TUPE - temporary lay-off is no bar to 'organised grouping of employees'

Thanks to Ed McFarlane of Deminos HR for preparing this case summary

Does laying-off employees before a transfer mean that they are not 'assigned' to an 'organised grouping of employees', stopping them from transferring under TUPE in a service provision change?

No, held the EAT in Inex Home Improvements Ltd v Hodgkins & others.

The Claimants worked on a building project in Sandwell, which was split into various tranches, they were laid off as per a national agreement when a tranche was completed. Their employer Inex did not get a further tranche of work, which went to another contractor in circumstances that the employment tribunal found would have been a service provision change, but since the Claimants were laid-off, they weren't an 'organised grouping' and so didn't transfer.

The EAT rejected this approach, taking a purposive approach to TUPE over a service provision change, for the 'protection of employment' despite those regulations deriving from UK law not EU law, and noted that:

"Common sense suggests that a temporary cessation of employment including for the purpose of holidays, sickness, or expressed to be a temporary lay off should not of themselves deprive employees of their employment if there is a service provision change during the period of temporary cessation."; but noting "In our opinion a temporary cessation of work in the case of a service provision change immediately prior to the transfer does not necessarily prevent a TUPE transfer taking place. The purpose, nature and length of the cessation are of course relevant in determining whether or not the organised grouping continued in existence.".

Company can bring Discrimination Claim

Thanks to Sophie Beesley of Old Square Chambers for preparing this case summary

Can a limited company, as a member of a Limited Liability Partnership, bring a direct discrimination claim for detrimental treatment because of the protected characteristic of an associated person?

Yes, held the EAT in EAD Solicitors v Abrams.

Mr Justice Langstaff rejected the argument that only an individual can be protected from discrimination under the Equality Act 2010 because only an individual can have a protected characteristic.

Rather, Langstaff P upheld the employment tribunal's decision that, just as a corporation can be a discriminator (described in the Act as a 'person'), so too can it be a person on the receiving end of mistreatment. There was no reason to restrict the meaning of person in s.13(1) to an individual. The term, consistent with the definition in the Interpretation Act 1978, could cover both an individual and a corporation.

Consistent with case law, the treatment complained of must be linked to the protected characteristic of an individual, but the treatment can be given to any person, natural or legal; there is no requirement that the person with the protected characteristic is the same person who suffers the detriment.

Employment Law Changes - 1 October 2015

Just a reminder - the following changes are taking place on 1 October 2015:-
 

• minimum wage changes (adult rate increases from £6.50 to £6.70)

 

• tribunals lose power to make wider recommendations in discrimination cases - now they can only make recommendations relating to the individual complainant (see here)

 

• the right for Sikhs to wear turbans (instead of safety helmets - currently only allowed on building sites) will be expanded to all workplaces, subject to various exceptions (see here)

 

• self-employed people become exempt from health & safety laws if they have no employees, subject to various exceptions (see here)

BIS Call for Evidence on Tips & Gratuities

BIS is calling for evidence on how tips, gratuities and service charges are collected and what deductions are made from them by the employer.

At present, tips paid in cash to the employee belong to the employee, whereas tips paid to the employer are the property of the employer, and it is simply a matter of what is agreed between employee and employer that governs whether it needs to be paid over. Tips and gratuities do not count for national minimum wage purposes.

The Government is seeking evidence on how tips work in practice including tronc systems, charges levied on staff as a percentage of their sales, or an administration charge. It also seeks views on what the Government can/should do to improve the practice of employers.

Responses are due by 10 November 2015.

ECJ: Meaning of 'transfer of a business'

Thanks to James English of Hempsons solicitors for preparing this case summary

Is it a TUPE transfer if a majority shareholder takes over its subsidiary's activities after it is wound up?

Yes, held the ECJ in Ferreira da Silva e Brito & Others v Estado Portugues.

The applicants were dismissed as part of a collective redundancy when Air Atlantis, which provided charter flights, was wound up. Its main shareholder, TAP, began to operate some of its routes using its aircraft, offices and equipment, other assets and employees. The applicants brought proceedings seeking reinstatement and compensation, and the matter was referred to the European Court of Justice (CJEU).

The CJEU held that there had been a transfer for the purposes of the Acquired Rights Directive. The decisive factor in establishing that a transfer had taken place was the fact that the entity had retained its identity, indicated by the fact that the activity continued or resumed. In a situation such as air transport, the fact that tangible assets transferred was also a key factor. In this case, TAP had taken over the charter flight routes, including aircraft leases, assets, activities, and employees. It was irrelevant that they were integrated into TAP's structure, and did not retain an autonomous organisational structure. A 'functional link' between the assets and staff, and the activities which they carried out, had been preserved, which allowed TAP to carry out the same activity.

New Enterprise Bill published

The government has, today, published the Enterprise Bill. The employment-law related aspects are:-
 

• protecting the 'apprentice' brand, by (amongst other things) making it a criminal offence to offer an apprenticeship course or training if it is not a statutory apprenticeship (clause 19)

 

• a power to introduce, by statutory instrument, a cap on public sector exit payments of £95,000 (or such other amount as is specified in the S.I.) in a 28 day period (section 26).

Employment Tribunal Fees

The House of Commons Library produced a briefing paper earlier this week summarising the background to and operation of the fees system.

It provides a statistical analysis of its impact, proposals for reform, and discusses the legal challenges to the Fees Order. It is an excellent document, well worth reading.

Working Time - Travel Time to First Job of the Day

Thanks to Paul Smith of Broadway House Chambers for preparing this case summary

In the case of mobile workers, is the time spent travelling from home to customers' premises to be regarded as 'working time' for the purposes of the Working Time Directive?

