Employment law 2015 review: another year over...

Our annual employment law review looks at the highlights from 2015

A general election year (nearly) over! We began the year with the most extensive reshaping of the existing maternity, paternity and adoption leave provisions for decades. We also saw a flurry of legislative provisions making their way onto the statute books - though not necessarily in force - before the end of the Coalition Government notably, restrictions on historic holiday pay claims, the banning of zero hour contract exclusivity clauses and a promise of future gender pay gap reporting.

In an election result proving the adage "he who lives by the crystal ball soon learns to eat ground glass", we now have a Conservative Government victory despite wide spread predictions of a hung Parliament. The headline legislative reform target in employment law is industrial action reform under the Trade Union Bill.

With the legislative reform programme of the Coalition Government concluding and the new Conservative Government programme getting underway, case law developments have taken centre stage this year. Star billing went to the perennial favourites of collective redundancy consultation and holiday pay, alongside the relative newcomer of the 'public interest' test in whistleblowing claims.

As 2015 draws to a close, here we pick out some highlights. In a change from our usual festive song theme, this year's review centres on movies, with a few boxsets thrown in for good measure:

• Collective redundancies: Lost in Translation, Licence to Kill, The Nightmare before Christmas, The Terminator, Reckless
• Holiday pay: National Lampoon's Vacation, A Bridge Too Far, [Pay] of a Salesman, National Lampoon's European Vacation, The Equalizer
• Working time: Time Bandits
• Whistleblowing: Back to the Future, The Wrong Man
• TUPE: Dr Who, Rules of Engagement, The [Intention] Game
• Sickness & disability: Quantum of [Discretion], The [Part time] World Is Not Enough, Spectre [of TUPE], On Her Majesty's [Fitness] Service
• Associative discrimination: The Big Bang Theory (series 1 to 3)
• Family friendly: Daddy Day Care, Bringing up Baby
• Agency/zero hour workers: The Temp, The Tooth(less) Fairy
• Tribunal fees: Braveheart
• Unfair dismissal: A Day at the Races and The Glass Menagerie [a trois], [Delay] Another Day, Mission Impossible
• The 2015 awards (drum roll please...)

Collective redundancies

Lost in Translation

Following the collapse of Woolworths, the employees made redundant in stores employing 20 or more staff received compensation for breach of the collective consultation obligations. Those who worked in stores employing fewer than 20 employees did not.

In 2013 the Employment Appeal Tribunal (EAT), being a stickler for good grammar, held that the UK legislation did not correctly implement the underlying EU Directive - all to do with the use of a plural or singular. This controversial decision meant that the duty to collectively consult would be triggered when proposing to dismiss 20 or more employees across the employer's business as a whole (establishments), rather than at a single establishment as provided for in the legislation.

Following a further appeal to the Court of Appeal, the crucial 'establishment'/'establishments' question was referred to the Court of Justice of the European Union (CJEU). In April, the CJEU confirmed the UK can legitimately limit the threshold for redundancies necessitating collective consultation to those where 20 or more redundancies are proposed at a 'single establishment'. Why? It was simply inconsistent translation of the EU Directive into various languages that caused all the fuss!

Licence to Kill (but not to close a military base without consultation)

At what point does the employer "propose" redundancies? In particular, must an employer consult about a strategic decision that would foreseeably or inevitably lead to collective redundancies such as a site closure? Back in 2007, the EAT held in UK Coal Mining Ltd v National Union of Mineworkers that, yes, they did. But is this correct following the CJEU's rather fuzzy Fujitsu judgment?

The case of The United States of America v Nolan, concerning the closure of a US military base located in the UK, has held the potential promise of providing an answer for a number of years. Were the US military chiefs sitting in the Pentagon taking strategic defence decisions really supposed to consult budget assistant, Mrs Nolan first? Are we any closer to an answer? A little, but it is still some way off.

