a car parking space, an email, a dismissal and perversity

Mrs Donnelly worked for the Environment Agency from 1992. She was on a flexitime contract. Towards the end of her time there she was disabled by osteoarthritis of the knees and spondylitis, which affected her back and her hip. As a result she found it difficult to walk far. This meant she had to change roles. In January 2010 she was offered a temporary role as an alternative, but she only did it for two weeks before going off sick with stress. She had a number of concerns about that change in role and her employment, but at the heart of a long running tribunal claim were the trouble she had getting a parking space close to her office, an email she alleged was harassment, and her ultimate dismissal in 2011 for lack of capability. She was successful in all those claims before Employment Judge Reed sitting at the Employment Tribunals in Liverpool. The Agency appealed: (The Environment Agency v Donnelly).
Mrs Donnelly argued that her employer had imposed a “provision criterion or practice” (PCP) that she must walk to the office from an overflow car park when she got into work at half past nine, and that in refusing to earmark a parking space in the main car park for her, they had failed to make a reasonable adjustment. The Agency argued that she could have come into work at nine, when there were plenty of spaces, and so there was no PCP. they also proposed that she could be “shuttled in” from a more distant car park, in the sense that she could ring the office and someone would come and fetch her and, at the end of a shift, return her. Controversially, it was also suggested that she could use a disabled person’s parking space, but on the understanding that she would have to remove her car if the space was required by a blue badge holder. The Employment Appeal Tribunal disagreed with such arrangements. Mrs Donnelly was contractually entitled to come into work at the later time, and it was for her employer to make reasonable adjustments, not for her.
Turning to the email said to have been harassment, this was written to her during her final episode of sickness. In it a Mr Hopwood referred to her “negativity” and cast doubts on her capability or willingness to fulfil any role with the Agency at all. The Employment Tribunal described the email as “less than supportive or helpful” but, according to the Employment Appeal Tribunal, that fell far short of harassment. The email could not reasonably have been read as falling within the statutory definition of harassment – and so that finding was set aside, on the basis that the finding made by the Judge was perverse:

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is a zero hours contract one of employment or self-employment?

News about zero hours contracts continues unabated. After I reported last month that the Chartered Institute of Personnel and Development had conducted research suggesting that many people are happy with zero hours contracts, Vince Cable has performed the sort of volte face that seems to come easily to politicians by announcing that the crackdown on zero hours contracts that he had championed just weeks earlier will not now take place. However there is to be a Government consultation.
In G4S Secure Solutions (UK) Ltd v Alphonso the Employment Appeal Tribunal has looked at what amounts to a zero hours contract in the context of procedural issues as to whether a claim was in time or not and whether the appeal could proceed despite having the employee failed to comply with the Tribunal’s orders. As I have mentioned before zero hours contracts are not defined in statute and it is therefore unsurprising that we have seen a rash of cases dealing with legal issues concerning their operation in practice.
Mr Alphonso originally started work as security guard for G4S in 2002. In 2011 he asked to move to a zero hours contract for personal reasons; this was agreed and put in place on 14 November that year. He was thereafter offered work twice, but then in May the next year he was sent his P45. It was automatically generated because he had not worked for three months and his screening for suitability to work as a security guard had expired. He presented a claim for compensation for unfair dismissal. The question was, when did he stop being employed – when he received his P45, or when he transferred to a zero hours contract? G4S said his zero hours contract meant there was no obligation to offer work, or for him to take it, so it was not an employment contract but a self-employed arrangement.
Unsurprisingly the Employment Appeal Tribunal held that it was not as simple as that.

