This topical half-day conference will bring you up-to-date with the most recent changes to employment law and the subsequent issues that may affect your business. Key topics included: The rigours of recruitment Has the tide turned for TUPE? - TUPE update Negotiate to terminate – the new law on pre-termination negotiations

1. Michelmores Employment
Conference 2013
Woodwater House, Exeter

2. Timetable
• 9.30am –
• 10.00am –
• 10.45am –
• 11.00am –
• 12.00pm –
• 1.00pm -
The Rigours of Recruitment
Rachael Lloyd
TUPE Reforms – Old Dog New Tricks? –
Andrew Tobey
Coffee Break
Negotiate to Terminate
Tim Davies & Tom Stenner-Evans
12 Month Round Up
James Baker
Lunch

3. The Rigours of Recruitment
Rachael Lloyd, Solicitor
Woodwater House, Exeter

4. Recruitment – Get it Right!
• Risks are present as soon as you release your job
advert
• Don’t be a horror story!
• ‘Currys interview 'humiliation' as graduate made to
dance’

5. Pre-Employment
• Discrimination risks present even before the
employment relationship begins
– Job advert
– Application forms – personal and sensitive information
– Interviewing – what you can and can’t say

6. Offering the Job
• Feedback to unsuccessful candidates – what are the
risks?
• Offers
– Offer Letters – KEY TERMS
– Conditional offers – flexibility

7. Withdrawing Offers
• When can you withdraw an offer?
– Conditional offers
– Change of circumstances
– Falsified CVs?
• Take care with communication

8. Background Checks
•
•
•
•
•
•
Permission to work in the UK
Medical reports
Professional qualifications
DBS checks
Social media
Credit checks?

9. New Employment
•
•
•
•
Probationary periods
Claw-back of training fees?
Types of contract & contractual terms
Tailor the contract to the individual
–
–
–
–
Job description
Bonus/commission schemes
Restrictive covenants – past and present
Directorships

10. TUPE Reforms – Old Dog New Tricks?
Andrew Tobey, Partner, Head of
Employment
Woodwater House, Exeter

11. Looking at 4 Key Areas:
• Service provision changes – what’s changed/what
hasn’t/new case law
• Changing employee terms post-transfer
• Information and consultation obligations
• TUPE reforms – outcome of Government
consultation

12. TUPE Regulations 2006
• When is there a relevant transfer?
• Relevant transfer 1
– Transfer of a business
Regulation 3(1)(a)
‘a transfer of an undertaking, business or part of an
undertaking or business situated immediately before the
transfer in the United Kingdom to another person where
there is a transfer of an economic entity which retains its
identity’

13. Relevant transfer 2 – Service Provision Change
(SPC)
• Regulation 3(1)(b)
• 3 situations which qualify for an SPC are:– Original service contract outsourcing from client to
contractor (‘Outsourcing’)
– Transferring the service contract from one contractor to
another (‘Re-tendering’); and
– The transfer of a service contract back in-house (‘Insourcing’)

14. The Conditions for an SPC (1)
(a) Immediately before the service provision change –
(i)there is an organised grouping of employees
situated in Great Britain which has as its
principal purpose the carrying out of the
activities concerned on behalf of the client

15. The Conditions for an SPC (2)
(ii) the client intends that the activities will,
following the Service Provision Change, be
carried out by the transferee other than in
connection with a single specific event or task of
short-term duration; and
The activities concerned do not consist
wholly or mainly of the supply of goods for
the
client’s use

16. SPC Conditions – Problem Areas
•
Is there an organised grouping of employees
assigned to the contract?
• Employer needs to specifically assign employees to
client team
• Ability of employer to avoid SPC by non-assignment
• Can be single employee service provider
[Eddie Stobart v Moreman EAT 2012]
[Seawell v Ceva Freight Court of Session 2013]

17. Is there sufficient similarity between the old
and the new activity?
• Activity needs to be essentially the same before and
after the transfer – a question of fact and degree
• No SPC if there is a fundamental change in the
nature of the service provided
• Minor differences can be disregarded – a common
sense and pragmatic approach is required
[Johnson Controls v Campbell & Others EAT 2012]

