BarrCo Employment Law Bulletin May 2010
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  • 1. - EMPLOYMENT BULLETIN MAY 2010 CONTENTS: • Sex discrimination: dismissal not pregnancy based; • Age discrimination: retirement age of 48 not justified; • Default retirement age • Dismissal: previous incident can be taken into account; • Businesses report increase in whistleblowing measures; • Drinking on duty: clear policies needed; • TUPE: exemption applies where company was in liquidation; • Disciplinary hearing: right to legal representation; • Age discrimination: £180,000 compensation awarded; • Dismissal: “could be dismissed” not actual dismissal; • Dismissal: adequate investigation required; • Disability: not for an employer to assert a disability; • Constructive dismissal: claims successful after years of unwanted conduct; • National identity cards to be scrapped; • Discipline: discretion to postpone disciplinary proceedings pending police investigation; • Vicarious liability: liability for wrongful acts of employees; • Parental leave: carrying forward of holidays; • Changing bonus schemes; Margaret-Anne Trench – Solicitor 20 Green Lane, Lower Kingswood, Surrey, KT20 6TB T: 01737 833850 M: 07900 490070 Regulated by the Solicitors Regulation Authority (SRA No: 469453) Member of the Employment Lawyers Association VAT registration number: 941 1724 41 www.barrco.org.uk
  • 2. Sex discrimination: dismissal not pregnancy based A solicitor has lost her claim for unfair dismissal and sex discrimination on the grounds of her pregnancy, based on allegations that there was an “old boys club” culture at the firm, and there had been an instance of sexual harassment where she was slapped on the bottom by a senior managing partner. The tribunal dismissed her claims on the basis that the documents they were shown made it abundantly clear that the writing had been on the wall for her at a much earlier stage – well before she had made her disclosure. In relation to the alleged instance of sexual harassment, it had been noted that she had laughed it off at the time. The case is a clear reminder to employers that when they are not happy with an employee’s performance or conduct they should start a documentary trail at the earliest possible opportunity in order to justify the true reasons for a dismissal in the event that matters reached that stage. Age discrimination: retirement age of 48 not justified An employment tribunal has decided that a retirement age of 48 for football assistant referees was direct age discrimination that could not be justified as a proportionate means of achieving the legitimate aim of creating career progression opportunities. There were no alternative means of achieving the employer’s aim that were less discriminatory, and the employer was not able to explain why it applied a retirement age of 48 rather than any other age. This case highlights the difficulties in justifying retirement below the current national retirement default age of 65. Default retirement age The Conservative and Liberal Democrat Coalition Agreement provided some clues as to the future development of employment law under the new Government. One of the key areas affecting employment law is the current default retirement age of 65. In their manifestos, the Conservatives promised to review how to abolish the default retirement age, while the Liberal Democrats wanted to see it scrapped. Given this shared objective, it comes as no surprise that the Agreement records that the default retirement age will be phased out. However, it is silent as to any timetable for change and it is expected that such timing will be hotly contested. The Agreement also outlines the impact on public sector employment through the proposed deficit reduction, together with bringing forward detailed proposals for both manifesto commitments to restricting banker’s bonuses. Dismissal: previous incident can be taken into account The EAT has held that when deciding whether to dismiss for gross misconduct, an employer was entitled to take into account a previous similar incident for which no formal warning had been given. The employee was an administrator in a school for children with social and emotional difficulties and in May 2007 had been verbally told not to intervene when teaching staff were restraining a difficult child. No further formal discussion or disciplinary action took place regarding the incident but there was a similar incident some months later which resulted in her dismissal for gross misconduct. In reaching its decision to dismiss, the school took into account that because of what had been said to her at the incident in May, the employee knew that she was not to interfere when the October incident occurred. The EAT held that the first incident was part of the relevant background to the later incident for which the employee was dismissed. This reminds employers that all relevant circumstances to an incident should be taken into account when considering whether to dismiss. However, note that such incidents must relate to a similar type of conduct and that incidents for which Margaret-Anne Trench – Solicitor 20 Green Lane, Lower Kingswood, Surrey, KT20 6TB T: 01737 833850 M: 07900 490070 Regulated by the Solicitors Regulation Authority (SRA No: 469453) Member of the Employment Lawyers Association VAT registration number: 941 1724 41 www.barrco.org.uk
