new employment with the same employer or continuous employment throughout?

Posted on January 28, 2013 by Martin Malone

Welton v Deluxe Retail (t/a Madhouse) is a case concerning continuity of employment for the purposes of calculating qualifying service for statutory employment rights. Under these provisions, any week when the employee’s relations with his or her employer are “governed by a contract of employment” will count towards continuous employment.

The case came about after Mr Welton was dismissed by Deluxe on 23 February 2010 – a Tuesday – when they closed their Sheffield shop down. The working week ran from Sunday to Saturday and therefore ended on Saturday 27 February 2010. At some point in the next working week, he was offered, and accepted, a job at another of Deluxe’s shops, in Blackpool. He started work on 8 March, i.e. more than a week after the previous working week ended.

Mr Welton resigned from his employment by letter dated 11 December 2010. Consequently, if employment at both stores was treated as continuous then he had sufficient service in order bring his claim. However, if the employment at the Blackpool store did not count as continuing from his employment at the Sheffield store then he did not. It was found at a preliminary hearing that he was not offered employment before the Sheffield store closed and the earliest date on which an offer to employ him in Blackpool was made was on 1 March.

The question was – did his contract begin when he actually started work, in which case there was a one-week break in continuity, or did it start at the earlier date when he accepted the offer? Mr Welton (representing himself in The Employment Appeal Tribunal) put up three arguments:

1. that he should be seen as being subject to a contract of employment during the first working week after the termination of his employment at Sheffield;
2. that, if not, his absence was due to a "temporary cessation of work" and, therefore, not a termination of employment; or
3. if not, there was an arrangement, albeit after the event, that his absence should not break contunuity of employment. Continue reading →

no guarantee payments for employees who agree a shorter week

Posted on November 27, 2012 by Martin Malone

In the continuing harsh economic climate, it is not uncommon for employers and employees to strike a deal whereby employees agree to work shorter hours, or take lower wages, to avoid being made redundant. Abercrombie v AGA Rangemaster Ltd deals with just such a situation, and in it the Employment Appeal Tribunal considers the relationship between such agreements and the right to a guarantee payment under the Employment Rights Act 1996 (ERA) section 28 if work is not provided for them on a day when they would normally work.

Guarantee payments are frequently misunderstood. They are payments in respect of any normal working day for which the employer provides no work in circumstances specified in the legislation. The statutory entitlement is five days in any three months and the current rate is £23.50 per day, hence a maximum of £117.50 in any three months period. As such it is not a particuarly valuable benefit.

In this case, after a deal for a shorter working week was struck, which entailed hours being compressed so that workers did not need to work on a Friday, the union representing the employees sought guarantee payments for those Fridays. The claim failed in the Employment Tribunal, which considered that, once the shorter week was in place, the employees did not “normally” work on Fridays – so there could be no right to a guarantee payment . The Employment Appeal Tribunal, confirming that this was right, made the further point that it didn’t matter whether the agreed variation in the contract was a permanent one or a temporary one.

Continue reading →

union recognition for employees working outside the UK

Posted on November 27, 2012 by Martin Malone

Netjets Management Ltd v CAC is a significant decision for multinational, unionised businesses, which applied the case of Ravat v Halliburton Manufacturing and Services Ltd to applications for union recognition and held that an application by a union for recognition for collective bargaining could succeed in respect of pilots working for a European airline, in circumstances where they worked all over Europe and different aspects of their employment terms and conditions were handled in different jurisdictions, but factually the workers in the proposed bargaining unit had a strong connection with the United Kingdom.

Relevant factors included that individual workers’ contracts were governed by English law and subject to English jurisdiction, despite HR administration being handled in Lisbon. Although there was no necessity for a decision as to whether there had been any breach of Article 11 of the European Convention on Human Rights in this case, (the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and join trade unions), Mr Justice Supperstone did comment that:

The reality is that if the Union cannot bargain collectively with the Claimant in relation to their pay, hours and holidays in Great Britain they will not be able to exercise their Article 11 right.

