When does it become fair to dismiss an employee for long term sickness absence?

We are often asked what is the best approach to dealing with an employee who has been on extended sick leave. In general, it is necessary to establish that the employee is not going to be fit to return to work (on a full or partial basis) for the foreseeable future. Without this there is the risk that the employee could contend that they were about to return when they were dismissed or there could be a sudden improvement in condition which might curtail the expected absence. Of course, that assessment requires medical evidence so the process normally involves engaging the services of an occupational health consultant. Employers also need to be aware of potential disability issues.

These issues were recently considered by the Court of Appeal in O’Brien -v- Bolton St Catherine’s Academy. Ms O’Brien commenced work with the employer as an ICT teacher in 2005. In 2011 she was assaulted by a pupil. She did not suffer severe physical injuries but she was very shaken. On her return to work she was concerned that the school was not taking adequate steps to protect her. In particular she was dissatisfied by a refusal to reinstate a policy under which pupils who assaulted staff were automatically excluded.

In December 2011 she went off sick with a diagnosis of stress at work. After more than a year off work she was dismissed on 31 January 2013 on the ground of medical incapacity. her appeal against the decision to dismiss was rejected. Ms O’Brien presented a complaint of unfair dismissal to an employment tribunal. She also claimed that her illness constituted a disability and that she was either dismissed in circumstances giving rise to direct disability discrimination or that she suffered unfavourable treatment on account of her disability. She also claimed wrongful dismissal (breach of contract) because the school paid her in lieu of notice when it was not entitled to do so, as well as claiming arrears of holiday pay.

Her claims for automatic unfair dismissal and direct discrimination failed, as did the claim for holiday pay. However, she was found to have been unfairly dismissed and subjected to less favourable treatment on account of her disability. There was also a finding of wrongful dismissal.

In June 2015 the Employment Appeal Tribunal (EAT) found in favour of the school (save in respect of the relatively minor claim for wrongful dismissal). Ms O’Brien appealed to the Court of Appeal and judgment was handed down on 15 March 2017. Lord Justice Underhill considered the relevant law. He noted that evidence had been presented on behalf of Ms O’Brien at the hearing of the initial appeal against dismissal indicating that, according to an associate psychologist, there was, as at February 2013, a diagnosis of mild depression and severe anxiety. There was also a reference to post traumatic stress disorder but it was unclear whether this was in fact diagnosed. She contended that she was fit to return to work. In its decision on appeal the school determined that Ms O’Brien was not fit to return to work because her condition had not been fully treated and accepted that she was disabled within the meaning of the Equality Act 2010.

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EAT Judgment: There can be no disability-related harassment claim without first establishing the disability

In the recent case of Peninsula Business Service Ltd v Baker, the Claimant had advised his manager that he had dyslexia and had also provided a psychologist’s report confirming the diagnosis.

The Employer’s occupational health provider prepared a report confirming that the Claimant was likely to be considered disabled and recommended reasonable adjustments, however the Claimant’s supervisor had reservations about this and thought that the Claimant could have engineered the report in his favour.

The Employer subsequently arranged for a private company to carry out covert surveillance of the Claimant, the reason for this being that they suspected that he was carrying out work for a second Employer. The surveillance report did not substantiate the Employer’s suspicions, however it did show that the Claimant was not devoting all of his time to his work. Disciplinary proceedings were commenced and a copy of the surveillance report was sent to the Claimant during these proceedings, despite not showing that he was engaged in any fraudulent conduct.

The Claimant brought claims at the Employment Tribunal, claiming that the surveillance was harassment (unwanted conduct relating to his disability) and also victimisation as the disclosures he had made about his disability were ‘protected acts’.

The Tribunal found that the surveillance could not be deemed to be harassment as the Claimant did not know about it at the time, however later telling him about it for disciplinary purposes was harassment. Furthermore the Claimant’s reliance on his asserted disability was the reason for the surveillance, so the conduct did relate to his disability. The Employer arranging the surveillance was also victimisation – as the Claimant’s performance appraisals had always been positive the surveillance could only have been triggered by suspicions about his disability.

