Paris Smith LLP - Employment law update 2013
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Transcript of Paris Smith LLP - Employment law update 2013
Employment Law Conference
“2013 – Another Busy Year for
Employment Law”
Clive Dobbin & David Roath
LLP Partners
2 October 2013
Topics
Changes in legislation –
Clive Dobbin, Paris Smith LLP
Case Law update –
David Roath, Paris Smith LLP
Changes in Legislation
Clive Dobbin
LLP Partner
Paris Smith LLP
Changes in Legislation
Tribunal Reform
Unfair Dismissal compensation
Settlement Agreements
Pre-Termination Negotiations
Employee shareholders
To come
Tribunal Reform
Tribunal Rules
New ET1/ET3
Tribunal Fees
Employment Tribunal Fees
Claimants must now pay fee to commence tribunal
claim
Applies to claims presented on or after 29 July 2013
2 stage fee structure
Issue Fee
Hearing Fee
Employment Tribunal Fees
Type A claims – e.g. unpaid wages, redundancy
payments, PILON, breach of contract, equal pay,
non-consultation under TUPE
Type B claims – e.g. unfair dismissal and
discrimination
If various claims, fee will be the fee which relates to
the highest level claim
Employment Tribunal Fees
Type A Type B
Issue Fee £160 £250
Hearing Fee £230 £950
Hearing fee payable 3-4 weeks prior to hearing (to
be determined)
Employment Tribunal Fees
Fees for specific applications:- Set aside default judgement £100
Judicial mediation £600 (payable by Respondent)
Counter-claim £160
Application for a review £100 Type A
£350 Type B
For application, need to issue application, will then be
issued notice requiring payment of fee
Only when fee is paid will application be considered
Employment Tribunal Fees
Civil Courts fee remission system will apply to
employment tribunals
New fee remission system coming into force on 7
October 2013
2 tests – disposable capital test and household
income test
Tribunal will have discretion to order unsuccessful
party to reimburse fees incurred by successful party
Unfair DismissalCompensation Cap
Unfair dismissal compensation cap
Cap applies to unfair dismissal compensatory
award
Applies where effective date of termination is on or
after 29 July 2013
Future increases will take effect from 6 April, rather
than 1 February
Unfair DismissalCompensation Cap
Lower of:-
£74,200
52 weeks’ pay
A week’s pay calculated in same way as under
Employment Rights Act
Excludes from calculation pension contributions, benefits
in kind and discretionary bonuses
Settlement Agreements
Compromise Agreements renamed Settlement
Agreements
Change effective from 29 July 2013
In agreements references to ‘Compromise Agreement’
need to be changed to ‘Settlement Agreement’
Get your agreements reviewed?
Pre-Termination Negotiations
Evidence of ‘pre-termination negotiations’ inadmissible in
ordinary unfair dismissal proceedings
‘Pre-termination negotiations’ – any offer or discussion of
proposed settlement terms
Purpose – to make it easier to have discussions with regard to a
proposed termination
Overcomes problems with case law on whether a current
dispute
Pre-Termination Negotiations
Limits
Applies to ordinary unfair dismissal claims only (not
automatically unfair dismissal claims)
Doesn’t apply to discrimination claims
Doesn’t apply to breach of contract claims
Can employee just claim constructive dismissal via a
breach of contract claim?
