What do employers need to know and do this November?

Written on 24 Nov 2014

Please find below our key points arising from recent developments for employers this November.

Holiday pay – take action now

The hot topic of the month has been the Employment Appeal Tribunal (“EAT”)’s decision in the holiday pay cases (see here). Whilst the decision potentially limits the scope of historic claims, it will be critical for employers impacted to take steps now to change their holiday pay practices. Our holiday pay tool can be used to identify the risk for your business. Your usual OC Contact will be happy to guide you through this and advise you accordingly.

Please also be aware that this decision may have wider implications e.g. on your pension provision (see here) and on any contractual provisions you agree on liabilities on an acquisition or outsourcing. Again, we are happy to discuss any specific concerns you may have in this respect further.

Shared parental leave – time to prepare

1 December sees the new laws on shared parental leave come into force. The new regime applies to babies who are due on or after 5 April 2015 and any child adopted on or after that date. You should ensure you understand this new regime as you may start receiving queries imminently as well as needing to deal with requests from parents whose child is born prematurely. Please see here for our key issues for businesses. Please also look out for our alerts on our employment blog (here) and @OCemploymentlaw which will look at the key points on specific issues employers need to understand and deal with. ACAS has also published good practice guidance for employers available here. Again, your usual OC Contact will be happy to talk you through preparing for this new right and provide you with our getting ready checklist and charts.

Please be aware that the new right to shared parental leave is distinct from the existing right to unpaid parental leave which enables parents of children under 5 (or disabled children under 18) to take 4 weeks unpaid leave each year up to a maximum of 18 weeks in total. However, the Government has issued new regulations due to come into force on 5 April 2015 extending this right to all children under 18.

Are you getting to grips with pre-claim conciliation? Watch out for time limits and error

Pre-claim conciliation became mandatory from 6 May 2014. Figures released by ACAS last week show that uptake has been high with 37,404 notifications but that 58% of these notifications end up without any further action being taken or resolution, lending support to the continuing concerns over the impact of Employment Tribunal (“ET”) fees on access to justice. Indeed, this month saw UNISON back in the High Court on this very issue.

However, the rules on pre-claim conciliation bring with them also scope for procedural error. We have seen in our practice situations where claims are proceeding in the ET despite the fact that the pre-claim conciliation rules do not appear to have been met.  This month sees a reported ET claim on one procedural issue where a claimant wrongly thought she was exempt from pre-claim conciliation. The ET permitted the claimant to rectify her error by subsequently carrying out pre-claim conciliation on the basis that the initial claim had never been validly presented. However, the knock on effect for the claimant was that whilst her ET1 was then treated as presented on the date that the defect was rectified, potentially her claim might now be out of time (subject to an ET exercising its discretion to extend time as appropriate).

This case, together with our experience, suggests that ET staff are processing rather than considering a claimant’s claim form and leaving it for the Respondent to raise any issues that the process has not been met. Care should therefore be taken on receipt of a claim to check that the early conciliation requirements are in order (Thomas v Nationwide Building Society (ET))

Do you know when the duty to offer a woman on maternity leave, but who is “at risk” of redundancy, suitable alternative employment arises?

The EAT has confirmed that this preferential right for a woman on maternity leave to be offered suitable alternative employment ahead of other “at risk” employees kicks in when the employer first becomes aware that the employee’s role is redundant or potentially redundant – this is itself arguably uncertain but in practice will usually be when an “at risk” letter is sent to the employee. A woman on maternity leave should not be required to engage in any form of selection process with other “at risk” employees who do not benefit from this preferential right, even though such a process may show that she is not in fact the best person for the job. Further, it does not matter that the suitable alternative role is arguably not a “vacancy” in the wider sense being available only to a limited number of employees. The Council here was therefore wrong when on a restructuring it offered a role combining two former roles to the employee not on maternity leave, on the basis that the preferential duty to offer suitable alternative employment only applied to the woman on maternity leave once she had not been selected for the restructured role, her redundancy had been confirmed and she was placed in the redeployment pool. (Sefton Borough Council v Wainwright (EAT))

What is the position on redeploying agency workers caught up in an employer’s redundancy exercise?

An ET has confirmed that agency workers are only entitled to a limited right to be informed about vacancies in a hirer’s organisation. On a restructuring they do not have the same opportunity as permanent staff in terms of being eligible for vacancies. Consequently, Mr C who had worked at the Ministry of Defence for eight years as an agency worker only had the right to know that his role was being advertised as part of a substantial restructuring exercise. Whilst permanent staff had the right to apply for that role under stages one to three of the MoD’s recruitment process, Mr C only had the right to apply for it were it still to be available at stage four (when the process was opened up to external applicants). Mr C’s job was in fact filled at stage one.There are indications that this decision is being appealed. (Coles v Ministry of Defence (ET))

Dismissing under a capability procedure for ill health. Is an employer under a duty to make reasonable adjustments or is there potential discrimination arising from a disability?

