Oliver McCannn
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Employers Update - August 2011
Welcome to the August edition
of Employ!
Summer is
nearly over and now starts
the run up to Christmas – I
believe some shops are
already stocking Christmas
items!
Once again there is yet more
employment and HR news to
bring to you within this
edition. Also, The HR
Exchange holds its next
event on the 15th September
– full details available
here:
www.thehrexchange.co.uk.
If you have any questions or
wish to explore our
employment law service
options, please contact us -
we can tailor a service
option to suit your needs!
Oliver McCann - Partner and
Head of Employment
James Bellamy
- Employment Solicitor
Tel: 0844 8000 263
Email:
oliver.mccann@taylors.co.uk
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It is no surprise that
you and other employers feel that the
Employment Tribunal system plays into the
hands of litigious employees. More often
than not they are allowed to pursue claims
without the risk of having to pay costs if
they lose, knowing that employers will have
to spend money to defend the claim, let
alone all the wasted management time.
The Employment Tribunal
Rules allow the award of costs against any
party whose behaviour is unreasonable or who
pursues a claim which is vexatious,
unreasonable or misconceived. Such power was
recently exercised when a claimant brought a
claim against her employer for sexual
harassment which was found to be vexatious
and frivolous. The employer persuaded the
Employment Tribunal to order the claimant to
pay the employer £100,000 in costs -
believed to be the highest costs order made
to date!
What do I need to know?
In a litigious era, this judgment should
be seen as a wake up call to all claimants
and their representatives that they will be
punished for pursuing vexatious claims. It
has become far too common for claimants and
their representatives to throw every
allegation at an employer, regardless as to
its truth or merit, in the hope that the
employer will buckle under the pressure and
settle.
Taylors routinely act for
employers in such situations and take a
robust approach when defending such claims.
We have a two clients currently seeking
costs against the respective claimants with
the costs hearings both taking place in
early September. One arises from what we
believe was a vexatious whistle-blowing
claim and the other from unreasonable
behaviour on the part of the claimant in
rejecting a sensible offer to settle which
they failed to beat at the final hearing.
If you are faced with a
similar situation, speak to Taylors
Employment Team – we will fight your corner
and seek recovery of your costs wherever
possible!
It may not make immediate sense but
read on!
An employee commenced employment on 1
February 2010. On 26 July 2010 she received
notice that the employer intended to end the
employment relationship no later than 1
February 2011 and she was required to serve
her notice period on garden leave. On 11
January 2011, the employee submitted a claim
for unfair dismissal whilst working her last
few weeks. When the employer received the
claim from the Employment Tribunal they
summarily dismissed her with effect from 21
January 2011.
Upon dismissal, the employee amended her
claim to allege that the act of summary
dismissal rendered her dismissal
automatically unfair as she had been
dismissed for asserting a statutory right.
The Tribunal had to decide what the
effective date of termination was – was it 1
February (the original date) or 21 January
(the date she was summarily dismissed whilst
on notice)?
The EAT held that the effect of summary
dismissal of an employee who is serving
notice is to bring forward the date of
dismissal. This being the case, the
employee’s claim for ordinary unfair
dismissal would fail as she did not have the
required 12 months’ service to be eligible
to claim. However, the EAT did agree that if
the reason for the dismissal was the fact
that the employee exercised her statutory
right to claim unfair dismissal, then the
dismissal would be automatically unfair -
regardless of length of service.
What do I need to know?
In this case, the employer reacted without
thinking about the consequences and arguably
made a difficult situation far worse for
themselves. This emphasises the importance
of taking pro-active strategic legal advice
in relation to the dismissal of any
employee, regardless of the circumstances.
Remember that where an employee does not
have the required 12 months’ service, it is
likely they will try to find a way around
this by finding a claim which does not
require 12 months continuous service such
as:
- whistle blowing dismissals;
- pregnancy dismissals;
- dismissals for asserting a statutory
right;
- health and safety dismissals; or
- discrimination claims.
These are but a few of the claims which
can be brought without 12 months’ service
and you, as the employer, need to take
proactive steps to protect your position
from such claims. Better to be safe than
sorry!
Taylors Employment Team specialise in
finding solutions or giving strategic advice
to meet your objectives but at the same time
protect your position.
It may not always feel like it, but
common sense does prevail in the judicial
system!
Here, an employee employed as a
Principal Intelligence Analyst by the
Police, was dismissed after he had been
tasked to produce an annual strategic threat
assessment to the Police Authority to cover
a wide range of issues and threats to the
community. Rather than address all threats
properly, the claimant scored all threats as
0% but the threat of internal terrorism as
100%. He then went on to set out his beliefs
in relation to internal terrorism and his
personal mission to uncover the truth using
police resources. Needless to say, this
created a conflict with his role and the
duties he was required to perform ad
resulted in his dismissal. Not only did he
claim he had been unfairly dismissed but
also that he had been discriminated against
on grounds of his philosophical beliefs
which were that the 9/11 and 7/7 attacks
were “false flag operations” authorised by
the UK and US governments and that the media
is controlled by a global elite seeking new
world order.
