[Thanks to Simon Hale of Hardwicke for preparing this case summary]
The decision of the High Court in Customer Systems Plc v Ranson, Atherton, Edmond and Offland [2011] EWHC 3304 is authority for the proposition that an employee who learns of confidential matters relating to competition from a potential new employer is not bound to pass the information to his existing employer, as he would then be in breach of confidence to the new employer.
The Claimant, an I.T. consultancy, brought claims against a number of former employees who had left to set up or work for a rival business, alleging variously that they were in breach of fiduciary duty, in breach of their restrictive covenants and in breach of the duty of fidelity.
Sir Raymond Jack followed Tullett Prebon Plc v BGC Brokers [2011] IRLR 420 (per Maurice Kay LJ at [42]) and held that a duty of fidelity to one's current employer would not necessarily defeat the duty of confidence to a new employer.
An unusual feature of the decision was that Mr Edmond was awarded indemnity costs, in part due to the Claimant's conduct of the litigation, having brought high value claims of little merit in order to intimidate a young man of limited means.
Tuesday, 27 December 2011
Thursday, 22 December 2011
TUPE - Service Provision Change and Supply of Goods
[Thanks to Sarah Russell, solicitor at Ventura, for preparing this case summary, and to Laurie Anstis of Boyes Turner for standing in during Daniel Barnett's absence]
Were workers on a manufacturing assembly line providing services for the purposes of a Service Provision Change ('SPC') under Regulation 3(1)(b) of TUPE?
No, according to the EAT in Pannu v Geo W King Ltd. The position was not altered by the fact that the purchaser of the assembled goods also paid for the components. The employment tribunal had found that the overall manufacturing process was more than just assembly of components, as the constituent components were checked for safety, but still found that it was 'wholly or mainly' a supply of goods, and so exempted from the SPC provisions. HHJ Peter Clark upheld this finding. He endorsed the comment of HHJ Burke QC in Metropolitan Resources Ltd v Churchill Dulwich Ltd [2009] IRLR 700 (EAT) that the SPC provisions are straightforward and their application to individual cases is a question of fact for the tribunal.
Were workers on a manufacturing assembly line providing services for the purposes of a Service Provision Change ('SPC') under Regulation 3(1)(b) of TUPE?
No, according to the EAT in Pannu v Geo W King Ltd. The position was not altered by the fact that the purchaser of the assembled goods also paid for the components. The employment tribunal had found that the overall manufacturing process was more than just assembly of components, as the constituent components were checked for safety, but still found that it was 'wholly or mainly' a supply of goods, and so exempted from the SPC provisions. HHJ Peter Clark upheld this finding. He endorsed the comment of HHJ Burke QC in Metropolitan Resources Ltd v Churchill Dulwich Ltd [2009] IRLR 700 (EAT) that the SPC provisions are straightforward and their application to individual cases is a question of fact for the tribunal.
Ministers of Religion As Employees
[Thanks to Rad Kohanzad of Atlantic Chambers, for preparing this case summary, and to Laurie Anstis of Boyes Turner for standing in during Daniel Barnett's absence]
Is an ordained Minister appointed as Minister to a group of congregations by the Methodist Church an employee?
Yes, says the Court of Appeal in President of the Methodist Conference v Preston.
In upholding Underhill's J judgment, describing it as a masterly and detailed analysis of the authorities, the Court of Appeal held that the employment tribunal was wrong to simply follow President of the Methodist Conference v Parfitt in light of the House of Lords decision in Percy v Board of National Mission of the Church of Scotland.
Although Percy was concerned with the position of a Minister in a different Church and the House of Lords did not expressly overrule Parfitt, the decision of the EAT and Court of Appeal in the present case was that Percy had impliedly overruled Parfitt.
This decision is likely to apply to all Churches and Ministers of a congregation or group of congregations.
Is an ordained Minister appointed as Minister to a group of congregations by the Methodist Church an employee?
Yes, says the Court of Appeal in President of the Methodist Conference v Preston.
In upholding Underhill's J judgment, describing it as a masterly and detailed analysis of the authorities, the Court of Appeal held that the employment tribunal was wrong to simply follow President of the Methodist Conference v Parfitt in light of the House of Lords decision in Percy v Board of National Mission of the Church of Scotland.
Although Percy was concerned with the position of a Minister in a different Church and the House of Lords did not expressly overrule Parfitt, the decision of the EAT and Court of Appeal in the present case was that Percy had impliedly overruled Parfitt.
This decision is likely to apply to all Churches and Ministers of a congregation or group of congregations.
Tuesday, 20 December 2011
TUPE and Company Administrations
[Thanks to Saul Margo of Outer Temple Chambers for preparing this case summary]
This morning the Court of Appeal handed down Judgment in the case of Key2law (Surrey) LLP v Gaynor De'Antiquis. The issue before the Court was whether administration proceedings under Schedule B1 of the Insolvency Act 1986 can constitute, "insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor" within the meaning of regulation 8(7) of the TUPE Regulations 2006. The Court upheld the decision of the EAT that administration proceedings cannot constitute such proceedings, ie the test is absolute rather than fact-based.
Ms De'Antiquis was a solicitor employed by a firm of solicitors and was dismissed on grounds of redundancy on 21 July 2008. The firm entered administration on 25 July 2008 and on 28 July the administrators entered into a management contract with Key2 in relation to the office that Ms De'Antiquis had worked at prior to her dismissal. She brought claims under various heads against Key2 on the basis that Key2 was liable as transferee of the undertaking in which she had worked.
Regulation 8(7) provides that where insolvency proceedings are analogous to bankruptcy proceedings and have been instituted with a view to liquidation of the assets, then Regulations 4 and 7 do not apply. There is no transfer of staff to the transferee and no claim for unfair dismissal against him. Key2 claimed that exception could, depending on the facts of the particular case, also apply to administration proceedings under Schedule B1 of the Insolvency Act.
In what is a lengthy judgment, Rimer LJ examined in detail the origins and purpose of the Acquired Rights Directive which the TUPE Regulations implemented. He found significance in the fact that an administrator is bound to pursue certain objectives one of which is the rescuing of the company. Even though it may be immediately clear to administrators that a rescue of the company is not on the cards it does not follow that the appointment of administrators was "with a view" to the liquidation. A fact-based approach which focusses on the intention or views of the administrator or upon what is likely to be achieved is therefore not appropriate.
This morning the Court of Appeal handed down Judgment in the case of Key2law (Surrey) LLP v Gaynor De'Antiquis. The issue before the Court was whether administration proceedings under Schedule B1 of the Insolvency Act 1986 can constitute, "insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor" within the meaning of regulation 8(7) of the TUPE Regulations 2006. The Court upheld the decision of the EAT that administration proceedings cannot constitute such proceedings, ie the test is absolute rather than fact-based.
Ms De'Antiquis was a solicitor employed by a firm of solicitors and was dismissed on grounds of redundancy on 21 July 2008. The firm entered administration on 25 July 2008 and on 28 July the administrators entered into a management contract with Key2 in relation to the office that Ms De'Antiquis had worked at prior to her dismissal. She brought claims under various heads against Key2 on the basis that Key2 was liable as transferee of the undertaking in which she had worked.
