Acas has announced an important change to its policy on conciliation.
Until October 2004, Acas had a duty to offer conciliation in nearly all tribunal claims. In October 2004, the Employment Act 2002 introduced fixed conciliation periods; this limited Acas's duty to conciliate to a fixed, limited period (after which it had a power to conciliate which, in accordance with parliament's intention, it only exercised in very limited circumstances).
Acas has now announced that, in the light of the government's intention to abolish fixed periods of conciliation, it will (from tomorrow) exercise its power to conciliate in all cases, irrespective of whether the fixed period for conciliation has expired.
Monday, 31 March 2008
Costs in Employment Tribunals
The EAT has handed down a decision considering the correct approach to take when assessing costs against a litigant.
In Jilley v Birmingham & Solihull Mental NHS Trust, the tribunal made costs orders against the Claimant, and referred the assessment to a county court. The potential costs liability was substantial.
Remitting the question of costs to the tribunal, the EAT stated that:-
In Jilley v Birmingham & Solihull Mental NHS Trust, the tribunal made costs orders against the Claimant, and referred the assessment to a county court. The potential costs liability was substantial.
Remitting the question of costs to the tribunal, the EAT stated that:-
- it is incumbent on a tribunal to consider whether it is going to take the paying party's financial means into account. It is not good enough to delegate that task to the county court (paras. 44 and 46);
- a useful option to consider for the tribunal, when referring costs to the county court for assessment, is to place a cap on an award to reflect the paying party's ability to pay (para. 47).
Boring but important: New Tax Provisions
HMRC has laid the The Income Tax (Pay As You Earn) (Amendment) Regulations 2008 before Parliament.
The Regulations close the loophole identified in Demibourne Ltd v HMRC (see bulletin 15/8/06), which held that HMRC was entitled to charge an employer full tax and NI under the PAYE regulations, where the parties have wrongly viewed the employee as self-employed, without giving credit for the tax and national insurance already paid directly by the 'employee'. In other words, under this loophole, HMRC could charge tax twice!
Well, the loophole is closed. The Regulations come into force on 6th April 2008.
The Regulations also tidy up the PAYE Regulations, given the abolition of the starting-rate of income tax.
The Regulations close the loophole identified in Demibourne Ltd v HMRC (see bulletin 15/8/06), which held that HMRC was entitled to charge an employer full tax and NI under the PAYE regulations, where the parties have wrongly viewed the employee as self-employed, without giving credit for the tax and national insurance already paid directly by the 'employee'. In other words, under this loophole, HMRC could charge tax twice!
Well, the loophole is closed. The Regulations come into force on 6th April 2008.
The Regulations also tidy up the PAYE Regulations, given the abolition of the starting-rate of income tax.
Thursday, 20 March 2008
EAT Time Limits
The Court of Appeal has considered the EAT's strict adherence to the 42-day time limit for instituting an appeal.
As all employment practitioners know, the EAT requires certain documents to be attached to the Notice of Appeal. If any document is missing, the appeal is invalid. In this case, Jurkowska v Hlmad Ltd, one of the documents was omitted in very unusual circumstances, and was lodged 33 minutes after the 4pm deadline.
The Court of Appeal upheld Underhill J.'s decision to extend time for instituting the appeal. Whilst confirming that the strict approach in United Arab Emirates v Abdelghafar remained good law, the three Court of Appeal judges took different views as to certain aspects of that judgment and to EAT practice / procedure:
As all employment practitioners know, the EAT requires certain documents to be attached to the Notice of Appeal. If any document is missing, the appeal is invalid. In this case, Jurkowska v Hlmad Ltd, one of the documents was omitted in very unusual circumstances, and was lodged 33 minutes after the 4pm deadline.
The Court of Appeal upheld Underhill J.'s decision to extend time for instituting the appeal. Whilst confirming that the strict approach in United Arab Emirates v Abdelghafar remained good law, the three Court of Appeal judges took different views as to certain aspects of that judgment and to EAT practice / procedure:
- Rimer LJ considered that an extension of time might, in exceptional circumstances, be granted even if the Appellant has no 'good reason' for the delay (which is a mandatory requirement under Abdelghafar (para. 19)
- Hooper LJ was doubtful about the comments in Abdelghafar to the effect that a lack of prejudice to the Respondent is immaterial (para. 60)
- Sedley LJ did not think that any changes should be made to the Abdelghafar test (para. 71), although he showed some tentative leaning towards Rimer LJ's views
Update: Employment Bill 2008
The Employment Bill has had its third day in committee in the House of Lords (see Hansard). Discussion included:
Thanks to www.emplaw.co.uk for their permission to reproduce this item.
