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The Employers Update - June 2010

Welcome to this month’s edition of Employ! The World Cup does not have long left to run but hopefully it has not caused you any HR headaches!

Once again we cover further important developments in the HR sphere together with details of a new interactive tool from ACAS called the ACAS Work Model. Feel free to distribute this newsletter to your colleagues and contacts.

If you have any queries in relation to the content of Employ, or any employment issue, please call the Employment Team on 0844 8000 263 or email oliver.mccann@taylors.co.uk.

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

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


In This Edition:

» Depression and Disability!
» Vetting and Barring Scheme
» Disciplinary Procedures
» Want to Talk “Off the Record”?
» Compensation Uplifts!
» ACAS Model Workplace
» Your Questions Answered

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Depression and Disability!

Make no mistake, handling the personnel issues which arise from mental illnesses is not only very sensitive but fraught with legal issues, particularly from the DDA 1995 perspective!

A recent case involved a lawyer who had a job offer from DLA Piper solicitors withdrawn. She believed the primary reason for this was the medical questionnaire which disclosed a history of depression. DLA state the reason for the job offer withdrawal was a freeze on recruitment in light of the credit crunch.

One of the issues was how to determine whether a mental illness constitutes a disability under the DDA. Although medical evidence is critical to this issue it also stated that when considering the issue of an impairment in cases of alleged depression, there is a distinction between clinical depression and a reaction to adverse circumstances. While both can produce symptoms of low mood and anxiety, only the first condition should be recognised under the DDA - the requirement that an impairment have a long term effect, should mean that the two conditions are more easily distinguished.

Another issue related to “perceived” discrimination. The claimant argued that even if she was not in fact disabled it matter not, DLA perceived her to have a condition which was a disability and so she had been discriminated against (akin to the Coleman v Attridge law case). The EAT recognised that it would have had to refer the matter to the European Court of Justice to determine whether perceived discrimination was covered by the directives. It chose not to on the basis that firstly it may not be necessary if a disability is in fact established, secondly to do so would be based on assumptions i.e. that DLA had in fact withdrawn the offer because of the disability which had not yet been determined.

Another case has just held that treatment on the basis of a mistaken perception that an employee is suffering from a disability is not covered by the DDA. There must be an actual disability.

This case highlights the dangers of retracting job offers based on medical information gleaned from pre employment medical questionnaires.

What do I need to know?

  • handling issues arising from mental illnesses needs extra care and attention
  • consider what the appropriate stage is to seek medical information in the recruitment process
  • note that the new Equality Act 2010 (due in October) will restrict significantly the use of such questionnaires until the job offer stage – the key policy reason is to force the employer to make a recruitment decision based on competency, skills and experience and if medical issues arise at the offer stage, to force the Employer to have to justify its decision after consideration of reasonable adjustments
  • ensure you have the full medical information before making any decision
  • consider whether, based on the medical information, the condition is in fact a disability and covered by the DDA
  • note the new Equality Act 2010 will cover “perceived” discrimination – avoid basing decisions on perception
  • the ability to distinguish between a mental condition which is covered by the act and one which is not is not as easy as the EAT suggest when one considers that DDA conditions extend to those that are “likely” to be long term – this could apply to many mental conditions even if it seems trivial at the outset. Again full medical information will assist in this regard.

Vetting and Barring Scheme “(VBS”) Update

The new coalition government has announced it will halt the registration with the VBS following criticism it is disproportionate, over burdensome and infringes civil liberties.

What do I need to know?

The timing and potential scope of the requirement on individuals working with children and vulnerable adults to register on the scheme depends on the review of whether or not it remains a criminal offence for barred individuals to apply to work with children or vulnerable adults and employers will continue to face criminal sanctions if the knowingly employ such barred individuals.

There also remains an obligation to refer to the Independent Safeguarding Authority any information on an individual working with children and vulnerable adults where they consider them to have caused harm or pose a risk.

Contractual Disciplinary Procedures – Be Careful!

A recent case has upheld a claim for damages for breach of contractual disciplinary procedures, rejecting the principle that breaches of contractual disciplinary procedures in the run up to dismissal are not meant to sound in damages.

An NHS Orthopaedic Surgeon was summarily dismissed for gross professional and personal misconduct following a disciplinary hearing. The Surgeon has been unable to find permanent employment in the NHS since. A claim was brought against the trust for damages in the sum of £4m alleging a breach of contract based on:

  1. the conduct of the disciplinary procedure was defective and in breach of the NHS’s express disciplinary procedure
  2. the disciplinary procedure was a contractual term of his employment contract
  3. the defective procedure directly caused the finding of misconduct
  4. the misconduct finding resulted in the Surgeons inability to find permanent NHS employment post dismissal due to a loss in professional status

The Court of Appeal has confirmed that the Surgeon may pursue a claim for damages arising from the NHS’s breach of the contractual disciplinary procedure. Such a claim is not restricted by the previous principles that damages for breach of employment contracts are limited to the end of the period when the contract could lawfully have been brought to an end (i.e. the end of the notice period plus the time it would have taken to go through any contractual procedure for dismissal). It also stated that the case of Johnson v Unisys was limited (this case related to a claim for damages arising from the manner of dismissal) to breaches of implied terms of trust and confidence applicable to the manner in which dismissal occurred. However in this case the claim is founded on a breach of express contractual disciplinary procedures and so there is no reason in law why such a claim for damages should be restricted.

The Surgeon now has the chance to pursue his claim but his claim for damages will still be difficult as he well have to establish the 4 points above, in particular demonstrating that the defective procedure has caused the misconduct finding which in turn caused his dismissal which in turn caused his losses. It is likely the NHS will seek to argue forcefully that absent any defects a correct procedure would still have resulted in dismissal.

What do I need to know?

