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June is nearly over and, at the time of writing at least, the sun is shining and the forecast is for a hot summer. It will certainly make a change from the cold wet summers of the past two years. If we are blessed with such an eventuality (and given the Met office's history this is by no means a certainty), will employers begin to see a rise in summer absenteeism
For those of us who are working long hours it is sometimes inconceivable that other employees, perhaps even your own members of staff, will think nothing of taking days off to enjoy the sunshine on the company's time. Whilst not meaning to sound like a killjoy, this type of problem can affect large and small companies and have quite serious consequences. For example, in hot weather, public transport providers notoriously suffer from absenteeism. Services are therefore adversely affected, complaints made and fines levied by the regulatory bodies. If you envisage a problem with this kind of absenteeism it is important that you call your designated employment lawyer who will provide you with a plan to avoid it. We are here to deal with exactly that kind of problem and, remember, you cannot come to us with a problem too early. The earlier you identify a problem, the easier it will be for us to resolve.
If you have enquiries about the items featured or require any further information then don't hesitate to contact us on 0151 239 1000, freephone 08000 320974 or by e-mail to email@example.com.
This month's news:
1. Pregnancy and work
Maternity rights of employees are of such significance that two recent items are worth noting even though they make no change to the law:
First, EC proposals to amend the Pregnant Workers Directive 92/85 to increase the period of compulsory paid maternity leave to 18 or 20 weeks, six of which would have to be on full pay after the birth and the rest either before or after the birth, were (at least for the time being) blocked by the European Parliament in early May. For those who want more detail, the European Parliament issued a Press Release "EU parliament rejects maternity leave plans" on 6th May.
Second, the new BIS - Department for Business, Innovation and Skills (formerly BERR and previously DTI!) has published a new double guide, "Pregnancy and work: what you need to know". It is in two parts, one for employers, the other for employees. It is not a legal guide (neither the word "act" nor the word "regulation" appear anywhere in it) but it is really rather good. It is set out as two column checklists headed "What to do" and "Why" and is a useful practical summary of, well, what to do and why. If problems arise, the law proper will of course become relevant and for that, as ever, it is best to contact us at as early a stage as possible.
1. Minimum wage.
Just a (nonetheless important) reminder. The government announced in early May that the standard rate for the National Minimum Wage will increase from the current £5.73 to £5.80 per hour from 1st October 2009. The rate for 18-21 year olds will rise to £4.83 and for 16-17 year olds to £3.57. At the same time the government also announced that those aged 21 will be entitled to the full standard rate NMW as from October 2010.
2. Enforcement of employment tribunal awards.
Many workers who win employment tribunal awards have not been paid by the end of the 42 day period allowed before interest starts to accrue (recent research suggests that almost half have not been paid in full within that time frame). From 1st April 2009 it has been easier for successful claimants to recover money awarded to them by employment tribunals as the requirement that an award had to be registered in the County Court or High Court before it could be enforced was then removed (by the Tribunals, Courts and Enforcement Act 2007). Now the government has anounced proposals to go a step further. There are now plans "to develop a service whereby creditors will be able to commission a high court enforcement officer to enforce their award or settlement ....". The idea is for this service to become be available as soon as the respondent fails to pay the sum due. The costs of enforcement will be recoverable from the respondent with limited cost liability for the creditor.
One of the key benefits of our service is that we provide an extensive range of business law services and CLB Dispute Solutions includes comprehensive and specialist facilities for dealing with all enforcement procedures. Contact Sarah Scothern for further information.
3. No-win no fee arrangements.
Damages-based arrangements, known as "contingency fee agreements", are currently without statutory regulation in employment tribunals. This is because of an anomalous and long standing interpretation of the law under which proceedings in Employment Tribunals are classified as "non-contentious". The government is concerned that some solicitors have been exploiting contingency fee agreements unreasonably and that vulnerable clients may not understand what is involved. There are now proposals to introduce new rules to put a cap on the percentage of damages that can be recovered under such arrangements and which will require legal representatives to provide claimants with clear and transparent information on total costs.
Employees who have been unfairly dismissed can ask a tribunal to make orders providing for reinstatement (restored to the same job), re-engagement (taken back by the employer in another job) and compensation. For fairly obvious reasons the vast majority request compensation but when a tribunal orders reinstatement this can present particular difficulties for employers.
