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The Employers Update - November 2009

Welcome to this month’s edition of Employ!

With the Christmas season now upon us we take a look at some of the steps that can be taken to avoid Christmas events turning into an employment nightmare.

We also give a general round up on the latest developments in HR and Employment law.

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

Oliver McCann

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


In This Edition:

» It’s Christmas Time!
» The Devil is in the Detail!
» Stigma Losses
» Pre-employment Questionnaires!
» Your Questions Answered

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It’s Christmas Time!

The works Christmas party which is usually a joyous occasion, can provide nasty hangover for some employers!

Of course it is important for all to enjoy themselves but given potential legal ramifications for employers which can arise from this annual event, it is usually prudent to set out clearly the boundaries of unacceptable behaviour and consider carefully your arrangements for the event. One employer set a rule that “doubles” at the free bar were not permitted only to receive a bar bill at the end with a long list of “trebles”.

Employers owe a duty of care for the health, safety and welfare of its employees, even at the Christmas party. Employers can also be vicariously liable for discriminatory acts by its employees.

So here are some timely tips for the Christmas party:

  • Consider the office party as an extension of work where the rules of the workplace continue – send out a reminder to everyone that normal work rules still apply including the Equal Opportunities and Bullying & Harassment Policy
  • Ensure that all employees are invited but not forced to attend
  • If providing a free bar, do so with guidelines that you expect all employees’ to drink responsibly
  • Where alcohol is to be served ensure a good range of non alcoholic drinks and plenty of food
  • Consider travel arrangements to and from the venue and be wary of any employee drink driving
  • If employees are expected in work the following day remind them about the risk of being over the drink drive limit the following day
  • Watch out for underage drinking from the younger members of staff
  • Ban the use of any illegal substances warning that such use at the works party will result in disciplinary action and be viewed as a gross misconduct offence
  • Remember the non-smoking regulations still apply even if you are using your premises for a private function
  • Ensure that guidelines are set if your staff engage in the “Secret Santa” ie. keep the presents clean without discriminatory or offensive suggestions

The Devil is in the Detail!

Whistle blowing cases are notoriously complex and quite often an employer will not realise when a “protected disclosure” has been made to it which gives the worker protection from suffering any detriment or dismissal by making such a disclosure.

The consequences of not spotting a protected disclosure and falling foul of legislation which protects the worker can be devastating with dismissals being automatically unfair regardless of length of service and compensation being unlimited.

Aggrieved workers who have taken advice quite often engineer a situation where they gain protection from making disclosures.

A recent case may now help clarify when an employee gains protection. It confirmed that to make a “protected disclosure” it is necessary to disclose information about a situation i.e. by conveying facts. Making allegations is not sufficient! The court gave an example to demonstrate the difference. Simply stating “you are not complying with Health and Safety legislation” is only an allegation and does not gain protection. However saying “the hospital wards have not been cleaned for the past two weeks” discloses information which would gain protection if it clearly suggests that there has been a breach of a legal obligation.

In this case the employee’s solicitor letter failed to contain a disclosure, just allegations and was insufficient to gain protection.

What I need to know?

  • Scrutinise written complaints from workers, don’t just assume it is a grievance!
  • Key areas to look out for when a worker complains are complaints about criminal activity, breaches of legal obligations (which have been given wide meaning including breaches of their own legal rights), miscarriages of justice, health and safety (very common) and environmental damage.
  • It is enough that the worker has a reasonable belief in the disclosure even if they are mistaken as to that belief!
  • Take care if you suspect there is a protected disclosure and take advice!

Stigma Losses

A recent decision has confirmed that a claimant can claim for losses arising from the stigma of having brought a discrimination claim against a previous employer.

The claimant in this case worked for Abbey National and was made redundant in circumstances which were found to be unfair and amounting to race discrimination. The claimant presented extensive evidence at the hearing to demonstrate that despite concerted efforts to find similar work in the financial services sector he could not. He claimed this failure was caused by the stigmas of having brought a discrimination claim against Abbey National. An award of £2.7m was made which included future loss on the claimant’s inability to work in the financial services sector again amongst other things.

