The Gender Equality Duty

On the 6 April the Gender Equality Duty (“GED”) comes into force under the Equality Act 2006. It has been described as the most important sex equality legislation for 30 years, and will impose a positive duty on public authorities to address the different requirements of men and women among their service users. The duty shifts the balance from an individual being required to show discrimination towards the public authority demonstrating equality. The duty applies equally to the roles of service provider and employer.

Public Authorities

Under the Equality Act 2006, a public authority is defined as “any person who has functions of a public nature” and will therefore cover GP and Dental surgeries.

Service Provider

Male and female service users have different requirements and will approach a service accordingly. The Equal Opportunities Commission gives the example of the provision of service by a General medical practice and states that men are less likely to visit their GP than women; a practice should examine the way their services are provided and whether there are alternatives that would increase use by male patients. This could be the provision of a clinic at football grounds or targeting male patients for specific treatments.

Employer/Employee

The relationship between an employer and an employee is another area targeted by the new legislation. Recruitment and employment policies should be reviewed as the GED imposes the duty on an employer to ensure that the workplace has a gender balance. Are there barriers that are reducing the number of suitable female applicants for posts? Examples of these may be the maternity arrangements available or the provision of flexible working.

Implications

A failure to comply with the GED can result in the imposition of a compliance notice by the Equal Opportunities Commission (which will become the Commission for Equality and Human Rights in due course)

Maternity and Adoption Leave (Amendment) Regulations 2006

Maternity and Adoption Leave (Amendment) Regulations 2006

From 1 April 2007, changes to Maternity Leave entitlements will come into force extending Additional Maternity Leave (“AML”) to all female staff. The legislation also introduces the opportunity for “keeping in touch” days and reasonable contact between the employer and employee. The legislation will impact on all female staff employed by general practices.

Impact on Employers

· 8 weeks notice must be given by the employee that they intend to return before the end of their AML.

· Entitled to Maintain “Reasonable Contact” during the maternity leave to discuss workplace matters. This is to reduce the chances of being accused of harassment during the maternity period although “reasonable” is not defined.

· Salaried female GPs and practice staff will be entitled to 39 weeks paid maternity leave; this has been increased from 26 weeks.

· “Keeping in Touch” days can be agreed with the employee to allow her to attend work for up to a maximum of 10 days without losing entitlement to maternity or statutory maternity pay.

Impact on Employees

· All female staff will be entitled to 52 weeks maternity leave from the 1 April 2007

· There is no longer a requirement to have been with the same employer for 26 weeks to be entitled to AML.

· Salaried female GPs and practice staff will be entitled to 39 weeks paid maternity leave; this has been increased from 26 weeks.

· “Keeping in Touch” days can be agreed with the employer to allow her to attend work for up to a maximum of 10 days without losing entitlement to maternity or statutory maternity pay.

Gifts of money for minor children: how can parents, grandparents, close relatives or god parents provide for children?

Introduction

The birth of a new baby usually associates delighted parents, grandparents or close relatives giving sums of money. If not following the birth, subsequent birthdays and Christmas are traditional times for monetary gifts to be awarded.

The following questions then arise:

What should parents do with the money?

Can it be invested in the child’s name?

Can they spend it freely for the benefit of the child?

Are there any formal restrictions as to what parents can do; perhaps more importantly, what cannot be undertaken.

Monies that are deposited in a bank or building society account

A minor can open a bank or building society account. The Building Societies Act 1986 provides that a minor may be admitted as a member.

However, if the child is not old enough to operate the account, parents may decide to invest the money in their own names. If this is the case, what rights and obligations do the parents then have?

Has a trust been created?

It may well be the case that where say relatives hand over monies to the children’s parents “to hold for the children” that the parents are acting in the fiduciary duty as trustees.

A first consideration is that of “children” – are there step children and children of both parents in the family? A gift for the benefit of “the children” is ambiguous and needs to be clearly defined to avoid future problems arising when “the children” reach their majority.

Are any formalities needed to create a trust?

Section 53 (1) of The Law of Property Act provides that a declaration of trust in respect of any land, be actioned and proved in writing and signed by a person who is able to declare such a trust or by his/her will.

It is clear however that if the declaration of trust is over property other than land (or an interest in land) an oral declaration is sufficient.

Thus a donor who provides money, or other assets to parents, can create a trust in favour of the children without any written document.

Are parents subject to any duties as trustees?

If it is assumed a trust is created –parents (or grandparents) will then be subject to all the formal duties and obligations imposed on trustees. A prime duty here is that in relation to investment.

Generally a will (or any other document creating a trust instrument) will give trustees absolute discretion as to how trust funds should be invested.

Where a gift by a third party is given to the parents to hold on trust “for the children”, it is unlikely that the donor will have given an express power. However, it will be implied if the donor states “use it as you may think fit for the children”. In the absence of any express or implied power, then investments must be made in accordance with the Trustee Act 2000.

Parents may be very surprised to learn that they may be subject to these (onerous) duties with regard to investment of money given to them for the benefit of their children assuming a valid trust is created.