The EAT allowed the appeal.

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More news about modern working practices and the “gig economy”

Last week’s news was dominated by the Budget and the Class 4 National Insurance contributions’ increase which was announced and then, within 24 hours, kicked into the long grass. An interesting fact which emerged in the news is that the UK workforce now includes 15% who are classed a self-employed for tax purposes. However, as I have reported this month (in the Pimlico Plumbers case) many of these people are nonetheless classified as workers in the context of employment law and therefore have rights which can be pursued in employment tribunals.

On 22 February The Work and Pensions Committee heard evidence from executives from Uber, Deliveroo, Amazon and courier firm Hermes UK as part of its investigation into modern employment practices. It is estimated that there are now some five million workers in the “gig economy”, of whom some 910,000 are on zero hours contracts, an increase of 100,000 from 2015 to 2016 (ONS Labour Force Survey). UK and Ireland managing director of Deliveroo, Dan Warne, said that flexibility is important to its riders, adding:
We cannot offer that amount of flexibility to those riders if we’re forced to pay a given wage and a given hour to every single rider.
However, it emerged recently that Deliveroo had a clause in its contracts that banned workers from contesting their self-employed status in employment tribunals. Under questioning, Mr Warne acknowledged that the Company needed to “revise the contract”. He said:
This is not something that’s enforced, so there’s no need to have it in there… In practice, if they wished to contest their [self-employed] status they could do so and we wouldn’t challenge them on that.
Although the clause would almost certainly not have been enforceable, it is easy to see how it could operate as a powerful disincentive to low-paid riders with no guarantee of work.

Meanwhile, it has emerged that DPD, which deliver parcels for Marks & Spencer, John Lewis and River Island, fines their couriers £150 per day if they cannot find cover when they are ill. This has resulted in drivers being forced to work when they are sick. The fine, which is described as “liquidated damages”, means that couriers who earn on average £200 a day, lose £350 if they cannot work through illness and are unable to find a substitute. Chair of the select committee, Frank Field, commented:

The gig economy is producing wave after wave of evidence on the grim reality of life at the bottom of Britain’s labour market…A group of companies now controls the working lives of an unknown number of people, and yet evades its own responsibilities as employers and taxpayers by labelling those people as self-employed… This move [by DPD] makes the rest of the gig economy look as though it operates in the Garden of Eden.

A local example of dubious working practices came to light a few weeks ago. Mooboo Bubble Tea, a cafe chain, has a branch located in Liverpool One. New staff reported that they were being made to work a 40-hour trial shift with no pay and no guarantee of a job, apparently in direct breach of the minimum wage regulations.

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Pimlico Plumbers and the definition of a “worker”

As I mentioned in last month’s newsletter, an important judgment concerning the status of workers was handed down by the Court of Appeal on 10 February, namely Pimlico Plumbers Limited and Mullins -v- Smith. The decision was regarded as significant enough to make it on to the national news bulletins and Newsnight, as well as widespread coverage in the press.

Mr Smith is a plumber who worked exclusively for Pimlico Plumbers between August 2005 and April 2011. He claims that, following a heart attack in January 2011, he was wrongfully dismissed in May 2011. According to his initial agreement with Pimlico Plumbing he was a “sub contracted employee”. The contract also stipulated that he had to wear a Pimlico Plumbers uniform, work for five days a week (a minimum of 40 hours), give notice of annual leave and be available to take on-call work. There was a ban on undertaking what was described as “private work”, breach of which would lead to instant dismissal. The contract also provided for payment of “wages”.

