Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
February 2012

Welcome to our February newsletter. Our news this month is dominated by case reports about issues which are frequently encountered by SME employers and which demonstrate just how difficult it can be to get things right, even with the best intentions.

I expect that, like me, most of our readers don't have au pairs but, if you do, the decision in Jose v Julio (and other linked cases) will make interesting reading. Is the nanny or au pair effectively one of the family? Well, that's an interesting question, particularly if, as is considered in the judgment, you might be regarded as exploiting him or her as a worker!

Back with issues that are more likely to be of concern in our workplaces the decision in Dunn v The Institute of Cemetery and Crematorium Management is worth noting. It's not at all unusual for husbands and wives to work together, particularly in small businesses and this can create major tensions with other workers. It can also present intriguing dilemmas and Judge McMullen QC (who has been complimented previously in our newsletters for his commendably practical approach to such issues) highlighted in his judgment that the world has moved on since some of the earlier decisions on this point. Put simply, Mrs Dunn could not be treated differently, merely by reason of her marriage to Mr Dunn. However, there is clearly a wider issue concerning civil partnerships and established relationships (however they may be defined) which Judge McMullen, understandably given current law, did not address. There is clearly further litigation to follow in this respect.

There is nothing wrong with an employer having a policy to address such issues. Of course, we can design a policy on this and other issues which precisely meets your requirements and within our subscription package. We must also thank Judge McMullen QC for his contemporary reference to Downton Abbey, by way of explanation!

We have more TUPE news with several important decisions reported (let's face it, it would be unusual not to have a TUPE case or two to report!), as well as cases dealing with a claim for compensation concerning the manner of dismissal and the potential overlap between overtime and the Working Time Regulations opt out.

There is also important guidance from Lord Justice Elias concerning suspensions and referring matters to the police. As he points out in the decision in Crawford and Another v Suffolk Mental Health Partnership NHS Trust employers are often far too keen to suspend employees and frequently do so as a matter of course while investigating matters of alleged misconduct. There is also a tendency to involve the police at a very early stage, particularly in work sectors in which safeguarding is relevant.

Finally, we have news about the decision in Mba v Merton Council which the Daily Mail predictably reported as the latest in a long line of attacks on Christian values. However the case in fact merely confirms what has been settled law for some time, although it seems increasingly at odds with the extension of protected rights on the ground of religion and otherwise which we have reported in recent months.

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Martin Malone

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January 2012
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This month's news:

1. increases in tribunal limits

We reported last month the increases in limits for unfair dismissal compensation and calculation of a week's pay for redundancy and other purposes. The full changes have now been published and are as follows:

  • Maximum compensatory award for unfair dismissal: £72,300 (no maximum in discrimination cases)
  • Maximum unfair dismissal basic award/redundancy payment: £12,900
  • Minimum basic award for unfair dismissal in special cases: £5,300
  • Additional award: £22,360
  • Maximum week's pay for basic award and redundancy pay purposes increases from £400 to £430
  • Refusal of right to be accompanied (e.g. in disciplinary or flexible working request hearings): £860
  • Failure to consider a flexible work request: £3,440
  • Failure to provide a written statement of terms and conditions of employment: 1,720

The changes take effect with reference to the date of dismissal or other relevant event.

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2. like one of the family...

Domestic workers living as part of the family for whom they work can fall under the “au pairs and nannies” exception to the right to be paid minimum wage. Other exceptions listed in the Regulations include members of the armed forces, share fishermen, prisoners and, fairly obviously, volunteers and the self-employed. Of course, interns or trainees are not excepted and this has generated a good deal of recent media interest. The au pair exception - and how to determine whether a person falls within it, was recently examined by the Employment Appeal Tribunal (EAT) in Jose v Julio (and other linked cases).

In each of the cases a migrant worker living in the UK and working as a domestic servant alleged that she was not treated as part of the family and was thus entitled to minimum wage. The EAT held that this issue needed to be looked at as a whole, and that in particular there was no necessity for there to be a degree of equivalence in the tasks undertaken by the worker and family members, nor that the family should share aspects of all of the domestic work the nanny, or housekeeper, is expected to undertake.

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3. offshore workers can be required to take annual leave while onshore

Offshore workers in the oil and gas industries generally work on a ”two weeks on, two weeks off” shift basis.

In Russell & Ors v Transocean International Resources Ltd & Ors (Scotland), offshore workers, whose contracts required that they take their leave during periods when they were ashore, unsuccessfully sought to establish that they were entitled to take their statutory annual leave under the Working Time Regulations 1998 (WTR) at times when they would otherwise be offshore.

The competing representations were succinctly summarised by Lord Hope as follows:

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4. discrimination the ground of marital status and a judicial mention for Downton Abbey

The Equality Act 2010, like its predecessors, protects those with the protected characteristic of marriage from discrimination on the ground of that characteristic. Does this concept, originally introduced to deal with the outmoded practice of dismissing women as soon as they married, which still continued into the 1960s, have any current relevance in the 21st century?

Dunn v The Institute of Cemetery and Crematorium Management shows that it still has a place in modern employment law. In this case, the Employment Appeal Tribunal (EAT) looked at a situation where the discrimination did not take place simply because the claimant was married, but because she was married to a particular individual. Mrs Dunn was unfairly constructively dismissed, and alleged that the reason for this was that she was married specifically to her husband: Mr Dunn was also employed by the same employer, and in dispute with it over his other business interests. There was no evidence that the unfavourable treatment was because of her marital status alone, so the claim could only succeed on this ground if discrimination on the grounds of marital status extends to cover the situation of being married to a particular person.