  • Identify whether you express your disciplinary procedure to be “contractual”
  • If the disciplinary procedure is “contractual” you must follow it, a failure to do so will be breach of contract
  • Consider amending any contractual procedures to build in some flexibility in to the procedures – note obligations to inform and consult staff regarding any changes
  • Prior to effecting a dismissal conduct a thorough review of the procedure adopted as against the express contractual procedure. If you identify any defects take legal advice on how to remedy the defects without a continuing breach
  • A breach of such procedures could significantly increase your potential liability, such claims for damages not being limited in the level of compensation which can be awarded

Want to Talk "Off the Record"?

A common question employers ask an employee when they desire of a parting of the ways!

Legal professionals call “off the record” discussions “without prejudice communications” – the intention behind these discussions is that whatever is discussed between the parties cannot be used in evidence against them in subsequent litigation. Employers need to take care however to ensure that when they wish to talk “off the record” such discussions will in fact gain protection from this legal doctrine.

Case law has confirmed that “without prejudice” discussions will only be inadmissible in subsequent litigation where the discussions are genuinely aimed at a settlement. To apply both parties must be aware there is a dispute or a potential dispute which is capable of settlement. As such an employee who is called in to a meeting without any idea as to any dispute cannot enter into without prejudice discussions – as such timing of such discussions is key!

Case law had established that even properly held without prejudice discussions may still lose its inadmissibility where discrimination issues are involved (perhaps where the motives behind the discussions are to advance or protect discriminatory conduct). The “exception” has now been clarified by a recent case which states that the “exception” would only apply where the without prejudice discussions would act as a cloak for perjury, blackmail or other clear and unambiguous impropriety regardless of the nature of the dispute.

In this case the claimant, who was claiming victimisation following a previous sex discrimination complaint, had sought to rely on settlement discussions in relation to the previous dispute to try and evidence her claim. The court refused to allow this on the basis that in this particular case the discrimination point she was trying to assert arising from the settlement discussions was far from being a clear discriminatory act.

What do I need to know?

Engaging in without prejudice discussions to resolve a dispute can be a huge benefit to both parties but Employers need to be wary that attracting the privilege which arises from without prejudice discussions is always susceptible to challenge emphasising the importance of taking advice before doing so.

Compensation Uplifts!

Before the statutory disciplinary and grievance procedures were scrapped the Employment Tribunals had the power to make a statutory increase (or decrease) of up to 50% on any award having regard to any failure to comply with statutory procedures.

Although the statutory procedures have been abolished they have been replaced by the Statutory ACAS Code of Practice on Discipline and Grievance. A failure to comply can result in the award being increased or decreased by up to 25%.

A case under the old rules has set out some of the considerations when applying the uplift, which could equally apply when applying the uplift under the new code of practice. They are:
  1. whether the procedures were ignored completely or applied to some extent
  2. whether the failure to comply with the procedures was deliberate or inadvertent
  3. whether there are circumstances which may mitigate the blameworthiness of the failure
  4. the size and resources of the employer are also, in principle, capable of being relevant
What do I need to know?
  • It is a legal requirement to comply with the statutory code of practice for discipline and grievances when considering misconduct /poor performance issues under a disciplinary procedure
  • Failure can result in the an award being increased by 25%
  • If you are struggling to comply with the Code of practice identify whether any alternative action should be taken to mitigate the consequences of the breach

ACAS Model Workplace

ACAS has launched its Model Workplace tool on its website. Following a recent demonstration at an ACAS event, Taylors Solicitors would recommend this interactive tool to all businesses, regardless of their size.

The ACAS Model Workplace is designed to be used by anyone who has a responsibility for people management. – from owner managed businesses to larger business who delegate management responsibilities to its managers and supervisors. It covers 10 modules including recruitment procedures, equality and diversity, discipline and grievances and pay. After completing each module you will be rated – green as compliant, amber as some areas to address, red as an urgent note to make changes. There will be guidance as to where the issues are with reference to ACAS material which may help.

It is intended to help you asses the effectiveness of people management in your workplace, give practical guidance on setting up and maintaining good employment relations and connect you to useful resources.

You could ask departmental managers to complete the tool which will enable HR departments to assess how well their current polices, procedures and employee relations are understood and practiced in each department and take targeted remedial action where necessary.

Tool link: http://www.acas.org.uk/index.aspx?articleid=2806

Your feedback on the interactive tool would be really appreciated (which we will pass to ACAS) as well.

If you use the interactive tool and it requires action which you need legal assistance with please do not hesitate to contact us.

Your Questions Answered

1. Are employees who are required to work bank holidays, entitled to pay in lieu of time off or additional holiday?

Much depends on what the employees overall holiday entitlement. If for example your full time contract provides for 20 days plus bank holidays, then requiring an employee to work on a bank holiday would mean that you are not allowing the employee to take the statutory minimum leave of 28 days per annum. As such you would have to give a day of in lieu. It is not allowed to pay in lieu of holiday entitlement except when the employment is terminated. If you provide holidays over and above the statutory minimum then you may be entitled to pay in lieu for such days if the contract allows you to.

2. We have won a security contract with a customer. The previous contractor provided a mixed service of security and cleaning. The cleaning aspect is being given to another contractor. Is this a service provision change under TUPE such that we have to inherit the employees?

TUPE may apply. The key is whether or not the service you are providing moving forward, is materially different to the previous one. To establish this, it will be necessary to compare every aspect of the service currently provided, to the service to be provided, perhaps with reference to the service agreement with the Customer, if one exists. If it is materially different, then there is no service provision change and TUPE does not apply. The outgoing contractor will have to make its staff redundant. If TUPE does apply you need to identify which, if any, employees are assigned to “service” which you are taking i.e. the security personnel only, not the cleaning personnel.

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