Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
March 2013

This month's newsletter revisits some familiar territory, covering issues such as TUPE, flexible working, piecemeal changes to employment law by the government, human rights and the need to be very careful when taking into account prior warnings when contemplating dismissals. Following postponement of their introduction and a defeat in the Lords it seems that the demise of employee shareholder contracts may have arrived before they are even introduced which would, according to most observers, be a welcome development.

I must also draw your attention to a recent decision in the Employment Appeal Tribunal which confirms that enhanced terms for older employees, for example in the case of redundancies, do not constitute age discrimination as long as the employer can demonstrate objective and reasonable criteria for applying them.

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Regards
Martin Malone


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This month's news round-up:

1. Poundland and (not) human rights

Poundland

It was difficult to miss the near ubiquitous reporting of the Court of Appeal's decision in the case of Reilly & Anor, R (on the application of) v Secretary of State for Work and Pensions, in which it quashed the Jobseeker's Allowance (Employment and Enterprise) Regulations 2011 SI 2011/917. Contrary to the impression given by (some of) the media, the Court did not find that there was any breach of the human rights of unemployed people who had been compelled to undertake unpaid “work experience” to avoid having their jobseeker's allowance withdrawn. Rather, there had been a failure to introduce these workfare programmes within the scope of any primary legislation. In particular, the “job seekers” had been misled about how long they could lose benefits for if they did not agree to participate.

In fact the Court of Appeal specifically made it clear that there was nothing wrong, in principle, with having such schemes. Lord Justice Pill summarised the position as follows:

A policy of imposing requirements on persons receiving a substantial weekly sum, potentially payable for life, is readily understandable. Equally, the means sought to achieve that end are understandable; claimants should be required to participate in arrangements which may improve their prospects of obtaining remunerative employment. Provided schemes "are designed to assist [claimants] to obtain employment" and to "[improve] their prospects of obtaining employment"...sanctions for failing to participate are understandable. Whether a particular arrangement meets those statutory requirements...is susceptible to challenge by judicial review, but that stage has not been reached. The issue is whether the Scheme named in the Regulations satisfies the requirements for specificity in section 17A by way of being "prescribed".

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2. it's not apportionment - but it certainly looks like it

Hackney_town_hall

If anyone wonders just how expensive and protracted an employment dispute can be the Court of Appeal decision in London Borough of Hackney v Sivanandan is well worth reading. Lord Justice Mummery introduces his judgment as follows:

"It is 12 years since this discrimination dispute began. It arose out of two unsuccessful job applications at the end of the 20th century. The case is now a 21st century version of a 19th century Chancery saga. And it is not over yet.

"The reader of this judgment will be spared what Underhill J (the President) described in the Employment Appeal Tribunal (EAT) as the "complex and extraordinarily long history". It is a Dickensian narrative of allegations and counter-allegations, applications and cross-applications, misunderstandings, objections, complaints, hearings, adjournments, reviews, appeals and cross-appeals and repeated wrangling about procedure, case management matters, schedules, and even about the bundling and delivery of documents."

However, it is not the extraordinary length and complexity of the proceedings which justifies this item. Rather, the Court addressed the question of whether a tribunal is entitled, where there is more than one discriminator, to apportion liability between respondents.

Ms Natasha Sivanadan failed to get a post as a Training and Development Co-ordinator for Hackney Action for Racial Equality (“HARE”). Subsequently she brought discrimination proceedings against Ms White, an employee of Hackney Council (“Hackney”) who was on the interview panel for the job, a number of others involved in the recruitment process, and Hackney itself, on the basis that Hackney was vicariously liable for its employees’ actions. At two separate hearings, an Employment Tribunal awarded compensation of £1,905.41 against Ms White, and £421,415 against Hackney, the latter including aggravated damages of £25,000.

Hackney appealed two aspects of the award of compensation. First it challenged the element of aggravated damages (but not the calculation of the rest of the compensation) and, second, it argued that the Tribunal could not award any more compensation against it than the £1,905.41 it had awarded against Ms White.