18. Fragmentation of the Service Post-Transfer
• SPC can be avoided if similar activity service is
fragmented post-transfer between several providers
• Opportunity for client/contractor to prevent SPC
applying by fragmentation of service
• No SPC if there is a change of client identity on
transfer
[Hunter v McCarrick Court of Appeal 2013]

19. SPC Exceptions
• Doesn’t apply to short-term contracts or specific
event contracts [Liddells Coaches v Cook EAT 2012]
• When activities consist of the supply of goods for the
client’s own use [Pannu v George W King EAT 2012]

20. Government Reforms to SPC’s
• No scrapping of the SPC transfer concept to avoid
creating greater business uncertainty and litigation
• Activities pre/post-transfer must remain
‘fundamentally or essentially the same to qualify as
an SPC’
• Scope for avoidance by modifying service activity

21. Changing Employment Terms Post-Transfer
• What terms transfer under TUPE?
• All the transferors rights, powers, duties and liabilities in
connection with employees’ contracts of employment
transfer (Reg.4(2))
– Essentially all transferor’s employee liabilities transfer over other than
criminal liabilities
– Acts or omissions of the transferor are deemed to be acts/omissions
of the transferee
– Terms transfer as in force as at the date of transfer
– Need to obtain full disclosure of transferring employees
terms/thorough due diligence
– Reg.11 disclosure of basic employee information – don’t rely on this –
too little/too late!

22. Varying terms and conditions post transfer
• Any changes to transferring employee’s terms and
conditions that are by reason of/connected with the
transfer are void unless change is due to an ETO
reason
• If an ETO reason applies you still have to agree the
change in the normal way

23. ETO reasons for changing terms
• ETO = economic, technical or organisational change
which entails changes in the workforce
• Changes must affect the numbers or functions of the
workforce
• Transferor can’t make use of transferee’s ETO
business reasons

24. Varying terms and conditions post transfer
• How do you disconnect change from transfer?
– Leave sufficient period of time between transfer and
change
– Dismiss and re-engage
– Link to a non-transfer related reason

25. Pre and post-Transfer proposed changes to
terms and conditions
• Can allow transferring employee to resign and claim
automatic unfair dismissal if substantial change is
materially detrimental (Reg.4(9) /claim constructive
dismissal if proposed change constitutes a
fundamental breach (Reg. 4(11)
[Tapere v South London and Maudsley NHS Trust EAT 2009]
[Abellio London Ltd v Musse EAT 2012]

26. What does not constitute an ETO reason for
a post-transfer change in terms?
• Harmonisation of transferring employees’ terms with
transferees existing terms
• Relocation of employees workplace (if no change in
overall workforce numbers or functions)
• Making a business more attractive to a purchaser by
dismissing staff pre-transfer

27. New TUPE Reforms re: changes to terms
and conditions
• Relocation of employee’s workplace will be an ETO reason i.e.
a valid change if agreed and not an automatic unfair dismissal
• Terms and conditions inherited under collective agreements
can be re-negotiated after 1 year post-transfer provided
change is not any less favourable to employee – follows ruling
in Alemo-Herron v Parkwood Leisure ECJ 2013
• Transfer related contract changes will only be void if they are
by reason of the transfer itself, and not a reason connected
with the transfer

28. The Alemo-Herron Decision – ECJ 2013
• Courts must apply ‘static’ not ‘dynamic’ approach to
collective agreements i.e. transferring employee
terms are frozen at transfer date and transferee not
bound by changes made post-transfer under
collective agreements to which they are not a party
• A significant change in approach to the application of
TUPE/ARD

29. Pre transfer information and consultation
• Reg.13
– Imposes duty on transferor and transferee to provide
information about the transfer and its implications and
consult with appropriate reps of all ‘affected employees’
– Who are ‘affected employees? Not just the transferring
employees
– Timing of consultation
– Election of representatives (consequences of non-election)
– Additional duty to consult if ‘measures’ are contemplated
– Provision of information by transferee to transferor to
permit consultation re: measures

30. Practical tips on information and
consultation obligations
• Don’t leave until the last minute
• Leave plenty of time for election process
• Be aware of the costs of failing to comply!

