A round up of the most recent Employment Tribunal decisions

Pre-transfer Dismissal Caught by TUPE - Spaceright v Baillavoine
Spaceright was in administration. Its managing director – the Claimant - was dismissed for redundancy by the administrators who believed that a business without an incumbent MD would be more attractive to potential buyers. But at the time the Claimant was dismissed there was no specific buyer in mind.

Could the dismissal have been for a reason connected with the transfer when a buyer hadn’t even been identified? The tribunal said yes and the Employment Appeal Tribunal agreed. The dismissal was held to be automatically unfair. The administrators’ desire to make the business more attractive didn’t amount to an economic, technical or organisational reason and so Spaceright could not escape liability.

High Court Springs into Action - Clear Edge v Elliot
Springboard injunctions have traditionally been used as a way of stopping former employees using information they’ve obtained improperly. A company might apply to the courts for this special sort of injunction when it looks as though an ex-employee might use confidential information to get a head start in competition against them.

Now the High Court has confirmed that these sorts of injunctions aren’t limited to enforcing post-termination restrictions. They can apply in response to any contractual breaches by an employee.

In this case the three Defendants were a single team employed by Clear Edge. The company believed that they had conspired to leave and join a new employer and had copied and kept confidential information during their employment. This amounted to a serious breach of the duty of fidelity and, potentially, of their fiduciary duty too.

The High Court granted the springboard injunction because of the real risk of the employees misusing the information. The court said that it’s right to intervene in this way to prevent an employer suffering losses because of a former employee’s breach of contract. This sort of injunction isn’t just for cases where an employee threatens to abuse confidential information.


Overtime Ban Not Necessarily Unlawful - Arriva London South v Nicolaou
Mr Nicolaou was a bus driver. He’d refused to opt out of a 48-hour week under the Working Time Regulations but was used to working overtime on days which were designated as rest days. Arriva introduced a policy which said that any employee who had not opted out of the 48-hour week wasn’t allowed to work overtime on rest days.

Nicolaou claimed that, because he would never be working more than 48 hours averaged over 26 weeks, he couldn’t be penalised by not being allowed to work on rest days. But the Employment Appeal Tribunal found against him. It said that the reason Arriva didn’t allow him to work on rest days was not because he had refused to sign the opt-out. It was in order to implement a reasonable policy and to make sure that the Working Time Regulations were being complied with.


A Twist on Marital Discrimination - Dunn v Institute of Cemetery and Crematorium Management
Mrs Dunn raised grievances about changes to contractual sick pay provisions in her contract. Her grievances were rejected and during the appeal process, the company’s Chief Executive made mention of Mrs Dunn’s husband (who worked for the same employer) and his out-of-work activities and other behaviour. Mrs Dunn’s appeal was rejected and her role was proposed for redundancy. But before the redundancy process was in full swing she resigned, claiming constructive dismissal. She also claimed victimisation under the (then) Sex Discrimination Act – her case was that her employer wanted to make her redundant because she was married to Mr Dunn.

Up to this point, there had really only been protection from discrimination which related to marital status, in other words the fact that a person was or wasn’t married. The tribunal held that Mrs Dunn had only been treated less favourably because she was married to Mr Dunn, rather than because of her married status. Her dismissal was held to be unfair but her discrimination claim failed.

This changed on appeal. The Employment Appeal Tribunal held that the marital status provisions cover discrimination based on marriage to a particular person, and not just being married (or not being married, as the case may be).


Keeping Schtum’s the Best Option - Customer Systems v Ranson
An employee is about to jump ship and join a competitor. But before this happens, he comes across some confidential information relating to his prospective employer’s competition with his existing employer. A quandary. Does he have to pass this information on to his existing employer?

The High Court said no. An employee isn’t bound to divulge this because the duty of fidelity to the existing employer does not necessarily trump the duty of confidentiality to the new employer.


Time to Take a Holiday? - Russell v Transocean International Resources
An important decision for all employers of workers who don’t follow a standard working pattern.

The employees worked on offshore oil and gas installations, spending two weeks offshore and then two weeks onshore. Each period of time onshore was known as a ‘field break”. The employer insisted that employees took their annual leave during these field breaks. But the Claimants argued against this. They said that annual leave is a release from an obligation to work and should therefore be taken out of offshore time.

So, should annual leave be taken out of working time (in this case, time spent offshore) or from non-working time (field breaks)?

