re-engagement for employees dismissed after "dramatic" TUPE transfer

Manchester College v Hazel & Anor looks at when a dismissal relating to harmonisation of terms after a TUPE transfer will be fair, and when it is not, the appropriate remedy. The case arose after a contract for provision of education in the prison service was transferred under TUPE to a new provider. After the transfer, the new provider discovered expenses which had not been uncovered during due diligence prior to transfer and started a cost-cutting process. After asking for volunteers for redundancy, it then sought to change contract terms for some of the transferred employees to harmonise terms and conditions – this involved significant pay cuts. Cases were brought by two of the employees affected, Miss Hazell and Mrs Huggins, who refused to agree the changes and were dismissed for their refusal. They were then offered new contracts at reduced rates, which they accepted. However, they also made unfair dismissal claims in relation to their old contracts. The Employment Appeal Tribunal first looked at the fairness of the dismissals. While the harmonisation was an “economic, technical or organisational” reason for dismissal – it did not entail a change in the workforce, and so fell outside the scope of that defence. While there happened to have been recent redundancies the harmonisation was a separate issue and did not make a change to the workforce employed. Because the dismissals were for a reason connected to the transfer, they were automatically unfair.
His Honour Judge McMullen QC summarised the court’s view of the matter as follows:
In our judgment, the findings in relation to timing are ones of fact for the Tribunal. It was required to look into the mind of the actors in this drama and decide what it was [that] caused the dismissal of the Claimants.

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tribunals must check parties’ availability when listing hearings

Listing of tribunal hearings is a perennial problem for all concerned, particularly if many witnesses are required.
University Of East Anglia v Amaikwu was an appeal against the refusal of an application for an adjournment of a hearing of an unfair dismissal and discrimination claim by the respondent to the claim. The application was made when the tribunal relisted the hearing after the original date had been cancelled at the last moment because no judge was available to hear the case (an all too frequent occurrence, anecdotal evidence suggests).
A new date was sent out without first asking the parties whether there were any periods when they or their witnesses could not attend. The date given was when one of the employer’s witnesses had already booked to travel to Albania for a family wedding. The notification sent by Employment Judge Pritchard-Witts was peremptory and unequivocal:
The hearing must take priority over a family wedding. The Claimant’s objections are well founded and this case is becoming decidedly stale. Postponement refused.
Some might take the view that a simple assertion, without more, that an employment tribunal hearing "must" take priority over a family wedding is a bold call.

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with prejudice

In Gallop v Newport City Council the Employment Appeal Tribunal has held that an inadvertent disclosure while giving evidence that there had been “without prejudice” negotiations did not waive privilege, and a tribunal should not have taken them into account when assessing an award of compensation. The point came out of an unfair dismissal case where, in response to a question from the tribunal, a witness let slip the existence of failed negotiations to settle the dispute. On the basis of the information it gathered about the offer, the tribunal found that there was a 50/50 chance that the case would have settled amicably before a hearing and so awarded him half of the sum offered in the negotiations and reduced other elements of compensation by half.
The Employment Appeal Tribunal held that the tribunal was wrong to have enquired about the terms of the agreement and wrong to take it into account in assessing the award. Neither party had set out to waive privilege, nor was there reliance on the privileged material. The EAT commented that:
Employment Tribunals must not enquire into negotiations between the parties before them where no agreement is reached and where there has been no clear and unequivocal waiver of privilege by the parties. … It is pellucidly clear to us that privilege was not waived in this case, and no advice was given to the Claimant in person as to the principles of privilege.

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reasons for dismissal

Nejjary v Aramark Ltd is a reminder that a tribunal is only entitled to take into account the reasons given by an employer when deciding whether a dismissal is within the reasonable range of responses to misconduct, and should not take into account other matters disregarded by the employer. In this case a hospitality manager who worked on events hosted by Goldman Sachs was sacked for three acts of gross misconduct following client complaints about problems at events he had managed. He already had two warnings on file for similar offences, but these were not referred to in the disciplinary procedure at all. He appealed, and his dismissal was upheld but on the basis of just one of the three offences.
He complained to an employment tribunal who found that there was a fair reason for dismissal (conduct) and that a fair procedure had been followed. They then considered whether the decision to dismiss was reasonable in the particular case. They held that on its own, the single allegation upheld at appeal would not have justified dismissal, but took into account two live warnings still extant for similar matters in concluding that the dismissal was fair. The Employment Appeal Tribunal held that the tribunal had been wrong to take any account of matters not considered by the employer in its consideration of whether the dismissal was a reasonable response, and moreover had been wrong to hold that as an alternative the claimant had contributed to his own dismissal by his conduct
Mr Recorder Luba QC summarised the position as follows:
The plain fact, as found by the Employment Tribunal and as confirmed by Ms Mellon [for Aramark] in her submissions before us, was that the reason and the only reason for the dismissal was the single matter that remained extant at the time of the appeal; that is to say, …an instance of failure to check a booking form.

