Twitter, Facebook and the like

Posted on June 23, 2011 by Martin Malone

Cases concerning the when and how of employee use of social networking sites (such as Twitter and Facebook) are now beginning to reach the employment tribunals.

No new legal principles are involved in deciding when and whether it is appropriate for an employer to discipline or even dismiss an employee for inappropriate use of these sites. But because the subject is likely to come up with increasing frequency it may be useful to draw attention to a couple of recent cases.

In the first (local) case an employment tribunal found that dismissal was within the band of reasonable responses open to pub chain Wetherspoons after it dismissed a shift manager at one of its pubs in Cheshire because she had posted insalubrious comments about two customers on Facebook. The customers concerned had abused the manager, a Miss Preece, when she was on duty. The abuse had continued afterwards in that Miss Preece was later subjected to anonymous telephone calls, including one in which she was told "get your f*cking P45 ready because you are out of here…". An important factor which led the tribunal to rule that the dismissal was fair was that Miss Preece had signed up to Wetherspoon’s formal email and social media policy which included an explicit statement to the effect that disciplinary action could be taken if any comments on Twitter, Facebook etc. should "be found to lower the reputation of the organisation, staff or customers" (Preece v JD Wetherspoons plc Liverpool ET on 18 January 2011).

However in another case a few weeks earlier an employment tribunal held that dismissal was not within the band of reasonable responses open to the Halfords chain of stores. Halfords had disciplined and then dismissed a deputy manager who had posted negative comments on Facebook. Mr Stephens had set up a Facebook page: "Halfords workers against working 3 out of 4 weekends". He sued for unfair dismissal, won and was awarded £11,350 compensation (Stephens v Halfords plc Torquay ET on 3 November 2010).

In this type of case, as in any "misconduct" unfair dismissal case, an employment tribunal will look at whether the employer went through appropriate procedures and will consider whether or not dismissal fell within the range of reasonable responses open to an employer in all the circumstances (and will not substitute its own view of what would have been reasonable). As many HR practitioners are aware, in carrying out this exercise an tribunal will apply three main tests, as follows:

At the time when he dismissed him, did the employer believe that the employee had been guilty of the misconduct?
Were there reasonable grounds for the belief?
Did the employer carry out as much investigation into the matter as was reasonable in all the circumstances of the case before dismissing the employee?

Subscribers should note that we have added a draft social media policy to the library of downloadable documents in the protected area of our website.

consultation on modern workplaces – holidays

Posted on June 23, 2011 by Martin Malone

The Government issued its BIS "Modern Workplaces Consultation" on 16 May 2011 . One of the topics covered is "Working Time Regulations". Consultation closes on 8 August 2011.

The introduction to this part of the consultation explains that the proposals "concern the interaction of annual leave with sick, maternity, adoption, parental, and paternity leave". Changes are necessary to ensure that UK law is consistent with the EU Working Time Directive, as interpreted by the European Court of Justice.

Under British rules the right to annual holiday is generally forfeited to the extent that it is not taken in any particular holiday year – it cannot be carried forward. Judgments of the EU Court of Justice show that in one situation this is unlawful in respect of the basic four weeks’ annual leave required by the Directive. This arises where the worker concerned was unable to take their basic four week annual leave entitlement due to sickness and did not have the opportunity to take it again within the same leave year. EU law requires that a worker in that position should be able to carry forward any untaken part of the basic four weeks’ leave to the next year. Current British law does not provide that right.

The main relevant proposal in the consultation document is therefore to change current British law accordingly. The change will be in respect only of the basic four weeks’ annual leave required by EU law and the employer will be able to insist that the unused leave is taken in the current leave year if there is still an opportunity to do so.

Further related changes will ensure:

that if a worker falls sick during scheduled annual leave he will be able to reschedule the untaken part of the basic four weeks’ annual leave to a later date, including carrying it over if it is not possible to reschedule in the current leave year (the employer will be able to insist that leave that is unused in such circumstances should be taken in the current leave year if there is still an opportunity to do so);
that a worker will be entitled to carry forward to the following year any annual leave (not just the basic four weeks) which is untaken due to absence on maternity, adoption, parental or paternity leave (including additional paternity leave and the proposed new flexible parental leave – see the separate post on this). The consultation document says that the Government is not proposing to extend this to other types of leave.

