These were the main employment law developments in 2006.

The Employment Equality (Age) Regulations 2006 became law on 1 October 2006. This law makes it illegal to discriminate against employees, job seekers or trainees on the grounds of age. Discrimination, or treating someone less favourably, can be by using age to justify not employing, dismissing, refusing training to, or inadequate/poor conditions of employment including lack of promotion or retiring before the default age (65).

The Work and Families Bill aims to provide more choice to families balancing work and caring responsibilities. The Bill will extend the period of maternity pay to nine months from April 2007. In addition, it aims to bring in new rights for mothers to transfer a proportion of their maternity leave and pay to the father.

Employers are now vicariously liable for breaches of statutory duty under the Protection from Harassment Act. Employees are now able to bring a civil court claim against the employer for any harassment that can be shown to be a course of conduct which has caused alarm or distress. It is likely this ruling will be used by claimants as an additional weapon against employers where no unlawful discrimination has taken place, and the claimant doesn’t have one year’s service to bring an unfair constructive dismissal claim.

Demibourne v HM Revenue is a significant warning to employers who engage consultants and contractors. It is the employer’s responsibility to determine the employment status of a worker and to deduct PAYE and Class 1 National Insurance Contributions unless the individual is genuinely self employed. This new approach has led to increased complexity for employers seeking PAYE settlements and emphasises the need for employers to carry out a careful assessment of the employment status of any contractors whom they engage.

Rolling-up holiday pay refers to the practice whereby payment for annual leave is not made at the time a worker takes his or her holiday. Instead, an element relating to holiday pay is incorporated into a worker’s hourly remuneration. The ECJ has now confirmed that such a practice is indeed unlawful.

The new TUPE Regulations finally came into force on 6th April 2006. The new regulations widened the scope to include service provision changes and made the transferee and the transferor jointly liable for any failure to inform and consult with affected employees. Transferors are now obliged to give some employee information to the transferee, or face a penalty.

The Scottish Court of Session held that a pro rata reduction of a bonus to reflect an employee's absence on ordinary maternity leave was not sex discrimination. This will be a persuasive argument for English tribunal cases and is encouraging news for employers.

This decision means that more part-time workers will be able to make a claim under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. Regulation 2(4) of the Part-time Workers Regulations provides that two types of worker (part time and full time) will be comparable if both workers are:

• employed by the same employer under the same type of contract; and
• engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification, skills and experience.

This case related to part time fire-fighters and full time fire-fighters and decided that the main purpose, duties and responsibilities of both jobs were the same and therefore the groups were engaged in the same or broadly similar work.

This case deals with whether an employee is entitled to accrue holiday pay during a period of long term sick leave. A group of employees on long term sick leave exhausted their entitlement to contractual and statutory sick pay. The employees successfully argued that they were entitled to accrue paid holiday during their period of sick leave under the Working Time Regulations 1998. Following an appeal by HMRC this case has been referred to the European Court of Human Rights.

The EAT ruled that employers are not required to continue full pay for disabled employees off sick after any contractual full sick pay entitlement has expired, save in exceptional cases. Under the Disability Discrimination Act 1995, an employer must make "reasonable adjustments" for disabled employees placed at a substantial disadvantage by a particular practice. Disabled employees may have lengthier sickness absences and therefore be disadvantaged by a reduction from full pay during absence, but it would not normally be a reasonable adjustment to continue full pay.