Employment Law:
Key developments
from the last 12 months
1 Hempsons | Annual Review 2014
The big issue
The impact of Tribunal fees has perhaps been
the most noticeable feature of the last 12 months,
substantially reducing the number of tribunal
claims. UNISON’s attempts to challenge the
fees have been defeated for a second time. The
introduction of early conciliation via ACAS on
6 May 2014 may contribute to that downwards
trend. We have highlighted some other areas of
interest in this summary of 2014.
2 Hempsons | Annual Review 2014
The highlights
Employment rights
and obligations
Holiday pay continues to be a hotly debated issue. In Bear
Scotland -v- Fulton, the EAT said that regular compulsory but
non-guaranteed overtime should be taken into account when
calculating holiday pay. Purely voluntary overtime fell outside
of the scope of this decision, although many commentators
are of the view that regular voluntary overtime should also be
included. The Government responded by limiting claims for
arrears of pay to two years, for those claims presented after
1 July 2015. In addition, an employee will be unable to claim
longstanding arrears if there is more than 3 months between
deductions.
In Li -v- First Marine Solutions, the employee resigned and
did not work her notice period. The terms of her employment
contract allowed her employer not only to withhold any pay
due for the period she did not work, but also to deduct from
any other sum due to her the shortfall (that is, the equivalent
to that part of the notice period she didn’t work). The clause
was enforceable.
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In Cleeve Link -v- Bryla, the employer was able to recover
training costs on the departure of the employee in
accordance with an appropriately worded clause in the
employment contract.
The right to request flexible working was simplified from
30 June 2014. The obligation on the employer is to consider
the request ‘reasonably’, with many procedural hurdles
removed. The same grounds for rejecting a request apply.
From 1 October 2014, expectant fathers (or partners)
have had the right to take up to 6.5 hours unpaid leave to
accompany a pregnant woman to an ante-natal appointment
(on two occasions).
Certain NHS bodies must now ensure that their directors
meet the Fit and Proper Person Requirement and have in
place robust processes for dealing with any concerns that
may arise about a director. Although compliance is the
responsibility of the employer, enforcement is by the Care
Quality Commission.
Employment rights and obligations
Organisational change, business
transfers (TUPE) and redundancy
The ‘gold plating’ of the TUPE regulations was removed by
the Collective Redundancies and Transfer of Employment
(Protection of Employment) (Amendment) Regulations 2014
(CRATUPEAR, anyone?). The key changes were:
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•
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•
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In a service provision change, the service after the
transfer must be fundamentally the same as that before
(effectively confirming the position in case law)
It is now possible to vary contracts of employment for
reasons connected to a transfer, although not if the
transfer is the sole reason for the change
Where an employment relationship is subject to a
collective agreement, any changes post-transfer will not
necessarily bind the employer, if they are not a party to
the negotiations
Terms that derive from collective agreements can now
be varied one year after the transfer
A change of place of work is an ‘economic, technical or
organisational’ (ETO) reason, so that this may now be a
fair reason for dismissal – redundancy
Consultation on redundancies can now begin before the
transfer (a step to take with extreme caution and only by
agreement).
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ACAS published its new guidance on ‘Handling TUPE
Transfers’ and, in March 2014, the government issued
revised ‘Fair Deal’ guidance (essentially permitting staff
who are compulsorily transferred out to remain in the NHS
Pension Scheme rather than require a transferee to provide a
comparable pension scheme).
When does a transfer take place – when a
prospective employer assumes responsibility for a
workforce, or when it starts providing the service? The
EAT decided it was the latter in Housing Maintenance
Solutions -v- McAteer.
Whilst it may seem convenient to identify those
employees who transfer by reference to the
amount of time they spend on their activities,
this is not the legal test: Costain Limited –vArmitage. The Employment Tribunal held that a
project engineer who spent 67% of his time on
the transferring contract should transfer. However,
the transferee’s appeal was successful. The EAT
held that it was not simply a ‘snapshot’ of time spent
on an activity that mattered, but the need for a conscious
decision to organise the work.
Organisational change, business transfers (TUPE) and redundancy
The long-running saga of Manchester College -v- Hazel
came before the Court of Appeal. It confirmed that an ETO
reason must entail changes in the number or function of
the workforce. Whilst redundancies were a possibility under
the College’s restructuring exercise (and both Claimants
had been at risk), they were not at risk of redundancy at
the time they were dismissed; at that time the reason for
dismissal was their refusal to sign up to the new terms,
which was automatically unfair.
What if an employer reaches an impasse with the trade
unions on introducing contractual changes. Bromley
Council’s attempt to bypass the unions to exit certain
national collective terms relating to pay fell foul of section
145B Trade Union and Labour Relations (Consolidation)
Act 1992. This prevents employers from inducing staff to
depart from collectively negotiated terms. As a result, the
Council was required to pay affected staff £3,600 each
(Bugden & ors -v- London Borough of Bromley).
