It's a trap!

Employment Law Newsletter - March 2015


In this issue ...

  Will you join us?   Getting oneself organised  
  The second instalment - and a bit more   Do it yourself!  
  Zero now means more than nil   A resistance to change  
  How far do you have to go?   Not knowing is not all  
  Mind that gap  

Will you join us?

If you don't already know, our annual updates on employment law will be on Tuesday 9th June (at the Malmaison Hotel, Manchester) and Thursday 11th June (at the Novotel London City South). To register or for further details, please click here.


The second instalment - and a bit more

In the February 2015 issue, we told you about the annual uprating of the flat rate maternity, other parental and sickness payments with effect from April. We now know the increases to the core limits in employment protection legislation that will apply from the same time. The cap on a week's pay will be £475 (making the maximum statutory redundancy payment and basic award for unfair dismissal £14,250). Where a successful claimant's annual pay is greater, the top potential compensatory award for unfair dismissal, irrespective of assessed financial loss attributable to the dismissal, will become £78,335. And the daily guarantee payment for lay-off rises to £26.

Meanwhile, there is fresh doubt about rises in compensation for injury to feelings in cases of unlawful discrimination. Previously, the Employment Appeal Tribunal (EAT) had twice stated that the so-called 'Vento' guidelines/bands for such compensation should be increased by 10% in line with a Court of Appeal (CA) ruling (Simmons v Castle) for personal injury cases in the ordinary courts. This would, for example, take the top band Vento awards from £30,000 to £33,000. However, in Chawla v Hewlett Packard, a different division of the EAT has adopted the opposite position, holding that the Simmons uplift does not apply in the employment tribunals. Clearly, although this is limited good news for employers, the divergence of opinion now needs resolution by the CA itself and there can be no certainty until that happens.


Zero now means more than nil

The government has published some details of an extension to the ban on exclusivity clauses in 'zero hours contracts' (ZHCs). Exclusivity clauses seek to prevent a person working for any other employer. The ban itself is in the Small Business, Enterprise and Employment Bill, featured in our June 2014 and July 2014 editions and currently due to receive its third reading in the Lords this week.

The extension, anticipating the problem we identified in the first of our earlier features mentioned above, will mean that contracts that do not guarantee a certain minimum level of pay will, like literal ZHCs, also not be able to contain an enforceable exclusivity clause. In due course (presumably, after the dust of the general election has settled and Parliament reconvenes), Regulations will specify a minimum income - calculated by multiplying the NMW by an agreed number of hours - for a contract below which an exclusivity clause will be invalid. However, this stricture will not apply to any contract where the hourly rate is at least £20.


How far do you have to go?

Employers are often vexed by the hoops they are seemingly required to jump through when conducting a disciplinary investigation. And, although some of this is the stuff of myth or derived from third party report rather than direct experience, they are sometimes rightly bothered. However, in Shrestha v Genesis Housing, a welcome dose of realism has been served up by the CA.

A support worker who used his car to visit clients in their homes, Shrestha submitted mileage claims to his employer. Following an audit, all his claims were found to be substantially in excess of the mileages for recommended or normal routes to his various destinations. In the resultant disciplinary investigation, Shrestha put forward, with little supporting evidence, a purported explanation - diversions, traffic jams, roadworks, parking difficulties - for each and every excessive claim. The employer, finding it quite implausible that every journey would have been affected as Shrestha asserted, chose not to explore with him the circumstances of each. He was dismissed for gross misconduct.

The CA confirmed that the dismissal was fair. It was within the 'band of reasonable responses' for the employer to be incredulous here. It would be too restrictive to require it to investigate every line of defence put forward unless it was manifestly false or unarguable.


Getting oneself organised

In our July 2013 edition, we covered Ceva Freight v Seawell, where a single employee was held not to be an 'organised grouping of employees' able to come under the 'service provision change' limb of TUPE. But, as the CA's recent decision in Rynda v Rhijnsburger confirms, the ruling in Ceva was based on a lack of organisation, not of numbers. In Rynda, the employee concerned was responsible for the Dutch properties within a fund, all the assets of which were managed by her employer. When that service was taken over by another asset management company, Rynda, the question was whether Rhijnsburger transferred to its employment.

The CA found no difficulty in answering in the affirmative. The employee was devoted full-time to the Dutch properties and had no colleagues working with her on that 'portfolio'. In those circumstances, it had to be concluded that, before the changeover, her employer had consciously organised things that way.

That was a factor missing in Ceva and, even where there were more employees, in Eddie Stobart v Morman (see our April 2012 issue). So, notwithstanding the use of the plural in TUPE's wording, it is possible for one employee to be an organised grouping of employees.

