Employment Law Titles ~ Winter 2005/2006

Admissibility of Claim Forms – Missing Information

 

The normal rules governing Employment Tribunal (ET) procedures are contained in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004. Rule 1(4) states that the details of a claim must include all the ‘relevant required information’, which includes the claimant's name and address.

 

The Employment Appeal Tribunal (EAT) has sometimes been critical of the Rules and the way in which they are administered by ET Chairmen who, it believes, should exercise a judicial role, with the overriding objective of seeing that justice is done.

 

In the recent case of Hamling v Coxlease School Ltd., Ms Hamling claimed that her former employer had unfairly dismissed her, had discriminated against her on grounds of sex and/or disability and had wrongly calculated her redundancy payment. The ET Chairman rejected the claim because Ms Hamling’s personal address had been omitted from the claim form. Her solicitor’s address was included however.

 

The EAT judged that the definition of ‘relevant required information’ is such that even information listed in Rule 1(4) need not be provided unless it is ‘relevant’ to do so on that particular claim form. By this definition, Ms Hamling’s address was not relevant information. In practical terms, the claim could proceed as the form indicates that if a representative’s details are given, all further communications will be addressed to them.

 

In addition, the EAT judged that where a claim is referred to the ET Chairman because it does not provide the relevant required information, the Chairman should consider whether the failure in question is material or immaterial in the context of the particular claim and the requirement of the Rules. In this case, the EAT was satisfied that the failure to provide Ms Hamling’s personal address was both irrelevant and immaterial, so there was no breach of the relevant Rule and the appeal was allowed.

 

Says <<CONTACT DETAILS>>, “The decision in this and earlier cases shows a willingness on the part of the appellate courts to interpret the wording of the Rules of Procedure so that justice is not prevented solely on account of a technical breach.”

 

Amending Claim Forms and Reinstatement Under a Fixed-Term Contract

 

In a case concerned with the effective date of termination (EDT) for the purposes of unfair dismissal (Prakash v Wolverhampton City Council), the Employment Appeal Tribunal (EAT) has ruled that:

 

 

 

The circumstances were that on 1 November 2001, Mr Prakash, a consultant with some thirty years’ experience in local government, began working for Wolverhampton City Council as an Executive Director of a community project. The contract was for a fixed term of three years.

 

In early 2003, the Council received complaints about Mr Prakash in relation to incidents of alleged bullying and sexual harassment. Subsequently, after a four day disciplinary hearing, he was eventually dismissed from his post with effect from 23 October 2003. Mr Prakash exercised his right of appeal against this decision but the appeal did not take place until some 16 months after his dismissal.

 

On 15 January 2004 – i.e. within three months of his dismissal but before the internal appeal was heard – Mr Prakash originated a claim to the ET that he had been summarily dismissed on 23 October 2003.

 

When the internal appeal was held on 3 February 2005 – over three months after the 31 October 2004 expiry date of the fixed-term contract – Mr Prakash was told that his appeal had been successful and he would be reinstated. As his contract had now expired, however, he was offered re-engagement in a suitable post and his details were placed on the redeployment register for a six month period ending on 9 August 2005. In fact, Mr Prakash did not apply for any posts and was removed from the redeployment register on 10 October 2005.

 

Mr Prakash sought to amend his original claim form to assert that his EDT was after 23 October 2003. As a precautionary step, he also issued a new claim form asserting that his EDT was on either 9 August or 10 October 2005, but that if the dismissal did take effect on 31 October 2004 (when his fixed-term contract ended) then it was not reasonably practicable for his complaint to have been presented within three months of that date and the amendment had been sought within a reasonable period.

 

Mr Prakash argued that the decision to offer to re-engage him in effect automatically extended his contract of employment to the date of the internal appeal hearing at the earliest. The ET, however, ruled that the expiry date of the original contract was the EDT. Mr Prakash’s original claim of unfair dismissal was therefore premature. With regard to the application to amend the claim form, the ET considered it did not have jurisdiction to consider this as there was no existing claim to amend. Any amendment would create an entirely new cause of action. Accordingly, the ET dismissed the claim based upon the complaint of unfair dismissal having occurred on 23 October 2003.

 

Mr Prakash took his case to the EAT. The EAT agreed with the ET that the resurrection of a fixed-term contract simply reinstates the original contract terms. Otherwise, an employee whose appeal is delayed until after the expiry of his or her fixed-term contract could be in a better position than an employee whose appeal is heard at an earlier date, an outcome which the EAT described as ‘wholly arbitrary and capricious’.

 

With regard to the appeal in respect of jurisdiction to allow an amendment to the claim form, the EAT judged that there was nothing in the rules that expressly prevents such an amendment being allowed to add a cause of action that has come about after the presentation of the original claim form where appropriate.

Annual Increase in Tribunal Awards

 

The Employment Rights (Increase of Limits) Order 2006, which details the annual inflation-linked increase in limits on the amounts which can be awarded by employment tribunals, was made on 14 November 2006 and applies where the appropriate date falls on or after 1 February 2007.

