Friday 30 July 1999

DTI Proposals on Boardroom Pay

The DTI has this morning issued a consultation document containing proposals on boardroom pay and on limiting 'golden farewells' for directors.

The Press Release indicates that the consultation document contains the following proposals:

1. limiting notice or contract periods to one year (or less) unless there are exceptional reasons for a longer period;
2. strengthening disclosure provisions on service contracts by requiring companies to provide a clear explanation to shareholders of any compensation agreements agreed by the board following the departure of a director;
3. requiring quoted companies to ask shareholders to vote on its remuneration report every year, or enabling shareholders to move a resolution on remuneration at the AGM.

Stephen Byers, Secretary of State for Trade and Industry, said "Most people recognise the need to pay a 'golden hello' to attract the best but don't understand the need to pay a golden farewell for failure."

Replies to the consultation document should be received by 29th October 1999. According to the press release, the consultation document is available at http://www.dti.gov.uk/cld (but it was not there when I looked!)

Thursday 29 July 1999

Employment Relations Bill

A complete copy of full text ERA 1996 marked up with all amendments made since enactment in May 1996, including amendments prospectively made by the 1999 Act, is available now on the "emplaw" internet site. Amendments are marked up in colour and annotated. It is downloadable.

We have been preparing this amended version of ERA 1996 since January 1999 when the first version of the ERB appeared. It is now on the professional area of our web site at www.emplaw.co.uk (passwords are required but cost only from £5 + VAT and can be bought on-line with a credit card via our ISP's secure server). I'd be very grateful if anyone who uses it felt able to make any comments in the guestbook on the site.

This week's EAT decisions

Discrimination

LEICESTER CITY COUNCIL
v
MRS P McCONNELL

(EAT, 5th March 1999, Holland J.)

When determining whether race discrimination has occurred, an employment tribunal must find a comparator who is not in the racial group in question and where the relevant circumstances are not materially different. If an actual comparator cannot be found, the tribunal must consider the position of a hypothetical comparator.

Extract from judgment: "We reject the subtleties of Mr Segal's reply. In the absence of an actual comparator we see no difficulty in requiring a Industrial Tribunal as an industrial jury to compare the treatment found to be accorded by this employer to the Applicant with the treatment that would have been accorded to a person who is white but who otherwise shares the same characteristics. It is to be remembered that criminal juries are regularly asked to undertake just that intellectual exercise, for example when deciding whether murder is reduced to manslaughter by reason of provocation. Not only is this approach required, but (as this case demonstrates) comparison with a comparator (actual or notional) provides a vital intellectual discipline."

For a copy of the transcript, select http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/01ead573571930cd802567ba004f2511?OpenDocument

Discrimination
TOM SAWYER & ALL OTHER MEMBERS
OF THE LABOUR PARTY
v
MR R AHSAN
(EAT, 14th July 1999, Lindsay J.)
It is unlawful for a political party to discriminate on grounds of race in the selection of a candidate for a local councillor, under section 12 of the Race Relations Act 1976. An employment tribunal therefore has jurisdiction to hear such an allegation.
For a copy of the transcript, select http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/1729a1d037f0e08d802567b7003758b1?OpenDocument


Procedure
MRS M J BENYON & OTHERS
v
DAVID SCADDEN & OTHERS

(EAT, 14th June 1999, Lindsay J.)
This case confirms that it is legitimate, in appropriate cases, to take a backing trade union’s funds into account when making a costs order against an applicant. Moreover, there is nothing wrong in principle with ordering costs to be taxed on the indemnity basis.
For a copy of the transcript, select http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/1f60a27108ef26a4802567b7003b17fb?OpenDocument


Unfair Dismissal
VAUX BREWERIES LTD
v
MR I McNAUGHTON

(EAT, 23rd June 1999, HHJ Peter Clark)

Where a bar manager admits certain, but not all, allegations of sexual harassment against two members of the bar staff, it is within the range of reasonable responses for an employer to decide not to interview other members of staff (so as not to undermine confidence if dismissal did not occur) before deciding to dismiss the manager.

For a copy of the transcript, select
http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/b16e38592d9c8a61802567bb004024db?OpenDocument

Sunday 25 July 1999

New cases

ECM (VEHICLE DELIVERY SERVICE) LTD
v
B COX & OTHERS

TUPE

Court of Appeal (Mummery, Laws and Henry LJJ), 22nd July 1999

The Court of Appeal held that when deciding whether a TUPE transfer has occurred, a tribunal should take the whole range of factors into account as in Spijkers. It is an error of law, and a misunderstanding of Betts and Suzen, to regard whether the transferor refused to re-employ ‘transferring’ employees as the dominant question.

