local authority spending and the spiralling cost of the agency carousel

In September last year I wrote about the problem of what have been described as “revolving door managers” in the NHS. Settlement payments have amounted to a shocking £1.6 billion, often paid to employees who were re-employed in virtually the same or similar jobs with weeks or months. Faced with a problem on such a massive scale the Government proposed arrangements for clawbacks in the event of re-engagement. However, I and others pointed out that a direct intervention to alter contractual rights would be fraught with difficulties and no doubt susceptible to frequent legal challenges. The problem remains unresolved.

In the meantime it seems that the contagion has spread to local authorities, but on a scale perhaps even greater than in the NHS. According to research carried out by The Times (£) local authorities have spent an eye-watering £5 billion in rehiring staff they recently made redundant in a “scandalous…spending spree on agency and consultancy workers”.

The spending is all the more surprising since it comes at a time when councils have seen their budgets cut by £20 billion. It seems that the response to losing 400,000 permanent or other salaried staff has been to replace them with agency workers and consultants. In some sectors, for example social workers, the same person who used to work for the council secures higher paid work in the private sector, perhaps as a self-employed consultant, and then sells those services to the council, in effect to do the same work as before.

The newspaper conducted its research by making a series of freedom of information requests to local authorities. The results revealed that the worst offenders were Birmingham (£155 million in the last five years), Essex (£133 million), Kent (£127 million) and the London Boroughs of Lambeth (£125 million) and Camden (£125 million). Locally, Lancashire was the biggest spender (£51.2m), followed by Manchester (£48.3m), Liverpool (£29.7m), Cheshire East (£29.4m), Wirral (£18.9m) and St Helens (£16.2m).

However, what is the alternative? If councils are required to make savings then, as with any business, by far the biggest expense is the wage bill. The problem is that, as any accountant will tell you, moving an expense item from one column to another (e.g. permanent staff to consultants or agency staff) delivers no saving at all. The situation can get even worse if, for example, the only available service providers (e.g. for social care) cost a good deal more than direct employees. No-one can blame the agencies for charging as much as they can get away with.

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big payouts

In November 2014 I warned that employers should get ready for backdated holiday claims, particularly from those who are now entitled to include average overtime when calculating the rate payable.

The Government’s response was to attempt to limit the effect on employers by introducing the Deductions from Wages (Limitation) Regulations 2014. The Regulations are intended to restrict employers’ exposure to backdated claims by limiting the period of claim to two years before presentation of the claim and by confirming that the right to paid holiday is not automatically incorporated as a term in employment contracts. However, of course, this does not displace the entitlement to paid holidays under the Working Time Regulations.

Further, the Regulations only apply to claims lodged after 1 July so there is a window of opportunity for employees.

Of the UK workforce of 30.8 million, five million do voluntary or compulsory overtime. The scope for claims and increased payments going forward is therefore considerable.

In mid-January John Lewis and Waitrose staff were informed that they will share £22 million in additional payments this year to provide for the increased entitlements. 60,000 employees will share “bonus” (i.e. backdated) payments in February amounting to £10 million and the ongoing cost for the employer will be £12 million per year. However, there is a catch. The cost of the payments is likely to result in the reduction of a profit-related bonus which is due in March.

Tracey Killen, the partnership’s director of personnel said:

The John Lewis Partnership has acted promptly to change its pay practices in response to the EAT ruling. We believe our approach is a fair and practical outcome for our partners in light of this decision.

Meanwhile, a voluntary redundancy deal agreed with workers at Cadbury’s Bournville plant has in resulted payouts which average £100,000 per employee.

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Government minister attacks “scandal” of non-payment of tribunal awards

Business minister Baroness Neville-Rolfe has described as scandalous the fact that so few tribunal awards are paid promptly by employers. However, perhaps she should have looked to her own Government before criticising others.

