1. Political belief/affiliation: UK law in breach of human rights

UK law may need to be amended to protect employees from dismissal because of their political beliefs or affiliation.

The European Court of Human Rights has ruled that a BNP bus driver's right to freedom of assembly was infringed by the lack of remedy for his dismissal due to being elected as a local councillor for the BNP.  He had insufficient service to claim unfair dismissal and the Court of Appeal had earlier ruled that there was no breach of UK race discrimination law.

The right of freedom of assembly applies to all associations, including those with offensive views (which might fall foul of the test currently applied to religion or belief discrimination cases of being "worthy of respect in a democratic society").

The European Court considered that UK law would need to be amended either to create an exception to the requirement for a qualifying period for unfair dismissal or a free-standing claim for unlawful discrimination on grounds of political affiliation, to enable the claimant to argue that dismissal was not justified in the circumstances. 

The government may decide to appeal the decision but, if not, a change in the law may be required.  In the meantime, private sector employers may well face attempts to argue that religion or belief discrimination law should be developed to protect political views. (Redfearn v United Kingdom, ECHR)

2. Unfair dismissal: ruling on prior warnings, human rights challenge rejected

Employers can rely on a current prior warning to support a dismissal for misconduct which would not justify dismissal on its own, even where the two instances of misconduct are not similar.  This is particularly so where the terms of the warning make it clear that any further misconduct of any nature could result in further disciplinary action.

When considering the reasonableness of dismissal for subsequent misconduct, a tribunal is not entitled to disregard a valid warning (issued in good faith and with prima facie grounds) because it considers it unjustified.  However, an employer and therefore the tribunal should take into account the factual circumstances giving rise to the warning; the degree of similarity of the misconduct may be a relevant factor.  It will also be relevant to consider whether an appeal or other challenge is pending and whether, having given the warning to the claimant (but before his dismissal), the employer subsequently took a more lenient approach to similar misconduct by other employees.

The EAT also noted that a final written warning always implies that further misconduct of whatever nature will be met with dismissal, unless the terms of the contract provide otherwise or the circumstances are exceptional. (Wincanton Group v Stone, EAT)

Caselaw has established that employers may dismiss fairly for misconduct if this is within the "range of reasonable responses".  The Court of Appeal has ruled that there is no need to apply a more stringent test of proportionality where human rights are engaged, for example because of potential damage to reputation or job prospects.  These rights are adequately protected by the range of reasonable responses test, as the reasonable employer should have regard to the gravity of the consequences of dismissal when determining the nature and scope of a fair process and reasonable investigation. (Turner v East Midlands Trains, CoA)

3. Social media: caution required when disciplining for Facebook comments

Employers should not assume that they have the right to restrict an employee's freedom to express views on social media where these concern personal beliefs and do not have a work-related context (such as being about the employer or work colleagues).

An employee's explanation of his views on gay marriage on his Facebook page was not work-related. It will not be assumed that comments are posted in a work-related context simply because the employee has identified his employer on his Facebook wall, or because he has work colleagues as Facebook friends, where the rest of the content is clearly personal and social. Personal postings on a social media website, which work colleagues could sign up to receive, are different from an email sent to work colleagues. The employer's equal opportunities policy prohibiting the causing of offence to colleagues was construed as applying only to work-related contexts.

The court also ruled that the moderate expression of a view about gay marriage, which was not judgemental or disrespectful, was not misconduct, even though some colleagues disagreed strongly and found the view offensive.

The employee's demotion for misconduct therefore amounted to a dismissal and engagement on new terms; he was out of time to claim unfair dismissal and so only received his notice monies as damages for wrongful dismissal. (Smith v Trafford Housing Trust, HC)

Where Facebook comments are work-related (eg, abusive comments about work colleagues which could amount to harassment), employers should act quickly. The very nature of social media sites facilitates continued discussion on a subject and renders it more likely that the comments will form part of a continuing act, thereby extending the time limit for bringing a claim and potentially increasing the compensation payable for injury to feelings. (Novak v Phones 4U, EAT)  

4. Pay in lieu of holiday: EU law allows calculation using pay rate applicable when accrued

Employers may be able to pay in lieu of accrued but unused annual leave on termination only at the rate of pay applicable during the period the leave was accrued, rather than the rate applicable at the date of termination.  This could give rise to savings where employees have accrued the leave while on unpaid sabbatical or during a temporary period of reduced hours.

The ECJ has ruled that it was not contrary to the Working Time Directive for employees to receive no payment in lieu of untaken annual leave in respect of a period when they performed no work under a temporary zero-hours contract.

