Government Proposals for Employment Law Reform

The Government has published on the internet (but not yet in any sort of press release) proposals to deregulate business. They cover all sorts of things, from planning to procurement. Of interest to employment law practitioners, the proposals are:-

• increase the unfair qualifying dismissal period from one year to two years
• introduce fees for bringing tribunal claims
  
• consult on removing Equality Act provisions imposing liability on employers for third party harassment which they do not take reasonable steps to prevent

All these were the subject of consultation some time ago, but no Response to the Consultation has yet been published. This new document, 'One-In, One-Out, Second statement of new Regulation', suggests that the government has already decided what steps it intends to take. See page 14 (Appendix D) of the document.

The question does arise whether these proposals are genuine, or whether they are little more than political grandstanding and cannot be implemented due to EU law issues. Watch this space...

Daniel Barnett

Discrimination - Vicarious Liability & Aggravated Damages

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

Can agents of an organisation make it vicariously liable for acts of discrimination under the Employment Equality (Religion or Belief) Regulations 2003, regs 22 and 23 (now s. 109 of the Equality Act 2010), even though they have not been authorised by the principal to discriminate?

Yes, says the EAT (Silber J) in Bungay v All Saints Haque Centre. The appellants in this case were members of the board of a religious centre. It was held by an employment tribunal that they had caused the unfair dismissal of the claimants, who were employees of the centre, and that they had unfairly discriminated against them on ground of their faith (on account they were Hindu). The appellants were authorised to run the centre even though they did this in a discriminatory manner. Under agency principles however (and see now EA 2010, s. 109 (3)) their acts were treated as being done by the centre.

The tribunal also found the board members were jointly and severally liable with the centre for discrimination damages on the ground they were "prime movers" in the campaign of discrimination.

Further (following The Governing Body of St Andrew's Primary School v Blundell [2010] UKEAT/0330/09/0608), aggravated damages could be awarded in respect of the board members' post-employment conduct in taking a high handed approach to disciplinary proceedings and making unfounded allegations to the police, which cause the claimants much distress.

Government Proposals for Employment Law Reform

UPDATE: Government Proposals for Employment Law Reform This is important. Further to my email bulletin this morning (see below) announcing the government's intention to increase the unfair dismissal qualifying period from one to two years, I have been sent the following statement by the Department for Business, Innovation and Skills:- "We can confirm that there was a drafting error in the Second Statement of New Regulation. No final decision has been taken to increase the unfair dismissal qualifying period." It seems from conversations that various individuals have had with BIS this afternoon (and thanks to Paul Callaghan of Taylor Wessing for telling me about this), that BIS are still considering the responses to the consultation document and have not reached a decision on whether to increase the unfair dismissal qualifying period. A correct version of the government proposals is here (see p14). Note that the new phrasing suggests that the increase in qualifying period is a proposal, but the introduction of fees is definitely coming. There is also an excellent blogpost on this topic, from employment barrister Sean Jones, here. TEXT OF PREVIOUS BULLETIN SENT TODAY 12.30pm The Government has published on the internet (but not yet in any sort of press release) proposals to deregulate business. They cover all sorts of things, from planning to procurement. Of interest to employment law practitioners, the proposals are:- increase the unfair qualifying dismissal period from one year to two years introduce fees for bringing tribunal claims consult on removing Equality Act provisions imposing liability on employers for third party harassment which they do not take reasonable steps to prevent All these were the subject of consultation some time ago, but no Response to the Consultation has yet been published. This new document, 'One-In, One-Out, Second statement of new Regulation [LINK REMOVED]', suggests that the government has already decided what steps it intends to take. See page 14 (Appendix D) of the document. The question does arise whether these proposals are genuine, or whether they are little more than political grandstanding and cannot be implemented due to EU law issues. Watch this space... Daniel Barnett

Michael Rubenstein's Annual ILS Lecture

Michael Rubenstein, editor of the IRLRs, is presenting his annual talk for the Industrial Law Society on forthcoming cases.

This lecture, which is one of the highlights of the employment lawyer's calendar, contains a comprehensive list of all employment cases coming up before the EAT, Court of Appeal, Supreme Court and Court of Justice. I really recommend this one as a three-line whip.

Here are the dates:-

London - 10th October
Newcastle - 12th October
Manchester - 17th October
Leeds - 18th October

More details here.

