Newsletter January 2012


The Government is pushing ahead with the employment law reforms I outlined before Christmas.
Consultation has started on different options for fees for bringing employment tribunal claims. Two models are suggested, with fees being at least £200 and going up from there, depending on the nature of the claim, its size and/or the stage reached in the proceedings.

At the same time there are stories circulating that the new two year qualifying period will only apply to new joiners from 6 April 2012, so existing staff will be ‘grandfathered’.

More details on these changes lie ahead. Meanwhile, if you are making staff redundant after the end of January, do not overlook in your calculations the usual annual increase in the weekly earnings cap, which goes up to £430.

Darryl Evans
T: +44 (0)7771 725341

Charging fees in employment tribunals and the EAT

Before Christmas the Ministry of Justice launched a consultation (which will close on 6 March 2012) on possible fee charging structures in the employment tribunal and the Employment Appeals Tribunal.

It contains two options for tribunal charging. The first proposes an issue fee and a hearing fee, the amount of which would depend on the nature of the claim and whether it was an individual claim or a multiple claim. So, for example, in an individual unfair dismissal claim, the claimant would pay an issue fee of £200 and a hearing fee of £1,000.

The second option would involve only an issue fee, the amount of which would depend on what the claimant states the claim to be worth. An individual unfair dismissal worth less than £30,000 would cost £500 to issue; one worth more would cost £1,750.

Both options propose a range of application-specific fees and a scheme to assist claimants who cannot afford the fees.

The first option could be introduced in 2013, with the second taking longer to be fully implemented – at least until 2014.

Two year qualifying period

On 6 April 2012 the qualifying period for unfair dismissal will increase from one to two years. My latest understanding is that this change will only apply to employees whose employment begins on or after 6 April 2012. Those who are already in employment before that date will retain the current one-year qualifying period. The draft regulations when issued should confirm whether this will be the case or not.

Annual increase in unfair dismissal and statutory redundancy limits

From 1 February 2012 the limit on a week’s pay for various legal purposes, including the calculation of statutory redundancy pay, will rise to £430 (from £400). At the same time the cap on the compensatory award for unfair dismissal in normal circumstances will rise to £72,300.

Statutory benefit rates

The proposed rates of statutory benefits to apply from April 2012 are as follows.

  • Standard rates for statutory maternity pay, statutory paternity pay and statutory adoption pay: £135.45 (with the weekly earnings threshold for these payments rising from £102 to £107.)
  • Statutory sick pay: £85.85 (with the weekly earnings threshold also rising from £102 to £107).
  • Maternity allowance: £135.45 (with the earnings threshold remaining at £30).

Redundancy procedure – disclosing scores and interview notes

As part of individual redundancy consultation an employer should disclose individual redundancy scores to the employee, explain how they were arrived at and give the employee a chance to challenge individual markings. Failure to do that can make the dismissal unfair.

In Camelot Group plc v Hogg (UKEAT/0019/10), the employee was given her scores and told she had not secured a job. She did not accept them and asked to see her interview notes. However, she did not specifically challenge her scores or specify which of them she disputed. She received the notes before a meeting at which she was told that her employment would be terminated.

The Employment Appeals Tribunal (EAT) said that an employer does not have to agree to every unspecific request for documentation which is not fully explained. The employer in this case was not obliged to provide the employee with a copy of her interview notes. The employee knew her overall score and did not challenge it or its individual components so there was no indication that she had reserved her right to challenge her scores. The dismissal was not unfair.

Dismissing an employee who is long-term sick

The EAT has also been looking at the procedure required where an employer is proposing to dismiss an employee who is absent from work owing to long-term sickness. To demonstrate it has acted reasonably in treating the employee's absence as a sufficient reason for dismissal, the employer should:

  • consult with the employee,
  • carry out a reasonable investigation into the employee's state of health, and
  • reach a reasonable view as to whether the employer can be expected to wait longer before deciding whether or not to dismiss.

It is not necessary to carry out a more stringent investigation than in other cases, such as misconduct. The decision to dismiss, confirmed the EAT, is a management one, not a medical one. Also, the claimant's length of service was not relevant to the investigation required, although it may be relevant to the decision as to whether or not to dismiss. (Dundee City Council v Sharp (UKEATS/0009/11).)

