more TUPE and variation of terms

The EAT has given further helpful guidance on determining whether a variation to terms and conditions after a services transfer pursuant to TUPE 2006 falls within the ambit of Regulation 4(4) and Regulation 7(1) (automatically unfair dismissal for a reason connected with the transfer) of TUPE 2006. The decision in Enterprise Managed Services Ltd v Dance is arguably of greater relevance in today’s work environment than that in Smith v Brooklands (also reported this month) since it concerns re-tendering between contracting businesses. However, the EAT in Dance follows the same approach as that in Brooklands (unsurprising since the leading judgment was given by HHJ McMullen in both cases).
In this case, Mr Dance and others were employed by Williams which, along with another contractor, Enterprise, provided services to MHS. From around October 2008 meetings were held between MHS and its contractors emphasising, amongst other concerns, budgeting constraints and the requirement that future services would have to be provided at reduced cost but achieve high service performance. Both Williams and Enterprise depended on MHS for the supply of work. In January 2009 Enterprise reviewed terms and conditions for its workers, introducing performance related pay and different hours. These altered terms were accepted by its staff. Williams made no changes but lost the contract and Mr Dance and others transferred by operation of TUPE to Enterprise in April 2009.

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variation of terms after a TUPE transfer: when is it permissible?

One of the most difficult issues a transferee employer has to deal with after the transfer of a business to it is when it can make changes to the terms and conditions of staff in the transferred company. TUPE 2006 makes clear that any purported variation of an employment contract will be void if the sole or principal reason for the variation is the transfer itself or a reason connected with the transfer that is not an "economic, technical or organisational reason" (Regulation 4(4)).
This has led to a great deal of caution exercised by transferee employers and their advisors when intending to implement changes. However, the legislation is quite clear. There is no absolute prohibition on changes to terms and conditions in the context of a TUPE transfer unless such changes are solely or mainly by reason of the transfer, or are for a reason connected with the transfer (which is not an economic, technical or organisational reason). On occasion, it can be said that sight of the wood is lost for the trees.
The case of Smith & others v Trustees of Brooklands College illustrates this point succinctly.

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stay of tribunal proceedings, precedence of the High Court and beware the term "draconian"

A litigant can sometimes find it difficult to elect the forum in which to issue proceedings. Sometimes it can simply be an issue of cost. Litigating in tribunal is less expensive and the findings of fact will bind a higher court. When deciding whether a stay of tribunal proceedings should be granted where claims are issued on similar facts in more than one court, it is necessary to consider the balance between duplication of court proceedings and the prejudice which might be caused by a stay. In Chorion plc and others v Lane the High Court held that tribunal proceedings should be stayed where there was a sufficient overlap between the tribunal and court proceedings. However, it should be remembered that there is no absolute rule that provides that tribunal proceedings should automatically be stayed.
The litigant, Mr Halstead, in Paymentshield Group Holdings Ltd v Halstead had first issued proceedings in an employment tribunal for unfair dismissal and breach of the Working Time Regulations 1998 in respect of holiday pay. Some two months prior to the hearing, Mr Halstead decided to send a letter before action with attached draft particulars of claim to Paymentshield. When Paymentshield sought a stay of the tribunal proceedings, Mr Halstead at first agreed but then changed his mind, intending to fund the more costly High Court proceedings with the compensation he expected to win from his tribunal claims. He applied for reinstatement of the tribunal proceedings and two employment judges at first instance agreed with him, agreeing to lift the stay because no High Court proceedings had been issued.

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the Beecroft report and "protected conversations"

A remarkable kite-flying exercise emerged today with widespread news coverage of the report about employment law produced by venture capitalist Adrian Beecroft at the request of David Cameron. With headlines such as “Scrap unfair dismissal claims for lazy workers – report” (BBC) and “Give firms freedom to sack unproductive workers, leaked Downing Street report advises” (Telegraph), the report suggests employers could dismiss employees without giving a reason, by using a “Compulsory No Fault Dismissal System”. According to the report, “the employee should be given a chance to argue his or her case, and to suggest (but not demand) that they be given time to improve or be transferred to a less demanding job at a lower wage. If no agreement could be reached, the employee would receive the same payment they would get if they had been made redundant”. So employers would become unaccountable (save for the equivalent of a redundancy payment) even if the action taken was blatantly unfair and unjustified. Incidentally, if that option is available, why would any employers follow the requirements for a full redundancy process if they can be safely circumvented? The report refers to Britain’s “terrible” employment laws and suggests that they are undermining economic growth. The report is fundamentally wrong on two counts.

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just how far can the concept of philosophical beliefs extend?

As originally drafted, the Employment Equality (Religion or Belief) Regulations 2003 prohibited discrimination on grounds of religion or "similar" philosophical beliefs. Then the Equality Act 2006 removed the requirement for such similarity, and extended the protection to any philosophical belief: the Equality Act 2010 s.10 continues with that wide definition.
Removal of just one word dramatically increased the potential for seeking protection from discrimination on a whole range of lifestyles, ideas and practices. As we’ve reported on many occasions it is fair to say that, over recent years, claimants have put forward quite an esoteric mix of possible candidates, and establishing whether these actually amount to a protected philosophical belief is becoming a standard pre-hearing review issue for employment tribunals.

