Schofield & Sweeney CIPD Presentation

EMPLOYMENT LAW UPDATE 2011

Presented by

ALEX CLEMENTS and

JAMES AUSTIN

Headache 1: Issue

• How should the Widget Company manage Richard?

Headache 1: Relevant Law

• Default Retirement Age of 65 introduced in 2006 • ‘Heyday’ challenge by Age Concern• Reviewed in 2010 to ‘reflect the change in

economic circumstances’• Repealed on 6 April 2011• Transitional Provisions end 30 September 2011


• The last date where the Default Retirement Age can operate is 5 October 2012

• Notice given on 5 April 2011 specifying intended retirement date of 5 April 2012

• Maximum six month extension agreed with new retirement date of 5 October 2012

• No longer a ‘potentially fair’ dismissal

Headache 1: Relevant Law?

End of compulsory retirement?

“These changes do not mean that individuals can no longer retire at 65 –

simply that the timing of retirement becomes a matter of choice rather than

compulsion”


Workforce Planning• Concerns that even discussions about

retirement are discriminatory• Without prejudice conversations?• Consequences of not addressing performance &

capability issues with older workers• Disgruntled younger employees


ACAS Guidance• Working without the default retirement age• Hold workplace discussions regularly - build into

appraisal system• Ask open questions about employees plans for

short, medium and long term future


Employer Justified Retirement Age• Employers cannot retire employees at a set age

unless the age can be objectively justified – SOSR Dismissal

• “Proportional means of achieving a legitimate aim”

• Old regime justification included exceptional levels of mental or physical fitness

• Only employees• What is a legitimate aim?

– Prigge v Lufthansa


Legitimate Aims:• Workforce planning• Protecting dignity of older employees – avoiding

performance management and fitness to work issues

• Protecting against incompetence• Having an age balanced workforce - promoting

the exchange of experience and innovation between ages


• Capability is a potentially fair reason for dismissal– ‘relates to the capability or qualifications of the

employee for performing the work of the kind he was employed to do.’

Headache 1: Conclusion

• No default retirement age

• Unlikely to be a legitimate aim for imposing retirement

• Hold early and regular discussions

• Don’t make assumptions

• Use capability procedure

Headache 2: Issue

• Can Coalition impose the salary reduction on Ken?


• Employer’s can amend terms and conditions through agreement

• If there is no agreement employer’s can dismiss employees and offer new contracts of employment

• Dismissal could be for “some other substantial reason”• S.98 (4) Employment Rights Act 1996:

– Taking into account the size and administrative resources of the employer did it act reasonably in treating it as sufficient reason for dismsisal

– Determined in accordance with equity and the substantial merits of the case


• Garside and Laycock v Booth– B had been employed by G for 7 years– In 2009 due to a drop in sales and profits G

asked employees to take a 5% pay cut– G consulted staff then issued a voting paper– 2 employees refused change– G terminated contracts and issued new ones – B appealed unsuccessfully


• Garside and Laycock v Booth– B claimed unfair dismissal– Tribunal found dismissal unfair:

• G hadn’t been in a desperate financial position and business reasons were not “cogent”

• B’s refusal of change was reasonable• G made poor attempt at consultation

– G appealed


• Garside and Laycock v Booth– EAT overturned decision

• Change doesn’t need to be crucial to save business

• Question of reasonableness of employer’s decision• Did pay cut apply to all, including management?

– Where overwhelming majority of workforce accept change dismissal is likely to be fair

Headache 2: Issue

• Can Coalition impose the new contract on Vince? If so, does it still have to pay the £1,000?


• Slade v TNT– TNT’s operating profits fell from £68.5m to £11.9m – TNT offered to buy out bonus– TNT warned if offer declined contracts would be

terminated and offers of re-engagement made– S claimed that offer of re-engagement must include

buy out in order for TNT to have acted reasonably– Tribunal found SOSR– EAT upheld decision – no duty to offer buy out


• Provided it follows the correct procedure Coalition should be able to:– impose salary reduction on Ken – remove bonus from Vince and his colleagues

• Coalition won’t have to pay Vince or the others £1,000

Headache 3: Issue

• What should Fortuna Fashions do for Rachel?