Although this case is perhaps most likely to be relevant for large, multinational organisations, there is an increasing tendency for SMEs to conduct business within other European states which, of course, carries with it the likelihood of having to deal with jusrisdictional issues, as well as working practices which may be untypical. Continue reading →

it’s not unusual…

Posted on November 27, 2012 by Martin Malone

It’s not unusual for there to be parallel proceedings in both the High Court and in the Employment Tribunal – for example, an unfair dismissal claim and a claim for breach of contract for a highly paid employee. In such circumstances, it’s usual for the tribunal case to be put on hold while the High Court case is determined. BUQ v HRE is an example of the opposite situation, where a High Court claim was stayed pending an Employment Tribunal discrimination claim.

The case arose when an employer made allegations of financial impropriety against once of its senior executives. The executive responded by alleging that the disputed expenditure had been authorised by another more senior director, and made a claim in the employment tribunal alleging unfair dismissal and that the same director had sexually harassed him. The alleged harasser argued that the executive had made false allegations of harassment to undermine the credibility of the financial allegations, and sought an injunction to restrain the executive from publishing his allegations.

There was thus an overlap between the two sets of proceedings, in that both would consider the allegations about finances. While normally the High Court determination of the facts of such matters would be followed by the employment tribunal later, in this case the High Court considered that the Employment Tribunal was best placed to deal with the allegations of harassment and establish the truth of the matter and adjourned a listed trial date pending resolution of the tribunal case.

The circumstances of this case were fairly unusual, and it will be rare that the High Court will be prepared to delay its own proceedings where there is an overlapping tribunal case.

It would be fair to say that the vast majority of High Court judges take the view that the civil court system as opposed to the employment tribunal system provides the better forums in which to make findings of fact based on disputed evidence. There remains a very clear heirarchy when it comes to perceptions of the pecking order for courts and tribunals. Continue reading →

"employee ownership" – full steam ahead

Posted on November 27, 2012 by Martin Malone

Readers of last month’s newsletter are aware of my serious reservations about them; however, no review of recent employment law news would be complete without at least a passing reference to the new proposals to introduce a new “employee-owner” status, which after a very short consultation period, are being rushed through with what some might describe as unseemly haste in order to come into effect next April. The basic proposition is that employers will be allowed to offer employment on terms that an employee receives between £2,000 and £50,000 worth of shares in return for signing away a number of employment rights, including the right to claim unfair dismissal or a redundancy payment, to request flexible working (in most circumstances) or to ask for time off for training. Employees would also have to agree to giving longer notice of their intention to return early after maternity or adoption leave. Employees who agree to such a deal could then be required to sell back any shares if they leave or are dismissed at “unrestricted market value”. Any gains in value would be free of capital gains tax, but the shares will be subject to tax and NI in the same way as other employee shares.

As I commented, there seems to be little enthusiasm for the measure for a variety of reasons. Some suggest it will not be widely adopted, others that it is too cumbersome a mechanism and will be too expensive to run, and still others that it is open to abuse by unscrupulous employers at the expense of economically weaker employees. Moreover, when disputes arise (as they inevitably will) they are likely to prove far more difficult and expensive to resolve than unfair dismissal claims, thereby rather defeating the stated purpose.

Continue reading →

slave labour in a modern context?

Posted on September 17, 2012 by Martin Malone

Earlier this summer, a case brought in the Administrative Court by two benefits claimants made the headlines when two schemes requiring claimants to join unpaid work experience schemes on pain of losing Jobseeker’s Allowance were challenged. In one, a geology graduate already working as a volunteer in a museum in pursuance of her ambition to secure a paid job in the museum sector was expected, instead, to work in Poundland for two weeks, although this meant it cost her her voluntary position. In the other a qualified HGV driver was required to undertake a full time voluntary position for six months on an unpaid basis.

