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Employment Law Legal Update January 2017

Posted on 6th February, 2017

Welcome to our latest bite size update on items which we hope will be of interest to HR Professionals and Managers with responsibility for employment practice within the workplace.

Should you wish to contact us in relation to any items mentioned within our updates please see the contact details on the bottom of the page.

Capping Public Sector Exit Payments: Power to make regulations comes into force

Power to make regulations capping public sector exit payments at a maximum of £95,000.00 came into force on 1 February 2017.

Government publishes guidance on employing disabled people and people with health conditions

On 23 January 2017, the Department for Work and Pensions published guidance on employing disabled people and people with health conditions. This guidance provides a summary of information on links to resources for employers to help increase their understanding of disability, enabling them to recruit and support disabled people and those with long term health conditions in work.

The guidance is available from the following link:  www.gov.uk/government/publications/employing-disabled-people-and-people-with-healthconditions

What amounts to a disability under the Equality Act 2010?

Under the Equality Act 2010 employees are protected from discrimination in respect of ‘protected characteristics’. Disability is one of the protected characteristics.

Employees who claim they have been subject to disability discrimination have to be able to show that they have or had a disability. The Equality Act 2010 contains a specific definition of ‘disability’. A person has a disability if they have a physical or mental impairment which has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. Each element of the definition has to be considered.

Some conditions, such as blindness, cancer and multiple sclerosis are deemed to be disabilities and some conditions are specifically excluded from the definition of disability, such as addiction to alcohol.

What are normal day-to-day activities?

Normal day-to-day activities for these purposes include ‘things people do on a regular or daily basis, and examples include shopping, reading and writing, having a conversation or using the telephone, watching television, getting washed and dressed, preparing and eating food, carrying out household tasks, walking and travelling by various forms of transport, and taking part in social activities’ (from the Equality Act 2010 Guidance).

What does long-term mean?

Long-term means the condition(s) has lasted or is likely to last at least 12 months or likely to last for the rest of the life of the person affected.

What does substantial mean?

Substantial means ‘more than minor or trivial’ with consideration focusing on the effects of the condition on the individual employee.

For more information

It is imperative that employers with employees who suffer from conditions that may amount to a disability are aware of the legal duty to make reasonable adjustments and take appropriate steps to ensure anyone who suffers from a disability at work is not subject to discrimination. We recommend seeking legal advice if there is any uncertainty.
Having an effective Equal Opportunities Policy in place is strongly recommended, together with appropriate awareness and training, to make it clear discriminatory treatment will not be tolerated and to increase confidence among employees about equality of opportunities.

Draft Regulations imposing gender pay gap and equality reporting duties on public authorities have been published

The Regulations impose new duties on public authorities in England with 250 employees or more to publish gender pay gap information, including the difference in bonus pay and between mean and medium hourly rates of pay. Gender pay gap information is to be published by 30 March 2018, and at annual intervals thereafter.

The Regulations introduce these reporting duties as part of the existing Public Sector Equality Duty (PSED) contained in section 149 of the Equality Act 2010 rather than creating a new standalone duty. The Regulations contain similar provisions to the draft Equality Act 2010 (gender pay gap information) Regulations 2017 which apply to the private and voluntary sectors and which are still expected to come into force on 6 April 2017.

Public authorities will be obliged to include information in their report demonstrating compliance with the PSED. This information on compliance is to be published by 30 March 2018 and then every 4 years thereafter.

Public authorities must also publish one or more objectives that will work towards achieving any of the three core objectives of the PSED contained in section 149 (1) (a) – (c) of the EA 2010. The objectives must be specific and measurable and published in a manner that is accessible to the public.

ICO prosecutes former company employee for unlawfully accessing client data

A former recruitment agency employee has been prosecuted and fined under section 55 of the Data Protection Act 1998 for unlawfully obtaining personal data. The Defendant emailed the personal data of approximately 100 clients and potential clients to her personal email address as she was leaving to start a new role at a rival recruitment company. She then contacted those individuals in her new job.

The former employee pleaded guilty to the offence and was fined £200.00, ordered to pay costs of £214.00 and a victim surcharge of £30.00 at Warrington Magistrates Court.

Small amounts paid by employers under the financial penalty regime

New figures released in January suggest the government has failed to recoup significant sums under the financial penalty regime for employers that lose Tribunal cases. The financial penalty regime came into force on 6 April 2014. Employers who are found by a tribunal to have breached a worker’s rights where the breach has “one or more aggravating features” may be ordered to pay a financial penalty to the Secretary of State.

In response to a question asked by an MP, Business Minister Margo James admitted that since April 2014, just £17,704.00 has been paid to the Treasury in financial penalties. Of the 18 fines levied against employers for aggravated breaches in employment law, only 12 have been paid in full.

