It's a trap!

Employment Law Newsletter - December 2015


In this issue ...

  The end of the year   And the gander loses out again  
  No change   Three from the recent past  
  Some change   A 'practice' needs practice  
  Sauce for the goose but not for the gander   Resigned to collective redundancy consultation  
  Temp to perm with TUPE?  

The end of the year

Well, here we are again – Christmas is fast approaching and the end of another year is in sight.

To us, it seems that 2015 has been quieter than most of its recent predecessors for fundamental or eye-opening shifts in the landscape of employment law. Of course, that perception, if it is accurate, is only about relativities – there has still been much of interest and for consideration in the last 12 months and it has not been difficult to find material for this issue or its nine predecessors during that period. And, in any event, landmark legislation or case law is not necessary to keep those with responsibility for 'people management' on their toes – as our daily dialogue with managers always reminds us, each situation differs in some way from those that have preceded it and demands fresh appraisal.

Anyway, here's our last 2015 take on employment law. Our next issue will be in the second half of January, but, in the meantime, have a great Christmas break!


No change

An involuntary change in the identity of one's employer means TUPE applies, right? Well, no, at least not inevitably, according to the Employment Appeal Tribunal (EAT) in Hyde Housing Association v Layton.

Layton was dismissed by M, his original employer, and re-engaged under a new contract with Hyde, a consortium (but not a separate legal entity) which M had joined. The EAT found that, because M was still liable as Layton's employer, albeit now on a 'joint and several' basis with the other members of the Hyde consortium, the change of employer did not come within the scope of TUPE. In essence, as with a change in the ownership of shares, the employer's legal relationship with the employee was unchanged.


Some change

This is not an epoch-making ruling, but it seems to have attracted a bit of attention in the last two or three weeks, so we'd better join in by paying it some lip service. In Greenfield v The Care Bureau, the European Court of Justice (ECJ) was asked to consider the effect on entitlement to holidays under working time legislation when, during a holiday year, a part-time worker increases his or her regular weekly hours – specifically, is the worker's accrual of holidays affected retrospectively?

You may think that you already knew, or can work out, the answer to this one, and you're probably right. But, for the record, the answer is that any annual leave that has already accrued under the earlier, 'lower hours' working regime does not have to be recalculated retrospectively to reflect the increased working hours. Recalculation of holiday entitlement is confined to that part of the holiday year falling after the change in hours. The only 'crossover' occurs in relation to holidays taken – any leave taken in excess of the total entitlement under the previous working pattern should be deducted from future leave (and, conversely, any leave accrued but untaken by the time of the change can be carried forward).


Sauce for the goose but not for the gander

We think the EAT's decision in MBNA v Jones probably falls into the same category as Greenfield (the 'we could have worked this out for ourselves' one), especially as the point it makes has been made in other cases over the years. But, if it's good enough for the litigators and judges to repeat, it's good enough for us - so, can the two guilty protagonists in a chain of related events be treated differently, one being dismissed and the other not?

Yes. At a business social event, before which staff had been warned that normal rules on behaviour applied, Jones and a colleague, both of whom had been drinking, fell out. Jones punched his workmate in the face. Afterwards, the victim texted Jones several times with abuse and threats, including one to 'rip your fucking head off'. However, nothing came of those menaces.

Jones was dismissed. His colleague received a final written warning. The EAT found the dismissal fair because it was reasonable for the employer to conclude that the nature and circumstances of the respective offences were not the same.


And the gander loses out again

An integral element of a successful claim of unlawful discrimination is that the employee has suffered a 'detriment' as a consequence of the less favourable treatment. In Singh v Cordant Security, the EAT emphasised this in rejecting a claim of racial discrimination by a security guard who, subject to a disciplinary investigation, then made a claim of racial abuse against his white supervisor (later found by the employment tribunal to be wholly fabricated) which the employer failed to pursue.

The EAT held that, given the fabrication, the simple fact of the employer's not going through process was not a detriment in itself and produced no detriment – Singh could have no legitimate sense of grievance or injustice.


Three from the recent past

Here's some more news on things we have touched upon in recent issues

The Tribunal fee system

In our September 2015 edition, we mentioned various reviews of or threats to tribunal fees. However, a recent report by 'the HRDIRECTOR', based on comment from a senior official in the Ministry of Justice, suggests that the requirement to pay a fee will remain outside Scotland (where the executive's policy is to abolish them).

