Employment Law Update February 2012 - 20/02/2012

News Update

Details on the new unfair dismissal qualifying period

When the qualifying period for unfair dismissal claims is increased to two years on 6 April 2012, reports indicate that it will only apply to those employees who start a new job on or after this date. Employees who started their employment before this date will remain subject to the one year qualification period. It is expected that regulations confirming this will be published shortly and this will be confirmed in a later Update.

Consultation on automatic enrolment thresholds

Under the Pensions Act 2008, automatic enrolment for pensions will take place for those workers who are between the age of 22 and state pension age and earn more than £7,475 a year in the relevant pay reference period. As we advised in a recent Update, from 1 October 2012 employers with over 120,000 workers on their PAYE scheme will be required to automatically enrol workers into qualifying workplace pension schemes. The trigger earning figure for qualifying enrolment and the qualifying earnings figures are to be reviewed each year. Current qualifying earnings are between £5,035 and £33,540 for defined contribution schemes.

The Department for Work and Pensions has announced a consultation to consider what the qualifying figures should be for the tax year 2012-2013 and to discuss the factors that should be taken into account when determining the figures.

The proposals contained in the consultation document are; £8,105 for the automatic enrolment earning trigger, £5,564 for the lower qualifying earnings figure and £39,853 for the upper qualifying earnings figure. Responses to the consultation must be sent by 26 January 2012 and we will update you on the outcome in a later Update.

Pilot mediation scheme

Following the Government’s response to it Resolving Workplace Disputes consultation, it has been announced that BIS is to fund mediation training for a number of employees in a group of 24 SMEs in Manchester and Cambridge. This pilot aims to encourage the use of mediation to avoid disputes reaching the Employment Tribunal. The Government has published an open tender for companies to deliver the mediation training.

This pilot will be launched later this year and will run for a year before it decided whether to extend the scheme to other areas of England, Wales and Scotland.

More councils are to borrow against or sell assets to settle equal pay claims

The Government has given permission to another 12 councils to borrow against or sell assets worth up to £200million this financial year to tackle historical pay inequality. The intention is to able such claims to be settled without there being an increase in council tax or a cut in services.

£1,000 deposit orders

It has been announced that on 15 February 2012 an Order will be introduced increasing the amount the regulations can specify as the maximum amount for a deposit order to £1,000. It is likely the tribunal rules of procedure will soon be amended allowing tribunals to make deposit orders of £1,000 from 6 April 2012. The current limit is £500.

Acas Guidance – London Olympic Games

As the Olympic Games fast approach, Acas has issued guidance on how to deal with issues arising from the London Olympics this summer such as managing attendance, flexible working and volunteers. There is also a question and answer session for employers and employees. The guidance can be found at http://www.acas.org.uk/index.aspx?articleid=3392.

Case Updates

Suitable alternative employment in redundancy – reasonable refusal

The EAT in Readman v Devon Primary Care Trust considered whether a potentially redundant employee had unreasonably refused an offer of alternative employment. The EAT emphasised that the Employment Tribunal should look at whether it was unreasonable for that particular employee to refuse the alternative employment and not base its decision on whether a hypothetical reasonable employee should have accepted the alternative employment. 

Under the Employment Rights Act 1996, an employee is not be entitled to a redundancy payment if he refuses alternative employment that either has the same essential terms as his previous job or does differ in its essential terms but is still suitable employment for the employee, or after accepting the alternative employment he then unreasonably ends it during the trial period. It is for the Employment Tribunal to decide whether the employee, taking into account his particular circumstances, was reasonable in refusing the suitable alternative employment.

In this case, Mrs Readman’s job was ‘Community Modern Matron’ and she ran community and district nursing in part of Devon. When her job was made redundant she was offered an alternative role in a community hospital as ‘Modern Matron’. Mrs Readman refused this role because she had not worked in a hospital for many years and she did not want to do so. Mrs Readman later successfully applied for a community nurse job in Canada and emigrated. When Mrs Readman subsequently brought a claim for her redundancy payment, the Employment Tribunal decided that the alternative role was suitable and she had unreasonably refused it. Therefore, it was held that she was not entitled to a redundancy payment.

Mrs Readman was successful in her appeal to the EAT. It should be noted that the Employment Tribunal’s finding that the role of Modern Matron was suitable was not challenged before the EAT. The EAT found that Mrs Readman’s wish not to work in a hospital setting, taking into account her particular circumstances, was reasonable. The EAT also pointed out that the fact that she may have had an idea that she would like to go to Canada (but she did not make any applications until after she had turned down the alternative role) and the fact that she would prefer her redundancy money over the Modern Matron job were not the main reason for her refusal.

Banning overtime for those who do not sign the 48-hour week opt-out is potentially lawful

In Arriva London South v Nicolaou, the EAT found that it was lawful for Arriva to refuse overtime for Mr Nicolaou who had refused to sign the 48 hour opt-out.