It is an essential characteristic of a contract of employment that there must exist mutual trust and confidence between employer and employee. When an employee brings a claim of unfair dismissal it generally follows that this trust and confidence is irreparably damaged, but not in all cases. The issue has recently been considered by the EAT in Central and NW London NHS Foundation Trust -v- Abimbola. Mr Abimbola worked as a psychiatric nurse and was dismissed after it was determined at a disciplinary hearing that he had used unreasonable force to restrain a patient. He had also received a written warning for an alleged assault on another patient. Although it was accepted that the Trust genuinely believed that Mr Abimbola used disproportionate force, a tribunal concluded that there were no reasonable grounds for that belief so he was unfairly dismissed and ordered to be reinstated.
The Trust's appeal on liability failed but it also appealed on the matter of the remedy of reinstatement.
Section 116 of the Employment Rights Act 1996 provides that, when considering reinstatement, a tribunal must consider whether the claimant wants reinstatement, whether it is practicable for the employer to comply with such an order and, if the claimant caused or contributed to his dismissal, whether it would be just to order reinstatement.
This case concerned the second issue of practicability. The EAT judge decided that "practicable" means "more than possible" and decided that if the mutual trust and confidence between employer and employee was lost, then "practicable" reinstatement was also lost.
This outcome may seem fairly obvious but it highlights an important issue which is frequently addressed by us when dealing with appeals. The EAT can and will readily overturn decisions by tribunals which are "wrong in law" in the sense that the relevant law has been misunderstood or incorrectly applied. However, it cannot order a different outcome, based on the facts, unless it concludes that the decision made by the tribunal was "perverse", failed to take into account relevant factors or was unduly influenced by irrelevant factors.
An interesting feature of this case was that the EAT found that the tribunal had reached the wrong conclusion based on the facts because the claimant had been found to be dishonest in some of his evidence. According to the EAT another significant feature was that he had a written warning for the other incident which affected whether the Trust could re-employ him. This raises yet another issue - if they could keep him in employment with a warning (as they did), why could this now be a feature which could disqualify him from reinstatement? Similarly, Mr Abimbola had three prior allegations of sexual misconduct, albeit that these were unproven. The EAT decided that, although unproven, these allegations "would affect" the level of trust and confidence that the Trust could have in him. Finally, the Trust genuinely believed that Mr Abimbola had restrained a patient in a headlock.
In failing (sufficiently) to take into account these features the EAT took the view that the tribunal should not have ordered reinstatement of Mr Abimbola and sent the case back to a differently constituted tribunal to consider only the question of what compensation should be awarded for unfair dismissal.
In the writer's humble opinion the case raises a number of troubling questions. While emphasising the practical difficulties caused by what is legally considered as practicable, there is also the matter of whether an employer's decision to keep an employee in employment prior to the event leading to dismissal can, after that event, lead to the conclusion that the employer does not have to keep that employee in employment. Keep an eye on our blog for further discussion about the issues raised by this case.
Under current rules there is a maximum permitted noise level of 87dB(A) in the workplace and employers must provide ear protectors to workers exposed to 85dB(A) and must make them available on request to workers exposed to 80dB(A) (see the Control of Noise at Work Regulations 2005, SI 2005/1643).
Long standing litigation involving some major companies in the knitting industry (sometimes called "the Nottinghamshire & Derbyshire Deafness Litigation") has recently concluded. The Court of Appeal has held that employees who can show they are suffering from hearing loss induced by noise at work have a free standing claim, regardless of the regulations, if the risk that they might be adversely affected was ascertainable and should have been ascertained by their employer.
In those circumstances a claim can be successfully brought under the general provisions in the old Factories Act 1961, the relevant part of which simply provides that "There shall, so far as is reasonably practicable, be provided and maintained safe means of access to every place at which any person has at any time to work, and every such place shall, so far as is reasonably practicable, be made and kept safe for any person working there".
The case in point involved a woman who had been exposed to considerable noise at work between 1971 and 1989 (Baker v Quantum Clothing Group & ors  EWCA Civ 499 on 22nd May 2009). Employers nowadays will be more concerned with the regulations mentioned at the beginning of of this note than with the Factories Act rules but nevertheless the case serves as a salutary warning to employers who employ staff in noisy workplaces to check that they are not exposing staff to unacceptable noise levels.
Take a look at our final item in this newsletter for more information about noise at work, specifically music.
There has been a long standing legal problem about tips. Are they wages? Most people who leave a tip in a restaurant expect that it will go, directly or via some form of pooling, to the waiter or waitress who served them. But do tips count as "wages" for the purposes of the National Minimum Wage?
It was established by the Court of Appeal many years ago (1996) that if tips are collected as part of the customer's bill and then paid out by the employer to staff they count as part of wages but if they are paid direct by a satisfied customer to, for example, a waiter or waitress they do not.
