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Up!

No not just the latest Disney Pixar film but also the level of unfair dismissal claims (up 29%), redundancy pay claims (up 48%) and claims for a failure to inform and consult on collective redundancies (up a massive 154%).

Discrimination cases have also risen and so too has the level of many awards in most jurisdictions. The highest award was a mouth watering £1.3 million for Race Discrimination! If you listen to what is on the grapevine then there maybe a similar level of award for disability discrimination next year!

Age discrimination claims are now starting to become prominent both in the number of claims being lodged (increased by 29%) and the size of the award – the average rising from £3,350 to £8,870, the highest award rising from £12,000 to £90,000.

Could your business absorb such potential liabilities? If not then maybe your business should consider the Employer Protection Scheme operated by Taylors (for full details click here)

The increase in the number of claims and awards emphasises the importance of ensuring that you handle HR and employment matters correctly. Being proactive and taking advice at the outset is usually much cheaper than taking advice once a claim is under way!

The cause for the general increase is clearly the recession! Dismissals are up because of redundancies, litigation up because employees struggle to find alternative employment now and so have nothing to lose, and awards are up because there are fewer jobs available making it more difficult for claimants to mitigate their losses!

Regrettably 2010 statistics are likely to follow a similar pattern! Indeed a recent case has confirmed that the bands for injury to feelings awards initially set down by a case called Vento should be modified, the lower band increasing from £5,000 to £6,000, the middle band from £15,000 to £18,000 and the upper band from £25,000 to £30,000. Inevitably discrimination claims will most definitely increase in 2010.

Agency Workers

There will be further consultation on the implementation of regulations relating to Agency Workers as required by the EU Directive on Agency workers.

The directive requires that agency workers be given equal treatment in comparison to permanent workers as regards to basic working conditions such as pay, hours, holidays and pension eligibility.

It is intended that such rights only crystallise after 12 weeks continuous work in the same job but some rights will be available from day one such as the right to receive information about job vacancies, access to on site facilities and transport services.

It is feared by many employment agencies that the implementation of this Directive will severely impact upon their business in the supply of temporary staff with many of the current benefits associated with temporary staff being removed.

The government hopes to introduce legislation in this regard by October 2011. The delay is intended to help recruiters and their clients’ time to prepare for the changes and also to avoid significant changes during the current economic climate. Some common sense as If ever there was a time that temporary staff are needed, given the unpredictability of the current economy, it is now!

A Cover Up!

Employment Tribunals are increasingly wary of employers who dress up an employment relationship as a self employed or worker contract through express documentation.

There have been two big decisions on “sham contracts” this year already. It is a topic which does not seem to go away and indeed Taylors are advising clients on similar issues as this goes to press.

In our February edition we reported on a case called Protectacoat (click here for link to February 09 edition …….),. This case has been affirmed in a further decision of the Court of Appeal. Here Car Valeters were signed up to terms and conditions which stated they were self employed, could provide a substitute and that there was no obligation to provide work or accept work.

It was held that the factual reality did not (and were never intended to) reflect the written terms, in particular the valeters had to notify the company if they were not going to turn up to work and they were expected to turn up to work otherwise. Further no one seriously expected the valeters to provide a substitute.

Accordingly despite the contracts having passed the scrutiny of HMRC and despite having being agreed by the workers as to the basis of their appointment it was held that these workers were in fact employees and so entitled to all the rights of an employee including the right to claim unfair dismissal. The Contractor, Autoclenz, exercised sufficient control over the workers, there was mutuality of obligation (ie to provide work and to do the work) and there was an obligation for the work to be performed personally.

It is critical that you review your relationship with so called casual workers, consultants, self employed contractors to ensure that you have assigned them the correct status and, if not, put in place measures to protect you going forwards.

The Taylors Employment Team has significant experience advising on such matters.

Notification of Dismissal

A recent case has confirmed that a dismissal is only effective once communicated and will not be the day any letter dismissing is sent or the day any such letter maybe deemed delivered.

Here the employee was sent home following a disciplinary meeting and advised that a letter would be sent confirming the outcome.

The Employer sent a dismissal letter on the 30th November by recorded delivery. The letter was signed for, not by the employee but someone on the employee’s behalf who had then gone away for a few days and so did not open the letter until 4th December.

As such time to bring an unfair dismissal case did not start running until 4th December, and not 30th November when the letter was signed for. This can be critical when determining if a claim for unfair dismissal is presented within the strict 3 month time limit.