The Supreme Court found against the employees. It said that a rest period (rest periods include daily rest, weekly rest and annual leave) means any period that isn’t working time. It doesn’t matter where the employee is and what he’s doing during his rest periods, as long as he’s not working. So field breaks fell into this category and, as a result, the employer could require workers to take their annual leave during their time onshore.


And Finally... - Britian's Got Talent at The EAT!!!!
Not a buzzer or giant red cross in sight as judges at the Employment Appeal Tribunal found against a Britain’s Got Talent auditionee. Ms Czikai claimed discrimination, saying that the show had failed to make reasonable adjustments and its broadcasting of her audition amounted to harassment because of the negative attention she suffered as a result.

But there was one fairly hefty obstacle in her claim’s way. To succeed, the discrimination must have been at the hands of a prospective employer. Ms Czikai would have to have shown that the audition was a job application. Was it?

No, said that EAT. The purpose of auditioning was to progress in a competition; it wasn’t an application for a job. Ms Czikai chose to go to the audition and there was no mutual obligation between the parties. The EAT went on to say though that had she become part of the programme’s roadshow and been contractually obliged to perform then that would have amounted to employment for discrimination purposes.

Age discrimination: youthful pub manager boasted about "new young dynamic team" to "redundant" older worker

A great case study with some key learning points about age discrimination.

A pub manager in his first supervisory role left to his own devices made a series of errors in dismissing a disabled older worker, in a case with so many mistakes by management that it could be used to train line managers on employment issues.

The company is a large brewery that owns the Atlantic Inn on St Mary's, one of the Isles of Scilly. Mrs Wyburne-Ridsdale was a member of the bar staff there who worked on shifts. She worked four evening shifts per week. The work was seasonal, with the pub being very busy in summer, but very quiet in winter.

Mrs Wyburne-Ridsdale suffers from obsessive compulsive disorder, a condition that was later accepted by the tribunal to be a disability. While the company argued that it was never aware that Mrs Wyburne-Ridsdale had the condition, the tribunal found that previous managers had been aware of it, although she had never asked for any adjustments to be made. She was described as "honest, reliable and a hard worker".

On 11 November 2010, a new 19-year-old manager was appointed. He was tasked with cutting costs. The company saw him as being capable of doing the job, even though it was his first management position. He had been trained in pub management and basic employment issues. According to the recruitment director, the new manager "was, or at least should have been, aware of the necessary procedures and issues affecting dismissal".

By the end of November, the manager had reduced Mrs Wyburne-Ridsdale's shifts to two per week. She complained to him, but his response was simply that the pub was quiet and there was a reduced need for staff in winter.

Various other minor issues relating to how Mrs Wyburne-Ridsdale did her job seem to have arisen after that, although the new manager appears to have had very little day-to-day contact with her.
Following one incident in which the new manager told Mrs Wyburne-Ridsdale off for "bottling up" when she had not been instructed to do this, she explained that she has obsessive compulsive disorder. She pointed out that she had very little to do at that point and part of her coping strategy for her condition was to keep busy. The manager was said to be "shocked" on finding out about her condition and did not know how to react.

The manager told his area supervisor that he was finding Mrs Wyburne-Ridsdale increasingly difficult to work with. The area supervisor told the manager to "deal with the situation in accordance with the brewery's procedures".

On 17 December 2010, the manager and assistant manager had a "chat" with Mrs Wyburne-Ridsdale, who was accompanied by a friend from outside work, Ms Kindley. At the start of the meeting, the manager announced that he was making Mrs Wyburne-Ridsdale "redundant". It was alleged that his stated reason was that she was no longer needed because he now had his "new young dynamic team" in place. Ms Kindley made some limited attempts to argue that there could be no redundancy because new staff were being recruited. Mrs Wyburne-Ridsdale's employment was terminated immediately with one week's pay in lieu of notice.

On 4 January 2010, Mrs Wyburne-Ridsdale received a letter from the company confirming her dismissal and stating that the reason was "a breakdown of a professional working relationship". She was surprised because, although one or two minor issues had been brought to her attention by the manager, she had been happy to comply with his instructions. In any event, redundancy had been the stated reason for her dismissal in the final meeting.

In response to Mrs Wyburne-Ridsdale's claims of disability and age discrimination, the company claimed that she had been dismissed for various acts of misconduct. These included:
being seen taking a drink from the fridge that she was alleged not to have paid for, on an evening when she was allowed to finish early and stayed in the pub as a customer;
having to be told on a number of occasions that the way that she was pouring pints was wasteful;
being seen inviting a customer to drink a mis-poured drink quickly so that the manager would not see it; and making an allegation about someone "feeding a flower to [Mrs Wyburne-Ridsdale's] reindeer".

