The year ahead in Employment Law
Every Government says it wants to simplify employment law – but bitter experience suggests that, when it comes to it, no Government can resist the temptation to make it more complicated.
This year we will see a new ‘National Living Wage’ applying to employees aged 25 or over, which will make paying employees the right amount more complicated than it has ever been. We will also see the Trade Union Bill passed by Parliament, making it even more complicated than it already is for a union proposing to take industrial action – although we are unlikely to see many complaints from employers for that particular increase in red tape.
Larger employers – those with 250 or more employees – will see new regulations requiring them to report on the gender pay gap. The details of this are yet to be finalised and it is not clear how onerous a requirement this will turn out to be. Merely giving the average pay of men and women in an organisation will be straightforward enough – but essentially useless in tackling the problem of unequal pay or even of establishing if there is in fact a problem in the particular workplace. To really make a difference, the new law will have to require a detailed break down of pay for each different kind of employee in an organisation. This would be a significant burden on business, however, and it will be interesting to see what sort of balance the Government tries to strike.
Even without new regulation, employment law remains a movable feast. Expect a year of new case law on everything from disability to the calculation of holiday pay – a subject that simply refuses to go away. Whatever 2016 brings, we will continue to help you make sense of it.
Disclosing Confidential Information
Employees have a duty to serve their employers in ‘good faith’, which includes respecting confidential information.
In Farnan v Sunderland Association Football Club, Mr Farnan was the Club’s International and National Marketing Director on a starting salary of £190,000 plus a discretionary bonus. He began to fall out with the Club, however, when their appointment of Paulo Di Canio as Manager caused difficulty with the Club’s potential sponsors. He felt that he was being ostracised and undermined by the Club’s leadership.
As a result, he began copying important emails to his wife’s personal email account, with a view to using the contents in any future litigation with the Club. In May 2013 he was dismissed for gross misconduct. He sued for wrongful dismissal – a contractual claim for his notice and unpaid bonus – claiming in the region of £1 million.
The High Court found that Mr Farnan had sent emails to his wife in order to ‘bank’ proof of the work he had done in securing various sponsorship deals. The Court found that this practice had not been authorised by the employer and amounted to a breach of confidentiality. Mr Farnan was not entitled to retain a personal copy of sensitive information for potential use against his employer at a future date. He had also acted in breach of contract by sending an agent details of the work he had been doing with the Club in Africa. This was done with a view to obtaining alternative work but the Court found that the information that he had shared included confidential information.
As a result, the Club’s dismissal for gross misconduct was upheld, and Mr Farnan’s claim for £1 million was unsuccessful.
Speaking English in the workplace
One issue that often concerns employers with a diverse workforce is the impact of employees speaking languages that may not be understood by their managers. Can an employer legitimately insist on employees speaking English while at work?
The answer depends on the reason why the employer is concerned. If a rule is motivated by a hostility towards non-UK staff then that will probably amount to race discrimination.
In Kelly v Covance Laboratories Ltd, however, the Employment Appeal Tribunal held that there was no discrimination when an employer insisted that an employee should not speak in her native Russian while at work. An important feature of the case was that the employer was engaged in animal experiments and had a legitimate fear of infiltration from animal rights activists. The employer found the behavior of the employee suspicious and, in particular, was anxious about her practice of using her mobile phone for extensive conversations in Russian.
The tribunal accepted that this suspicion was not based on her nationality and held that any employee who had been having conversations in a language other than English would have been treated in the same way.
Reasonable adjustments and sickness absence
One of the most difficult employment law issues currently facing employers is the link between sickness absence and the duty to make reasonable adjustments for disabled employees under the Equality Act 2010. The duty to make reasonable adjustments arises when an employer applies a ‘provision criterion or practice’ which puts a disabled employee at a substantial disadvantage when compared with employees who are not disabled.
In Griffiths v Secretary of State for Work & Pensions the provision in issue was the employer’s absence management procedure, which engaged when the employee’s absence reached a particular ‘trigger’ point. The Employment Appeal Tribunal held that there was no duty to make reasonable adjustments to the policy for disabled employees, because it applied equally to both disabled and non-disabled employees. On this point, the Court of Appeal disagreed. The policy would disadvantage those employees who were more likely to be absent as a result of their disability. However, because the employee’s absence was extensive and likely to continue for the foreseeable future, there was no breach of the duty to make reasonable adjustments.
Employers should make special provision for disabled employees in their absence management procedures. But employers are entitled to insist on reliable attendance, and there is no requirement to disregard all and any disability-related absence. The focus of the duty to make reasonable adjustment should still be on finding ways to get the employee back to work – either by adjusting the working environment or the work itself. The law does not require employers to simply tolerate high levels of absence on an open-ended basis.
