Partner and Head of Education
T: 0870 763 1332
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The Education Team at Martineau run three free Breakfast Briefings every term, in Birmingham, London and Leeds. Our briefings this term include Effective complaints handling and DPA/FOIA update. Please click here for further details.
Strategy, Students and Governance
Charities Act 2006 - HEFCE's consultation on information requirements as principal regulator | read
We report on HEFCE's proposals for obtaining the information it will need to gather in its new role as the principal charity regulator for HE. The consultation closes on 12 March 2010.
Of course universities have commercial interests! Information Tribunal's decision on disclosing course materials under the Freedom Information Act | read
This article examines the Information Tribunal's recent decision regarding disclosure of course materials in response to a request under the Freedom of Information Act, in particular on the question of whether publicly-funded institutions have commercial interests.
Finance, Technology and IP
Working from home | read
This article highlights the potential risks of employees working from home in light of the Data Protection Act 1998.
"Boilerplate Clauses": Entire Agreement Clauses | read
Although often thought of as unimportant, entire agreement clauses can in fact matter greatly. We examine why this is, and what you should do to ensure your entire agreement clause is effective.
Practical Planning Permissions | read
Following consultation, on 1 October 2009 the government brought into force subsidiary legislation introducing greater flexibility for planning permissions. We examine the new provisions in more detail.
Sustainability - Green Leases | read
Sustainability is likely to have an impact on the way landlords and tenants deal with each other. This article links to our plain English guide on "Green Leases - what might they look like?" which is aimed at answering some of the questions you may have about leasehold arrangements in the future.
Ladele decision clarifies equality rights collision | read
We comment on a recent judgement in which the Court of Appeal considered whether the rights under the Sexual Orientation Regulations 2007 effectively "trump" the right to freedom of religion.
Information and Consultation of Employees Regulations 2004: what do you have to talk about? | read
Last month, Martineau successfully defended a case under the ICE Regulations, proving that not every act by an employer (including a decision to carry out a redundancy exercise) will trigger the need to inform and consult under the Information and Consultation of Employees Regulations 2004. These Regulations will not be triggered where the effect of the act is not material in the context of the business of a university as a whole.
Full article details
|• Strategy, Students and Governance
Charities Act 2006 - HEFCE's consultation on information requirements as principal regulator| back to top
HEFCE has set out its proposals for obtaining the additional information it will need to gather from universities in order to carry out its new statutory role as the principal charity regulator for HE. The Act requires the principal regulator to do all it reasonably can to promote compliance by members of governing bodies with their legal obligations “in exercising control and management of the administration” of universities and colleges, some of which are amongst the largest charities in the country. HEFCE’s role applies only to English HEIs which are exempt charities, however constituted; the Office of the Third Sector is to invite the 18 institutions which are currently not exempt to consider de-registering during 2010.
The consultation paper points out that exemption from most of the regulatory powers of the Charity Commission has resulted in a hazy public conception of universities as charities, and suggests that its proposals will enable governors publicly to demonstrate that they are meeting their charity law obligations, as well as enabling HEFCE to discharge its new role from 2009-10 onwards. There is no requirement for it to promote compliance with charity law before the date of its appointment as principal regulator, expected any time now, unless there are ongoing implications of events which happened earlier.
The 2006 Act will extend most of the Charity Commission’s regulatory powers, including direct intervention, to exempt universities, but requires it to consult HEFCE before exercising them. A memorandum of understanding setting out how the two regulators will work together is to be published. As the Commission will be largely dependent on HEFCE for information about universities, the outcome of these arrangements, not directly touched on in this consultation, will be significant; this is considered further below.
Regulations will give principal charity regulators power to collect information necessary for the undertaking of their duties. This new power is separate from HEFCE’s existing power to require information as a funder, but it is made clear that some information already supplied by institutions under the accountability obligations - including bank account details held for payment of grants - will also be used for the new purposes and may be passed to the Charity Commission. At a pragmatic level universities are likely to welcome not having to provide the same information twice, but it is not difficult to envisage legal argument about the use for one purpose of information supplied for another, particularly if an extreme case were to arise where the freezing of bank accounts or exercise of other intervention powers was at stake. The revised financial memorandum will have a schedule listing information required for charity law compliance.
