Newsletter March 2011


Changes to employment legislation generally come into effect in either April or October each year. This April, the main change is to paternity entitlements and the arrival of the right for parents to take additional paternity leave of up to 26 weeks. The other main change which was expected was a major extension to the circumstances in which parents could request flexible working but the Government decided to withdraw this late in the day.

An interesting case for employers and employees alike concerns how an email sent by an employee from home to a colleague's private email can lead to dismissal. The facts are quite extreme but they act as a reminder of the dangers of electronic communication and the increasing importance for
employers to have clear email and internet communication policies.

In my last newsletter I highlighted the important changes to retirement rules, the principal impact being that it would fast become unlawful to require an employee to retire at 65 (or any other age) unless that could be objectively justified. Well, time is just about up. Any retirement notice
must be served by 5 April.

Darryl Evans
T: +44 (0)7771 725341

Important changes to paternity leave and pay

The right to additional paternity leave of up to 26 weeks will be available to parents of babies due on or after 3 April 2011 and to adoptive parents who are notified that they have been matched with a child for adoption on or after that same date.

The rules concerning these rights are complex, particularly in relation to whether or not the mother must have returned to work for the right to APL to be available, and to the circumstances in which the leave is paid.

I recommend that any employer with a paternity policy updates it to reflect these changes.

Flexible working U-turn

A proposed extension to the right to request flexible working to all parents with children under 18, due to come into force in April, has been abandoned by the Government. This change came as part of an announcement that further measures will be taken with the aim of alleviating the burden on employers, especially those with fewer than 10 employees.

In addition, as part of the Budget the Government published a 'Plan for Growth'. This includes a proposed review of employers' liability under the Equality Act 2010 for third-party harassment. It hopes to establish 'the lowest burden from employment regulation in the EU'.

Email sent from home leads to fair dismissal

Mr Gosden was employed by Lifeline Project Ltd, a charity linked to the Prison Service, when, outside work and from his own computer, he sent to a colleague an email containing racist and sexist material. The email included the heading "It is your duty to pass this on!" which his colleague
duly did, to a person working at a prison and therefore into the Prison Service's computer system.

After an investigation and disciplinary hearing, in the course of which Mr Gosden denied sending the email, he was dismissed for gross misconduct. The dismissal was found to be fair, the employer (wisely) concentrating on the damage to its reputation as the basis for the decision to dismiss.

Mr Gosden's encouragement for the email to be passed on seems to have contributed to the outcome but the case is nonetheless a reminder to employers and employees that what employees do at home using social media and other electronic communication methods can impact employment if the
employer is damaged as a result. (Gosden v Lifeline Project Ltd ET/2802731/2009.)

Employment status - next case off the rank

In Knight v BCCP (UK EAT/0413/10/JOJ), Mr Knight was a taxi driver engaged by a taxi firm for just over six weeks. He did not receive any holiday pay, sick pay or overtime. He worked under the taxi firm's control to some extent but only received wages for the occasions he actually worked. The employment tribunal determined that he was not an employee and the Employment Appeals Tribunal (EAT) saw no grounds upon which to change this. The fact that he was under no obligation to accept work and the taxi firm under no obligation to offer him any was key.

UK employment law protection - still reaching out to other parts of the

Two wives of British servicemen, working for the Ministry of Defence in Belgium and the Netherlands, were dismissed because their husbands' employment with the armed forces ended. They claimed unfair dismissal and gender discrimination under UK law. Even though they worked abroad, they had a sufficiently strong connection with Great Britain for their claims tobe heard.

Their terms and conditions were governed by English law and they were only eligible to work on those terms because they were married to members of the armed forces: both factors in them having unfair dismissal protection. As far as discrimination was concerned, the European 'principle of effectiveness' that requires a domestic rule about jurisdictional scope to be interpreted where necessary to enforce an EU right was relevant.

This is another case of expatriates having UK protection. The fact that employment on UK terms and conditions was a relevant factor is particularly noteworthy for all expatriate cases. (Ministry of Defence v Wallis (2011 EWCA Civ 231).

