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August 2016 Review
Welcome to our August Employment Law update which is somewhat shorter than usual due to August traditionally being a quieter month as a result of the Courts not sitting, other than in exceptional circumstances.

Perhaps the most significant Employment Law issue to be reported this month is the Employment Appeal Tribunal (EAT) decision in G4S Cash Solutions (UK) Ltd v Powell that reasonable adjustments could not be imposed without the employee's consent.

Mr Powell worked for G4S as an engineer and was responsible for the maintenance of ATMs across Central London. Unfortunately, in 2012 Mr Powell began experiencing problems with his back which resulted in a period of sickness absence. He advised G4S that he would no longer be able to carry out duties that involved heavy lifting or working in confined spaces and upon his return from sickness absence, his employers placed him in the role of 'key runner'. This role essentially required Mr Powell to drive from from GCSU Ltd's depot in order to deliver parts and keys to the ATM engineers, allowing them to travel between different job locations via public transport.

Mr Powell's employers however continued to pay him at his original pay grade for his previous role of engineer, and Mr Powell understood that this arrangement would continue indefinitely.

However, in May of 2013 GCSU Ltd began considering whether it was feasible to keep the 'key runner role due to operational reasons. They advised Mr Powell that it was never the intention that the role would be permanent and provided him with a list of alternative roles for his consideration. They further advised him that if he did not feel any of the roles were suitable for him, then he would be dismissed on the grounds of his medical capability.

Mr Powell at this point sought advice from a solicitor and raised a grievance on the basis that his employers were attempting to change his terms and conditions of employment without his consent. GCSU Ltd therefore agreed to make the role of key runner a permanent one, but at a reduced rate of pay (10% lower than Mr Powell's existing salary) reflective of the fact that the role did not require engineering skills. Mr Powell refused to accept this reduction in pay and he was subsequently dismissed on 8 October 2013.

At first instance, the Employment Tribunal rejected the Claimant's argument that he had agreed to a variation of contract when he started in the key runner role and therefore that he should have been entitled to continue in this role on his previous salary, permanently. The Tribunal further stated however that his employer was required to make reasonable adjustments under section 20 of the Equality Act 2010 to employ Mr Powell as 'key runner' on his existing rate of pay. GCSU Ltd appealed against the finding of the Employment Tribunal and Mr Powell cross-appealed on the basis of his variation of contract argument.

In respect of Mr Powell's cross-appeal, the Employment Appeal Tribunal (EAT) found there had been no variation to contract as an employer seeking to make a reasonable adjustment was not entitled to insist on the adjustment being made without the employee's consent. The EAT further stated that if an adjustment (which is not compatible with the terms of the contract of employment) is proposed to the employee then the employee is entitled to decline it and therefore such an adjustment will not be valid without an agreed variation of the contract of employment. In Mr Powell's case, there had obviously been a variation of his contract in 2012, however the terms of the variation had not been set out. Although the Tribunal had not reached a conclusion in this respect it was not necessary for the EAT to remit the issue due to their subsequent finding regarding the reasonable adjustment question.

The EAT therefore further stated that the Tribunal were correct in finding that GCSU Ltd was required to employ Mr Powell as a 'key runner' on his existing salary, as a reasonable adjustment. In addition, there was no reason why the duty to make reasonable adjustments would exclude a requirement to protect an employee's pay in such circumstances in conjunction with other measures taken to ensure the employee was not put at a disadvantage due to his disability - why should the measure to place the employee in an alternative role be seen as a reasonable adjustment under section 20 of the Equality Act 2010 but his remuneration not? The question to be asked would always be whether it was reasonable for the employer to have to take such a step. The EAT did state however that in some circumstances an adjustment could cease to be reasonable - for example if the financial/economic situation of the business changes, or if they no longer required a particular role.

In light of the above, it is advisable for employers to seek advice if considering alternative employment for their employees following a return from sickness absence/as a result of a disability, to ensure that any adjustments made are arranged correctly.

Continuing with our discrimination theme, in the case of Kratzer v R + V Allgemeine Versicherung AG the European Court of Justice (ECJ) held that the EU Directives which prohibit age and sex discrimination could not be relied upon by an individual who makes an application for a job for the purposes of claiming compensation for discrimination, and not to be successful in securing the role. The full transcript for this case can be found by using the link, above.

A final 'newsworthy' matter this month is the draft legislation on termination payments. The Government has now published its response to the consultation launched in July 2015 regarding how termination payments should be treated for the purpose of tax and National Insurance contributions (NICs), in addition to the draft legislation which will implement these changes. The proposed changes are as follows:
  • aligning the rules for income tax and employer NICs so that employer NICs will be payable on payments above £30,000 (which are currently only subject to income tax)
  • removing the foreign service relief exemption for termination payments
  • clarifying that the exemption for injury does not apply in cases of injured feelings
  • Making notice payments subject to tax and Class 1 NICs, even if the employee is asked to leave employment immediately or part way through the notice period. It is thought that this will remove confusion about the different rules for payments in lieu of notice (PILONs).
The Government has invited feedback as to whether the draft legislation achieves their objectives - views must be received by 5 October 2016 and the changes are thought to take effect from April 2018.

Further details of the consultation can be found here: https://www.gov.uk/government/consultations/simplification-of-the-tax-and-national-insurance-treatment-of-termination-payments-consultation-on-draft-legislation.

We will be back with our full review and update service next month. In the meantime, please check out our blog and Twitter feed for frequent employment law news of particular interest to SMEs. You can also find out about our subscription services on our website.

Kind regards,
Katharine Kelly
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Designed from the ground up and provided only by Canter Levin & Berg Solicitors, we act for organisations nationwide. Our unique proposition has always been to deliver a prompt, efficient, and personal service to our subscribers through the provision of direct access to our specialist employment solicitors.

Our team is made up of qualified legal professionals who ensure that your business is being guided and supported by the latest and most efficient employment law resources at all times.
Katharine Kelly
Katharine Kelly
Katharine specialises in making sure that employers have all their employment law and HR requirements in place and up to date. Her pleasant manner is combined with her knowledge of employment law issues from a legal perspective so that she makes sure that employers have maximum protection and immediate support in connection with all problems which they may encounter on a day to day basis. Katharine is "on call" to deal with her clients in a way which her clients really appreciate. She will always take the next step to make sure that problems are solved quickly, efficiently and professionally.
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Sean Carty
Sean Carty
Sean joined the Employment Department of Canter Levin & Berg in December 2007. He has experience in all areas of employment law though specialises in Employment Tribunal litigation. Sean has particular expertise in dealing with complex discrimination matters, business reorganisation and redundancy, and unfair dismissal. He also deals with company disputes, breach of contract claims and injunctions, including claims relating to breaches of restrictive covenants.
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Susan Stafford
Susan qualified as an Associate Solicitor in January 2016 and works within the Employment Law Department. She deals in all aspects of employment law but particularly specialises in advising employers from a variety of industry sectors on all aspects of employment law and human resources issues, ranging from drafting company documentation through to dismissal
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