Welcome to the next in our series of quarterly round ups on developments in employment law.

Case law developments

Unfair dismissal

Calculating notice

The "effective date of termination" (EDT) is all important for calculating whether an employee has enough continuous service to bring a particular claim and whether the claim has been presented within the required time limit. Where employment is terminated by notice, the EDT is "the date on which the notice expires". On the face of it, a straightforward statement. However, every year we seem to have more cases.

In Wang v University of Keele, on the evening of 3 November Dr Wang received an email, which he opened and read, giving him three months' notice of termination of his employment. On 4 November he also received a letter by post restating the termination but adding that he would only be paid up until 2 February.

Dr Wang issued tribunal proceedings on 2 May. The University defended on the basis the EDT was 2 February and, therefore, his claim was one day out of time. It argued that notice began on 3 November (date of e-mail) and, in any event, the employment had ended on 2 February (last day for which he was paid).

The Employment Appeal Tribunal (EAT) disagreed. In a comprehensive review of authorities, they decided that the legal principle in relation to verbal notice applies equally to written notice: notice starts to run on the day following the day that notice is given, the law takes no account of fractions of a day. The EAT agreed that notice was given on 3 November (date e-mail read) but that meant that notice did not start to run in this case until 4 November with the result that the EDT was 3 February (the period of three months includes the EDT itself) with the corresponding statutory limitation period ending on 2 May. In any event, the unilateral decision by the University to pay him only until 2 February did not make that date the EDT. In the e-mail, the University had given three months' notice not three months less one day.

Lesson: unless the employment contract clearly provides otherwise, contractual notice, whether oral or written, runs from the day after notice is given.

Uncertain immigration status

In 2008 a criminal offence of "knowingly employing" and a civil penalty of up to £10,000 per illegal worker for "negligently employing" someone without permission to work in the UK were introduced. These sanctions were introduced amongst much media hype and promises of tough enforcement. In light of the sanctions employers are well advised to check the immigration status of their staff. In Kurumuth v NHS Trust North Middlesex University Hospital, that is exactly what the Trust attempted to do. Unfortunately getting a clear answer out of the UK Border Agency (UKBA) proved difficult, so what was the Trust to do?

In this case, Ms Kurumuth came to the UK in 1992 with a work permit, but was refused further leave to remain in 1997. On appeal, the Home Office sent her a letter stating that she was entitled to continue to take on paid work until her appeal was determined, but her appeal remained unresolved for many years. After the introduction of a new system in 2008, the Trust was no longer happy with this letter as proof of her immigration status. The Trust made enquiries with the UKBA about Ms Kurumuth's immigration status, but a clear response could not be elicited. The Trust believed it had no choice but to conclude there was no evidence that Ms Kurumuth had any right to work in the UK and dismissed her without notice on 29 January 2010. Ms Kurumuth brought several claims in the employment tribunal including unfair dismissal.

The tribunal found that the manner of dismissal was procedurally unfair. However, it made a 100% Polkey reduction in relation to the compensatory award which reduced Ms Kurumuth's compensation to nil.

On appeal, the EAT rejected Ms Kurumuth's argument that the tribunal should have decided she was entitled to work in the UK: that was a matter for the Immigration and Asylum Tribunal to determine. The Trust had a genuine reason for her dismissal. The Trust had taken reasonable steps to investigate; considered all of the available documentation, and made enquiries with the UKBA. UKBA had failed to provide a clear statement on her immigration status. Consequently, the Trust formed a genuine belief that she was not entitled to work.

Lesson: this decision suggests that it is reasonable for employers to err on the side of caution to avoid tough penalties for employing illegal workers.

The Facebook generation

Social networking sites are increasingly a feature in employment disputes. In Preece v JD Wetherspoons plc the Liverpool employment tribunal found that a pub manager was fairly dismissed for gross misconduct after she made inappropriate comments on Facebook about two customers, who had verbally abused and threatened her. Her employer was entitled to take the view that the conversation on Facebook, which took place while she was at work, did not reflect her upset or anger at the customers, but seemed more like a joke between friends. It did not matter that she thought her privacy settings meant only close friends could see her entries. In fact a wider audience was able to view her Facebook page, including the daughter of the customers in question. As a result, the manager was found to be in breach of the employer's e-mail and internet policy, which specifically referred to employees' use of social media such as Facebook.

Lesson:

  • For employers, the importance and usefulness of having a properly drafted policy regarding the use of social media.
  • For employees, take care if using Facebook or similar social media as a way of venting frustration about work.

