These Employment Law Updates are aimed at providing information on recent developments and what the regulatory changes mean for you in practice, in managing workplace issues on a proactive basis.
To achieve our objectives and to continuously improve the Updates, we would be pleased to receive feedback from you. Please e-mail any comments or suggestions which you may have relating to the Updates to [email protected]. We look forward to hearing from you.
- New compensation limits for dismissals on or after 6 April 2014
The limit on the amount of a week’s pay for statutory redundancy and the basic award for unfair dismissal will increase from £450 to £464. Similarly the maximum compensation award for unfair dismissal goes up from £74,200 to £76,574 subject to the cap of one year’s salary whichever is the smaller. Guaranteed pay also rises to £25 a day.
- Early conciliation of Tribunal claims
With effect from 6 April 2014 Claimants will now need to contact ACAS to explore possible conciliation before issuing a Tribunal claim. The new provisions apply to claims presented to a Tribunal on or after 6 May 2014 but individuals can contact ACAS for conciliation and present a claim before that date. Any pre-claim or post claim conciliation that ACAS has started before 6 April can also continue.
This new procedure is different from the current ACAS conciliation which has been relatively successful. This new mandatory procedure requires a prospective claimant to send certain information to ACAS. After an early conciliation support officer has made initial contact with the prospective claimant and confirmed that they wish to proceed the claimant’s information is sent to a conciliation officer who must then try and promote a settlement within a prescribed period with the prospective respondent. If a settlement is not reached or because the period expires the conciliation officer will then issue a certificate to that effect. A prospective claimant will be unable to pursue most Tribunal claims without this certificate.
Prospective claimants will not have to provide any information on the nature of their claims on the form and there is no obligation to engage in actual conciliation so the chances of the parties reaching a settlement are not high. The clock will stop for limitation purposes beginning with the day when the prospective claimant contacts ACAS and ending on the day when they receive the certificate from ACAS. The conciliation officer must endeavour to promote a settlement between the prospective parties for up to 1 calendar month and a one off extension for up to a maximum of 14 days is allowed if there is a reasonable prospect of achieving a settlement.
- Discrimination questionnaire abolished
The statutory discrimination and equal pay questionnaire procedure under the Equality Act 2010 is abolished with effect from 6 April 2014. ACAS has produced a non-statutory guidance addressing how individuals should ask questions regarding discrimination and equal pay and how employers should respond which you can find here.
The Guidance sets out six steps to follow when requesting information in a discrimination context which echo the current prescribed questionnaire form. For equal pay there are only 3 steps for a questioner to follow. There is no direct penalty for breach of the guidance. However, a Tribunal may look at whether an employer has answered questions and how it has answered them as a contributory factor in making its overall decision on the questioner’s discrimination.
Many employers responded to questionnaires to avoid an adverse inference being drawn in any subsequent discrimination claim. Employers may therefore want to continue to do so.
- Same-sex marriage
Same-sex marriage is now permitted in England and Wales with effect from 29 March 2014, when marriage of same-sex couples with have the same legal effect as a marriage of an opposite sex couple. This means that any reference in law to marriage or connected terms such as “spouse” will apply equally. The legislation will give surviving same-sex spouses similar occupational pension rights to civil partners, but only in relation to pensionable service on or after 5 December 2005, although this limit is under review.
- New rates of statutory maternity pay and sick pay and sick pay records
With effect from 6 April 2014 the statutory weekly sick pay will increase to £87.55 and maternity pay, ordinary and additional paternity pay and adoption pay will rise to £138.18 per week.
The Percentage Threshold Scheme to enable employers to claim statutory sick pay from HMRC where the total SSP paid in a month excess 13% of employers class 1 NICs for that month is to be abolished with effect from 6 April 2014.
Employers are no longer required to maintain statutory sick pay records of employee’s sickness absence and payment of their statutory sick pay from 6 April 2014. Employers will be free to keep records in the best method for their business. Previously an employer had to maintain a record of employer’s sick leave days paid and sick pay not paid, the reasons therefor and qualifying days for 3 years.
- Right to request flexible working
The new rules for flexible working requests will be implemented by 30 June 2014, missing the original target of 6 April by nearly 3 months. However now is the time for employers to start thinking about putting policies in place to be able to support or refuse a flexible working request without raising discrimination issues.
ACAS has produced a useful detailed guidance on handling requests to work flexibly which you can find here.
There is a new duty to deal with the request in a “reasonable manner”. Care in responding to such request is paramount given the potential risks for employers.
- Rehabilitation of offenders
Changes to the Rehabilitation of Offenders Act 1974 came into effect on 10 March 2014. This was part of the government’s plan to reduce reoffending by helping offenders get back into work.
Under the reforms the rehabilitation periods will change as follows for custodial sentences:
- For a sentence of six months or less – the current rehabilitation period of seven years from date of conviction becomes the period of sentence plus a ‘buffer’ period of two years.
- For a sentence of six to 30 months – the current rehabilitation period of 10 years from date of conviction becomes the period of sentence plus a ‘buffer’ period of four years.
- For a sentence of 30 months to four years – previously never spent becomes the period of sentence plus a ‘buffer’ period of seven years.
- For a sentence over four years – as previously, is never spent.
