employment law seminar: disputes, settlements and employment law updates 2014

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Employment law breakfast seminar Thursday 5 June 2014 Justin Govier, Partner Jonathan Bruck, Senior Solicitor Erica Humphrey, Solicitor

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IBB Solicitors' employment lawyers, based in West London, delivered a seminar to HR executives. The seminar covered: Negotiating an exit- the situation prior to July 29 2013 Pre-termination negotiations after 29 July 2013 “Any offer made or discussions held before the termination of the employment in question, with a view to it being terminated on terms agreed” • Cannot be used as evidence in ordinary unfair dismissal cases • Unless improper behaviour • Non-monetary offers • Even if no eventual settlement • Still have WP principles (Portnykh -v- Nomura) Limitations • Only ordinary unfair dismissal cases • Not automatic unfair dismissal, not discrimination, not breach of contract • Increase in multiple claims • Everyone has a protected characteristic • Risk assess Acas code of practice and guidance • Guidance broad and general • Useful examples, but not all the answers • Need case law, although doesn’t always help • Trying to formalise an informal process Some issues • Chronology – letter, meeting, agreement? • Should allow employee to be accompanied • Militates to letter first • Allow time to consider offer (10 calendar days to consider proposed formal written terms of a settlement agreement) • Template letters – useful, current caution around amending • Create precedent letter Improper behaviour • Harrassment, bullying, intimidation, offensive words, aggressive behaviour, physical assault (or threat), criminal behaviour, victimisation, discrimination • Undue pressure, e.g. not giving reasonable time for consideration of proposed written terms. 10 calendar days recommended (unless agreed otherwise) • Stating (before disciplinary process) that employee will be dismissed if offer rejected (as opposed to stating that disciplinary process will commence) Unfair dismissal compensatory award • Basic award - £464 • Compensatory award – lesser of £76,574 or 52 weeks’ actual gross pay • Law firm challenge – judicial review - R (on the application of Compromise Agreements Ltd) v Secretary of State for Business, Innovation and Skills Case law update: calculation of holiday pay- commission • EU Law- at Least four weeks' paid Leave" • Working Time Regs- a week's pay' • WiLliams and others v 8ritish Airways Plc [2011] - normaL remuneration" includes any payment intrinsically Linked" to the performance of tasks • Lock v British Gas Trading Limited [2012] - AG opinion: commission was intrinsically Linked to his role as a salesman - Suggested that is averaged over the Last twelve months Early conciliation Mandatory for claims presented after 6 May 2014

TRANSCRIPT

Page 1: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Employment law breakfast seminar

Thursday 5 June 2014

Justin Govier, Partner Jonathan Bruck, Senior Solicitor Erica Humphrey, Solicitor

Page 2: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Negotiating an exit Justin Govier Partner

Page 3: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Negotiating an exit prior to 29 July 2013

•Where to start? (Before 2 years !)

•Without prejudice rules - genuine attempt to settle a dispute and no “unambiguous impropriety”

•Often needed earlier than that, exploratory conversations

•Artificialscriptedconversations,manufacturingof disputes and wrong labelling of WP

•“Cloak and dagger”

Page 4: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Pre-termination negotiations after 29 July 2013

•“Any offer made or discussions held before the termination of the employment in question, with a view to it being terminated on terms agreed”

•Cannot be used as evidence in ordinary unfair dismissal cases

•Unless improper behaviour

•Non-monetary offers

•Even if no eventual settlement

•Still have WP principles (Portnykh -v- Nomura)

Page 5: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Limitations

•Only ordinary unfair dismissal cases

•Not automatic unfair dismissal, not discrimination, not breach of contract

•Increase in multiple claims

•Everyone has a protected characteristic

•Risk assess

Page 6: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Acas code of practice and guidance

•Guidance broad and general

•Useful examples, but not all the answers

•Need case law, although doesn’t always help

•Trying to formalise an informal process

Page 7: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Some issues

•Chronology – letter, meeting, agreement?