Regulation 8(7) provides that where insolvency proceedings are analogous to bankruptcy proceedings and have been instituted with a view to liquidation of the assets, then Regulations 4 and 7 do not apply. There is no transfer of staff to the transferee and no claim for unfair dismissal against him. Key2 claimed that exception could, depending on the facts of the particular case, also apply to administration proceedings under Schedule B1 of the Insolvency Act.
In what is a lengthy judgment, Rimer LJ examined in detail the origins and purpose of the Acquired Rights Directive which the TUPE Regulations implemented. He found significance in the fact that an administrator is bound to pursue certain objectives one of which is the rescuing of the company. Even though it may be immediately clear to administrators that a rescue of the company is not on the cards it does not follow that the appointment of administrators was "with a view" to the liquidation. A fact-based approach which focusses on the intention or views of the administrator or upon what is likely to be achieved is therefore not appropriate.
Thursday, 15 December 2011
TUPE and Unfair Dismissal
[Thanks to Nicholas Hill of Outer Temple Chambers for preparing this case summary]
The Court of Appeal has given Judgment in the case of Spaceright Europe Limited v Baillavoine, a case in which the Court of Appeal considered for the first time conflicting lines of authority that had developed at EAT level as to the correct construction of regulation 7(1) of TUPE 2006. The reasoning in Harrison Bowden v Bowden [1994] ICR 186 and Morris v John Grose Ltd [1998] ICR 655 was preferred over the reasoning in Ibex Trading v Walton [1994] ICR 907. The transfer does not need to be in contemplation at the time that the dismissal is effected in order for the dismissal to be caught by regulation 7(1).
Mr Baillavoine was the Managing Director of Ultralon Limited when it entered administration on 23 May 2008. The administrators, who intended to sell the business as a going concern, dismissed a number of employees including Mr Baillavoine. The business was subsequently purchased by Spaceright Europe Limited. The ET held that Mr Baillavoine's dismissal was automatically unfair because he had been dismissed for "a reason connected with the transfer" within the meaning of regulation 7(1). The fact that the dismissal took place in order to achieve a sale at a future date was sufficient for it to fall within regulation 7(1). The EAT upheld that reasoning as did the Court of Appeal.
The Court of Appeal held that the construction of regulation 7(1) adopted in Harrison Bowden and Morris was more consistent than the approach in Ibex with the purpose of the directive which the TUPE regulations implemented. Moreover, the reference to the transfer in regulation 7(1) rather than, for example, a transfer, created no difficulties. It is a common experience of life that an event (A) may sensibly be considered to be "connected with" a later event (B), even though it was not known, contemplated or foreseen at the time of event (A) that event (B) would happen.
In dismissing a further ground of appeal, the Court of Appeal held that the dismissal was not for an ETO reason. An ETO reason is not available in circumstances where an employee is dismissed in order to make the business of a company a more attractive proposition to prospective transferees of a going concern.
The Court of Appeal has given Judgment in the case of Spaceright Europe Limited v Baillavoine, a case in which the Court of Appeal considered for the first time conflicting lines of authority that had developed at EAT level as to the correct construction of regulation 7(1) of TUPE 2006. The reasoning in Harrison Bowden v Bowden [1994] ICR 186 and Morris v John Grose Ltd [1998] ICR 655 was preferred over the reasoning in Ibex Trading v Walton [1994] ICR 907. The transfer does not need to be in contemplation at the time that the dismissal is effected in order for the dismissal to be caught by regulation 7(1).
Mr Baillavoine was the Managing Director of Ultralon Limited when it entered administration on 23 May 2008. The administrators, who intended to sell the business as a going concern, dismissed a number of employees including Mr Baillavoine. The business was subsequently purchased by Spaceright Europe Limited. The ET held that Mr Baillavoine's dismissal was automatically unfair because he had been dismissed for "a reason connected with the transfer" within the meaning of regulation 7(1). The fact that the dismissal took place in order to achieve a sale at a future date was sufficient for it to fall within regulation 7(1). The EAT upheld that reasoning as did the Court of Appeal.
The Court of Appeal held that the construction of regulation 7(1) adopted in Harrison Bowden and Morris was more consistent than the approach in Ibex with the purpose of the directive which the TUPE regulations implemented. Moreover, the reference to the transfer in regulation 7(1) rather than, for example, a transfer, created no difficulties. It is a common experience of life that an event (A) may sensibly be considered to be "connected with" a later event (B), even though it was not known, contemplated or foreseen at the time of event (A) that event (B) would happen.
In dismissing a further ground of appeal, the Court of Appeal held that the dismissal was not for an ETO reason. An ETO reason is not available in circumstances where an employee is dismissed in order to make the business of a company a more attractive proposition to prospective transferees of a going concern.
TUPE – Service Provision Change
[Thanks to Laurie Anstis of Boyes Turner who is standing in for Daniel Barnett during his absence, and to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
For there to be a service provision change under Reg 3 (1) (b) of TUPE, must the activities carried out by different providers before and after the transfer be carried out for the same client? Yes, says the EAT in Hunter v McCarrick.
In this case the claimant was employed by a provider of property services. The company which owned the properties became the subject of a winding up petition. The lender on the properties appointed Law of Property Act Receivers who assumed control of the properties thereafter and appointed a new property services company. It was held there could be no service provision change when not only was there a change in contractors, but also of the client.
Reg 3(1) (b) (ii) provides that an SPC arises where activities cease to be carried out on a client's behalf and are instead carried by a subsequent contractor on the client's behalf. That had to be read as meaning the same client. As a service provision change under Reg (3) (1) (b) is a wholly new statutory concept independent of the Acquired Rights Directive there was no warrant for adopting an interpretation of it other than that required by the ordinary meaning of the language used.
For there to be a service provision change under Reg 3 (1) (b) of TUPE, must the activities carried out by different providers before and after the transfer be carried out for the same client? Yes, says the EAT in Hunter v McCarrick.
In this case the claimant was employed by a provider of property services. The company which owned the properties became the subject of a winding up petition. The lender on the properties appointed Law of Property Act Receivers who assumed control of the properties thereafter and appointed a new property services company. It was held there could be no service provision change when not only was there a change in contractors, but also of the client.
Reg 3(1) (b) (ii) provides that an SPC arises where activities cease to be carried out on a client's behalf and are instead carried by a subsequent contractor on the client's behalf. That had to be read as meaning the same client. As a service provision change under Reg (3) (1) (b) is a wholly new statutory concept independent of the Acquired Rights Directive there was no warrant for adopting an interpretation of it other than that required by the ordinary meaning of the language used.
Wednesday, 14 December 2011
Consultation on Employment Tribunal Fees
[Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett during his absence, for preparing this summary]
The Ministry of Justice has today issued a consultation document on charging fees in employment tribunals and the Employment Appeal Tribunal.
In the employment tribunal, two alternative options are put forward.
For the first option, the fee would depend on the nature of the claim, with three suggested levels. Level one would cover claims for unpaid wages and redundancy payments, level two would cover unfair dismissal claims and level three would be for discrimination and whistleblowing claims. Separate issue and hearing fees are proposed, with "indicative fees" of between £150-£250 for issue of a claim and £250-£1,250 for a hearing.