  • 3. a warning has already been issued cannot be redetermined, although where a warning has previously been given, this can of course be taken into account. Businesses report increase in whistleblowing measures The latest International Business Report survey from Ground Thompson UK LLP has found that over half of UK businesses are now equipped with measures enabling whilstleblowers to report suspect activities in their workplace. The survey found that 54% of the 500 privately owned businesses it questioned had implemented hotlines, a 35% increase from last year. In addition, the survey found that 49% of the businesses questioned employ specialist fraud detectors, a 12% increased from the previous year. Drinking on duty: clear policies needed The importance of clear policies has been illustrated by a case involving a shandy drinking caretaker. The employee had been employed for nearly three years by a company which owned and managed student accommodation. One afternoon he decided to spend his break in the nearest local hostilitary, where he ordered himself a lager shandy. This led to disciplinary proceedings against him which culminated in a letter stating “you consumed alcohol during work time and unfortunately that is deemed as an act of gross misconduct, so I am sorry to say that we are going to have to say goodbye to you”. The tribunal held that the employee was unaware that he was in breach of the company’s policy by consuming alcohol at a break time and that the company’s policy on alcohol was “unclear and confusing”. The employee was awarded almost £13,000 in compensation providing a stark reminder to employers of the importance of having clear policies in place. TUPE: exemption applies where company was in liquidation Even where a company opted (under pressure from a prospective buyer) to go into liquidation, specifically to avoid the TUPE regulations, nonetheless this was not a sham, or improper, provided the aim was to liquidate that company’s assets. Administration “rather than liquidation,” if being conducted with that aim, will also fall within the definition of “analogous insolvency proceedings” where the TUPE exemption will apply. Disciplinary hearing: right to legal representation Case law has determined that an individual employed by a public body has the right to be legally represented at a disciplinary hearing where their employability in their profession is at stake. In a recent case an individual working for a private body failed to obtain a declaration that she may be permitted legal representation at her disciplinary hearing because the matter was essentially a private law employment case with a standalone disciplinary issue as to whether she had breached the terms of her employment. As a result, she was not entitled to have legal representation but in accordance with the ACAS code was entitled to bring a trade union representative or a fellow colleague, unless the employer agreed otherwise. Age discrimination: £180,000 compensation awarded An NHS manager has been awarded damages in respect of her successful age discrimination and victimisation claims while working for Leeds teaching hospitals NHS trust. She was awarded £29,500 for injury to feelings (compensation for the age discrimination element), £5,000 aggravated damages (for the high handed, insulting and malicious way the Margaret-Anne Trench – Solicitor 20 Green Lane, Lower Kingswood, Surrey, KT20 6TB T: 01737 833850 M: 07900 490070 Regulated by the Solicitors Regulation Authority (SRA No: 469453) Member of the Employment Lawyers Association VAT registration number: 941 1724 41 www.barrco.org.uk
  • 4. Trust had dealt with her when she pursued her grievances about age discrimination and for the conduct of the tribunal proceedings) and a further £147,000 for loss of income and pension. The case highlights the size of compensation that can be awarded in age discrimination cases, particularly where employees can provide evidence of their reduced prospects in obtaining future employment because of their age. Dismissal: “could be dismissed” not actual dismissal Under the Employment Rights Act, an employee is dismissed if their contract is terminated by their employer. In a recent case the EAT ruled that when an employee was sent off site (at the clients request) and was then considered (unsuccessfully) for alternative roles within the company, and was not being paid in the meantime (it being an accepted common concept in the security industry that no work means no pay), he had not been dismissed. There was no effective date of termination – all that had happened was that he was warned that he could be dismissed if no alternative roles could be found for him within