Update on Legal Developments. Paul Statham

Transcription

1 Update on Legal Developments Paul Statham

2 Introduction I will try to cover the following:- Case law from January 2012 to date Statutory Changes from January 2012 to date Timetable for Changes in 2013

3 Breach of Contract In Société Générale v Geys [2013] IRLR 122 the Supreme Court held by a majority that the normal contractual principle applies to an employment contract and a repudiation by the employer must be accepted by the employee to bring the contract to an end. The competing automatic dismissal theory was rejected as it rewards wrongdoers. Geys was a common law case about banker s bonuses. He claimed 12.5m and the bank said it was no more than 7m. The employer terminated Mr Geys contract with immediate effect, marching him off the premises and paid 32,000 into his bank account which was the equivalent of his payment in lieu of notice. However, they failed to mentioned they were exercising their right to terminate using their contractual power to terminate in lieu of notice.

4 Breach of Contract 2 In Edwards v Chesterfield Royal Hospital NHS Foundation Trust & Botham v Ministry of Defence [2012] ICR 201, the Supreme Court held that breach of contract claims for failure to follow a contractual disciplinary procedure were inextricably linked to the dismissal process and so claims for financial loss caused by damage to reputation could not succeed. The court reasserted the principle in Johnson v Unisys [2001] ICR 480 that claims for damages for breach of the implied term of trust and confidence based on unfair treatment connected to dismissal could only proceed as a statutory claim for unfair dismissal extended to claims asserting breach of a contractual disciplinary procedure.

5 Breach of Contract 3 In Smth v Trafford Housing Trust [2013] IRLR 86 the High Court held that a Housing Trust acted in breach of contract. A housing manager said on Facebook that gay marriage was an equality too far and was then disciplined and demoted. Mr Justice Briggs said moderate expression of his particular views about gay marriage in church on his personal Facebook wall used only for personal and social rather than workrelated purposes would not cause the reasonable reader to think worse of the Trust. The frank but lawful expression of religious or political views may frequently cause a degree of upset, and even offence, to those with deeply held contrary views, even where none is intended by the speaker. This is a necessary price to be paid for freedom of speech

6 Religion and Belief In Redfearn v UK [2013] IRLR 51 the majority of the EHCR held that the UK had infringed the Article 11 rights of Mr Redfearn, who was a BNP councillor by failing to protect employees with less than one year s service from dismissal on grounds of political opinion or affiliation. He was dismissed from his job as a bus driver for Serco following his election. He brought an direct race discrimination claim which failed at the Court of Appeal [2006] EWCA Civ 659 The Court directed the UK Government to either create an exception to the qualifying period or creating a free-standing claim for unlawful discrimination on grounds of political opinion or affiliation. The case took over 6 years to reach the ECHR. It is a mystery why it was originally argued as a race not a religion and belief case.

7 Religion and Belief 2 In Eweida & Others v The UK 15/1/13 the majority of the ECHR found that the UK Government had breached Nadia Eweida s right to manifest her religion under article 9 of the Convention after she had refused to comply with BA s uniform policy which at the time forbade wearing of visible religious symbols (a cross) in customer facing roles. Too much weight was given by the UK courts to BA s corporate aims and not enough to her desire to manifest her religion. The other 3 joined claimants all lost. Shirley Chaplin was a nurse who wanted to wear a cross. The NHS uniform policy on clinical safety grounds justified the ban on crosses. Lillian Ladele, the registrar who refused to conduct civil partnerships and Gary McFarlane, the Relate counsellor who would not give sex therapy to same sex couples lost because the ECHR found that the employers had acted in a proportionate way in balancing the rights of users of services with the claimants religious beliefs.

8 Age Discrimination In Seldon v Clarkson Wright and Jakes [2012] ICR 716 the Supreme Court held that a firm s compulsory retirement of a partner at 65 was directly discriminatory but justified on the legitimate social policy grounds of intergenerational fairness and preserving the dignity of older workers. The Court distinguished direct from indirect discrimination cases. Only aims underpinned by social policy can be relied upon to justify direct discrimination. The Court remitted the case to the tribunal to decide if the policy was objectively justified as an appropriate and necessary means of achieving the two aims of inter-generational fairness and dignity to older workers.