A private member's Bill designed to end the practice by which employers can use gratuities and service charges to 'top up' staff wages to meet the National Minimum Wage failed to become law in 2003 but the idea was taken up by the government. A formal consultation paper on the subject was issued in November 2008. Now, in May 2009, the government has announced that using tips to make up staff pay to minimum wage levels is to be outlawed from October this year.
Coincidentally also in May 2009, the Court of Appeal has upheld the EAT decision in the Annabel's case (Annabels (Berkeley Square) Ltd (2) George (Mount Street) Ltd (3) Harry's Bar  EWCA Civ 361, Court of Appeal on 7th May 2009). This confirmed that tips and gratuities paid via the particular tronc system operated by the employers' concerned could not be included in "wages" for National Minimum Wage purposes. It is rumoured that in some clubs and restaurants in London's West End the tips can be so great that they result in some staff being liable to higher rate income tax although of course, at the other extreme, there are other places where a waiter or waitress may not even earn the National Minimum Wage if tips are not taken into account.
In an important ruling which will be welcomed by employers the House of Lords has held that equipment not provided by an employer, particularly if it is not on the employer's premises, will not generally count as "equipment provided for use or used by an employee at his work" within the meaning of the Provision and Use of Work Equipment Regulations 1998. It follows that employers are not generally liable to pay damages pursuant to those regulations to an employee who suffers personal injury as a result of failure of such equipment.
In the House of Lords case a Mrs Jean Smith was employed by Northamptonshire County Council as a driver and carer. As part of her job, she was required to collect people in need of care from their homes and take them by minibus to a day centre. An accident occurred at the home of one of these people, a Mrs Cotter. Mrs Smith was pushing Mrs Cotter in a wheelchair down a wooden ramp. The ramp had been installed by the NHS about 10 years previously and led from the living room to the patio area outside Mrs Cotter's house. Mrs Smith had performed this task many times before without incident but as she was doing it on 1st December 2004 an edge of the ramp crumbled beneath her foot, causing her to stumble and sustain injury.
Mrs Smith brought a personal injury claim in the County Court alleging that her employers were in breach of the 1998 regulations. She won. The County Court judge found that the ramp counted as "work equipment" and that it was ""provided for use or used . . . at work" within the meaning of the regulations.
The employers appealed and the case went all the way to the House of Lords (Smith v Northamptonshire County Council on 20th May 2009). The House of Lords pointed out that some degree of limitation has to be implied into the Regulations to prevent absurd results - by way of example one of the Law Lords suggested that if Mrs Smith's arguments and the County Court judgment were right it would follow that there could be liability for defects in such things as the chair in the committee room in the House of Lords or the escalator in the Westminster Underground station. While all involved accepted that the ramp counted as "work equipment" for the purposes of the PUWER regulations, the House of Lords ruled that on a proper understanding of the regulations it could not be said to have been "provided for use or used by an employee at his work". So Mrs Smith's claim failed.
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As is well known, in general terms a part-time worker has the right"not to be treated by his employer less favourably than the employer treats a comparable full-time worker ......[if] the treatment is on the ground that the worker is a part-time worker" (there are qualifications and limitations to this rule but that is the general effect of the Part-time Workers Regulations 2000).
Two knotty problems as to proper interpretation of the regulations have recently been resolved by the Employment Appeal Tribunal. One is what happens if there is no "comparable full time worker"; in that situation, can a hypothetical full-time worker be used instead? The other is whether "the ground that the worker is a part-time worker" means that part time status has to be the sole reason for the less favourable treatment.
As to the first problem, the EAT has now ruled that, save in two situations specifically covered by the regulations, it is not permissible to use a hypothetical full time worker as the comparator (the two exceptional situations occur when a full-time worker switches to part-time work and/or vice-versa).
As to the second problem, the EAT has ruled that "Part-time work must be the effective and predominant cause of the less favourable treatment complained of; it need not be the only cause".
In the case in point a lady worked part time as a teacher of shorthand in the Journalism Department at Sheffield University. She complained that full time workers were paid for preparation time but she was not and that this was a breach of the Part-time Workers' Regulations. She faced a problem because there were no full time teachers of shorthand with whom she could compare herself so instead she sought to compare her position with that of a "generic teacher" on a University Teacher's contract. An employment tribunal accepted this as a valid comparison for the purposes of the regulations. The University appealed and has won. The EAT has ruled that (save in the two situations noted above) a hypothetical comparator cannot be used and that that is what a "generic teacher" on a University Teacher's contract would be.
