Oliver McCannn
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Employers Update - July 2011
Welcome to the July edition
of Employ!
Keeping
you abreast as to
developments in the field of
HR and employment law.
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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Taylors have successfully
represented national sports retailer, JJB
Sports Plc, in an unfair dismissal claim
where the employee was made redundant
without prior consultation and without the
opportunity to appeal.
What do I need to know?
Due to legal issues, full details cannot be
disclosed at present. However, the
Manchester Employment Tribunal accepted the
argument that, having regard to the
particular facts of the case, consultation
and an appeal would have been utterly
futile.
Such arguments rarely succeed and should not
be seen as a green light to overlook the
importance of individual consultation which
should apply in most redundancy cases. This
case should be confined to its own facts and
any future redundancies considered on their
own facts, not those of others.
Employers are encouraged to take advice on
any proposed redundancies before instigating
the process. Note also that Taylors offer a
special Redundancy Protection Scheme – see
our website for details.
Over the past 18 months or so, there
have been a number of cases which suggest
that in some circumstances the nature of a
disciplinary process and its implications
for the employee were such that Article 6 of
the European Convention on Human Rights
(right to a fair trial) would be engaged and
so support the employee’s right to legal
representation.
The common theme was that Article 6 would
be engaged where the accusations were so
serious that an adverse outcome would
effectively debar the individual from
working within that profession ever again.
This was applied on R v Governors of X
School, and Kulkarni v Milton Keynes
Hospital.
However, subsequent cases have sought to
water down the effect of those decisions
with R (Puri) v Bradford Teaching Hospitals
NHS Trust and R (on the application of Kirk)
v Middlesbrough Borough Council & Ors.
This has been reinforced now after the
Supreme Court last month overturned the
decision of the Court of Appeal in R v
Governors of X School. The Court found that
Article 6 was not engaged within internal
disciplinary proceedings in relation to a
teacher accused of sexual misconduct with a
minor. The concluded that the outcome of the
disciplinary procedure would not have such a
substantial influence or effect on the
subsequent barring procedure operated by the
ISA, which itself was expected to make its
own findings of fact on the available
evidence and make its own judgement on the
seriousness of the conduct before placing
someone on the barred list.
What do I need to know?
This judgment is of particular significance
to public sector employers where the
application of the European Convention on
Human Rights has direct effect. Public
sector employers should now be aware that an
employee is not automatically entitled to
legal representation at a disciplinary
hearing, even where that might result the
employee being referred to the authorities
and potentially placed on the children's
barred list.
However the Court did not rule out legal
representation completely! It stressed legal
representation may be required in limited
cases, ie. where the outcome of disciplinary
proceedings is sufficiently connected to or
would substantially influence an external
regulatory body in its own decision-making
process.
A court has held that there is no duty
to narrow the pay gap between the pay of men
and women where that pay gap arises from
factors or decisions not tainted by sex.
What do I need to know?
Where a woman is employed to do work
which is of equal value to that performed by
a man, if any term of her contract of
employment is less favourable than a similar
term in the man’s contract, the relevant
term in the woman’s contract shall be
treated as so modified as not to be less
favourable.
Accordingly, in the case of less
favourable pay, the woman’s contract will be
treated as though it had the same pay
provisions as contained in the man’s
contract. However, establishing that a woman
is employed to do work of equal value to
that performed by a man will not necessarily
lead to the importation into the woman’s
contract of what is referred to as an
“equality clause”. That is because it is
open to the employer to show that the
difference in pay or other conditions is
explained by something that has nothing to
do with sex. So, in an equal value case, if
the employer establishes a genuine
explanation – not a sham, fraud or pretence
- for the variation in the contracts and
that that explanation does not involve sex,
then that is the end of the matter. In
particular, he need not show objective
justification. If the employer proves a
gender neutral explanation for the
difference in pay, that is sufficient.
In this case, an Employment Tribunal had
previously held that a disparity in pay
between a man and woman who performed work
of equal value was originally caused by a
TUPE transfer (between 2002 and 2004) and so
the current employer was not liable for that
disparity during that period (as the
disparity was not tainted by sex). However,
the Tribunal then went on to hold the
employer liable for the disparity post 2004
as they had continued to award pay increases
and performance related pay (PRP) bonuses to
this individual and had failed to take
active steps (such as red circling/freezing
the salary of the higher paid male employee)
in order to address the pay gap.
