Thursday 1 December 2011 Employment Law Update

Thursday 1 December 2011

Employment Law Update

1. Dismissal Cases: Deadlines John Lewis Partnership v Charman [EAT 2011]: A claim may be accepted beyond 3 month deadline - employee reasonably ignorant of time limit and awaiting the outcome of an internal appeal against dismissal. Wang v University of Keele [EAT 2011]: Contractual notice (oral or written) runs from day after notice is given – important for determining the EDT in unfair dismissal cases. Best Practice: When giving notice, ensure dismissal date is clear – if it is ambiguous, it will be construed in favour of the employee.

2. Dismissal Cases: Variation of T&Cs Garside & Laycock v. Booth [EAT 2011]: SOSR dismissal for refusing a pay-cut: key question is the reasonableness of employer’s decision to dismiss, NOT whether it is reasonable for employee to accept pay cut! Slade v. TNT [EAT 2011]: Termination and re-engagement: balancing advantages to business with effect on employees = reasonable SOSR dismissal. Best Practice: If proposing changes to T&Cs always engage in meaningful consultation and ensure proposals are reasonable.

3. Dismissal: Notices CF Capital v. Willoughby (CA, 2011): An employer cannot unilaterally withdraw an intended, unambiguous written notice of termination, notwithstanding the fact that the notice was given prematurely / mistakenly. Best Practice: In the context of a potential redundancy situation, ensure that notice is not given prematurely, ie. before parties have explored any alternative arrangements.

4. Mitigation of Loss Debique v Ministry of Defence (EAT, 2011): § Claimant brought a successful claim for indirect discrimination. § Employer made reasonable offer of alternative employment but the Claimant refused it. § Claimant was awarded nothing in respect of loss of earnings - she had unreasonably rejected the offer of re-engagement and therefore failed to mitigate her loss. Best Practice: Potential to reduce liability if you are able to make a reasonable offer of re-engagement to a “wronged” employee!

5. Disciplinary Policies Hussain v. Surrey & Sussex NHS (HC 2011): § Was the disciplinary procedure contractual? § The importance of provision to the working relationship § The level of detail and certainty prescribed by the provision § Context and workability of the provision Best Practice: Disciplinary policies should still be kept expressly non-contractual. This minimises the risk of wrongful dismissal claims for breach of contractual procedure and avoids need to consult when proposing amendments.

6. Reasonable Adjustments Leeds Teaching Hospital v. Foster [EAT 2011]: An adjustment does not need to have “good” or “real” prospects of successfully alleviating a disabled employee’s disadvantages for it to be a reasonable! Best Practice: If an adjustment is identified, consider implementing it. Avoid second guessing its prospects of success!

7. Reasonable Adjustments [cont] Cordell v FCO [EAT 2011]: § An adjustment costing £ 250 K not reasonable § Cost alone decision § Judgement call as to what is “right and just” Best Practice: Reasonableness of an adjustment can take into consideration cost, but be careful where cost alone is sole determining factor! Take advice!

8. Holiday Law Developments KHS AG v. Schulte (European case - ECJ, 2011): § The Working Time Directive (out of which the WTR are borne) does not require the unlimited accumulation of annual leave by an employee on sick leave for several years § Purpose of annual leave = provide a rest from work for health and safety reasons § Member States (inc. UK) may therefore provide for holiday entitlement accrued by long-term sick employees to expire after a set period. § What is an appropriate “set-period”? No clear-cut answer – longer than 6 months – in this case 15 months was sufficient

9. Holiday Law Developments [cont] Fraser v. St George’s NHS Trust (EAT, 2011): §In order to be paid for statutory holiday accrued whilst on sick leave, an employee must give the required statutory notice in the relevant leave year. §“Use it or lose it” approach §Positive from an employer perspective. . . BUT BEWARE: this case is in direct conflict with an authority from earlier this year. . .

10. Holiday Law Developments [cont] Conflicting Cases: NHS Leeds v Larner Employee off sick for an entire year was entitled to paid annual leave for that year (or payment in lieu of such on dismissal) despite no request for the leave! AG opinion in Schultz-Hoff also casts doubt on the Fraser case Best Practice: Until this conflict is resolved, it is risky to rely blindly on the Fraser case when dealing with requests for holiday pay from sick employees. As a general rule, encourage those employees on long-term sick to take accrued annual leave!

11. Holiday Law. Williams v. British Airways plc 2011 § What is basic pay for holiday purposes? § “Normal remuneration” § Comparable to periods of work § Any inconvenient aspect which is intrinsically linked to personal performance Best Practice: Review method of calculating holiday pay to ensure compliant with UK and EU law.

12. Termination Payments Publicis Consultants v. O’Farrell [EAT 2011]: Reserve the words “ex-gratia” for payments that are truly intended in excess of contractual entitlement Best Practice: Do not mis-label payments! Identify clearly the nature of the termination payment.

13. Implied Terms Garratt v. Mirror Group Newspapers [EAT 2011]: Term implied through custom and practice meant that enhanced redundancy payment was conditional on employee entering into a compromise agreement. Best Practice: It is always better to rely on an express term than an implied one. If a term is important, ensure that it is expressly stated and publicised accordingly!

