The recent case of Whitham v Capita Insurance Services has held that stopping permanent health insurance benefits once an employee reached the age of 55 amounted to age discrimination. Although only a first instance decision, it is nonetheless likely to be of interest to employers.
If you ever come across TUPE in your organisation, this article is well worth a read.
The government’s proposed changes to TUPE are now likely to be published next month, with a view to them coming into force in January 2014.
The proposed changes are expected to include:-
The High Court has held that a letter from an employer’s solicitors to an employee setting out a proposed settlement sum, and a subsequent letter of acceptance from the employee, constituted a binding agreement settling the claim and a counterclaim and setting out the terms of the settlement. The letter should have included the words “subject to contract” if the employer intended further negotiations to follow before a binding agreement was found.
This recent case illustrates the importance of using the correct terminology throughout negotiations to ensure that the parties are not bound by the terms of a deal until the documentation is finalised.
If you are planning to issue any Claim Forms before 29 July 2013, in order to avoid paying Tribunal fees, the Ministry of Justice has announced the latest time it will accept online submission of Claim Forms is 4pm on Friday, 26th July 2013. You will not be able to issue claims online over the weekend.
A recent Employment Appeal Tribunal decision has resulted in a fundamental change to the law on collective consultation, making the road ahead one that will have to be carefully navigated by employers.
The case of USDAW v WW Realisation Ltd involved the collapse of high street store Woolworths, where trade union USDAW sought protective awards for a failure to consult. Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”) provides that employers only have a duty to consult employee representatives where 20 or more redundancies are proposed at one ‘establishment’ in a 90 day period. The Employment Tribunal ruled, in line with section 188, that each Woolworths store was a separate ‘establishment’ and so claims relating to stores with less than 20 staff failed. As a result, those employees in bigger stores were given protective awards which totalled £70 million, whilst employees in smaller stores of under 20 staff received nothing.
USDAW appealed the decision to the EAT, where a landmark decision was handed down. The EAT ruled that the duty to consult would apply to all the redundancies made by Woolworths, regardless of whether employees were based at stores with more or less than 20 staff. The judge declared that the ‘at one establishment’ rule contained in TULRCA was incompatible with the corresponding EU Directive. The EU Directive states that an employer has a duty to consult where 20 or more redundancies by the same employer are made within any 90 day period, ‘whatever the number of workers in the establishments in question’. Therefore, the ‘at one establishment’ rule in TULRCA had to be disregarded in order for UK legislation to properly reflect EU law.
It is unusual for a court to disregard the words of a statute in this way. However, having examined the Government’s consultation on the implementation of TULRCA, as well as the parliamentary debates surrounding the legislation, the EAT was satisfied that the ‘one establishment’ specification had not been mentioned and, therefore, it could not be regarded as integral to the policy of the legislation. The EAT was persuaded that parliament’s intention had been to correctly implement EU law.
The judgement in USDAW v WW Realisation Ltd will significantly affect large, multi-site organisations which have previously been able to use the ‘one establishment’ test to side-step the need for collective consultation. It seems that large employers such as these will need to ensure an increasingly ‘joined-up’ approach between their different sites. They will need to be aware of the number of redundancies being proposed across the organisation at any one time, in order to avoid inadvertently breaching the collective redundancy obligations.
Jo Swinson, the Parliamentary Under-Secretary of State for Employment Relations and Consumer Affairs, has issued a ministerial statement announcing, amongst other things, that the the cap on the unfair dismissal award will be changed to the lower of £74,200 or one year’s pay with effect from 29 July 2013.
We are all familiar with the concept of the duty to make reasonable adjustments for disabled employees. This duty extends to an employer’s recruitment process, where reasonable adjustments to the interview procedure should be made, where needed, for disabled candidates. However, employers still have the ultimate discretion to employ the best candidate for the job.
Perhaps rather frustratingly for employers, the position with regard to redeployment of existing disabled employees has, until now, been less straightforward. Cases over the last decade have stretched the duty to make reasonable adjustments to encompass the redeployment of a disabled employee to an alternative role, even when they are not the best candidate. This was the situation in the case of Archibald v Fife Council (2004), where the House of Lords held it was a reasonable adjustment to redeploy a road sweeper with an injured back to an alternative and less active role, even though she was not the most suitable candidate for that role.
