Employment update - November 2015

30 November 2015

Wragge Lawrence Graham & Co's employment & equalities experts bring you the latest developments that may affect your business - what they are, and what you can do about them.

This month's update covers:

And links to our podcasts:

Criminal charges for failing to submit HR1: City Link directors acquitted

Criminal prosecutions under employment legislation are rare. Under previously unused 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. The prosecutions in the former being against three directors and in the latter against a director and an insolvency practitioner.

On 12 November, the three directors of City Link were acquitted of the criminal charges. What does this mean for any future prosecutions? Our employment & equalities experts outline the legal obligations and prospects for future prosecutions in our alert: Criminal charges for failing to submit HR1: City Link directors acquitted

The meaning of redundancy for collective consultation

There are two different statutory definitions of 'redundancy': section 139 Employment Rights Act 1996 (ERA) which governs unfair dismissal and section 195 Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) which governs collective consultation where an employer proposes 20 or more redundancies in a period of 90 days or less.

To fall within the statutory definition of "redundancy" for unfair dismissal purposes, an employee's dismissal must be "wholly or mainly attributable to" the employer:

  • Ceasing or intending to cease to carry on the business for the purposes of which the employee was employed by it (business closure);
  • Ceasing or intending to cease to carry on that business in the place where the employee was so employed (workplace closure); or
  • Having a reduced requirement for employees to carry out work of a particular kind or to carry out work of a particular kind at the place where the employee was employed to work (reduced requirement for employees).

However, for collective consultation purposes, it means a "dismissal for a reason not related to the individual concerned". This might occur, for example, where a business or plant closes down, or where an employer no longer needs as many employees to carry out a particular task. It might also occur where dismissals are to take place in a reorganisation or reallocation of work, but where there is no overall reduction in the number employed because the employer is taking on new recruits.

The difference in the definitions for individual and collective redundancy can be illustrated by a situation where an employer wants to introduce a change in terms and conditions. If the employer cannot secure the agreement of the employees to propose changes, it may consider terminating the existing employment contracts in accordance with contractual notice and issue new contracts incorporating the variation. This would be unlikely to fall within definition of redundancy under the ERA, but would fall within the definition for collective consultation purposes under TULCRA as not being related to the individuals concerned.

We now have confirmation from the Court of Justice of the European Union (CJEU) that the wider definition for collective consultation purposes also encompasses resignations in response to an employer unilaterally imposing significant and detrimental changes to an employee's contract for reasons not related to them as an individual. In the Spanish case of Rivera v Gestora Clubs Dir SL, the CJEU held that resignations in response to a 25% pay cut imposed by the employer for economic reasons unrelated to the individuals must be counted as 'redundancies' for collective consultation triggers.

Holiday leave accrual and changing working hours

Under the Working Time Regulations every worker is entitled to 5.6 weeks' annual leave. 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. This is subject to a statutory maximum of 28 days.

What happens where a worker changes from part time to full time hours part way through a leave year?

In the case of Greenfield v the Care Bureau Ltd, the leave year began on 15 June each year. Ms Greenfield took seven days' paid leave in July, at which point (and in the 12 weeks leading up to this), she was working one day a week. Therefore, the leave she had taken at that time equated to seven weeks' leave, which exceeded her 5.6 weeks' entitlement.

From August 2012 Ms Greenfield dramatically increased her hours and began working a pattern of 12 days on, two days off. When she requested a week's leave in November 2012, Care Bureau refused her request, pointing out that she had exhausted her entitlement to paid annual leave in July 2012.

Ms Greenfield argued that leave already accrued and taken should be retrospectively recalculated and adjusted following an increase in working hours; in effect, the new working hours should be used to calculate the leave entitlement that had already accrued, even if that leave had already been taken.

Although the court held that there does not need to be a retrospective calculation of leave already accrued, it did state that an employer should recalculate annual leave for the period after the change in working hours. In other words, Mrs Greenfield accrued leave based on her part time hours while she worked part time hours and leave based on full time hours while she worked full time hours.

A common sense decision which accords with practice already used by the majority of employers.

ALL ABOUT AGE: 'Botox' your CV

"Hiring the best people for your business is your most important task as a business owner", said Steve Jobs, the late Apple founder. This is hardly controversial as most businesses will agree that recruiting the right people is fundamental to an organisation's success.

However, a recruitment process that finds the best person for the job is not always easy - especially taking into account unconscious recruiter bias. See our recent article 'Botox' your CV

Podcasts

#TUPE: Avoiding an Information and Consultation Calamity, key recent developments in this tricky area.

#Equality: Respect at Work, tackling discrimination in the workplace.


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