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Press Releases from Employment Relations
Employment News April 2010
The turbulent economic climate gives rise to constant changes in the delivery of goods and services as companies try to reduce their costs. Equally businesses that are struggling are takeover targets. The consequence is that TUPE is frequently on the legal agenda for businesses.
At our breakfast forum on 16 April we will be looking at the pitfalls for unwary employers with the TUPE regulations. If you would like to be notified of this and our other monthly events please e-mail Anne@employment-relations.co.uk who will be able to put you on the distribution list.
Statutory Changes
As October and April are the two major commencement dates for any employment law changes, we are highlighting some of the important April changes here. We are also looking at some of the measures in last week’s budget.
Law Changes
- The Apprenticeships, Skills, Children and Learning Act 2009 (Commencement No. 2 and Transitional and Saving Provisions) Order 2010, SI 2010/303. This inserts a new obligation on employers to allow time off for training. For the moment, the changes are confined to employers of more than 250 staff but from 6 April 2011 it will apply to small employers. A new part 6E has been inserted into the Employment Rights Act enabling the right to time off for training.
- Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) (Amendment) Regulations 2010, SI 2010/137). These regulations specify a new form of fitness for work medical certificate allowing doctors to say whether an employee is fit for some work rather than unfit to resume normal work. If the doctor considers the employee is fit to resume some work then the doctor must provide some information about any changes needed to support this.
- The Employee Study and Training (Eligibility, Complaints and Remedies) Regulations 2010 specify the manner of the request for time off for studying and how any complaint is to be presented to a tribunal.
- Additional Paternity Leave Regulations 2010. The regulations allow mothers to transfer the second six months of their 12 months leave to the father. The right will apply to births after 3 April 2011. Somewhat bizarrely, the right can only be taken 20 weeks after the birth of the child and is for a maximum of 26 weeks. By that stage, mother will have used 20 weeks of her maternity pay thus leaving an absolute maximum of 19 weeks reclaimable by the father. The regulation is therefore currently nonsense and only makes sense if statutory maternity pay is extended to 52 weeks.
- The Occupational and Personal Pension Schemes (Automatic Enrolment) Regulations 2010 will oblige employers to automatically enrol job holders into qualifying pension schemes from October 2012.
- National minimum wage will rise by 2.2% to £5.93 per hour in October 2010.
- Consultation is about to be launched on a new default retirement age.
- Company car tax halved for ultra low carbon cars.
Age Discrimination
The interesting case of Keane vs Investigo and others was decided on Age Discrimination but has considerable impact on any discrimination case that is brought in circumstances where the applicant never intended to take up the job. Ms Keane was an experienced accountant who applied for more than 20 advertised jobs suitable for recently qualified accountants. Not having been offered interviews, she brought age discrimination claims against the agencies advertising the jobs. Some agencies settled out of court and by December 2009 she had pocketed in excess of £20,000. Other agencies fought the claim. She lost in the employment tribunal but appealed to the Employment Appeal Tribunal. The Appeal Tribunal held that there was no detriment if she did not intend to take up any job offer. The president of the Appeal Tribunal stated that an application had to be genuine before a statutory disadvantage could take place adding that if there was no previous authority for this there was now.
Child Protection
In a case known as A v B, it was held that an employee was fairly dismissed by a public authority employer as a result of police disclosure that he had been engaged in paedophile activity even though there was no conviction. A was a career civil servant with a senior job involving foreign travel. The allegations concerned behaviour in Cambodia although he was acquitted by the courts there. Disciplinary and dismissal procedures then followed. The employer argued that A was fairly dismissed on the basis of a breakdown of the fundamental relationship of trust and confidence. The Appeal Tribunal finding that the dismissal was fair said that whilst it might stick in the throat that an employee might lose a job and in practice possibly any chance of future employment if he has no opportunity to challenge an allegation in a court of law. However, the employer was entitled to be jealous of his public reputation and it was therefore reasonable for the employer in the relevant circumstances to dismiss.
What is perhaps significant now is the established principle in the case of R (on app'n of "G") v Governors of "X" School that where a public sector employer is dismissing in circumstances where the employee’s ability to earn a livelihood is affected, because of the safeguarding provisions, that such an employee should be entitled to legal representation at any dismissal or disciplinary proceedings.
