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February 2016 Review
the employment law briefing
Welcome to our monthly review of employment law news. This month I am delighted to welcome Katharine Kelly and Susan Stafford as contributors. Both are Associate Solicitors in our employment law department. Katharine has headed up our Employment Solutions service for SMEs for a number of years and she has recently been joined by Susan who completed her training and qualified as a solicitor in January 2016. Katharine's article concerns what constitutes a reasonable period for an employer to lay off or place an employee on short-time working, assuming that there is power in the contract of employment to do so. Susan's articles include discussions about recent decisions concerning the treatment of dyslexia as a disability, the latest development in the long-running saga of Lock v British Gas Trading Limited, which concerns the inclusion of commission, or perhaps more accurately its equivalent, in holiday pay and a case concerning the operation of the ACAS early conciliation scheme.
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This month's news:
This month's news round-up:
A Starbucks employee has won a disability discrimination case against her employers after problems arising from her dyslexia led her to make mistakes. Meseret Kumulchew was a supervisor at a Starbucks branch and one of her duties included taking the temperature of fridges and water at specific times and then entering the results in a duty roster. When the information inputted appeared to be wrong Kumulchew was accused of falsifying documents and disciplinary proceedings were instigated. She told the tribunal that she had always made it known to her employer that she was dyslexic and said her actions were no more than a mistake.
The Employment Tribunal found that Starbucks had failed to make reasonable adjustments and had discriminated against her because of the effects of her dyslexia. They also found an element of victimisation and said that there appeared to be little or no knowledge of equality issues.
Unfortunately, the above is a situation that we see all too often in the workplace and can often be as a result of employers misunderstanding their obligations to disabled employees. Fairness and equality in the workplace are vital parts of a successful business and the failure comply with such practices often leads to expensive and highly publicised claims at the Employment Tribunal, as Starbucks have undoubtedly learnt.
I find that the most effective way to prevent complaints of disability discrimination is to educate employers from the outset. The starting point is undoubtedly the definition of disability. The Equality Act 2010 provides that "a person is disabled if they have a physical or mental impairment which has a substantially adverse and long term effect on their ability to carry out normal day to day activities". There are no set rules on what is covered however employers must at the forefront consider "the effect" on an employee's ability to do their role.
Aside from establishing the actual disability employers often misunderstand what constitutes a discriminatory act. It's a matter of common sense that employers should not directly discriminate, so for example should not dismiss an employee because they are disabled. However, it is often not known that an employee will also have a valid claim at the Employment Tribunal if they can argue that they have been discriminated by perception, for example if they have been discriminated against because of their association with a disabled person and also if a workplace practice disadvantages them.
One of the most common types of disability discrimination is failure to make reasonable adjustments. In the Starbucks case the Employment Tribunal found that that the failure to provide disciplinary notes in a typed form and in a timely fashion, amounted to a failure to make reasonable adjustments. What will amount to a reasonable adjustment is a matter for the tribunal to decide and we can only advise on the basis of previous decisions. However, the general position is, if an adjustment is reasonable then you must make it to ensure you are not disadvantaging disabled employees.
Furthermore, it is not a prerequisite for employees to prove their disability. The Employment Tribunal criticised Starbucks in requiring Ms Kumulchew to prove her dyslexia with a "certificate" before her mitigation could be considered. She informed her employer, after having taken advice from her GP, that she was unable to issue a certificate for dyslexia but suggested that they send her to a company doctor should they wish. They failed to do so and instigated disciplinary proceedings anyway, which the tribunal held was direct discrimination.
Nevertheless Employers should not be deterred from instigating disciplinary proceedings against their disabled employees, although the starting point in deciding whether to do so, should be to consider whether it could be construed that their disability may have affected their conduct or performance. If in doubt, you should always obtain an Occupational Therapist's report.
You may remember some time ago we reported on the groundbreaking decision of the European Court of Justice in Lock v British Gas. The impact of this judgment was significant since this is the case that held that holiday pay should include provision for commission that the employee would have earned had they not been on holiday.
Given the financial implications of this decision to employers nationwide British Gas sought leave to appeal the decision on grounds that the Employment Tribunal should not have following the Bear Scotland case because that decision was about whether overtime should be incorporated into holiday pay and argued that in doing so the EAT had wrongly interpreted the wording of the Working Time Regulations to conform with the EU Working Time Directive (No. 2003/88) that commission should be included in holiday pay.
The question in this appeal was whether the previous Employment Tribunal was right to insert wording into the Working Time Regulations to allow commission and similar payments to be included in holiday pay calculations. The Employment Appeal Tribunal held that they were, they rejected the appeal and upheld the previous decision that commission payments should be included in the calculation of holiday pay. Mr Justice Singh commented that such an interpretation would not go 'against the grain' of the legislation given that Parliament's purpose in enacting the WTR was to comply with its obligation to fully implement the Directive. The EAT took the view that if the Bear Scotland case was wrongly decided then, that was an issue for the Court of Appeal to rule on.