The second option would introduce a fourth level of fees, for claims where the claimant is seeking an award of over £30,000, and have issue fees only, ranging from £200 to £1,750.
The consultation paper contains much detail about the proposals, including fee remission, fee refunds, discounts in the case of multiple claims, and fees for other tribunal procedures, such as requesting written reasons for a judgment.
An issue fee of £400 and hearing fee of £1,200 is proposed for the Employment Appeal Tribunal.
The consultation closes on 6 March 2012.
The Ministry of Justice has today issued a consultation document on charging fees in employment tribunals and the Employment Appeal Tribunal.
In the employment tribunal, two alternative options are put forward.
For the first option, the fee would depend on the nature of the claim, with three suggested levels. Level one would cover claims for unpaid wages and redundancy payments, level two would cover unfair dismissal claims and level three would be for discrimination and whistleblowing claims. Separate issue and hearing fees are proposed, with "indicative fees" of between £150-£250 for issue of a claim and £250-£1,250 for a hearing.
The second option would introduce a fourth level of fees, for claims where the claimant is seeking an award of over £30,000, and have issue fees only, ranging from £200 to £1,750.
The consultation paper contains much detail about the proposals, including fee remission, fee refunds, discounts in the case of multiple claims, and fees for other tribunal procedures, such as requesting written reasons for a judgment.
An issue fee of £400 and hearing fee of £1,200 is proposed for the Employment Appeal Tribunal.
The consultation closes on 6 March 2012.
Contractual Damages for Manner of Dismissal
CORRECTION: The earlier bulletin omitted the name of the case concerned, which is now included in the amended version below.
[Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett during his absence, for preparing this case summary]
Can an employee who is dismissed in breach of a contractual disciplinary procedure claim damages for breach of contract flowing from the manner of their dismissal?
No, says the Supreme Court, with Lady Hale, Lord Kerr and Lord Wilson dissenting, and Lord Philips finding against the employees on difference grounds, in the joined appeals of Edwards v Chesterfield Royal Hospital and Botham (FC) v Ministry of Defence [2011] UKSC 58.
In Johnson v Unisys Limited [2001] UKHL 13), the House of Lords refused to award damages where the manner of the employee's dismissal was in breach of the implied term of trust and confidence, and suggested that Parliament had intended the employee's remedy in such a case to be by way of an unfair dismissal claim, rather than a breach of contract claim.
In Eastwood v Magnox Electric and McCabe v Cornwall County Council ([2004] UKHL 35), the House of Lords developed the concept of the "Johnson exclusion area". This prohibited claims for damages in relation to a breach of the implied term of trust and confidence arising out of the dismissal itself, but allowed claims which "precede and are independent of" the dismissal.
Giving the leading judgment, Lord Dyson (with whom Lord Walker and Lord Mance agreed) emphasises the development of disciplinary procedures in the context of unfair dismissal law, before holding that:
In her dissent, Lady Hale notes that she is the only member of the Supreme Court to have been an employee, rather than a self-employed barrister or office holder, and holds that unfair dismissal law ought not to be used as a basis for limiting the rights of employees.
Lords Kerr and Wilson distinguished between the two cases, finding that Edwards had established a cause of action before dismissal, which should be permitted, whereas Botham's claim arose solely from the fact of the dismissal, and should be barred.
[Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett during his absence, for preparing this case summary]
Can an employee who is dismissed in breach of a contractual disciplinary procedure claim damages for breach of contract flowing from the manner of their dismissal?
No, says the Supreme Court, with Lady Hale, Lord Kerr and Lord Wilson dissenting, and Lord Philips finding against the employees on difference grounds, in the joined appeals of Edwards v Chesterfield Royal Hospital and Botham (FC) v Ministry of Defence [2011] UKSC 58.
In Johnson v Unisys Limited [2001] UKHL 13), the House of Lords refused to award damages where the manner of the employee's dismissal was in breach of the implied term of trust and confidence, and suggested that Parliament had intended the employee's remedy in such a case to be by way of an unfair dismissal claim, rather than a breach of contract claim.
In Eastwood v Magnox Electric and McCabe v Cornwall County Council ([2004] UKHL 35), the House of Lords developed the concept of the "Johnson exclusion area". This prohibited claims for damages in relation to a breach of the implied term of trust and confidence arising out of the dismissal itself, but allowed claims which "precede and are independent of" the dismissal.
Giving the leading judgment, Lord Dyson (with whom Lord Walker and Lord Mance agreed) emphasises the development of disciplinary procedures in the context of unfair dismissal law, before holding that:
- Johnson operates as a bar to a claim for damages for the manner of dismissal in the case of both implied and express contractual terms.
- Both Edwards and Botham fell, on their facts, within the Johnson exclusion area.
In her dissent, Lady Hale notes that she is the only member of the Supreme Court to have been an employee, rather than a self-employed barrister or office holder, and holds that unfair dismissal law ought not to be used as a basis for limiting the rights of employees.
Lords Kerr and Wilson distinguished between the two cases, finding that Edwards had established a cause of action before dismissal, which should be permitted, whereas Botham's claim arose solely from the fact of the dismissal, and should be barred.
Contractual Damages for Manner of Dismissal
[Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett during his absence, for preparing this case summary]
Can an employee who is dismissed in breach of a contractual disciplinary procedure claim damages for breach of contract flowing from the manner of their dismissal?
No, says the Supreme Court, with Lady Hale, Lord Kerr and Lord Wilson dissenting, and Lord Philips finding against the employees on different grounds.
In Johnson v Unisys Limited [2001] UKHL 13), the House of Lords refused to award damages where the manner of the employee's dismissal was in breach of the implied term of trust and confidence, and suggested that Parliament had intended the employee's remedy in such a case to be by way of an unfair dismissal claim, rather than a breach of contract claim.
In Eastwood v Magnox Electric and McCabe v Cornwall County Council ([2004] UKHL 35), the House of Lords developed the concept of the "Johnson exclusion area". This prohibited claims for damages in relation to a breach of the implied term of trust and confidence arising out of the dismissal itself, but allowed claims which "precede and are independent of" the dismissal.
Giving the leading judgment, Lord Dyson (with whom Lord Walker and Lord Mance agreed) emphasises the development of disciplinary procedures in the context of unfair dismissal law, before holding that:
In her dissent, Lady Hale notes that she is the only member of the Supreme Court to have been an employee, rather than a self-employed barrister or office holder, and holds that unfair dismissal law ought not to be used as a basis for limiting the rights of employees.
Lords Kerr and Wilson distinguished between the two cases, finding that Edwards had established a cause of action before dismissal, which should be permitted, whereas Botham's claim arose solely from the fact of the dismissal, and should be barred.
Can an employee who is dismissed in breach of a contractual disciplinary procedure claim damages for breach of contract flowing from the manner of their dismissal?
No, says the Supreme Court, with Lady Hale, Lord Kerr and Lord Wilson dissenting, and Lord Philips finding against the employees on different grounds.
In Johnson v Unisys Limited [2001] UKHL 13), the House of Lords refused to award damages where the manner of the employee's dismissal was in breach of the implied term of trust and confidence, and suggested that Parliament had intended the employee's remedy in such a case to be by way of an unfair dismissal claim, rather than a breach of contract claim.