Failing to follow a contractual disciplinary procedure

Most well-advised employers make it clear in their employment documentation that the disciplinary and grievance policies are not part of the employment contract. Why? To stop employees claiming extra damages, in the form of loss of income for the extra period the employee would have been employed had the employer who ignored the contractual procedure in fact followed it.

The combined cases of Edwards v Chesterfield Royal Hospital NHS Foundation Trust and Botham v Ministry of Defence (2011 UKSC 58) seem, surprisingly in my view, to change the law on this. According to the Supreme Court the contract breach of not following procedure is not ‘separate from and independent of’ the act of dismissal. That means the employee’s redress lies in a claim for unfair dismissal, not contractual damages.

This brings such breaches within the principle of Johnson v Unisys Limited (2001 UKHL 13) in which the House of Lords refused to award damages where the manner of the employee's dismissal was in breach of the implied term of trust and confidence. Note, however, that Eastwood v Magnox Electric and McCabe v Cornwall County Council (2004 UKHL 35) refined this by allowing claims which arose of the employee’s conduct which preceded and was independent of the dismissal.

Redundancy and suitable alternative employment

Mrs Readman, a nurse, was placed at risk of redundancy and offered three alternative posts by her employer. One of the posts, a Hospital Matron position, was correctly found by the employment tribunal to amount to suitable alternative employment. Mrs Readman refused this post on the grounds that, having worked in community nursing since 1985, she had no desire to return to a hospital setting.

As a result, her employer refused her claim for a redundancy payment. The EAT overturned the tribunal’s decision which disallowed her claim for the payment. The tribunal had not asked whether it was reasonable for that particular employee, in her specific circumstances, to refuse the offer. The test was what was reasonable for the employee in question, not what a reasonable employee would do. (Readman v Devon Primary Care Trust (UKEAT/0116/11).)

Holiday taken during non-working time

If you are an employer which requires staff to take annual leave during periods when no work is undertaken, take note of Russell and others v Transocean International Resources Limited and others (2011 UKSC 57).

The Supreme Court has concluded that entitlement to annual leave under the Working Time Regulations 1998 can be satisfied during periods when workers are not otherwise required to work. In this case the employers were entitled to insist that employees working on an offshore installation took their paid annual leave during so-called "field-breaks" spent onshore.

TUPE – change of client means no service provision change

There have been several interesting TUPE decisions in the last few weeks.

In Hunter v McCarrick (UKEAT/0617/10), Mr McCarrick was employed by a provider of property services. Its client, the company which owned the properties, became the subject of a winding up petition which resulted in receivers acting for the lender on the properties to assume control of the properties and appoint a new property services company.

The EAT held there could be no service provision change. Not only was there a change in the contractors, but also of the client (i.e. the receivers rather than the failed company).

TUPE - pre-transfer dismissals

Mr Baillavoine was the Managing Director of Ultralon Limited when it entered administration. The administrators, intending to sell the business as a going concern, dismissed Mr Baillavoine and other employees. The business was subsequently purchased by Spaceright Europe Limited.

The Court of Appeal held that the dismissal, which took place before the TUPE transfer, could be "connected with the transfer" and therefore potentially automatically unfair, regardless of whether the identity of the transferee was known (or even contemplated) when the dismissal was carried out. Also, the administrators' desire to make the business more attractive to potential transferees did not amount to an ‘economic, technical or organisational reason’ for dismissal within the meaning of regulation 7(1). (Spaceright Europe Ltd v Baillavoine and another UKEAT/0339/10.)

TUPE - changing terms and conditions

Enterprise Managed Services Ltd v Dance(UKEAT/0200/11) considered the question of changing terms and conditions in the aftermath of a TUPE transfer.

Mr Dance had been employed by Williams which, together with another contractor, Enterprise, provided services to MHS. As a result of certain MHS requirements Enterprise reviewed staff terms and conditions, won the MHS contract from Williams and inherited Mr Dance and the other Williams staff.

Enterprise consulted with the inherited staff over changes they proposed to make to their terms and conditions. Mr Dance refused to accept the new terms and was dismissed.

The EAT considered whether the dismissal was in connection with the transfer and decided that the reason for the change was the need for productivity, which had arisen before and independent of the transfer. The transfer itself was not the reason.

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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