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CLB Employment Solutions newsletter

Newsletter – job applicant refused employment because he’s bald

The BBC reports that in June 2010 a Court in Northern Ireland ordered the Police Service there to reconsider an application for recruitment by a bald man. He had been rejected out of hand because he could not give them hairs of up to 3cm in length required for a drug test.

He was also unable to provide about 200 body hairs as an alternative.

Maybe the man could have brought a case of indirect sex discrimination as he would no doubt have found it easy to prove that many more men than women go bald – but then again the picture on the BBC website suggests that perhaps he had just had a very close shave rather than that he was bald.

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CLB Employment Solutions employment tribunal decisions newsletter

Newsletter – redefining unreasonable behaviour at an employment tribunal

Judges and juries in criminal trials sometimes need police protection. However those taking part in employment tribunal cases don’t generally expect to face physical violence so spare a thought for former solicitor Russell Hardwick. He retired a few weeks ago after a long stint as an Employment Judge no doubt expecting some peace and quiet. This was not to be. Not only does he still sometimes sit in the tribunal in Reading but just the other day he was physically attacked by a litigant who had lost his case.

The attacker, a Mr Mohammed Choudhury, went up to the judge and threatened him with a meat cleaver which he lifted above the judge’s head. Happily barrister Andrew Burns was on hand. Giving a new meaning to the expression “Defence Counsel” he jumped to the aid of the judge who it seems escaped into his room and was unharmed save for shock.

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CLB Employment Solutions fit notes newsletter sickness absence

Newsletter – fit notes – employers beware!

As previously reported in our blog a website is offering fake new-style Med 3s which include a ‘Statement of Fitness for Work’. The web-site charges £9.99 – and it’s “buy one and get one free”.

The website concerned (http://www.doctorsnotestore.com) says it provides “Guaranteed 48 hour delivery of authentic looking replica doctors sick note or medical certificate. Written on official doctors notepaper, with real stamp“. It says “all fake-sick notes come with an official sick note stamp” and offers the ability to choose from doctors at medical centres in London, Manchester, Birmingham, Glasgow – or any other area.

It also says that documents purchased from it “are to be used for entertainment purposes only. We do not condone intentional false absence from an employer or educational institution. We do not condone illegal use of these documents“. But then it goes on to say “Print a homemade sick note and you are much more likely to be caught out“.

Fake sick notes are not new. A BBC news item in August 2008 suggests they have been around since at least 1997. However their abuse for fraudulent purposes continues to be something about which employers and HR departments should be on their guard and the development of new fake fit notes is a prompt for a timely reminder.

More seriously, it seems that the previous Government’s introduction of “fit notes” to replace old-style “sick notes has hit an unexpected snag. The new fit notes were introduced in April (by the less than snappily named Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) (Amendment) Regulations 2010). They enable a doctor to select a ‘may be fit for work’ option if they think that returning to work will help the individual concerned. The fit note form provides tick boxes for a doctor to suggest, where appropriate, common ways for an employer to support the individual’s return to work and also provides space for the doctor to give general advice.

The unexpected snag was highlighted at a recent CBI sickness absence conference. The snag is that although all doctors can tick the boxes, many are apparently unable to write clearly. The Daily Telegraph report on the conference says that the fit-note “…has been billed as the cure to Britain’s sicknote culture but has been laid low by a more serious affliction – doctors’ illegible handwriting“.

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CLB Employment Solutions equal opportunities newsletter

Newsletter – Equality Act 2010 progress

Changes to the Government Equalities Office web pages have recently fuelled rumours that the new coalition government may be rethinking the timetable for introduction of the Equality Act 2010. The Act received Royal Assent on 8 April 2010, immediately before Parliament was dissolved. Major parts of it have been intended to come into force on 1 October 2010.

The timetable for implementation has been withdrawn from the GEO website. As at 25 July 2010 this now simply states that “The Government is currently considering how the different provisions will be commenced so that the Act is implemented in an effective and proportionate way. In the meantime, the Government Equalities Office continues to work on the basis of the previously announced timetable, which envisaged commencement of the Act’s core provisions in October 2010”.

So 1 October is still on the cards – but maybe not!

