The big news that everyone is surely talking about this month is that ACAS early conciliation is now compulsory.
Anyone who wants to bring a claim in an employment tribunal must now first submit an early conciliation form alerting ACAS to the case. What follows will be a period of talking through the issues and trying to avoid getting the tribunal involved in the dispute.
There is one proviso – and it is a big one – in that both parties must agree to conciliate. Students of language might wonder how, given that the parties cannot be forced into conciliation, it can really be described as “compulsory”. Let’s hope that claimants play ball anyway. However, the compulsory aspect is really little more than the employee having to tell ACAS that he or she is planning to bring a claim and getting a certificate to this effect.
It is, of course, easy (and very tempting) to be cynical, but there is rarely anything to lose in attempting conciliation and it does give employers a chance to avoid litigation by settling cases before positions become (too) entrenched. The scheme’s success, though, will depend on everyone seeing it that way.
When whistleblowing is not the reason
Panayiotou v Kernaghan
The so-called “whistleblowing” laws protect people who make “protected disclosures” from being treated badly by their employer as a consequence. Where an employee is dismissed for having “blown the whistle”, that dismissal will be automatically unfair and there is no cap on the amount of compensation that can be awarded by a tribunal.
The issue in this case was whether the employee was dismissed because he had made protected disclosures, or because he had refused to let issues relating to those disclosures lie.
Mr Panayiotou was a police officer. He had made a number of protected disclosures about his colleagues’ treatment of victims of crime and, on the whole, his complaints were well-founded.
Mr Panayiotou believed that action had not been taken to remedy the issues and so he began to take matters into his own hands. That made him increasingly difficult to manage, according to his employer, and he was eventually dismissed. He claimed automatically unfair dismissal.
The tribunal (and the Employment Appeal Tribunal) held that Mr Panayiotou had been badly treated, but not because he had made protected disclosures. The reason was his employer’s frustration with him. While that was linked to the disclosures, it was not the same thing. So the claim failed.
This case illustrates that it is helpful, when dismissing an employee who has previously made protected disclosures, to state explicitly that it is the employee’s behaviour, not their protected disclosure, which gives grounds for dismissing.
Court corrects glitch in restrictive covenant
Prophet plc v Huggett
It is easy to get hung up on the wording of contracts, but the courts do try hard to make contracts work in the real world, even when the wording has gone a bit … wrong. This means that sometimes the wording will be adjusted, just slightly, so that they make business sense.
That is what happened in Prophet v Huggett where the High Court allowed an employer to enforce a defective 12-month restrictive covenant.
The problem was in the drafting; the clause did not work. It did not protect Prophet from commercial harm caused by employees leaving to work for competitors. In essence, it read so as to prevent Mr Huggett – a sales manager – from being engaged or employed in connection with any products which he had been involved with while working for Prophet. But as Prophet’s products were unique (no competitors sold what Prophet sold), the clause was worthless.
When Mr Huggett resigned, Prophet applied for an injunction to prevent him working for one of its direct competitors. The Court granted the application, in spite of the deficiencies in the restrictive covenant. It was important to look at what the parties would have intended, and here they must have meant for the restriction to have applied more broadly than drafted. (The simple addition of “or similar products” would be enough to make the clause work for the employer.)
The important point here was that Prophet had a clear and legitimate business interest to protect and the court acknowledged that, while at the same time doubtless causing great relief for whoever had drafted the clause. This case, while helpful for employers is a little surprising as traditionally the courts will not rush to rewrite restrictive covenants. Of course, the real answer is to ensure that your friendly lawyers have reviewed the restrictions before they are signed.
Yet more change to the Transfer of Undertakings (Protection of Employment) Regulations 2006 a.k.a. “TUPE”. It used to be the case that a transferor (the outgoing employer) had to give a transferee employee liability information 14 days before the transfer. That information includes transferring employees including names, contractual terms, details of any disciplinary action taken against them or legal action they have brought.
