Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
January 2012

Welcome to the first 2012 edition of the Canter Levin & Berg Employment Solutions newsletter.

Case reports tend to be thin on the ground in January as a result of the Christmas and New Year break but we have hit the ground running this month. Government announcements about the postponement of planned changes (pension enrolment and extended parental leave) have led to two revisions of this newletter while being written. It seems that the government is keen not to impose what might be seen as additional burdens particularly on small and medium employers in what are, on any reading, very difficult economic times.

Another symptom of our economic condition is the significant increase in the number of businesses going into administration, including well-known brand names. There has been a good deal of confusion concerning whether employees transfer under TUPE in a pre-pack administration but that issue now appears resolved as the result of a very clear decision from the Court of Appeal.

Our other case reports include coverage of job offers as an alternative to redundancy, postponement of employment tribunal hearings and whether misconduct needs to be of a particular character or seriousness in order to justify dismissal. There is also news about an award of nearly £1 million for race discrimination and unfair dismissal.

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This month's news:

1. BIS launches mediation trials but are they necessary?

On 23 January the Employment Relations Minister, Edward Davey, announced a pilot scheme for regional mediation networks for SMEs.

This has resulted from the government's Resolving Workplace Disputes consultation which opened with the consultation document in January 2011 and closed with the government's response in November 2011.

Located in Cambridge and Manchester, BIS will fund mediation training for employees from a group of 24 SMEs in each of the pilot areas. A network of trained mediators will be available to provide mediation to other organisations with a view to resolving workplace disputes without the need for employment tribunal proceedings.

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2. extended parental leave to be postponed for one year

It had been expected that the government would implement updated provisions of the Parental Leave Directive requiring member states (if they had not already done so) to extend the period of unpaid parental leave available to parents by 5 March this year.

Our current Regulations provide that, once an employee has completed one year's employment with an employer, he or she can take up to 13 weeks' unpaid parental leave for each child born or adopted. The leave can be taken at any time up to the child's fifth birthday (or five years after placement in the case of adoption).

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3. TUC rails against "chequebook justice" in tribunals

In a widely reported speech made on 20 January, TUC general secretary Brendan Barber has launched a vigorous attack on what he has called "chequebook justice" as a result of the government's plans to introduce fees for employment tribunal proceedings.

Under the proposals claimants will have to pay an initial fee on commencement of proceedings of between £150 and £250. There will be an additional fee of £250 to £1250 if the matter goes to a hearing with a potential award of over £30,000, or £200 to £600 if compensation is limited to a maximum £30,000. Fees for discrimination claims will be as much as £1750. Many have commented that expecting people who have just lost their jobs to pay fees in order to pursue claims of unfair dismissal or discrimination is rather perverse. On the other hand, according to Department of Justice minister Jonathan Djanogly, the latest figures show that the employment tribunals service costs the taxpayer £84 million per annum.

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4. unfair dismissal qualifying period change will not be retrospective

As we have reported in our blog, the qualifying period in order to bring a claim of unfair dismissal is being restored to two years. Although the change will come into force this April it will only apply to employees whose employment commences on or after 6 April 2012. It will therefore take some time for the change to have a practical impact for employers.

For example, someone who commences employment on 5 April 2012 will secure protection from unfair dismissal from 5 April 2013, whereas someone who commences employment on 6 April will not achieve the same level of protection until 6 April 2014.

However, it is vitally important for employers to remember that there are unfair dismissal claims for which there is no qualifying period so that protection from unfair dismissal is available from day one. These are chiefly claims resulting from the assertion of statutory rights and those which can lead to findings of automatically unfair dismissal. Subscribers should check our employment law guide for details of those unfair dismissal claims in respect of which the qualifying period does not apply.

It is equally important to remember that the qualifying period only applies to unfair dismissal claims.

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5. reasonable for employee to reject alternatives to redundancy which would have been accepted by a reasonable employee

Is it reasonable for someone to refuse a job offer as an alternative to redundancy if a reasonable person would have accepted the job offered? Yes, according to the Employment Appeal Tribunal in Readman v Devon Primary Care Trust.

Mrs Readman was at risk of being made redundant by her employer and was offered three posts as alternatives to redundancy. Two of them were at a lower grade and the other was at an equivalent grade. She tried one of the lower grade jobs for a four-week statutory trial period but she resigned from this and claimed a redundancy payment.

Instead she was offered the equivalent grade position as an alternative to redundancy. She was asked to accept the offer and, if she did not do so, the Trust would decide whether to make a redundancy payment or not, based on whether her refusal to take the job was unreasonable.

Critically Mrs Readman began her nursing career in 1976 and she had worked as a community nurse since 1985. The alternative job at an equivalent grade was as a Modern Matron and would require her to work in a hospital setting. She did not wish to do so. The Trust decided that her refusal of the job offer was unreasonable and therefore declined to make a redundancy payment.

The employment tribunal therefore had to decide:

  • (1) whether the offer of employment was an offer of suitable employment, and
  • (2) whether the employee had unreasonably refused that offer.

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6. should a tribunal allow adjournments because of the claimant's ill health?