Much of the judgment of the court in Reilly & Another, R (on the application of) v Secretary of State for Work & Pensions was concerned with issues of maladministration and whether the schemes were within the statutory powers of the DWP, which are important issues but not issues of employment law. The crucial issue that made the case newsworthy, and does have an employment flavour, was whether these schemes represented “forced labour” and were thus contrary to Article 4 of the European Convention of Human Rights. Mr Justice Foskett took the view that while opinions might differ as to the appropriateness or effectiveness of such schemes they are “a very long way removed from the kind of colonial exploitation of labour that led to the formulation of Article 4”and so could not be called “forced labour“ or “slavery”. Continue reading →

a quick round-up of other employment law news in July

Posted on July 26, 2012 by Martin Malone

carrying forward holiday entitlement

On 25 July the European decision that employees can take extra holidays to make up for time off sick while on holiday was expanded when it was confirmed by the Court of Appeal that a worker who was unable to take four weeks’ annual leave due to sickness did not have to make a request to carry forward the untaken leave into a new holiday year in order to receive a payment in lieu of it on termination of employment. Many employers restrict the right to carry forward untaken leave into the next holiday year. This restriction is now of no practical effect for those who were sick when on holiday.

wearing religious symbols

In a suprisingly specific intervention, David Cameron has referred to the Eweida case (which we have previously reported) by stating in a PMQ reply that it is "an absolutely vital freedom" for employees to be entitled to wear religious symbols at work. Ms Eweida was told that she could not wear her crucifix necklace on health and safety grounds. The case is due in the European Court this September.

Baby P still featuring in employment law

Long after the tabloid headlines have gone the employment issues surrounding the “Baby P case” are still occupying the Employment Appeal Tribunal. The latest case concerns whether or not it was reasonable to dismiss two employees who had received warnings for misconduct.

The written warnings concerned alleged failure to follow monitoring procedures. Following the intervention of the Secretary of State for Children, Schools and Families, the individuals concerned were recalled for formal disciplinary proceedings concerning the issues which had resulted in the initial warnings. Notwithstanding that they had already been judged concerning the matters under review (the legal principle of "res judicata") both were summarily dismissed for gross misconduct.

The Employment Appeal Tribunal held that the dismissals were fair. The new investigators were entitled to reach a different view because the initial disciplinary proceedings were not " judicial". However, it was emphasised that each case should be considered on its own facts so that this should not be regarded as a "green light" for others to act similarly.

"super injunctions" in employment law and compromise agreements

Gary Walker was employed as Chief Executive of United Lincolnshire Hospitals Trust and was sacked when it was alleged that he swore openly in meetings. However, his dismissal was reported to be about him disobeying a government order to focus his attention on hitting targets for non-urgent medical cases and instead concentrating on emergencies.

He claimed unfair dismissal and an employment judge found that there was evidence that his disclosures about patient safety were protected under whistle-blowing legislation.

The claim was settled on payment to him of £320,000 plus legal fees and a confidentiality clause which prevents him from talking about the issues behind his dismissal.

David Bowles, chairman of the Trust until he resigned in 2009 concerning the targets issue stated:

The thing which really shocked me is that I, and all the other witnesses who would have been appearing at the employment tribunal, received gagging letters as well.

Tribunal system in “meltdown”

According to a report in People Management the number of outstanding tribunal cases has quadrupled from 144,900 in 2007 to 530,400 at the end of 2011. ACAS also has a significant backlog which calls into question its ability to provide a filtering process for new claims, as envisaged by the government’s recent proposals.

OPINION: Much of the recent press coverage about employment law and procedure has been focused on liberating small businesses from the burden of what are perceived to be onerous (and often described as European) employment law rights. The reality is that many SMEs are forced into settlement of unwarranted claims by the wholly unreasonable protraction of what should be straightforward claims. The sooner the employment tribunal system is abandoned as a failed "short cut" and brought into the civil court process with the ability to apply tried and tested filtration of claims the better.

Tribunal Fees

Jonathan Djanogly, Ministry of Justice Minister, has said that it is unfair for the taxpayer to foot the bill for tribunals which cost £84 million a year. As you will have gathered from the last item I agree, but probably not in the way that Mr Djanogly has in mind. His proposal is that for "level one claims" the issue fee will be £160, with a hearing fee of £230 and "level two claims" will have an issue fee of £250 and a hearing fee of £950.

Level one claims are supposed to be "routine matters" such as deductions from wages and level two claims are to be classed as more complex matters such as unfair dismissal and discrimination claims.

