Employment Update - October 2009
Friday 30th October 2009
Employment News
Employment Tribunal and EAT Statistics show a decrease in the number of claims
The Employment Tribunal and Employment Appeal Tribunal have recently published their statistics for 1 April 2008 to 30 March 2009. These show an overall decrease in claims and an increase in those being dealt with without a hearing (disposed). Key findings include:
- a 20% decrease in the number of claims from 2007/08 (151,000 from 189,300);
- rises from 2007/08 in unfair dismissal claims (by 29%), breach of contract (by 31%), redundancy pay (an increase of 48%) and failure to inform and consult on redundancy (up by 250%);
- a decrease in claims under the Working Time Directive, equal pay (by 27%) and sex discrimination (by 31%) from 2007/08 figures;
- a total of 92,000 claims were disposed of, which is an increase of 13% on 2007/08; and
- an increase by 13% on 2007/08 of claims rejected by the EAT as having no reasonable prospect of success (up from 888 to 927).
At the Labour Party Conference at the end of last month, the Prime Minister reiterated his commitment to passing legislation to alter current pay structures. Under the proposed law, bonuses will be deferred so they can be reclaimed if a bank's performance fails to meet expectations.
The system of guaranteed bonuses will also be scrapped and regulators will be given powers to force banks to shore up their capital bases if they continue to pay out excessive bonuses. However, proposals fell short of capping individual bonuses. The government is also likely to push for greater transparency on salaries below board level.
Case Law
TUPE - clarification of an employer's duty to inform and consult
The Court of Appeal, in Royal Mail v Communication Workers Union [2009] EWCA Civ 1045, considered an employer's obligations to consult in a TUPE related transfer. The Court indicated that the employer's duty is only to convey the facts as it believes them to be. Employers will be relieved to learn they will not generally be liable if they make an error in the information they give about the legal implications of the transfer.
Facts
In this case, Royal Mail Group ('RMG') transferred certain post office services to W H Smith. RMG took the view that TUPE would not transfer the contracts in this situation, and so did not inform employees' representatives that automatic transfers would take place. This is because it was RMG's practice to redeploy affected staff under the mobility clauses in their contracts, or offer them voluntary redundancy.
Under Regulation 13(2)(b) of TUPE, RMG were obliged to inform employees' representatives of 'the legal, economic and social implications of the transfer..' In this situation, the representatives were the Communication Workers' Union ('CWU'). Because of RMG's view of the situation, they gave the CWU incorrect information about the legal effects of the transfer.
At the tribunal hearing, it was held that RMG did not have a genuine belief that no TUPE transfers would take place, and so was in breach of its obligations to inform.
On appeal, the Employment Appeal Tribunal (EAT) found that RMG was mistaken in its view that TUPE did not apply to any of the employees. However, it concluded that there was no evidence that RMG did not hold such a genuine belief, even though it was mistaken in its view that no automatic transfers would take place. The EAT also held that an employer would fulfil their obligations under the TUPE regulations if they informed the employees' representatives in keeping with their genuine belief of the legal implications of the transfer. The employer did not fall foul of the requirements simply for making a mistake about the legal situation.
Decision
The Court of Appeal dismissed the CWU's appeal against the EAT's decision. It held that whilst an employer is obliged to consider the legal implications of a transfer, it would be difficult to say with absolute certainty what those implications were. Because of this, the court upheld the EAT's views that the employer is obliged to give information on what they genuinely believed the legal, social and economic implications of the transfer were. However, it did not impose strict liability on the employer in terms of the accuracy of that information.
Comment
Employers will welcome this decision, as imposing strict liability as to the accuracy of the information they are obliged to give would have been particularly onerous. It would have created particular hardships for smaller employers, who would not have the resources to seek specialist legal advice on such a complex area of the law.
However, the court stressed that the employer's belief in the information they give on the legal implications must be genuinely held: it does not absolve an employer of the responsibility to take reasonable steps to ensure that information they provide is accurate.
Dismissal to prevent enhanced pension rights may be justified
In the case of Woodcock v Cumbria Primary Care Trust ET/2506917/08, the Employment Tribunal held that the employer did not discriminate against an employee on the grounds of his age. The employer in this case dismissed Mr Woodcock without proper consultation so that notice expired before he could qualify for more generous pension payments. This was held to have been justified because the failure to consult would not have affected the outcome, and it has also been a proportionate means to achieving a legitimate aim.