9 Age Discrimination 2 In Woodcock v Cumbria Primary Care Trust [2012] ICR 1126 the Court of Appeal held that an employee s redundancy dismissal which the employer brought forward in order to avoid the costs of an enhanced pension if he was still employed at 50 was objectively justified direct age discrimination. Cost alone would not justify the discrimination but the Court were satisfied that the avoidance of a windfall was an additional factor justifying the discrimination.

10 Working Time In Russell & Others v Transocean International Resources Ltd & Others [2012] ICR 185 the Supreme Court held that regular field breaks onshore satisfied the entitlement to paid holiday under Reg 13(1) WTR of offshore oil rig workers. In British Airways plc v Williams & others [2012] IRLR 1014 the Supreme Court held that airline pilots holiday pay is not restricted to basic pay but must include flying pay supplements under the Civil Aviation (Working Time) Regulations In NHS Leeds v Larner [2012] IRLR 825 the Court of appeal confirmed a worker did not have to request leave or that leave be carried over when on long-term sickness in order to be entitled to a payment in lieu of untaken holiday on termination of employment.

11 Working Time 2 In Dominguez v Centre informatique du Centre Ouest Atlantique [2012] ICR 23 the European Court held that the right to 4 weeks paid holiday had direct effect so public sector workers can rely directly on Article 7(1). It also ruled that Member States could attach qualifying conditions to leave in addition to the 4 weeks. The UK Government legislative response is still awaited. In May 2011 in the Consultation on Modern Workplaces they proposed amending the WTRs but nothing has happened. In ANGED v FASGA [2012] ICR 1211 the European Court held that the principle of carry over of annual leave when sick as set out in Pereda applied both to cases where someone was sick when holiday was due to begin and when taken ill during the holiday.

12 Disability Discrimination In X v Mid Sussex Citizens Advice Bureau [2013] IRLR 146 the Supreme Court held that volunteers were not covered by the EC Equal Treatment Framework Directive. It followed that S.68(1) of the Disability Discrimination Act 1995 which defined employment did not have to be read including volunteers.

13 Equal Pay In Abdulla v Birmingham City Council [2012] UKSC 47 a majority of the Supreme Court upheld the decision of the Court of Appeal not to strike out claims for equal pay brought in the civil courts rather than the tribunal because of time limit issues. Since the tribunal would reject the claims as out of time, it could not be said that the claims could more conveniently be disposed of in the tribunal. The claims could proceed as breach of contract claims in the civil courts relying upon the operation of the statutory equality clause.

14 Protected Disclosure In Fecitt & others v NHS Manchester [2012] ICR 372 the Court of Appeal held that the correct test to decide if a worker has been subjected to a detriment on the grounds that they made a protected disclosure is whether the disclosure materially influenced the employer s decision. They went on to hold that an employer cannot be vicariously liable for the acts of employees unless the employee has committed a legal wrong. There is no provision in the Employment Rights Act making employees personally liable for victimising whistleblowers.

15 Redundancy In University of Stirling v UCU [2012] ICR 803 the Scottish EAT held that fixed term employees who were not re-engaged when their contracts were expired were not dismissed as redundant for the purposes of the collective redundancy consultation so they did not count in calculating the numbers made redundant and their dismissal did not trigger the obligation to consult. In Capita Hartshead Ltd v Byard [2012] ICR 1256 the EAT held that a redundancy pool of one was unfair as the employer had not genuinely applied their mind to the issue. By contrast, in Halpin v Sandpiper Books Ltd EAT 0171/11 the EAT held a pool of one was fair where an overseas office was closing and there was only one employee. The EAT emphasised that tribunals should not readily interfere in decisions about criteria or redundancy pools which are matters for the employer.

