It's a trap!

Employment Law Newsletter - December 2014

 
 

In this issue ...

  An early Christmas present?   Not quite so fast  
  Early results for early conciliation   Wrong is not the same as negligent  
  Sharing a bit more on shared parental leave   Adjust only so far  
  It's all about timing   It's a two-way street – in two ways  
  Last but not least  
 

An early Christmas present?

The good news is that the union supporting the employee litigants in Bear Scotland v Fulton, the well-publicised case about overtime pay and holiday pay (see our Special Edition of 5th November), has said it will not be going to appeal on the most contentious aspect of the EAT's ruling – the one that restricts most claims for back pay to a maximum of one year. Unite says it has no desire to seek a reversal that would have the effect of placing at least some employers under severe financial pressure.

Whether that will be the end of the story is highly debatable. Given that the EAT itself suggested that this aspect of its judgment was the only one worthy of consideration by a higher court, and given also that an impending general election might have played some part in Unite's outwardly generous stance, it is quite probable that another case will in due course take this point up to the Court of Appeal and perhaps beyond. So, don't get the bunting out and bin those systems for calculating retrospective liability quite yet!

In any event, other facets of this whole 'calculation of holiday pay' panorama are still up for grabs. First, and still open to appeal from the employers in Bear, is the 'gateway' question of whether it is possible to interpret the WTR to give effect to the rulings of the ECJ or whether that requires Parliamentary amendment (which would not be retrospective at all). Then, there are questions left unanswered by Bear. These include – 'Is truly voluntary overtime covered?' 'What other non-basic payments might fall outside the calculation?' and 'What is the relevant reference period?'.

 

Early results for early conciliation

The figures for the first six months of early conciliation have recently been published. Across around 37,000 cases, the headlines are that:

10% of employers and 10% of employees did not wish to engage in the process beyond the minimum required.
18% of cases resulted in a COT3 settlement.
Of the remainder, only one-third resulted in a claim to the employment tribunal.

The last two statistics combine to provide clear confirmation that the requirement to pay a fee is the main cause of the radical reduction in the number of claims.

 

Sharing a bit more on shared parental leave

We have covered this subject in our last two – September 2014 and October 2014 – editions. So, this time, we are going to say no more than (a) the final version of the Regulations are out (but your time will generally be better spent looking at the guidance documents to which we have previously referred) and (b) there are just a few places still available on our seminars on 15th and 21st January. If you want to join one, please contact Patrick Collinson at pcollinson@collinsongrant.com

 

It's all about timing

Regulation 10 of the Maternity and Parental Leave Regulations 1999 is an important piece of legislation. It entitles a woman who becomes redundant while on maternity leave to be offered a suitable available vacancy that exists (even if another redundant employee is or might be better suited to the role).

In Sefton MBC v Wainwright, the employee brought a claim of automatically unfair dismissal based on Regulation 10 when, in a restructuring exercise, she was dismissed after losing out to a colleague in competitive selection for a new role created to encompass both their previous roles. The employer's defence was that, because the new job was only available to a restricted field of two, it was not truly a 'vacancy' but part of a redeployment process and that Regulation 10 did not come into play until that process had run its course, she then (and only then) became 'redundant' and any other opportunities for her could be considered.

The EAT disagreed with such sophistry. It held that Ms Wainwright's redundancy occurred with the decision to dispose of her original job, which meant that, as she was suitably qualified for the newly-created role, she should have been given 'first refusal' of it. Any other construction of events, said the EAT, would allow employers to manipulate events to deprive employees of the protection of Regulation 10.

 

Not quite so fast

If an employee leaves without notice, the normally resultant breach of contract does not mean that he or she can actually be forced back to work. But can the employer both stop paying him or her and yet still treat the contract as alive (the latter step often having the advantage of keeping controls on competition in place for a longer overall period than if the contract terminated immediately)?

Yes, says the Court of Appeal in Sunrise Brokers v Rodgers. Mr Rodgers, a derivatives broker, left immediately – in essence, to hasten the point at which (he thought) he would be free to take up more attractive employment elsewhere. He ignored Sunrise's refusal to accept his resignation in breach and its willingness to continue paying him if he worked during a notice period.

Sunrise were able to secure an injunction to enforce the employee's duty of loyalty for the period covered by his notice obligation (12 months). The fact of non-payment of salary could be disregarded in this decision because the non-payment arose simply because of the employee's unwillingness to present himself for work.