There are changes in non-custodial sentences too:
- For a Community Order (and Youth Rehabilitation Order) – the current rehabilitation period of five years from date of conviction becomes a ‘buffer’ period of one year applying from the end of the sentence.
- For a fine – the current rehabilitation period of five years becomes one year.
- For an absolute discharge – the current rehabilitation period of six months becomes none.
- For a conditional discharge, referral order, reparation order, action plan order, supervision order, bind over order or hospital order – the current rehabilitation period varies, but is mostly between one year and the length of the order, and this becomes the period of the order.
- Shared parental leave – new regulations
Provisions for shared parental leave and pay will apply for babies due or adopted on or after 5 April 2015. If a mother wishes to bring her maternity leave and pay to an end early, eligible parents can share the balance of up to 50 weeks of leave and 37 weeks of pay equally. Draft Regulations have now been published for consultation, but they are complex to say the least and there will be considerable implications for workforce planning.
- Minimum wage rates
The new minimum wage rates have been confirmed. The adult rate will rise to £6.50 an hour with effect from 1 October 2014. For 18-20 year olds the rate rises to £5.13 an hour. The Government accepted the Low Pay Commission’s recommendations for these increases.
At the same time, the Government has also published two sets of regulations increasing the maximum penalty for employers who fail to pay their workers the national minimum wage to £20,000 which came into force on 7 March 2014. The Government wants to introduce legislation as soon as possible so that the maximum penalty can apply in respect of each underpaid worker.
- Deferred Prosecution Agreements
The Serious Fraud Office and the Crown Prosecution Office have now published their final version of their joint code of practice on when Deferred Prosecution Agreements may be negotiated. Deferred Prosecution Agreements (DPA) offer businesses a negotiated resolution which avoids the consequences of a criminal conviction. Companies do not have the right to engage in the processes, as the decision to enter into a DPA rests wholly with the prosecutor. Nor is an invitation to enter into discussion a guarantee that an agreement will be offered. Employers need to remain vigilant about their bribery, fraud and money laundering risks and ensure that their policies and procedures are regularly reviewed and updated. It is only by detecting possible offences before others do that proactive measures can then be taken to minimise the risk of a prosecution. For more information on the code of practice please click here. Where there is no effective compliance programme in place it is more likely the prosecutor will decide that a prosecution of the Company is in the public interest.
- Breastfeeding in the workplace
ACAS has published its guide to assist employers and employees with managing requests to breastfeed in the workplace. There are examples of good practice for employers. A copy is available here or a direct link from here.
- Post-employment victimisation
Jessemey v Rowstock Ltd and another  EWCA Civ 185
In this case the Court of Appeal overturned the EAT decision and held that post-employment victimisation is proscribed by the Equality Act 2010 and that the failure of s.108 of the Act to prohibit post-employment victimisation was a frank drafting error. The Appeal Judges took into account the context of the Act, the law on post-employment victimisation at the time it was drafted, the wording of the explanatory notes of the Act and the obligations under EU law for the Act to provide protection against such victimisation in reaching its decision.
S.108 protects former employees from post-employment discrimination and harassment but it did not expressly protect against post-employment victimisation. The Court considered that rather than draft an amendment to the Act the simplest course would be to insert the words “in this sub-section, discrimination includes victimisation” at the end of s.108(1), to give effect and the EU obligations.
By way of background Mr Jessemey was dismissed by his employer R on the ground of retirement and he brought age discrimination and unfair dismissal claims. Shortly afterwards R provided an unfavourable reference to an employment agency for Mr Jessemey. As a result, he brought a victimisation claim. The employment tribunal accepted that the reason why R had provided the unfavourable reference was that Mr Jessemey had brought discrimination proceedings against it. However his claim could not succeed because s.108 did not prohibit post-employment victimisation. Mr Jessemey appealed and the Equality and Human Rights Commission intervened on his behalf. The EAT however held that while it was unlikely that Parliament had intentionally failed to provide protection against post-employment victimisation the wording in s.108 did just that. Mr Jessemey appealed to the Court of Appeal where he was finally successful. His claim will now be remitted to the Tribunal for an assessment of compensation for his automatically unfair dismissal and age discrimination claims as well as victimisation.
Key point: This clarification is to be welcomed given the earlier uncertainty. There was no rational basis for treating post-employment victimisation differently from post-employment discrimination and harassment.
- Collective redundancy consultation – establishment test referred to ECJ
USDAW v Ethel Austin Ltd (in administration) and another UKEAT/0547/12; 0548/12
The Court of Appeal has now sent to the European Court of Justice a request for clarification of what constitutes an “establishment” for collective consultation purposes after a late but successful appeal by the Secretary of State. In the EAT, reversing the decision of the Employment Tribunal, it was held that establishment in the context of the obligation “to inform and consult where an employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less” meant the whole of the employer’s business not just each individual business. A decision is not expected for many months. In the interim, employers are faced with uncertainty as to the best approach where 20 or more dismissals are proposed within 90 days anywhere in the business. The approach should be to proceed on advice, but to consider at least consulting with all affected employees to observe the statutory information and consultation obligations as a minimum.
- No exemption for foreign sovereign states
United States of America v Nolan (No. 2)  EWCA Civ 79
The Court of Appeal has upheld the decision of the EAT that s.188 of the Trade Union Labour Relations (Consultation) Act 1992 does not contain any special implied exemption for foreign sovereign states from the obligation to consult about collective redundancies with their UK employees. The USA had not claimed state immunity at the outset of the case nor relied on any “special circumstances” defence (that consultation was not reasonable or practical).