Quick recap

• The employment tribunal (2007) and EAT (2009) say the trigger is the proposal to close the military base.
• 2010 the Court of Appeal said, 'wait a minute, not so sure' following Fujitsu (a judgment it too found hard to follow) and referred the case to the CJEU.
• The CJEU held on for 18 months before coming up with the less-than-illuminating answer that 'this one is outside our jurisdiction' as the EU Directive does not apply to 'public administrative bodies'.
• Back to the Court of Appeal in 2014, who say, 'well, it is in our jurisdiction as the scope of the UK legislation is wider than the EU Directive'. The USA could have claimed state immunity back in 2007 but didn't, it could have made a 'special circumstances' defence but didn't, so let's proceed to a full merits hearing.
• 'Not so fast' says the USA, with a further jurisdictional appeal to the Supreme Court.
• October 2015 and the Supreme Court confirms the Court of Appeal is correct on jurisdiction. So back to the Court of Appeal for determination, as necessary, on the outstanding UK Coal Mining/Fujitsu issue.

Will we finally get a Court of Appeal ruling on the substantive question or will the USA finally throw in the towel, rueing the day it decided not to claim state immunity or special defence? We can but dream that one day we will have an answer!

The Nightmare before Christmas

Criminal prosecutions under employment legislation are rare. Under previously scarcely used provisions in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), 2015 has seen two separate prosecutions instigated for alleged failure to notify the Secretary of State of proposed collective redundancies - the City Link and USC cases

On 12 November, the three directors of City Link were acquitted of the criminal charges. The directors were found not guilty as the court accepted that the directors genuinely believed as at 22 December (the date they decided to place the company into administration) that a sale of the business was probable and as such there would be no redundancies.

The verdict cannot be taken as diminishing the importance of complying with the notification requirements. It also does not significantly diminish the possibility of prosecutions being successful in future where the evidence suggests that redundancies were inevitable and the required notification is not given at the correct time.

Notwithstanding the failure of the prosecution in the City Link case, the Government appears increasingly willing to pursue potential criminal sanctions against directors of failed corporate entities which have left taxpayers picking up a hefty tab for their failure to comply with employment legislation.

You wait years and then two come along together: the spotlight will now be on the pending prosecutions due to be heard in March in relation to the closure of a USC warehouse for which staff were given 15 minutes' notice of their redundancy.

The Terminator

The CJEU reminds us that the definition of 'redundancy' for collective consultation purposes is wider than the meaning of redundancy under the Employment Rights Act 1996 (for unfair dismissal/ redundancy payment purposes). In the Spanish case of Pujante Rivera, the CJEU held that where an employee resigns in response to a significant pay cut imposed for economic reasons unrelated to the individual employee, that termination counts as a redundancy for the purposes of collective consultation obligation triggers. "Hasta la vista, baby!"

Reckless

When assessing the level of a protective award, the maximum award of 90 days' gross pay per employee will be made not only for deliberate decisions to breach the consultation duty, but also where the employer's ignorance of the law arose from a 'reckless failure' to seek legal advice (E Ivor Hughes Educational Foundation v Morris).

Holiday pay

National Lampoon's Vacation

Legal arguments over what constitutes 'normal remuneration' for calculating holiday pay appear endless.

Last year EAT in Fulton and Baxter v Bear Scotland combined with Wood v Hertel and Laws v Amec confirmed that holiday pay must correspond to normal remuneration including "non-guaranteed" overtime in relation to the first four weeks of statutory leave which derives from the European Directive (Directive leave).

The EAT, on the facts of the cases before it, preferred to refer to the overtime in question as 'non-guaranteed' rather than 'voluntary'. This led some commentators and a Northern Irish Industrial Tribunal in Patterson v Castreagh BC to leap to the erroneous conclusion that 'voluntary' overtime did not need to be included.

On appeal to the Court of Appeal in Northern Ireland, this erroneous conclusion was well and truly quashed in July. As both parties had conceded in that case, the court expressly states that "in principle there is no reason why voluntary overtime should not be included as part of a determination of entitlement to paid annual leave".

As the EAT stated in Bear Scotland, the answer is simple: "normal pay is that which is normally received". Focusing on whether overtime is or isn't 'voluntary' is a red herring. The key is regular receipt.