Job References

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

Can a reference be lawful (i.e. not negligent in its preparation) even though it is, to the layman, unfair?

Yes, says the Court of Appeal in Jackson v Liverpool City Council.

J worked for Liverpool City Council in its youth offending team. He left to join Sefton Borough Council with good references. He then applied for a post with Sefton in its youth offending service. One of his three references from his former employer (Liverpool) was caveated. It was suggested there were record keeping issues. But these had not been investigated before he left (this was made clear in the reference). He failed to get the job and was unemployed for a year.

The trial judge (upheld by the Court of Appeal (applying Spring v Guardian Assurance [1995] 2 AC 296) considered the reference true and accurate even though it referred to matters which were untested and unproved. The claim for negligent mis-statement therefore failed.

The moral of the tale is to try to agree your reference before you leave.

Varying Terms and Conditions of Employment

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

The EAT (Wilkie J) has handed down its decision in Slade v TNT (UK), which is authority for the proposition that an employer did not necessarily act unfairly when, after failed negotiations to change terms of employment, which included an offer to "buy out" certain existing terms, the employer terminated existing contracts with an offer of re-employment on the new terms which did not include the buy-out payment.

TNT employed loading bay operatives who enjoyed an "end of sort" (EOS) bonus. For legitimate reasons TNT sought to remove that bonus. Negotiations ensued which including an offer of a buy out payment but TNT warned that if the deal was declined, existing contracts would be terminated and an offer of re-employment made.

The employment tribunal decided that there was "some other substantial reason" for the resultant dismissal and the employer had acted fairly. The EAT considered the tribunal had correctly focused on the reasonableness of the employer's decision, balancing the advantages to the business with the effect on the claimants. Applying the band of reasonable responses test, the EAT considered that it was not right to say that the only reasonable response for the employer would be to offer re-engagement on terms which included the buy-out sum. It was open to a reasonable employer to conclude that they should not offer a lump sum on re-engagement when they were not going to achieve any of the benefit of the agreement for which the lump sum had been offered.

Assessing Costs in ETs

[Thanks to Nadia Motraghi of Old Square Chambers for preparing this case summary]

Does a tribunal have to take into account a Claimant's capital when considering his means in the context of making an expenses award (costs in England & Wales)?

The EAT held that it does in Shields Automotive v Grieg. While a tribunal was not bound to consider a paying party's means (see r41(2) ETR 2004), if it did, it was required to take account of his whole means, including his capital in the former matrimonial home.

Secondly, the Claimant's misrepresentations below came back to bite him after the EAT heard fresh evidence from his estranged wife refuting the nature and extent of his outgoings and regarding disposal of capital prior to the hearing.

The EAT held that given the Claimant's misleading evidence, no tribunal could properly assess the Claimant's means. Therefore it was appropriate for no account to be taken of his means. The EAT ordered the case be remitted to the tribunal for the Claimant to pay the whole of the Respondent's expenses below and ordered remission of the assessment of the expenses to the Auditor of the Sheriff Court (detailed assessment in the County Court in England & Wales).

ECJ - Pilot's Holiday Pay not limited to Basic Salary

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

When a pilot is on holiday, should holiday pay be calculated from basic salary, or should the calculation include allowances on top of basic salary?

After a reference by the Supreme Court in the cases of Williams & Others v British Airways plc the answer to the question that landed at the European Court of Justice "ECJ" is that generally, allowances must be included in holiday pay where they relate to "any inconvenient aspect" intrinsic to the performance of the job, e.g. a flying allowance paid to a pilot, whereas an allowance for occasional or ancillary costs, e.g. an allowance for time spent away from the pilot's base (but not working) might not need to be taken into account for holiday pay. However, pay during leave should be comparable to pay during periods of work.

The ECJ was concerned that if employers only pay basic salary for annual leave, the prospect of losing pay could deter people from taking annual leave, which would be contrary to the social policy of encouraging people to take leave.

The ECJ left the question of which elements of pay should be incorporated into holiday pay to be determined by the national Court.

The ECJ was considering a question arising from The Civil Aviation (Working Time) Regulations 2004, which cover aircrews, implementing the sector-specific provisions relating to Working Time. However, the Judgment may have broad implications for calculating holiday pay for workers where task-related allowances form part of remuneration.

