Unfair Dismissal Compensation Increases

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Starting this year the date on which the maximum limit for the compensatory and basic awards changes will move from 1st February to 6th April.

The Increase Order has been laid before Parliament and on 6th April the maximum compensatory award will increase from £74,200 to £76,574 in line with inflation.

Retail Price Index linked annual increases began in 1999 when the maximum award was increased from £12,000 to £50,000. As an interesting reminder of how much inflation has eroded the value of our currency it has crept up year by year since then (with the exception of 2010 when the recession meant it reduced by £900).

The maximum amount for the statutory concept of a ‘weeks pay’ will also increase from £450 to £464 which means the maximum basic award / statutory redundancy pay will be £13,920.

So, for an employee who earns more than £76,574 per annum and has 20 years service during which they were aged 41 or over, the maximum total award will be a very considerable sum of £90,494.

For those who earn less than £76,574 and also have the most continuous service over age 41, the maximum total award will be their gross annual pay, plus £13,920.

These increases will only affect claims in which the date of termination is on or after 6th April 2014.

As always, it is important to take advice before beginning any dismissal process to ensure the dismissal is fair and will not trigger liability for compensation.

Right to be Accompanied – Constructive Dismissal for refusing employee’s choice of companion

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Section 10 Employment Relations Act 1999 entitles an employee to be accompanied to a disciplinary or grievance meeting by a work colleague or trade union official.

In Leeds Dental Team Ltd v Rose, Mr Rose was invited to a disciplinary meeting and duly requested to be accompanied by the practice’s principal. The Practice refused his request because they felt the principal would be ‘supportive’ of the Claimant’s position.

Mr Rose went off sick and later resigned claiming that he had been constructively dismissed. The Employment Appeal Tribunal held that the employer’s refusal to allow Mr Rose to be accompanied to the aborted disciplinary meeting was a breach of trust and confidence and upheld his claim.

Following Toal v GB Oils Ltd (which we summarised here), this case is a further reminder that an employee’s choice of companion can only rarely be safely resisted.

Right to be Accompanied – Who can accompany?

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Employees have a statutory right to be accompanied to disciplinary and grievance meetings (see section 10 Employment Relations Act 1999).   The right is engaged if the Employee ‘reasonably requests to be accompanied’.

The ACAS Code of Practice on Disciplinary and Grievance Procedures says that what is ‘reasonable’ will depend upon the circumstances of each individual case, and goes on to say that ‘it would not normally be reasonable for a worker to insist on being accompanied by a companion whose presence would prejudice the hearing…’.

So, if a worker reasonably requests to be accompanied, does the request for the particular companion have to be reasonable?

The Employment Appeal Tribunal decided in Toal v GB Oils Ltd that the request for a particular companion does not have to be reasonable.  In so doing the EAT rejected the ACAS guidance and found that the right as it related to any particular companion, was limited only to the categories set out in Section 10 (3) Employment Relations Act 1999 and not by an further consideration of reasonableness.

There are two things to note from this:

  1. Employers cannot refuse to allow an employee to be accompanied by a particular person provided that person falls within the categories in Section 10 (3), no matter how objectionable they may consider that person to be.
  2. ACAS guidance is trumped by a literal interpretation of the relevant Act of Parliament.

 

SOSR – Allegations of Sexual Abuse

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Where an employer forms a reasonable belief, based upon a reasonable investigation, that an employee is guilty of sexual abuse – particularly where his/her work involves access to vulnerable groups such as children – then it will be fair to dismiss for the potentially fair reason of conduct (see Section 98 (2) (b) Employment Rights Act 1996).

However, what happens when allegations are made against the employee and the employer cannot investigate those allegations?

An employer can dismiss fairly for a ‘substantial reason such as to justify the dismissal of an employee holding the position which the employee held’ (SOSR) under Section 98 (1) (b).

Does the fact of such a serious allegation against an employee who has access to vulnerable children amount to a substantial reason in these circumstances?

The answer, as is often the case, is that it depends upon the facts in each particular case. In the recently reported case of Z v A the Employment Appeal Tribunal held that the School in question had unfairly dismissed a caretaker against whom unsubstantiated allegations had been made.

There is no rule that the mere fact of an allegation of abuse will justify dismissal, despite considerations for the welfare of the pupils at the school and its reputation.

This decision sounds more surprising than it is when the facts of the case in question are understood, however, it serves as a further reminder that SOSR cannot be used as a convenient ‘catch all’ category for dismissals that do not fit with category of ‘conduct’ and where the dismissal lacks substantive and procedural fairness.

Knowledge of Disability

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Employers have a duty to make reasonable adjustments for disabled employees under Section 21 and Section 20 Equality Act 2010.