The Employment Tribunal ordered the
Claimant to pay a deposit to pursue his
unfair dismissal claim and struck out his
claim for discrimination on the basis that
his beliefs did not constitute a
philosophical belief capable of protection
under the Religion or Belief Regulations
2003 (now the Equality Act 2010). Although
it was found the beliefs were honestly held,
they related to substantial aspects of human
life and were compatible with human dignity,
the Tribunal did not believe it passed the
test set out in previous case law.
What do I need to know?
Previous case law set out criteria which
had to be met for a belief to gain
protection. They are as follows:
- The belief must be genuinely held.
- It must be a belief and not an
opinion or viewpoint based on the
present state of information available.
- It must be a belief as to a weighty
and substantial aspect of human life and
behaviour.
- It must attain a certain level of
cogency, seriousness, cohesion and
importance.
- It must be worthy of respect in a
democratic society, not be incompatible
with human dignity and not conflict with
the fundamental rights of others.
In the case above, the claimant failed
because it was held his beliefs did not
attain a certain level of cogency or
cohesion.
Two recent decisions serve as useful
reminders that those labelled subcontractors
or self employed individuals may in fact be
workers and/or employees!
The distinction between self employed,
workers and employees can at times be
difficult to determine, but nevertheless is
important as the status will determine
rights to holidays, rest periods, minimum
wage and ultimately the right to claim
unfair dismissal. On top of that there will
be income tax and national insurance
implications!
What do I need to know?
One case involved 20 car valeters, all
expressly described as self employed
subcontractors. They all paid their own tax,
purchased their own insurance, uniforms and
tools. There was an express clause stating
there was no obligation to attend work and
provide services personally and all entered
the contracts freely.
The Supreme Court upheld previous
decisions, namely that the true factual
circumstances of the relationship between
the hirer and the subcontractors trumped the
written contract and all were held to be
employees, not just workers as they had
claimed. This meant their claims for breach
of the national minimum wage requirements
and paid holidays succeeded.
In another case, a solicitor was offered
an employment contract with a firm of
solicitors. He negotiated that they engaged
him on a self employed basis which would
make him financially better off. However,
when he was dismissed he alleged he was
actually an employee (a typical response
from these relationships).
Although the case progressed on an issue
of illegality (misrepresentations to HMRC
about his status) which is the subject of a
re-hearing following an appeal, the case
neatly illustrates the danger of self
employed individuals changing their stance
to suit their needs.
We would encourage you to conduct annual
reviews of all your relationships with
workers, subcontractors and self employed
individuals. By doing so you can mitigate
your exposure to employment and worker
status claims. Remember, relationships
develop over time and what may have
genuinely started off as a subcontractor
relationship could have morphed into an
employment relationship over time.
Taylors regularly prepare and review
subcontractor and self employed consultancy
agreements. If you need to review your
business relations with certain third
parties, give Taylors Employment Team a call
– the last thing you want is an unfair
dismissal claim or a tax bill!
Perhaps one day we may get some clear
and firm guidelines on the ongoing issue of
holidays and sick leave.
There has been yet another recent decision
which you need to be aware of.
An employee was off sick for the whole of
the holiday leave year. Her employment was
subsequently terminated on grounds of
incapability. The employer refused to pay
the employee for accrued but unused holidays
on the basis that no formal request had been
made to take annual leave.
The EAT applied the European case of
Pareda v Madrid Movilidad SA which had held
that an employee who has been injured during
a period of booked annual leave is entitled
to a replacement period of leave on his
return.
What do I need to know?
The EAT concluded that the employee had
been unable to take her annual leave by
reason of ill health and so was entitled to
use that right on her return to work the
following year or be paid in lieu upon
dismissal, notwithstanding the fact that she
had made no formal request to use that leave
in accordance with the Working Time
Regulations 1998.
The EAT made an observation that the
position would be different if a person
failed to take leave and they had been fit
all year round to take such leave but failed
to do so.
No doubt there will be further cases – in
the meantime Taylors advise all clients to
encourage those on sick leave to use their
accrued holiday leave.
Q. We run a haulage business and have
discovered that one of our drivers
mistakenly allowed his HGV licence to expire
and continued to drive our vehicles, which
meant he was effectively driving without
insurance at the time. The responsibility to
renew the licence rests with the drivers.
Can we dismiss for gross misconduct, even
though there were no actual consequences
from his failing?
A. The issue is whether or not dismissal
falls within the band of reasonable
responses. Much depends on the clarity of
your requirement that the obligation to keep
the licence in place rests with the driver
and the consequences (in terms of dismissal)
for failing to do so. Likewise, the length
of service of the employee may be relevant,
together with any other mitigating factors.
Ultimately, case law has confirmed that a
taking into account “potential” serious
consequences is justified, even when they
never materialize – I believe the offence is
a very serious one and could have been
disastrous for the Company, and it therefore
warrants dismissal!.
Q. We employ an apprentice but his
behaviour and attitude is poor. We want to
terminate the apprenticeship – are there any
special rules?
A. Termination of apprenticeship
contracts for misconduct is not as
straightforward as an ordinary employment
relationship. It has been held that the
first purpose of an apprenticeship is
training, with the secondary purpose serving
the employer. Usually, such contracts are
for a fixed period and are not terminable at
will. We recommend you take legal advice
before taking any steps to end your
relationship with the apprentice – a more
strategic report will be required!
Copyright 2006 - 2011 Taylors Solicitors
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