Fortunately, if comparatively small sums are involved –parents will probably discharge their duties by investing monies in National Savings Certificates. However, to avoid any possible hint of criticism in the future –parents would be well advised to take independent financial advice.

Can parents spend the money for the benefit of the children?

The answer here depends on the manner and any powers given to the parents by the donor.

In its simplest form “here is £25.00 spend it on the children for me”. This is an express authority for parents to apply the money for the benefit of the children.

In the absence of such directions – the donor must look to Sections 31 & 32 of the Trustee Act 1925.

In brief terms trustees may, at their sole discretion, pay to a parent or guardian or apply towards the infants, maintenance education or benefit, the income arising “as may in all the circumstances be reasonable”.

In so far as income is not so applied, it has to be accumulated until the infant either attains 18 years or marries under that age.

It is clear that parents have power to apply the whole of the income for the benefit of their children.

A power to advance capital is incorporated within Section 32 of the Trustee Act 1925. This enables Trustees to advance up to one half of the capital to which a beneficiary is, or might be, entitled. Trustees have an absolute discretion as to how such power should be exercised and, in appropriate circumstances, it is possible to widen the discretion to the extent of the whole presumptive capital.

A typical situation could be for Trustees to exercise their discretion, where the minor beneficiary requires special equipment to assist with an educational requirement or need, particularly if an element of disability was involved.

Taxation

Minors are subject to income tax, capital gains tax and inheritance tax in the same manner as adults. The corollary of this is that minors are also entitled to the various tax allowances and reliefs as adults: for example the income tax personal allowance and capital gains tax annual allowance.

There are anti-avoidance provisions in place where it is deemed that income arising belongs to the parent rather than the child (subject to a general exemption of £100.00 gross income per income tax year).

The anti-avoidance provisions referred to above are excluded where grandparents make provision for minor children rather than immediate parents.

Trusts for Bereaved Minors

A donor may wish to make ‘settled property’ or money for the benefit of children; a Will trust could make similar provision. The concept of “Bereaved Minors” trusts was introduced within the Finance Act 2006 – (provided certain qualifying criteria are met); such trustscanhavesignificant IHT advantages.

Summary

A minor can hold a bank or building society account but it must not become overdrawn

Gifts of money for the benefit of children by parents, grandparents, other relatives or friends may create a trust in their favour

Parents and grandparents are subject to the same duties as other trusteesand have the same powers and obligations.

Andrew Murdoch

Associate – 27 March 2007

Unfair Dismissal and Retirement on Grounds of Ill Health

The Employment Appeal Tribunal (EAT) has ruled (First West Yorkshire Limited t/a First Leeds v Haigh) that where an employee is on long-term sick leave and his pension scheme contains provisions entitling him to an ill health pension on grounds of permanent incapacity, an employer will generally be expected to give consideration to ill health retirement before dismissing the employee for incapacity.

Mr Haigh worked as a bus driver for First West Yorkshire Limited. He had nearly 30 years’ service. In June 2005, he suffered from a suspected stroke while driving a bus. As a result, the DVLA suspended his PSV licence for a minimum of 12 months. In October of that year, the company’s occupational health adviser reported that Mr Haigh remained unfit but might be able to undertake alternative duties before the licence suspension period expired. Mr Haigh then suffered a second episode and so it was unlikely that he would regain his PSV licence until October 2006, by which time he would be 60 years old. The company’s pension scheme allowed retirement on the ground of permanent incapacity.

A decision was taken to dismiss Mr Haigh on the ground of incapacity and this occurred in November 2005. Hr Haigh appealed and the appeal meeting was adjourned as the medical picture was at that time incomplete.

On 14 February 2006, the occupational health adviser again reported on Mr Haigh’s condition. At this time, the doctor advised that he was seeking an up-to-date report from the specialist treating Mr Haigh and that his condition could not be classified as permanent at that stage. A letter from the specialist was received on 9 March but Mr Haigh’s appeal against the decision to dismiss him was resumed on 24 February. He was then given a choice – either he took some further sick pay but lost all opportunity to seek an ill health pension, or he was dismissed. Mr Haigh declined to accept the company’s terms and was dismissed.

The Employment Tribunal (ET) was critical of the company’s failure to consider sufficiently the medical evidence, particularly with regard to the question of ill health retirement. Medical evidence should have been obtained before skipping the important step of retirement on grounds of ill health. In the ET’s view, Mr Haigh was unfairly dismissed. It appeared that the company wanted to avoid the cost of his ill health retirement but it was not entitled to deprive him of this right if, ultimately, it should turn out that he was permanently unfit to work. First West Yorkshire appealed against this decision.

The EAT dismissed the appeal. It confirmed that, as a general rule, when an employee is absent through ill health for an extended period, before dismissing the employee an employer will be expected to take reasonable steps to consult him, to find out by means of appropriate medical evidence the nature of and the prognosis for his condition and to consider alternative employment. The EAT went on to say that where an employer ‘provides an enhanced pension on retirement through ill health, it seems to us that an employer will also be expected to take reasonable steps to ascertain whether the employee is entitled to the benefit of ill health retirement’.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.