capability or conduct? one, the other or both?

Posted on November 23, 2011 by Martin Malone

A helpful case for employers, but one that should be treated with caution, deals with the issue of whether a dismissal which is purportedly for misconduct can be found to be fair even if the tribunal holds it is for capability and conduct (both potentially fair reasons for dismissal under section 98(2) Employment Rights Act 1996).

It is a common problem for employers whether, faced with an employee’s incompetence or negligence, they should opt for a capability or conduct procedure and/or dismissal. Often, the behaviour in question overlaps both conduct and behaviour. The soundest advice is to cover both bases although, of course, in the case of a capability dismissal it is expected that a different kind of procedure with different expectations and support will be followed. An early EAT decision in Hotson v Wisbech Conservative Club made clear that an employer is not tied to the label he happens to put on particular facts, nor is he prevented from running the two as alternatives. However, it is clearly wise to ensure that both capability and conduct are considered at an early stage to ensure that no argument can be progressed that prejudice has been caused to an employee.

In Screene v Seatwave Ltd, Seatwave was the victim of a large scale fraud and Mr Screene was the unfortunate financial controller who failed to detect the fraudulent transactions. Mr Screene was called to a disciplinary hearing to consider three allegations, the central one being that he "failed to identify or address large amounts of cash leaving the German bank account totalling to roughly 1.7m euros within several weeks". The next day Seatwave wrote to Mr Screene "to confirm the decision to summarily dismiss you on the grounds of Gross Misconduct". The letter continued: "you have been negligent in the completion of your duties as follows…an absolute failure to complete non UK bank reconciliations leading to significant financial losses for the company". It concluded: "your serious negligence in the performance of your duties…clearly justifies Summary Dismissal". Continue reading →

disciplinary hearings and hospital trusts

Posted on November 22, 2011 by Martin Malone

Along comes another case to add to the long list of claims against hospital trusts concerning alleged flaws in the disciplinary process. Trusts have very detailed contractual disciplinary procedures, complicated by reviews and the introduction of new and often overlapping procedures consequent to Directions issued by the Secretary of State which have led to a plethora of claims of failure to comply with contractual terms, express or implied. These cases have often assisted more generally in the clarification of tricky legal questions (such as the right to legal representation at disciplinary hearings under human rights legislation).

In Lim v Royal Wolverhampton Hospitals NHS Trust the High Court was asked to consider whether Mr Lim (a consultant anaesthetist) should be granted an injunction preventing a capability hearing from proceeding until an assessment panel of the National Clinical Assessment Service (NCAS) had made a determination as to his performance. The court was asked to determine two questions:

1. Whether the Trust was in breach of contract by failing to comply with its own procedures by failing to refer the issues (relating to bullying and inappropriate behaviour) to the NCAS
2. Whether, by seeking to revive allegations of misconduct some three years earlier, the Trust failed to comply with the terms of its own disciplinary procedure that it should act fairly and speedily.

Continue reading →

employment tribunal claims: do the latest changes really take account of the “human factor”?

Posted on October 26, 2011 by Martin Malone

You know that moment when someone voices something you’ve been thinking for a while? Lord Justice Mummery hit the nail on the head for many who have experience of the employment tribunal system in Gayle v Sandwell and West Birmingham Hospitals NHS Trust when he responded to criticisms about how long the case had taken to progress through the system and how much money had been spent on it.

On the face of it, the criticism was a fair one – the claimant unsuccessfully appealed twice after being unsuccessful in her claim that she was unfairly dismissed for taking unauthorised time off for union duties at a three week hearing, with the final decision being made nearly five years after the events in question. But as Lord Justice Mummery made clear, this case was very much the exception to the rule; few tribunal cases last longer than a day or two; still fewer go to one level of appeal, let alone two, and he pointed out that there are a range of reasons why cases such as this one take a long time to resolve. In particular, he remarked that it is difficult to achieve a speedy, inexpensive outcome where one or more party to the proceedings is determined to take every point of law, evidence and procedure. Continue reading →

extension of flexible working rights

Posted on September 26, 2011 by Martin Malone

The Government has made clear for some time its intention to extend the right to request flexible working to most employees rather than just those who having caring responsibilities.