16 TUPE In Meter U Ltd v Ackroyd [2012] IRLR 367 the EAT held there was not a relevant transfer when staff employed to read meters were offered work after a transfer of a contract if they set up their own franchise companies. Staff who refused were dismissed. The ET found the dismissals automatically unfair. The EAT disagreed as changes to the workforce for an ETO defence did not include limited companies. There was therefore a reduced demand for employees and that entailed a change in the workforce. In Key2Law (Surrey) LLP v De Antiquis [2012] IRLR 212 the Court of Appeal held that the exceptions to TUPE where there are bankruptcy or similar insolvency proceedings did not apply to companies in liquidation. In Abellio London Ltd v Musse [2012] IRLR 360 the EAT decided that 5 employees required to work at a depot 6 miles away following a TUPE transfer had suffered a substantial change to their detriment so they could object to the transfer. Their daily travel increased by 2 hours which was not trivial or insubstantial and working conditions covered physical conditions and location of workplace as well as terms and conditions of employment.

17 Employment Status In Tiffin v Lester Aldridge LLP [2012] ICR 647 the Court of Appeal held that a fixed-share partner in a firm of solicitors which converted to an LLP was not an employee for the purposes of the Employment Rights Act. In Clyde and Co LLP & another v Bates van Winklehof [2012] IRLR 992 the Court of Appeal held a junior equity partner in an LLP was not worker and so could not bring a whistleblowing claim. However, a claim for discrimination could proceed as a member of an LLP is covered by S.45 of the Equality Act In Quashie v Stringfellows Restaurants Ltd [2013] IRIR 99 the Court of Appeal reversed the decision of the EAT that a lap dancer was an employee. The club did not employ the dancers to dance; rather she paid them to be provided with an opportunity to earn money by dancing for the clients...the fact the dancer took the economic risk is also a powerful pointer against the contract being a contract of employment.

18 Part Time Workers In O Brien v Ministry of Justice [2012] ICR 955 the European Court held that national law can only exclude part-time judges from the definition of worker in the EU Part-time Workers Directive (no.97/81) if the relationship between judges and the MOJ is substantially different from an employment relationship. The case was remitted to the Supreme Court and is due to hand down it s decision imminently. The case is about access to the judicial pension scheme and whether exclusion of part-time judges is objectively justified.

19 Changes From April 2012 Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 (Employment Rights Act 1996) The unfair dismissal qualification period rose from one to two years for all new employees employed on or after 6th April Estimated this will lead to a reduction of around 2,000 claims per annum, which brings net direct benefits to employers of around 4.7m per annum.

20 Changes From April 2012 The Employment Tribunals Act 1996 (Tribunal Composition) Order 2012 This amends the composition of employment tribunal hearings for unfair dismissal cases to be heard before 'a judge sitting alone'. Parties will be able to request a tripartite panel and this will be accepted or rejected at the judge s discretion.

21 Changes From April 2012 Amendments to Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 These amendments make the following changes:- When a judge considers that a claim has a limited chance of success at tribunal, to increase the maximum limit at which deposit orders can be made from 500 to 1,000. To increase the maximum limit at which judges can award costs to either party from 10,000 to 20,000. To change the rules on witness statements in the employment tribunal so that they shall be taken as read, meaning that a witness statement will not be read out in its entirety - unless the judge directs otherwise. To administratively remove automatic witness expenses.

22 Revised Parental Leave Directive March 2013 The Parental Leave (EU Directive) Regulations 2013 come into force on the 8 th March It increases entitlement to parental leave from 13 weeks to 18 weeks in respect of an individual child. It extends the right to request a contractual variation on return from parental leave to agency workers.

23 New Employment Tribunal Rules April 2013 An initial paper sift carried out by a judge Tribunal powers to strike out claims A lead case mechanism for dealing with multiple claims A simplified procedure for withdrawing claims A new procedure for preliminary hearings that combine separate pre hearing reviews and case management discussions A clear rule on the provision of written reasons A rule on limiting oral evidence and submissions leading to more efficient timetabling of cases

24 New Employment Tribunal Rules April 2013 Presidential Guidance Alternative Dispute Resolution New Cost Rules More flexible deposit orders New ET1 and ET3 Encouraging prompt payment of awards Dealing with new regime on fees and compulsory referral to ACAS for pre-action conciliation

25 Enterprise and Regulatory Reform Bill April 2013? Clause 7-9 Pre-action conciliation by ACAS Clause 10 Decisions by Legal Officers Clause 11 Composition of EAT Clause 12 pre-termination negotiations Clause 13 changing cap on compensatory award Clause 14 Financial penalties Clause 15 Protected disclosure amendments Clause 17 Indexation of amounts Clause 18 Renaming Compromise Agreements