The Small Business, Enterprise and Employment Bill includes provisions that employers who do not pay awards when they are due will receive a warning notice from an enforcement officer. Continued failure to pay will lead to a penalty of 50% of the award. There will be further penalties for repeated non-payments.

Speaking in the House of Lords on 26 January during the Bill’s latest committee stage she said:
I believe we share the same aim—that of ensuring the best outcomes for individuals who have been through an employment tribunal, and ensuring that they receive their awards. Our research indicates that, without enforcement, only 40% of awards are paid within six months. That is clearly scandalous. Our financial penalty clause is intended to incentivise prompt payment of employment tribunal awards and to prevent employers ignoring judgments by employment tribunals. It applies to all tribunals, awards and settlements conciliated by ACAS. Employers who have not paid the award will receive a warning notice from the enforcement officer. By paying the award in full, promptly, they will avoid a penalty. However, if they do not pay in full, they will be hit with a penalty of 50% of the award. If they continue not to pay, or to pay only part of the award, they can receive further penalties, each of 50% of the unpaid amount, as well as incurring interest on the outstanding award. We consider that encouraging prompt payment in this way is an effective way of dealing with a problem that we agree exists.
As I reported last September the problem is endemic, not just in terms of the delay in paying awards but in paying them at all. Research shows that 49% of successful claimants receive payment in full, 16% receive a part payment and 35% receive nothing at all. A key problem which is not addressed by the Government’s latest proposals is the number of respondents that cease trading, leaving claimants as unsecured creditors. In our relatively relaxed corporate regime it is fairly easy for such businesses to unload their creditors and carry on, particularly by the use of pre-pack administrations.

However the Government would do well to consider its own tardiness in making payments following successful claims. In February 2013 the Supreme Court delivered its judgment in the case of O’Brien v Ministry of Justice confirming that fee paid tribunal judges are entitled to pension payments. The entitlement to receive payments was confirmed in the Employment Tribunals in January 2014 and again in the Employment Appeal Tribunal in March 2014. Although inviting judges to submit details of their claims in March 2014, many remain entirely unpaid. Perhaps the Ministry of Justice should be issuing penalties against itself!

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a successful appeal against dismissal automatically revives the contract

In Salmon v Castlebeck Care (Teesdale) Ltd and others the Employment Appeal Tribunal was asked to consider whether a successful appeal against dismissal has the effect of automatically reactivating the contract of employment or whether an employer needs to take the further step of reinstating the employee. It also considered whether or not there is a need to communicate the decision to the employee before it takes effect.

These may seem obvious points but there are practical aspects that are useful to know in advance of having to deal with such a scenario.

In the case in question Mrs Salmon, Miss Snape and Mrs Edwards were summarily dismissed from their employment with Castlebeck Care Teesdale Limited on 10 July 2013. The dismissals were in respect of alleged gross misconduct. All exercised their contractual right of appeal.

On 4 September 2013 the business of Castlebeck transferred to Danshell Healthcare Limited. Employees were TUPE transferred. Miss Snape’s appeal had been heard before the transfer but no decision had been issued. Mrs Salmon’s appeal was heard on 17 September (by Castlebeck’s HR director who had also transferred under TUPE). Their dismissals were deemed to be “unsafe” but the appeal by Mrs Edwards was dismissed.

No express decision to reinstate was made and there was no indication in clear and unequivocal terms that the contracts of Mrs Salmon and Miss Snape had been revived as a result of their successful appeals. Instead, Danshell instructed Peninsula, who acted as their employment consultants and therefore presumably on their advice, to prepare settlement agreements.

Both were due due meet a Miss Hills of Danshell on 10 October but that meeting was cancelled the day before. At this time neither of them had been told the outcome of their appeals.

They brought claims for unfair dismissal in the Leicester Employment Tribunal. The claims against Castlebeck succeeded but the claims against Danshell failed on the basis that Danshell had never been their employer.