- tightening up minimum wage enforcement (proposals agreed);
- broadening the type of expenses that can be reimbursed to voluntary workers without triggering eligibility for the minimum wage (proposal agreed);
- making the NMW apply to all mariners when within UK territorial waters and to all mariners on UK registered ships whereever they may be working (proposal withdrawn after discussion);
- increasing fines for employment agencies who charge fees to job seekers when not allowed, and imposing a new duty to protect welfare of temps (proposals withdrawn after discussion);
- trade union exclusion/expulsion following the ASLEF ase (cl 17) - (proposals withdrawn after discussion)
Thanks to www.emplaw.co.uk for their permission to reproduce this item.
Monday, 17 March 2008
Age Regulations Amended
The government has published The Employment Equality (Age) Regulations 2006 (Amendment) Regulations 2008, which come into force on 6th April 2008.
The changes are relatively minor, dealing with:
The changes are relatively minor, dealing with:
- issues relating to continuity of service for the service-related benefit exception; and,
- closing a loophole under the Regulations in connection with time limits (the original Regulations did not provide properly for the three month extensions of time under the dispute resolution regulations).
Wednesday, 12 March 2008
Discrimination Questionnaires
The EAT has, this morning, handed down the important decision of D'Silva v NATFHE. It reminds practitioners that a failure by an employer to respond to a discrimination questionnaire (or an equivocal / evasive response) does not - without more - automatically raise a presumption of discrimination.
Underhill J states that there will often be good reasons why questionnaires have not been answered (or documents not disclosed), or that the failure will have no bearing on whether an act of discrimination took place. In such cases, "time and money should not be spent pursuing the point" (para. 38).
Underhill J states that there will often be good reasons why questionnaires have not been answered (or documents not disclosed), or that the failure will have no bearing on whether an act of discrimination took place. In such cases, "time and money should not be spent pursuing the point" (para. 38).
Employment Tribunal Judgments on internet delayed
According to Monday's Hansard, the Tribunals Service is putting back its proposals to provide Employment Tribunal judgments on the internet. It will not happen until Caseflow (the computerised ET case management system) is developed and rolled out across the regional ET offices. Caseflow is to be piloted in autumn 2008. National rollout will depend on the results of the pilot.
Amongst other things, once judgments are available on the internet, it will make it easier for Claimants to identify Respondents with a track record of discrimination or unreasonable practices (relevant to the statutory defence for discrimination, or the amount of the compensation uplift under the Employment Act 2002). On the downside for Claimants, it may enable Respondents to identify (and avoid recruiting) those who have previously brought a tribunal claim.
[Thanks to www.emplaw.co.uk for this information]
Amongst other things, once judgments are available on the internet, it will make it easier for Claimants to identify Respondents with a track record of discrimination or unreasonable practices (relevant to the statutory defence for discrimination, or the amount of the compensation uplift under the Employment Act 2002). On the downside for Claimants, it may enable Respondents to identify (and avoid recruiting) those who have previously brought a tribunal claim.
[Thanks to www.emplaw.co.uk for this information]
Tuesday, 11 March 2008
Victimisation in Litigation
The EAT has handed down a judgment considering the conflicting policies of allowing litigators to fight cases sensibly, and the importance of not victimising someone who brings a discrimination claim.
Mrs Dathi claimed discrimination. Her employer refused to disclose certain documents during the litigation. Mrs Dathi claimed that the letter in which the Respondent refused to disclose those documents amounted to an act of victimisation. She also contended that a robust letter resisting her application for costs was a further act of victimisation. The Respondent claimed both letters enjoyed absolute immunity, being produced for the purpose of litigation.
The EAT (HHJ McMullen QC) held that both letters came into existence for the purpose of litigation and attracted absolute immunity. Even if they did not, they would have amounted to honest and reasonable communications between representatives for the purpose of preparing for a trial, which would be a defence to a victimisation claim (see paras. 27-28).
South London & Maudsley NHS Trust v Dathi
Mrs Dathi claimed discrimination. Her employer refused to disclose certain documents during the litigation. Mrs Dathi claimed that the letter in which the Respondent refused to disclose those documents amounted to an act of victimisation. She also contended that a robust letter resisting her application for costs was a further act of victimisation. The Respondent claimed both letters enjoyed absolute immunity, being produced for the purpose of litigation.