 

The main increases in compensation limits are:

 

·         the maximum compensatory award for unfair dismissal has increased from £58,400 to £60,600;

·         the maximum amount for a week's pay (for calculating basic award or redundancy payment) has increased from £290 to £310; and

·         the limit on the amount of guarantee payment payable to an employee in respect of any day has increased from £18.90 to £19.60.

As there is no statutory cap on the amount a tribunal can award in, for example, discrimination cases, the Order does not cover them.

 

The Employment Rights (Increase of Limits) Order 2006 includes a full list of the increases and can be found at http://www.opsi.gov.uk/si/si2006/20063045.htm.

 

Employers will be interested to note that this annual uplift may not always be the only change in the limits. The Work and Families Act contains a clause giving the Secretary of State the power to make a one-off increase to the maximum weekly amount payable as compensation in cases of unfair dismissal, redundancy and insolvency.

 

 

 

 

 

 

 

 

 

 

Breaches of the Statutory Dismissal Procedure

 

The normal period of continuous employment necessary in order to qualify for unfair dismissal rights is one year.

 

All employees are entitled to be given a written statement of the main particulars of their employment, provided their employment lasts for one month or more, within two months of the start of the employment.

 

In a recent case (Scott-Davies v Redgate Medical Services) the Employment Appeal Tribunal (EAT) held that there is no free-standing right to bring a claim for breach of the statutory dismissal procedure in the absence of a valid claim of unfair dismissal. In addition, the right to be provided with a written statement of employment particulars is not one to which the statutory procedures apply.

 

Mr Scott-Davies was dismissed by Redgate Medical Services before he had completed one year’s employment. He was therefore excluded from bringing a claim for unfair dismissal under the Employment Rights Act 1996. The employer accepted that it did not follow the statutory dismissal procedures, nor did it provide a written statement of employment particulars. Mr Scott-Davies claimed that had he been allowed access to the statutory dismissal procedures and been given written particulars of his contract, he might not have been dismissed.

 

The Employment Tribunal (ET) decided that it did not have jurisdiction to hear free-standing complaints of failure to follow the statutory dismissal, disciplinary and grievance procedures. The EAT agreed. If such a statutory provision existed, it would specify the time limits for bringing such a claim and the potential remedies for breach of the statutory procedures. The purpose of the procedures is to encourage more disputes to be settled in the workplace. For the ET to have jurisdiction to consider free-standing complaints would rather have the effect of increasing the volume of claims.

 

In addition, the remedy available to someone who has not been provided with a written statement of employment particulars is by way of a reference to the ET, not a complaint. The ET can advise what the terms of employment are but there is no right to a monetary remedy. An award is only payable if the failure to provide the statement is established in the course of other proceedings before that ET.

 

Had Mr Scott-Davies been employed for more than one year, he would have succeeded in his claim for unfair dismissal becauseit is automatically unfair for an employer to dismiss a qualifying employee without following the appropriate statutory procedure. However, the complaint of failure to follow a statutory procedure can only be invoked as part of a valid application to the ET. Where there is no jurisdiction to hear a claim, there cannot be any jurisdiction to link to it a complaint of failure to follow a statutory procedure.

 

 

Contact <<CONTACT DETAILS>> if you would like advice on any employment law matter.

 

Changes to Family Friendly Legislation

 

The Work and Families Act introduces measures intended to give more choice to families attempting to balance work and caring responsibilities. It imposes significant new obligations on employers.

 

The period of statutory maternity pay has been extended from six to nine months for employees with an expected week of childbirth commencing or after 1 April 2007.

 

Further measures include:

 

 

From 1 October 2006 the small employers’ exemption from the normal rule that refusing to allow a woman to return to work after maternity leave is automatically unfair dismissal was ended with regard to employees whose expected week of childbirth begins on or after 1 April 2007. This confirms that an employee has the right to return to the same or a similar job regardless of the size of the organisation.

 

The changes made to the maternity leave regulations are for the most part mirrored in the case of adoption leave for parents of children expected to be placed for adoption on or after 1 April 2007. However, the requirement for 26 weeks' continuous employment in order to qualify for adoption leave remains.

 

The Government plans to extend paid maternity leave to 52 weeks and to introduce new rights to paternity leave for fathers at a later date.

In addition, the existing provisions which give parents of young and disabled children the right to request flexible working arrangements will be amended by the Flexible Working (Eligibility, Complaints and Remedies) (Amendment) Regulations 2006 to extend this right to those with caring responsibilities for adult relatives. The definition of ‘carer’ will be an employee who is or expects to be caring for an adult who:

·        is married to, or the partner or civil partner of the employee; or

·        is a near relative of the employee; or

·        falls into neither category but lives at the same address as the employee.

The ‘near relative’ definition includes parents, parents-in-law, adult children, adopted adult children, siblings (including those who are in-laws), uncles, aunts, grandparents and step-relatives.

