can there be a finding of contributory fault following a constructive dismissal?

In Frith Accountants Limited v Mrs J Law the relatively narrow questions for the Employment Appeal Tribunal were whether someone who has been constructively dismissed can be held to have contributed to that dismissal, whether the basic award should have been adjusted to take into account the employee’s conduct and whether the assessment at 40% of the prospect of future dismissal was too low.

However, the case is noteworthy since, as observed by EAT President Mr Justice Langstaff, it “may be the first [appeal] case to deal with an alleged contribution by an employee where the breach of contract by the employer was a breach of the implied term of trust and confidence”.

Mrs Law worked in an accountant’s office and was aged 62 at the date of her dismissal. She had performed well at a performance review in 2011 but did not receive a pay rise in 2012 as a result of concerns about her performance. She accepted that she had been late in filing returns with HMRC but thought that this was an easy mistake to have made. She disputed other alleged errors. Instead of treating the matter as one of performance management and undoubtedly unwisely but equally with good intentions, Mr Frith, a principal of the practice, decided to raise his concerns with Mrs Laws’ son. As the Tribunal had said, this was not the way to go about such matters!

Unsurprisingly Mrs Laws was horrified when she found out and she resigned. Equally unsurprisingly the Employment Tribunal found that this was a constructive unfair dismissal. However, even if Mrs Laws had made errors and was unwilling to accept criticisms, these actions could be said to have contributed to the employer’s action in breaching the duty of trust and confidence. Mr Justice Langstaff noted that it will be unusual for a constructive dismissal to be caused or contributed to by an employee, since it is based on a breach of contract by the employer. Further since a constructive dismissal results from a “fundamental” breach of contract by the employer “then not only will it be repudiatory, but by definition there will be no reasonable or proper cause for the employer’s behaviour”. However, although the question of constructive dismissal is answered by seeking to establish a fundamental breach of contract, the question of compensation is dealt with by statute and covers all dismissals, including constructive dismissals.

However, in this case the Tribunal had summarily dismissed the possibility that Mrs Laws had contributed to her dismissal. Mr Frith’s decision to act as he did was “a matter entirely for him”. There was therefore no causal connection between anything done by Mrs Laws and the action taken by Mr Frith which resulted in her dismissal.


why do politicians “do God” and how does a “Christian UK” sit with employment law?

A great deal of hot air has been generated as a result of David Cameron’s decision to play up his faith in the Church of England. His article suggests a warm beer and village greens approach to his Christianity – “…I appreciate its liturgy, and the architecture and cultural heritage of its churches. My parents spent countless hours helping to support and maintain the village church that I grew up next to, and my Oxfordshire constituency has churches – including some medieval masterpieces – that take your breath away with their beauty, simplicity, and serenity”. While this contribution nearly led the political debate over the Easter weekend (Alastair Campbell’s pithy deconstruction of the article from a political perspective – “We had the warm up act with his ‘Jesus invented the Big Society’ and now the full Monty as Easter nears), pushing down the headlines Ukraine and Syria, much more interesting from an employment law perspective is what is meant by “a Christian country” and how that interacts with, say, equality and human rights law.

According to YouGov poll in late 2012 76% of Britons say that they are “not religious”, whereas 56% say that Britain is Christian and 61% agree that it should be. What does being a Christian country mean? Manifestations include the royal Coronation service and oath, the latter including the following fairly unequivocal obligation:

Will you to the utmost of your power maintain the Laws of God and the true profession of the Gospel? Will you to the utmost of your power maintain in the United Kingdom the Protestant Reformed Religion established by law? Will you maintain and preserve inviolably the settlement of the Church of England, and the doctrine, worship, discipline, and government thereof, as by law established in England? And will you preserve unto the Bishops and Clergy of England, and to the Churches there committed to their charge, all such rights and privileges, as by law do or shall appertain to them or any of them?

Parliament convenes with Christian prayers and bishops sit in the House of Lords.


expensive holidays

In August 2013 I asked the question whether holiday pay should include overtime.

In the case of Neal v Freightliner Limited Employment Judge van Gelder, sitting in Birmingham, readily found that holiday pay should equate to “normal pay”, i.e. what the employee normally receives, relying on the European Court decision in British Airways plc v Williams and others. The common sense approach to “normal pay” is that if it routinely includes overtime, commission or bonus payments, then so should holiday pay.

So why is it back in the news? Unsurprisingly, the judgment in Neal is being appealed and the hearing before the Employment Appeal Tribunal is only a couple of months away. If, as many expect, given the comprehensive analysis and convincing rationale in the initial judgment, it is upheld on appeal then, unlike the judgment of Judge van Gelder, this will be a binding authority on how holiday pay should be calculated.

