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• Employment Update - November 2007

Introduction

Legal uncertainty regarding retirement dismissals

The President of the Employment Tribunals HHJ Meeran, has handed down a Practice Direction that all current (and future) tribunal claims which involve an allegation that regulation 30 of the Age Regulations (providing for lawful retirement at or beyond 65) is unlawful, should be stayed.

The cases will be stayed until the ECJ has dealt with Heydey's application for a judicial review of the mandatory retirement age of 65. Heydey argue that the UK's retirement provisions do not properly implement the EC Equal Treatment Framework Directive ("the Directive") and that a default retirement age is not permissible under the Directive. The ECJ's decision on this issue is not expected until late 2008, early 2009.

This is an unsatisfactory situation for employers, who may now risk a future age discrimination claim in retiring an employee at the age of 65, even if they follow the correct retirement procedure.

Watch this space for future developments.

Employee's absence report not treated as a grievance

In the recent case of Evans v Dick Lovett Ltd (T/A Porche Centre Swindon).The EAT held that the Tribunal had erred in its decision to treat an employee's absence report as constituting a grievance under the statutory procedure set out in the Employment Act 2002.

Whilst this is good news for employers, it is best practice for employers to continue to be cautious about any written complaints that are received. If in doubt, ask the employee whether they would like the complaint to be treated as a formal grievance and respond accordingly.

Mrs Evans (''the Claimant'') was employed by Dick Lovett Ltd (''the Respondent''). At a meeting in April 2006 the Claimant was advised she would not be receiving a pay rise, for reasons connected to her pregnancy. Following the meeting the Claimant went home in a distressed state and was absent from work for a week.

On the Claimant's return to work she completed an absence report in which she confirmed "following on from meeting with Richard and Mark, went home very upset. Didn't sleep and suffered numerous nose bleeds" On 19 September (5 months

later) the Claimant lodged an Employment Tribunal complaint, including claims of sexual discrimination and equal pay.

The issue in contention was whether or not the absence report that the Claimant had submitted constituted a "grievance" under

Section 32 (3) of the Employment Act 2002. Under this section an employee is not permitted to present a claim until a period of 28

days has expired since the date which the grievance is made. Furthermore, the usual limitation period (3 months from the date of the act complained of, in discrimination cases) is extended to 6 months where a valid grievance has been raised.

At first instance the Tribunal conceded that whilst the absence note did not state the precise reasons why the Claimant was upset, the minutes from the meeting coupled with the absence report put the grievance into context, and could satisfy the requirements of a statutory grievance.

The Respondent appealed against the decision. The EAT upheld the appeal and stated that a document that is relied upon as constituting a grievance should give some indication to that effect. In addition it clarified the position that subsequent events, in this case the meeting, could not be used to put other documents into context, or to interpret documents. As a result the Claimant had failed to satisfy the requirements for Section 32 of the Employment Act 2002.

Redundancy: Employee's scores in selection process must be revealed to comply with "3-step" dismissal procedure

In the case of GM Daves v Farnborough College of Technology the EAT has confirmed the view expressed in earlier cases that in a redundancy selection exercise, an employer must set out in the letter calling the employee to a consultation meeting, the employee's scores against the selection criteria. The EAT also held that this failure to comply with step 1 of the statutory dismissal procedures was not capable of being remedied at an internal appeal hearing.

Employers should give employees sufficient information regarding the application of redundancy criteria (including their scores) so that the employee can understand and challenge why he, as opposed to someone else, has been selected for redundancy.

Mr Davies (''the Claimant'') was employed by Farnborough College of Technology (''The Respondent'') as a lecturer in the Marketing Department. As result of a decline in demand for the courses which he taught, the Respondent began a redundancy process and the Claimant, along with two other members of staff in the Marketing Department were notified that they were "at risk" of redundancy. The Claimant was notified of the redundancy situation and advised of the redundancy selection criteria

The Claimant was subsequently advised that after application of the selection criteria, he had achieved the lowest score and would therefore be made redundant. He was called to a meeting and was advised that he would be dismissed on the grounds of redundancy.

The Respondent did not at any time before, or during the meeting provide the Claimant with an explanation of the basis for the Respondent's conclusion that he should be made redundant.

The Claimant brought an internal appeal against the decision and at the appeal hearing was provided with his scores and thus had the opportunity to correct, supplement and challenge the conclusions that had been drawn by the Respondent in their application of the selection criteria. The Respondent maintained its position on the redundancy, and the Clamant brought a claim to the Employment Tribunal for unfair dismissal.