In September 2010 the Department for Business Innovation and Skills announced an intention to extend flexible working rights to all parents of children under 18 from April 2011 (covering a further 300,000 employees) and plans to roll out the rights to all employees. Extension of the rights would be accompanied with a new and simplified system for requesting parental leave.

However the April 2011 change was postponed. The reason given by the Government was the economic climate but it was made clear that the widening of entitlement remained firmly on its agenda (in accordance with the Coalition Agreement). Continue reading →

consultation on tribunal reform

Posted on June 23, 2011 by Martin Malone

In February we reported that at the end of January the Government published a consultation paper designed to "improve the way in which workplace disputes are resolved" (the consultation period ended on 20 April).

Proposals for a more active role for ACAS in trying to settle claims before they get to a tribunal have been generally welcomed but other proposals have been criticised by experts in the field, not least one to the effect that employment judges should be able to sit alone in unfair dismissal cases. Hopefully the government will listen to the views of the experts this time around. They failed to do so in 2004, when the last serious attempt to improve dispute resolution processes was made. The embarrassing result was that the compulsory procedures then introduced were removed in their entirety just five years later.

It may be helpful, given other current consultations and proposals, to point out that the January 2011 consultation was concerned simply with dispute resolution. It had little to do with the substance of employment law. The separate May 2011 consultation on “Modern Workplaces” (noted in our other posts this month) deals with that.

In addition to these consultations the government made a quite heavy duty employment law announcement on 11 May. This was picked up by various newspapers which provided headlines such as "Coalition to water down employees’ rights"” (The Guardian) and "Sackings to be made easier and payouts cut in war on red tape" (Daily Telegraph). The Unite Union came out with a snappily titled press release saying "Plans to make a bonfire of employment protection policies need to be extinguished".

For avoidance of confusion, it is worth pointing out that this announcement had little or nothing to do with the January and May formal consultations. Also, it turned out to be something of a damp squib. The "action" part of it merely promises a review of three parts of employment law later this year – the parts in question being (i) the absence of a cap on the amount which employment tribunals can award in discrimination cases; (ii) the 90 day consultation period where collective redundancies are proposed; and (iii) TUPE. The first of these took a knock just this week when a proposal to cap discrimination payments at £50,000 was lost due to lack of Parliamentary time

Given that much of the relevant British law is required by EU Directives it seems unlikely that any radical changes will be made. However it may be that official protestations last autumn to the effect that there were then no proposals to change the TUPE regulations are being modified in the light of the Government’s subsequent commitment not to "gold-plate" EU Directives. One area of "gold-plating" is the service provision part of TUPE. While TUPE itself is designed to implement an EU Directive, this part (reg 3(1)(b)) is not. It has, for example, the effect of making it practically impossible for a local education authority to save money by outsourcing provision of school meals to a catering company which offers staff less generous pensions than the LEA.

The road to hell is, of course, paved with good intentions. While employment law may itself be confusing, plans to simplify it can all too easily make things even more confusing. An important message for both employers and employees to take from all this is that while the detail of how the rules apply may be complicated in some cases, it is still true that as a a general rule common sense and fairness will usually win the day in employment law matters.

when does employment end?

Posted on May 23, 2011 by Martin Malone

It can be critically important in employment law to know when a person’s employment came to an end. This is mainly because there are strictly applied time limits for bringing certain claims in employment tribunals based on the date on which employment was terminated. For example, an unfair dismissal claim must normally be presented to an Employment Tribunal before the end of the period of three months beginning with the “effective date of termination”. The power of employment tribunals to extend the time limit is extremely limited, meaning that it can be very difficult to persuade them to do so.

For this reason, and for other reasons such as calculating the length of “continuous employment” required for accruing employment certain rights, it can be very important to be clear about how to ascertain the “effective date of termination”.

An EAT case in April 2011 has helped clarify this point. For many years it has been established law that where an employee is dismissed by word of mouth notice is deemed to start from the beginning of the day after it was given. This is because the law takes no account of fractions of a day so the day on which notice is given does not count. However, it has not been certain that the same rule applies where the dismissal notice was in writing, not least because written notices often specify the date on which the notice period starts and/or ends.

