Employment Law Monday Update – 21 October

Employment Law Monday Update – 21 October

Anyone who works in HR will know how quickly changes come about in Employment Law, and how hard it is to keep up with them all. With that in mind, the Michelmores Employment Team has created a weekly newsletter that encapsulates the most significant Employment Law developments of the last 7 days. The Weekly Update will be sent out around midday on Monday, so be sure to keep an eye out for it!

The Need for a Fair and Proper Redundancy Procedure

Contract Bottling Ltd v Cave and another [UKEAT/0100/14]


An employee may be successful in an unfair dismissal claim if they can show that their employer failed to implement a proper procedure in dismissing them. However, any compensation awarded to the employee may be reduced where it is likely that, even if a proper procedure had been followed, the employee would have been dismissed anyway. This is called a ‘Polkey’ reduction, after the seminal case on this principle.

The recent case of Contract Bottling Ltd clarifies the approach the Employment Tribunal must take when considering applying a Polkey reduction.

The Facts

Contract Bottling Ltd was bought out of administration and needed to implement some changes to reduce overhead costs. Ten staff members were selected for potential redundancy. The staff in the pool came from a variety of different departments and held a range of skills. Four were made redundant, using a single redundancy selection matrix with the intention of dismissing the four lowest scoring employees.

Two of the dismissed employees made a claim for unfair dismissal which was successful. However, when the tribunal came to determining whether a Polkey reduction was applicable, it found that there was insufficient evidence to suggest that, had the company applied a fair redundancy process, the claimants would have been dismissed nonetheless. This decision was appealed.

The Judgment

The Employment Appeal Tribunal (‘EAT’) overturned the original decision, stating that there was in fact the possibility of dismissal as a consequence of reducing overhead costs to the company.

The court held that a Polkey reduction must be justified by the chance of a future fair dismissal occurring, and not justified by the reasons why the dismissal was unfair.

What this means for employers

The case is useful in clarifying the method which Tribunals will use to consider whether a Polkey reduction is appropriate. However, not only to avoid claims for unfair dismissal arising in the first place but also to minimise the compensation available if an unfair dismissal claim is successful, employers should ensure that a fair and proper redundancy regime is in place, and should carefully consider the criteria for making an employee redundant.

Disability Discrimination: Reasonable Adjustments

General Dynamics Information Technology Ltd v Carranza [EAT, 2014]

The Facts

The Claimant suffered with stomach adhesions. After 206 days of sickness absence in three years (caused mainly by his disability), he was given a final written warning.

In December 2012, the Claimant was dismissed, following a further three months of sickness which was not related to his disability.

The Claimant brought Employment Tribunal claims of unfair dismissal and disability discrimination.

The Employment Tribunal found that the Claimant’s employer should have disregarded the final written warning and, in not doing so, there had been a failure to make reasonable adjustments.

However, the Claimant appealed to the EAT, which overturned the first instance decision. The EAT held that the Employment Tribunal had failed to identify a ‘step’ which the employer could have taken. It doubted that mentally disregarding a warning would be such a step, and also rejected the argument that such an adjustment would have been reasonable. It was stated that ‘it would be remarkable and…regrettable if an employer, by showing leniency to a disabled person…in an absence management procedure, thereby became required by law to disregard all disability related absence prior to that time whatever the impact on the business by doing so.’

Employers are often more lenient with disabled employees when managing sickness absence. However, if being lenient once created an obligation to always be lenient, this could have many adverse consequences for the employer. An employer’s leniency on one or two occasions does not create a legal right for a disabled employee to have all disability related absence discounted.

The EAT has made it clear that employers, where acting reasonably, can lawfully and fairly dismiss disabled employees.

Legislation Update

Shared Parental Leave – the Implications for Employers

Acas has published a new guide to assist employers in understanding shared parental leave. It explains how the process of shared parental leave will work and the steps that need to be taken.

The Shared Parental Leave Regulations are currently before Parliament and are due to come into force on 1 December 2014. Eligible parents will be able to use the new shared leave rights where their baby is due to be born on or after 5 April 2015 (or for children placed for adoption on or after that date).

ICO Publishes Updated Code of Practice for CCTV and Surveillance Cameras

The new Code of Practice provides best practice advice for those involved in operating CCTV and surveillance cameras that view or record individuals’ information, and how to comply with the Data Protection Act 1998. It also includes an expanded section on handling and responding to data subject access requests.

Employers should check that their existing policies comply with the new code. If you require assistance with checking or amending your existing policies, please contact a member of the editorial team below.