FJG Employ....

Everyone is equal but some are more equal that others

Equal pay claims are an interesting area of law and a recent claim by 5 female hospital workers delineates this area further.

 

The Claimants received a higher basic hourly pay and, all but one, received higher overall pay than their male colleagues.  However, the Claimants all received less pay per hour for weekend work and unsocial hours. It was this aspect that the Claimants claimed equal pay for.

 

First off the ET rejected the Claimants' idea that there was a term within their contracts relating to unsocial hours specifically.  The ET further disputed that it was less favourable than a similar term in their male colleagues contracts. The ET held that in reality the Claimants' enhancements (i.e. their overall, better 'normal' hourly wage) formed part of their working hours and basic pay. The pay was to see in conjunction with the lower pay for unsociable hours and viewed as an overall package.

 

This decision was overturned by the EAT, and then the Court of Appeal agreed.  The Court of Appeal decided that that the terms of the contract that related to unsocial hours and weekends were distinct and consequently could be snapped off and compared with other contracts.

The Court of Appeal held that in line with the House of Lord's decision in Hayward v Cammell Laird Shipbuilders Limited that as the terms in the Claimants' contracts were distinct and capable of comparison they therefore should not all be "lumped together" as the ET had suggested. The Court of Appeal stressed that equal pay is focused on each distinct term relating to remuneration as opposed to the totality of pay received.

There is no such thing as a good tax

HMRC has issued rules for the correct tax coding for termination payments, that came into effect from 6 April 2011.

Under the 2010 rules, if a termination of employment payment is made to an employee after the P45 form has been issued to the employee and the payment in question is more than £30 000, any amount over £30 000 will be taxed. The taxation amount is 20% and the code “BR” (for basic rate). The employer is required to withhold 20% of the amount over £30 000, and the former employee is responsible for any further tax that may be payable.

 After 6 April 2011

From the 6th of April, employers making a termination payment after the P45 form has been issues, are required to use the tax code “0T”. This code indicates that the employee has no personal allowances and that the payment is subject to basic and higher rates of tax. The employer is required to withhold income tax at 20%, 40% or 50%, as appropriate.  Ensuring that PAYE is operated correctly and that the correct tax codes are used is the responsibility of the employer and is vital in order to avoid any penalties being imposed on the former employee.

 

So now you know.

Delay in Justice is Injustice

Each time we perform a 'health check' on a company (looking into and updating their employment contracts, staff handbooks and the like. If you fancy one of these, give us a call) we offer this advice, very loudly and very clearly: Do not make your staff handbook contractual.  If you do, you run the risk of a claim coming your way for a misplaced disciplinary meeting or a badly timed letter.  Despite our sage advice it seems the Employment Tribunals are hot on our heels to cast a shadow on the safe haven of the non contractual handbook.

 A recent case has held that there is an implied term in contracts of employment that disciplinary processes be conducted fairly and without undue delay.  Of course, the approach by employers to the disciplinary procedures should be fair and should be actioned promptly, as per the ACAS guidelines. However, until now the ACAS have been just that, and the failure to follow them does help bolster a claim and does result in a pecuniary uplift should the claimant win.  Now the High Court has decided that these aspects of the guidelines are so important they are inferred into each and every contract.

In the conclusion and discussion of the matter the Honourable Mrs Justice Slade DBE did, however, make clear that the effect of such an implied term depends on the circumstances of the particular case.

Lost Time is Never Found Again

A recent case that made it all the way to the EAT (Employment Appeals Tribunal) confirmed its decision that a claim of unfair dismissal may not always be able- in his words 'reasonably practical' to be brought within the time limit, if an employee is 'reasonably ignorant' of the time limit prior to having the outcome of the appeal process finalised.  He must, however, still get his claim in within a reasonable period after.  Reasonable-ness is quite important apparently.

The Claimant received confirmation that his appeal failed in mid July as he had been away. The last date on which he could submit a claim lapsed on 12th June, under the 3 months minus one day rule.  However, the Claimant was dismissed on 13th March and attended an appeal hearing regarding his dismissal on the 24th May. The letter regarding the outcome of the appeal was dated 28th June.

This was not mentioned in the judgement but the behaviour of the employers in this example seems to ring some scurrilous bells.  Some employers intentionally try to run the claimant out of time by insisting on long time periods between meetings and the official outcomes. 