In the case in question, an employment tribunal had refused to hear an employee’s unfair dismissal claim because, according to the tribunal, the claim had been lodged one day out of time. The claim had been lodged on 2 May 2009. The employer pointed out that the emailed dismissal letter giving the employee three months’ notice of dismissal had been received by the employee on 3 November 2008. According to the employer this meant the effective date of termination was 2 February 2009 and the last day for filing an unfair dismissal complaint was therefore 1 May 2009. As the claim had been filed on 2 May it was out of time. The employment tribunal accepted this argument, refused to allow an extension of time and dismissed the claim.

The employee appealed to the EAT. He won.

In a fully reasoned decision the EAT made it clear that, unless there is some agreement or stipulation to the contrary, the same rule about when notice starts to run applies to written notices of dismissal as to verbal notices. So in both cases the default position is that notice starts to run at the beginning of the day after it is given. Therefore in this case the notice period ran from 4 November 2008, not 3 November, so the effective date of termination was 3 February 2009, not 2 February. The last day for filing an unfair dismissal claim was therefore 2 May 2009, meaning that the employee had filed his claim in time after all.

For practical purposes, a lesson to be learned from this case (Wang v University of Keele) is that it will generally be prudent for an employer to stipulate the intended date of termination in any dismissal letter. That will generally avoid any uncertainty. The other, more general lesson, for both employers and employees is to be fully aware of the great importance of the statutory time limits and the fact that they are generally very strictly applied by employment tribunals.

sex discrimination – speculation can be taken into account

Posted on May 20, 2011 by Martin Malone

Even leading law firms can get it wrong. What do employers do if they have to make redundancies and one of the candidates has been absent on maternity leave? That gave rise to a dilemma for national solicitors’ firm Eversheds. They have lost a legal battle but it is possible that they will win the financial war as compensation awarded against them is to be reassessed.

Eversheds had to dismiss as redundant one of the two solicitors in a particular department. There was a potential sex discrimination problem because one was a woman and the other a man. The woman had recently been absent on maternity leave and one of the criteria used in the selection process concerned levels and timings of billing. That criterion would obviously weigh against her as she had been away. Not wanting to be accused of sex discrimination by the woman concerned, Eversheds decided that the most appropriate way to play fair was to deem that for redundancy selection purposes she had had a good billing performance record. They awarded her “points” on that basis.

In the event it was the male solicitor, who had been with Eversheds for 14 years, not the woman, who was selected for redundancy. Eversheds then faced a sex discrimination claim by him.

He had complained from the start that the “favouritism” shown to his female colleague amounted to sex discrimination against him. Eversheds had clearly been in a quandary but felt what they were doing was fair and that if he sued them they would be able to rely on an exception in the anti-sex discrimination statute to the effect that in considering whether a man has suffered unlawful sex discrimination “no account shall be taken of special treatment afforded to women in connection with pregnancy or childbirth”.

He did sue. And he won. Not only did he win, but the employment tribunal awarded him well over £100,000, mostly for loss of future earnings. The tribunal refused to take into account the possibility that he might have been dismissed anyway a few months later in a separate redundancy exercise on the basis that this was mere speculation. Eversheds, no doubt feeling badly treated, appealed to the Employment Appeal Tribunal, both against the decision that they had acted unlawfully and against the amount of compensation.

At the appeal they lost on the first of these points. The President of the EAT said that the exception noted above should be construed “in a manner which incorporates the principle of proportionality”. On the facts of this case Eversheds had gone beyond what was reasonably necessary – there were alternative ways of removing the maternity related disadvantage to the woman without unfairly disadvantaging the male claimant. Eversheds had gone over the top in the method they used to ensure that she would not be placed at a disadvantage in the redundancy selection process.

However Eversheds did win on the compensation point to the extent that the EAT sent that aspect back for reconsideration by a different employment tribunal. In doing so the Appeal Tribunal made the important point that the employment tribunal had a duty to take a view on whether the claimant in the case would have been dismissed anyway a few months later in a second redundancy exercise notwithstanding that this would involve a significant degree of speculation. Quoting from an earlier judgment, the President said that “The mere fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence” and gave a strong steer to employment tribunals that when assessing compensation in a dismissal case they should not decline to undertake a “would he have been dismissed anyway?” exercise merely because it involves speculation.