The Government says, apparently without irony, that "We are aware that businesses will have concerns around the abuse of these provisions". It expresses the belief (hope?) that "employers’ notification procedures for sickness absence" will prevent a worker on annual leave falsely claiming that he was sick so that he can take more annual leave at a later date. The consultation document specifically asks for comments on this aspect.

Consideration ("preliminary thinking") is also being given to other ideas – for example allowing employers to "buy out" annual leave in excess of the basic four week minimum required by the EU Directive or to require the worker to carry that excess over to the following year in any case of "overriding business need".

Importantly, the consultation document confirms that there is no change to the British Government’s opposition to EU proposals to remove the "opt-out" rule (the rule which enables workers to opt-out of the 48 hour average maximum working week limit).

Summary of forthcoming changes

Posted on March 24, 2011 by Martin Malone

Here is an outline list of eight employment law related changes (and non-changes) announced by the Government due in the near future. The last three are of sufficient general importance to merit separate consideration – provided by separate posts (see links below).

The outline list is as follows:

1. Time off to Train

The Government has now announced that this right will not be extended to employees of small businesses in April 2011. Almost a year ago the previous government introduced a right for employees to request time off for training, phased in from April 2010. This started last April for employees of larger employers (250+ staff) and was to be extended to employees of any size of employer in April 2011. The Coalition Government announced in November that firms with fewer than 50 employees would remain exempt. It has now announced (on 16 February) that all further implementation is to be deferred “to allow further, thorough discussion, scrutiny and evaluation”.

2. Bribery Act deferred

Implementation of the Bribery Act 2010 was also due for April 2011. This has been postponed to, at the earliest, June 2011. The Ministry of Justice has yet to issue final “guidance” and has promised that the Act will not come into force until 3 months after the guidance is issued.

3. Visa reform (non EU workers)

Currently businesses are given an annual allocation for the number of foreign workers they can bring into the country. On 16 February the Government announced a new system under which employers will have to apply to the UK Border Agency for a certificate of sponsorship for a specific post. Subject to Parliamentary approval this will come into force on 6 April 2011.

4. Flexible working

The age limit of children in respect of whom employers must seriously consider requests by employees for flexible working is increased from 17 to 18 as from 6 April 2011.

5. Equality Act 2010

The provision allowing “positive action” in recruitment and promotion (s.159) comes into force on 6 April, as does the “public sector equality duty” (s.149).

6. Criminal record checks and vetting of employees

See the separate news item under the heading “Protection of Freedoms Bill“.

7. Additional Paternity leave

See the separate news item under the heading “Additional paternity leave“.

8. Abolition of “default retirement age”

See the separate news item under the heading “Abolition of default retirement age“.

controversial recruitment practice at Bristol City Council

Posted on June 17, 2010 by Martin Malone

Bristol City Council has caused a furore by banning white people from applying for a traineeship because it wants to boost staff diversity. According to a report in the Daily Telegraph the two-year training opportunity is only open to people from black or ethnic minority backgrounds because the “normal recruitment process was not rectifying” under-representation. The Council claims it can circumvent race discrimination laws because the traineeship does not guarantee a job at its conclusion. However, the scheme has been criticised as “totally racist” and Tory MP Philip Davies has said “It is an utter outrage and the council should be hanging its head in shame”. On the other hand Bristol Labour MP Kerry McCarthy said, “I would support schemes like this – it gives people an opportunity”.

So what is the law in this controversial area? Perhaps the best known example of positive discrimination is the use of “women-only shortlists” in the selection of parliamentary candidates. Again, the stated reason is to address under-representation. The general position is that positive discrimination in employment is banned although Harriet Harman is known to support a change in the law to address inequality. However, employers can give training and support exclusively to people from disadvantaged socio-economic backgrounds. This is because, technically, it is not regarded as positive discrimination because there is no legislation prohibiting discrimination based on socio-economic background. In Bristol’s case, of some 9000 staff, 8370 are white. When addressing inequality based on race the Race Relations (Amendment) Act 2000 gives public authorities a statutory general duty to promote race equality. The Equality and Human Rights Commission has the power to enforce adherence to the duty by issuing compliance notices. EHRC guidance identifies training as a specific area in which the duty should be applied.