The employment tribunal found that the first three complaints related to practices that may have been happening before the new manager took over, but soon stopped once he had signalled that he was unhappy with them continuing. They had never become misconduct issues with Mrs Wyburne-Ridsdale. The issues were trivial and could not, individually or collectively, justify dismissal. The tribunal could not fathom why the reindeer issue was relevant at all to the dismissal, and found that raising this cast serious doubt on the credibility of the company's evidence.
The tribunal was also absolutely clear that redundancy could not have been the reason for dismissal. The company was recruiting extra staff at the time and had given Mrs Wyburne-Ridsdale's shifts to someone else. The tribunal found Ms Kindley to be a credible witness and accepted that the manager had referred to his "new young dynamic team" making Mrs Wyburne-Ridsdale surplus to requirements. The tribunal found the manager's evidence to be "conflicting, confusing and inconsistent".

The tribunal upheld the claims of disability and age discrimination. The tribunal felt that compensation, to be decided at a remedy hearing if the parties could not agree an amount, should be at the upper end of the lowest Vento band, which is £500 to £6,000.

Recent Employment Tribunal case law round-up

A round-up of recent case law in dismissals and disciplinaries and on-site sleeping arrangements in the construction of pay.

Fear of Penalties Resulting in Dismissal
Mrs Okuoimose, a Nigerian, worked for City Facilities Management (CFM). Because she was married to an EEA national she had a right of residence but when a Home Office stamp in her passport ran out she was suspended without pay. She was dismissed some weeks later on the grounds that it would be illegal to continue to employ her. However on the same day as the dismissal, Mrs Okuoimose provided CFM with a letter from the Border Agency confirming that she could work in the UK. CFM re-instated her and she made a claim for unlawful deductions of wages for the suspension period.

The tribunal dismissed her claim, concluding that the contract was illegal during that period because Mrs Okuoimose had failed to provide proof of her entitlement to work. The EAT disagreed. If the right to residence exists (in this case because Mrs Okuoimose was a family member of an EEA national) then the expiry of a passport stamp will not alter that fact and will not make continued employment illegal. It was irrelevant whether CFM thought it was behaving reasonably or that it was worried about penalties.

Other employers who have not fared well recently include Orchard Farm in Dorset. Former employee Mr Hashman, who had won the right in October 2010 to have his anti-hunting beliefs protected under the Religion and Belief Regulations, has now won his claim for unfair dismissal. When Mr Hashman was told his services would no longer be required, he believed this was directly related to the fact he had been a witness at two hunting prosecutions, as written about on his internet blog.


Reasonable Adjustments and Issues of Cost
In Cordell v Foreign Commonwealth Office a deaf employee was supported by a team of lip speakers in her role in Warsaw. An offer of another role in Kazakhstan was withdrawn after an assessment of the costs of providing a similar team there. Not only were there real practical difficulties in arranging lip speakers in Kazakhstan but also the cost of provision would amount to five times Ms Cordell’s salary and indeed was nearly as high as the costs of running the whole embassy.

She claimed disability discrimination but this was rejected by the EAT. While cost is not a decisive issue in deciding whether an adjustment is reasonable, this does not mean that it is not relevant. A tribunal can consider a range of issues, such as the size of any budget, what the employer has spent in comparable situations and what other employers are prepared to spend. The tribunal was entitled to take into account the FCO’s budget for reasonable adjustments and in this context, the adjustment sought was not reasonable.


Delay and Fairness in Disciplinary Procedures
In Dr Lim v Royal Wolverhampton Hospitals NHS Trust, the High Court held that there is an implied term in contracts of employment that disciplinary processes be conducted fairly and without undue delay. Dr Lim faced capability and conduct hearings. As part of the conduct issues, the trust raised allegations of conduct some three years after the events in question had taken place. The Court held that there was an implied term requiring that disciplinary processes be conducted fairly and without undue delay (although it also held that the Trust had not acted in breach of this).


Withdrawing a Dismissal and Special Circumstances
We know that where either an employer or employee uses unambiguous words of dismissal or resignation, they are deemed to have dismissed or resigned unless "special circumstances" apply; such as words said in the heat of an argument. In CF Capital Plc v Willoughby, the employer and Mrs Willoughby were involved in negotiations about a transfer of her status from employment to self-employed work. She asked for more information before making up her mind but before it was received, her manager wrote to confirm her move to self employed status and stated that the termination of her employment contract would become effective from a certain date. When she protested, he tried to retrieve the position and said that he had misunderstood the outcome of the negotiations.

