You are unlikely to have been able to avoid the recent headlines announcing that workers can sue their employers for millions of pounds in holiday back-pay claims, going all the way back to the 1990s. But is this really the Euroemploymentlawdisaster that we are led to believe? As so often with such things, the answer is “mostly, no”. However, as with anything to do with the laws on holiday pay, the detail is complex, often mind-bendingly so.
In the UK, we usually calculate holiday pay based upon a worker’s basic salary – but we do not normally include overtime, commission or similar payments. However, a series of recent judgments have made it clear that the European Directive on working time requires employers to factor in overtime and commission payments – and anything else a worker would normally receive if they were working – so they are not dissuaded from taking holiday by being paid less when on holiday than when at work.
Much of the fevered commentary has, however, missed out two crucial points.
First, the higher holiday pay rate only applies to the first four weeks’ paid holiday each year (including bank holidays). The employer can continue paying basic salary for any additional annual leave (although note the rules are slightly different if the employee does not have normal working hours).
Second, employees are very unlikely to be able to bring the scary-sounding claims for huge amounts of underpaid holiday pay, going back years, as has been excitedly reported. The most recent Employment Appeals Tribunal decision makes it clear that a three month gap in holiday underpayments is enough to stop a claim going any further both in time. In practice, very few workers will have taken the right holiday at the right intervals in order to enable to sue for such historic amounts.
It is a serious and potentially costly issue from now on, though. All employers should be examining their holiday pay arrangements to ensure that they understand how they are affected and what they should do to minimise the cost exposure. As ever, we’re here to help.
Ill-health absences and disability
General Dynamics Information Technology Ltd v Carranza
It is notoriously difficult to judge when it might be right to call time on a frequently absent employee’s service. That is even more so where the employee is disabled, because of the extra layers of responsibility placed on employers to ensure fairness.
Mr Carranza suffered from stomach adhesions – a disability. His employer had made adjustments for his condition. But after being off work for 41.5 weeks in three years (mostly, but not solely, disability-related) he was given a final written warning.
He then had two more periods of disability-related absence, which did not prompt any action by his employer, before suffering a shoulder injury and being off work for three months. That absence once again triggered the company’s formal procedure. He was dismissed and brought a disability discrimination and unfair dismissal claim.
Mr Carranza won at tribunal where it was held that it would have been a reasonable adjustment for the employer to disregard the final written warning. The employer had overlooked disability-related absence in the past and it would have been reasonable to have done so again, it found. The dismissal was also procedurally unfair because the employer had not reviewed the final written warning.
The Employment Appeal Tribunal (EAT) overturned that decision. It said it would be remarkable and regrettable if an employer who had shown leniency was then required to disregard all disability-related absence, whatever the impact would be on the business. The EAT also confirmed that there are only limited circumstances in which an employer, when deciding to dismiss, should have to re-open the circumstances of a final written warning.
Here the employer had been entitled to dismiss because of the final written warning, the substantial post-warning absence and the occupational health advice that the absence would continue. The findings of disability discrimination and unfair dismissal were set aside.
Duty of care in misconduct proceedings
Coventry University v Mian
Ms Mian argued that her employer had breached its duty of care in instigating disciplinary proceedings against her without properly investigating the facts.
Ms Mian was a senior lecturer at the University. It was alleged that she had signed an inaccurate reference which overstated an ex-colleague’s qualities and qualifications. There was some confusion about how the reference came into being and Ms Mian denied writing the final version, although similar drafts were found on her computer.
She was invited to a disciplinary hearing but had been signed off work sick and did not attend. The hearing went ahead without her and the allegations were dismissed. She left the University and began a new job.
Ms Mian brought a claim against the University in relation to the psychiatric injury she said she had suffered because of its decision to start disciplinary proceedings. Doing so without making more enquiries was a breach of contract and/or it was negligence, she argued. The judge agreed; if the University had looked further into the facts, it would have seen that there were not grounds for disciplinary proceedings.
The Court of Appeal overturned that decision. The question the judge ought to have asked was: were there reasonable grounds to suspect that the allegations were true? That was not about whether or not the allegations were actually true. Here, a reasonable employer could indeed have concluded that there was a case to answer.
Whilst this is a sensible, robust decision for employers, it is perhaps concerning that it took a trip to the Court of Appeal to get the right result.
Substituted PILON did not alter termination date
Rabess v London Fire and Emergency Planning Authority
The date on which employment terminates is important for all sorts of reasons. One of these is to establish the time within which to bring an employment tribunal claim – usually three months from the effective date of termination (EDT). In this case there was disagreement over when termination took effect and when, therefore, the tribunal claim clock began ticking.
Mr Rabess was dismissed for gross misconduct on 24 August 2012. On 3 January 2013 he commenced proceedings and on 9 January there was an internal appeal at which gross misconduct was substituted for “misconduct”. As Mr Rabess was already on a final written warning, his dismissal stood but he was given six weeks’ pay in lieu of notice. Did that mean that his EDT was actually later than 24 August and that his unfair dismissal claim had been brought in time?
No, said the Employment Appeal Tribunal which held that the EDT remained 24 August. The appeal decision and the payment in lieu had done nothing to alter it. In Mr Rabess’ case the employer in its appeal letter had, in fact, confirmed the EDT as 24 August and so that left little doubt about it.
A good reminder, then, to be clear about what you consider to be an employee’s termination date. If an internal appeal changes an aspect of the original decision then it is worth clarifying what effect (if any) that has on the EDT.
