Justice Kay, where he rejects Haringey's allegation that Shoesmith had breached the implied term of trust and confidence. It results, he says, 'from a misuse of the concepts of trust and confidence'.

I'll let Kay LJ play us out: 'While in one sense it may be said Haringey lost confidence in Ms Shoesmith's abilities and felt that, as a result of the Ofsted report and the secretary of state's direction, she could no longer be trusted to be an effective DCS, that is not the sense which attaches to the implied duty.

'Its concern with trust and confidence is more closely connected with those terms in the sense in which they are used in a fiduciary or quasi-fiduciary context. It is broken and the breach is repudiatory when the employee evinces an intention no longer to comply with it, whereupon the employer may accept the repudiation and dismiss summarily.

'In the present case, although Haringey seeks to disavow it, the concern was as to Ms Shoesmith's competence and capability rather than as to trust and confidence in the correct sense. That would make it far more difficult to justify summary dismissal, as opposed to dismissal on three months' contractual notice, at common law.'