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Employment Law Update

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  1. Employment Law Update Toni McAlindin March 2012 To join the Employment Law network and receive free bulletins email info@tonimcalindin.co.uk

  2. 2011

  3. A Lean time for employment law • Traditionally a conservative administration dislikes new employment law and will try and curtail existing laws • However a coalition is more complex with liberal policies having the opposite effect • This is evident over the past 18 months and so there is little new law but constant confusion as to what will come next, what might go etc • A number of consultative documents have been published on reducing laws eg one changing tribunals, on modern workplaces and on reducing red tape • However these do include proposals for new legislation

  4. October 2011

  5. Agency regulations • For many years successive governments rejected an EU directive on agency workers. In 2008 the CBI and TUC reached agreement on a possible compromise which allowed the government to agree the directive. Applies after 12 weeks. • Final regulations in place plus guidance on some of the detail. • Definition of worker that in Working time regulations – adjusted to reflect triangular relationship between agency worker, hirer and agency • Excludes self-employed, those working through their own limited liability company, those on managed service contracts but includes those contracted to an umbrella company, or who operate a personal service company or are supplied through intermediaries. Still not clear re limited companies other than excludes genuinely self-employed

  6. Agency regulations • Will be entitled to paid holidays, but not to occupational sick pay or pension • Equal treatment will apply to conditions which apply generally in the workplace whether by collective agreement, generally or by custom and practice • Pay will mean basic pay plus contractual entitlements directly linked to the work undertaken ie overtime, shift allowances, unsocial hours premiums/bonuses, payments for difficult or dangerous duties and some commission payments and bonuses • It will exclude bonus payments based on organisational performance, linked to a performance appraisal, payments due to the long term relationship such as profit-sharing, share ownership schemes

  7. Agency regulations • The 12 week period will be calendar weeks regardless of working patterns • A new qualifying period will begin only if a new assignment with the same employer is substantively different or if similar there is a 6 or more week break before the clock stars again • Annual leave and sick leave will pause the clock, the clock should continue to tick through maternity-related absence and where there are long absences due to sickness or jury service the clock will be reset after 28 weeks

  8. Agency regulations • Agency liable for any breach but will have defence if have taken reasonable steps to obtain necessary information from hirer • Any party in the chain of causation can be named • After 12 weeks the worker can request a written statement from the agency – 28 days to respond – no separate right of enforcement • Liability to access to employment and collective facilities responsibility of hirer • Agency workers count towards thresholds for representative bodies of agency • Access to employment opportunities from day one • Vocational training to be addressed under a number of measures • Hirer to make adjustments for pregnant worker, liability for alternative work or pay lies with the agency (for duration of assignment) – right to paid time off for ante-natal • From October 2011

  9. Guidance on regulations • Expands on several areas • A great deal on the issue of self-employment, stressing that only the genuinely self-employed are excluded but providing little real information of help to those in limited companies • More detail on calculation of the 12 week period • More detail on what makes a position substantively different • More detail on what is included in pay • More detail on the exclusion when the agency is the employer and has to pay for gaps • Slight change in definition of agency worker – as well as contract of employment it now includes “or any other contract with the agency to perform work or services personally” • Slight change to Swedish regulations

  10. Religious discrimination appeals • Appeals in religious discrimination cases – Ladele, McFarlane, Eweida. Referred to the European Court of Human Rights. Lost on grounds of religious discrimination. Claims under art. 9 which guarantees freedom of thought, conscience and religion and provides that freedom to manifest one’s religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals or the protection of the rights and freedom of others. • The question is whether any such right has been interfered with and if so whether it is justified. Different test to discrimination law.

  11. Religious discrimination continued • Intervention by Equality and Human Rights Commission. Originally proposed a “reasonable accommodations” approach similar to reasonable adjustments in disability discrimination cases. EHRC applied for leave to intervene. • EHRC believes that judges have interpreted the law too narrowly and have set the bar too high. • However now set out their views in a consultative paper Legal intervention on religion or belief rights: seeking your views • It has been given permission to intervene but no longer mentions reasonable accommodation as it feels it needs more consideration. It does not intend to support any parties to litigation but to give its expert opinion on the appropriate application of the law???????