The right to request flexible working for carers is due to be introduced on 6 April 2007. The Department of Trade and Industry has published guidance for employers which can be found at http://www.dti.gov.uk/employment/workandfamilies/flexible-working/index.html.

 

 

Collective Redundancies – Protective Awards

 

A recent decision shows that employees who are not union members will have to make their own claims in cases in which an employer breaches certain employment law regulations as the union can make a claim only on behalf of its members.

 

The Employment Appeal Tribunal (EAT) upheld a decision by the Employment Tribunal (ET) that when there are collective redundancies and a trade union successfully obtains a protective award for a company’s failure to consult with employees in respect of whom the union was recognised, the award is not also available to employees made redundant at the same time who are not represented by the union (TGWU v Brauer Coley Ltd.).

 

The Transport and General Workers’ Union (TGWU) obtained a protective award with regard to workers in the company’s shop floor engineering section after the ET found that Brauer Coley Ltd. had failed to comply with a requirement of section 118 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) to consult with workers, when the company without warning dismissed as redundant all the employees at its premises in Shirley, West Midlands. The TGWU was recognised in respect of employees in this section but also sought to persuade the ET to make an order in respect of all the redundant employees, not just those for whom the TGWU was recognised. The ET was not prepared to do so.

 

The EAT found that the obligation to consult employees not represented by a recognised trade union (TULRCA s189 1a or b) is similar to that owed to employees represented by a trade union (TULRCA s189 1c) but the mechanism is different as employee representatives must be elected or appointed to look after their interests. In its view, a protective award can only be made in favour of those in respect of whom a complaint of breach has been proved. If the breach in question is a ‘non-union’ breach, it can only be claimed, and the protection only sought, by the employees themselves.

 

There was no complaint of a breach by reference to s189 1a or b and there could not have been because the TGWU could not have made such a claim. The protective award was plainly made on the basis of a complaint under s189 1c only and the ET was correct in limiting the order.

 

As the case dealt with a previously undecided point, the EAT did give leave to appeal the decision.

 

Controlled Access to UK Labour Market for New Accession Countries

 

Bulgaria and Romania joined the European Union (EU) on 1 January 2007. From that date Romanians and Bulgarians have the right to travel throughout the EU. However, employers should note that the Government has decided to limit access to the UK’s labour market for citizens of both countries.

 

Low-skilled workers from Romania and Bulgaria are restricted to existing quota schemes to fill vacancies in the agricultural and food processing sectors. There is to be no net increase in these existing schemes and workers are required to have an authorisation document.

 

Skilled workers will continue to be allowed to work in the UK, along with their dependants, if they obtain a work permit or qualify under the Highly Skilled Migrant Programme.

 

Bulgarian and Romanian students will continue to be allowed to study in the UK and to seek part-time employment during their stay but need a work authorisation document to do so. Self-employed workers continue to be able to work here, but must be able to prove that they are genuinely self-employed.

 

These new arrangements will be reviewed within 12 months. The proposed new Migration Advisory Committee will assist in this process, taking account of the needs of the UK labour market, the impact of the migration of nationals of the central European countries which joined the EU in 2004 and the positions adopted by other EU countries.

 

Employers and employees have a duty to abide by the new rules and it is an offence, punishable by an on the spot fine of £1,000, for a Bulgarian or Romanian national to work in the UK illegally. Employers who do not comply with the rules can be subject to a fine of up to £5,000.

 

Other measures have also been announced. These are:

 

 

The Worker Registration Scheme (WRS) will continue to apply to nationals of the eight central European countries which joined the EU in 2004 but does not apply to Bulgarian and Romanian nationals.

 

Employment Rights – Ministers of Religion

 

For many years it has been accepted law that ministers of religion do not normally come within the definition of ‘employee’ for the purposes of the Employment Rights Act 1996 (ERA) because they have traditionally been deemed to be ‘office holders’ working for God and as such do not have a contract of employment.

 

In December 2005, however, the House of Lords ruled (Percy v Church of Scotland Board of National Mission) that the relationship between a minister of religion and her church could be considered to be one of employment within the meaning of the Sex Discrimination Act 1975. As the claimant did not pursue her claim for unfair dismissal, the appeal did not consider whether or not she was an employee within the narrower definition under the ERA. However, two of the Law Lords commented at that time that this question needed clarification.

 

The Employment Appeal Tribunal (EAT) has now heard an appeal (New Testament Church of God v Reverend Sylvester Stewart) at the heart of which was the consideration as to whether previous cases, which determined that a minister of religion was not an employee of the relevant church because there was no intention to enter into legal relations owing to the unique nature of a minister of religion being appointed to carry out spiritual duties only, are still good law in light of the decision of the House of Lords in Percy v Church of Scotland Board of National Mission.

 

The New Testament Church of God appealed against the decision of the Employment Tribunal (ET) that the Reverend Sylvester Stewart’s position as Pastor of the church was governed by a contract of employment between the parties and he could, therefore, bring a claim for unfair dismissal. The Church argued that he was not an employee and so was not entitled to bring such a claim.

