It's a trap!

Employment Law Newsletter - June 2013


In this issue ...

  Nowhere to turn   Trust is not a corporate sentiment  
  A nasty rumour   LinkedIn to litigation  
  An update on the Update Service      

Nowhere to turn

A failure to allow or process an appeal by an employee dismissed for disciplinary reasons will generally mean that the dismissal is unfair, even if only on a technicality. But the frequent worthlessness of that proposition in a TUPE situation has been illustrated by the EAT's decision in Bangura v Southern Cross Healthcare.

The dismissal occurred several weeks before the care home in question was transferred to another care provider, Four Seasons (FS). By the time of the transfer, Ms Bangura had submitted an appeal against dismissal, but it had not been heard, never mind resolved. Nothing changed subsequently, so the dismissal remained effective. She was not employed immediately before the transfer and the dismissal was not connected with the transfer, so TUPE could not be used to get her (notionally, in law) into the employment of FS.

And just in case you're thinking that, at least, she would have secured compensation for unfair dismissal from Southern Cross - well, you might remember that business from a couple of years ago; it was basically bust (hence the transfer to other providers of its entire estate of more than 700 homes).


A nasty rumour

Here's another one involving insolvency. But, if the rumours are true, its implications are by no means limited to dead businesses and are very significant.

Although no written judgment has yet been published, there have recently been a number of reports, from reputable sources, about the EAT's decision in USDAW v WW Realisation 1 (in liquidation) and Ethel Austin (in administration). This is a case about the closure, by insolvency managers, of stores at a defunct retailer and the application of the rules on 'collective' redundancy consultation. In line with the prevailing orthodoxy (for another, and appellate, example, see the Renfrewshire Council decision in our December 2012 issue), the employment tribunal found that each store was a separate 'establishment' - so, unless there were 20 or more redundancies at a given store, there was no duty to consult with employees' representatives.

It is now being suggested that, on appeal, the EAT has taken the very different view that the wording and structure of the EU's Directive on Collective Redundancies (with which the UK's own legislation should comply and be read) means that 20 or more proposed redundancies (within 90 days or less) across an entire business will activate the obligation to consult collectively - in effect, that an employer's entire operations, regardless of location, is a single establishment.

The potential consequences could be huge, particularly for any business whose 'geographical dispersal' is significant. First, a minimum of 20 redundancies across the network that are all caused by a programme initiated at 'head office' would subsequently require consultation with representatives. That alone would demand greater monitoring, coordination and control from the centre than before. But, second, it is possible that even unrelated, separately-initiated cutbacks in different branches or units would be caught if the aggregate (proposed) redundancies and their timespan fell within the ambit of the legislation.

Whether or not that second scenario can be kept clear of collective consultation, perhaps on the basis that it arises from more than one 'proposal' or plan, remains to be seen once the decision is published and evaluated. However, unless the EAT has explicitly allowed for this possible limitation, we may have to wait for another 'test case' (not least because, as the respondent employers in the USDAW case were insolvent, there appears to be little prospect of an appeal to the Court of Appeal). So, with uncertainty reigning in the short-term and quite possibly for longer, the only prudent advice is to watch what is happening across the organisation.

We shall keep you posted.


An update on the Update Service

The Disclosure and Barring Service (DBS), which replaced the Criminal Records Bureau (CRB) last year, is completing the transition by launching its 'Update Service' (in old money, the Portable DBS/CRB check) from 17th June.


Trust is not a corporate sentiment

In Oasis Community Learning v Wolff, the EAT ruled that re-engagement (as opposed to reinstatement) could be 'practicable' for an unfairly dismissed employee even though he had persisted, after dismissal, in making damaging allegations about the professionalism and integrity of his employer and other employees. This was because, with a large, geographically-spread organisation, a re-engagement order could be based on another workplace in a different part of the country, where there would be no question of individual working relations being soured by those allegations. In essence, an organisation doesn't have feelings and, if the individuals who do can be kept apart, more is possible.


LinkedIn to litigation

'Social media' are outgrowing their name. They are now an integral feature of working as well as social life, with sites such as LinkedIn providing tools for customer relationship management. But this evolution and expansion comes with a clear risk. So, in the new age of networking, a business that wants to protect its interests must try to limit the individual's rights of privacy, contract and freedom of expression. And, for most purposes, that is best done by a policy on the subject of using social media on work-related matters (note - not just 'at work' or 'for work').

Overall, that is too broad a subject for this feature, but one aspect is an employee's, or former employee's, use of business contacts made and held on a LinkedIn account. There is a tension there between the broad principles of intellectual property and the individual's rights. And the fundamental obstacle is the fact that, under the terms of LinkedIn's user agreement, the account is set up under a contract between LinkedIn and the individual.

Of course, in general terms, the law says that the employer owns any intellectual property created by employees in the course of employment - and, if an account-holder is described, on a business networking site, in terms of his/her current job and employer, contacts and interactions can be seen as 'in the course of employment'.

Few cases have yet tested the law on this aspect of LinkedIn, but, in Hays v Ions, in 2008, the High Court ordered an ex-employee of a recruitment firm to hand over business contacts on his personal LinkedIn account after he allegedly approached them when he set up a rival agency. But Hays involved the ex-employee's active use of contact information and the ex-employer's wish to use it itself. What about a general policy of 'the employer taking control' on the employee's departure? In principle, that might be more difficult.

It is perfectly possible to have, and operate, a rule that, when an employee leaves, they must sit down with a manager and delete from their account any LinkedIn connections acquired in the course of their work. In many cases, that might be a satisfactory resolution of things. But, with a persistent minority of people, it might not. We are reliably informed that LinkedIn will reinstate deleted contacts if the ex-employee, as the contracting party, asks it to. So, the Hays-type employer can have the contacts but cannot have exclusivity.

Some commentators have gone farther, arguing that employers should establish agreements to enable them to obtain usernames and passwords and take control of ex-employees' LinkedIn accounts when they leave. Where an employee complies with this policy, things might go unnoticed for some time at least. But it will run straight up against the terms of LinkedIn's user agreement, mentioned earlier. So, particularly any attempt to force resistant employees to hand over passwords, whether under such an agreement or not, could well amount to the employer's unlawful act of procuring or inducing a breach of this contract by the employee.

Despite all this, it will be prudent for employers to make reference in their terms and conditions to contact lists stored on sites such as LinkedIn, with a clear instruction that such lists must be returned to the employer once the employee leaves.

How much all this information is worth to the employee anyway is another matter. Judging by Eagle v Morgan, a recent US case, the answer could often be 'nothing'. A manager sued her former employer for invasion of privacy by misappropriation of identity because it changed the password on her LinkedIn account after she left and replaced her name and picture with those of another employee. Locked out of her LinkedIn account for three months, she claimed $250,000 on the basis that she generated $1m annually from her 4,000 contacts. Despite finding for the plaintiff on invasion of privacy, the court refused to award any damages because she had not proved that those sales were a result of her use of LinkedIn.


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.