TUPE: Change in Identity of Employer

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

Is there a transfer of an undertaking when an employee changes from being employed by a single employer to a group of employers which includes the original employer?

No, held the EAT in Hyde Housing Association v Layton, upholding the employers' appeal, there was no transfer of the Claimant's employment on the facts. The EAT also noted that multiple transferors would not prevent TUPE applying.

The Claimant had been employed by Martlet, a provider of social housing, which joined with other providers to form the Hyde Group, which was not a separate legal entity. After a restructure the Claimant was dismissed by Martlet and re-engaged on a new contract by a group of employers including Martlet, an arrangement reportedly common in the sector.

The Claimant claimed unfair dismissal, the issue was whether his employment transferred under TUPE regulation 3 (1) (a). The EAT held that since Martlet had retained liability for the Claimant's employment notwithstanding that its liability was now joint and several with other employers, the change of employer was not legally relevant for TUPE purposes. The EAT also held that the Acquired Rights Directive did not require TUPE to apply, as the employer's legal position with regards to the employee was unchanged (as with a change of shareholders). Noting the potential importance and novelty of the issue, the Claimant received leave to appeal.

Holiday Pay: When Part-Time Workers Increase Hours

Thanks to James English of Hempsons solicitors for preparing this case summary If a part-time worker increases her hours, is her employer obliged to recalculate her entitlement to annual leave retrospectively, even taking into account annual leave already accrued and taken? No, held the ECJ in Greenfield v The Care Bureau Ltd. The Claimant's working hours and days varied from week to week. She took 7 days' paid leave at a time when she was working one day a week (the equivalent of 7 weeks' leave). Her employer said this exhausted her entitlement. She then increased her hours to 12 days on, 2 days off each fortnight. After her employment ended, she claimed a payment for accrued but untaken annual leave. The employment tribunal upheld her claim, but following an appeal and application for reconsideration, referred the matter to the European Court of Justice (ECJ). The ECJ held that annual leave must be calculated in accordance with a worker's contractual working pattern, and the hours, days (and fractions thereof) actually worked. However, the taking of leave accumulated in one period has no connection to the working hours in the later period when leave is actually taken. There was already authority that a reduction from full-time to part-time working should lead to no reduction in the amount of leave a worker has already accumulated (Zentralbetriebsrat der Landeskrankenhauser Tirols, 2010). An employer must therefore distinguish between different periods of different working patterns and calculate the leave that accumulates in each period separately, taking the same approach whether this is during employment, or after it has ended.

Unfair Dismissal: Consistency of Treatment

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

Does inconsistency of treatment make a dismissal unfair?

Not necessarily, held the EAT in MBNA Limited v Jones.

Two employees were at a corporate social event, before which they had been warned that normal standards of behaviour and conduct would apply. But the two began drinking and fell out. Mr Jones punched a Mr Battersby in the face. In turn, later on, after the event, Mr Battersby texted Mr Jones on a number of occasions threatening, inter alia, to "rip your f*ing head off". He never carried out his threats.

A disciplinary investigation ensued with charges brought against both. The outcome was that Mr Jones was dismissed for his behaviour but Mr Battersby was given a final written warning.

In the unfair dismissal case brought by Mr Jones the employment tribunal considered his dismissal to be unfair because of the inconsistency of treatment between the two. On appeal the EAT overturned this decision. The Employment Judge had not applied the test set out in section 98(4) of the Employment Rights Act 1996, which requires recognising that there may be a range of reasonable ways in which an employer may react to the circumstances which give rise to the dismissal. He had also failed to apply the test in Hadjioannou v Coral Casinos Limited, and, in particular, failed to consider whether there was a decision made in truly parallel circumstances which made it unreasonable for the employer to dismiss the employee.

In the present case the Employment Judge had not expressly, for the purposes of a disparity argument, drawn a distinction between a deliberate punch in the face at what was designated to be a workplace and a threat afterwards that was never carried out. If he had, he would have been bound to conclude the circumstances were not the same.