This could lead to much more significant repercussions for employers than might initially be thought. As highlighted in the Daily Telegraph this raises the spectre of retrospective claims. It has been the standard practice of many employers in the UK to apply what is commonly referred to as “basic pay” when calculating holiday pay. If such employees are routinely paid more than basic pay when working then they may well have claims for the difference going back as far as 2008. The potential impact for employers of having to fund substantial back payments for numerous employees is obvious. As highlighted by an article in The Construction Index, employment sectors which routinely pay significant overtime, such as the construction industry, are likely to be severely affected.

Taking into account the value of retrospective claims it is reasonable to assume that, as well as class actions brought by unions and other employee organisations, in a similar vein to misselling claims employees will be notified of their ability to claim “windfall payments” by extensive advertising and claims companies offering no win no fee deals.

So what should employers do?


new compensation limits…and a new time of year for the uplift

In a little heralded employment law development, the date for the annual change to tribunal compensation limits has shifted from February to April each year, and the Statutory Instrument announcing the new limits has been issued: Employment Rights (Increase of Limits) Order 2014.
Here are the main changes (effective 6 April 2014).
The new maximum compensatory award for unfair dismissal increases to £76,574 from £74,200(an increase of £2374).
The maximum week’s pay, used for calculating redundancy payments and basic unfair dismissal awards, increases from £450 to £464.
Statutory maternity pay, ordinary and additional paternity pay and statutory adoption rates increase from £136.78 to £138.18.
In addition, employment tribunals will have the right to increase compensatory awards by up to 50% if there are “one or more aggravating features”.


a very expensive assumption

The outcome of Vision Events (UK) Ltd v Paterson was, to say the least, harsh on the claimant, Mr Paterson. He worked as a multimedia producer on a flexi time basis. He enjoyed his job. He had joined the Company in 2004 and after a promotion in 2008 his salary increased from £21,000 per annum to £28,000 per annum but without overtime (as had previously been paid). However, in place of the overtime he was entitled to flexitime whereby if he worked beyond his contracted 45 hours per week he was entitled to take time off at a time to suit the employer. He did not take all the time off he could have. When he asked to take a block of flexi time off in one go to make a trip to New Zealand, his employer refused to let him. He built up over 1000 hours owing to him, at which point, in May 2012, he was (fairly) selected for redundancy. Unsurprisingly, he looked for payment for those hours, but his employer maintained that there was no obligation to pay him at all – there was nothing in his contract saying they had to. The employer did offer a part payment in respect of the extra hours. This offer was refused and it was withdrawn. He successfully made a claim for unlawful deductions from wages in the Employment Tribunal. He was awarded £12,514 for 1042.84 hours. the employer appealed.
It is worth noting that the employer had not entirely ignored the flexi-time procedure in its documentation. There was a policy in the handbook:
Although the system is intended to be flexible and beneficial to both companies and employee, the company always retains the final say in determining the hours to be worked by all employees.

Due to the nature of the company’s business, flexi-time system, without appropriate rules would result in chaos, therefore the system is based on the principles of organised flexibility and prior notification of all variations in working hours.

The basic rules of the flexi-time system are explained below with the timesheet example in the next section giving an idea of how it is administered in practice.

1. Unless otherwise stated in the employee’s statement of particulars of employment, or otherwise agreed with their direct manager no later than 17:30 the previous working day, all employees are expected to start work no later than 08:30 each day. Any employee not at work by that time without prior agreement to the contrary will be considered late for work.

2. Employees are not allowed to let the number of flexi-hours they are carrying drop below zero at any time, without specific prior agreement from the company. Where this is agreed, the employee will be required to make up the time as soon as possible, subject to the requirements of the company.

3. If an employee is carrying a number of flexi-hours greater than zero, then they may or may not be entitled to be paid overtime as defined employee’s statement of particulars of employment [sic] if overtime is payable then the employee will normally be paid 50% of their outstanding flexi-hours as overtime each month. Normally this is calculated at the end of each month but the accrued position can be calculated at any interim date if necessary. If an employee is not carrying any flexi-hours at the end of the month, then they are not entitled to be paid overtime.

4. In exceptional circumstances employees may request to be paid more than the normal 50% of outstanding flexi-time. The company will not be obliged to agree or give reasons for declining the request.

5. Overtime is calculated on a monthly basis and is not determined by the length of any work period on any particular day.

6. Flexi-time will be paid as the number of hours multiplied by the employee’s hourly salary rate.

7. Any flexi-hours not paid are carried forward to the next month.

8. The company reserves the right to instruct that all or part of an employee’s outstanding flexi-time is taken as time off, rather than being held for payment.

9. All requests to take time off using the company flexi-time system must be approved in advance by the administration manager.

