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Oliver McCannn   


Employers Update - September 2011

Welcome to the latest edition of Employ!

It is with great pleasure that we welcome Leanne Eddleston , award winning solicitor, who has joined the Employment Team from Eversheds, in line with Taylors philosophy of bringing a city service to your doorstep without the city rates.

In this edition, we take a look at the latest Employment Tribunal statistics and further case law developments on variations to terms and conditions of employment, reasonable adjustments and holiday pay.

If you have any queries relating to any matters within Employ or wish to discuss any HR/Employment matter feel free to contact the employment team.

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

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


In This Edition:

Employ! Email Updates

Employ! is Taylors FREE monthly employment law newsletter which keeps busy HR professionals up to date with developments in the fast-moving world of work. Sign up now to have Employ! sent to you via email each month.

In effect from 1st October!

It is that time of year again so below are a list of what changes with effect 1st October:

1. The Agency Worker Regulations 2010 come into force – bringing equality of treatment for Agency Workers. From day 1 agency workers have the right to access the same facilities and amenities and access to information on job vacancies as they would have been if they had been directly employed and from week 12 the same entitlement to basic terms and conditions of employment, including pay! Contact the Employment Team if you use Agency Workers but have not yet carried out an impact assessment of the changes that will follow.

2. National Minimum Wage increase – Main rate rises from £5.93 to £6.08 per hour, with the development rate from £4.92 to £4.98, young workers from £3.64 to £3.68 and apprentice rate £2.50 to £2.60.

Employment Tribunal Statistics

The Employment Tribunal Statistics are out for the year April 2010 to end of March 2011. The key findings are:


  1. 8% fall in the number of claims in comparison with the previous year but still 44% higher than the year 2008/09.
  2. 28% of claims related to Unfair Dismissal, Breach of contract and redundancy.
  3. Number of working time directive claims increased from 95,200 to 114,000+
  4. The number of discrimination claims is more or less static, except for Age Discrimination which saw an increase of 30% (perhaps linked to redundancy selection).
  5. Maximum unfair dismissal award was £181,754 with the average award being £8924.
  6. Highest awards in other areas – sex discrimination £289,167, disability discrimination £181,000.
  7. Highest costs award was £83,000 with average costs award being £2830 – the number of cases where costs are awarded is still very small.

What do you need to know?
The reality is that litigation is now a way of life and employees, more aware of their rights than ever before, have little hesitation to litigate particularly when they struggle to find alternative employment.

You can protect your business from the cost of defending such claims and compensatory awards. Taylors Employer Protection Scheme gives you complete peace of mind and balance sheet protection. For more information go to our website at http://www.taylors.co.uk/employer-protection-scheme.htm

Enforcing changes to terms and conditions of employment!

What do you do when you need to change your organisational structure or operations which require some, or all, employees to accept variations to their contracts of employment?

Over recent years this has been one of the key issues for employers to combat the impact of the recession on their business.

The key is to always try to seek agreement with employment through individual and collective consultation. That is a must! However, if negotiations fail, then an employer has a number of different tactical options. By far the safest is to consider termination of the existing contract of employment and offer re-engagement on the new contract.

This is what TNT did after negotiations failed with their employees (Which included an offer to buy out their existing terms). Have reached an impasse, TNT terminated the contracts of its loading bay operatives after they refused to agree to changes which would result in their “end of sort” bonus being removed. TNT had warned the affected staff this is what would occur if the refused to agree to the changes or accept the offer to buy out the terms.

The employees complained that the dismissals were unfair, with one of the points being that it was unreasonable not to offer re-engagement which included the buy out option. The EAT upheld the Employment Tribunals decision that the dismissal were fair.

What do you need to know?

  • The reason for dismissal was “some other substantial reason”
  • The employer had acted fairly and reasonably by balancing the advantages to itself with impact on the employees, which included consultation
  • It was not reasonable to include the buy out option with the offer of re-engagement as the employer would not have gained the advantage such a buy out would have produced if accepted as part of compromise agreement

Silence from AWOL employee does not mean resignation!

A common practice adopted by employers dealing with AWOL employees is to treat them as having resigned if they fail to make contact by a certain date.

What do you need to know?
A recent case however highlights the danger of this practice. The EAT confirmed there is no such concept as “self dismissal”. To terminate an employment contract there has to be effective communication of that fact from one party to the other. In this case, the letter sent by recorded delivery to the employee was never received as he had moved house and the Employer notified that the employee had not collected the letter.

It’s not about the quality of the adjustment!

A recent case has suggested that it is not necessary for an adjustment to have a good or real prospect of alleviating the disadvantage suffered by a disabled employee in order to be "reasonable".

What do you need to know?
In this case the employee was placed at a substantial disadvantage by the requirement for him to work within the security department, because his disability, stress, was caused by that department. It would have been reasonable to place him on the redeployment register. It was not necessary to for an employment tribunal to find that there would have been a good prospect of a redeployment opportunity becoming available and the employee being well enough to work. As long as there is a “prospect” of that at the date of the decision then the adjustment maybe reasonable, even though the chance is lower!

On the face of it this case is not good news for businesses as it lowers the burden of proof for employees to argue what is a reasonable adjustment. However perhaps it makes life easier for you now as it removes the need to assess the prospect of any adjustment being successful in removing the disadvantage. If an adjustment is identified then you need to consider implementing that to see if it alleviates the disadvantage suffered, rather than trying to second guess whether it will work or not.