In Eastwood v Magnox Electric and McCabe v Cornwall County Council ([2004] UKHL 35), the House of Lords developed the concept of the "Johnson exclusion area". This prohibited claims for damages in relation to a breach of the implied term of trust and confidence arising out of the dismissal itself, but allowed claims which "precede and are independent of" the dismissal.
Giving the leading judgment, Lord Dyson (with whom Lord Walker and Lord Mance agreed) emphasises the development of disciplinary procedures in the context of unfair dismissal law, before holding that:
- Johnson operates as a bar to a claim for damages for the manner of dismissal in the case of both implied and express contractual terms.
- Both Edwards and Botham fell, on their facts, within the Johnson exclusion area.
In her dissent, Lady Hale notes that she is the only member of the Supreme Court to have been an employee, rather than a self-employed barrister or office holder, and holds that unfair dismissal law ought not to be used as a basis for limiting the rights of employees.
Lords Kerr and Wilson distinguished between the two cases, finding that Edwards had established a cause of action before dismissal, which should be permitted, whereas Botham's claim arose solely from the fact of the dismissal, and should be barred.
Monday, 12 December 2011
Live in Housekeepers and Minimum Wage
[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
What is the test for determining whether a domestic worker treated as a family member is ineligible for the National Minimum Wage under Regulation 2 (2) of the NMW Regulations 1999? A series of conditions are set out in Regulation 2 (2).
The test is to be approached holistically, there is no one single factor, such as the provision of accommodation, meals, or the sharing of tasks, which is decisive, says the EAT in Julio & ors v Jose & ors, a series of conjoined appeals.
Whilst the exemption is to be construed narrowly, and particular regard should be given to the various factors in Regulation 2 (2), the entire arrangement and the nature of the relationship are relevant, with consideration to the general dignity of the worker's situation.
The "sharing of tasks" relates to sharing tasks done by the family as a whole, not sharing the work done by the worker under the contract. The EAT rejected a literal approach to the requirement that the worker undertakes tasks jointly with the family, or that there should be some equivalence between the tasks done by the family and the worker, noting that every family is different and tasks are often divided up between family members.
The judgment suggests, obiter, that an employer exploiting or mistreating an NMW-exempt domestic worker (not an issue in these cases) would not be treating them "as a family member" and would, by implication, lose the exemption from the NMW, with potentially expensive consequences.
What is the test for determining whether a domestic worker treated as a family member is ineligible for the National Minimum Wage under Regulation 2 (2) of the NMW Regulations 1999? A series of conditions are set out in Regulation 2 (2).
The test is to be approached holistically, there is no one single factor, such as the provision of accommodation, meals, or the sharing of tasks, which is decisive, says the EAT in Julio & ors v Jose & ors, a series of conjoined appeals.
Whilst the exemption is to be construed narrowly, and particular regard should be given to the various factors in Regulation 2 (2), the entire arrangement and the nature of the relationship are relevant, with consideration to the general dignity of the worker's situation.
The "sharing of tasks" relates to sharing tasks done by the family as a whole, not sharing the work done by the worker under the contract. The EAT rejected a literal approach to the requirement that the worker undertakes tasks jointly with the family, or that there should be some equivalence between the tasks done by the family and the worker, noting that every family is different and tasks are often divided up between family members.
The judgment suggests, obiter, that an employer exploiting or mistreating an NMW-exempt domestic worker (not an issue in these cases) would not be treating them "as a family member" and would, by implication, lose the exemption from the NMW, with potentially expensive consequences.
Wednesday, 7 December 2011
Supreme Court: Working Time and Annual Leave
[Thanks to Catriona Stirling of Cloisters for preparing this case summary]
If an oil and gas industry worker has a shift pattern of two weeks working offshore followed by two weeks onshore, can periods spent onshore count towards that worker's entitlement to annual leave under Regulation 13 of the Working Time Regulations 1998?
Yes, the Supreme Court has said in Russell v Transocean International .
Such workers do not have a right to take their annual leave as time off from their offshore work. It is not necessary that holidays must always be taken from time that would otherwise be work. There is no qualitative requirement to test whether a given period can be counted as rest. A rest period is simply any period that is not working time. Any period when the workers were onshore would fall into that category. The employer was entitled to insist that annual leave was taken during the periods when the workers were onshore.
If an oil and gas industry worker has a shift pattern of two weeks working offshore followed by two weeks onshore, can periods spent onshore count towards that worker's entitlement to annual leave under Regulation 13 of the Working Time Regulations 1998?
Yes, the Supreme Court has said in Russell v Transocean International .
Such workers do not have a right to take their annual leave as time off from their offshore work. It is not necessary that holidays must always be taken from time that would otherwise be work. There is no qualitative requirement to test whether a given period can be counted as rest. A rest period is simply any period that is not working time. Any period when the workers were onshore would fall into that category. The employer was entitled to insist that annual leave was taken during the periods when the workers were onshore.
Monday, 5 December 2011
Injury to Feelings + Aggravated Damages
[Thanks to Rad Kohanzad of Atlantic Chambers for preparing this case summary]
The EAT (Underhill P) has handed down its decision in Metropolitan Police v Shaw where it held:
In order to reduce the risk of a tribunal awarding a punitive element within an aggravated damages award, the EAT suggested that tribunals use the following wording in their judgments:
"injury to feelings in the sum of £X, incorporating aggravated damages in the sum of £Y"
The EAT observed that, personal injury claims arising from whistleblowing detriments or discrimination should be brought in the same tribunal as claims for other losses because there is often an overlap between an award for injury to feelings and injury to mental health, and it is difficult for the second tribunal hearing the case to assess whether the claimant has already received compensation for what is in substance the same suffering.
Finally, the EAT observed that it had doubts about the basis for the award of aggravated damages in principle. However, it considered the practice to be too well entrenched to warrant abolition at EAT level.
The EAT (Underhill P) has handed down its decision in Metropolitan Police v Shaw where it held:
- compensation in whistleblowing cases should be assessed on the same basis as awards in discrimination cases;
- aggravated damages are compensatory and not punitive; and
- aggravated damages represent an aspect of injury to feelings rather than a wholly separate head of damages.
In order to reduce the risk of a tribunal awarding a punitive element within an aggravated damages award, the EAT suggested that tribunals use the following wording in their judgments:
"injury to feelings in the sum of £X, incorporating aggravated damages in the sum of £Y"
The EAT observed that, personal injury claims arising from whistleblowing detriments or discrimination should be brought in the same tribunal as claims for other losses because there is often an overlap between an award for injury to feelings and injury to mental health, and it is difficult for the second tribunal hearing the case to assess whether the claimant has already received compensation for what is in substance the same suffering.
Finally, the EAT observed that it had doubts about the basis for the award of aggravated damages in principle. However, it considered the practice to be too well entrenched to warrant abolition at EAT level.
Marital Discrimination
[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
Does an employer act unlawfully if he treats an employee less favourably, not because she is married, but because she is married to a particular man?
Yes says the EAT (HHJ McMullen) in Dunn v Insititute of Cemetry and Crematorium Management.
Mrs Dunn was employed as a technical services manager. Following a dispute over her employment terms she resigned and claimed constructive unfair dismissal. But she also claimed breach of the Sex Discrimination Act 1975 because she contended she was less favourably treated because she was married to Mr Dunn, with whom the employer was also in dispute. She was treated as an adjunct of him.