The previous timetable was as follows:

  • October 2010: Main provisions to be in force.
  • April 2011: Integrated public sector Equality Duty, the Socio-economic Duty and dual discrimination protection to be in force.
  • 2012: age discrimination ban in provision of goods, facilities, services and public functions.
  • 2013: Private and voluntary sector gender pay transparency regulations expected if employers have not already done enough

Both the Conservatives and the Lib-Dems have been generally in favour of the Act (especially in so far as it is a technical, consolidating, provision bringing together in one place a mish-mash of statutes and regulations going back to 1970). However the Conservatives indicated before the general election that if elected they would not implement the so-called “socio-economic duty” or the provision allowing (but not requiring) a degree of positive discrimination in recruitment and promotion (section 159). The coalition’s view is not yet clear.

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CLB Employment Solutions compensation contract terms Court of Appeal damages employment law newsletter

Newsletter – circumventing statutory compensation limits

Mr Edwards was a consultant surgeon working for the Chesterfield NHS Trust. He was dismissed for gross misconduct and subsequently was unable to find employment within the NHS.

Rather than claiming unfair dismissal at an employment tribunal, where compensation is limited by statute (currently to an absolute maximum of £76,700), he brought a breach of contract claim in the High Court where there is no limit on the amount which can be awarded. He claimed a huge amount, a little under £4.3m including a sum in excess of £3.8 million for loss of future earnings.

He was able to go to the High Court rather than an employment tribunal because he was able to show that the Trust was in breach of contract. It had failed to follow the disciplinary procedures which were set out in his employment contract. In particular his employment contract provided that a person with legal qualifications should have chaired the panel which considered his case, that a clinician of the same medical discipline as himself should have been on the panel and that he should have been allowed legal representation at the hearing. The disciplinary procedure operated by the Trust in his case suffered from defects in all those areas. He claimed that if the procedure had been handled correctly, in accordance with his contract, no finding of misconduct would have been made and he would not have been dismissed.

At first instance he won a pyrrhic victory (the Court said his claim could proceed but intially ruled that damages would be limited to loss of earnings for the contractual three months’ notice period, later varied to include damages in respect of the period during which he would have remained employed while a disciplinary procedure which complied with the terms of his contract ran its course).

He has now won a more substantial victory in the Court of Appeal. The Court of Appeal has agreed with him that damages should include compensation for loss of the chance of staying in employment.

That is quite significant. It means that an employee can, in appropriate cases, be eligible to win damages far in excess of the amount an employment tribunal can award for unfair dismissal. However this will not be an open door to huge claims. Thus in a misconduct case the employee would have to show that he had been dismissed after a disciplinary hearing conducted in a way which was seriously out of line with his contractual entitlement and that there was a genuine chance that he would not have been dismissed had the hearing been properly conducted.

No doubt in the real world it is unlikely that these conditions would often be fulfilled but even so this is a salutary warning to employers. Advice should be taken from us in good time and always before disciplinary proceedings take place, to ensure that the risk of “getting it wrong” is minimised.

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CLB Employment Solutions newsletter privilege

Newsletter – the “without prejudice” rule

As is well known, communications made “without prejudice” between disputing parties in attempts to achieve an out of court settlement of their dispute are not generally admissible evidence if they fail to reach a settlement and the matter goes to trial. The reason, of course, is that it is important public policy to encourage parties to negotiate and settle disputes out of court. But does this public policy apply when an out of court settlement has been reached?

This was the question which recently faced the High Court. It decided that the general rule did not apply where a settlement agreement had been reached but the parties have then gone to court to resolve a separate dispute about what a clause in the agreement meant. The High Court decided that the interests of justice in such a situation warranted an exception to the general rule. As will be seen from what follows below, that decision has now been overruled.

Those conducting negotiations on a “without prejudice” basis need to be aware that there are long-standing exceptions to the general rule. However the exceptions apply only in very limited circumstances. The main “traditional” exception is where exclusion of what was communicated would act as a cloak for perjury, blackmail or other “unambiguous impropriety”.