the company. On a separate note, however the EAT was concerned that the employee was alleging a repudiatory breach by the employer. It was noted that removal from site, stopping pay and the alleged harassment and discrimination on the grounds of race, were capable to amount to a breach of the implied term of trust and confidence but this had not been an argument that had been put forward by the employee at the tribunal. Dismissal: adequate investigation required When assessing the reasonableness of an investigation into misconduct with serious consequences for an employee, the Court of Appeal has approved established principles that the employment tribunal should take into account the gravities of the consequences on the employee, where these are serious, the investigator must be “even handed” in looking for evidence in the accused favour as well as evidence against them. An employer faced with a conflict of evidence does not always have to decide that it “believes” one person and not another. It could decide that the difference is merely one of perception, and that both parties are telling the truth as they see it. Alternatively, it could decide that the conflict cannot be resolved, in which case the accused employee must be given the benefit of the doubt. The case concerned a nurse from the Philippines, whose dismissal had serious consequences for her on the basis that the matter was reported to the police (although she was acquitted) but she was also lost her right to remain the UK. The allegations against her were that she had abused a patient in a number of ways, but the investigation was found to be inadequate and her dismissal therefore unfair. Of particular concern, the investigator had not made any notes of the interview with a witness and colleague, but had preferred their evidence on the basis that they felt she was more convincing than the employee and had no reason to lie. It was also noted that they had not in any way thought to question the reliability of her evidence, some elements of which the tribunal found should have warranted further enquiry before the dismissal (for example she had stated that the claimant had looked through a window to see if she was being observed, whereas the investigating manager admitted at the tribunal hearing that this would not have been possible because the blinds would have been closed). The case is a reminder to employers that an adequate investigation into gross misconduct is essential, particularly where there are likely to be serious consequences for the employee. Disability: not for an employer to assert a disability Margaret-Anne Trench – Solicitor 20 Green Lane, Lower Kingswood, Surrey, KT20 6TB T: 01737 833850 M: 07900 490070 Regulated by the Solicitors Regulation Authority (SRA No: 469453) Member of the Employment Lawyers Association VAT registration number: 941 1724 41 www.barrco.org.uk
  • 5. After an employee had lost the sight in one eye, her manager had referred to her “disability” and changed her duties. This was despite the fact that the employee did not consider herself to be disabled and no medical evidence had been obtained or considered to support the employer’s conclusion. In changing her duties, the employee considered this to be a detriment and resigned, claiming constructive dismissal and disability discrimination, both of which were successful. The employee’s concession that she was not disabled had been made in a clear and detailed way on several occasions and was an informed decision as she had previously been advised by both a solicitor and the CAB. However, note that direct discrimination and harassment based upon a person’s perception of another’s disability will be covered if/when the Equality Act 2010 comes into force this October. Constructive dismissal: claims successful after years of unwanted conduct It is well established law that to bring a claim for constructive dismissal there has been unacceptable conduct by the employer, which breaches the implied contractual term of trust and confidence, which is so serious that it goes to the root of the contract, entitling the employee to resign with immediate effect and claim constructive dismissal. One of the striking features of a recent case was the considerable length of time (between one and five years) that the employees had put up with the “intolerable” conduct before resigning. However, the fact that the employees had put up with the conduct and even initiated talk of a sexual nature as a copying strategy to the sexual harassment they had been subjected to, did not mean the conduct was not “unwanted” and their claims for sexual harassment and constructive dismissal were successful following years of this unwanted conduct. The case reminds employers of their obligation to address without delays complaints received by employees with a view to knocking them on the head and resolving the situation at the earliest opportunity. National identity cards to be scrapped The Government introduced the identity documents bill on 26 May 2010. The bill makes