Employment Law Bulletin April 2013




Mind the Perception/Reality Gap

If you were to believe the rhetoric employed by elements of the government, you would be forgiven for thinking that the business community was on the verge of storming Parliament in protest at the “mountain of red tape” which makes up this country’s notoriously burdensome and oppressive employment legislation.

Strange, then, that one finding of a new report commissioned by the Department for Business Innovation and Skills, which records the views of 40 businesses – The ‘Employer Perceptions and the Impact of Employment Regulation’ study – is that employers generally think that employment regulation is needed and that it’s fair. Those that think differently tend to fear or misunderstand the laws – it’s called the “perception reality gap”, apparently. The cynics among you might doubt that the swathe of new employment rules contained in the Enterprise and Regulatory Reform Act, which was finally passed last week, will do anything to bridge this gap.

In addition to the controversial “employee shareholder” status, which entered the law despite being rejected twice by the House of Lords and which survived only with some radical “concessions” being made (more on this next month, once the dust has settled and we’ve all got our heads round how it actually works), the Act provides (amongst many other things) for:

  • Unfair dismissal compensation to be capped at the lower of one year’s pay and the current compensation limit of £74,200.
  • Settlement offers and negotiations to be, in certain circumstances, inadmissible in unfair dismissal proceedings.
  • The removal of the requirement for a disclosure to be made in good faith to count as a “protected disclosure” in the whistle-blowing legislation, while at the same time providing that the whistle-blowing itself has to be in the public interest for it to count. Mind you, given that the relevant law is in the Public Interest Disclosure Act 1998, it may come as a surprise to many that there wasn’t already a public interest criterion.
  • Compulsory pre-claim conciliation through ACAS, with consequent extensions to the relevant time limits for submitting claims.
  • The introduction of penalties for employers who are found to have breached employment rights.
  • The introduction of fees for Employment Tribunal claims.

The implementation dates for the various measures vary and have so far been subject to frequent change, but we will of course cover the various rights in more detail as they are introduced.

Turning to the month’s cases…


Relying on secret recordings

Vaughan v London Borough of Lewisham

Ms Vaughan – a litigant in person – brought various claims against her employer. She wanted to rely on 39 hours of covert recordings she had made of contacts and meetings – including disciplinary hearings – between her and the Council. She claimed that the recordings would prove that the employer’s notes were inaccurate, although she didn’t go into more detail.

The tribunal refused to allow this evidence. The tapes would first need to be independently transcribed and that would have a disproportionate effect on costs, the tribunal said.

The Employment Appeal Tribunal (EAT) held that the tribunal had been right not to allow the evidence because Ms Vaughan had not established its relevance. The tribunal did not have anything to go on; Ms Vaughan hadn’t been specific about what the recordings revealed.

However, the EAT did hold that in some respects the Judge had been wrong, in that recordings needn’t necessarily be independently transcribed before a decision on admissibility can be made. As a first step Ms Vaughan should have given the Council her own transcript, along with the recordings, and the Council could then have decided whether or not to dispute the accuracy. Importantly, it also held that, although the recordings having been made covertly was “very distasteful”, this did not of itself mean they were inadmissible. If Ms Vaughan were now to make a more focused application identifying parts of the recordings to be admitted in evidence then the outcome could be different.

To the extent that this might encourage employees to make covert recordings for later use in Tribunal proceedings, this is a most unwelcome finding.


Early retirement scheme becomes unstuck

HM Land Registry v McGlue

HM Land Registry (HMLR) was offering its workforce early retirement. Ms McGlue expressed interest but, because she was on a career break at the time, she was turned down. Managers had decided between themselves that employees who were on a career break and who were not due to return before a set date should be excluded from consideration.

Ms McGlue claimed indirect sex discrimination. She said that a provision, criterion or practice had applied to her as part of a group which was excluded from being considered for early retirement and that this had disadvantaged her.

The tribunal upheld her claim and awarded her £71,000 in compensation, which was the amount she would have received under early retirement. She was also awarded £12,000 for injury to feelings and £5,000 for aggravated damages.

HMLR appealed, arguing that Ms McGlue had suffered no financial loss because she had continued to be employed by HMLR. Ms McGlue’s response was that, had she taken early retirement, she would have found a similarly paid job and so would have had the benefit both of an ongoing salary and the early retirement sum.

Unfortunately for HMLR, McGlue’s evidence in this regard had not been challenged at the Tribunal (and so was accepted as fact) so Ms McGlue was indeed entitled to be compensated for loss of the chance of taking early retirement, even though she continued to be employed. The Employment Appeal Tribunal rejected HMLR’s appeal against the compensation award but did overturn the aggravated damages award.


New Eltham Conservative Club v Mr & Mrs Hazel

Another case involving issues of the calculation of compensation and mitigation demonstrates the difficulties in this area and came to a less happy conclusion for the Claimant.

Mr and Mrs Hazel were employed by New Eltham Conservative Club as stewards. There were money problems and they were made redundant.

They won their unfair dismissal case at tribunal. Mr Hazel, who was four years away from retirement, was awarded compensation from the date of dismissal to the date he would have been due to retire. The Club appealed that decision, arguing that the tribunal should have reduced that amount to take account of the possibility that Mr Hazel could have been properly dismissed at the time he was actually dismissed, or some time before he retired.

The Employment Appeal Tribunal agreed. On the basis of the liability findings the tribunal ought to have considered and factored in that possibility. The case was sent back to the tribunal to reconsider compensation.


And Finally…….

Stella English v Amshold Group Ltd

No round-up of cases this month would be complete without mention of the constructive dismissal claim brought by Stella English, the winner of the 2010 series of The Apprentice, in which to the delight of the tabloid press, Lord Sugar appeared to give evidence.

We need not dwell for long on the much-reported allegations made by Ms English, which included the complaint that by being paid £100,000 for a job where she felt that she did not have sufficient responsibility, she was “an overpaid lackey” – not something that many observers would feel constituted treatment worth resigning over.

Given that the tribunal found that not only would Ms English’s complaints not have amounted to an actionable claim if they had been true, but that the events alleged had not actually happened, the comments made by Judge Warren – including that “this was a claim that should never have been brought” – could be seen as restrained. Lord Sugar has commented in the press that the claim was “a derisory attempt to smear [his] name and extract money from [him]” and called on other employers to join in his campaign to put an end to “derisory” claims being brought by Claimants “chancing their arm and landing a big pay day” in the hope that employers will settle, for fear of costs, publicity and management time involved. It is not clear whether the Respondent will be making an application for costs – given the very clear statements by the Judge that the case should never have been brought, this would surely be one of the exceptional cases where a costs award would be appropriate.