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Russell Cooke Solicitors - Employment Law Update

January 2011

 
 

Welcome to the latest edition of the Employment Law Update brought to you by the employment team at Russell-Cooke. The aim of this service is to keep you informed of recent developments in this fast moving field of law so that you are better prepared to deal with issues as they arise in your workplace and recognise when professional advice might be required.

Contact details for members of the team are provided at the end of the Update. If you have a query about the issues covered or about any employment law related matter please do not hesitate to get in touch.

In this update:

  • Redundancy rendered unfair due to a failure to explain why an employee was marked down in a scoring exercise
  • Dismissal during the protected consultation period did not result in an automatically unfair dismissal
  • Claim by the employee of a Hong Kong based company allowed to proceed in the Employment Tribunal
  • Business Immigration – Closure of Tier 1 (General) Visa Route
  • Extension of the right to request flexible working from April 2011
  • Statutory Redundancy Pay and Unfair Dismissal Awards Increase
  • Statutory Payments – New Rates from April 2011

 

Redundancy rendered unfair due to a failure to explain why an employee was marked down in a scoring exercise

Due to the loss of a major client, the employer, a printing business, commenced a round of redundancies. It was agreed with the union that the categories for scoring would be attendance, quality, productivity, abilities, skills, experience, disciplinary record and flexibility. The Claimant was placed in a pool of three and after the preliminary scoring he was informed that it was likely that he would be selected for redundancy. He was invited to a meeting and his scores were provided to him in the meeting itself.

The Claimant was marked down in the areas of abilities, skills and flexibility. He queried this, highlighting his qualifications, 27 years’ experience and his willingness to be as flexible as any other employee. The employer’s response stated that his comments were noted, however, they believed the scores given by the assessors were reasonable and appropriate.

The Tribunal noted that the employer had failed to give any explanation as to how they had arrived at the scores. The scoring sheets did contain a space for comments but this had been left blank.

Before the Tribunal, the employer did provide an explanation for the scores, stating that the Claimant did not do a particular task and that he only worked 9 to 5. The employer also stated that the two managers scoring the employees saw the customer invoices going out and were therefore in a good position to assess the work done by the employees. However, the Claimant was able successfully to answer all of these points. The other employees had wanted to take on an easier element of the work and leave the harder jobs for the Claimant which he had been happy to agree to; the Claimant had never worked only 9 to 5 and as he sent many of his invoices directly to clients, the managers carrying out the assessment would not have seen these. The Tribunal noted that the Claimant would have been able to explain this all in the consultation process, perhaps preventing dismissal, but he had not been given a chance as nothing had been explained to him. As a result, the employer had failed to carry out reasonable consultation.

In addition to the finding of unfair dismissal, the Employment Appeal Tribunal agreed with the Tribunal’s finding that the Claimant’s compensation should not be reduced as there was no evidence that he would have been dismissed if a fair procedure had been followed. The fact that 3 employees were at risk of redundancy did not mean that the Claimant faced a 33% chance of dismissal and the evidence of the Claimant’s response to the reasons for his scoring indicated that he would not in fact have been selected if a fair procedure had been followed.

This case is a reminder to employers that being able to show that a fair procedure has been followed is vital to defend against claims of unfair dismissal from redundant employees. Objective and reasonable scoring criteria are important but these are only a starting point; the scoring process must be reasonable and transparent. If an employee can establish that their redundancy is unfair there is a risk of significant damages being awarded.

Pinewood Repro Ltd t/a County Print v Page UKEAT/0028/10

 

Dismissal during the protected consultation period did not result in an automatically unfair dismissal

The Claimant was employed as a solicitor by the Respondent and following her redundancy, pursued claims for race discrimination and unfair dismissal. As a substantial number of redundancies had been contemplated, the employer had been obliged to carry out collective consultation for a minimum period. The Tribunal found that the redundancy procedure had been entirely fair save for the employer’s decision to dismiss the Claimant during the protected consultation period. She succeeded in her claim for unfair dismissal and the employer appealed.

The Employment Appeal Tribunal upheld the employer’s appeal. In particular, the EAT found that a decision to dismiss within the collective consultation period, in breach of the Trade Union and Labour Relations (Consolidation) Act 1992, did not automatically and in itself render the dismissal unfair. There was a specific remedy for breach of the collective consultation obligations and the Claimant had in fact pursued a separate claim and been awarded 30 days’ wages by the Tribunal for this breach. The issue to be determined in an unfair dismissal claim was whether the employer had acted reasonably, taking into account all of the circumstances.

While this case indicates that Tribunals must focus on overall reasonableness and cannot take an unduly technical approach, employers must still be aware of the procedural requirements for fair redundancies and the separate but equally important collective consultation obligations. Employers should plan redundancy procedures carefully as any overlap between consultation and notice of dismissals is likely to result in protective awards of damages for failure to consult. In the case of Junk v Kühnel, the European Court of Justice held that notice of dismissal amounted to a redundancy and this should only be given after the consultation period has ended. Generally, it will be unwise for an employer to serve notice of dismissal before the conclusion of the statutory consultation period.

Hammonds LLP & Others v Mwitta UKEAT/0026/10

Junk v Kühnel C-188/03

 

Claim by the employee of a Hong Kong based company allowed to proceed in the Employment Tribunal

Mr Pervez was employed by MCS Ltd, a company that was incorporated and based in Hong Kong. They had no direct UK presence but in September 2008, Mr Pervez was seconded to a UK based associated company. One year later, he was dismissed and he brought claims against MCS Ltd alleging unfair dismissal, discrimination on the grounds of race and/or religion and unlawful deductions from wages.

