Exit discussions are no bar to a constructive dismissal claim

As you may be aware constructive dismissal occurs when an employee terminates their employment in response to their employee’s treatment of them. The employee has to show that they have resigned in response to fundamental breach of contract by the employer. The Employment Rights Act essentially say that if the employee terminates their contract in circumstances which they are entitled to do so without notice because of the employer’s conduct that termination constitutes a dismissal.

In the case of Gibbs v Leeds United FC the Court was required to determine liability for breach of contract, considering whether Leeds United FC was in breach of its contract with the Claimant, whether that breach was repudiatory and whether, when the Claimant resigned, he did so at least in partly as a result of that breach.

The Claimant (here photographed when at Tottenham) had worked as an assistant manager at Leeds United Football Club. When the head coach was dismissed it was expected that, as is usually the case, the Claimant would also be dismissed despite working under the terms of a fixed term contract which was due to expire in June 2016.

Following the departure of the head coach the claimant did enter into discussions concerning the early termination of his employment however the Chairman made clear that he wanted him to remain at the club. The Claimant returned to work as requested although discussions continued with the club in an attempt to negotiate the early termination of his contract. During this period the Claimant was not assigned work which fell within his contract to do, although he turned up ready and willing to do it. He complained and said that he had been left with nothing to do and expressed that he was unhappy about this situation. However subsequently on the 23 June he received an email from the club secretary, Graham Bean, which read as follows:

Details

Can the privilege that covers protected conversations under section 111A ERA be waived?

No, held the Employment Appeal Tribunal in Faithorn Farrell Timms LLP v Bailey, giving the first appellate judgment on protected conversations.

Protected conversations are a mechanism whereby employers can enter into discussions concerning the proposed termination of an employee’s employment where there is no existing ‘dispute’ (i.e. that there are no ongoing formal disciplinary/capability issues). The pre-termination conversations and terms of settlement are protected in so far as they cannot be used as evidence in any subsequent employment tribunal claim for unfair dismissal. Protected conversations which are covered by section 111A of the ERA 1999 were implemented in July 2013 and have sought to bridge the gap to allow employees to enter into conversations with a view to agreeing the exit of an employee where there is no previous dispute. It is of course common ground that employers have always been able to rely upon without prejudice “privileged” communications, however this will only apply in the event of a genuine attempt to resolve an existing dispute. The aforementioned case demonstrates the difficulties an employer may encounter when there is an overlap between the without prejudice and section 111A rules.

The Claimant complained of constructive unfair dismissal and indirect sex discrimination in part as a result of the discussions she had initiated for the agreed termination of her employment. She referred to the protected conversation in both her grievance and ET1 (claim form) as did the Respondent when providing a response. It was not until the preparation of the full merits hearing that the Respondent sought to challenge the admissibility of evidence under both section 111A ERA and the without prejudice rules. The Tribunal ruled that the material in question was generally admissible, subject to redaction of specific references to any offer.

The Respondent appealed and the Claimant cross appealed on the basis that the Tribunal had failed to deal with the Claimant’s contentions that the Respondent could not rely on the without privilege or section 111A material given its improper behaviour and had ruled that in any event the parties had waived their privilege.

The Employment Appeal Tribunal (EAT) drew a distinction between the without prejudice rules and section 111A and noted most importantly that common law without prejudice rules will only apply when there is a dispute between the parties.

Details

What are the likely implications of Brexit on UK Employment Law/HR practices?

Employers may not be aware that much of the current legislation in place to protect employee rights actually derives from the European Union – for example, working time regulations, rights of the employees on a business transfer (TUPE) and family leave rights to name but a few. Indeed some Politicians for the ‘Leave Campaign’ will no doubt have argued that such laws were inhibitive to British businesses and produced too many rules and regulations having a negative effect on both time and profits.

What is likely to happen?

In reality it is doubtful that the UK Government would look to repeal any employment law which implements minimum EU requirements, the reason being that many of these laws simply complement existing UK law (equal pay rights for example). In addition, much of our existing employment law simply reflects good/acceptable practice in business (or indeed life generally!) such as the right not to be discriminated against on the grounds of sex, age, disability etc. Furthermore some UK Laws actually go above and beyond the minimum requirements of EU legislation – in respect of holidays for example, the EU Working Time Directive 2003/88/EC only requires EU Member States to provide for a minimum of 20 days’ annual leave for employees, whilst the UK statutory minimum leave entitlement is actually 28 days inclusive of normal bank and public holidays.