  12. Minimum wage from October 2011 • From 1st October adult rate rises to £6.08 • 18-20 £4.98 • 16-17 £3.68 • Apprentices £2.60

  13. Proposals and consultative documents

  14. New rates • From 1st February 2012 the maximum compensatory award for unfair dismissal will rise from £68,400 to £72,300 • The maximum amount of a week’s pay for redundancy and the basic award will rise from £400 to £430 • From 9 April 2012 statutory maternity, paternity, adoption, additional paternity and maternity allowance will rise from £128.73 to £135.45 and statutory sick pay will rise from £81.60 to £85.85

  15. Resolving workplace disputes Consultative document April 2011 Proposals • Greater use of mediation • All claims to be submitted to ACAS in first instance, parties can use pre-conciliation and hopefully settle. Otherwise still free to progress to tribunal • Greater powers to tribunals to strike out, costs etc • Allowing employment judges to sit alone in unfair dismissal cases • Increase qualifying service for unfair dismissal to two years • Providing for a fee to progress a claim – consultation on amount to follow • Making changes to tribunal hearings to make them shorter • Introducing the use of legal officers to deal with certain case management functions

  16. Results of consultation • Unfair dismissal qualifying period two years from April 2012 (employment up to 5th one year) • Emphasis on early resolution of disputes • Compromise agreements to be renamed settlement agreements. Standard text to avoid cost to parties and Employment Rights Act will be amended so that existing and future claims can be compromised without having to list all potential causes of action • Consultation on how to introduce a scheme to provide quicker, cheaper determinations in low value, straightforward claims such as holiday pay • Lord Justice Underhill to carry out a comprehensive review of tribunals by April 2012

  17. Results continued • A new term “protected conversations” to allow parties to have a frank conversation about any employment issue without the existence of a formal dispute • Concerns are raised that this might allow employers to put pressure on employees and to discriminate without this information subsequently coming to light at a tribunal • The Government’s justification is that employers are stuck with under performing employees because they are afraid to speak to them • Worries that it could be used to bully staff and bypass agreed procedures • It might become a shortcut to avoid disciplinary processes

  18. Charging fees • One of the proposals in the disputes paper relates to charging fees to progress a tribunal claim and a consultative document has been issued • Two alternative options are put forward. Option 1 if chosen would be implemented in 2013 whilst option 2 would require primary legislation so would not be implemented until 2014 • Option one – the fee would depend on the nature of the claim. There will be a fee to initiate the claim and one to proceed with the hearing. There are three levels as follows • Level one unpaid wages and redundancy (£150, £250) • Level two unfair dismissal (£200, £1000) • Level three discrimination/whistleblowing (£250, £1250)

  19. Fees continued • Option two • A one-off fee would be paid at the outset again related to one of the three levels noted above • Provided the claims were under £30,000 the fees would be • Level one £200 • Level two £500 • Level three £600 • All claims above £30,000 would be £1,750 • No fees will be payable by individuals unable to pay (based on HM Courts and Tribunals Service remission system)

  20. Modern workplaces • Right to request flexible working was to be extended to parents of children aged under 18 (currently under 17 unless disabled) from 6 April 2011. 18th March 2011 Government announced repeal of regulations. • Confusion until the publication of Modern workplaces which looks at four specific areas of reform • Three were expected ie equal pay audits, implementation of the Stringer and Pereda judgements regarding holidays after long term sickness and flexible working. In the latter case the government had drawn up regulations to extend existing law but instead repealed these and are now proposing flexible working for all • The unexpected fourth area relates to flexible parental leave which was mooted in January 2011 but without the detail

