Newsletter June/July 2013


It's the holiday season, sultry weather, time to relax a bit, enjoy the Ashes when you can and anticipate the wave of new activity in September....?

I'm sorry to tell you that the Government is not playing along. 29th July is a significant day for employers facing unfair dismissal claims (and for employees making them). From that date, fees will be payable and the compensatory award will be capped at a year's pay - materially reducing the award that many employees could recover and therefore saving money for many employers. The 'protected conversations' regime also comes into force. There is more on each of these significant developments below.

If you are taking a break in August please enjoy it but don't forget that when you get back, the employment law landscape will not be the same as it was when you left.

Darryl Evans
T: +44 (0)7771 725341

Tribunal fees imminent - but not without a fight

As mentioned in my May Newsletter, fees will be payable on all Employment Tribunal claims lodged on or after Monday 29 July 2013. This includes a filing fee and, later, a hearing fee. Guidance issued by the Government says that if a claim is submitted before that date, no fees will be due even if, for example, the hearing takes place afterwards.

UNISON, however, is challenging the legality of fees by seeking a judicial review. It argues that fees will stop people exercising their EU rights, being set at prohibitive levels; that the EU principle of 'equivalence' is breached because fees are not payable in most first-tier Tribunal claims so why pick on employees; that charging fees indirectly discriminates against women because of the disproportionate effect they will have; and that there has been no proper assessment of the Public Sector Equality Duty.

A decision on whether a judicial review will be undertaken is expected very soon. If permission is granted, then, according to UNISON "consideration may be given to deferring implementation of the new fees regime".

A further cap on an unfair dismissal award

Also from 29 July the cap on the unfair dismissal award will change to the lower of £74,200 and 52 weeks' pay.

This will apply where the effective date of termination is after the date of the amending order.

Please note that this does not affect discrimination or whistleblowing claims, so it may further encourage ex-employees to try to find grounds for claim in one of those areas, if for nothing else than to improve their bargaining position.

Protected conversations and settlement agreements

Again from 29 July the new regime allowing confidential pre-termination negotiations arrives, accompanied by the related (but rather less significant) renaming of 'compromise agreements' as 'settlement agreements'.

Confidential pre-termination negotiations are a new, complex, statutory framework which will allow certain discussions to be kept confidential from a tribunal in most unfair dismissal cases. I am in two minds as to how much value they will be to employers.

In summary, what they do is to allow a discussion about an exit 'on terms' - the sort of 'without prejudice chat' we are all used - to take place before any dispute has arisen between employer and employee. So they overcome that problem of whether a 'without prejudice' tag will stick because the conversation occurs too early in the process.

However, the regime is full of traps, it seems to me. The protection is lost if there has been 'improper behaviour - expect lots of case law which attempts to work out what that means, although the Acas Statutory Code of Practice on Settlement Agreements does seek to offer some guidance on this. Worse, the protection only applies to ordinary unfair dismissal claims - not claims for discrimination, for example, and nor for breach of contract claims. So in a claim covering all of these areas the Tribunal can be aware of the conversation except for unfair dismissal purposes where it must ignore it (even though it knows about it) - query how that is going to work. Also, the employer must comply with the exact requirements of the Code in handling the conversation - a further risk area and doubtless an addition to time and cost. I can see all of this putting a lot of employers off.

Also, there is always the risk whenever such a conversation occurs that, even if the court or tribunal cannot hear about it, the employee knows it happened and what the employer was thinking. So he may not, for example, be able to use the discussion as evidence that the decision at the end of a performance process was pre-ordained, but he will know it may have been and may be all the keener to press on with his claim as a result.

The next thing....

Well, there are quite a few 'next things' in the pipeline actually, but let me highlight this one: the Government has published a consultation on proposals to strengthen and simplify the current civil penalty scheme that imposes a sanction on those who employ illegal migrants.

The Government plans to introduce tougher civil penalties on employers who continue to exploit illegal migrant labour to reflect the harm they cause. At the same time, it seeks to cut red tape by significantly reducing the administrative costs of conducting right-to-work checks.

The consultation closes on 20 August 2013 and changes are likely to be made in early 2014.

Woolworths - a new lease of (legal) life

The great name lives on, in the law reports at least. That said, it will do so infamously - rarely in my memory has a decision provoked quite so much excited comment from employment lawyers than the one related to the Woolworths closure.

That is because the decision of the Employment Appeals Tribunal (EAT) represents a major change in the way collective redundancies have to be treated. It should be noted by all medium and larger employers.

As a result of the Woolworths closure the liquidators had to make staff redundant across its many stores. It decided it could avoid having to comply with the statutory collective redundancy consultation process - 30 or 90 days of consultation with unions or elected representatives before redundancies are made - in stores with less than 20 employees. That was because the obligation under UK law only bites where 20 or more employees are being dismissed within 90 days at one establishment and the liquidators argued that each store was a separate establishment.

The EAT decided that this final requirement - 'at one establishment' - is incompatible with European law. As long as an employer is making 20 or more redundancies overall in a 90 day period, that will trigger the statutory procedure, irrespective of where they work.

