Employment Law Update

2. Employment Law Update

3. 1. Redundancy – Reduction in Headcount Not Required • Packman v. Fauchon: The EAT has held that it is not necessary for the number of employees carrying out work of a particular kind to be reduced in order to satisfy the definition of “redundancy”. • In this particular case, a firm suffered a downturn in business and therefore had a diminished need for the book-keeping services carried out by one of its employees. As a result, the employer sought to significantly reduce the hours she worked each week. The employee refused to work reduced hours and therefore was dismissed.

4. 2. Redundancy – Reduction in Headcount Not Required (Cont) • The Tribunal found that she had been dismissed by reason of redundancy and was therefore entitled to a statutory redundancy payment. The EAT subsequently upheld this decision and in doing so confirmed that the actual headcount of employees does not need to be reduced in order for a redundancy situation to have arisen. Best Practice: In accordance with the Employment Rights Act 1996 (“ERA”), a redundancy situation will arise if the employer’s requirements for employees to carry out work of a particular kind have ceased or diminished or are expected to do so. This decision has confirmed that reducing the amount of work to be done by the same number of employees can give rise to a redundancy situation. Employers should bear in mind, however, that a reduction in hours will not always amount to a genuine redundancy situation. Each decision will be fact sensitive and will need to be assessed on the particular circumstances of that individual situation.

5. 3. “Pool of One” in Redundancy Selection 3. “Pool of One” in Redundancy Selection • Wrexham Golf Co Ltd v. Ingham: The EAT has considered the question of whether the “range of reasonable responses” test applies to the decision to use a “pool of one” in a redundancy selection exercise. They found that yes, it does. • In this case, the Appellant Golf Club dismissed the Claimant, its sole bar steward, for redundancy. The Employment Tribunal found the dismissal unfair, noting that the Club had not considered any sort of selection pool. • The EAT overturned the finding of unfair dismissal, holding that the Employment Tribunal had not applied the “range of reasonable responses” test to the question of whether it was reasonable for the Club to focus on the Claimant alone as the person at risk of redundancy, indicating that the Tribunal ought to have asked itself whether it was reasonable for the Club not to have considered selection from a wider range of employees than just the Claimant.

6. 4. “Pool of One” in Redundancy Selection (Cont) 3. “Pool of One” in Redundancy Selection Best Practice: Employers may take some comfort from the finding that in some straight-forward redundancy situations, where a decision is made to eliminate a single role, an employer may act reasonably even if it does not apply its mind to the question of establishing a selection pool. However, in most cases, it would still be prudent at least to consider whether a selection pool is appropriate.

7. 5. More Redundancy: Redundancy Scoring 3. “Pool of One” in Redundancy Selection • Nicholls v. Rockwell Automation Ltd: A recent case has re-affirmed that in deciding whether a redundancy dismissal is unfair, the Tribunal should not undertake a detailed critique of the redundancy scores awarded unless there is evidence to question the employer’s motives. • In this particular case, the Tribunal found that the employer was faced with a genuine redundancy situation, that a fair process had been followed and that the employer did not have an ulterior motive. Notwithstanding this, it held that the dismissal was unfair on the basis that some of the scores awarded to the employee had been lower than they should have been.

8. 6. More Redundancy: Redundancy Scoring (Cont) 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • The EAT overturned this decision and held that it had been wrong for the Tribunal to take this approach. As per previous case law, unless there is evidence of a clear inconsistency which would indicate bias or incompetence on the behalf of the employer, the Tribunal should not carry out an exercise of close examination of the scores awarded in a redundancy process. Nor should the Tribunal substitute its own view as to the score it would have awarded to the employee in the place of that which was actually awarded by the employer. Best Practice: In carrying out the scoring process, employers should take steps to make sure the scores awarded can be explained and justified if they do come under scrutiny. An effective method of doing this is to be able to refer to documents and records upon which scores are based and to ensure that the scoring process is carried out by an objective manager, or possibly two separate managers, to offer as much protection as possible from allegations of bias.

9. 6. More Redundancy: Redundancy Scoring (Cont) 7. Breakdown of Trust Dismissals 3. “Pool of One” in Redundancy Selection • Leach v. OFCOM: The Court of Appeal has warned that although the mutual duty of trust and confidence goes to the heart of an employment relationship, a breakdown of trust should not be used as a convenient label to justify dismissal in every situation where an employer feels let down by an employee or where there is no other lawful reason for the dismissal. • In this case, the employer dismissed an employee after receiving limited information from the Police that he had been involved in child abuse in Cambodia. OFCOM defended the employee’s subsequent unfair dismissal claim on the basis that he had been dismissed for “some other substantial reason”, namely a breakdown in trust and confidence between the parties in light of the Police information.

10. 8. Breakdown of Trust Dismissals (Cont) 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • The Court of Appeal agreed with the EAT’s finding that the dismissal had been fair in the circumstances. However, it stressed that whether an SOSR breakdown of trust dismissal is unfair will depend on each case on the particular facts and in particular it will be for the Tribunal to determine whether on the facts the breakdown is substantial and sufficient enough to justify the dismissal. Best Practice: This case is one of a number of recent decisions on SOSR dismissals. In the present case, where the dismissal was held to be fair, the procedure followed by the employer was not criticised. This can be contrasted with other recent SOSR cases where the dismissal has been held to be unfair, and where no or very little procedure was followed. In particular, employers should make sure they carry out a fair process and this will usually require a fair and reasonable investigation of the facts before deciding whether the SOSR reason is sufficient enough to warrant dismissal.