The initial contract was replaced with a longer and more detailed contract in 2009, which was entitled “Agreement – Self-Employed Operative”. Mr Smith was required to provide his own tools and equipment and he had to pay his own expenses. He also had to maintain adequate public liability insurance. Sub-paragraph 6.1 of the contract stated:
You are an independent contractor of the Company, in business on your own account. Nothing in this Agreement shall render you an employee, agent or partner of the Company and the termination of this Agreement (for whatever reason) shall not constitute a dismissal for any purpose.
Following the termination of the 2009 contract, Mr Smith lodged an employment tribunal claim, complaining of unfair dismissal, wrongful dismissal, entitlement to pay during medical suspension, holiday pay and arrears of pay. He also claimed direct disability discrimination, discrimination arising from disability and a failure to make reasonable adjustments on account of his disability. At a pre-hearing review Judge Corrigan determined that Mr Smith was not an employee. There were circumstances set out in the contract in which Pimlico Plumbers did not have to pay Mr Smith such as when an invoice was unpaid after six months; he had to rectify problems at his own cost; the understanding of the parties that he was self-employed, both for employment and tax purposes, and that he was VAT registered.

However, Judge Corrigan went on to find that he was a ‘worker’ within the meaning set out in section 230 of the Employment Rights Act 1996:

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Equality Act 2010 (Gender Pay Gap Information) Regulations 2017

On 6th December 2016, the Government published the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, which will require large private sector businesses to publish gender-based pay statistics each year.

These Regulations are likely to come into force (subject to parliamentary approval) on 6th April 2017, and will essentially require employers with 250 or more employees (within the private and voluntary sectors) to publish gender pay information on their company website on 5th April 2018 and thereafter on an annual basis. The information must remain on the website for not less than three years and they must also submit this information to the Government each year (a Government website will be created where the information will have to be published, however details concerning the Government website will likely be released nearer 5th April 2017.)

The above has raised a number of questions from employers such as which individuals need to be taken into account for these purposes, and, exactly what information do they need to provide?

Firstly, in terms of the personnel be taken into account, the Regulations state that such individuals must be undertaking work for the business in a personal capacity, therefore consultants as well as employees, must be accounted for.

Secondly, with regards exactly what information must be provided, the following guidelines are given:

the difference in mean pay between male and female employees
the difference in median pay between male and female employees
the difference in mean bonus pay between male and female employees
the difference in median bonus pay between male and female employees
the proportions of male and female employees who were paid bonus pay
the proportions of male and female employees in each quartile of their pay distribution

The information must be collated from data taken on 5th April every year, starting with 5th April 2017. The bonus information should be based on the preceding 12-month period, beginning with the 12 months leading up to 5th April 2017.

What happens if my business does not comply?

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Can gross negligence amount to gross misconduct?

When we advise SMEs that are contemplating steps which might lead to the termination of an employee’s employment, one of the first steps is to establish one of the “potentially fair reasons” for dismissal. As most readers will know they are (1) conduct or misconduct, (2) capability or performance, (3) redundancy, (4) to avoid breaking the law (e.g. a driver losing their licence) and (5) the sweeping-up provision referred to as “some other substantial reason” (section 98(2) Employment Rights Act 1996). Capability or performance is normally broken down further to separate dismissals for incapacity (such as by reason of extended sickness absence) from poor performance (such as a failure to improve to an acceptable standard having been placed on a performance improvement plan).

Normally it is important to decide the basis on which to proceed from the outset since, otherwise, it is unlikely that it will be possible to show that a fair procedure was followed. However, there are exceptions and an example can be found in the decision of the Court of Appeal in Adesokan v Sainsbury’s Supermarkets Limited.

Mr Adesokan was accused of undermining the Sainsbury’s “Talkback Procedure”. This is a long-established scheme whereby staff are encouraged to be engaged, motivated and to take pride in their work. It also provides a means of quantifying and assessing the level of engagement of staff. As part of the process participating staff are able to provide information in strict confidence concerning other staff and, particularly, line and senior managers. Results of participation in the process can affect performance progression as well as influencing decisions concerning, pay, bonuses and staff deployment. It would be fair to say that it is at the heart of Sainsbury’s personnel procedures.

