Newsletter November/December 2016


The first case I report this month is an important one regarding disciplinary procedures and the extent to which Tribunals should look into the process followed in their earlier stages, where warnings have been given.  Further on there is an instructive case about how to handle ‘protected conversations’.  You will also read with interest about the goings on at last year’s Christmas party at Northampton Recruitment Limited, whose then Managing Director is not a man to cross swords with in a bar.

Away from legal updates, I am pleased to report that Evans Employment Law is expanding!  My friend and former colleague from Slaughter and May days, Charles Newman, is joining me as a consultant.  Subsequent to leaving Slaughters Charles became a partner in the London office of national firm Beachcrofts but has since, like me, opted-out of the large firm culture and done his own thing.  I can offer him a home from which to support his clients and at the same time he offers me back-up for mine when I need it, for example over holiday absences.  He is a very bright and experienced employment lawyer so it is great to have him alongside me.

Darryl Evans
T: +44 (0)7771 725341

Effect of final written warning being manifestly inappropriate

It is something of an employment law anomaly that Tribunals are generally not supposed to look into the earlier warning stages of a disciplinary process when deciding whether a dismissal for a final act of misconduct is fair.  This can allow employers to impose what might in reality be unreasonable and unfair sanctions right up to the final written warning stage to ‘set up’ the employee for dismissal for their next, potentially minor, offence.  The decision in Bandara v British Broadcasting Corporation (UKEAT/0335/15) identifies some limitations on that principle.

Mr Bandara, a Senior Producer at the BBC, had until August 2013 an unblemished disciplinary record going back almost 18 years. He was then disciplined for two incidents, one being alleged verbal abuse and the other relating to an editorial decision which was alleged to breach BBC guidelines.  The disciplinary decision-maker considered that both incidents potentially constituted gross misconduct and decided to impose a final written warning.

Soon after that Mr Bandara was subject to further disciplinary proceedings, concerning allegations of bullying and intimidation, being abusive towards colleagues and refusing to obey management instructions. The (different) decision-maker on this occasion found most of the allegations wholly or partially proved and decided that he should be summarily dismissed.

Mr Bandara’s claim for unfair dismissal failed, in spite of the Tribunal’s finding that the final written warning was manifestly inappropriate.

The Employment Appeals Tribunal (EAT) upheld Mr Bandara’s appeal. It noted that, in general, earlier decisions by an employer should be regarded as established background and should not be reopened. However, an earlier sanction can be reopened if it is ‘manifestly inappropriate’, meaning there is something about its imposition which plainly shows that it ought not to have been imposed. The Tribunal was entitled to do that in this case.

However, the Tribunal was wrong in deciding that the dismissal was nonetheless fair. What it then needed to do was assess the extent to which the employer had relied on the final warning in deciding to dismiss for the next offence.  Had that been key to the decision, or had the BBC concluded that the later offences were grounds for dismissal irrespective of the prior warning?  What the Tribunal actually did was form its own view on whether the later offence justified dismissal and that was wrong.  The claim was sent back to a new Tribunal for reconsideration.

The ‘gay cake’ case

Lee v McArthur and others (2016 NICA 39) is the widely reported decision of the Northern Ireland Court of Appeal regarding the bakery run by devout Christians who refused to decorate a cake with a picture of Bert and Ernie, the happy couple, and the caption 'Support Gay Marriage'.

It is worth noting that the bakery did not refuse to put the caption on the cake because the couple were gay.  Its evidence was that they would have refused to do so had the couple been straight.  Equally, they would have agreed to decorate the cake for the (gay) couple with a different slogan.  So it was not the sexuality of the customer which was the issue, but the nature of the slogan and their association with it.

The Court held that the slogan could only benefit gay or bisexual people and that the bakery would not have objected to decorating a cake saying 'Support Heterosexual Marriage'. It cancelled the order because the message related to gay marriage and there was an exact correlation between those of that particular sexual orientation and those whom the message supported the right to marry. This was a case of 'associative discrimination' with the gay and bisexual community, and amounted to direct discrimination.

The McArthurs' own right to free speech was not being infringed because nobody could reasonably conclude that, by icing a cake, they were expressing personal support for the slogan. Their personal views were their matter, but expressing those in the manner in which they provided services to customers could be unlawful.  They were entitled to refuse to decorate cakes involving any religious or political message, but they were not allowed to refuse to decorate cakes which carried a particular religious or political message just because it conflicted with their own opinions.

Can poor redundancy consultation make a dismissal unfair?

Yes, says the EAT, if it is 'perfunctory and insensitive'.

Mr Thomas had over 40 years' service with BNP Paribas, ending up as a director of its property management division. He was put at risk of redundancy and immediately placed on 'garden leave' and told not to contact clients or colleagues. Various procedural errors followed, including getting Mr Thomas’s first name wrong in a letter.