According to the EAT, reviewing the authorities, including Chief Constable of the Bedfordshire Constabulary v Graham [2002] IRLR 239, section 3 of the Sex Discrimination Act 1975 (see Equality Act 2010, s. 8) could be construed as protecting the claimant by reason of her status, not only of being married, but also of being married to her husband. Furthermore, although the 1976 Equal Treatment Directive was not of assistance in this interpretation, the claimant's rights under Arts 8,12 and 14 of the ECHR were engaged, and section 3 of the SDA should be construed accordingly.
Does an employer act unlawfully if he treats an employee less favourably, not because she is married, but because she is married to a particular man?
Yes says the EAT (HHJ McMullen) in Dunn v Insititute of Cemetry and Crematorium Management.
Mrs Dunn was employed as a technical services manager. Following a dispute over her employment terms she resigned and claimed constructive unfair dismissal. But she also claimed breach of the Sex Discrimination Act 1975 because she contended she was less favourably treated because she was married to Mr Dunn, with whom the employer was also in dispute. She was treated as an adjunct of him.
According to the EAT, reviewing the authorities, including Chief Constable of the Bedfordshire Constabulary v Graham [2002] IRLR 239, section 3 of the Sex Discrimination Act 1975 (see Equality Act 2010, s. 8) could be construed as protecting the claimant by reason of her status, not only of being married, but also of being married to her husband. Furthermore, although the 1976 Equal Treatment Directive was not of assistance in this interpretation, the claimant's rights under Arts 8,12 and 14 of the ECHR were engaged, and section 3 of the SDA should be construed accordingly.
Equal Pay: Material Factor Defence
[Thanks to Jonathan Moffatt of Outer Temple Chambers for preparing this case summary]
If the explanation for a pay differential between employees had nothing to do with sex at the time of their recruitment, can that explain the continuing differential in subsequent years to satisfy the material factor defence under section 1(3) of the Equal Pay Act 1970? Yes, according to the EAT (Underhill P) in Secretary of State for Justice v Bowling.
C and her comparator were recruited on like work at about the same time. The latter was placed two points above C on an incremental scale because of his background and experience. By the time of the next pay review C had matched the performance of her comparator. The tribunal found that the original reasons for the differential ceased to be a material factor.
The EAT disagreed. The "catching up" might have undermined the justification for the differential, but it did not undermine its causative effect. The labelling of the explanation as "historical" was not helpful. The real question was whether a cause ceased to operate as an explanation for the differential at the date under consideration. The explanation in this case was not time-limited.
If the explanation for a pay differential between employees had nothing to do with sex at the time of their recruitment, can that explain the continuing differential in subsequent years to satisfy the material factor defence under section 1(3) of the Equal Pay Act 1970? Yes, according to the EAT (Underhill P) in Secretary of State for Justice v Bowling.
C and her comparator were recruited on like work at about the same time. The latter was placed two points above C on an incremental scale because of his background and experience. By the time of the next pay review C had matched the performance of her comparator. The tribunal found that the original reasons for the differential ceased to be a material factor.
The EAT disagreed. The "catching up" might have undermined the justification for the differential, but it did not undermine its causative effect. The labelling of the explanation as "historical" was not helpful. The real question was whether a cause ceased to operate as an explanation for the differential at the date under consideration. The explanation in this case was not time-limited.
Tuesday, 29 November 2011
Equal Pay Claims in the Civil Courts
[Thanks to Saul Margo of Outer Temple Chambers for preparing this case summary]
The Court of Appeal has this morning given judgment in Birmingham City Council v Abdulla, in which 174 former employees of the Council represented by Leigh Day & Co assert that the failure to give them pay equal to that of various predominantly male groups of staff, in accordance with the Equal Pay Act 1970, comprises a breach of contract enforceable in the civil courts.
The Council applied to strike out on the basis that the civil court should decline to exercise its jurisdiction to hear claims presented to the civil courts after the 6 month time limit for presenting claims to the employment tribunal had expired. Colin Edelman QC, sitting as a Deputy Judge of the QDB, had dismissed the Council's application in December 2010. The Court of Appeal has upheld his decision.
Although there is a discretion to strike out claims that could more conveniently be determined in the ET (in section 2(3) of the Equal Pay Act and effectively reproduced in section 122 of the Equality Act 2010), Mummery LJ held that it would be an extreme exercise of judicial discretion to strike out a claim for breach of an equality clause brought within the limitation period applicable to the civil courts. That discretion should be exercised only for the purpose for which it was conferred, namely the distribution of judicial business, and not to stifle claims that had been made in time.
The Court held that the analogy that had been drawn with the principle of forum non conveniens in the Ashby v Birmingham City Council case (judgment in which had been given after Abdulla) was not helpful. Save in exceptional cases amounting to an abuse of process, it is not for claimants to have to explain why they did not go to the ET in time: Parliament had given them an option as to whether to commence proceedings in the civil courts or the ET.
The Council has applied for permission to appeal to the Supreme Court.
The Court of Appeal has this morning given judgment in Birmingham City Council v Abdulla, in which 174 former employees of the Council represented by Leigh Day & Co assert that the failure to give them pay equal to that of various predominantly male groups of staff, in accordance with the Equal Pay Act 1970, comprises a breach of contract enforceable in the civil courts.
The Council applied to strike out on the basis that the civil court should decline to exercise its jurisdiction to hear claims presented to the civil courts after the 6 month time limit for presenting claims to the employment tribunal had expired. Colin Edelman QC, sitting as a Deputy Judge of the QDB, had dismissed the Council's application in December 2010. The Court of Appeal has upheld his decision.
Although there is a discretion to strike out claims that could more conveniently be determined in the ET (in section 2(3) of the Equal Pay Act and effectively reproduced in section 122 of the Equality Act 2010), Mummery LJ held that it would be an extreme exercise of judicial discretion to strike out a claim for breach of an equality clause brought within the limitation period applicable to the civil courts. That discretion should be exercised only for the purpose for which it was conferred, namely the distribution of judicial business, and not to stifle claims that had been made in time.
The Court held that the analogy that had been drawn with the principle of forum non conveniens in the Ashby v Birmingham City Council case (judgment in which had been given after Abdulla) was not helpful. Save in exceptional cases amounting to an abuse of process, it is not for claimants to have to explain why they did not go to the ET in time: Parliament had given them an option as to whether to commence proceedings in the civil courts or the ET.
The Council has applied for permission to appeal to the Supreme Court.
Friday, 25 November 2011
Calculating Pension Losses
[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
May an employment tribunal adopt a flexible approach to calculating pension loss, for example by using different multipliers to those annexed to employment tribunal pension loss guidelines?
A qualified 'yes', provided it gives cogent and credible reasons for so doing, says the EAT (Langstaff J presiding) in an obiter Judgment on a remedy appeal in Chief Constable of West Midlands Police v Gardner.
The EAT heard the remedy appeal despite overturning the Respondent's liability, and gave guidance on the approaches to calculating pension loss.
The employment tribunal calculated pension loss on the basis of a 'substantial loss' approach, but by using different multipliers from those in the 2003 booklet Compensation for Loss of Pension Rights Employment Tribunals 3rd Edition.