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3. a well-meaning homespun impression of human rights

playground

Hill v Governing Body Of Great Tey Primary School is another high profile case which I mentioned briefly last month. Since it concerns disclosure of information and that is such a hot topic at the moment the decision is, I believe, worth further analysis, particularly in terms of the possible application of the European Convention on Human Rights The case concerned a dinner lady who was dismissed for breach of confidentiality after telling parents about a nasty bit of playground behaviour involving their child (the innocent party) without permission, and then going to the local press about it when she was suspended. The child had been tied to a railing in the playground and whipped across the legs by other pupils. There were red marks on her legs and rope burns and scratches on her wrists.

When she was sacked she made an unsuccessful whistle-blowing claim, and a successful unfair dismissal claim.

An Employment Tribunal found that she had been dismissed unfairly because the investigation and disciplinary process before dismissal were unfair, but that she would have been dismissed within a couple of months had a fair procedure been followed – and she was also guilty of 80% contributory fault, reducing her compensation accordingly. The Tribunal concluded that she would have been dismissed fairly after two months if proper procedure had been followed, and taking into account in addition the 80% deduction on account of her contributory conduct, awarded her £49.99

The Employment Appeal Tribunal (EAT) overturned the decision and remitted it for a rehearing.

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4. flexible work requests and flexible parental leave

twins

I've mentioned pending changes to flexible work requests and flexible parental leave over the last few months and it seems that the details are now finalised. Already implemented are the following:

  • - The right to request flexible work is extended to employed agency workers returning from maternity/paternity leave;
  • - Unpaid parental leave is increased to 18 weeks for each child.

The Children and Families Bill 2013, which recently has its second reading in the Commons, implements further changes to:

  • - Allow parents to share maternity leave (after the first 2 weeks’ compulsory leave) as parental leave, which will be paid, subject to the same qualification rules as for maternity and paternity pay. The Department for Business Innovation and Skills has launched a consultation on how the new right will be administered, looking at issues like whether the one year period will run from the beginning of maternity leave or the birth of the child, and how employees should give notice to end maternity leave and pay where they propose to share leave.

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5. better redundancy deals for older workers?

retirement

In Lockwood -v- Department of Work and Pensions and The Cabinet Office, the Employment Appeal Tribunal (EAT) has endorsed the legitimacy of a voluntary redundancy scheme which provided enhanced benefits for older employees.

The claimant applied for redundancy at the age of 26, having worked at the DWP since she was 18. She was entitled to a redundancy payment under the Civil Service Compensation Scheme of nearly £11,000. However, if she had been over 35, she would have been entitled to over £17,000 more. She made a claim of direct age discrimination, but failed in the Employment Tribunal.

The EAT upheld the decision. There were material differences between the two groups – older workers would find it more difficult to find new employment and would have heavier family financial commitments than younger workers. The EAT also agreed that the different payments were justified, in that the different levels of payment were a proportionate means of achieving the legitimate aim of providing workers with a financial cushion to tide them over until they find another job – which would be harder for older workers.

The decision provides important clarification concerning this difficult issue which has troubled many employers since age discrimination legislation was implemented in 2006. It is in line with calculations for redundancy payments and basic awards for unfair dismissal which take into account both an employee's length of service and age. When the Regulations first came into force many employers took steps to remove all of their own procedures that might result in an employee suffering an advantage or disadvantage merely because of his or her age. However, now that we have a few years' worth of decisions concerning how protection from age discrimination works in practice, it has become clear that Tribunals will readily find that making different provisions according to the ages of employees is permissible, as long as there is a credible rationale for the approach taken.

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6. unreasonable prior warnings can make a dismissal unfair

The_Milford_Club

Where an employee is dismissed for misconduct and there was a live final warning on their disciplinary record which appears, on the evidence, to have been "manifestly inappropriate", then a tribunal should not just look at whether the employer has taken a reasonable approach to the event triggering dismissal, it must also look back and consider whether the final warning was fairly given as well: so says the Employment Appeal Tribunal in Simmonds v Milford Club.

A steward at a private club (how many employment cases have featured stewards in private clubs!) was dismissed for disobeying an instruction to give all staff a bottle or bottles as a Christmas bonus; he gave them a cash gift instead. The sanction was settled on because he already had a current final warning, for letting his wife deposit takings at the bank instead of doing it himself.

The Employment Tribunal to which he took his case felt that the bonus issue alone would not justify dismissal, but that taking into account the earlier warning, it was fair to dismiss. With regard to that warning, they found as a fact that the steward had never been told not to allow anyone else to bank the takings, but thought he ought to have worked that out from his previous experience as a pub landlord.