The EAT quashed the Tribunal’s finding of a fair dismissal.  It criticised the decision to start garden leave and to prohibit contact with colleagues during the consultation period. It found it 'particularly troubling' that the Tribunal had determined the manner of consultation to be ‘perfunctory and insensitive’, yet considered that it was reasonable, without saying why. Such a process would not necessarily be unreasonable, and hence unfair, but some form of reasoning from the Tribunal to explain why not was required. (Thomas v BNP Paribas Real Estate UKEAT/0134/16.)

Right to rest break does not need to be requested

The EAT has held that a claim for ‘refusal’ to permit rest breaks under the Working Time Regulations 1998 (WTR) can be brought where the employer fails to make provision for such breaks, even if the worker does not actually ask for them. Employers must take active steps to ensure that their working arrangements enable workers to take the requisite rest breaks.

Mr Grange was a ‘Relief Roadside Controller’ for Abellio, which meant he regulated and monitored bus services. His working day initially lasted eight and a half hours, including 30 minutes for lunch.  His lunch break was, however, often difficult to fit in given the busy work schedule, so Abellio decided to reduce the working day to eight hours, meaning Mr Grange would work without a break and finish half an hour earlier.

Mr Grange raised a grievance and then a Tribunal claim.  That claim failed on the basis that there had been no ‘refusal’ to permit the exercise of the right to a rest break. Mr Grange had made no request to take daily rest breaks following the change in hours, so there had been no actual act of refusal.

The EAT identified that there was conflicting case law on the point (albeit concerning different provisions under the WTR). Referencing the core EU Directive, the EAT concluded that the employer must afford the worker the entitlement to take a rest break and that entitlement will be ‘refused’ if it puts into place working arrangements that fail to allow the taking of such breaks. It returned the case to the Tribunal to decide whether the situation before the changes to the contract were made, where work pressures prevented the break being taken, was a refusal.  (Grange v Abellio London Ltd UKEAT 0130/16/1611.)

Age limit of 35 for police applicants acceptable

Regular readers will know that I am quick to report age discrimination cases, taking the view which I do that the courts generally are inclining to give employers more leeway in justifying age discrimination than other forms of detriment. With that in mind, I give you Gorka Salaberria Sorondo v Academia Vasca de Policía y Emergencias (C-258/15).

The European Court of Justice (ECJ) has held that EU law does not stop Spanish law imposing an upper age limit of 35 for applicants to the Basque Police and Emergency Services Academy. The ECJ accepted that having particular physical capabilities is a characteristic relating to age and that the nature of the specific duties involved in being a police officer requires a particular level of physical capability – it is, said the ECJ, a genuine and determining occupational requirement. Preserving the operational capacity and proper functioning of the police service is legitimate objective and an upper age limit on applicants of 35 is within what is necessary to achieve that objective.

To me it’s an odd decision (and entirely validates my general view about the different approach of the courts in age cases).  Why could the legitimate objective not be met by rigorous tests of physical capability, which would be a less discriminatory requirement than a simple age ban?  Presumably there are policemen and women who carry on in post after the age of 35, undertaking the physical work required.  Or, if a felon needs to be chased, are the over 35s required to take a rest on a park bench and leave apprehension to the youngsters?  Very odd.

Anyway, if you think that police officers are looking younger and younger these days, then at least you can sleep easy in the knowledge that they are, and the ECJ has said that that’s ok.

Christmas party misbehaviour

In a timely judgement, the High Court has held Northampton Recruitment Limited not liable for a violent assault by its managing director on a colleague at an impromptu drinking session following the annual Christmas party.

The drinking was separate from the Christmas party itself: at a different location and attended by guests in addition to the employees and their partners. The evidence was that conversation had been largely on non-work-related topics. On the other hand, the company paid for transportation to the new venue and was expected to meet the cost of at least some of the drinks.

In addition, it was a work-related discussion which triggered the assault.  A controversial debate took place and the managing director lost his temper and began to lecture the employees present on how he owned the company and made the decisions. When the claimant, Mr Bellman, challenged him (in a non-aggressive way) the manager punched him twice, causing him to fall and sustain brain damage.

Nonetheless, the encounter was not within the course of his employment. Those present had attended the session entirely voluntarily and out of personal choice. The employer could not be held liable for the actions of its employee in these circumstances. (Bellman v Northampton Recruitment Ltd 2016 EWHC 3104 (QB).)

Whistleblowing – identifying the breach

In Eiger Securities LLP v Korshunova UKEAT/0149/16 the EAT has confirmed that, to establish that a protected disclosure has been made for whistleblowing purpose, an employee must show that he or she reasonably believed that the disclosure of information tended to show that the employer had failed to comply with a legal obligation to which it was subject.

That means that the Tribunal needs to identify the source of the legal obligation. The identification of the obligation did not need to be detailed or precise but it had to be more than a general belief that certain actions were wrong.

