Employment Law Bulletin July 2013




The moment has arrived for one of the biggest changes in employment law for years – employees now have to pay to bring claims in tribunals. Or do they? The fees regime commenced on Monday (29th July).

However, two legal challenges to the introduction of fees have been launched; one in England, and one in Scotland. There are several grounds of challenge, one of which is that tribunal fees would indirectly discriminate against women, who typically earn less than men yet bring a greater proportion of tribunal claims.

The English case is going to a full hearing in October, and the Scottish case has been adjourned until (probably) October, with the government promising to reimburse any tribunal fees if the fee regime is held to be unlawful.

Of course tribunals have always cost claimants, whether in terms of legal fees, expenses or time. But what this new system of structured fees may do (if it survives the backlash) is force employees to think more like employers. Commercial realities won’t always trump the moral obligation to take an employer to task, but they’ll certainly help focus claimants’ minds on whether or not it’s all worth it. The government predicts a 25% drop in the number of tribunal claims; we suspect it will be more.


New Cap On Unfair Dismissal Compensation

Monday (29th July) also saw the introduction of the new cap on unfair dismissal compensation, of a year’s pay. This cap is in addition to the existing cap of £74,200. Whether this will make much difference is practice is questionable, since awards of more than a year’s pay have always been rare. It may well mean that settlement negotiations will start at a more sensible level, though.


Compromise Agreements Abolished

An accurate, if also completely misleading headline. In a less fundamental change also brought in from Monday ‘Compromise Agreements’ have been renamed ‘Settlement Agreements’.

Before you get too excited, all that has changed is that one word. Whether this was a sensible use of legislative time is a question for another day…

The government has also introduced something called a ‘confidential pre-termination discussion’ which is a complex name for a simple concept. Employers are now allowed to open discussions with employees about exit packages without that, of itself, carrying the (small) risk of the employee constructive dismissal.

The idea is that tribunals can no longer be told about such conversations in an unfair or constructive dismissal claim. However, they can be told about such conversations in other types of claim, such as discrimination (for example, if a pregnant woman alleged she’d been approached with an exit package because she was pregnant). They can also be told about such conversations if the employer has engaged in improper conduct, or placed undue pressure on them to accept the offer. The reality is that it is no different to what well-advised employers (by which we of course mean, advised by us) have been doing up until now. So, whilst it’s a nice headline grabber for the government, to show how business-friendly it is, it will have almost no impact at the coal-face.

Now for the cases…


Investigations where crime alleged

Miller v William Hill

Q: What is a reasonable investigation?

A: It depends.

Reasonableness is all about context, and that includes consequences. Where an employer is investigating misconduct involving possible criminal activity, it should take extra care, because of the serious effects that these sorts of dismissals can have on employees – damage to their reputation and on their ability to work in the future, for example. So it’s reasonable to investigate those things which could exonerate the employee, as well as those pointing to their guilt.

That’s what the Employment Appeal Tribunal (EAT) held in Miller v William Hill. Ms Miller was the deputy manager of a betting shop. She was suspected of having taken money which should have been returned to customers whose bets were void. She claimed to have made the refunds, but her explanations didn’t fit with CCTV footage. The employer didn’t believe her and she was dismissed.

Was the tribunal right to find that the dismissal was fair? The EAT said not. One of Ms Miller’s main arguments on appeal was that William Hill should have looked at the entire CCTV footage (to see if there was evidence backing up her defence) and not just the few segments the internal audit department had identified as indicating guilt. The EAT agreed with her. It would not have taken long, and it wouldn’t have been costly, for the company to have done that. Its failure meant that the investigation was not as thorough as the circumstances warranted, and was therefore unfair.


Unfair to dismiss for ill-founded complaints

Woodhouse v North West Homes Leeds Ltd

Mr Woodhouse raised ten grievances and brought eight tribunal claims against his employer over a four-year period. They all alleged race discrimination and almost all were found to be without merit.

His employer eventually dismissed him, believing that he had lost trust and confidence in the company. You may well sympathise with it. A tribunal claim followed in which Mr Woodhouse alleged that he had been dismissed for ‘protected acts’. (Making a claim under, or alleging a breach of, the Equality Act can amount to a protected act. Dismissing someone because they have carried out a protected act amounts to victimisation.)

The tribunal found for the employer. There had been no victimisation. The employer hadn’t treated Mr Woodhouse less favourably because of his race; any other employee who had raised a similar number of ill-founded complaints would also have been dismissed. The dismissal had been for ‘some other substantial reason’ (trust and confidence) and not because of protected acts.