However, Section 15 provides that the Employer does not discriminate if he did not know, and could not reasonably be expected to know that the Employee is disabled.

So, what if the Employer seeks professional advice from an Occupational Health provider and is informed (incorrectly) that the Employee does not qualify as disabled within the meaning of the legislation? Does this mean that the employer ‘does not know and cannot reasonably be expected to know that the Employee is disabled’?

You would be forgiven for thinking that the Employer could rely upon the expert’s advice and safely conclude on this basis that the Employee is not disabled. However, the Court of Appeal in Gallop v Newport City Council has decided that although Employers should seek advice from appropriately qualified medical advisors, they nevertheless cannot rely upon what they are told and merely ‘rubber stamp’ the advice. The Employer must make its own factual judgment as to whether or not the Employee is disabled.

This places a most uncomfortable burden on Employers, who cannot even rely upon what qualified medical professionals tell them and have to decide upon disability themselves when the issue taxes a great many Employment Judges.

Employment Tribunal Fees – UNISON challenge fails

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From July 2013 individuals who wish to take Employment Tribunal claims have had to pay a fee. The fees ranged from £160 for a simple claim (such as a wages claim) to £250 for a more complex claim (like unfair dismissal). Any claim which is not accompanied by the appropriate fee must be rejected by the Tribunal (See Rule 11).

A further fee of between £230 to £950 is also payable if the case progresses to a hearing. There are some provisions for the remission or part-remission of fees which depend on status and income.

The introduction of the fee system produced a spike in Tribunal claims (as those with pre-July 2013 complaints scrambled to get them into the system before fees were introduced) and then – predictably – a considerable drop off of cases submitted (reportedly more than one half less).

Fewer Tribunal claims means less access to justice, not only for those who claim unrealistically or in bad faith, but also for those with genuine complaints. It is good for employers, but bad for those who have genuinely been wronged and cannot afford the cost of enforcing their rights.

EU law prohibits national courts from making it impossible or excessively difficult for individuals to gain access to rights conferred by EU Law (which many employment related rights are). So the UK’s largest Union, UNISON, took a legal challenge to the introduction of fees on this basis and three others (including arguments that the fee regime will indirectly discriminate against those within protected classes).

The High Court has today issued its Judgment refusing UNISON’s challenge to the lawfulness of the fee regime. We understand that UNISON intend to appeal this decision to the Court of Appeal.

For now at least, and no doubt to the relief of many employers, the Fee regime is here to stay.

Whistleblowing

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The Employment Rights Act 1996 protects those who make disclosures that tend to show failure to comply with a legal obligation. Protection is against any detriment or a decision to dismiss.

To qualify, a disclosure must contain factual information (not just opinion), which tends to show one of the things listed in Section 43B (1). But what happens when an employee makes several disclosures, to different people, which individually do not tend to show a failure to comply with a legal obligation, but which when taken together do?

The Employment Appeal Tribunal in Norbrook Laboratories (GB) Ltd v Shaw decided that emails sent separately by a manager to the Health & Safety Officer and the HR Department of his employer, regarding driving in icy conditions, when read together did amount to a protected disclosure. The earlier communications could be taken to be ’embedded’ in those that followed, because they had been referred to.

This case is a useful reminder to employers that whistleblower protection will often engage in subtle ways. Employers and their advisors must be careful to identify protected disclosures and ensure they act to protect whistleblowers and avoid adverse liabilities and publicity.

Worker status

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Worker status conveys rights on individuals that do not exist for those who are genuinely self employed or a separate trading entity.

These include rights to:

  • National Minimum Wage
  • Rest breaks and annual leave
  • Protection against deductions from pay
  • Maternity, Paternity and Adoption pay
  • Protection from less favourable treatment on the basis of part time working
  • Statutory Sick Pay
  • Protection from less favourable treatment because of having made a protected disclosure (i.e. whistle blowing)
  • Protection from discrimination

Often businesses will contract with individuals on a ‘self employed’ or ‘contracted out’ basis and agree terms that are compatible with this (and incompatible with the individual being a worker).

So if an organisation and an individual enter into a contract that expressly provides:

  • The individual is a ‘contractor’
  • The individual is in business on his own account
  • The individual may send another person to do the work
  • The individual may hire assistants to do the work
  • The individual is financially responsible for any assistant/s or subcontractor
  • The individual may choose to undertake other work
  • There is not entitlement to holiday or sick pay
  • The individual must pay his own tax

Is this sufficient to ensure that the individual is a ‘self employed contractor’?

The answer is ‘not necessarily’!

Mr Justice Mitting decided in Boss Projects LLP v Bragg that no matter how watertight the contract may be, if in reality its provisions were not intended to be used, then despite express contractual provisions such as these, the individual may still be a worker.