Canter Levin & Berg Employment Solutions

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October 2015 Review

the employment law briefing

Welcome to our October review of employment law news. Topics covered include information about zero hours contracts and exclusivity clauses, considering how hard we work and the protential problems for employers that can be caused by "presenteeism", a case involving bad behaviour by MBNA employees at a function at Chester racecourse, the remarkable complexities that can accompany dismissal for sickness-based incapacity and the application of criminal sanctions in connection with breaches of the procedures applicable in the event of collective redundancies.

Other notable news includes an urgent review of the civil courts which is also applicable to tribunals. Proposals include the digitisation of many courts and tribunals so that processes are largely completed online, the much wider use of judicial officers (i.e. court staff) to carry out many of the tasks currently being performed by judges and the creation of an online court for resolving lower value disputes.

In the last couple of days a much simpler fee remission application process has been introduced using a revised application form. This allows those who are eligible not to have to pay fees including tribunal fees for commencing proceedings and the hearing fee. There is no longer a requirement in all cases to provide original supporting documents and the process is altogether more straightforward.

There was also an interesting example of the power of a settlement agreement. Former head of security at News International, Mark Hanna, had threatened to go public with shock revelations about his employer including confessions made by defendants in the phone hacking trial. In a late night Youtube video posted last month he said that he was "standing up to all those who sit back and treat us with contempt, the Murdochs and Brooks of the world". However, he has recently settled his employment claim against News UK (successor to News International). He announced the settlement on 17 October in the only tweet on his Twitter page. Almost unbelievably, given the prior strength of his feelings about the matter, he said "Having reviewed this material, I no longer believe the allegations I made to be true. I am also satisfied that I was not dismissed because of any protected disclosure." A remarkable coincidence!

This month's news:

  1. New rules and guidance for zero hours contracts
  2. How hard do we work?
  3. Comparisons with the treatment of others rarely assist in disciplinary matters
  4. Dismissal based on sickness absence can be complicated
  5. Redundancy consultations and notifications - criminal sanctions

Kind regards

Martin Malone

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This month's news round-up:

1. New rules and guidance for zero hours contracts

McDonalds

On 15 October the Department for Business Innovation and Skills published its Zero Hours Contracts: Guidance for Employers. This web-based resource is fairly brief but usefully covers the main issues. As I have mentioned before the term "zero hours contract" is not legally defined so the Government's description is helpful:

A zero hours contract is one in which the employer does not guarantee the individual any hours of work. The employer offers the individual work when it arises, and the individual can either accept the work offered, or decide not to take up the offer of work on that occasion.

The guidance confirms that everyone employed on a zero hours contract is entitled to statutory employment rights with no exceptions.

Examples of "appropriate use" are provided including working for new businesses, seasonal work, covering for unexpected staff sickness, working at special events and testing a service. Perhaps more contentiously there is also advice concerning inappropriate use. The guidance states that "they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable".

It is also indicated that zero hours contracts might not be appropriate if an individual work regular hours for a continuous period, e.g. someone who works 9.00 a.m. to 1.00 p.m. Mondays to Wednesdays for 12 months. It is suggested that better options for such an employee would be a permanent part time contract or a fixed term contract.

The guidance also addresses the issue of exclusivity clauses and in this regard it is unequivocal. It points out that under the Small Business, Enterprise and Employment Act the use of an exclusivity clause in a zero hours contract is prohibited so that, if such a clause is included, "the law states the individual can ignore it". Attempts at avoidance, such as requiring permission to look for alternative employment, are similarly banned.

In fact these new rules concerning exclusivity clauses are yet to take effect but the Government has published, in draft, the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015.

Read more...

2. How hard do we work?

Jeremy Hunt

I imagine that, if asked, many people in employment would say that they work very hard. Controversially, at the recent Conservative Party Conference, Health Secretary Jeremy Hunt, suggested benefits cuts would make people "work hard" by strengthening the nation's work ethic. He said:

My wife is Chinese, and if we want this to be one of the most successful countries in the world in 20, 30, 40 years' time there's a pretty difficult question that we have to answer which is essentially: are we going to be a country that is prepared to work hard in the way that Asian economies are prepared to work hard, in the way that Americans are prepared to work hard?