Reasonable Adjustments

[Thanks to Sarah Russell, solicitor at Ventura, for preparing this case summary]

Does there need to be a good or real prospect of an adjustment alleviating the disadvantage suffered by a disabled employee for that adjustment to be a reasonable one? Not necessarily, held the EAT in Leeds Teaching Hospital NHS Trust v Foster.

Mr Foster was placed at a substantial disadvantage by the requirement for him to work within the security department, because his disability, stress, was caused by that department. It would have been a reasonable adjustment to put him on the redeployment register. It was not necessary to find that there would have been a good prospect of a redeployment opportunity becoming available and Mr Foster being well enough to work. There need only have been a prospect of that at the date of the decision. A real prospect of an adjustment removing a disadvantage is sufficient to make an adjustment reasonable, but an adjustment may be reasonable even if there is a lower chance.

ECJ – Compulsory Retirement Age for Pilots

[Thanks to Emma Price of Temple Garden Chambers for preparing this case summary]

Is a compulsory retirement age for pilots contrary to the EU prohibition on age discrimination? 'No', says the European Court in Prigge v Lufthansa, but subject to necessity and proportionality.

The ECJ gave Judgment today on a reference from the German Federal Labour Court arising from a collective agreement to which a German Airline was a party. The agreement automatically terminated the employment of the Airline's pilots when they reached the age of 60.

In respect of Article 2(5) of the Directive, measures that aim to stop human failure causing aeronautical accidents constitute measures aiming to ensure public security and protection of health. Member states can authorise social partners, through collective agreements, to adopt measures in furtherance of this aim. However, since the applicable national and international law considered it unnecessary to prohibit pilots from acting as pilots until the age of 65, a measure prohibiting pilots from acting as pilots after 60 was not necessary.

Similarly, under Article 4(1) of the Directive, possessing particular physical capabilities may be a 'genuine and determining occupational requirement' for pilots and it is undeniable that physical capabilities diminish with age but the requirement was disproportionate where prohibition was from the age of 60.

Rest Breaks

[Thanks to Kathleen Donnelly of Henderson Chambers for preparing this case summary]

Does requiring a security guard to remain on call during his rest breaks contravene the requirements of the Working Time Regulations? Not necessarily, according to the Court of Appeal in Hughes v The Corps of Commissionaires Management Ltd.

Regulation 12 provides that a worker is entitled to an uninterrupted 20 minute rest break when his daily working time is more than 6 hours. Regulation 21 excludes that requirement where the worker "is engaged in security and surveillance activities requiring a permanent presence...", but Regulation 24 provides that an employer should "wherever possible allow him to take an equivalent period of compensatory rest".

The security guard in this case was provided with an area where rests could be taken, but he had to remain on call during those periods, meaning that his break might be interrupted. Significantly, if that happened he was permitted to start his break again.

The Court of Appeal held that the employee's work fell within Regulation 21, and that the breaks provided to him were properly described as an "equivalent period of compensatory rest" (Regulation 24). The employee's suggestion that a risk assessment might be required because of the possibility of interruption was firmly rejected, the Court noting that he might well end up with a break longer than the 20 minutes typically required by the Regulations.

Unfair Dismissal

[Thanks to Neil Addison of Palmyra Chambers for preparing this case summary]

Is an employer considering an appeal against dismissal entitled to find that the dismissal was fair on entirely different grounds from the original decision to dismiss? Yes and no, according to the EAT in the case of Perry v Imperial College Healthcare NHS Trust.

The employee in this case worked for two different NHS Trusts, in different jobs, working different hours. In the Imperial College job she was required to travel whilst the other job was clinic based. Due to medical problems with her mobility she was signed off sick by Imperial but continued with her other job.

When Imperial found out that she was doing the other job she was dismissed for gross misconduct on the basis that she had defrauded Imperial by receiving sick pay. When she appealed it was realised that that decision was unsupportable but nevertheless the appeal panel confirmed her dismissal on completely different grounds, namely that she should have informed Imperial that she was capable of doing other work to which they could have redeployed her.

Despite the indication in the summary at the head of the decision, the EAT did not decide that the appeal panel was not entitled to find other reasons for dismissal but held that the finding made by the panel did not justify summary dismissal. They also found that the tribunal itself did not properly address itself to the fundamental test laid down in British Home Stores Ltd v Burchell, was the decision to dismiss within the range of responses available to an employer acting reasonably. Since, on the facts, the decision was not within the range of reasonable responses the dismissal was held to be unfair.

