Ashfords Solicitors - Employment Update

Report on flexible working

On 15 May 2008, Imelda Walsh, the Government appointed reviewer and Sainsbury's HR Director, reported her findings regarding the extension of the right to request flexible working to parents of older children.

Currently, parents of children under the age of 6 have the right to ask their employer to allow them to work flexibly (which includes part time, flexitime and job sharing). Ms Walsh was charged with considering whether this right should be extended to parents of older children and concluded that it should be extended to employees with parental responsibility for children up to the age of 16, and that this change should be introduced in one go.

The Government have indicated that they intend to implement the proposed change to extend the right to parents of older children, and that they intend to consult on the method of introduction.

Rights for agency workers

On 12 May 2008, the Government announced plans to extend equal rights to the 1.4 million agency staff employed in the UK.

The announcement follows agreement being reached between the CBI & the TUC, with the proposal being that agency workers will gain equivalent rights to their permanent counterparts in relation to pay, holidays and maternity leave upon completion of 12 weeks continuous service. The agreement does not extend to pension rights or sick pay, and in order to gain the right to paid maternity leave, agency workers will need to accrue the same length of service as permanent employees.

The Government will now seek to reflect this agreement in the terms of the Temporary Workers Directive at the European Council meeting in June and hopes to introduce implementing legislation in the 2008-09 Parliamentary session.

According to CBI figures, half of all agency placements last less than 12 weeks, so therefore would not be affected.

Draft legislative programme

On 14 May 2008, the draft legislative programme that is expected to be included in this Autumn's Queen's Speech was announced by the Prime Minister. The early announcement of proposed measures is intended to permit consultation over the summer period in advance of the Queen's Speech. The main proposals are:

Equality Bill – a consolidating Bill to bring together around 100 pieces of legislation in a single Act. Amongst the new provisions is the power for Tribunals to make recommendations to employers in discrimination claims.
Education and Skills Bill – introducing a right for employees to request (unpaid) time off for training. This would be a similar right to the current right to request flexible working, and employers would be able to reject a request if they had a good business reason.
Consultationon the Walsh Report recommendations (see above) concerning the extension of flexible working.

Compensation for breach of the Working Time Regulations 1998

In the case of Miles v Linkage Community Trust Limited the Employment Appeals Tribunal (EAT) upheld the Employment Tribunal's first instance decision not to award compensation, despite the fact that they found there was a breach of Working Time Regulations 1998 (the Regulations). This case is a practical reminder that the compensation that can be awarded under the Regulations is not designed to be punitive, the tribunal retains discretion to award nothing, even when there has been a serious and extended breach of the Regulations.

The Regulations grant workers certain rights, including the right to 11 hours uninterrupted rest a day. When the worker's activities involve the need for continuity of service or production, they are entitled to an "equivalent period of compensatory rest".

An employment tribunal claim can be brought if the employer refuses to allow workers to exercise such rights. It the tribunal upholds the claim it will make a declaration to that effect and "may make an award of compensation". The compensation will be "such amount as the tribunal considers just and equitable in all the circumstances, having regard to -

(a) the employer's default in refusing to permit the worker to exercise his right, and

(b) any loss sustained by the worker which is attributable to the matters complained of".

Facts

The Respondent (Linkage Community Trust Ltd) was a provider of specialist education in care homes. The Claimant was employed by the Respondent on a shift system which required him to work for a long period (and sleep) at the care home and did not always give him a break of at least 11 hours.

The Claimant brought a claim for breach of the Regulations and the Respondent conceded that the sleep-in time constituted working time so the only remaining issue was the amount of compensation due.

The Employment Tribunal held that the Claimant was not entitled to any compensation because no pecuniary (financial) loss arose from the breach. The Tribunal relied on the lack of scope under the Regulations to award damages for injury to feelings and the fact that there was no culpable default on the part of the Respondent. In assessing the amount of the compensation, the Tribunal considered a period which started when the Claimant raised a grievance about his rights under the Regulations.