The Claimant's appeal criticised what it termed a 'pick and mix' approach to calculating pension loss. The EAT held that the tribunal had not committed an error of law, but noted that when a tribunal departs from an established approach, it must do so for good reason and state what its reasons are. The EAT stated that it would not recommend straying from established approaches "...except where it is plain that the interests of justice require it...".
The Judgment contains a useful discussion of the various approaches to pension loss and compensation.
May an employment tribunal adopt a flexible approach to calculating pension loss, for example by using different multipliers to those annexed to employment tribunal pension loss guidelines?
A qualified 'yes', provided it gives cogent and credible reasons for so doing, says the EAT (Langstaff J presiding) in an obiter Judgment on a remedy appeal in Chief Constable of West Midlands Police v Gardner.
The EAT heard the remedy appeal despite overturning the Respondent's liability, and gave guidance on the approaches to calculating pension loss.
The employment tribunal calculated pension loss on the basis of a 'substantial loss' approach, but by using different multipliers from those in the 2003 booklet Compensation for Loss of Pension Rights Employment Tribunals 3rd Edition.
The Claimant's appeal criticised what it termed a 'pick and mix' approach to calculating pension loss. The EAT held that the tribunal had not committed an error of law, but noted that when a tribunal departs from an established approach, it must do so for good reason and state what its reasons are. The EAT stated that it would not recommend straying from established approaches "...except where it is plain that the interests of justice require it...".
The Judgment contains a useful discussion of the various approaches to pension loss and compensation.
Wednesday, 23 November 2011
Best Employment Law Reforms Joke competition
Last week, the Secretary of State for Work and Pensions announced substantial reforms to UK employment law. Here are some comments from some of the leading UK commentators on employment law.
The funniest comment will receive a complimentary copy of the 5th edition of the Law Society Handbook on Employment Law; by happy coincidence published on the same day as the reforms were announced and the winner of the 'most immediately out of date book of the world' competition.
To submit a joke, either tweet @daniel_barnett or email me on daniel.barnett@outertemple.com
Several contenders (the highest ones are the most recent submissions)
(sent by Sean Jones)
(sent by Robert McCreath)
(sent by Emma Atkins)
(sent by Rachel Farr)
Picture the scene… An office. Grey. It's November outside. An employer asks an employee if they can have a protected conversation. Nervously, the employee agrees. As he does so, a disco ball is lowered through the polystyrene ceiling tiles and, as the employer strips off his jacket to reveal a sequined bustier, he begins to sing…
"At first I was afraid, I was petrified -
Kept thinking I'd employ you til the day you died.
But now we can talk frankly
And I can tell you how you're wrong
And I've grown strong - I can dismiss you for a song!
'Cos all you do is take up space
You never buy us donuts, you've a sad look on your face
I should have changed that stupid passcode
I should have made you leave your key
If I'd have known for just one second you'd come in to bother me
Go on now, walk out the door
Just turn around now
'Cos you're not welcome anymore.
Weren't you the one who makes the office groan?
Well here's your stuff - and repay your season ticket loan!
Chorus:
Your prospects may dive
But now you're gone here's the news - we're gonna thrive
We can fire without cause
And without breaking any laws
Protected convos are the future,
And now we're gonna boot ya…
Hey hey!"
Music fades...
(sent by Mark McWilliams)
Sacked by your employer? I hear Acas are recruiting...
(sent by Ian Taylor)
Employee: Sir Alan, please could we have a protected conversation?
Sir Alan: Certainly. You're fired.
(sent by Anya Palmer)
Vince walks into a bar and orders that bartender needs 2 years before he can claim unfair dismissal. Then consults on whether to order that.
(sent by Kim Hurley)
INTRODUCING the new and improved Cone of Silence for all your Protected Conversation needs. Buy now and you will also receive a free copy of our users manual entitled “How To tell your employees they Are rubbish, old or should quit or they’ll be Fired in Five Easy Steps.
COMING SOON – The mobile Protected Conversation device. This is an essential piece of kit which will allow you to tell all of your employees how rubbish and old they are while you are on the move!
(sent by Abigail Morris)
Knock Knock
Who's there?
Shhh... I'm having a protected conversation
(author asked to remain anonymous)
There was a minister called Vince Cable
Whose time at the DTI table
Saw the erosion of rights
Lots of union fights
Just because he's a somewhat unstable
The funniest comment will receive a complimentary copy of the 5th edition of the Law Society Handbook on Employment Law; by happy coincidence published on the same day as the reforms were announced and the winner of the 'most immediately out of date book of the world' competition.
To submit a joke, either tweet @daniel_barnett or email me on daniel.barnett@outertemple.com
Several contenders (the highest ones are the most recent submissions)
(sent by Sean Jones)
(sent by Robert McCreath)
(sent by Emma Atkins)
(sent by Rachel Farr)
Picture the scene… An office. Grey. It's November outside. An employer asks an employee if they can have a protected conversation. Nervously, the employee agrees. As he does so, a disco ball is lowered through the polystyrene ceiling tiles and, as the employer strips off his jacket to reveal a sequined bustier, he begins to sing…
"At first I was afraid, I was petrified -
Kept thinking I'd employ you til the day you died.
But now we can talk frankly
And I can tell you how you're wrong
And I've grown strong - I can dismiss you for a song!
'Cos all you do is take up space
You never buy us donuts, you've a sad look on your face
I should have changed that stupid passcode
I should have made you leave your key
If I'd have known for just one second you'd come in to bother me
Go on now, walk out the door
Just turn around now
'Cos you're not welcome anymore.
Weren't you the one who makes the office groan?
Well here's your stuff - and repay your season ticket loan!
Chorus:
Your prospects may dive
But now you're gone here's the news - we're gonna thrive
We can fire without cause
And without breaking any laws
Protected convos are the future,
And now we're gonna boot ya…
Hey hey!"
Music fades...
(sent by Mark McWilliams)
Sacked by your employer? I hear Acas are recruiting...
(sent by Ian Taylor)
Employee: Sir Alan, please could we have a protected conversation?
Sir Alan: Certainly. You're fired.
(sent by Anya Palmer)
Vince walks into a bar and orders that bartender needs 2 years before he can claim unfair dismissal. Then consults on whether to order that.
(sent by Kim Hurley)
INTRODUCING the new and improved Cone of Silence for all your Protected Conversation needs. Buy now and you will also receive a free copy of our users manual entitled “How To tell your employees they Are rubbish, old or should quit or they’ll be Fired in Five Easy Steps.
COMING SOON – The mobile Protected Conversation device. This is an essential piece of kit which will allow you to tell all of your employees how rubbish and old they are while you are on the move!(sent by Abigail Morris)
Knock Knock
Who's there?
Shhh... I'm having a protected conversation
(author asked to remain anonymous)
There was a minister called Vince Cable
Whose time at the DTI table
Saw the erosion of rights
Lots of union fights
Just because he's a somewhat unstable
Carrying Over Holiday Pay When Sick
[Thanks to Claire Darwin of Matrix Chambers for preparing this case summary]
The hard-working judges in the CJEU have yesterday, in KHS AG v Schulte, handed down a judgment which casts doubt on whether a holiday taken pursuant to the Working Time Directive should involve mere relaxation and leisure.