The case concerned the closure of a US Army base in Hampshire. Following the decision to close the base, management informed and consulted with the representatives of the civilian employees and then gave 200 employees notice of dismissal. Mrs Nolan sought a protective award arguing that there had been no consultation over the decision to close the base and was successful. As the strategic decision had already been taken to close the base, the Tribunal held that it was no longer possible to have meaningful consultation about avoiding mass redundancy dismissals.
Just before the remedies hearing the USA raised the question of whether the Tribunal had jurisdiction to make a protective award given its state immunity. The Tribunal held that as the USA had already submitted to the jurisdiction of the Tribunal it had power to determine matters before it. The Tribunal ordered the USA to pay each of the redundant employees 30 days’ pay. The USA appealed and they lost before the EAT so appealed to the Court of Appeal on the same point. The Court of Appeal referred the matter to the ECJ who confirmed it had no jurisdiction to answer the question as civilian staff working on military bases were covered by the exclusion in the Directive for employees of public administrative bodies and the employees fell within that exclusion.
The case is now back before the Court which will still have to decide the final key point namely whether the obligation to consult collectively arises when an employer is proposing to make a strategic, business or operational decision that will foreseeably lead to collective redundancies or only once the employer has made that strategic decision and is proposing consequential redundancies.
- Civil partners’ pensions
Innospec Ltd and others v Walker  UKEAT 0232/13/1802
The EAT in this case held that Mr Walker’s employer had not directly discriminated against him in refusing to provide a full spouse’s pension in relation to his service accrued before 5 December 2005 as discrimination was not prohibited by the Equal Treatment Framework Directive before Mr Walker was a member of Innospec’s pension scheme. He retired after 23 years in 2003, receiving a pension around £85,000 a year. He had lived with his partner before retirement and they entered into a civil partnership in January 2006. Had Mr Walker had a wife, she would have been entitled to a 2/3s pension on his demise but because his service occurred entirely prior to the coming into force of the law prohibiting discrimination on the grounds of sexual orientation, his partner could only hope for a survivor’s pension of around £500 per annum. The Directive did not require the prohibition on sexual orientation discrimination to be implemented retrospectively so it was legitimate for the Equality Act 2010 not to provide a remedy for discrimination occurring before 5 December 2005 when the Civil Partnership Act 2004 came into force.
Key point: For the moment pension scheme trustees can now provide pensions for surviving civil partners based on the period of the member’s service after 5 December 2005.
- Unison’s challenge to fees in Tribunal
The High Court dismissed Unison’s challenge to the introduction of fees in the employment tribunals. Unison had challenged the lawfulness of the introduction of the fee regime on 4 grounds, including the EU principle of effectiveness, public sector equality duty and indirect discrimination. The Court considered that the case had been brought prematurely and there was insufficient evidence to overturn the fee regime.
The Court recommended that it would be more satisfactory for Unison to wait and see and hold the Lord Chancellor to account should his optimism as to the fairness of this fees regime prove unfounded. The Government may have to revise the fees regime if future statistics support Unison’s argument that they are having a substantial deterrent effect. Given the evidence of the reduced number of claims, the introduction of fees has had a significant impact. The Lord Chancellor has also opined that a successful claimant should expect to recover the fees they have paid from the Respondent. However there is no formal provision for this in the EAT rules as yet.
- Chain of email correspondence
Norbrook Laboratories (GB) Ltd v Shaw UKEAT/0150/13
Mr Shaw who managed the team of sales persons emailed Norbook’s health and safety manager twice when there was a period of heavy and widespread snowfall as he wanted to know if there was a policy for driving in snowy conditions and formal guidance for his team who were required to drive in these hazardous conditions. He was told that there was no guidance or policy. A few days later he emailed HR reiterating the dangers of driving in the snow and repeating his previous requests for guidance.
Mr Shaw was subsequently dismissed by Norbrook and he brought claims for automatic unfair dismissal and detriment on the grounds of making a protected disclosure. (He had insufficient service to claim ordinary unfair dismissal.) The Tribunal considered that the emails amounted to a qualifying disclosure taken together even though they were not individually a qualifying disclosure. Norbook appealed the decision but were unsuccessful. Although Mr Shaw’s latest email had been sent to HR the Tribunal had not erred in considering the email correspondence as a whole. He was communicating information not expressing his opinion as to a danger to health and safety. As Mr Shaw had referred in his email to the earlier communications HR could not have been in any doubt about the danger of the driving conditions. His email correspondence was capable of amounting to a qualifying disclosure and his case will now proceed to a full hearing.
Key point: Separate correspondence need not be sent to the same recipient where the earlier correspondence is clearly embedded in it to amount to a qualifying disclosure. A different conclusion might have been reached if the recipient had been unaware of the earlier communications. Employers should now look at the totality of comments made by an employee and not each one in isolation.
- Knowledge of protected act
Anastasiou v Western Union Payment Services  UKEAT 0135/13
A was interviewed by F on behalf of Western Union in relation to another employee’s complaint about the accuracy of information being disclosed to investors and potential investors in relation to Western Union’s performance and prospects. A expressed similar concerns about the prospect of Western Union meeting performance targets. After the investigation F circulated his report to a very limited circle. The conclusions of that report were not known amongst Western Union’s senior management.
