Newsletter May 2015


In this month's newsletter two big decisions stand out (with not a great deal else going on, elections aside).

The first concerns the 2013 amendments to the whistleblowing legislation, which provided that a claimant now has to prove that their disclosure was made 'in the public interest'.

The second takes full circle the debate about whether a single Woolworths store was a separate 'establishment' for the purposes of collective redundancy consultation. According to the European Court of Justice it was, thus restoring the law to where it was understood to be before this case caused such a tremor in the legal world.

Darryl Evans
T: +44 (0)7771 725341

Disclosures in the public interest

In 2013 the whistleblowing legislation was amended to state that an employee was only protected if his or her qualifying disclosure was 'in the public interest'. It did not, however, define what the public interest was.

In Chestertons v Nurmohamed (UKEAT/0335/14) the Employment Appeals Tribunal (EAT) took a wide view. The whistleblower, a director in the Chesterton's estate agency, alleged he has made a protected disclosure by complaining that Chestertons was overstating the costs of its London office, resulting in lower bonuses for him and around 100 other managers.

The EAT noted that the objective of the amendment to the legislation was to prevent claimants from relying on a breach of their own contract of employment by the employer as being the basis for a protected disclosure. However, despite the fact that in this case the claimant was alleging such a breach and that was his primary concern, he was also alleging breaches of his colleagues' contracts. Those colleagues amounted to a section of the public which brought it within the realm of 'public interest'. So even though the disclosure in question related to a contractual dispute affecting a group of staff, rather than the wider public, it could qualify as a public interest disclosure. Because the whistleblower reasonably believed that the disclosure was in the public interest (i.e. the interests of the group of managers) he was protected.

Meaning of establishment - back to where we started

As outlined in my introduction, the European Court has ruled that an 'establishment' is the entity to which the employees are assigned to carry out their duties. That dids not equate to the legal employer - so the whole of the employing company - but rather, in the situation of the closure of Woolworths stores, to the individual store in which they worked.

So when looking at the numbers of employees to see whether an employer needs to take part in collective consultation (necessary when contemplating 20 or more redundancies in a period of 90 days), Woolworths was right to count each store as a separate establishment. This meant that it did not need to engage in collective consultation with staff who worked in a store with a headcount of less than 20.

This case has caused consternation amongst advisers and clients making multi-site redundancies at the same time. Order, as they say, has now been restored.

Constructive dismissal - affirmation of contract

Despite the fears of employers it is usually very difficult for an employee to make a successful unfair constructive dismissal claim. One of the several challenges for an employee is responding to the alleged breach of contract quickly and not delaying and thereby 'affirming' the breach.

In Colomar Mari v Reuters Ltd (UKEAT/0539/13) the claimant took delay to something of an extreme. She waited 18 months to resign after she alleged breaches of her contract of employment by Reuters. As a result she was found to have affirmed her contract of employment, despite her argument that she was too ill to resign any sooner. This meant that she was unable to rely on those alleged breaches as giving her a reason to resign and claim unfair constructive dismissal.

The EAT took into account the fact that she was fit enough to enter into significant email dialogue regarding her contractual entitlements, and also to make extensive travel plans during her period of illness.

Harassment of zero-hours worker

An Employment Tribunal has awarded £19,500 to a waitress working under a zero-hours contract for injury to feelings as a result of being subjected to gender harassment.

The lady claimed that her line manager asked frequent questions about her sex life and regularly touched her inappropriately. When she finally made a complaint, the hotel carried out an entirely inadequate investigation and took no disciplinary action against the line manager.

The Tribunal decided that harassment had taken place, and that the hotel should be liable for it. The size of the award was because of the lady's age (22), and her vulnerability (she had fragile mental health).

This case is a reminder that just because someone is a zero-hours worker, they are still entitled not to suffer discrimination under the Equality Act. The employer will be liable for any such discrimination unless it can demonstrate that it had taken all reasonable steps to prevent it. (Southern v Britannia Hotels Ltd and another ET/1800507/14.)

Warning given in bad faith

The Court of Appeal in Way v Spectrum Property Care Limited UKEAT/0181/13) has held that a warning given in bad faith cannot be relied upon when deciding whether or not to dismiss an employee.

Mr Way had received a final written warning, which was taken into account by the employer in its decision to dismiss him for unrelated misconduct. The warning had been given because he had helped a friend obtain employment with his employer, in breach of his employer's recruitment procedures. He also sent a number of inappropriate emails. He alleged that the manager who gave him the warning had also been involved in the recruitment process and had given the warning in bad faith.

The Court of Appeal agreed and as a result determined that it should not be used as the springboard from which the employer later dismissed the employee.

Other cases regarding the extent to which tribunals should look at the validity of earlier warnings have generally concluded that such warnings should not be questioned in detail unless they are manifestly inappropriate. Here the 'bad faith' element of the warning took it into the territory in which the warning would need to be assessed.

Application of UK employment law to overseas based worker

Mr Olsen, a Dane, was an internationally mobile employee. The question for the EAT was whether he had a sufficiently strong connection to the UK to allow him to claim unfair dismissal under the Employment Rights Act 1996.

He was an employee of a Bermudian company and had chosen a contract governed by Bermudian law over a contract under English law which would have required his relocation to England. His contract stated that his base was Switzerland, from where he managed around 100 employees internationally including around 20 in the UK. He spent more of his working time in the UK than any other country.

The EAT held that there was not a sufficiently strong connection to the UK. It noted that he had purposely structured his working arrangements and the amount of time he spent in the UK in order to avoid paying UK tax. (Olsen v Gearbulk Services Ltd & Anor UKEAT/0345/14.)

A Government's final motions

The last piece of employment legislation before the election came in the form of the Small Business Enterprise and Employment Bill, which received Royal Assent on 26th March. Two measures are worth noting, although they have not been brought into force yet:

  • Employers with 250 or more employees will have to publish details of their gender pay gap
  • Exclusivity clauses in zero hours contracts will be banned

I will provide more details when these do become effective.

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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