11. 9. Disability Discrimination – Reasonable Adjustments 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • Olenloa v. North West London Hospital: The EAT have held that the duty to make reasonable adjustments for a disabled employee does not necessarily automatically end when the employee goes on sick leave. • An employee on sick leave brought a claim more than 3 months after his sick leave had commenced. The employer argued that the claim was out of time on the basis that the duty to make reasonable adjustments ceased when the employee went on sick leave and was no longer working the job. • The EAT held that this was incorrect. The employee argued that making reasonable adjustments would have prevented him from going on sick leave in the first place or, if he was already on sick, helped him to return to work. The EAT therefore concluded that the Tribunal would need to identify which adjustments were reasonable and the effect they would have had before determining when or if the duty had ceased. Only then could the Tribunal determine the deadline for the employee to bring the claim.

12. 10. Disability Discrimination – Reasonable Adjustments (Cont) 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection Best Practice: Employers are under a duty to make reasonable adjustments to help disabled employees where they are at a substantial disadvantage. This case serves as a reminder that this duty can continue whilst an employee is on sick leave, especially if the reasonable adjustment would help an employee return to work. It also serves as a warning that employers should, wherever possible, adopt a proactive approach to absence management and take appropriate steps to try to get absent employees back in the workplace.

13. 11. Mutuality of Obligation 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • Drake v. Ipsos Mori UK Ltd: Can a person working under a succession of individual contracts be an employee? Yes, says the EAT, reversing a Tribunal decision that had held that there was no contract because there was no “mutuality of obligation”. • The Claimant worked on an “assignment by assignment” basis for the Respondent from 2 February 2005 until 5 November 2010. He claimed that each individual assignment was a contract of employment, so giving him sufficient continuity of service to bring a claim for unfair dismissal. The Respondent’s case was that even though the Claimant was a worker for the purposes of employment legislation, he was not an employee. • The EAT held that there was a contract in place and sufficient mutuality whilst the Claimant was actually undertaking an assignment for the Respondent. Contrary to the Tribunal’s decision, the fact that the assignment could be brought to an end did not mean that there was no contract in existence whilst the assignment was continuing.

14. 12. Mutuality of Obligation (Cont) 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection Best Practice: The EAT was influenced by the fact that the Respondent’s own handbook referred to the assignments as being contracts. This was a salutatory lesson for the Respondent that a written agreement, contract or document will be analysed carefully (as well as consideration given to the practical day-to-day workings) and it is very important that all such documentation reflects the intentions of the employer and the realities of the situation.

15. 13. English Language Requirement 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • Dziedziak v. Future Electronics Ltd: The Reading Employment Tribunal held that there was an act of direct discrimination on the grounds of nationality when a line manager told Mrs Dziedziak (who was Polish) to not use “her own language” at work. • At the end of October 2008, Mrs Dziedziak was having a work-related conversation at work with a colleague in Polish. She was called to a meeting shortly afterwards with her line manager, who reprimanded her for speaking Polish, as a colleague had complained that their conversation was distracting her. Mrs Dziedziak identified the person who might have complained and provided evidence of a personality conflict, supporting the claim of direct discrimination. • The EAT found that, whilst race is not the same as language, the fact that the Claimant was instructed to refrain from speaking “in her own language” rather than being told to not speak Polish at work or to only speak English, established an intrinsic link between the comment and her nationality.

16. 14. English Language Requirement (Cont) 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • Consequently, the use of those specific words meant the Claimant was directly rather than indirectly discriminated against on the grounds of her nationality. • On appeal, the EAT expressed the view that the instruction would not have been directly discriminatory had Mrs Dziedziak been told to not speak Polish or to only speak English, although of course this could have amounted to indirect discrimination. • The instruction to speak English at work was a provision, criteria or practice (“PCP”) that put Polish nationals at a substantial disadvantage compared to other employees and could not be shown to be a proportionate means of achieving a legitimate aim. The Company was unable to provide an explanation for this discriminatory practice and on the evidence the Tribunal’s view was that direct discrimination had occurred due to the singular nature of the instruction.

17. 15. English Language Requirement (Cont) 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • This is a slightly unusual case in that the ET found that there was an act of discrimination, which means that an employer cannot rely on a defence of justification, even though the actions of the line manager were based on language which would amount to an indirect racial characteristic, in this case language. Previous cases have suggested a language requirement can be indirect rather than direct discrimination, given that language, ability or speaking, for example in Polish, is not limited to or the exclusive characteristic of Polish nationals, however more Polish nationals will speak the language, hence the indirect nature of the rule.

18. 15. Annual Employment Tribunal Statistics 2011/12 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection • Ministry of Justice published the annual Employment Tribunal and EAT statistics (to 31 March 2012) • Key statistics:- • 15% fall in the number of ET claims • Costs awards up from 487 to 1,411 (an astonishing 92% being awarded in favour of Respondents) • Mean average unfair dismissal award - £9,133 • Median average unfair dismissal award - £4,560

19. 6. More Redundancy: Redundancy Scoring (Cont) 3. “Pool of One” in Redundancy Selection Taylors Solicitors Employment Team Will Clayton – Partner – Head of Employment Emma Swan – Senior Associate t: 0844 8000 263 www.taylors.co.uk