Mrs Salmon appealed the decision to the Employment Appeal Tribunal on the basis that her successful appeal had the effect of reviving her contract of employment so that she was therefore TUPE transferred to Danshell on 4 September.

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Sikh solicitor wearing turban refused access to HMP Belmarsh

Amrik Singh Bilkhu is an assistant criminal defence solicitor with GT Stewart Solicitors in East London. He holds accreditations for criminal law, fraud and advocacy. He qualified in 2001 and has made visits to prisons for many years. As a Sikh he has worn a turban, held together with four pins, for 24 years.

In October 2013 he visited HMP Belmarsh to see a client who was on remand. On arrival he was told that he had to remove the four pins that were holding his turban in place, even though that meant that the religious garment would have fallen apart. The result was that he was refused access to the prison.

Mr Bilkhu brought a claim alleging religious discrimination. Initially the Ministry of Justice defended on the basis that Mr Bilkhu had not been refused entry, but had in fact elected not to proceed with the visit to his client, rather than submit to a search of his turban. Of course, in adopting this approach the Ministry was entirely missing the point. It is therefore no surprise that it has now capitulated and paid undisclosed damages to Mr Bilkhu rather facing a county court trial in May.

Mr Bilkhu’s solicitor Duncan Burtwell, also of GT Stewart said:
The way that Mr Bilkhu was treated in this matter was appalling and it ought never to have been necessary to bring this claim on his behalf.

Any legitimate security concerns relating to Mr Bilkhu’s turban pins could have been more proportionately addressed than by the refusal to admit him to the prison altogether.

In any event, Mr Bilkhu’s attendances at Belmarsh on previous occasions and Belmarsh’s ‘approval’ of his turban pins for subsequent legal visits rendered the entire incident ridiculous.
He also said that Mr Bilkhu had suffered “indignation and distress” which were compounded by effectively being branded “a vexatious liar with nothing better to do than bring minor claims such as this one”.

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coming in 2015

In late October I wrote about what is probably the most significant change coming in 2015, the introduction of shared parental leave. As I pointed out at the time, although the changes apply to babies due or due to be adopted on or after 5 April, requests for leave could come as soon as next month so arrangements need to be in place now.

Due in May 2015 is the introduction of the Fit for Work service following pilot runs which were supposed to have started already but seem to be awaiting implementation. Under a partnership agreement 45 NHS occupational health teams covering 103 sites will provide face to face appointments for the new service. This is in addition to the telephone helpline and website that were initially announced. When I wrote about the service last August I gave it a qualified welcome. However, doubts have emerged about its likely effectiveness. Guidance for employers is yet to be published and it is entirely voluntary, on the part of both employers and employees. If an employee refuses to take part, that is the end of the process. Even if a report is prepared the employee can refuse consent for its disclosure to the employer. It is down to GPs to decide whether to refer employees for assessment. According to recent research the proportion of likely referrals of eligible patients varied widely from 11% to 72%.

As usual statutory rates will increase on 5 April 2015 with statutory maternity, adoption and shared parental leave rates increasing to £139.56 per week and SSP to £88.45 per week.

Also on 5 April the right to unpaid parental leave will be extended to parents of any child under the age of 18 years.

Cases to watch out for include the decision of the European Court in USDAW v Ethel Austin Ltd and others concerning whether the 20 employees’ threshold for collective consultation applies to one “establishment” or a whole organisation (likely to be the latter).

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is an employee suffering from depression and anxiety disabled?

If you ask an employer or HR manager whether a diagnosis of depression and anxiety means that an employee is disabled for the purposes of the Equality Act most, probably erring on the side of caution, would reply in the affirmative.

Many GPs sign off employees as suffering from anxiety and/or depression, sometimes adding that it is work-related, which opens up a whole new area from the employer’s perspective. It is not the employer’s function to second guess the diagnosis but many will, perhaps after a few weeks of absence, refer the employee to an occupational health consultant, for examination and a report.

