The Employers Update - October 2009
Welcome to the October edition of
Latest figures from the Employment
Tribunal Service show an increase in
unfair dismissal claims, redundancy
pay claims and a rise in the level
of tribunal awards. In this months
edition we take a look at some of
the actual figures, causes for the
increase and what can be expected
for 2010 as well as usual round up
of recent employment law and HR
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If you wish to discuss any matters
raised within this edition of
Employ! please contact the
Employment Team on 0844 8000
263 or send an email to
Tel: 0844 8000 263
No not just the latest Disney Pixar
film but also the level of unfair dismissal
claims (up 29%), redundancy pay claims (up
48%) and claims for a failure to inform and
consult on collective redundancies (up a
Discrimination cases have also risen and
so too has the level of many awards in most
jurisdictions. The highest award was a mouth
watering £1.3 million for Race
Discrimination! If you listen to what is on
the grapevine then there maybe a similar
level of award for disability discrimination
Age discrimination claims are now starting
to become prominent both in the number of
claims being lodged (increased by 29%) and
the size of the award – the average rising
from £3,350 to £8,870, the highest award
rising from £12,000 to £90,000.
Could your business absorb such potential
liabilities? If not then maybe your business
should consider the
Employer Protection Scheme operated by
full details click here)
The increase in the number of claims and
awards emphasises the importance of ensuring
that you handle HR and employment matters
correctly. Being proactive and taking advice
at the outset is usually much cheaper than
taking advice once a claim is under way!
The cause for the general increase is
clearly the recession! Dismissals are up
because of redundancies, litigation up
because employees struggle to find
alternative employment now and so have
nothing to lose, and awards are up because
there are fewer jobs available making it
more difficult for claimants to mitigate
Regrettably 2010 statistics are likely to
follow a similar pattern! Indeed a recent
case has confirmed that the bands for injury
to feelings awards initially set down by a
case called Vento should be modified, the
lower band increasing from £5,000 to £6,000,
the middle band from £15,000 to £18,000 and
the upper band from £25,000 to £30,000.
Inevitably discrimination claims will most
definitely increase in 2010.
There will be further consultation on
the implementation of regulations relating
to Agency Workers as required by the EU
Directive on Agency workers.
The directive requires that agency
workers be given equal treatment in
comparison to permanent workers as regards
to basic working conditions such as pay,
hours, holidays and pension eligibility.
It is intended that such rights only
crystallise after 12 weeks continuous work
in the same job but some rights will be
available from day one such as the right to
receive information about job vacancies,
access to on site facilities and transport
It is feared by many employment agencies
that the implementation of this Directive
will severely impact upon their business in
the supply of temporary staff with many of
the current benefits associated with
temporary staff being removed.
The government hopes to introduce
legislation in this regard by October 2011.
The delay is intended to help recruiters and
their clients’ time to prepare for the
changes and also to avoid significant
changes during the current economic climate.
Some common sense as If ever there was a
time that temporary staff are needed, given
the unpredictability of the current economy,
it is now!
Employment Tribunals are increasingly
wary of employers who dress up an employment
relationship as a self employed or worker
contract through express documentation.
There have been two big decisions on
“sham contracts” this year already. It is a
topic which does not seem to go away and
indeed Taylors are advising clients on
similar issues as this goes to press.
In our February edition we reported on a
case called Protectacoat (click here for
link to February 09 edition …….),. This case
has been affirmed in a further decision of
the Court of Appeal. Here Car Valeters were
signed up to terms and conditions which
stated they were self employed, could
provide a substitute and that there was no
obligation to provide work or accept work.
It was held that the factual reality did not
(and were never intended to) reflect the
written terms, in particular the valeters
had to notify the company if they were not
going to turn up to work and they were
expected to turn up to work otherwise.
Further no one seriously expected the
valeters to provide a substitute.
Accordingly despite the contracts having
passed the scrutiny of HMRC and despite
having being agreed by the workers as to the
basis of their appointment it was held that
these workers were in fact employees and so
entitled to all the rights of an employee
including the right to claim unfair
dismissal. The Contractor, Autoclenz,
exercised sufficient control over the
workers, there was mutuality of obligation (ie
to provide work and to do the work) and
there was an obligation for the work to be
It is critical that you review your
relationship with so called casual workers,
consultants, self employed contractors to
ensure that you have assigned them the
correct status and, if not, put in place
measures to protect you going forwards.
Taylors Employment Team has significant
experience advising on such matters.
A recent case has confirmed that a
dismissal is only effective once
communicated and will not be the day any
letter dismissing is sent or the day any
such letter maybe deemed delivered.
Here the employee was sent home
following a disciplinary meeting and advised
that a letter would be sent confirming the
The Employer sent a dismissal letter on the
30th November by recorded delivery. The
letter was signed for, not by the employee
but someone on the employee’s behalf who had
then gone away for a few days and so did not
open the letter until 4th December.