The consultation maintains HEFCE’s position, adopted when these proposals were first announced several years ago, that its additional requirements would be the minimum consistent with the effective discharge of its new responsibilities. Its comparison of the information which it already receives from universities with that collected by the Charity Commission from large registered charities, analysed in a schedule, confirms the comparatively modest scope of additional information required. HEFCE believes this can be secured by building on the existing process of annual accountability review, using electronic communication and the same reporting date. Some information collected from registered charities is regarded as unnecessary for universities - e.g. dates of birth and addresses of members of governing bodies - or as representing duplication - e.g. an annual return summarising activities, achievements, aims, strategy, measurement of performance and an opinion on financial health.
HEFCE proposes a one-off survey in the current financial year to identify all the ‘subsidiary’ charities administered by or established for the purposes of universities, for which it is also to be the principal regulator. These charities are exempt by virtue of the parent university’s exemption; they may have a number allocated by HMRC, but there is currently no authoritative list, and the paper suggests that the accounts of such subsidiaries are not always consolidated with those of the university. There will be an obligation to notify changes once the list is established. Any registered charity associated with a university will of course continue to deal with the Charity Commission direct, as will students’ unions in future.
You can look up basic information about the activities, finance and governance of any registered charity on the Charity Commission’s website. HEFCE proposes that most of the same information about universities should be publicly available, on institutions’ own websites but with a link from HEFCE’s site. The proposal recognises that universities put most of the information on their websites already, but suggests that by December 2010 it should be pulled together on one page about charitable status. Perhaps surprisingly, financial information is not to be a mandatory requirement, on the grounds that the sector’s SORP prevents direct comparison with other charities’ accounts, and that comparative information is already available from HESA.
Because exempt charities are not required by statute to prepare an annual report, the new requirement for charity trustees to demonstrate in the report how they have delivered their charitable purposes for the public benefit, having regard to the Charity Commission’s guidance, does not apply to most universities. The 18 registered institutions in England, and all those in Wales and Scotland, are or will be required to report on public benefit. HEFCE is committed to requiring exempt universities to comply with good practice by reporting in the same way, and suggests that an account in the narrative forming part of the financial statements, which may be by reference to other publications, would be preferable to a requirement for a separate report.
Large registered charities are required to report serious incidents - those which have or might have put the charity’s assets, beneficiaries or reputation at risk - to the Charity Commission as they arise, or retrospectively in the annual return. This information is not published, unless it results in the report of a formal inquiry. In guidance the Commission identifies ‘zero tolerance’ issues such as fostering criminal extremism, fraud and money laundering, or abuse of vulnerable beneficiaries, and also expects other incidents presenting serious risk to be reported in detail. It then decides whether the charity has handled the situation satisfactorily, or if further steps are necessary. Charitable funds have always attracted abuse and the Charity Commission’s history has been focussed on seeking to counter it.
Following an inquiry process, the Commission has extensive powers to act for the protection of charities, including suspension of trustees or employees and appointment of others, and the freezing of funds, if there is a finding of misconduct or mismanagement, or if action is necessary or desirable to protect property. The consultation paper confirms that the Commission’s powers will apply to universities, subject to the requirement for consultation with HEFCE as principal regulator, although it does not set out what they are. Unlike, for example, the LSC or its successors, which will be the principal regulators for FE, HEFCE has no statutory power of intervention. Use of the new powers to intervene in the conduct of a university may have seemed far-fetched when the proposals were first announced, but may appear less so in the light of recent well publicised events in London.
This is part of the background to the consultation paper’s anticipation that proposals on both the concept and method of reporting serious incidents will generate most discussion. Distinguishing the sector’s well-developed processes for risk management from the uneven situation applying across all registered charities, HEFCE accepts that reporting serious incidents as they occur would be unduly burdensome. However it does propose that serious incidents and actions taken to deal with them should be reported annually, first by inclusion in the audit committee’s annual report to the governing body, and then in the annual assurance return to HEFCE. It would be up to the audit committee to decide what information and assurance they required in order to discharge this function; the paper suggests reports from the senior manager responsible for risk management, and/or a risk or compliance committee; and reliance on internal audit or reports of incidents.