A Bridge Too Far

Also arising out of last year's EAT decision in Bear Scotland was the question - how far back can an employee claim for underpayments?

Significantly, the EAT concluded that the workers cannot claim any holiday underpayment as forming part of a series of deductions of wages where more than three months has elapsed between the "deductions".

In August, the claims of Mr Fulton and Mr Baxter in Bear Scotland returned to the Glasgow Employment Tribunal to determine just how long a series of deductions they could in fact bridge together, after taking into account gaps of more than three months between payment of holiday pay for the taking of "Directive leave" (the first four weeks).

Both Mr Fulton and Mr Baxter submitted claims in 2013 and further claims in 2014. How much could they recover? Mr Fulton claimed £10,060 of underpayments going back to December 2008. However, due to breaks of more than three months he was only able to recover underpayments of £2,146 which occurred in 2013 and 2014. Likewise Mr Baxter who claimed underpayments of £15,170 going back to May 2007, was only able to recover underpayments of £1,796 for 2013 and 2014.

In addition to the limits placed on back claims by the courts, the Government has also taken steps this year to limit claims going back several years. The Deduction from Wages (Limitation) Regulations 2014 impose a two-year backstop period on most unlawful deduction of wages claims presented on or after 1 July 2015, including claims for holiday pay.

[Pay] of a Salesman

Last year the CJEU in Lock v British Gas Trading Ltd said that where a worker is paid commission calculated on the basis of the sales they make, that commission must also be included in the calculation of the holiday pay. The fact that the reduction in remuneration actually occurs after the period of annual leave is taken is irrelevant. In other words, commission that couldn't be earned due to a worker being on holiday must be taken into account in the subsequent pay period.

The case returned to the tribunal in February to consider whether the UK's legislation can (A) be interpreted in line with the CJEU decision and, if so, (B) how much holiday pay Mr Lock was entitled to. In March 2015 we received the tribunal's decision on question A only.

The tribunal found that there is no obstacle to interpreting the Working Time Regulations 1998 (WTR) so as to include commission payments in the calculation of holiday pay under regulation 13. As for question B, this is for a further hearing, currently delayed pending an appeal on question A due to be heard this month.

Subject to the pending appeal, commission that couldn't be earned due to a worker being on holiday must be taken into account in the subsequent pay period. What we don't know as yet is what happens where the commission rate includes an element of 'rolled-up' holiday pay and what was Mr Lock's actual loss?

National Lampoon's European Vacation

Once again the long-running saga of how to deal with holiday leave entitlement for those on sick leave featured this year. Basically, European case law means that workers on long-term sick leave must be allowed to carry unused holiday leave over to the next holiday year. But for how long can they carry over leave?

Back in 2011, the CJEU confirmed that while workers on sick leave are afforded a carry-over period, this does not mean that it can be carried over indefinitely: there comes a time when it ceases to constitute a rest period and is merely a period of relaxation and leisure (KHS AG v Schulte).

However, the limit on the carry-over period to be read into the WTR has been nebulous. In July, we finally got judicial guidance plumping for 18 months (Plumb v Duncan Print Group Ltd).

The Equalizer

Under the WTR a week's leave should allow workers to be away from work for a week. It should be the same amount of time as the working week: if a worker does a 5-day week, he or she is entitled to 28 days' leave; if he or she does a 3-day week, the entitlement is 17 days' leave.

What happens where a worker changes from part-time to full-time hours part way through a leave year? In a common sense decision, the CJEU has confirmed in the case of Greenfield that while there does not need to be a retrospective recalculation of leave already accrued, a new calculation is needed for the period during which the working hours were increased. In other words, Mrs Greenfield accrued leave based on her part-time hours while she worked part-time hours and accrued leave based on full-time hours while she worked full-time hours.

Working time

Time Bandits

Under the Working Time Regulations, travel time to and from work is not counted as working hours, but travel which is part of the employee's duties is counted as working time.

It has long been understood that travelling to and from home to an assigned depot or booking-on point, does not count as 'working time' for itinerant workers. How does the rise of mobile employer apps for giving the day's appointment list change things?