Of course, we now know that those who worked at getting the tax credit changes through Parliament should perhaps have worked harder or rather more wisely by including the relevant provisions in primary finance legislation rather than secondary legislation that was liable to be and was duly struck down this week in the House of Lords.

However, Mr Hunt has latched on the perception that UK workers do not work as hard as those in other countries. Of course such generalisations cover a multitude of scenarios but, as a general benchmark based on hours worked per annum the top five countries are:

  1. South Korea
  2. Chile
  3. Russia
  4. Hungary
  5. Czech Republic

However, evidence has emerged which suggests that UK workers are working very hard, perhaps too hard to the extent that this may be a cause of concern for both employers and employees.

First, according to research by Canada Life Group Insurance, 22% of UK employees did not take their full holiday entitlement in 2014 with 5% saying that they were pressured by their employer into not doing so. Reasons for not taking a full entitlement included providing cover for maternity leave and covering for members of staff who had left.

Second, and more concerning, research by National Accident Helpline has revealed 89% of workers have not taken sick leave when unwell.

Read more...

3. Comparisons with the treatment of others rarely assist in disciplinary matters

Chester_Racecourse

It is very common when receiving instructions in connection with unfair dismissal claims for the complainant to compare they way they have been treated with the treatment of other employees, e.g. "it's not fair because he did far worse than me and only got a written warning". In nearly all such cases the treatment of others is irrelevant when determining whether or not the individual was treated fairly or unfairly, particularly in terms of sanctions imposed. Although employees can often see their actions as directly comparable with others it is rare for there to circumstances in which a direct and equal comparison can be made.

A good example is the recent decision of the Employment Appeal Tribunal in MBNA Limited -v- Jones. Mr Jones was a collections officer with MBNA Bank in Chester. In November 2013 the bank celebrated its 20th birthday with an event at Chester Racecourse. Staff were told that it was a work event and normal standards of conduct would apply, with any misbehaviour being dealt with in accordance its procedures and guidelines. Although the event started at 7.00 p.m. Mr Jones had started drinking at about 5.00 p.m. He was in company with another employee, Mr Battersby. Early on in the evening there was an incident which involved Mr Battersby kneeing Mr Jones in the back of his leg and Mr Jones licking Mr Battersby's face. Staff who were present did not regard it as more than fun or banter. Later in the evening Mr Jones had his arms around Mr Battersby's sister. Mr Battersby again kneed him in the leg and, in turn, Mr Jones punched Mr Battersby in the face.

After Mr Jones left the event he went with others to a club. Mr Battersby waited outside the club and sent Mr Jones seven texts which included a repeated threat to "rip your f*cking head off". As it happened there were no further incidents that night and Mr Jones did not read the texts until the following morning.

MBNA conducted a disciplinary investigation and brought charges against both employees. It was concluded following a disciplinary hearing that Mr Jones had initiated the altercations by licking Mr Battersby's face and his claim of self-defence was rejected. It was also noted that the incidents took place at a MBNA branded event, thereby impacting on the reputation of MBNA. He was summarily dismissed for gross misconduct.

In the case of Mr Battersby, he was found to have sent texts which were "of an extremely violent nature and were wholly inappropriate". However they were considered as a response to Mr Jones hitting him and he was issued with a final written warning.

An appeal against dismissal by Mr Jones was unsuccessful.

At the Employment Tribunal it was argued on behalf of Mr Jones that there was inadequate investigation, insufficient weight was attached to provocation and there was inconsistency between the dismissal of Mr Jones and the warning issued to Mr Battersby. On behalf of MBNA it was contended that it was impermissible to find that Mr Jones was unfairly dismissed because of the way that Mr Battersby had been treated.

Read more...