14. Sham Contracts Autoclenz Ltd v. Belcher [Supreme Court, 2011]: § Expressed in contract as “self-employed contractors” § In reality the workers were expected to attend work and provide their services personally § Held to be employees and therefore entitled to minimum wage and holiday pay Best Practice: Practical reality will outweigh what is expressed in the contract! Ensure what is written in the contract accurately reflects the reality of the relationship.

15. Redundancy Scoring Dabson v. David Cover & Sons [EAT 2011]: Marks awarded in redundancy selection process should only be investigated by Tribunal in exceptional circumstances. Best Practice: Although welcome news for employers, need to ensure selection criteria are chosen carefully and scores awarded fairly and objectively. Clear evidence of bias, mistake or discrimination may justify the Tribunal looking more closely.

16. Variation of Contracts Moutrie v. Public Sector Consultants [ET 2011]: § Employer bound by proposed variation to individual’s notice period § The lack of clarity when the variation would be implemented was employer’s downfall! Best Practice: Where implementing changes to T&Cs, clarity on what is proposed and when the changes take effect, if at all, is critical!

17. Redundancy Dismissals King v Royal Bank of Canada (EAT, 2011): § Dismissal claim procedurally unfair, but genuinely on grounds of redundancy and therefore not substantively unfair § Genuine redundancy situation does not negate remedy of reengagement / re-instatement being awarded. § Vacancies to be considered not limited to those at time of dismissal – should include those arising at time when employer should have been following a fair procedure. Best Practice: Meaningful consultation and full consideration of alternative vacancies critical to fair redundancy!!

18. Whistleblowing NHS Manchester v. Fecitt & Ors 2011(CA) § Protected disclosures by 3 employees against another colleague § For employer to avoid liability must show that the making of the disclosure did not materially influence detrimental treatment § Cannot be vicariously liable under PIDA/ERA where employees victimise their whistleblowing colleagues Best Practice: Before you dismiss or impose detrimental changes on employee, ensure that reason is not influenced by past disclosure

19. Employment Law Reform: Government Proposals Cutting Red Tape: Reforming Unfair Dismissal: § Qualifying period to bring a UD claim will be increased from 1 to 2 years from April 2012 § Fees to bring UD claim - details of fees not yet confirmed but rumoured to be: - £ 250 for lodging claim then £ 1, 000 listing fee (to list hearing) - Fees to be refunded if Claimant is successful - Higher fees if claim for more than £ 30, 000

20. Reforming Unfair Dismissal Employer arguments for and against UD reforms: Will deter vexatious / weak claims. Claimants more likely to turn to discrimination elements in order to circumvent the 2 year qualifying period – more costly to defend. Give employers more confidence to hire – minimise the “fear factor”. Dispensation of fees for lowincome Claimants? Will catch most people without a job! Overall: argument that the difference made won’t be dramatically advantageous to employers? Could in fact end up costing them more overall? Claimants who settle pre-hearing will want to recover fees they have paid out from the employer – higher costs of settlement. Dramatic changes won’t be seen – no major advantage

21. Employment Law Reform: Government Proposals Protected Conversations: What? Government is to consult on employers being able to have “frank” conversations with under-performing staff without fear that those conversations will be admissible in Tribunal proceedings Why? The Government wants to stimulate growth and encourage employers to create new jobs. The Government believes that if employers are so concerned that they will end up in a Tribunal, they will be reluctant to create those jobs.

22. Protected Conversations Background: Possible compromise instead of implementing the controversial proposals of the Beecroft Report (“no-fault dismissals”) Will it work? : Reservations have been raised already: § Difficult to lay down rules as to what will and what won’t be a PC? § Cannot oblige an employee to engage in a PC? Protection from victimisation for those who refuse? § Unscrupulous employers may take advantage – use PCs to initiate inappropriate conversations § Doomed to fail? (much like the statutory DDPs? )

23. Sickness Absence Shake-up? § An independent review has made a recommendation to the Government that a new body, the Independent Assessment Service (IAS), be set-up to assess individuals signed off work for more than 4 weeks. § Long-term absence is a costly problem for employers – an estimated £ 9 billion per year! § Under the current “fit-note” regime, GPs are expected to make job-related decisions without the relevant expertise. § The current sickness absence system is ineffective.

24. Sickness Absence Shake-up [cont] Other Recommendations? § Employer expenditure on sick employees (eg. medical treatments, rehabilitation, etc) should attract tax relief. § Record-keeping requirements under the Statutory Sick Pay regime to be relaxed to reduce administrative burden. § Job briefing service to help long-term sick employees to get back into work before they fall into the benefits system § Public sector occupational sick pay regime to be reviewed – sickness absence rates higher and Occupational Sick Pay more generous than in private sector

25. More Proposals! § Compensated no fault dismissals for micro firms § Slim down dismissal procedures § Call for evidence on period of collective consultation and TUPE § Portable CRB checks § Closing loophole in whistleblowing cases § Simplifying settlement agreements § Compulsory pre-claim conciliation

Taylors Solicitors Employment Team Oliver Mc. Cann – Leanne Eddleston Rawlings House Exchange Street BLACKBURN BB 1 7 JN t: 0844 8000 263 www. taylors. com Ninth Floor 80 Mosley Street MANCHESTER M 2 3 FX