Legislation

Since April 2012:

  • Witness statements to be taken as read in the employment tribunals.
  • Qualifying period for unfair dismissal claims increased from one year to two years. The government believes this will encourage economic growth by giving businesses more confidence when they consider taking people on.
  • Maximum tribunal costs awards increased from £10,000 to £20,000.
  • Deposit orders increased from £500 to £1000.
  • Judges to sit alone in unfair dismissal cases.

As from 1 October 2012, the National Minimum Wage was increased to:

  • Standard Adult Rate (21 and over) £6.19 per hour (previously £6.08)
  • Development Rate (age 18 to 20) remains at £4.98 per hour.
  • Young Workers Rate (under 18 but above the compulsory school age and not apprentices) remains at £3.68 per hour.
  • Apprentice Minimum Wage - £2.65 per hour (previously £2.60).
  • The Accommodation Offset - £4.82 per day (previously £4.73).

Cases

There have been a number of important cases in the last 12 months. We have picked the following as a sample of some of the key issues which have been through the tribunals and courts.

Religious Discrimination

The European Court of Human Rights has considered whether UK law provides sufficient protection for employees who wish to manifest their religious beliefs in the case of Eweida & Others v UK. The cases can be summarised as follows:

  • Ms Eweida worked for British Airways (‘BA’) and wanted to wear a cross in contravention of BA’s Uniform Policy.
  • Ms Chaplin worked as a geriatric nurse and also sought to wear a cross in contravention of her employer’s uniform policy.
  • Ms Ladele worked as registrar and was required to carry out civil ceremonies as part of her role. Ms Ladele was dismissed for refusing to carry out the ceremonies.
  • Mr McFarlane worked for Relate and refused to provide sexual counselling for same sex couples. Mr McFarlane was dismissed.

The right in question was Article 9 of the European Convention on Human Rights, namely the right to freedom of thought, conscience and religion, but a qualified right to manifest one’s religion or beliefs.

The only caveat to this right is that it is subject 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 for the protection of the rights and freedoms of others’.

  • Ms Eweida - The Court had to consider whether BA’s restriction contained in its Uniform Policy was proportionate. The Court found that BA had given too much weight to its desire to protect a specific image. The Court found that there was no evidence that a discreet cross would in anyway have a negative impact on the BA brand. Having found this, BA had clearly breached Article 9 by failing to protect Ms Eweida’s rights.
  • Ms Chaplin – although Ms Chaplin’s right to manifest her religion was important, the reason for asking her to remove her cross was for health and safety reasons as she worked on a hospital ward. As such, the interference by her employer was permissible, given the hospital were best placed to ascertain what health and safety steps were necessary.
  • Ms Ladele and Mr McFarlane – it was found that national authorities have a wide margin of appreciation when balancing different rights, and this had not been exceeded in either of these cases. The employer’s aim of acting in a way which does not discriminate against others was therefore found to be legitimate.

Age discrimination

The case of Seldon v Clarkson Wright and Jakes (a Partnership) considered the issue of compulsory retirement ages. The Supreme Court found that the compulsory retirement age of 65 was a directly age discriminatory measure but that it was capable of justification as the two broad aims of inter-generational fairness and preserving dignity of older workers may legitimately and proportionately have been met.

The case has been returned by the Supreme Court to the employment tribunal to consider whether the retirement age of 65 was a proportionate means of achieving a legitimate aim. To be heard 26 and 27 February 2013.

The case of Homer v Chief Constable of West Yorkshire Police considered whether the requirement of a degree for a position could be age discriminatory. Mr Homer argued that such a requirement put people of his age at a disadvantage. The Supreme Court held the requirement of a degree was potentially discriminatory and the case has been remitted to a tribunal to consider whether the discrimination could be justified.

In Woodcock v Cumbria Primary Care Trust the Court of Appeal held that the decision to dismiss as redundant the chief executive without proper consultation in order to avoid his qualification for an enhanced pension was not unlawful age discrimination as it could be justified.

The decision to dismiss without consultation was found to be a proportionate means of achieving a legitimate aim. The Court of Appeal did however, make it clear that costs savings alone, generally, would not suffice.

Holidays and sickness absence

Neidel v Stadt Frankfurt am Main  (2012) – The Court of Justice of the European Union (‘CJEU’) found in this German case that on retirement, a public servant is entitled to payment in lieu, if he has not, on account of sickness, been able to take all or part of the minimum paid annual leave of four weeks to which he is entitled.

However, national legislation may preclude the payment of an allowance in lieu as regards any possible additional entitlement to paid leave. This means that the additional 1.6 weeks entitlement under the Working Time Regulations 1998 would not have to be paid in lieu. The CJEU also found that a carry-over period of 9 months was not sufficient according to its recent case law.

In NHS v Larner the Court of Appeal held that an employee was entitled on termination of employment to payment for unused statutory holiday when they were on sick leave for the whole of the leave year. The Court of Appeal held that the employee’s failure to request holiday and failure to ask for it to be carried forward during the previous leave year did not mean that she lost the right to payment. The Court did state that the Working Time Regulations should be interpreted to comply with Article 7 of the Working Time Directive.

The Working Time Regulations 1998 are being reviewed with regard to annual leave carry over under the Modern Workplaces Consultation. The government have yet to give a response with regard to this part of the Consultation.

Redundancy

The case of Stirling v University and College Union sparked controversy when the Employment Appeal Tribunal (‘EAT’) found that the expiry of a fixed term contract did not amount to a redundancy but was instead a ‘reason relating to them as individuals’. Thus, the termination of the fixed term employees’ contracts in this case did not count for the purpose of collective consultation. This is a departure from previous thinking in this area and relates to the specific facts of this case.

Employment status

The Court of Appeal overturned the EAT in the case of Stringfellows Restaurants v Quashie. In this case the Court of Appeal found that the ‘lap dancer’ was not an employee of the club and so was not able to bring a claim of unfair dismissal. Although there was a degree of mutuality of obligation when the dancer was at the club, this was found to be insufficient to amount to an employment relationship.

The Transfer of Undertakings Regulations 2006 (‘TUPE’)

The EAT has considered what constitutes an ‘organised grouping of employees’ under TUPE in the case of Eddie Stobart Limited v Moreman and others. In this case the EAT upheld the tribunal’s decision that there was no automatic service provision change when a contract was outsourced from one contractor to another.

The EAT found that to fall within TUPE, employees must be organised by reference to the requirements of the particular client. The employees in this case spent the majority of their time working for a particular client, but were organised according to their shifts and not according to the requirements of that client.

The EAT found in the case of Meter U Limited v Hardy & Others that the replacement of transferring employees with limited company franchises was for an ETO (economic technical or organisational) reason, meaning that the dismissals were potentially fair as redundancies.

Terminating the employment contract

In the case of Geys v Société Générale London Branch the Supreme Court found that an employee’s contract of employment only terminated once they had received an unequivocal notice from their employer that the contract was immediately being terminated by way of a payment in lieu of notice clause.

The Court held that a contract only comes to an end once the employee elects to accept the repudiation (‘the elective theory’), which in this case was a few weeks later and resulted in a significant bonus payment falling due.

The case highlights the importance of drafting clear contractual terms and being clear when terminating the employment contract. The effective date of termination should be clearly identified when terminating an employee’s employment.