Although not dealing with any new principles of law, the decision of the Employment Appeal Tribunal in the case of O'Cathail v Transport for London provides useful guidance about how tribunals should approach requests for adjournments from claimants on the ground of ill health.

It is well known to those who appear regularly at tribunal hearings (and other court hearings for that matter) that witnesses, including claimants, can find giving evidence and being subjected to cross examination a daunting ordeal. There is therefore often suspicion that those who say they are too unwell to attend the hearing are sometimes simply trying to avoid the hearing. Of course, as in all other walks of life, genuine illnesses can affect everyone and it's often easy to identify that the person concerned clearly cannot attend the hearing.

However, particularly in tribunals where costs are generally not recoverable, the costs incurred as the result of an adjournment can be considerable (possibly including substantial barristers', solicitors' and expert witnesses' costs) and a cynic might take the view that a late adjournment might even promote an offer in settlement of a claim in order to avoid further costs resulting from the adjournment.

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7. dismissal fair even though conduct not "reprehensible"

The decision of the Employment Appeal Tribunal in RBS v Donaghay has clarified a question which may not be obvious at the inception of disciplinary proceedings but often emerges in the course of the process: if an employee is to be dismissed for misconduct, does that conduct need to be what would be generally regarded as "reprehensible"? There is also a chain of case law which makes the question relevant in such circumstances.

According to the Oxford English Dictionary "reprehensible" means "deserving censure or condemnation".

As an aside, the summary of the judgment posted on the Employment Appeals Tribunal website includes the word "esto" which is an obscure Scottish legal term (the employment tribunal was in Glasgow) and means "a technical term used in written pleadings used to introduce a secondary line of defence which accepts, only for the sake of argument, facts which are still disputed in the primary defence".

After a little diversion to deal with semantics, Mr Donaghay was a customer services adviser who was in a relationship and lived with another RBS employee, known in the proceedings as "LC". The facts of the case are set out in the decision:

"On Saturday 3 January 2009, the Claimant went out drinking with friends whilst LC remained in the flat. He returned late in the evening or in the early hours of 4 January. An argument took place between the Claimant and LC which culminated in him admittedly pushing her so as to cause her to fall onto the sofa. He then left but, having done so, tried to get back into the flat and caused a disturbance by shouting, swearing and kicking the front door so as to force his way back into the flat.

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8. new pay rates, tribunal award limits and postponed pension provisions

New statutory pay rates

From 1 April the standard rate of statutory maternity, paternity and adoption pay increases from £128.73 to £135.45 per week.

From 6 April the standard rate of statutory sick pay increases from £81.60 to £85.85 per week. It is also expected that the basic state pension will increase from £102.15 to £107.45 in April.

Increases in maximum tribunal awards and "a week's pay"

The maximum unfair dismissal award is to increase from £68,400 to £72,300 and the maximum amount of a week's pay for the purposes of calculating a statutory redundancy payment and the basic and additional awards for unfair dismissal increases from £400 to £430.

These changes take effect where the event that gives rise to an award occurs on or after 1 February 2012.

Automatic pension enrolment

Although due to come into effect later this year on 26 January the government announced that it is delaying implementation of automatic enrolment of employees into a qualifying workplace pension scheme and with mandatory contributions by the employer.

The Pensions Act 2008 provides that such employers must automatically enrol all eligible employees not already participating in a workplace pension scheme into the employer's pension scheme or the National Employment Savings Trust (NEST).

It had been thought that all employers with 50 or more employees would have to implement the scheme by 1 October 2012. However, taking into account "exceptionally tough economic times", businesses with fewer than 250 employees are to be given more time. Those with 50 to 249 employees have until 1 April 2014, 30 to 49 employees 1 August 2015 and fewer than 30 employees 1 January 2016.

9. award of nearly £1m for race discrimination and unfair dismissal

A former NHS worker, Elliot Browne, has been awarded £933,115 in compensation for race discrimination and unfair dismissal.

Mr Browne was a divisional director at Central Manchester University NHS Foundation Trust until he was dismissed in 2008. An employment tribunal sitting in Manchester found that Mr Browne had been subjected to discriminatory treatment in the final year of his employment with the Trust. He had spent 34 years working for the NHS and was the first and only black man to hold the position of divisional director for clinical scientific services with the Manchester Trust.

In 2007 his manager raised concerns about overspending in the department and Mr Browne's perceived lack of "personal leadership". He subsequently raised what the tribunal found to be a "well-founded" grievance about race discrimination, claiming that he had been unfairly singled out for disciplinary action and criticism by comparison with white work colleagues.

Mr Browne maintained that the result was that members of staff "closed ranks" and began disciplinary proceedings which may have led to dismissal. He was signed off work with stress and in May 2008 he was suspended and dismissed.

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10. administrations, TUPE and redundancies

It is an unfortunate fact of modern life that it seems that new administrations for high street retailers and other businesses seem to be announced almost every working day. A key concern in the context of employment law and, more importantly, for the employees concerned, is whether their employment automatically transfers to the new employer under TUPE or whether the new employer can "cherry pick" or perhaps even select none of the existing employees for the new business.

There has been conflicting case law in the last few years but it seems that we now have a clear statement from the Court of Appeal.

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