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when criticism becomes apparent bias

Tribunal judges have the power and are encouraged to deal robustly with weak and vexatious claims (or indeed defences – sauce for the goose…), and in doing so are likely to be critical of the conduct of the case by the party in question. However, they must take care not to overstep the mark and appear to prejudge other issues – for example an award of costs. In Oni v NHS Leicester, the tribunal dismissed a nurse’s claims of constructive unfair dismissal, race discrimination and victimisation after a long hearing and commented that both the claims and the way in which they had been conducted were unreasonable. In particular they said she was an unreliable witness and her answers to questions were evasive and equivocal. An application was made for costs against her; she argued that the same tribunal should not consider the question of costs, on the ground of bias, but the tribunal declined to step down. The matter went to the Employment Appeal Tribunal who accepted that while there was no actual bias, the views expressed about the case’s weakness meant that there was apparent bias and so costs should be considered by a differently constituted tribunal. While tribunals are entitled to comment on the conduct of claims before them, they should be careful not to go too far and indicate what view they would take on a costs application.
A further point which arose from the case was that when considering costs the tribunal had not taken any account of the claimant’s ability to pay an award of costs. This is a factor which should always be taken into account – and it was suggested that tribunals could usefully direct the use of county court form EX140 to establish the losing party’s financial circumstances.
This case is particularly timely because, taking into account the Government’s proposed reforms, we can expect to see a significant increase in the number of costs awards made, as well as the "weeding out" of unmeritorious claims.

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"something more" required to establish discrimination

In the 2007 case Madarassy v Nomura International the Court of Appeal remarked that:
"The bare facts of a difference in status and a difference in treatment only indicate a possibility of discrimination. They are not, without more, sufficient material from which a tribunal ‘could conclude’ that, on the balance of probabilities, the respondent had committed an unlawful act of discrimination."
Birmingham City Council v Millwood is an illustration of one way of establishing the “something more” needed to reverse the burden of proof where a difference in treatment has been shown.
A black employee was found to have been treated less favourably than an Asian employee. They were in comparable circumstances – both were family support workers but had originally been teaching assistants. The Asian employee was given a permanent contract while the black worker was not. Various explanations were put forward. These included suggestions that there had been administration problems, that funding for the post of family support worker was limited, and that the Asian worker had asked for a permanent contract and had relevant experience. These were not untrue; but they were not enough of an explanation. This, said the Employment Appeal Tribunal was the “something more” needed to shift the burden of proof.
Mr Justice Langstaff (President of the Employment Appeal Tribunal) set out the reasoning applied as follows:
It seems to us that two issues arise for our determination. The first is whether as a matter of law Mr Beever is correct in his submission that whatever the explanations advanced for the treatment of the Claimant and however inadequate or wrong they might be, the Tribunal could not simply upon the basis of the difference in race and status coupled with the inadequacies of the excuses proffered regard the burden of proof as shifting. If he is right in that submission, then the appeal must succeed and the claim must be dismissed. If he is wrong in that submission, we have to ask whether the Tribunal by asking for "something more" identified that which Mr Swanson submits they did: that there had here been a number of rejected explanations put forward for consideration.

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more about settlement agreements and compensatory awards

Proposals regarding settlement agreements from earlier this year have been fleshed out in a new government paper. Avid readers will recall talk of “protected conversations” – these seem to have died a death for now. The Government’s response to consultation seems to accept that such a concept could add to the administrative burdens on employers and create a new area of contention which could be “a field day for lawyers”. The response instead concentrates on “settlement agreements” to replace compromise agreements. The question is whether this will amount to more than just a change of name.
The paper sets out a proposed model wording for a settlement agreement, which doesn’t differ all that much from the sort of wording seen in compromise agreements in common use. This is not too surprising, given that any wording must be sure to satisfy the requirements of s203 of the Employment Rights Act 1996, which permits contracting out from employment rights in limited circumstances. Moreover, the standard wording sets out a long list of potential claims which could be covered. Many compromise agreements look pretty cumbersome, it is true, but that is for a number of reasons – some excessive caution perhaps, but many issues are often dealt with over and above statutory employment claims. Pensions and personal injury claims are frequently carved out. Benefits in kind and so on are dealt with. Employers want post termination restrictions and confidentiality obligations added or reaffirmed. The tax position needs to be dealt with. The employer wants written confirmation that the necessary legal advice has been given. The model agreement put forward covers some, but not all of these, and extends, with its guidance notes, to 15 pages.
More specifically we now have the answer to the question of contribution to the employee’s legal costs.