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asleep on the job

In Whittlestone v BJP the Employment Appeal Tribunal has taken another look at an issue which seems to recur from time to time – are workers entitled to minimum wage for hours spent asleep? Ms Whittlestone worked as a home care for an agency. By day she visited a number of service users at home for 20 minute “shifts” to attend to their needs, travelling between them by bus – nearly always without having time to return home between them. She was not paid for travel time. She had no set working hours, but worked as needed to carry out the number of visits allotted to her. She also slept over for eight hours overnight, when required, at a house occupied by three disabled adults for an additional fixed fee of £40 a week. As she appears to have slept over at least two nights a week this was well under the minimum wage. She resigned, giving a month’s notice and during her notice period she was given markedly less work that was the norm – which had been at least 50 hours a week on average before she handed in her notice.
She made a claim to be paid the minimum wage for the sleepovers, for her travel time and to recover deductions made from her final pay for alleged overpayments. She failed in the Employment Tribunal, but succeeded in the Employment Appeal Tribunal on all three claims:

With regard to the sleepovers, it was irrelevant that she had never actually had to attend to any of the occupants of the house overnight – in this case her very presence in the house amounted to work – her job was to be there.
Regarding the second aspect of the claim, the Tribunal had failed to understand that the work being done was assignment work, and that therefore she was entitled for be paid for the time spent travelling between assignments.
With regard to the overpayments, taking into account the rules for calculation of notice pay for those without normal hours of work under section 89 of the Employment Rights Act, she had not been overpaid, and so the employer had not been entitled to make any deductions.

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DAS finally forced to face up to fair legal expenses insurance

European Community Directive 87/344/EC on legal expenses insurance gives policyholders the right to a free choice of representative in legal proceedings. Notwithstanding this, private individuals of modest means who look to legal expenses insurance to fund litigation (and many household policies include some form of cover) find that they are offered in house representation or are directed to a solicitor from a panel maintained by their insurer, rather than their own choice of representative. In practice insurers try to keep costs down by inviting tenders from law firms willing to undertake work on cases on the basis of a low fixed fee. In my experience the value of such services ranges from poor to positively harmful but, of course, all that insurers are concerned about is discharging their contractual obligations for the minimum outlay. Ironically the type of restrictions that have applied are exactly the mischief that the Directive was designed to address. Unsurprisingly insurers and particularly DAS have fought tooth and nail to restrict access to legal representation.

In a victory for those seeking genuine access to justice the European Court in Jan Sneller v DAS Nederlandse Rechtsbijstand Verzekeringsmaatschappij has held that an insurer is not entitled to insist on using its own in-house lawyers. Mr Sneller’s insurers, DAS, refused to cover the costs of a lawyer he instructed in his unfair dismissal claim, on the basis of its policy terms which said that external lawyers could only be used if DAS had considered that external lawyers were necessary. This was unduly restrictive in the light of the right of insured individuals to have the choice of an appropriately qualified person to represent them in any proceedings.

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disguised employees: they’re not as smart as they’d like to think they are

Last May I commented on the Queen’s Speech and the removal of the presumption of self-employed status in LLPs. I pointed out at the time that almost invariably fixed share partners in LLPs were, in reality, employees in all but name so that there was little point in LLPs continuing to pretend otherwise.
Notwithstanding (occasionally convoluted) protests from leading accountancy firms, particularly those that championed such arrangements, details of the crackdown have now emerged in the form of draft legislation published by HMRC. According to detailed guidance notes the changes are likely to affect “Individual members of a limited liability partnership (LLP) who work for the LLP on terms that are tantamount to employment (‘salaried members’) and LLPs that have salaried members”. The objective is to make the tax system fairer by ensuring that employment taxes are paid by LLP members who are essentially employees and, significantly, the LLP employer – consequently liable for 13.8% Employers’ NIC contributions.
There is a three-fold test.
the disguised salary condition
Disguised salary means remuneration which is either fixed (as in many cases) or not affected to any material extent by the profits and losses of the business. What is a material extent? This condition will be satisfied unless at least 20% of the overall remuneration is directly related to the profits and losses of the business as a whole. Consequently individual or team performance incentives will not satisfy this condition.
the influence condition
In order to avoid the presumption of employed status the member must be able to exert “significant influence over the affairs of the partnership”. What this means in practice is likely to lead to a good deal of litigation but one would expect that this will catch many fixed share members, particularly in larger organisations.
the capital contribution condition
Under many current arrangements fixed share partners are liable to make only nominal capital contributions and these are sometimes covered by adjustments to drawings so that it is not necessary to make any capital payment at all from outside resources. In order to make the idea of capital contribution meaningful the third condition requires that in order to avoid the presumption of employment status, a member must contribute an amount equivalent to at least 25% of their remuneration. Consequently remuneration of £100,000 would require a capital contribution of £25,000. Furthermore this is an annual requirement so any increase in pay will require a corresponding 25% increase in capital contributions.