Mr Nicolaou was a bus driver and he refused to opt out of his right to work no more than an average 48-hour working week. Arriva had introduced a policy saying that overtime would not be made available to anyone who had not signed an opt-out. Shortly after this policy was introduced Mr Nicolaou was taken off the overtime roster. He brought a claim in the Employment Tribunal claiming that removing him from the overtime roster was because he had refused to sign and opt-out and that this amounted to a detriment. The Employment Tribunal upheld his claim but Arriva successfully appealed to the EAT.

Under Regulation 4(1) of the Working Time Regulations 1998, a worker has the right to work no more than an average 48-hour working week unless he opts-out. An employer is not allowed to subject a worker to a detriment on the grounds that he refused to agree to waive his rights to a 48-hour week.

The EAT found that the relevant test was not a ‘but-for’ one in these type of cases, it was a question as to the reason why. The EAT found that the reason why the overtime was withdrawn was because the policy had to be enforced and the judge found the policy was reasonable and necessary to ensure compliance with the employer’s statutory duty under Regulation 4(2) of the Working Time Regulations 1998. Under Regulation 4(2) an employer must take all reasonable steps to ensure compliance with the 48 hour limit in relation to those workers to who it applies. The EAT found that this aim could be separated from the refusal by the bus driver to sign the opt-out agreement. The EAT found that the link that was required between Mr Nicolaou’s protected act and the withdrawal of overtime complained of was not made out in these circumstances regardless of whether the withdrawal amounted to a detriment from the employee’s viewpoint.

Dismissal may be unfair if true reason for dismissal is different to the given reason

In (1) Governing Body of John Loughborough School (2) LB of Haringey v Alexis, the EAT has held that where an employee is supposedly dismissed for misconduct reasons the dismissal may be unfair if the true reason for dismissal was a different reason altogether such as capability issues and the misconduct reason had been used ‘opportunistically’ as the reason for dismissal.

Under the Employment Rights Act 1996, if the right to bring an unfair dismissal claim has been established then the employer must show what the reason (or principal reason) was for dismissal and that it was a potentially fair reason.

In this case, the Dr Alexis was the Head Teacher of a voluntary aided school. The Director of Children’s Services, Sharon Shoesmith, felt that Dr Alexis was not up to the job and put pressure on her and the school governors to get her to leave. Dr Alexis did not resign and when an Interim Executive Board was appointed to replace the governors they resolved to get her removed after a critical report was published by OFSTED. Demonstrations subsequently took place in support of Dr Alexis. However, Dr Alexis was dismissed and the reason given was that she had failed to take any steps to prevent the demonstrators entering the school or to mitigate the disruption and other risks. Dr Alexis succeeded in her unfair dismissal claim at the Employment Tribunal and the respondent’s appeal was dismissed by the EAT. Dr Alexis had claimed that the demonstrations were an excuse for her dismissal and the real reason was actually the earlier decision of the Interim Executive Board.

While the EAT acknowledged the difficulties in establishing the reason or principal reason for dismissal where there are mixed motives for the decision, even if a subsequent act of misconduct could justify dismissal the dismissal may still be unfair if the real reason is a different one and the misconduct has been used opportunistically to dismiss the employee. However, the EAT did highlight that simply because an employer has a predisposition for wanting to dismiss an employee, this does not by itself mean that if the employee then for example commits an act of misconduct entitling the employer to dismiss, the misconduct may not be the reason or principal reason for dismissal. It will depend on the facts of each individual case.

Employer vicariously liable for employee’s violence against his manager

The Court of Appeal in Weddall v Barchester Healthcare Ltd found the employer vicariously liable when one of its employees attacked his manager as the violence was held to be in the course of his employment. However, in the joined case of Wallbank v Wallbank Designs Ltd it was found that the employee was not acting in the course of his employment and therefore the employer was not vicariously liable.

To briefly summarise the facts of the Weddall case, the employee threw his manager onto a table 12 feet away after his manager gave him an instruction. The Court of Appeal found that the employer was vicariously liable as the employee was acting in the course of his employment. In the judgment the possibility of friction in any employment relationship was noted but the Court said this was especially so in a factory environment where instant instructions and quick reactions are needed. The judgment went on to say that the risk of an over-robust reaction to an instruction is a risk created by the employment and it could be said that this risk is reasonably incidental to the employment rather than unrelated to it. It was found in this case that the employee’s reaction was an almost instantaneous response to an instruction.

The Wallbank case involved a drunken employee who, after receiving a phone call from his manager making a routine request for him to volunteer for a night shift, cycled to work and attacked his manager. The Court found that this act was independent from his employment and he was not acting in the course of his employment.