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A woman on maternity leave who is at risk of redundancy
is entitled to be offered suitable alternative employment
in preference to other colleagues. An employer cannot
manipulate the redundancy situation, and distinguish
between redeployment or displacement and redundancy
in order to avoid this obligation (Sefton Borough Council
-v- Wainwright).
An employee whose fixed term contract expires does not
need to be included in the headcount (when calculating 20
or more employees) for collective consultation purposes, as
the reason for dismissal relates to that individual (University
College Union -v- University of Sterling).
Organisational change, business transfers (TUPE) and redundancy
Whistleblowing
The act of whistleblowing can be distinct and separate
from the employee’s conduct in blowing the whistle:
Panayiotou -v- Kernaghan.
The Claimant, a police officer, raised concerns which
his employer acknowledged. When he became
dissatisfied with their response he launched a
campaign that made him difficult to manage. His
employer then dismissed him, purportedly for a
different reason – his outside business interests. His
dismissal was not related to the act of whistleblowing.
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It is also possible to whistleblow in instalments:
Norbrook Laboratories -v- Shaw. In this case, the
concerns were raised in several emails to different
people. Each one was insufficient in itself to be a
protected disclosure, but taken together, they were.
Whistleblowing
Dismissal
Can an employer increase the penalty given to an employee if the
employee appeals? Not unless the policy is very clear that the
appeal panel has this power – very rare in our experience: McMillan
-v- Airedale NHS Foundation Trust. ACAS strongly discourages
penalising an employee who appeals.
There were three important cases on constructive dismissal. In
Atkinson -v- Community Gateway Association, it was held that an
employee was not prevented from claiming constructive dismissal
even though the employee was in breach of contract at the time,
although it would be relevant to (any) compensation. An employee
who resigned giving longer notice than the contract required (seven
months rather than three) was held to have affirmed his contract and
so no longer able to pursue a claim of unfair dismissal (Cockram -vAir Products).
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When deciding if an employee has waived the employer’s breach
of contract (and so lost the right to claim constructive dismissal)
the focus should be on the employee’s actions and not simply
the passage of time; a delay of six weeks before resigning
was sufficient in the case of Chindove -v- Morrisons
Supermarkets for the employee to lose that right.
What if an employee is accused of a serious criminal
offence, in this case child abuse? Clearly, the
employer cannot investigate the allegations but the
earlier case of Leach -v- Office of Communications
confirmed that it was possible to dismiss for ‘some
other substantial reason’ provided that certain
safeguards were met. The case of Z -v- A was an
example of how not to do it! Delay and reliance on a
bare accusation rendered the dismissal unfair.
Dismissal
Gender Identity
Opportunities
Category
Sex Quotas
Privileges
Employment
Treatment
National Origin
Racist Group
Disadvantageous
Exclusion
Prejudice
Arbitrary Civil Rights
Discrimination
Affirmative Action
Restricting
Social
Gender
Deny
Obesity is not by itself a disability: Kaltoft -v- Municipality of Billund. However, if the effects
of the obesity include a long term physical or mental impairment which hinders effective
participation in professional life, the worker may meet the definition of disability. The focus is
on effect and not cause.
Equal Opportunity
Profiling Colour Race Age
Laws
People
Religious
DISCRIMINATION
Attitude Human Rights Reverse
It will often be the case that a morbidly obese worker suffers from a range of related ailments
which have an adverse effect on their normal day-to-day activities. In so far as obesity is
caused by lifestyle choices, being overweight of itself does not qualify as a disability; the
health consequences of being overweight may well do.
It should be remembered that sex discrimination in the context of child care provision applies
to men as well as women. A manager’s claim of sex discrimination against his employer
was successful; his request for flexible (part-time) working in order to look after his daughter
was rejected although similar requests from female staff had been granted; Pietzka -v- PwC.
In Shuter -v- Ford Motor Co, a man who received paternity pay at the statutory rate was
unsuccessful in comparing himself to women who received enhanced occupational maternity
pay. The employer was able to justify the different treatment on the grounds of the increased
recruitment and retention of women to the workforce, who were previously underrepresented
in that industry.
For the duty to make reasonable adjustments to apply, the employer must know (or ought to
know) that the employee is a disabled person. If an occupational health service advises that
the employee is not disabled, surely an employer cannot have the required knowledge? Not
necessarily, said the Court of Appeal in Gallop -v- Newport City Council. The unsupported
view from occupational health that the employee was not disabled was wrongly accepted
unquestioningly by the employer. Employers should be wary of simply ‘rubberstamping’ a
favourable view and ensure that the key elements of disability are addressed, and that the
report is consistent with what the employer knows of the employee.
There is no need for an employee to point to a comparator if the discrimination is on grounds
of pregnancy or maternity, and falls within the ‘protected period’. The protected period runs
from the beginning of the pregnancy to the end of the maternity leave period (or the return
to work, if earlier). In Lyons -v- DWP JobCentre Plus, the employee was dismissed for poor
attendance five months after she returned from maternity leave. She suffered from post-natal
depression. Her claim of sex discrimination was unsuccessful. The employer was entitled to
take into account the absence caused by a pregnancy-related illness outside the protected
period.