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beware of the reality – just because you say it’s a zero hours contract doesn’t necessarily mean that it is

In a blog post last August I asked the question “what are zero hours contracts and how do they work in practice?”. I pointed out that there is no formal legal definition of a zero hours contract and it is therefore merely a description of a type of working arrangement that has become more popular in recent years.
Until the last few days everyone seemed to agree that zero hours contracts are “a bad thing”. But as some have pointed out, they are not such a well-defined concept as to be readily regulated. Borrer v Cardinal Security Ltd demonstrates that employers who want to use zero hour contracts may find that they do not always get what they want.
Mr Borrer was employed by Cardinal Security for over four years. For most of that time he was a security guard at a Morrisons store in Brighton. His contract was not specific about his hours – “your working hours will be specified by your line manager”, and he rang or texted each week to see what those would be for the next week. In practice he consistently worked about 48 hours a week.
For reasons not made clear in the judgment of the Employment Appeal Tribunal, Mr Borrer was moved to Morrisons in Seaford – but the manager there was not happy with him. He was given a couple of weeks’ paid leave, and then offered two or three days a week at another shop. In response to that he resigned in these terms:
As far as you and the company are concerned, employment rights do not exist. I absolutely reject your statement that I was on a zero hours contract. I worked the same hours since I have been with you. Given the way you have behaved, I therefore have no alternative but to resign.
The Employment Tribunal took the view that the agreement was a “no work, no pay” arrangement. Although Mr Borrer would be entitled, for example, to minimum notice of termination, that was not much use to him if he was not entitled to any pay.
He appealed to the Employment Appeal Tribunal, which took a different view.

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paying for private medical treatment – thin end of the wedge?

Mrs Butcher started work for the veterinary practice Croft Vets in 1996. Over time the practice expanded and she was promoted to finance and reception manager. In the period from 2007 to 2010 the practice opened a new hospital and acquired new phone and IT systems, both of which suffered the inevitable teething troubles, all of which Mrs Butcher had to manage on top of her existing responsibilities. Unsurprisingly, she was observed sitting in her office staring out of the window in tears shortly after returning to the office, following a week off, during which she had moved house. A few days later in May 2010 she went off sick with depression, never to return.
Her employer’s initial response was to offer the choice between support to carry on with her existing workload or taking a lesser job at lower pay. After a few weeks, they asked her to see a consultant psychiatrist “to allow us to consider whether there are any steps we can take now to facilitate your return to work”.
The psychiatrist reported back on 19 August that work related stress had triggered a severe depressive episode with marked anxiety. He recommended that as well as antidepressant medication she should have six further psychiatric sessions including CBT to help her recover. He gave an indication that the cost would not exceed £750. There ensued some correspondence between employer and psychiatrist which confirmed the diagnosis, and discussed how long she might remain unwell. No steps were taken to implement the psychiatric recommendations. In November 2010 Mrs Butcher resigned. She alleged that that her employers had caused her breakdown, questioned the psychiatrist’s diagnosis, and ignored his recommendations, all of which meant that she had suffered disability discrimination. The final view of the psychiatrist, (given after her resignation) was that given specialist help, while it was difficult to predict how long she would be unwell, the average period for recovery would be a year, but that given the severity of the issues at work, there was only a 50/50 chance of her being able to return at all.

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is reward for long service age discriminatory?