A was later dismissed for fraudulent expenses claims. He brought claims of automatic unfair dismissal and ordinary unfair dismissal. The Tribunal found that he had made a qualifying whistleblowing disclosure. However, on appeal by Western Union the EAT held that the Tribunal had failed to demonstrate how it concluded that A’s protected disclosure materially influenced Western Union’s treatment of A because there was no finding of fact in respect of any of the detriments he suffered that the individuals involved in his ultimate dismissal had any knowledge of his protected act. A’s claims were therefore dismissed.
Key point: The question for a Tribunal is whether the potential disclosure had materially influenced that individual in their treatment of a Claimant. There has to be a link and not just an inference.
- Payment not required for unused flexi-hours at termination
Vision Events (UK) Ltd v Paterson UKEASTS/0015/13
Mr Paterson worked for Vision. Vision operated a flexi-hours scheme whereby Mr Paterson was entitled to take paid time off in respect of extra hours already worked. However, the contract of employment and the handbook were silent as to the treatment of unused flexi-hours when an employee left.
Mr Paterson was made redundant and Vision offered to pay him for some of his hours but not all of them. He claimed that he was entitled to be paid an hourly rate for all flexi-hours. He had by then accrued 1,042.84 hours. Mr Paterson brought a claim in the Tribunal for inter alia unauthorised deduction from wages. As there was no express term in his contract of employment as to how flexi-hours would be dealt with at termination the Tribunal was not persuaded that this effectively meant that he had to forfeit those hours or take some of his flexi-time during his 7 week notice period. The Tribunal therefore implied a term into his contract that payment would be made for accrued flexi-hours and Vision were ordered to pay him £12,514.
Vision successfully appealed to the EAT alleging that there was no implied term that flexi-hours should be paid for and the fact that Vision were prepared to make a goodwill payment in these circumstances was not a concession that there was a legal requirement for them to pay for the flexi-hours. Vision were entitled to require that Mr Paterson use up some of his flexi-hours during his notice period. Implied terms will only be required where it is necessary for business efficacy or if both parties would have said that such a term was agreed between them. That was not the case here and the majority of the EAT agreed with Vision. The EAT was also unanimous that Vision was entitled to require Mr Paterson to use up his flexi-hours during his notice period.
Key point: Employers should ensure, when drawing up employment contracts that the terms of any flexi-hour scheme are clear and state how these hours will be dealt with on termination. Employees should also be required to manage their accrued hours to avoid a significant build up as in Mr Paterson’s case. This will avoid disputes of this kind.
- Sex discrimination
- Burden of proof
The Solicitors Regulation Authority v Mitchell UKEAT/0497/12
Mrs Mitchell and her male colleague were permitted to work from home on certain days each week to facilitate their childcare arrangements. Once Mrs Mitchell’s children reached school age her right to work from home was revoked by the SRA although she was offered the facility of working more flexible working hours. The SRA’s explanation for her less favourable treatment was rejected by the employment tribunal. The SRA failed to show a non-discriminatory reason for its treatment of Mrs Mitchell. The Tribunal inferred, in the absence of a satisfactory explanation, a discriminatory reason for the less favourable treatment, finding that Ms Chambis, Mrs Mitchell’s manager had given a false explanation for the less favourable treatment which constituted something more than a difference in treatment and therefore the Tribunal were entitled if not bound to conclude that Mrs Mitchell had suffered discrimination. The SRA appealed.
The issue in the case was not whether Mrs Mitchell’s manager was able to revoke the agreement about her working at home but why she did so. In sex discrimination claims the Claimant has to show “something more” than a mere difference in protected characteristic coupled with less favourable treatment as compared to a comparator before he or she crosses the threshold of establishing facts from which a Tribunal could in the absence of an adequate explanation infer a discriminatory reason for the unreasonable treatment and reverse the burden of proof. In this case, not only was the SRA’s explanation false which was not just a question of Mrs Chambis’ credibility but that there was no other explanation for the less favourable treatment which led to the conclusion that the SRA had discriminated against the Claimant. The EAT held that the Tribunal’s finding was clear and correct and justifiable on the facts.
Key point: Once a prima facie case of discrimination has been established the burden of proof shifts to the employer. Inadequate, false or frankly unbelievable explanations will lead to an inference of discrimination.
- Disability discrimination – reasonable adjustments and time limits
Jobcentre Plus v Jamil UKEAT/0097/13
Ms Jamil worked for the Jobcentre in Ealing which was an hour away from her home. In November 2010 she became disabled with rheumatoid arthritis and she asked to transfer to Jobcentre’s Uxbridge office which was closer to home. Although a reasonable request this was refused, as there was apparently no vacancy at the Uxbridge office. She brought a claim arguing that Jobcentre had discriminated against by failing to make the reasonable adjustment of transferring her work from Ealing to Uxbridge.
She was out of time for bringing her claim as more than 3 months had elapsed since Jobcentre had refused her request. However the Tribunal found that the Jobcentre had maintained a continued interest list on which it would record employees’ interests in transferring to a different office. This list together with a letter in which the Jobcentre allowed the possibility of a review of the decision showed that it was constantly monitoring the situation. As such there was no single refusal, but rather a continuing act within the meaning of 123 of the Equality Act 2010 and Ms Jamil’s claim was therefore in time.