However, critically in this context, no mention was made of arrangements to apply on the termination of employment


beware of rash promises

Regular readers will no doubt recall the pickle that Dresdner Bank found itself in when making extravagant promises to city bankers in London. In July 2012 I reported that Dresdner Bank was facing a payout of up to £42 million when the High Court decided that a promise made by the CEO at a meeting was sufficient to create a binding contractual obligation. Unsurprisingly the bank appealed the decision to the Court of Appeal but to no avail, as I reported a year later.
Back to the present and British Telecommunications plc v Luck is an interesting case as it addresses the tortious liability of an employer in relation to negligent or fraudulent misrepresentation. Unlike Dresdner, the question in this case was not one of whether the employer should be held to something it didn’t want to but whether the employer should be held to a promise which turned out to be wrong. The essence of this case was that as part of the process of a TUPE transfer, staff at BT were assured that their participation in the BT pension scheme would be unaffected by the transfer. What in fact happened was that BT sold its shareholding in the transferee company in which had entered into a joint venture and the transferred staff’s membership of the scheme ceased. The alternative scheme offered less generous benefits and the employees brought a claim for misrepresentation.
Faced with the claim BT argued that the representations they had made were true; alternatively that they had an honest and reasonable belief that they were true. As for losses it was argued that the joint venture was inevitable and there was nothing the employees could have done to negotiate the opportunity to remain within the BT pension scheme.
In addition to Dresdner this case has echoes of Minter v Julius Baer[2004] EWHC 2472 (Ch) , decided some ten years earlier, wherein Mr Minter attempted, unsuccessfully, to argue that Julius Baer had made promises as to the level of his future pension to tempt him from his then employer, the doomed Barings.


goodbye to the statutory questionnaires – thank goodness!

Section 66 of the Enterprise and Regulatory Reform Act will repeal the statutory discrimination questionnaire procedure from 6 April 2014 and in advance of this, ACAS has published guidance about asking and responding to questions relating to workplace discrimination after the abolition of the statutory procedure. The guidance is non statutory and is not binding on tribunals. Together with tips on how to ask and respond to questions, the guidance sets out a template to help organise them.
For employers, the abolition of the statutory procedure will be a considerable relief. Many employees tactically used the procedure to make prying enquiries into how the employer ran the business in order to embarrass the employer into caving in and stumping up compensation to avoid time and expense in answering wide reaching enquiries and the public airing of private decisions in tribunal. Indeed, the compilation of difficult questions for employers, including statistics about the make up of the workforce and history of claims and complaints, had become something of an art form for some claimant lawyers. Many employers were daunted by enquiries which would take literally hundreds of hours of work to comply with.
Of course, employees will still be able to put questions concerning their treatment to employers and the ACAS guidance will help them do this. In any event, they can simply ask for information, sometimes as part of a grievance or disciplinary process. They can also use other means of extracting information such as making subject access data requests for personal data under the Data Protection Act 1998. This latter option has become very popular in the last few years and many employers have caved in to complying with very wide ranging requests and possible resulting settlements of claims when there was really no need. There is a tension between differing interpretations of what employers are required to provide by way of disclosure in connection with tribunal proceedings and disclosure under the Data Protection Act. Indeed the Information Commissioner has suggested that disclosure should be provided even when that exceeds the requirement in connection with the proceedings.
Last August I provided guidance on how to deal with subject access requests


shall I just say sorry?

Back in 2009 I reported about the problems being encountered by ACAS in trying to deal with conciliations which had been brought in as part of the process of dealing with tribunal claims. Primarily as a result of lack of resources there were significant delays. The truth is that the scheme didn’t work and most people paid no more than lip service to it.
Undeterred by previous experiences the Government has ploughed on with its plans to reintroduce ACAS conciliation and the Enterprise and Regulatory Reform Act 2013 (Commencement No.5, Transitional Provisions and Savings) Order 2014 (SI 2014/253) brings into force, from 6 April 2014, compulsory conciliation. The Early Conciliation Rules of Procedure are set out in the Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations.
So, from 6 April all potential Employment Tribunal and Employment Appeal Tribunal claimants will be obliged to don their conciliatory hats and engage in an attempt to reach a settlement with their employers via ACAS before bringing their claims. Unsurprisingly ACAS is extolling the virtues of this process on the basis that it will be impartial, free and could avoid the expense of going to tribunal. All the discussions will take place “without prejudice” and so any matters discussed cannot later be relied upon in tribunal. They have gone so far as paying for Goole Ads in the run up to implementation
Settlement talks should be attempted for a month, with the potential to extend for a further two weeks. The clock will stop running whilst talks are under way so far as time limits for bringing claims is concerned although time will continue to run in circumstances where a prospective respondent contacts ACAS for early conciliation.
How practicable all this is remains to be seen. Can we really expect that when a matter has been fully explored in conciliation talks that, if those talks fail, compromising details revealed in confidential discussions will not be used? Clever cross questioning will easily winkle out this information if the other party knows it exists. So far as employees are concerned, they are likely to be at a disadvantage by virtue of inexperience and lack of fire power at that stage. Companies with HR departments and access to lawyers will be fully prepped. However, the process will buy claimants some time. If they use this time wisely, they will be putting their claim together throughout the conciliation period, picking up useful points that have come their way by virtue of the process.