Curiously in view of the potential for overlap, the section of the paper dealing with serious incident reporting does not mention the existing obligation of the designated officer (in future, accountable officer) under the audit code of practice to notify without delay the chair of audit and HEFCE, amongst others, of any serious weakness, such as immediate threat to the institution’s financial position or significant fraud. This dislocation contrasts with the approach adopted in the consultation’s section on the summary information return which the Charity Commission requires from large registered charities. HEFCE briskly despatches this as unnecessary for universities because of the existing mechanisms which are in place as a result of funding responsibilities.
Notification of serious weakness is referred to instead in the section on declarations in and signature of the annual assurance return, where the point is made that the scope of serious incidents reportable by registered charities may be wider than serious weakness as referred to in the code. The annual assurance return is to be revised to include a question about compliance with charity law, and to broaden the question which asks for confirmation of notification of any serious weakness.
Respondents are encouraged to offer alternative solutions to the proposed additional reporting of serious incidents, whilst bearing in mind the likelihood of complaints from other charities if requirements of the sector are lighter than theirs. The frequency of references to the Commission in this section of the paper is noticeable. Cries of loss of autonomy in opposing the proposals will not be enough. The questions are first whether further reporting represents unnecessary duplication of requirements of the code of practice and the assurance return; and second whether the principal regulator, with the Commission looking over its shoulder, can discharge its statutory duty by relying on the effectiveness of the sector’s mechanisms for identifying and managing risk, against a background of what it describes as wide variation in levels of risk and sources of assurance.
This consultation runs in parallel with the current consultation on revisions to the financial memorandum. The closing date for responses to both is 12 March.
Partner and Head of Education
T: 0870 763 1332
© Martineau 2010
Of course universities have commercial interests! Information Tribunal's decision on disclosing course materials under the Freedom Information Act | back to top
The long-awaited decision of an appeal by the University of Central Lancashire against the decision of the Information Commissioner regarding disclosure of course materials in response to a request under the Freedom of Information Act (FOIA) has been concluded and a decision was issued in December. Though the Information Tribunal upheld the Information Commissioner’s decision that the course materials relating to a BSc in Homeopathy should be disclosed on the basis of the particular circumstances of that case, it clearly rejected the Information Commissioner’s view that publicly-funded institutions did not have commercial interests to be protected.
The Information Commissioner’s position as set out in his original decision notice was that universities’ need to be commercially competitive was not paramount, because their survival was not dependent on self-funding. While the Information Commissioner conceded that the ability to recruit students had an undoubted effect on finances, he did not perceive it as a commercial interest. He regarded universities as non-profit-making bodies and the provision of higher education as a public service, notwithstanding the imposition of tuition fees. Many universities construed that decision as a moratorium within HE on relying on the exemption under the FOIA which, subject to the public interest test, exempts a public authority from disclosure which would prejudice its commercial interests (s43(2)).
The Information Tribunal concluded that a broad interpretation of “commercial interests” under the FOIA should be adopted. It did not consider that the fundamental charitable character of a university precluded the existence of commercial interests. Its view was that universities were dependent on student fees to remain solvent and, hence, they had a commercial interest in maintaining the assets upon which the recruitment of students depended. It accepted the University’s evidence that it operated in competition with other institutions seeking to market their undergraduate courses to potential students. The Information Tribunal then went on to say that regardless of whether a broad or narrow interpretation of “commercial interests” was applied, it was satisfied that the University’s interest in teaching materials produced for its degree courses was “commercial”.
The Information Tribunal, however, concluded that there was insufficient evidence to demonstrate that the University was likely to suffer prejudice to its commercial interests by disclosing the homeopathy course materials. In particular, the University sought to argue that it would incur a loss of competitive advantage because other institutions offering alternative qualifications would be able freely to exploit the University’s materials to promote their own competing courses, without incurring the expense that independent creation of those courses would entail. The Information Tribunal rejected that argument, stating that, without gaining access to the homeopathy case histories, which were construed as exempt because they contained confidential and sensitive personal information, the value of the course materials to any potential competitor was negligible as the materials lacked empirical support. In addition, there was no evidence to support the University’s case that disclosure would affect student recruitment. Other related arguments advanced by the University were also rejected for lack of evidence.