Pre-Termination Negotiations
Limits (cont)
Doesn’t apply where improper behaviour
ACAS Code & ACAS Guide now published
Examples of improper behaviour Discrimination, harassment and victimisation
Not being given a reasonable time to consider offer (Code
suggests a minimum of 10 days)
Employee being warned, if does not sign agreement, disciplinary
proceedings will be commenced and employee will be dismissed
Employee Shareholders
Employees give up certain rights in return for being given
shares
Shares should be worth at least £2,000
Can be new employees or current employees
For applicants, can make offer conditional on new status
For existing employees, protected against being
dismissed, or being subjected to any other detriment,
because do not agree to new status
Employee Shareholders – Rights Given up/Varied
Unfair dismissal
Redundancy payment
Right to request flexible working (other than if request
made on return from parental leave)
Right to request time off for study/training
Return from maternity leave (notice period increased from
8 to 16 weeks)
Can still bring other claims (e.g. discrimination)
Employee Shareholders
Safeguards
Employee must be given a statement of particulars,
including:-
The rights being given up
Whether any voting rights attach to shares
Whether shares carry right to any dividends
Whether entitled to participate in distribution of
surplus assets on a winding up
Employee Shareholders – Statement of Particulars (cont)
Statement of particulars (cont)
How rights differ to other (largest class of) shares
Whether shares are redeemable, and at whose
option
Whether there are any restrictions on transfer
Whether shares subject to pre-emption, drag along
or tag along rights
Employee Shareholders – Safeguards (cont)
Requirement for employee to obtain advice
Employer must pay for the reasonable costs of
obtaining advice (even if individual doesn’t become
an employee shareholder)
7 days must pass between advice and agreement
Employee Shareholders - Benefits
First £2,000 of shares free from income tax and NI
Future gains exempt from capital gains tax (on
shares worth, when given, up to £50,000)
Does not apply if individual has a “material interest”
Also income tax exemption applies to payment of
legal fees for advice
Employee Shareholders
Not a huge enthusiasm during consultation period
If going to take advantage of it:-
Consider articles
What rights attach to new shares (e.g. dividends and
voting rights)
Deal with what happens when employee leaves
Make sure you get the procedure correct
Changes in Legislation –October 2013
October 2013 - 3rd party harassment rules
Changes in Legislation –January 2014
TUPE reforms
Service provision changes - to remain, but new service must
be ‘fundamentally or essentially the same’
Employee liability information – to remain, period of time
extended from 14 days to 28 days prior to transfer
Easier to change location
Can renegotiate terms from collective agreement one year
after transfer, provided overall change is no less favourable to
employee
Changes in Legislation
April/Spring 2014
ACAS mandatory pre-claim conciliation
Financial penalties on employers who lose tribunal
claims
Abolition of discrimination questionnaires
Case Law Update
David Roath
LLP Partner
Paris Smith LLP
Gross Misconduct
Unfair dismissal
To be a fair dismissal, employer must:-
1. Have fair reason to dismiss
2. Act reasonably in dismissing for that reason
Decision to dismiss must be within the band of
reasonable responses
Gross Misconduct
Does finding of gross misconduct mean that dismissal will
inevitably be reasonable?
Brito Babapulle v Ealing Hospital NHS Trust
Finding of gross misconduct
Decision to leap straight to dismissal not correct
Consider all potential mitigating factors such as:-
Length of service
Unblemished record
Consider both stages (and show in decision letter)
Unfair Dismissal
Use of covert video surveillance
Will it make a dismissal unfair?
Privacy under Article 8
Data Protection Act
Unfair Dismissal
City and County of Swansea v Gayle
ET found Council’s use of covert surveillance to be “too
thorough”
Unjustified interference with Article 8
Ignorant of Data Protection Code
Unfair Dismissal
City and County of Swansea v Gayle
EAT overturned decision
Employer cannot be criticised for being too thorough
Article 8 not engaged – filming outside sports centre,
employer’s time and fraudster
Even if it was, action legitimate
Surveillance did not impact on fairness
Ignorance of Data Protection Code did not affect fairness
Court Video Surveillance
Use only where necessary
Use reputable firm
Consider Data Protection issues
Redundancy
Loss of right to statutory redundancy payment
Employee unreasonably refuses an offer of suitable
alternative employment
Is alternative suitable (objective test)?
Is refusal reasonable?
Employee’s reasons subjective – does employee have
sound and justifiable business reasons to refuse?
Redundancy
Devon Primary Care Trust v Readman
Tribunal must focus on employee’s reasons for refusal
and the circumstances of the employee in question
Band of reasonable responses test does not apply
Preference for money not decisive (but should be taken
into account)
Holiday Pay
What rate of pay should an employee be paid when on
holiday?
Should overtime worked in previous 12 weeks be taken
into account?
WTR uses calculation from Employment Rights Act (ERA)
Workers must be paid at the rate of a week’s pay for
each week’s leave
Holiday Pay – Position under ERA
Employee with normal hours and where pay does not vary
with the amount of work done:-
Holiday pay is based on basic salary
Overtime worked is not taken into account
Where no normal hours or pay does vary according to
amount of work done or time of work:-
Pay is based on average pay over the previous 12 working weeks
Holiday Pay
European Court of Justice decisions
Robinson Steele v RD Retail Service Workers on holiday should receive their “normal
remuneration”
Williams and others v British Airways Remuneration “intrinsically linked to performance of
tasks” should be included when calculating holiday pay
Allowances over basic pay were intrinsically linked
Holiday Pay
Neal v Freightliner
Normal hours
Worked regular overtime (but not guaranteed or compulsory)
ET rules that:-
Overtime duties “intrinsically linked”
UK law not in line with European Directive
Neal awarded pay based on overtime worked as well
EAT decision needed
Accrued Holiday
Regulation 14 WTR
Payment of accrued holiday should be:-
calculated in accordance with relevant agreement; or
pay the worker would have received if they had taken a
period of paid leave
Can the sum to be paid be a token amount (such as £1?)