The Employment Appeal Tribunal disagreed
and held that the current employer was not
liable for the disparity in pay post 2004.
The pay increases and the PRP bonuses were
normal arrangements applied to all employees
equally across the board. The cause of the
original pay disparity was TUPE and so not
related to sex and the continued pay
increases and PRP payments which were
applied equally to all employees (regardless
of sex) did not break that causal
connection.
One step forward, two steps back -
just as we thought matters had settled down
with holiday leave another twist in the tale
occurs!
What do I need to know?
Last year, we thought we had clarity on
the position of annual leave and sickness
absence following the developments in
Ainsworth v HMRC and Pareda. From those
cases we concluded:
- that annual leave under the Working
Time Regulations 1998 does accrue whilst
on sick leave
- where it is not possible to use that
annual leave due to sickness before the
end of the holiday year, it may be
carried over into the next holiday year
- it is permissible to take holiday
whilst off sick
- where an employee falls ill whilst
on holiday leave, then they can insist
on such absence being treated as sick
leave.
However, the case of KHS AG v Schulte
proceeds through the European Court of
Justice with the Attorney General having
given her opinion, which throws matters into
confusion once more.
Here, a German case has referred the
issue of whether or not the right to take
accrued holiday leave can expire after a
period of time. The AG has given her opinion
as follows:
- EU law does not require that workers
on long-term sick leave accrue the right
to paid annual leave without any time
limitations. She said that allowing a
worker to take accrued leave several
years after the leave year to which it
related would not achieve the
Directive's purpose of enabling the
worker to recuperate from the effort and
stresses of that year, which is most
effectively met when workers take leave
in the year it arises.
- A national law under which annual
leave entitlement expires 18 months
after the end of the relevant leave year
(effectively giving workers up to two
and a half years to use a year's leave
entitlement) would be sufficient for the
effective exercise of the right to
annual leave in cases of long term sick
leave. She commented that this was a
guideline only, but also expressly
mentioned that a period of six months
would be insufficient.
This opinion is not binding on the ECJ
and so we await greater clarity but this
could be at least a favourable twist in the
tale for employers!
It has been held that an employee who
was dismissed for refusing to accept a 5%
pay cut was not unfairly dismissed.
The employer needed to cut costs and
increase profits after sales had dropped
substantially from the previous year. The
business had to maintain at least 2% profit
to maintain working. To achieve that, the
employer proposed a 5% pay cut across the
entirety of its staff. The Claimant refused
and was eventually dismissed. At the time of
dismissal he was the only one of 80+
employees who refused to accept the pay cut.
What do I need to know?
- the reason for dismissal was “some
other substantial reason”
- the employer acted reasonably in
that there was a genuine business need
to reduce costs and that the procedure
it adopted leading up to dismissal was
reasonable
- the test of fairness was not whether
it was reasonable for the employee to
accept lesser terms
- it was not necessary to prove that
the very survival of the business was at
stake
This case may prove useful in these
continuing difficult economic times to
support a unilateral imposition of lesser
terms. However, the key to successfully
imposing terms is ensuring that there is a
sound business reason for what is proposed
and that what is proposed and the manner of
introducing the new terms is reasonable.
Usually this requires careful strategic
management from start to finish and taking
legal advice is critical to reducing your
exposure to claims.
Q. Is it discrimination to simply
inform another colleague that one of the
members of staff is homosexual?
A. Much depends in what context the
discussion arises. If it is a factual
discussion with no element of malice or ill
purpose, then it will not constitute either
harassment or direct discrimination.
However, if the conversation is held with
ill purpose, perhaps to “out” the colleague
against his or her will or to create an
intimidating environment, then at that point
the conversation may overstep the line.
Q. I have an employee who is on long
term sick. They are currently in receipt of
permanent health insurance benefits. I have
heard that you cannot dismiss an employee
whilst they are in receipt of such benefits
– is this correct?
A. This is a complex legal area, in
relation to which you will need to obtain
careful legal guidance. There are
restrictions on your ability to dismiss an
employee in receipt of PHI payments. However
this may not necessarily apply in all cases
and careful examination of the employee’s
contract of employment, the staff handbook
and the PHI scheme will be critical to
determine what, if any, options you have to
dismiss.
Note also that if dismissal is an option,
there must still be a fair reason and
procedure adopted and you are almost
certainly required to comply with your
obligations to make reasonable adjustments
under the Equality Act 2010 as well.
Copyright 2006 - 2011 Taylors Solicitors
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