31. Penalties for failure to inform and consult
• Who can bring a claim?
• The ‘special circumstances’ defence, if not ‘reasonably
practicable’ for employer to comply – construed
narrowly/don’t rely on it
• Maximum of 13 weeks gross pay per affected employee
(uncapped) – penal not compensatory award
[Todd v Strain & Others EAT 2010] (Failure to inform re: changes
to salary payment dates by transferee)
[Shields Automotive v Langdon EAT 2012] (Protective award
reduced from 7 to 3 weeks)

32. New changes to information and
consultation obligations
• Transferor’s liability to provide employee
information to transferee/ will be 28 days before
transfer, not 14 (still inadequate)
• Micro-businesses (10 or less employees) can consult
directly with their employees if no recognised union
or existing representative group

33. Further changes in the pipeline?
• Re-balancing of TUPE towards the interests of new
employer’s business?
• An ability to harmonise terms post-transfer?
• Further micro opt outs?
• Further reduction of ‘gold plating’?
• New regs. before Parliament in December 2013.

34. Pre-Termination Negotiations
Tim Davies, Partner
Tom Stenner-Evans, Solicitor
Woodwater House, Exeter

35. Davies & Partners
Stationers
“Moving forward - never
stationary”

36. Without Prejudice
‘The rule applies to exclude all negotiations
genuinely aimed at settlement, whether oral
or in writing, from being given in evidence.’
Rush & Tompkins v GLC [1989] AC 1280

37. Without Prejudice – Limitations
• There must be an existing dispute
‘I do not consider that the act of raising a
grievance by itself means that parties to an
employment relationship are necessarily in
dispute.’
BNP Paribas v Mezzotero [2004] IRLR UKEAT 218

38. Pre-Termination Negotiations (PTNs)
• New section 111A ERA,
inserted by section 14
of the Enterprise and
Regulatory Reform Act 2013
• Effective from 29 July 2013

39. PTNs - Definition
‘…any offer made or discussions held, before
the termination of the employment, with a
view to it being terminated on terms agreed
between the employer and the employee’

40. PTNs - The Rule
Pre-termination negotiations are inadmissible
in any subsequent claim for unfair dismissal

41. PTNs - The Limitations
• Only applies to ‘ordinary’ unfair dismissal claims
(breach of contract, discrimination & whistleblowing
claims are not protected)
• Query hybrid claims?
• Tribunal may dis-apply the rule where there has
been ‘improper behaviour’

42. Davies & Partners
Stationers
Pre-Termination Negotiation
Take
1

43. Dear T
o
Comm
e
xxxxxx
x
Davie
s&P
“Mov
artne
rs Sta
ing fo
rwar
tione
rs
d - ne
ver st
ation
ary”
m,
nceme
nt of P
xxxxx x
x requ
on 21
Novem
b
The iss
u
erform
a
n ce M
anage
ired to
attend
er 201
a form
3.
al
ment
pe r f o r
m a n ce
7 Nove
mber 2
013
es to b
xxxxxx
manag
e addr
xxxxxx
ement
essed
xxxx xx
xxxxxx
meetin
xxxxxx
at the
xxxxxx
xxxxxx
xx x
meetin
g
xxxxxx
g are x
xxxxxx
x
xxxxxx
xxxxxx
xxxxxx xxxxxxxxxxxx
xxxxxx
xxxxxx
xxxx x
xxxxxx xxxxxxxxxx
xxxxxx
right t
xxx xxx
xxxxxx
o be a
xxxxxx
xxxxxx
ccomp
xxxxxx
xxxxxx
xxxxxx
anied
xxxxx x
x
x xxx.
xxxxxx
xxxxxx
xxxxxx
xxxxxx
xxxx

44. Davies & Partners
Stationers
Pre-Termination Negotiation
Take
2

45. Settlement Offer - Considerations
•
•
•
•
Salary: £48,000 pa
Benefits: Company car and BUPA
Notice: 3 months
Strength of my position:
–
–
–
–
How strong are the performance grounds?
What claims might TSE bring if we dismiss him?
What is the chance those claims would succeed?
How much compensation might he recover from ET?