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Discrimination
Doctors/maintaining
high professional
standards
Most NHS bodies will adopt the process set out in MHPS or have
their own policy based on it.
At what point can an employer arrange a capability hearing to
consider concerns about a doctor’s competence? An employer
must liaise with NCAS when addressing serious concerns about a
doctor’s performance. The case of Lim -v- Royal Wolverhampton
Hospital NHS Trust (2011) suggested that an employer could only
arrange a capability hearing after NCAS had assessed the doctor
and found that there were intractable performance problems
so that there was no reasonable prospect of remediation. This
approach is now considered flawed in light of the decision
in Chakrabarty -v- Ipswich Hospital NHS Trust. Although the
employer must contact NCAS, NCAS is not obliged to carry out
an assessment. If NCAS decides that no assessment is required
(perhaps because a review has already been conducted and an
NCAS assessment will add little) or no action plan can be agreed,
then the employer can begin capability proceedings.
A consultant haematologist continued to work in private practice
when they were absent from work due to sickness from their
substantive NHS post, having been informed not to. Dismissal for
gross misconduct was found to be fair: Brito -v- Ealing Hospital
NHS Trust. The case also stresses the importance of being clear
about the allegations the employee has to face at a disciplinary
hearing.
As mentioned elsewhere (McMillan), MHPS does not give a Trust
the right to increase a penalty if the employee appeals.
In Chakrabarty, the Court also stated that there was no requirement
to await the outcome of a concurrent GMC assessment.
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Doctors/maintaining high professional standards
Data protection/
social media
Is an employee’s name ‘personal
data’? It can be, said the Court of
Appeal in Edem -v- The Information
Commissioner. This means that
employers should think carefully
before disclosing the names of its
staff to ensure it is complying with the
Data Protection Principles.
Social media continues to be a
problem in the workplace. In Laws
-v- Game Retail Limited, the EAT
refused to provide any special
guidance on how the law of unfair
dismissal applies to social media,
indicating that the same rules apply
as for any other form of misconduct.
The employee was dismissed for
offensive tweets unrelated to work,
but it was accepted that there was
a close enough connection between
his work and his activities on Twitter
to justify dismissal (for example, the
employee followed and was followed
by a number of his employer’s stores).
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In contrast, a worker for Scottish
Canals was successful in his
unfair dismissal claim, when he
was dismissed for a two year old
Facebook message which suggested
that he had been drinking when
on standby. The Tribunal said the
employer failed to consider the nature
of Facebook, the fact that individuals
often exaggerate on social media,
and that the postings were old (Smith
-v- Scottish Canals).
Data protection/social media
On the horizon
2015 promises to be an eventful year, with a General Election, but for that reason it
will be hard to say how eventful. Some legislation is scheduled to come in during the
course of the year, and several important cases will be heard.
The new and labyrinthine Shared
Parental Leave scheme applies for
those parents whose Expected Week
of Childbirth is on or after 5 April 2015
(or if a child is placed for adoption on
or after that date).
The Small Business, Enterprise and
Employment Bill should introduce
a ban on exclusivity clauses in
zero hours contracts, following the
consultation on anti-avoidance
measures.
Student nurses and student midwives
gain protection from 6 April 2015 when
they are brought within the special
definition of worker for the purposes of
whistleblowing claims.
The CJEU will consider whether
an establishment should normally
extend to more than workplace (when
considering whether the obligation of
collective consultation on proposals
to dismiss 20 or more employee at
one establishment or workplace) in the
Woolworths case (USDAW -v- Ethel
Austin Limited).
The Care Quality Commission
intends to apply the Fit and Proper
Person requirement to all providers
of regulated healthcare activities from
April 2015. They have now received
their first complaints about a number
of current and former directors.
11 Hempsons | Annual Review 2014
To do
• Put in place your Shared Parental
Leave policy
• Check you have the required
documents for directors in
accordance with the Fit and
Proper Person requirement
• If you have received staff following
a business transfer, consider if you
can review any collective terms
and conditions after a year
• Review your holiday pay strategy –
we don’t mean that you must start
including all types of overtime in
holiday pay.
We should also learn this year if
an employer is required to consult
on the business reasons leading
to redundancies, during collective
consultation, when the Court of Appeal
reconsiders the case of USA -v- Nolan.
On the horizon
Contacts
Janice Barber
Partner
[email protected]
020 7484 7501
Harrogate
London
Manchester
Martin Cheyne
Partner
Fiona McLellan
Partner
Paul Spencer
Partner
[email protected]
01423 724121
[email protected]
020 7484 7522
[email protected]
0161 234 2474
Andrew Davidson
Partner
Jean Sapeta
Partner
[email protected]
01423 724129
[email protected]
020 7484 7552
12 Hempsons | Annual Review 2014
Contacts