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October 2012 wage rates and contributions and the final demise of the state retirement age

As most readers are no doubt aware national minimum wage rates were subject to their usual increase on 1 October. The main rate has increased from £6.08 to £6.19.
The rates for workers aged 16-17(£3.68) and 18-20 (£4.98) are unchanged this year.
The apprentice rate has increased from £2.60 to £2.65 and the accommodation offset (which employers providing accommodation can set off against the minimum wage) has increased from £4.73 to £4.82 per day.
The TUC has pointed out that those on the minimum wage (who are mainly women) will experience a net drop in spending power in real terms, taking into account that the rise in the main rate is 1.8% whereas RPI inflation is currently 2.9%. General Secretary Brendan Barber commented:
While we are pleased that Government has rejected the siren calls of some employers to freeze the minimum wage for adult workers and apprentices, these increases are still far below inflation and will leave the lowest-paid facing a real terms cut.
These new rates are a particular blow to younger people who will face the biggest hit on their living standards. There is no evidence that the minimum wage has had an adverse impact on young people’s employment so it is hard to see the logic behind their pay freeze.
[These] increases do not do enough to help hard-pressed families. We need a bolder increase next year otherwise the real incomes of minimum wage workers will continue to fall, along with consumer demand.
Also on 1 October auto-enrolment came into force for the biggest employers

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slave labour in a modern context?

Earlier this summer, a case brought in the Administrative Court by two benefits claimants made the headlines when two schemes requiring claimants to join unpaid work experience schemes on pain of losing Jobseeker’s Allowance were challenged. In one, a geology graduate already working as a volunteer in a museum in pursuance of her ambition to secure a paid job in the museum sector was expected, instead, to work in Poundland for two weeks, although this meant it cost her her voluntary position. In the other a qualified HGV driver was required to undertake a full time voluntary position for six months on an unpaid basis.
Much of the judgment of the court in Reilly & Another, R (on the application of) v Secretary of State for Work & Pensions was concerned with issues of maladministration and whether the schemes were within the statutory powers of the DWP, which are important issues but not issues of employment law. The crucial issue that made the case newsworthy, and does have an employment flavour, was whether these schemes represented “forced labour” and were thus contrary to Article 4 of the European Convention of Human Rights. Mr Justice Foskett took the view that while opinions might differ as to the appropriateness or effectiveness of such schemes they are “a very long way removed from the kind of colonial exploitation of labour that led to the formulation of Article 4”and so could not be called “forced labour“ or “slavery”.

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dismissals for breakdown of trust must be for a substantial reason

Breach of the implied term of mutual trust and confidence is frequently relied upon by employees as the basis for resigning and claiming constructive dismissal. From this perspective, breach of such a term will always be a fundamental one bringing the contract to an end (Morrow v Safeway Stores). In Leach v Ofcom the Court of Appeal looks at the other side of the coin – where an employer dismisses an employee because of a breakdown of trust – and issues a reminder that the mantra of breakdown of trust should not be used as a "catch all" reason where the employer cannot establish a conduct reason for dismissal. Breach of trust by an employee will not justify dismissal unless it can be shown to be “substantial” – and so it seems it is not, of itself, fundamental.
The case arose when an employee, whose job entailed no contact with or direct responsibility for children, was found to have misled his employer about an earlier arrest abroad on child sex charges, and where subsequently, following his acquittal of those charges, the employer also received a warning, in the form of limited disclosure, from the police that he still posed a risk to children. The employer made enquiries and initiated a disciplinary process. Ultimately, the employer decided to dismiss the employee on the ground that he had not been honest about his earlier arrest, and because he represented a continuing risk to children – and in its role as a regulator the employer itself had a duty to protect children. It described this as a “breakdown of trust” – presumably because at the time it was considered that the misconduct was not of itself serious enough to justify dismissal.

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