Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
March 2014

Welcome to our April review of what has been happening in the world of employment law. Following last month's news of a 79% drop in employment tribunal claims, MP Matthew Hancock has made the rather contentious suggestion that the drop in claims demonstrated that "this had become a system that in too many cases was being ruthlessly exploited by people trying to make a fast-buck. Increasingly, the real victims were the businesses targeted by bogus claimants". It would be interesting to know the empirical basis for this declaration. In any event things are not as clear cut as Mr Hancock may think since the Government is undertaking a review of the fees regime, less than a year after it was introduced. No doubt fearing a reversal in the event of a further judicial review application (this was virtually flagged up in the Unison judgment), it seems that fees payable are going to be scaled back, if not abolished altogether. That is all well and good but what about those who have been denied access to justice in the meantime?

A significant development, trialling throughout April and to become mandatory from 6 May, is compulsory early conciliation via ACAS. I have set out how the scheme is going to operate plus some potential pitfalls.

As predicted earlier this year the contentious but somewhat nebulous issue of zero hours contracts is back at the top of the agenda, mainly as a result of Ed Miliband's speech last week. Although it was widely supposed that Labour would suggest the abolition of zero hours contracts, in fact, the intention is to remove some of the poor employment practices that tend to accompany them, many of which were highlighted in a recent select committee report.

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Martin Malone

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This month's news round-up:

1. expensive holidays


In August 2013 I asked the question whether holiday pay should include overtime.

In the case of Neal v Freightliner Limited Employment Judge van Gelder, sitting in Birmingham, readily found that holiday pay should equate to "normal pay", i.e. what the employee normally receives, relying on the European Court decision in British Airways plc v Williams and others. The common sense approach to "normal pay" is that if it routinely includes overtime, commission or bonus payments, then so should holiday pay.

So why is it back in the news? Unsurprisingly, the judgment in Neal is being appealed and the hearing before the Employment Appeal Tribunal is only a couple of months away. If, as many expect, given the comprehensive analysis and convincing rationale in the initial judgment, it is upheld on appeal then, unlike the judgment of Judge van Gelder, this will be a binding authority on how holiday pay should be calculated.

This could lead to much more significant repercussions for employers than might initially be thought. As highlighted in in the Daily Telegraph this raises the spectre of retrospective claims. It has been the standard practice of many employers in the UK to apply what is commonly referred to as "basic pay" when calculating holiday pay. If such employees are routinely paid more than basic pay when working then they may well have claims for the difference going back as far as 2008. The potential impact for employers of having to fund substantial back payments for numerous employees is obvious. As highlighted by an article in The Construction Index, employment sectors which routinely pay significant overtime, such as the construction industry, are likely to be severely affected.

Taking into account the value of retrospective claims it is reasonable to assume that, as well as class actions brought by unions and other employee organisations, in a similar vein to misselling claims employees will be notified of their ability to claim "windfall payments" by extensive advertising and claims companies offering no win no fee deals.

So what should employers do?

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2. why do politicians "do God" and how does a "Christian UK" sit with employment law?

A great deal of hot air has been generated as a result of David Cameron's decision to play up his faith in the Church of England. His article suggests a warm beer and village greens approach to his Christianity - "...I appreciate its liturgy, and the architecture and cultural heritage of its churches. My parents spent countless hours helping to support and maintain the village church that I grew up next to, and my Oxfordshire constituency has churches - including some medieval masterpieces - that take your breath away with their beauty, simplicity, and serenity". While this contribution nearly led the political debate over the Easter weekend (Alastair Campbell's pithy deconstruction of the article from a political perspective - "We had the warm up act with his 'Jesus invented the Big Society' and now the full Monty as Easter nears), pushing down the headlines Ukraine and Syria, much more interesting from an employment law perspective is what is meant by "a Christian country" and how that interacts with, say, equality and human rights law.