TUC Survey: 52% of women have experienced sexual harassment at work

The Trade Union Congress (TUC) has published the results of a survey that suggests a large portion of women have been sexually harassed at work, with most deciding not to report it. According to the survey of 1,500 women, 52% said they had experienced some form of sexual harassment. 28% of Respondents said they had been subjected to comments of a sexual nature about their body or clothes whilst at work while 20% have suffered unwanted verbal sexual advances in the workplace. The report highlighted that in most instances, cases of sexual harassment were not reported with 79% of Respondents saying that they did not tell their employer about the harassment. The TUC believes this is because most incidents of harassment occur amongst younger females in insecure and often low paid employment who fear the consequences of complaining.

Protective awards for former Phones 4 U employees

Over 400 former employees of Phones 4 U have succeeded in claiming almost £1.4 million in protective awards 2 years after the company’s collapse into administration. The award follows an Employment Tribunal’s ruling that the company had failed to collectively consult under the Trade Union and Labour Relations (Consultation) Act 1992 when it suddenly ceased trading in September 2014, closing 550 stores. The ruling will result in over 400 ex-employees each receiving protective awards of £3,712.00 from the redundancy payments service.

Case law focus on the impact of mobility clauses in a redundancy situation

The Court of Appeal in High Table Ltd v Horst [1997] IRLR 513 held that where a redundancy situation arises out of the closure of a workplace, the “workplace” for redundancy purposes is where the employee actually works, not where they could be required to work under their contract:

”… if an employee has worked in only one location under their contract of employment for the purposes of the employer’s business, it defies common sense to widen the extent of the place where he was so employed, merely because of the existence of a mobility clause…. It would be unfortunate if the law were to encourage the inclusion of mobility clauses in contracts of employment to defeat genuine redundancy claims.”

However, where there is a redundancy situation and an employer is entitled to exercise a contractual mobility clause, if the employer exercises the clause there will be no need to dismiss the employee and there will therefore be no right to a redundancy payment.

In United Bank v Akhtar [1989] IRLR 507, Mr Akhtar’s employer tried to rely on the mobility clause in his contract to transfer him from Leeds to Birmingham. On its face, the mobility clause gave the employer a right to require Mr Akhtar to relocate on either a temporary or permanent basis. However, he received little notice of the move and the employer refused to exercise its discretion to meet his relocation expenses. The EAT held that the mobility clause had to be read subject to the necessary implication that there was a requirement for reasonable notice and that the employer would not behave in such a way as to make the performance of the employee’s duties impossible.

There is also an overlap between an express contractual obligation such as a mobility clause and the implied duty to maintain trust and confidence (White v Reflecting Roadstuds Ltd [1991] ICR 733 (EAT)).

In the case of Kellogg Brown & Root (UK) Ltd v (1) Fitton UKEAT/0205/16 and (2) Ewer UKEAT/0206/16, 21 November 2016 the EAT considered whether an employment judge, in two separate decisions, had been incorrect in finding that employees, who had been dismissed for refusal to relocate under a mobility clause when their office closed, had been unfairly dismissed for redundancy.

Facts

Kellogg is an engineering, construction, technology and services company. It had offices in Greenford and Leatherhead. Mr Fitton and Mr Ewer worked at Greenford. The mobility clause in their employment contracts provided that:

”The location of your employment is … but the company may require you to work at a different location including any new office location of the company either in the UK or overseas either on a temporary or permanent basis. You agree to comply with this requirement unless exceptional circumstances prevail.”

Kellogg’s disciplinary procedure cited a failure to carry out reasonable instructions as an example of misconduct.

Kellogg decided to close the Greenford office due to workload and office capacity. In April 2015, employees were told that Greenford was to close at the end of June and that they were transferring to the Leatherhead office. To allow for additional travel costs Kellogg operated a six-month compensation scheme. It also proposed a reduction of core times with an earlier finish for those affected by M25 traffic.

A number of employees with childcare and elderly parent caring responsibilities left under “exceptional circumstances” and received a redundancy payment.

Mr Fitton and Mr Ewer were instructed to transfer to Leatherhead. Their positions, which are considered further below, were dealt with by the same employment judge but at separate hearings (before appeals from the judge’s decisions were joined for hearing before the EAT).

Mr Fitton

Mr Fitton was 34 and had worked for Kellogg for 11 years. On 21 April 2015, he met
his line manager and explained that he lived in Harrow and could either walk to work or take the tube, which took about 20 minutes. He was able to drive but did not have a car. While he was aware of a possibility of car sharing he objected to what would be a two-hour commute each way to and from Leatherhead.

