Repudiatory Breach by Employer

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

Does an employee's willingness to negotiate a termination package prevent a claim of constructive dismissal?

No, held the High Court in Gibbs v Leeds United Football Club.

The Claimant was the assistant manager at Leeds United. The manager he worked with was sacked. The Claimant was asked if he was interested in becoming head coach but he declined. He expected to be dismissed although he was asked to continue in his role whilst discussions were held about a consensual departure.

The Claimant was not expected to work with the new manager. He was excluded from any meaningful part in the training of the first team, which was part of his normal duties, and he was not invited to pre-season training. Instead, he was told by email that he was to have no contact with the first team and he would work with the youth academy. He resigned in response.

The High Court held that it was not a breach of contract on his part to initiate a discussion about consensual termination. The fact that he had said that he was prepared to leave if suitable terms were agreed was beside the point. He had remained ready and willing to fulfil his duties. The email was repudiatory, since it led to a plain loss of status, and he had resigned in response to that and was therefore entitled to succeed in his claim for notice pay.

Trade Union Bill receives Royal Assent and becomes Trade Union Act

The Trade Union Bill received Royal Assent today and becomes the Trade Union Act.

Key provisions are:-

• requirement for at least 50% turnout in votes for industrial action
• in certain public services, including in the health, education, transport, border security and fire sectors, an additional threshold of 40% of support to take industrial action from all eligible members must be met for action to be legal
• setting a 6 month time limit (which can be increased to 9 months if the union and employer agree) for industrial action so that mandates are always recent
• requiring a clearer description of the trade dispute and the planned industrial action on the ballot paper, so that all union members are clear what they are voting for
• creating a transparent process for trade union subscriptions that allows new members to make an active choice of paying into political funds
• ensuring that payroll deductions for trade union subscriptions are only administered where the cost is not funded by the public

The commencement date is not known; it will be brought into force by a statutory instrument in due course.

Consultation on Tipping

The Government has launched a consultation on its proposals to secure a fairer deal for workers.

The consultation paper reflects the evidence received from consumer, worker and employer groups, and sets out the Government’s proposals for the handling of tips and service charges. They include:
 

• updating the current voluntary code of practice and putting it on a statutory footing to increase employer compliance
• increasing transparency for consumers to make it clearer that suggested discretionary payments for service are discretionary and that consumers are free to choose
• preventing or limiting any employer deduction from discretionary payments for service, except for those required under tax law

In addition the Government is considering:
 

• whether to ban or restrict the levying of table sales charges on staff – a fee paid by waiting staff based on their sales during a shift
• how to incentivise and increase the prevalence of well managed tronc systems

Article 8 (right to privacy) not engaged by employer investigating emails

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

When an employer investigated an employee's emails to a work colleague, was Article 8 of the European Convention on Human Rights (right to privacy) engaged?

No, held the EAT in Garamukanwa v Solent NHS Trust, on the facts of that case.

The Claimant was a clinical manager for the Trust. He formed a personal relationship with a staff nurse, Ms MacLean. The Claimant then suspected that Ms McLean had formed a relationship with a female colleague, Ms Smith. He resented this. Anonymous malicious emails were sent from various fictional email addresses to management. Ms Maclean also became concerned that the Claimant was now harassing and stalking her. The employer investigated, and concluded there were items on the Claimant's iPhone which implicated him and linked him to the anonymous emails. He was dismissed for gross misconduct. His claim for unfair dismissal failed.

In the course of the employment tribunal proceedings he unsuccessfully argued that the employer had acted in breach of Article 8 by examining matters related purely or essentially to his private life. The employment tribunal rejected this. It considered that Article 8 was not engaged on account that the emails had a potential impact on work, and dealt, at least in part, with work related matters.

The EAT agreed. It relied on the guidance of Mummery LJ in X v Y on the impact of Convention rights in unfair dismissal cases. The first question always to be asked is whether the circumstances of the dismissal fall within the ambit of one or more articles of the Convention. Unless they do, the rights are not engaged and need not be considered further.

Article 8 does extend to protect private correspondence and communications and, potentially, emails sent at work where there is reasonable expectation of privacy. However, here, the emails had impacted on work related matters and the emails were sent to work addresses of the recipients. They distressed colleagues, potentially affecting their work, and the Claimant's judgement, as a manager, was rightly to be examined.