 

The EAT dismissed the appeal on the grounds that the House of Lords had clearly stated that ‘if the relationship between church and minister has many of the characteristics of a contract of employment in terms of rights and obligations, these cannot be ignored simply because the duties are of a religious or pastoral nature’.

 

This decision could have wide-reaching effects with regard to the employment law rights of those who work for religious organisations. The New Testament Church of God is reported to be seeking leave to appeal the decision. If permission to appeal is denied, the case will return to the ET to determine whether Reverend Stewart was unfairly dismissed.

 

Gay Worker Wins Harassment Case

 

Another case has illustrated the danger to employers of failing to take action when an incident of workplace bullying is reported.

 

Chris Martin worked for Parkam Food Ltd., a company in West Yorkshire that produces poultry products which it supplies to supermarkets. Three months after he started his job as a quality assurance worker, he discovered homophobic and pornographic graffiti, which referred to him personally, drawn in black marker pen on the walls of the men’s toilets. Mr Martin made a verbal complaint to his employer but nothing was done. He then complained in writing about the graffiti and other behaviour he had experienced. After additional drawings appeared, the company placed a notice in the toilets warning staff regarding graffiti but no reference was made to homophobic behaviour.

 

Mr Martin continued to make complaints but felt that he was treated ‘like a piece of dirt’. In November 2005 he was suspended and resigned in protest because he said the company had failed to investigate his complaint or try to find out who was responsible for the graffiti.

 

Mr Martin won his claim of constructive dismissal and claims of sexual harassment and discrimination under the Employment Equality (Sexual Orientation) Regulations 2003. The Employment Tribunal found the drawings ‘offensive and homophobic’ and ruled that Parkam Food’s harassment policy was ‘completely ineffective’. The company had failed to comply with its own procedures and had not investigated Mr Martin’s grievance with adequate diligence or seriousness. Furthermore, it had failed to safeguard his dignity at work. The level of the compensation award will be decided at a later date.

 

Says <<CONTACT DETAILS>>, “This case should serve as a warning to employers to take complaints of victimisation, harassment and bullying seriously. Action must be taken to change a workplace culture in which stereotypical and discriminatory opinions are tolerated. We can assist you in drawing up a bullying at work policy specifically tailored to the needs of your business.”

 

 

Government Plans Increase in Holiday Entitlement

 

In May last year the Government confirmed its intention to introduce measures to provide that bank and public holidays are not included in the statutory entitlement to four weeks’ paid holiday per year, under the Working Time Regulations 1998.

 

There are eight permanent bank and public holidays in Great Britain and the Government wishes to counteract the current anomaly whereby it is generally lower paid workers who have these days included in their annual holiday entitlement.

 

Instead of giving workers a legal entitlement to time off on bank and public holidays, the intention now is to introduce legislation to increase the current statutory minimum holiday entitlement from 4 to 5.6 weeks (28 days).

 

The Government will shortly publish a response to its initial consultation on these proposals and will then conduct a further consultation exercise before any changes are made to the law. It is envisaged that the increase in holiday entitlement will be implemented in stages, commencing in October 2007.

 

The TUC has calculated that the move will result in some two million workers receiving more holiday than they do at present, with those who work in shops, warehouses, the health industry, cleaning industry and in restaurants, bars and hotels most likely to benefit.

 

HIV Positive Employee Receives Compensation for Disability Discrimination

 

In December 2005, the definition of disability for the purpose of the Disability Discrimination Act 1995 (DDA) was extended so that it now includes people diagnosed with HIV.

 

Employers have a legal obligation under the DDA to make reasonable adjustments to accommodate the needs of anyone with a condition covered by the scope of the legislation. In addition, it is unlawful to treat a disabled employee less favourably than an employee without that particular disability, unless such treatment can be justified, and reasonable steps must be taken to prevent someone with a disability being disadvantaged at work.

 

A former Armani manager recently received £18,000 in compensation after the Central London Employment Tribunal (ET) ruled that he had been discriminated against because he has HIV.

 

Massimo Pasquarelli ran the Emporio Armani restaurant in South West London. He had worked for the company for 14 years, starting as a kitchen porter and working his way up to be restaurant manager.

 

In April 2005, the restaurant staff were told that they would be made redundant when the fashion store closed for refurbishment. Shortly after this, Mr Pasquarelli revealed to his bosses that he was HIV positive. He was first diagnosed with the condition in 1993 but it had never affected his work. All the staff except Mr Pasquarelli were found alternative employment with the company and he subsequently became depressed on account of losing his job and was unable to work.

 

Mr Pasquarelli brought a claim for disability discrimination against Orthet, which retails and distributes Armani group products in the UK.

 

The ET found that Orthet had discriminated against Mr Pasquarelli for a reason relating to his disability by not offering him alternative work. He had been treated less favourably than someone to whom that reason did not apply. In giving its ruling, the ET said that it would expect Mr Pasquarelli’s many years of loyalty to be rewarded by the offer of at least a temporary position for the duration of the restaurant’s closure.

