1. Employment law reforms - updates to 2013 timetable

The new protection for pre-termination negotiations introduced by the Enterprise and Regulatory Reform Act will come into force on 29 July 2013. This will enable employers to hold termination settlement discussions prior to starting a disciplinary or performance management process without the risk of the discussion being referred to in an ordinary unfair dismissal claim, unless there has been “improper conduct”. However, there is no protection if an employee brings an automatically unfair dismissal or discrimination claim, and few employers are likely to be in a position to discount the possibility of such claims. See our blog on the accompanying Acas Code for further details.

By way of reminder, other changes coming into force in June/July are:

  • Whistleblowing protection changed with effect from 25 June 2013: (i) employers can be vicariously liable where a whistleblower's colleagues subject them to detriment; (ii) disclosures are only protected if, in the employee's reasonable belief, they are in the public interest; (iii) protection is not lost if such a disclosure is made for ulterior motives (though compensation could be reduced by up to 25%, and depending on the facts employers may be able to argue that their actions are by reason of the bad faith circumstances rather than the disclosure). Employers should update their whistleblowing policies and consider staff training, particularly for managers in how to deal with bullying by colleagues.
  • From 25 June 2013, the qualifying period for unfair dismissal does not apply where the main reason for dismissal is the employee's political opinions or affiliation.
  • Revised employment tribunal rules and fees for employment tribunal claims will apply from 29 July 2013. A briefing on the new rules will be available on our blog shortly. Judicial review applications challenging the introduction of fees have been made in England and Scotland.

The Government has also confirmed planned implementation dates for certain other proposals:

  • a draft order imposing an additional cap of 52 weeks' pay on the unfair dismissal compensatory award has been published and is expected to be made in July 2013
  • the third party harassment provisions in the Equality Act 2010 are to be repealed from 1 October 2013
  • statutory discrimination questionnaires are to be abolished from 6 April 2014
  • tribunals are to have a discretion to order equal pay audits from October 2014.

2. Multi-site collective redundancies: EAT ruling published

In last month's round-up we covered reports of a significant EAT ruling that the obligation to inform and consult for collective redundancies applies whenever an employer proposes 20 or more redundancies in aggregate, even if this is spread across a number of separate workplaces or business units. The judgment was published at the start of July and confirms the position. USDAW v WW Realisation 1 Ltd (in liquidation))

HHJ McMullen ruled that the legislative threshold of 20 proposed dismissals "at one establishment" within a 90 day period was incompatible with the EU Directive as he construed it, and struck out the words "at one establishment". More detail on the judgment and the potential to challenge it is set out in our blog.

The likelihood of appeal is still unknown; there are 21 days from publication of the judgment to submit an appeal. Various parties are lobbying BIS to step in.

Interestingly, a Northern Ireland industrial tribunal has just referred the issue of the interpretation of "establishment" to the ECJ (Lyttle v Bluebird UK Bidco 2 Ltd).

In the meantime, any multi-site employers carrying out redundancy consultation at some sites but not others may well wish to include all of their worksites in the process to avoid the risk of legal challenge, particularly if unionised. Employers making fewer than 20 redundancies at all their workplaces, but more than 20 dismissals in aggregate, will have a more difficult judgement to make.  

3. TUPE: recent developments

  • The Employment Minister, Jo Swinson, has announced that simplified TUPE regulations will be unveiled in September, rather than the beginning of July as originally indicated. This may suggest a delay to the original planned implementation date of October 2013.
  • The Inner House of the Scottish Court of Session has endorsed recent EAT cases (for example, Eddie Stobart v Moreman) ruling that, where a client transfers its work to a new contractor, there will not be a service provision change under TUPE simply because there are employees who happen to spend most or all of their time working for that client.

The requirement for there to be an “organised grouping of employees”, the principal purpose of which is to carry out work for a client, means that there must be an element of conscious organisation by the employer of the employees into a team, which as a whole has as its principal purpose the carrying out of activities for that client. The fact that one employee works 100% for one client does not mean there is the necessary organisation of a team, nor that the team as a whole will be viewed as dedicated to that client (where others on the team work much lower percentages of their time for the client). (Ceva Freight (UK) v Seawell)

