Employment Law Update April 2012 - 03/04/2012
Details on the new unfair dismissal qualifying period
We mentioned in last month’s News Update that confirmation would be given in relation to which employees would be subject to the new unfair dismissal qualifying period once the relevant Statutory Instrument had been introduced. It has now been confirmed that the new unfair dismissal qualifying period of two years will only apply to those employees who start their employment on or after 6 April 2012. Therefore, employees in employment prior to 6 April 2012 will remain subject to the one year qualifying period.
Other changes coming into effect on 6 April 2012
Other changes coming into effect on 6 April 2012 as a result of the Resolving Workplace Disputes Consultation include:-
- The maximum amount for deposit orders will rise to £1,000.00
- The maximum limit for costs will rise to £20,000.00
- Witness statements are to be taken as read in the employment tribunal
- The removal of automatic witness expenses
- Judges will be able to sit alone in the Employment Tribunal
It has been announced that the reforms following the Resolving Workplace Disputes Consultation requiring primary legislation will be introduced when Parliamentary time allows. These reforms include:-
- Financial penalties for employers
- Judges sitting alone in the EAT
- Early conciliation
Other changes suggested as a result of the consultation such as protected conversations and fees in the Employment Tribunal will be consulted upon this year. The Response is also due this year in relation to the Call for Evidence on collective redundancies consultation periods and TUPE and further details will be given in a future Update when the Response has been published.
National Minimum Wage Rates
It has been announced that from 1 October 2012, the National Minimum Wage Rates will be as follows:-
- Adults - £6.19 (from £6.08)
- 18-20 year olds - £4.98 (no change)
- 16-17 year olds - £3.68 (no change)
- Apprentices - £2.65 (from £2.60
Ofqual to become a prescribed person for whistleblowing purposes
From 22 March 2012, the Office of Qualifications and Examinations Regulation will be a prescribed person to whom whistleblowers can make protected disclosures for matters in relation to which Ofqual exercises functions under the Apprenticeships, Skills, Children and Learning Act 2009. The list of prescribed persons is found in the Public Interest Disclosure (Prescribed Persons) Order 1999.
Call for evidence
BIS has launched a call for evidence to examine:-
1. The existing dismissal processes which BIS say can be perceived to be, and often are, lengthy and unfair to both employers and employees. BIS are seeking views on how to make the dismissal processes simpler, quicker and clearer; and
2. The possible introduction of a compensated no fault dismissal scheme for businesses with less than 10 employees which would include alternative legislation in place of the standard unfair dismissal law but would leave discrimination and automatic unfair dismissal protection intact.
Responses to the call for evidence must be submitted no later than 8 June 2012.
Redundancy pool of one was unfair
In Capita Hartshead Ltd v Byard, the EAT upheld the Employment Tribunal’s finding of unfair dismissal following the Claimant’s selection for redundancy from a pool of one.
The facts of this case are as follows; the Claimant worked as an actuary but as a result of many of the pension schemes she worked on being wound up or clients lost, she did not have enough work for a full-time position. Despite there being three other actuaries, the Claimant was put into a redundancy pool of one which her employer argued was because there was not enough for four actuaries and with the work being of a personal nature the employer was concerned that clients could be lost if work was transferred between actuaries. The Claimant was selected for redundancy and proceeded to lodge a claim of unfair dismissal, arguing that all four actuaries should have been included in the selection pool.
The Employment Tribunal held that the employer’s decision to have a selection pool of one was unfair and did not believe there was any great risk of losing clients by changing actuaries and essentially found that the employer had not genuinely applied his mind to the pool. The Employment Tribunal found no evidence to suggest that the employer could reasonably have concluded that it would have been useless to have more than one actuary in the pool on the basis that the Claimant’s dismissal would almost certainly have occurred.
The EAT rejected the employer’s subsequent appeal and held that the principles in unfair dismissal claims for assessing whether the correct selection pool has been used include; the tribunal should not substitute its own views because the focus is on the range of responses from a reasonable employer, the reasonable response test applies to the formation of the selection pool, there is no legal requirement that the pool has to be limited to employees doing the same or similar work because it is for the employer to determine and where the employer has genuinely applies his mind to it it will be difficult for the employee to challenge it, the tribunal can challenge the reasoning of the employer to see if he has genuinely applied his mind to the pool and if the employee has genuinely applied his mind to the pool then, while it will be difficult for an employee to challenge it, it will not be impossible.
The EAT made it clear that while the selection pool is primarily a decision for the employer to make, this does not mean that tribunals cannot find that a decision by an employer is so flawed that the employee selected has been unfairly dismissed.
Advocate General gives opinion trigger point for collective consultation obligations
In The United States of America v Christine Nolan, the Court of Appeal made a reference to the European Court of Justice to determine whether the employer’s obligation to consult about collective redundancies arises (a) when the employer is proposing, but has not yet made, a strategic business or operational decision that will foreseeably or inevitably lead to collective redundancies; or (b) only when that decision has actually been made and he is then proposing consequential redundancies.
The Advocate General (AG) has given his opinion in relation to the question referred and says that the employer’s obligation to begin consultations in relation to collective redundancies arises when a strategic or commercial decision is taken which compels the employer to contemplate or to plan collective redundancies. The AG also opined that where there is a group of undertakings and the decision to make redundancies is made by the undertaking controlling the employer rather than the employer itself, then the obligation to consult arises when then controlling undertaking adopts a strategic or commercial decision which compels the employer to contemplate or to plan for collective redundancies.