As a final point it is worth noting that despite a (potential) Brexit, the UK will still need to maintain strong trading relations with Europe. If the UK is a member of the EEA (European Economic Area) it would be required to remain subject to many aspects of EU employment law.

In light of the above, whilst in my view the majority of employment law legislation will not be repealed or significantly changed, the UK Government may look to alter some employment law that UK businesses have struggled with. The following are areas that may be most susceptible to change:

Details

Can workers claim injury to feelings for a breach of the Working Time Regulations 1998?

This question was recently considered by The Employment Appeal Tribunal (EAT) in the case of Santos Gomes v Higher Level Care Ltd UKEAT/0017/16.
The Facts
The Claimant, Miss Santos Gomes was successful in proving that her employer, Higher Level Care Ltd, had failed in their duty to provide her with 20 minute rest breaks as required by the Working Time Regulations 1998 (WTR).  or this element of the claim she was awarded compensation for her financial loss in the amount of £1,220. The Employment Tribunal however refused to entertain a further compensation claim for injury to feelings.

The Claimant brought an appeal to the EAT on the basis that Regulation 30(4) did not prevent an award for injury to feelings being made, compensation for injury to feelings was not restricted to discrimination laws, and the WTR did not provide an adequate remedy for this as is required by EU Law.
The Law
Regulation 12 of the WTR states that a worker is entitled to a minimum rest break of 20 minutes when working for more than 6 hours per day. Subsequently a worker is permitted to bring a complaint against their employer for a breach of these entitlements. When in such occasions an ET finds in favour of the Claimant, a declaration must be made in this regard and an award of compensation can be made.

The WTR state only that any compensation awarded should be what the ET considers to be ‘just and equitable’ taking into account all of the circumstances and the employers default in refusing to allow the worker to exercise their right (Reg 30(4)(a)) and any subsequent loss sustained by that worker attributable to the matters complained of (Reg 30(4)(b)).  Whilst compensation for injury to feelings is available in some types of employment law claims (mostly for discrimination), you cannot claim such compensation for breach of contract or indeed unfair dismissal claims.
The decision of the EAT

Details

Tips and troncs – under review

It has recently been announced that the Government is to consult on a proposal to ban deductions from employees’ tips. It has long been accepted that employers are within their rights to make the deductions despite the apparent unfairness. However, not surprisingly, and following the exposure of deductions made from some of Britain’s best known restaurant chains the Government has following an 8 month review, decided to consult as to whether deductions from staff tips should be scrapped.

The deductions are taken in the name of an “admin fee” and mean that staff do not get the full percentage of the tips that were intended for them. Unite officer Dave Turnbull said:
We are pleased that the government has woken up to this scandal, but we would ask that they think carefully about an effective solution. Capping admin fees will simply legitimise the underhand practice of restaurants taking a slice of staff tips and be near enough impossible to enforce.

When customers eat at the likes of Pizza Express, they give tips in the expectation that all of it will go to staff and not be pocketed by management.
The Government’s consultation, which will run until 27 June, sets out options for meeting three broad objectives: making it clear that tips and service charges are voluntary; making it clear where these payments go; and ensuring workers get a fair share of the money raised.

The Government said that while unions and other employee groups had asked for a requirement for 100 per cent of tips to be paid to workers, and the majority of customers would prefer to see this, employers were “more supportive of retaining the current treatment of discretionary payments for service; maintaining their flexibility to reward workers but increasing the transparency of actions”.

Prior to 2009 restaurants were allowed to take tips and gratuities into consideration to effectively make up national minimum wage. However, from October 2009 such deductions were prohibited which meant that all eligible workers must receive at least national minimum wage in base pay with any tips paid on top. With that has brought a great deal of confusion as to what this meant.

Details

Judge at EU’s top court backs workplace ban on headscarf

An advocate general at the European Court of Justice has said that companies should be free to ban Muslim women from wearing head scarves if they have a general policy barring all religious and political symbols.

This was said in the run up to a landmark ruling expected from the EU’s highest Court this year. The case involved a woman who worked as a receptionist for the company G4S. After working for the company for three years she decided to start wearing a headscarf for religious reasons. As a result the employee was dismissed given that she had contravened Company policy, which at the time was an unwritten rule.