Negligent misstatement

Be careful of what you say

It has been long established that if a former employer provides a reference then it has duties towards the subject of that reference to take reasonable care to ensure the information contained is true, accurate and fair. Failure to do so could result in claims including defamation, malicious falsehood, negligent misstatement and/or discrimination.

However, provision of a reference is not the only way a former employer may find themselves liable in damages for negligent misstatement about a former employee. In McKie v Swindon College the High Court has found an ex-employer liable to one of its former employees in the tort of negligent misstatement for careless, fallacious comments it made about him in an e-mail to his then employer, which led to his dismissal.

Mr McKie worked for Swindon College from 1995 to 2002. When he left to take a position at another college he was given an excellent reference. In May 2008, he accepted a position with the University of Bath which involved overseeing degree courses at further education colleges. Mr McKie's new job involved his liaising with and visiting those colleges, including Swindon College. On 5 June 2008, the new HR director at Swindon College sent an e-mail to the University of Bath stating:

"We would be unable to accept Rob McKie on our premises or delivering to our students... we had very real safeguarding concerns for our students and there were serious staff relationship problems during his employment at this college. No formal action was taken against Mr McKie because he had left our employment before this was instigated. I understand that similar issues arose at the City of Bath College."

Owing to this e-mail, the University of Bath dismissed Mr McKie. Mr McKie sued Swindon College in the tort of negligent misstatement.

Having heard the evidence, including that of several of Mr McKie's former colleagues, the High Court judge found that during his time at Swindon College, Mr McKie was a "well-regarded, highly respected member of staff" and the contents of Swindon College's e-mail were "largely fallacious and untrue". The author had no personal knowledge of Mr McKie and based it on unsubstantiated comments by one former colleague whose own evidence was that his comment "in no way" justified the contents of the e-mail. The procedure adopted at Swindon College in respect of the e-mail was described by the judge as "slapdash, sloppy, failing to comply with any sort of minimum standards of fairness". In addition, for the HR manager to dismiss the contents of Mr McKie's personnel file (which recorded promotions and indicated no complaints) as of no great relevance was "just plain wrong".

Regardless of the above findings, Swindon College would only be liable in the tort of negligent misstatement if it had owed Mr McKie a duty of care. The judge found that the damage Mr McKie suffered as a result of the e-mail was "eminently foreseeable". Also, while six years had elapsed since the end of Mr McKie's employment with Swindon College, it had itself brought about the necessary degree of proximity by purportedly relying on information concerning that employment.

The judge expressed the view that, in dismissing Mr McKie, the University of Bath had also acted unfairly as the University should have enquired further about the alleged problems that Swindon College had experienced. However, Mr McKie did not have the requisite continuous service to bring an unfair dismissal claim in an employment tribunal.

Lesson: more haste, less speed when acting on gossip.

Discrimination

Refusing time off to pray at Mosque objectively justified

Many religious discrimination claims stem from requests for time off for religious days of rest and/or to attend prayers. Broadly, where an employer seeks to prevent an employee from taking time off to pray, or requires the employee to work on a religious day of rest, this may amount to indirect discrimination unless the employer can show the requirement is objectively justified.

The case of Cherfi v G4S Security Services Ltd concerned a Muslim security guard. G4S had a contract to provide security for a site in Highgate where Mr Cherfi was employed. Under the terms of the security contract, G4S's client required all security officers to remain on site throughout their shifts including breaks. Consequently, Mr Cherfi was refused permission to travel to Friday prayers at a mosque in Finsbury Park at lunchtimes. However, there was a prayer room on site and Mr Cherfi was offered the option of working a Saturday or Sunday rather than Friday. However, he was not prepared to work at the weekend and wanted to attend congregational prayers, rather than use the prayer room.

The EAT upheld the tribunal's decision that while requiring Mr Cherfi to remain at work on Friday lunchtimes did place him at a disadvantage as a practising Muslim, it was objectively justified based on a number of factors:

  • The employer faced financial penalties or even loss of its contract with the client;
  • It was not feasible for G4S to restructure its shift patterns;
  • There was a prayer room on site; and
  • Mr Cherfi had been offered alternative work patterns which would have enabled him to attend the mosque around his work commitments.

Having carried out the necessary balancing act, the tribunal was entitled to conclude that the employer's requirement was objectively justified.