According to YouGov poll in late 2012 76% of Britons say that they are "not religious", whereas 56% say that Britain is Christian and 61% agree that it should be. What does being a Christian country mean? Manifestations include the royal Coronation service and oath, the latter including the following fairly unequivocal obligation:

Will you to the utmost of your power maintain the Laws of God and the true profession of the Gospel? Will you to the utmost of your power maintain in the United Kingdom the Protestant Reformed Religion established by law? Will you maintain and preserve inviolably the settlement of the Church of England, and the doctrine, worship, discipline, and government thereof, as by law established in England? And will you preserve unto the Bishops and Clergy of England, and to the Churches there committed to their charge, all such rights and privileges, as by law do or shall appertain to them or any of them?

Parliament convenes with Christian prayers and bishops sit in the House of Lords.

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3. can there be a finding of contributory fault following a constructive dismissal?


In Frith Accountants Limited v Mrs J Law the relatively narrow questions for the Employment Appeal Tribunal were whether someone who has been constructively dismissed can be held to have contributed to that dismissal, whether the basic award should have been adjusted to take into account the employee's conduct and whether the assessment at 40% of the prospect of future dismissal was too low.

However, the case is noteworthy since, as observed by EAT President Mr Justice Langstaff, it "may be the first [appeal] case to deal with an alleged contribution by an employee where the breach of contract by the employer was a breach of the implied term of trust and confidence".

Mrs Law worked in an accountant's office and was aged 62 at the date of her dismissal. She had performed well at a performance review in 2011 but did not receive a pay rise in 2012 as a result of concerns about her performance. She accepted that she had been late in filing returns with HMRC but thought that this was an easy mistake to have made. She disputed other alleged errors. Instead of treating the matter as one of performance management and undoubtedly unwisely but equally with good intentions, Mr Frith, a principal of the practice, decided to raise his concerns with Mrs Laws' son. As the Tribunal had said, this was not the way to go about such matters!

Unsurprisingly Mrs Laws was horrified when she found out and she resigned. Equally unsurprisingly the Employment Tribunal found that this was a constructive unfair dismissal. However, even if Mrs Laws had made errors and was unwilling to accept criticisms, these actions could be said to have contributed to the employer's action in breaching the duty of trust and confidence. Mr Justice Langstaff noted that it will be unusual for a constructive dismissal to be caused or contributed to by an employee, since it is based on a breach of contract by the employer. Further since a constructive dismissal results from a "fundamental" breach of contract by the employer "then not only will it be repudiatory, but by definition there will be no reasonable or proper cause for the employer's behaviour". However, although the question of constructive dismissal is answered by seeking to establish a fundamental breach of contract, the question of compensation is dealt with by statute and covers all dismissals, including constructive dismissals.

However, in this case the Tribunal had summarily dismissed the possibility that Mrs Laws had contributed to her dismissal. Mr Frith's decision to act as he did was "a matter entirely for him". There was therefore no causal connection between anything done by Mrs Laws and the action taken by Mr Frith which resulted in her dismissal.

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4. the unrepresented claimant who knew too much


Employment tribunals, being creatures of statute, have had an unhappy history when it comes to considering time limits and balancing adherence to them with general principles of fairness.

As all those with experience of unfair dismissal claims will know, there is a strict time limit of three months for commencement of proceedings. The time limit will only be extended if it was not reasonably practicable for the claim to be lodged in time and what is "not reasonably practicable" has been very narrowly construed.

On the face of it there is a more relaxed approach to discrimination claims since the test for ostensibly out of time claims is not whether it was reasonably practicable for the claims to be presented but whether it is "just and equitable" to allow them to proceed.

Back in 2009 I wrote about the application of time limits in the context of an unfair dismissal claim resulting from redundancy and the unusual circumstances in which an apparently out of time claim was allowed to proceed. I have also commented previously about the apparent injustice of excluding good claims in a tribunal (supposedly less formal than a court) based on a procedural error.