46. Settlement Offer – Considerations (2)
• What else might it cost us if we dismiss?
– Legal fees
– Management time lost in dealing with the claim(s)
• Wider commercial benefit in removing him?
– Improved staff morale
– Improved productivity

47. Heads of Terms
• Termination Date
• Arrangements until termination (e.g. garden leave,
specific projects)
• Notice arrangements
• Benefits e.g. holiday pay, company car, medical
cover
• Pension
• Termination Payment - tax treatment

48. Heads of Terms
• Reference
• Public announcement to staff/customers
• Confidentiality & derogatory comments
• Restrictive covenants
• Legal fees
• Deadline for acceptance/completion

49. STRICT
LY PRI
VATE A
TSE : P
ND CO
ropose
NFIDE
Witho
d Term
NTIAL
ut Pre
s o f Se
judice
veranc
and Su
e
•Term
bject t
ination
o Cont
dat e : 3
•Gard
ract
0 Nove
en lea
m
v
be r 2 0
e u n t il
•All ho
13
then, a
liday t
ssistin
o be u
g w it h
•3 mo
sed up
hando
nths’ p
before
ver du
ay in li
termin
•1 mo
ties as
eu of n
nt h’ s p
ation d
requir
otice ay , t ax
at e
ed
taxabl
•Favo
free
e
u r a b le
refere
•Restr
n ce – w
ictive c
ording
ovena
to be a
•£350
nts to
greed
+ vat t
remain
oward
in forc
•Dead
s legal
e
line fo
fees
r comp
letion
for agr
eemen
t….

50. ACAS Code of Practice
• Key requirements and best practice
• No direct penalty for failure to follow the Code
• Right to be accompanied?
• Reasonable period to consider an offer: 10 days
• ‘Improper behaviour’

51. Improper Behaviour
• Not defined in the legislation
• ACAS Code:
– harassment, bullying and intimidation, including offensive
words or aggressive behaviour
– physical assault or the threat of physical assault & other
criminal behaviour
– all forms of discrimination and victimisation

52. Improper Behaviour (2)
• Undue pressure:
– not giving reasonable time for consideration of the
proposal
– saying that, if the settlement is rejected, the employee will
be dismissed
– an employee threatening to undermine an organisation's
public reputation (unless PIDA applies).

53. Performance Review Meeting

55. Disclosure Obligations
• All documents relevant to an issue in the claim
– Includes harmful documents!
• Reasonable search required
– Includes emails, recordings, social media posts
• Be wary of internal emails / statements – must be
disclosed even if marked as ‘private and confidential’
– ‘necessary for the fair disposal of proceedings’
Nasse v The Science Research Council; Vyva v Leyland Cars
[1979]

56. Privilege
• Privilege entitles a party to withhold evidence from
production to a third party or the court. This
evidence may be either written or oral.
• Once privilege has been established, an absolute
right to withhold the document in question arises.
• Two key forms of privilege
– Legal advice privilege
– Litigation privilege

57. Legal Advice Privilege
• Applies to:
– confidential communications
– which pass between a client and his lawyer; and
– which have come into existence for the purpose of giving
or receiving legal advice about what should prudently and
sensibly be done in the relevant legal context.
Three Rivers District Council & Ors v The Bank of England [2004]
• Exercise caution when distributing advice internally
• Only applies to lawyers!

58. Litigation Privilege
• Four rules to satisfy 1. material must be confidential
2. it must be a communication between a lawyer (acting in a
professional capacity) and his client, or between either the
lawyer (acting in a professional capacity) or the client and a
third party, or be a document created by or on behalf of the
client or his lawyer
3. it must be made for the dominant purpose of litigation; and
4. litigation must be pending, reasonably contemplated or
existing.
• More than a mere possibility, but not necessarily greater than
50%.