The employee brought a claim for wrongful dismissal. This was dismissed by the lower courts and further on appeal. However it was referred to the European Court of Justice in Luxembourg to establish whether G4S had contravened the European Union’s anti-discrimination directive.

The Advocate General provided an indication that such a ban would not be deemed direct discrimination and could be justified in order to enforce a policy on religion and ideological neutrality. In arriving at this decision it was said that “whilst an employee cannot leave their sex, skin colour, ethnicity, sexual orientation, age or disability at the door, upon entering their employer’s premises, they may be expected to moderate the exercise of his religion in the workplace.”

If the European Court of Justice’s final ruling agrees with that of the Advocate General, then this will be landmark decision. However, this is not the first time that the contentious issue has come before the European Courts.

Details

Indirect religious discrimination

Can a worker be dismissed for refusing to leave a partner convicted of unrelated criminal conduct with which the dismissed worker was not involved?

 

This question was considered in the recent case of Pendleton v Derbyshire County Council & Anor (Religion or Belief Discrimination) [2016] UKEAT 0238 15 2903.  The facts of this case were that the Claimant’s (Mrs Pendleton’s) husband was the headteacher of a local school.  The Claimant herself was also a teacher employed at another local school where she was teaching a Year 6 class, had an unblemished disciplinary record and was highly respected both in school and also within the Anglican Christian community (being a devoted and practising Anglican Christian).

 

In January 2013 the Claimant’s husband was arrested on suspicion of downloading indecent images of children and voyeurism.  He was later convicted of these offences and sentenced to ten months’ imprisonment.

 

The Claimant initially left her husband and went to stay with her parents, taking leave from work – at this point the headteacher of the school where she was employed assured her that her position would remain open for when she returned.  Although there was no evidence that the Claimant had any knowledge or involvement in her husband’s actions, the headteacher had also stated that the school couldn’t support her if she stayed with her husband.

 

During her period of leave the Claimant decided that whilst she did not condone what her husband had done, she placed importance on her marriage vows and would therefore stay with him if he could show unequivocal repentance.

 

The school subsequently dismissed the Claimant summarily, stating that she had “… chosen to maintain a relationship with [her] partner who has been convicted of making indecent images of children and voyeurism. This has led the panel to believe that [her] suitability to carry out the safeguarding responsibilities of [her] role … have been eroded. Furthermore, the choices [she had] made in [her] personal life are in direct contravention to the ethos of … the … School”.

 

The Claimant’s appeal against her dismissal was unsuccessful and she therefore brought claims of unfair dismissal, wrongful dismissal and indirect religious discrimination against the Respondent based upon her religious beliefs as noted above.

 

The Employment Tribunal agreed with the Claimant’s submission that she had been unfairly dismissed, stating that the reason for her dismissal was not some other substantial reason (SOSR) – she had not committed an act of misconduct let alone gross misconduct – but rather the Respondent’s view that the Claimant had used poor judgment in staying with her husband despite him being a convicted sex offender.  The Claimant’s claim of wrongful dismissal also succeeded in light of the above.

 

With regards the indirect discrimination claim however, the Tribunal noted that the claimant held a belief for the purposes of section 10(2) Equality Act 2010, that: “her marriage vow was sacrosanct, having been made to God and being an expression of her religious faith”.  The Tribunal further accepted that the Respondent had applied a provision, criterion or practice of dismissing those who chose not to end a relationship with a person convicted of making indecent images of children and voyeurism, however concluded that the Claimant would have been dismissed whether she believed in the sanctity of marriage or not as another individual in the same situation would have also been dismissed, even if they did not share the Claimant’s religious belief.  The tribunal did comment however that had they needed to consider the question of proportionality, they would have found that the Respondent did not show that the dismissal was a proportionate means of achieving a legitimate aim.

 

The Claimant appealed to the Employment Appeal Tribunal (EAT) on the basis that making her choose between her marriage vows and her career was enough to show she had been placed at a disadvantage, especially given she had been required to act against her religious beliefs.

Details

Can a demotion amount to a breach of contract/constructive dismissal claim?

In the case of Gibbs v Leeds United Football Club Ltd [2016] EWHC 960 (QB) (28 April 2016) the matter in question concerned a contract of employment between the Claimant (Mr Gibbs) and the Respondent (Leeds United FC).

 

The question was whether the Claimant had been constructively dismissed due to a repudiatory breach of his contract of employment by Leeds United, or whether he chose to leave the club without there being any breach of contract.  There was a also a further question in respect of whether the Claimant acted unreasonably in failing to mitigate his losses by rejecting the offer of the role of Head Coach after he had resigned.

