Employment update - June 2014

23 minute read
02 June 2014


Our employment experts bring you the latest employment law issues and provide action points to help you and your organisation.

Changes to flexible working requests

On 30 June 2014, the Flexible Working Regulations will be extended to cover all employees who have completed 26 weeks' service. Applicants will no longer have to have responsibility for caring either for children under the age of 17 (or 18 if the child is disabled) or adults over the age of 18. Those requests can, as at present, include changes to working hours, working time or working location.

It is important to note, as Steve Williams, ACAS' head of equality services says, "it's only a right to ask, and it's certainly not a right to have". While employers will not be under an obligation to accept all requests, they will be obliged to consider all requests reasonably within a three-month time frame. This time frame, which can be extended with agreement, must include time for any appeal. The Act does not include a definition for "reasonably" although ACAS has published the final draft Code of Practice (the Code) and supplementary guidance (the Guidance) on how employers should handle requests.

The Code suggests following a process that is similar to that used currently, albeit without the prescribed time frames: meeting with the employee as soon as possible to discuss the request, considering the request objectively, communicating the decision to the employee, and if rejecting, providing one of 8 business reasons.

The Act specifically provides examples of reasons that employers can use to justify a refusal, including the ability to meet customer demand and additional costs. The same considerations that have applied since the introduction of the right to request in 2003 still apply and the need for evidence to justify the decision remains crucial. Employees retain a right of appeal where dissatisfied with the decision.

What will happen when employers are faced with competing requests from employees?

While the Guidance recognises that it may not be feasible for employers to agree to all requests, it states that each request should be considered on its own merits at the time that it is made. Where employers cannot distinguish between employees' requests, the Guidance suggests that employers may employ a method of random selection, although it advises that employers should make clear to employees that this is how this situation will be dealt with.

The Code also anticipates that it might be possible to gather employees together to discuss the requests made, in the hope of reaching a compromise that is agreeable to all. This may not appear realistic, given that the needs and interests of individual employees will clearly change over time.

Organisations will need to be careful to avoid inadvertently discriminating against any individual because of a protected characteristic covered by the Equality Act 2010. While employers should avoid immediately approving requests from individuals with protected characteristics, practically, where competing requests are made, an employer may feel compelled to make a decision in the light of the potential risk of a discrimination claim. The key will be for employers to consider requests properly and avoid making arbitrary decisions!

The risks of getting it wrong include tribunal claims for breach of the Act in relation to the process, constructive dismissal and/discrimination, the latter being perhaps the most likely claim.

Many organisations already offer flexible working to the entire workforce so there is unlikely to be a flood of applications on 1 July. However, now is a good time to review policies, procedures and practices to take into account the changes, review the ACAS guidance and consider ways to support managers (including training) on how to handle the flexible working conversation.

ACAS Early Conciliation - A guide to "stopping the clock"

On 6 May 2014, ACAS Early Conciliation (EC) became mandatory for the majority of prospective claimants in employment tribunal claims.

Before they can lodge proceedings, claimants must submit a form to ACAS or telephone them. However it is only mandatory for claimants to contact ACAS - they do not actually have to take part in any pre-claim conciliation.

The conciliation period will usually last for up to one calendar month, although this can be extended for up to 14 days. If at any point ACAS concludes settlement is not possible, it must issue an EC certificate. The claimant can then present their claim to the tribunal.

The most important element to understand is the so-called 'stop the clock' mechanism. Once a prospective claimant has contacted ACAS, the time limit to present their claim will be extended to take account of the conciliation period.  In practice, however, this is not as simple as it sounds.

Stopping the clock

The period beginning with the day when the claimant contacts ACAS (Day A) and ending on the day when they receive or are deemed to have received the EC certificate (Day B) will 'stop the clock'.  In working out this 'pause' period, you count the period beginning with the day after Day A and ending with Day B.

It is not, however, as simple as adding this 'pause' period to the end of the limitation period as the actual extension triggered will depend upon when Day A and Day B actually fall. The new mechanism makes calculating the time limit for presenting a claim at tribunal much more complex. Some working examples below illustrate the operation of the 'stop the clock' mechanism in practice.

There is already some debate about how the mechanism will operate in practice. Where a prospective claimant contacts ACAS with less than one month to go before the expiry of the tribunal time limit (the 'late contact' example below), they have a month from the day they receive the EC certificate in which to bring the claim. Unfortunately what is meant by 'one month' is unclear. The information prepared by HM Courts and Tribunals Service to date states that, in these circumstances, if Day B is 5 June, then the last day for bringing a tribunal claim would be 4 July. However there is also commentary which suggests that the last day for bringing a claim would be 5 July. Employers should be aware therefore of the scope for argument about the timeliness of claims lodged at the end of the period.


Example A: Single respondent, effect of differing dates for Claimant contacting ACAS.
  Early Contact Late Contact
Dismissal 9 May 9 May
Original time limit expiry 8 August 8 August
EC form filed (Day A) 11 June 11 July
Times pauses 12 June 12 July
ACAS emails EC certificate (Day B) 23 June 23 July
Clock paused 11 days 11 days
New time limit 19 August

Clock is stopped for 11 days (23 June + 11 days = 4 July).