However, we are not left without difficulty given that the EAT failed to provide any practical considerations or guidance on how the calculation of any holiday pay should be worked out.
As you will probably be aware early conciliation is the requirement, introduced by the Enterprise and Regulatory Reform Act (ERRA) that all prospective claimants must contact ACAS before they can present claim to the Employment Tribunal. Prospective claimants are provided with an EC certificate with a unique reference number at the conclusion of the Early Conciliation process which must be entered on the Employment Tribunal claim form when a claim is submitted.
This gives both employers and employees the opportunity to negotiate, narrow the issues or even settle claims without the need to incur extensive legal costs.
However, due to the strict time restraints imposed by the tribunal, it is vital that the details inputted onto the early conciliation certificate are correct. Early conciliation does stop the clock from running with regards to your time limitation to bring a claim in the tribunal although if a mistake is identified you cannot go back. Therefore if an error in the identification of the respondent is identified following the expiry of the primary limitation period there can be the real risk that the claim against the correct respondent would be out of time.
This has quite clearly in the past caused Claimants and their legal advisors a great deal of difficulty and whether the claim could proceed was and still is essentially a matter of judicial discretion.
However, in Mist v Community NHS Trust the Employment Appeal Tribunal provided helpful guidance on whether an error in the identification of a respondent in an early conciliation certificate could prevent the employment tribunal from accepting a claim.
The first respondent was named correctly in the Claimant's ET1 although the claimant had failed to name the second respondent in both the ET1 and the EC certificate. The second respondent was joined at a later date although this was challenged on the basis that they had been joined out of time.
At first instance the Employment Tribunal agreed and ruled that the claim against the second respondent had been brought out of time. The Claimant appealed, broadly on the basis that the Tribunal had given undue prominence to the limitation period at the expense of the Claimant's right to a remedy and had failed properly to assess the balance of hardship. The second respondent cross-appealed, alleging that the Tribunal had no jurisdiction to hear the case against the second respondent in circumstances where the Claimant had not first obtained a relevant ACAS conciliation certificate.
One of the most important and often useful clauses within a contract of employment for employers in any trade is the 'lay off/short-time working clause'.
For those that are not aware, such a clause would usually entitle an employer who suffers a downturn in the work available, to either reduce the hours of the affected employees or alternatively, completely 'lay off' such employees without pay - subject of course to the employee's right to receive statutory guarantee pay in qualifying circumstances.
If an employer attempts to take this action without such a clause being present, the employee may be entitled to resign and claim constructive unfair dismissal.
Section 135(1)(b) of the Employment Rights Act 1996 provides further guidance as to the rights of the employee in a lay off situation, and explicitly states that provided the below criteria are satisfied, the employee's employment will be terminated and a redundancy payment must be made:
If the employer reasonably believes that work will become available in the next four weeks, it must serve a 'counter-notice' (section 149 ERA) meaning that the employee will not be eligible for the redundancy payment at this time.
Previously there have been conflicting decisions in the Employment Appeal Tribunal as to whether an employer can only lay off an employee for a 'reasonable period'.
In the recent case of Craig v Bob Lindfield & Son Ltd UKEAT/0220/15, the EAT was asked to consider whether a 'reasonableness term' could be implied into a lay off/short time working clause within a contract of employment to allow lay off and short-time working for an indefinite period without pay.
The facts of the case were that in July 2014 following a reduction in work available, the Respondent, a design and technology company, advised all affected employees that they would be laid off as of 21 July 2014. The contracts of employment of the affected employees did allow for this course of action, albeit the relevant clause was actually contained within the Employee Handbook rather than the Contracts of Employment, which was incorporated into the Contracts.
The Claimant, a designer, was one of the aforementioned affected employees and on 22 August 2014, sent an email to his employer advising that he had found alternative employment elsewhere and was due to start on 1 September 2014. The Claimant further advised that given he had now been laid off for almost five weeks, he felt he was entitled to a statutory redundancy payment to which the Respondent replied that this was not the case as he thought that work would resume shortly.
The Claimant thereafter informed the Respondent that he felt he had no alternative in the circumstances, than to resign and bring a claim for constructive dismissal. The Respondent subsequently issued him with a section 149 counter-notice and advised the Claimant that his role was still required by the Company and was therefore not redundant.
The Claimant brought a claim at the Employment Tribunal claiming constructive dismissal on the basis that the lay off period was unreasonable. The Employment Tribunal found for the Respondent, stating that there was no implied term in respect of the reasonableness of a lay off period and even if there were, the period in these circumstances was not held to be unreasonable. In addition, as there had been no repudiatory breach of the contract of employment the Claimant was not entitled to claim constructive dismissal.
The Claimant subsequently appealed against the Employment Tribunal's decision on the basis that the Tribunal was incorrect to find that the lay-off clause was not subject to a term that lay-off should be no longer than was reasonable, and that it further erred in concluding that four and a half weeks was not an unreasonably long period.
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