re-engagament after TUPE transfers

Last month I reported on the latest TUPE changes and took the opportunity to revisit some key TUPE principles. The decision of the Court of Appeal in Hazel & Anor v The Manchester College. The specific questions considered were whether it was automatically unfair to dismiss transferred employees who accepted jobs on new terms, albeit under protest, after transfer and whether, having found that it was, an employment tribunal could order that they should be engaged on the old terms by way of a remedy.
The facts leading up to the case were that two employees, Christine Hazel and Mandy Huggins were lecturers employed by the prison education service, based at HMP Elmley in Kent. In August 2009 they were TUPE transferred when the services were outsourced to The Manchester College, following a successful bid to take over the prison contracts. The following year the College started a cost saving restructuring process. As part of that the lecturers were offered new terms and conditions, which included pay cuts as part of a harmonisation of terms. The reasons given included the general economic situation facing the further education sector, changes in the funding allocation machinery and the discovery of “hidden costs” in Offender Learning. The College provided notification to the DWP of a possible 300 redundancies. They were warned that they might be dismissed if they did not agree, but they would be offered re-engagement on the new terms. After consultation, they agreed all the changes save for the pay reductions which were 18.5% for Mrs hazel and 13.2% for Mrs Huggins.
On 30 September 2010 they were sent notices of dismissal, effective 28 December 2010. On 20 October they accepted the new terms under protest and “without prejudice”. They continued working after 28 December but at the reduced pay level. They brought employment tribunal proceedings claiming unfair dismissal notwithstanding that they were still working for the same employer but based on the termination of the existing contract as they were entitled to (see Hogg v Dover College).
It was Employment Judge Corrigan, sitting in the Employment Tribunal in Ashford in July 2011, who raised the possibility that TUPE might also apply, with reference to the 2009 transfer. Faced with having to acknowledge that there was a TUPE transfer it was then submitted on behalf of the College that the dismissals were for an economic technical or organisational reason entailing changes in the workforce. However this argument failed so the dismissals were automatically unfair. At a remedy hearing re-engagement orders were made which meant that their pre-dismissal rates of pay were reserved.
Appeals to the Employment Appeal Tribunal concerning both liability and remedy failed.
The College maintained its appeal to the Court of Appeal.


number of employment tribunal claims plummets but “too soon” to say whether that’s to do with the new fees

On 7 February the High Court published its judgment following a hearing last October and Noovember and confirming its rejection of Unison’s challenge to employment tribunal fees in Unison, R (on the application of) v The Lord Chancellor & Anor. Put simply, the overall outcome was that the Court considered that it was too soon to tell what the impact of the introduction of fees would be and so the case had been brought prematurely.
The challenge was fourfold:

1. The obligation to pay a fee made it excessively difficult to enforce EU law rights such as equal pay. In the absence of concrete evidence that this is in fact the case, it was too soon to say, in the Court’s view.
2. The fee levels were not equivalent to those in other courts. This was rejected for a number of reasons, including that in the county court, where fees may be lower, there is more of a risk of having to pay the other side’s costs, and the option of free conciliation is not available.
3. The Public Sector Equality Duty had not been complied with. This argument also failed – these proceedings were the wrong way to make the challenge. Moreover, it was too soon to see whether fears that the elimination of discrimination would be held back were well-founded.
4. Fees are indirectly discriminatory, having a bigger impact on, for example women. Recognising that generally speaking women tend, still, to be paid less than men, and so would find it harder to find the money to pay fees, it was still too early to say.

However Unison could still garner some hope from the decision:

– The Lord Chancellor appeared to accept that as a general rule, successful claimants should recover any fees they have paid from a losing employer. The fly in that particular ointment is the poor recovery rate in tribunals – what are the chances of recovering fees when many employers never pay any part of the compensation that they have been ordered to pay?
– It was made plain that if and when evidence emerges that the fee regime has had, for example a discriminatory impact, then The Lord Chancellor will not be able to argue that Unison have left it too late to bring a claim.

The Court had plenty to say about the haste with which the case had been brought and was clearly underwhelmed by the standard of preparation. For example, the time estimates for the case were inadequate, adjournments were necessary to deal with new material, new documents and arguments cropped right up to the end of the hearing and over a hundred authorities were produced, most of which were never looked at.
In addition the timing of the case turned out to be most unfortunate. The Court sat on 22 and 23 October and 4 November. On 18 October the Government published details of new employment tribunal claims brought between July and September 2013. The information was referred to in the judgment but rather airily dismissed.