No, according to ET in Podlasiak v Edinburgh Woollen Mill
Only ET decision, but shows direction of decisions
Holidays and Sickness
Worker is entitled to 5.6 weeks’ annual leave
4 weeks under Directive
1.6 weeks additional provided by WTR
Regulation 13(9) WTR prohibits carry over of unused leave
NHS Leeds v Larner – employer must allow carry over for
sick employee
Does 5.6 week entitlement carry over?
Holidays and Sickness
Sood Enterprises Ltd v Healy
Carry over is limited to 4 weeks under Directive
Compensation
Compensatory award in unfair dismissal cases
Loss of salary and value of benefits (such as
pension)
What if the employee has died?
Can claim continue?
Can claim include loss of insurance benefit?
Compensation
Fox v British Airways
Loss of death in service benefit recoverable
Unusual case
Often loss would be cost of securing alternative benefit
Breach of contract more common
Pay in lieu of notice (where no express right)
Watch insured benefits on termination:-
Death in service
Private medical
Reasonable Adjustments
Equality Act
Duty on employers to make reasonable adjustments for
disabled employees
Provision, criterion or practice puts a disabled employee at
a substantial disadvantage in comparison with those who are
not disabled
Sickness/Attendance Policy
Must you discount all absences relating to disability?
Reasonable Adjustments
Commissioners for HMRC v Whiteley W suffered from Asthma, which was often made worse by common
viral infections
ET ruled HMRC should have found that all absences due to infections
were “directly related” to her asthma, and should have discounted
them altogether when applying its sickness absence policy
ET wrongly interpreted medical evidence
Asthma sufferer would not necessarily suffer more infections, but
disability potentially exacerbated effects?
Reasonable Adjustments
Commissioners for HMRC v Whiteley
At least two possible approaches employers might adopt:-
Consider the periods of absence in detail and (if necessary, with
expert evidence) assess precisely the level of absence that is
attributable to disability
Consider what level of absence someone with a particular
disability would reasonably be expected to have over the course
of an average year due to that disability
Collective Redundancies
Requirement to consult collectively
Propose to dismiss as redundant 20 or more employees
at one establishment within a period of 90 days or less
100 or more redundancies – 45 days before the first
dismissal takes effect
Less than 100 redundancies – 30 days
Separate establishments often useful for employer
Collective Redundancies
USDAW v Ethel Austin
The words “at one establishment” must be disregarded
for the purposes of any collective redundancy exercise
involving 20 or more employees
Multi site caught if 20 or more overall
Conflicting EAT decisions
Reference to ECJ
Grievances
Implied term of trust and confidence
Breach of contract (including implied term) can lead
to claim of constructive dismissal
Can failure to follow grievance procedure amount to
breach of implied contractual term?
Grievances
Blackburn v Aldi Stores Right to an impartial appeal in respect of a grievance is an
important feature of the Acas Code and also the employer’s own
procedure
Failure to adhere to a grievance procedure is capable of
amounting to or contributing to a breach of the implied term of
trust and confidence
Breaches of grievance procedures “come in all shapes and sizes”
Not all breaches of procedure will be breach of implied term
Confidential Information
Employee owes duty of confidentiality whilst employed
(implied duty of fidelity)
Usually express duty of confidentiality post employment
Employee can be sued for breach of confidentiality
What about new employer who benefits (without
inducing)?
Confidential Information
Pintorex Limited v Keyvanfar
New employer vicariously liable for breach of confidentiality by
employee
Director of new employer would also have been jointly liable for the
breach of confidence if he had been involved in a common design
to commit the breach of confidence or had dishonestly ignored the
breach
As a new employer, you can’t encourage or induce breach, or turn a
“blind eye”
Who owns the account?
Who owns the contacts?
LinkedIn T&Cs
Do you have a policy?
Post termination restrictions
Whitmar Publications Ltd v Garage Employee had managed four LinkedIn groups on behalf of
Whitmar
Claimed that the groups were personal to her and “just a hobby”
The court required the ex-employees:-
To give Whitmar exclusive access, management and control
of the LinkedIn groups
Not to access or do anything that would inhibit or prevent
Whitmar from accessing the LinkedIn groups
Whitmar Publications Ltd v Garage
A (small) piece in the puzzle
Whitmar did not have post termination restrictions
Have:-
Post termination restrictions
Express duty of confidentiality – refer to LinkedIn contacts
Rules over LinkedIn use
Thank You, Any Questions?
For further information and advice, contact:
Clive Dobbin, Partner
T: 023 8048 2370
www.parissmith.co.uk
Number 1 London Road, Southampton, SO15 2AE