Welcome to the November 2011 newsletter. There may be big changes ahead. According to a report by venture capitalist Adrian Beecroft leaked on 25 October, the Government has been advised to alter unfair dismissal rules to enable employers to more easily dismiss unproductive staff and workers who ”coast along”. The report apparently recommends a “Compensated No Fault Dismissal” where an employee could simply be dismissed with basic redundancy pay and notice - presumably without further explanation or comeback.
In addition, in discussions about the major package of employment law to be introduced Nick Clegg has backed the idea of “protected conversations” as a means to resolve disputes informally. The idea is that employers will be able to challenge unproductive staff or advise them to consider retirement without worrying about the concern of comments becoming grounds for a tribunal claim.
Another report has concluded that extended drinking hours have had a direct impact on workplace absence; but not in a good way. A comparison of work absence carried out through the UK Labour Force Survey found that absence rates rose by 1% after more pubs and bars could legally stay open past 11pm. That is an estimated 5,349,617 hours or 667,702 sick days. Perhaps this can be explained in part by the results of separate research carried out by Aviva, which reveals that almost one in ten employees polled said they needed to drink to unwind at the end of the day. One is seven said that said that their diet has suffered as they have no time to cook. Of course, this may be because they are down at the pub.
The Bribery Act has claimed its first conviction but perhaps surprisingly, this was not about a corporate entity accused of failing to take the adequate procedures required by the Act, but about a magistrates court clerk. Mr Patel admitted bribery and misconduct after taking a £500 bribe to avoid putting details of a traffic summons on the court database. He now faces a maximum of ten years in prison.
On a grander scale, in a current German bribery trial centering around the motorsports world, Gerhard Gribkowsky, the former Bayerische Landesbank manager, is accused of accepting bribes as part of CVC Capital Partners Ltd's 2005 purchase of BayernLB's 47% stake in Formula One. Bernie Eccleston will be giving evidence and the case will no doubt be watched with interest by prosecutors in the UK. Any British national who is alleged to have committed bribery, regardless of where in the world, could be investigated and prosecuted by the SFO in the UK.
Professional bodies which can discipline their own members may need to revisit their internal procedures after the Court of Appeal's judicial review decision in R v ILEX Appeals Tribunal. An ILEX student was disciplined for bringing the organisation into disrepute and when the disciplinary panel found against her, she appealed and lost. The appeal panel included the Vice President of ILEX. The question was whether the VP's presence meant that the composition of the appeal panel resulted in apparent bias or in ILEX being judge in its own case. The Court of Appeal agreed that a judge should not sit where there was a real possibility that, looking at it objectively, the tribunal could be biased. This meant that the VP was disqualified from participating in the appeal.
The complex issue of employment status has been considered again, this time in Johnson-Caswell v MJB (Partnership) Ltd. The issue was whether the training and supervision of a worker necessary to comply with FSA regulations results in a degree of control sufficient to mean there is an employment relationship. Mr JC's contract as an independent financial advisor stated that he was self employed and he also had discretion about the way he worked and how he was paid. Those factors still did not outweigh the “control” aspect of employment status, which in this case was held to be significant because of the need to comply with FSA requirements. This could have significant implications on FSA and other regulated sectors where there is a need for businesses to ensure compliance.
Mrs Okuoimose, a Nigerian, worked for City Facilities Management (CFM). Because she was married to an EEA national she had a right of residence but when a Home Office stamp in her passport ran out she was suspended without pay. She was dismissed some weeks later on the grounds that it would be illegal to continue to employ her. However on the same day as the dismissal, Mrs Okuoimose provided CFM with a letter from the Border Agency confirming that she could work in the UK. CFM re-instated her and she made a claim for unlawful deductions of wages for the suspension period.
The tribunal dismissed her claim, concluding that the contract was illegal during that period because Mrs Okuoimose had failed to provide proof of her entitlement to work. The EAT disagreed. If the right to residence exists (in this case because Mrs Okuoimose was a family member of an EEA national) then the expiry of a passport stamp will not alter that fact and will not make continued employment illegal. It was irrelevant whether CFM thought it was behaving reasonably or that it was worried about penalties.
Other employers who have not faired well recently include Orchard Farm in Dorset. Former employee Mr Hashman, who had won the right in October 2010 to have his anti-hunting beliefs protected under the Religion and Belief Regulations, has now won his claim for unfair dismissal When Mr Hashman was told his services would no longer be required, he believed this was directly related to the fact he had been a witness at two hunting prosecutions, as written about on his internet blog.
Also, Poundland has had to review its dress code after a member of staff walked out after being told she should remove a remembrance poppy. She subsequently received support from customers who launched a Facebook campaign to boycott Poundland shops in protest. The company has now apologised and will allow employees to use their own discretion in wearing poppies.
