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Oliver McCannn   


Employers Update - August 2011

Welcome to the August edition of Employ!

Summer is nearly over and now starts the run up to Christmas – I believe some shops are already stocking Christmas items!

Once again there is yet more employment and HR news to bring to you within this edition. Also, The HR Exchange holds its next event on the 15th September – full details available here: www.thehrexchange.co.uk.

If you have any questions or wish to explore our employment law service options, please contact us - we can tailor a service option to suit your needs!

Oliver McCann - Partner and Head of Employment
James Bellamy - Employment Solicitor

Tel: 0844 8000 263
Email: oliver.mccann@taylors.co.uk


In This Edition:

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Record Costs Award!

It is no surprise that you and other employers feel that the Employment Tribunal system plays into the hands of litigious employees. More often than not they are allowed to pursue claims without the risk of having to pay costs if they lose, knowing that employers will have to spend money to defend the claim, let alone all the wasted management time.

The Employment Tribunal Rules allow the award of costs against any party whose behaviour is unreasonable or who pursues a claim which is vexatious, unreasonable or misconceived. Such power was recently exercised when a claimant brought a claim against her employer for sexual harassment which was found to be vexatious and frivolous. The employer persuaded the Employment Tribunal to order the claimant to pay the employer £100,000 in costs - believed to be the highest costs order made to date!

What do I need to know?
In a litigious era, this judgment should be seen as a wake up call to all claimants and their representatives that they will be punished for pursuing vexatious claims. It has become far too common for claimants and their representatives to throw every allegation at an employer, regardless as to its truth or merit, in the hope that the employer will buckle under the pressure and settle.

Taylors routinely act for employers in such situations and take a robust approach when defending such claims. We have a two clients currently seeking costs against the respective claimants with the costs hearings both taking place in early September. One arises from what we believe was a vexatious whistle-blowing claim and the other from unreasonable behaviour on the part of the claimant in rejecting a sensible offer to settle which they failed to beat at the final hearing.

If you are faced with a similar situation, speak to Taylors Employment Team – we will fight your corner and seek recovery of your costs wherever possible!

Dismissal because of Unfair Dismissal Claim was Unfair Dismissal?

It may not make immediate sense but read on!

An employee commenced employment on 1 February 2010. On 26 July 2010 she received notice that the employer intended to end the employment relationship no later than 1 February 2011 and she was required to serve her notice period on garden leave. On 11 January 2011, the employee submitted a claim for unfair dismissal whilst working her last few weeks. When the employer received the claim from the Employment Tribunal they summarily dismissed her with effect from 21 January 2011.

Upon dismissal, the employee amended her claim to allege that the act of summary dismissal rendered her dismissal automatically unfair as she had been dismissed for asserting a statutory right.

The Tribunal had to decide what the effective date of termination was – was it 1 February (the original date) or 21 January (the date she was summarily dismissed whilst on notice)?

The EAT held that the effect of summary dismissal of an employee who is serving notice is to bring forward the date of dismissal. This being the case, the employee’s claim for ordinary unfair dismissal would fail as she did not have the required 12 months’ service to be eligible to claim. However, the EAT did agree that if the reason for the dismissal was the fact that the employee exercised her statutory right to claim unfair dismissal, then the dismissal would be automatically unfair - regardless of length of service.

What do I need to know?
In this case, the employer reacted without thinking about the consequences and arguably made a difficult situation far worse for themselves. This emphasises the importance of taking pro-active strategic legal advice in relation to the dismissal of any employee, regardless of the circumstances. Remember that where an employee does not have the required 12 months’ service, it is likely they will try to find a way around this by finding a claim which does not require 12 months continuous service such as:

  1. whistle blowing dismissals;
  2. pregnancy dismissals;
  3. dismissals for asserting a statutory right;
  4. health and safety dismissals; or
  5. discrimination claims.

These are but a few of the claims which can be brought without 12 months’ service and you, as the employer, need to take proactive steps to protect your position from such claims. Better to be safe than sorry!

Taylors Employment Team specialise in finding solutions or giving strategic advice to meet your objectives but at the same time protect your position.

Global Conspiracy not a Philosophical Belief!

It may not always feel like it, but common sense does prevail in the judicial system!

Here, an employee employed as a Principal Intelligence Analyst by the Police, was dismissed after he had been tasked to produce an annual strategic threat assessment to the Police Authority to cover a wide range of issues and threats to the community. Rather than address all threats properly, the claimant scored all threats as 0% but the threat of internal terrorism as 100%. He then went on to set out his beliefs in relation to internal terrorism and his personal mission to uncover the truth using police resources. Needless to say, this created a conflict with his role and the duties he was required to perform ad resulted in his dismissal. Not only did he claim he had been unfairly dismissed but also that he had been discriminated against on grounds of his philosophical beliefs which were that the 9/11 and 7/7 attacks were “false flag operations” authorised by the UK and US governments and that the media is controlled by a global elite seeking new world order.