provision for the cancellation of the UK national identity card, the identification card for EU nationals and the destruction of the national identity register. However, the identity card for foreign nationals (biometric resident’s permits) is to be retained. Discipline: employer’s discretion to postpone disciplinary proceedings pending police investigation A recent case has shown that an employer has a wide discretion as to whether to postpone internal disciplinary proceedings when there is an ongoing police investigation into the same allegations. The case concerned a prison officer who was accused of orchestrating violence among prisoners and planting drugs on them. The internal investigation was started in April 2006 but the employee was not dismissed until over a year later. He claimed unfair dismissal and initially won, essentially because the tribunal considered that the delay in dismissing him was “lengthy and unacceptable”. However, the Prison Service won on appeal on the basis that the EAT considered that a decision maker forming a view on whether disciplinary proceedings should be continued alongside a criminal investigation has a wide discretion. Vicarious liability: liability for wrongful acts of employees Margaret-Anne Trench – Solicitor 20 Green Lane, Lower Kingswood, Surrey, KT20 6TB T: 01737 833850 M: 07900 490070 Regulated by the Solicitors Regulation Authority (SRA No: 469453) Member of the Employment Lawyers Association VAT registration number: 941 1724 41 www.barrco.org.uk
  • 6. Until the late 1990’s the basic test for deciding whether an employer should be held liable for the wrongful act of an employee was to consider whether the employee had used an unauthorised method to do a job he was authorised to do (in which case the employer would be vicariously liable) or whether the employee was simply doing something which was unauthorised (in which case the employer would not be vicariously liable). In 2001 the House of Lords ruled that the correct test was to concentrate on the connection between the nature of the employment and the particular wrong and to ask whether, looking at the matter in the round, it was just and equitable for the employer to be liable. Following this ruling, in recent years the tendency has been towards more liberal protection of the parties. However, a recent Scottish case has shown that in spite of this tendency there are limits. The court held that the employer was not liable for a wrongful act of the employee even though it was done in the workplace, during working hours, because it was “an unrelated and independent venture of the employees own: a personal matter, rather than a matter connected with his authorised duties). The case involved a female worker who was grabbed by the hair by a male colleague and was injured when her head was pulled right back. However, based on the above comments of the court, she lost her claim and her appeal too. Parental leave: carrying forward of holidays Last months bulletin reported on a European decision which held that workers moving from full-time to part-time work should not suffer a reduction in their right to be paid their full annual leave that had accumulated before they changed to part-time status. A further European decision has now also suggested that UK workers on parental leave at the end of the holiday year should be able to carry over the untaken holiday entitlement that they accrued before their parental leave started, if they do not have sufficient time to take it before the end of the employers current holiday year. Changing bonus schemes Employers who attempt to dress up what is intended to be a purely discretionary bonus in the language of entitlement are likely to be caught out, as the reservation of discretion must be absolutely clear. A bonus scheme set out a formula applicable to a 2008 bonus, but went on to reserve the right to change the formula linked bonus arrangement at any time. The Court of Appeal ruled that this wording simply allowed the employer to use a different formula in future years, not to change the formula set for 2008. The employer had also sought to change the employee’s terms and conditions, including removing the bonus, and had asked the employee to sign to indicate his acceptance. Because the change had no immediate impact on the employee and the employee had not signed as requested there was nothing to suggest that his continued work amounted to a deemed acceptance. This highlights the importance of following up a response from the employee where they have been asked to agree changes to terms. Disclaimer: the information contained in this Bulletin is only intended as summary guidance. No liability is taken for reliance upon it, without seeking further assistance and advice. Margaret-Anne Trench – Solicitor 20 Green Lane, Lower Kingswood, Surrey, KT20 6TB T: 01737 833850 M: 07900 490070 Regulated by the Solicitors Regulation Authority (SRA No: 469453) Member of the Employment Lawyers Association VAT registration number: 941 1724 41 www.barrco.org.uk