better redundancy deals for older workers?

retirement

In Lockwood -v- Department of Work and Pensions and The Cabinet Office, the Employment Appeal Tribunal (EAT) has endorsed the legitimacy of a voluntary redundancy scheme which provided enhanced benefits for older employees.

The claimant applied for redundancy at the age of 26, having worked at the DWP since she was 18. She was entitled to a redundancy payment under the Civil Service Compensation Scheme of nearly £11,000. However, if she had been over 35, she would have been entitled to over £17,000 more. She made a claim of direct age discrimination, but failed in the Employment Tribunal.

The EAT upheld the decision. There were material differences between the two groups – older workers would find it more difficult to find new employment and would have heavier family financial commitments than younger workers. The EAT also agreed that the different payments were justified, in that the different levels of payment were a proportionate means of achieving the legitimate aim of providing workers with a financial cushion to tide them over until they find another job – which would be harder for older workers.

The decision provides important clarification concerning this difficult issue which has troubled many employers since age discrimination legislation was implemented in 2006. It is in line with calculations for redundancy payments and basic awards for unfair dismissal which take into account both an employee’s length of service and age. When the Regulations first came into force many employers took steps to remove all of their own procedures that might result in an employee suffering an advantage or disadvantage merely because of his or her age. However, now that we have a few years’ worth of decisions concerning how protection from age discrimination works in practice, it has become clear that Tribunals will readily find that making different provisions according to the ages of employees is permissible, as long as there is a credible rationale for the approach taken. Continue reading

reduction in redundancy consultation unlikely to affect SMEs

hot_desking
There has been a great deal of press coverage about the Government’s proposal to halve the consultation period for large scale redundancies from 90 days to 45 days.

According to employment relations minister Jo Swinson (yes, I’d never heard of her either until now):

The process is usually completed well within the existing 90-day minimum period, which can cause unnecessary delays for restructuring and make it difficult for those affected to get new jobs quickly. Our reforms will strike an appropriate balance between making sure employees are engaged in decisions about their future and allowing employers greater certainty and flexibility to take necessary steps to restructure.

However, Brendan Barber of the TUC countered this:

The last thing we need is for the government to make it easier to sack people. Unemployment has not gone as high as many feared because employers have worked with unions to save jobs, even if it has meant sharing round fewer hours and less work. Continue reading

when should the practicality of a return to work be considered?

breach of contract?

With reductions in tribunal awards on the way, and with it becoming increasingly difficult to find alternative employment, the remedies of reinstatement and re-engagement, which have rather fallen into disuse, are perhaps due a revival.

Rembiszewski v Atkins Ltd is a decision on when the practicability of the dismissed worker returning to work should be assessed – should it be at the point when the question of remedy was considered by the tribunal or at the point when the return to work would actually happen?

In May 2009 Mr Rembiszewski, an architect, raised concerns about a fire exit at a railway station. This was a protected disclosure in the context of whistleblowing legislation.

In September 2009 the employer commenced redundancy consultations. Based on scoring in pools of candidates at risk Mr Rembiszewski was selected for redundancy.

The Employment Tribunal held that he was dismissed not for whistleblowing but for redundancy. However the procedure was flawed and therefore his dismissal was unfair. Mr Rembiszewski applied for reinstatement but, since he was made redundant, the Tribunal determined that the appropriate remedy was re-engagement. The employer maintained that this was impractical, taking into account in particular an assertion made in the course of the proceedings that the Company had acted vexatiously, abusively, disruptively, or otherwise unreasonably. As it turned out, the Tribunal concluded that there were no suitable jobs available for Mr Rembiszewski and he was therefore awarded compensation of £25,403.

On appeal it was contended on behalf of Mr Rembiszewski that the Tribunal erred in not considering reinstatement and that practicability should be considered at the time either reinstatement or re-engagement would take effect rather than the date of dismissal. There was also a Polkey argument, i.e. that if the correct redundancy procedure had been followed then the outcome would have been the same. This was quickly rejected by the Employment Appeal Tribunal since, had the employer wished to rely on it, it should have adduced evidence in this regard at the Tribunal hearing and it did not do so.