Facts
Following a merger of several Primary Care Trusts, the chief executives of the merging trusts were invited to apply for new roles. Mr Woodcock was unsuccessful with his application, and he was sent a letter on 4 September 2004 warning that he was at risk of redundancy, and that he may be given 12 months' notice. However, it was decided not to give him this notice as the new Chief Executive, Ms Page, thought it likely that alternative employment would be found.
However, Mr Woodcock was not offered another role and was invited to a formal meeting in April 2007 to begin the redundancy process. There were difficulties in Mr Woodcock attending on this date. Ms Page believed that Mr Woodcock was attempting to stall the process so that he would reach his enhanced pension entitlement on his 50th birthday, before his employment ended.
As a result, Ms Page decided that in order to safeguard the funds of the Trust, she would terminate Mr Woodcock's employment on 22 May 2008 before his 50th birthday, despite not having followed the consultation process through with him. Mr Woodcock made a claim for age discrimination.
Decision
The Employment Tribunal held that dismissing without proper consultation, to avoid Mr Woodcock attaining greater pension rights at 50, amounted to less favourable treatment on the grounds of age. However, it took the view that this was justified as a proportionate way of achieving a legitimate aim: that of safeguarding the money of taxpayers and the Trust. Also, there was no suitable alternative position for him, so the consultation process would not have changed the outcome.
Comment
This decision is in contrast to that in the case of London Borough of Tower Hamlets v Wooster, reported in last month's Employment Update. In that case the EAT held that an employee who had been dismissed before his 50th birthday in order to prevent him accruing more generous pension rights had been directly discriminated against on the grounds of age. However, unlike the present case, the employers did not argue that their discrimination was justified.
It is interesting to note the contrasting approach that the EAT has taken in each case, and the implications for other cases of dismissals to avoid enhanced early retirement packages. Employers need to be wary of deciding to dismiss in these situations. Though tribunals will take the reasons into account, it is by no means certain that all such cases will be decided in an employer's favour.
Dismissal fair where allegations had not been proved
In Henderson v Connect (South Tyneside) UKEAT/0209/09 the EAT upheld the tribunal's decision that the dismissal of a bus driver was fair. The bus driver was dismissed, at the request of a third party, for past allegations that had never been proven.
Facts
Mr Henderson was employed under a contract between Connect (South Tyneside) Ltd ('Connect') and South Tyneside Metropolitan Borough Council ('the Council') to drive children. Under the contract, the Council had the right to veto the employment of individuals.
When Mr Henderson was initially employed, his Criminal Records Bureau check in January 2008 did not return any convictions. The Council later received information alleging that Mr Henderson had sexually abused children. The police had investigated the matter in 2004, but decided not to prosecute. At a meeting between the Council, Connect and the police it was decided that there was substance to the allegations. As a result, the Council decided to veto his employment, despite Connect's attempts to dissuade them.
Mr Henderson issued a claim for unfair dismissal, which the tribunal rejected: they held that he had been dismissed for 'some other substantial reason' (the Council's veto) and that deciding to dismiss therefore fell within the band of reasonable responses.
Mr Henderson appealed the tribunal's decision on the grounds that the tribunal had not allowed him to put his side of the case before they decided to dismiss. However, the EAT stated that the Council, as a third party, was under no duty to allow him to state his case. Also, as the employer had attempted to avoid the injustice brought about by the Council's decision, the dismissal was fair.
Comment
In this case, the employer made strenuous efforts to avoid any injustice towards Mr Henderson. Even if they had not taken steps to encourage the Council to reconsider their veto, Mr Henderson would still have been fairly dismissed.
Whilst it may seem harsh that an employee can be dismissed where there are unproven allegations, it is likely that the increasing stringency of vetting procedures increases the likelihood of these situations. Public sector employers in particular should be alerted to the increased risk of such decisions being challenged in tribunals. They should also be mindful of the risk of adverse publicity arising from these cases, due to the current media interest in the issue of vetting.
The distinction between a 'worker' and someone carrying on a business undertaking
The EAT, in its decision on Clarkson v Pensher Security Doors Ltd UKEAT/0107/09, has provided useful guidance on the distinction between a worker, and someone carrying on a business undertaking. In this case, there were strong factors indicating either designation.
Facts
Mr Clarkson undertook a large part of the electrical work for Pensher Security Doors Ltd ('Pensher'). The Employment Tribunal had to decide whether Mr Clarkson fell within the definition of a worker, or if he carried on a business undertaking. Factors the tribunal noted in favour of his being a worker, included:
- Mr Clarkson worked under a contract;
- both parties were obliged to provide and undertake work;
- Mr Clarkson had to carry out his services personally; and
- Pensher told him what tasks to carry out, and provided him with some equipment.