 

After winning his case, Mr Pasquarelli agreed to an out of court settlement.

Because diagnosis with HIV is now within the scope of the DDA, disclosure can enable an employee who is HIV positive to exercise his or her rights under the Act and an employer must accordingly make reasonable adjustments if required.

Disclosure of a person’s HIV status is not a legal requirement. Ultimately, the choice as to whether to inform others of his or her HIV status belongs to the individual. There may be good reasons for selective disclosure to others on a ‘need to know’ basis – for example, a person’s line manager if time off is needed for medical reasons – but this must always be with the employee’s permission. An employer has a duty to ensure that confidentiality concerning a person’s HIV status is respected. Failure to do so is contrary to the Data Protection Act 1998.

 

 

 

 

HSC Safety Statistics

 

The Health and Safety Commission has published work-related health and safety statistics for 2005/2006. These show that 212 people were killed in the workplace, compared with 223 for the previous year. Of the 212 fatalities, just over 40 per cent occurred in two industries, with 59 in the construction industry and 33 in the agriculture, forestry and fishing industries.

 

In the same period, 146,076 non-fatal injuries to employees were reported, a rate of 562 per 100,000 employees. This compares with 150,559, a rate of 587 per 100,000 employees, for the previous year. Of the 26,805 major injuries, over one third were caused by slipping or tripping. Of the 117,471 other injuries to workers which resulted in an absence of more than three days, two fifths were caused by handling, lifting or carrying.

 

30 million working days were lost overall (1.3 days per worker) – 24 million on account of work-related ill health and 6 million because of workplace injury. Two million people were reported as suffering from an illness which they believe was caused or made worse by their current or past work.

 

There were 384 fatal injuries to members of the public during 2005/2006, a rise of four per cent on the previous year, and 15,374 reported non-fatal injuries, an increase of 7 per cent on 2004/2005.

 

In 2005/2006, the Health and Safety Executive (HSE) issued 6,383 enforcement notices, 25 per cent fewer than in the previous year. 1,012 offences were prosecuted by the HSE, compared with 1,320 in 2004/2005. The number of convictions for breach of health and safety law also decreased from 1,025 in 2004/2005 to 741 in 2005/2006.

 

The TUC has expressed alarm at the fall in the number of employers being prosecuted for ignoring health and safety law. Unsurprisingly, a recent TUC survey of union safety representatives revealed that enforcement is the most effective method of ensuring that employers comply with the laws. The survey found that four out of ten employers who receive a legal enforcement notice not only comply with the notice but also take action to make other areas of the workplace safer. The HSE has claimed that the fall in enforcement has been significantly reversed in recent weeks.

 

Says <<CONTACT DETAILS>>, “Many work-related accidents could be avoided if proper risk assessments and regular safety checks were carried out. Contact us if you would like guidance on your legal responsibilities as regards health and safety.”

 

Immigration – New Regime for Highly Skilled Workers

 

In March 2006, the Government published for consultation a ‘Command Paper’ entitled ‘A Points-Based System: Making Migration Work for Britain’.

 

The proposed new immigration scheme consists of a five-tier framework as follows:

 

 

For each tier, applicants will need sufficient points to obtain entry or leave to remain in the UK. All but the most highly skilled immigrants will require a sponsor (normally their employer) who will be responsible for ensuring that a migrant worker complies with the rules of their entry to the UK and returns home at the end of their stay.

The points-based system is being phased in tier by tier, with a revised Highly Skilled Migrant Programme (HSMP) introduced on 5 December 2006. Under the new rules, applicants require a minimum of 75 points to qualify for the HSMP. Also, points are scored according to a new set of criteria, which are:

In addition, there is a new English language requirement, which applicants must satisfy in addition to meeting the above points-scoring criteria.

 

As regards HSMP extension applications, the test that applicants must show that they have 'taken all reasonable steps to become lawfully economically active' has been replaced with a new test, which applies a similar points scoring assessment to that introduced for initial HSMP applications. Extension applicants will also be tested for English language skills.

 

The Home Office has also announced the launch of an ‘Employers’ Taskforce’, made up of representatives from businesses and colleges, to work with the Government to develop the new sponsorship rules mentioned above.

For further information on the new rules, see the Home Office website at http://www.homeoffice.gov.uk/passports-and-immigration/.

 

In Brief

 

ACAS – New Electronic Learning Guide

 

The Advisory, Conciliation and Arbitration service (ACAS) has added a new electronic-learning guide to its website. The new course focuses on sexual orientation and gender reassignment issues in the workplace and specifically it:

 

 

The guide can be accessed free of charge at http://www.acas.org.uk/ once you have registered to use the ACAS website.

 

In Brief

 

Managing Sickness Absence

 

The Chartered Institute of Personnel and Development (CIPD), working with the Health and Safety Executive and the Advisory, Conciliation and Arbitration Service, has launched a free online toolkit to assist in dealing with absence management.