While we're on the subject of merging singular and plural, the EAT has decided, in Ottimo Property Services v Duncan, that a service provision change can happen where there is a group of individual clients for whom the service activities in question are provided (such as tenants in a commercial property or management companies acting for residents in apartments, who, in each case, might combine to procure maintenance services at best value). The EAT has said that, so long as the identity of the clients remains the same through the changeover and the clients have a common intention or purpose, nothing hangs on TUPE's use of the singular ('client').


Do it yourself!

It's only taken some 17 years, but, finally, section 56 of the Data Protection Act 1998 has been brought into effect.

This makes a criminal offence of the practice of an employer requiring a job applicant or employee to use a subject access request to get a copy of their own criminal record for supply to the employer in connection with recruitment or continued employment (so-called 'enforced subject access').

The correct approach for employers is, of course, to use the disclosure regime under DBS, Disclosure Scotland or Access Northern Ireland.


A resistance to change

During the recession of the last six or seven years, there has been a slight tendency - perhaps not conscious - for the tribunals and courts to be quite tolerant or accommodating of variation clauses in contracts and handbooks, allowing an employer to make a contractual change without employees' consent to the specific alteration.

But three recent decisions, all with adverse outcomes for the employer, have served to emphasise that this is not a free for all and that much hangs on the precise words used in a general unilateral variation clause.

In Hart v St Mary's School, an express requirement to 'work such time as is necessary for the proper performance of duties', even when supplemented by a statement that 'hours may be varied depending on requirements of the timetable', was insufficient for the EAT to allow the school to make a teacher work across five rather than three days per week. That kind of structural change was not contemplated by the words used.

In Norman v National Audit Office, the wording 'terms are subject to amendment', allied with 'you will be notified' [of amendments], were found by the EAT to lack the clarity or precision to permit changes without employees' agreement. The fact that terms were 'subject to amendment' did not conclude the issue of the manner or process of amendment, and the reference to 'notification' could just as readily be understood as being after agreement as following unilateral imposition.

And in Sparks v Department of Transport the High Court ruled that even 'after consulting, we may make unilateral changes which are not detrimental' could not be relied upon by the Department to impose alterations. As it happened, the changes involved were definitely 'detrimental', but the introduction of that concept in any event caused a vagueness that would make the clause unworkable.

Do your flexibility clauses need re-considering to reflect your objectives and intentions? If you think they might, call us.


Not knowing is not all

In Land Registry v Houghton, a bonus scheme disqualified from payment those employees who had received a warning for excessive absence. The EAT found that, for someone with a disability that caused or significantly contributed to an absence record justifying a warning, that exclusion amounted to unlawful discrimination arising from disability. It was irrelevant that the warnings system made some allowances for those with a disability (because, if a warning was ultimately issued to someone in that group, it still disqualified the recipient from a bonus) or that the HR Officer who administered the bonus scheme was unaware that the claimant had a disability (because the discrimination ultimately arose from the scheme rules, not the decision or attitude of an individual about payment).

Of course, disability discrimination law is no stranger to the idea that lack of knowledge, individual or corporate, is no defence. The concept of 'constructive knowledge' is well-established here. Where it cannot be shown an employer or manager was actually aware of the employee's disability, the law can nevertheless deem them to be aware because of obvious pointers that were ignored - they ought reasonably to have known.

However, there are limits to that doctrine. In Donelien v Liberata UK, the employee alleged that she had a stress-related disability and that her employer had failed to make reasonable adjustments for her before dismissing her for persistent short-term absence and failure to comply with reporting procedures. The employer denied that she was suffering from a disability of which it was, or ought reasonably to have been, aware. And, on the latter point - that of constructive knowledge - the EAT accepted that the employer had enquired and investigated enough to be exempt. It had commissioned two reports from its occupational health specialists. Further, while those reports had not answered a specific question about an underlying medical condition and had simply opined that the employee was not disabled, the employer had not just relied on that 'say so' but had sought independently to find out more from the employee and her GP. Therefore, although there was a disability in existence by the time of dismissal, no knowledge of it could be attributed to the employer. It had made reasonable efforts to find out more and it did not need to be 'perfect' in this respect.


Mind that gap

There has been a late amendment to the Small Business, Enterprise and Employment Bill (see also 'Zero now means more than nil' above), reviving the spirit of an unused and almost forgotten provision of the Equality Act 2010. It will oblige the Secretary of State to make Regulations, within a maximum of 12 months of the Bill's becoming law, to require employers of 250 employees to report on pay between men and women in their workforces ('gender pay gap reporting'). Although much of the detail will only surface in the Regulations themselves, the Bill says that reports can be required no more frequently than annually. It also exempts certain types of employer, notably local authorities and NHS Trusts.



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.