And, perhaps as confirmation of the survival of the fee scheme, advances are being made in other aspects of the fees regime. Applications for remissions – that is, exemptions or reductions – have quickly shown themselves to be problematic to process, a situation that serves no-one well. However, help is at hand, literally. Re-badged as Help with fees, the process now asks those applying to undertake a self-assessment of eligibility that does not, as a matter of course, require the submission of supporting documentary evidence – the bulk of that checking task will be undertaken by the tribunal. A new form (EX160) is available online.

Prosecution of former City Link directors fails

In the October 2015 issue, we alerted you to the new practice of prosecuting an organisation's officers for failing to notify the authorities of proposed redundancies. In the City Link case we cited, the prosecution has now failed. But before you incite your directors to throw their hats in the air in joyous celebration, be warned. The acquittal was based on a substantive point (that, at the time in question, there was no 'proposal' to effect redundancies and, by appointing administrators, the ex-directors still had every hope that the business and its employees would be saved), not on any idea that bringing charges against individual managers was impossible or inappropriate as such.

National Living Wage coverage

A survey in September of more than 1,000 organisations by the CIPD and The Resolution Foundation has looked at the scope of the National Living Wage (NLW). It estimates that, when it comes into effect from 1st April next year, the NLW will apply in some way to almost 55% of all employers (but 'to a large extent' to less than 20%), with much higher proportions being affected in the retail, hospitality and healthcare sectors.

The most popular plan for accommodating the increased cost of the NLW is through improved productivity or efficiency, with reducing the number of jobs being the least favoured method. Does anybody not think that these two approaches are far from being mutually exclusive? – one person's 'improved efficiency' can be another's redundancy exercise...


A 'practice' needs practice

Indirect discrimination is based on the disproportionate effects of a 'provision, criterion or practice' applied by an employer. In Bethnal Green & Shoreditch Educational Trust v Dippenaar, the employee's claim proceeded from the third of these – the employer's alleged practice of dismissing teachers on high salaries to save cost (which was said to have a disproportionate effect on older staff). But the EAT said that Dippenaar's dismissal alone was not enough to establish a practice of this type – a practice requires repetition of something or, at the very least, the anticipation of repetition. Until there was evidence of that, the employee had not made out a prima facie case that would shift the burden of proof to the employer to justify the differential effect.

Of course, an isolated act or decision based on age or any other protected characteristic under the Equality Act can still amount to direct discrimination if there is strong enough evidence.


Resigned to collective redundancy consultation

In Pujante Rivera v Gestora Clubs, the ECJ has ruled that the laws on collective consultation about 'mass redundancy dismissals' can, in assessing whether the numbers threshold has been achieved, take into account resignations induced by an employer's unilateral change of terms and conditions for economic or restructuring reasons. In Gestora, the resignation was in response to a 25% reduction in pay which the employer imposed alongside the orthodox redundancy dismissals of other employees.

At first glance, this looks unfair on employers, seeming to impose on them an obligation to get the crystal ball out and work out which of those employees who are affected by changes to terms and conditions will choose to resign as a consequence. But it's not that difficult. Forget both such guesswork and any focus on future actual resignation. Proceed as you have, or should have, always done under the legislation on consulting with employees' representatives about redundancies. That is, include in the count of proposed redundancy dismissals not only the number of actual terminations envisaged but also the number of employees whose contracts you wish to change and which do not allow you to make the alteration without the individual's specific agreement. That way, you will be able to have confidence about whether the threshold of 20 'proposed redundancy dismissals' has been reached or not.


Temp to perm with TUPE?

One of the exclusions from the 'service provision change' rules under TUPE is where the client intends the contract in question to be for a single specific task of short-term duration.

In ICTS UK v Mahdi, the new owner of a building, now empty pending supposed redevelopment, replaced the security company used by the previous owner with a different provider, First Call (FC). FC argued that TUPE did not apply because, whereas the previous contractor had been responsible for an occupied, operative site, FC itself was merely looking after an empty location while it awaited reconfiguration – a short-term arrangement. The employment tribunal accepted this position, but the EAT sent the case back for further consideration by the tribunal. It noted that no planning permission had yet been granted and therefore no building work commenced and went on to observe that, although the client's intention on changeover (rather than outcome) was the test, events after the granting of a contract can still be relevant to identifying that intention.


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

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.