Continuity of Employment

Thanks to Georgina Bryan of Littleton Chambers for preparing this case summary

Did the employment tribunal’s erroneous view that the presumption of continuity of employment applied vitiate its conclusion?

Not in this case, held the EAT in Thames-Side Court Estate v Jones.

s.218 ERA provides that where X is employed by A and B in succession, the change of employer will not break continuity of employment where A and B are “associated employers”. Employers are “associated” if one is a company over which the other has indirect control. The employment tribunal held that the Claimant had sufficient continuity of employment to bring an unfair dismissal claim on this basis.

In the EAT it was undisputed that the employment tribunal had erred in considering that there was a presumption of continuity of employment in cases involving associated employers. However, this was not fatal to the employment tribunal’s decision.

The first employer company was part of an opaque corporate structure. The Respondents had declined to attend the employment tribunal and provided only limited disclosure. In these circumstances, and on the facts of the case, the employment tribunal was entitled to infer that the first employer had an ultimate human beneficiary who was a member of the Respondents’ family. The employment tribunal had made permissible findings of fact and applied the correct test for an “associate employer”, namely whether one employer had legal (rather than de facto) control over the other.

Fee Remission in Tribunals

Thanks to Claire Scott, professional support lawyer at Burness Paull LLP, for telling me about this HMCTS has made some changes to the fee remission system, removing much of the bureaucracy which made it difficult to claim fee remission. From 28 October 2015, the fees remission process is called “Help with Fees” and a new 'Help with Fees form', called the EX160, is available online. HMCTS now asks applicants to make a self-assessment of their eligibility for help with fees, and there is no longer a requirement for every applicant to submit paperwork (such as bank statements and payslips) to support their request for help with fees. HMCTS will check directly with the Department for Work and Pensions (DWP) whether an applicant is on the qualifying benefits, and will check whether an applicant's income makes them eligible for help with their fees. However, some applicants may still be asked to supply paperwork as part of their application process, and so applicants should continue keep records of their pay and benefits documents.

Race Discrimination - Detriment

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

Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett until the end of the month.

Can the failure to investigate a (groundless) grievance amount to discrimination where the employee has not suffered a detriment?

No, held the EAT in Singh v Cordant Security Ltd.

The Claimant was a security guard. He was of Indian ethnic origin. It was alleged that he smelt of alcohol at work, and he was sent home whilst that was investigated. He then alleged that his supervisor, who was white, had used racially abusive language towards him.

The employment tribunal found that the Claimant had invented these allegations in the face of the disciplinary allegations. However, he had been subjected to less favourable treatment on the grounds of race - his manager's allegations were investigated, his weren't, and his employer could offer no adequate explanation for this. The employment tribunal upheld his claim of race discrimination, granting a declaration, but made no award of compensation. He had suffered no injury to feelings as his allegation was untrue.

The EAT allowed his employer's appeal. A detriment is a necessary element of discrimination. The mere fact that a grievance was bound to fail did not exclude the possibility of there being a detriment (Deer v University of Oxford), but the Claimant could have no sense of grievance or injustice that a false allegation had not been investigated. Whether the failure to investigate could amount to a detriment was a matter for the employment tribunal to determine, but on this employment tribunal's findings, the Claimant could show no detriment.

Disability Discrimination - Long-term Absence

Thanks to Karen Jackson of didlaw for preparing this case summary

Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett until the end of the month.

In an unfair dismissal case where the reason for dismissal was long-term ill-health absence, must an employment tribunal consider whether the employer could have been expected to wait longer before dismissing the employee?

Yes, held the EAT in Monmouthshire County Council v Harris.

The Claimant was disabled and worked partly at home. A new manager would no longer allow this, and the Claimant was dismissed following a period of absence. The employment tribunal found this to be an unfair dismissal and discrimination arising from a disability.

The EAT upheld the Respondent’s appeal, criticising the employment tribunal for failing, on the unfair dismissal point, to address the central question of whether the employer could reasonably be expected to wait longer, per BS v Dundee City Council and East Lindsey District Council v Daubney.

