Newsletter November/December 2011

Welcome and season's greetings

Early last month the government announced its proposals for reforming aspects of employment law in order to reduce the burden on businesses. You can find my commentary on those as part of the summary of them below.

I will therefore limit this introduction to wishing all of you a very Merry Christmas and New Year and to thank all of my clients and other contacts for their support in making 2011 a very fulfilling and successful first year in business for me.

Darryl Evans
T: +44 (0)7771 725341

Employment law reforms - a reduction in burden on employers?

The key proposals in the government's announcement in early November are:

  • the increase in the period of employment required to bring an unfair dismissal claim from one year to two years
  • the introduction of the concept of the 'protected conversation', which would allow an employer to have frank discussions about poor performance with a worker without fear that they could be used as evidence in a tribunal
  • a requirement for all claims to go to Acas, the conciliation service, for attempted mediation before reaching an employment tribunal
  • a 'rapid resolution scheme' for more simple cases to be settled within three months
  • employment judges to sit alone, i.e. without lay members, in unfair dismissal cases
  • employers to face financial penalties of up to £5,000 where they have seriously breached an employee's employment rights
  • further investigation into the possibility of reducing the 90 day period for collective redundancy consultation
  • modernisation of maternity and paternity leave
  • complaints about breaches of the employment contract to be excluded from whistleblowing laws

Where possible, the government intends to implement the changes in April 2012.

The government is still thought considering the idea of compensated no-fault dismissals for micro-businesses.

Of the proposals, the rapid resolution scheme has already been working well in Manchester and should help employers by savings costs, so this one gets a tick. So too would the suggested amendment to whistleblowing: these laws were not established to allow employees to claim whistleblowing status as a result of complaining of a breach of their own employment rights.

In other areas, though, the proposals, to this employment lawyer, look ill-conceived.

Foremost amongst those is the idea of the 'protected conversation'. It sounds good, but I think it would add new uncertainty and process. When is a conversation 'protected' and what is required to make it so? How many staff will respond to the conversation by going off sick with stress, a bugbear of so many employers? There is also the risk of increased numbers of constructive dismissal claims as employees use the conversation as evidence of fundamental breach of contract, leading to arguments about whether the conversation was protected or not. Some organisations have labeled the idea a charter for bullies, where workplace harassment can occur in a legally safe haven.

My overriding complaint about this policy, though, is that it is directly contrary to good staff, and specifically performance, management. Managers hate giving hard messages on performance and they would now have a get out because they will feel they can do so in a protected environment where what they say doesn't really matter and is a forerunner to dismissal anyway. I have commented before in this Newsletter that managing staff out for poor performance is not that challenging if you are pro-active, face up to issues early and follow procedures efficiently. And guess what - the employee's performance might even improve!

The requirement for all cases to be referred to Acas does not really add anything to the current position, as all cases are referred to Acas anyway. You cannot force parties to mediate, less so reach an agreement in a mediation process.

Finally I and many others do not believe that the removal of tribunal lay members is helpful. Employment Judges are almost unanimous in their view that lay members provide a very useful service in bringing their knowledge of the average workplace into the legal setting of a tribunal, thereby increasing the prospect of a balanced and fair judgment. Their removal would represent a further step towards employment tribunals being regular courts in all but name rather than specialist forums for the resolution of workplace disputes.

Is wearing a poppy on Remembrance Day a protected belief?

Strict dress codes at work may result in some employers preventing their employees from wearing a remembrance day poppy to work. Is this discrimination on the grounds of philosophical belief?

Not according to one employment tribunal, in the case of Lisk v Shield Guardian Co Ltd and others (ET/3300873/11). The belief of expressing support in this way was too narrow to amount to a philosophical belief.

Holiday carry forward for sick employees

I rarely report employment tribunal decisions because they are not binding and interesting decisions on legal matters are usually referred on appeal to the Employment Appeals Tribunal (EAT). But this month I find myself mentioning two.

A tribunal has held, in the case of Adams and another v Harwich International Port Limited (ET/1503084/10), that sick workers can carry forward their full 5.6 weeks' statutory holiday entitlement into a subsequent leave year, when they have been unable or unwilling to use it due to sickness absence. The Employment Judge did not think, however, that this meant that indefinite accumulation and carry forward should be permitted.

