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This is a very interesting claim and I find it fascinating mainly because of the fortitude it must take to bring a claim when refused a job and you suspect foul play. 

 

The Claimant applied for employment with a charity but was unsuccessful. She claimed that her non-appointment was the result of discrimination and victimisation due to her previous discrimination claim against the charity.

The Claimant brought proceedings against the charity and Hackney council for race and sex discrimination and also raised a claim of victimisation.  Hackney were a party to the action because it was the council that funded the charity.  In addition to the council, the Claimant named specific employees of the council and some of the charity and even committee members as Respondents in the proceedings.

The Tribunal upheld the Claimant's complaint of victimisation.  To that end the Tribunal determined that the Respondents were jointly and severally liable to pay the Claimant £421,415. The Tribunal did however single out one employee of the council who was awarded to pay £1,250 for injury to feelings alone and was not liable jointly and severally for the £421,415.

The Employment Appeals Tribunal ("EAT") dismissed the council's appeal against the Tribunal's decision that the award be joint and several.   The EAT held that compensation for loss caused by unlawful discrimination should follow the ordinary principles of the law of tort. As such, where an employer and employee are jointly liable for the loss caused - each is liable for the entire award of compensation and it is not necessary to apportion liability as between the discriminators.

 

This should be a loud warning for companies regarding discrimination.  Police your employees and make sure there are strict policies detailing the consequences of discrimination. 

Business is a Combination of War and Sport

 Most employers will have heard of 'TUPE' (The Transfer of Undertakings (Protection of Employment) Regulations 2006) some may even have had the dubious pleasure of using them.  Recently a case has been decided on the parameters of this legislation and what can and cannot occur with regard to a "pre-pack" TUPE Transfer.

 

"Pre-pack" arrangements involve agreeing the sale of a business before entering it into administration. This allows the insolvency practitioner to effect a quick sale and give the best deal to creditors, and enables the buyer to wipe off certain debts and ditch unprofitable parts while the rest of the business continues to trade.

But where does this leave TUPE? TUPE protect employees when a business changes hands by automatically transferring their contracts, and any associated liabilities, to the new company.  However, where insolvency proceedings are 'non-terminable' - where the business continues as a going concern, as in a "pre-pack" - employees' contracts do transfer, but there is greater scope for the employer to vary contracts than in a non-insolvency transfer.

But enough of the theory.

 

The Employment Appeals Tribunal ("EAT") has handed down its decision in Pressure Coolers v Molloy which indicates that on a proper construction of Regulation 8 (1)-(6) of TUPE, it was the transferee, not the Secretary of State, who was liable to pay an employee's basic award and notice pay following his unfair dismissal by the transferee after a "pre-pack" TUPE transfer. Intrigued?

The claimant was a bench fitter employed by Maestro International Limited. Maestro went into "pre-pack" administration for the purposes of allowing Pressure Coolers to acquire its business. The claimant was dismissed shortly after the transfer.

First, the purpose of the administration was not to liquidate the transferor's assets, but to sell its business as a going concern. Regulation 8(7) of TUPE (which is the regulation that disapplies the TUPE Regulations if the purpose of the administration were for the liquidation of assets) therefore did not apply.

Next, the transferee sought to rely on TUPE, Regulation 8 (1)-(6), which states that liability for sums payable to an employee under the relevant statutory claims (here, the basic award and notice pay) does not pass to a transferee, but is, instead, picked up by the Secretary of State. But, as we have seen Regulation 8 (7) hasn't kicked in. Therefore the burden does not pass from the Transferee.

The EAT held that the Transferee was, indeed still liable. could not. For Regulation 8(1)-(6) to apply the relevant liability must have arisen prior to the transfer. The employee had been dismissed by the transferee after the transfer and the transferee was solely liable for the sums claimed.

