Newsletter May 2013


My review of employment law developments in May arrives slightly late this month, but is as action packed as ever!

Headline items are probably confirmation of the date from which fees for bringing tribunal claims will apply - 29 July - and the alteration to whistleblowing rules which will likely stop employees using breaches of their own contract terms and rights as the basis of a whistleblowing claim -
a relief for all employers.

I would also like to mark the latest and possibly last chapter in the Seldon case on age discrimination - the first significant litigation in the area of forced retirement and one which seems to end in defeat for Mr Seldon, with his law firm's decision to force him to retire as a partner at 65 held to be

Darryl Evans
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Fees for employment tribunal claims - start date confirmed

It has been confirmed that fees will be implemented in employment tribunals and the Employment Appeals Tribunal (EAT) on Monday 29 July 2013, subject to final Parliamentary approval. Although the fees are material (£250 to start a claim followed by a £950 hearing fee), any claimant in receipt of benefits will be entitled to full remission of the fees.

In addition, the provisions relating to financial penalties on employers will apply to any tribunal claim presented on or after 25th October 2013. Under these, if the employment tribunal concludes that an employer has breached any worker's rights and that the breach has any 'aggravating factor' - considerable uncertainty surrounds the meaning of that term - it may order the employer to pay a penalty to the Secretary of State of between £100 and £5,000 (halved if paid within 21 days of the tribunal's decision being sent to the employer). If more than one claim is involved complex rules apply.

Whistleblowing changes

From 25th June 2013 certain changes to whistleblowing rules come into force.


  • will not apply unless the disclosure in "the reasonable belief of the worker making the disclosure, is made in the public interest". A breach of the employee's contract of employment is therefore no longer likely to be covered
  • will, however, be extended to those who make disclosures in bad faith (e.g. for money or out of spite). If the tribunal thinks that the disclosure was made in bad faith, then it will have the power to reduce compensation by up to 25%, though.

There is also a slight extension to the meaning of 'worker' which acts as a reminder that it is not only employees who fall within whistleblowing rules but also potentially others such as contractors.

While on the subject of whistleblowing...

If an ex-employee blows the whistle, would this be regarded as a 'protected disclosure' allowing the employee under the Employment Rights Act 1996?

In Onyango v Berkeley Solicitors ([2013] UKEAT/0407/12) a solicitor sent a letter of complaint to the Legal Complaints Service about his former firm. He also sent the firm a letter before claim. In both cases these letters were sent after his employment had ended.

The firm reported him to the Solicitors Regulation Authority (SRA) accusing him of forgery and dishonesty. As a result he was investigated by the SRA.

The solicitor claimed that Berkeley had subjected him to a detriment for making two protected disclosures, i.e. the two letters. The EAT has decided that these disclosures were capable of being protected, even though they occurred post-termination.

Beware, therefore, of taking action against former employees.

Applying the Acas Code of Practice to 'some other substantial reason'

Mr Lund had several difficulties with his work which alienated colleagues and affected morale. His employer, St Edmunds School, dismissed him on the grounds that it had lost confidence in him.

The employment tribunal found his dismissal was for 'some other substantial reason', but was unfair, both substantively and also procedurally because he had no warning of the dismissal meeting and no opportunity to appeal. It awarded compensation, reducing it on ground of contributory fault, but with no uplift for breach of the Acas Code of Practice on the basis that the Code was 'silent' as to whether it applies to some other substantial reason dismissals.

The EAT held the tribunal was wrong. His claim related to his conduct which led his employers to consider whether he should be dismissed, even if it was the effect of that conduct on others, rather than the conduct itself, which was the ultimate reason for dismissal. Nor was it correct to decline to
apply the uplift simply because compensation had been reduced on ground of contributory fault. The uplift should have applied.

This means employers should follow the minimum procedural steps in the Acas code in similar situations. Whether that extends to 'some other substantial reason' situations in which there is no conduct (or performance) issue at all remains uncertain. (Lund v St Edmunds School [2013] UKEAT/0514/12.)

12 month restrictions upheld in insurance sector

In Romero Insurance Brokers Ltd v Templeton and another ([2013] EWHC 1198) the employee was a senior insurance broker whose contract included a restriction that for 12 months following termination he would not procure orders from, or do business with, a client of the employer with whom he had dealt within the last six months of his employment.