On a wider point, Mr Cherfi argued that the employer's justification argument should not have succeeded as it was based only on cost considerations. The EAT rejected that the justification was based on cost alone, finding it was also based on operational needs. However, interestingly, if it had done so, the EAT would have taken "as correct" the view expressed in Woodcock v Cumbria Primary Care Trust, that cost alone might justify a policy, criterion or practice (PCP) provided that the normal proportionality test is met.

Lesson: the non-binding comment about the relationship between cost and justification is noteworthy. For some years, the "cost-plus" approach advocated in Cross (indirect sex discrimination case) was accepted as orthodoxy. However, this has now been called into question in Woodcock (direct age discrimination case) and now in Cherfi (indirect religious discrimination case), which might indicate a shift in judicial thinking.

This is an issue which will continue to arise. Further judicial guidance will hopefully be available at the end of the year/early 2012 as there are currently pending appellant level cases both domestically and from Europe. The Court of Appeal will hear the appeal in Woodcock on 31 October.

Paid "volunteer" not covered by discrimination law

Discrimination law applies to a broader category of individuals than that of employees for unfair dismissal purposes. It protects those who are in employment or applying for employment not only under a "contract of employment" but also those under a "contract personally to do work". Whether volunteers have protection under discrimination legislation has been the subject of a number of recent cases. Recently the Court of Appeal in X v Mid Sussex Citizens Advice Bureau held that an unpaid volunteer was not covered by the discrimination legislation.

In Breakell v West Midlands Reserve Forces' and Cadets' Association, the issue was whether a "paid" cadet force volunteer was covered by the definition of employment in the discrimination legislation. Mr Breakell's terms of service described his role as "voluntary youth worker" and provided that those in his role "may" be paid for attendance. The payment was not related to the number of hours worked, and was intended to compensate for the loss of other earnings on those days. On occasion, due to budgetary constraints, no payments were made for days attended.

The EAT held that the Cadet Force was under no contractual obligation to provide any work for Mr Breakell. Equally, Mr Breakell was under no contractual obligation to do any of the work provided. As such, it held that Mr Breakell was a volunteer and therefore not covered by discrimination legislation. Although the Cadet Force would normally pay an allowance "if" Mr Breakell did attend, that did not mean there was a contractual obligation to do work.

Lesson: there appears to be a fine line between a paid casual worker (who, once an assignment is undertaken, is generally obliged to perform it if they are not to be in breach of contract) and a volunteer, who is genuinely at liberty to work or not work at any time.

Mr Breakell is currently appealing to the Court of Appeal. Also, leave to appeal to the Supreme Court is currently pending in X v Mid Sussex Citizens Advice Bureau.

TUPE

Are rights under an inherited collective agreement static or dynamic? No resolution from the Supreme Court...

The long running saga of the transfer of rights derived from collective agreements continues. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) mean transferee employers inherit obligations under collective agreements, where these provide rights or benefits for the transferring employees. The issue is whether future amendments to rights under collective agreements are binding on the transferee employer and enforceable by the employees? Are these inherited rights "static" (i.e. crystallised as at the date of transfer), or "dynamic" (i.e. subject to change if the collective agreement is varied after the transfer without the input of the transferee employer, for example at national level)?

Clearly, the issue is very important to those dealing with transfers where the employees have collective agreements. This is particularly so in the public sector, where there are long-standing collective agreements negotiated at national level between public sector employers and trade unions.

The Supreme Court has recently handed down its much anticipated judgment on this issue in the case of Parkwood Leisure Limited v Alemo-Herron. Unfortunately, those who were hoping for a resolution of the issue will be disappointed, as the Supreme Court is now seeking guidance from the European Court of Justice before making a decision.

For more detail please see our alert "Are rights under an inherited collective agreement static or dynamic? No resolution from the Supreme Court..."

Legislative developments

New guidance

Agency workers

On 6 May the "final" version of the Agency Workers Regulations 2010 Guidance was published. Among other things, the guidance explains:

  • What arrangements fall outside the scope of the Regulations;
  • When the 12-week qualifying period for equal treatment is met;
  • What constitutes pay for the purposes of the Regulations;
  • When agency workers will be entitled to bonus payments.

However, at the beginning of June we had amendments to the final version with regards to:

  • Further clarification on the requirements as to "pay between assignments";
  • Removal of "one-off non-contractual bonus payments" from the definition of "pay", acknowledged by the Department for Business Innovation and Skills (BIS) as included by "mistake"; and
  • The removal of guidance for agency supply teachers, which is to be extended after consultation with the Department of Education and published "shortly".

It is currently unclear whether this will be a separate publication to the main guidance or reinserted. So keep your eyes out for the final, final, final version of the guidance. The latest version can be downloaded from the BIS website.