It was settled that re-engagement rather than reinstatement was the option potentially available. As for the date at which practicability of returning to work should be considered, it was confirmed that this must be the date at which it would take effect. Continue reading

European Court of Justice judgment on timing of collective consultation obligations

In United States of America v Nolan, the European Court of Justice has confronted the combined forces of redundancy procedure and semantics. Perhaps overfaced with such a powerful combination it has declined to give a ruling in the long running saga of whether the USA was in breach of an obligation to inform and consult employees before closing an army base situated in the UK, because although UK law does not exclude public bodies from the operation of domestic rules on redundancy consultation, the European directive on collective consultation expressly does make such an exclusion. The Court of Appeal had asked it to determine the point at which the duty to consult is triggered. While the UK legislation refers to redundancies being "proposed" – EU law uses the term "contemplated"; and so uncertainty has arisen about when, exactly, the duty to consult is triggered. The point therefore remains to be determined by the Court of Appeal.

As is usual with European cases the judgment of the Court was preceded (last March) by the Opinion of the Advocate General (AG). The AG was concerned that, above all, the obligation to consult under TUPE should not be triggered "prematurely". This seems to be an entirely laudable concern, taking into account that employees might be unnecessarily worried about a potential transfer, even though that transfer might not ultimately happen. However, that appears to be at odds with the European reference to redundancies being "contemplated" which implies that, at that stage, the decision to make people redundant has not been finalised.

The counterpoint to that is that a consultation should not take place too late, so that it is in effect a sham. What is the point of a collective consultation when the decision to make people redundant has already been taken, i.e. when redundancies are "proposed"?

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the most summary of dismissals

City traders may not spring to mind as the most deserving of sympathy but spare a thought for those who were unable to access their offices today.

According to a report in today’s Times (behind paywall) about 100 traders turned up at work this morning only to find that their passes had been deactivated. They were met in reception by HR staff who gave them bags containing their personal belongings and were told that they would have two weeks’ paid leave, following which they should return to collect their redundancy payments.

Evidently, UBS have decided entirely to disregard proper redundancy procedure which requires notification to employees that they are at risk of being made redundant as soon as the possibility arises, as well as meaningful consultation which should include consideration of alternatives to redundancy. Continue reading

August employment news from abroad

Welcome to the Employment Solutions Blog from Saint Martin de Gurson (a small village between Bordeaux and Bergerac in South West France). As I hope you’ll understand this month’s report is a condensed version of the usual monthly report but I hope that you find some items of interest.

1. what happens if a claimant refuses to co-operate in obtaining medical evidence

GCHQ v Bacchus is a case in which Mr Bacchus failed to attend an appointent so that GCHQ could obtain its own psychiatric evidence in connection with his claim for disability discrimination based on anxiety. He was ordered by an employment tribunal to attend an appointment but did not do so. The tribunal nonetheless proceeded on the basis that it already had medical evidence (provided by the claimant). GCHQ appealed successfully to the Employment Appeal Tribunal. The EAT agreed with its submissions that it was unfairly disadvantaged by being unable to obtain its own medical evidence. However, the claim was not struck out. Instead, the EAT made an “unless order” requiring the claimant to attend the medical examination, failing which his claim would be struck out.

The case highlights a notable distinction between employent tribunal procedure and that which applies for personal injury claims in the county court. The standard court procedure is for the claimant to nominate proposed medical experts. If one is accepted by the defendant then a single report is prepared. However, the expert is required to make a statement acknowledging that the report is prepared for the court rather than for either party, and should therefore be impartial. On the face of it, there seems no good reason why the same procedure should not apply for tribunals. As I have commented on numerous occasions, taking into account the complexity of many tribunal claims, there is no reason why well tried court procedures should not be adopted.


2. can an employer fairly use a “pool of one” for selection for redundancy

In Wrexham Golf Co v Ingham the Employment Tribunal was asked to consider whether an employer can fairly use a “pool of one” when determining candidates (or, more accurately in this instance, a candidate) at risk of being made redundant. Those who are familiar with redundancy procedures will be aware of the need to be scrupulously fair when selecting a candidate or candidates for redundancy and the need to be able to demonstrate this if called upon to do so. It is generally an essential part of this process to identify what is commonly referred to as a pool of candidates for redundancy from which selections can be made. Often the pool will comprise employees in an under-performing department or those whose duties can be combined so as to reduce the overall number of employees performing a particular type of work. In some cases there might be only one employee performing a job which can de dispensed with.