In Cordell v Foreign Commonwealth Office a deaf employee was supported by a team of lip speakers in her role in Warsaw. An offer of another role in Kazakhstan was withdrawn after an assessment of the costs of providing a similar team there. Not only were there real practical difficulties in arranging lip speakers in Kazakhstan but also the cost of provision would amount to five times Ms Cordell's salary and indeed was nearly as high as the costs of running the whole embassy.
She claimed disability discrimination but this was rejected by the EAT. While cost is not a decisive issue in deciding whether an adjustment is reasonable, this does not mean that it is not relevant. A tribunal can consider a range of issues, such as the size of any budget, what the employer has spent in comparable situations and what other employers are prepared to spend. The tribunal was entitled to take into account the FCO's budget for reasonable adjustments and in this context, the adjustment sought was not reasonable.
If an employer pleads the wrong reason for dismissal on the ET3, can the tribunal depart from this and make up its own mind about what the reason for dismissal may be? In Screene v Seatwave, the reason for the summary dismissal of a financial controller who had failed to spot a fraud of £1.7 million was clearly misconduct but on the ET3 the company stated the reason to be “incapability”.
Mr Screene argued that the tribunal should not have departed from the reason actually put forward by the company, but the EAT disagreed. As long as the claimant has every opportunity to address the “change of tack” and is not prejudiced by it in any way, a tribunal can make up its own mind as to the real reason.
We know that where either an employer or employee uses unambiguous words of dismissal or resignation, they are deemed to have dismissed or resigned unless “special circumstances” apply, such as words said in the heat of an argument. In CF Capital Plc v Willoughby, the employer and Mrs Willoughby were involved in negotiations about a transfer of her status from employment to self-employed work. She asked for more information before making up her mind but before it was received, her manager wrote to confirm her move to self employed status and stated that the termination of her employment contract would become effective from a certain date. When she protested, he tried to retrieve the position and said that he had misunderstood the outcome of the negotiations.
Were these “special circumstances”? No, said the Court of Appeal. The essence of the special circumstances exception is that the person using the unambiguous words must be given the chance to “cool off” and say that he did not mean what was said, before the recipient acts on them. The exception does not simply provide an opportunity for a retraction or withdrawal of those words.
In Wray v JW Lees & Co, Ms Wray's claim concerned the question of whether all the hours she was required to stay on the premises should be taken into account in assessing whether she had been paid the National Minimum Wage. She was a temporary pub manager who was provided with free accommodation and she was required to sleep in that accommodation every night as a security and preventative measure. Her claim was dismissed. It came down to whether or not a worker is required to do any work during the time she sleeps on the premises. If not, those hours will not be treated as salaried hours. Even if she did have to call the emergency services had there been a fire or break-in, the degree of responsibility was minimal. It would be a different story if, for example, she were a night-sleeper in a residential care home or a hotel manager.
Mrs Wallace wanted to open a window after she had been to the toilet at her workplace at Glasgow City Council, but unfortunately found that she was unable to reach the window. Enterprisingly, she stood on the rim of the bowl to do so; but it then toppled over and so did she, injuring her foot. Should she have left the window closed or gone to the janitor's office for a pole? No, said the Court of Session. It was “wholly foreseeable that a person would be anxious to be in a position to ventilate the toilet after she had used it”. No risk assessment had been carried out in relation to the use of the toilet bowl for opening the window and the council was ordered to pay Mrs Wallace £15,900 in damages. This was, however, reduced by 50% to reflect the contribution of her actions to the accident.
In Dr Lim v Royal Wolverhampton Hospitals NHS Trust, the High Court held that there is an implied term in contracts of employment that disciplinary processes be conducted fairly and without undue delay. Dr Lim faced capability and conduct hearings. As part of the conduct issues, the trust raised allegations of conduct some three years after the events in question had taken place. The Court held that there was an implied term requiring that disciplinary processes be conducted fairly and without undue delay (although it also held that the Trust had not acted in breach of this).
In relation to the capability hearing, Dr Lim's contract required a reference to NCAS for an assessment to determine whether any of the deficiencies in his practise could be addressed through an educational action plan. The trust had not made the referral and so had had no chance to consider whether the action plan could succeed. Instead, the trust had proceeded straight to the capability process and so had acted in breach of contract.
Will pre-trial publicity affect the likelihood of an award of costs being made against a claimant in the EAT? Yes, according to Iteshi v OFWAT. The Claimant had sent a letter to his MP, copied to the EAT, in which he made unsubstantiated allegations of fraud and conspiracy with the Government between judges. This was described as part of a “disgraceful” campaign to expose and discredit the employment tribunals and EAT and was an abuse of process. Mr Iteshi was also heavily criticized on the grounds that his claim was misconceived and unreasonably conducted.
Even though the Respondent had not issued a costs warning in advance, its skeleton argument was said to be sufficient warning of the way in which matters could proceed, given that the Claimant had a legal background. Costs of £750 were awarded.
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