Remember, the Agency Workers Regulations 2010 are due to come into force on 1 October this year and are intended to ensure that:

  • After 12 weeks in a given job, agency workers will be entitled to equal treatment with direct hires on basic working and employment conditions;
  • From the first day of their assignment, agency workers will be entitled to information about vacancies in the hiring organisation. This will give them the same opportunity as other workers to find permanent employment and equal access to on site facilities such as childcare and transport services; and
  • Additional rights for new and expectant mothers.

Definition of disability

The new "Guidance on matters to be taken into account in determining questions relating to the definition of disability" under the Equality Act 2010 came into force on 1 May 2011. The new guidance is largely similar to the 2006 guidance but updated to reflect changes in the Equality Act and case law such as the removal of the list of capacities and the meaning of "likely". The guidance will be considered by a court or tribunal when deciding whether a person is disabled for the purposes of the Equality Act 2010.

A copy of the guidance can be obtained from the Office for Disability Issues website.

ISA on referrals

Employers must refer relevant information to the Independent Safeguarding Authority (ISA) so that it can identify those who pose a threat and bar them from working with vulnerable groups. This can include, for example, the dismissal or removal of someone working or volunteering in a regulated activity with children and/or vulnerable adults because they have harmed a child or vulnerable adult.

Pending the outcome of the review of the current Vetting and Barring Scheme by the Government, the ISA has published guidance on providing information to identify people who pose a threat and bar them from working with vulnerable groups under the existing scheme.

The guidance sets out the key elements of the referral process, when a referral should be made, the employer's legal responsibilities (including those in the voluntary sector) and the main points of relevant law.

The guidance is available on the ISA website.

Consultations

Consultation on modern workplaces

On 16 May 2011, the Government published its "Consultation on Modern Workplaces". In this "four for the price of one" consultation the Government sets out its proposals for changes to shared parental leave, flexible working, annual leave and equal pay audits.

  1. A new system of shared flexible parental leave

The Government is aiming to introduce a new system of parental leave in April 2015 to "give parents the freedom to make arrangements that suit their families and allow a balance between work and family commitments, while also meeting their responsibilities to their employers."

The proposals include retaining an 18-week "maternity leave" period reserved exclusively for mothers available to be taken in a continuous block around the time of the baby's birth. The remaining 34 weeks of the existing maternity leave and the current additional paternity leave periods will both be reclassified as "flexible parental leave". It will, subject to a possible four week exception, be up to the parents to decide how they wish to divide the 34-week period between themselves. It will be possible for the employee to agree with the employer to take the leave flexibly, for instance in blocks of time between which the parent returns to work and in blocks of days rather than weeks. This would allow a parent to return, for instance, on a part-time basis.

The existing right to unpaid parental leave up to the child's fifth birthday (18 if the child is disabled) will be incorporated into the new "flexible parental leave".

  1. Flexible working

The Government proposes to extend the right to request flexible working to all employees who have 26 weeks' consecutive continuous service. Employers will be allowed, but not required, to prioritise competing requests to take account of the employees' personal circumstances.

  1. Annual leave

The Government also proposed changes to the Working Time Regulations 1998 to take account of European Court of Justice case law that has established that workers unable to take their annual leave due to sickness absence, or maternity or paternity leave in the current leave year must be able to carry it forward into the following leave year. The Government proposes that:

  • Sickness absence: where a worker has been unable to take their annual leave due to sickness absence and it is not possible to reschedule the leave in the current leave year, employers may limit the ability to carry over annual leave to the first four weeks of statutory leave (regulation 13 leave). Employees will only be able to carry over the additional 1.6 weeks regulation 13A leave if the employer agrees.
  • Family leave: where a worker has been unable to take their annual leave due to absence on maternity, adoption, parental and paternity leave (and, in due course, to the proposed new flexible parental leave) they must be allowed to carry that leave over into the next leave year. This includes the whole of the 5.6 weeks statutory leave (both regulation 13 and 13A leave).
  • Generally: in relation to all employees, employers to be able to "buy out" the additional 1.6 weeks regulation 13A leave or require employees to defer that leave into the following leave year if this can be justified in terms of overriding business need.
  1. Equal pay audits

The Government is proposing to introduce new legislation that will require tribunals to order an employer to conduct a pay audit where that employer has been found to have discriminated because of gender in relation to pay matters. The tribunal would be obliged to order the audit unless satisfied that it would not benefit either the employer or its employees because:

  • An audit had been conducted in the last three years;
  • The employer has other appropriate means of ensuring a non-discriminatory pay structure e.g. clearly transparent pay structures; or
  • It would not be productive in the particular circumstances, for instance in the case of micro-employers or where the breach is not indicative of underlying structural pay inequalities.