The Tribunal found that the real reason why Ms Jamil had not been offered a transfer was because her husband worked in the Uxbridge office. Her claim succeeded and Jobcentre appealed unsuccessfully. As there was clearly no “end-stop, no once and for all refusal”, Jobcentre was obliged to consider throughout the remaining period of her employment how its duty should be discharged. This was a continuing duty which continued not to be honoured so Ms Jamil was still within the time limit for bringing her claim for failing to make a reasonable adjustment. The case was easily distinguishable from the Cast v Croydon College case.
Key point: If the employer acknowledges and admits that the duty to make adjustments is ongoing by agreeing to review the decision, there will be no cut off and the time for bringing a claim will be extended beyond 3 months.
- Harmonisation terms
Hazel & anor v Manchester College  EWCA Civ 72
In this case the Court of Appeal agreed with the Tribunal’s decision that two employees were unfairly dismissed when they refused to accept a pay cut as part of a harmonisation process following a transfer under TUPE. They were dismissed for an ETO reason connected with the transfer but this reason was not one which entailed changes in the workforce. This meant that their dismissals were automatically unfair. The Court rejected the College’s argument that the fact that redundancies had also been made as part of the harmonisation process should be taken into account to establish the changes in the workforce required for a fair dismissal. The Court also agreed with the Tribunal’s unusual decision that the employees should be re-engaged on the new terms but on their previous salaries to provide for pay protection.
After a TUPE transfer the College planned to make savings through 300 redundancies and by cutting the retained staff’s wages. The Claimants were no longer at risk of redundancy when the College had received enough volunteers for redundancy but they were then asked to sign a new contract which included a substantial pay cut. They were both dismissed for refusing to sign the new contracts. They each then agreed the new contract terms and continued working for the College but presented claims to an employment tribunal for automatic unfair dismissal. The College’s argument that the Tribunal had no jurisdiction to order re-engagement because they had already signed up to the new terms was rejected as misconceived. Although the redundancies and harmonisation were part of a single cost cutting package, that had no bearing on the question of what was the principal reason for their dismissals which was for refusing to sign the new terms. Harmonisation is not an ETO reason and the dismissals were automatically unfair.
Key points: An employee can be re-engaged on new terms if still employed by the employer. There was still an employment relationship in place when the old contract of employment was terminated. The principal aim of TUPE is to ensure that employees should retain their existing terms following a transfer.
- Pension Protection Regulations
Changes to the statutory protection that applies to employees’ pension rights under TUPE transfer are coming into effect as from 6 April 2014. After that date when a transferee employee intends to use a money purchase scheme or a stakeholder scheme to satisfy the pension protection requirements under a TUPE transfer it will be able to offer the option of matching the transferor employer’s level of employee contributions as an alternative to the current requirement of matching the employee’s chosen contribution rate up to 6%. These changes reflect the introduction of the employer auto-enrolment duties under the Pensions Act 2008 to prevent a situation where a transferee employer must pay a higher level of contributions than either the employee’s old employer or that required under the Act. Pension protection requirements in respect of defined benefit schemes have not been changed.
- Dual contracts
Under new rules effective from 6 April 2014 offshore employment income in a dual contract arrangement will be taxable in the UK. These new tax avoidance rules remove eligibility for the remittance basis of taxation for overseas employment income of non-domiciled individuals using separate employment contracts.
- Recovery of appeal fees from Respondent
Portnykh v Nomura International plc UKEAT0448/13
In this case the EAT ordered Nomura to pay all Mr Portnykh’s fees for bringing an appeal against certain case management decisions in his claim for unfair dismissal in which he was successful. As his appeal was successful but his fee remission application had yet to be decided, the EAT considered it could make a contingent order postponing payment by Nomura until the outcome of the fee remission application was known and making payment conditional upon the application being rejected. The EAT took into account the fact that Nomura had the means to pay Mr Portnykh’s appeal fee of £1,600 and had substantially lost on the appeal.
Key point: It is intended to be the general position that successful employee Claimants should expect to recover the fees he or she has incurred from the unsuccessful Respondent employer, although this is not yet provided for in the Regulations.
- Without prejudice discussions over reason for dismissal not admissible
Portnykh v Nomura International plc UKEAT0448/13
P brought proceedings against his former employer N complaining of automatic unfair dismissal by reason of having made a protected disclosure or disclosures. An issue arose at the pre-hearing review as to the admissibility of certain correspondence marked without prejudice. P contended that this material was not admissible in evidence but the employment judge ruled that it was. P appealed. Nomura’s case was that the reason for P’s dismissal was misconduct. After it proposed to dismiss him for misconduct negotiations commenced with P, his legal advisers and Nomura during the course of which it was alleged that P put forward the suggestion that the reason for dismissal should be stated to be redundancy and Nomura agreed to that course. Later, however, only after negotiations had broken down did P contend that he had been dismissed as a result of having made a protected disclosure.