The EAT (HHJ McMullen QC) held that both letters came into existence for the purpose of litigation and attracted absolute immunity. Even if they did not, they would have amounted to honest and reasonable communications between representatives for the purpose of preparing for a trial, which would be a defence to a victimisation claim (see paras. 27-28).
South London & Maudsley NHS Trust v Dathi
Thursday, 6 March 2008
Unilateral Variations of Contract
The EAT has handed down a decision reaffirming the options an employee has when an empoyer seeks to foist a unilateral variation of contract on him. The four choices (para. 20) are:-
In this case, the employee agreed to the changes 'under protest' but then refused to work under the new terms. The EAT held that the decision to dismiss him was fair as, having agreed (alebit under protest), he could not renege on his agreement - therefore he was refusing to obey lawful and reasonable instructions.
Robinson v Tescom Corporation
- acquiescing in the variation;
- resign and claim constructive dismissal;
- refuse to work under the new terms, and force the employer to take what steps it thinks appropriate; or,
- stand and sue, by working under protest and seeking damages (either for breach, or for unfair dismissal).
In this case, the employee agreed to the changes 'under protest' but then refused to work under the new terms. The EAT held that the decision to dismiss him was fair as, having agreed (alebit under protest), he could not renege on his agreement - therefore he was refusing to obey lawful and reasonable instructions.
Robinson v Tescom Corporation
Wednesday, 5 March 2008
Minimum Wage Increase
The government has, today, announced the annual increase to the minimum wage. The adult rate will rise from £5.52 to £5.73. The rate for 18-21 year olds will also increase from £4.60 to £4.77, while the 16-17 year old rate will rise from £3.40 to £3.53.
All increases will take effect on 1st October 2008. See BERR Press Release for more details.
All increases will take effect on 1st October 2008. See BERR Press Release for more details.
Tuesday, 4 March 2008
Strikes: Deducting a day's wage
The High Court has considered, in Cooper v Isle of Wight College, how much pay an employer can deduct from a worker's wage packet when that worker is on strike.
Blake J. held that the employer can only deduct the amount that an employee could recover in an unlawful deductions claim (which, for someone working a 260-day year, is 1/260th of salary). The employer cannot go further, and deduct the actual loss to the business (such as the pro rata element of holiday pay entitlement).
Blake J. held that the employer can only deduct the amount that an employee could recover in an unlawful deductions claim (which, for someone working a 260-day year, is 1/260th of salary). The employer cannot go further, and deduct the actual loss to the business (such as the pro rata element of holiday pay entitlement).
Strikes: Deducting a day's wage
The High Court has considered, in Cooper v Isle of Wight College, how much pay an employer can deduct from a worker's wage packet when that worker is on strike.
Blake J. held that the employer can only deduct the amount that an employee could recover in an unlawful deductions claim (which, for someone working a 260-day year, is 1/260th of salary). The employer cannot go further, and deduct the actual loss to the business (such as the pro rata element of holiday pay entitlement).
Blake J. held that the employer can only deduct the amount that an employee could recover in an unlawful deductions claim (which, for someone working a 260-day year, is 1/260th of salary). The employer cannot go further, and deduct the actual loss to the business (such as the pro rata element of holiday pay entitlement).
Friday, 29 February 2008
Fast track for tribunal claims
The Government has announced in Hansard that it proposes to develop a fast-track system for employment tribunals to deal with simple monetary claims.
This 'fast-track system' will involve five jurisdictions: unlawful deductions from wages claims; breach of contract claims; redundancy pay claims; holiday pay claims; national minimum wage claims. It is likely that employment judges will sit alone to determine such claims, without the assistance of wing members.
[Thanks to www.emplaw.co.uk for allowing me to use their summary.]
This 'fast-track system' will involve five jurisdictions: unlawful deductions from wages claims; breach of contract claims; redundancy pay claims; holiday pay claims; national minimum wage claims. It is likely that employment judges will sit alone to determine such claims, without the assistance of wing members.
[Thanks to www.emplaw.co.uk for allowing me to use their summary.]
When is a controlling shareholder an employee?
The EAT has, in Clark v Clark Construction, today provided observations on the relevant criteria to consider when seeking to determine whether a controlling shareholder is also an employee..