These were all features that entitled the employment tribunal to conclude that Article 8 was not engaged and therefore not relevant because the Claimant had no reasonable expectation of privacy in respect of such communications.

Government To Investigate Non-Compete Clauses

The Government is launching a call for evidence asking for views on non-compete clauses. These are often seen in employment contracts and can prevent individuals from competing against their former employer or working for a competitor for a set period of time.

There is a good post on this call for evidence from barrister Jamie Anderson here.

Incorporation of Terms: When Staff Handbook Absence Policy is Contractual

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

Is an absence management policy in a Staff Handbook 'apt for incorporation' into employee contracts?

Yes, held the Court of Appeal, on the facts in Department for Transport v Sparks, dismissing the Department's appeal against a finding that an absence management policy had contractual effect.

The case arose from a dispute as to whether certain parts of the Department's staff handbook were incorporated into employees' contracts. The Claimants (7 in all) had obtained a declaration in the High Court that certain clauses in the Department's Staff Handbook had contractual effect. The appeal focused on a short-term absence management policy, which, if contractual, restricted managers' scope for taking disciplinary action until specific trigger points had been exceeded, 21 days of short-term absence in any 12-month period.

The Court reviewed the tests for the incorporation of handbook policies into employment contracts. Viewing the employment documents as a whole, the relevant introductory wording of the handbook pointed to a 'distinct flavour of contractual incorporation'. The fact that it might generally be a desirable feature of industrial management to handle absence matters through non-contractual policy would not prevent a particular provision from being 'apt for incorporation'. In contrast, a policy that was stated as forming a 'framework within which to approach such matters' would not be contractually binding.

Practitioners may wish to note that the Court stated that with the handbook existing only in electronic form, it was far from satisfactory that various versions of it had been irretrievably deleted on updating without retaining previous versions.

Employment Agency Amendment Regulations

The conduct of employment agencies and businesses is governed by (amongst other things) The Conduct of Employment Agencies and Employment Businesses Regulations 2003. From 8 May 2016, these are amended by the newly published The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016.

The main change is the removal of the requirement for employment agencies/businesses to agree terms, and enter into a written contract, with hirers before providing any services.

There are other, subsidiary changes, including a requirement for the regulations to be reviewed by the Secretary of State every five years and some tweaking to the requirements for job adverts.

Enforcement of Tribunal Awards and Settlements

The Department of Business, Innovation and Skills has published its form for claiming penalties from employers for non-payment of tribunal awards or settlements.

Under the new s37A to 37Q of the Employment Tribunals Act, a Claimant who has not been paid any sums under a settlement or tribunal award can ask BIS to issue a penalty of 50% of the outstanding amount, subject to a minimum of £100 and a maximum of £5,000.

Acas Early Conciliation: what is a 'month'?

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

When the time limit for an employment tribunal claim is extended by a month (under s207B ERA 1996) after Acas Early Conciliation, does the extension run following the 'corresponding date' rule (e.g. from 30th June to 30th July)?

Yes, held the EAT in Tanveer v East London Bus and Coach Company Limited, dismissing the Claimant's appeal against a decision barring his unfair dismissal claim as out of time.

The Claimant was dismissed on 20th March 2015, he went to ACAS on 18th June 2015 and an Early Conciliation 'EC' Certificate was issued on 30th June 2015 ('Day B' in Section 207B ERA). The Claimant's solicitors presented the Claim Form on 31st July 2015, and the unfair dismissal claim was dismissed by the employment tribunal as one day late, but time was extended for a discrimination claim.

The appeal turned on the application of the 'corresponding date' rule to Section 207B, which extends time for a claim by one month after Day B. The rule meant that time runs from the date in question (the issue of the EC certificate) to the corresponding date in the following month (i.e. 30th June to 30th July), or the last day in a shorter month, e.g. 31st May to 30th June. The EAT followed as binding the House of Lords decision in Dodds v Walker, a tenancy case, but also noted that this interpretation made for clarity and simplicity. 'One month after Day B' did not mean one month from "in this case" 1st July. As Lord Diplock said in Dodds"all that the calculator has to do is mark in his diary the corresponding date in the appropriate subsequent month".