Nomura’s position was that there was no dispute between the parties at the relevant time sufficient to justify the exclusion of the documents notwithstanding they had been marked without prejudice and subject to contract or in the alternative there was a specific factual situation which brought the case well within the known exception that excluding the material from consideration would result in unambiguous impropriety. Nomura claimed that if the without prejudice material was excluded P would be able to put forward an entirely distorted perspective as to the reason for his dismissal. The Appeal Tribunal held that consideration of the travelling draft of the Compromise Agreement amply illustrated the parameters of the dispute that had arisen. It was about money and it was about the reason for the termination. The Appeal Tribunal also held that the employment judge was wrong in suggesting Nomura would be disadvantaged by the exclusion of the evidence. The appeal was therefore allowed. The correspondence between Nomura and P marked without prejudice and the draft Compromise Agreement was not admissible as evidence in P’s automatic unfair dismissal claim for marking a protected disclosure.
Key point: The without prejudice rules should not operate as a cloak for perjury, blackmail or other unambiguous impropriety. However this last exception should be applied only in the clearest of cases of abuse of a privileged occasion.
- Summary termination
Knight v Robert Bates Wrekin Landscapes Ltd UKEAT/0164/13
K worked as a gardener for RBW. His contract listed 17 grounds on which his employment could be terminated without notice. Once such circumstance was theft of the employer’s or customer’s property and another was breach of the employer’s or customer’s security rules. RBW found a bag of bolts from the site at which he was working in K’s van. He was suspended and his explanation during the investigation was that he put it in the van and had forgotten to hand it in. He was dismissed without notice. He brought a claim for wrongful dismissal and was successful.
The employment judge accepted his explanation that he had simply forgotten to hand in the bolts. He was not guilty of theft but guilty of failing to comply with the requirement to obtain permission before removing the bolts off site. This was not deliberate because he had forgotten about the bolts. In the judge’s view this was not a fundamental breach of contract. RBW appealed. The issue before the EAT was whether the termination provision applied to any breach of security rules however minor. RBW claimed that they were entitled to dismiss K under the contract for a breach. There was no requirement for it to be a deliberate breach. The EAT held that under summary termination provisions it was important to apply general principles of contractual interpretation. To interpret the clause is giving RBW the right to dismiss for any breach of security however minor would be contrary to the normal principles of employment law.
Key point: The decision confirms that an employer cannot simply decide that an employee’s conduct amounts to gross misconduct if the deliberate and serious wrongdoing element is missing. Usually only gross misconduct or gross negligence will warrant summary dismissal. The case is also a reminder that summary termination clauses must be clearly drafted.
- Vicarious liability
Mohammed v Morrison Supermarket EWCA/Civ 2016
In March 2008 a customer visited Morrison’s supermarket in Birmingham. After an altercation at the service kiosk a Morrison’s employee - K - responded to the customer in an abusive fashion, followed him into the car park and subjected him to a serious attack.
The customer then sued Morrison’s claiming it was vicariously liable for K’s actions. The trial judge held that it was not liable and the Court of Appeal agreed. It was found that K carried out the attack purely for reasons of his own. There was no sufficiently close connection between the wrongdoing and his employment so it was not fair and just to hold Morrison’s vicariously liable. Although the employment of K by Morrisons provided the opportunity for the assault to occur, that was not sufficient as K’s duties did not include an element of keeping order over customers. His acts were beyond the scope of his employment.
Key point: There must be a sufficiently close connection between the wrongdoing and the employment so it is fair and just to hold the employer liable.
- No implied contract with end user for blacklisted agency worker
Smith v Carillion (JM) Limited and another UKEAT/0081/13
Mr Smith was an engineer and an active member of UCATT. He took on the roles of shop steward or health and safety representative on a number of building sites in which he was employed between 1997 and 2000. He was always engaged through employment businesses that provided his services to construction companies including John Mowlem. He claimed he had been blacklisted because of his trade union activities. When it later came out that John Mowlem had used the services of a consulting association which had maintained a secret blacklist of workers, he brought against John Mowlem for detrimental treatment on the grounds of trade union activities and activities of a health and safety representative. He was nevertheless unsuccessful because he was not employed by the construction company. He was left without a remedy even though he had suffered a genuine injustice. He appealed but the EAT agreed he had no claim. There was no contract between him and John Mowlem so there is no legal recourse for him.
Key point: An employment relationship will only be found to exist between an agency worker and an end-user where it is necessary to imply a contract of employment between them in order to give effect to the reality of that relationship. Since 2 March 2010 blacklists regulations have been in force making it unlawful for employers and employment agencies and others to compile or use a blacklist of trade union members for discriminatory circumstances, such as employment vetting.
- Costs award
Kapoor v Governing Body of Barnhill Community High School 2013 UKEAT/13
K brought complaints of discrimination, victimisation and harassment relating to her employment by the Barnhill school. The tribunal dismissed all her claims. On considering the application for costs by the school, which was made both on the basis that K’s case was misconceived and that the conduct of the proceedings was unreasonable, the tribunal accepted there was unreasonable conduct and awarded £8,900 against her. The tribunal said it took into account that it found K to have presented her case falsely. K appealed to the EAT against the costs award and was successful. The EAT held that the tribunal had fallen into error in directing itself without more to hold that to conduct a case by not telling the truth has to conduct a case unreasonably. The case had to be considered as whole. The case was remitted to the same tribunal for a further consideration on the question of costs.