In June 2013 Mr Adesokan was working with a human resources partner, Mr Briner. Mr Briner sent what is described in the judgment as a “wholly inappropriate email” to the managers of five stores, which included the following:
Here is our opportunity to show everyone how amazing we are at colleague engagement….

I think you should focus predominantly on getting your most enthusiastic colleagues to fill in the survey; using your huddles and briefings as a way of engaging these people. Slightly different to other years 100% completion is less important as long as you have a completion rate above 60% you will get a well-rounded view of your store.

So focus on the Colleague Engagement Index questions and less on 100% completion; let us know how it goes and please do ask us for any help and guidance!
It appeared that the email was sent by both Mr Adesokan and Mr Briner but it turned out that it was sent only by Mr Briner and Mr Adesokan knew nothing about it. It was sent to coincide with the commencement of the Talkback Procedure. Judge Gore QC, sitting in the High Court, observed that the email offended the philosophy of the Procedure and was likely to compromise the results.

Mr Adesokan became aware on 24 June that the email had been sent. He asked Mr Briner to clarify what he meant with the store managers. He didn’t do so and Mr Adesokan did not follow up his enquiry. By 1 July Mr Briner had still not responded to the request for clarification but Mr Adesokan did not report or seek to remedy the problem. In fact, he did nothing at all about it. However, someone else sent a copy of the email to Sainsbury’s CEO on 13 September and he commenced an investigation. The upshot was that Mr Adesokan was summarily dismissed on 25 October. The reasons given were as follows:
You were accountable for Talkback on your region, the key colleague satisfaction metric.

You were aware that your HR partner had communicated to stores in a way that deliberately set out to manipulate the Talkback scores on your region.

You failed to take any adequate steps to rectify this serious situation.

Together, it is my belief that these demonstrate gross negligence on your part which is tantamount to Gross Misconduct.
Mr Adesokan commenced High Court proceedings for wrongful dismissal, on the basis that what he had done did not constitute gross misconduct.

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Online tribunal decisions are here

Last month I wrote about the impending online publication of all new employment tribunal decisions. In particular I highlighted the importance of this development for employers, notably SMEs, who might find that they have details of their businesses and procedures exposed to an extent not seen before. Appeal judgments have been available for years but this is the first time that first instance employment tribunal judgments have been made easily accessible by the general public.

The system is now live at www.gov.uk/employment-tribunal-decisions. So what are the first impressions? Well, it’s easy to use and, as I expected, there is a powerful search facility. A search of “Liverpool” produced two employment tribunal decisions, one concerning claims of direct race discrimination and unfair dismissal against a local nursing home. The judgments are available as downloadable pdfs.

There is also an RSS feed. Those familiar with the technology will know that RSS is generally regarded as standing for “Really Simple Syndication”. It is a way in which websites, blogs and even email clients such as Outlook can take automatic feeds from the website so that new content is automatically added whenever the page is updated. It is therefore a way in which the published tribunal decisions will reach a much wider audience than just those who happen to visit the government website.

It will also be possible for people to set up background searches, for example using Google Chrome. Google, like many other search engines and related tools, has a feature which allows people to set up alerts so that they are emailed whenever the relevant search term appears. Professional organisations have even more sophisticated tools for news gathering and this new resource will dramatically increase the range of content available to be accessed by them.

Perhaps the most interesting aspect of the website is that the content is not confined to new judgments. Available judgments date back as far as May 2015 so it must therefore be assumed that there is no time restriction on the judgments that may be published. Presumably judgments will be added over time so there remains a fair chance employment tribunal judgments from some time ago could suddenly appear.

The real problem for employers is that, even if claims are successfully defended, the details in the judgments could expose operational details which they would much rather keep to themselves, such as security, HR procedures and financial information.

