Employment Law Bulletin February 2013


There is, it seems, rarely a dull moment in employment law these days and we have recently seen some fresh announcements from the Department for Business, Innovation and Skills to add to the announcements we told you about last month (limiting unfair dismissal compensation to one year’s pay and the potential removal of service provision changes from the scope of TUPE). We now also have the promise of Acas early conciliation being introduced from April 2014 and the introduction of a new Health and Work Assessment and Advisory Service in 2014. Its role will include providing state-funded occupational health testing for employees who are off sick for more than four weeks. Both sound like very promising ideas in theory, but employment law often finds a way to confound the most promising ideas in practice, so we shall see…

On that positive note, the cases, in which the eagle-eyed observer might notice a trend this month of the Employment Appeal Tribunal overturning tribunal decisions:





Absent Employer Still in Control

White & Todd v Troutbeck SA

Mr White and Ms Todd worked as caretakers/managers of a house and small farm estate part-owned, but rarely visited, by Troutbeck.

Their contract had no fixed hours, although it contained several references to ‘employment’. When the company terminated the arrangement Mr White and Ms Todd claimed unfair dismissal, relying on an employment contract. The question was: were they employees (and so entitled to claim) or workers?

The company argued that it did not have day-to-day control over Mr White and Ms Todd and so that went against there being an employer-employee relationship. The original tribunal agreed, finding in Troutbeck’s favour.

That decision was overturned on appeal. The Employment Appeal Tribunal decided that a lack of day-to-day control is not conclusive. The test of whether or not someone is an employee is about the entire relationship, starting with the written agreement. The key question is whether the ‘employer’ had a contractual right of control? It is not simply about who is in charge of the daily work.

This cases serves as a useful reminder to all businesses using self-employed contractors to make sure that the written agreements are as explicit as possible with regard to the individuals’ status as workers, rather than employees.




New Unfair Dismissal and Redundancy Limits

It’s time to get used to a new set of figures. The annual rise in the unfair dismissal basic award and statutory redundancy payment took effect from the beginning of this month.

So dismissals that happen on or after 1st February 2013 could attract these maximum amounts:

  • A week’s pay – £450
  • Statutory redundancy/basic award – £13,500
  • Unfair dismissal compensatory award – £74,200
  • Combined unfair dismissal award – £87,700

Remember also that the government is introducing an overall cap on the compensatory award for unfair dismissal of one year’s pay. No firm date has been announced, but it is likely to take effect from the summer.




Handbook Terms Contractual

Allen v TRW Systems

The redundancy policy in TRW’s employee handbook provided for enhanced payments. The terms had been agreed with TRW’s works council and were repeated several times in letters issued to the workforce.

The issue was whether the enhanced redundancy terms were contractual, binding TRW and forcing it to pay these more favourable settlements.

The tribunal held not, saying that the terms had not been incorporated into the employment contracts because they were not referred to in the written statement of terms. This was a curious decision and the Employment Tribunal (EAT) overturned it. The tribunal should have taken account of the works council agreement, the express promise in the employee handbook and the assurances repeated in letters to employees. It was fair for the employees to have had a reasonable expectation of receiving the enhanced terms, the EAT said.

The case has been sent to a different tribunal to decide again.




Dismissal Wiped Out By Lesser Sanction?

Piper v Maidstone & Tunbridge NHS Trust

The Reverend Piper (RP) was an employee of the trust where he worked as a chaplain. He was dismissed for gross misconduct but, on appeal, the sanction was reduced to a final warning, demotion and a transfer to a different hospital.

RP wrote to the Trust rejecting its offer of re-engagement because of the ‘severe financial and psychological penalties’ he felt it would impose on him. He brought a claim for unfair dismissal which the Trust defended on the basis that there was no dismissal.

The tribunal found for the Trust on the basis that as the appeal had been successful and the dismissal had been replaced by the lesser sanction of warning, demotion and transfer, there was in effect no dismissal about which to complain. Once again, the Employment Appeal Tribunal took a different view. The Trust’s internal appeal procedure required an employee’s consent to a lesser penalty. As RP had not agreed to his dismissal being replaced by the warning, demotion and transfer, his dismissal stood and his unfair dismissal claim could proceed.

A reminder, if one was needed to ensure that disciplinary policies are carefully worded.




Defining Disability

Aderemi v London & South East Railway

Mr Aderemi was an assistant at a railway station in London. His job required him to stand for long periods – about nine hours – at a time. This affected his back. He was assessed by an occupational health doctor who concluded that his mobility was significantly restricted, he was in a lot of discomfort and was unlikely to be able to return to his job in the foreseeable future.

Mr Aderemi was dismissed on capability grounds and claimed unfair dismissal and disability discrimination.

The question of whether or not Mr Aderemi was disabled reached the Employment Appeal Tribunal (EAT) after the original tribunal found against him on that point. The tribunal had held that his impairment did not have a substantial, adverse effect on his ability to carry out normal day-to-day activities and so he wasn’t disabled. In reaching that decision, the tribunal concentrated on the things Mr Aderemi could still do.

If you’ve been paying attention this far through the bulletin, you will not be surprised to hear that the EAT disagreed, holding that the tribunal had looked at this the wrong way round. Rather than taking into account what Mr Aderemi could do, it ought to have considered the things he couldn’t do. These included bending, lifting and standing around for 30-minute periods, all of which may have brought him within the definition of disabled.

The case was sent back to the tribunal to be re-heard but not before providing a reminder that tribunal often seem to have a tough time with disability cases, and are quite capable of coming up with surprising results.





And Finally…. The Quashing of Ms Quashie’s Status

 Stringfellows Restaurants v Quashie

Cast your mind back to last summer when Ms Quashie, a lapdancer at Stringfellows, was found by the Employment Appeal Tribunal (EAT) to be an employee.

It held that the club exercised a sufficient degree of control over Ms Quashie, for instance by requiring her to work certain regular days every month, to comply with a dress code and to perform a number of free dances.

This time it was the EAT’s turn to be overturned, with the Court of Appeal deciding decided that Ms Quashie is not an employee after all. Crucial to this decision was the way in which Ms Quashie was paid. She negotiated her own fees with clients and the risk of being out of pocket on a particular night was hers alone.

It would be unusual, the Court of Appeal said, for there to be an employment contract where the worker takes the economic risk and is paid exclusively by third parties.

So, good news for Mr Stringfellow and other owners of exotic entertainment venues…