- Discrimination liability for agents
Kemeh v Ministry of Defence 2014 AER 90
K was stationed in the Falklands in June 2010 as a British Army cook. Whilst there was subjected to two episodes of race discrimination. The first was by a civilian employee, A, who was a sub-contractor employed as a butcher to the employer, the MoD. The second was by a sergeant - S - his immediate line manager. On his return to the UK K commenced proceedings in the Employment Tribunal against his employer on the grounds that it was liable for the two discriminatory acts of A and S. It was accepted that abusive comments were made and that they constituted acts of direct racial discrimination. The MoD denied liability for the act of A since she was not in its employment. The Tribunal disagreed and awarded the employee £12,000 for injury to feelings. The MoD appealed and the award was reduced to £6,000. The employee appealed on the question of whether A was the agent of his employer but his appeal was dismissed. No question of agency arose. The employer could not be liable for A’s act of discrimination. The award was appropriate at £6,000 as it was a one off incident.
Key points: Someone who is employed by a contractor is not an agent simply on the ground that he or she performs work for the benefit of the third party employer. One-off incidents should be compensated using the lower band of the Vento guidelines.
- Validity of final written warning
Adegobola v Marks and Spencer plc 2013/EWCA siv 1808
A was employed by M&S as a customer assistant from December 2007 until she was dismissed on the grounds of gross misconduct on 15 November 2011. After an incident with another member of staff in July 2010 she was issued with a final written warning explaining that further acts of misconduct could result in her dismissal. She sought to appeal against this final written warning, but was out of time and M&S declined to hear it. There were further incidents in October 2010 relating to some aggressive conduct and misuse of her staff discount card matter and VAT. The matter was investigated by S and E who had both been involved in the previous disciplinary hearing. As a result of the investigation hearing A was dismissed for gross misconduct. She appealed.
The decision was to dismiss was upheld. A’s claims before the tribunal were dismissed and again before the EAT. A then appealed to the Court of Appeal who held that it was legitimate for an employer to rely on a final warning provided it was issued in good faith, that there were at least prima facie grounds for imposing it and that it was not manifestly inappropriate to issue it. In this case the tribunal found that A could have been dismissed for gross misconduct in relation to the discount card incident alone irrespective of the earlier warning. It was therefore not necessary to review the authorities as to the extent to which the tribunal should investigate the merits of an earlier warning. However the Court of Appeal found that the tribunal must have considered the question of good faith and the complaints raised by A and rejected them.
Key point: It is wiser not to have the same people investigating fresh disciplinary matters where they were involved in a previous investigation to, avoid any suggestion of bias.
- Discrimination on grounds of race and/or religion or belief - pools for comparison
Naeem v Ministry of Justice UKEAT/0215/13
This case concerned N a Muslim prison chaplain. Prior to 2002 the MoJ only employed Christian chaplains. N commenced his employment in 2004. He argued that because he and other Muslim chaplains could only progress through the pay scale from 2002 onwards they were subjected to a disadvantage in terms of their earnings. N brought claims of race discrimination and discrimination on grounds of religious belief in relation to his standing in the MoJ pay scales.
The PCP which applied to N was the “non Phase 1 pay system’ which incorporated pay progression at the time which in turn was related to length of service. This PCP applied equally to non-Muslim chaplains as it did to Muslim chaplains. However, it did not put Muslim chaplains at a particular disadvantage when compared to non-Muslim chaplains.
The tribunal found that there had been prima facie indirect discrimination on the grounds of religious belief and race but the claims failed because the MoJ had been able to establish justification. Although N had been subject to a PCP which had put him at a particular disadvantage the MoJ had established that the PCP was a proportionate means of achieving an legitimate aim. On appeal N appealed a question of justification and the MoJ cross-appealed on whether the tribunal had been rightful to include as members of the pool of comparables pre-2002 chaplains. The cross-appeal was allowed. N had been treated in exactly the same way as any chaplain of whatever race or religion appointed at the same time as him.
The proper pool for comparison was both Muslim and Christian chaplains who had been engaged from 2002 onwards.
Key point: In this case length of service was not inherently linked to his religion or race, as it can be in age discrimination cases.
- Injunctions and trade secrets
ESL Fuels Ltd v Fletcher and another 2013 EWHC 3726
The case concerned an interim injunction application. There was no express contractual post-termination restraint on the use of confidential information by Mr Fletcher, a former employee of ESL. Therefore ESL had to establish that it had a real prospect of establishing at trial that the information which it seeked to protect was of a sufficiently high degree of confidentiality so as to amount to a trade secret.
Mr Fletcher and others had worked as senior executives in ESL before setting up their Newco. The litigation concerned the products which Newco was manufacturing using allegedly ESL’s trade secrets. Mr Fletcher was ESL’s effective managing director. ESL claimed that Mr Fletcher and others were manufacturing a similar product using trade secrets offering it at a virtually identical pricing structure to clients as currently offered to them by ESL. The Court held that there was a real risk of Newco being strangled at birth if it were prevented from doing business until the case was resolved. An interim injunction preserving the confidentiality of the manufacturing process was granted to protect ESL, but on the basis that the Defendants had given an undertaking to preserve the profits pending the outcome of the case. They were not however prevented from selling the new product.
Key point: Mr Fletcher did not have any written terms of employment let alone any express contractual post-termination restraints on the use of confidential information. Similar interim injunction applications against ex-employees will be equally uncertain and unpredictable. It is vital to consider including post termination restrictions in any senior employment contract from the outset.