It is now long established that workers on long-term sick leave accumulate holiday (Stringer v HMRC). However in Schulte the CJEU confirmed that this right is not without limits, and that to allow workers to accumulate unlimited amounts of holiday entitlement, or pay in lieu, does not reflect the purpose of Article 7 of the Working Time Directive. Whilst many of us might disagree with this, the CJEU held that holiday taken after a certain point in time ceases to provide a rest from work, and becomes "merely a period of relaxation and leisure". They held that a holiday which involves mere relaxation and leisure, but does not provide a worker with a rest from work, is not consistent with the aim of Article 7 of the Working Time Directive.
In Schulte, the CJEU had to consider whether German national law, which provides that workers lose their right to holiday (or pay in lieu) at the end of a "carry over period" of 15 months (starting at the end of the year in which the holiday entitlement had arisen), was compatible with Article 7 of the Working Time Directive.
The CJEU held that it was compatible, and gave the following useful guidance on the use of so-called "carry over periods":
The hard-working judges in the CJEU have yesterday, in KHS AG v Schulte, handed down a judgment which casts doubt on whether a holiday taken pursuant to the Working Time Directive should involve mere relaxation and leisure.
It is now long established that workers on long-term sick leave accumulate holiday (Stringer v HMRC). However in Schulte the CJEU confirmed that this right is not without limits, and that to allow workers to accumulate unlimited amounts of holiday entitlement, or pay in lieu, does not reflect the purpose of Article 7 of the Working Time Directive. Whilst many of us might disagree with this, the CJEU held that holiday taken after a certain point in time ceases to provide a rest from work, and becomes "merely a period of relaxation and leisure". They held that a holiday which involves mere relaxation and leisure, but does not provide a worker with a rest from work, is not consistent with the aim of Article 7 of the Working Time Directive.
In Schulte, the CJEU had to consider whether German national law, which provides that workers lose their right to holiday (or pay in lieu) at the end of a "carry over period" of 15 months (starting at the end of the year in which the holiday entitlement had arisen), was compatible with Article 7 of the Working Time Directive.
The CJEU held that it was compatible, and gave the following useful guidance on the use of so-called "carry over periods":
- Any carry-over period must be substantially longer than the reference period for the holiday year in respect of which it is granted (Readers will remember that in Schultz-Hoff and Others the CJEU commented that a carry-over period of 6 months was not compatible with the Working Time Directive);
- It must ensure that the worker can have, if need be, rest periods that may be staggered, planned in advance and available in the longer-term;
- It must protect employers from the risk that a worker will accumulate lengthy periods of absence; and the consequent difficulties in organising work which lengthy periods of absence might entail.
Why employment law reforms won't work... And why they will !
WHY THEY WON’T WORK…
1. If a manager is unable to evaluate the suitability or performance of his staff within one year, there is little reason to suppose he will be better able to do it within two years. The extra year simply encourages an extra year of underperformance.
2. Litigation systems exist because people can’t or won’t settle matters amicably. Governments can’t force people – whichever side of the industrial divide they sit on – to be reasonable. They can only provide effective redress systems against unreasonable employers, and effective sanctions against unreasonable employees. The reforms don’t achieve either of those aims.
3. Compulsory mediation won’t help. Without substantial investment, Acas lacks the resources to do much more than hold a few telephone conversations, which it already does in the majority of cases.
4. Protected conversations will hurt, not help, employers. If an employer wants a frank conversation about poor performance, far better to do it on the record as it will help the employer defend any subsequent claim. If an employer simply wants to say, ‘we’re going to push you out unless you resign’, why should they receive protection from the consequences of their actions?
5. The reforms do nothing to eliminate the real problem of employees bringing unfounded discrimination or whistleblowing claims, which are more disruptive to business than unfair dismissal claims and which cost more to defend/settle.
6. Countries with more employment regulation have lower unemployment rates (and thus better economies). America – with almost no employment regulation – has 9% unemployment, contrasted with the UK’s 8%. The lowest unemployment rates in EU are Austria (3.9%), Netherlands (4.5%) & Luxembourg (4.8%) - all countries with far more ‘red tape’ than the UK.
7. Employers hire because they have too much work to cope with, or foresee making a profit on the cost of hire. They don’t refuse to hire because of a fear of a statistically unlikely tribunal claim several years down the line. The premise of Vince Cable’s reforms are wrong.
AND WHY THEY WILL…
1. Making it easier to dismiss means making it easier to hire. Today’s dismissed employee is tomorrow’s new recruit.
2. Employment tribunals dealt with 248,000 claims last year; they are highly expensive to run. Anything that can reduce the cost to the public purse is a good thing.
3. Introducing a compliance fine for employers who breach employment laws and lose a case at tribunal will encourage employers to settle claims rather than fight in court, which reduces the cost to the system.
4. Anybody can bring a tribunal claim, at almost no risk of having to pay any legal costs. When it costs an employer many thousands of pounds to defend claims, it means there is no level playing-field. Introducing a fee to bring a claim shifts risk and helps redress the imbalance.
5. Compulsory attempts at mediation through Acas will resolve a proportion of claims; sometimes the employer will recognise the employee has a point and be willing to settle, before the parties draw the battle-lines of litigation and entrench their positions.
6. Slimming down dismissal procedures means less cost to an employer when dismissing staff, and reduces the risk of ‘techincal’ unfair dismissals.
7. Portable CRB checks, which eliminate the need for a fresh application when moving jobs, will reduce cost and eliminate delay during the recruitment process.
1. If a manager is unable to evaluate the suitability or performance of his staff within one year, there is little reason to suppose he will be better able to do it within two years. The extra year simply encourages an extra year of underperformance.
2. Litigation systems exist because people can’t or won’t settle matters amicably. Governments can’t force people – whichever side of the industrial divide they sit on – to be reasonable. They can only provide effective redress systems against unreasonable employers, and effective sanctions against unreasonable employees. The reforms don’t achieve either of those aims.
3. Compulsory mediation won’t help. Without substantial investment, Acas lacks the resources to do much more than hold a few telephone conversations, which it already does in the majority of cases.
4. Protected conversations will hurt, not help, employers. If an employer wants a frank conversation about poor performance, far better to do it on the record as it will help the employer defend any subsequent claim. If an employer simply wants to say, ‘we’re going to push you out unless you resign’, why should they receive protection from the consequences of their actions?
5. The reforms do nothing to eliminate the real problem of employees bringing unfounded discrimination or whistleblowing claims, which are more disruptive to business than unfair dismissal claims and which cost more to defend/settle.
6. Countries with more employment regulation have lower unemployment rates (and thus better economies). America – with almost no employment regulation – has 9% unemployment, contrasted with the UK’s 8%. The lowest unemployment rates in EU are Austria (3.9%), Netherlands (4.5%) & Luxembourg (4.8%) - all countries with far more ‘red tape’ than the UK.
7. Employers hire because they have too much work to cope with, or foresee making a profit on the cost of hire. They don’t refuse to hire because of a fear of a statistically unlikely tribunal claim several years down the line. The premise of Vince Cable’s reforms are wrong.