•Should allow employee to be accompanied

•Militatestoletterfirst

•Allow time to consider offer (10 calendar days to consider proposed formal written terms of a settlement agreement)

•Template letters – useful, current caution around amending

•Create precedent letter

Page 8: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Improper behaviour

•Harrassment, bullying, intimidation, offensive words, aggressive behaviour, physical assault (or threat), criminal behaviour, victimisation, discrimination

•Undue pressure, e.g. not giving reasonable time for consideration of proposed written terms. 10 calendar days recommended (unless agreed otherwise)

•Stating (before disciplinary process) that employee will be dismissed if offer rejected (as opposed to stating that disciplinary process will commence)

Page 9: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Not improper behaviour

•Stating that the terms of a procedural termination will be less favourable

•Not agreeing to provide a reference

•Not paying for independent advice

•Encouraging employee, in a non-threatening way, to re-consider rejection of offer

•Often it’s not what you say, but how you say it

•More pitfalls for SMEs

Page 10: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Has it been a success so far?

•Legally – more clarity

•Practically: - It is a process, less “cloak and dagger”, statutory seal of approval, nothing wrong with it - transparent, frank communication - Reduction in two-pronged approach - Internal procedures -Benefitsoutweighproblems - Employees use as well

Page 11: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Getting the package right

•Knowing your employee

•Part HR professional / part psychologist

•Non-financialissues

•Tactics (room to move)

•Non-financialdealbreakers?

Page 12: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Factors

•Management time going through process•Certainty•Immediacy•Confidentiality•Non-derogatory clause•Announcement (customers, suppliers, employees)•Restrictive covenants•Legal fees•Avoiding test case for others•Public dispute•Recruiting replacement (e.g. “redundancy”)

Page 13: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Factors

•Lump sum (accelerated receipt)•Dismissal in any event•Contributory conduct •Loss of earnings•One year cap•Job market•Reference•Tribunal fees•Punitive•Advice – legal and non-legal•Employee expectations (as opposed to realities)•Merits of the case

Page 14: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Employment law update Erica Humphrey Solicitor

Page 15: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Employment tribunal statistics 2012/13

•Feesintroducedforclaimsfiledonorafter29July2013•Upto£1,200(£250filingand£950hearing)•79%fewerclaimsreceived:

- Oct-Dec 2012 – 45,710 claims received -Oct-Dec2013-9,801claimsreceived

•75%fewerthaninthelastquarter•Unison challenge – judicial review

- (R (Unison) v Lord Chancellor and another [2014] EWHC 218(Admin)

Page 16: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Unfair dismissal compensatory award

•Basic award - £464•Compensatory award – lesser of £76,574 or 52 weeks’ actual

gross pay•Lawfirmchallenge–judicialreview

- R (on the application of Compromise Agreements Ltd) v Secretary of State for Business, Innovation and Skills

Page 17: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Case law update: calculation of holiday pay - commission

•EU law – “at least four weeks’ paid leave”•Working Time Regs - a ‘week’s pay’•Williams and others v British Airways Plc [2011] – “normal

remuneration” includes any payment “intrinsically linked” to the performance of tasks

•Lock v British Gas Trading Limited [2012] - AG opinion: commission was intrinsically linked to his role as a salesman - Suggested that is averaged over the last twelve months

Page 18: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Case law update: calculation of holiday pay - overtime

•Neal v Freightliner Ltd [2012] – EAT •Faulton and another v Bear Scotland Ltd [2012] – EAT•Watch this space…

Page 19: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Case law update: collective redundancy

•The Woolworths case (USDAW v Ethel Austin Ltd (in administration) and another case UKEAT/0547/12)

•Collective consultation when: - Proposing to make redundant 20 or more employees - “at one establishment” -Withinaperiodof90daysorless - 100+ employees = 45 days’ consultation -Fewerthan100employees=30days’consultation

•EAT: the words “at one establishment” should be disregarded•Referred to the ECJ

Page 20: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Case law update: disciplinary and grievance

•BlackburnvAldiStoresLtd(2013)(EAT) - Failure to provide impartial grievance could amount to a fundamental breach of contract

•MillervWilliamHillOrganisationLtd(2013)(EAT) - Reasonable belief in the employee’s guilt - Where an employee dismissed for criminal or serious misconduct, level of investigation must be “careful and conscientious” - Should focus no less on any potential evidence that may… at least point towards innocence…as he should on the evidence directed towards proving the charges against him

Page 21: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Case law update: disciplinary and grievance

•StuartvLondonCityAirport(2013)(CA) - Employee fairly dismissed for theft even though acquitted in a criminal trial

•BritoBabapullevEalingNHSHospital(2013)(EAT) -Afindingofgrossmisconductwillnotinevitablymake dismissal a reasonable response

Page 22: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Early conciliation Jonathan Bruck Senior Solicitor

Page 23: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Early conciliation

•Mandatory for claims presented after 6 May 2014

Page 24: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

The issues

•Claimant (C) must notify Acas of intention to make a claim

•“stop the clock” on limitation

•Up to one calendar month (extension for further 14 days by agreement)

•Claims for relevant proceedings cannot be presented before earlyconciliationcompleteandearlyconciliationcertificate

Page 25: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Acas notification

•Earlyconciliationnotificationform

•Names, addresses and contact details

•Group claim form

•More than one Respondent (R) – different time limits!

