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Russell Cooke Solicitors - Employment Law Update


November 2012

 
 

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:

  • Tribunal was wrong to search for the “principal purpose” of a resignation when deciding whether a constructive dismissal had taken place
  • National Minimum Wage Rises
  • Recent TUPE Cases
  • Proposed employment law reforms in the battle against “Red Tape”
  • Olympic Opening Hours Stirs Debate on Sunday Trading
  • EU Commissioner Announces Measure to Increase the Participation of Women on the Boards of Companies


This material will shortly be available at our website together with an archive of past updates (there is also the facility to sign-up to receive the updates here).

 

Tribunal was wrong to search for the “principal purpose” of a resignation when deciding whether a constructive dismissal had taken place

Logan v Celyn House Ltd [2012] UKEAT 0069_12_1907

A veterinary nurse (Claimant) brought a claim at the Employment Tribunal against her former employers for constructive dismissal.

The Claimant had 12 grievances against her employer. One of these was that it had failed to provide her with contractual sick pay. The Claimant’s employer had rejected the entire grievance, including that in relation to sick pay. The Claimant appealed this decision, but her appeal was also rejected by her employer. The Claimant resigned following this failed appeal.

The Employment Tribunal found that the Respondent had failed to provide the Claimant with contractual sick pay and that it had committed a repudiatory breach of contract. Therefore, the Claimant was entitled to treat her employment contract as terminated and to any damages she had suffered as a result. However, the Tribunal dismissed the Claimant’s other grievances.

When deciding whether the Claimant had been constructively dismissed the Tribunal considered that the principal reason behind her resignation was that the Claimant had felt that she was being subjected to bullying, harassment and discrimination, as well as her belief that her complaint about these matters had been inadequately handled by her employer.  The Tribunal found against the Claimant in respect of these matters however.  As the failure to pay contractual sick pay had not been the principal reason for the Claimant’s resignation, the Tribunal dismissed the constructive dismissal claim.

On appeal, it was found that the Tribunal had been incorrect to consider the principal reason for the resignation. Rather the question to be asked was whether the failure to pay sick pay was a reason for the Claimant’s resignation. The Tribunal had concluded that the reason for the resignation was the Claimant’s 12 grievances, one of which was the failure to pay contractual sick pay. Accordingly the EAT found that the Claimant had been constructively dismissed.

Therefore, if an employee resigns because of a number of grievances, it is enough that one of those grievances has merit and constitutes a sufficiently serious  breach of contract for the purpose of bringing a constructive dismissal claim. Employers should not therefore rely on the employee having left primarily due to an unfounded complaint.

 

National Minimum Wage Rises

A reminder that the new national minimum wage levels came into force on 1 October 2012. This raises the national minimum wage for workers aged over 21 to 6.19 per hour. The national minimum wage level for apprentices will increase to 2.50 an hour. In addition, if an employer provides accommodation to workers free of charge and seeks to use an accommodation offset, the maximum it will be able to offset from the employee’s minimum wage will increase to 4.82 a day.

These increases come as part of the Government’s approval of the Low Pay Commission’s report 2012. One of the Commission’s recommendations was that the Government should utilise its powers to name those who infringe the National Minimum Wage Regulations established in 2012, as well as publicise the fact that infringers will be caught and punished. This recommendation follows 1,000 infringers having been caught in 2011 without being named. The Minister for Employment Relations has recently taken the step of naming an employer who has failed to pay the national minimum wage to workers, following an intervention by Revenue and Customs. Mrs Rita Patel, who runs a beauty salon in Leicester, was found to meet the criteria for being named and shamed under the Department for Business, Innovation and Skills scheme.

This move suggests that the Department of Business intends to enforce the National Minimum Wage Regulations more emphatically in future.

 

Recent TUPE Cases

Recent cases on the subject of TUPE highlight important points on the interpretation of the Regulations. 

Edinburgh Home-Link Partnership and Others v The City of Edinburgh Council and Others [2012] UKEAT 0061_11_1007

This case involved the transfer of the provision of services to the homeless, which had previously been contracted out by The City of Edinburgh Council, “in house”. The Claimants, who were two directors of the service providers, were not transferred under TUPE to the Council. The Employment Tribunal found against them on the basis that the role of the Claimants appeared to have been the strategic maintenance of the organisation, rather than one of service delivery. 

On appeal, the Claimants argued that the Tribunal was wrong to consider whether or not the Claimants were directly involved in providing services to the homeless. The EAT dismissed the Claimants’ appeal. The EAT stated that, when deciding whether an employee transfers, the question to be asked is whether the employee has been assigned to an organised grouping of employees that has, as its’ principal purpose, the task of carrying out activities on behalf of the client for which the client had contracted. The Council had contracted with Edinburgh Home Link for the provision of visiting support for early intervention purposes, those in crisis and those with multiple needs. The EAT Judge, the Honourable Lady Smith, stated that the primary duties of maintenance of the organisation carried out by these employees, namely ensuring Care Commission compliance, was ‘separate and distinct from the carrying out of the activities required by the client contract’. The Judge suggested that to find that TUPE applied in the case of a mere ‘link...between the claimant employee and client work’ would be akin to finding that a handy man who kept the transferor’s Head Office in a suitable order should be assigned under TUPE.

This demonstrates that those in managerial and administrative roles in organisations whose sole work is maintenance of the organisation which carries out a given contract, will not necessarily transfer under TUPE.