Elias P., presiding, set out the following guidelines for tribunals follow (at para. 98):-
1. Where there is a contract ostensibly in place, the onus is on the party seeking to deny its effect to satisfy the court that it is not what it appears to be. This is particularly so where the individual has paid tax and national insurance as an employee; he has on the face of it earned the right to take advantage of the benefits which employees may derive from such payments.
2. The mere fact that the individual has a controlling shareholding does not of itself prevent a contract of employment arising. Nor does the fact that he in practice is able to exercise real or sole control over what the company does.
3. Similarly, the fact that he is an entrepreneur, or has built the company up, or will profit from its success, will not be factors militating against a finding that there is a contract in place. Indeed, any controlling shareholder will inevitably benefit from the company's success, as will many employees with share option schemes.
4. If the conduct of the parties is in accordance with the contract that would be a strong pointer towards the contract being valid and binding. For example, this would be so if the individual works the hours stipulated or does not take more than the stipulated holidays.
5. Conversely, if the conduct of the parties is either inconsistent with the contract (in the sense described in para.96) or in certain key areas where one might expect it to be governed by the contract is in fact not so governed, that would be a factor, and potentially a very important one, militating against a finding that the controlling shareholder is in reality an employee.
6. In that context, the assertion that there is a genuine contract will be undermined if the terms have not been identified or reduced into writing. This will be powerful evidence that the contract was not really intended to regulate the relationship in any way.
7. The fact that the individual takes loans from the company or guarantees its debts could exceptionally have some relevance in analysing the true nature of the relationship, but in most cases such factors are unlikely to carry any weight. There is nothing intrinsically inconsistent in a person who is an employee doing these things. Indeed, in many small companies it will be necessary for the controlling shareholder personally to have to give bank guarantees precisely because the company assets are small and no funding will be forthcoming without them.
8. Although the courts have said that the fact of there being a controlling shareholding is always relevant and may be decisive, that does not mean that the fact alone will ever justify a Tribunal in finding that there was no contract in place. The fact that there is a controlling shareholding is what may raise doubts as to whether that individual is truly an employee, but of itself that fact alone does not resolve those doubts one way or another.
Elias P., presiding, set out the following guidelines for tribunals follow (at para. 98):-
1. Where there is a contract ostensibly in place, the onus is on the party seeking to deny its effect to satisfy the court that it is not what it appears to be. This is particularly so where the individual has paid tax and national insurance as an employee; he has on the face of it earned the right to take advantage of the benefits which employees may derive from such payments.
2. The mere fact that the individual has a controlling shareholding does not of itself prevent a contract of employment arising. Nor does the fact that he in practice is able to exercise real or sole control over what the company does.
3. Similarly, the fact that he is an entrepreneur, or has built the company up, or will profit from its success, will not be factors militating against a finding that there is a contract in place. Indeed, any controlling shareholder will inevitably benefit from the company's success, as will many employees with share option schemes.
4. If the conduct of the parties is in accordance with the contract that would be a strong pointer towards the contract being valid and binding. For example, this would be so if the individual works the hours stipulated or does not take more than the stipulated holidays.
5. Conversely, if the conduct of the parties is either inconsistent with the contract (in the sense described in para.96) or in certain key areas where one might expect it to be governed by the contract is in fact not so governed, that would be a factor, and potentially a very important one, militating against a finding that the controlling shareholder is in reality an employee.
6. In that context, the assertion that there is a genuine contract will be undermined if the terms have not been identified or reduced into writing. This will be powerful evidence that the contract was not really intended to regulate the relationship in any way.
7. The fact that the individual takes loans from the company or guarantees its debts could exceptionally have some relevance in analysing the true nature of the relationship, but in most cases such factors are unlikely to carry any weight. There is nothing intrinsically inconsistent in a person who is an employee doing these things. Indeed, in many small companies it will be necessary for the controlling shareholder personally to have to give bank guarantees precisely because the company assets are small and no funding will be forthcoming without them.
8. Although the courts have said that the fact of there being a controlling shareholding is always relevant and may be decisive, that does not mean that the fact alone will ever justify a Tribunal in finding that there was no contract in place. The fact that there is a controlling shareholding is what may raise doubts as to whether that individual is truly an employee, but of itself that fact alone does not resolve those doubts one way or another.
Monday, 25 February 2008
Enforceability of Employment Contracts
The EAT has held, in Steelcraft v Ellis, that a clause asserting that a 'contract' was not intended to create any legally enforceable rights is void under s203 of the Employment Rights Act 1996 if the only purpose of that clause is to alter what would otherwise be the legal effect of contractual arrangements.
