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In last September’s newsletter we reported the European case of Pereda -v- Madrid Movilidad SA in which it was held that, in certain circumstances, holiday entitlement which was unused because the employee was on sick leave could be carried forward to the next holiday year. We also reported on the House of Lords decision in Stringer -v- HMRC in which it was held that holiday entitlement continues to accrue during periods of sickness absence.
It should therefore come as no surprise that the effect of these decisions has now worked its way into general employment law practice.
Updated guidance has been issued by Business Link and the issue has been considered by an employment tribunal in the case of Shah -v- First West Yorkshire Ltd. Mr Shah was due to take annual leave from 22 February to 21 March 2009. However, he broke his ankle and was off work from January until 18 April. He was paid holiday pay for the time when he was expected to have been on holiday rather than on sick leave. Mr Shah asked to reclaim his holiday entitlement but was told that the days had been “lost” because the new holiday year started on 31 March and it was Company policy that accrued but untaken holiday entitlement could not be carried forward.
Mr Shah took his complaint to the Leeds Employment Tribunal and won. According to Regulation 13(9) of the Working Time Directive (in its current but no doubt soon to be changed form):
Leave to which a worker is entitled under this regulation may be taken in instalments, but –
(a) it may only be taken in the leave year in respect of which it is due, and
(b) it may not be replaced by a payment in lieu except where the worker’s employment is terminated.
Following the lead in Attridge Law LLP -v- Coleman the Employment Judge took the bold step of adding words to the Regulation in order to give effect to the underlying thrust of the legislation:
I therefore construe Regulation 13(9) by adding at the end of Regulation 13(9)(a) words to the effect:-
“Save where a worker has been prevented by illness from taking a period of holiday leave, and returns from sick leave, covering that period of holiday leave, with insufficient time to take that holiday leave within the relevant leave year, in which case, they must be given the opportunity of taking that holiday leave in the following leave year”
In last month’s newsletter we reported on proposals to abolish the state retirement age of 65. This view has been reinforced by a policy briefing paper published by the Equality and Human Rights Commission on 25 January which proposes total abolition and a statement to Parliament made by the Solicitor-General on 28 January in which it was indicated that the default retirement age is “probably past its sell-by date”.
There is still a great deal of misunderstanding about the operation of the default retirement age under the current law, even among employment lawyers. In reality “default retirement age” is a misnomer because it is no longer enough to terminate employment merely because someone has reached age 65. Rather, there is a procedure to be followed which requires a “constructive dialogue” to take place between employer and employee before retirement is implemented. If an employer has a standard procedure which provides that employees will usually retire at age 65 there is still a requirement to follow the consultation process but, in general, retirements implemented within the standard procedure will not be unfair. However, it is vital to remember that you get one bite at the cherry. For example, it would be quite wrong to be selective in deciding to whom the “default” retirement age applies. It takes only a little thought to realise how vulnerable such an approach is to accusations of unfairness. Similarly, considerable caution has to be exercised when implementing retirements for those above 65. While retirement dismissals for those aged under 65 are in most circumstances automatically unfair, those in respect of employees over 65 remain potentially unfair. Take the example of an employee who has requested to work beyond 65 and the request has been granted. How will the employer be able to say that it has acted fairly in requiring retirement at, say, 66 or 67 if there has been no material change in employment circumstances so that the only relevant change is that the employee is a year or two older? – age discrimination on a plate! It is also worth bearing in mind that these claims can be horrendously expensive. The employee will no doubt argue that, given the chance, they would have gone on working for years and, of course, since we are dealing with discrimination there is no limit on the amount which can be awarded. Equally, other than in cases of sudden degeneration, it would be a brave employer who takes action to terminate employment based on incapacity if, only a year or so earlier, the employer and employee have agreed that the employee is fit to carry on working.
The removal of a “default retirement age” will certainly not make matters easier for employers but there are a few precautions which can be taken with a view to minimising risk. It is sensible to have a policy or at least a commentary in the staff handbook which deals with retirement in general terms. As long as the principles outlined are adhered to this will encourage consistency. Employers should also take the opportunity of consultation with a view to encouraging employee initiated retirement. Few employees want to carry on working indefinitely and there is nothing wrong with agreeing well in advance with an employee that he or she will continue working until aged, say, 67 or 68, or even older. If employment is terminated in accordance with an agreement made with the employee it is very unlikely to be considered unfair. Above all, employers must avoid knee-jerk decisions and attempts to use retirement as a cover for dismissal for other reasons. We frequently encounter situtations in which an instruction is issued at board level to retire Mr X or Mrs Y as part of a restructure or just to reduce wage costs (older and long-serving employees are generally higher paid). Any dismissals prompted by such an instruction are very likely to result in unfair dismissal as well as discrimination.
In the meantime it is worth considering that age discrimination is age discrimination even if the person subjected to the discrimination is not “old” and there is an age gap of only a few years as demonstrated in the recent case of Achim Beck reported here.