At first instance the claim for unfair dismissal was rejected on the basis that there had been sufficient warning, and consultation with the employee and an objective selection criteria had been fairly applied and there had been sufficient consideration of alternatives. The Tribunal stated that any deficiency with the notification of the Claimant of his redundancy scores had been remedied at the appeal hearing.

The Claimant appealed against the Tribunal's decision and argued that the Respondent was in breach of schedule 2 of the Employment Act 2002 in that they had failed to provide him with a sufficient or any explanation of the basis of the Respondent's decision to make him redundant.

The EAT allowed the appeal. It held that the Respondent had breached step 1 of the statutory procedures and therefore the dismissal was automatically unfair.

The principle that arose from the decision is that any breach of the statutory procedure that would amount to automatic unfair dismissal cannot be cured at an appeal hearing.

Minister of religion confirmed to be an employee of the church

In the case of New Testament Church of God v Rev. Sylvester Stewart the Court of Appeal upheld the EAT's decision which stated that a Christian Minister was an employee of the Church.

The employment position of Ministers of the Church has been frequently considered by the courts which have been reluctant to find that an employment relationship exists. However, in this case the Court of Appeal held that the Minister was an employee within the meaning of section 230 of the Employment Rights Act 1996.

The court confirmed that whilst in this instance the Minister was found to be an employee within the meaning of the Employment Rights Act, the decision did not lay down a rule that would necessary apply to all Ministers, this would be a question of fact for the Tribunal. As an aside comment the Court confirmed that the imposition of a contract upon a Church which was doctrinally opposed to it, may breach Article 9 of the European Convention of Human Rights; namely freedom of religion.

9 seconds too late!

Many of you will remember the case of Beasley v National Grid Electricity Transmissions where the EAT upheld the Tribunal's decision not to accept an unfair dismissal claim which was presented 88 seconds too late.

The recent case of Miller v Community Links Trust was an even closer call! The claim form was submitted a mere 9 seconds past the deadline, and was declared out of time. This recent case further illustrates the strict deadlines for submitting Tribunal claims.

Mr Miller (''the Claimant'') wished to submit claims for unfair dismissal and discrimination on the grounds of disability, race, and sex. He employed a 'legal representative' who was a second year law student to draft and submit his claim to the Tribunal.

The Claimant's representative pressed the submit button on the Tribunal website at 23.59.59 on the last day for presentation. It was received at 00.00.08 - 9 seconds out of time!

Section 111 of the Employment Rights Act 1996 provides that the Tribunal shall not consider an unfair dismissal claim unless it is presented to the Tribunal:-

"(a) Before the end of the period of three months beginning with the effective date of termination, or

(b) within such further period as the tribunal considers reasonably practicable for the complaint to be presented before the end of that period of three months.''

The Tribunal presided over the meaning of when a claim is 'presented' which means it is 'received' and confirmed that whether or not presentation is 'reasonably practicable' is a question of fact for each tribunal in consideration of the circumstances of each case.

On the facts of the case, the EAT stated that it was reasonably practicable for the unfair dismissal claim to have been presented within time and therefore the claim was out of time. It is worth noting that in accordance with the discrimination legislation where claims of discrimination are made out of time, the Tribunal may hear claims where it is 'just and equitable' to do so. The requirements of this test are easier to satisfy.

During the hearing mention was made to the disclaimer on the Tribunal's website which states that:

''There will be a delay between you submitting your claim and the relevant Tribunal office receiving it. You must bear this in mind when you are submitting a claim on the last day of the time limit that applies to your particular complaint(s).''

Those contemplating submitting a claim to the Employment Tribunal online would be well advised to bear this is mind!

TUPE: Only rights existing prior to the transfer are transferred

The Court of Appeal held in the recent case of Jackson v Computershare Investor Services PLC that the Transfer of Undertaking (Protection of Employment) Regulations ("TUPE") does not confer additional rights so as to improve an employee's situation following the transfer of employment. In this case Computershare's benefit scheme provided an enhanced severance package for employees who had joined the company "pre 2002". The employee in this case had transferred to Computershare under TUPE in 2004. The Court of Appeal held that the employee was entitled to benefits from the date of the transfer and not from the commencement of continuous employment. The court held that TUPE could not be used to create rights that did not exist prior to the transfer.

In accordance with regulation 4(1) of Transfer of Undertaking (Protection of Employment) Regulations 2006 ("TUPE 2006") (which replaced regulation 5(1) of the Transfer of Undertaking (Protection of Employment) Regulations 1981 (''TUPE 1981'')) whenever there is a relevant transfer, those employed by the transferor assigned to the organised grouping of resources automatically transfer to the transferee with their existing terms of employment and statutory rights (including continuous service) in tact.