Taylors advice would be to verbally communicate the decision to dismiss on the day you send the decision letter. That way time starts running immediately and gives greater certainty on time limits.

Service Related Pay

A case is proceeding through the court system which is challenging the application of service related pay.

Initial thoughts that this case must be based on age discrimination (which outlaws service related benefits beyond 5 years unless objectively justified) are misplaced.

The case in fact alleges that the application of service related pay is a breach of the Equal Pay Act 1970. A female employee working for the Health and Safety Executive has identified 3 male comparators who are paid more remuneration partly because of their longer service where pay varied with length of service up to 10 years service. The female argues that the service related pay had a disparate impact on women who tended to have lesser service due to career breaks to care for family.

The recent decision was on a preliminary point about whether or not it was necessary for the employer to justify both the period over which a length of service pay criterion operates as well as the actual adoption of the criterion – it was held that the employer did and that the burden of proof to show the criterion is appropriate shifted to the employer once the employee had given evidence raising serious doubts about its appropriateness to achieve legitimate aims.

It however serves as a timely reminder to review any service related benefits, in particular pay, which may be in breach of not only age discrimination legislation but also in breach of the Equal Pay Act and the Sex Discrimination Act.

Whistleblowing Nurse Reinstated

Some may recall the case of Margaret Haywood, the nurse who secretly filmed the appalling care given to elderly patients at the Royal Sussex Hospital and screened on BBC’s Panorama.

The nurse was struck off the register on grounds she had breached confidentiality.

However the High Court overturned the decision to strike her off the register and ordered reinstatement. The court did however conclude a 12 month caution was appropriate.

Cases of whistle blowing are rarely this high profile and it is often not always clear when the employee is disclosing information covered by the Public Interest Disclosure Act 1998. Whilst certainly this nurse has brought to the publics attention appalling information about the care of elderly staff by her employers which can only be commended obtaining protection under the whistle blowing is not straightforward as various legal hurdles need to be overcome to gain protection.

Remember protection under the whistle blowing act can be gained by an employee complaining that the employer is in breach of a legal obligation (including their contract of employment) and as such where any complaint or grievance is received you need to assess whether any points raised might be covered by whistle blowing issues, no matter how trivial they may seem!

Your questions answered

1. I am in the process of making more than 20 redundancies. If they are not all from one site do I have to inform and consult?

If you are making more than 20 redundant in one “establishment” then the Trade Unions and Labour Relations (Consolidation) Act 1992 (TULRCA) says that the consultation period must be at least 30 days (90 days if more than 100).

The issue is the meaning of the word “establishment” and this is not defined in any of the relevant legislation.

The European Court has said that it cannot be left to individual member states to form their own interpretation of establishment but rather it should have a uniform interpretation across all member states. A recent Greek case came before the ECJ which provided guidance on this issue.

It held that three separate production units in three different locations of an organisation with a head office were three separate establishments. The ECJ went on and gave some further guidance on this issue as follows:

• An ‘establishment’ designates, depending on the circumstances, the unit to which the workers made redundant are assigned to carry out their duties.
• The entity in question need not have any legal, economic, financial, administrative or technological autonomy.
• Nor is it essential for the entity in question to be endowed with a management which can independently effect collective redundancies.
• Nor must there be a geographical separation from the other units and facilities of the undertaking.
• Therefore an ‘establishment’ may consist of a distinct entity, having a certain degree of permanence and stability, which is assigned to perform one or more given tasks and which has a workforce, technical means and a certain organizational structure allowing for the accomplishment of those tasks.

This still does not provide comprehensive guidance on the meaning of establishment. Each case will be turn on its own facts. What you should do is to bear these guidelines in mind when contemplating redundancies of more than 20 but if you are unsure then seek legal advice.

2. Can an employee refuse to come into work for fear of contracting swine flu?

Strictly speaking if the employee is fit to attend work then they should attend work unless you authorise the absence. A failure to attend work can be a disciplinary offence and the employee should be advised of this. However before you proceed with disciplinary action speak to the employee to try and understand the underlying cause of their fears so that you can perhaps allay those concerns or consider alternatives ways of working for a temporary period.

It would be sensible to put in place a swine flu policy which sets out guidance to employees about swine flu generally and where they can further information but also sets out the Company’s policy on matter such as those who contract the illness and self certification, those who are in contact with those with the illness, those who are in high risk categories and what steps can be taken to reduce the risk of infection etc.

Copyright 2006 - 2010 Taylors Solicitors

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