Another example of the potential for confusion has been demonstrated by an MP’s question in Parliament concerning whether a golf club in the questioner’s constituency was right to propose to stop offering reduced rates for pensioners on the basis of its understanding of the Equality Bill. The Solicitor-General’s reply was clear enough: “No…take it from me – it has got it wrong”.
Meanwhile, according to a report in The Sun, the boss of a hairdressing salon in Newcastle has been told that she cannot advertise for a “junior stylist” because this would discriminate against the elderly. Michelle Hilling, 39, commented, “This country has gone completely mad”.
The first of many construction workers’ blacklist cases started at London Central employment tribunal on 20 January 2010. A Mr Mick Dooley claims his name was on a blacklist of construction industry trade union activists and that he lost his job as a bricklayer as a result. He is bringing a claim against Balfour Beatty. A considerable number of similar claims against other construction companies are going ahead in Manchester.
It seems that between April 2006 and February 2009 a variety of well known construction companies paid in total more than £450,000 for access to a blacklist of trade union member names. The list was run by an individual named Ian Kerr. The matter came to the attention of the Information Commissioner and resulted in prosecution of Mr Kerr who in May 2009 was fined £5,000 at Macclesfield magistrates court after pleading guilty to breaches of Data Protection law.
Now, following consultation, the government has published draft regulations to prohibit the compilation, use, sale or supply of blacklists containing details of trade union members and activists where the purpose is to discriminate against workers on grounds of trade union membership or trade union activities.
Rights will arise where a person is refused employment or subjected to a detriment for reasons relating to a blacklist, as well as where a person is unfairly dismissed for the same reason. The worker will be able to complain to an employment tribunal for compensation, or to a court for damages. Compensation is to be a minimum of £5,000. However, contrary to the government’s original proposals, the draft Employment Relations Act 1999 (Blacklists) Regulations do not provide for an employer’s use of information contained in an unlawful blacklist to be a criminal offence.
Shortly before Christmas, the Unite trade union was effectively forced to call off a planned strike by cabin crew employed by British Airways. BA persuaded the High Court that the ballot for strike action had not complied with the strict rules for strike ballots.
BA obtained an interim injunction on 17 December 2009 and this had the effect of ensuring that the strike was called off.
The Union has, unsurprisingly, started over again and another strike ballot began on 29 January and closed on 22 February. We now know that the result is a mandate for strike action. No doubt Unison will make quite sure that this time it will conform precisely with the legal requirements for a valid ballot. BA, fearing the worst, is widely reported to be doing everything it can either to prevent the strike or to mitigate its effects. No doubt BA’s lawyers will be scrutinising the details of the ballot to see whether further technical defects can be found, not least because it has been estimated that strike action will cost the Company £20-£25m per day. Amongst other things it is said that the company is proposing to withdraw non-contractual perks from any cabin crew who go on strike, including in particular withdrawing the perk of being able to buy heavily discounted air tickets for private use.
Can BA legally do this? Some interesting points will arise.
Under UK law the starting point is that an employee generally has no rights against an employer who has treated him less well than others because he took part in industrial action. The position is different if the detrimental treatment by the employer is sufficiently serious to amount to a fundamental breach of an important contractual term (such as the implied term of “trust and confidence”) and is so serious that the employee would be entitled to resign and claim constructive dismissal. In that situation British law gives the employee clear rights but no doubt BA will take great care to ensure that any removal of perks falls well short of that hurdle.
However that is not the end of the story. Recent judgments of the European Court of Human Rights may lead to changes in UK law. As noted above detrimental action against strikers must be of a fundamentally serious nature if it is going to provide strikers with legally enforceable rights. The European Court of Human Rights has recently suggested that this is too tough a test. In a series of cases involving Turkey and Russia it has recently indicated that it thinks the law should move on and has ruled that if an employee is treated less well than others because he or she has taken, or intends to take, part in a strike or other industrial action he or she will have a legal right to sue their employer under the Convention.
British courts must interpret UK law in a way which will give effect to the Convention and if that is impossible can issue a “declaration of incompatibility” which is likely to lead to Parliament making appropriate changes to UK law. In some circumstances it is even possible for direct applications to be made to the European Court of Human Rights.
On the face of it, this could pose a problem for BA. However the problem may be less immediately serious for BA than the notes above may suggest. This is because the UK Human Rights Act 1998 allows direct application of the Convention only in respect of the activities of public authorities and persons carrying out functions of a public nature. It does not give private citizens or companies directly enforceable rights against each other. So while the judgments of the Court of Human Rights noted above may lead to changes in UK law which might in future prevent BA taking the sort of action they may be considering against strikers, BA may currently be immune from legal action if they go ahead with their “perk removing” plans – anyway this time. But even that is not certain. The UK Courts and tribunals have shown that they are prepared to go to great lengths, even inserting words into Acts of Parliament, to ensure that they fulfil their duty to interpret UK law in a way which will give effect to the Convention.
On 19 February it became 2-0 in favour of BA when High Court Judge Sir Christopher Holland dismissed Unite’s bid to overturn the changes. Consequently, BA have the backing of the Court for the imposition of changes including freezing pay and cutting crew on long haul flights. the judge said that he took into account the airline’s financial position, saying:
“If the crew [numbers] materially and fairly contribute to the preservation of BA and more importantly for present purposes job security and pay, how can I condemn the less than extreme changes as unreasonable?”