By way of background information, the claimant’s contract of employment stated that he must “diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Chief Executive and the Board at which are commonly undertaken and exercised by the managers of Professional football club companies of the Company’s status in relation to the playing, coaching and scouting aspects of the Company’s undertaking (included but not limited to player conditioning and the development of tactical instructions and playing standards generally) and in the discharge of the same he shall:…comply with all reasonable and lawful instructions and requests given:…(B) to the Assistant Manager by the Chairman; (C) to the Assistant Manager by the Company; (D) to the Assistant Manager by the Chief of the Executive…and perform such hours of work as may from time to time reasonably be required of him…”

 

The Claimant was engaged on a fixed term three year contract, however after around eight months of employment the Respondent Company was purchased by a Mr Cellino.  The Respondent thereafter wanted to recruit their own management team, and agreed with the Claimant’s manager to end the manager’s contract early – the Claimant therefore expected that the same thing would happen to him.

 

A new manager was subsequently recruited by the Respondent along with a new assistant manager, however the Claimant was not offered a termination package.  The Claimant did express during a meeting with the owner of the Company that if work was not available for him, he would be happy for his contract to be terminated if a termination package could be agreed.

 

An agreement was not met however and the Claimant subsequently reported to work under the new manager.  Unfortunately they did not get on and the Claimant received an email stating that his role had been changed and he was now required to train the Respondent’s youth players instead of the first team.  The Claimant felt that this instruction constituted a demotion and subsequently resigned.

 

Four months later, strangely, the Claimant was offered the role of manager following the dismissal of his predecessor.  He refused this offer, stating that the treatment he had received by the Respondent had undermined his relationship with his fellow employees.  The Claimant brought a breach of contract constructive dismissal claim against the Respondent.

 

The High Court held

Details

Discrimination claim against Newcastle United

The former Newcastle United midfielder Jonas Gutierrez has won a disability discrimination claim against his former club after being dropped from the club as a result of his battle with testicular cancer.

Gutierrez who has previously been described as one of Newcastle’s most valuable players signed a new four year deal with the club in 2011. His contract provided a clause providing for an automatic one year extension if he played 80 premier league games. Gutierrez was a regular first team player although following his cancer diagnosis and subsequent treatment the club informed him that he wasn’t going to be retained given that he had only reached 78 of the 80 games that were required to trigger the extension.  Gutierrez argued that the club purposely didn’t select him for premier league games in an attempt to manipulate the extension trigger as they no longer wanted him at the club.

Gutierrez made four claims under the Equality Act 2010 which makes it unlawful to discriminate against workers on the grounds of mental or physical disability which are as follows.

A claim under section 13 for “direct discrimination”
A claim under section 15 for “unfavourable treatment”
A claim under section 21 for failure to make reasonable adjustments.
A claim for disability-related harassment.

The tribunal dismissed claims two and four largely because the effects of his cancer were no more disruptive to his ability to work that the common injuries suffered by footballers. Claim 1 was upheld because the tribunal inferred from the facts that the club were deliberately managing the claimant’s selection to prevent him triggering the option of extension. They further went on to say that the reason why the respondent had managed the claimant’s selection was because they had no longer wanted him at the club because of his cancer.

Details

Incorporation of company handbooks into employment contracts

The employment contract sets out an employee’s rights, responsibilities and duties within the employment relationship. However, as an employer, you also need a set of policies complying with the ACAS code on grievance and disciplinary procedures, paid holiday and maternity and paternity leave. The general position and assumption of most employers are that policies are non contractual and therefore an employee will be prohibited from bringing a breach of contract claim in the event that their employers fail to adhere to any of their policies.

However, the above is not conclusive and the Court will often consider a number of factors in considering whether policies contained in company handbooks will be viewed as contractual. Policies that infer statutory rights such as sickness and holiday rights will be deemed contractual on the basis that the employer is obliged to provide full particulars of their employment under the Employment Rights Act 1996. However with non-statutory rights the Court will try to ascertain what the intentions of the parties were when entering into the agreement

Whether a policy is contractual became a point of contention in Sparks v Departments for Transport [2015] EWHC 181 (QB)  which concerned the contractual validity of a decision by several government agencies to tighten up their sickness absence rules by reducing the amount of time before sickness procedures were triggered.

Details