As still more than a month to original expiry date, no further extension. So 8 August + 11 days  = 19 August
22 August (arguably 23 August*)

Clock is stopped for 11 days (23 July + 11 days = 3 August).

As this is less than a month before expiry of original expiry date, time extended to Day B + 1 month = 22 August (arguably 23 August)
Example B: Two respondents, effect of differing dates for issue of EC certificate
  Respondent 1 Respondent 2
Dismissal 12 May 12 May
Original time limit expiry 11 August 11 August
EC form filed (Day A) 24 May 24 May
Times pauses 25 May 25 May
ACAS emails EC certificate (Day B) 2 June 15 June
Clock paused 9 days 22 days
New time limit 20 August

Clock is stopped for 9 days (2 June + 9 days = 10 June).

As still more than a month to original expiry date, no further extension. So 11 August + 9 days = 20 August
2 September

Clock is stopped for 22 days (15 June + 22 days = 6 July).

As still more than a month to original expiry date, no further extension. So 11 August + 22 days = 2 September

TUPE roundup

Confirmation that employees cannot claim directly against a transferee for failure to inform and consult

In the case of Mr G Allen and Others v Morrisons Faciliities Services Ltd,the EAT was asked to consider whether employees could bring a claim directly against a new employer to whom their employment had transferred under TUPE, in connection with a failure to inform and consult.

The EAT concluded that they could not.

It is well known that the transferee employer is obliged to provide the transferor with information relating to "measures" it proposes to take in relation to the employees, as part of the consultation process. It is also well known that a transferee can also be jointly and severally liable for a transferor's failure to inform and consult.

But what happens when the transferee is the party at fault?  This case is a useful reminder that the claim must be brought against the transferor, even where the allegations relate to a transferee's failure to provide measures information. The transferor can then bring the transferee into proceedings, claiming that any failure to comply with the duty to inform and consult arose out of the transferee's failure to provide measures information.  The tribunal may then order the transferee to pay compensation if it determines this to be appropriate.

Transfers occurring before 31st January 2014 - relocation is not an ETO

Those familiar with TUPE will be aware that a dismissal in connection with the transfer will be automatically unfair unless it is for 'an economic, technical or organisational reason entailing changes in the workforce'.  The narrow interpretation given by the courts to the term "changes in the workforce" had given rise to difficulties in practice, as it had been held to require changes in numbers or functions of staff and so precluded relocations where neither of those would arise.

A change made by the amendments to TUPE in January this year confirmed that "changes in the workforce" now includes a situation where employees are dismissed in connection with a relocation which does not otherwise involve any reduction in employee numbers.

The EAT has confirmed this month in NSL Ltd v Mr P Besagni & Others that this was not the case before the introduction of the amendments to TUPE on 31st January 2014. Therefore, when the London Borough of Barnet outsourced some of its parking operations and the claimants declined to move from Barnet to Croydon and Lancing following a relocation of those services by the new employer, their subsequent dismissals were automatically unfair. The precise date of transfer will therefore be key to identifying the employer's scope for location change.

Employees transferred to parent company following share purchase of subsidiary

In an unusual decision, the EAT has confirmed that a transaction which was structured as a share purchase, to which TUPE would not apply, could nevertheless give rise to a TUPE transfer as a result of the  subsequent actions of the new owner of the Company.

Following the share purchase, the new owner replaced the Board of the employer company with its own nominees, told employees they would be embarking on a period of integration into the new owners business and brought in an integration team overseen by a consultant who reported directly to the parent company CEO. The court found that the reality was that the operation of the business in which the staff were employed, and all decision making relating to it, had transferred to the parent company and this was sufficient to give rise to a transfer of all employment contracts under TUPE.

Where employers wish to retain employees within companies they have acquired, this case suggests that a level of care and planning will be necessary to ensure that a TUPE transfer is not thereby triggered where this is not intended. There remain difficulties in altering terms and conditions of employment in the context of a TUPE transfer and most employers will therefore wish to avoid triggering such transfers where appropriate communication and management structures can be put in place to ensure that employees clearly continue in the employment of the acquired subsidiary.

"Grace period" to check work permits increases from 28 days to 60 days

The Home Office has published a revised code of practice on preventing illegal working. The new code of practice will apply where the person was employed on or after 29 February 2008 and the breach occurred on or after 16 May 2014, the date on which the new code was published.

An employer is required to carry out its own checks where employees are inherited following a TUPE transfer.  At present the new employer has a "grace period" of 28 days following transfer in which to do this.

This code to 60 days following the transfer, the period during which the new employer should carry out the document checks which will enable it to avail of the so called "statutory defence" in the event that any person employed did not in fact have the right to work in the UK. The statutory defence to a charge of employing workers illegally can be claimed where an employer is able to show that it checked and retained copies of prescribed documents verifying both the identity and the right to work in the UK of each person employed.