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5. yet another TUPE update

To add to the panoply of TUPE cases, we have four useful decisions this month which illustrate the impact of the Regulations. Three out of the four, Enterprise, Pannu and Hunter, all deal with the scope of the rules applying TUPE to service provision changes (SPCs), which, as all our regular readers know, are not a matter of European law, but our very own wonderful invention. The cases consider situations where there is a change in the nature of the activity, the situation where the same services are provided but for a different client, and what amounts to a provision of a service, rather than the supply of goods.

In Enterprise Management Services Ltd v Connect-Up Ltd, the Employment Appeal Tribunal considered the break-up of a contract for the provision of IT support services to Leeds schools. Enterprise provided the services as a preferred supplier, under a contract which left schools free to go elsewhere if they so wished – which some did, to two other providers. At the end of the contract suppliers were invited to tender for a new contract which excluded about 15% of the work covered by the previous arrangement. Those tendering included Connect-Up, who were already providing IT support to some schools. The new contract also allowed schools to choose from a number of suppliers, and over half opted for Connect-Up. Employees dismissed by Enterprise when they lost the contract were found not to have transferred to Connect-up as the major provider of IT services after the new contract came into force for two reasons:

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6. no compensation for manner of dismissal...ever

In Edwards v Chesterfield Royal Hospital and Botham (FC) v Ministry of Defence the Supreme Court revisited the question of whether, over and above any right to compensation for unfair dismissal, employees can recover damages for the way in which they have been dismissed and specifically in the situation where the employer has failed to follow a contractual disciplinary procedure.The cases of Mr Edwards and Mr Botham concerned the same issues of law and were therefore considered together.

It has been long been clear that there is no scope for damages for injury to feelings being awarded in a claim for breach of contract (as opposed to a discrimination claim, where compensation for injury to feelings is established by statute). Numerous attempts have been made, however, to try and establish the possibility that a separate claim might succeed where an express term had been broken, rather than the implied term of mutual trust and confidence. The Supreme Court, by a majority, has now excluded that possibility, rejecting the suggestion that breach of a disciplinary procedure followed as part of the dismissal process can somehow be seen as independent of the dismissal itself. To do so might take it outside the rule excluding separate damages for the manner of dismissal - something the Supreme Court considered Parliament had intended should be fully encompassed within the statutory protection against unfair dismissal.

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7. employer entitled to refuse overtime to employee who refused to sign opt out from Working Time Regulations

Arriva London South Ltd v Nicolaou concerned a bus driver who complained that his employers were imposing an unlawful detriment when they withdrew rest day overtime from him. The decision was made under a policy of only giving overtime to those workers who had agreed to opt out of the 48 hour maximum working week. The policy was designed to ensure compliance with the rule on maximum working hours under the Working Time regulations.

His Honour Judge Peter Clark, sitting alone in the Employment Appeal Tribunal applied the test that it was necessary to establish the “reason why” an employer had acted in the way it had.

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8. suspension of employees during disciplinary proceedings and referrals to the police

The case of Crawford and Another v Suffolk Mental Health Partnership NHS Trust, recently considered by the Court of Appeal, appears on its face to be concerned with relatively straightforward issues resulting from dismissals for gross misconduct following alleged mishandling of patients, particularly the deployment of a "safe handling technique" which had caused open skin tears as well as the forcible administration of medicine. The employees concerned were suspended and the police were informed about potential criminal offences. The process took its course and this resulted in a delay of six months between suspension and dismissal.

At the resulting employment tribunal it was accepted that the genuine reason for dismissal was misconduct and the question was whether dismissal was reasonable measuring the actions of this employer against the yardstick of a reasonable employer. There were factual errors so that some of the conclusions reached in the disciplinary process could not be sustained and this was accepted by the Trust. There were also procedural defects. Findings of unfair dismissal followed. The Trust appealed successfully and on further appeal to the Court of Appeal the findings of unfair dismissal were restored and the cases were remitted to a further tribunal to determine whether or not, had the employer followed a fair procedure, the employees might have been fairly dismissed and, if so, whether their compensation should be reduced (commonly referred to as the Polkey argument, after a case of that name).

So far, so unremarkable. However, Lord Justice Elias was clearly concerned about the delay between suspension and dismissal. It was pointed out to him that a delay of this length is not that unusual in practice but he was concerned that "six months' suspension puts considerable pressure on staff" and that "it is difficult to see why the investigation of a single incident of this nature should have taken so long".

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9. can a Christian be required to work on Sundays?

I have often written about the surprising extent to which protection is available from discrimination on the ground of religion or belief or, for that matter because of having no religion or belief. It is therefore perhaps surprising that one of the central tenets of Christian faith, rest on a Sunday, is not something to which Christians are necessarily entitled. There are special rules for shop workers and betting workers but apart from these sectors, unless the contract of employment states otherwise, it is usually possible for employers to insist on employees working on Sundays, even if they are devout Christians. The point was recently confirmed in the employment tribunal case of Celestina Mba v Merton Council. Miss Mba worked for Merton Council at Brightwell Respite Care House in Morden for three years. She was required to work on Sundays since the Council said it had a duty to ensure children had weekend care. Miss Mba said she was prepared to work night shifts and on Saturdays in order to avoid having to work on Sundays. However, the tribunal found that there was no viable alternative to her working on Sundays.

The tribunal also took into account evidence from witnesses including Michael Nazir-Ali, former bishop of Rochester, and concluded that not working on Sundays was "not a core component of the Christian faith" because it was observed by some and not by others.

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