That was enough to mean the University won the case. Nevertheless the EAT went on to consider whether for the purposes of the Regulations "the ground that the worker is a part-time worker" means that part time status has to be the sole reason for less favourable treatment. As noted above the EAT ruled that it is not necessary for a part time employee to show that their part time status is the only reason for the less favourable treatment complained of - but to win a claim under the Regulations he or she must be able to show that it was an "effective and predominant cause".
With all the hooha about rewards for failure, bonuses for bankers and MPs milking the system, it's good to know that the Courts and tribunals, if and when they are invited to get involved, are prepared to take a broad view and move on from what might be regarded as a traditional approach. Two recent examples, one favouring employers and the other employees, show that the law evolves as times and circumstances evolve.
The first is the case of Rose Gibb. We mentioned this in our May newsletter but it had then only just been decided and the full judgment transcript was not then available. It is now available and an update may be of interest.
As a reminder, the background is that Ms Gibb resigned from her job as chief executive of Maidstone and Tunbridge Wells NHS Trust, a few days before publication on 10th October 2007 of a report on an outbreak of c.difficile which had caused the deaths of 90 people at the hospital for which she was responsible. As part of agreed severance terms Ms Gibb was promised a total of some £250,000. A public outcry followed and Alan Johnson, the Minister of Health, intervened. In the event, given the pressure to do so, the Trust decided to go back on its promise. Ms Gibb sued. She accused the Trust of "unjustly enriching itself" at her expense by withholding £175,000 of her £250,000 severance agreement.
The High Court ruled, in essence, that the severance package agreement was void. It was simply unreasonable in what lawyers know as the Wednesbury sense (so-called after a 1947 case in which the Court of Appeal ruled that the courts can consider whether a local authority might have contravened the law by acting in excess of its power and that this meant they can consider whether the local authority acted unreasonably by taking into account matters that ought not to have been taken into account or disregarded matters that ought to have been taken into account). The judge ruled that in this sense the Maidstone and Tunbridge Wells NHS Trust had acted unreasonably when it promised such a large payment, that it should not be forced to pay it and that it had not unlawfully enriched itself or benefited. He ordered Ms Gibb to pay the trust's legal costs.
Ms Gibb has now lodged papers at the Court of Appeal, where she will seek to appeal the ruling. The Chief Executive of her union, Managers in Partnership, has said "This is all going to take time. Separately, we are also bringing a claim in the employment tribunal. We can't say any more at the moment about the grounds ofappeal but will release further information in due course".
Bankers such as Sir Fred Goodwin who presided over catastrophic performances by their banks and then resigned with huge pensions will no doubt be watching with interest. While on the topic of Sir Fred, on 18th June, he was reported to have agreed to forego (pay back) approximately 25% of his RBS pension payout (having taken a tax free lump sum of £2.7m to be going on with). Apparently motivated by seeking "a quieter life" it is also rumoured that this is a precursor to taking up new employment - at what salary, with whom and with what benefits remain to be seen!
The second case is that of a Mrs Linda Sturdy. This concerned compensation for injury to feelings in a discrimination case. There is no formal or statutory limit on the amount which a tribunal can award for injury to feelings in discrimination cases but in December 2002 the Court of Appeal effectively set the normal absolute maximum at £25,000 (in Vento v West Yorkshire Police).
That maximum has now been exceeded. As reported in last month's newsletter an employment tribunal in Leeds considered that Mrs Sturdy, who had won a claim of unlawful age discrimination after 17 years unblemished service with the NHS, had been so badly treated by her employers that she should be awarded the £25,000 maximum. However the tribunal agreed to increase the award by 18.5% to take account of inflation since the Court of Appeal's ruling noted above. So Mrs Sturdy was awarded £29,500 for injury to feelings (plus interest). It is understood that this is the largest sum ever to have been awarded by an employment tribunal for injury to feelings in a discrimination case.
However, it is now known that Mrs Sturdy's Counsel had argued for £75,000 to be awarded for the injury to her feelings. This was on the ingenious basis that she had made three separate claims and should get £25,000 for each! Given that she only had one set of feelings to injure it is not altogether surprising that the tribunal decided to make a single global award - but this does not detract from the achievement of persuading a tribunal to award a greater amount than the Court of Appeal had set as the effective normal maximum just a few years ago.
Lewisham v Malcolm was the important case in summer 2008 in which the House of Lords ruled, in effect, that for the last 9 or 10 years the courts and tribunals had been using a fundamentally wrong approach in deciding whether a person could or could not claim disability discrimination. Lewisham v Malcolm was a housing case not an employment law case, but within a few months the Employment Appeal Tribunal accepted that the House of Lords ruling applied in employment cases as well.