In the case of Bebbington vs Palmer trading as Sturry News, the EAT ruled that a 15 year old newspaper boy on a paper round was not to be regarded as working under a contract of employment.
On 16 August 2008, Sturry News had asked the paper boys to be at the shop for 6.30 am to start work for 7.00 am which was permitted under their child employment permit. Bebbington’s mother misheard and went to the shop telling the owner that it was unlawful to ask her son to work before 7.00 am. Following an argument Bebbington stopped his paper round and commenced a claim for unfair dismissal and breach of contract. The employment tribunal at Ashford dismissed the claim and his Honour Judge Serota in the appeal tribunal agreed.
In the case of Maga vs the Trustees of the Birmingham Archdiocese of the Roman Catholic Church. The court of appeal was asked to rule on vicarious liability. In the unfortunate case Father Clonan was a priest in the diocese of Birmingham who paid the claimant to do odd jobs for him and around the presbytery. During the course of the relationship, Mr Maga was sexually abused. Initially the High Court ruled that the Archdiocese was not vicariously liable because the claimant was not involved in the church activities and was not engaged with Father Clonan in a religious level. Lord Neuberger ruled that because of the role of a priest he was in a sense, never off duty, and thus the diocese was liable.
Whilst not wishing to over-emphasise the risks, many businesses encourage their staff to be engaged in a number of outreach activities as part and parcel of their corporate social responsibility. Consideration needs to be given to the company’s insurance arrangements (are there any exclusions?) and also whether any CRB checks are required for staff.
As always, it is the law of unintended consequences that wins and large employers may feel more constrained in releasing staff for activities such as mentoring or even a staff and families tea party.
Data Protection
The Government’s amendment to the Employment Relations Act 1999 on union blacklists came into force on 2 March. The regulations cover the compilation, use, sale and supply of details of trade union memberships and activities. It provides an employee with the right to make a tribunal claim within 3 months of the conduct complained of but with the right to extend the time if it is just and equitable to do so. This covers a situation where the information only comes to light some time later.
Discipline and Grievance
The statutory discipline and grievance procedures still throw up some interesting decisions as the possibility of claims involving the statutory procedures still exist (eg accusations of continuing conduct). It is worth looking at such decisions still.
In the case of Stuckey vs Daido Industrial Bearings Europe Ltd and Elswood it was held that the tribunal could not succeed against the employer because he had not identified the behaviour complained of in any grievance. In Mr Stuckey’s case, he claimed disability discrimination but no document that could form part of any grievance made reference to his disability.
Contracts
For employers, the case of Bateman and Others vs Asda Stores Ltd which was determined by the Employment Appeal Tribunal is of considerable interest. Asda wanted to bring in a new pay structure to be known as the “top rate”. The negotiations had Asda seeking to ensure that no staff suffered a drop in pay. 9300 staff transferred voluntarily into the scheme, 8300 against their will. Asda justified the imposition of a new pay scheme by reference to the staff handbook. The handbook stated “Asda reserve the right to review, revise, amend or replace the contents of this handbook and introduce new policies from time to time reflecting the changing needs of the business.”
6 test cases came before the Appeal Tribunal. As it was agreed that the handbook was incorporated into the staff contracts and because the handbook gave Asda the right to review the contents and also to introduce new policies, the changes were acceptable.
It has always been our view that a handbook should expressly be subject to review and that the bulk of the mutual obligations are contained in the handbook rather than contracts and the decision of the EAT gives force to that as a model.
In a knowledge economy, one of the most important protections that exists for any employer is the restrictions on competition and the poaching of staff. In the case of Tullett Prebon plc and Others v BGC Brokers, LP and Others, the High Court found in favour of Tullett Prebon and the restrictions on poaching of staff. Tullett currently are seeking 500 million dollars in damages and a compensation hearing has been deferred.
Consultation
In the case of Darnton vs Bournemouth University, the University was fined £10,000 for failing to comply with the information consultation regulations. Mr Darnton had made a request that procedures be started to appoint employee representatives.
Discrimination
There have been two recent cases on the burden of proof on discrimination cases, both of which come up with rather different conclusions.