This is consistent with the EAT’s decision in OCS v Rudden (see bulletin 19th July 1999). It may no longer be such good advice (if it ever was!) to inform employers that refusing to take on any members of the existing workforce will significantly increase their chance of avoiding a TUPE transfer.


MR J A LLOYD
v
TAYLOR WOODROW CONSTRUCTION

Redundancy

EAT. An appeal against selection for redundancy, by way of rehearing, can cure the procedural defect whereby workers were not told of the selection criteria until 8 weeks after the dismissal.

For the transcript, see
http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/e1122416c4e82144802567b6004ca4c7?OpenDocument


TRIANGLE CARS
v
MISS A M HOOK

Unfair Dismissal

EAT. HHJ Altman confirms that tension between two employees is capable of being ‘some other substantial reason’ for a dismissal. However, this case is interesting because the tribunal hinted that the Polkey defence (i.e. s/he would probably have been dismissed even if a proper procedure had been followed) may not be applicable to unfair dismissal, as contrasted with redundancy, cases (para. 14).

For the transcript, see:
http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/2da23e6098cda045802567b50049f7f5?OpenDocument

Monday 19 July 1999

This week's EAT decisions

Contents
1. Summary of Decisions posted to EAT website this week.
2. Correction of previous posting

1. Summary of Decisions posted to EAT website this week

MR B HITCHCOCK
v
VALE CASTINGS LTD

Procedure: Submissions of ‘no case to answer’ should rarely be allowed

The transcript is available from:
http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/17e849b52d86b4f3802567af004971e6?OpenDocument


ANGUS COUNCIL
v
MR A EDGLEY

Unfair Dismissal: Although highly desirable, it is not mandatory for an employment tribunal to refer to the ‘range of reasonable responses’ test when determining whether a dismissal is fair or unfair.
The transcript is available from: http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/2fccc8b5d6bd1978802567af004f8e83?OpenDocument


OCS CLEANING SCOTLAND LTD
v
(1) PHILIP RUDDEN & 17 ORS
(2) OLSCOT LTD

TUPE: There is no rule of law stating that the re-employment (or offer to re-employ) a significant section of an existing workforce is a condition necessary before a transfer of undertakings of a labour-intensive business can occur. Insofar as people might have thought otherwise from Betts and Suzen – Betts dealt with an asset-reliant business, and Suzen had different facts!

Somewhat interestingly is the acknowledgement by Morison J. that:

"15. There is no doubt that the position in law in relation to transfers of undertakings is in a mess. The Süzen decision appears to conflict with the decision which the court had given earlier in the case of Schmidt yet it is asserted in the latter case that the former was still good law. In subsequent decisions of the court there is simply reference made to various paragraphs in their previous decisions and it would appear that there is going to be no more guidance from the European Court of Justice on the difficult question as to in what circumstances an economic entity retains its identity. That question is of particular importance and difficulty in a labour intensive business such as contract cleaning. Employment Tribunals are required to apply their minds to these questions. It is the President's view that where they have sought to apply the law as best they can, unless there has been an obvious misdirection the decision which they arrive at should be supported by the Employment Appeal Tribunal. This is such as case. We are unanimously of the view that this was a decision which the Employment Tribunal were entitled to arrive at."
Thus the EAT has made it clear it does not like TUPE appeals!

The transcript is available from:
http://wood.ccta.gov.uk/eat/eatjudgments.nsf/faf4a44f36aa53fc80256794004040c2/bf9f04ccde7c0831802567af0052aecd?OpenDocument.


2. Correction of previous posting
Henry Scrope, of DiscLaw Publishing, has pointed out an error in the posting dated 16th July 1999.
There has been an enabling clause in the Employment Rights Act 1996 allowing the government to extend employment rights to all workers (apart from the genuinely self-employed) for some time. It can currently be found at clause 23 of the Bill.
The ‘news’ element of the last posting should have been limited to detailing the research on workers / self-employed published last week by the Business Research and Faculty of Law at the University of Cambridge.

Friday 16 July 1999

Extension of employment rights to some 'self-employed'

The government announced yesterday that it would introduce a new power under the Employment Relations Bill to extend some or all existing employment rights to all workers, apart from those who are genuinely self-employed.

The extension is intended to bring agency workers and temporary workers within the mainstream fold of employment law protection (they already have rights under the NMWA and WTR, assuming they fall within the definition of 'worker').

Research carried out by the Business Research and Faculty of Law at the University of Cambridge demonstrated that 86% of 'workers' perceive themselves as employees. However, under the current (vague) tests for distinguishing employees from self-employed, only 70% of true 'workers' fell within the definition of 'employee', and the status of the remaining 30% was unclear.

Employers, particularly agency employers, currently avoid giving their workers 'employee' status by two principal methods:

(1) the widespread use in contracts of 'waiver' or 'relabelling' clauses purporting to determine status; and,

(2) the use of terms denying that the employer has an obligation to provide work to the worker.