Fair Days Work for a Fair Days Pay

In certain claims like discrimination and equal pay there is a need for comparators. These play the legal part of the 'control' group when doing a science experiment. It is really important to ensure that when framing a claim that the right comparator is used so that it helps highlight what is claimed and is a true representation of what the claimant could rightly have expected from the employer. The Employment Appeal Tribunal ("EAT") has handed down its decision in Beddoes v Birmingham City Council which gives a further definition regarding comparators.

 This case put forward that while determining if Claimants (here school staff but Council employees) are in the 'same employment' as comparators (other Council staff the fact that school governors - who are not actually the employer - set the Claimants' terms and conditions (albeit on Council recommendations) did not mean that the Claimants were not under a 'single source' of terms and conditions with other Council staff. This hugely long sentence basically means that Council staff are potential comparators with school teachers.

This seems like a very specific finding but if we boil it down we find that the EAT means overall that the approach to defining comparators (and therefore people in 'the same employment') should be construed naturally. It should be looked at in the round, as it were. They did however point out that if there was sufficient evidence that Governors (in this case but keep an open mind) had departed from Council (open mind) recommendations, the outcome might differ. The EAT suggested that a material factor defence might arise for an employer in such situations. In mass Equal Pay litigation, with mistakes in job titles being "inevitable", Tribunals should be very ready to accept amendments to correct mis-descriptions of job titles, subject to considerations of jurisdiction and prejudice to the employer.

Your Hands are your Servants

Your hands, your eyes, your voice, your thoughts are your servants        

Sometimes when you have 'Help' they do feel like part of the family, don't they?  They may live in a different wing, they may have to start their day by emptying the bed pans but overall they are part of the furniture.  Aren't they?

 

I jest, obviously, but recently the EAT was tasked with unravelling such a conundrum. And they concluded- yes!

 

All three Claimants were foreign domestic workers employed in the Respondents’ households.  The EAT held that the work done by each of the three Claimants for their respective employers was work to which regulation 2(2) of the National Minimum Wage Regulations 1999 applied. As Regulation 2(2)(a)(ii) means that if the worker is not a member of the employer’s family, but is “treated as such” they are not eligible for the minimum wage the outcome was... unhappy claimants.  

 

This exemption, the statute's trump card if you will,  appears in reg. 2(2) and is to be construed narrowly.  It has been held that the worker’s place within the family must be considered overall and not looked at 'through a keyhole'. Unfortunately for the Claimants, in the circumstances in this case, the exemption applied and they were found to be 'treated as one of the family'.

 

In the consideration of the worker's place within the family, in particular, regard must be paid to the provision of accommodation and meals by the employer.  In addition, the sharing of tasks and leisure activities must be looked at. Further, the Tribunal will also look at other matters such as the general dignity with which the domestic worker is treated; the degree of privacy and the autonomy the workers are afforded.  Finally, and maybe quite significantly, the extent to which, if at all, they are exploited. 

 

The “sharing of tasks” does not include the work which the worker was employed to do.  The tasks that are for consideration are the tasks performed by the family as a family unit.  The issue is whether the worker is integrated into the family.  There is no justification for importing the concept of equivalence.

 

This is an interesting case because so few of us realise that if you have a nanny or a cleaner you are an employer and the rules of employment apply to you too.

Pension Scheming

A key challenge for our client will be identifying who they (the relevant "jobholders") have to auto enrol as not only are a large number of their staff temporary, they also tend to be younger in age. The requirements for all employers are as follows:

• Workers aged 22 and over, but under State Pensionable Age will have to be auto enrolled if they have qualifying earnings (£7,475 in 2011/12) ("Eligible Jobholders"),
• Workers between 16 and 21, and those between 65 and 75 who have qualifying earnings, may opt to become a member of an automatic enrolment scheme ("Non-Eligible Jobholders"), and
• Those aged over 16 but under age 75 who do not earn the minimum qualifying earnings can demand membership who can demand membership of a pension scheme. ("Entitled Workers").

