Employers Update - September 2011
Welcome to the latest edition
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
edition, we take a look at
the latest Employment
Tribunal statistics and
further case law
developments on variations
to terms and conditions of
adjustments and holiday pay.
have any queries relating to
any matters within Employ or
wish to discuss any
HR/Employment matter feel
free to contact the
Oliver McCann - Partner and
Head of Employment
- Employment Solicitor
Tel: 0844 8000 263
In This Edition:
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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.
The Employment Tribunal Statistics are
out for the year April 2010 to end of March
2011. The key findings are:
- 8% fall in the number of claims in
comparison with the previous year but
still 44% higher than the year 2008/09.
- 28% of claims related to Unfair
Dismissal, Breach of contract and
- Number of working time directive
claims increased from 95,200 to 114,000+
- The number of discrimination claims
is more or less static, except for Age
Discrimination which saw an increase of
30% (perhaps linked to redundancy
- Maximum unfair dismissal award was
£181,754 with the average award being
- Highest awards in other areas – sex
discrimination £289,167, disability
- 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
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
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
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
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
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
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.
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.
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
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
However the question of what is to be
included in holiday pay has now been
referred back the national courts to decide.
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
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
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.
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
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.
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