Newsletter March 2014


The number of claims lodged at employment tribunals between October and December 2013 fell by 79% compared with the same period in 2012. This is a startling statistic and illustrates why many barristers specialising in employment law have suffered a marked drop in work.

For years governments have been concerned that the employment tribunals system has been creaking under the weight of applications, with a consequential high cost to the exchequer. The introduction of tribunal fees was aimed at deterring uncertain applicants and it seems evident that exactly that has happened. There is a union-led claim in progress contesting these fees as having the effect of denying access to justice and these statistics will fuel that argument. My own view is that this is only part of the story and that economic circumstances are also playing their part - employers may not be shedding staff as they have been, but at the same time they are not rushing to recruit heavily either. No churn means no disputes.

From this April a claimant will be referred to Acas for compulsory arbitration before he/she can lodge a claim. In addition, employers who behave particularly badly will face the risk of financial penalties on top of the compensation they must pay a claimant. These measures, set alongside judicial mediation (where a case is mediated by an employment judge rather than resolved at a full hearing), all steer parties to settlement rather than a day (or many days) in court.

Statistically you, as employers, are presently less likely to be on the wrong end of a tribunal claim and, given the pressures in the system, you are more likely to settle any claim that is made. Unless the fees regime changes there is no obvious reason why this will change. Emptier tribunals; idler barristers.

Darryl Evans
T: +44 (0)7771 725341

New minimum wage rates announced

From 1 October 2014 the national minimum wage rates will increase as follows:

  • adult rate to become £6.50 per hour (a 19p, or 3%, increase)
  • 18 - 20 year old rate to become £5.13 per hour (a 10p, or 2%,
  • 16 - 17 year old rate to become £3.79 per hour (a 7p, or 2%,
  • apprentice rate to become £2.73 per hour (a 5p, or 2%,

This is the first increase in real terms since 2008. The Business Secretary, Vince Cable, has accepted the Low Pay Commission's proposal for bigger increases in the NMW in future provided that economic conditions continue to improve.

Startling drop in Tribunal claims

The Ministry of Justice's quarterly statistics for October to December 2013 show a 79% drop (compared with the same period in 2012) in the number of applications lodged at Employment Tribunals. The number of claims received was just 9,801, compared to an average of 50,000 new claims per quarter in 2012/13.

The figures may not be entirely reliable, being provisional only and subject to revision, in addition to which a claim is now not entered onto the case management system used for generating the figures until the relevant fee is paid, so there may be claims in the system but not yet registered.

Nonetheless, there has pretty clearly been a marked drop and if the trend continues it will give the trade union UNISON leverage to argue that the Lord Chancellor should amend the fees regime.

The statistics also reveal that the number of single claims has been declining for the last five years, while the number of multiple claims is more volatile due to large numbers of claims against a single employer, which can skew the national figures.

Children and Families Act 2014 receives Royal Assent

This Act will introduce several changes for working parents over the next year. These include:

  • 30 June 2014: the right to request flexible working will be extended to all employees. The current statutory procedure that employers must follow when considering flexible working requests will be replaced with a duty on employers to consider requests in a reasonable manner, supplemented by a statutory code of practice from Acas.
  • 1 October 2014: fathers and partners will be able to take time off to attend up to two antenatal appointments.
  • 5 April 2015: mothers, fathers or adopters will be able to opt to take shared parental leave within the first year after the birth or adoption placement. More details of how these rules will operate are expected in the coming months.

Statutory discrimination questionnaires abolished on 6 April 2014

Currently a person who thinks that he or she may have been unlawfully discriminated against, harassed or victimised can seek information from his r her employer by means of a prescribed questionnaire procedure. This procedure is now being abolished, although a complainant may still ask questions of the respondent and a court or tribunal can still draw adverse inferences from a refusal to respond or from evasive answers. In practice therefore this change may have little impact.

High Court corrects drafting error to uphold non-competition restriction

I certainly do not advocate sloppy drafting of post-termination restrictions - on the contrary, these provisions, if carelessly drafted, can render the restriction void.

Imagine my surprise, then, when the High Court showed unexpected tolerance of some poor drafting. In Prophet plc v Huggett (2014 EWHC 615 (Ch)) the Court enforced a 12 month non-compete restrictive covenant which, if read literally, offered the employer no protection at all. A proviso in the provision stated that the restriction against joining a competing business only operated to prevent the employee from being engaged or employed in connection with any products in which he was involved during his employment. As no competitor would ever be selling the employer's products, the clause was useless.

Help arrived in the form of the Court itself which said that the wording could be corrected by looking at what a reasonable person would have understood the parties to have meant by their use of the language. It was willing to read words into the covenant to produce a commercially sensible result and went on to uphold the re-worded covenant.

It is standard advice that a court will not write wording into a clause in this situation. If this change is adopted elsewhere it creates an awful lot of uncertainty for departing employees and new employers. Surely it is a one-off, or at least relevant only to blatant errors (and, probably, employees who deserve to be restricted).