This behaviour, of course, is frowned upon and the ACAS code highlights the conduct expected from each party throughout the process, 'employers and employees should raise and deal with issues promptly and should not unreasonably delay meetings, decisions or confirmation of those decisions'

Time is Money

Future losses are always interesting when considering compensatory awards. There are many factors to consider such as the area in which the claimant worked, do they have a specialist skill, are the skills transferable, what is the market like and so on and so forth. It is not uncommon to project future losses for up to 12 months that the Respondent should be accountable for.

 

In the case of Wardle v Credit Agricole Corporate and Investment Bank it was decided that when the Tribunal was calculating future losses, they should assess the loss suffered up to a certain point in time when an employee would be likely to secure another job on similar terms.  The current practice of awarding compensation up to the point when there was certainty that the employee would secure another job on equivalent terms. This is a lovely, and unfortunately uncommon, employer friendly decision based on the following information:

 

The Claimant had never worked for any company longer that 5 years and he was still in contact with head hunters.  On the basis of these facts it was decided that there was an 80% chance that the Claimant would have left his employment with the Respondent after he collect loyalty premiums.  Slightly ironic and a touch cheeky of the Claimant to potentially claim for more but luckily the judges stepped in and applied some long overdue logic to proceedings.  It was concluded that career long loss should only be awarded in exceptional circumstances and this situation was not one of them.

A lean compromise is better than a fat lawsuit

Compromise agreements are discussed a lot in employment law and are a useful and final tool when dealing with employees that have been dismissed or are being litigious.

 

A compromise agreement is a legally binding agreement, between employer and employee which accompanies a lump sum (or sometimes instalments) of money to the employee that, once exchanged, means the employee will have no further recourse upon the employer.

 

The amount of money which comes with each agreement is individual and is normally negotiated between the parties.  Sometimes the agreement is offered with a first and final amount which is not up for negotiation.  Each instance is different and can be affected by such factors as; age of employee; length of service; any discrimination or foul play displayed by either side; procedural discrepancies on the side of the employer; salary and/or contractual obligations.

 

Compromise agreements are becoming more popular due to their finality and the binding nature that not only restrict the employee bringing a future claim on any grounds, but also the silence that they bring.  A compromise agreement, once signed by both parties, denies the ex-employee the right to discuss the fact that it even existed, let alone disclose the amount received.  This then leaves the employer safe in the knowledge that the potentially disgruntled ex-employee will not be able to besmirch the reputation of the employer.

 

A compromise agreement is only valid once it has been signed by both parties, and the employee has had independent legal advice to ensure that he is happy with its contents.  On the whole, the independent legal advice will be paid for by the employer in the form of a clause within the agreement offering to pay for legal fees up to 'X' amount. A ball park figure of £300 + VAT is normal.

 

In reality there is very little difference between compromise agreements, but there may be clauses that need to be specific to each employer in respect of their market place.  When considering a compromise agreement as a means to sever employment it is worth considering what a standard agreement consists of, and whether it will serve your purpose.  If your market place is highly specialised and a standard agreement includes a clause stopping the employee practising in that arena, you may need to pay them more to accept- or amend the clause.

 

When ACAS are involved in mediation the agreement is referred to as a COT3 and is the only other alternative to a legally binding agreement that is not actioned through a Tribunal.

The child supplies the power but the parents have to do the steering

As it stands, new mothers can take 12 months off work, of which nine months are paid. New fathers only receive two weeks’ paid leave from work.  The new scheme means that the new mother will have their leave quota reduced to five months’ paid leave, and, in exchange,  new fathers will receive an extra four weeks, making their new entitlement six paid weeks in total. The couple will also be allowed to divide an additional seven months between them.  Of this extra time four months will be paid for.

This, essentially, means that fathers will be allowed to take five and a half months paid leave after the birth of their child by using up some of the mother’s entitlement. This therefore splits the loss of an employee, and the cost, over two companies.  It also has the implication that now it won't necessarily be advantageous to have a work force that is predominantly men as they will now be allowed to have quite a chunk of time off 'to have babies', which could arguably have the knock on effect of reducing sex discrimination.

New fathers also have the option of taking another three months unpaid leave – if the mother decided to return to work after five months. In the alternative, both the mother and the father could take six months’ off work each at the same time, much of it paid, to look after their new baby. Employers would not be able to refuse requests for the time off, officials said.

A lean compromise is better than a fat lawsuit

Compromise agreements are discussed a lot in employment law and are a useful and final tool when dealing with employees that have been dismissed or are being litigious.

 

A compromise agreement is a legally binding agreement, between employer and employee which accompanies a lump sum (or sometimes instalments) of money to the employee that, once exchanged, means the employee will have no further recourse upon the employer.