out of court settlements in disputes between employers and employees

Posted on June 17, 2010 by Martin Malone

Detail view of two businessmen shaking hands

As is well known, the basic general rule is that ‘out of court settlements’ of employment disputes are not legally binding in the sense that they cannot exclude an employee’s right to take the matter in question to an Employment Tribunal. There are some exceptions to this rule. These require specified conditions to be fulfilled. If the conditions are fulfilled then agreement to accept an amount in full and final settlement will be the end of the matter. The agreement will be valid and the courts and tribunals will not entertain a claim based on the same subject matter.

One of the most common exceptions is where the out of court settlement takes the form of a ‘compromise agreement’ satisfying specified statutory conditions. Typically one of the most important conditions is that the employee must have “received advice from a relevant independent adviser as to the terms and effect of the proposed contract and in particular it effect on his ability to pursue his complaint before an employment tribunal”.

Over the years there have been many examples of cases in which employees have sought to bring cases to employment tribunals even though they have signed ‘out of court’ settlements agreeing not to do so. As will be apparent from the notes above such cases are bound fail if the statutory conditions for valid compromise agreements have been complied with so the employee concerned will generally argue than one or other of the conditions referred to above was not properly fulfilled.

This is what happened in a case in May 2010. A substantial number of staff employed by Glasgow City Council settled equal pay claims out of court. Although they signed what the Council considered to be binding agreements that they would not bring in the employment tribunal equal pay claims covering a particular specified period, they changed their minds and tried to do so. Presumably they had received advice after signing the agreements that the amounts they had agreed to take in full and final settlement were less than the amounts they would probably have been awarded if they had taken their cases to the tribunal.

Glasgow City Council put forward the obvious argument that the employment tribunal had no jurisdiction because the staff had signed valid compromise agreements accepting the amounts offered in full and final settlement. The employees, on the other hand, argued that the compromise agreements they had signed were not valid. This, they argued, was because the important condition noted above had not been fulfilled. Although they had received advice from relevant independent advisers, as required, they claimed that as this advice had not included advice on whether the settlement offer put forward by the Council was a ‘good deal’ it did not fulfil the important condition noted above. Glasgow City Council said in reply that this was not what the wording noted above requires. The Council argued that the wording merely requires the adviser to explain what the proposed settlement agreement provides and what its effects would be. This, the Council said, had been done. There was no need for the advice to go further and specifically there was no requirement that it should include advice enabling employees to make informed decisions as to whether to accept or reject a proposed settlement.

The Council won. The employment judge said it was clearly desirable that the advice given to the employees should have been such as to allow them to make an informed decision. However she concluded, “with some reluctance”, that that is not what the statutory wording required. The judge ruled that the compromise agreements signed by the employees were valid and that therefore the employees could not bring claims to the tribunal in respect of the period for which they had already agreed to accept amounts in full and final settlement of those claims.

It should be noted that this is the judgment of an employment tribunal. As such, although of course influential (especially given the seniority of the employment judge who heard the case) the decision does not set a binding precedent.

limits on employers’ liability for wrongful acts of employees

Posted on June 17, 2010 by Martin Malone

Until the late 1990s the basic test for deciding whether an employer should be held liable for the wrongful act of an employee was to consider whether the employee had used an unauthorised method to do a job he was authorised to do (in which case the employer would be “vicariously liable”) or whether the employee was simply doing something which was unauthorised (in which case the employer would not be “vicariously liable”) The rather quaint legal description for an employee acting without authority is that “he was on a frolic of his own”.

In 2001 the House of Lords ruled that “important legal decisions should not turn on such semantics”. It established instead that the correct test is to concentrate on the connection between the nature of the employment and the particular wrong and to ask whether, looking at the matter in the round, it is just and reasonable for the employer to be liable. Following this ruling, in recent years the tendency has been towards more liberal protection of third parties.

In April 2010 there was a case in the Scottish Court of Session (Inner House, analagous to the Court of Appeal in England and so a senior court) which has shown that in spite of this tendency there are limits. The Court of Session held that an employer was not liable for a wrongful act of an employee even though it was done in the workplace during working hours because it was “an unrelated and independent venture of his own: a personal matter, rather than a matter connected to his authorised duties”.