4. Dismissal based on sickness absence can be complicated

monmouthshire

In Monmouthshire County Council -v- Harris the Employment Appeal Tribunal was asked to review a finding in the Cardiff Employment Tribunal that Mrs Harris was unfairly dismissed and that the dismissal was an act of disability discrimination. At a remedy hearing in September 2014 she was awarded £238,216.37. The Employment Appeal Tribunal proceeded on the basis of determining, in respect of the unfair dismissal, whether the Employment Tribunal erred in regarding procedural defects as sufficient to make the dismissal substantively unfair and whether there was a failure to consider the Council's substantive grounds for dismissal. It also considered whether the Tribunal erred in failing to consider, in the context of discrimination, whether dismissal was a proportionate means of achieving a legitimate aim and whether or not it took into account irrelevant considerations.

Mrs Harris had worked for the Council since 1992. Latterly she was suffering from depression, sinusitis, asthma and an underactive thyroid. Accordingly she was disabled for the purposes of the Equality Act 2010. At a time prior to autumn 2010 and following occupational health advice she had been permitted to change her working arrangements to include working from home. Thereafter a new line manager, Mr Austin, was appointed. In January 2013 Mrs Harris complained that Mr Harris was not supporting her working from home and asked to return to her previous arrangements. Thereafter she commenced a period of sickness absence and did not return to work.

She attended meetings with HR in March and May 2013. On 28 May Mr Austin met with HR and it was decided that Mrs Harris' employment should be terminated. She was notified by letter dated 4 June. the dismissal was due to take effect on 31 July. She appealed and the appeal was heard on 4 July. She objected to a lack of consultation, raised concerns about her working relationship with Mr Austin and complained that the decision to dismiss was based on an out of date report. The appeal was rejected.

In June and July she applied for ill-health retirement but this was declined. A medical opinion obtained in October 2013 concluded that although she was still unfit for work and likely to remain so for the foreseeable future, it could not be said that she would be permanently unfit until the normal retirement age.

At the resulting Employment Tribunal it was noted that the reason for dismissal was "absence which arose due to the claimant's medical condition (a disability)". There was inadequate warning of the possibility of dismissal and inadequate consultation. In addition there was a failure to make reasonable adjustments which also went to the question of the fairness of the employer's behaviour. Mr Austin had effectively prevented Mrs Harris from maintaining the home working arrangements from January 2013. There was also a failure to take into account the updated reports that had been obtained for the ill-health retirement application. The fairness of the dismissal was also tainted by the active participation of Mr Austin. As for the discrimination claim the Council failed to make reasonable adjustments on the basis that if working from home was properly implemented from January 2013 there may have been no ongoing sickness absence at all. The Council appealed.

Read more...

5. Redundancy consultations and notifications - criminal sanctions

Embankment Plymouth 25 june 2009

Most employers and HR staff with experience of dealing with redundancies are aware of the requirements for collective consultation. Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 requires employers, where 20 or more employees are proposed to be made redundant within a period of 90 days, to consult with the employees who are at risk of being made redundant for a minimum of 30 days. The period is extended to 45 days where 100 or more employees are affected. Failure to consult can result in protective awards of up to 90 days' pay.

There is also a requirement to notify the Secretary of State of the proposed redundancies and this is done by using prescribed form HR1.

What is less well known is that failure to do so is a criminal offence and can result in prosecution and a fine. According to the Government's website the fine may be up to £5000. However this is incorrect. Section 194 of the Act provides that an employer is liable on summary conviction to a fine not exceeding level 5 on the standard scale. Since 12 March 2015 such fines have been unlimited.

Further, pursuant to section 194(3):

Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to neglect on the part of, any director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.

Accordingly, individuals can be prosecuted and, if convicted, face an unlimited fine as well as a criminal record.

This month, in a marked departure from the prior approach pursuant to which such prosecutions were virtually unheard of, prosecutions under the Act have been brought against the chief executive of Sports Direct and three former directors of City Link.

Read more...

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