•On-line, phone, post

•Acas records receipt (Day A)

•Email receipt / date stamped

Page 26: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Upon notification

•EarlyConciliationSupportOfficerattemptstocontactCwithin24 hours

•Obtains details (using checklist)

•Allocates conciliator

Page 27: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Options for claimant

•DemandCertificatefromECSO(whowillpresumablytrytopersuade otherwise?)

•Ifcertificateissued,clockrestarts

•Agree that Acas can contact R (Acas database for large employers)

Page 28: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Options for Respondent

•Contactusuallywithin48hours

•Refuse involvement

•Discuss settlement with conciliator

Page 29: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Certificate

•Issued at any time that conciliator concludes settlement is not possible (or 2 weeks if ECSO cannot contact C)

•Same conciliator if claim issued - helpful

Page 30: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Expectations

•Acas will not advise on timing

•Acas obliged to accept, even if out of time

•Certificateisnotavalidationofclaim

Page 31: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Early conciliation

Effect on time limits

•Day A = day Acas receives EC form/phone-call from C

•DayB=dayCisdeemedtoreceiveECcertificate(oractualreceiptdateifearlier)

•Deemed receipt: -datecertificateemailedbyAcas -2workingdaysafterAcaspostscertificate(assuming1stclassused)

•Time limit for claiming extended to 1 month after Day B if time would otherwise expire between Day A and Day B + 1 month

Page 32: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Early conciliation Example

•C dismissed with effect from 8 May 2014 & wants to claim UD•Normal time limit would expire 7 August 2014•C emails EC form to Acas on 5 June 2014 (Day A)•AcasmakescontactwithCon9June2014.CagreestoAcascontacting

R but R is not willing to agree a settlement•AcasissuesECcertificateandemailsittoCon13 June 2014 (Day B)•When does the UD time limit expire? -ERA1996:‘Inworkingoutwhenatimelimitsetbyarelevant provision expires, the period beginning with the day after Day A and ending with Day B is not to be counted’ -thereforethe8daysbetween(andincluding)6June2014and13June 2014 do not count -timelimitextendedby8daysto15 August 2014

Page 33: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Early conciliation

Another example

•C dismissed with effect from 8 May 2014; wants to claim UD•Normal time limit would expire 7 August 2014•C emails EC form to Acas on 5 August 2014 (Day A)•AcasmakescontactwithCon8August2014•C agrees to Acas contacting R•Acas makes contact with R on 12 August 2014•R is not willing to agree a settlement•AcasissuesECcertificateandemailsittoCon13 August 2014

(Day B)•TimelimitforUDclaimexpires13September2014(onemonth

after Day B)

Page 34: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Settlement

•IfCOT3tosettleallclaimsthennocertificate

•IfCOT3tosettlesomeclaimsthencertificateforrest

•New ET1

Page 35: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Issues for Respondents

•Checklist

•Jurisdiction

•Exemptions

•Timing

•Name of Respondent

Page 36: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Relevant proceedings

•Most claims

•Can go through EC but then add new claims

•C has mix (e.g. unfair dismissal and right to be accompanied), therefore exempt, goes through EC anyway and seeks to rely on clock stop?

Page 37: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Other Exceptions

• Joint claims, someone else complied

• If R contacted Acas first (no clock stopping unless C presents form)

• Mixed proceedings

• Unfair Dismissal Interim Relief

Page 38: Employment Law Seminar: Disputes, Settlements and Employment Law Updates 2014

Conclusion

• Timing issues might present headaches for C and litigation

• Will C’s try it on anyway?

• Will Rs conciliate in fees regime?

• Individual cases will depend on the parties and conciliator

• Concern over Acas resources (new conciliators appointed)

• 10 days delay already experienced

• Longer period of uncertainty for Rs

• R may still not receive advance notice of claims