This reflects recent case law from Europe which has clearly established that workers who are unable or unwilling to take leave during a period of sickness absence should be allowed to take it following their return to work, even if that means carrying it forward to a subsequent leave year.

However, in the case of KHS AG v Schulte (C-214/10) the European Court of Justice has held that the EU Working Time Directive does not require unlimited accumulation of annual leave by a worker on sick leave for several years. The actual length of time in which holiday can be carried over will
depend on the circumstances of each case. In that particular situation, relating to a German collective agreement, a 15 month limit on carry forward was lawful.

Summary dismissal during notice

It is common practice for employers to dismiss employees with immediate effect rather than with notice where to give notice would enable an employee to accrue the necessary qualifying service to claim unfair dismissal.

In the case of M-Choice UK Ltd v Aalders (UKEAT/0227/11), Ms Aalders was placed on six months garden leave after about six months employment, and was told that her employment would end on the anniversary of her joining M-Choice 'at the latest' (thus potentially allowing her the one year period
of qualifying service).

Before her employment ended she brought a claim for unfair dismissal stating that her employment was due to terminate on the one year anniversary (probably therefore tipping M-Choice off to their blunder). Lo and behold, possibly with the benefit of legal advice, a fortnight before the proposed
termination date, M-Choice wrote to say Ms Aalders' employment was being terminated with immediate effect.

She then amended her claim to state that the principal reason for her dismissal was because she had asserted a statutory right, i.e that she had brought an unfair dismissal claim, and therefore her dismissal was automatically unfair.

The EAT held that the dismissal date was the date on which Ms Aalders was actually dismissed. Ms Aalders did not therefore gain the necessary one year's service qualify to claim unfair dismissal. There was nothing to stop the employer from superseding the notice by bringing employment to an earlier end in the course of the notice period, albeit that it may have to make a payment in lieu of the remainder of that notice period.

Marital discrimination

The Equality Act 2010 provides that marital status is a protected characteristic and that an employee is entitled not to be treated unfavourably because of that characteristic.

Mrs Dunn was employed as a technical services manager. Following a dispute over her employment terms she resigned and claimed constructive unfair dismissal. But she also claimed breach of the Sex Discrimination Act 1975 because she contended she was less favourably treated because she was married to Mr Dunn, with whom the employer was also in dispute. The EAT agreed.

According to the EAT, the law protected Mrs Dunn by reason of her marital status, not only because she was married, but also because she was married to a particular person. (Dunn v Institute of Cemetery and Crematorium Management UKEAT/0531/10.)

The effectiveness of TUPE

The Department for Business, Innovation and Skills has issued a call for evidence seeking views on the effectiveness of TUPE 2006 given concerns that the regulations gold-plate the Acquired Rights Directive and are overly bureaucratic.

In particular, the government is seeking views on the impact for businesses of the inclusion of service provision changes within the scope of TUPE 2006, whether the insolvency provisions should be amended to specify which insolvency proceedings they apply to and how the interaction of TUPE and
collective redundancy consultation could be improved.

The closing date for answers is 31 January 2012. If the balance of evidence calls for possible changes to the current legislation, formal consultation will follow.

Government review recommends new body to authorise long-term sickness

The government has published the results of an independent review of the sickness absence system, which recommends the creation of an Independent Assessment Service (IAS) to provide an in-depth assessment of individuals' physical and/or mental function when they have been signed off work for four weeks.

The IAS would provide advice about how an individual on sickness absence could be supported to return to work. The review also analyses the current sickness absence system and makes a number of other suggestions to help combat the 140 million days lost to sickness absence annually.

The disadvantage of this is that it will add another layer of bureaucracy. The potential advantage is that the independent body might be more robust in giving an opinion that the employee can return to work in some capacity, as the new 'fit note' system does not appear to have made any difference to the level of sickness absence.

Other recommendations arising from the review are:

  • fit note guidance should be revised to ensure that judgments about fitness to work are not job-specific. Currently, the majority of fit notes sign people off as completely unfit so employers cannot make adjustments where an illness is compatible with a return to work
  • employer expenditure to keep sick employees in work, or speed their return to work, such as medical treatments or vocational rehabilitation, should attract tax relief
  • the Percentage Threshold Scheme, which compensates employers for very high rates of sickness absence costs, should be abolished as it costs £50 million a year and gives employers no incentive to manage absence
  • statutory sick pay record-keeping obligations should be abolished, reducing administrative burdens on employers and saving them £44 million

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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