The decision on discrimination arising from a disability was also flawed as the employment tribunal erred in considering proportionality. The employment tribunal could consider an earlier failure to make reasonable adjustments, but only if it recognised that there was no continuing obligation to make the adjustments at the time of dismissal and took into account the up-to-date medical evidence (which provided “an uncertain and pessimistic prognosis”).

Adjournments - requirement to give reasons when considering an application to adjourn

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

Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett until the end of the month.

Must an Employment Judge demonstrate that the key points have been considered when refusing an adjournment?

Yes, held the EAT in British Security Industry Association v Brown. An Employment Judge need only give brief reasons, but must address the key points put forward in the application.

A final hearing was listed in accordance with the parties' available dates, but then adjourned to a date beyond those for which availability had been requested. The Respondent pointed this out in its application for an adjournment and explained that its key witness had a pre-arranged commitment abroad for the re-listed dates. The request was refused without referring to the points raised.

The EAT held that in such a case, the employment tribunal's reasons can be short, but must not omit factors essential to the consideration. The decision must also be within the parameters of reasonableness and explain how it accords with the overriding objective.

The Respondent's points were reasonable. The Employment Judge's reasons did not show that he had considered them to any degree or why he rejected them. The appeal was therefore allowed, his decision set aside and the Respondent's postponement granted.

Indirect Age Discrimination

Thanks to Rad Kohanzad of Serjeants’ Inn Chambers for preparing this case summary Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett until the end of the month. In an indirect discrimination claim, can an employment tribunal use the burden of proof to fill a gap in the evidence to establish that there was a provision, criterion or practice (PCP)? No, held the EAT in Bethnal Green and Shoreditch Education Trust v Dippenaar. An employment tribunal found that the Claimant, a teacher, was dismissed because of the expense of employing her arising from her seniority. She succeed in both her unfair dismissal and indirect age discrimination claims. The indirect discrimination claim relied on a practice (as opposed to a provision or criterion) of dismissing employees on high salaries, claiming that the practice indirectly discriminated against older teachers. The EAT found that there was insufficient evidence for the employment tribunal to find that there was a practice of employees being dismissed owing to the expense of employing them because a practice involves repetition of conduct, or at least the anticipation of repetition. Quashing the finding of indirect discrimination, the EAT held that the PCP must be established before the burden of proof can shift.

Collective Redundancies

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

Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett until the end of the month.

Is there an exception for 'public administrative bodies' from collective consultation on large-scale redundancies in TULRCA 1992?

No, held the Supreme Court in a 4-1 decision in the long-running case of USA v Nolan, dismissing the USA's appeal.

The case arose from the closure of a US Army base in 2006, resulting in the dismissal of Mrs Nolan and others without collective consultation. The Supreme Court rejected an argument that the consultation provisions in TULRCA (as amended by regulations in 1995) were invalid as regards the US Army as a public administrative body. The argument being that as the EU Directive on collective consultation excluded public administrative bodies, the 1995 regulations (implementing an ECJ judgment) could only extend TULRCA's provisions that were EU law and not pure UK law.

The Court held, answering a "difficult and borderline question" that the 1995 regulations amended what was a unified regime of EU and UK law for collective consultation under the original 1992 Act, so the 1995 amendment was not ultra vires by extending UK law to cover public administrative bodies, including the US Army, with Lord Carnwath dissenting on this point.

The Court dismissed two other grounds of appeal relating to whether TULRCA should be construed so as to avoid liability for a foreign state under jure imperii considerations governing non-commercial activity of states. (State immunity had not been pleaded).

The case was remitted to the Court of Appeal to determine the UK Coal/Fujitsu issue of when the obligation to collectively consult is triggered, is it by the business decision on redundancies, or by the implementation of that decision?

Whistleblowing - breach of contract and the public interest

Thanks to Dionne Dury of Fox Whitfield solicitors for preparing this case summary

Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett until the end of the month.

Can a complaint about contractual matters be in the "public interest" under the new whistleblowing provisions?

Yes, held the EAT in Underwood v Wincanton Plc.