60. OPTIONS
• Option 1 – stand your ground (4 months’ pay &
benefits)
• Option 2 – propose a further counter offer (5
months’ pay and benefits)
• Option 3 – agree Tom’s offer (6 months’ pay and
benefits).

61. The Annual ‘12 Month Round-Up’
James Baker - Associate
7 November 2013
Woodwater House, Exeter

62. Key Changes to Employment Law
1.
2.
3.
4.
5.
6.
7.
ET Fees and New ET Rules
UD Compensation Cap / Employer Penalties
New ‘Day One’ Right: Political Opinion/Affiliation
Whistleblowing Changes
General Case Law Update
A look ahead to 2014/15
Look at what you could be doing!

63. 1. ET Fees
•
•
•
•
£250 (plus £950, Hearing Fee)
£160 (plus £320 Hearing Fee) for ‘Level 1’ cases
Judicial Mediation - £600
Remission (if on benefits and disposable income less
than £50 p/w)
• Fee recovery - in ET discretion
• UNISON challenge

64. 1. New ET Rules
• Simplified process
• More case management
powers to Judges
• Initial sift of ET1/ET3
• Early ‘Preliminary Hearing’
• Judges sitting alone: no wing
members.

65. 2. UD Compensation Cap / Penalties
• Maximum one years’ pay (if less than £74,200)
(NB: Only where EDT is after 29 July 2013)
• Power to further reduce, to lower of the above or
national annual median wage (currently £28,000)
• From April 2014 - £100 - £5,000
• Penalty for aggravating features
• Payable to Exchequer
• Half discount if paid within 21 days.

66. 3. New ‘Day One Right’
• UD protection from Day
One where:
– The dismissal relates to
employees
political
opinion or affiliation
– Change
required
following EU ruling in BNP
Redfearn case
– Effective 25th June 2013.

67. 4. Whistleblowing Changes
• Must now be in ‘public interest’
• But ‘good faith’ requirement removed
• Reduced compensation (up to 25%)
if not bona fide
• VL for employers whose staff
victimise WBs.

68. 4. Whistleblowing Changes
• Public Interest
‘Indeed, although our aim is to prevent the
opportunistic use of breaches of an individual's
contract that are of a personal nature, there are also
likely to be instances where a worker should be able
to rely on breaches of his own contract where those
engage wider public interest issues. In other words,
in a worker's complaint about a breach of their
contract, the breach in itself might have wider public
interest implications.’ [Hansard, 3 July 2012]

69. 4. Whistleblowing Changes
• Must now be in ‘public interest’
• But ‘good faith’ requirement removed
• Reduced compensation (up to 25%)
if not bona fide
• VL for employers whose staff
victimise WBs.

70. 4. Public Concern at Work’s Recent Report
• Typical whistle-blower:
–
–
–
–
–
–
skilled worker/professional: less than two years service
60% of WBs receive no response
63% blow the whistle at least twice
most likely response – disciplinary
15% are dismissed!
Those who raise a concern with a Regulator generally have
better outcomes.

71. 4. Whistleblowing Changes Cont/...
• Consulting on further changes;
• E.g. paid incentive to WB (as in US finance sector);
‘…BIS, the Ministry of Justice and the Home Office will consider the case
for incentivising whistle blowing, including the provision of financial
incentives to support whistle blowing in cases of fraud, bribery and
corruption. As part of this work we will examine what lessons can be
drawn from the successful ‘Qui Tam’ provisions in the US where
individuals who whistle-blow and work with prosecutors and law
enforcement can receive a share of financial penalties levied against a
company guilty of fraud against the government bribery or corruption in
DFID-funded developing countries…’

72. 4. Whistleblowing Changes Cont/...
• Mandatory referrals from Employment Tribunals to
Regulators
• Legislation to avoid ‘black-listing’ of whistle-blowers
– NB Ohyango v Berkely Solicitors [2013] IRLR 338
• Solicitor resigned and complained about BS to Legal Services
Commission
• BS responded by making a complaint of forgery and dishonesty to
the Solicitors Regulation Authority
• Held that notwithstanding the complaints to the LSC and the SRA
were made after the termination of employment, O had still been
subjected to a detriment as a result of having made a protected
disclosure.