What is the problem? In shortest possible summary the problem stems from the fact that, as a matter of logic, for a claimant to show "discrimination" he normally has to show that he has been treated worse than someone else. The problem is deciding with whom the comparison should be made. Unfortunately, the wording of the Disability Discrimination Act 1995 in this respect is ambiguous.
The ambiguity was resolved in 1999. In essence, the Court of Appeal then held in an employment law context that the correct comparator was simply a work colleague who was not suffering from a disability (Clark v Novacold  EWCA Civ 1091). This meant that if a disabled person took time off work and was dismissed as a result, he would be able to show that he was treated worse than his fit colleague who, being fit, had not taken time off and was not dismissed. Thus he could claim that his dismissal was unlawful discrimination by reason of his disability. Now, however, following the House of Lords 2008 decision, the correct comparator is different. The House of Lords has ruled that the ambiguity in the 1995 Act was wrongly resolved in 1999. The House of Lords ruled, in essence, that in the case used as an example above the correct comparator would be a fit person who has taken time off work (without permission) and who has been dismissed for doing so. As the same treatment, dismissal, would have been meted out to both the person suffering from a disability and to his fit colleague, it would follow that there was no discrimination - and so no claim.
Not surprisingly this reinterpretation of the law caused consternation amongst employees suffering from a disability and their supporters and advisers.
Before noting the two recent developments which prompted this note, it should be explained that, on the facts of the Lewisham v Malcolm case, the House of Lords clearly came to a just result. Mr Malcolm was a tenant of a Council property who wanted to exercise his right to buy, possibly with a view to selling on at a quick profit. When the Council found that he was in breach of his tenancy agreement by not occupying the property and by allowing a third party to live there it refused to sell him the property. Mr Malcolm said that he suffered from a disability, that it was not possible for him to occupy the property personally because of the disability and that it followed that the Council's refusal to sell amounted to unlawful disability discrimination. On the basis of the 1999 Court of Appeal decision noted above, he was right. However this would clearly have been an unjust result - hence the House of Lords ruling.
The two recent developments which prompted this note are:
10. ...and finally
Another conflict between religion and employment law.
While on the subject of the Equality Bill (see item 9 above) it is worth noting that, if enacted as it stands, one little noticed effect will be to force churches to employ gay lay staff even if they do not wish to do so. Under current law there is an exemption which makes it lawful to reject a gay job applicant if the intended employment is "for the purposes of an organised religion" provided certain specified conditions are fulfilled (Employment Equality (Sexual Orientaton) Regulations 2003 reg 7(3)).
The new Bill uses similar wording to the 2003 regulations (which it will replace) but adds the crucial extra words that "Employment is for the purposes of an organised religion only if the employment wholly or mainly involves (a) leading or assisting in the observation of liturgical or ritualistic practices of the religion, or (b) promoting or explaining the doctrine of the religion (whether to followers of the religion or to others)" (Equality Bill sch 9 para (2)(8)).
The official explanatory note to the Bill confirms that the proposed revised version of the exemption would not entitle a church to refuse employment to a gay person who applied for a post as a church youth worker or accountant if the reason for the refusal was the person's sexual orientation.
Cynical lawyers with reasonable memories might point out that at least one employment tribunal seems to have jumped the gun and effectively applied the proposed new law as long ago as 2007. The C of E Bishop of Hereford had refused to employ a gay man as Diocesan Youth Officer because he was gay. The man sued. Notwithstanding that it recognised that it must not substitute its own view as to what was reasonable for the view of the Bishop, the tribunal ruled that this was unlawful. It ordered the diocese to pay the man almost £50,000 compensation for breach of the 2003 sexual orientation Regulation (Reaney v Hereford Diocesan Board of Finance Cardiff ET, July 2007). So maybe the Equality Bill is, in this respect, doing no more than specifically spelling out what the law already is.
Noise (this time music and speech) and work
As many employers have found to their cost, playing music without paying for the performers' rights can attract the attention of the Performing Rights Society (PRS). Examples include mechanics playing music in a workshop loud enough that people in the waiting room could hear it, police listening to music in a police station and children singing Christmas carols (remarkably, many of these still have copyright protection). A striking recent example is a woman who has been asked for £99 for playing classical music to her horses to keep them calm, on the ground that this constitutes a "public performance". Another curious case has resulted in the owner of a patisserie in Sheffield being told to obtain a music licence even though he only plays talk radio.
However, it seems that if the music is played through earphones, such as with an mp3 player or iPod, this is OK and no licence is required!
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