That 14 day period has been extended to 28 days before transfer, with effect from the beginning of this month. In theory, this means more time for the transferee to plan and to take issue with the information they are being given but in many cases – where, for instance, a business transfer agreement is put in place – it will most likely make no practical difference. There has, after all, been no material reported cases on the employee liability information provisions.
Inspection of employees’ computers ordered
Warm Zones v Thurley and another
The courts recognise that commercial confidentiality is serious business. Judges dislike attempts by individuals to take and use information which does not belong to them.
Ms Thurley and Ms Buckley found themselves on the wrong end of a (fairly uncommon) injunction. They were employees of Warm Zones who left to work for a competitor. It transpired that while they were still working for Warm Zones, they had sent emails that suggested that they would share details of Warm Zones’ painstakingly and expensively compiled customer database with their new employer.
Warm Zones successfully applied for an injunction to have the employees’ computers inspected to establish the extent of their confidentiality breach.
The High Court did not accept the employees’ contention that their emails had merely “talked up” the information they had. The company had spent a long time working up its database and it was commercially valuable, containing information which was not in the public domain. The court’s decision was influenced by the fact that Warm Zones offered to pay for the inspection. It was also influenced by the fact that the employees’ contracts contained a confidentiality clause but no restrictive covenants; that meant that the injunction application was focused on securing the confidential information and not to restricting other activities.
Anyone who has applied for an injunction to force an employee (or ex-employee) to do, or not do, something will know that it is not an easy process. It involves a real balancing act between the company’s business interests and a person’s right to use acquired skills and knowledge in the open market – and there is a risk of injustice, whichever way the injunction application goes. In this case the Court was quick to see the value in Warm Zones’ confidential information and to prevent its misuse.
Prepare for new holiday pay rules
The law on holiday pay never gets any simpler. In Neal v Freightliner an employment tribunal held that non-guaranteed overtime should be included in holiday pay calculations. Mr Neal’s ‘voluntary’ overtime was intrinsically linked to the performance of his role and it was irrelevant whether he was contractually obliged to carry it out or not.
This was a step away from what some employers had previously been doing in only taking into account employees’ basic pay when calculating their holiday pay.
The issue is now on its way to the Employment Appeal Tribunal (EAT).
In a few months’ time, when the EAT has decided the issue (subject to any further appeal, of course) then we will be in a better position to assess the effects of this case. In the meantime, it is never a bad idea to review your holiday pay practices….
Employees blameworthy in constructive dismissals
Frith Accountants v Law
Sometimes things happen at work which make it impossible for employees to carry on in their job. Constructive dismissals generally cast employers in a bad light. But what about where an employee’s conduct in the lead-up to the dismissal was questionable? Can that be taken into account, as it can in unfair dismissal cases?
The Employment Appeal Tribunal (EAT) has made it clear that in some constructive dismissal cases tribunals can reduce a claimant’s compensation to reflect their own contribution to their dismissal.
Ms Law worked for a firm of accountants. There were issues relating to her performance. She refused to accept that she had made some mistakes and was quite incoherent in her explanations. Her employer raised the issue with her son. Ms Law was horrified, resigned and claimed constructive dismissal.
She won at tribunal and at the EAT. However, the EAT said that when it came to the question of compensation, the tribunal should have taken Ms Law’s conduct into account. While in this case her actions did not justify a reduction, the EAT went on to say that while it may be rare, it is perfectly possible for such a reduction to be made.
News of the dramatic fall in the number of claims being issued at employment tribunals in the UK will have been welcomed by many employers, and the House of Commons may be no exception.
It has been reported that claims by staff including caterers, librarians and clerks have cost the Commons more than £91,000 in legal costs alone since the middle of 2010. According to the Huffington Post UK, 16 claims went to employment tribunal with claimants alleging grounds including victimisation, unfair dismissal and discrimination.
It seems that there are measures in place to improve the treatment of staff. Conservative MPs have been issued with a new code of conduct covering best practice in the workplace. Alongside the code sits a new grievance procedure. Who would have thought that MPs’ behaviour could ever be questionable?