The Information Tribunal was sceptical that a competitor could significantly exploit the course materials without a flagrant breach of copyright law or without incurring the opprobrium of the academic community. It also queried whether the BSc in Homeopathy had significant commercial value, given its limited enrolment and the absence of overseas interest. The Information Tribunal concluded, therefore, that such commercial interests as were engaged were not, in the particular circumstances, likely to be prejudiced. As a result, the public interest test did not need to be performed, but the Information Tribunal indicated that the balance would lie in favour of disclosure, in the interests of monitoring academic quality by the taxpayer, promoting new methods of teaching and insights into course content and, most importantly of all in the context of this case, the significant public controversy relating to the study of homeopathy.
While universities will no doubt delight in the Information Tribunal’s recognition of their commercial interests, which was apparent to all except the Information Commissioner, they should not casually invoke the exemption. It is extremely important that if information is to be withheld in reliance on the belief that disclosure would prejudice the university’s commercial interests, that belief should be supported by clear, verifiable evidence.
Senior Associate, Education Team
T: 0870 763 1455
© Martineau 2010
|• Finance, Technology and IP
Working from home can be a tempting alternative to the office. However, you do have to exercise some caution when allowing employees to take work home. The Information Commissioner’s Office (ICO) recently found that the Mid Staffordshire NHS Foundation had breached the Data Protection Act 1998 due to the actions of a member of staff.
An employee of the HR department of the Trust transferred personal information about an employee to a home computer. The information included details of the employee’s previous criminal conviction, which is defined as “sensitive personal data” under the Data Protection Act and which is, as you might expect, to be treated particularly carefully.
The information transferred was not subject to any protections, such as passwords or encryption and the ICO found that this amounted to a breach of the Data Protection Act. Furthermore, the ICO felt that the Trust did not initially act with sufficient urgency when it became aware of the matter. The Chief Executive of the Trust has had to sign an undertaking confirming that certain security improvements will be made, including new rules for staff working from home.
The Seventh Data Protection Principle requires that:
“Appropriate technical and organisational measures shall be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data.”
This requirement can pose problems for organisations when people are working outside the office, particularly with the prevalence of laptop and hand held computers. The ICO published a Good Practice Note back in November 2007 recommending that portable devices have appropriate encryption software in place in case they are stolen, lost or left in a taxi, as may be the case. If the devices are not protected with encryption software, the ICO has indicated that it will pursue enforcement action against the relevant organisation.
Marks & Spencer fell into difficulties with the ICO for this reason. M&S employed a company to assist with its pension scheme. In order to enable the company to carry out this work, the personal data of 26,000 members of the M&S pension scheme were provided to the company. The information was loaded onto a laptop in preparation for a meeting the next day but that night the house of the Managing Director of the company was burgled and the laptop stolen. The information on the laptop was not encrypted and, as a result, M&S was the subject of an enforcement notice from the ICO.
If you do allow staff to work from home or if you provide staff with portable devices such as laptops, you need to consider whether there is a risk of a security breach and take measures to avoid this, such as protecting devices with encryption software. It is also a good idea to make staff aware of the problem and to put in place an appropriate policy regulating how staff are to use personal data when working from home.
Partner, Intellectual Property & Technology Team
T: 0870 763 1107
© Martineau 2010
"Boilerplate Clauses": Entire Agreement Clauses | back to top
In our November bulletin we started looking at “Boilerplate” clauses and their significance to universities when entering into contracts.
As a quick recap, “Boilerplate” clauses are usually towards the end of a contract and are often dismissed as being unimportant, “tidy up” type clauses, which have been included as part of a “catch-all” exercise. However, they can matter greatly.
In this, the second in our series, we look at Entire Agreement clauses, which address terms and other matters which may accidentally become part of a contract.
You could be forgiven for assuming that when you sign a contract, what is written down constitutes the contract. However, in English law a contract does not have to be in writing; unwritten agreements are also legally enforceable. It follows that not all of the agreed terms of a contract need to be in writing; some terms could be written and some oral, with documents, terms and discussions outside of the agreement also forming part of it.