These issues are by the nature nuanced and are often finely-balanced in practice, so it is always a good idea to seek advice if in any doubt.
We don’t see too many cases on the rights of part-time workers. Most employers are quite comfortable with the idea that, on a pro-rata basis, part-time workers should enjoy the same terms and conditions as their full-time colleagues.
However it seems that matters are not straightforward when it comes to the payment of judges. In MOJ v Burton & Engel, part-time judges of the Residential Property Tribunal (no, us neither) alleged that they had been less favourably treated than full-time Judges of the First-Tier Tribunal (Tax Chamber) – there being no full time Residential Property Tribunal Judges with whom they could compare themselves.
Their complaint was that while Tax Judges are given specific time to write up their decisions, Property Tribunal Judges had to rely on discretionary payments. Tax Judges were guaranteed payment; Property Judges were not.
The Employment Tribunal held that this was less favourable treatment, despite the difficulty in showing that the Property Tribunal Judges were in practice paid less. But it was not terribly impressed with the claims made by the Property Tribunal Judges in terms of how much time they spent writing their decisions and found that they should have been able to do the job much quicker than they claimed. The Tribunal therefore rejected their quantification of loss and adopted a much more modest approach. The employer claimed that given the Tribunal’s view of the evidence it should have found that the claimant suffered no disadvantage at all.
In dismissing the appeal, the Employment Appeal Tribunal held that the fact that Tax Judges were entitled to be paid for judgment writing as a right, whereas the Claimants were subject to a discretionary system, was sufficient in itself to establish less favourable treatment. As to calculating loss the Tribunal had been entitled to take a broad brush approach and the results were not manifestly wrong.
TUPE – tasks of short-term duration
A change in contractor does not give rise to a transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) transfer if the contract at stake is one for performing a task of short-term duration. So if you are not happy with your builders and employ another firm to finish building your house, then you should not find that the same builders turn up the next day having been transferred to a new employer! However, judging what is meant by ‘short-term duration’ is not straightforward.
In ICTS UK Limited v Mahdi, ICTS was providing security for a former campus for Middlesex University. The site was sold, and ICTS carried on providing security for the new owner. In October 2013, however, the owner decided to award the security contract to a new contractor: First Call. ICTS believed that the transfer of the security contract would be caught by TUPE, but First Call disagreed, arguing that the task of providing security for a vacant site was only temporary, and that when the site was redeveloped the security required would be entirely different.
The Tribunal accepted that this was just a short-term task and that TUPE did not therefore apply. However in reaching this decision the Tribunal refused to take into account the fact that as of August 2014 (the hearing) no planning permission had been applied for and there was no sign of the site being redeveloped – which undermined the owner’s argument that guarding the vacant site was a short-term contract.
The Employment Appeal Tribunal held that refusing to take this into account was an error. While it was the client’s intention at the time of the contract that mattered, rather than whether the task had turned out to be short term in practice, the tribunal should not have ignored subsequent events. What happens in practice can often shed a useful light on what the intentions of the parties are and the tribunal should have considered whether the fact that there was no sign of any redevelopment taking place indicated that the real intention at the time of the transfer was that the site would remain vacant for a considerable period of time.
The case will now return to the tribunal for reconsideration.
Early conciliation – adding new claims
Before bringing an employment tribunal claim, an individual must first contact Acas so that attempts can be made to settle. If no settlement is reached then Acas will issue a certificate giving a unique reference number, which must be included in any subsequent tribunal claim. If the claim does not include that number reference, then it will be rejected.
But what if the individual wants to change the claim later? In Science Warehouse Limited v Mills, the employee resigned while on maternity leave and alleged that she had been subjected to maternity discrimination. She contacted Acas but no settlement was reached and she subsequently submitted a discrimination claim. In its response to that claim the employer made a number of allegations about her conduct, and the employee argued that the making of these allegations amounted to victimisation under s127 of the Equality Act. She applied for permission to include this new allegation in her claim and the employer argued that she should have to contact Acas first to allow it to attempt to broker a settlement of that subsequent victimisation claim.
The Employment Appeal Tribunal held that there was no requirement for her to do so. Contacting Acas was a prerequisite for starting tribunal proceedings, but was not a prerequisite for amending a claim that had already been submitted. The purpose of the rule was to prevent claims from being brought in the first place. Once a claim had been brought, contacting Acas again would have been a purely technical exercise. The tribunal had a wide discretion to allow claims to be amended and the appeal was dismissed.
Not a surprising decision of itself, but there is still a lot of uncertainty regarding the detailed application of the rules on the early conciliation process, so there are likely to be more cases.