 

The toolkit gives information on absence management practices and procedures and is split into four parts to help managers:

 

 

The toolkit can be found on the CIPD website athttp://www.cipd.co.uk/subjects/hrpract/absence/absmantool?vanity=http://www.cipd.co.uk/absencemanagementtool.

 

 

In Brief

 

New DTI Guide on Employee Rights and Responsibilities

The Department of Trade and Industry has published a 96-page guide entitled Individual Rights and Responsibilities of Employees.

The guidance provides a useful summary of the employment law rights of employees and the corresponding obligations for employers. It can be found at http://www.dti.gov.uk/files/file34565.pdf.

 

Is a Director an Employee?

 

When a company becomes insolvent, whether or not a shareholder and director is an employee, within the meaning of section 230 of the Employment Rights Act 1996, for the purposes of a claim for a redundancy payment from the Secretary of State for Trade and Industry, will depend on all the relevant circumstances. This was the issue in the case of Gladwell v Secretary of State for Trade and Industry.

 

Mr Gladwell was a director of Phileas Fogg Travel Ltd., which became insolvent. At that time, he owned 50 per cent of the shares. The Secretary of State refused his claim for a redundancy payment on the grounds that he was not an employee of the company.

 

The Employment Tribunal (ET) judged it to be a borderline case. There were a number of factors which would indicate that Mr Gladwell should be regarded as an employee but in considering the question of control over the company, the ET found that he was one of two joint controllers of the company. He himself had stated that he was both employer and employee and the ET held that a person cannot be both.

 

The Employment Appeal Tribunal (EAT), in considering past authorities on this issue, drew attention to the decision of the Court of Appeal in Secretary of State for Trade and Industry v Bottrill, which stated that, ‘If an individual has a controlling shareholding, that is certainly a fact which is likely to be significant in all situations, and in some cases it may prove to be decisive. However, it is only one of the factors which are relevant and certainly is not to be taken as determinative without considering all the relevant circumstances’.

 

The EAT concluded that the ET’s decision suggested it had given too much significance to the question of control and saw this as being decisive to the exclusion of other relevant factors. This was inconsistent with the authorities. A majority shareholder will, in practice, act as the employer and make decisions on behalf of the company in which he or she has shares. This does not, however, prevent that person from being an employee.

 

The EAT remitted the case to another ET for the issue to be reconsidered.

 

Says <<CONTACT DETAILS>>, “One of the relevant factors to be taken into consideration in cases such as this is the contract of employment. We can assist you to ensure that your employment terms make sure you have the appropriate contractual relationship with your company.”

 

 

 

Pension Schemes and Age Discrimination

 

The parts of the Employment Equality (Age) Regulations 2006 that apply to pension schemes came into force on 1 December 2006.

 

The Regulations prohibit age-related discrimination and harassment, allowing discriminatory treatment only when it can be proven by the employer to be a proportionate method of pursuing a legitimate business aim. This protection is now extended with regard to pension benefits accrued or payable after 1 December 2006. The Regulations also empower the trustees and managers of occupational pension schemes to alter the scheme rules to ensure compliance with the Regulations.

 

There are exemptions to the rules which affect a variety of areas. For example:

 

 

There are special rules for dealing with pension increases for pensioners over 55 years of age and for ‘bridging pensions’ for men aged between 60 and 65 years of age.

 

The Regulations also apply to employer contributions to personal pension schemes, with exemptions similar to the above.

 

Pension scheme trustees who have not already done so should take immediate steps to audit their scheme rules and make such changes as are necessary to ensure that these comply with the Regulations. Where there is an age-based rule, they should take advice as to whether it meets the necessary criteria for exclusion from the Regulations by virtue of being a proportionate response to a legitimate business aim. Failure to comply with the Regulations as regards pensions creates the risk that scheme benefits will be ‘levelled up’ as appropriate from 1 December 2006, which could prove to be very costly indeed for the scheme and ultimately for the employer.

 

<<CONTACT DETAILS>> can advise you on any adjustments necessary to your pension scheme.

 

Preparing for the Smoking Ban

 

Legislation enacted under the Health Act 2006 will ban smoking in most enclosed workplaces and public places with effect from 1 July 2007. The ban also extends to work vehicles not used exclusively by one person.

 

According to figures published by the TUC, around a quarter of all workers smoke, although many workplaces are already ‘smoke free’. Approximately two million people in Great Britain work in establishments where smoking is still allowed throughout and another ten million in workplaces where smoking is allowed somewhere on the premises.

 

Whether starting from scratch in introducing a ban on smoking in the workplace or updating an existing ‘no smoking’ policy, employers are advised to begin preparing for the new legislation now in order to achieve a smooth implementation of the policy.

 

Employers should consult with staff on the best way of introducing the ban rather than just notifying them that one is being introduced to comply with the law. A negotiated policy is more likely to be acceptable to employees and there may be possibly contentious issues to determine, such as what time is to be allowed for smoking breaks for workers who will have to go outside to smoke and arrangements regarding any resulting litter.