Protected conversations

The facts of Lenlyn UK Ltd v Kular (UKEAT/0108/16) are worth setting out in summary because they are useful guidance for managing a ‘protected conversation’ under section 111A, Employment Rights Act 1996. This permits an employer to have a discussion with an employee about a negotiated departure without that discussion being admissible in an ordinary unfair dismissal claim, unless there has been ‘improper behaviour’ by the employer.

Lenlyn found that £1.9m in cash had gone missing owing to the fraud of a contractor. As the contractor had gone into administration, the money was irrecoverable. A report from an external accountant concluded that the conduct of the Financial Controller, Mr Kular, ‘could be considered negligent’ although there was no sign of dishonesty. The report recommended that Lenlyn ‘consider the need for a full disciplinary investigation’.

Rather than do that, Lenlyn decided to make Mr Kular an offer in a protected conversation.  It called him to a meeting and told him that the accountant's view was that he had been ‘grossly negligent’, that it was considering taking disciplinary action against him, that no decision had been made and that it wanted to make him a ‘without prejudice’ offer to leave. Mr Kular was given a settlement agreement and told to think about it and respond by the following Monday (six days later).  He was not required to attend work in the meantime. When he got home Mr Kular discovered that he had been cut off from access to Lenlyn’s IT system.

Rather than accept the offer, he resigned and his claim for constructive unfair dismissal was successful. The Tribunal decided that what happened at the meeting was admissible because the impropriety exception applied. Mr Kular had not been given reasonable time to consider the settlement offer and the accountant's report had been misrepresented to the claimant.

The EAT concluded that the Tribunal was entitled to reach this conclusion. The employer's conduct in pre-judging the issue showed that it no longer intended to be bound by the employment contract and its misrepresentation of the report was also a breach of the trust and confidence duty.

The clear lessons are that it is necessary to enter into a ‘protected conversation’ with an open mind, willing to follow an alternative approach if the employee rejects the offer and that the Acas guidance that the employee should be given 10 days to consider the severance offer should be respected.

Gender pay reporting

The Government has published the revised draft of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 under which employers employing 250 or more employees will be required to publish information about the gender pay gap in their organisation. The rules are planned to come into force on 6 April 2017.

Prior versions of these regulations contained a large number of problem areas.  The new version addresses some of those but plenty remain for those employers who are impacted.  Please contact me if you want more information on the requirements.

What the Chancellor said

The Chancellor’s Autumn Statement was very interesting generally, given the context of Brexit, but I will confine myself to reminding you of the main elements impacting employment law.

‘Employee shareholder’ status, George Osborne’s master plan to increase the stake-holding of ordinary employees in companies, whereby the employee would get tax efficient shares in return for forgoing a (limited) number of employment protections, is being shelved.  The Government plans to abolish the tax reliefs for ESS shares acquired under an agreement made on or after 1 December 2016. The tax advantages will continue to apply for existing arrangements. However, the Government intends to close ESS to new users altogether ‘at the earliest opportunity’.  It has spotted that ESS is in practice being used for tax planning rather than the purpose for which it was intended, which is, of course, what many of us said would happen when it was first proposed.

Mr Hammond also confirmed limits to the benefits that attract tax and national insurance advantages under salary sacrifice. The tax-advantaged benefits will, from April 2017, be confined to enhanced employer pension contributions to registered pension schemes (and pensions advice); childcare benefits (employer-supported childcare and provision of workplace nurseries); cycles and cyclists' safety equipment provided under the cycle to work scheme; and ultra-low emission cars. Arrangements in place before that date will be protected until April 2018 or for cars, accommodation and school fees, until April 2021.

Thirdly, there was confirmation that the exemption from income tax and national insurance for termination payments up to the current threshold of £30,000 will be retained but employer NICs will be payable on payments above £30,000 from April 2018.

The future world of work

The Commons Select Committee on Business, Energy and Industrial Strategy (previously BIS) has launched an inquiry into the future world of work, particularly the rapidly changing nature of work, and the status and rights of agency workers, the self-employed and workers in the 'gig economy'. It will look at low-pay and poor working conditions for people working in these non-traditional employee roles. The terms of reference cover:-

  • Is the term 'worker' defined sufficiently clearly in law at present? If not, how should it be defined?
  • For those casual and agency workers working in the 'gig economy', is the balance of benefits between worker and employer appropriate?
  • What specific provision should there be for the protection and support of agency workers and those who are not employees? Who should be responsible for such provision – the Government, the beneficiary of the work, a mutual, the individual themselves?
  • What differences should there be between levels of Government support for the self-employed and for employees, for example over statutory sick pay, holiday pay, employee pensions, maternity pay?
  • Is there evidence that businesses are treating agency workers unfairly, compared with employees?
  • Should there be steps taken to constrain the use by businesses of agency workers?
  • What are the issues surrounding terms and conditions of employees, including the use of zero-hour contracts, definitions of flexible contracts, the role of the Low Pay Commission, and minimum wage enforcement?
  • What is the role of trade unions in representing the self-employed and those not working in traditional employee roles?

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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