Employment Law Update

Ben Doherty Senior Associate

Julie Sabba Associate

March 2012

EMPLOYMENT LAW REFORM

The Coalition Government is focused on reducing the regulatory burden on business

A series of changes to employment law are being consulted on and some are already in force

A reform of the ET system is underway to reduce costs and speed up proceedings

UNFAIR DISMISSAL

Qualifying period for unfair dismissal has increased to 24 months

Applies to all employees employed on or after 6 April 2012

Those employed before 6 April 2012 will still be subject to the 12 month qualifying period

No qualifying period required if employee is dismissed for an inadmissible reason

Employment Judges to sit alone in unfair dismissal cases

DEPOSIT ORDERS & COSTS AWARDS

The maximum for deposit orders in Tribunal claims likely to be increased from £500 to £1,000 on 6 April 2012

Appropriate if claim has no reasonable prospect of success

The maximum for costs awards likely to increase from £10,000 to £20,000

Appropriate if a weak case has been pursued or the Claimant has acted unreasonably

EMPLOYMENT TRIBUNAL FEES

The Government is currently consulting on the introduction of Tribunal fees

Two options are proposed:-

Fee to depend on nature of claim, with 3 levels of fees (increasing depending upon complexity). This would involve a fee for making the claim (£150 - £250) and a fee for the Hearing (£250 - £1,250); or

A fourth fee level would be added for claims over £30,000. There would only be a fee for making the claim (from £200 - £1,750).

Fees for appealing ET’s decision (£400) and Appeal Hearing fees of £1,200 for EAT claims

EMPLOYMENT TRIBUNAL FEES

The fees that a Respondent will be required to pay are as follows:

application requesting for written reasons - £100 or 250 (depending on level)

application for review - £100 or £350 dismissal after settlement or withdrawal - £60 set aside default judgment - £100 counter-claim - £150 judicial mediation - £750

PRE-CLAIM CONCILIATION

The Government is consulting on the proposal that Claimants submit key details of their claim to ACAS before submitting a formal claim to the Employment Tribunal

If the key details are submitted within the time limit this will “stop the clock”

Thereafter, there will be a statutory period of one month for ACAS to attempt to conciliate the dispute

This would be a mandatory scheme

GREATER POWERS OF STRIKE OUT

Proposal that ET can strike out a claim at any stage rather than exclusively at PHRs

Without the opportunity of parties making representations

Employment Judge sitting alone can do this

PENALTIES FOR EMPLOYERS

Employers likely to be issued with penalties by the ET where they have breached employment rights

Penalties would be payable to the Exchequer, not the Claimant

Penalties would be based on half the total award to the Claimant (£100 minimum and £5,000 maximum)

Penalty to be reduced by 50% if paid within 21 days

OTHER CHANGES BEING CONSULTED ON

The ceasing of expenses for witnesses

Amendment of whistleblowing rules so that breaches of employment contracts are no longer covered

Compromise Agreements to be simplified

Collective redundancy consultation

Consultation on improving the operation of TUPE

PROTECTED CONVERSATIONS

The Government has proposed the use of protected conversations between Employer and Employee

Would allow frank discussions about poor performance, retirement etc.

Would be inadmissible in Court

Scope for abuse!

OTHER CHANGES – PENSIONS AUTO-ENROLMENT

Eligible Employees to be automatically enrolled into pensions with mandatory Employer contributions

For Employers with 3,000 plus staff, auto-enrolment will start in Autumn 2012

For Employers with fewer than 3,000 staff, auto-enrolment will commence at a later date according to number of employees

OTHER CHANGES – PARENTAL LEAVE

Parental leave to increase from 3 months to 4 months

Unlikely to come into force until 2013

Open to all eligible workers including fixed-term, part-time and temporary agency workers

CASE REVIEW

Redundancy Cases

1. Selection Pools: Halpin –v- Sandpiper Books

When should an Employment Tribunal interfere with the pool for selection chosen by the Employer? – Rarely

The decision by the Employer to limit the pool to a pool of one was open to it; such a decision cannot be easily overturned

“Selection only operates, when fairness is concerned, where there is a number of similarly qualified possible targets for redundancy”

1. Alternative Employment: Readman –v- Devon Primary Care Trust Can an employee act reasonably in refusing an offer of suitable

alternative employment where the Employment Tribunal correctly concludes that a reasonable employee would have accepted the employer’s offer?

The proper question is “whether the employee in question acted reasonably in refusing the offer”.

Samsung Electronics –v- Monte D’Cruz

Can the employer appoint “the best person for the job”, even if that involves a degree of subjectivity?

A Tribunal should certainly consider how far an interview process was objective

“Subjectivity” in redundancy cases was often seen as a “dirty word”, however “some subjectivity was inevitable”.

TUPE CASES

1. ETO Defence: Meter U Ltd –v- Ackroyd

Is it an ETO defence to provide the services rendered by franchised limited companies, rather than by its own employees?

The EAT held that the term ‘workforce’ in Regulation 7 (2) TUPE 2006 did not include limited companies performing services for the employer

If the franchise arrangements were a sham, the ETO defence would not apply as it would be a simple change in terms and conditions in connection with a transfer.

1. Service Provision Change: Johnson Controls –v- UK Atomic Energy Authority Is there a SPC when the service is conducted in a fundamentally

or essentially different manner following the changeover?

A question of fact in each case and requires an holistic assessment by the Employment Tribunal.

Recent EAT decisions suggest there will be no service provision change under Reg 3 (1) (b) when the service is significantly re-modelled

1. Organised Grouping of Employees: Eddie Stobart Ltd –v- Morman Is it sufficient to say that the transferring employees “go with the

work” Analytical distinction between an organised grouping of

employees, on the one and, on the other, whether employees are assigned

The EAT held that it is necessary to identify an organised grouping of employees in advance of the question of which employees were assigned to it

The employees were “organised” as to their shifts, not as to a particular customer.

DISCRIMINATION

Christian Beliefs and Gay Rights: Bull –v- Hall & Preddy Hotel in Cornwall operated a strict policy refusing double

bedrooms to unmarried couples

Claimants, had undergone a civil partnership ceremony argued that they should be treated the same way as a married couple

Court’s reject Mr & Mrs Bull’s Article 9 argument, ie that the “no unmarried couples” policy was simply a manifestation of their religious belief

If they chose to run a business, they had to run it in accordance with the law

Objective Justification: Cost alone? – Woodcock –v- Cumbria Primary Care Trust The Court of Appeal rejected the argument that cost

cannot be a legitimate aim, so as to justify some types of discrimination

The Employment Tribunal found that service of the notice was less favourable treatment on the grounds of the Claimant’s age

It accepted that this treatment of the Claimant was a proportionate means of achieving the Trust’s legitimate aim of achieving the dismissal of a redundant employee in a cost effective manner and so as to prevent him from benefitting from a windfall.

Britain’s Got Talent: Czikai –v- Freemantle Media & ors Talent show contestant held not to be a job applicant No disability discrimination

QUESTIONS?