Yes, held the Court of Justice of the European Union in Federacion de Servicios Privados del sindicato Comisiones obreras v Tyco Integrated Security SL.

Tyco employs technicians who install and maintain security equipment at customers' premises in Spain. The technicians are provided with a vehicle and they travel from their own homes to the locations they are instructed to install the equipment, sometimes of distances exceeding 100km. They are in contact with their employer by mobile phone and are not generally required to travel to an office or a central location save for the weekly purpose of collecting tools and materials.

For the purposes of the Working Time Directive and the relevant Spanish legislation, Tyco argued that the technicians' travelling time was a "rest period" rather than working time because they were not carrying out any installations or maintenance during those periods. The CJEU disagreed, stating that such an argument "would distort that concept and jeopardise the objective of protecting the safety and health of workers" and that it was working time.

Tyco also argued that because the technicians' have the individual autonomy to make decisions as to their itinerary and which route(s) to take during their travelling time, these factors put them outside the boundaries of the Directive. Once again, the CJEU disagreed and made reference to the fact that the travelling time can neither be shortened nor used freely by the technicians for their own interests. Accordingly, the technicians were "at the disposal" of Tyco and thus their travelling time is covered by the Directive.

Proper Limits to HR's Role in Disciplinary Situations

Thanks to Sarah Fitzpatrick of Collingwood Legal for preparing this case summary

Can a dismissing or investigating officer seek guidance or advice from human resources?

Yes, held the EAT in Ramphal v Department for Transport, relying on the Supreme Court decision in West London Mental Health NHS Trust v Chhabra, but such advice should be limited to questions of law and procedure and not stray into areas of culpability.

The central issue was whether the Employment Judge had properly considered an inference that the HR department had inappropriately lobbied the dismissing officer as to the culpability of the Claimant and the appropriate sanction to impose.

HHJ Serota found that there was evidence to support "an inference of improper influence and the Employment Judge should have given clear and cogent reasons for accepting there was no such influence" (para 54). Accordingly the appeal was allowed and the case was remitted to the original employment tribunal for a rehearing.

Useful guidance is given at at para 56, "an employee facing disciplinary charges and a dismissal procedure is entitled to assume that the decision will be taken by the appropriate officer, without having been lobbied by other parties as to the findings he should make as to culpability.....and also given notice of representations made by others to the Dismissing Officer that go beyond legal advice, and advice on matter of process and procedure."

Law Society calls for Employment Tribunal Reforms

The Law Society has published a discussion document, Making Employment Tribunals Work For All.

The main proposals are:-

· all employment law disputes should be dealt with in a single jurisdiction consisting of four levels.
· claims should be dealt with flexibly, depending on their intricacy and the financial stakes involved.
· simple cases, such as handling unpaid wages claims should be dealt with on a paper basis in Level 1.
· more complex cases, such as multi-strand discrimination cases or restrictive covenants, should be heard by an experienced judge in Level 4.
 

Presenting a Tribunal Claim

Thanks to Naomi Cunningham of Outer Temple Chambers for preparing this case summary

Was it open to an employment tribunal to find that it had not been reasonably practicable to present a complaint within 3 months where there had been a previous abortive (but timely) claim dealing with the same subject-matter?

Yes, held the EAT in Software Box Ltd v Gannon. 

Mrs Gannon, who suffered from alcohol dependency, anxiety and depression, presented an ET1 complaining of unfair dismissal together with an application for remission of fees. A series of administrative bungles at the employment tribunal meant she didn't learn that she had been refused remission until after the date for payment had passed, and her ET1 had been rejected. As soon as she did learn, she borrowed the fee and presented a further ET1 out of time.

Counsel for the Respondent argued that it wasn't open to the employment tribunal to find that it hadn't been reasonably practicable for Mrs Gannon to present her complaint in time because she had previously done exactly that.

Langstaff P wasn't having any of that. The question was whether it had been practicable for Mrs Gannon to present the particular claim - i.e. her second claim - in time. The Employment Judge hadn't considered that question properly, so the case was remitted.

The President also noted that Mrs Gannon could have applied, and could still apply, to extend time for payment of the fee.

TUPE: Long-term sick employee not 'assigned'

Thanks to Ed McFarlane of Deminos HR for preparing this case summary

Can an employee who is permanently off work sick be assigned to an organised grouping of employees in the event of a TUPE transfer?

No, held the EAT in BT Managed Services Ltd v Edwards.

The Claimant, a field operations engineer, had been off work for over 5 years with no indication of him ever returning. He had received PHI benefits, until that was exhausted, then discretionary sick pay. He remained 'on the books' of a particular unit. When that unit transferred from BT Managed Services to Ericsson, an employment tribunal held that Mr Edwards did not transfer as he was not assigned to the grouping of transferred employees.

Dismissing the appeal, the EAT held that to be assigned to an organised grouping, an absent employee "will generally require some level of participation or, in the case of temporary absence, an expectation of future participation in carrying-out the relevant activities on behalf of the client" and contrasted permanent inability with long-term sick or maternity leave, where the absence might be regarded as temporary. An administrative connection with a transferring grouping (e.g. for pastoral purposes) would not suffice for a transfer:

"Mere administrative connection to that grouping is insufficient to constitute an employee as being assigned to the grouping in the absence of some participation in the grouping's economic activity."

Scotland to Abolish Employment Tribunal Fees

In 'A Stronger Scotland: The Government's Programme for Scotland 2015-16', the Scottish Government has announced it intends to abolish employment tribunal fees.

At page 3 of the document (p6 of the pdf file), the Government states "...we will abolish fees for employment tribunals - ensuring that employees have a fair opportunity to have their case heard."