The Claimant appealed to the EAT.

Decision

The EAT noted that compensation under the Regulations was a "form of reparation" rather than a sanction on the employer designed to punish it. When considering the employer's default, the Tribunal should consider the period of time during which there was a default, the degree of the default and the amount of the default (in terms of the number of hours required to work and to be given off as rest periods).

The EAT held that the Tribunal was correct to take the time between the Claimant's grievance and the termination of his employment as the relevant period (a matter of eight months). The default occurred when the Claimant raised his grievance, as regulation 30 requires a worker to seek to exercise their right and for the employer to refuse the worker permission to do so.

In considering the degree of the default, the Tribunal had considered the fact that there was no lack of good faith or goodwill on the part of the employer, that it was not "a culpable employer" and that they had obtained legal advice.

The Tribunal also used their discretion as regards compensation, which extended to a discretion not to make an award. Consequently, the EAT held that the Tribunal had not erred in finding that it was not appropriate to award compensation in this case.

Comment

This decision emphasises that compensation awarded for a breach of the Regulations is not designed to punish the employer, but to make reparations to the worker. In this case, in view of the nature of the employer's default and the fact that the worker suffered no loss, it was open to the Tribunal to decide to award no compensation. However, it is likely that in many cases a worker will suffer no financial loss as a result of a breach of the Regulations and there is no scope to award injury to feelings. This means that, in effect, the amount of the compensation awarded will be based on only the employer's default.

Redundancy: reasonable refusal of a suitable alternative job

The EAT has recently upheld a Tribunal's decision that an employee's refusal of an alternative job offered upon redundancy was reasonable.

s. 142 of the Employment Rights Act 1996 provides that, in a redundancy situation, an employee who unreasonably refuses an offer of suitable alternative employment made before termination or within four weeks thereafter will lose their entitlement to a redundancy payment. However, the reasonableness of any offer will be affected by the employer's communication and general handling of the redundancy situation (since these will inevitably affect the employee's perception of any job offer).

In Commission for Healthcare Audit and Inspection v Ward, the employee had become disenchanted with the handling of the redundancy process because of the employer's initial lack of clarity over, and refusal to discuss, the details of the alternative job on offer. The employee also alleged the alternative job involved a significant loss of status. Whilst the Tribunal found that the job did not involve any loss of status and was "on balance" suitable, the employee had not been unreasonable in refusing it, based on her perceptions.

The EAT upheld this decision by holding that it was permissible for a Tribunal to find that a job was suitable but that in the circumstances the employee perceived it (not unreasonably) as unsuitable. The fact that, objectively speaking it was only "marginally" suitable rather than "plainly" suitable was a relevant consideration.

Employer to prove reason for dismissal in whistleblowing cases

In Kuzel v Roche Products Limited, an ex-employee who was unfairly dismissed claimed that the reason for her dismissal was that she had made protected disclosures under the Public Interest Disclosure Act 1998 (PIDA 1988). This would have made the dismissal automatically unfair under s 103A of the Employment Rights Act 1996, and would crucially have removed the upper limit on her damages. The Respondent denied that the reason for the dismissal was linked to the Claimant's protected disclosures, but were unable to prove any alternative fair reason for the dismissal.

The Court of Appeal considered the burden of proof in cases where the employee alleges automatically unfair dismissal under PIDA 1988 and concluded that it was for the employer to prove that it had a potentially fair reason for dismissing the employee, or to prove that the reason asserted by the employee was not the real reason.

The Court of Appeal confirmed that the changes to the burden of proof in discrimination cases set out in the case of Igen v Wong did not effect the burden of proof in whistleblowing cases.

The Employment Tribunal held that the Claimant's dismissal was substantively unfair and automatically unfair as there had been a failure to follow the statutory dismissal and disciplinary procedures. However it was not automatically unfair under s103A of the ERA 1996.