Over time this may lead to arguments as to what terms have been agreed and what the specifics of those terms are, despite a written contract having been signed. Examples of such arguments are:
- a different term was agreed orally between the parties but not incorporated into the written contract;
- a different term was agreed in previous written commercial negotiations between the parties (for example via email exchanges or a Heads of Terms document), but this has not been included in the final written contract; and/or
- a final provision of the written contract does not accurately reflect the previous agreement of the parties, concluded during the commercial negotiations (either oral or written).
These arguments can be used about any issue whatsoever, from agreement of the commercial terms (e.g. the prices charged and the ability to review them) to the right to manage the contract (e.g. assignment).
To counteract these potential arguments, solicitors started adding a clause into their written contracts which stated that the signed contract reflected all of the terms of the contract agreed between the parties, and that no other terms could be implied from previous commercial negotiations (be they oral or written).
Whilst this type of clause is not an absolute guarantee that issues will not arise, it does demonstrate that the intentions of both parties when they signed the contract were that it would be an accurate reflection of the deal they had done and would include all of the terms they had agreed.
You must make sure that your “entire agreement” clause is as effective as possible, for example:
- state that the Agreement is the “entire” agreement between the parties;
- define Agreement clearly and accurately, including any schedules, appendices and any other document that has been, or is to be, entered into under its provisions;
- the clause should state that the Agreement supersedes all previous agreements (this covers the point made above concerning commercial negotiations which take place before the written contract is signed and includes Head of Terms, for example); and
- finally, make sure that you include the caveat that you are not attempting to exclude any misrepresentations or fraud which have induced either party to enter into the contract, as parties should always be free to bring a claim for fraud or misrepresentation if they believe this has occurred.
What happens if you get this type of clause wrong? At worst, if you do not include it at all or do not draft it correctly, you might not be able to rely on the written signed contract. In short, a court could decide that previous negotiations form part of the agreed contract and overrule what you actually put in writing.
To conclude, whilst the “entire agreement” clause risks escaping your attention because it is not commercial, it is amongst the most important from a legal viewpoint. Without it you may find that your written terms including commercial ones can be challenged by another party to the contract. Commercial negotiations, which you thought had been disregarded, may be binding after all, or terms you wanted to be binding are not, or at least not in the way you had planned! You are forming numerous contracts daily so this uncertainty should be avoided i.e. be careful to include a clear Entire Agreement provision.
T: 0870 763 1390
© Martineau 2010
Extension to the time limit to implement a planning permission
In respect of planning permissions that were granted prior to 1 October 2009, a new category of application has been introduced allowing renewal of a permission which is in danger of lapsing. The renewed permission is a fresh permission. Since 2004, and the advent of the Planning and Compulsory Purchase Act, any planning permission must usually be implemented within a period of three years from the date of grant. This measure was brought into being to prevent planning permissions being ‘banked’. In the current economic climate, and to ease issues relating to funding, changes have been brought in to allow greater flexibility in allowing longer periods for planning permissions to be implemented. Provided a planning permission was granted prior to 1 October 2009, and has not yet been implemented, then an application can be submitted for an extension to the time limit to implement that permission. The application should be identical to the application which was made in respect of the existing permission. The renewed permission would last for the default period of three years but it is at the discretion of the local planning authority to grant a longer, or shorter, period in which to implement the new permission.
There are three main differences in which the renewal application differs from an ordinary application:
- the amount of information which has to be provided on application;
- the consultation requirements (in respect of statutory consultees only); and
- the fee payable (which will depend upon the size of the scheme and will be a full application fee).
It is intended that the measures will be temporary to deal with the current economic circumstances.
Under the Environmental Impact Assessment Regulations 1999 (EIA) an application for renewal is considered to be a new application. Accordingly, where a development is listed either under schedule 1 or schedule 2 of the EIA and satisfies the criteria threshold set out (i.e. it is likely to have significant effects on the environment) this would require a local planning authority, if requested, to issue a new screening opinion as to whether an environmental impact assessment is necessary. If such an assessment is carried out in relation to the original application then changes to the environmental statement may not be necessary.