In Tyco Integrated Security SL, the CJEU has ruled that the time taken by remotely instructed itinerant workers travelling from home to the first client designated by the employer and from the last client to home is indeed 'working time'.

This ruling has direct implications for the calculation of the working week, rest breaks and daily rest periods of such workers. Employers may see margins squeezed as the number of appointments a worker can make in a day/week are affected.

Whistleblowing

Back to the Future

2013 changes to the protection afforded to whistleblowers mean that an individual must have a reasonable belief that the disclosure they are making, to whoever they make it, is "in the public interest".

A driver for this change was to prevent an individual from benefitting from whistleblowing legislation by relying on a self-serving disclosure of a breach of their own contract of employment. Prior to the 2013 change, the 2002 EAT decision in Parkins v Sodexho Ltd, meant individuals could do just that. But what does "in the public interest" mean?

In the spring, the EAT in Chesterton Global Ltd (t/a Chestertons) v Nurmohamed held that an individual reasonably believed that his disclosure relating to an alteration to accounting figures, which negatively affected his and 100 other senior managers' commissions, was 'in the public interest'. In particular, 'the public' can refer to a subset of the general public, even one composed solely of employees of the same employer. Also, it did not matter that the individual was mostly motivated by concern about his own position.

This autumn, the EAT in Underwood v Wincanton plc confirmed that following Chesterton the 'public interest' requirement may be met by a relatively small group of persons, and that those persons may be employees of the same employer who have the same personal interest in the matter as that raised by the claimant. In this case, a contractual dispute over the allocation of overtime by only four drivers was sufficient to establish a reasonable belief that the disclosure was "in the public interest".

These cases suggest that the "in the public interest" test is a very low hurdle indeed with the 2013 amendment having very little impact on reversing the effect of Parkins v Sodexho Ltd.

It will be relatively rare that a workplace issue with the potential to constitute a qualifying disclosure will solely affect one worker with no implications for any other workers. At the moment we appear to be back to where we started with workers being able to claim whistleblowing protection for disclosure of a breach of their own contract of employment as long as they can show some element of concern for colleagues in the same position.

A sequel to come... the Court of Appeal is due to hear the appeal in Chesterton, but not until mid-October 2016.

The Wrong Man

The manner in which the worker makes the disclosure dictates the ease with which they gain protection. The legislation is structured to impose additional obligations the further removed the recipient of the information is from the worker's employer. A lesson a shop steward learnt to his cost in Barton v Royal Borough of Greenwich.

The shop steward purported to make a disclosure to the Information Commissioner's Office (a prescribed person) after hearing unsubstantiated allegations from a disgruntled colleague which he took at face value. The information he disclosed amounted to a "qualifying disclosure", which would have been enough to make it a protected disclosure if he had made it to the employer. By instead making the disclosure to a 'prescribed person', he also had to show a 'reasonable belief' that the information disclosed was 'substantially true'.

On the facts of this case, this is where he went wrong. He 'jumped the gun': he could easily have taken steps to verify the allegations, but chose not to which lost him the protection he might otherwise have had.TUPE

TUPE

Dr Who

In order to establish which employees transfer under TUPE by way of a 'service provision change' (SPC), there must be an organised grouping of employees, to which the employee is assigned which had as its principal purpose the carrying out of activities on behalf of the client, and existing immediately before the SPC.

Who is 'assigned' to the 'organised grouping' being transferred under a service provision change? A question that comes up year after year. This year we have confirmation that:

• An employee who successfully appeals post-transfer against their pre-transfer dismissal does transfer. In the absence of a contractual provision to the contrary, a successful appeal revives the employment contract (Salmon v Castlebeck Care).
• An employee who had been off work for six years and had no prospect of returning to work was not assigned. Just because an employee is on long term sick leave does not necessarily mean they are not assigned, it is only where the employee is permanently unable to return to work (BT Managed Services v Edwards).