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working time and minimum wage disputes – "working time" is not necessarily the same in both cases

Both the National Minimum Wage Regulations 1999 (NMW) and the Working Time Regulations 1998 (WTR) call for calculations of "working time", so there is a temptation to assume that the words mean the same thing in both provisions. But beware – there is a crucial difference when it comes to periods when a worker is on stand-by.
Contrast Baxter v Titan where, in the context of the NMW, periods a chauffeur spent away from home between assignments where he was able to sleep over at a hotel were not working time, with Wray v JW Lees & Co (Brewers) Ltd where periods where a temporary pub manager was required to remain on work premises but was permitted to sleep did not count for minimum wage but, it was accepted, could count as working time for the purposes of the WTR.

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Agency Workers Regulations 2010 – it’s not all doom and gloom!

The Agency Workers Regulations 2010 SI 2010/93 came into force on 1 October, giving effect (eventually) to the 2008 EU directive on temporary agency work. The government has given in to the inevitable, albeit not gracefully – there is still talk of removing any "gold plating" of the EU requirements, for example by amending them to take one man service companies out of the scope of the regulations.
As reported last month and in brief, the Regulations give agency workers the right to equal treatment on basic working and employment conditions, including pay and holidays, as if they had been recruited directly by the hirer. Most of these rights apply after 12 weeks’ service but some, notably the right to access to the hirer’s facilities such as a canteen, transport between sites or a creche, and to access to information on permanent vacancies, apply from day one.
There has been a lot of coverage on the possible negative impact on the economy (see for example this report from Allen & Overy of 12 September 2011), but in the spirit of "it’s not all doom and gloom", here are a few points which may reduce the impact for individual employers

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an employee may well be reasonable in resisting pay cuts, but that does not automatically make it unreasonable to dismiss and re-engage them

In these continuing hard times, with profits squeezed and businesses facing collapse, it is becoming increasingly common to consider salary reductions as a cost saving exercise. Although some consider it a risky option, given the prospect of employment tribunal claims for unfair dismissal and breach of contract, it is well established that dismissal for refusal to accept a change of contract terms is potentially fair (as "some other substantial reason" for dismissal), and will actually be fair if the employer acts reasonably in deciding to dismiss. Such fairness, of course, calls for genuine efforts to negotiate the changes before resorting to giving notice of dismissal and offering re-engagement on new terms.
Two recent cases have reiterated this general principle and made certain aspects of it very it clear

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disability discrimination and the effectiveness of reasonable adjustments – exactly what is "reasonable"?

The extent of the duty to make reasonable adjustments to avoid placing a disabled person at a substantial disadvantage, including taking steps to get them back to work, is highly fact sensitive. It has been looked at by the Employment Appeal Tribunal in a number of recent cases without giving a definitive answer about how effective an adjustment needs to be to qualify as a "reasonable" one to expect the employer to take.
The EHRC Code of Practice on Employment Chapter 6: Guidance on Reasonable Adjustments indicates that the effectiveness of a measure is a factor which may be take into account in deciding whether a measure is reasonable, but just how effective does a measure have to be to be reasonable?
For example, where a proposed adjustment to reduce emphasis on communication skills in a set of redundancy selection criteria would nonetheless still not have prevented an employee with a social anxiety disorder being selected for redundancy, that adjustment was held to be "not reasonable" (Lancaster v TBWA Manchester). Likewise, from the case of Salford NHS Primary Care Trust v Smith, it seems that although consultations, trials, and exploratory investigations may lead to the making of a reasonable adjustment, because they do not directly alleviate the disadvantage the disabled person suffers they are not in themselves "reasonable adjustments" as defined in the legislation. Therefore a failure to undertake them will not, apparently, be a breach of the duty.

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employee references – the potential minefield that is the requirement to be true, accurate and fair

Many employers are wary of giving references, fearing they will end up in a no win situation. They may find themselves at the wrong end of a claim either by a new employer complaining that a reference was misleading, or by a former employee complaining that they have not got a job because the reference given was not true, accurate and fair. They are probably right to be wary – there is no universal obligation to give a reference, but if an employer does choose to give one, it is undoubtedly true that care needs to be taken when writing a reference.
Where an employee leaves during the course of a disciplinary or performance procedure, it would be misleading to prospective employers to fail to mention this, but what of the position where misconduct or a professional failing is discovered after the employee has left?
The Court of Appeal considered this in the case of Jackson v Liverpool City Council, where after a social worker had left his job at the Council, a number of issues were raised by clients which suggested record keeping failings on his part. When he later applied for a further job and a reference was requested, the Council gave a reference indicating that had he not left, he would have been subject to a form of performance management, but that the issue had not been investigated. The reference met the requirements of being both true and accurate – but was it fair?

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