The Tribunal stated that it was for the employer to establish the reason for the dismissal, and that in this case the employer had failed to establish a fair reason for the dismissal. However, as the employee had not established that the reason for her dismissal was the fact that she had made protected disclosures, there could be no finding that the dismissal was automatically unfair under s.103 ERA 1996.

The Claimant appealed first to the EAT and then again to the Court of Appeal.

Her lawyers argued that where there was no evidence to the contrary, the Employment Tribunal must adopt the reason for the dismissal put forward by the ex-employee, which in this case was that she was fired for whistleblowing.

The Court of Appeal rejected that argument. The Court of Appeal confirmed that when an employee positively claims there was a different and inadmissible reason for their dismissal, they must provide some evidence in support of this. If the tribunal is not convinced by the employer's explanation of the potentially fair reason for dismissal, it may find the dismissal was for the reason asserted by the employee. There is not, however, a legal requirement that it must do so. The Court of Appeal held that the tribunal must decide on the evidence what reason for dismissal to accept.

The case clearly demonstrates that the employer retains the burden of proof in cases of automatic unfair dismissal and provides some useful guidance of how to approach this issue in whistleblowing cases.

The Employment Appeals Tribunals takes a strong view on intimidation

In early May the Bury St Edmunds Employment Tribunal, in Force One Utilities v Hatfield, struck out the Respondent's defence because the Respondent threatened the Claimant in the tribunal car park. Later in the month the EAT in Nicholls v Corin Tech Ltd & Others handed down judgement that threats made using unpleasant and intimidating language, outside the lifts at the Southampton Employment Tribunal could constitute unlawful victimisation under the Disability Discrimination Act 1995.

Mr Nicholls had brought a claim against his employer for, amongst other things, disability discrimination. Following a preliminary hearing, he was allegedly subjected to intimidation by the Respondent's owner, Mr Currie. This incident took place outside the lifts at the Southampton Employment Tribunal. Mr Nicholls then brought another claim alleging discrimination by victimisation, citing this incident. The Employment Tribunal rejected his claim on the basis that judicial proceedings immunity applied as the threats were so closely connected with the hearing. The EAT overturned this, holding that the incident outside the lift did not form any part of the judicial process.

On a separate issue, the EAT held that conduct intended to deter a Claimant from enforcing his statutory employment rights would be sufficient closely connected with the employment relationship to amount to a (potentially) unlawful act by an employer within the meaning of the discrimination legislation.

Offence of employing illegal workers effective

The new civil sanctions imposed by the Immigration Asylum and Nationality Act 2006 that came into force on 29 February 2008 see February's Employment Update would appear to have led to increased action against illegal working according to Home Office figures released this month. Potential liability can include an unlimited fine and a two year prison sentence where an employer knowingly employs someone without permission to work in the UK. The Home Office figures indicate that, in the first 80 days of the new illegal working regime, action was taken against 137 businesses, more than ten times the number of successful prosecutions in the whole of 2007 where under the old regime there were only 11 successful prosecutions.

And finally..........

Lie detectors to combat "sickies"

There were reports in the press at the beginning of the month that the hot weather had caused a sudden increase in staff sick days. Following successful trials using lie detectors to detect false benefits claims, it has been suggested that employers could soon be able to use them to establish whether employees' sick days are genuine. Voice Risk Analysis (VRA) which works by detecting variations in a caller's voice, could be utilised by HR departments to scrutinize reported sickness. It has been suggested that this will act as a further deterrent against unjustified sickness absence, which is believed to amount to 12% of sick days, resulting in 21 million lost days every year, and costing the UK £1.6 billion. However, there are risks that employing methods such as these could alienate staff and lead to allegations of a destruction of trust and confidence. Also employers could have difficulty using the results of any such monitoring as the grounds to discipline staff. However, this might all turn out to be 'hot air' in any case as the great British summer appears to have returned to normal!

Employment Update - May 2008