The High Court decided that the covenant was reasonably necessary in the context of the insurance industry, where renewals usually take place annually. Mr Romero had been specifically recruited to build up the employer's business so it was legitimate for the employer to seek to protect its client relationships. A longer restriction, however, would not have been enforceable.

Seldon - the end of a landmark battle?

I feel a slight sadness in reporting the latest chapter in the story of Mr Seldon, on the grounds that it might well be the last. He was the partner with law firm Clarkson Wright & Jakes, who brought a claim of age discrimination against them when he was forced to retire at age 65. This was the first leading case on age discrimination.

The case was sent back by the Supreme Court to the employment tribunal for it to consider, among several things, whether 65 was an appropriate age for mandatory retirement in those particular circumstances or whether another age such as 68 or 70 should have been adopted.

The tribunal decided that retention and planning were legitimate aims, that collegiality was also (with some caveats) a legitimate aim, and that a mandatory retirement age achieved these three aims. It then held that a mandatory retirement of 65 was a proportionate means of doing so. Mr Seldon has therefore lost.

This decision does not mean all employers can now go back to a compulsory 65 retirement age. Each case will depend on its facts. Also, the case considered social policy and demographics in 2006, since when the default national retirement age has been abolished. But professional services firms in particular will be eying the decision and factors which justified the compulsory retirement with interest. (Seldon v Clarkson Wright & Jakes ET/1100275/07.)

Employer loses patience with multiple claimer and griever

Mr Woodhouse, who is black, lodged ten internal grievances alleging race discrimination in a space of four years. He also brought seven employment tribunal claims. They were almost all found to be 'empty allegations without any proper evidential basis or grounds for his suspicion'.

The employer dismissed him because of a breakdown in trust and confidence. Was this victimisation? Yes, said the EAT. The grievances and tribunal claims were 'protected acts' and Mr Woodhouse was dismissed because he made them. There was no suggestion of bad faith (which would have prevented the grievances being protected acts). On that basis, he was victimised, which has to be correct legally, if extremely frustrating for the employer. (Woodhouse v West North West Homes Leeds [2012] UKEAT/0007/12.)

DBS update service about to be launched

The Disclosure and Barring Service (DBS), the body which replaced the Criminal Records Bureau (CRB) at the end of last year, is launching its new update service.

From 17 June 2013 individuals will be able to subscribe for a modest fee to an update service that will keep their criminal record certificate up to date and allow them to take it with them when moving between jobs with similar checking requirements. Employers will then be able to carry out free online checks to find out whether there have been any changes to an individual's certificate. This in effect transfers cost from employers to employees.

DBS certificates will initially be sent only to the individual applicant in to give them time to challenge the contents before the certificate is released to a potential employer.

Interns under closer scrutiny

The Department for Business, Innovation & Skills (BIS) has released new guidance as part of a 'more aggressive' stance to tackle employers who use unpaid interns but do not pay them pay them the national minimum wage. One report suggests this is deliberately timed to link to the arrival into the job market of fresh graduates in September.

The guidance points to unpaid internships being generally restricted to work experience for a limited period, involving 'shadowing' work, not actually doing it. Examples are given to help employers understand where an internship ends and worker/employee status starts.

The guidance also gives examples of interns who should be paid the minimum wage even if they are not actually doing any work, such as where the intern is promised employment at the end of an internship (so the internship period is likely to be seen as training for the job).

Guidance for small employers

The Equality and Human Rights Commission has published two sets of guidance for businesses employing 20 or less staff.

'The Equality Act: Guidance for Small Business' outlines how the Equality Act 2010 is applicable to small businesses and how they can ensure that what they are doing is legal. 'A guide to business and human rights' outlines the way in which smaller businesses should identify and manage human rights issues that could arise within their workplace.

The last word... left to Lord Bilimoria, clearly not a man who minces his, who offers a perspective on the new employee shareholder status. As mentioned in a previous update, there are varying views on the use (or not) of this status. It is clear, though, where Lord Bilimoria stands:

"I guarantee that [the employee shareholder scheme] will not work, that it will not be taken up by business, that is has wasted a lot of Parliamentary time and that it will waste a lot of legislation ...this is not just a dog's breakfast, it is a mad dog's breakfast".

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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