The Employment Tribunal ordered the Claimant to pay a deposit to pursue his unfair dismissal claim and struck out his claim for discrimination on the basis that his beliefs did not constitute a philosophical belief capable of protection under the Religion or Belief Regulations 2003 (now the Equality Act 2010). Although it was found the beliefs were honestly held, they related to substantial aspects of human life and were compatible with human dignity, the Tribunal did not believe it passed the test set out in previous case law.

What do I need to know?
Previous case law set out criteria which had to be met for a belief to gain protection. They are as follows:

  • The belief must be genuinely held.
  • It must be a belief and not an opinion or viewpoint based on the present state of information available.
  • It must be a belief as to a weighty and substantial aspect of human life and behaviour.
  • It must attain a certain level of cogency, seriousness, cohesion and importance.
  • It must be worthy of respect in a democratic society, not be incompatible with human dignity and not conflict with the fundamental rights of others.

In the case above, the claimant failed because it was held his beliefs did not attain a certain level of cogency or cohesion.

Employment Status

Two recent decisions serve as useful reminders that those labelled subcontractors or self employed individuals may in fact be workers and/or employees!

The distinction between self employed, workers and employees can at times be difficult to determine, but nevertheless is important as the status will determine rights to holidays, rest periods, minimum wage and ultimately the right to claim unfair dismissal. On top of that there will be income tax and national insurance implications!

What do I need to know?
One case involved 20 car valeters, all expressly described as self employed subcontractors. They all paid their own tax, purchased their own insurance, uniforms and tools. There was an express clause stating there was no obligation to attend work and provide services personally and all entered the contracts freely.

The Supreme Court upheld previous decisions, namely that the true factual circumstances of the relationship between the hirer and the subcontractors trumped the written contract and all were held to be employees, not just workers as they had claimed. This meant their claims for breach of the national minimum wage requirements and paid holidays succeeded.

In another case, a solicitor was offered an employment contract with a firm of solicitors. He negotiated that they engaged him on a self employed basis which would make him financially better off. However, when he was dismissed he alleged he was actually an employee (a typical response from these relationships).

Although the case progressed on an issue of illegality (misrepresentations to HMRC about his status) which is the subject of a re-hearing following an appeal, the case neatly illustrates the danger of self employed individuals changing their stance to suit their needs.

We would encourage you to conduct annual reviews of all your relationships with workers, subcontractors and self employed individuals. By doing so you can mitigate your exposure to employment and worker status claims. Remember, relationships develop over time and what may have genuinely started off as a subcontractor relationship could have morphed into an employment relationship over time.

Taylors regularly prepare and review subcontractor and self employed consultancy agreements. If you need to review your business relations with certain third parties, give Taylors Employment Team a call – the last thing you want is an unfair dismissal claim or a tax bill!

Holiday Pay and Sick Leave!

Perhaps one day we may get some clear and firm guidelines on the ongoing issue of holidays and sick leave.
There has been yet another recent decision which you need to be aware of.

An employee was off sick for the whole of the holiday leave year. Her employment was subsequently terminated on grounds of incapability. The employer refused to pay the employee for accrued but unused holidays on the basis that no formal request had been made to take annual leave.

The EAT applied the European case of Pareda v Madrid Movilidad SA which had held that an employee who has been injured during a period of booked annual leave is entitled to a replacement period of leave on his return.

What do I need to know?
The EAT concluded that the employee had been unable to take her annual leave by reason of ill health and so was entitled to use that right on her return to work the following year or be paid in lieu upon dismissal, notwithstanding the fact that she had made no formal request to use that leave in accordance with the Working Time Regulations 1998.

The EAT made an observation that the position would be different if a person failed to take leave and they had been fit all year round to take such leave but failed to do so.

No doubt there will be further cases – in the meantime Taylors advise all clients to encourage those on sick leave to use their accrued holiday leave.

Your Questions Answered

Q. We run a haulage business and have discovered that one of our drivers mistakenly allowed his HGV licence to expire and continued to drive our vehicles, which meant he was effectively driving without insurance at the time. The responsibility to renew the licence rests with the drivers. Can we dismiss for gross misconduct, even though there were no actual consequences from his failing?

A. The issue is whether or not dismissal falls within the band of reasonable responses. Much depends on the clarity of your requirement that the obligation to keep the licence in place rests with the driver and the consequences (in terms of dismissal) for failing to do so. Likewise, the length of service of the employee may be relevant, together with any other mitigating factors.

Ultimately, case law has confirmed that a taking into account “potential” serious consequences is justified, even when they never materialize – I believe the offence is a very serious one and could have been disastrous for the Company, and it therefore warrants dismissal!.

Q. We employ an apprentice but his behaviour and attitude is poor. We want to terminate the apprenticeship – are there any special rules?

A. Termination of apprenticeship contracts for misconduct is not as straightforward as an ordinary employment relationship. It has been held that the first purpose of an apprenticeship is training, with the secondary purpose serving the employer. Usually, such contracts are for a fixed period and are not terminable at will. We recommend you take legal advice before taking any steps to end your relationship with the apprentice – a more strategic report will be required!

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