Who is 'the client' is also an important question. The client must remain the same before and after a transfer for a service provision change to occur. This year we have learnt:

• A 'client', for the purposes of a service provision change under TUPE, may include the plural. The result is that a service provision change may occur where there is a common intention between two or more different entities to contract with the same service provider (Ottimo Property Services Ltd v Duncan).
• The EAT has also reminded us that although a change of 'client' excludes a SPC, there could still, depending on the facts, be an old style 'business transfer'. TUPE provides two different gateways into protection: The 'business transfer' gateway which applies where there is a transfer of an undertaking or part of an undertaking and the 'service provision change' gateway (Aguebor v PCL Whitehall Security Group).

Rules of Engagement

When must the employees actually be engaged in the activities for the organised grouping to be classed as 'existing immediately before' the SPC?

Can there be a SPC following a temporary cessation of work, e.g. in a lay-off situation? The EAT in Inex Home Improvement v Hodgkins points out that a temporary absence from work or a temporary cessation of work did not, in itself, mean there was no longer an organised grouping. It is the organised grouping that needs to be in existence immediately before the transfer. This does not equate to the employees who constitute that grouping actually carrying out the activities immediately before the transfer. Whether employees remain an organised grouping is a question of fact dependent upon the purpose of the lay-off, its length and surrounding circumstances.

The [Intention] Game

TUPE does not apply to a SPC where the client 'intends' that the activities will, following the transfer, only be carried out by the new provider 'in connection with a single specific event or task of short duration'. How is that intention proved? In particular, are events after the date of transfer relevant to determine the question of intention?

The EAT tells us that although the exception is predicated on the client's intention at the time of the alleged transfer, subsequent events may cast light on what the relevant intention was at that time (ICTS UK Ltd v Mahdi and others UKEAT/0133/15).

Sickness & disability

Quantum of [Discretion]

Managing sickness absence is a notoriously tricky area for employers, particularly when dealing with disabled employees, who may require more time off than others. The application, without modification, of an employer's sickness absence procedure to a disabled employee may give rise to a discrimination claim, but to what extent are employers obliged to make adjustments to those procedures?

In Land Registry v Houghton and others, five disabled employees had each received a formal warning as a result of a number of disability-related sickness absences. This had the knock on effect of automatically excluding them from an annual corporate bonus.

The EAT agreed that the automatic exclusion from a bonus scheme of disabled employees who had received a sickness absence warning amounted to unlawful 'discrimination arising from disability'. Despite the employer having reasonable adjustments in place to delay the issuing of a warning to an employee absent due to a disability, the fact that receiving a warning led to an automatic disqualification from the bonus scheme was sufficient to amount to unfavourable treatment in consequence of disability.

Had the employer included an element of manager's discretion as it had done for improvement following conduct-related warnings, it may have succeeded in justifying the scheme as a proportionate means of achieving the legitimate aim of encouraging and rewarding good performance and attendance.

Lesson: employers operating bonus schemes linked to attendance should ensure that there is sufficient discretion built into schemes. Having reasonable adjustments in place to delay the issuing of a sickness absence warning is not the full answer, it is also necessary to provide flexibility as to the effect of that warning.

The [Part time] World Is Not Enough

The case of The Trustees of Swansea University Pension & Assurance Scheme v Williams, asks whether a disabled employee was treated unfavourably as his ill health pension was based on part-time hours he worked as a reasonable adjustment during the last two years of his employment rather than the full time hours he had worked during the previous 10 years of his employment.

For a claim of 'discrimination arising from disability' the employee needs to establish 'unfavourable treatment'. The EAT held the test for unfavourable treatment was not the same as less favourable treatment. It was not appropriate to compare Mr Williams' position with that of other disabled employees whose ill health retirement came on more suddenly at a time they were still working full time hours. As for 'unfavourable treatment', the ill health retirement scheme inherently benefited disabled employees as it only applied to disabled employees and so its operation was not unfavourable treatment arising from disability. This case is currently on appeal.