 

Wrong is not the same as negligent

Employers owe a duty of care towards their employees. Whether it is viewed as an aspect of the law of negligence or of the law of contract, it is centred on ensuring that the employee does not come to physical or emotional harm when at work. In Coventry University v Mian, the scope of the obligation was tested in the context of disciplinary proceedings.

Dr Mian was the object of allegations about inaccurate or exaggerated references for a former colleague. The University conducted a quite extensive preliminary investigation, which included an initial meeting with Dr Mian. It concluded that there was a case to answer and invited Dr Mian to a disciplinary hearing. She was then signed off sick and the hearing was conducted in her absence – she submitted written representations and her union representative attended. The allegations against her were dismissed. She brought proceedings claiming that there had been a breach of the duty of care and she had suffered psychiatric injury as a consequence.

The Court of Appeal ruled against her. If, judged objectively at the time rather than with hindsight, the decision to instigate disciplinary proceedings was 'reasonable', in the sense that it was a decision open to a reasonable employer in the circumstances (even if some other reasonable employers would have pulled out sooner), there was no failure in the duty of care. The fact that, ultimately, the 'accused' was found 'not guilty' was then not important.

Many of you will already have noted that this approach is similar to that operated in judging cases of unfair dismissal ('the range of reasonable responses'). And, again like unfair dismissal law, the key to this favourable outcome for an employer is the adequacy of the foundation for deciding to bring disciplinary proceedings in the first place.

 

Adjust only so far

In General Dynamics v Carranza, the employee had a final written warning for repeated absences, about 90% of which were attributed to his disability. He was subsequently dismissed for another absence that was not disability-related (a shoulder injury). In a claim for disability discrimination, the employee argued that a reasonable adjustment by the employer was for the final written warning to have been disregarded in the decision to dismiss.

The EAT declined to accept this. First, it doubted that the 'mental process' (implicitly, a difficult one) of 'disregarding' the fact of the earlier warning was a 'step' in the sense of the Equality Act's requirement for an employer to 'take such steps as it is reasonable to have to take to avoid the disadvantage [that a disabled person suffers from the normal operation of a provision, criterion or practice.]'. More practically, the EAT could not see why it was reasonable to disregard the warning altogether anyway. It had been relied upon in response to an absence that was not disability-related, it had some root in earlier absences of that type and, before acting on the shoulder injury, the employer had ignored two brief spells of disability-related absence that happened after the warning had been issued. And, on that last fact, the EAT was clear – recent leniency on the effects of the employee's disability should not preclude any reliance by the employer on previous disability-related absences.

 

It's a two-way street – in two ways

If an employee brings a 'contract claim' in the employment tribunal, it is (uniquely in all forms of tribunal claim) possible for the respondent employer not just to defend the claim but also to bring a counterclaim for moneys owed by the employee. Any counterclaim must be presented within 28 days beginning with the date of the employer's receiving the employee's claim.

Is there any way out if, as in Ridge v HM Land Registry, the employer misses the boat on that 28-day deadline and the tribunal finds no grounds for extending it? Yes, says the EAT, confirming for the first time that the doctrine of set-off can be used in the employment tribunals. In Ridge itself, this meant that the employer could reduce its liability to Mr Ridge for pension contributions that had not been credited to him during a notice period by the amount of overpaid wages.

This innovation or extension is useful, but it does not eliminate the need for an employer, where appropriate, to protect its interests by way of a counterclaim presented in time. First, set-off can only work against something, so would be worthless by itself if the employee's original claim failed on its own merits – whereas a registered counter-claim can continue. Similarly, the fact that a counter-claim can stand on its own two feet means that it is important if its value greatly exceeds that of the employee's claim (however meritorious it might be) – set-off would produce only a limited return.

 

Last but not least

We shall be back 'in print' in mid-January, but, as this is our last issue of 2014, we wish you all a very happy Christmas – wherever and however you are spending it.

 
 
 

If you would like to discuss this or any other issue facing your organisation please speak to your usual contact at Collinson Grant or Jo Hale on 0161 703 5600

www.collinsongranthr.com

Although care has been taken in the preparation of this Newsletter, Collinson Grant cannot accept responsibility for errors, omissions or advice given. Readers should note that only Acts of Parliament and Statutory Instruments have the force of law and only the courts can authoritatively interpret the law.