According to the Equality Act 2010 a person is disabled if he or she has a physical or mental impairment which has a substantial and long-term adverse effect on the ability to carry out normal day-to-day activities. Many people know that, in simple terms, “long term” means 12 months. However the Act says that an impairment is long term if it has lasted for 12 months, is likely to last for at least 12 months or for the rest of the life of the person affected. In addition, if an impairment ceases to have a substantial adverse effect it is to be treated as continuing to have that effect if it is likely to recur.

In Saad v University Hospital Southampton NHS Trust and Health Education England the Employment Appeal Tribunal considered the meanings of both “substantial adverse effect” and “long term”.

Mr Saad was a specialist registrar in cardiothoracic surgery. He maintained that he had a disability within the meaning of the Equality Act 2010 based on a diagnosis of a depressive and general anxiety disorder. He said that his condition impacted in the work environment including his ability to communicate with colleagues, access the workplace and concentrate. In addition the condition was long term, even though the symptoms fluctuated over time.

At an employment tribunal it was accepted that he suffered from a depressive and general anxiety disorder. However this did not have a substantial adverse, nor a long term, effect on his ability to carry out normal day-to-day activities. Accordingly his claim failed.

On appeal it was accepted that communication with colleagues, ability to access the workplace and concentration all formed part of normal day-to-day activities. His barrister contended that, taking into account decisions of the European Court disability should mean a “limitation which results in particular from physical, mental or psychological impairments which in interaction with various barriers may hinder the full effective participation of the person concerned in professional life on an equal basis with other workers”.

It was noted that Mr Saad had been employed under a series of fixed term contracts from early 2003 until September 2012. He raised a number of grievances with his employer in July 2011 and was signed off work by reason of ill health and, apart from a brief spell in February 2012, did not return to work. He was initially signed off with a diagnosis of pain and insomnia and was subsequently diagnosed as suffering from anxiety and depression. In the tribunal he gave evidence about his condition:

He becomes tense and anxious if he is near UHS or unexpectedly sees anyone from UHS. He cannot speak with colleagues on the telephone about hospital issues and when he has met colleagues unexpectedly he has become anxious and started to sweat and shake. There was no indication of when or how often this had occurred. He was “totally confined” to his flat and could not leave it unless it is absolutely necessary to do so, which means he cannot undertake shopping or go out for walks. He could not read two books which he purchased because he found it difficult to concentrate. He now deletes all emails he receives which are, or may be connected with his medical work.

The tribunal noted that there was no evidence concerning when and how often these symptoms occurred and the extent to which they impacted on his day-to-day activities. Contradictions emerged when he was cross-examined. He had looked after himself while his wife was away and had travelled abroad on at least three occasions. He had been able to go out walking and take exercise and had not encountered any difficulties in taking part in the proceedings, including attendance at employment tribunal hearings. Further, in November 2011 he had reported that he was fit to return to work. However he could not do so because of ongoing procedures with the employer and because of his anxiety about returning to his existing job. More specifically he told his GP that he had been fit enough to return to work but had not done so because he did not want to work with his former colleagues.

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reputational risk – are Tweets private?

In Game Retail Limited v Laws the Employment Appeal Tribunal was asked to consider the topical question of the extent to which tweets posted by an employee on his private Twitter account can impact on the employment relationship.

This judgment may be difficult to follow unless you are familiar with Twitter. If you are not, it demonstrates why you should make sure that either you or one of your managers should become so as soon as possible. Also, although it is not intended as guidance in all cases, it is an important reminder to all Twitter users in employment that the use of Twitter, and for that matter other social media accounts such as Facebook, can have far-reaching consequences.

Game is a major high street games retailer with over 300 stores nationwide. Mr Laws was a risk and loss prevention manager responsible for investigating losses, fraud and theft and conducting audits in about 100 stores based in the north of England. Each store has its own Twitter account, accessible by the manager and deputy manager and the accounts were used to promote the retailer through social media.