Spectre [of TUPE]

The Equality Act 2010 prohibits discrimination by an employer not only against existing employees but also against job applicants. In NHS Direct v Gunn, the EAT considered the inter-relationship between the protections afforded under anti-discrimination law and the protections afforded to employees on a transfer of undertaking. In particular, what happens if the transferee, before the transfer, indicates that it will not honour reasonable adjustments made by the transferor in respect of an employee who it is expected to transfer? Can the employee object to the transfer and bring a discrimination claim on the basis of being a job applicant?

The EAT has confirmed that transferring employees are not job applicants of the transferee. To hold otherwise would remove the certainty afforded by TUPE that employees transfer on existing terms and conditions. BUT, where a transferee envisages redundancies post-transfer (for instance due to a site closure) and offers suitable alternative employment pre-transfer, they may be considered a 'job applicant' for the purposes of that offer thereby having protection under the Equality Act even where they object to the transfer.

On Her Majesty's [Fitness] Service

In July, the Fit for Work Service became available in all of England, Scotland and Wales. The Service provides online and telephone advice. In addition a 'referral' service offers free occupational health assessments (usually over the telephone) with return to work plans for employees who have been or expect to be absent for four weeks or more. The service is designed to complement rather than replace existing occupational health provision and is likely to be particularly useful for small employers who do not have existing occupational health arrangements.

While the full impact of the new service is yet to be assessed, the Government has already announced in the Autumn Statement that it intends to further expand the Service.

Associative discrimination

The Big Bang Theory (series 1 to 3)

The 2008 CJEU decision in Coleman v Attridge Law established the concept of so-called 'associative' discrimination - it is not necessary for an employee to be disabled to bring a direct disability discrimination claim: the claim can be based on someone else's disability.

In 2015 the concept is not only very well established but expanding at an ever increasing rate!

• In CHEZ Razpredelenie Bulgaria AD v Komisia za Zashtita ot Diskriminatsia, the CJEU has held that an individual may claim indirect discrimination under the EU Race Equality Directive on the basis of association with a group that is disadvantaged by a provision, criterion or practice (PCP), even if he or she is not of the same ethnic or racial group.
  
  This means an indirect discrimination claim may be brought by a person not possessing the protected characteristic of those disadvantaged by the relevant PCP. It is enough that the person suffers alongside those of a certain ethnic origin, provided the treatment stems from a measure which impacts disproportionately due to that group's ethnic origin.
  
  There is now a question mark over the indirect discrimination provisions of the Equality Act which requires an individual to establish that the PCP creates a group disadvantage based on a protected characteristic that they themselves possess. Time will tell how significant this judgment will prove to be...
• Can a limited company bring a claim that it has been directly discriminated against where it suffers detrimental treatment because of the protected characteristic of someone with whom it is associated? In EAD Solicitors LLP and ors v Abrams, the EAT said yes.
  
  The EAT has held that a limited company which was in turn a member of a limited liability partnership (LLP), could bring a claim alleging direct discrimination against the LLP based on the age of the limited company's principal shareholder and director.
  
  This judgment could potentially pave the way for other companies to bring claims of unlawful discrimination to tribunal, for example if a company was to fail to win a contract because the religious beliefs of its directors or senior manager did not accord with the beliefs or views of the prospective client. The case is currently on appeal.
• In Thompson v London Central Bus Company the employee claimed to have been victimised by the employer when subjected to disciplinary proceedings. What was unusual about his claim for victimisation was that Mr Thompson did not argue that he himself had carried out a protected act but rather he was associated with others who had made protected acts. Is it possible to bring a claim for victimisation by association? An employment tribunal held that in theory, yes it can.
  
  The decision was at first instance and therefore need not be followed by other tribunals. Following CHEZ, the tribunal's approach appears to be consistent with a continuing trend expanding the scope of associative discrimination.

Family friendly

Daddy Day Care

We began the year with the most extensive reshaping of the existing maternity, paternity and adoption leave provisions for decades, beginning with a flagship change: the introduction of shared parental leave. Sitting alongside existing family leave rights, eligible parents are able to share the care of their child during the first year after birth or adoption by the mother/adopter returning to work or curtailing maternity/adoption leave. Will this prove to be an important push in changing social attitudes towards the sharing of childcare responsibilities? Time and take up will tell.

