- Unfair dismissal: Supreme Court rules on rights for international commuters based in Britain
Employees who live in Britain and commute to work abroad may have unfair dismissal rights in Britain, particularly if the employment contract is governed by British employment law and the employee has been reassured that he will retain British employment law rights. The Supreme Court has ruled that unfair dismissal rights will be available where the employment relationship has a stronger connection with Great Britain than with the foreign place of work.
Employers should bear this ruling in mind when determining what governing law to apply to an individual's employment contract, what response to give to requests for reassurance on employment law rights, and in which countries to recruit. They should also consider whether unfair dismissal rights may apply before deciding the process and reasons for dismissal of internationally mobile employees.
For further details see our ebulletin here.
- Collective redundancies: expiry of fixed-term contracts may not count towards threshold
In a surprising judgment, the EAT has ruled that the simple expiry of a fixed-term contract without renewal is a dismissal for a reason "related to the individual concerned". As such, it is not a "redundancy" counting towards the threshold of 20 proposed redundancies within a 90 day period triggering the collective redundancy consultation duties.
The EAT considered that at least one of the reasons for the 'dismissal' on non-renewal was the individual's own agreement to a fixed term contract accepting that it would come to an end at a particular date or on the occurrence of a particular event. This was a reason "related to the individual" because it has something to do with what he is or has done, ie the fact that he has agreed to a fixed term.
The decision conflicts with the prevailing view that the expiry and non-renewal of a fixed-term should count for collective redundancy threshold purposes unless the reason for non-renewal is something personal to the individual such as their conduct or capability. Non-renewal because the funding for a position has ended, or because the role was to provide cover for absence or work on a specific project which has come to an end, was thought to count. This was particularly relevant to those sectors which use fixed-term contracts extensively (eg, the educational sector), but also where an employer was planning say 18 redundancies in 90 days and the expiry of a couple of fixed-term contracts could tip the scales into collective consultation territory.
The decision is unclear as to whether the non-renewal of a fixed-term contract will always fall outside the definition for collective redundancies or whether it could be covered if it can be seen as part of a wider redundancy exercise being carried out by the employer and/or where the individual can point to a reasonable expectation or common practice of repeated renewal of fixed-terms.
Pending any appeal, employers would be well advised to err on the side of caution when carrying out wider redundancy exercises if the inclusion of fixed-term non-renewals would make the difference as to whether the collective consultation obligations are triggered. (University of Stirling v University and College Union, EATS)
- TUPE: meaning of organised groupings and ETOs
- The EAT has confirmed that, where a client transfers its work to a new contractor, there will not be a service provision change under TUPE simply because there are employees who happen to spend most of their time working for that client (for example, because of the interaction between the shift pattern and the organisation of the work).
The requirement for there to be an "organised grouping of employees", the principal purpose of which is to carry out work for a client, means that there must be some form of deliberate planning or intent that the employees work for that client, ie that they be organised by reference to the requirements of the particular client (eg, they are designated as the client team).
Whether there is an organised grouping is a separate and prior question to whether individual employees are assigned to that grouping (when the time individuals spend on the work will be relevant). (Eddie Stobart v Moreman, EAT)
- Dismissing employees to replace them with limited company franchises (some of which were set up by the ex-employees) is "an ETO reason entailing changes in the number of the workforce" and therefore not automatically unfair.
Arguments that the "workforce" could include corporate franchises, so that there was no headcount reduction in workforce, were rejected. As a result of this decision, replacement of employees in this way may be an attractive option for transferees wishing to reduce staffing costs.
The EAT left open the question of whether a change of an individual's status from employee to independent contractor could also be a "change in the workforce". (Meter U v Hardy, EAT)
- Voluntary redundancy/early retirement: employers may be able to set budget and use severance cost as a criterion for selection of volunteers
An employer may be justified in selecting those with the cheapest entitlements under a voluntary redundancy/early retirement scheme when seeking to reduce headcount within a fixed budget, despite the indirectly discriminatory effect on a particular age band.
In this case the employer had a set budget for a voluntary redundancy/early retirement scheme. Subject to ensuring a balance of experience, the employer accepted applications from employees whose entitlements would cost the least (the Cheapness Criterion). This disadvantaged those aged 50 to 54, but its use had been supported by the recognised union.
The EAT found that the aim of the Cheapness Criterion was to reduce the number of applicants at a cost which came within the set budget and/or to reduce headcount so that the business could break even. Both potential aims were legitimate, and the use of the Cheapness Criterion was held to be a proportionate means of achieving them given it was the only practicable criterion in this case (though the EAT thought this might not always be so).
The EAT considered that the employer was entitled to set its own budget for a particular project (which was not directly discriminatory), even if it could have afforded more and even if that meant that selection had to be made between applicants and it turned out that this required a selection exercise which could only practicably be done on a basis involving some indirect age discrimination. This was contrasted with an employer trying to justify the continuation of a directly age discriminatory pay provision, where the employer (probably) cannot rely on the cost of removing it as the sole justification.
The tribunal, perhaps wrongly, had concluded that the case was one involving "costs plus" justification, but as this was not challenged on appeal the EAT declined to enter the debate as to whether costs alone can justify discrimination. The Court of Appeal's judgment in Woodcock v Cumbria Primary Care Trust (reserved on 7 December 2011) will hopefully shed some light on this issue.
The EAT upheld a second claim of indirect sex discrimination from an employee excluded from the scheme because she was on a career break and not expected to return prior to a specified date. Although the exclusion of employees on long-term absence was in principle capable of being justified, it was not proportionate where those on career breaks were entitled to return early but were not informed of the specified date and were thereby deprived of the opportunity to make themselves eligible. (HM Land Registry v Benson, EAT)
- Termination: no break in continuity of service where resignation withdrawn
The EAT has confirmed that, where an employer accepts the withdrawal of an employee's resignation, continuity of service is retrospectively restored. The resignation is treated as never having been effective, in the same way as a dismissal where a dismissed employee is reinstated on appeal (unless the contract provides otherwise). As a result, the employee in this case had sufficient service to claim unfair dismissal when she resigned for a second time a few weeks later. (Chelmsford College Corporation v Teal, EAT)
- Maternity rights: reference to ECJ on rights of mother through surrogacy
A tribunal is to refer to the ECJ the question of whether a mother expecting a baby through surrogacy is entitled to maternity leave and various benefits including paid leave, so that she can bond with her baby, establish breastfeeding and maintain and develop her family life. (C-D v S-T, ET)
The Scottish Court of Session has also asked the ECJ whether a non-pregnant employee must be protected against "associative" pregnancy discrimination. (Kulikauskas v Macduff Shellfish, CS)
- New resources