• Obligation to make reasonable adjustments remains under the Equality Act

• Cost a factor in reasonableness

• How certain do you need to be the adjustment will help?


• Cordell v FCO– C profoundly deaf and requires lip speakers– Posting withdrawn as support would cost in

excess of £300k pa– C pointed to costs of private education– C unsuccessful at tribunal & EAT– Schooling costs relevant not determinative– Look in context of overall budget


• Foster v Leeds Teaching Hospital NHS Trust– F had to be moved from security department

because of stress– Would be reasonable adjustment to put him

on redeployment register– Does not need to be a good prospect, merely

some prospect at the date of the decision


• Mylott v Tameside Hospital NHS Foundation Trust

• M dismissed on grounds of ill health• Claimed should have been able to apply for ill

health retirement• Adjustments are to help employees remain in

work, not to compensate them for losing a job.


• Consider the cost of reasonable adjustments – but remember it is not the only factor

• Give consideration to any adjustment even if it is not certain to help

• Remember adjustments are to help people back to work

Headache 4: Issue

• Can England Plc carry out a competitive interview process?


• Morgan v The Welsh Rugby Union– National Elite Coach Development Manager and

Coach Education Manager roles made redundant– New role of National Coach Development Manager– Person spec included list of skills and attributes – Interview - Presentation then questions– Standard questions prepared and a scoring system

set out– Committee did not adhere to format for the interview


• Morgan v The Welsh Rugby Union– Committee gave overall scores and appointed other

candidate – M claimed that if objective criteria followed he would

have got the job– Tribunal found the appointment fair

• No obvious bias

– EAT upheld decision• New role requires assessment of ability to carry out that role• Employer’s judgment

Headache 4: Issue

• Can England Plc refuse to make an enhanced payment if the redundant employee refuses to sign a compromise agreement?


• Garratt v Mirror Group Newspapers– G was a photographer– Past practice of enhanced redundancy payments– Collective agreement stated enhanced redundancy

payment – 2 weeks’ basic pay per annum– G offered £80,000 subject to a compromise

agreement– G refused to sign – told he would receive £48,000


• Garratt v Mirror Group Newspapers– No other employee had refused to sign– Tribunal found requirement to sign implied

into contract– EAT upheld decision

• Employees had always been required to sign• Employees knew of requirement• Employees had always received legal advice


• England Plc can carry out a competitive interview process where the successful applicant is chosen on basis of interview– It is preferable to have defined criteria which

applicants are assessed against

• England Plc can refuse to make an enhanced payment– Requirement to sign a compromise agreement can be

implied– Preferable to state such a requirement clearly

Headache 5: Issue

• How much protection should Dr Green have to defend his career?


• Apply normal disciplinary rules to the case

• Is the sanction within the band of reasonable responses?

• What damage has been caused to colleagues and organisation?

• Would another sanction be appropriate?


Legal representation at hearing

• Mattu v The University Hospitals of Coventry and Warwickshire NHS Trust– Art 6 of ECHR – right to have civil rights

determined before an impartial tribunal– Right to practice a profession a civil right– Right to a particular employment is not a civil

right


• Don’t treat social media offences any differently to other forms of misconduct

• Consider who can be a representative at hearings

• Is the offence likely to finish a career rather than just a job?

Headache 6: Issue

• Can Cerebral Juice dismiss Holly?


• Bowater v N W London Hospitals– B was a staff nurse– At end of shift helped colleagues restrain a patient

having an epileptic fit– B climbed on to ankles to restrain patient– Patient’s trousers and underwear removed to

administer diazepam– Patient kicked B between legs causing her to land on

his genitals– B remarked "It's been a few months since I have been

in this position with a man underneath me"


• Bowater v N W London Hospitals– Patient unaware of incident– B dismissed for gross misconduct for failing to:

• Restrain the patient appropriately• Promote dignity of patients• Uphold reputation of profession

– ET found dismissal unfair but 25% contribution• Most people would have found remark humorous

– EAT overturned decision– CA restored ET decision

Headache 6: Issue

• Is Holly under a duty to accept a role from Botox Selecta?