And the future? Grandparental leave - one for next year!

Bringing up Baby

Childcare vouchers: "remuneration" or a "non-cash benefit"? After years of surprising lack of judicial guidance, an employment tribunal has this year confirmed the HMRC guidance that childcare vouchers are indeed a "non-cash benefit". So, on the one hand, the value of childcare vouchers should not be included when calculating the first six weeks of statutory maternity pay (SMP). On the other hand, the employee is entitled to receive the childcare vouchers during her maternity leave without sacrificing any SMP. As such, a provision requiring a pregnant woman to opt out of the scheme when on maternity leave amounted to unlawful maternity and sex discrimination (Donaldson v Peninsula Business Services - currently on appeal).

Agency/zero hour workers

The Temp

Under the Agency Workers Regulations 2010 (AWR), from the first day of their assignment, agency workers are entitled to information about vacancies in the hirer's organisation to give them the "same opportunity" as other workers to find permanent employment. What is the scope of this obligation?

This year, the EAT confirmed that the AWR does not prevent an employer giving preference for vacant posts to permanent employees in need of redeployment. Regulation 13 of the AWR simply provides a right to information. It does not give agency workers a right to have an interview or preferential consideration for permanent employment. In particular, the AWR does not prevent an employer from giving priority to permanent staff who have been placed in a redeployment pool during a restructuring exercise (Coles v Ministry of Defence).

The Tooth(less) Fairy

Since 26 May this year any provision of a zero hours contract (ZHC) which prohibits the worker from doing work or performing services for someone else are unenforceable. So ZHCs remain lawful, but exclusivity clauses are banned.

This was one of the first statutory provisions brought into force by the new Conservative Government but there was a rather important missing element - a mechanism for redress. Recognising the toothless nature of the ban, in October the Government published the draft Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 under which a ZHC worker will have the right not to be subjected to any detriment or (for ZHC employees) be dismissed for failing to comply with an exclusivity clause.

At the time of writing, the date for when the needed redress provisions will come into force is unknown. Also, the Government's stated intention pre-election to extend the prohibition on exclusivity clauses to worker's contracts under which the individual was not guaranteed a certain level of weekly income (a 'prescribed contract'), has yet to make into post-election draft legislation.

Tribunal fees

Braveheart

Following the introduction of tribunal fees at the end of July 2013, we have seen a very significant decrease in the number of tribunal claims. Unison has now failed in its challenge to the introduction of fees in the High Court twice, with its appeal to the Court of Appeal this year also failing.

The future of tribunal fees still remains uncertain. There is scope for a fresh challenge from a real rather than hypothetical claimant. Also, a Government review of the fees and remission schemes is currently underway. The Court of Appeal expressly stated that if the review finds there are good grounds for concluding that the decline in the number of claims is accounted for by claimants being realistically unable to afford to bring proceedings, the level of fees and/or the remission criteria will need to be revisited.

Regardless of the tribunal fees challenge in the English courts, the proposed further devolution of powers to Scotland includes control over the management and operation of employment tribunals. The Scottish National Party has already stated its intention to get rid of tribunal fees following devolution. This may lead to forum shopping for those who have a choice to issue their claim either in England or Scotland.

The story is not over yet.

Unfair dismissal

A Day at the Races and The Glass Menagerie [a trois]

In relation to the fairness of a misconduct dismissal, tribunals will have regard to inconsistency of treatment. Broadly, employers should consider the level of sanction that has been imposed on other employees in the company in similar circumstances and act consistently with previous decisions, unless there are material differences.

In MBNA Ltd v Jones, following the flow of alcohol over the course of a company family day at the races, good-hearted banter escalated to hostility resulting in Banker A punching Banker B in the face and later that night Banker B sends threatening texts to Banker A. Banker A dismissed, Banker B given a final written warning.