For those who want to read the full story, the EAT judgment in Eversheds Legal Services Ltd v de Belin, is available on the internet.

CBI attacks Employment Tribunals and sets out compelling case for reform

Posted on April 18, 2011 by Martin Malone

The Government is currently carrying out a consultation on workplace dispute reforms and on Friday 15 April the CBI added its substantial contribution to the debate in the form of its report: “Settling the matter: Building a more effective and efficient tribunal system“.

The report criticises the current “slow, legalistic and antagonistic” process so derided in particular by owners of SMEs who regard it as stacked against them from the outset.

The CBI’s key proposals are:

take action to weed out weak claims and create the capacity to hear valid claims more quickly;
encourage early agreement on a fair settlement; and
improve efficiency when cases do go to a tribunal.

Katja Hall, CBI Chief Policy Director, said:

It’s always regrettable when the relationship between employer and employee breaks down to the point where a tribunal claim is made. But when this happens, both sides deserve a system that is consistent, quick and keeps legal costs to a minimum. Instead, we are saddled with a tribunal system that is expensive, stressful and time-consuming for all parties.

“Surely it’s in everyone’s interests for cases with merit to be heard quickly and settled, while weak claims are swiftly identified and weeded out. We’d like to see more workplace disputes being resolved before they reach tribunal.”

The submission is well-written and researched and it sets out a compelling case for reform of the employment tribunal system. The case studies make for particuarly interesting reading and demonstrate clearly that the current system is broken and dire need of a thorough overhaul.

Territorial jurisdiction

Posted on March 24, 2011 by Martin Malone

Regular readers will know that BA cabin crew have kept the courts and tribunals very busy in the last couple of years.

In the latest case involving them the Court of Appeal has ruled that cabin crew, based in Hong Kong but flying to and training in London, worked partly at an establishment in Great Britain: accordingly they are entitled to bring claims under the Race Relations Act 1976 and the Employment Equality (Age) Regulations 2006.

Mrs Mak and 15 colleagues of Chinese origin worked as cabin crew for British Airways. They were ordinarily based in Hong Kong; they worked on BA flights to London (in the case of Mrs Mak an average 28 round trips per year) and would stay in hotels in London. They also had to attend compulsory training courses in London. Mrs Mak and her colleagues brought claims for unlawful direct and indirect race discrimination and age discrimination. The preliminary question arose as to whether an employment tribunal had jurisdiction to hear the claims. For the tribunal to have jurisdiction it had to be satisfied that their employment counted as being at an establishment in Great Britain.

At a Pre-Hearing Review an employment judge ruled that the claimants worked at least partly in Great Britain and so under the relevant statutory wording counted as being at an establishment in Great Britain. The employment tribunal therefore had jurisdiction. British Airways appealed to the EAT but lost. They appealed on to the Court of Appeal and have lost again.

The arguments put forward by BA were mainly technical, based on the precise wording of the relevant sections and regulations and how they should be properly interpreted. Those arguments are not considered further here but there was also an important general point. BA argued that the amount of “work” done by Mrs Mak in Great Britain was so small that it should be disregarded. The original tribunal had accepted that compulsory training time and standby time were both in GB and were both work. It was also agreed by all parties that standby time took place in Hong Kong and not in GB.

The Court of Appeal dismissed BA’s argument. Compulsory training time in Great Britain was work and was not trivial. In terms of time taken it was relatively small but it was a regular and crucial part of Mrs Mak’s role, which she could not have done without. It was therefore not trivial.

Note: As from 1 October 2010 the Equality Act 2010 has repealed the Race Relations Act 1976 and revoked the relevant parts of the Employment Equality (Age) Regulations 2006. There is no specific provision in Equality Act 2010 to define its territorial scope. Presumably under that Act normal common law rules will therefore apply as they do in unfair dismissal cases (essentially meaning that the test is a general test of whether an individual’s employment relationship is sufficiently closely connected with Great Britain to make it appropriate that he should be able to bring a claim in Britain, as explained by the House of Lords in the leading case of Lawson v Serco [2006] ICR 250 and subsequently developed).

newsletter – phoney discrimination claims

Posted on December 20, 2010 by Martin Malone

One of the problems with anti-discrimination law is that it sometimes results in “phoney claims”. The problem must, of course, be kept in perspective and overall the fact that the law is sometimes abused is a small price to pay for the valuable protections it affords to genuine victims.