In 2012 Mr Laws opened his own Twitter account, unconnected with the store accounts. However he followed the stores for which he had responsibility in order to monitor their tweets. His manager understood that he was doing this “to see if anything had happened with communication that had been unacceptable”.

In July 2013 a store manager notified his regional manager about a tweet that Mr Laws had posted. The tweet would not have appeared by default in any of the stores’ accounts. However, it could have been read and retweeted by any of his followers. There was an investigation which involved downloading all Mr Laws’ tweets. 28 were identified as being offensive. Of the 100 stores Mr Laws dealt with, 65 were identified as followers of his account. One tweet by the Preston store manager and presumed to have been retweeted by Mr Laws stated “…if your [sic] a Game or GS shop you need to be following this guy”. It was after this tweet that the other 64 followed his account.

An investigation meeting was held on 22 July 2013 during which Mr Laws admitted that he owned the account and had followed a lot of the stores. he also accepted that people and individual stores could choose to follow his tweets. It was found by the investigator that the tweets were in the public domain, clearly accessible by stores and that some were of an abusive nature. Mr Laws was suspended the following day. In the meantime, with the help of his 14-year-old son, he had taken down his Twitter account. He was charged with gross misconduct on the basis that “between July 2012 and July 2013 you posted a significant number of offensive, threatening and obscene tweets on your Twitter account, which were in the public domain and therefore able to be viewed by anyone on Twitter, including Game employees in stores that follow you or that you follow”. the charge was upheld and Mr Laws was summarily dismissed. His appeal was unsuccessful.

At the Employment Tribunal the Judge concluded that the decision to dismiss did not fall within a band of reasonable responses of a hypothetical reasonable employer (the applicable test). The reasons were that he had not registered on Twitter as part of his job but mainly to communicate with acquaintances outside work, using his own mobile phone and concerning matters unrelated to work. The offensive tweets were posted in his own time outside of work. he also provided explanations for some of the tweets.

There is no doubt that some of the tweets were offensive:

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Catholic midwives lose abortion case

The right to respect for religious and philosophical beliefs often turns on the question of where to draw the line, whether it concerns the wearing of religious symbols or what, in fact, constitutes a philosophical belief capable of protection.

Although not directly triggered by the relevant provisions of the Equality Act 2010, in the judgment of the Supreme Court in Greater Glasgow Health Board v Doogan and another, delivered on 17 December, the question of where to draw the line was again to the fore.

Mary Doogan and Concepta Wood are experienced midwives who worked as labour ward co-ordinators. They are both practising Roman Catholics who notified their employer of their conscientious objection to taking part in the termination of pregnancies. Pursuant to section 4 of the Abortion Act 1967 (entitled “Conscientious objection to participation in treatment”):
“(1) Subject to subsection (2) of this section, no person shall be under any duty, whether by contract or by any statutory or other legal requirement, to participate in any treatment authorised by this Act to which he has a conscientious objection:

Provided that in any legal proceedings the burden of proof of conscientious objection shall rest on the person claiming to rely on it.

(2) Nothing in subsection (1) of this section shall affect any duty to participate in treatment which is necessary to save the life or to prevent grave permanent injury to the physical or mental health of a pregnant woman.

(3) In any proceedings before a court in Scotland, a statement on oath by any person to the effect that he has a conscientious objection to participating in any treatment authorised by this Act shall be sufficient evidence for the purpose of discharging the burden of proof imposed upon him by subsection (1) of this section.”
A small proportion of terminations take place in the labour ward rather than the gynaecology ward with a midwife being assigned to give these patients one to one care. The job of the labour ward co-ordinator includes booking in patients, allocating staff in the ward and supervising and supporting midwives. Both respondents believe that human life is sacred from the moment of conception and that termination of pregnancy is a grave offence against human life. They also believed that any involvement in the process of termination rendered them liable as accomplices and therefore culpable for that grave offence. The hospital took the view that delegation, supervision and support did not constitute “participating” in the treatment and therefore rejected their grievances.