• Debique v Ministry of Defence– D struggled to combine motherhood with

being a soldier– D successfully claimed unlawful indirect sex

and race discrimination– D received £15,000 for injury to feelings– No loss of earnings awarded as D refused

alternative role offered during notice period– EAT upheld decision

Headache 6: Issue

• Would Holly be able to bring a claim for sex and age discrimination if her replacement was an older man?


• Burden of proof:– Employee must prove facts from which a tribunal

could conclude in the absence of an adequate explanation that the employer has unlawfully discriminated. This would include:

• Evidence of a difference in sex/age• Evidence of a difference in treatment• Evidence of the reason for the difference in

treatment– Employer must then prove it did not discriminate


• Community Law Clinic Solicitors Ltd and ors v Methuen– M was an Asian man aged 54 – Dismissed after 5 months because failed to meet targets– Replaced by younger Afro-Caribbean woman who was

paid much less – M claimed dismissed on the grounds of age, sex and race– Respondent said department running at a loss and could

not afford M– ET at a PHR decided case had “little” prospect of success

• M failed to point to fact from which discrimination could be inferred• Not bound to fail• Deposit order


• Community Law Clinic Solicitors Ltd and ors v Methuen– EAT disagreed

• M didn’t explain discrimination claim• Can’t base claim solely on being replaced

by someone with different protected characteristics

– EAT allowed age discrimination claim to proceed


• Cerebral Juice shouldn’t dismiss Holly depending on the investigation

• Holly is under a duty to consider an alternative job at Botox Selecta

• Being replaced by an older man should not be enough for Holly to bring discrimination claims

Headache 7: Issue

• Has Ross got any claims?


• Redundancy selection and discrimination• Eversheds v De Belin

– Claimant scored lower than colleague in redundancy exercise

– Colleague been on maternity leave so given a notional score

– Maternity protection is only what is “reasonably necessary” – i.e. proportionate

– Other options available such as when both employees at work


Can a reference be lawful if it seems unfair?• Jackson v Liverpool CC

– J applied for new job– Reference from Liverpool caveated that there

were record keeping issues– Made clear these had never been

investigated– CA – reference true and accurate even

though referred to matters which were untested


• Take maternity leave into account but don’t over compensate

• Take care with wording of references

• If possible, try to agree a reference before termination

Headache 8: Issue

• Is Michelle entitled to be paid for the overnight stays?


• Wray v J W Lees & Co– W temporary pub manager required to stay on

premises overnight– W claimed pay for overnight hours – NMW

legislation– ET incorrectly looked at definition of working

time in Working Time Regs– EAT held W not working so not entitled to pay


• Wray v J W Lees & Co– W free to leave the premises at any time– W’s position different to night watchman or night

sleeper in a residential home who had responsibilities throughout the night (South Manchester Abbeyfield v Hopkins)

– NMW Regulation 16:• Not working time if employee entitled to spend it at home• If employee is provided with accommodation at or near work

and is given time to sleep, such time is not working time unless the employee is required to work

Headache 8: Issue

• Has Tracy received the breaks she is entitled to under the Working Time Regulations?


• Hughes v The Corps of Commissionaires Management Ltd– Reg. 12 of the WTR states employees entitled to 20

minute break after working more than 6 hours– Reg. 21 sets out exclusions where employer requires

permanent presence e.g.:• Security guards• Doctors• Dockers• Airports

– Reg. 24 states that where reg. 21 applies employer:• Must try to provide “equivalent period” of compensatory rest; or• Take other measures to safeguard health and safety


• Hughes v The Corps of Commissionaires Management Ltd– H was a security guard– H could decide when to take breaks but could be

interrupted– H claimed he wasn’t receiving correct breaks– ET held:

• H wasn’t entitled to breaks but might be to compensatory rest• No practical way CCM could provide uninterrupted 20 minute

compensatory rest• CCM provided H with adequate health and safety protection


• Hughes v The Corps of Commissionaires Management Ltd– EAT found the arrangements amounted to

providing a period of compensatory rest– CA upheld EAT’s decision:

• Compensatory rest didn’t have to be uninterrupted 20 minutes

– CA also held CCM provided adequate health and safety protection


• Michelle is not entitled to be paid for staying overnight

• Tracy may not be receiving the correct breaks. The position may be different if Tracy carried out a different type of work

Headache 9: Issue

• The rights of agency workers


• The Agency Workers Regulations– In force 1 October 2011– Not retrospective

• Applies to:– Temporary agency workers– Those who supply temporary agency workers– Hirers


Day One rights

• Access to collective facilities and amenities of hirer

• Canteen or other similar facilities• Child-care facilities• Provision of transport services

• Access to employment vacancies

• Liability for above on the hirer


Continuity• Entitled to the same “basic working and

employment conditions” as if directly recruited by the hirer after 12 weeks

• Continuity broken and starts again when:– AW starts new assignment with new hirer– AW stays with same hirer but substantially

different role– Break of at least 6 weeks


• Continuity not broken but weeks will not count where:– Break of less than 6 weeks– Break of up to 28 weeks where AW ill– Break where AW taking annual leave– Break caused by planned shutdown– Break caused by strike

• Continuity continues where break due to maternity, adoption or paternity leave


12 week rights• “Relevant terms and conditions ordinarily

included” relating to:– Pay– Duration of working time– Rest periods– Rest breaks– Annual leave

• Liability can rest with agency or hirer– Agency has defence if it took “reasonable steps” to

obtain relevant information


• Pay includes:– Basic pay– Overtime pay– Shift allowances– Bonuses/commission

• Where directly attributable to the TA

– Vouchers or stamps with monetary value


• Pay excludes:– Occupational sick pay– Occupational pensions– Redundancy pay– Notice pay– Bonuses

• Not linked to contribution of individual

– Discretionary bonus payments– Majority of benefits in kind


• Liability for breach:

• AW compensated for any loss– Minimum award of 2 week’s loss

• Potential fine of up to £5,000 if deliberately trying to avoid the Regulations


• Employment status of Agency Workers

• BIS v Studders

• No employment contract where:– No evidence of intent to create an

employment relationship– No obligation to accept assignment– No obligation to offer work


• Supply information to an agency in good time

• Be careful when moving agency staff from one role to another

• Keep an eye on the length of assignments• Clarify which benefits fall within the

Regulations and which don’t• Check the terms of engagement with the

agency

Headache 10: Issue

• Can Wealthy City dismiss Carlo?


• Orr v Milton Keynes Council– O was a part time youth worker– O discussed a sexual assault with kids at a

community centre despite manager Mr Madden

– 3 days later during discussion about working hours O was rude towards M

– O was dismissed after disciplinary hearing conducted by group manager


• Orr v Milton Keynes Council– ET found

• O’s behaviour towards M sparked by M trying to reduce O's working hours without agreement

• When O began to use Jamaican patois M had committed direct race discrimination

• Dismissal fair and non-discriminatory because– Reasonable investigation– Reasonable response to what was known to the

dismissing officer at the time


• Orr v Milton Keynes Council– EAT upheld decision

• ET’s should consider usual unfair dismissal test• Not enough for O to show but for discrimination

would not have been dismissed

– CA agreed• Only knowledge or state of mind of decision maker

is imported to employer• MK had carried out reasonable investigation• O was dismissed for 2 counts of gross misconduct


• Dismissal might not fall within band of reasonable responses depending on investigation

• If Wealthy don’t discover Mankini’s abuse dismissal may be fair

On the horizon

New Developments

National Minimum Wage

• From 1 October:– Workers aged 21+: £6.08– Workers aged 18-20: £4.98– Workers aged 16-17: £3.68

Reform

• 2 year qualifying period to claim unfair dismissal

• Having a cap on discrimination claims

• Introduce fees to commence proceedings

• Abolition of unfair dismissal?

www.schofieldsweeney.co.uk

Simon [email protected]

0113 220 6274

Alex [email protected]

0113 220 6280

James [email protected]

0113 220 6275

Polly O’[email protected]

0113 220 6341