The Employment Appeal Tribunal rejected this assumption. If an Employment Tribunal has reason to consider that a material previous disciplinary sanction may have been manifestly inappropriate, it should hear evidence and decide on the relevant facts whether the sanction applied was manifestly inappropriate.

The Honourable Mrs Justice Slade explained the correct approach in such circumstances as follows:

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7. new employment law popping up in the most unlikely locations

parliament

As the Enterprise and Regulatory Reform Bill wends its way through parliament, the government keeps adding miscellaneous bits and bobs to it. Perhaps most noteworthy are the proposals to implement regulation of the Press post-Leveson by inserting amendments which appear entirely out of context, primarily because that is precisely what they are!

New employment law is creeping in by a similar method. Two recent additions that enhance the rights of whistle-blowers and extend protection to employees dismissed on the ground of political opinion have appeared in the last few weeks

One set of amendments to the Bill have been prompted by the fallout from recent high profile issues within the NHS, and are aimed at strengthening protection for whistle-blowers. They will:

  • - introduce a provision whereby the detrimental acts of one co-worker towards a whistle-blower will be treated as being done by the employer, thus making the employer responsible (vicarious liability);
  • - add a requirement for protected whistleblowers to be "acting in the public interest";
  • - remove the requirement for disclosures to be made in good faith (while at the same time providing power for tribunals to reduce compensation by up to 25% if they are not made in good faith); and
  • - provide a defence for an employer who is able to show that they took all reasonable steps to prevent the detrimental treatment of a co-workers to towards another who blew the whistle.

These changes have resulted primarily from the case of NHS Manchester v Fecitt. Three nurses who raised concerns about the qualifications of a colleague were subjected to victimisation.

click to read more...


8. yet another TUPE round up!

TUPE

The Advocate General has given his opinion in the case of Alemo-Herron & Ors v Parkwood Leisure Ltd supporting the proposition that employees transferred under TUPE can continue to benefit from “dynamic” collectively agreed terms and conditions post transfer.

Next, the DWP has launched a consultation on the amendment of the Transfer of Employment (Pension Protection) Regulations 2005 on the pension contributions a transferee must make following a business transfer. The current regulations say that 'relevant contributions' must be made and that the amount contributed must equal the employee's contributions subject to a maximum of 6% of basic pay. The reason for the change is that the regulations do not make it clear that the pension scheme member is entitled to choose their own rate of contribution. The proposal is that members will be able to choose their own contribution, which the employer must match, up to the 6% cap. Transferees will also be able to satisfy their obligation to protect pension contributions by keeping up contributions equivalent to those made before the transfer.

I also reported, in brief, last month, the consultation on changes to TUPE 2006 to removed so-called “gold plating”. In a bit more detail, the proposals are:

click to read more...


9. employee shareholder contracts - unwelcome, unworkable and unlikely to see the light of day

George Osborne

For some months I have been writing about the problems likely to be encountered in implementing the government's proposed employee shareholder contracts, apparently a particular favourite of George Osborne. Just last month I referred to criticism from the Law Society and it now turns out that no sooner had Mr Osborne referred in the Budget to changes to facilitate the implementation of the new contractual arrangements than the whole plan was thrown out by the Lords the very next day and by a majority of 54. The contracts were initially due to be introduced on 1 April 2013 and recently put back to 1 September 2013 but it now remains to be seen whether the government will continue to push on with its plans - in the face of almost universal opposition from the full political and economic spectrum - or admit defeat. I am bound to observe that one might reasonably think that there are rather more important issues which should be occupying the government's attention at the moment.

In the record of proceedings and along with delegating the planning functions of the Mayor of London, registration of town and village greens and development orders within the curtilage of a dwelling house (see my observations elsewhere concerning jumbled legislation) came the simple words "Clause 27 - Leave out Clause 27", thereby at a stroke eliminating the proposals in their entirety.

Although existing employees would not have been required to sign employee shareholder contracts (and thereby forego their entitlement to employment protection), concerns had been expressed that new contracts of employment would have been offered only on this basis and that job seekers would be obliged to accept job offers on this basis, thereby steadily eroding employment rights. Perhaps ironically recent research has shown that most SME employers are far more concerned about the state of the economy and lack of lending facilities than employment rights for employees, which are generally regarded as a good thing!

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