Were these “special circumstances”? No, said the Court of Appeal. The essence of the special circumstances exception is that the person using the unambiguous words must be given the chance to “cool off” and say that he did not mean what was said, before the recipient acts on them. The exception does not simply provide an opportunity for a retraction or withdrawal of those words.


Sleeping on the Job
In Wray v JW Lees & Co, Ms Wray’s claim concerned the question of whether all the hours she was required to stay on the premises should be taken into account in assessing whether she had been paid the National Minimum Wage. She was a temporary pub manager who was provided with free accommodation and she was required to sleep in that accommodation every night as a security and preventative measure.

She claimed pay, at the minimum wage, for all the time she was on the premises - including when asleep. Her claim was dismissed. It came down to whether or not a worker is required to do any work during the time she sleeps on the premises. If not, those hours will not be treated as salaried hours. Even if she did have to call the emergency services had there been a fire or break-in, the degree of responsibility was minimal. It would be a different story if, for example, she were a night-sleeper in a residential care home or a hotel manager.

Questionable merit in watering down unfair dismissal rights

Questionable merit in watering down unfair dismissals rights

Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on the Chancellor of the Exchequer's expected announcement at the Conservative Party Conference on Monday that the Government will increase from one year to two years the qualifying period for gaining employment protection rights against unfair dismissal:

"While watering down unfair dismissal rights is seen as a way to boost recruitment and improve job prospects for young people and the long-term unemployed, the short-run impact will be limited by the overall weak state of the labour market while in the long-term any positive effect on hiring is likely to be offset by a corresponding increase in the rate of dismissals.

"The vast weight of evidence on the effects of employment protection legislation suggests that while less job protection encourages increased hiring during economic recoveries it also results in increased firing during downturns. The overall effect is thus simply to make employment less stable over the economic cycle, with little significant impact one way or the other on structural rates of employment or unemployment.

"There is no evidence that UK employment suffered significantly in the 1970s as a result of the introduction in 1975 of a six month qualifying period for rights against unfair dismissal or that there was any substantial benefit when the qualifying period was subsequently raised to two years in the 1980s before being lowered to one year in 1999.

"Moreover, while there is no available evidence of the effect of these changes in unfair dismissal rights on workplace productivity, there are prima facie reasons for expecting that the current one year qualifying period strikes an appropriate balance between enabling employers to make reasonable decisions on employee potential and giving employees a sufficient sense of job security to actively engage with the organisation they work for.

"Increasing the qualifying period for obtaining unfair dismissal rights thus runs the risk of reinforcing a hire and fire culture in UK workplaces which would be detrimental to fostering a culture of genuine engagement and trust between employers and their staff and potentially harmful to the long-run performance of the UK economy. Although the policy change will undoubtedly be welcomed by the de-regulation lobby, it isn't the way to boost growth and jobs.

"In addition, it is unlikely that raising the threshold from one to two years will have its intended effect of reducing the number of employment tribunal claims because employees are increasingly bringing claims linking unfair dismissal with discrimination claims which can be made from day one of employment. ONS figures suggest that an extra 12% of employees would potentially be denied the chance to claim unfair dismissal due to length of service as a result of the change - hardly likely to make much of a dent in overall tribunal numbers given that only a small proportion of these would make any claim."

ends

Notes to Editors
• John Philpott is available for interview
• The Chartered Institute of Personnel and Development (CIPD) is the world's largest Chartered HR and development professional body, setting global standards for best practice in HR. With over 135,000 members across 120 countries, the CIPD is focused on supporting and developing those responsible for the management and development of people within organisations


CIPD Press Enquiries
Robert Blevin / Katy Askew / Katie Breeze
Tel: 020 8612 6400
Email: press@cipd.co.uk

The dawn of The AWR!

Finally its the night before the big day!

Tomorrow the most significant piece of legislation ever to affect the recruitment profession and for hirers of temporary agency workers comes into effect: The Agency Workers Regulations 2010. It has been an exciting and sometimes challenging journey for us, which has taken us to all four corners of the UK preparing some of the countries largest employers and their recruitment providers for the changes ahead.  I have even had a quick trip to Westminster in between to give my views on The Regulations to Ministers and The Department of Business!

We have been inundated this week, with last minute questions and queries.  This is a massive change to how temps will be managed and delivered and it will take time to embed, and for confidence to be established as to the new changes and entitlements.