However, the decision in Ingham emphasises that identifying the pool is but one part of the process of termination of employment which, overall, must be fair. When a tribunal considers the question of fairness a tribunal must consider whether the actions taken by the employer were within a range of reasonable responses available to a reasonable employer. In this case the tribunal had focused unduly on the question of “the pool” to the exclusion of the wider question of overall fairness in the context of the range of reasonable responses. Accordingly the finding of unfair dismissal, even though Mr Ingham was the sole bar steward at the club, was unfair, and the matter was remitted to a fresh employment tribunal for a full rehearing.


3. philosophical beliefs, the Proms and public protest

The BBC Proms 2012 are in full swing and provide those of us who enjoy them with a delightful selection of the finest classical music as particularly demonstrated by a recent concert of some of Vaughan Williams’ Symphonies which I was lucky enough to catch on BBC4 the other day. By the way, I recommend The Broadway Sound on 1 September, conducted by the remarkable John Wilson. Anyway, back to employment news! Sarah Streatfield is a violinist in the London Philharmonic Orchestra (LPO) who protested about a performance by the Israel Philharmonic Orchestra (IPO) at the 2011 Proms. Her protest took the form of a letter to the Independent protesting about the decision to invite the IPO to participate in the Proms. Three other members of the LPO and twenty other musicians were co-signatories.

She was suspended for six months on full pay for “damaging the reputation of the orchestra”. She claimed that the LPO failed to respect her “humanist beliefs” and claimed direct and indirect discrimination as well as harassment and victimisation.

An employment tribunal accepted that her humanist beliefs were capable of protection under the Equality Act 2010. However, since the LPO had no knowledge of those beliefs the discrimination claims stood no reasonable prospect of success. This resulted in the striking out of her claims for discrimination.

However, her claims for victimistation and harassment were not struck out. The tribunal provided an indication of its view of the prospects of the claims succeeding by requiring her to pay a £250 deposit as a condition of proceeding.

The significant aspects of the decision are that the claims for victimisation and harassment may proceed (subject to payment of the deposit) and, much more importantly as a general proposition, that humanism is a philosophical belief which is capable of protection under the legislation.

Many may take the view that this is a very liberal interpretation of what constitutes a philosophical belief capable of statutory protection. Although the decision is not binding on other tribunals, it might well be thought that the border between political and philosophical beliefs has been breached. An interesting philosophical question!


4. making employees on maternity leave redundant

Most employers are aware that treating employees on maternity leave unfairly is likely to result in an expensive claim for discrimination and, perhaps also, unfair dismissal. However, there are circumstances in which, entirely fairly, employees who are on maternity leave, find themselves at risk of redundancy. Since the factors which can lead to the need to redundancies can arise at any time, it is inevitable that, from time to time, those affected, may be on maternity leave. Those who are uncertain about such matters might reasonably decide to postpone redundancies or to exclude employees on maternity leave from the process.

There is an understandable and entirely approrpriate concern on the part of employers that affected employees should be treated fairly and, with this in mind, ACAS has published a guide for Managing Redundancy for Pregnant Employees or those on Maternity Leave. The guide is commendably well written and straightforward and includes really useful case studies which will undoubtedly assist those employers who face this scenario. It is highly recommended reading.


5. £157bn overtime and “nightcations”

This item comes with a source warning! According to research undertaken by Travelodge one in ten Britons are working an additional 16 hours’ unpaid work per week “in order to keep their bosses happy” and take a night off rather than a holiday in order to “recharge their batteries and boost relationships”. Apparently the value of this unpaid work is £157bn, based on an average 9.1 extra hours per week which equates to an average £5,726.18 unpaid work per working person. The report also states that 66% of adults are suffering “soaring stress levels” while 31% find it “difficult to get through the average week”. Apparently 37% of “workaholic Britons” are opting for “nightcations” instead of longer holidays.

According to Shakila Ahmed of Travelodge:

This year we have experienced a significant rise in just Saturday night bookings compared to previous years. To obtain a better understanding of the rationale behind this trend we commissioned research to investigate how the economic crisis is affecting the psychologies of British holidaymakers.

Our research findings have highlighted that Nightcation breaks are a growing trend amongst Britons as they are an easy to book, cost effective short break that help workaholic Britons recuperate and recharge for the week ahead.

Travelodge tell us that “more than a third of workers recognise that a Nightcation gives their relationship with their partner a much needed boost”.

I leave you to draw your own conclusions as I enjoy another glass of fine St Emilion while writing this newsletter in South West France!


6. finally, (for regular readers) I know that you’d be disappointed if there wasn’t a TUPE item!

