It's a trap!

Employment Law Newsletter - February 2014


In this issue ...

  It's now cheaper to comply   Back from Europe, but still no result  
  Why wait for live legislation?   It's the same old song  
  Consultants given a stamp of approval?   Flexi-time: use it or lose it!  
  Off to Europe   What's yours is mine (even in the information age)  
  How oddball is your interviewing?  

It's now cheaper to comply

The National Minimum Wage (NMW) is £6.31 per hour. For a 40-hour week, that equates to less than £13,500 per annum. Even with some additional employment costs, this is unlikely to rise any higher than £15-16,000. So, with this month's increase to £20,000 in the penalty for failing to apply the NMW, it is now 'officially' cheaper for employers just to get on with it.


Why wait for live legislation?

Discrimination on the basis of a person's 'caste' has been coming up on the rails for a year or two. The current position is that Parliament has given the Secretary of State the power to amend the Equality Act so as to include caste as a protected characteristic. But that power has not yet been used, pending further evaluation and consideration.

That hasn't detained the Huntingdon employment tribunal in Tirkey v Chandok. It allowed to proceed a claim alleging differential treatment by a high-caste Hindu employer towards an Adivasi, one of the tribal peoples who stand outside the caste system and have a generally inferior position in Indian society. Of course, if that decision is subject to appeal and overturned, the necessity for legislation to give such protection might resurface.


Consultants given a stamp of approval?

Generally, Collinson Grant advises managers on the options for managing employees, taking into account any legal risks. Our consultants will indicate preferred courses of action, but will leave the 'executive' decision for the manager to take, sometimes after they have consulted a higher manager. But, occasionally, our role goes further and extends into that 'executive' function - we are commissioned (often after doing an investigation) at least to make a visible, formal recommendation to management or, even, to act as agent for the client, determining and implementing appropriate action. How does that participation by an external party fit with the law of unfair dismissal?

The Employment Appeals Tribunal (EAT) considered that question in GM Packaging v Haslem. Here, an employer had delegated to an HR Consultant the effective decision making, both at first instance and on appeal, about a senior manager who had sexual relations with a subordinate on company premises after hours. The EAT's view was that, if the situation otherwise satisfied the test of reasonableness (investigation, procedure, seriousness of offence et cetera), there was no problem with the use of an 'outsider'. Naturally, the devil is in the detail - reasonableness will often be more likely if the consultant is not just 'good' but also familiar with the business and its culture, processes and standards.


Off to Europe

The much-awaited consideration by the Court of Appeal (CA) of the EAT's decision in USDAW v Woolworths (featured in the June 2013 and July 2013 issues) did not last long. That's because the question - whether the duty to consult with employee representatives arises when there are more than 20 redundancies proposed anywhere in an organisation (not only when they all fall in a single 'establishment') - has been referred to the European Court of Justice (ECJ). That court already has a reference from Northern Ireland on the same point.

As to when the ECJ will get round to a ruling, we don't know, but don't assume it will be in the next 12 months. As to the answer to the question, we shall hedge our bets. The Government seems confident that the 'establishment' criterion will be endorsed - if you look at the actual regulations amending TUPE (summarised in the January 2014 issue), you will see that the bit allowing pre-transfer redundancy consultation by the incoming employer persists with references to 'establishment'. But it does seem difficult to reconcile our legislation with the terms of the Directive which the ECJ will use as the benchmark.


Back from Europe, but still no result

Even when the ECJ gets asked a question, it does not always answer it. In Nolan v USA, mentioned in our December 2012 newsletter, the ECJ was meant to resolve another burning issue: the matters on which an employer is required to consult. This subject had been thrown into focus by the EAT's decision in UK Coal Mining, which was that, at least for a full closure, there was an obligation to consult on that (as a 'proposal') as well as on the resulting redundancies and their effects. Arguably, this was in conflict with previous rulings of the ECJ.

However, with the stage set and the audience in hushed anticipation, the ECJ decided it did not have jurisdiction in Nolan to consider the point. So, Nolan came back for resolution by the CA here. But, again, observers were left disappointed. The judges' time was taken up on other, technical arguments by the US government - so submissions and then a decision on the key point have been postponed until the hearing reconvenes. Watch this space (or 'don't hold your breath'?).


It's the same old song

We might have just welcomed in a whole load of new detail under TUPE (see our January 2014 issue), but the appellate courts are still dealing with cases under 'the old law', to the extent it makes any difference. In Manchester College v Hazel, the CA has upheld the EAT's ruling (covered in our December 2012 issue) that a new employer's wish to harmonise the terms of its original workforce and those of staff who have recently transferred in is not 'an economic, technical or organisational reason entailing changes in the workforce'. Although job losses or changes in job content do satisfy that definition, they must affect the same employees whose terms are subject to alteration. It is not enough that there is a 'redundancy exercise' occurring for other employees in the same business.

And although the recent changes to TUPE include a tinkering with the wording relevant to the facts of Hazel, we think the same outcome would occur if the case were assessed under the revised rules.


Flexi-time: use it or lose it!

A combination of the Working Time Regulations (WTR) and almost universal provisions in contracts of employment mean that payment in lieu of accrued holidays on the ending of employment is a given. But, although it has superficial similarities, accrued flexi-time does not currently carry the same guarantee.

In Vision Events v Paterson, the EAT decided that, unless there was an express term in the employment contract about payment in lieu of 'flexi hours' accrued but not used, there was no right to be compensated for their loss on termination. There was no necessity to imply a term to that end.


What's yours is mine (even in the information age)

Does the 'information age' reduce an employer's ability to treat employees' relationships with clients as a proprietary interest capable of protection through restrictive covenants? According to the High Court (HC) in East England Schools v Palmer, no.

Palmer was a recruitment consultant for an agency in the education sector. Her contract featured a covenant prohibiting her from dealing, for six months after leaving employment, with candidate teachers or client schools with whom she had dealt in the 12 months preceding termination. The HC accepted that, in this sector, there is relatively little loyalty (from schools or candidates) to particular agencies. It also acknowledged that much information is publicly available through the internet or social media anyway, including the names of schools, contact details of those handling resourcing and recruitment, and curricula vitae or biographies of candidates. But it held that the employer here was entitled to enforce the covenant as there still was a 'proprietary interest' worthy of protection. Stronger relationships, from which additional information not so readily available was obtained, could still provide an edge in a competitive marketplace.


How oddball is your interviewing?

Interviewing job applicants can be a dry and formal business. To liven things up, you may want to try one of the 'Top 25 oddball interview questions' compiled by

Here are some samples:

If you could throw a parade of any type through the office, what type of parade would it be?
How lucky are you and why?
If you were a pizza delivery man, how would you benefit from scissors?
Are you more of a hunter or a gatherer?
Do you believe in Big Foot?
If you were a box of cereal, what would you be and why?
Why is a tennis ball fuzzy?
What is your least favourite thing about humanity?
How many square feet of pizza is eaten in the US each year?
If there was a movie produced about your life, who would play you, and why?

The list includes questions used by Apple, Dell, Norwegian Cruise Line and Goldman Sachs. As far as their effectiveness is concerned, we have no data.


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.