An application to extend the time limit to implement is more than a rubber stamping exercise. A local planning authority may refuse a renewal application in circumstances where the development plan has changed or where there are other material considerations which suggest that the proposal should no longer be “treated favourably”.
The consultation requirements in respect of renewal applications differ as to whether a scheme is an environmental impact assessment scheme or a non-environmental impact assessment scheme. In relation to the former, the local planning authority has a discretion as to which statutory consultees should be consulted as a proportionate approach to dealing with the application.
An environmental impact assessment scheme does not give the discretion regarding consultees and therefore all those set out in article 10 of the General Development Permitted Order are required to be consulted.
Other consultation requirements, for example publicity, are unchanged and are the same as for a new application, save for where the local planning authority has a discretion (and in those circumstances the proportionate approach should be adopted).
Other matters to take into account include revisiting any section 106 agreement linked to the original permission. Any renewed application is as susceptible to a judicial review challenge as the original permission.
Previously local planning authorities have dealt with minor amendments in an informal way. There was no prescribed statutory procedure.
The Town and Country Planning Act has been amended following consultation in relation to a document entitled ‘Planning for a Sustainable Future’ to deal with post-consent minor amendments.
The government has not gone as far as defining what a ‘non-material’ amendment is because it is felt that what is ‘non-material’ depends on the context of the overall scheme.
Where a non-material change is made then conditions may be imposed, removed or altered as a result.
The procedure can only be used in respect of non-material amendments to planning permissions and does not cover those permissions given in respect of listed buildings or conservation areas.
Where as previously different approaches have been adopted by different local planning authorities, the new measures will formalise the way of dealing with non-material amendments by all local planning authorities.
Because an application for a non-material amendment is not an application for a planning permission the local planning authority has a discretion as to who they consult with, although in the majority of cases it is anticipated that consultation will not be necessary.
Minor material amendments
To facilitate the use of an existing power under Section 73 of the Town and Country Planning Act local planning authorities have been given the discretion as to whom they consult with in order to facilitate the making of minor material amendments.
A minor material amendment has been defined as one ‘whose scale and nature results in a development which is not substantially different from one which has been approved’, although this is not a statutory definition. This definition was offered by WYG Planning and Design who were commissioned to consider the options for introducing either a new procedure for making minor material amendments or for using or adapting existing procedures.
The use of this measure depends upon an existing condition, which is then amended. For example, a developer may wish to submit a revised plan. Providing the existing plan, which will be replaced, is referenced in the conditions the new measures can be utilised to replace a plan as a minor material amendment.
Solicitor, Property Group
T: 0870 763 1388
© Martineau 2010
Not a day goes by without further references to the impact of climate change on the way we live and work, whether it’s reporting that November 2009 was the wettest on record, that this winter is the coldest/snowiest since 1963 or the prospect that 2010 will be the hottest year ever (although anyone who has been stuck in the snow recently might question that forecast).
Whilst such matters may seem far removed from landowners and occupiers the direct impact of climate change is being felt in a number of areas. We have reported previously on the likely effects of the CRC Energy Efficiency Scheme (and our guides are available at www.sghmartineau.com/publication_event/updates.htm), but that is only one part of the story.
Buildings are said to account for 40%-50% of greenhouse gas emissions so with the government’s current target to reduce such emissions by 80% by 2050 against 1990 levels the ways in which properties are used and energy is consumed will have to change. As major landowners and occupiers of premises, this will impact on universities. So, in turn that will mean changes to the way in which landlords and tenants interact with each other, practically and legally. This will be most obviously documented in the lease which is agreed between the parties.
We have prepared a plain English guide on “Green Leases - what might they look like?” designed to answer questions you may have about how you might wish to consider leasehold arrangements in the future. Click here to see a copy of the guide.
Partner, Property Group
T: 0870 763 1672
© Martineau 2010
Ladele decision clarifies equality rights collision | back to top
On 15 December 2009 the Court of Appeal handed down its judgment in Ladele - v - Islington London Borough Council ( EWCA Civ 1357) a greeing with the Employment Appeal Tribunal (the EAT) that the Council did not discriminate against Ms Ladele, a registrar, when it dismissed her for refusing to carry out civil partnership ceremonies.