- Pensions – auto-enrolment
2014/2015 earnings triggers and thresholds
The order which sets out the earnings trigger on qualifying earnings band for the 2014/2015 tax year has been laid before Parliament. The order sets out the relevant figures as follows:
- Earnings trigger - £10,000 - Qualifying earnings band - £5,772 to £41,865
Once approved by Parliament this order will come into force on 6 April 2014. Employers already subject to auto-enrolment and those with staging dates in the 2014 and 2015 tax year should ensure that their processes are updated to reflect the new figures and assessment is made in good time of which staff are eligible for auto-enrolment as more time may be needed than employers think. All staff should be properly communicated with so they know what is happening.
- Caste discrimination
Tirkey v Chandok and Another ET/3400174/13
Although the Government has undertaken to amend the Equality Act 2010 to ensure that caste will be a protected characteristic in 2015, this recent case held that caste discrimination is already covered by the 2010 Act. The Tribunal considered that although the Government had decided to legislate to make it clear that caste is an aspect of the protected characteristic of race, this was not determinative. The Tribunal held that ethnic origin under the 2010 Act was wide enough to encompass caste. Discrimination by descent is unlawful and constitutes direct race discrimination.
Domestic legislation had to be read as far as possible to give effect in a way that is compatible with the European Convention on Human Rights. Article 14 of the Convention prohibits discrimination. The Tribunal held that the definition of discrimination in Article 14 was wide enough to include caste discrimination.
The case concerned T, who was employed by a married couple as a live-in domestic servant and was required to work 7 days a work from 6am until after midnight. During 4.5 years’ of employment she was paid around £3,140 in total and had 1 day’s holiday. She brought claims for race discrimination and religion and belief discrimination and sought to add caste discrimination. She argued that the reason why she was recruited and treated in the manner alleged was that her employers believed that she had a lower status to them due to her caste. The Tribunal agreed. Her caste discrimination claim could proceed.
Key point: Accordingly any employee like T can now bring a claim for caste discrimination on the law as it currently stands.
- Sex and/or pregnancy and maternity discrimination – dismissal after end of maternity period
Lyons v DWP JobCentre Plus  UKEAT 0348
Miss Lyons started work in November 1999. She had suffered from depression, and had periods of absence due to this and other periods of sickness. She became pregnant in 2009 and was involved in an accident when she was in an advanced stage of pregnancy in which accident a motorcyclist died. She was deeply shocked by this and was off for 2 weeks in January 2010. She commenced her maternity leave on 1 February 2010 and she was due to return on 17 September. After her baby girl was born however, she suffered months of anxiety and distress and in July she was diagnosed as having moderately severe post-natal depression. Her maternity leave ended on 1 August 2010 but before she returned to work she saw her doctor who signed her off as unfit for work until 14 October. She did not attend work when she was due back on 17 September and she sent in her sickness certificate. The DWP’s attendance management policies and procedures then came into play and when she did not return to work she was dismissed on 1 March 2011.
She brought complaints of unfair dismissal, direct sex discrimination and/or pregnancy/maternity discrimination. The Tribunal found that she had been treated unfavourably for a pregnancy related illness by being dismissed for post-natal depression but as it did not occur between the beginning of the pregnancy and the end of her maternity leave it did not amount to discrimination by DWP, under s.18 of the Equality Act 2010. There was no direct sex discrimination and the unfavourable treatment occurred outside the protected period.
Miss Lyons suffered an illness which extended beyond the period of maternity leave and therefore DWP was entitled to take into account this absence after maternity leave and compare that period with any period of sickness of a man. Her complaint of unfair dismissal was upheld however, but there was a 50% Polkey reduction to be applied. The reason for her dismissal was capability due to her long-term absence from work. Having considered all the relevant factors the Tribunal held there was a 50% chance that Miss Lyons would still have been dismissed if the DWP had acted fairly and reasonably.
Key point: Outside of the protected period, a female employee will not succeed with a sex discrimination claim on returning to work unless she can show that she has been treated less favourably than a male comparator.
- Daughter’s Facebook disclosure reduces father’s age bias compromise
According to a report by Law360, a Florida appeals court ruled that a former headmaster could not enforce an $80,000 age bias settlement agreement because he breached the deal’s confidentiality clause by disclosing the settlement to his daughter, who then announced the news to her 1,000+ Facebook friends.
The settlement resolved the age discrimination and retaliation suit Mr Snay filed after his contract was not renewed by Gulliver, and its confidentiality clause specified that the existence and terms of the agreement between Mr Snay and the school were to be kept strictly confidential between him, his attorneys and his spouse only.
Mr Snay told his daughter about the deal and she shared the news with her many Facebook friends, a significant portion of whom were current or former Gulliver students. The school paid the back pay and the attorney’s fees due, but refused to pay up the £80,000 because of the Facebook post. Ouch.
Key point: The confidentiality of such an agreement is paramount so where there is an unambiguous breach the award may well be unenforceable.
And finally some good news……the Ministry of Justice has published its quarterly Tribunal statistics to December 2013. There has been a 79% drop in claims compared with the same period in 2012 and the number of single claims has dropped from the monthly average of between 4,000-5,000 down to 1,700. Not such good news for employment advisers though.