It's a trap!

Employment Law Newsletter - May 2013


In this issue ...

  Will you be there?   Consultation on redundancies  
  We said it!   Well, is it covered or not?  
  TUPE   The magician's trick  

Will you be there?

Our free, one-day employment law updates will be held in Manchester and London on Tuesday 18th June and Thursday 20th June respectively. The sessions will be full of topical material and there will be time for discussion - including over a buffet lunch. There are a few spaces left and, thanks to the html wizardry of our new format, you can click here to reserve yours.


We said it!

In April's issue we set out a broad timetable for recent and forthcoming changes in employment legislation, admitting that we might have overlooked something. Well, it's good to be proved correct! We probably should have mentioned that, with the arrival of the Enterprise and Regulatory Reform Act:

'caste' will become part of the current protected (against discrimination et cetera) characteristic of 'race' under the Equality Act.
a dismissal for an employee's political opinion or affiliation will be 'automatically unfair' (with no need for a period of qualifying service).

Both changes are due in the summer.


TUPE - whom should you inform and when?

In I Lab v Metcalfe, the EAT considered two aspects of the employer's duty under TUPE to inform (and, perhaps, consult with) representatives of affected employees - how far does the scope of 'affected employees' extend, and when is the duty 'triggered'?

On the first, the facts of Metcalfe are key. The transferor employer had two separate, completely self-contained businesses, only one of which was acquired by the transferee. The second business was ultimately liquidated. Although its employees had initially been told that some of them might also transfer, the EAT held they were not 'affected' by the TUPE transfer of the first business (even if it were shown that the closed business could only survive with assistance from the transferred one). So, the duty to communicate through representatives did not apply to employees of the second operation.

At this point, a note of caution is justified. It is possible for only part of a single business to transfer and, in that situation, it is also possible for employees remaining in the non-transferred part still to be 'affected' by the transfer or measures associated with it. There, they would be entitled to be informed/consulted through representatives.

On the second point, the EAT was clear, if a little abstract - there is no duty to inform under TUPE because of a 'proposed' transfer. TUPE's wording requires the provision of information 'long enough before the transfer to enable the employer [then] to consult' representatives. So, the duty could not be said to apply, far less to be breached, until a transfer actually happens and acts as a 'benchmark'.

On this strict analysis, it is open to a prospective transferor to leave things until the eleventh hour. The duty to inform might never come into play (because the transfer never happens) or it might still be satisfied (because, although the transfer happens, there are no pre-transfer 'measures' envisaged that will demand consultation and a short timescale is appropriate). But, again, be careful with this. The risk of course is that the 'eleventh hour' strategy combines with the existence of 'measures' that do require pre-transfer consultation with representatives. Then, the only legally safe approach would be to postpone the transfer to allow for consultation first. Rather messy and impractical. The better tack is, without worrying overly about whether a transfer will ultimately happen, to anticipate and then announce and inform in good time according to the circumstances.


Collective consultation on redundancies - with whom and when?

The same two broad points were considered by the EAT, in Kelly v Hesley Group, for the application of the collective redundancy consultation rules. But the detail was different.

First, what decides if an existing representative body is an appropriate one, with authority from employees to undertake consultation? The EAT said it was insufficient for a body to be called a 'Joint Consultative Committee' (JCC). If it nevertheless had members who were not chosen by employees but co-opted by the employer and its constitution explicitly excluded 'negotiation' as a function, there was concern. The EAT described the second aspect as 'problematic' - whatever distinction might be drawn between 'consultation' and 'negotiation' (according to the EAT, it is diminishing anyway), the formal exclusion of the latter from the JCC's functions did not naturally suggest that a representative obviously had colleagues' authority to undertake statutory redundancy consultation properly.

Second, the EAT confirmed that the word 'proposing' (to dismiss as redundant) in the legislation should be construed naturally and not by assimilation with the probably broader 'contemplating'. It is only when redundancy dismissals have some solidity in the employer's plans that the duty to consult collectively is activated.


Well, is it covered or not?

Until 2010, anti-discrimination legislation protected individuals against acts of post-termination victimisation by their former employers (such as refusing to give a reference or giving an unfair one) because of an allegation made or tribunal proceedings brought by them while still in employment. However, in Rowstock v Jessemey, the EAT ruled that the wording of the Equality Act 2010 does not replicate that protection.

Now, only two months after Rowstock, another division of the EAT (in Onu v Akwiwu) has decided that it is possible to interpret the Act as covering post-termination victimisation. But fear not! Later this year, the Court of Appeal will consider an appeal in Rowstock. So, all should become clear within the next 12 months and, if the decision is that the Act's wording is deficient, the Government will then have to consider amendments. That is, unless the process becomes even more confused and protracted with an appeal to the Supreme Court or a reference to the European Court of Justice.

Of course, as you presumably would not victimise a past employee for this reason anyway, your interest in the outcome of this debate might be limited.


The magician's trick

If you'd received a pound for every one you'd seen, you'd be wealthy - TV magicians who pluck someone from the audience, borrow their watch, make it disappear from under a handkerchief or inside a bag and, then, to the wonder of all, retrieve it from a parallel universe. Well, now, employment law has its own 'vanishing and reappearing trick'.

It concerns internal appeals against dismissal. The normal rule is that if a dismissed employee appeals successfully, the dismissal is treated as if it never happened. Fundamentally, the individual cannot 'have their cake and eat it' by deciding then to stay out of employment and bring an unfair dismissal claim. But, in Thomson v Barnet PCT, the EAT illustrated that there are still situations where that option resurfaces because of the appeal. Here, a nurse dismissed on capability grounds was reinstated on appeal - but only with a three-year final warning, further training and a competency assessment, all of which had to be accepted by her before she would be allowed to come back to work. She resigned. It was held that, coming on the back of the original dismissal decision (which, by virtue of the appeal ruling, had been excessive), the PCT's new sanctions could be relied upon as a 'last straw' to generate a 'constructive' dismissal.

Of course, material to this approach is that the 'non-dismissal' measures arising from an appeal are not permitted by the relevant procedure or, if they are, are nevertheless excessive in the circumstances. But the Thomson decision is a helpful reminder that eradicating a dismissal on appeal is not necessarily the end of the story - the substituted response must still be proportionate to the particular situation.


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.