In the case referred to above, the High Court held that an exception applied even though it did not come within any of the “traditional” categories. Two companies had been arguing over a disputed invoice and eventually came to an out of court settlement. It then transpired that they had different interpretations of what a particular clause in the settlement agreement meant. One sued the other, effectively to get a final determination as to what the clause really meant. The High Court recognised that evidence concerning the negotiations leading to the settlement would help it come to a just decision but the negotiations had been conducted on a “without prejudice” basis. So there was a preliminary problem as to whether evidence of what was said during the negotiations was admissible.

In the event the High Court concluded that the interests of justice required that evidence of the “without prejudice” exchanges should be admissible to the extent that it would be admissible had the exchanges not been “without prejudice”. By a two to one majority, the Court of Appeal has now overruled the High Court (Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2010] EWCA Civ 79). At least on the facts of this case, the Court of Appeal took the view that the public interest policy of protecting without prejudice communications is stronger than the policy of providing a judge with the means to arrive at a just solution.

Another recent case shows that judicial suggestions that the “without prejudice” rule should be less strictly applied in discrimination cases than in commercial cases should not be taken too far. Santander (then the Abbey National) had dismissed a Mrs Woodward. She brought proceedings against Santander in the employment tribunal alleging victimisation, sex discrimination and detrimental treatment for whistleblowing and attempted to introduce as evidence letters written on a “without prejudice” basis by Santander. The employment tribunal refused to allow her to do so.

On appeal, the EAT agreed with the original tribunal (Woodward v Santander UK Plc, EAT on 25 May 2010). The EAT pointed out that, as noted above, exceptions to the general rule are rare because of the important principle that “parties should not be discouraged from settling their disputes by a fear that something said in the course of negotiations may be used to their prejudice in subsequent proceedings“.

So the message from these two cases is that “without prejudice” negotiations in attempts to settle disputes can generally be safely made without fear of them later coming to light in a court or tribunal.

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CLB Employment Solutions newsletter pensions retirement

Newsletter – retirement age

As pensions and retirement usually go together there is much scope for muddling the rules relating to them. Adding to possible confusion, two government consultations on related matters are both being headed by eminent men with the same surname. Former Labour Minister John Hutton is to chair a commission on public service pensions while economist Will Hutton is to head up a review of fair pay in the public sector.

Leaving aside anything to do with occupational pension schemes, there are three separate topical hot potatoes which are sometimes confusingly rolled into one. They are: (i) the “default retirement age”; (ii) raising the age at which a person is entitled to the State Retirement Pension; and (iii) equalising the age at which men and women become entitled to the State Retirement Pension.

The “default retirement” age is 65. For practical purposes this simply means that an employer can require an employee to stop work because he or she has reached age 65 without fear of being sued for unfair dismissal or unlawful age discrimination. Proper procedures must be followed. If they are followed an employee can generally be required to retire even if he or she would prefer to continue to work. The previous government had announced a review of the “default retirement age” which could lead to increasing it or even abolishing it altogether and the current government is committed to continue that process (and indeed following the 2009 judgment in the much publicised “Heyday” case would have found it very difficult not to do so).

Separately, the age at which a person can become entitled to the State Retirement Pension is being reviewed. Currently it is 65 for men and 60 for women. The previous government set out that the State Pension age would gradually increase to 68 for both men and women over a period of 22 years from 2024 to 2046. The proposal was that it would go up to 66 between April 2024 and April 2026, then to 67 between April 2034 and April 2036 and to then to 68 between April 2044 and April 2046. This process is now to be accelerated. On 24 June 2010 the new coalition government issued a consultation paper entitled “When should the state pension age increase to 66?“. The consultation will close on 6 August 2010.

Finally, there is the question of equalising the age at which men and women become entitled to the State Retirement pension. Different pension ages for men and women are of course contrary to sex discrimination rules but are temporarily allowed under a special EC/EU exemption which applies to the State Retirement Pension – not to occupational pensions. The State Pension age for women born after 6th April 1950 is already being gradually increased from 60 to 65, with the phasing in having already started (in April 2010 and due to be completed by 2020). A State Pension age calculator which takes account of this phasing in is available on the DWP website .

Clearly the above three matters (“the default retirement age”, raising the State Pension age and equalisation of State Pension age for men and women) are interrelated. Thus for example the consultation document noted above on raising the State Pension age states that “Under current legislation, introduced in 1995, the state pension age for men and women will not be equalised until April 2020. This is an important consideration in framing any options for increasing the state pension age, particularly any option which looks at making such a change before 2020“.