Manchester College v Hazel and Another [2012] UKEAT 0642_11_0907

In a recent case a number of contracts were transferred to Manchester College. The college was in the process of making changes in light of the difficult economic situation they faced. As part of this process several redundancies were made and the college sought to make further savings by harmonising employment contracts. The Respondents were asked to enter into new contracts with the college on a lower salary. The Respondents were dismissed when they failed to accept the new terms. Thereafter Manchester College offered the Respondents contracts of employment at a lower salary once again which they accepted. The Respondents then sued for unfair dismissal and were successful at Tribunal.

The EAT upheld the Tribunal’s findings that although the dismissals had been for economic, technical and organisational reasons, these reasons did not entail a change in the workforce. Therefore, as the employees had been dismissed because of their refusal to accept harmonised terms, they had been dismissed for a reason connected to the transfer. As such, their dismissals were automatically unfair. The EAT upheld the Tribunal’s order that the Respondents should be re-engaged at their old rate of pay.

It is therefore essential to establish the link between the economic, technical and organisational reason relied on and the proposed course of action, before seeking to rely on this provision.

 

Proposed employment law reforms in the battle against “Red Tape”

Vince Cable has announced several proposed reforms to existing employment legislation which, if implemented, could make it easier for businesses to terminate employment contracts. These measures are aimed, according to the Department for Business, at giving businesses more flexibility and confidence in managing their workforce. Mr Cable’s proposals have received a mixed reception. Representatives of business have largely welcomed the reforms, as easing the compliance obligations on businesses, but many trades unions have expressed concern that it will increase job insecurity amongst workers.

Further proposals announced include a lower cap on compensation for unfair dismissal, measures to encourage the use of compromise agreements in resolving disputes, changes to Employment Tribunal rules and changes to TUPE legislation.

The Secretary of State will be given wide powers to vary the statutory limit on unfair dismissal. Current proposals include the choice to lower the cap to a number of weeks pay. Unfair dismissal awards are currently capped at 72,300. This proposal could see lower paid employees recover far less at the Employment Tribunal than has, until now, been possible (although in practice employees are not often awarded more than one year’s salary). A consultation on this measure was announced on 14 September 2012 and will close on 23 November 2012. 

A consultation was also opened into proposals for changes to Employment Tribunals. As part of this consultation Tribunal judges will have the opportunity to sift cases at the outset and the power to strike cases out where appropriate.

Following the publication of responses to the consultation into the effectiveness of TUPE the Government will consider making changes to the existing system including; whether TUPE should apply to service provision changes, whether both parties to a transfer should be jointly and severally liable for resulting claims and whether dismissals which take place following the relocation of a business should not be considered automatically unfair dismissals on the basis that such dismissals are made for economic, technical and organisational reasons.

Mr Cable’s initiatives do not include the widely debated plans to allow for “no-fault” dismissals, which he has now publicly abandoned. 

 

Olympic Opening Hours Stirs Debate on Sunday Trading

The extension of store opening hours on Sunday during the Olympic Games has contributed to a continuing debate over whether Sunday Trading Laws, currently in place, should be repealed. At present larger stores, with a square area of over 280 m2, can only remain open between the hours of 10 a.m. to 6p.m. on a Sunday. There are no restrictions in place for smaller stores, which provides them with a degree of protection from competition with larger stores. The current Trading Laws also find favour with religious groups and trades unions.

Under special measures introduced larger stores were able to select their own opening hours during the Olympics. Existing legal protections to prevent unlawful detriment to workers who declined to work on Sunday remained in place. Although this was intended to be a temporary measure it soon became clear that the Government had been in consultation with business leaders to consider the effect of suspending Sunday Trading which Chuka Ummuna, Business Secretary for the Labour Party, claimed breached assurances given to Parliament that this measure would only be temporary. The Chief Executive of ASDA is reported to be in favour of the repeal of existing Sunday Trading legislation, as it provides customers with greater accessibility.

Commerce and Employment Minister, Kevin Stewart, has stated that he stands by his decision not to make Sunday Trading a priority for his department.

 

EU Commissioner Announces Measure to Increase the Participation of Women on the Boards of Companies

The EU Commission will propose legislation to increase the number of women on company boards this month. This follows the launch of the Women on Boards Pledge for Europe by Vivian Reading which called for women to have 30% of representation on boards by 2015 and 40% by 2020. Draft legislation seen by the Financial Times suggests that companies which did not adhere to the legislation would face fines. Furthermore, companies could face bad publicity for failing to reach any quotas introduced.

In response to the proposed legislation, the Business, Innovation and Skills Committee launched a new enquiry into women in the work-place, which considered issues including the pay gap between men and women, as well as the impact of the current economic crisis. The consultation closed on 5 October 2012. The results will be announced in due course.

 

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.

© Copyright: Russell-Cooke,

The Employment Team at Russell-Cooke

Anthony Sakrouge (Partner) 020 8394  6504  Anthony.Sakrouge@russell-cooke.co.uk
Jane Klauber (Partner) 020 8394 6483  Jane.Klauber@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 Hulmes (Solicitor) 020 8394 6537 Emma.Hulmes@russell-cooke.co.uk
Jane Pendry (Solicitor) - 020 8394 6478 Jane.Pendry@russell-cooke.co.uk


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