This really is a big deal for larger companies with lots of sites, which of course could be entirely autonomous in their operations. The company must now keep close tabs on work force changes at all sites on an ongoing basis to monitor whether the threshold is triggered. (USDAW and others v WW Realisation 1 Ltd (in Liquidation) and another UKEAT/0547/12.)

As a footnote to this case, a Northern Ireland tribunal has had to consider similar issues as a result of the closure of stores in the Bonmarche chain. It has referred several questions about the meaning of the laws to the European Court, so we may hear more on this subject in the forthcoming months.

Fair misconduct dismissal despite non-compliance with ACAS Code

The EAT has held in Buzolli v Food Partners Ltd (UKEAT/0317/12) that Mr Buzolli's dismissal for gross misconduct was fair, notwithstanding defects in his prior final written warning.

The warning was for failing to attend work due to being under the influence of alcohol. During the currency of the warning Mr Buzolli drove his company vehicle into a bridge and he was dismissed for gross misconduct. Mr Buzolli claimed that FPL had failed to follow a fair procedure by not stating in his warning letter that any further misconduct could lead to his dismissal.

The EAT decided that it was clear from FPL's disciplinary policies, and, happily, as a matter of common sense from the fact that this was a final written warning, that further misconduct might result in dismissal.

A final written warning letter should always make it very clear that any further misconduct could lead to dismissal, but it is comforting for employers to know that the law is willing to take a pragmatic view in a situation such as this.

Must a friend be reasonable?

If a worker 'reasonably' requests to be accompanied by a companion at a disciplinary or grievance, does the request for a particular companion have to be 'reasonable'? No, is the outcome of Toal v GB Oils Ltd. (UKEAT/0569/12).

At a grievance hearing the employer refused Mr Toal his choice of companion, a Union official.

The EAT said that as long as the choice of companion is within the permitted categories, the worker may choose whomever he wishes. Interestingly, the EAT rejected the guidance at paragraph 36 of the relevant Acas Code of Practice - a reminder that Codes are helpful but may not always be correct.

Covert surveillance

In City and County of Swansea v Gayle (UKEAT/0501/12) the EAT held that Mr Gayle's human rights were not infringed when he was dismissed after his employer covertly obtained video evidence showing him, on five occasions, at a sports centre playing squash while he should have been working.

What Mr Gayle was doing amounted to fraud, so he could have no reasonable expectation that he was entitled to privacy with regard to his fraudulent conduct. The fact that he was in a public place at the time could well have affected this decision.

Age discrimination - how young will it go?

All the way is the answer.

Ms Roberts was 18 when dismissed as a result of her consistent poor performance. As part of the employer's efforts to improve her performance, the management - left her post-it notes - possibly a performance management tool not widely recommended. On those notes the company included encouraging words such as "stroppy kid" and "a stroppy little teenager". Whilst the Tribunal found that the words were, as it happened, quite accurate, it held that this amounted to harassment on grounds of her age.

The Tribunal noted that the remarks were not a casual one-off conversation with a colleague in the workplace, but a continuing series of deliberately critical comments made by managers in the execution of managerial responsibilities relating to Ms Roberts' performance.

The lesson is: you are never too young to be the victim of age discrimination. (Roberts v Cash Zone (Camberley) Limited ET 2701804/2012).

Your monthly TUPE fix

Ceva provided services to Seawell which then took them back in house. Mr Moffat spent 100% of his time on the services, in a supervisory role. Other employees of Ceva spent part of their time providing the same services to Seawell. Did Mr Moffat transfer under TUPE?

The Scottish Court of Session, considering regulation 3(3)(a)(i) of TUPE, ruled that where the activities are carried out by the collaboration of a number of employees who are not organised as a group whose principal purpose the carrying out of the activities in question, it is not right to isolate one of the employees who happens to devote all, or virtually all, of his working time to assisting in the collaborative effort.

The TUPE requirement for an organised grouping implies an element of conscious organisation by the employer of his employees into a grouping - of the nature of a 'team - which has as its principal purpose the carrying out of the activities in issue. There was no service provision change and Mr Moffat did not transfer to Seawell. (Ceva Freight (UK) Ltd v Seawell Ltd 2013 CSIH 59.)

Statto's corner

Her Majesty's Courts and Tribunals Service (HMCTS) has published its latest round of quarterly Tribunal statistics for January to March 2013, together with annual figures for April 2012 to March 2013.

The number of claims in the first quarter of this year was up 36% on the same period in 2012. This was driven by an increase in working time claims, which doubled over the period and accounted for just over a third of claims.

Unauthorised deduction claims amounts to 16% of claims and unfair dismissal 11%. In 2012/13 the outstanding Employment Tribunal caseload increased by 13%, with the number of accepted claims rising by 3%. This included a 39% fall in the number of claims for failure to inform and consult on a TUPE transfer, a 39% rise in claims for a failure to inform or consult on redundancy, a 74% rise in the number of sex discrimination claims and a 24% fall in the number of age discrimination claims.

The average 'age' of a case at the time of its disposal by the Tribunal was 80 weeks.

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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