OPINION: Let’s just pause at the fees. The usual exemptions will apply so that people who have just lost their jobs, and consequently their income, will qualify for fee exemptions. A key element of the vast majority of employment claims is for loss of income (no surprise) and costs provisions require the determination of who is the "winner" and who is the "loser". Does that sit comfortably with the concept of tribunals (a supposedly fee free alternative to court proceedings) so that property owners can go to the Lands Tribunal at no charge but former employees (with correspondingly no income) have to pay? This may seem to be employee biased but the bigger picture is that the "winner" has to pay the "loser". By the time that you get to that concept there really is no point in maintaining tribunals.

There is also a basic access to justice point. Theo Huckle QC, Counsel General to the Welsh government, has commented as follows:

True and free access to justice for all citizens, whether their claims are popular or unpopular, is an integral part of the democratic settlement in the UK. This decision totally undermines that principle.

The process of approaching a legal court or tribunal is off-putting for most citizens. The thought of doing so without direct legal advisory support and representation is daunting in the extreme.

To be required to do so and pay substantial fees as well in advance will undoubtedly deter many applicants with good claims who will thereby be denied access to justice.

employees do not owe a fiduciary duty to their employers

Posted on July 26, 2012 by Martin Malone

As we mentioned in last month’s introduction, the Court of Appeal has confirmed that an employee, unlike a director, does not owe a fiduciary duty to his employer, overturning a High Court decision which had found in favour of the affected employer.

A fiduciary duty is the highest standard of care in either equity or law. It demands extreme loyalty to the person to whom the duty is owed – the principal or, in this case, the employer. Someone who is subect to it must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents.

Ranson v Customer Systems plc is the case in point. Mr Ranson was a specialist information technology consultant. His contract required him to keep confidential information which came to his attention in the course of his employment both during and after his employment with the Company. This is really no more than the common law obligation which applies to all contracts of employment (see Faccenda Chicken v Fowler) and is a central tenet of employment law. However the contract said nothing about contacting clients. Mr Ranson decided to set up a competing business and both before and during his notice period he contacted clients about potential work for his new business. As a result, a contract was placed with his new business two days before he left Customer Systems (CS).

CS brought proceedings against him in the High Court claiming breach of a contractual obligation of fidelity (often referred to as a duty of good faith) and a breach of a fiduciary duty of loyalty as a result of meeting with clients of CS with a view to securing their business.

The High Court sided with CS and held that there were breaches of both the contractual duty of fidelity and also a fiduciary duty of loyalty.

The Court of Appeal disagreed. Continue reading →

changing the effective date of termination of employment

Posted on July 26, 2012 by Martin Malone

It is a truth universally acknowledged that an employer and employee cannot agree between them to change the date on which employment is regarded as ending for the purposes of calculating time limits in tribunal cases. This is known as the “EDT” or effective date of termination and is imposed by statute. In cases of summary dismissal the EDT will nearly always be the date on which dismissal took place.

Hawes v Curtis is an example of the rare case when the EDT may not be the original date of dismissal. The circumstances were that two employees, who were both keyholders, were dismissed for misconduct after stock shortages were discovered, but their employer was not able to identify which individual employee was responsible. Continue reading →

Sunday workers’ rates of pay and the Olympics

Posted on June 29, 2012 by Martin Malone

In case you’re overcome with excitement at the prospect of the Olympic torch appearing on a High Street near you, here’s a quick reminder of the employment law impact of the suspension of the usual Sunday Trading laws from 22 July to 9 September.

Shop workers can opt out of Sunday working in larger shops by giving three months’ notice, provided they are not employed just to work on Sundays. To give these workers a chance to opt out in time to avoid longer Sunday working hours for the Olympic period, this notice period has been shortened to two months or the interval between the date notice is given and the day before the suspension starts, if that is longer. If workers want their opt-out to last only for the period of longer opening hours, they should specify this in their notice, otherwise it will continue indefinitely until they give notice to opt back in. The last date on which a shortened notice can be given is 9 July 2012.

In a separate development concerning Sunday trading an attempt by Boots to cut Sunday pay for some its staff has been ruled unlawful. Continue reading →