Employment law banner

Employment Law Newsletter - Febraury 2012


A new name for you

We are busy. We intend to carry on that way. So, we are pleased to announce that our employment law/employee relations team has just grown, with the arrival of Victoria Young. Since qualifying as a solicitor in 2007, Victoria has been in private practice with Taylor Vintners and Blocks, established legal practices in East Anglia. In those settings, she has accrued considerable experience and expertise in all aspects of the application of employment law. She will be based mostly in the south, but, as you know, we can provide telephone and e-mail support from wherever we are - so, feel free to give her a call on the usual number (or contact her on vyoung@collinsongrant.com).

Now, what do you fancy?

A redundancy payment can be lost if the employee has refused an alternative job that is suitable (that suits the employee's skills, experience and previous pay) - but only if the refusal was unreasonable. And the criteria for that have always been seen as largely personal. Domestic commitments, travelling time and so on might make the new job impractical.

But, in Readman v Devon PCT, the EAT extended this 'subjective' approach. Mrs Readman, a Community Matron whose job had become redundant, refused the offer of continuing employment, on the same terms and in the same region, as a Hospital Matron. She had chosen to move away from work in a hospital 25 years earlier. She had no wish to return there. The EAT said that was acceptable. She should receive her redundancy payment.

This potential for focus on what might be termed 'Utopian whim' will make it even more difficult for employers to withhold redundancy payments from those resistant to a modicum of change.

You've made your bed, so lie on it

Heard the one about the employee who declined to opt out of the 48-hour maximum working week and then sued his employer for failing to give him overtime? Well, we have. It is the case of Arriva London South v Nicolaou. You will be glad to know that the EAT found against the claimant. The 'detriment' of not being considered for overtime was not truly or simply caused by his decision not to opt out but by the employer's quite proper consequential policy of ensuring that he did not exceed the average 48-hour week. It said that it would be strange if the employer could be 'condemned' for adopting a reasonable policy designed to ensure that those exercising the right not to opt-out maintained that right.

Oh, what a tangled web

How does a duty of fidelity work? You might think that, while working for one employer, you must report confidential information about a competitive threat from another company, even (or especially?) one that you are about to join. But, apparently not, according to the High Court in Customer Systems v Ranson and others. Here, a software consultancy took action against several former employees who had resigned to establish or work for a rival operation. It failed. A duty of fidelity to the (then) current employer did not necessarily 'trump' the duty of confidence to the new employer. To add insult to injury, the judge awarded costs in favour of one of the defendants. His former employer had brought claims of high value and little substance in order to intimidate him, a young man of limited means.

Inflation is higher than you think

You might think that inflation is dropping from its recent zenith of around 5%. But not, apparently, in employment compensation. From 1st February, the maximum value of a 'week's pay' rose to £430 (up by 7.5%). The compensatory award for unfair dismissal went to £72,300 (an increase of 5.7%).

Taking a view on liquidation

The most burdensome elements of TUPE do not apply to those taking over an operation from a business subject to 'insolvency proceedings .. instituted with a view to liquidation of the assets of the transferor' (Regulation 8). So, can administration proceedings ever come within Regulation 8, to relieve a new employer of the employment liabilities of the old? 'Never', says the CA in Key2law LLP v De'Antiquitis. Whatever the actual view of the administrators about the viability of the business, they are always formally required to pursue certain objectives, one being the rescue of the business. That made administration and the insolvency proceedings envisaged by TUPE incompatible. So, beware - any acquisition of a business from an administrator that satisfies the criteria for a 'relevant transfer' under TUPE will not then be able to escape its normal effects.

And taking the long view

While we are on the subject(s) of TUPE and administrators, here's another one for your collection - Spaceright v Baillavoine. The question the CA considered is one that, given the frequency of the practice, you might have thought had been resolved by now. Can a dismissal by an administrator, effected to make the business more attractive to purchasers and so before the buyer was identified, be 'for a reason connected with the [subsequent] transfer' under Regulation 7 of TUPE? The answer is important. If it is 'yes', the dismissal will be unfair, unless it is for an economic, technical or organisational ('ETO') reason entailing changes in the workforce (and is otherwise handled reasonably). And 'yes' is the answer that the CA gave. It had no difficulty in navigating round the words 'the transfer' in Regulation 7. It observed that it was common for an event to be 'connected with' a later one, even though the latter could not be guaranteed or foreseen at the time of the former. And the CA moved on to rule that the ETO defence was not available for dismissals to make the business more 'saleable'. So, when purchasing a going concern from an administrator, do check whether people have been dismissed in the period before the transfer. The liability in law will often pass to you, the transferee.

Picking on the wife

A longstanding, but often overlooked, 'protected characteristic' (discrimination on the grounds of which is unlawful) is that of 'marriage and civil partnership'. In Dunn v Institute of Cemetery and Crematorium Management, the EAT had to consider whether unfavourable treatment because an employee was married to a particular person came within the legislative protection. In essence, Mrs Dunn alleged that she was treated less favourably because her husband was also in dispute with her employer. The EAT concluded that her claim on the ground of her specific association was within bounds. There was no merit in the employer's argument that the law only proscribed discrimination because a person was married, not because a person had a particular spouse. This will cause increased scrutiny when an employee is dismissed or side-lined because his/her spouse has left to set up or join a competing business. But there might be a defence here that it is the risk of breach of confidentiality arising from any close association, not just marriage, that is the causative factor.


Doubling up

The draft Order to increase the qualifying period necessary to claim unfair dismissal was published late last week. Once approved, it will be simple in its effect. Those whose continuous employment starts on or after 6th April 2012 will need to accrue two years' service before they will be protected. If not already qualified, anyone who started before that date (even just the day before) will need only to cross the current threshold of one year's service to become so.

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

If you would like to discuss this or any other issue facing your organisation please speak to your usual contact at Collinson Grant or Richard Hendry 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.