However, the Employment Appeal Tribunal (EAT) decided otherwise. Even where an employee raises grievances which are not made out, they are protected from being victimised (as long as the grievances were raised in good faith). The question is simply whether or not the employee had been dismissed because he had complained of discrimination. As Mr Woodhouse had been dismissed for that reason, the employer was liable – the Tribunal cannot look behind that fact. Whilst this may seem harsh, the law is strict when it comes to victimisation. However, if the grievances had been made in bad faith then things would have been different; they wouldn’t have amounted to protected acts and there couldn’t be victimisation.

The lesson here is that where an employee raises a discrimination-based grievance (or series of grievances), employers must take especially great care about dismissing, and the fact that the grievance may not be upheld won’t help the employer. If the employee really does believe that they have been mistreated, and they don’t have an ulterior motive, then dismissing them – or taking any detrimental action against them – will be victimisation.

Employees bringing multiple grievances and claims are particularly difficult to deal with – we are of course willing and able to help you get the right outcome.


‘Stroppy little teenager’ remark was harassment

Roberts v Cash Zone

An employment tribunal has decided that an 18 year-old was harassed on grounds of her age when her employer made various comments about her during performance meetings.

Cash Zone described her as a ‘kid’, a ‘stroppy kid’ and a ‘stroppy little teenager’. While the tribunal concluded that ‘teenager’ was an accurate description, it was held to have been used in a pejorative, rather than factual, sense.

Ms Roberts was awarded £2,000 in compensation. The amount can be put down to there having been a series of intentionally critical comments, as opposed to a one-off remark.

The reality of this case is that ‘teenager’ can conjure up plenty of stereotypical connotations. Could it have been found to have been an innocent and non-discriminatory reference to a person’s age? A mere description? When prefixed with ‘stroppy’ and ‘little’ then probably not.


The new grey(ish) whistleblowing test

The new whistleblowing provisions are in. As of 25th June the law is clearer about the circumstances in which whistleblowers are protected from dismissal or mistreatment in the workplace.

We’d love to say things are now black and white but, as so often the case, there are a few shades of grey.

Here are some of the main points:

  • to trigger whistleblowing protection, the employee must reasonably believe that their disclosure is in the public interest.
  • ‘public interest’ isn’t defined, but will not now normally cover whistleblowing about a breach of the employee’s own employment contract. That sort of complaint should be raised as a grievance.
  • disclosures do not have to be made in good faith – they will be protected even if motivated by spite or money.
  • protection now extends to actions against the whistleblower by another employee. It used to the case that only the employer’s actions mattered. Now, a whistleblower can bring a tribunal claim stemming from a detriment, or bullying or harassment brought about by a colleague.

Your whistleblowing policy may well need some attention to take account of the changes – and we would of course be happy to help you with this.



Surveillance not a breach of human rights

County and Borough of Swansea v Gayle

The Employment Appeal Tribunal (EAT) was asked to decide if covert surveillance that captured an employee’s misconduct was a breach of privacy, and if he had been unfairly dismissed.

Mr Gayle worked for Swansea Council. He was suspected of playing squash when he should have been at work, and so the Council used a private investigator to film him. The recording was used in evidence against Mr Gayle and he was dismissed.

He brought an unfair dismissal claim, also arguing that the Council had breached Article 8 of the European Convention on Human Rights – the right to respect for private and family life. The EAT found against him. The dismissal was fair. Employers are entitled to know where their employees are and what they are doing while they are being paid. There had been no breach of Article 8 either; Mr Gayle had been filmed in a public place and therefore should not have expected privacy.

As tempting as it may be to leap into action that will catch employees red-handed, don’t rush out with the camcorder too quickly. Employers should carefully weigh up the pros and cons of commissioning and using this sort of surveillance. In Mr Gayle’s case where the misconduct amounted to a type of fraud, it was found to have been justified – but it won’t always be.

And finally….

Apportionment of liability

Country Weddings v Crossman

The Employment Appeal Tribunal (EAT) has held that tribunals do not have the power to apportion liability between respondents.

Where a claimant wins their case against two or more respondents, the most the tribunal can do is decide that they are jointly and severally liable to pay compensation. That means that the winning claimant can pursue just one respondent for the full amount, and that if there’s a dispute between the respondents about who was more to blame than the other then the County Court or the High Court decides the issue.

In Country Weddings v Crossman, the tribunal had decided that the transferee in this TUPE case should be responsible for paying the full amount of compensation for breach of the regulations. That went against the idea of joint and several liability which the regulations provide for.