26 Enterprise and Regulatory Reform Bill 2 Pre-Action Conciliation Government consulting at the moment on secondary legislation Proposed forms require only basic contact information not information about the dispute Main concerns are complication of time limits and how multiple claims will be handled

27 Enterprise and Regulatory Reform Bill 3 Decisions by Legal Officers & Composition of EAT The Bill provides a power to the Secretary of State to pass regulations to appoint Legal Officers to make decisions in certain proceedings as long as both parties consent in writing. The intention is to introduce a rapid resolution jurisdiction to deal with simpler claims by Legal officers with the written consent of both parties. A full consultation is due. The Bill also amends the Employment Tribunals Act 1996 by providing that an appeal to the EAT will not have to be heard by a judge and lay members. Judges will have the discretion to direct that a full panel will hear the case depending on the facts.

28 Enterprise and Regulatory Reform Bill 4 Cap on Compensatory Award The Bill provides a power to make regulations to amend the cap on the compensatory award (currently 74,200) either up or down. In January the Government published a response to the consultation Ending the Employment Relationship. They propose using the power to reduce the cap to 12 months pay or the statutory cap whichever is lower. I understand that subject to the Bill getting Royal Assent the secondary legislation will be tabled in April 2013.

29 Enterprise and Regulatory Reform Bill 5 Settlement Agreements The terms "compromise agreement" and "compromise contract" to be replaced with "settlement agreement. There is to be a Statutory Code of Practice that will include template letters. This will be subject to consultation. There is also to be guidance including advice on good practice, a clear definition of improper behaviour. It will also cover the practical implications of the principle in clause 12 of the bill about the inadmissibility of pre-termination negotiations. Inadmissibility does not apply in automatic unfair dismissal claim

30 Enterprise and Regulatory Reform Bill 6 Financial Penalties Clause 14 proposes a power for tribunals to impose a financial penalty on the employer irrespective of the nature of the remedy awarded to the claimant. Any financial penalty imposed must be at least 100 and cannot exceed 5,000. If the remedy awarded by the employment tribunal to the claimant is a financial award (e.g. compensation) then any financial penalty imposed must be set at 50% of the amount of the claimant s financial award subject to the minimum and maximum amounts.. If the employer complies with the order to pay a financial penalty no later than 21 days after the date that written notice of the decision is sent by the employment tribunal to the employer, the amount of the financial penalty is reduced by 50%. There must be one or more aggravating features in order for the tribunal to impose a penalty but these are not defined in the Bill.

31 Enterprise and Regulatory Reform Bill 7 The Public Interest Disclosure Act Clause 15 proposes to reverse the decision in Parkins v Sodexho Ltd [2002] IRLR 109 Mr Parkins claimed that a breach of a contract of employment is a breach of "any legal obligation". The Employment Appeal Tribunal held that there is no reason to distinguish a legal obligation which arises from a contract of employment from any other form of legal obligation. This decision has raised the possibility that any complaint about any aspect of an individual s employment contract could lay the foundation for a protected disclosure. This means that public interest disclosures must in future satisfy a public interest test and excludes those which can be characterised as being of a personal rather than public interest.

32 Collective Redundancies April 2013 In December 2012 the Government announced in a response to a consultation on collective redundancies that as from 6 th April 2013 the 90 day minimum period of consultation for redundancies of 100 or more will be replaced with a 45 day minimum. New non-statutory guidance will be prepared by Acas to provide guidelines on principles and behaviours behind good quality consultation. Employees on fixed term contracts which reach their natural end will be excluded from consultation.

