It's a trap!

Employment Law Newsletter - October 2015


In this issue ...

  And it was only a rehearsal!   Whistleblowing - make way for the coach and horses?  
  Laying off TUPE isn't easy   On the up, for some hours at leas  
  You're nicked!   Bad faith must be given a proper airing  
  From the horse's mouth  

And it was only a rehearsal!

For those of you still coming to terms with the legislation and associated guidance on shared parental leave (SPL) and trying to develop intelligible related internal policies and procedures, there was some really good news from the Conservatives' recent conference in Manchester. The Government, somehow presumably convinced of the ease with which the SPL machinery has been accommodated by employers, will consult next year on the extension, in 2018, of the regime to cover grandparents. If there be a slight silver lining to this probable cloud of complexity, it seems that any new rules will only cover working grandparents, as those who are retired or otherwise 'economically inactive' would be unlikely to meet eligibility criteria of a type similar to those under the SPL provisions.


Laying off TUPE isn't easy

The case law on what is meant under TUPE by an 'organised grouping' - of employees (in a 'service provision change' – SPC) or of resources (in other types of transfer) - has grown steadily. For relatively recent examples, see our July 2013 and March 2015 issues. The latest angle is this – can there be such a body if, at the time of changeover in a service or undertaking, the constituent elements have been broken up because of a lay-off situation caused by a lack of work?

That was the question confronting the Employment Appeal Tribunal (EAT) in Inex v Hodgkins, a case in which Inex was represented by Collinson Grant's head of employment law, Jo Hale.

Inex had laid Hodgkins and colleagues off temporarily (in accordance with a provision in their contracts) because there was unlikely to be any further work available for them under the contract on which Inex was working for a month or two. Subsequently, that contract was lost by Inex and awarded by the client to another business (L). Inex argued that, nonetheless, the SPC provisions of TUPE applied to pass the contracts of employment to L. The EAT agreed, holding that the requirement in TUPE for an organised grouping of employees to have, at the time of changeover, the 'purpose of carrying out activities' for the client does not necessarily mean the employees must actually be engaged in those activities at that time.

Interestingly, although the SPC part of TUPE is not driven by the obligation to comply with the EU's Acquired Rights Directive, the EAT nevertheless adopted a purposive ('protection of employment') approach to the question. However, it did not make a final finding, remitting the case to the employment tribunal for a decision on the facts.


You're nicked!

Many of you will be aware of the statutory obligation to notify the Secretary of State for Business of impending 'mass redundancies'. In the good old days, although an employer's failure to comply with the timescales (which, like the number of proposed dismissals, tally with those for commencing consultation with employee representatives) could lead to a fine of up to £5,000 being levied, the usual response of the authorities tended to be something along the lines of 'please try harder next time'.

However, it seems that this relaxed approach is in peril. The fine is now unlimited. And there have been recent reports of personal prosecutions being brought against the directors of City Link and Sports Direct, two businesses with substantial (and in one case at least, well-publicised) redundancy exercises where the notification formalities were not observed. In the face of significant governmental liability for various payments due to employees affected by these and other high-profile failures, the new ethos is apparently to discourage other businesses from flouting the rules by creating a 'corridor of uncertainty' about prosecution, whether corporate or individual. So, although you might continue to 'get away' with a late submission or non-submission of a Form HR1, there will be a real risk for any of your organisation's board implicated in the failure.


Whistleblowing - make way for the coach and horses?

As recently as April 2015, we reported the case of Chestertons v Nurmohamed, in which the EAT made a substantial dent in the 2013 amendment to the whistleblowing rules intended to eliminate 'private' claims or disputes about a contract of employment. That ruling is on appeal to the Court of Appeal, but that has not stopped the EAT, in Underwood v Wincanton, from charging again through, and widening, the gap created by Nurmohamed.

In Underwood, a group of employees complained to their employer about an alleged breach of contract (the inequitable distribution of overtime amongst drivers). They claimed that, as a result of this complaint, they were subjected to a detriment. The group numbered just four, whereas in Nurmohamed it had been around 100. Nonetheless, the EAT ruled that this was sufficient to constitute a section of the public and bring into play the 'public interest disclosure' protections.


On the up, for some hours at least

Albeit somewhat overshadowed by talk of the forthcoming National Living Wage, the good old national minimum wage (NMW) is still about and experiencing its latest annual hike. The new NMW hourly rates with effect from 1st October are:

Aged 21 or older    £6.70 (from £6.50)
Aged 18 – 20 £5.30 (from £5.13)
Aged 16 – 17 £3.87 (from £3.79)
Apprentice £3.30 (from £2.73)

But not all hours at the workplace are covered by the NMW. In Shannon v Clifton House Residential, a care worker who lived on-site permanently could not claim for his 'on-call' hours at night. Even though he could, in principle, get asked to assist working colleagues during those hours, that happened only very rarely in practice. The EAT said he was entitled to spend this time at home, frequently asleep, whereas the NMW is only payable for hours when a worker is awake and working.


Bad faith must be given a proper airing

There is limited scope for a tribunal to consider whether a dismissal is tainted by the supposed bad faith or improper motives of a decision-making manager (see Davies v Sandwell Council in our March 2013 issue and Way v Spectrum Property Care in the May 2015 one).

However, in Secretary of State for Justice v Lown, the EAT has pointed out that, during the tribunal hearing, an employer must be allowed to respond to any such suggestion of bias. It is not enough for a tribunal simply to infer bad faith from surrounding circumstances or to accept the dismissed employee's uncontested evidence on the subject.


From the horse's mouth

The September 2015 newsletter mentioned some developments on employment tribunal fees. One featured only in passing was the review by the Ministry of Justice. This has recently received a list of proposals from the President of the Employment Tribunals (England and Wales) and the Regional Employment Judges. They include:

Splitting claims into three categories (short, standard and open tracks, the classification currently used by the tribunals to manage cases) instead of two;
Discounts for presentation of claims online, for dealing with correspondence electronically and for 'hearings' which can be disposed of on the papers alone; and
Requiring respondents to pay 'response fees' and hearing fees.

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.