 

The amount of money which comes with each agreement is individual and is normally negotiated between the parties.  Sometimes the agreement is offered with a first and final amount which is not up for negotiation.  Each instance is different and can be affected by such factors as; age of employee; length of service; any discrimination or foul play displayed by either side; procedural discrepancies on the side of the employer; salary and/or contractual obligations.

 

Compromise agreements are becoming more popular due to their finality and the binding nature that not only restrict the employee bringing a future claim on any grounds, but also the silence that they bring.  A compromise agreement, once signed by both parties, denies the ex-employee the right to discuss the fact that it even existed, let alone disclose the amount received.  This then leaves the employer safe in the knowledge that the potentially disgruntled ex-employee will not be able to besmirch the reputation of the employer.

 

A compromise agreement is only valid once it has been signed by both parties, and the employee has had independent legal advice to ensure that he is happy with its contents.  On the whole, the independent legal advice will be paid for by the employer in the form of a clause within the agreement offering to pay for legal fees up to 'X' amount. A ball park figure of £300 + VAT is normal.

 

In reality there is very little difference between compromise agreements, but there may be clauses that need to be specific to each employer in respect of their market place.  When considering a compromise agreement as a means to sever employment it is worth considering what a standard agreement consists of, and whether it will serve your purpose.  If your market place is highly specialised and a standard agreement includes a clause stopping the employee practising in that arena, you may need to pay them more to accept- or amend the clause.

 

When ACAS are involved in mediation the agreement is referred to as a COT3 and is the only other alternative to a legally binding agreement that is not actioned through a Tribunal.

Just when are reasonable adjustments unreasonable?

The recent case of Cordell v FCO held that there can be a tipping point with regard to the cost of the reasonable adjustment being too high and the continued obligation to provide it.

 

This is a very specific situation with a lot of money at stake and it runs along these lines...  Ms Cordell worked for the British Foreign & Commonwealth Office ("FCO") and is profoundly deaf.  Her working life is achieved through the support of lip speakers. She was offered a role that would move her to Astana (that's the capital of Kazakhstan by the way) but it was retracted because the cost of the lip speaker support she needed would be £300,000. Ms Cordell complained of discrimination as the FCO were more than happy to offer her £25,000 per child, per annum for school fees (we don't know how many children she has but I doubt it's 12).  Unsurprisingly her claim failed at the Tribunal and at appeal.  

 

It was decided at the EAT that the job was withdrawn, not through discrimination, but because of cost and on therefore could not be discriminatory. The Tribunal's consideration of the cost of lip speakers in the context of the FCO's total budget for reasonable adjustments and the total cost of embassy staff was legitimate, and what the FCO was prepared to spend on school fees was relevant but not determinative.

STOP PRESS!!

After many months of rumour, and a mini false start a month or so ago, Business Secretary Vince Cable has announced the government's proposals for what is claimed to be the biggest shakeup of employment law for decades. The government has also published its Response to the Consultation on Resolving Workplace Disputes.

The main proposals are:-

• unfair dismissal qualifying period to increase to two years
• compulsory lodging of all claims through ACAS, for an attempt at mediation, before they can be lodged with the tribunal
• consultation on the introduction of protected conversations, with the proviso that they will not extend to protect discriminatory acts
• a call for evidence, with a view to consultation, on reducing minimum period for redundancy consultation to 60, 45 or 30 days

And some other proposals, which have not previously been alluded to:-

• options for a 'rapid resolution scheme', to enable simple claims to be settled within three months
• amendment to s147 of Equality Act 2010, to clarify compromise agreements can be used to settle discrimination claims
• complaints about breach of employment contract (Parkin v Sodexho) to be taken out of whistle-blowing law
• financial penalties to be introduced on employers who breach employment rights, payable to the Exchequer, subject to a discretion exercisable by Employment Judges
• a fundamental review of employment tribunal rules of procedure, to be led by Underhill J (who steps down as President of the EAT at the end of next month), to include changes to costs and deposit orders
• Employment Judges to sit alone in unfair dismissal cases
• CRB checks to be portable, so no need for a fresh application when moving jobs
• maternity and paternity leave to be 'modernised', with emphasis on greater involvement for fathers

And the government has said it is still looking at the option of compensated no-fault dismissals for micro-businesses.  No news yet as to when these will come into force.  We are looking at a very interesting new year trying to incorporate all these new ideas and it will be exciting to see how the rhythm of a claim will be changed.  Here's hoping that they don't serve to disadvantage anyone or there will be calls for more reforms before the new financial year rings in.