In F & G Cleaners Limited v Saddington (the claimant’s name may seem appropriate in a TUPE case for regular readers) the question for the Employment Appeal Tribunal was whether employees who were offered self-employment in the event of a TUPE transfer were unfairly dismissed. The answer might seem obvious for regular readers (and TUPE aficionados) but it is surprising how often this scenario can arise, particularly in the field of contract cleaning.

Unsurprisingly the EAT took the view that there was no failure to mitigate by failing to take the offer of self-employment. However, the interesting twist is that it was also held that there could have been a failure to mitigate if the only disadvantage was the inability to claim unfair dismissal. For those who are interested in this point, I’ll leave you to click the link and read the judgment.

In this case the decision not to accept self employment was not a failure to mitigate and (important in employment law) the potential failure to mitigate did not arise when the offers were made but when the dismissals took effect. I doubt that this was a relevant consideration for the employees at the time. Who was the person who ever said that employment law is straightforward and suitable for a summary tribunal process?!

complex redundancy selection criteria not always necessary

When advising on redundancy procedures, employment lawyers tend to emphasise that employers should take care to ensure that they use objective criteria when selecting from a pool of employees. And very good advice it is too. Mitchells v Tattersall, however, shows that this does not inevitably mean a box ticking exercise is required.

Mitchells, the brewery, had a senior management team (“SMT”) of five. They ran into financial difficulties and the board decided to look at cutting the SMT to reduce expenses. They identified the property manager as the manager who contributed least, and was least likely to contribute, to bringing in revenue and on that basis decided that he should be made redundant. He successfully claimed unfair dismissal. The employment tribunal found that the dismissal was unfair because the board had used subjective criteria when selecting for redundancy, and that the procedure followed was unfair. However, they considered that he would have been made redundant if a fair selection method and procedure had been followed, and on the basis that there was a one in five chance of his being made redundant in any event, reduced compensation by 20%

Continue reading

no unfairness in process for selecting candidates for alternative employment

Job Centre

Consideration of alternative employment is a part of a fair redundancy procedure and it is common practice for employees to be asked to attend interviews for alternative jobs, competing against other internal, and sometimes external, applicants.

In Samsung Electronics (UK) Ltd v Monte-D’Cruz the Employment Appeal Tribunal (EAT) overturned a finding of unfair dismissal by an employment tribunal, which held that a redundancy was unfair, in part because the criteria used for selecting candidates for an alternative job were subjective and “nebulous”. The competencies against which applicants were assessed were “creativity, challenge, speed, strategic focus, simplicity, self-control/empowerment, customer focus, crisis awareness, continuous innovation and teamwork/leadership”. The tribunal thought it would have been better to select by reference to a person specification, and that past performance was not properly taken into account. 

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Paper boys and girls in Crawley served with redundancy notices

In an extraordinary turn of events the regional newpaper conglomerate Northcliffe Media, which publishes 113 newspaper titles, has served redundancy notices on newspaper boys and girls in Crawley. Unsurprisingly the young workers have turned to social media by setting up a Boycott the Crawley News Facebook page. According to a report in the Press Gazette Hannah, the founder of the Facebook page, stated:

They should have looked after the people who had looked after them for over 20 years, the distributors who had done a fantastic job. They should have been given the chance to negotiate costs and lower their fee if necessary.

Only as a last ditch attempt should they have been ruthless. They didn’t contact the advertisers to see if they would increase their payments, they didnt contact the distributor…no effort at all actually. Just push the paper boys and girls and the distribution company aside and go with the cheap foreign labour

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increases in tribunal limits

We reported last month the increases in limits for unfair dismissal compensation and calculation of a week’s pay for redundancy and other purposes. The full changes have now been published and are as follows:

  •  - Maximum compensatory award for unfair dismissal: £72,300 (no maximum in discrimination cases)
  •  - Maximum unfair dismissal basic award/redundancy payment: £12,900
  •  - Minimum basic award for unfair dismissal in special cases: £5,300
  •  - Additional award: £22,360
  •  - Maximum week’s pay for basic award and redundancy pay purposes increases from £400 to £430
  •  - Refusal of right to be accompanied (e.g. in disciplinary or flexible working request hearings): £860
  •  - Failure to consider a flexible work request: £3,440
  •  - Failure to provide a written statement of terms and conditions of employment: £1,720

The changes take effect with reference to the date of dismissal or other relevant event.