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Thursday 21 November 2013

Employment Law Bulletin November 2013

Welcome

Not the most surprising news ever, but there has been a marked decrease in the number of claims brought in the Employment Tribunals since fees were introduced in July. Whether this reduction is permanent, simply compensates for the rush in claims before the introduction of fees meaning that numbers will go back to the old levels, or somewhere in between (which is our guess) remains to be seen.

It is still very early days for tribunal fees, and if UNISON’s current judicial review challenge succeeds, then fees may be consigned to being a brief footnote in employment law history. UNISON is arguing that fees put a price on justice which is immoral and allows unscrupulous employers to ride roughshod over their workers’ rights (just to be clear – they think this is a bad thing!).

A decision is expected before the end of the year. Meanwhile, the employment law world is watching and waiting, and the increasing willingness of the Courts to overturn Government policy decisions (with recent decisions on hospital closures and disability benefit) will surely be cause for concern, in the corridors of power.

Turning to this month’s cases:

 

When did a constructive dismissal take effect?

Secretary of State for Justice v Hibbert

Establishing the date on which someone stops being an employee ought to be simple, but there can be scope for confusion, particularly in cases of constructive dismissal. It is important because the date of termination starts the clock ticking on the three month time limit for lodging employment tribunal claims.

Here, whether or not Ms Hibbert had presented her claim in time depended on when her resignation took effect. She had hand- delivered a letter to her employer on 29 June 2012. In it, she said, “… there has been a fundamental breach of my employment contract by my employer and I have no alternative but to resign my position”. She could not be persuaded to stay, and her employer subsequently wrote telling her that she was obliged to provide four weeks’ notice. That would have made her effective date of termination 27 July 2012.

So which was the true termination date – 29 June, or 27 July? The earlier date would mean her unfair dismissal claim was out of time; if the later date was right, her claim was, in time. The tribunal decided that the resignation letter contained an unambiguous resignation but, as Ms Hibbert hadn’t given a date for termination, it took effect on the date later suggested by her employer, namely, 27 July.

The Employment Appeal Tribunal disagreed. It held that Ms Hibbert had resigned on 29 June; the words she had used indicated a clear intention to resign with immediate effect. It was relevant that Ms Hibbert had written her letter after taking legal advice and it was not a “heat of the moment” decision.

Although the employer had subsequently suggested that she had to work her notice, the die had already been cast – according to normal contractual principles, the employment had already terminated and subsequent talk of notice (which Ms Hibbert did not actually work but was paid for) made no difference.

The practical advice here is to establish at the time of resignation when the employee’s last day is to be.

Right to be accompanied

Section 10 of the Employee Relations Act 1999 gives employees the right for workers to be accompanied at a disciplinary or grievance hearing if they “reasonably request” this. The ACAS Code of Practice on Disciplinary and Grievance Procedures is to be updated following the Employment Appeal Tribunal’s (EAT) decision in Toal v GB Oils, in which two employees asked to be accompanied at a grievance meeting by a particular union official. The employer objected to the union representative they wanted to be accompanied.

The EAT ended up looking at what “reasonably” meant, holding held that it was the request to be accompanied which had to be reasonable, not the identity of the chosen companion, who can be any fellow worker or a trade union official.

This was a surprising decision, as it means an employer cannot object to an unreasonable choice of companion. It was certainly a surprise to ACAS, since the current version of the Code says that “it would not normally be reasonable for workers to insist on being accompanied by a companion whose presence would prejudice the hearing nor would it be reasonable for a worker to ask to be accompanied by a companion from a remote geographical location if someone suitable and willing was available on site“.

This is an unhelpful decision for employers, who can now be saddled with accompanying persons who are trouble-makers, have their own agenda or are otherwise unsuitable. Refusing to allow such persons to attend may render the subsequent dismissal unfair, so the employer is put in a difficult position.

 

 Reasons for constructive dismissal

Wright v North Ayrshire Council

Does a Claimant need to show that a repudiatory beach by the employer was the main reason for resigning in order to claim constructive dismissal?

Constructive dismissal is normally understood to arise when the employer acts so badly that it is in breach of the employment contract and that the breach is so serious that it “repudiates” the contract of employment – the employee accepts this repudiatory breach by resigning (usually) with immediate effect.

It has always been assumed that the repudiatory breach has to be the main reason for resigning for this to work. Not so, the Employment Appeal Tribunal (EAT) has held – it is enough that the repudiatory breach played some part in the decision to resign – it doesn’t need to be the main reason.