  21. Modern workplaces • Flexible working • To be introduced for all employees. The existing statutory procedure will be replaced by a duty to consider requests “reasonably” and a statutory code of practice will be issued to give employers guidance on how to handle requests and demonstrate a reasonable process. Concerns re competing interests eg childcare, disability etc • Equal pay • Employment tribunals would be able to require that employers that have discriminated on the grounds of sex in relation to contractual or non-contractual pay matters conduct an equal pay audit

  22. Modern workplaces • Working time regulations 1998 • Will be amended to allow four weeks’ statutory annual leave to be rescheduled and/or carried over into the next leave year when a worker falls ill during annual leave. For maternity, paternity, parental and adoption leave it will be 5.6 weeks of leave. Appears to be no limit to when this can happen. • KHS AG v Winfried Shulte decision by ECJ appears confusing re the above. • Case asks whether the ability to accrue leave or to carry over is limited in time. Asks whether Member states can limit a worker’s entitlement to minimum paid annual leave to the holiday year in which it accrues, even for those on prolonged sickness and if not whether it can be limited to 18 months. • ECJ concluded that directive does not preclude capping leave. Allowing leave to be taken sometime after it has accrued does not achieve the directive’s purpose. • 15 months time limit under German law ok but six months may be too short a time, for Member states to draw up own rules??????? Implications for UK.

  23. Modern workplaces • Parental leave • 18 weeks maternity leave for the sole use of the mother, maternity pay and allowance as now • Fathers would continue to receive two weeks’ paternity leave at flat rate in first 8 weeks • Remainder (34 weeks – 21 paid, 13 unpaid) to be shared between parents, taken when they choose, including together, in weeks or days depending on business need, to be reclassified as parental leave available to either parent on an equal basis (same for adopters or same-sex couples) • 21 weeks of pay reclassified as parental pay

  24. Modern workplaces • Parental leave continued • Part of the period of flexible parental leave will be reserved for the exclusive use of each parent ie four weeks • This would be paid at the flat rate • Could be taken when the parties wish after birth and even together • Means an extra four weeks in total ie if mother takes mandatory 18 weeks then flexible 34 there needs to be another four weeks for the father • Increase right to existing unpaid parental leave to 18 weeks, consider raising age of child (currently 5) – postponed to 2013 • Rules on taking leave to take account of business need ie employer may not be able to accommodate part-time or short periods of leave • Consider unpaid ante-natal leave for fathers

  25. Red tape challenge • Budget announced three year moratorium on new regulations for small businesses (less than 10) and genuine new start ups but not paternity or default retirement age • Also Red tape challenge, one in, one out – Consultation October 2011 on employment implications, ie compliance and enforcement, recruitment, managing staff and terminating employment • Mention of changes to TUPE, discrimination awards and consultation periods for redundancy • However many of these not within the competence of the UK government – much said about discrimination compensation but in reality only a few high payouts • May have more success with redundancy consultation periods particularly since the EU is currently reviewing the collective redundancy directive, the Acquired rights directive and the overall framework directive on information and consultation

  26. Red tape challenge contd • Includes • Seeking views on a proposal to introduce compensated no fault dismissal for micro firms with fewer than 10 employees • Working with ACAS to simplify dismissal processes including the Code or supplementary guidance for small businesses • Creating a portable CRB check that can be viewed by employers online from 2013 • Carrying on with the review of parental provisions • Implementing the proposals on working time • Further consultation on flexible working • Changes to whistleblowing rules to stop individuals using the legislation for areas affecting their own contracts of employment • Consultation on reviewing third party harassment • Consultation on integration of tax and national insurance

  27. Red tape challenge contd • Consultative documents have been issued on a review of Tupe and redundancy • Tupe is regarded as too complex • The document asks whether there should be a right to harmonise terms and conditions • The redundancy consultative document asks questions about reviewing the consultation time periods for collective redundancies (the directive has no fixed timescales) and looking at the definition of an establishment