TUC Publishes Advice on Legal Implication of Brexit

The TUC has published a 66-page Advice by Michael Ford QC on the potential impact of Brexit on employment and health & safety laws.

It's an impressive piece of research. Anyone interested should probably read the summary at the end before attempting the full Advice.

Christian Proselytising and Discrimination

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

Was disciplinary action against an employee for improperly promoting Christianity to a junior colleague unlawful religious discrimination?

No, held the EAT in Wasteney v East London NHS Trust.

Ms Wasteney is a Christian. Complaints were made by a junior worker of Muslim faith about her behaviour. The complaints related to various interactions with Ms Wasteney which the complainant employee characterised as "grooming". This included Ms Wasteney's praying with the junior employee, the laying on of hands, giving her a book which concerned the conversion to Christianity of a Muslim woman and inviting her to various services and events at Ms Wasteney's church. This was unwanted attention.

These complaints were investigated and the Trust found Ms Wasteney guilty of serious misconduct by blurring professional boundaries and subjecting a junior colleague to improper pressure and unwanted conduct. She was given a formal warning. Ms Wasteney claimed unlawful religious discrimination and harassment.

The employment tribunal rejected those claims and the EAT agreed.

There was a distinction to be drawn between merely manifesting a religious belief, discipline for which would be unlawful discrimination. On the other hand, disciplining someone for improperly promoting religious belief in a way that was not consensual, and which took advantage of someone in a subordinate relationship, was not unlawful discrimination because of religion or belief.

Nor did Article 9.1 of the European Convention on Human Rights (freedom of thought, conscience and religion) assist Ms Wasteney. This was qualified by Article 9.2 (the rights and freedoms of others). So that did not, said the employment tribunal (with which the EAT agreed), give Ms Wasteney "a complete and unfettered right to discuss or act on her religious beliefs at work irrespective of the views of others or her employer".

In rejecting Ms Wasteney's appeal, the EAT considered that the employment tribunal approached its task correctly and provided proper and adequate explanation of its reasons.

Protected Disclosure - Information v Allegation

Does the distinction between 'information' (which can be a qualifying disclosure) v an 'allegation' (which cannot) remain good law?

No, held the Employment Appeal Tribunal in Kilraine v London Borough of Wandsworth.

The Claimant, an Education Achievement Project Manager, complained that the Respondent was failing in its legal obligations in respect of bullying and harassment, and that her line manager had not supported her when she, the Claimant, had raised a safeguarding issue in relation to a school.

The employment tribunal found that they were allegations, and not disclosures of information, in accordance with Cavendish Munro v Geldud. Although agreeing on the facts of the case, the EAT disagreed with that as a general principle of law. It considered the distinction between 'allegation' and 'information' to be a false dichotomy, and that often something could be both - see para. 30 of the judgment.

Restrictive Covenants

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

In Bartholomews Agri Food v Thornton, the High Court resoundingly rejected the reasonableness of a restrictive covenant in an employment contract on various grounds.

First, the Court ruled, in accordance with Pat Systems v Neilly[2012] IRLR 979, that a covenant which was unenforceable when it was first imposed, remains unenforceable regardless of whether the employee is later promoted to a role where it could be regarded as reasonable. In this case, the covenant was in place when the employee first entered the business as a trainee agronomist in 1997. At that time he had no experience or customer base; therefore a non-compete clause which prevented him from working with any of the employer's existing customer base for six-months was manifestly inappropriate and in restraint of trade. On that basis alone, the covenant was unenforceable.

In any event, the Court went further and found that the terms of the covenant were drafted too widely to be reasonable even after the employee's 20-year career. It sought to prevent the employee from dealing with any customer of the employer regardless of whether he had had any prior dealings with the customer. Given that the employee worked with customers who represented only 2% of the company's overall turnover, it would be manifestly unfair to prevent him from working with customers representing the other 98% of the employer's existing customer base.

Nor was the Court persuaded by an unusual term of the clause which provided that the employer would continue to pay the employee in full during the six-month period. Following JA Mont (UK) Ltd v Mills [1993] IRLR 1782 in the context of a severance agreement, it would be contrary to public policy to allow an employer to 'purchase' a restraint of trade.