Claiming protective awards on behalf of others

In Independent Insurance Co Ltd (in provisional liquidation) v Aspinall and anor, the EAT have held that where an individual claimant successfully claims for a protective award resulting from the employer’s failure to comply with its collective redundancy consultation obligations, this cannot be extended to benefit the individual claimant’s colleagues who were not a party to the proceedings, even though they were also affected by the failure. This case confirmed that only trade union and employee representative can obtain awards on behalf of a group of affected employees.

Indirect sex discrimination to have paid work experience requirement

A recent tribunal case held in Northern Ireland (Crilly v Ballymagroarty Hazelbank Community Partnership) found that it was indirect sex discrimination for an employer to require applicants to have two years’ paid work experience over a five year period because it had a disproportionate adverse impact on women. The tribunal found that the employer could not justify the requirement by saying that the role required an experienced individual to start immediately.

The vacant position was a neighbourhood regeneration officer and applicants were required to have two years’ relevant paid experience within the last five years. The claimant in this case had not had any paid work for six years because of her childcare commitments but she had done plenty of voluntary work in relevant areas. The claimant was not shortlisted for the job and went on to claim that the paid work experience requirement amounted to indirect sex discrimination. The employer argued that the requirement was for a legitimate business reason, ie. it needed someone with experience to start immediately. The tribunal found in favour of the claimant and held that the requirement did have a disproportionate adverse impact on women. The tribunal also found that the business reasons put forward by the employer were not proportionate because the requirement would allow a person to apply who had no paid employment in the last 3 years. As there was also a two-month induction period, the tribunal considered that any issues could have been resolved during that period. The claimant was awarded £14,677 for actual and future loss and injury to feelings.

Forthcoming Legislation

4 January 2012 - Retirement

This was the last day on which an employee could make a statutory request not to retire on the intended date of retirement under the statutory retirement procedure.

31 January 2012 - TUPE and Collective Redundancy

This was the last date by which evidence could be submitted in relation to the effectiveness of TUPE and the scope of the collective redundancy rules. To date, there has been no announcement of a formal consultation.

1 February 2012 - New tribunal award limits

The new tribunal award limits detailed in the January Update came into force on this date.
 

6 March 2012 - Consultation Ends

Consultation on fees in Employment Tribunals and the Employment Appeal Tribunal closes.

April 2012

Unfair dismissal - qualifying period to be increased to 2 years.

Parental Leave - unpaid parental leave is due to increase to 4 months.

Maternity/Paternity/Adoption Pay - to increase.

Statutory Sick Pay - to increase.

June 2012 - Extra Bank Holiday

The May Bank Holiday will be moved to Monday 4 June 2012 and an extra Bank Holiday added on Tuesday 5 June 2012 to celebrate the Queen’s Diamond Jubilee.

1 October 2012 - Protected Disclosures

The Pensions Regulator is to be added to the list of people to whom a protected disclosure may be made in relation to matters in respect of occupational pension schemes and other private pension arrangements.

1 October 2012 - Automatic pension enrolment

For those employers with over 120,000 workers on their PAYE scheme.

5 October 2012 - Retirement

This is the latest possible date for retirement under the statutory redundancy procedure.

October 2012 - National Minimum Wage

The National Minimum Wage may increase. This will be covered in a later Update when further information is available.

2012 onwards
 
Pensions Act 2008 – amendments

• Automatic enrolment of eligible employees into, and mandatory employer contributions to, qualifying pension schemes – to be phased in from 2012 over a 5 year period.
• New offences created – such as wilful failure to comply with the automatic enrolment provisions – up to 2 years’ imprisonment and/or a fine.
• A new head of automatic unfair dismissal is created where employees are dismissed for exercising their rights under the Act or as a result of an employer being prosecuted under the Act.
• Workers are given a new right not to suffer a detriment as a result of enforcing their rights under the Act.

2012 - Consultation on changes to the Working Time Regulations

Consultations are currently taking place on proposals to amend the WTR to take into account European case law which has determined that workers who are unable to take their annual leave as a result of sickness absence or maternity or parental leave in the current leave year must be able to carry it over into the following leave year.

Other proposed developments that do not yet have a confirmed date

• Employer penalties for breaching employment rights
• Simplification of compromise agreements
• Consultation on rapid resolution scheme as an alternative to going down the tribunal route

By 2012 - Education and Skills Act 2008

Obliges employers in England and Wales to release young people for education or training and check whether a young person in participating in education or training before employing them.

April 2015 - Flexible system of shared parental leave is to be introduced

This consultation closed on 8 August 2011 and a response is currently awaited. The response is expected in early 2012. The aim is for the system to be introduced in April 2015, subject to affordability.

6 April 2015 - Tax exemption for wholly electrically propelled cars

Such cars are currently subject to a five-year exemption from taxable benefit charge. From 6 April 2015 this will be 9%.

Contact:  Caroline Noble - 0844 8554189 - cnoble@jacksons-law.com