The consultation runs until 8 August 2011. The Government aims to legislate on flexible parental leave, flexible working and equal pay "as soon as possible" in this Parliament. Secondary legislation to amend the Working Time Regulations is expected to be implemented sometime in 2012.

Announcements

Extension of employment law review

On 11 May 2011, the Employment Relations Minister, Ed Davey, detailed three further areas of employment law to be reviewed:

  1. Compensation for discrimination: compensation levels for cases of discrimination are unlimited and the government has taken on board employers' concerns that high awards may encourage people to take weak, speculative or vexatious cases in the hope of a large payout. The Government's professional services group, chaired by Sir Michael Snyder, is currently lobbying for a £50,000 cap for discrimination awards.
  2. Collective redundancy rules: clarification about what point consultation on redundancies should start or end is to be reviewed. In particular the Government is considering concern by employers in relation to the current 30/90 day requirements.
  3. TUPE: the Government is considering concerns that some provisions of TUPE 2006 are "gold plated" over and above what is required by the Acquired Rights Directive.

2012 bank holiday for Diamond Jubilee

Tuesday 5 June 2012 will be a bank holiday, to commemorate the Queen's Diamond Jubilee. The late May bank holiday will be moved to Monday 4 June, to allow for a four-day weekend of celebrations.

While an extra bank holiday sounds great for employees, check your contractual annual leave terms. When statutory annual leave was increased from four to 5.6 weeks, the increased entitlement was clearly intended to represent the eight existing bank holidays. However, it always remained the position that workers do not have a statutory right to take holiday actually on a bank holiday. Instead the number of paid annual leave days was generally increased. Accordingly, time off for bank holidays counts against a worker's annual holiday entitlement. As such the extra bank holiday does not necessarily mean an extra day is added to a worker's overall annual leave entitlement. Any right to time off or extra pay for working on a bank holiday depends on the terms of the contract of employment.

Suggestion of a lower wage for the disabled causes outrage

There has been outrage recently over a suggestion in the House of Commons that disabled people should be able to work for less in order to increase their chances of obtaining employment. Conservative MP, Philip Davies, made the suggestion that the national minimum wage (currently £5.93 p/h for workers aged 21 and over) was actually a hindrance to those with a disability. He said that employers were reluctant to employ a disabled person and pay them the minimum wage if they were unlikely to be as productive as other workers. Davies suggested that a disabled person should be able to choose to receive a lower wage initially in order to get onto the career ladder. The Government has made it clear that they do not share Davies' views, and disability charities such as Mind and Scope have called these suggestions "preposterous".

Although Davies' comments have caused widespread outrage and anger, they do highlight genuine concerns that too many employers are still choosing to employ a person without a disability over someone with a disability. A Scope spokesperson said that the suggestions "reveal a lot about how we value disabled people". Employers should be careful to ensure that they are not discriminating against disabled people and do not fall foul of the requirements within the Equality Act 2010 ("the Act").

A brief reminder:

  • Employers must ensure that they do not discriminate directly by treating an employee less favourably than others because of their disability, or by treating them unfavourably because of something arising in consequence of disability. This protection also extends to job applicants. So offering a disabled job applicant a lower wage than an applicant without a disability would be unlawful under the Act.
  • It is unlawful for employers to discriminate indirectly by applying a provision, criterion or practice that puts job applicants or employees with a shared disability at a disadvantage, without objective justification. In order to objectively justify the treatment or behaviour, an employer must show that it was a proportionate means of achieving a legitimate aim. For example, an employer may apply a particular practice in order to comply with health and safety requirements. It must demonstrate that the practice was "reasonably necessary" to achieve that legitimate aim. Actions will not be "reasonably necessary" if the employer could have used less discriminatory means to achieve the same objective.
  • The Act imposes a duty on employers to make reasonable adjustments to premises or working practices to help disabled job applicants and employees if, without that adjustment, they would suffer a substantial disadvantage. Failure to do so is unlawful discrimination. Reasonable adjustments could include: widening a doorway, providing a ramp, providing documents in Braille, altering working hours, allowing time off for treatment and providing special equipment. The reasonableness of an adjustment will be assessed with reference to the circumstances in each case, such as proportionality and the resources available to the employer.