The Working Time Regulations specify that payment in lieu on termination is to be calculated at the rate of pay applicable at termination, unless the employee's employment contract (or other "relevant agreement") specifies the sum due.  Employers could therefore stipulate in the employment contract that any sum in lieu of untaken leave on termination will be calculated according to the pay rate when accrued (save in respect of leave accrued during sickness and family-related leave, where the legal position is different). (Heimann v Kaiser, ECJ)  

5. Compromise agreement: legal costs indemnity may cover alleged crimes

The Court of Appeal has overturned a High Court decision (see here) on the scope of a compromise agreement indemnity for legal costs in defending proceedings as a result of his job, ruling that this was not limited to the lawful responsibilities of the employee's post and would apply to alleged crimes committed while performing the job. The case highlights the importance of tight drafting of indemnities to reflect the parties' true intentions. (Coulson v News Group Newspapers, CoA)

6. TUPE: scope of service provision change discussed

The service provision chance (SPC) limb of TUPE does not apply where the activities are in connection with "a single specific event or task of short-term duration". There have been conflicting EAT views as to whether this only applies when events are short-term as well as tasks. Most recently the EAT considered that the "short-term" requirement did not apply to events but that single events would by definition be short-term in any case. It considered that activities in connection with events would be excluded from the SPC provisions however long the activities themselves – note that this conflicts with government guidance on the issue and may be open to challenge. In this case, a 12-month contract to transport children while their usual school was rebuilt was in connection with a short-term task and therefore excluded from the SPC provisions. (Liddell's Coaches v Cook, EAT)

The SPC limb also only applies if the activities to be performed by the new contractor are fundamentally or essentially the same as those performed by the original contractor. The EAT has ruled that, although a planned significant reduction in work can mean the activities are viewed as different, this will not be the case where the same service is being provided but to a lower standard. Here a local authority took a service fulfilling a statutory duty back in house when the expected new contractor pulled out. Although it only had the resource to provide a skeleton service such that some functions of the service were neglected, the activities remained the same, ie to fulfil the statutory duty. (London Borough of Islington v Bannon, EAT)

7. New tribunal compensation and statutory benefits levels: February/April 2013

From 1 February 2013, the cap on the unfair dismissal compensatory award will increase from £72,300 to £74,200 and the cap on weekly pay (used to calculate the unfair dismissal basic award and statutory redundancy pay) will increase from £430 to £450.  This gives a maximum unfair dismissal award of £87,700.

From April 2013 the weekly rate of statutory maternity/paternity/adoption pay will increase from £135.45 to £136.78.  The weekly rate of statutory sick pay will rise from £85.85 to £86.70.  (According to the 2012 Autumn Budget Statement, these rates will increase by 1% a year for three years from April 2013.)

8. Government confirm flexible parental leave and extension to right to request flexible work from 2014/15

The government has announced a new flexible parental leave regime that will allow parents to share 50 out of 52 weeks of statutory maternity leave and 37 out of 39 weeks of statutory maternity pay from 2015.  Parents may divide the leave between them and take it concurrently or consecutively provided the arrangement has been agreed with their respective employers.  If agreement cannot be reached, employees will be entitled to take their flexible parental leave in a single block commencing on a date of their choice.

This new regime will replace the current regime of statutory maternity and additional paternity leave and pay; mothers retain the right to two weeks' compulsory maternity leave following birth and fathers retain the two week ordinary paternity leave period.  Fathers will have the right to unpaid time off to attend two antenatal appointments.  The new scheme will be available to adopting parents and those with surrogacy arrangements.

There will be a separate consultation on the administrative details of the new scheme in 2013. (It is also worth keeping an eye on a Spanish case, Montull v Instituto Nacional de la Seguridad Social (C-5/12), asking the ECJ whether a similar scheme, giving the mother a primary right which can be shared with the father at the mother's election, is contrary to EU law.) 

The increase in unpaid parental leave from 13 to 18 weeks for each child (required to give effect to EU law) will be implemented from March 2013, and from 2015 each parent will be able to exercise this right for children up to the age of 18.

The right to request flexible working will be extended to all employees with at least 26 weeks' continuous employment from 2014. The current statutory framework, which sets out the grounds upon which an employer can refuse a request to work flexibly, will be replaced with a principles-based system where employers will be obliged to consider requests in a reasonable manner, within a reasonable period of time. A statutory code of practice and best practice guidance will be issued to assist employers; an Acas consultation on the code is expected in 2013.  Employees will still be limited to one request in any 12-month period. The Children and Families Bill, which will bring the new regime into force, is expected to be published by April 2013.  

9. Government to press ahead with "employee shareholder" status

The government has published its response to a consultation paper on the Chancellor's proposal for a new employment status, previously "employee owner" but to be renamed "employee shareholder". To obtain this status, individuals would give up some employment rights in exchange for capital gains tax (CGT) exempt shares in their employer. The Growth and Infrastructure Bill will introduce the new status and is currently being considered in committee. The government has tabled amendments to the Bill reflecting aspects of its response to the consultation.

Respondents to the consultation included only a "very small number" who welcomed the proposed new status and anticipated using it. Nevertheless, the government will proceed with the legislation.

The government plans to reorganise its guidance on employee, worker and employee owner status, to assist businesses to use these appropriately. There will be new guidance for individuals about the personal consequences of the new status, and guidance for businesses about its implementation, including guidance on valuation and forfeiture of shares.

Other aspects of the government response include:

  • requiring employee owner shares to be fully paid up, and that individuals must give no consideration for them other than agreeing to be employee owners
  • allowing non UK-registered companies to use employee owner status. It will also be possible to issue parent company shares to employee owners, rather than employer shares, where the employer is a subsidiary
  • removing the upper limit (£50,000) on the value of employee owner shares, although this value will be retained as an upper limit (as at the time of acquisition) on the value of shares qualifying for the CGT relief
  • requiring employee owners to give 16 weeks' notice of return from additional paternity leave, rather than six (in the same way as for additional maternity leave).