In particular our client will need to decide whether when employing temporary staff their earnings will exceed approximately £623 per month in 2011/12 and the likelihood that they will remain employed with the company for more than three months. In this instance if the employee is between 22 and at present 65, has earnings in excess of the qualifying earnings and is employed form more than three months the Company will have to contribute to his/her pension.

When?

The implementation of auto enrolment is being phased in by the government over at least four years starting on the 1^st October 2012, with the staging being based on the number of PAYE employees an employer has. With over 1,000 employees our client's duty to auto enrol will commence from a date after the 1 October 2013, subject to confirmation from the Department of Work and Pensions that is anticipated in January 2012.

On reaching the staging date after 1 October 2013 our client must enrol the relevant jobholders, who are not presently within their group's money purchase scheme or final salary scheme into a qualifying pension scheme within three months of them becoming eligible.

One option is to admit these jobholders into their existing money purchase scheme as it meets the minimum requirement of providing employer contributions of 3% of qualifying earnings and in total at least 8% of qualifying earnings, the necessary level of contributions required once the enrol process has been completed by all employers. At present our client's money purchase scheme is more generous than this and it would prove expensive to move all new employees into this scheme.

Alternatives options (potentially less expensive than the existing scheme) are available and our client could consider auto enrolling those employees not in one of the existing schemes into a contract based group personal pension schemes, a trust based money purchase scheme or the National Employment Savings Trust ("NEST").

Do the Employees have a choice?

Our client's employees may opt out of the chosen pension within one month, but only after active membership has started. An opt-out within one month leads to an employee's membership being cancelled and the employer/scheme have to refund any contributions.

Irrespective of the employees view towards the pension benefits offered by their employer the emphasis is placed on the jobholder to opt-out as the employer is not allowed to provide any inducement to encourage the employee to opt-out.

 

Change Before You Have To

It is the start of April 2012 and as we all know April is the month for change mainly in the form of the Budget but also changes in legislation...

Step forward changes to unfair dismissal qualifying periods, tribunal procedures, apprenticeship contracts and statutory maternity pay. 

Unfair Dismissal

Arguably the most significant change to be seen this month is an increase in the qualifying period for unfair dismissal rights from one to two years. The longer wait to receive unfair dismissal rights will only apply to those starting employment on or after 6 April – the change is not retrospective. In light of this change it would be a good idea for Employers amend their handbooks, policies and procedures to reflect this new situation.

It has been mooted that these changes are set to save employers £6million a year and it is hoped that they will also cut the number of unfair dismissal claims by 2,000 annually. However, just because employees will have to wait longer for a bona fide unfair dismissal claim doesn't mean they will have lost their desire for a claim per se.  We anticipate that they will simply switch claims. The new qualifying period does not apply where dismissal is for reasons such as discrimination or whistle-blowing, for which protection continues to apply from day one of employment.  It is also worth being aware that although there is a statutory cap for unfair dismissal compensation, the cap is lifted on discrimination claims.

Tribunals
A number of procedural changes take effect from 6 April. Employment judges sitting alone (in other words, without the usual two lay panel members) will now be the default position to hear unfair dismissal cases, and all cases in the Employment Appeal Tribunal will be heard by an employment judge alone, unless the judge directs otherwise. This is a cost-saving measure, which is not supported by responses to the Government consultation, or by tribunal judges. The Government will review the situation after a year.

Other tribunal changes include doubling maximum costs awards, from £10,000 to £20,000, and deposit orders (paid in by claimants or respondents as a condition of a case with little prospect of success being allowed to proceed) from £500 to £1,000. These are useful tools and can be used as a method to encourage settling or to discourage a potentially vexatious litigant.

Witness statements will henceforth be taken as read, unless an employment judge directs otherwise, and the parties to a claim will be liable for witness expenses, rather than this being state-funded.