  • An Employment Tribunal Judge has ruled (at a pre-hearing review) that TUPE does apply to transfer "workers" with a contract personally to perform work, as well as those with a contract of service or apprenticeship – only independent contractors in businesses on their own account are excluded. This is because TUPE defines "employee" as any individual who works for another person, whether under a contract of service or apprenticeship or otherwise. It appears to be the first time a tribunal has considered the point. The obligations to inform and consult and provide employee data should therefore extend to workers, although in our view this would not mean that workers without a contract of service or apprenticeship could claim unfair dismissal by reason of a transfer. (McCririck v Channel 4 and IMG Media)  

4. Victimisation: dismissal for making multiple discrimination grievances unlawful

Where an employee makes repeated allegations of discrimination which the employee believes to be true but which the employer considers unfounded, employers may be tempted to dismiss on the grounds of a breakdown in trust and confidence. A recent EAT ruling emphasises that in most cases this will amount to unlawful victimisation (because the dismissal is because of a protected act, namely alleging unlawful discrimination, whether or not the original allegations are unfounded).(Woodhouse v West North West Homes Leeds, EAT)

It will only be in exceptional circumstances, such as in Martin v Devonshire Solicitors, that the employer's reasons can be viewed as separate from the protected acts. The facts in that case were rare: the alleged events were found never to have occurred and likely to be paranoid delusions on the part of a mentally ill employee.

The fact that an employee makes multiple complaints, and becomes "obsessive and fixated" or irrational, does not amount to exceptional circumstances and does not amount to a reason to dismiss separate from the complaints themselves. Employers in this situation need to consider some other form of resolution, perhaps through mediation or workplace counselling, while also ensuring each grievance is properly addressed.

5. Redundancy selection: use of historical performance data for employee on leave permitted

Employers making redundancies from a selection pool including employees on maternity leave or other prolonged family leave should ensure that identical selection criteria are applied to all employees, or risk discrimination claims. However, given that the employees' absence may mean they cannot be assessed at the same point in time as others, the ECJ has suggested that employers can use historic performance data when scoring those employees against the criteria, provided this does not disadvantage the employees.

The ECJ also confirmed that an employee's right to return from certain types of prolonged family leave to a similar job will not be satisfied by the offer of a job which the employer knows will soon be eliminated. (Riezniece v Zemkopibas Ministrija C7/12)

6. Disability discrimination: limit to duty to automatically appoint redundant disabled employee to vacancy

Previous case law has established that, when a disabled employee's role becomes redundant, the duty to make reasonable adjustments may require the employer to appoint the employee to an existing vacancy without competitive interview (Archibald v Fife Council).

The EAT has now confirmed that this will not be the case where the employer genuinely and reasonably considers that the employee does not meet the essential criteria for the job. In this case the employee had previously interviewed for the same role and been found to have lacked two essential criteria. (Wade v Sheffield Hallam University)

7. Equal pay: comparators at different establishments permitted, even if jobs could not exist at claimant's worksite

The Supreme Court has ruled that employees can bring an equal pay claim based on comparators working at a different location but employed by the same employer, provided their terms of employment would remain broadly similar were they employed at the same location as the claimants. The fact that the comparators would never work there in reality (because that type of job would never be required there) was irrelevant. A different worksite will only disqualify a comparator if geography plays a significant part in determining what the comparator's terms of employment are. (North v Dumfries and Galloway Council)  

8. Unfair dismissal: covert surveillance may not render dismissal unfair

The EAT has ruled that an employee has no reasonable expectation of privacy when filmed in a public place during hours when the employee should have been working – an employer is entitled to know what someone is doing during working hours. The employee was also acting fraudulently by claiming pay for time not worked and, as such, could have no reasonable expectation of privacy.

The employer's decision to engage a private investigator to covertly film the employee outside a sports centre during working hours (even though it already had oral evidence of misconduct) did not render the decision to dismiss unfair in this case. However, it is important to bear in mind that the position could be different where the filming is carried out on private premises or if the evidence obtained is not used fairly, for example if an employer jumps to assumptions about the fitness to work of an employee on sick leave without obtaining appropriate medical input. (City and County of Swansea v Gayle)  

9. Legislative consultations: reservists and tax break for health-related interventions

Following consultation, the Government has published a White Paper setting out its plans for the future of the UK’s reserve armed forces, including the removal of the two year qualifying period to claim unfair dismissal where the dismissal is by reason of the employee’s reservist service, and increasing the number of training days required from 35 to 40 days.

HM Treasury is consulting on a tax exemption for the first £500 spend on medical treatment or vocational rehabilitation recommended for an employee by the new health and work assessment and advisory service to be set up in 2014 (for employees on sick leave for at least four weeks). The consultation ends on 16 August 2013.