33 Employee Shareholder Status April 2013 On 8 th October the Chancellor announced the creation of a new employment statusemployee owner or employee shareholders In return for shares between 2000 and 50,000 which are free of capital gains tax, the employee owner gives up the right to:- Unfair dismissal Redundancy Right to request flexible working Right to request training And they have to give 16 weeks notice of intention to return to work rather than 8 weeks after maternity or paternity leave. The Growth and Infrastructure Bill currently going through Parliament will implement the change and it is due to come into force in April 2013

34 Transfer of Undertakings (Protection of Employment) Regulations 2006 On the 17 th January the Government announced a consultation on amending TUPE Repealing the provisions which include most service provision changes within TUPE Repealing the specific requirement on notifying Employee Liability Information Changing the wording on restricting changes to contracts Changing the wording on protection against dismissal Changing the wording on substantial change in working conditions to the material detriment of employees Amending the meaning of entailing changes in the workforce so it covers changes in the location of the workforce Ensuring TUPE consultation by the transferee counts for the purposes of collective redundancies Allowing micro businesses to consult employees direct rather than through elected representatives Consultation closes on 11 th April 2013

35 The Equality Act 2010 Changes In October 2012 the Government Equalities Office announced that they would repeal:- The third party harassment provisions s.40(2)-(4) The tribunal s power to make wider recommendations in discrimination cases s.124(3)(b) The procedure to obtain information- Questionnaire procedure s.138 Clause 57 and 58 of the Enterprise and Regulatory Reform Bill will implement the repeal.

36 Tribunal Fees July 2013 (?) Bringing Claims The headline proposal is that universal fees to bring employment tribunal claims will be introduced in the latter half of 2013 and the Option 1 fee structure whereby fees are banded and there is a fee on issue and when a case is set for hearing is preferred to the Option 2 which proposed a single (higher) fee payable on issue and an increased fee if the claimant claimed over 30,000. There will be two "levels" of claims. For level one claims which are generally for sums due on termination such as unpaid wages, pay in lieu of notice and redundancy pay, the issue fee will be 160 and the hearing fee will be 230. For level two claims (all other claims), the issue fee will be 250 and the hearing fee will be 950.

37 Tribunal Fees 2 Multiple Claims The proposals for multiple claims are: 2 and 10 individuals pay a fee of 2 x the fee for single claims 11 and 200 individuals pay a fee of 4 x the fee for single claims; and 201 or more individuals pay a fee of 6 x the fee for single claims.

38 Tribunal Fees 3 Fees for Applications Fees for counterclaims cost 160, Fees for a review of default judgments cost 100, Fees for reviews cost 100 or 350 depending on the level Fees for applications to dismiss following settlement or withdrawal cost 60. Fees for Judicial Mediation cost 600 to be paid by respondents

39 Tribunal Fees 4 Employment Appeal Tribunal The fee for lodging an appeal to the EAT is to be 400 If it is allowed to proceed to hearing a further fee of 1200 is payable There were just over 2000 appeals received by the EAT in 2010/11 but only 600 or so proceeded to a preliminary or full hearing The Government can potentially raise 560,000 from appeals that will not even proceed to a preliminary hearing

40 Tribunal Fees 5 Fee Remission The Government proposes using the current civil courts remission system to protect claimants who cannot afford to pay the fees. This provides for 3 gateways: Receipt of one of a listed income-related benefit Gross income of 13,000 if single or 18,000 for a couple Disposable income computed on the legal aid means criteria The latter can result in partial remission. Below 50 a month confers a complete exemption then every extra 10 of income makes the claimant liable for a fee of 5.

41 Tribunal Fees 6 Time Limits The Government has accepted that claims will be treated as lodged in time if accompanied by a fee or an application for remission even if the application is not processed until later or it is decided the claimant does not qualify. The Government are proposing a review of the remission system for all civil cases with a consultation paper due soon. New remission system will start in Autumn so we will have to deal with fees from July under the existing remission system then it could all change by October

42 Tribunal Fees 7 What is Wrong Fees are payable in all cases without exception. No refund of fee even if case settles straight away. Discretion to tribunal to make losing party refund fees of winning party. But some 39% of tribunal awards are not paid at all and a further 8% are only paid in part according to Government research in Will be another factor in negotiations and may be an obstacle to settlement. Fees don t discourage unmeritorious claimants, they discourage the impecunious ones Sean Jones QC.

43 Conclusions If you are on twitter you can follow my tweets. I and I tweet on anything to do with tribunal fees and re-tweet other interesting people on #ukemplaw covering all legal developments in employment and trade union law. Paul Statham, Pattinson & Brewer pstatham@pattinsonbrewer.co.uk