Unite remains defiant with a spokesman stating that the “regrettable” judgment made “absolutely no difference” to the substance of the dispute with BA.
The normal rule is that an employee is entitled to be accompanied at a disciplinary hearing by a colleague or trade union official but not by a lawyer. In March 2009 the High Court made an exception. It held that if the substance of the matter could lead to the employee’s name being added to the Protection of Children Act register of people deemed unsuitable to work with children then the right of the employee to a fair trial under the Human Rights Act can give him or her the right to be represented by a lawyer at the disciplinary hearing.
In the case in question disciplinary proceedings were started against a young part-time music assistant at X School as a result of alleged acts of abuse of trust with a 15 year old male pupil. After an internal disciplinary hearing in February 2008 he was dismissed and told that he would be reported to the appropriate authorities for possible inclusion in the POCA register of people deemed unsuitable to work with children. He appealed to the school’s staff appeal committee and asked to be allowed to have legal representation. Permission for this was refused. The staff appeal proceedings were then stayed while he applied to the High Court for judicial review of the refusal.
The High Court found in his favour. The judge said that in this case
“the gravity of the particular allegations made against the Claimant ……. taken together with the very serious impact upon the Claimant’s future working life …… are such that he was, and is, entitled to legal representation at hearings before the Disciplinary Committee and the Appeal Committee”.
The school appealed to the Court of Appeal but has lost (G, R (on the application of) v X School & Ors, Court of Appeal on 20th January 2010).
Agreeing with the High Court the Court of Appeal has ruled that the right to a fair trial provided by the Human Rights Act means that a claimant must be given the opportunity to be legally represented at a disciplinary/appeal hearing when that hearing is determinative of his civil right to practise a profession. This confirms a similar decision in a 2009 case involving a doctor who had been refused permission to be represented by lawyers at a disciplinary hearing (Kulkarni v Milton Keynes Hospital NHS Foundation Trust).
So while the general rule remains that an employee is not normally entitled to be represented by a lawyer at a disciplinary hearing, it is now clear that this is not an absolute rule. If the allegations are sufficiently serious and if an adverse finding could have a serious effect on the employee’s future employment prospects then legal representation should be allowed in spite of the general rule.
New regulations were made in January 2010 to implement in England, Wales and Scotland the 2008 European Council Directive 2008/104/EC on temporary agency work. Although the Agency Workers Regulations 2010 have now been made they will not come into force until 1 October 2011, a few weeks ahead of the 5 December 2011 deadline set by the EC Directive.
The regulations ensure that after 12 weeks in a given job agency supplied workers will be entitled to equal treatment with employees concerning basic working and employment conditions, including pay and holidays, as if they had been recruited directly by the hirer. In addition from the first day of an assignment agency workers will be entitled to information about vacancies in the hirer to give them the same opportunity as other workers to find permanent employment and to equal access to on-site facilities such as child care facilities.
In more detail, the main provisions are as follows:-
The Prime Minister pledged to the TUC Congress in September 2009 that “when parliament returns our new legislative programme will include equal treatment for agency workers”. This pledge has thus now been fulfilled.
According to the Employment Appeal Tribunal in Bateman -v- Asda Stores Limited the answer is a qualified yes.
Asda wanted to ensure that all their staff were employed on the same pay and work structure. As a result it was necessary for employees working under an old regime to transfer to new arrangements. Approximately 9,330 employees agreed but the remainder did not. As a result, six employees (as representatives of those 700 or so who did not agree to the changes) brought claims for unauthorised deductions from pay contrary to section 13 of the Employment Rights Act 1996.
Asda had taken the precaution of including the following in its Colleague Handbook:
Changes to the Colleague Handbook
[C] The Company reserves the right to review, revise, amend or replace the content of this handbook, and introduce new policies from time to time to reflect the changing needs of the business and to comply with new legislation. A copy of the handbook is displayed on the colleague communication board in your store and on Pipeline, and replacement copies are available from your People Manager.
The Handbook also included details of the old and new pay structures. The tribunal took the view that the relevant clauses in the Colleague Handbook permitted Asda to impose unilateral changes on employees, even where they involved reductions in pay and benefits. The Employment Appeal Tribunal agreed. However, it should be noted that there was also a warning that an employer who attempts to use such a right unreasonably, arbitrarily or capriciously, or without any or any adequate consultation, will be likely to have acted in breach of the duty of trust and confidence which is implied into all contracts of employment so that could in itself lead to a fundamental breach of contract entitling an employee to claim constructive unfair dismissal.
Our advice is that any employer seeking to impose a unilateral change in terms of employment should proceed with considerable caution. Yes, it can be done, but the chances of getting things wrong by failing to follow a clear and fair procedure are high. As ever, it follows that anyone contemplating such action should contact us before the process commences.
@martinmalone. The Legg Report – amount ordered to be repaid £1.12m; cost of report £1.16m