 

The aims of smoking policies are to protect all staff from the harmful effects of second-hand tobacco smoke, to ensure that everyone has a clear understanding of their rights and responsibilities, in order to avoid problems arising, and to ensure compliance with the law. The policy should include details of any support that is to be provided by the employer to those who wish to give up smoking, what action will be taken against anyone who does not comply with the ban and the procedures set up to resolve complaints and disputes. Once implemented, the policy should be monitored to ensure that it is working properly. All new employees should be provided with a copy.

 

Under the legislation, occupiers of substantially enclosed work premises will have to display prominent ‘no smoking’ signs (of at least A5 size) at all entrances to the premises and also place signs in company vehicles as appropriate. Employers will be liable to a fixed penalty of £200 (reduced to £150 if paid within 15 days) if they do not have the required signage. If a fixed penalty is not paid the employer could face a fine of up to £1,000 (and a criminal record). The penalty for failing to take reasonable steps to prevent smoking on the premises will be a fine of up to £2,500.

 

Employees and visitors will be subject to a fixed penalty of £50 (reduced to £30 if paid within 15 days) if found smoking in the workplace premises. If the fixed penalty is not paid, the offender could face a fine of up to £200, plus a criminal record.

 

Contact <<CONTACT DETAILS>> for assistance with drawing up a smoking policy in good time to ensure that it is finalised and implemented ready for when the new law takes effect. 

 

 

 

 

 

 

School Support Worker’s Dismissal Unfair

 

Long-term sickness must always be handled sensitively and employers need to be aware of the full range of conditions that come under the Disability Discrimination Act 1995 (DDA) and make reasonable adjustments in order to assist someone who is classified as disabled for the purposes of the Act to return to work after sickness absence.

 

Before 5 December 2005, a mental illness was only recognised as a disability for the purposes of the DDA if it was clinically well-recognised. This requirement no longer applies. If an employee suffers from a physical or mental impairment that has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities then that person is disabled for the purposes of the Act.

 

Recently, a junior school IT technical support worker, who had been battling against depression for many years, brought a claim for unfair dismissal when she was dismissed after being signed off work with depression.

 

Carolyn Adamczyk had worked at Ocklynge Junior School in Eastbourne for 14 years. When she was 14, Mrs Adamczyk was on a ride at Battersea Park fun fair in London when the mechanism failed and five children were killed. This traumatic incident was an underlying factor in her depression.

 

In 2003, Mrs Adamczyk had a nervous breakdown and subsequently suffered from depression and flashbacks to the roller coaster accident. This caused her to take time off work. The school was aware of the past incident but when she tried to make a phased return to work, Mrs Adamczyk was told that her job was no longer necessary and she was dismissed.

 

The Employment Tribunal (ET) heard that when Mrs Adamczyk was dismissed, her employers were simultaneously advertising to fill a post that was virtually identical to the one she had held. The school claimed that the new position was more highly skilled but the ET rejected this argument, finding that Mrs Adamczyk had not been offered training which would have enabled her to upgrade her IT skills. The ET also found that when she first became ill, she had been removed from the school board of governors in order to facilitate her dismissal.

 

The ET ruled that Mrs Adamczyk had been discriminated against on the grounds of disability. In addition, her employers had failed to consult with her prior to her dismissal and had made no effort to find her alternative employment.

 

A remedies hearing to settle the level of compensation payable will take place at a later date.

 

Says <<CONTACT DETAILS>>, “Dealing with long-term absences is a difficult area of the law. Each case must be decided on its own merits and proper procedures must be followed. Contact us if you would like advice on this matter.”

 

Shift Worker Wins Disability Discrimination Claim

 

The duty imposed on employers by the Disability Discrimination Act 1995 to make reasonable adjustments to ensure that a disabled employee is not disadvantaged because of working practices or the physical features of the workplace can include a duty to provide alternative employment.

 

Around 14 per cent of the UK working population now do shift work and this can have an adverse effect on employees’ health as well as having associated safety risks.

 

In a recent case, the Employment Tribunal (ET) found that a worker who became depressed after working night shifts for a car part manufacturer in Washington, County Durham, was discriminated against by his employer.

 

Craig Routledge had worked for 12 years for TRW Systems. Sleep deprivation brought on by working alternate day and night shifts caused him to become depressed and he was registered as disabled. His doctor advised him that he needed to take time off work to allow his sleep pattern to return to normal and that he should not return to working night shifts until he had made a full recovery.

 

The ET found that TRW Systems had indirectly discriminated against Mr Routledge by reason of his disability by not giving him assurances that it would provide him with a full-time day job because he was too ill to continue working night shifts. In addition, his employers had discriminated against him on the grounds of his disability by not offering to make adjustments in order to enable him to return to work.

 

The ET will decide on the level of compensation payable at a separate hearing.

