1. Settlement discussions: limits of without prejudice protection; Acas Guide on new regime

The new protected settlement discussion regime came into effect on 29 July 2013. Unless there has been 'improper behaviour', termination discussions and settlement offers will not be admissible as evidence in ordinary unfair dismissal claims, even where there is no "dispute" so that without prejudice protection does not apply. The most common example will be where an employer wants to initiate discussions as an alternative to, and before, starting a disciplinary or performance management process, but a recent case illustrates how the situation might also arise after a disciplinary process has ended.

The EAT ruled that a settlement offer made after a disciplinary hearing to consider dismissal, but before the employee was informed of the outcome, was covered by without prejudice protection. This was because the employee might reasonably have been contemplating litigation in the event of dismissal, so there was a 'dispute'. But discussions after the employee had been told of the decision to issue a final written warning rather than dismiss were admissible in a subsequent unfair dismissal claim;  the EAT considered that there was no potential dispute at that point.  (The EAT apparently did not consider the potential for a claim based on the final warning).

The new regime would provide protection in such a situation.  Of course, it is better to avoid making unhelpful admissions in the fist place, particularly before the settlement agreement is signed. (A v B&C)

On 29 July Acas published a non-statutory Guide to accompany the statutory Code on the new settlement discussion regime. The Guide discusses how to make a settlement offer as well as providing useful examples of what is and isn't likely to be "improper behaviour". See our blog for a summary of the key points highlighted by the Guide.

Employers should review their policies and precedent agreements in light of the new regime. It may be useful to add a provision to disciplinary and performance management policies referring to the new settlement discussion regime, making clear that the employee can also initiate the discussions, and confirming that any settlement discussions will have no bearing on any formal procedure followed subsequently.

Precedent compromise agreements also need to be updated to reflect the fact that they have been renamed "settlement agreements" in legislation setting out the conditions for waiver of statutory employment rights.

2. TUPE: update on planned reforms; ECJ applies 'static approach' to terms set by collective agreement

  • The Government has published its response to the consultation on proposed reforms to TUPE. The original plans were to bring the reforms into force in October 2013, but the timetable has slipped and the Government now intends to lay new regulations before Parliament in December 2013 and bring them in to force in January 2014.  The headline change to the original proposals is that the provisions applying TUPE to service provision changes (ie, outsourcing, changes of contractor, and insourcing) are to be retained.  Further details are set out in our blog.  
  • A TUPE transfer operates to transfer employees on their existing employment contracts. However, where these contracts provide for pay or other terms to be set by collective agreements negotiated by the transferor employer and union, and the transferee has no possibility of participating in these negotiations, the ECJ has ruled that the pay or other rights are frozen at the time of the TUPE transfer. The transferee is not bound by any changes agreed by the transferor post-transfer in this situation. See our blog for further details. (Parkwood Leisure v Alemo-Herron, ECJ)

3. Discipline/grievances: employees can choose 'unreasonable' companion

The EAT has ruled that employees exercising the statutory right to be accompanied at a disciplinary or grievance hearing are entitled to have present whomever they choose, provided the individual is a relevant union representative or work colleague. Employers cannot refuse a particular companion on the grounds that their presence is unreasonable. The requirement that a request to be accompanied is 'reasonable' does not extend to the identity of the companion.

The ruling contradicts the relevant Acas Code of Practice and is surprising given that a particular choice of companion might be unreasonable due to a conflict of interest or because their presence might prejudice the hearing. However, the maximum compensation for breach of the right to be accompanied is two weeks' pay (subject to the statutory weekly pay cap) and, in this case, only nominal compensation was due, as the employee suffered no detriment (another companion attended). (Toal v GB Oils, EAT) 

4. Holiday: right to carry over can be limited to 4 week EU-derived entitlement

Recent ECJ case law has established that workers unable to take statutory holiday due to sickness must be permitted to carry over their unused entitlement at the end of the holiday year. There has been uncertainty as to whether this applies only to the EU-derived minimum 4 weeks' holiday, or also to the additional 1.6 weeks' statutory holiday provided under UK regulations. The EAT has now ruled in favour of the former. UK regulations do not need to be construed to permit carry-over of the additional 1.6 weeks in these circumstances, so that entitlement will be lost unless the individual has a contractual right to carry over. (Sood Enterprises v Healy, EAT)

5. Statutory holiday pay: overtime pay must be taken into account

Voluntary overtime pay should be taken into account when calculating statutory holiday pay for a worker's 4 week EU-derived holiday entitlement, notwithstanding that UK regulations exclude this.

An Employment Tribunal has ruled that the relevant UK provisions can be interpreted purposively to comply with EU law requiring the payment of "normal remuneration" reflecting both basic salary and remuneration "intrinsically linked to the performance of the tasks" carried out under the employment contract (see BA v Williams). An appeal has been lodged. (Neal v Freightliner Ltd, ET)

6. Business emails: employer entitled to copies held on employee's home computer

The Court of Appeal has ruled that an employer is entitled to require a current or former employee or other individual working for it to produce business emails stored on their personal computer or other devices, for inspection and copying. This is a necessary incident of the agency-principal or employment relationship and there is no need for the company to assert ownership of the emails.  (Fairstar Heavy Transport NV v Adkins, CA)

7. New legislation: tribunal rules and fees, unfair dismissal compensation, employee shareholders

  • New employment tribunal rules came into force on 29 July 2013. Employers need to be aware of some important changes, which will affect how claims are handled and the opportunities for settlement. Tribunal fees were also introduced on this date, subject to the outcome of two judicial review applications. Our briefing discussing the main changes and their impact for employers is available here.
  • From 29 July 20123, the upper limit on the unfair dismissal compensatory award was varied to the lower of 52 weeks' pay and the annually fixed limit (currently £74,200). The new limit will apply only to cases where the effective date of termination is on or after 29 July 2013.
  • On 1 September the new "employee shareholder" status came into force. Guidance has been published by BIS and HMRC.

8. New consultations: whistleblowing, childcare

  • The Government has published a call for evidence on the current whistleblowing legislation. It is seeking views by 1 November 2013 as to whether changes are required to ensure that whistleblowers are adequately protected and that workers are not discouraged from coming forward about wrongdoing.
  • The Government is consulting until 14 October 2013 on its proposed new tax-free childcare scheme.

9. New resources