Sickness absence triggers and reasonable adjustments

Managing sickness absence can be a tricky area, particularly in the case of disabled employees, who may require more time off than others.

The application, without modification, of an employer's sickness absence policy to a disabled employee may give rise to a discrimination claim.

Under section 20 of the Equality Act, where a provision, criterion or practice (PCP) puts a disabled employee at a substantial disadvantage compared to employees who are not disabled, the employer is required to make such adjustments as are reasonable to remove that disadvantage. What is reasonable will depend on all the circumstances of the case, including:

  • The effectiveness of the adjustment in removing or reducing the disadvantage.
  • The extent of any disruption to the employer's business.
  • The cost of the adjustment in light of the employer's financial and other resources.

A sickness absence policy will amount to a PCP. Since some disabilities can cause higher sickness absences, it follows that the strict application of the policy resulting in a disciplinary sanction, may amount to putting a disabled employee at a substantial disadvantage. Having said this, the duty to make reasonable adjustments does not mean that employers must ignore all disability-related absences when applying a sickness absence policy.

The difficult question: to what extent and at what stage do employers need to adjust their policies in order to satisfy their duty to make reasonable adjustments?

In the case of Griffiths v DWP the Employment Appeals Tribunal (EAT) considered whether an employer had breached its duty to make reasonable adjustments by issuing an improvement warning under its sickness absence policy where the employee's absence had been disability-related. The EAT confirmed that, on the specific facts of this case, the duty to make reasonable adjustments had not arisen, and even if it had, then the adjustments sought were not reasonable.

Griffiths v DWP

Ms Griffiths worked for the DWP as an Administrative Officer. In early 2011 she had a 62-day period of continuous sickness absence and was later diagnosed as suffering from post-viral fatigue syndrome and fibromyalgia (it was accepted by both parties that she was disabled).

Prior to receiving the diagnosis, the DWP had implemented its absence management policy which triggered a "written improvement warning". The attendance policy comes into effect when an employee's absence reaches the "Consideration Point". This is set at "eight working days of sickness absence in any rolling 12 months…but may be increased as a reasonable adjustment if you are disabled".

On receipt of the written warning, Ms Griffiths raised a grievance. She claimed that she had suffered a 'substantial disadvantage' in that she suffered worry and stress as a result of the improvement warning letter being triggered. She sought two reasonable adjustments. Namely:

  1. that the absence period in February-May 2011 be disregarded for the purposes of the attendance policy; and
  2. that the number of days' absence which would activate the usual Attendance Policy provisions in the future be increased.

The DWP rejected Ms Griffiths' grievance and did not make either of the requested adjustments. Ms Griffiths brought a claim of disability discrimination for failure to make reasonable adjustments only.

The tribunal rejected the claim. By a majority, it decided that there had been no breach of the employer's duty. Ms Griffiths appealed to the EAT.

The EAT's decision

Duty to make reasonable adjustments did not arise

The EAT upheld the tribunal's decision. It considered that the duty to make reasonable adjustments had not arisen because Ms Griffiths could not establish that she had been placed at a 'substantial disadvantage' in comparison with persons who were not disabled. The EAT held that the proper comparator for this case is a non-disabled person absent for sickness reasons for the same amount of time but not for disability-related reasons. She had been treated under the policy in a no less favourable way than a non-disabled person would have been.

While she had not benefitted from the advantageous discretionary provisions of the policy directed to disabled persons, this simply underscored that all that had happened was that she failed to gain an advantage. That was not a disadvantage, substantial or otherwise.

Adjustments sought were not reasonable

Although the failure to establish a duty meant that the appeal failed, the EAT also considered whether, if a duty had been owed, the adjustments sought went beyond what was reasonable.

The EAT confirmed that the reasonable adjustments envisaged by statute were those that enable a disabled employee to return to work or carry out their work. In this case, the adjustments were about the treatment of past and future absence from work, and therefore were not within the scope of the statute.

What does this mean for absence management policies?

Employers will not usually be required to modify triggers contained within an absence management policy simply because an employee is disabled. The duty to make reasonable adjustments is to ensure disabled employees are not placed at a substantial disadvantage. It does not extend to enabling a disabled employee to have more favourable terms than non-disabled colleagues.

It is, however, important to remember that Mrs Griffiths' case concerned the trigger points for the absence management policy. What this case, crucially, did not concern was the application of the policy resulting in dismissal, demotion, or some other detriment (amounting to a substantial disadvantage). The policy did state that managers had a duty to make reasonable adjustments for disabled employees and could allow a reasonable additional amount of disability related sickness absence before any material sanctions were imposed.

Simply triggering the process did not place Mrs Griffiths at a substantial disadvantage. If the policy had been further applied with a more serious sanction without, at that stage, consideration of discounting some of her disability related absence or redeployment to another role where the levels of absence could be accommodated then Mrs Griffiths may have succeeded in her claim.

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