Both brought judicial review proceedings which were unsuccessful. They appealed to the Inner House (the Scottish equivalent of the Court of Appeal and succeeded. Lady Dorrian, delivering the lead judgment, stated:
The right is given because it is recognised that the process of abortion is felt by many people to be morally repugnant. As Lord Diplock observed in the RCN case, it is a matter on which many people have strong moral and religious convictions, and the right of conscientious objection is given out of respect for those convictions and not for any other reason. It is in keeping with the reason for the exemption that the wide interpretation which we favour should be given to it. It is consistent with the reasoning which allowed such an objection in the first place that it should extend to any involvement in the process of treatment, the object of which is to terminate a pregnancy.” (emphasis supplied by the Supreme Court)
The Supreme Court unanimously disagreed. Lady Hale, delivering the lead judgment, focused on what was meant by “participating in any treatment authorised by this Act to which he has a conscientious objection”.

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end of the line for employment tribunal fees challenge (for now)

The challenge to employment tribunal fees brought by UNISON finally hit the buffers when Lord Justice Elias (pictured), delivering the lead judgment in the High Court, rejected the application. There were two grounds for the application. First, it was claimed to be unlawful in not complying with the EU principle of effectiveness because it was either impossible or exceptionally difficult for prospective claimants to bring a claim. Second, it was claimed that fees were indirectly discriminatory in that they placed women, ethnic minorities and the disabled at a substantial disadvantage.

In a controversial judgment Judge Patrick Elias, who has a strong background in employment law, observed that the reduction in the number of claims brought after the introduction of fees was “striking”. Before fees were introduced Employment Tribunals received an average of 48,000 claims per quarter. In the most recent recorded period (July to September 2014) that number had dropped to 13,612. Evidence from the CAB showed that fees made four out of five workers less likely to claim or deterred from claiming at all. Further, over four in ten of those with employment problems had a household income of less than £46 per week after essential bills.

The Government contended that other factors, such as the introduction of ACAS compulsory conciliation, might have contributed to the reduction. Regular readers know my views about the effectiveness of the new ACAS scheme and even the Government’s own figures concerning the operation of the scheme cannot justify any significant impact.

However, the main reason why the application failed was the lack of tangible evidence “that any individual has even asserted that he or she has been unable to bring a claim because of cost”. The most contentious part of the judgment then followed:

The question many potential claimants have to ask themselves is how to prioritise their spending: what priority should they give to paying the fees in a possible legal claim as against many competing and pressing demands on their finances? And at what point can the court say that there is in substance no choice at all? Although Ms Monaghan would not accept that this is the task facing the court, it seems to me that in essence that is precisely what the court has to do. In that context, as Moses LJ said in the first Unison challenge, it is not enough that the fees place a burden on those with limited means. The question is not whether it is difficult for someone to be able to pay – there must be many claimants in that position – it is whether it is virtually impossible or excessively difficult for them to do so. Moreover, the other factors which I have identified as potentially inhibiting a worker from pursuing a claim may reinforce the conclusion that the risks inherent in litigation are not worth taking. These factors engender a cautious approach to litigation but do not compel the inference that it would be impossible in practice for some of these claimants to litigate.

This part of the judgment has led to considerable debate which centres around the widely held view that judges are out of touch with the real world and do not understand the financial strictures which blight many people, particularly low paid workers. Some have even gone so far as to compare Judge Elias’ salary with many of those contemplating proceedings and questioning whether the judge was able to understand such problems in practical terms.

A particularly strident critic is employment lawyer and blogger Kerry Underwood who took the opportunity to write A Christmas Carol by the High Court in which he takes aim at what he perceives to be the obvious inequities demonstrated by the judgment.

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