Ms Jackson (''the Claimant'') commenced employment with CI (UK) Ltd (''the Company'') in 1999. Her employment was transferred to Computershare Investor Services PLC (''the Respondent'') in June 2004. Regulation 5(1) of TUPE 1981 applied to the transfer

The Respondent operated two different types of redundancy severance packages for its employees. The first package was an enhanced redundancy package for the benefit of those employees who joined prior to 1 March 2002. The second package was broadly similar to statutory redundancy payments and this package was applicable to employees who joined on or after 1 March 2002.

The Claimant was made redundant by the Respondent and made a claim for unfair dismissal and breach of contract. The Claimant argued that she should be entitled to the enhanced redundancy as her continuous employment with the Respondent had commenced in 1999 (therefore prior to March 2002).

At first instance the Tribunal found that the Claimant had joined the Respondent at the time of the transfer which was in 2004. However, in the Court's interpretation of regulation 5(1) of TUPE 1981 the Tribunal decided that the Claimant's service with the Respondent should be treated as if it had begun in 1999, and that she should therefore be entitled to benefit from the scheme.

The Respondent appealed against the decision stating that the Tribunal's interpretation of regulation 5(1) of TUPE 1981 was incorrect. It held that TUPE could not be used as a method of creating additional rights that were not in existence at the time of the transfer. The EAT overturned the decision and the Claimant appealed.

The Court of Appeal upheld the EAT's decision and dismissed the appeal.

The Court of Appeal stated that regulation 5(1) TUPE 1981 does not confer additional rights on a transferred employee so as to improve the employee's situation, it simply safeguards existing rights.

The High Court rules on objection to a TUPE Transfer

In the recent case of New ISG Limited v Vernon and others, the High Court has laid down a judgement concerning an employee's right to object to a transfer under Regulation 4 (7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE 2006"). The court held that a group of employees were allowed to object to a transfer two working days after the transfer had taken place.

Vernon and others (''the Defendants'') were employed in sales positions by New ISG Limited which provided recruitment agency services to the rail industry.

New ISG Limited became insolvent and joint Administrators were appointed on 13 July 2007. The Administrators offered the assets and goodwill for sale on 19 July 2007. UKRS ("the Claimant") agreed to purchase the assets of the company.

On 27 July 2007 the staff were invited to attend a meeting and were informed that the Claimant had purchased the company, and that they were now employees of UKRS.

Regulation 4 (7) of TUPE 2006 provides an employee with the right to object to the transfer:

"(7) paragraphs (1) and (2) shall not operate to transfer the contract of employment and the rights, powers, duties and liabilities under or in connection with it of an employee who informs the transferor or the transferee that he objects to becoming employed by the transferee."

The Defendants argued that they had received little information with regards to the proposed sale from the joint Administrators.

The Defendants resigned on 31 July 2007 and commenced employment with a direct competitor. The Defendants were subject to restrictive covenants which were contained in their contracts with New ISG Ltd. It was alleged that the Defendants had solicited a number of clients and workers belonging to the Claimant, and confidential information was removed from the Claimant's premises - in breach of those restrictive covenants.

The Claimant obtained a without notice injunction to prevent the Defendants acting in breach of restrictive covenants. The issue arose of whether the Defendants' objections to the transfer to the Claimant had prevented the transfer of their employment pursuant to Regulation 4 (7) of TUPE 2006

The Defendants argued that Regulation 4 (7) had to be interpreted positively having regard to an employee's right to choose his employer. In this case the Defendants were not informed of the identity of the transferee until after the transfer had been effected, therefore their objections could only have been made after the transfer had taken place.

The High Court upheld the Defendants' argument and stated that the resignations had been 'effective objections' within the meaning of Regulation 4 (7). It followed that the benefit of the restrictive covenants had not transferred to the Claimant, and the application for injunctive relief was refused.

The Queen's Speech

The Queen delivered her speech on the 6th of November 2007, making reference to several employment related proposals many of which shall be implemented during this parliamentary session.

The Queen's speech contained the following proposals:

• An employment simplification bill: This shall clarify important matters of employment law such as the national minimum wage and trade union law;

Reform of the statutory dispute resolution procedures;

National insurance contributions bill: The objective of this bill will be to raise the upper earning level for national insurance contributions to bring it into alignment with the higher rate income tax threshold and

Pensions Bill: The provisions of the bill shall be aimed at placing a duty on employers to ''contribute to good quality workplace pensions for their employees''.

Furthermore the speech also indicated that the Government intends to extend flexible working rights to parents with children older than 6 years of age.

Watch this space for further information!

Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.