This case will feature in a future Update once the ECJ has reached a decision.
Overtime requests and payment for overtime
The case of Blair and ors v Hotel Solutions London Ltd considered requests made by employers for a group of employees to work overtime and whether the employees were entitled to be paid under their contracts for the overtime. The EAT upheld the tribunal’s decision that a group of employees were not entitled to paid overtime under their contracts.
In this case, the Claimants’ contracts expressly stated that overtime was voluntary but it also required them to cooperate if their employer required them to work overtime at short notice. As part of their job, the Claimants had to clean 15 rooms a day in the hotel. The Claimants said they could only get all 15 rooms cleaned if they only took a 30 minute break for lunch rather than the hour they were entitled to under their contracts. They brought claims for unlawful deduction from wages in respect of the non-payment of overtime relating to the 30 minutes of their break that they worked.
The employers said that if the Claimants could not finish their work within the working hours then they could say so and go home, thereby arguing that any extra hours worked were on a voluntary basis. While the tribunal found that the employer discouraged the Claimants from saying they could not finish the 15 rooms and going home, therefore meaning they often worked part of their break to clean it without extra pay, the tribunal did not find that because the Claimants were in practice required to work overtime they should be paid for it. The tribunal rejected the claims on the basis that they would be eligible for overtime pay only if they were expressly required by the employer to work overtime which, on the evidence at tribunal, did not happen.
The Claimants appealed to the EAT arguing that a requirement to work overtime can arise where an employee is asked to do more work than can be completed within their normal working day. The EAT rejected that argument on the basis that the requirement to cooperate could not limit the express clause in the Claimant’s contracts stating that any overtime is voluntary. The EAT held that a requirement for cooperation in their contracts was not a general requirement to work overtime.
TUPE and change in working conditions
The EAT held in Abellio London v Musse and Centrewest London Buses that requiring the employee bus drivers to change location following a TUPE transfer gave rise to claims of constructive, automatically unfair, dismissal.
In this case, the Claimants worked as bus drivers for Centrewest on route 414 from their Westbourne Park Depot. Following a service provision change from Centrewest to Abellio, the Claimants were told that they would be required to work from a depot in Battersea. Working from the depot in Battersea would mean an extra hour travelling for one Claimant and more than two hours extra travelling for the other Claimants. The Claimants objected to this because it would disrupt their family and domestic arrangements.
The Claimant’s contracts of employment contained provisions in relation to working location and made it clear that they would try their best to accommodate the employees’ preferred working locations and after they had completed 6 months service they could apply for a transfer to one of Centrewest’s locations more suitable to where they lived.
One Claimant resigned while still employed by Centrewest and the others resigned on the day of the transfer.
The Employment Tribunal held that the Claimants had been constructively dismissed (the move was a repudiatory breach of contract because the mobility clause in their contracts did not extend to Battersea) and dismissed by virtue of regulation 4(9) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 in that there had been a substantial change to their working conditions to their material detriment. It was held that they had been automatically unfairly dismissed because the dismissals were by reason of the transfer. The employer’s appeal to the EAT failed and the EAT found that ‘working conditions’ is wider than ‘contractual conditions’. The EAT found that it is a question of fact as to whether there has been a change in working conditions under the TUPE Regulations 2006. The EAT held that in determining whether there has been a detriment, the tribunal must look at it from the employee’s perspective.
Long term sick worker and holiday requests
In the December Update we highlighted the conflicting decisions reached by the EAT in NHS Leeds v Larner and Fraser v St George’s NHS Trust in relation to whether employees on sick leave should notify their employer of their intention to take leave in order to be paid for it.
The EAT has recently given a further judgment in relation to this issue in the case of Allsop v Christiani and Nielsen. The EAT followed the Fraser case and held that in order to receive holiday pay an employee, even if on sick leave, must notify his employer of his intention to take leave. As mentioned in the December issue, the Larner case has been appealed to the Court of Appeal. The appeal was due to be heard at the end of March and we will update you on the judgment in a future Update when hopefully there will be clarity on the issue.
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.
6 April 2012 -
Unfair dismissal - qualifying period to be increased to 2 years.
Maximum amount for deposit orders
Maximum limit for costs
Witness statements to be taken as read in the ET
Removal of automatic witness expenses
Judges able to sit alone in unfair dismissal cases
Parental Leave - unpaid parental leave is due to increase to 4 months.
Maternity/Paternity/Adoption Pay - to increase.
Statutory Sick Pay - to increase.
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
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.
Automatic pension enrolment
For those employers with over 120,000 workers on their PAYE scheme.
New National Minimum Wage Rates
The new National Minimum Wage Rates detailed in the News Update section above will come into effect.
5 October 2012
This is the latest possible date for retirement under the statutory redundancy procedure.
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.
Consultation on changes to the Working Time Regulations
Consultations have taken 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. The Response to the Consultation is due this year.
Other proposed developments that do not yet have a confirmed date but will be implemented when Parliamentary time allows:-
- Employer financial penalties for breaching employment rights
- Allow judges to sit alone in the EAT
- Early conciliation
Others areas in which the Government is likely to consult this year include:-
- The introduction of protected conversations
- Simplifying compromise agreements
- New rapid resolution scheme
- Collective redundancy consultation
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.
New Employment Tribunal Code to come into effect
The new Code, following the review by Mr Justice Underhill, will come into effect.
Parental Leave extends from three to four months for each parent.
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%.