Questions concerning retirement and pensions will undoubtedly become increasingly important subjects for public discussion over the next few months and years. We believe that it will generally be helpful to bear in mind that the three matters noted above are in fact, and in law, separate matters even though interrelated so that changes to one can have a knock on effect on the others.

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CLB Employment Solutions contract terms Court of Appeal news newsletter

Newsletter – rewards for failure

It’s not only private sector bank chiefs who can be handsomely rewarded even though they have presided over disasters. One reason for what can sometimes appear to be unwarranted generosity is of course self-interest: senior directors are usually aware of any dirty linen there may be in their employers’ cupboards and an important part of the compensation packages they negotiate is often their agreement to keep quiet, euphemistically referred to as a “confidentiality clause”. That, of course, can be worth a lot.

In a recent public sector example, the former chief executive of Maidstone and Tunbridge Wells NHS Trust (a Ms Rose Gibb) resigned from her job in October 2007. This was just a few days before publication of a report on an outbreak of the clostridium difficile “super bug” which had caused the deaths of 90 people. Ms Gibb was not, of course, personally responsible but the outbreak occurred on her watch and the report said there had been ‘a significant failing on the part of the Trust which failed to protect the interests of patients’.

To the outrage of many, including Alan Johnson who was then Secretary of State for Health, the Trust had agreed to pay Ms Gibb a “compensation package” of around £250,000. As normal, the agreement included confidentiality clauses. Given the public outcry when the amount became known, the Trust quickly changed its mind. Although it had agreed to pay around £250,000 it refused to hand over more than the “pay in lieu of notice” part of it. That was £75,000 but was not enough to satisfy Ms Gibb. As the Trust had agreed to pay more it was perhaps understandable that she sued for the £175,000 balance.

The High Court rejected her claim, holding that the agreement was so unreasonable that it was void (see for example BBC News of 28 April 2009Bug scandal boss loses pay fight“). Ms Gibb appealed to the Court of Appeal. Not surprisingly, as the case concerned legal rights rather than moral ones, she has won.

Basically, the Court of Appeal’s reasoning was simply that the agreed payment was not irrational (the Trust’s lawyers had advised that Ms Gibbs could win up to £250,000 if she was dismissed) and that the High Court must not act as auditor or substitute its own view as to what was reasonable for the view of the Trust. In any event, and perhaps rather more controversially in the circumstances, the Court thought that “…£240,000 was not on its face outlandish compensation for the arbitrary termination of a career which it was unlikely Ms Gibb would be able to resume or resurrect“.

Parts of the Court of Appeal’s unanimous judgment of 23 June 2010 make wonderful reading. Lord Justice Sedley referred in passing to the execution of Admiral Byng in 1757, saying “It seems that the making of a public sacrifice to deflect press and political obloquy, which is what happened to [Ms Gibb], remains an accepted expedient of public administration in this country“.

Even though he agreed that Ms Gibb should have the full £250,000 Sedley LJ pointed out that profligate expenditure by a public body is not beyond the reach of the courts. He referred to an entertaining 1894 example of judicial auditing of civic expenditure. Councillors had been inspecting a waterworks in the Wicklow Hills and had had a rather good picnic lunch at public expense. They were appealing against a surcharge imposed on them as a result but got little sympathy from the judge who said:

“I think it is relevant to refer to the character of this luncheon. I have before me the items in the bill. Amongst the list of wines are two dozen champagne – Ayala 1885 – a very good branch – at 84s a dozen; one dozen Marcobrunn hock – a very nice hock; one dozen Chateau Margaux – an excellent claret; one dozen fine old Dublin whiskey – the best whiskey that can be got; one case of Ayala; six bottles of Amontillado sherry – a stimulating sherry; and the ninth item is some more fine Dublin whiskey… There is an allowance for brakes; one box of cigars, 100; coachmen’s dinner; beer, stout, minerals in siphons, and ice for wine. There is dessert and there are sandwiches, and an allowance for four glasses broken – a very small number broken under the circumstances …”

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CLB Employment Solutions minimum wage newsletter

