It's a trap!

Employment Law Newsletter - March 2014


In this issue ...

  A spring clean – or a bit more – for employment law   When an appeal is not quite an appeal  
  A block on change?   In the dog house  
  Resolution   Line managers have a crucial role to play in dismissals  
  How illegal is illegal?   ...and in managing absence  
  There's Failure and then there's just a failure   Collinson Grant gains traction with HR outsourcing  

A spring clean – or a bit more – for employment law

As the bulbs and buds burst forth and the birds start to sing more vibrantly, the law affecting employment experiences its own annual regeneration. But, this year, the spring changes are both more condensed and more extensive.

From 10th March, radical reductions occur in the periods before which criminal convictions generally become 'spent' and need not be disclosed to prospective employers – although, for custodial and other time-based penalties, a small part of the differential between old and new 'rehab' periods is offset by the fact that the new ones are counted from the end of the sentence rather than the date of conviction. The details can be found at

Next, the principal limits for compensation go up on 6th April (not, as before, 1st February). The maximum for a 'week's pay', used to calculate both statutory redundancy payments and the basic award for unfair dismissal, rises to £464. And the 'top cap' on the compensatory award for unfair dismissal becomes £76,574. If claimants earn less than this, the cap is their annual salary.

On the same date:

the maximum civil penalty doubles to £20,000 for employers who, through failing to conduct pre-employment checks, engage adults who do not have the right to work in the UK; and
the percentage threshold scheme, whereby employers may sometimes recover from the Government the cost of Statutory Sick Pay, is abolished. It seems this is not just about cost-cutting for the Exchequer – it is also designed to sharpen employers' focus on reducing the cost of absence.

In the employment tribunal, 6th April also sees the activation of arrangements for prospective penalties for employers who lose cases in which there were 'aggravating features' – such as deliberation, repetition or malice. Where ordered, a penalty of between £100 and £5,000 will be payable to the Secretary of State – but there is a 50% discount for payment within 21 days.


A block on change?

It's probably too early to assess its long-term viability, but it seems that the content of section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) might obstruct some changes that, in contractual terms, would be lawful to implement. This quite obscure provision says that a worker who is a member of a recognised trade union has the right not to receive an offer from the employer which would result in any terms and conditions no longer being determined by collective bargaining. Breach leads to an award of almost £4,000. And any changes agreed with the worker following 'the offer' are of doubtful validity.

A common scenario is that, following a failure to negotiate changes to contracts with a union, an employer moves to seeking the agreement of individual employees. Several recent employment tribunal cases have considered how s.145B fits with this approach. Relying on the supporting rule (in s.145D) that, alongside the effect of the offer, the employer's motive or purpose must be considered, the majority of decisions have favoured employers,. But one has found a breach of s.145B.

On a possibly related matter, Labour recently put down an early day motion in the Commons seeking annulment of the regulations amending TUPE (which broadened the scope for changing terms drawn from a collective agreement - see the January 2014 issue). This is an unusual approach, not least because Labour did not oppose the new rules when they were laid before Parliament in late 2013. However, it is likely that, perhaps in terms that are less technical and talk more of the erosion of workers' entitlements, a clash of s.145B with the 'new TUPE' is behind this.



In our May 2013 issue, we mentioned two conflicting decisions of the Employment Appeal Tribunal (EAT) on the question of whether the Equality Act 2010 covers victimisation after employment has ended or whether it needs amending. In one, Rowstock v Jessemy, the Court of Appeal has now stepped in to confirm that the Act passes muster on this point. So, subject to an appeal to the Supreme Court and a different answer there, there is no need for Parliament to amend the Act.


How illegal is illegal?

In shorthand, it is often said that an employee who is party to an illegal contract cannot sue on it or enforce statutory rights arising from it. But that conceals the detail, not least on the latter point. First, while unfair dismissal rights might be beyond reach for such an individual, much of discrimination law is not. And now the EAT, in Wijesundera v Heathrow Logistics, has made distinctions within discrimination law itself.

Here, a Sri Lankan national knowingly worked illegally for a year before her employers obtained the requisite permit. When later dismissed, she brought claims of unlawful sexual harassment, some of which was said to have occurred during this 12-month period, and of discriminatory, unfair and wrongful dismissal.