This case is very factually based and so does not lay down any new principles. It does however emphasise that appeal panels and tribunals must concentrate on whether the facts as found justify dismissal as being a reasonable response. Where the original decision to dismiss was based on facts which cannot be supported at appeal or tribunal level it is likely that the decision to dismiss was unreasonable.

Acas Guidance on Social Networking

No, it's not an instruction manual on how to use Twitter. Rather, Acas has produced some Guidance Notes on Social Networking, offering tips on how to manage the impact of social networking on managing performance, recruitment, disciplinary and grievance issues.

There is also an excellent section on How to Draw up a Social Networking Policy, including practical tips and an explanation of the legal considerations involved.

Annual Employment Tribunal Statistics

[Thanks to Jahad Rahman of Kervin & Barnes Solicitors for preparing this case summary]

The ET and EAT statistics for 2010-2011 have been published and can be found here.

They show an 8% fall in claims received when compared with 2010 but a 9% rise in the number of cases disposed of. The number of single claims received has fallen 15% and the number of multiple claims has fallen 4%.

Whilst the number of unfair dismissal and redundancy pay claims has fallen slightly, claims under the Part Time Workers (Prevention of Less Favourable Treatment) Regulations almost trebled and Age Discrimination claims have risen 32%.

With regard to compensation, the median award for unfair dismissal was £4,591. The medians for discrimination claims were around £5,000-£6,500 (excluding age where the median award was £12,697). The highest award for unfair dismissal was £181,754. This is in excess of the statutory cap and it is likely that the dismissal was related to a complaint of whistleblowing or health and safety. The highest award for discrimination was £289,167 (sex) compared with £729,347 (disability) in 2009-2010.

The statistics also reveal a slight increase in the number of appeals received by the EAT, while the number of appeals disposed of at a full hearing fell by comparison with 2009-2010.

Wasted Costs

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

The EAT (Underhill P) has handed down its decision in Godfrey Morgan Solicitors Ltd v Cobalt Systems Ltd which is authority for the propositions that in a wasted costs hearing, the procedure adopted should be as summary as is consistent with fairness; that it might be permissible for a party and their representative to be cross-examined; and parties may make submissions.

The Claimant, having not been advised by his solicitors in a timeous manner that there were no prospects of settlement, withdrew his claim, but his solicitors did not communicate this until shortly before the hearing. The Respondent sought and won a wasted costs order against the Claimant's solicitors for (a) not advising him properly, and (b) delay in communicating the withdrawal. At the oral costs hearing with privilege waived, the Claimant and his solicitor were cross-examined, although some evidence from the case file was excluded by the tribunal for late disclosure.

The Claimant's solicitors unsuccessfully appealed against the wasted costs order against them on various bases.

The EAT distinguished this situation from a previous EAT decision on wasted costs orders - (Ratcliffe Duce and Gammer v Binns UKEAT/100/08) - and set out guidance on the conduct of wasted costs hearings. The EAT suggested that cross-examination of a representative would generally be inappropriate, disproportionate and/or unnecessary, but it may be fair and proportionate where a representative is no longer acting, privilege has been waived and a hearing fixed, and there are differing accounts of central facts to resolve. There was also no reason why parties could not make submissions to the tribunal.

Having viewed the excluded evidence, the EAT observed that the Employment Judge's findings against the Claimant's solicitors might have been different, but as the exclusion was within his discretion, the EAT did not interfere.

EAT Time Limits

[Thanks to James Medhurst of Employment Law Advocates for preparing this case summary]

The EAT (HHJ McMullen) has handed down its decision in Hine Marketing Partnership v Archant Dialogue, a case about a Notice of Appeal which was lodged out of time; a previous notice having been lodged before the deadline but missing a page of the written reasons. A decision of the Deputy Registrar not to accept the appeal was overturned.

The following factors were taken into account:

• The error in excluding a page of the judgment was venial and the essential dispute between the parties could be understood without the missing page being adduced.
  
• The Appellant had provided a full explanation for the delay in that there had been an error made by the office of the instructing solicitor. The fault of an adviser, in conjunction with other factors, is relevant to the exercise of the discretion.
  
• The case could not be said to have no merits.