  28. Health at work • Health at work – an independent review of sickness absence notes the huge cost of absence to individuals, their employers and society at large • It considers that many people signed off work could do some work • The fit note has not been a major success as GPs are unwilling or unable to provide meaningful information on whether an individual could come back to work part-time, on reduced hours, to different work etc • It proposes that after four weeks absence an individual be sent to an Independent Assessment Service to make a judgement on future action – it is not clear who will fund this nor who will run it – in other words it won’t be the GP who makes this decision

  29. Rehabilitation periods • The Government has announced a lowering of rehabilitation periods before a conviction can be spent under the Rehabilitation of Offenders Act 1974 • Under the Legal Aid, Sentencing and Punishment of Offenders Bill the periods will be reduced and will run from when the individual completes his or sentence rather than date of conviction as at present • Convictions resulting in a custodial sentence of more than four years will remain unspent • Job applicants will have to declare spent and unspent for jobs with children and vulnerable adults • Example many offences with a current 5 year term will reduce to one, 10 years to 4

  30. Caselaw – contracts

  31. 2 major cases • Edwards v Chesterfield Royal Hospitals NHS Foundation Trust • Consultant dismissed for professional misconduct. Could not find other work and likely to lose large sums over career life time • Claimed trust had not followed contractual disciplinary proceedings • Original case held only entitled to damages for notice period and period to follow proper procedures • Court of Appeal held this was not about the manner of dismissal (Johnson) but about breach of contract • He could have sought an injunction to make them go through procedures (he believed he would not then be dismissed) • Johnson had held no action at common law other than breach of contract • If loss flows from a contractual term other than notice there is no law to prevent recovery of financial loss flowing from the breach • Has to prove at full trial he would not be dismissed in order to succeed • Note will be heard by Supreme Court (plus Botham below) to see whether such claims fall within the Johnson exclusion or not

  32. Breach of contract as free-standing right • Botham v Ministry of Defence • Employee won unfair dismissal claim on basis of employer’s handling of disciplinary procedure • UD compensation was insufficient to cover his legal costs • Sought to recover under common law claiming free-standing right • On basis of Eastwood could only succeed if the breach of contract arose prior to dismissal and not as part of the dismissal process • Johnson holds cannot recover for the manner of his dismissal • Although he also claimed breach of the contractual disciplinary process this was part and parcel of his unfair dismissal • Note in Mezey v South West London and St George’s Mental Health NHS Trust - Court of Appeal upheld injunction to restrain an NHS trust from holding a capability hearing in breach of its disciplinary procedures

  33. Supreme court consider • The Supreme court has now reached its conclusion but there was considerable dissent between judges as to the proper construction of such rights • The court held that Johnson operates as a bar to a claim for damages for the manner of dismissal in both express and implied terms • Both cases were held to fall on their facts as they fell within Johnson rather than Eastwood • Two of the Lords thought that Edwards case related to a cause of action prior to dismissal but were overruled

  34. Negligent CRB Check • Many positions require the employer to carry out a criminal record check • Chief police officer required to provide any information considered relevant when a check is made • May involve an exercise in judgement particularly when someone is charged with an offence but not subsequently prosecuted. This could be for a variety of reasons eg the victim dropping the case or the police finding the person was innocent • Desmond v Nottinghamshire Police – individual accused on of alleged sexual misconduct. Subsequently decided no case to answer but information given for enhanced criminal record check which affected his position as a teacher • Held the police do not owe any duty of care in such cases and cannot be sued in negligence

  35. Caselaw dismissal

  36. Legal representation • In R (on the application of G) v The Governors of X School and anor - a teacher was dismissed for kissing a 15 year old boy. The school was obliged to report him to the Secretary of State to determine whether he should be placed on a list of persons prohibited from working with children. • High Court held that due to the serious nature of the allegations he should have been allowed legal representation at the disciplinary and appeal hearings • Commented that the case is limited to its own facts ie breach of human rights – serious impact on future job prospects. • Note Human Rights legislation applies in the public sector – most cases would concern normal unfair dismissal legislation • Heard by the Court of Appeal who confirmed previous decision ie that where the decision was determinative of a right to practice a profession there should be legal representation