In other words, an employer cannot avoid (what would otherwise be) contractual - and consequent statutory - obligations by inserting a clause in a contract providing that it has no legal effect. (see paras. 66-69 of the judgment).
In other words, an employer cannot avoid (what would otherwise be) contractual - and consequent statutory - obligations by inserting a clause in a contract providing that it has no legal effect. (see paras. 66-69 of the judgment).
Thursday, 21 February 2008
Increases to SMP and SSP
The draft Social Security Benefits Up-rating Order 2008 has been published. From 6th April 2008, SMP increases to £117.18pw (from £112.75), and SSP increases to £75.40pw (from £72.55).
[Thanks to David Perry of Tinsdills for telling me about this]
[Thanks to David Perry of Tinsdills for telling me about this]
Wednesday, 20 February 2008
Sexual Orientation Harassment
The EAT has, today, held that the Sexual Orientation Regulations 2003 do not prohibit homophobic banter against a heterosexual man who is known not to be gay.
The Claimant, who was heterosexual, was subjected to sexual innuendo by his colleagues to the effect that he was homosexual, even though they knew he was not. The 'joke' arose because he had (a) attended a boarding school and (b) lived in Brighton.
In English v Thomas Sanderson Blinds, HHJ Peter Clark held that the 2003 Sexual Orientation Regulations do not cover this form of 'homophobic banter'. He described the position as unsatisfactory and has given permission to appeal to the Court of Appeal.
The Claimant, who was heterosexual, was subjected to sexual innuendo by his colleagues to the effect that he was homosexual, even though they knew he was not. The 'joke' arose because he had (a) attended a boarding school and (b) lived in Brighton.
In English v Thomas Sanderson Blinds, HHJ Peter Clark held that the 2003 Sexual Orientation Regulations do not cover this form of 'homophobic banter'. He described the position as unsatisfactory and has given permission to appeal to the Court of Appeal.
Tuesday, 19 February 2008
Orders for Re-Engagement
The EAT has handed down a reminder, in Home Office v Khan & King, that orders for re-engagement should specify the job into which a Claimant is being re-engaged.
In particular, it is not adequate for the tribunal to set out a process for re-engagement (ie tell the Respondent to find a suitably paid job) and delegate the decision over the actual job to the parties (see para. 12 of the judgment).
In particular, it is not adequate for the tribunal to set out a process for re-engagement (ie tell the Respondent to find a suitably paid job) and delegate the decision over the actual job to the parties (see para. 12 of the judgment).
Friday, 8 February 2008
Expired Disciplinary Warnings
The Court of Appeal has held, in Airbus v Webb, that an employer may take expired disciplinary warnings into account when deciding whether to dismiss an employee.
Mr Webb had been given a final written warning for misuse of company time, which was stated to last for 12 months. One month after the warning expired, he was caught watching TV during company time with some colleagues and was dismissed. His colleagues - who had not had a previous final warning - were not dismissed.
The Court of Appeal (overturning the ET and the EAT - see bulletin 15/2/07) held the dismissal was fair. Mummery LJ stated that reliance upon an expired warning was a relevant factor in deciding whether the employer has acted reasonably - and may in some circumstances mean the dismissal is unfair - but does not inevitably mean that it is unfair. David Richards J. added (para 86) that employers should not now expect to be able to rely on expired disciplinary warnings as a matter of course - it is the exception rather than the rule.
[Thanks to Luke Menzies of the EEF, instructed by the successful Appellant, for telling me about this decision.]
Mr Webb had been given a final written warning for misuse of company time, which was stated to last for 12 months. One month after the warning expired, he was caught watching TV during company time with some colleagues and was dismissed. His colleagues - who had not had a previous final warning - were not dismissed.
The Court of Appeal (overturning the ET and the EAT - see bulletin 15/2/07) held the dismissal was fair. Mummery LJ stated that reliance upon an expired warning was a relevant factor in deciding whether the employer has acted reasonably - and may in some circumstances mean the dismissal is unfair - but does not inevitably mean that it is unfair. David Richards J. added (para 86) that employers should not now expect to be able to rely on expired disciplinary warnings as a matter of course - it is the exception rather than the rule.
[Thanks to Luke Menzies of the EEF, instructed by the successful Appellant, for telling me about this decision.]
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