What should be included in holiday pay calculations?

Some British Airways pilots challenged the calculation of their holiday pay arguing that the calculations should not be limited to basic pay but include allowances as well. This matter was referred to the European Court of Justice which has found that generally allowances must be included in holiday pay where they relate to “any inconvenient aspect” intrinsic to the performance of the job. So in the pilots case a “flying allowance” should be included. In other sectors this would include unsocial hours allowances, shift allowances etc. Any allowances paid to cover ancillary costs would not fall within the calculation.

What do you need to know?
The judgement has clear social policy reasons – employees should not be discouraged from taking annual leave on the basis that it will affect their pay. If only basic salary is paid, excluding usual allowances, then employees would be worse off by taking annual leave.

You, as an employer, need to review your calculation of holiday pay and ensure that you are including within the holiday pay calculation all appropriate sums over basic pay. Applying the simple social policy aim is likely to result in you reaching the correct conclusion.

However the question of what is to be included in holiday pay has now been referred back the national courts to decide.

Overnight "lay over"

Two recent cases have confirmed that requiring a worker to stay overnight in a particular location does not constitute 'work' under the National Minimum Wage Regulations (“NMW”).

In the first case the claimant was a casual driver who taxied holiday makers to their point of departure. Occasionally, he was asked to stay overnight in Bed and Breakfasts or other accommodation with the purpose of being available to taxi customers the following morning.

B claimed that the pay he received for the nights he was required to stay at other locations (“lay-over”) was less than the minimum wage.

The EAT stated that only the NMW were relevant to B's claim for lay-over pay pointing out that there is a big difference between what is “work” under the NMW and what is work under the Working Time Regulations. The EAT concluded that under the NMW when a worker is provided facilities to sleep in time will only be treated as ”working time” when the worker is awake for the purposes of working. The Claimant was free to use his time during the lay over period as he saw fit.

In another case time spent by a pub manager sleeping overnight in a public house did not qualify as 'work' for the purposes of the NMW. During the time spent overnight at the premises the employee was not required to do any work and had no responsibilities to fulfill.

What do you need to know?
When calculating employees pay in order to fulfill the requirements under the NMW, a worker who sleeps at or near a place of work and is provided with suitable facilities for sleeping will only be permitted to count this time as work when the worker is awake for the purpose of working.

Your Questions Answered

Q. We have been informed inadvertently that one of our employees has been applying for alternative roles and attending interviews. We really need someone in his role, but now believe that he has no intention of staying with the business. If that is the case then we need to replace him as soon as possible. How should we proceed?

A. There is no law which prevents an employee from looking for alternative jobs whilst employed by another employer. Although this is a tricky situation, the act of looking to work elsewhere is in itself unlikely to be fair grounds for dismissal.

In addition, this will only be a valid disciplinary issue if the employee is looking for new jobs during work hours, for example in breach of the Company’s internet or email policies, or if it begins to affect the employee’s performance. In such situations, it may be appropriate to monitor the employee and implement the Company’s performance management or disciplinary processes. Be wary, however, of unfairly monitoring the employee to the extent that he could argue a breach of trust and confidence, which could lead to a constructive unfair dismissal claim.

Practically speaking, it would be worth an informal discussion with the employee to ascertain why he might be looking to leave the business. If you do want to keep him, you may be able to fix any issues and persuade him to stay.

With regards finding a replacement, the Company will have the opportunity to recruit during the employee’s notice period. Looking to replace the employee before he has handed in his notice may again give him cause to argue a breach of trust and confidence and could result in a Tribunal claim.

Q. An employee recently left the business under a cloud relating to misconduct, although she wasn’t dismissed – she went voluntarily. Her new employer has now approached us for a reference. How should we deal with this?

A. There is no obligation on an employer to provide a reference (unless you have agreed to do so under the employee’s contract of employment, which is unusual). But you should always bear in mind the potential impact of not providing a reference and the risks of providing a misleading reference or one which paints the employee in a bad light.

If you do provide a reference for an employee, then you are under a duty to take reasonable care to ensure that is true, accurate and fair. This means that the reference must not be misleading; if it is then the employee may be able to bring a claim for negligence in respect of any damage suffered as a result.

One question in your circumstances is whether or not it is appropriate to allude to the incidents of misconduct? It would be risky to do so unless you can show that you genuinely believed the employee to be guilty, that you had reasonable grounds to believe that she was guilty and that a full investigation was carried out.

You also owe a duty to the prospective employer not to provide a negligent reference upon which they may rely – in other words, in this situation, you should not imply that this employee was an exemplary member of staff when you do not believe this to be the case.

In these particular circumstances, given that the employee was not dismissed for the misconduct, it would be unwise to refer to the misconduct in the reference at all. Instead, the most sensible approach would be to limit the reference to short, factual details confirming the employee’s employment, the dates of employment and the employee’s job title / role. You should make it clear to the receiving employer that your Company only provides such short factual references.

Going forwards, the Company should consider adopting a clear reference policy confirming that it will only issue short factual references. This way it will be clear to both employees and employers seeking a reference what information the Company is willing to provide.

Copyright 2006 - 2011 Taylors Solicitors

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