The short answer is that such a dismissal may be in breach of both the duty to make reasonable adjustments for a disabled person to alleviate a disadvantage and discrimination arising from a disability. However, as always, much will depend on the facts. However, helpfully the EAT has indicated that dismissal under a capability procedure should most rightly be considered as potential discrimination arising from a disability (which may be objectively justified by an employer) rather than a failure on the part of an employer to make reasonable adjustments.
Here, an employee claimed that the employer had failed in its duty to make reasonable adjustments where he had received a final written warning for repeated absences (largely due to his disability) and he was dismissed following a subsequent absence (unrelated to his disability). The provision, criterion or practice placing him at a disadvantage was the requirement of “consistent attendance at work” (rather than the employer’s absence management procedure).

The EAT held that the employer was not in breach of the duty to make reasonable adjustments by failing to ignore the final written warning when deciding whether to dismiss the employee for the later absence – this mental process of disregarding a warning was not the kind of “step” contemplated by the legislation. Further the fact that the employer had shown leniency in the past did not mean it was legally bound to do so again, regardless of the business impact.
This decision is helpful for employers dealing with employees who have extended periods of absence due to ill health, however, each case must be looked at on its facts and before any dismissal decision is taken an employer must explore the extent to which any adjustments can be made to reduce the ill health absence and what the prognosis is going forward. (General Dynamics Information Technology Ltd v Carranza (EAT))

What would you do if an employee walked out in breach?

Sunrise Brokers LLP decided that it would not accept the employee’s repudiatory breach but also, given that the employee was unwilling to work in circumstances where he could afford not to, the employer did not pay him. Despite this, the Court of Appeal (“CA”) held that the employer was entitled to an injunction to prevent the employee going to work for a competitor. Whilst each case will turn on its facts, this case demonstrates that it is key for an employer to take legal advice when faced with such a situation – it could easily have inadvertently accepted the employee’s breach or decided to place him on garden leave on full pay. See our alert here. We understand that this decision may be being appealed. (Sunrise Brokers LLP v Rodgers (CA))

Make sure you comply with obligation to provide employee liability information to a transferee at least 28 days before the sale or a business or outsourcing

An ET has ordered a transferor (in insolvency) to pay compensation to a transferee of £65,000 (131 employees at £500 each) for failure to provide employee liability information in accordance with TUPE. Here the transferor failed to inform the transferee that of its reasonable belief that £400,000 of salaries would be unpaid at the date of the transfer. The ET bore in mind that compensation awarded against the transferor must be just and equitable looking at the loss sustained as a result of the transferor’s failure to provide the necessary information and the limits on the transferee’s ability to mitigate its loss. However, the ET was not constrained by the actual loss sustained by the transferee in dealing with the transferee’s non-disclosure finding that it was not just and equitable to award less than £65,000. The transferee had incurred substantial management, banking and legal costs in dealing with the issue. 

In this case, due to the conditions that the transferee had tendered on it did not have an indemnity to cover the cost of the unpaid pre-transfer salaries. However, businesses in the position of a transferee would obviously be sensible where possible to include such protection into any acquisition and commercial contracts, along with a specific provision covering breach of the employee liability information provisions. (Eville & Jones (UK) Ltd v Grants Veterinary Services Ltd (in liquidation) (ET))

Do you use enforced subject access requests in your recruitment procedures? And are you up to date on best practice for CCTV and surveillance?

From 1 December, it will become a criminal offence to require an enforced subject access request i.e. where an employer (or prospective employer) compels an individual to make a subject access request under the Data Protection Act 1998 and then provide them with a response. An employer may face an unlimited fine in the Crown Court for doing so. The use of subject access requests has been used by some employers as a loophole to obtain information on criminal convictions such as spent convictions under the Rehabilitation of Offenders Act 1975, where an employer is not entitled to apply for such information itself. This new law will not however prevent employers from carrying out checks with the Disclosure and Barring Service when recruiting to occupations covered by the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975.

The Information Commissioner’s office has also published an updated code of practice for CCTV and other types of surveillance cameras (here). The Code provides best practice advice for those operating CCTV and surveillance cameras on how to comply with the DPA 1998. We shall be happy to review any existing policy you have in this respect for compliance with the Code.

Other developments

Last week saw the Woolworths case on the meaning of “establishment” for collective redundancy purposes heard by the European Court of Justice. We now await the Advocate General’s opinion (which is non-binding) and the Court’s decision. See our earlier alert here.

Are you a living wage employer? Pressure is mounting on businesses to adopt the living wage and which for businesses who regularly tender for services, may have wider implications on who they can or are prepared to contract with. On 3 November 2014, the Living Wage Foundation announced the new Living Wage rate for the UK, which has been set at £7.85 an hour. This is an increase of 2.6% on the 2013 rate and 21% higher than the current NMW rate for adults which is £6.50 an hour. The London Living Wage rate has been set at £9.15 an hour. According to the Foundation there are currently over 1,000 Living Wage accredited organisations in the UK employing 35,000 individuals.

Please do not hesitate to contact your usual OC Contact if you have any queries in relation to any of the matters set out above.