Employment Tribunals may only deal with claims if certain basic criteria are met, including the requirement that the employer resides or carries on business in England and Wales. In addition, in order to pursue a discrimination claim, the employee must work wholly or partly in Great Britain.

The Employment Appeal Tribunal considered that Pervez was working in the UK as his secondment was indefinite. However, it appeared that MCS Ltd did not reside or carry on business within the UK. The EAT took the view that if an employee was entitled to the protections set out in UK employment law, it was ‘wrong in principle’ that an employee should not then be able to enforce these rights in the Tribunal. The EAT held that MCS Ltd’s secondment of Mr Pervez to a UK based company amounted to carrying on business in England and Wales, despite the fact that the supply of workers to third parties was not part of their ordinary business. Mr Pervez’s claims could therefore proceed.

Where an individual is working in the UK and is eligible to bring claims under UK employment law, the fact that the employer has no real presence in the UK might not prevent claims proceeding. Overseas employers who second staff to the UK should be aware that such individuals may be able to rely on legal rights and protections under UK employment law. The availability of such rights is likely to depend on the nature of the individual secondment and it is advisable to obtain specific advice to avoid the cost of unexpected claims under UK law.

Pervez v Macquarie Bank Ltd (London Branch) and another UKEAT/0246/10

 

Business Immigration Closure of Tier 1 (General) Visa Route

The government announced on 21 December 2010 that it would not accept – with effect from 23 December 2010 – any new applications made from overseas under the Tier 1 (General) visa category for highly skilled workers, having previously announced that the Tier 1 (General) visa category would be closed from 31 March 2011.

The Tier 1 (General) visa category is now closed to new “out of country” applications.

However, the government also announced on 21 December 2010 that the Tier 1 (General) visa category will not be closed until 5 April 2011 for applicants from within the UK and that transitional arrangements will be put in place beyond this date for some applicants who are already in the UK.

In addition to closing the Tier 1 (General) visa category, the government plans to make changes to the other types of visa available within the Tier 1 category, although it has not yet published full details of these planned changes. However, the government has indicated that the Tier 1 (Entrepreneur) category will be changed to allow for greater flexibility and the Tier 1 (Investor) category will be altered to allow an accelerated route to settlement, depending on the level of investment.

A new Tier 1 “Exceptional Talent” visa category will be introduced for migrants who have “won recognition in scientific and cultural fields”. Only 1,000 visas of this type will be issued each year.

Employers who have previously employed highly skilled migrant workers holding Tier 1 (General) visas should be aware that, in the future, the majority of workers of this type will not be eligible for a Tier 1 visa. Instead, an employer wanting to employ a highly skilled worker from outside the EEA or Switzerland may have no option but to sponsor that worker under the Tier 2 visa category to undertake a specific role within the employer’s organisation. Such employers will have to possess a sponsorship licence from the UK Border Agency.

Please see our latest Business Immigration Briefing for further information: Business Immigration Briefing - 16 December 2010

 

Extension of the right to request flexible working

From April 2011, the statutory right to request flexible working will be available to employees with parental responsibility for a child under the age of 18. Currently, this right is only available for employees caring for a child under the age of 17 or a disabled child under the age of 18. Those caring for adults in need of care also have a right to request flexible working. The government has launched a consultation on whether the right to request flexible working should be extended to cover all employees and organisations may wish to review their policy in this area.

There is no obligation on employers to agree to a flexible working request but requests must be considered under a specific procedure set out in the flexible working legislation.

The Flexible Working (Eligibility, Complaints and Remedies) (Amendment) Regulations 2010 SI 2010/2991

 

Statutory Redundancy Pay and Unfair Dismissal Awards

From 1 February 2011, the maximum amount of a week’s pay, which is used both in the calculation of the basic award in unfair dismissal claims and in the calculation of statutory redundancy pay will increase from its current level of £380 to £400. The maximum compensatory award for unfair dismissal will increase from £65,300 to £68,400.

Employment Rights (Revision of Limits) Order 2010

 

Statutory Payments New Rates from April 2011

The Government has announced the following proposed rate changes:

  • Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay to increase from £124.88 to £128.73 per week.
  • Statutory Sick Pay to increase from £79.15 to £81.60 per week.

Hansard – House of Commons Ministerial Statements 9 December 2010

 

Contact us:

The Employment Team
Russell-Cooke Solicitors,
2 Putney Hill,
Putney,
London
SW15 6AB

Tel: 020 8789 9111
www.russell-cooke.co.uk

 

This material does not give a full statement of the law. It is intended for guidance only, and is not a substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be accepted by Russell-Cooke.

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The Employment Team at Russell-Cooke
Anthony Sakrouge (Partner) – 020 8394  6504  Anthony.Sakrouge@russell-cooke.co.uk
Alex Bearman (Partner) – 020 8394 6524  Alex.Bearman@russell-cooke.co.uk
Edward Wanambwa (Partner) - 020 8394 6445 Edward.Wanambwa@russell-cooke.co.uk
Fudia Smartt (Solicitor) – 020 8394 6525 Fudia.Smartt@russell-cooke.co.uk
Emma O'Byrne (Solicitor) – 020 8394 6537 Emma.O'Byrne@russell-cooke.co.uk
Kate Minett (Solicitor) - 020 8394 6557 Kate.Minett@russell-cooke.co.uk


Specialists in advising charities, not for profits, trade associations and public bodies
Jane Klauber (Partner) – 020 8394 6483  Jane.Klauber@russell-cooke.co.uk
Deborah Nathan (Solicitor) – 020 8394 6437 Deborah.Nathan@russell-cooke.co.uk   


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