 

Says <<CONTACT DETAILS>>, “Those who work a rotating shift pattern that includes periods of night work are particularly at risk from ill health resulting from disruption to normal sleep patterns. Employers should ensure that shift work schedules provide for adequate rest breaks and that the risks associated with shift working are identified and assessments made as to how these can best be avoided. Night workers (those who work for more than three hours during the period 11 pm to 6 am in one week out of every three) are entitled to receive regular health checks. Where possible, always give advance notice of any changes in shift patterns and avoid short-term rota changes for operational reasons.”

 

Staff Handbooks and Contractual Rights

 

It is not uncommon for employees’ contracts of employment to expressly incorporate the staff handbook, although much of its contents will refer to policy matters rather than having contractual status. Following a recent decision of the Court of Appeal (Keeley v Fosroc International), employers are advised to check the staff handbook to ensure that the provisions it contains do not create a legally binding contractual obligation where this is not intended.

 

Mr Keeley’s employment contract with Fosroc International consisted of a written statement of employment terms incorporating by reference a staff handbook. The first part of the handbook was entitled ‘Employee Benefits and Rights’ and contained a section headed ‘Redundancy’. This section had a provision stating that employees with two or more years’ continuous service were entitled to receive an enhanced redundancy payment from the company, although no method of calculating the payment was given.

 

Mr Keeley was made redundant but did not receive an enhanced redundancy payment. He therefore brought a claim for breach of contract.

 

The High Court ruled that the handbook’s provisions were incorporated into Mr Keeley’s employment contract insofar as they were apt to be contractual terms.

However, the provision which said that employees were ‘entitled’ to the enhanced redundancy payment was placed amongst others which were statements of company aspiration or policy. As a result, the provision was coloured by its context and could not be regarded as contractual.

 

Mr Keeley appealed to the Court of Appeal.

 

The Court of Appeal found that the terms included in the handbook could not be ruled out as having contractual effect solely because this was presented as a collection of policies. It was necessary to consider the nature and language of its terms.

 

When interpreting a provision incorporated into an employment contract it is necessary to consider its importance in the overall bargain struck between the employer and employee. A provision couched in discretionary or explanatory terms could still be construed as contractual.

 

Many terms in the handbook were apt to have contractual effect. The following facts indicated that the redundancy provision was intended to have contractual effect:

 

 

It did not matter that the handbook did not contain an explanation as to how the enhanced redundancy payment should be calculated as the company had a formula for this.

 

The provision was therefore intended to have contractual effect and Mr Keeley was entitled to the enhanced redundancy payment.

 

The Court of Appeal went on to state that provisions for redundancy, notwithstanding statutory entitlement, are now a widely accepted feature of an employee's remuneration package and are therefore particularly apt for incorporation in an employee’s contract.

 

Says <<CONTACT DETAILS>>, “It is vital to seek legal advice when drafting a staff handbook so that it is clear which provisions may be relied upon by employees as being contractual. If your staff handbook refers to enhanced redundancy payments that are intended to be discretionary, take advice to ensure that this is clearly stated.”

 

 

 

 

Stage 1 Letters in Statutory Disciplinary Procedures

 

The Employment Appeal Tribunal (EAT) has handed down an important decision (Draper v Mears Ltd.) giving guidance on the necessary content of a stage 1 letter under the standard dismissal and disciplinary procedures.

 

Mr Draper was employed by Mears Ltd. as a plumber. He had the use of a company van which he was permitted to drive to and from home but which could not be used for private purposes. The company did not allow its workers to swap vehicles without permission and also operated a ‘zero tolerance’ policy as regards driving a company vehicle after the consumption of alcohol.

 

In October 2004, Mr Draper exchanged his van for a larger one in order to transport some furniture for a relative. He failed to seek permission for the vehicle exchange or the private use of a company vehicle. After work that day, two managers from Mears came across Mr Draper sitting in the borrowed van outside a pub. One of them challenged him over the use of the vehicle and because he could smell alcohol. Mr Draper responded in an aggressive manner.

 

Following two investigatory meetings covering the company’s concerns over his actions, Mr Draper was asked to attend a formal disciplinary meeting. The letter requesting this said that the question of disciplinary action would be considered for ‘using a vehicle for social purposes, conduct which fails to reasonably ensure the Heath and Safety of oneself and others, insubordination and a breach of the Company Vehicle Regulations and Procedures’. Following the meeting, Mr Draper was dismissed.

 

Mr Draper brought a claim for unfair dismissal but the Employment Tribunal (ET) dismissed his claim. It was of the view that nothing said by the Tribunal should undermine the importance of an employer's duty to ensure that those driving its vehicles are fully fit to do so. An employer is entitled to conclude that a material breach by an employee is sufficiently serious in itself to warrant summary dismissal. Nor did the ET find that there had been a breach of the statutory dismissal and disciplinary procedures which would mean that the dismissal was automatically unfair.

 

Mr Draper appealed to the EAT on the ground that the ET had erred in law in deciding that the letter requiring him to attend the disciplinary meeting had complied with the requirements of stage 1 of the standard dismissal and discipl