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The Employers Update - March 2010

Welcome to the March edition of Employ with ongoing updates on developments in HR and Employment Law. If you wish to discuss any of the matters raised within this Employ! please do not hesitate to contact a member of the Employment Team.

For further information on the extensive services Taylors Employment team can offer you please feel free to contact us:

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

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


In This Edition:

» Is there a cure to avert constructive dismissal?
» Paternity Leave Changes approved!
» Beware of Collective Consultation Obligations
» Do as the master says!
» Late holiday requests
» Your Questions Answered

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Is There a Cure to Avert Constructive Dismissal?

Constructive unfair dismissal is where an employee resigns from his employment in response to a fundamental breach of the contract of employment by the employer. The usual fundamental breach alleged is a breach of implied terms of mutual trust and confidence, although others may include unilateral variations to the contract such as pay, working hours, place of work, the support offered to employees or a failure to safeguard an employee's health etc.

A recent case has confirmed that the test for constructive dismissal is not a range of reasonable responses test but a unitary one. More importantly the case confirmed that once there is a breach it cannot be cured.

In this case a Professor at a university resigned after exam papers he had marked were remarked by the chairman of the board of examiners. An inquiry from the University was subsequently set up which vindicated the Claimant and criticised the marking procedures in place. A tribunal held that the remarking of papers was a fundamental breach of contract and although the subsequent inquiry cleared the Professor of any wrongdoing it was not sufficient to cure the breach.

As such care now needs to be taken when investigating grievances and in particular what admissions, if any, are made as such admissions and steps put in place to rectify any breaches may not be enough to avoid a claim.

Paternity Leave Changes Approved!

Draft regulations pertaining to the new right to paternity leave have now been approved.

The most important is the Additional Paternity Leave Regulations 2010, which provide that additional paternity leave will be for a minimum of 2 weeks and maximum of 26 weeks. Such leave must not start until at least 20 weeks after the birth and must end no later than 12 months after the birth. Leave may only be taken in multiples of complete weeks. Similar provisions apply for adoption placements.

The regulations come into force on 6th April 2010 but will only apply to children whose expected week of birth (or adoption) begins on or after 3rd April 2011.

Fathers may take to up to six months additional paternity leave as long as the mother has returned to work. This gives the parents the choice of dividing the period of “paid leave” entitlement between them. For the Additional Paternity Leave to be paid it must fall within the 39 weeks period for which SMP would be payable. As such, fathers could receive Paternity Pay at the statutory rates for weeks 21- 39 assuming the mother utilised no more than 1 week of her Maternity Leave before the child was born. Parents will need to 'self certify' by providing details of their eligibility to their employer. Employers and HMRC will both be able to carry out further checks of entitlement if necessary.

Beware of Collective Consultation Obligations

A recent case acts as a timely reminder about the importance of engaging in some form of collective consultation, even where it is not possible to meet the minimum period of consultation (30 day = 20-99 employees, 90 days 100+).

An engineering company received notice from its customer to amend its working practices within 24 hours resulting in an immediate need to reduce the workforce by 50 employees. The need to make 20 or more redundant immediately triggered obligations to inform and consult under S.188 Trade Union & Labour Relations (consolidation) Act 1992. 50 staff were made redundant the day after the working practices were implemented.

Complaints were submitted by Unite, the recognized trade union that the Company had failed to comply with its S.188 obligations. The Employer argued that there were special circumstances rendering it not reasonably practicable to comply with s.188.

An Employment Tribunal found that there were special circumstances rendering it not practicable to consult for a 30 day period but that there were no special circumstances preventing the Employer from engaging S.188 (2) and (4) – information in writing about the collective redundancy circumstances and the need to consult on ways to avoid dismissals, reducing the number of dismissals and mitigating consequences of those dismissals. The tribunal felt the Employer could have engaged in some consultation over 2-3 days and awarded 90 days protective award.

The employers appeal failed except on the point that the award should reflect the mitigating circumstances that existed.

One has to have sympathy with the Employer who, without proper notice, ended in a collective consultation obligation. However the reasoning of the Tribunals emphasizes that obligations under s.188 are not to be taken as one complete obligation, but instead viewed independent of each other with the over riding theme that an Employer must do all that is reasonable practicable to comply with individual sub sections of s.188.

Do as the Master Says!

A recent case upheld a decision that it was fair to terminate an employee’s employment summarily where the employee had undermined the trust and confidence at the heart of the employment contract. Once established the employer was entitled to accept such a repudiatory breach and was released from the need to continue to employ the employee.

In this particular case a very senior employee had failed to report to Group Headquarters on fundamental issues pertaining to risk to the operating company thereby denying them the opportunity to assess the risk themselves. This was in specific breach of an express instruction which the employee had been issued with. The failure to comply with this instruction undermined the trust and confidence placed in the employee and entitled the Employer to dismiss for gross misconduct.

Late Holiday Requests

This is a common issue faced by employers relating to last minute requests by employees to take a day or two holiday leave, or worse still, a week or more.

Usually, employers set out the holiday procedure for booking annual leave within a handbook stating the amount of notice that needs to be given and other factors which will be considered when deciding whether to agree to the holiday leave request.

However what is the position where an employee is approaching the end of holiday year and submits a request which gives insufficient notice to take holidays but refusal of which would deny the employee the right to use his accrued holidays? A recent case confirmed that an employee is bound by notice provisions set out in the employment contract or under the Working Time Regulations 1998 and as long as the Employer does not use the notice provisions in a way that is unreasonable, inconsistent, or prejudicial manner then a refusal with the employee’s loss of his right to take holidays (without a payment in lieu) is lawful and not a fundamental breach of contract.

As long as there are justified reasons for refusal the loss of holiday leave is irrelevant. Such requests cannot be dismissed out of hand though and consideration should be given to each on a case by case basis.

Your Questions Answered

1. Can you clarify what an individual’s entitlement is to annual leave whilst off sick?

The position can be summarized as follows:

  • Annual leave continues to accrue whilst an individual is on sick leave
  • You must allow workers to take annual leave during a period of sick leave if they wish to do so
  • If no requests are made then you must allow the worker to take their annual leave upon return to work providing they can take their full entitlement within that holiday year
  • Where a worker returns to work but cannot take their full entitlement in the holiday year then they are not allowed to carry over holiday leave, unless the worker works in the public sector and can enforce European Directives directly in which case they can enforce the Pareda decision which says a worker must be allowed to take accrued holidays upon return to work even if that means holiday leave needs to be carried over on to another holiday year
  • Where employment terminates then a worker is entitled to be paid in lieu for accrued holidays not taken as at the date of termination including leave accrued and untaken in previous years where the failure to pay constitutes a series of deductions.

2. I have heard that the new Equality Act, due in October this year, will force employers to disclose details about their pay gaps. Is this correct?

The Equality Bill is still making its way through the system for final approval but is expected to be implemented in October 2010. Assuming no further changes to the current drafts then employers of more than 250 employees will be required to disclose to the government details of their pay gap within the organization. A failure to do so will result in civil enforcement and penalties. The good news is that it is voluntary until 2013.

Note that it will be prohibited to enforce pay secrecy clauses against employees. They will be free to discuss pay with one another – the only caveat being that such discussions are with a view to establishing a connection between pay and discrimination – but how easy will it be to prove otherwise?

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