The government's proposal would prevent employers from being able to stop many employees from accruing rights under the 1996 ERA. It would also lead to a reduction in workloads for Employment Tribunals, since the exciting preliminary appointments to determine whether a worker was employed or self-employed would reduce significantly in number.

Friday 9 July 1999

Redundancy Test

The House of Lords has now (hopefully) laid to rest the function v contract test for determining whether a redundancy situation exists.

This case dealt with the defintion of redundancy in the Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965. This is identical to the wording of sections 98/139 of the Employment Rights Act 1996.

Following the approach in Safeway Stores v Burrell, Lord Irvine LC (giving the leading judgment) stated that previous decisions setting out the 'function' or 'contract' test missed the point. The wording of the Act was clear, and there were two questions for tribunals to consider:

(1) Did a certain economic state exist? (in this case, whether the requirements of the business for employees to carry out work of a particular kind had diminshed; and,. if so,

(2) Was the dismissal attributable, wholly or mainly, to that state of affairs (i.e. causation).

The Collective Redundancies and Transfer of Undertaking (Protection of Employment) (Amendment) Regulations 1999

An SI was laid before parliament on 7th July 1999 improving procedures for informing and consulting employee representatives when there are plans to make large-scale redundancies or TUPE transfers.

The Collective Redundancies and Transfer of Undertaking (Protection of Employment) (Amendment) Regulations 1999 (which will be allocated a number in the next few days) is to bring UK law into line with the Acquired Rights Directive and the Collective Redundancies Directive.

The Regulations apply to redundancies or transfers involving 20+ employees. It comes into force on 28th July 1999, but will not apply in respect of collective redundancies or business transfers occurring before 1st November 1999.

The main changes are as follows:

(1) Employers who recognise a trade union must in future consult that union and cannot just consult other representatives of the employees;

(2) Specific requirements are laid down for electing employee representatives to be consulted in cases where the employer does not recognise a union;

(3) It is made clear that representatives of all employees who may be affected should be consulted - not just those whom it is proposed to be made redundant;

(4) Representatives are given specific rights for time off work;

(5) Remedies are changed, for example the protective award is increased from 4 weeks to 13 weeks' pay.

The S.I. will be formally published by HMSO in the next few days. I will send out a copy by Email to anyone who asks me! (dbarnett@2gis.co.uk)

Thursday 8 July 1999

Working Time Regulations

Two amendments are proposed:

(1) To disregard working time, for the purpose of the 48-hour week, where a worker is not required to work those hours by the employer. Thus white-collar managers who are contractually obliged to work 45 hours, but choose to work an additional unpaid 10 hours per week, would be regarded as working for 45 hours only and will not need to sign an 'opt-out' agreement. Normal overtime will still count as working time, because it is measured and the duration is determined by the employer. Only unpaid and, effectively, unrequested hours will be disregarded.

(2) The requirement for employers to keep records for opted-out workers, as to how many hours they are working, will be abolished.

The TUC has expressed concern that these amendments will permit unscrupulous employers to get around the intention of the Working Time Directive.

A copy of the consultation paper, which includes the draft S.I. giving effect to the amendments, is attached to this message (Adobe Acrobat 3.0 required).

Responses to the consultation paper are sought by 21st July 1999.

Thanks to Simon Jeffreys from Cameron McKenna for pointing me to this information.

Wednesday 7 July 1999

EAT online

The Employment Appeal Tribunal now has a web site at http://www.employmentappeals.gov.uk/

Judgments are available in full text, indexed by type of case (Sex Discrimination, Transfer of Undertakings, Unfair Dismissal etc), Appellant, Respondent or Judge. These are available in html format. Other parts of the site are available in pdf format, including Cause Lists and forms.

There is also a good section written for non-lawyers, on whether there is cause for appeal and what the procedures are.

EAT online

The Employment Appeal Tribunal now has a web site at http://www.employmentappeals.gov.uk/

Judgments are available in full text, indexed by type of case (Sex Discrimination, Transfer of Undertakings, Unfair Dismissal etc), Appellant, Respondent or Judge. These are available in html format. Other parts of the site are available in pdf format, including Cause Lists and forms.

There is also a good section written for non-lawyers, on whether there is cause for appeal and what the procedures are.

Tuesday 6 July 1999

Employment Law (UK) List

Employment Law (UK) List - http://danielbarnett.co.uk
Little of note has happened in the employment field since mid-June, hence the lack of bulletins over the last three weeks.

Members of the list are invited to send me summaries of any cases they are involved in, which might be of interest to other members (dbarnett@2gis.co.uk). You'll receive the benefit of knowing your name is being seen by about 150 employment solicitors, 15 barristers and a handful of journalists. If you prefer to remain anonymous, that's perfectly okay - just tell me!