In the case of Commissioner of Police of the Metropolis and Another vs Osinaike, Mrs Osinaike, having won a complaint for racial harassment in the London South Employment Tribunal lost her case at appeal. Mrs Osinaike, who is black, worked as a dedicated detention officer at Tottenham Police Station before transferring in January 2007 to Walworth. From the moment she was transferred, she encountered significant problems with colleagues. She filed a grievance for harassment and instituted tribunal proceedings. However, before the EAT, His Honour Justice Reid, ruled that the tribunal had erred in finding that the harassment was on the grounds of race. It was said that showing that conduct was unreasonable or unfair did not transfer the burden of proof and there was no evidence of any racial element.
In the case of the Secretary for State for Work and Pensions v McCarthy, the Department for Work and Pensions appealed a finding of discrimination on the basis that the hypothetical comparator was only assessed at the second stage rather than at the stage of the claimant’s allegations. The tribunal had found that the department of work and pensions had made stereotypical assumptions about the nature of relationships between gay men which it would have not about a heterosexual man (the hypothetical comparator). There Honour Justice Slade held that it would be wrong to adopt a too technical approach in overseeing a tribunal decision and they plainly believe that there was evidence justifying changing the burden of proof to the employer.
Sex Discrimination
In the case of Miller vs Belway Homes Ltd, the employer insisting on working full time with it causing a disparate impact on women wanting to work part time had to be able to justify the requirement to avoid unfair dismissal and sex discrimination. Ms Miller had been working for Belway Homes as area sales manager going on maternity leave in 2004, returning in January 2005. She asked to half her hours to 2.5 days per week, later increasing it to 3 days. With the downturn in the economy Belway had to introduce redundancies including Ms Miller’s post. One of her colleagues Ms Anstee took voluntary redundancy and Ms Miller was told that she could have Ms Anstee’s job providing she worked full time. Ms Miller wanted to keep her 3 day contract. This was not agreed and she was dismissed as redundant in May 2008. In the tribunal she succeeded in both her claims for unfair dismissal and sex discrimination. The employer’s appealed unsuccessfully. His Honour Judge Peter Clark held that Belway had applied a provisional criteria of practice of requiring full time work which caused a disparate impact on women.
We suspect there may yet be a further appeal to the court of appeal but the moral of the story seems to be that the employer should put another step into the search for reasonable alternative employment. The first step ought to be a search for a comparable position, ie part time. Only then, after a fruitless search could a full time position be offered. Even then, it is perhaps prudent to explore whether there is scope for a job share given that there were major employment changes occurring anyway.
Tribunal
In the case of M&L Sheet Metals Ltd vs Willis, the Appeal Tribunal considered the competing demands of “a range of reasonable responses test” with the breach of implied term of trust and confidence. In that case, Mr Willis complained of bullying and harassment and made a claim to the employment tribunal. He alleged harassment and bullying. The tribunal found that whilst the internal appeal was dealt with within the range of reasonable responses, nevertheless, there was a fundamental breach of contract. The appeal tribunal held that the range of reasonable responses test played no part in establishing whether there had been a further mental breach of contract.
In the case of Dunn & Another vs AAH, the Court of Appeal held that the obligation of trust and confidence existed both ways. Celesio AG are a large German company with substantial pharmaceutical operations in the UK with AAH as one of its subsidiaries. Mr Dunn and Mr Davidson were senior directors of various UK subsidiaries with a clause in their contract entitling the company to dismiss if they were “guilty of dishonesty or incompetence or wilful neglect of duty or of material or persistent conduct or commits any breach of this agreement other than a breach which is capable of remedy and is remedied forthwith at the employer’s request”. The particular issues in this case were that neither director had told Celesio of a serious problem that had emerged with a substantial letter of credit. The letter of credit involved possible fraud. When it came to light in November 2007, both directors were suspended on full pay and their contracts were terminated on the basis that they had breached the obligation of trust and confidence they owed their employers. Having lost in the High Court their appeal failed in the court of appeal.
Tupe
The Law Society has taken action against the office for legal complaints to determine whether the TUPE regulations apply to staff at the legal complaints service. Justice Minister Bridget Prentice and the office of legal complaints maintain that the TUPE rules do not apply and so the law society staff do not move to the new body.