Lockwood v Department of Work and Pensions & Anor is an illustration of how a directly discriminatory redundancy scheme can be justified. Under the Civil Service Compensation Scheme, introduced in 1987, redundancy payments are weighted in favour of older workers. Specifically, workers taking voluntary redundancy were entitled to one month’s pay for each year of service, plus the lesser of:
(i) one month’s pay for each year of service given after 5 years of service;
(ii) one month’s pay for each year of service given after the employee’s 30th birthday, plus
(iii) one month’s pay for each year of service after the age of 35
Ms Lockwood, aged 26 at the time of her redundancy, made a claim of age discrimination. In the Employment Tribunal it was held that the scheme was not age discrimination, and that if it was, it would be justified, and the Employment Appeal Tribunal upheld that conclusion. She appealed to the Court of Appeal.
The Court of Appeal considered two issues – was the Employment Tribunal right that there had been no age discrimination – and if they were wrong about that, were they right in their alternative conclusion that such discrimination was justified?
The Employment Tribunal had been mistaken in finding that because a 26 year old would have less need for a redundancy payment than an older worker she had not suffered less favourable treatment.

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what is normal?

Guarantee payments are fairly rarely encountered in practice, but in times of economic hardship they are likely to be encountered more frequently.
Abercrombie & Others v AGA Rangemaster Ltd is, according to the Court itself, probably the first case of its kind to reach the Court of Appeal.
Guarantee payments are payments that an employer is required by statute to make to employees who have been laid off or placed on short time work because of a downturn in business. Sections 28 to 34 of Part III of the Employment Rights Act set out the details. the maximum payable is £24.20 a day for five days in any 3-month period, i.e. a maximum of £121. In practice many employment contracts provide for payment to be made even if there is no work available to be done in which case, as long as the contractual entitlement at least matches the statutory requirement, the contractual provisions prevail.
In this case the Court upheld the right of hourly paid employees to claim guarantee payments for workless days while they were working a four-day week, Mondays to Thursdays, under a temporary agreement reached via their union, the GMB. The agreement had been reached to address a shortage of work during 2009. When, during the currency of the agreement, things took a turn for the better, the employer did not, as it could have done, cancel the agreement early but instead let it be known that anyone who wanted to could go back to 5 day working early – some did, but not all.
The GMB, on behalf of its members, contended that they could claim guarantee payments for Fridays, because they had not been provided with work on a day on which they would normally be required to work – the agreement had set up what was, in the words of counsel for the employees the “new normal”. The employer’s case was that the workers were not “normally required” to work on Fridays while the agreement was in force. The Court of Appeal found in favour of the employees, pointing out that whether or not someone was “normally” required to work on a particular day in accordance with their contract of employment did not mean quite the same thing as asking whether he is in fact required by his contract of employment to work on that particular day

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the perennial post termination covenants question – what is reasonable?

In Coppage & Anor v Safety Net Security Ltd the Court of Appeal looked at the reasonableness of a six month non solicitation covenant entered into by Mr Coppage, a director of a security company which supplied door supervisors and other security staff. The covenant was expressed so that it would cover anyone who had been a customer of the company at any time during the director’s period of employment. He said that was unreasonable. The Court of Appeal did not agree. The reasonableness of restrictive covenants is highly fact sensitive. Taking into account all the circumstances, including the short length of the restriction, the fact that it was a non-solicitation clause rather than a non-compete clause, and the fact that Mr Coppage had been the “face” of the company and so able to influence the customers, the judge’s original decision had been right.
Having reached this conclusion, the Court did not feel it necessary to rule on a second appeal based on the extent of a director’s fiduciary duty where solicitation took place after resignation, and declined to interfere with the finding that damages be set at £50,000. Although the evidence on loss had been limited, the first instance court had made a reasonable assessment on the information provided.
No general conclusions can be drawn about the validity of covenants covering long standing or even ex customers from this case. One does also suspect that the palpable unreliability of the evidence adduced on behalf of Mr Coppage did his case no good at all.
In another situation, it might be reasonable to seek to protect such a wide customer base. Here the customer base was a stable one – in a business where customers come and go more frequently, a restriction to the customer base for the last year or so might well be necessary to meet the test of reasonableness. For example, in Croesus Financial Services Limited v Matthew & David Bradshaw Mrs Justice Simler, sitting in the High Court, considered whether a restriction period of 12 months was appropriate relating to soliciting and dealing with former clients and the misuse of the Company’s information

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