Newsletter – Minimum Wage increase 2010

Draft regulations have now been published which will make the following main changes to the National Minimum Wage with effect from 1st October 2010:

  • the principal rate of the national minimum wage increases from £5.80 to £5.93 per hour;
  • the age at which the principal rate becomes payable is reduced from 22 to 21;
  • the rate for workers aged between 18 and 20 increases from £4.83 to £4.92 per hour;
  • the rate for workers aged below 18 who have ceased to be of compulsory school age increases from £3.57 to £3.64 per hour;
  • apprentices employed under a contract of apprenticeship who are within the first 12 months of that employment or who have not attained the age of 19, will receive a national minimum wage of £2.50 per hour;
  • the “accommodation amount”, applicable where an employer provides a worker with living accommodation, increases from £4.51 to £4.61 per day.

Although there is no formal confirmation yet on the Agricultural Wages Board website, it is understood that the annual review of the agricultural minimum wage (effective on 1 October each year) has settled on an average increase of 2.4% from 1 October 2010. An Agricultural Wages Order can be expected in due course.

Meanwhile, Boris Johnson, the mayor of London, has announced a 25p increase in the London living wage, bringing it to £7.85 per hour. There is of course no statutory compulsion on London employers to pay more than the national minimum wage. The London living wage is calculated by the Greater London Authority and is designed to take into account higher costs of living in London rather than elsewhere. There is a web-page listing employers who have committed to pay London staff the London Living Wage rather than the National Minimum Wage.

Finally, it is worth noting that the NMW has teeth. An optician in Manchester, Benjamin Gains, has recently been fined £3,696 for National Minimum Wage offences. He had paid his staff up to 40% less than that to which they were entitled and attempted to hide the fact that he wasn’t paying what he should by falsifying employee information.

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CLB Employment Solutions news newsletter

Newsletter – Vetting and Barring Scheme halted

The government has announced that it is re-thinking the Vetting and Barring Scheme, saying that it “…. recognises that many businesses, community groups and individuals see the current scheme as disproportionate and overly burdensome, and that it unduly infringes on civil liberties“.

The scheme was introduced in England and Wales under the Safeguarding Vulnerable Groups Act 2006. That Act was passed in reaction to the Soham murders which led to the June 2004 Bichard report and the uproar when it was disclosed that even after that the Department for Education had cleared a particular individual whose name was on a sex offenders’ register to work as a PE teacher.

Although the Tory party gave backing to the Act when it was a Bill, Theresa May (now the coalition government Home Secretary) explained on the Today programme on 15 June 2010 that defects in the Act have become apparent. She cited the Act as an example of the law of unintended consequences. In particular, the requirement that people must register with the newly established Independent Safeguarding Authority if they are going to work with children or vulnerable adults has led to grave concern that many volunteers will simply withdraw their help. Worthwhile activities such as after-school clubs might simply cease to function.

The underlying approach has been criticised on the basis that it effectively assumes that all voluntary helpers should be treated as paedophiles unless they have been vetted – the opposite of the more common sense position that everyone is “innocent unless proved guilty”.

The immediate practical implication of the Government rethink is to halt the next stage in implementaton of the VBS. Voluntary registration for new employees and job-movers working or volunteering with children and vulnerable adults was due to start on 26 July 2010. This has now been stopped. However as yet, there has been no announcement that the next stage, a requirement that as from 1 November 2010 all new employees and volunteers doing such work must be registered, will also be stopped.

Those parts of the scheme which have already been implemented remain in force. In particular:

  • The Independent Safeguarding Authority (“ISA”) is not being wound up;
  • It is a criminal offence for an employer knowingly to employ a barred person (and for a barred person to apply to work with children or vulnerable adults) in many posts;
  • Employers must notify the ISA if they dismiss or move an employee because of “vulnerable groups” concerns or consider that the employee poses a risk;

Criminal Records Bureau (CRB) and Access Northern Ireland checks remain. So do the two new lists of barred individuals which replaced the previous POVA, POCA and List 99 in October 2009.
The Scottish government, meanwhile, is pressing ahead. The Scottish government announced on 29th June 2010 that its scheme to “safeguard vulnerable groups and simplify and speed up the disclosure process will come into effect from November 30th“.