Apprenticeships
From 6 April a new 'prescribed form' apprenticeship agreement will be available. This will amend slightly the  standing of apprentices engaged under it in law. The agreement must contain the basic terms of employment required under section 1 of the Employment Rights Act 1996, and a statement of the skill being acquired. It would also entitle the apprentice to the more generous age related rate of the National Minimum Wage rather than the apprentice rate.  In addition, the apprentices can be terminated more easily than previous apprenticeship contracts.

Statutory pay
Rates for statutory maternity, paternity and adoption pay increase in line with the Retail Price Index. From the 1 April the current weekly rate of £128.73 rises by 5.2 per cent to £135.45, and from 6 April, statutory sick pay rises from £81.60 to £85.85. The weekly earnings threshold rises from £102 to £107.

References

References, and their impact on the potential employment of employees have been soundly discussed in case law. A recent case found that an employee who lost out on a job based on the offending reference, and was left unemployed for a year after, could not claim against the reference.

 

The case of Jackson v Liverpool City Council (LCC) concerned Mr Jackson who left employment and sought a job elsewhere. He was offered a job on the condition of 2 satisfactory references.  He had one that was complete and deemed satisfactory and one from LCC that was blank in places.  It turns out they had left questions unanswered because after Mr Jackson's departure LCC had discovered a few areas in which he worked that he ha not paid the most attention.  His record keeping seemed suspect and his advice to young offenders with whom he worked was at time erroneous. 

 

Although none of these allegations were, or could be, proven or investigated, LCC decided they should make a future employer aware that these problems relating to Mr Jackson had been highlighted.

 

Although there was nothing Mr Jackson could do to untangle himself from this problem, the facts were that LCC did not blame Mr Jackson unduly.  LCC informed the new employer exactly what the allegations were and that they had not and could not be proven or investigated.  What comes next I'm sure you can work out.  The reference stood and was in no way negligent.  Albeit to Mr Jackson more than a tad unfair.

 

A bad reference is not, strictly speaking, not allowed.  If you have done something negative in your past employment and that information is passed on you do have a choice and can bring a claim against it.  To do this you must show that the information in the reference is misleading, that providing such misleading information has had a detrimental effect on your standing with a prospective employer and that your former employer was negligent in providing such a reference.  Unfortunately if you did do the offending act the employer might want to share this information to cover themselves from a potential action by the new employer.  Complicated, huh?

 

 

Under Pressure?

It has just been revealed that stress is the number one cause of long-term absence for manual and non-manual employees. This finding is from the most recent CIPD/Simplyhealth Absence survey .  It is the first time stress has come top and it is in no way a freak coincidence that it happens at a time when job insecurity weighs heavy on the workplace.   

The link between job security and mental health problems is delineated in the survey. It seems that employers planning to make redundancies in the coming six months are significantly more likely to report an increase in mental health problems among their staff (51% compared with 32% who are not planning redundancies).  It hardly seems like rocket science but it is good to have it in conclusive figures.

For manual workers, stress is now level with acute medical conditions and has overtaken musculoskeletal problems (like a bad back for example) to become the top cause of long-term absence. While among non-manual staff, stress has moved ahead of acute medical conditions. This is actually quite a shocking piece of information and shows the battle employers are having to fight these days.

Dr Jill Miller, CIPD Adviser, says: "The survey this year shows that stress is for the first time the number one cause of long-term sickness absence, highlighting the heightened pressure many people feel under in the workplace as a result of the prolonged economic downturn."

Gill Phipps, HR spokesperson for Simplyhealth, comments: "Stress can often have a negative effect on the workplace, which can result in loss of productivity and disengaged employees. It's therefore encouraging that almost half of employers have a wellbeing strategy in place, with 73% offering counselling services and a further 69% providing an Employee Assistance Programme. These benefits allow employees access to information and advice on workplace issues, as well as emotional, psychological and personal issues, and can be a huge help during difficult times. Employers need to ensure that benefits such as these are communicated effectively to staff in order for employees to get the most from them."