Ms Wright was a care at home assistant. She raised three grievances, which the tribunal found were not properly dealt with and resulted in the employer being in repudiatory breach of contract. However, the tribunal went on to find that Ms Wright hadn’t leave in response to that breach; the real reason was that she had become her husband’s carer following his stroke. This meant that she had simply resigned and could not claim constructive dismissal.

However, the EAT disagreed, finding that the fact that the employer’s breach was not the only cause of the resignation didn’t defeat the claim. It was enough that the breach played a part. This is bad news for employers as it makes it easier for employees to win constructive dismissal claims. However, the extent to which an employee relies on their employer’s breach may well affect the amount of compensation awarded – If they would probably have resigned anyway then the compensation is likely to be reduced considerably to reflect this.

 

Frustration of disabled employee’s contract

Warner v Armfield Retail and Leisure

There sometimes comes a point in difficult workplace situations where an employer is left wondering just how the employment relationship can continue. In Warner v Armfield the Employment Appeal Tribunal (EAT) held that a disabled worker’s employment contract can be treated as terminated under the doctrine of “frustration” (that is, automatically brought to an end on the basis that it is impossible for it to continue), but only after the employer has fulfilled any duty to make reasonable adjustments which is imposed under the Equality Act 2010, where an employee has a disability.

Mr Warner was a site manager of a business that refurbished pubs and shops. He needed to be mobile and to perform carpentry. After suffering a stroke he was eventually dismissed and claimed unfair dismissal and disability discrimination.

The Tribunal held that once the duty to make reasonable adjustments had arisen, the employment contract could not be frustrated. The EAT disagreed, holding the contract can be frustrated, but only once all reasonable adjustments have been made.

It is rare for employers to rely on frustration when exiting an employee and this case will only make it more difficult where the employee is disabled.

 

TUPE – Service Provision Changes

Lorne Stewart v Hyde

Since 2006, the Transfer of Undertakings (Protection of Employment) Regulations have covered the situation of a “service provision change”, where there is a change of service provider – for example on an outsourcing, a second-generation outsourcing of a contract or where an outsourced service is brought back in-house.

The claimants worked for Carillion, which repaired and installed central heating and boilers for Cornwall County Council. That work was governed by a framework agreement. Alongside it, the Council could offer Carillion more work if it chose to, and often did so. There was no obligation for the extra work to be offered or accepted, although the reality was that Carillion (through Mr Hyde and his colleague) did it all.

When Lorne Stewart took over the contract, it refused to take two employees who provided the extra work under TUPE, and they were dismissed.

It was accepted that there had been a “service provision change” under TUPE relating to work set out in the framework agreement, but Lorne Stewart argued that where the work was not performed under the written contract, it was not part of the service provision change, even if in practice, the work was also taken over.

The EAT held it was irrelevant that there was no contractual obligation in place in respect of the additional work. Mr Hyde and his colleague undertook the work that was, or was intended to be, carried out by Lorne Stewart. Accordingly, there was a service provision change and their employment transferred under TUPE.

This makes appropriate due diligence even more important when a prospective owner intends to take over services under TUPE.

 

Knowledge of disability

Peregrine v Amazon

The Equality Act 2010 imposes a duty to make “reasonable adjustments” if a disabled employee is disadvantaged at work by a “provision criterion or practice” and the adjustment would allow the disabled employee to overcome the disadvantage.

Mr Peregrine was diagnosed with cancer in 1998. Amazon knew about this. He was disabled for statutory purposes. Nine years later he developed back pain which led to him taking long periods of time off work. He thought that the pain was caused by an injury or carrying weights and he asked for a risk assessment. That wasn’t carried out because he went off sick again.

Mr Peregrine claimed that he had been discriminated against. He said that the failure to carry out a risk assessment or to refer him to occupational health or a doctor amounted to disability discrimination and that Amazon had also not made any adjustments to prevent him from experiencing pain at work.

Sadly, Mr Peregrine was then diagnosed with a different form of cancer (linked to the first) which had in fact been causing the back pain and died.

His mother brought proceedings in the tribunal, claiming that Amazon had failed in its duty to make reasonable adjustments.

The tribunal held that Amazon could not have been expected to make the link between the back pain and the Claimant’s cancer and the Employment Appeal Tribunal agreed. As the employer did not know, and couldn’t reasonably have been expected to know, of the connection, there was no breach of the duty to make reasonable adjustments.

The principle which this tragic case confirms is sensible – in order to be subject to the duty to make reasonable adjustments the employer has to know that the employee is disabled and that the disadvantage suffered is linked to the disability. This includes “constructive knowledge”, that is, where the employer should reasonably have known, so it can’t willfully ignore the situation.

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