  37. Supreme Court decision • Note heard by the Supreme Court on 11 April 2011 • Held there is no right under Article 6 of the ECHR to legal representation where the dismissal could lead to barring the individual from his profession, where the barring decision is sufficiently independent of the dismissal decision • Not engaged at the disciplinary hearing, the nature of the ISA proceedings, being independent of the employer’s decision and dealing with a different question – meant no requirement for Article 6 to be engaged • However did note that where a decision in one set of proceedings determines the outcome in subsequent proceedings that determines a person’s civil rights, such a right may be engaged

  38. Social media dismissal In Preece v JD Wetherspoons Plc fair dismissal for gross misconduct for posting inappropriate comments about customers on Facebook. Pub manager and whilst still at work posted comments on Facebook about abusive customers identifying them by name. Her privacy settings meant that a wide range of people including the very customers could see her page. One made a complaint and she was dismissed for gross misconduct. Admitted that she was aware of the company’s email and internet policy and knew she had breached it. Clearly it is important to have such policies. In this case she breached the policy whilst at work but employers need to ensure the policy is broad enough to cover inappropriate comments whenever made.

  39. Is it the company’s business • Bates v Cumbria County Council • Mr Bates was head of religious studies. He had had run ins with the head teacher and with another teacher in his role as trade union representative but had an excellent record. • Staff had laptops which were used in the classroom and at home including work and personal emails. • Following earlier interventions staff had been allowed to use laptops for a certain amount of social networking • The other teacher complained that he was a member of a dating site and had looked at the site whilst at work (how did she know) • An IT investigation showed that he had looked at the site for 15 seconds during a lesson when pupils were watching a video • The Head teacher influenced the dismissing panel to dismiss him on the grounds of – “a seedy picture of someone sending sexual messages” • Held dismissal unfair – emotive language, head teacher’s attitude to a dating site coloured her view of the incident

  40. Over reaction! • Whitham v Club 24 t/a Ventura • Team leader. Company provided customer services for Skoda, part of Volkswagen and a significant customer. On site with both organisations • After a bad day posted a comment on her Facebook – settings only open to 50 friends • Comment related to working in a nursery but not with plants • Dismissed – company policy held posting information about the job on the internet might led to disciplinary action – clean record to date • Held unfair. No real investigation as to consequences of her comments. Volkswagen not mentioned, no confidential information on job mentioned, customer not asked and unlikely to terminate a large commercial contract on this basis

  41. Dismissal for refusing pay cut • Garside and Laycock Ltd v Booth company was undergoing trading difficulties - asked staff to accept a 5% reduction in pay. • Held meetings with staff, balloted, substantial majority agreed. Mr Booth refused. Various meetings to find alternatives with him. Refused and was dismissed. • SOSR but was it within the band of reasonable responses. Held unfair. • EAT disagreed. • Employers may need to make changes even when the situation is not desperate. If the view of an individual employee regarding reasonableness was the required test, it would be impossible to make a decision as most employees would find a detrimental change unacceptable. The tribunal needs to look at the overall situation and decide whether it is reasonable. The case was remitted for a reconsideration • Part of a difficult line of cases ie is the tribunal substituting its idea of what is fair rather than a range of responses

  42. Dismissal because of someone else’s behaviour • In Symes v The Pepperbox NurseryMrs Symes was a nursery nurse. Told her employer husband had been arrested for child pornography. • Reassured re her job. Then got more serious, more images found, he had been required to leave their home. • The nursery manager passed this information on to Somerset County Council and to Ofsted. • Later nursery made aware of specific charges and it was reported in a local newspaper. • Ofsted indicated that if Mr Symes was convicted and Mrs Symes continued to live with him she would become a “disqualified person” and unable to work with children. • Others expressed concerned. Eventually dismissed when failed to reassure nursery. • Dismissal fair – employer had been patient, had anticipated views of clients, information was on facebook, freely available, knew she was in difficult position but so were they. Had done all they could.