73. 5. General Update - Employee Shareholders
• Growth and Infrastructure Act – from 1st Sept 2013
• 3rd type of employment status
• £2,000 shares for waiver of UD, SRP, flexible working
and other employment rights
• Requires legal advice
• Plus 7 day cooling off period
• Much criticised – limited take up?

74. 5. General Update – Case Law
• Disciplinary & Dismissal Related Cases
– Brito v Ealing Hospital [UKEAT/0385/12]
• Consider all available sanctions even in cases of Gross Misconduct.
– Wright v North Ayrshire Council [UKEAT/0017/13]
• Consider all causes of a resignation in a CUD claim
• Don’t make assumptions about the likely cause of a resignation.
– SoS for Justice v Hibbert [UKEAT/0289/13]
• Employee wrote letter of resingation: ‘I have no alternative but to
resign my position’
• Words held not to be ambiguous and employer could rely on
resignation.

75. 5. General Update – Case Law
• Discrimination Related Cases
– Whitham v Capita Insurance
• Provision of benefits must not be restricted for cost reasons alone.
– Croft Vets v Butcher [EAT 0420/12]
• Where medical treatment is recommended by a medical expert
and relate to the employee’s ability to return to work, then the
employer may be required to pay for the treatment as part of
making ‘reasonable adjustments’.
– CD v ST [Case C 167/12] c.f. Z v A Government Dept
• In surrogacy situations both ‘mothers’ are entitled to compulsory
maternity leave, with remaining rights to be divided – Advocate
General’s Opinion only!

76. 5. General Update – Case Law
• Other Cases of Interest
– Neal v Freightliner Ltd [1315342/12]
• Holiday pay must be calculated on normal earnings, not basic pay.
Therefore include overtime and shift premiums etc.
– Coppage v Safety Net Services [2013 EWCA Civ 1176]
• Non-Solicitation restrictive covenant for a 6 month period was
appropriate for the ‘face of the business’.
– Little v Richmond Pharmacology Ltd [UKEAT 490/12]
• Indirect discrimination can be cured ‘on appeal’;
• Attempt to deal with expeditiously and before key changes may
be made (e.g. before return to work on application to work
flexibly).

77. 6. In the Pipeline ...
• ACAS Early Conciliation
–
–
–
–
Due to commence (06/04/14)
Clock stops for up to 1 month
Conciliation not compulsory
Satellite litigation (on time limits) likely.
• TUPE Changes
– Modify what amounts to a ‘Service Provision Change’, to
apply only where services are essentially the same
– ELI to be provided 28 days before the transfer.

78. 6. In the Pipeline ...
Cont/...
• TUPE Changes
– Collective Agreements – changes will apply for one year
post transfer;
– Change of location will be within the ETO Defence
– Consultation by transferee in respect of redundancy
consultation can count toward post-termination
redundancies.
• Redundancy Consultation Changes
– Consultation period already reduced from 90 to 45 days
for employers with over 100 employees;

79. 6. In the Pipeline Cont/...
• Likely review of zero hours contracts (2014)
– Likely legislation to curb abuses (e.g. exclusive contracts),
where precluded from working for a third party?
• Consultation with regard to flexible working (2014)
– Right to request extended to all workers?
– Removal of statutory right to request procedure?
• Flexible Parental Leave (2015)
– After initial 2 weeks leave months and fathers can share
maternity leave entitlement and will be known as ‘flexible
parental leave’.

80. 6. In the Pipeline Cont/...
• Extension of Unpaid Parental Leave (2015)
– To a parent with a child under the age of 18 years
• Surrogate Parents (2015)
– Will be eligible for adoption leave
• School Leaving Age to rise to 17 (2015)
– To 18 in 2016.

81. 7. Food for thought …

82. … HR ‘Light Bites’
A new quarterly lunchtime meeting for individuals
entering the world of Human Resources for the first
time …
Led by Bethan and
Rachael the first
meeting in January
will be a practical
overview of
employment law 24 Jan 2014