My top tips for next week are:

1. Communication - keep in close contact with your recruitment suppliers and clients 
2. Dialogue with your temps - reassure your temps as to their day one entitlements and the likely length of their assignment with you. Will it be expected to go past the 12 week qualifying period?
3. Be clear as to comparators - be able to demonstrate the comparator information
4. Internal Stakeholders - identify who and what feedback information needs to be relayed to your AWR decision making unit?

On a personal note, I would like to thank you all for your interest and support and for "Following Fiona" on the countdown to The AWR.  It continues to be a pleasure and a privilege to assist some of the best UK and global employers along with their recruiters. We look forward to providing on-going solutions and support for you in clear accessible language as implementation unfolds.

If you are unsure or need clarification on how to proceed next week, please do give me a call on:

0161 905 1219 or message me at fmckay@seminarsandsolutions.com  

Thanks again and good luck!

Fiona

Important feedback from yesterday's House of Commons AWR meeting

I had the pleasure yesterday of attending the House of Commons AWR meeting.  Hosted by Jim Dowd MP, we had the opportunity to ask MP's and Senior Civil Servants for clarification over the last minute panic that has ensued over whether the AWR will be coming into effect at all.

The answer was a clear YES!  The 1st October 2011 remains as the UK implementation date of the AWR. There is concern at BIS over the AWR, and it was acknowledged that there is a feeling of gold plating and still some disconnect over what the definition of a vulnerable and less favourably treated worker will be under the Regulations.  It was also confirmed that the clarification and determination of such will be left to the independent Judiciary - which ultimately means that case law will scope, test and define.

There is major concern both at BIS and Ministerial level that any AWR disputes must try to be resolved through Mediation. Employment Tribunal clarification should be sought as an absolute last resort.

Re-assurance was also given that it is a priority for UK MEP's along with BIS and lobbying groups that they will be working much smarter and harder to influence European decisions on new employment legislation and regulation.  This should reduce and or remove barriers to entry in the stimulation of our labour market.  It remains a priority for Government to allow and create new opportunities for the long term un-employed to return to the labour market either as an agency workers or as a fully employed. It is not the intention of the coalition Government to expunge agency workers and it is vital for our economy that we keep our labour market as flexible as possible.

Further meetings will continue pre and post implementation.

If you would like any further information, or would like to ask me any additional questions, please do give me a call on 0161 905 1219.

Fiona

UK workers oblivious to pensions reform in 2012

The auto-enrolment of workers into workplace pension schemes is the biggest reform to pensions for a century. The extent of the Government's communication challenge is highlighted by the Chartered Institute of Personnel and Development's (CIPD) Employee Outlook: Focus on Pay and Pensions survey, where over half (53%) of UK workers state that they are totally unaware of the reforms.

The survey reveals that the auto-enrolment pension reforms - which are due to come into effect in October 2012 - will have the greatest impact on the private and voluntary sectors, with 46% and 42% respectively stating awareness. Among the private sector, those working in the finance sector (57%), followed by construction (54%) and professional services (50%) are most aware of the reforms.

Awareness of the reforms increases with age, but percentages are still low. Among the 18-24 age group, just three in ten (31%) of private and voluntary sector workers are aware of the changes, increasing to two in five (40%) among the 25-34 age group. The employees most aware are those aged 55 and over (57%) and those between 45-54 years of age (45%). A similar pattern is found by level of seniority, with those in non-managerial roles being less aware than those in managerial roles.

Commenting on the research Charles Cotton, the CIPD adviser for performance and reward, said: "These findings suggest that both the Government and employers need to take a nuanced approach to communicating pension reforms to employees. With less than a year and a half to go, employee awareness is generally quite low.

"From our survey we can see the greatest challenge to communicating the reforms is among the young. A more targeted effort in communicating the changes to this group is needed to ensure they understand how the reforms will directly benefit them. The danger is that a cheap and cheerful one size-fits-all communication approach could end up costing the Government more in the long-term through a lower understanding and appreciation of retirement savings.

"Enrolling people into a workplace pension scheme is just one element of helping people pay for their retirement. We also believe that a move towards a non-means tested flat-rate pension would be beneficial to all, particularly as the removal of the default retirement age begins to take effect. Workers, employers and the Government all have an important part to play in the future of pensions."

Other findings include:
• Most workers (59%) are worried about paying for retirement
• Women (65%) are more anxious about where the money will come from to pay for their retirement than men (53%)
• Those working for the private and voluntary sectors in Wales (35%) and the North West (43%) are the least aware of the pension reforms.