  43. Failure to appeal final warning Davies v Sandwell Metropolitan Borough Council D was dismissed for misconduct following a number of incidents. Employer took into account a live final written warning – some doubt re its fairness and employer offered to rehear but D declined. Tribunal regarded that as relevant even though they had doubts about the final warning. Held failure to appeal allowed the Council to rely on warning. EAT disagreed. Failure to appeal irrelevant. If there were doubts about the FWW and tribunal held it was a nullity if would affect any subsequent dismissal. Jacks v BMI Baby Ltd Ms J was a cabin manager for BMI baby. For a variety of reasons she was demoted and given a final written warning. She committed another breach and was dismissed. Held if there is a dispute re a FWW, not for tribunal to interfere if it is satisfied FWW given in good faith. Will only do so in in exceptional circumstances.

  44. Territorial jurisdiction • A number of new cases • Original decision in Lawson v Serco held that where an individual works overseas there are three main scenarios when individuals may have rights in UK courts • At the time of dismissal the individual is working in Great Britain; • The peripatetic employee such as airline staff who have a base in Great Britain; • Expatriate employees who although both work and are based abroad can in certain circumstances benefit for UK rights • Employees posted abroad to work for a business carried on in Great Britain (newspaper correspondents); • Employees working for a British employer operating within a British political or social enclave

  45. Exceptions • Ravat v Haliburton Manufacturing and Services Ltd - Supreme court held that failing to fall within the 3 categories not necessarily fatal to claim. Employee based in Libya – stronger connection with Great Britain than with Libya. • Resided in the UK, travel expenses and salary paid in sterling into UK bank • Supreme court due to hear appeal in Mak – BA’s Hong Kong airline crew based in Hong Kong • Walker v Church Mission Society – worked 8 years in Africa, worked overseas, not posted abroad for the purposes of a business based in Great Britain nor a strong connection to Great Britain. Oxford-based employer. No rights.

  46. EU Convention • Koelzsch v Etat du Grand-Duche de Luxembourg • EU consider which laws apply under 1980 Rome Convention – looking at all the facts, where he or she performs greater part of obligations. • Mandatory laws of country in which place of business is situated ought only to apply where it is not possible to determine the country in which the work is habitually carried out. • Possible for peripatetic employees who work in several countries to habitually work in one. If not the law of the country in which they are based can apply

  47. Caselaw discrimination

  48. Equal pay

  49. Same employer, different establishment • Dumfries and Galloway Council v North and ors • Claimants nursery nurses, classroom assistants employed in schools . Sought to compare with manual workers working from depots. Different collective agreements. • Same employer but different establishments. • Can only compare if there is a real possibility of the comparator doing the same or broadly similar work at claimant’s place of work as his current place of work • Held should not be assumed that this is the same employment just because employed by same employer • To make comparison requires uniformity or commonality between the two employment regimes • If they worked on each other’s premises would they have their current terms. In reality neither group would ever work at the premises of the other so no real possibility so not in same employment • On Appeal Court of Session has overturned using Wilkinson below

  50. Court of Session - North • North and others v Dumfries and Galloway Council • Tribunal found the claimants were in the same establishment for equal pay purposes – looking at a hypothetical comparator it was possible to state what the terms would be • Overturned by EAT – there must be a real possibility of the comparators being transferred to the claimants’ establishment • Court of Session – no such extra hurdle – agreed with EAT in Wilkinson that the intention of the act could be restricted with this extra hurdle • BUT – case did not succeed. Accepted that terms and conditions should be considered broadly. Accepted that HR manager had provided compelling evidence that the male comparators’ terms and conditions would need to be significantly varied to make it possible for them to work at schools. If the hypothetical situation of the male workers’ transfer to the school arose, the terms and conditions common to other workers at the council would not necessarily apply to the transferred workers