The judgment dealt with the interaction of rights under the religion and belief regulations and those under the sexual orientation legislation. It makes clear that in the context of people providing public services or performing public functions, such as civil partnership ceremonies, their rights should not take precedence over those of service users. Employees should not be able to avoid carrying out their duties for a reason which is discriminatory, even when that reason derives from a religious belief.
Ms Ladele was found guilty of gross misconduct when she refused to participate in registering civil partnerships between same sex partners on the basis that to do so was inconsistent with her Christian beliefs. The Tribunal upheld Ms Ladele’s complaints of direct discrimination, indirect discrimination and harassment, but this decision was overturned by the EAT on appeal. The EAT decided that the ground for the treatment was the rule and not the Claimant’s beliefs; even if her beliefs were the reason she had refused to comply with the rule.
Ms Ladele appealed to the Court of Appeal.
What did the Court of Appeal decide?
The Court of Appeal ruled that:
- There is nothing in the Employment Equality ( Religion or Belief ) Regulations 2003 which entitled Ms Ladele to insist on a right not to undertake civil partnership duties due to her religious beliefs.
- Ms Ladele was neither directly nor indirectly discriminated against, nor harassed by the Council contrary to the Regulations. The Court of Appeal agreed with the EAT’s decision that Ms Ladele had not been directly discriminated against because her complaint was “not that she was treated differently from others; rather it was that she was not treated differently when she ought to have been”.
- In terms of Ms Ladele’s complaint of indirect discrimination, the Court of Appeal was satisfied that the Council’s policy decisions represented "a proportionate means of achieving a legitimate aim." The Council aimed to provide a service which complied with its overarching policy of being "an employer and a public authority wholly committed to the promotion of equal opportunities and to requiring all its employees to act in a way which does not discriminate against others".
- The Court of Appeal also went on to consider the conflict of rights issue, namely whether the effect of the sexual orientation legislation overrides a person’s right to freedom of religion. The Court of Appeal held that (except for in limited circumstances) legislation prohibiting discrimination on the grounds of sexual orientation in the provision of goods, facilities and services takes precedence over any right which a person would otherwise have by virtue of their religious belief or faith to practice discrimination on the ground of sexual orientation. Therefore, although employees have a right to freedom of thought, conscience and religion, this is subject to the limitations of the law and the interests of protecting the rights and freedoms of others.
What does this mean for universities?
The judgment confirms that employees are free to hold religious beliefs but employers (particularly those in the public sector) are entitled to require employees to comply with their equality policy, so long as it is a proportionate means of achieving a legitimate aim.
Universities cannot allow discrimination on the part of their employees, whilst also being under a legal obligation to promote equal treatment and comply with equality legislation.
Universities can take a degree of comfort from the distinction the courts continue to make between the holding of a belief and the actions taken by an employee because of his/her beliefs. Where the employee’s belief is causing him/her to act contrary to the university’s legitimate instructions or policies, then the university will not necessarily fall foul of the legislation if it disciplines or dismisses the employee because the reason for the action will be the employee's conduct, not the belief itself.
Partner and Head of Employment & Pensions Team
T: 0870 763 1378
© Martineau 2010
Information and Consultation of Employees Regulations 2004: what do you have to talk about? | back to top
These days, employers recognise that the duty to inform and consult employees is triggered in a number of employment scenarios, including before a TUPE transfer or in the event of proposed redundancies. There are further obligations when there is an agreement under the Information and Consultation of Employees Regulations 2004 (ICE Regulations). To date, few universities have had to grapple with the ICE Regulations, but with traditional consultation arrangements with trade unions becoming ever more strained in many cases, the ICE Regulations may be about to assume greater prominence one way or another. What consultation obligations do they give rise to?