In courts, where by contrast the vast majority of claims are subject to generous time limits of three years for personal injury claims and six years for other claims, there has been a recent clampdown on procedural mistakes with the result that numerous decent claims have been unable to proceed based on highly technical objections. I wrote a post earlier this year in which I made clear my disapproval of this trend.

So to the case in question. In Hall v ADP Dealer Services Limited the Employment Appeal Tribunal was asked to consider whether a tribunal was right to dismiss claims for age discrimination on the basis that they were time barred and it was not just and equitable to extend time. Ms Hall was employed by ADP from July 2011 to February 2012 as a compensation manager. On 30 November 2012 she submitted a claim against her former employer alleging age discrimination. Her complaints included that she had no probationary review, that she was subjected to age discriminatory behaviour at work including a derogatory, age-related comment, that she was dismissed because, so she was told, it was "not working out" and that she was given misleading references, the last of which was issued in July 2012. Ms Hall knew that her claim was, prima facie, out of time because she included in her application:

PLEASE NOTE: I know that a straightforward claim for age discrimination would be out of time but due to circumstances outlined in 9.1 and 10 below I feel it would be just and equitable to extend the time and I am therefore with great respect requesting this.

When she complained about the references she was told to raise a grievance. She duly did so and the grievance process continued until 19 September. At the employment tribunal the former employer contended that the dismissal, the references and the grievance process were discrete events rather than continuing acts. The distinction is important since, if they were discrete acts, each would be considered in isolation with reference to the applicable time limit for commencing proceedings. If they were continuing acts then time would be calculated as running from the last such act. The tribunal took the view that they were separate acts. It was not just and equitable to extend the time limit for the dismissal claim because Ms Hall could have brought her claim much earlier "as she had the knowledge, the expertise, and the ability to bring the claim".

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5. "keep music live" - unless you're producing War Horse!


In Ashworth and Others v The Royal National Theatre the question for Mr Justice Cranston (sitting in the High Court) was whether to grant an injunction pending trial requiring the Theatre to continue employing musicians, notwithstanding that part of the music for the show has always been recorded and the Theatre wanted to move to fully recorded music with a view to saving costs.

Injunctions are an emergency remedy and, as such, they need to be applied for promptly and with good cause. While a temporary injunction can be granted on the basis that a claim is made out with a real prospect of success, even though there has not been a full trial of the issues, the court must consider the balance of convenience between the parties and the risk of irremediable prejudice to a party if it turns out that the injunction should not have been granted.

In general injunctions which require someone to do something (mandatory) rather than not do something (prohibitive) are less readily granted particularly when, as in this case, there are financial implications for the party required to act in the manner directed by the Court.

War Horse is a very well known and celebrated National Theatre production which opened in the Olivier Theatre in 2007 and transferred to the New London Theatre in the West End in 2009, where it remains. It has been a great money spinner for the National Theatre but income has dwindled in the last few years. It is an expensive play to stage with its cast of 36 plus five musicians (the Claimants) and their deputies (who cover in their absence).

The composer of the musical score described it as an orchestral epic. Nonetheless, from the outset most of the music has been recorded. The live musicians have added to the recordings, including an opening trumpet solo and briefly appearing on stage during one scene. Productions in other parts of the world have not included live musicians, instead relying wholly on recorded music. In December 2012 the musicians used for the London production were told that it would go the same way and that, as a result, they would be made redundant in March 2013. Following conciliation involving the Musicians' Union they remained employed but their participation was significantly reduced.

On 4 March 2014 they were sent letters providing notice of termination of employment on 15 March. They were told that they were being made redundant in order to bring the London production into line with other productions. However, on 15 March they turned up for work as usual but they were turned away, hence the application for injunctive relief.

Having considered the contractual terms Mr Justice Cranston concluded that there was a serious issue concerning whether the National Theatre was entitled to terminate the contracts in the way that it did. However he was much more concerned about the question of any resulting remedy and this was also a relevant consideration when determining whether an injunction should be granted.

