Newsletter February 2014


In keeping with Somerset, Surrey and elsewhere, the swollen rivers of employment law continue to flow. 6 April is one of the two dates in the year for legislative changes and I identify below several measures to look out for. Meanwhile, there is a bias in the cases reported this month towards issues which can arise in many straightforward dismissal situations.

Darryl Evans
T: +44 (0)7771 725341

New compensation limits

The annual uplift to the statutory limits on compensation will come into effect this year on 6 April. The maximum compensatory award will become £76,574 (that's easy to remember), although it will only bite on high earners given the additional limit of one year's pay, which has existed since July 2013. The maximum for a 'week's pay', used in the calculation of statutory redundancy payments and basic awards in unfair dismissal cases, rises to £464.

Penalty for employing an illegal worker increases

The maximum penalty payable where an employer is found to have employed an adult who does not have the right to work in the UK is set to rise from £10,000 to £20,000.

Employers are subject to stringent requirements to check all employees' rights to work in the UK, which can be found in the Home Office Guidance on preventing illegal working in the UK.

If approved by Parliament, the new maximum will come into force on 6 April 2014.

Financial penalties for losing employers in Employment Tribunals

Tribunals will soon have the power to order that a losing employer pays, as well as compensation to the employee, a financial penalty in specified circumstances, such as where the employer has behaved with malice or there is some other aggravating factor. This will apply in claims made on or after
6 April 2014.

Early conciliation

The final 6 April change to flag is that early conciliation through Acas will come into effect, although it will only be mandatory from 6 May 2014. Under the new rules, claimants will need to contact Acas before issuing an Employment Tribunal claim, albeit there is no obligation to actually engage
in conciliation.

Extension of the right to request flexible working delayed

Finally, a measure which is not about to affect us. The government has confirmed that the extension of the right to request flexible working to all employees with 26 weeks service, irrespective of whether they have caring responsibilities, will not be brought into effect in April 2014 as originally intended. The revised implementation date is not yet known.

Dismissal without notice

So on to the cases concerning dismissal. The first addresses the value to an employer of setting out in a contract of employment a long list of transgressions which permit instant dismissal without notice. If one of those events occurs, can the employer rely on it?

Not necessarily. In Robert Bates Wrekin Landscapes Ltd v Knight (UKEAT/0164/13) the employer had the express right in the contract of employment to dismiss an employee without notice for breach of its customer's security requirements. However, the Employment Appeals Tribunal (EAT) decided that, although the employee had breached those requirements, the breach was not so serious as to justify summary dismissal. For that there had to have been gross misconduct or gross negligence, irrespective of what the contract of employment might say.

Without prejudice rule

It is very common for an employer planning to dismiss an employee, particularly a more senior one, to have an 'off the record' chat with the employee, to explain the situation and see if a deal can be done. The new protected conversations regime is aimed at facilitating that, but it is risky because although one of these types of conversations cannot be referred to in unfair dismissal proceedings, the same protection does not apply where discrimination is alleged.

So instead, an employer may well rely on the traditional approach of attaching the words 'without prejudice' to the meeting. The danger with this is that, for the 'without prejudice' rule to apply there must be a dispute between the parties and no unambiguous impropriety.

Portnykh v Nomura International plc UKEA|T/0448/13 is a helpful decision in this context, though. The employer proposed to dismiss the employee for misconduct, but then negotiated with the employee about an ex-gratia payment. The EAT held that correspondence between them marked 'without prejudice' was not admissible as evidence in the employee's subsequent automatic unfair dismissal claim. It was beyond argument that there was either a present or potential dispute and this was the case regardless of how amicable the negotiations were. Also, there was no impropriety.

The message is that whilst trying to have the first meeting on a 'without prejudice' basis probably will not work, the approach may well work in the next meeting.

Failure to follow independent panel's decision on appeal - fair or unfair?

Fair. The employer dismissed an employee for gross misconduct, as a result of which the employee appealed. That was heard by an independent panel, which overturned the employer's decision to dismiss.

The EAT said that the employer was not obliged to follow the panel's determination. It was significant that the employer's investigation had been reasonable and the terms of engagement between the employer and the panel did not say that the employer would implement the decision of the panel, nor that the panel would make the final decision.

This may well have been decided based on the very specific facts and merits of the case, and clearly disregarding the outcome of an appeal is a risky step, but this case shows that it is possible if the appeal body is external and can be shown to be advisory rather than binding. (Kisoka v Ratnpinyotip (t/a Rydevale Day Nursery) UKEAT/0311/13.)

Hanky panky - using an external HR consultant to investigate

On a similar theme, many 'micro employers' lack the expertise confidently to handle workplace problems and call on the support of external HR consultants. To what extent is it safe to rely on their assessments?

According to GM Packaging v Haslem (UKEAT/0259/13), to a large extent.

The employer had just nine employees. Its Managing Director became aware that a senior manager engaged in sexual activity with a member of his staff on company premises after hours. An independent HR consultant carried out an investigation and recommended dismissal, which was then carried out by the Managing Director. The employee's appeal was also delegated to the external consultant and was rejected.

The Employment Tribunal took the view that having sexual relations at work is not a particularly serious matter and held that the dismissal was unfair. On appeal the (more prudish) EAT held that the activity in question was capable of amounting to gross misconduct. The tribunal had made the mistake of substituting its own view for that of the employer. It was reasonable for the employer to act on the recommendation of the consultant.

Some more post-termination restrictions upheld

The case of East England Schools CIC (trading as 4myschools) v Palmer and another (2013 EWHC 4138 (QB) is interesting because it concerns the application of the rules on post-termination non compete provisions to the recruitment sector. This is an area of commercial activity where personal contacts are critical, both with recruiting companies and job seekers, the use of social media (for example, LinkedIn) is widespread, indeed encouraged, and much of the information needed to trade is widely available.

The employer here tried to protect its business with six month restrictions on ex-employees dealing with candidates or client employers for six months after termination.

The High Court upheld the restrictions, despite arguments that the relevant information was in the public domain, not confidential and therefore not capable of protection. The Court recognised the importance of building relationships in this sector and was willing to protect it. Six months was a reasonable period for such protection.

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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