Manifestation of religious belief

In Grace v Places for Children (UKEAT/0217/13) the EAT dismissed the claim of an employee who alleged unlawful religious discrimination. The employee was dismissed after holding an unauthorised 'training' session, during which she manifested her Christian belief by frightening colleagues in her interpretation of their dreams, leading one to believe she would suffer a miscarriage. The EAT held that the Ms Grace was not treated adversely because of her religion (which would entitle her to protection under the Equality Act) but because of the way she had manifested her religious belief. That manifestation was not protected.

Consistent enhancement of redundancy pay creates contractual rights

In Peacock Stores v Peregrine and others (UKEAT/0315/13) Peacock had routinely paid redundancy pay to staff in accordance with the statutory redundancy scheme, except for the statutory caps relating to length of service and the amount of weekly pay being dis-applied.

The employees aimed to demonstrate that there was a contractual entitlement to the uncapped payments. They were aided by evidence from the former head of HR (emphasis on the word 'former') to the effect that the calculation of redundancy payments in this way was 'most definitely custom and practice'.

The Judge concluded that there was 'a consistently applied and well understood policy of enhanced redundancy payments' and 'it is probable that remained the situation until 2002 when [one of the claimants] was made redundant'. There was no evidence to the contrary.

Employers operating a policy of enhanced payments are well advised to vary it regularly so no single scheme becomes established, and if feasible to include wording in a handbook making it clear that any enhanced arrangements are discretionary and open to change at any time.

Covert recording of disciplinary and grievance hearings

It is by no means rare for employees to record disciplinary meetings or hearings - mobile phones make that very easy. So is the recording then admissible as evidence?

In Punjab National Bank (International) Ltd and others v Gosain (UKEAT/0003/14) the Employment Appeals Tribunal (EAT) said that it was. A tribunal is entitled to decide that the recordings were admissible in evidence, the cogency and relevance of them to be determined at the final hearing.

Whistleblowing - knowledge of the complaint

Mr Anastasiou was interviewed as part of his employer's investigation into another employee's complaint of being marginalised due to concerns about the accuracy of information disclosed to investors. Mr Anastasiou similarly expressed doubts about the prospect of the company meeting performance targets. Shortly afterwards, he was dismissed for fraudulent expense claims.

The Employment Tribunal found that he had been subjected to certain detriments for making a protected disclosure, including making enquiries into his expenses claims and referring to the results of those enquiries to a disciplinary hearing.

The EAT accepted that Mr Anastasiou had disclosed information during the investigation, rather than merely expressed a personal opinion on a business strategy, and that the information disclosed was sufficient to constitute a potential breach of legal obligation by the company. He has therefore made a qualifying whistleblowing disclosure.

However, the Tribunal in its decision had not shown how the protected disclosure materially influenced the company's treatment of Mr Anastasiou - there was no finding of fact in respect of any of the detriments that the individuals involved had any knowledge of the whistleblow. If they were not aware of it, it could not have caused the dismissal. (Western Union Payment Services UK Ltd v Anastasiou (2014) UKEAT 1025.)

Dismissal for post-natal depression not discriminatory

Ms Lyons was dismissed having been off sick with post-natal depression for several months after the end of her maternity leave. Surely she was discriminated against because of pregnancy or sex?

Not so, said the EAT. Pregnancy discrimination only occurs where a woman is treated unfavourably during the 'protected period' of pregnancy and maternity leave. In addition, a woman is not necessarily discriminated against directly because of sex where she is dismissed because of pregnancy-related absence where her maternity leave has ended. In such circumstances, sex discrimination will only occur if her employer treats her less favourably than it would treat a sick man in similar circumstances. (Lyons v DWP Jobcentre Plus UKEAT/0348/13.)

Post-termination victimisation is unlawful

This was the view of the Court of Appeal in Jessemey v Rowstock Ltd and another (2014 EWCA Civ 185), despite wording directly to the contrary in the Equality Act 2010. That wording, said the Court, was a drafting error, overridden by the need to comply with EU law.

So in this specific case, Mr Jessemey's claim of victimisation on the grounds that his employer had provided an unfavourable reference to an employment agency because he had previously issued age discrimination proceedings against them succeeded.

Mothers under surrogacy arrangements not entitled to maternity leave under
EU law

The ECJ has held that a commissioning mother, who receives a child under a surrogacy arrangement, does not have the right to maternity leave under the Pregnant Workers Directive (whether or not she intends to breastfeed the child). The Directive's primary aim is to protect the health of a mother in the especially vulnerable situation arising from pregnancy. Although maternity leave is also intended to ensure that the special relationship between a woman and her child is protected, that objective concerns only the period after a woman's pregnancy and childbirth.

Similarly, it is not sex discrimination for an employer to deny a commissioning mother paid maternity leave. There is no less favourable treatment because of sex where the employer would have treated a male parent of a child born via surrogacy in the same way. (CD v ST C-167/12 and Z v A Government Department and the Board of Management of a Community School C-363/12.)

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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