AND WHY THEY WILL…
1. Making it easier to dismiss means making it easier to hire. Today’s dismissed employee is tomorrow’s new recruit.
2. Employment tribunals dealt with 248,000 claims last year; they are highly expensive to run. Anything that can reduce the cost to the public purse is a good thing.
3. Introducing a compliance fine for employers who breach employment laws and lose a case at tribunal will encourage employers to settle claims rather than fight in court, which reduces the cost to the system.
4. Anybody can bring a tribunal claim, at almost no risk of having to pay any legal costs. When it costs an employer many thousands of pounds to defend claims, it means there is no level playing-field. Introducing a fee to bring a claim shifts risk and helps redress the imbalance.
5. Compulsory attempts at mediation through Acas will resolve a proportion of claims; sometimes the employer will recognise the employee has a point and be willing to settle, before the parties draw the battle-lines of litigation and entrench their positions.
6. Slimming down dismissal procedures means less cost to an employer when dismissing staff, and reduces the risk of ‘techincal’ unfair dismissals.
7. Portable CRB checks, which eliminate the need for a fresh application when moving jobs, will reduce cost and eliminate delay during the recruitment process.
Government announces employment law reforms
After many months of rumour, Business Secretary Vince Cable has announced the government's proposals for what is claimed to be the biggest shakeup of employment law for decades. The government has also, this morning, published its Response to the Consultation on Resolving Workplace Disputes.
The main proposals are:-
- unfair dismissal qualifying period to increase to two years
- compulsory lodging of all claims through Acas, for an attempt at mediation, before they can be lodged with the tribunal
- consultation on the introduction of protected conversations, with the proviso that they will not extend to protect discriminatory acts
- a call for evidence, with a view to consultation, on reducing minimum period for redundancy consultation to 60, 45 or 30 days
- options for a 'rapid resolution scheme', to enable simple claims to be settled within three months
- amendment to s147 of Equality Act 2010, to clarify compromise agreements can be used to settle discrimination claims
- complaints about breach of employment contract (Parkin v Sodexho) to be taken out of whistleblowing law
- financial penalties to be introduced on employers who breach employment rights, payable to the Exchequer, subject to a discretion exercisable by Employment Judges
- a fundamental review of employment tribunal rules of procedure, to be led by Underhill J (who steps down as President of the EAT at the end of next month), to include changes to costs and desposit orders
- Employment Judges to sit alone in unfair dismissal cases
- CRB checks to be portable, so no need for a fresh application when moving jobs
- maternity and paternity leave to be 'modernised', with emphasis on greater involvement for fathers
A big thanks to PLC Employment, who attended the Press Conference and have tweeted much of the above information before DBIS has published its press release on the internet. For 'live' comment, have a look at the #ukemplaw thread on Twitter.
Tuesday, 22 November 2011
Compensatory Award – Statutory Cap
[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
At what stage should an employment tribunal 'gross-up' a Compensatory Award for Unfair Dismissal to allow for taxation when the statutory cap applies?
'Grossing-up' occurs before the cap is applied, says the EAT (HHJ Peter Clark presiding) in Hardie Grant London Ltd v Aspden.
The Claimant won her constructive dismissal claim. Since tax was due on her Compensatory Award over £30,000, the tribunal 'grossed-up' the Compensatory Award to allow for tax, after it had applied the statutory cap (at the time £65,300). The tribunal awarded £87,166.67, on the basis that the Award in the Claimant's hands after tax would be at the cap.
The EAT held that this was the wrong approach, although a Compensatory Award is based on the loss of net earnings, and 'grossing-up' ensures that the Claimant receives net lost earnings from the taxable element of the award, grossing-up occurs before the cap is applied. The EAT reduced the Compensatory Award to the then cap of £65,300.
At what stage should an employment tribunal 'gross-up' a Compensatory Award for Unfair Dismissal to allow for taxation when the statutory cap applies?
'Grossing-up' occurs before the cap is applied, says the EAT (HHJ Peter Clark presiding) in Hardie Grant London Ltd v Aspden.
The Claimant won her constructive dismissal claim. Since tax was due on her Compensatory Award over £30,000, the tribunal 'grossed-up' the Compensatory Award to allow for tax, after it had applied the statutory cap (at the time £65,300). The tribunal awarded £87,166.67, on the basis that the Award in the Claimant's hands after tax would be at the cap.
The EAT held that this was the wrong approach, although a Compensatory Award is based on the loss of net earnings, and 'grossing-up' ensures that the Claimant receives net lost earnings from the taxable element of the award, grossing-up occurs before the cap is applied. The EAT reduced the Compensatory Award to the then cap of £65,300.
Thursday, 17 November 2011
AG Opinion on Part-time Judges
[Thanks to Nathaniel Caiden of Cloisters Chambers for preparing this case summary]
Advocate General Kokott has handed down her decision today in O'Brien v Ministry of Justice. She considers that although it is for national law to decide if a part time judge is a worker, it was not permissible for national measure to discriminate between full-time and part-time judges, or between different kinds of part-time judges.
The case was referred by the Supreme Court on 28 July 2010. Mr O'Brien a part-time judge (who was paid a daily fee) had argued at the Supreme Court that the specific exclusion of part-time judges who are paid a daily fee from the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 was incompatible with the Part-Time Workers Framework Directive (97/81/EC) and so the Directive had not been properly implemented into UK Law.
The matters referred were
The question in the present case was whether the nature of a judge's employment relationship is substantially different from those that fall within the definition of 'worker' in national law. Mere labels attached (such as 'office holders') were therefore irrelevant in determining the nature of the employment relationship and so in answering the 'worker' question.
In answer to the second question, it was not permissible for national law to discriminate between different kinds of judges in the provision of pensions.
It will however be several months until the Court of Justice of the European Union hands down its decision; the CJEU's decisions normally, but not invariably, follow the recommendation of the Advocate General.
Advocate General Kokott has handed down her decision today in O'Brien v Ministry of Justice. She considers that although it is for national law to decide if a part time judge is a worker, it was not permissible for national measure to discriminate between full-time and part-time judges, or between different kinds of part-time judges.
The case was referred by the Supreme Court on 28 July 2010. Mr O'Brien a part-time judge (who was paid a daily fee) had argued at the Supreme Court that the specific exclusion of part-time judges who are paid a daily fee from the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 was incompatible with the Part-Time Workers Framework Directive (97/81/EC) and so the Directive had not been properly implemented into UK Law.
The matters referred were
- Is it for national law to determine whether or not judges as a whole are workers within the meaning of the Framework Agreement, or is there a Community norm by which this matter must be determined?
- If judges as a whole are workers within the Framework Agreement, is it permissible for national law to discriminate (a) between full-time and part-time judges, or (b) between different kinds of part-time judges in the provision of pensions?
The question in the present case was whether the nature of a judge's employment relationship is substantially different from those that fall within the definition of 'worker' in national law. Mere labels attached (such as 'office holders') were therefore irrelevant in determining the nature of the employment relationship and so in answering the 'worker' question.
In answer to the second question, it was not permissible for national law to discriminate between different kinds of judges in the provision of pensions.
It will however be several months until the Court of Justice of the European Union hands down its decision; the CJEU's decisions normally, but not invariably, follow the recommendation of the Advocate General.
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