Minimum Wage: Sleeping on the Job

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

The EAT (Underhill P) has handed down its decision in Wray v JW Lees & Co, which is authority for the proposition that whether time spent by a temporary pub manager on the employer's premises overnight fell to be taken into account for the purpose of being paid the national minimum wage depended solely on the relevant provisions of the National Minimum Wage Regulations 1999.

The employment tribunal had, in error, directed itself to the definition of working time in the Working Time Regulations 1998, which had no application in the context of a national minimum wage claim. Instead of remitting the case, the EAT was able, using the right legislation, to determine the claim on the facts found by the employment tribunal.

On these findings it was clear the claimant was not working during the periods in question and could not therefore call these into account into account for the purposes of a national minimum wage claim. The exceptions in regs 15 (1A) (time work) or 16 (1A) (salaried hours work) of the NMWR applied. The requirement to sleep at the premises did not require the employee to do any work and her position could be distinguished from that of night watchman or night sleeper in a residential home, who had responsibilities throughout the night (see South Manchester Abbeyfield v Hopkins [2011] ICR 254).

Continuity of Employment in the NHS

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

The EAT (HHJ McMullen QC presiding) has handed down Judgment in the case of Winchester and Eastleigh Healthcare NHS Trust v Walker which is authority for the proposition that (apart from TUPE and statutory reorganisations) statutory continuity of employment is not preserved for NHS staff moving between different health service employers unless S218 (8) ERA 1996 applies, which preserves continuity in prescribed circumstances.

In calculating a Basic Award, the employment tribunal incorrectly used the Claimant’s entire service within the NHS, rather than the period when she worked for the Respondent Trust. The EAT reduced the Basic Award as the Tribunal had disregarded S218 (8), which preserves continuity for staff moving between NHS employers in specified circumstances – see S218 (9) - which did not apply to the Claimant.

The Claimant objected to this point being raised in the appeal, but the EAT held that the as the substance of the S218 (8) point was live before the tribunal, it could be raised on appeal.

The Judgment also has commentary on contractual and statutory continuity at paragraph 22.

Summary Dismissal Trumps Notice Period

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

The EAT (Keith J) has handed down Judgment in the case of M-Choice UK Ltd v Alders, which is authority for the proposition that where an employee is dismissed with notice expiring after a year's service, but is then summarily dismissed before a year's service, the employee's right to claim 'ordinary' Unfair Dismissal is extinguished as the second dismissal displaces the first.

The Claimant was given 12 months' notice after 3 months' service. Whilst working her notice, she claimed Unfair Dismissal, and the employer then summarily dismissed her before she reached one year. The Claimant then brought a second claim of automatic unfair dismissal for asserting the statutory right not to be unfairly dismissed. The question at a PHR was whether the second dismissal deprived the Claimant of the right to claim 'ordinary' Unfair Dismissal. The Employment Tribunal said that it did not.

The EAT disagreed, applying Stapp v The Shaftesbury Society [1982] IRLR 326, holding that the Claimant's summary dismissal meant that she had never acquired the one year’s service needed to claim Unfair Dismissal.

The EAT observed that there was one claim of Unfair Dismissal put alternately, and that there could only be one effective date of termination.

The complaint of automatic unfair dismissal remains to be determined.

Agency Worker Regulations - minor amendments

A new statutory instrument, the Agency Workers (Amendment) Regulations 2011 have been made by the government, correcting some drafting errors in the original Agency Workers Regulations 2010.

The Regulations provide that agency workers (ie temps) will have the same rights to pay, benefits, rest periods and holidays as someone recruited directly by the hirer (including the hirer's own directly recruited temp workers and employees).

There is a 12 week qualifying period, so genuine short-term agency temps will not qualify for this right. The 12 weeks do not have to be continuous; there can be breaks between assignments and absences on grounds of eg sickness or jury service.

The corrections are:-

• the definition of 'agency worker' in regulation 3 is changed from requiring the agency worker to have a contract with the agency which is either an employment contract or "any other contract to perform work and services personally for the agency" to "any other contract with the agency to perform work or services personally". The change clarifies that the worker does not need to be working for the agency itself;
  
  
• the so-called 'Swedish Derogation' is clarified by removing another minor drafting error; and,
  
  
• tweaking the statutory defence in regulation 14, enabling a work agency to avoid liability for breach of the Regulations by a hirer when the agency takes reasonable steps to obtain information about the hirer's terms and conditions..

If you need help with any issues surrounding the Agency Worker Regulations, I recommend Lawspeed.