The problems of phoney claims generally centre around job applications. At one time there were quite frequent newspaper reports of people with African or Asian names putting in two applications for the same job, identical in all respects except for the name. Typically the applicant would use a very anglo-saxon sounding name in one application and his real name in another. When the phoney anglo-saxon got invited to an interview but the real person did not, the real one would threatened to sue on the basis that the only reason for his not having been invited for interview must have been his race. Employers would be tempted to pay a few hundred pounds to get rid of the nuisance even if a tribunal would be unlikely to make an award if it was aware of the facts.

We haven’t heard much of that particular scam recently (no doubt many employers now have systems in place which weed out phoney “dual applications”). Instead a new version of the same scam has appeared, this time making use of anti age discrimination law.

This “age-discrimination” version is a little more subtle than the “race discrimination” variety as there are no relatively easy to spot double job applications. Instead an older job applicant applies for a job which is clearly most suitable for a young person and stresses his age in the application. If he is not invited for an interview he may claim, or threaten to claim, unlawful age discrimination. If the case goes to a tribunal and the tribunal is persuaded that the applicant never genuinely intended to take the job, the scamster is unlikely to get far. He will not have have suffered a detriment and so will not succeed in a discrimination claim (an example was an EAT case almost exactly a year ago – Keane v Investigo & ors).

In another case a Mr Berry, a man in his mid-50s, brought at least four sets of proceedings in the London (Central) Employment Tribunal claiming that job advertisements breached the (now-replaced) Employment Equality (Age) Regulations 2006 because words such as “recent graduate” or “school leaver” suggested that they were aimed at younger people. Mr Berry never actually applied for the jobs in question but nonetheless brought claims to an employment tribunal. He did so largely in reliance on a 2008 ruling by the European Court of Justice in which that court held that “Public statements by which an employer lets it be known that under its recruitment policy it will not recruit any employees of a certain ethnic or racial origin are sufficient for a presumption of the existence of a recruitment policy which is directly discriminatory…”. Mr Berry claimed in effect that what was sauce for the goose (EU immigrants) should also be sauce for the gander (British people of a certain age) and therefore that this 2008 ECJ ruling meant he had legal rights. He also claimed for good measure that the job advertisements breached his rights under the European Convention on Human Rights.

He lost his claims in the tribunal and, perhaps surprisingly, decided to appeal. In October 2010, Underhill J in the Employment Appeal Tribunal had no trouble in dismissing his appeals, stressing not only that the legislation is not designed to provide income for people who “complain of arguably discriminatory advertisements for job vacancies which they have in fact no wish or intention to fill” but also that those who did so are likely to be liable for costs.

While the cases show that employment tribunals will not support scamsters, notably job applicants and others who have no intention of taking up advertised jobs, the fact remains that in practice such claims can be a nuisance. Only too often it can be less costly and more convenient for an employer simply to pay off a potential claimant rather than fight a case. Notwithstanding the suggestion noted above by Mr Justice Underhill that an unmeritorious claimant is likely to be liable for costs, there is no certainty of a costs order being made and, even if it is, in practice there is no certainly of being able to enforce it against the scamster. The government’s plan to abolish the 65 so called “default retirement age” (see the previous item) will do nothing to help. However other government plans may – there are rumours that the official review of employment laws currently under way will consider recommending that more claimants should be required to put up some form of cash security before being allowed to bring cases to an employment tribunal. If so, this would no doubt deter at least some phoney claimants.

The moral for employers and especially employment agencies is that great care should be taken to ensure that job advertisements avoid use of any words, phrases or images which could suggest that a job is only suitable for people of a particular age unless they are quite sure that such a requirement can be justified as a “proportionate means to achieve a legitimate aim” (to quote the wording used in the relevant legislation). In any case of doubt you should contact us for advice.