Ms Phipps continues and makes the excellent point : "with many organisations looking for ways to save money, employee health and wellbeing shouldn't be over looked and should remain at the heart of the company. Benefits that engage employees do not have to be expensive. By introducing a recognition scheme or equipping leaders with the skills they need to care for the health and wellbeing of their teams, employers can make small, affordable changes that make a positive difference."

Should you feel that your business could do with more support get in touch and let QualitySolicitors FJG be part of your team supporting you and your staff.

Director's Duties

It is not very often that there is a case in the ET that involves directors, but, you've guessed it there has been one recently.

 

The Court of Appeal, no less, has handed down its judgement on a case that concerned a loan to a director by a client company of machinery.  The arrangement was privately arranged as the parties knew each other as friends and as such the Company had no knowledge. When the Company subsequently found out they claimed that the director in question was accountable to the Company.  The director then claimed that the value of the arrangement was insignificant in so much as the machinery in question was old and worse for wear.

 

That was not the point, stated Lord Justice Mummery. The duties of a director are clear and evidently strict.  The director's 'no conflict' duty extended to preventing the director from depriving the Company of the opportunity to use the machinery.  Even if the machinery was not of a standard that the director considered they would be interested in.  It was therefore clear that the strict no conflict and loyalty duties were breached.  Further, the lack of evidence that the Company would have, in fact, taken the opportunity or had suffered any loss because they were not offered the opportunity were not relevant. The director had a duty first and foremost that he ignored and consequently the decision went against him.

 

A man will fight harder for his interests than for his rights

Human rights are bandied about a lot in the media, and in some cases they are plucked out of thin air as a means to give gravitas to an argument that normally would be ignored.

 

A recent judgement handed down from the Supreme Court held that it is not a contravention of Article 6 (right to a fair trial) to be denied legal representation during disciplinary procedures.  Although that may seem like an obvious the facts of this case were quite serious and the decision reflects a lot of consideration by our judiciary.

 

The Claimant (a teacher) was dismissed after a disciplinary hearing over allegations of indecent conduct with a 15-year old. The Claimant was denied legal representation at this disciplinary. Further to their decision to dismiss the governors were obliged to refer the Claimant to the Independent Safeguarding Authority "ISA".  The ISA is an independent body which conducts its own procedures to determine whether or not to put an individual on a 'barred list' of people banned from working in schools.

 

Further to his dismissal and referral, the Claimant sought a judicial review of his dismissal.  The basis on which he sought the review was that the disciplinary hearing breached Article 6 of the ECHR by denying him legal representation when his civil rights were in question - here the right to and his career in teaching.  Further, he sought a re-hearing with legal representation.  This request and approach was granted by the High Court.  The next step was the Respondent's appeal to the Court of Appeal, this was dismissed. So far, so good for the war cry of 'Human Rights'!

 

The matter finally made it to the Supreme Court.  At this point Lord Dyson held that Article 6 was not engaged at the disciplinary hearing, and therefore there was no need for a legal representative to be present.  The nature of the ISA proceedings, being separate to the Respondent's decision to dismiss and dealing with a different question (whether or not the Claimant should appear in the barred list) meant that there was no requirement for the Respondent's disciplinary proceedings to comply with Article 6.

 

In addition, there was no reason to suppose that the ISA's decision which has scope to consider wider evidence, would be unfairly influenced by the Respondent's decision to dismiss. Consequently, Article 6 (1) of the ECHR was not engaged at the disciplinary hearing as a safeguard against a person's civil rights being determined without the benefit of legal representation.

It is important to note however that Lord Dyson specifically highlighted that where a decision in one set of proceedings does determine the outcome in subsequent proceedings that will, in turn, determine a person's civil rights, then the right to a fair hearing, and by implication, legal representation, may be engaged at that first stage.  This leaves the door open to legal representation being allowed at disciplinary hearings in such circumstances.