In a recent case an employee complained to the Central Arbitration Committee that one of our university clients had failed to inform and consult under the ICE Regulations about proposed redundancies in a particular School. The University had an interim ICE agreement in place. It had carried out consultation in line with its general practices for redundancies, but had not formally consulted under the ICE Regulations. It argued that the scope of the proposed redundancies was too small to trigger that requirement. The Central Arbitration Committee held that the employee’s complaint was unfounded, holding that even a redundancy situation may not be “substantial” enough to trigger the need for informing and consulting under the ICE Regulations. This will be seen as a welcome decision by employers.
Effect of an ICE agreement
The ICE Regulations have not been adopted as widely as was first anticipated when the legislation was implemented around five years ago. However, there is no disputing the fact that they are gaining popularity - employees are in favour as it gives them a greater say in the running of the business; employers are seeing more advantages in the current climate of difficult relations with some trade unions.
In brief, an employer can elect to adopt an agreement under the legislation or, in certain circumstances and subject to particular criteria being met, employees can force an employer to adopt an ICE agreement. Where employers and employees fail to successfully negotiate the terms of the agreement, standard provisions will kick in after a defined period, requiring the employer to inform and consult in specified circumstances. In particular, under the standard provisions, an employer must inform employee representatives about:
- the recent and probable development of its activities and economic situation;
- the situation, structure and probable development of employment and any anticipatory measures envisaged, particularly where there is a threat to employment; and
- decisions likely to lead to substantial changes in work organisation or in contractual relations.
Employers must also consult with employee representatives about points two and three above.
The facts of the case were that the affected School within the University needed to increase income or reduce costs. Staff within the School were informed of this and there followed a series of consultation meetings, leading to the eventual decision to make some redundancies within the School. The redundancy exercise resulted in five members of staff accepting voluntary severance, three being given notice of termination on grounds of redundancy and a further four who were given notice but who were being allowed to make representations at the time the case was considered. In addition, other members of staff were allocated to new or changed roles.
The University argued that it had consulted with all affected employees and, to some extent, had complied with its obligations under the interim ICE agreement. However, crucially, the University argued that it was not obliged to meet the requirements of the ICE Regulations because the size and scope of the redundancy exercise fell outside the scope of the standard provisions under the ICE Regulations. This was because, first, it affected only a small part of the University and, secondly, it affected only a small number of employees in the context of the overall number.
The Central Arbitration Committee agreed. It found that the early decision to make a proposal for redundancies fell outside the first of the three categories above. Perhaps more importantly, it was also persuaded by the University’s “materiality” defence, which related more particularly to the third category. The University argued that, within an undertaking which employed 1,300 “core staff” (i.e. excluding hourly paid, casual staff), the 12 proposed redundancies were not “substantial”. The Central Arbitration Committee agreed that, on the particular facts of this case, that submission was correct.
It went on to clarify that in a smaller undertaking, for example one employing only 50 employees, the proposed dismissal of 12 employees “might, and probably would”, be substantial. The Central Arbitration Committee would not commit to stipulating where, precisely, the line should be drawn, but was adamant that a proposal to dismiss fewer than 1% of the workforce was not substantial, when looked at in terms of the undertaking as a whole.
The Central Arbitration Committee recognised that the ICE Regulations do not, in any event, carry the whole burden for providing consultation in respect of proposed redundancies, given that section 188 of the Trade Union and Employment Relations (Consolidation) Act 1992 requires employers to consult with a view to reaching agreement with the representatives of any recognised trade unions or, where none exists, employee representatives in certain cases. This further implies what may be taken into consideration when determining where the line between “substantial” and “insubstantial” could be drawn - i.e. where the number of proposed dismissals stands at 20 or more.
Interestingly, however, the Central Arbitration Committee was not willing to state categorically that even in its hypothetical example, a redundancy exercise affecting 24% of the entire workforce (i.e. 12 of 50), would necessarily be considered “substantial”.
In conclusion, this decision will give employers some comfort in knowing that, even with an ICE agreement in place, the employer is still entitled to take decisions without the need for prior consultation, as has traditionally been the practice across the education sector. This decision may also encourage more employers to consider the benefits of adopting an ICE agreement in this economic climate, given the problems involved in discussing such matters with trade unions ahead of what is likely to be a challenging time for universities in the short to medium term.
Associate, Employment Team
T: 0870 763 1454
© Martineau 2010
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