In the case, Leanne Wilson worked as a clerk at Exel’s frozen food depot in Motherwell. A male colleague crept up on her, grabbed her hair (which was in a pony-tail) and pulled her head right back, making a “ribald remark” as he did so. Miss Wilson was injured. She claimed damages against Exel, alleging that Exel was vicariously liable for the actions of her male colleague. The Sheriff dismissed her claim. She appealed but lost again.

Employers who are concerned about their liability for actions committed by their staff, and indeed employees, may wish to read the decision – Wilson v Exel UK Ltd [2010] CSIH 35 (on 29 April 2010) and should, of course, contact us for advice.

a possible loophole in unfair dismissal law

Posted on June 17, 2010 by Martin Malone

The case noted here was at employment tribunal level only. It is therefore not legally binding as a precedent and anyway may well be subject of an appeal. Nevertheless it is sufficiently interesting to merit a mention in this newsletter. At its simplest (and it must be said at once that this is a considerable over-simplification) the case suggests that in appropriate circumstances it may sometimes be possible for an employer to engineer an arrangement which enables him to dismiss employees who he thinks are overpaid without those employees being able to claim unfair dismissal.

The case suggests that this can sometimes be done by making deliberate use of an exemption in the TUPE rules which is designed to save jobs when a business is in danger of collapse. The TUPE rules (Transfer of Undertakings (Protection of Employment) Regulations 2006) ensure that, as a general rule, when a business is sold the purchaser automatically takes on all staff employed in the business together with all liabilities associated with their employment; dismissing any of them is automatically unfair dismissal. However there is an exemption when a business is in trouble, in order to promote the ‘rescue culture’ and because saving some jobs would be better than losing them all. The effect of the exemption, when it applies, is first that the purchaser does not automatically take on staff and second that dismissing them is not automatically unfair dismissal.

The exemption applies only in very limited circumstances. In essence it applies where the vendor is the subject of insolvency proceedings or “any analagous proceedings which have been instituted with a view to the liquidation of the assets of the [vendor] and are under the supervision of an insolvency practitioner”.

In the case in question a management buy-out of a business was proposed. The managers did not want to take on all the staff. This of course would have happened automatically under TUPE if the deal had gone ahead as a normal straightforward management buy-out. Deliberately, in an attempt to avoid this result, the deal was set up in a special way. Instead of there being a normal management buy out, the vendor company was put into liquidation, a liquidator was appointed to wind it up, its business and assets were sold to a new company owned by the managers and a much reduced number of staff was taken on from the old company.

Staff who were not taken on brought unfair dismissal claims, mainly on the basis that the arrangement was a sham. While the Leicester employment tribunal which heard their claims towards the end of April 2010 agreed with the staff that some “failure to consult aspects” of their claims should proceed to a full hearing, it dismissed their main argument. The tribunal held that the fact that the management buy-out had been set up in the somewhat cumbersome way it was in a deliberate attempt to avoid the effects of TUPE did not make it a sham. Accordingly, the main basis of the unfair dismissal claims failed.

As noted above, the case was at employment tribunal level only and is therefore not legally binding as a precedent and anyway may well be subject of an appeal. Also the factual background was considerably more complicated than is apparent from the outline above and no arguments were raised to the effect that the anti-tax avoidance principle (known as the “Ramsay principle” after the 1981 tax case in which it was first propounded) under which the authorities can sometimes look straight through ‘artificial’ arrangements might apply in an employment law context. Clearly it would therefore be foolish to go too far in reliance upon the decision in this case. That said, the decision may be of interest not only to professional advisers but also both to some employers and their employees – and it will be particularly interesting to see what the EAT decides if the employees appeal.

The case emphasises the uncomfortable overlap between employment, insolvency and tax law which has existed for many years and in many guises. The problem is that each area of law evolves with its own statutes and case law and, as a result, conflicts can emerge. One of the main benefits of CLB Employment Solutions is that, as a part of Canter Levin & Berg Solicitors, we are able to consider such issues from all relevant perspectives.