- Pensher did not tell Mr Clarkson how to approach his work;
- nor did they provide him with hand tools, which Mr Clarkson provided himself; and
- the employer did not tell Mr Clarkson how to carry out his work.
The EAT dismissed his appeal. They considered that he was an independent contractor who was free to work where he wished, and that he did work elsewhere.
Comment
This case offers an interesting perspective on how tribunals weigh up a variety of conflicting factors when deciding on the status of an alleged worker. It also highlights the difficulties faced when deciding on status. Given the risk of tribunal claims when workers are dismissed, employers need to be aware of the importance of deciding status for all staff and contractors.
Other news
Government consultation announced on paternity leave
The Government proposes to introduce legislation to provide fathers with up to six months' leave, if the mother goes back to work at any time after her initial 26 weeks of the standard 52 weeks' maternity leave. In these cases, the fathers may use the remainder of the mother's leave as part of their paternity leave.
This will apply to fathers whose children are due to be born after 3 April 2011. The proposals are also likely to include someone who is not the child's father but is the mother's partner and shares its upbringing.
Increase on tribunal awards for injury to feelings
The EAT has recently issued guidance for an increase on the Vento levels of awards for injury to feelings in discrimination claims. The revised levels are:
- £500-£6,000 for less serious cases;
- £6,000-£18,000 for cases of moderate seriousness; and
- £18,000-£30,000 for the most serious cases.
These amounts will take immediate effect for all cases currently going through tribunals.
The Department for Business, Innovation and Skills (BIS) publishes a Code of Best Practice on service charges and tips
The National Minimum Wage Regulations 1999 (Amendment) Regulations SI 2009/1902 came into force on 1 October 2009. These regulations increased the National Minimum Wage, and also prohibit service charges, tips and gratuities being used to 'top up' wages to meet the minimum.
The BIS guidance provides employers with guidance on how to provide customers with clear information so that they can make an informed decision on whether to leave a tip or other gratuity. The guidelines also assist affected employers with information on how to operate their remuneration methods for staff in a fair, open and transparent way.
Allegations by students against School staff: Employment Law implications
The Association of Teachers and Lecturers (ATL) reported earlier this week that a quarter of school staff they had surveyed had been the victims of false allegations by students. Dealing with allegations against staff is an issue that employers should be careful in dealing with, especially when considering suspending employees.
Whilst it may be impossible to avoid false allegations being made, how you deal with allegations is something that falls within your control. Taking the wrong steps could lead to claims in personal injury for stress-related conditions, as well as the cost and disruption caused by lost days and arranging temporary cover.
When you are faced with allegations against staff, whilst it is essential that the interests of the child remain paramount, it is also imperative that any initial investigations are carried out swiftly, fairly and thoroughly, and that any period of suspension is kept to a minimum.
Parents, students and other staff will consider that any employee placed on suspension may well be guilty. If possible, the procedure should therefore be dealt with confidentially, and as little information as possible should be published. It is however also a good idea to brief a public relations agent who can advise you if a story about the allegation is likely to reach the press.
Long periods of suspension also have a financial impact, as you will be paying both the suspended employee and for temporary cover. Also, if you later face a claim for unfair dismissal, there is a risk that a Tribunal would find the dismissal procedurally flawed if it considered that the period of suspension was too long, even if the decision might otherwise have been reasonable.
You should of course take care not to assume (or give the appearance of believing) that the member of staff is guilty at any stage in the investigation process, as this could amount to a breach of the implied term of trust and confidence, entitling the employee to resign and claim that they have been constructively unfairly dismissed.
It is interesting to note that, according to the ATL study, half of all allegations are dismissed at the investigation stage.
It is important that you follow any relevant internal procedures (such as your Disciplinary and Child Protection policies). It is important that you take all necessary steps to investigate thoroughly, without giving the impression that the employee is guilty of the allegations, whilst also balancing your safeguarding obligations.
If an employee is exonerated following an investigation (or the allegations do not lead to their dismissal), and they choose to return to School (and the ATL's evidence suggests that many do not), it is vital that you take steps to reintegrate them, and that they are given every support in facing what may be a difficult or hostile environment.
This process is best managed in consultation with the employee, giving them access to support as necessary. The longer the employee has been on suspension, then the greater the level of support that would be expected.
Ashfords LLP is regulated by the Solicitors Regulation Authority. The information in this note 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. Links to other sites and resources provided by third parties are included for your information only. We have no control over the content and accept no responsibility for them.