Arguably, the duty on employers was made even more onerous by the Employment Appeals Tribunal in Chief Constable of South Yorkshire Police v Jelic (2010). A police constable was moved away from front line duty into a non-public facing role after he developed a severe anxiety disorder. Sometime later, this role became more outward facing and the constable was retired by the Force on medical grounds. However, the EAT ruled that reasonable adjustments had not been made by the Force, as it should have considered switching the constable’s role with that of a less public facing employee.
The recent case of Wade v Sheffield Hallam University (2013) provides some welcome clarification. Mrs Wade, who was a disabled employee, found that her role was being made redundant. She applied for an alternative role within the university and was subject to a competitive interview process. Unfortunately, she failed to reach the required standard in two core competencies and therefore did not secure the job. Mrs Wade subsequently brought claims of disability discrimination, alleging that the university should have made reasonable adjustments by not requiring her to undertake an interview. However, the Employment Tribunal did not agree and ruled that waiving the requirement for a competitive interview was not reasonable as it would result in the university appointing someone who was not suitable for the role.
Mrs Wade appealed to the EAT, citing the decision in Archibald v Fife Council, but the initial decision of the Employment Tribunal was upheld. The EAT commented that, whilst waiving a competitive interview process might be a reasonable adjustment, it would not be reasonable in every case.
The decision is useful for employers in that it shows the duty to make reasonable adjustments will not always exclude the right to choose the best candidate for the job. However, employers will undoubtedly still need to be careful in negotiating such situations and would be well advised to seek legal guidance on a case by case basis.
Do your employee reps have the required authority for collective redundancy consultation?
In a very important recent decision (Kelly v Hesley Group Limited) the Employment Appeal Tribunal had restated that the statutory collective redundancy consultation rules must be followed strictly. The rules cover more than juts normal redundancy consultation, since “redundancy” is very widely defined. The same principles apply to TUPE consultation, so this case is of some significance.
In Kelly, the employer used an existing Joint Consultative Committee (JCC) to consult about planned changes to employees’ contracts, to reduce working hours, freeze salaries and introduce lower overtime rates. However, as is often the case, the JCC constitution did not give the JCC any negotiating function. It also allowed the employer to co-opt additional representatives to the JCC to ensure that “everyone has their voice heard”. Therefore it was found not to be an appropriate body for collective statutory consultation.
In the light of this case it is clear that employers must ensure that employee reps have a specific mandate for the required consultation/negotiation. Also that the burden of proving that authority is on the employer. Further, it is not enough to provide an “opportunity” for consultation. On the contrary the employer must proactively raise, and discuss, the key statutory issues.
All non-unionised businesses should therefore review the constitution of whatever collective consultation forum (if any) that they have in place, to check that it meets these strict, requirements. Otherwise they risk a hefty financial penalty, in the form of a “protective award” (of up to 13 weeks’ pay per affected employee) for breach of the statutory requirements. They also risk any imposed contractual changes, albeit agreed with their collective employee forum, being set aside. This would, for example, give individual employees good potential claims for unauthorised wage deductions, if their hours of work and/or pay have been reduced, to which there may be no defence.
Many other employers simply do not recognise the need to have appropriate collective consultation mechanisms in place at all. Sometimes this is because they are a smaller business which prefers to simply inform and consult with their whole workforce staff direct. However, that is currently not permitted, and although the Government are planning to give this right to micro businesses (of probably up to 10 employees), any larger employers will continue to be exposed if they have not put in place a properly authorised consultation body, with a clear mandate to deal not only with collective redundancies, and wider restructuring, any statutory TUPE consultation (eg if contracting services, in or out) and/or any workforce agreements under, (eg the Working Time Regulations).
Since such bodies take time to “bed in”, and build trust and confidence between the management and employee reps, it is important to plan ahead, and not wait to introduce just before having to consult. Top level management interest, and buy-in, plus good joint rep training, and a clear constitution, are key elements of a successful, and helpful, forum. Anything half-hearted, and reactive, is unlikely to be effective and can even be counter-productive.
The DWP has recently published some guidance on how to get the most out of fit notes. There is a general consensus amongst employers that fit notes have not assisted with managing sickness absence to the extent that most people had hoped.
Unfortunately, the guidance itself will not stop GPs from simply signing employees off work without giving the necessary details, but it might help employers understand how fit notes can (and should) be used to reduce absence levels.