National Minimum (and Living) Wage

The Department for Business, Innovation and Skills has issued a new 55-page booklet on Calculating the Minimum Wage.

It covers how to calculate the minimum wage, what counts as pay, what hours needs to be counted, and how to enforce the national minimum wage.

Discrimination Claims against Qualification Bodies can be brought in the ET

Thanks to Rad Kohanzad of Serjeants’ Inn Chambers for preparing this case summary

Do employment tribunals have jurisdiction to hear discrimination claims against qualification bodies such as the GMC?

Yes, held the Court of Appeal in Michalak v General Medical Council.

Dr Michalak was dismissed by the NHS Trust that employed her. Prior to her successful employment tribunal proceeding, the Trust referred her to the GMC. Dr Michalak complained that, in the investigation and hearing of her case, the GMC discriminated against her.

In finding that the employment tribunal had jurisdiction to hear the claim against the GMC, the Court of Appeal rejected the contention that the employment tribunal's jurisdiction was ousted by section 120(7) Equality Act 2010 because of the availability of judicial review.

Section 120(7) precludes employment tribunal claims against qualification bodies where the decision is subject to "proceedings in the nature of an appeal". Upholding the appeal, the Court held that Parliament had not intended that judicial review were proceedings in the nature of an appeal, and its availability did not therefore oust the jurisdiction of the employment tribunal.

This decision does not necessarily mean that all allegedly discriminatory acts of regulators are amenable to employment tribunal proceedings. If the act complained of is appealable, either internally or statutorily to the High Court, then the employment tribunal's jurisdiction will probably be ousted.

Consultation: Pension Losses in Employment Tribunals

Over the last few years, the (excellent) 2003 booklet on Compensation for Loss of Pension Rights in the Employment Tribunals has become increasingly out of date. The President of the Employment Tribunals has issued a consultation paper on abandoning that guidance and, instead, introducing Presidential Guidance involving a distinction between simple and complex pension loss cases. Responses are sought to the consultation by 20 May 2016, with details of how to respond in a letter from the President.

Protected Disclosure: Rarely appropriate to strike out on 'public interest' grounds

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

Can a complaint about an individual employee's cramped working conditions be a protected disclosure for 'whistleblowing' purposes?

Yes, held the EAT in Morgan v Royal Mencap Society, overturning an employment tribunal's decision to strike out an employee's claims relating to protected disclosures.

The Claimant claimed that complaints about cramped working conditions posing a risk to her health and safety were protected disclosures. An employment tribunal struck out the claims at a preliminary hearing, with no evidence from the Claimant, since taking the Claimant's complaints at their highest, the Claimant would not have had a belief that the 'disclosure' was in the 'public interest' (see Chestertons), so the claims must fail.

The EAT reversed the employment tribunal's strike out, noting that for whistleblowing claims to be struck out at a preliminary hearing, a high threshold was required. It was reasonably arguable that the employee's complaints, even if she were the principal person affected, may have been made with a reasonable subjective belief that they were in the wider interests of employees generally, so could meet the 'public interest' test as protected disclosures. Such questions of fact should be determined by hearing evidence and resolving factual disputes.

The 'public interest' test may be considered by the Court of Appeal in Chestertons later in the year.

Disability: No Imputed Knowledge

Thanks to Karen Jackson of didlaw for preparing this case summary Can knowledge by Occupational Health of a disability be imputed to the employer? No, held the EAT in Gallop v Newport City Council. The EAT found, following the Court of Appeal's guidance in CLFIS (UK) Limited v Reynolds, that knowledge cannot be implied, even where the fact of disability is already known within the organisation. The EAT opined that the focus of an employment tribunal's enquiry ought properly to be on the thought-processes and motivation of the decision-maker. The test is: did the decision-maker know of the disability and were they influenced by it? This decision conflicts with the EHRC Statutory Code of Practice on Employment at paras.5.17 to 5.19 which provide that employers will usually not be able to use the knowledge defence to a disability discrimination claim if an employer's agent or employee (such as Occupational Health) has knowledge. The Guidance is clear that knowledge is not imputed if it is gained by a person providing independent services to a worker, such as counselling. We wait to see if this goes to appeal to resolve the conflict.