As such time to bring an unfair dismissal
case did not start running until 4th
December, and not 30th November when the
letter was signed for. This can be critical
when determining if a claim for unfair
dismissal is presented within the strict 3
month time limit.
Taylors advice would be to verbally
communicate the decision to dismiss on the
day you send the decision letter. That way
time starts running immediately and gives
greater certainty on time limits.
A case is proceeding through the court
system which is challenging the
application of service related pay.
Initial thoughts that this case must be
based on age discrimination (which outlaws
service related benefits beyond 5 years
unless objectively justified) are misplaced.
The case in fact alleges that the
application of service related pay is a
breach of the Equal Pay Act 1970. A female
employee working for the Health and Safety
Executive has identified 3 male comparators
who are paid more remuneration partly
because of their longer service where pay
varied with length of service up to 10 years
service. The female argues that the service
related pay had a disparate impact on women
who tended to have lesser service due to
career breaks to care for family.
The recent decision was on a preliminary
point about whether or not it was necessary
for the employer to justify both the period
over which a length of service pay criterion
operates as well as the actual adoption of
the criterion – it was held that the
employer did and that the burden of proof to
show the criterion is appropriate shifted to
the employer once the employee had given
evidence raising serious doubts about its
appropriateness to achieve legitimate aims.
It however serves as a timely reminder to
review any service related benefits, in
particular pay, which may be in breach of
not only age discrimination legislation but
also in breach of the Equal Pay Act and the
Sex Discrimination Act.
Some may recall the case of Margaret
Haywood, the nurse who secretly filmed the
appalling care given to elderly patients at
the Royal Sussex Hospital and screened on
The nurse was struck off the register on
grounds she had breached confidentiality.
However the High Court overturned the
decision to strike her off the register and
ordered reinstatement. The court did however
conclude a 12 month caution was appropriate.
Cases of whistle blowing are rarely this
high profile and it is often not always
clear when the employee is disclosing
information covered by the Public Interest
Disclosure Act 1998. Whilst certainly this
nurse has brought to the publics attention
appalling information about the care of
elderly staff by her employers which can
only be commended obtaining protection under
the whistle blowing is not straightforward
as various legal hurdles need to be overcome
to gain protection.
Remember protection under the whistle
blowing act can be gained by an employee
complaining that the employer is in breach
of a legal obligation (including their
contract of employment) and as such where
any complaint or grievance is received you
need to assess whether any points raised
might be covered by whistle blowing issues,
no matter how trivial they may seem!
1. I am in the process of making more
than 20 redundancies. If they are not all
from one site do I have to inform and
If you are making more than 20 redundant in
one “establishment” then the Trade Unions
and Labour Relations (Consolidation) Act
1992 (TULRCA) says that the consultation
period must be at least 30 days (90 days if
more than 100).
The issue is the meaning of the word
“establishment” and this is not defined in
any of the relevant legislation.
The European Court has said that it cannot
be left to individual member states to form
their own interpretation of establishment
but rather it should have a uniform
interpretation across all member states. A
recent Greek case came before the ECJ which
provided guidance on this issue.
It held that three separate production units
in three different locations of an
organisation with a head office were three
separate establishments. The ECJ went on and
gave some further guidance on this issue as
- An ‘establishment’ designates,
depending on the circumstances, the unit
to which the workers made redundant are
assigned to carry out their duties.
- The entity in question need not have
any legal, economic, financial,
administrative or technological
- Nor is it essential for the entity
in question to be endowed with a
management which can independently
effect collective redundancies.
- Nor must there be a geographical
separation from the other units and
facilities of the undertaking.
- Therefore an ‘establishment’ may
consist of a distinct entity, having a
certain degree of permanence and
stability, which is assigned to perform
one or more given tasks and which has a
workforce, technical means and a certain
organizational structure allowing for
the accomplishment of those tasks.
This still does not provide comprehensive
guidance on the meaning of establishment.
Each case will be turn on its own facts.
What you should do is to bear these
guidelines in mind when contemplating
redundancies of more than 20 but if you are
unsure then seek legal advice.
2. Can an employee refuse to come into work
for fear of contracting swine flu?
Strictly speaking if the employee is fit to
attend work then they should attend work
unless you authorise the absence. A failure
to attend work can be a disciplinary offence
and the employee should be advised of this.
However before you proceed with disciplinary
action speak to the employee to try and
understand the underlying cause of their
fears so that you can perhaps allay those
concerns or consider alternatives ways of
working for a temporary period.
It would be sensible to put in place a swine
flu policy which sets out guidance to
employees about swine flu generally and
where they can further information but also
sets out the Company’s policy on matter such
as those who contract the illness and self
certification, those who are in contact with
those with the illness, those who are in
high risk categories and what steps can be
taken to reduce the risk of infection etc.
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