Mr Fitton took legal advice. He told Kellogg that he had been advised that he was redundant, entitled to a redundancy payment and that the mobility clause was unenforceable; he was not routinely required to travel and it was not a true condition of his employment. Kellogg responded that the mobility clause was there to ensure retention of the workforce and continuity of delivery for clients. Redundancy payments were made when specific personal circumstances were taken into account. The transfer of roles from Greenford to Leatherhead meant that there was no entitlement to a redundancy payment. Refusal to relocate could lead to dismissal for refusal to comply with employment terms.

On 18 June 2015, Kellogg instructed Mr Fitton to transfer to Leatherhead and advised that failure to do so would be treated as unauthorised, unpaid absence and investigated under its disciplinary process. Mr Fitton attempted to continue working at Greenford but was turned away. He did not attend the Leatherhead office. When he was invited to a disciplinary hearing for alleged unacceptable conduct he restated why he would not transfer. Mr Fitton was summarily dismissed and his internal appeal was unsuccessful. He issued tribunal proceedings for unfair dismissal and a statutory redundancy payment.

Mr Ewer

Mr Ewer was 64 and had been employed for 25 years. He had always lived in St Albans. On 25 April 2015, he met his line manager in a highly stressed state and objected to the additional travel. After taking legal advice, Mr Ewer wrote to Kellogg questioning the validity of the mobility clause and setting out what he considered to be his own exceptional circumstances: after 25 years’ service and approaching retirement he should be easing off daily stress rather than turning a daily commute of 18 miles each way into one of 47 miles each way.

Kellogg considered that requiring Mr Ewer to move to Leatherhead was reasonable on the basis that it was within the ambit of the mobility clause and measures were in place to assist. Neither Mr Ewer’s long service nor his age constituted exceptional circumstances. Mr Ewer replied suggesting that Kellogg should dismiss him for redundancy given that it was shutting his workplace and was not offering him a suitable alternative.

After he failed to attend the Leatherhead office, Mr Ewer was invited to a disciplinary hearing for alleged unacceptable conduct. He restated why he would not transfer. He was summarily dismissed and his internal appeal was unsuccessful. Mr Ewer issued tribunal proceedings for unfair dismissal and a statutory redundancy payment.

Employment tribunal decision

The same employment judge considered the claims at separate hearings and issued separate decisions.

The judge held that Mr Fitton and Mr Ewer’s place of work had been Greenford. The mobility clause was very widely drafted and lacked certainty. The instruction to work in Leatherhead had been unreasonable given the greatly increased travelling time. While the steps Kellogg had taken to alleviate the longer commute might have assisted some employees, they were of no significance to Mr Fitton and Mr Ewer. In particular, Mr Ewer’s refusal to move was not unreasonable given the proximity of his expected retirement, the substantial increase in his travelling time and his lifelong connection to where he was living.

The reason for the dismissals was redundancy. Following a disciplinary process was inappropriate, given that the reason for the dismissals was redundancy. Accordingly, the dismissals were unfair.

Kellogg appealed.

Decision

The EAT allowed the appeal against the findings that Mr Fitton and Mr Ewer had been dismissed for redundancy and held that the reason for their dismissals had been their alleged misconduct. However, it dismissed the appeal against the findings that the dismissals had been unfair.
The reason for the dismissals was alleged misconduct

The dismissals took place against the background of a redundancy situation (Kellogg was either ceasing to carry on business in the place where Mr Fitton and Mr Ewer were employed, or it had a diminishing need for employees to carry out the work that Mr Fitton and Mr Ewer were employed to do). The determination of the reason for dismissal was a matter for the tribunal.

In these cases, the employment judge erred by identifying a redundancy situation and allowing that to inform his finding as to the reason for dismissal. He should have asked what Kellogg genuinely had in mind. He had answered that when he found that, in each case, the company believed that it could rely on the mobility clause and that the instruction to move to Leatherhead was a reasonable instruction. It was the failure to comply with this instruction that resulted in the decision to dismiss.
The dismissals were still unfair

The EAT rejected Kellogg’s argument that, if he had been mistaken in his finding they were redundancy dismissals, his finding they were unfair could not stand.

In Mr Ewer’s case, the judge had considered whether the instruction to move to Leatherhead had been legitimate, in the sense of whether it was a valid contractual requirement, and had concluded that it was not. He had then asked whether the instruction had been reasonable and had concluded that it was not. He had then considered whether Mr Ewer’s refusal to work from the Leatherhead office had been reasonable and had concluded that it was. These were sufficient findings in respect of a conduct dismissal to support a conclusion that the dismissal had been unfair. Similar findings had been made in Mr Fitton’s case.

The decision illustrates the confusion that can arise when an employer seeks to exercise a contractual mobility clause against the backdrop of a redundancy situation. Using a mobility clause may enable an employer to avoid dismissing employees for redundancy. However, the terms of the mobility clause and the manner in which the employer operates the clause may themselves be subject to scrutiny and found wanting.

 

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