The EAT rejected all aspects of her case relating to dismissal – because they arose from the termination of a contract which, in law, never really existed because of the illegality. You might have thought that the same principle would have disposed of the harassment complaint. But the EAT deftly sidestepped that. It decided that, in contrast to perhaps an entitlement to particular benefits or services in employment, 'there is nothing intrinsic about being an employee [under a contract] that leads to sexual harassment or freedom from it'. The harassment claim could proceed despite the illegal basis of the employment.


There's Failure and then there's just a failure

Another bit of shorthand – the starting point for the protective award for breach of the collective consultation rules is the maximum (of 90 days' pay per employee). Not always so, according to the EAT in London Borough of Barnet v Unison (first covered in our March 2013 issue). The maximum award is only the presumption when there has been a complete disregard of the statutory requirements. Here, where the employer's failure was only partial (not informing representatives about agency workers), that approach was not correct.


When an appeal is not quite an appeal

There is a generally increased risk of liability if employees are not offered a right of appeal against disciplinary dismissal or if they are not given a hearing they have properly requested. Worse still, one would say, is the exposure of the employer who considers an appeal, concludes that dismissal was too severe but fails to take corrective action – in boxing parlance, that's rather 'leading with the chin'. But not quite always it seems. In Kisoka v Ratnpinyotip (t/a Rydevale Day Nursery) – a casename that should only be fully typed once if possible – the EAT found that an employer was able to ignore appeal findings.

In Kisoka, the small employer put out the employee's appeal against dismissal for gross misconduct (starting a fire at the nursery) to an independent panel. That panel said that the decision to dismiss should be overturned because there was insufficient evidence of guilt. Noting that the employer was responsible for the welfare of children, its original investigation had been reasonable and there were no explicit rules about the status or power of the appeal panel, the EAT found that the employer's refusal to comply with the panel's finding here did not make the dismissal unfair.

Interesting, but not a precedent for handling internal disciplinary processes!


In the dog house

That's where 'the Met' has found itself, in Metropolitan Police v Keohane, over the removal of a dog from her handler whose pregnancy meant she was no longer doing her normal job. Even though the police force needed to keep the dog operationally active, the pregnancy was a factor in the decision and it amounted to a 'detriment' to the handler. But, lest some readers might be shaking their heads in despair, we should point out that the detriment was not loss of companionship with the dog (delightfully named Nunki Pippin). More practically, the EAT found that the breaking of the relationship would risk adversely affecting the handler's career progression and opportunities for overtime on her return to work.


Line managers have a crucial role to play in dismissals

It's a sobering thought, but employers are on a loser from the outset in many employment tribunal claims. That's the suggestion from XpertHR's recently published survey of 138 employers. The single most common reason they gave for losing was that 'the company was at fault – because of poor judgment/decisions on the part of the line manager'. Incidentally, nearly a quarter thought they had lost because 'the process was biased towards the other party'.

So, no matter how much expertise you have in your HR department or externally, it is the knowledge and skill of those at the coalface that really matters. In case you feel the need, we still have some copies of the current edition of Employment law for line managers.


...and in managing absence

In a variation on the same theme, another survey found that line managers are equally important in tackling absence. A quarter of respondents (25.3%) cited 'improving line managers' buy-in to taking an active role in absence management' as the initiative which had the most impact on the problem. Looking at this from another perspective, if your line managers aren't bothered about absence rates, what hope have you got?

The least successful initiatives were: 'adjustments as suggested by doctor in fit notes'; 'gaining unions' agreement to more effective absence management' and 'introducing or improving an employee assistance programme'. Touchy-feely, wastey-timey?


Collinson Grant gains traction with HR outsourcing

Some HR services, such as legal compliance and payroll, are mandatory. Many others are only cost-effective if they produce tangible benefits. They are a drain on resources if they do not.

You have a choice about what to provide and how. And about how much to spend.

Collinson Grant has been helping clients manage people for more than 40 years. We provide a fully outsourced human resources function that manages people more effectively at lower cost.

Our service covers all aspects of HR. You can select which tasks you want to outsource fully and those you wish to retain in-house. Typically, we reduce the costs of running an HR function by 20%. Outsourcing also puts a wider range of specialist resources at your disposal.

Our clients include some of the UK's largest care home operators, the UK's largest provider of off-street parking, and a distribution business with a turnover of more than £1.4bn. We also work for owner-managed businesses and charities with fewer than 100 employees.

If this approach to managing HR sounds interesting, please contact David Mosscrop on +44 161 703 5600 or e-mail


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.