Just when you thought that TUPE does not apply to pre-pack deals in

...the EAT has changed its view. The specific provisions in TUPE on this are complex, but the key point is that as a result of a case called Oakland v Wellswood (Yorkshire) Ltd administrators and those buying businesses from them thought they had found a way to avoid TUPE applying on a so-called pre-pack deal.

As a result of OTG Ltd v Barke and others (UKEAT/0320/09) that appears not to be the case and employees may after all join the buyer in the normal TUPE way. It may still be, though, that certain liabilities in respect of the affected employees will be taken over by the Secretary of State rather than
pass to the buyer and that the buyer will have more scope than usual to agree variations to terms and conditions.

Final warnings: what if the employee does not appeal?

An employee who receives a final warning under a disciplinary policy is well advised to take the process through to appeal to demonstrate his/her refusal to accept the fairness of the sanction. But what if the employee does not do that? Can the employer who later dismisses the employee maintain that he/she accepted the validity of the warning?

According to Davies v Sandwell Metropolitan Borough Council (UKEAT/0416/10) the answer is no. The absence of an appeal did not stop a tribunal from looking behind the validity of that warning when considering the reasonableness of a later decision to dismiss. An employer whose decision to give a final warning is severe may still find it questioned at a later stage.

Does an individual employee have an entitlement to a bonus pool?

Attrill and others v Dresdner Kleinwort Ltd and Commerzbank AG (2011 EWCA Civ 229) is a case going through the courts concerning bankers' bonuses. An interesting preliminary point which has arisen, though, concerns whether an employee may be able to claim an entitlement to a discretionary bonus where he is one of many who will be considered for an allocation from a guaranteed minimum bonus pool. Note the words 'discretionary' and ‘pool’ - not enough, you might think, to suggest that the employee could have an enforceable right of any kind. The Court of Appeal was not so sure: the employer failed to knock out the claim on that initial ground and the case carries on.

Employee should not have taken away confidential information anticipating

Ms Chadwick, a senior employee (working in compliance) of the Brandeaux group companies and a holder of several group directorships, transferred large amounts of confidential information to her personal email account when she felt that relations with her employer were collapsing and an employment dispute was likely. She was not planning to use the information for competitive purposes: she merely argued that she had a legitimate interest in retaining any information that might assist her in defending herself in a dispute with her employer, or with a regulator.

The employer discovered the transfers after Ms Chadwick was made redundant and had been given three months' notice. It convened a disciplinary hearing and she was dismissed without notice.

As well as ordering that the company was entitled to the confidential information back, the High Court said that Ms Chadwick had breached her express contractual duties of confidentiality and the implied duty of fidelity to her employer. As no actual or potential regulatory dispute existed, the judge doubted whether the possibility of litigation with an employer could ever justify an employee acting as Ms Chadwick did. In the event of an employment dispute, she should have relied on the court's disclosure process to access relevant information. The breach was held to be sufficiently serious to justify summary dismissal.

The employer did not recover damages though. Although Ms Chadwick should have disclosed the breach of duty, which would have resulted in an earlier termination of her employment, the employer suffered no loss because it had benefitted from her services in return for paying her in the interim period. (Brandeaux (Advisers) UK Limited & Ors v Chadwick [2010].)

Increases to statutory payment rates

From 6 April 2011, the standard weekly rates will increase for the following payments:

  • statutory maternity pay, statutory paternity pay and statutory adoption pay: from £124.88 to £128.73 (with the weekly earnings threshold rising from £97 to £102)
  • statutory sick pay: from £79.15 to £81.60 (with the weekly earnings threshold rising from £97 to £102)
  • maternity allowance: from £124.88 to £128.73 (with the earnings threshold remaining at £30)
    Adjustments have also been made to the additional compensatory amount that small employers are entitled to recover from HM Revenue & Customs on top of the statutory maternity pay itself.

The information and any commentary contained in this newsletter are for general information purposes only and do not constitute legal or any other type of professional advice. Darryl Evans and Evans Employment Law Limited do not accept any and, to the extent permitted by law, exclude all, liability to any person for any loss which may arise from relying upon or otherwise using the information contained in this newsletter. If you have a particular query or issue you are strongly advised to obtain specific, personal advice and not to rely on the information or comments in this newsletter.

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