Following an appeal against the remedy, the EAT concluded that the Abbey National should not be penalised by the wrongdoing of third party perspective employers.

The Court of Appeal disagreed with EAT and confirmed that the correct approach is to ask when the claimant might obtain a job on an equivalent salary. Although finding some force in the argument by Abbey National, it was bound by previous case law which established that if stigma attaches to an employee as a result of the unlawful way in which an employer has run its business, the employer is liable for the losses resulting from the other employers not wanting to recruit its former employees. It concluded that stigma loss will usually be included in the criteria when assessing future losses; it need not be a separate head of damages.

Pre-employment Questionnaires

Do you or do you not have one? A typical dilemma for many employers, especially given the potential for discrimination claims, if you rely on the content of pre-employment questionnaires and where to draw the line is often unclear.

A recent novel case involved a Council suing a senior former employee for allegedly making negligent or fraudulent misrepresentations in the pre-employment questionnaire. The council were seeking significant damages to recover the losses incurred by entering into the contract with the employee (around £1m).

The employee applied for the role of Managing Director. She was offered the position conditional upon medical clearance. She completed a medical questionnaire but made no mention of her history of depression, stress related illnesses and previous use of anti depressant medication. The key question stated “Have any of your near relatives suffered from mental trouble” to which she answered “no”.

The employee was obviously cleared. Once employment started relations broke down and the employee started to suffer from mental health problems. Upon receipt of a psychiatrist report the Council wrote to the employee stating her contract had been frustrated by reason of her illness and was allowed to retire on an ill health pension.

Upon discovering that she had completed the pre-employment questionnaire and made no reference to her previous history the council brought a claim against her.

The Court held that the medical questionnaire was poorly drafted and as such she had not misrepresented her health position because her statements were not false or misleading. It also held that there was no general duty of disclosure obliging the applicant to disclose fact beyond the questions raised, the only obligation being not to wilfully withhold information.

Your Questions Answered

1. Our business is looking at various ways to reduce overheads. We have identified that it would benefit this aim by insisting that a number of employees take their annual leave entitlement during our quiet months to avoid us being short staffed through holidays in busier periods resulting in overtime costs. Can we do this?

Yes. The Working Time Regulations in fact make specific provision for employers insisting on employees taking annual leave. It requires the employer to give twice as many days notice as the length of holiday you want them to take i.e. 10 days annual leave will require you to give the employee 20 days notice.

It is common for employers to identify at the start of the calendar holiday year dates of any factory shutdowns and the number of days to be utilised during that shutdown. However, where you are going through a temporary patch, giving the notice above to take holidays is all that is required but ensure you apply the requirement in a non discriminatory way.

2. I have recently lost some key members of staff and have recognised a potential problem in that they have no restrictive covenants which could result in them contacting my clients if they too leave. Is it possible to introduce restrictive covenants to existing employees and what if they refuse?

It is often the case that this key protective measure is overlooked at the recruitment stage. Clearly, the commencement of employment is the best time to obtain agreement to restrictions within a contract of employment.

It is however possible to introduce restrictions during employment. Difficulties do arise if an employee refuses to agree to the restrictions. There is an  established case law which supports the proposition that the dismissal of an employee for a refusal to sign restrictive covenants can be fair, even where they may be more demanding or even unenforceable. However this can be a double edged sword so consider such steps carefully!

Key considerations will be:

  • The reasonableness of the restrictions
  • The business need for the restrictions
  • The procedure adopted for introducing the restrictions – has there been proper consultation?
  • The number of other employees who have agreed to the restrictions
  • Threats of dismissal will be unreasonable

What employers should do in these circumstances is:

  • Set out firstly what they are trying to protect
  • Identify which employees that relates to draft appropriate worded clauses that are limited to protecting the business interests
  • Consult with those employees about the draft clauses explaining the business reasons for implementing restrictions
  • Give an adequate opportunity to raise queries or points and consider them properly and where valid implement
  • After consultation issue contracts for signing

Employers must ensure that the covenants are drafted in such a way that they are there to legitimately protect their business and they do not go above and beyond what is necessary.

Copyright 2006 - 2010 Taylors Solicitors

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