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Can type 2 diabetes amount to a protected disability?

This is the question that was asked in the case of Taylor v Ladbrokes Betting and Gaming Limited, considered by his Honour Judge Hand QC in the Employment Appeal Tribunal.

Type 2 diabetes has been described as “the fastest growing health threat of our times and an urgent public health issue”. According to the latest statistics (November 2016) some 3.6 million people in the UK have been diagnosed as having diabetes and it is estimated that a further 1 million have the condition but have not yet been diagnosed. That equates to 14% of the working population. The question is therefore of considerable importance to employers, bearing in mind the possibility of claims and compensation for discrimination and the duty to make reasonable adjustments.

Mr Taylor was dismissed from his employment in November 2013 in the grounds of “incapacity or misconduct”. He submitted claims for unfair dismissal and unlawful disability discrimination, the latter covering the period from November 2012 to November 2013.

As most readers will be aware, according to the Equality Act 2010 a person has a disability if he or she has a physical or mental impairment which “has a substantial and long-term adverse effect on [that person’s] ability to carry out normal day-to-day activities”. Disability can also be established in cases where there is not a substantial adverse effect but the condition is progressive.

At the employment tribunal hearing Employment Judge Gaskell had no difficulty in accepting that type 2 diabetes involves an inevitably long-term effect. However, he was concerned about whether or not it had a substantial effect on the individual. It was noted that the condition was controlled by medication, principally intended to prevent progression to type 1 diabetes. The medical evidence also indicated that the condition could be controlled by choice of lifestyle, diet and exercise.

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National Minimum Wage (Amendment) Regulations 2017

Following on from my post in October 2016 which detailed the increase to the National Minimum Wage amongst other key Employment Law Changes, the draft National Minimum Wage (Amendment) Regulations have now been published and will come into force from 1st April 2017. In brief, the changes are as follows: The National Living Wage for…

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Another reminder of the need to apply correct procedures

The judgment of the Employment Appeal Tribunal in the case of Mrs B Tykocki v Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust concerns the standards to be applied when carrying out a disciplinary investigation and whether failure to follow procedures can of itself render a dismissal as unfair.

Mrs Barbara Tykocki worked for the Trust as a Healthcare Assistant from August 1989 until she was summarily dismissed for misconduct on 15 September 2014. The dismissal resulted from an incident during a night shift on 3-4 February 2014. A patient complained that Mrs Tykocki had been abusive to her and had effectively assaulted her when she asked for morphine to manage her pain. The patient alleged that Mrs Tykocki had put her hand over her face and told her to shut up. Mrs Tykocki, having denied the allegations, was suspended pending an investigation. The investigation noted two similar previous complaints from patients about Mrs Tykocki and concluded that the latest even had probably occurred as described by the patient. A disciplinary hearing followed on 12 August during which Mrs Tykocki’s union representative suggested that the patient might have been hallucinating. The hearing was adjourned to allow for further investigations in this regard. The hearing reconvened on 3 September by which time the patient had confirmed her earlier statement. A decision was made to dismiss Mrs Tykocki and this was confirmed to her in a letter sent on 15 September. An appeal against the decision to dismiss was unsuccessful.

Mrs Tykocki presented a complaint of unfair dismissal and the tribunal accepted that the incident on 3 February was the basis for her dismissal, was related to conduct and that is was potentially fair.

The tribunal then considered whether the Trust had carried out a reasonable investigation. It concluded that the enquiries made were adequate, that failure to provide all relevant documents to Mrs Tykocki and her representative this was an innocent error and the documents merely confirmed what was apparent from those that were disclosed. It also determined that the Trust was entitled to conclude, following investigations, that there was no evidence that the patient was hallucinating. The tribunal had reasonable grounds for its belief that there had been misconduct and the decision to dismiss was within the range of reasonable responses available to a reasonable employer. Mrs Tykocki appealed.

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