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6. Parliamentary committee renews attack on zero hours contracts


As I have reported during the last few months zero hours contracts have attracted a good deal of attention, mainly since it came to light that there are probably far more people employed subject to them than was previously thought.

While some employees have welcomed the flexibility they provide, others appear to have had little choice other than to accept the terms on offer or none at all. This has been particularly significant for benefits claimants who run the risk of having unreasonably refused a reasonable offer of employment and thereby losing their entitlement to benefits.

The issue has been considered by the Scottish Affairs Committee and its conclusion is that, on balance, they are a bad thing and "in the majority of cases" they should not be used at all. The Committee, in its interim report, noted an "alarming" increase in the use of casual labour and frequent breaches of the Minimum Wage Regulations.

Evidence to the Committee showed that:

  • - 20% of workers on zero hours contracts are paid less than their permanent equivalents doing the same job
  • - 5% are paid less than the national minimum wage although this is illegal
  • - thousands of social care workers are illegally denied payment for time spent travelling between appointments
  • - 40% receive no notice of employment
  • - 6% turn up for work - having paid for childcare, travel etc. - to find none available
  • - thousands of others' employers evade the provision of basic employment rights
  • - zero hours workers are entitled to limited employment rights but a significant proportion of employers are either ignorant of those rights or are wilfully blocking access to them

Its recommendations are that:

  • - Zero hours contracts must only be used where the employer can objectively justify it
  • - The Government must do more to protect workers who wish to challenge unfair, unsafe or unlawful conditions of employment
  • - Workers should be told from the outset of their employment what type of contract they are on and a written contract setting out the terms and conditions must follow within two months
  • - There should be a minimum notice period of work and workers should not be punished for turning down offers of work made within that period
  • - Where workers arrive for work but find none available then the employer should compensate them for the inconvenience
  • - Travel time between appointments should be paid and pay for zero hours workers should accurately reflect the number of hours that are worked to fulfil contracted duties
  • - An employer-led Code of Practice is unlikely to help workers who are exploited - in fact it may serve to embed a form of employment that in most circumstances is hard to justify
  • - If a Code is produced it should only be as a stepping stone to, or following, legislative change aimed at reducing the use of zero hours contracts and ensuring workers receive the income, rights and protections to which they are entitled

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7. ACAS early conciliation in practice


I have expressed my reservations about whether ACAS early conciliation will bring any significant benefits to dealing with employment tribunal claims. However, the Scheme is now operational and it is therefore important to know how it works in practice. The Scheme started on 6 April and is currently voluntary but from 6 May it will be compulsory.

A major concern is how the Scheme will impact on the very strict and short time limits within which claims must be brought: generally three months.

the form

Before a claim can be commenced it is necessary to provide notification to ACAS and to provide basic details including contact information. The easiest way to do this is by going to the ACAS website at As is increasingly the case when using such websites the enquirer is then taken through a couple of pages, including a lengthy explanation of the benefits of the Scheme before arriving at the form itself. Before proceeding to fill out the form, and in a rather schoolmasterly manner, the enquirer is then required to tick a box to say that they have read and understood the previous page.


The form itself is pretty straightforward. As well as providing name and contact details, the enquirer is asked to supply the employer's postcode in order to trigger a business address search. Having tried this out it works quite well for medium and larger sized businesses. However, small businesses might not be so readily found and, of course, any error in inputting the postcode could produce false results. There is also an option to add the employer's telephone number. As for the employment itself the enquirer is asked to provide the start date, end date, job title and the date of the event which is the subject of the claim.

Interestingly, the form also indicates that contact will be made using the telephone number(s) provided. However, there is no obligation to provide a telephone number or an email address so this may lead to practical difficulties.

the timescale

Notification needs to be provided to ACAS within the normal time limit for bringing a claim, for example three months less one day for unfair dismissal claims. In one sense this makes the process easier for claimants since there is no need at this stage to set out full details of the claim in an ET1.

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