Westalke v ZSL London Zoo, concerned a love triangle between the Meerkat keeper dating the Llama keeper who previously dated the Monkey keeper. A verbal confrontation started by the Monkey keeper escalated to a physical confrontation by the Meerkat keeper who hits the Monkey keeper in the face with a wine glass resulting in a deep gash. Meerkat keeper dismissed. Monkey keeper given a final written warning.

In both cases, the tribunals concluded that had the employers dismissed both employees for gross misconduct, then both dismissals would have been fair. However, there was an inconsistency in treatment between the fight participants. Since there was a disparity of treatment, Banker A and the Meerkat keeper's dismissals were found to be unfair.

But were the tribunals correct in their strict insistence that both parties to a fight should face the same penalty? Well, no.

In the MBNA case, the EAT reminded us that when considering a claim of unfair dismissal based on disparity, the tribunal must focus on the treatment of the employee bringing the claim. It will be rare for a dismissal to be unfair on the basis of inconsistent treatment alone. When allegations of inconsistent treatment are made, the test for tribunals is to ask whether the employer's differential treatment of the employees was so irrational that no reasonable employer could have taken that decision. On the facts of that case, it was not unreasonable for the employer to treat a deliberate punch in the face at the family day event differently to the retaliatory texts sent thereafter.

As for the zoo keepers, an appeal is pending (in any event compensation was reduced to nothing due to the Meerkat keeper's contributory fault) - chances of a successful appeal are promising.

[Delay] Another Day

A constructive dismissal occurs where the employer does not dismiss the employee, but the employee resigns and can show that they were entitled to do so by virtue of the employer's conduct. Crucially, the employee must not delay too long in resigning. If the employee continues to report to work he may be deemed to have waived the alleged breach of contract affirming the continuation of the contract.

In Colomar Mari v Reuters Ltd, the EAT state that delay and acceptance of sick pay is not necessarily fatal to a constructive dismissal claim. As ever, each case will depend on its particular facts. In this case a delay of 18 months, during which she claimed sick pay, did mean that the employee had affirmed the continuation of the contract.

Mission Impossible

For a dismissal to be fair, the employer must have a fair reason for dismissal and must have acted reasonably in treating that reason as sufficient to justify dismissal.

In Shrestha v Genesis Housing Association, the Court of Appeal was asked to consider whether the obligation to conduct a reasonable investigation means an employer must investigate every aspect of an employee's defence to a charge of misconduct. Can the employer decide something is too implausible to investigate? In this case, yes. As part of the process of investigation, the employer must of course consider any defences advanced by the employee, but whether and to what extent it is necessary to carry out specific inquiry into every aspect, no matter how implausible, in order to meet the Burchell test will depend on the circumstances as a whole.

In CRO Ports London Ltd v Wiltshire, the EAT reminds us that that where the employee admits the misconduct, the employer will not usually have to conduct an investigation. From an employer's perspective, the question will be whether the admission of misconduct means that there is little purpose to the kind of investigation envisaged by Burchell. As the EAT noted in this case, the admission may still leave relevant issues unresolved which reasonably require investigation. Each case needs to be assessed on its facts.

The 2015 Awards

(drum roll please...)

The 'Fashion Police' Award

And the winner is... Officials at the Cannes Film Festival

... for turning away a number of women in their 50s from a red carpet film screening because they were wearing - oh shock, horror - flat shoes! Views on shoes or gendered ageism?

The 'Innovative Recruiter' Award

And the winner is... MI6

... for seeking to recruit Intelligence Officers to work in the field overseas on Mumsnet

The 'Never give up' Award

And the winner is... once again The United States of America

...for nearly a decade of arguments over collective consultation and jurisdiction in Nolan v USA

The 'Innovator' Award

And the winner is... Mr Abrams

...for successfully arguing in EAD v Abrams that like you and I, limited companies are legal persons entitled to discrimination protection.

The 'Nice Try' Award

And the winner is... the striking teachers of King Edward VI College

... for taking all the way to the Court of Appeal an unsuccessful argument that the Apportionment Act 1870 meant that when calculating a day's pay to be deducted for a strike day it should be 1/365 calendar days rather than 1/260 working days.