One of the Claimant's claims was that he had made a protected disclosure and been subjected to a detriment by his employer. The disclosure was a written complaint made by him and three other lorry drivers that overtime was not being distributed fairly in breach of their contracts of employment.

The employment tribunal struck out the claim finding that a complaint, concerning only a group of workers about terms of their contracts, could not meet the new "public interest" test.

Overturning the employment tribunal's decision the EAT recognised that the employment tribunal's judgment had been given before any real guidance as to the meaning of "public interest" and before its decision in Chesterton Global Ltd v Nurmohamed. That case concerned an employee making a disclosure about contractual matters (commission payments) where 100 senior managers were affected. The EAT found that provided a section of the public, rather than simply the individual, was concerned, this was sufficient to meet the test.

The Chesterton case is the subject of an appeal to the Court of Appeal (listed for October 2016).

Zero Hour Contracts

Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett until the end of the month.

The Department for Business, Innovation and Skills has produced a guide for employers on zero-hour contracts.

It explains to employers how zero-hour contracts work, the difference between appropriate and inappropriate use of such arrangements, and gives guidance on best practice and alternatives to zero-hour contracts.
 

Employment Tribunal Fees Review

As readers know, the Ministry of Justice is conducting a review of the employment tribunal fee regime. The President and the Regional Employment Judges of the Employment Tribunals have, together, submitted written evidence for the review which is well worth reading. See in particular:- recommendation there be three, not two, tiers of cases (para 22) possible reduced fees for hearings on paper (para 23) possible additional fees for certain case management or preliminary hearings, albeit with reservations expressed (paras 24-25) the Respondent to pay a response fee and a hearing fee (para 26) proposals for the fees when the employer is insolvent, or a claim is rejected at the vetting stage (paras 28-30)

Unfair Dismissal: Allegations of Bad Faith

Thanks to David Leslie of Lyons Davidson for preparing this case summary.

Do allegations of bad faith have to be put to a dismissing officer in an unfair dismissal case?

Yes, if they are central to the employment tribunal's reasoning, held the EAT in Sec of State for Justice v Lown.

The Claimant was dismissed following an allegation that he had punched a prisoner in the back during a planned intervention.

The employment tribunal found that the dismissing officer was acting in bad faith and did not have a genuine belief in the Claimant's misconduct. However, that issue was not put to the dismissing officer, either during cross-examination or by the tribunal.

Upholding the appeal, HHJ Eady held that "the Respondent should have been given the proper opportunity to deal with the case" (paragraph 50). The EAT found that the employment tribunal had failed to consider whether the Respondent's conduct fell within the band of reasonable responses, substituting instead "the only correct standard of what the reasonable employer would have done" (paragraph 57).

The employment tribunal also should have considered a Polkeyreduction when there was "a finding of substantive unfair dismissal" (paragraph 61).

Time when Sleeping

Thanks to Miranda de Savorgnani of Outer Temple Chambers for preparing this case summary

Is an on-call night worker who lives at his place of work entitled to National Minimum Wage (NMW) for all hours of the night?

No, held the EAT in Shannon v Clifton House Residential, he is only entitled to NMW for the hours during which he is awake and working.

The Claimant fell within the exception under Regulation 16(1A) of the National Minimum Wage Regulations 1999 because he lived in the residential home where he was employed, and the time in question was time he was entitled to spend at home.

The employment tribunal was entitled to take account of the fact that there was another night worker on duty and that in practice the Claimant was rarely called upon.

The decided cases in this particularly fact-sensitive area demonstrate that mere presence does not itself necessarily entitle a worker to the NMW for the whole shift.

Shared (Grand)Parental Leave

You won't have missed the headline that the Government is planning to extend shared parental leave to include grandparents.

For those who find themselves answering questions about it, here are some important 'small print' points missed off most of the press reports:-
 

• the Government's aim is to bring this in by 2018
• it only affects working grandparents (non-working grandparents aren't likely to meet the eligibility criteria)
• the Government will consult on the details during the first half of 2016

For more, please see here.