Business needs are relevant too
Hensman v Ministry of Defence
Tribunals often hear cases involving employees, convicted of criminal offences, who have gone on to be dismissed from their jobs. In Hensman v Ministry of Defence, the Employment Appeal Tribunal (EAT) tackled the issue of an employee whose criminal conduct was attributable to his disability. Was the tribunal right to find that the dismissal was discriminatory and unfair? No, the EAT said.
Mr Hensman worked as a civilian for the Ministry of Defence (MoD). In 2008 he was found to have in his possession video footage and photos of a naked man in or near the shower area of the shared accommodation where Mr Hensman lived on the MoD base. It transpired that Mr Hensman had recorded the images and footage by hiding a camera under a towel. He was arrested, charged and suspended from work.
In July 2010 he was sentenced to a three-year community order after pleading guilty in the Crown Court to outraging public decency. Mr Hensman’s sentence took into account his Asperger’s syndrome and other disorders that had led to his fascination (and not sexual gratification) with the imagery he had recorded.
A disciplinary hearing at work was eventually held in November 2011 and he was told in a letter of May 2012 that he was dismissed. His internal appeal was unsuccessful and he went on to claim unfair dismissal and disability discrimination.
The tribunal held that the dismissal was discriminatory; Mr Hensman had been treated unfavourably because of a reason related to his disability which the MoD could not justify. The dismissal was also unfair because of the delay in the disciplinary process and because it was outside the band of reasonable responses; the Crown Court judge had found that the offence was disability-related and did not involve fault, and that could not be ignored, the tribunal said. A reasonable employer would have considered Mr Hensman’s length of service and his vulnerability in the labour market and in society generally.
But the Employment Appeal Tribunal (EAT) overturned the decision both on discrimination and unfair dismissal. The tribunal had given undue weight to the sentencing remarks in the criminal case. It ought to have factored in the MoD’s main concerns at the time of dismissal which included breach of confidence, covert filming and business needs. These were all relevant factors.
The case has been sent to a new tribunal to be decided. But the EAT’s decision highlights that even where an employee’s disability may be to blame for their conduct, the business and workforce context can be relevant to the decision to dismiss. As always, this comes down to the facts of the case.
No jurisdiction to hear employee’s claim
Creditsights v Dhunna
There are certain hurdles every employment tribunal claim must overcome before it can get anywhere near a final hearing. The first of these is the claimant’s entitlement to bring the claim in the first place. Many jurisdictional issues can come into play – e.g. has the claim been brought within the appropriate time limit, was the claimant actually an employee, etc. Raising such issues at the appropriate time can be a very effective tactical weapon, since if successful they can often dispose of some or even all of the claims.
In Creditsights v Dhunna, the arguments were about an employee’s right to rely on British employment law. Mr Dhunna worked for the British company, Creditsights, a subsidiary of a US organisation. He moved from London to work at Creditsights’ Dubai office. After being dismissed for alleged gross misconduct, he brought a claim for unfair dismissal (among others). The question was could he rely on the protection of British employment law?
The employment tribunal said not. The general rule is that the place of employment is decisive. There may be exceptions where the connection with Great Britain and British employment law is sufficiently strong to show that this can be justified, but that was not the case here. It was relevant to the tribunal’s decision that Mr Dhunna did not report to London because he was not within Creditsights’ remit; he was only on Creditsights’ payroll for the purpose of convenience and was paid in US dollars; he was not entitled to be included in Creditsights’ pension plan; and the revenue he generated did not count as Creditsights’. Mr Dhunna had moved out of the UK and had severed his links, the tribunal held. The Court of Appeal agreed.
This is a welcome case in that it clamps down to an extent on employees “forum-shopping” for the easiest and/or most lucrative palce to litigate and provides a bit more certainty to employers as to where employees’ rights apply.
Serial Litigant gets his just desserts
Her Majesty’s Attorney General v Iteshi
The Employment Appeal Tribunal has heard the case of a claimant who issued a series of unsuccessful claims which are reckoned to have cost his opponents a combined total reaching into six figures.
Mr Iteshi brought 30 cases in four years against employers, recruitment companies, and the Bar Council following a number of failed job applications. He has now been banned indefinitely from making any further claims because of his track record in bringing what were described as vexatious or hopeless cases.
Whilst this will give some comfort to employers who may be concerned about the risk of such vexatious, litigants do bear in mind that such individuals are rare, and this was at the extreme end of such behaviour.
The Information Commissioner’s Office (ICO) has updated its Code of Practice on the responsible use of surveillance. The changes take account of the changing face of technology in this field, which now includes sophisticated digital and portable devices, rather than simply “a camera on top of a pole…”
The ICO recognises that surveillance is no longer just passive, recording and retaining images. It is also being used to actively identify certain people and track their activities – something that has generated a fair amount of public concern.
The key message for employers is to understand what you can and cannot do. Those who use CCTV or other surveillance devices will find in the Code sound, practical advice for staying within legal parameters on capturing, retaining and disposing of data.
Shared parental leave
Just in case you thought you’d got away this month without a mention of shared parental leave…..
Acas has issued guidance on the new shared parental leave and pay provisions. The key date is 1 December 2014, when the new regulations come into force, which is disturbingly close! From then, mothers, fathers, partners and adopters will be gearing up to exercise their right to share leave in respect of babies born or placed through adoption on or after 5 April 2015.
Despite the catastrophic predictions in some corners of the media (sound familiar?) it is far from clear how much of an impact the new rules will have. The Government has estimated that between two and eight per cent of fathers will take up the new rights. Given the miniscule take-up of the existing right to additional paternity leave, our bet is that even that might be over-optimistic. Time will tell…