UK: Employment Briefing, August 2010 - Retraction of Dismissal Only in Exceptional Cases

Last Updated: 26 August 2010
Article by Bircham Dyson Bell

In Willoughby v CF Capital plc the EAT found that an attempted retraction of a dismissal by CF Capital plc of Ms Willoughby following discussions with her about changing her employment status was not valid.

CF Capital plc had presumed that Ms Willoughby had accepted a move to being self employed and wrote to her confirming this change and terminating her employment. When it realised that Ms Willoughby did not accept the change it explained that there had been a misunderstanding and sought to retract the termination and return to the status quo. Ms Willoughby did not accept the attempted withdrawal of the termination and instead brought proceedings for unfair and wrongful dismissal. At first instance a tribunal found that there were special circumstances (the genuine misunderstanding) which entitled CF Capital to withdraw its termination letter. The EAT disagreed, holding that the dismissal did not fall into the very narrow 'special circumstances' exceptions and that the dismissal was in unambiguous terms. Ms Willoughby had been entitled to regard the letter dismissing her as a clear intention to terminate her employment.

Transferred collective agreements incorporate legislative changes

The EAT in Worrall and others v Willmott Dixon Partnership Ltd and another considered the effect of the decision in Parkwood Leisure Ltd v Alemo-Herron and others, that only the terms of a collective agreement in force at the point of a TUPE transfer would bind a transferee and subsequent changes to the collective agreement would not bind it. This has become known as the 'static' interpretation.

The issue in this case concerned a collectively negotiated agreement which provided that in the case of voluntary redundancy, the Council (Mr Worrall's then employer) would, in exercising its discretion, award at least 5 added years. Mr Worrall's employment was then transferred under TUPE first to Serviceteam, then Morrison plc and finally to Willmott Dixon Partnership.

In 2008 Mr Worrall applied for and was given voluntary redundancy. Wilmott Dixon did not credit Mr Worrall with added years arguing that the right to award added years had been removed by the Local Government (Early Termination of Employment)(Discretionary Compensation)(England and Wales) Regulations 2006 which replaced the right to award added years with the power to award a lump sum payment.

Mr Worrall claimed that Willmott should have credited him (and 46 others) with the added years, relying on Parkwood v Alemo-Herron and noting that any changes subsequent to his transfer to Serviceteam should be ignored. The EAT disagreed and stated that the effect of Parkwood v Alemo-Herron was limited to 'future changes to collective agreements', which should be ignored. Statutory changes, however, such as the Local Government Regulations involved, should continue to bind future transferees. In other words, the static interpretation of the effect of collectively agreed terms is modified in respect only of legislative changes.

ECJ rules on pay during maternity suspension

The issue of pregnant workers' loss of supplementary allowances during maternity suspension and alternative work was considered by the ECJ in Gassmayr v Bundesminister fur Wissenschaft und Forschung and Parviainen v Finnair Oyj.

In Gassmayr, a pregnant junior hospital doctor in Austria lost her on call allowances when she was put on maternity health suspension. Her employer argued that these payments were related to services actually rendered and so were not payable during maternity suspension. In Parviainen the employee worked as an air hostess for Finnair receiving a substantial amount (around 40%) of her overall pay by way of supplementary allowances. Due to her pregnancy she was temporarily transferred to ground work.

The issue before the ECJ in both cases was whether an employee who is either suspended or temporarily transferred to another post by reason of her pregnancy is entitled to the same remunerative package, on average, as that she received before she went on maternity suspension/undertook alternative duties.

The ECJ noted that in the case of an employee carrying out different duties, European law (the Pregnant Workers Directive) only provided that pay should be at least as good as sick pay in the relevant country. However, such a worker is not entitled to receive all the remuneration she previously received by way of additional allowances. Payment must not undermine the objective of the Pregnant Workers Directive of protecting health and safety and should not be less than that of others carrying out that job but there is no requirement to continue to pay allowances that depend on the performance of specific functions.

With regard to Gassmayr, ECJ reiterated that the components of pay which depend on the performance of particular functions need not be paid when the employee is on maternity suspension. Whilst national measures should not undermine the objective of safeguarding the health and safety of pregnant workers it was not unlawful in this case to deny the payment of the on call allowance during maternity suspension.

Under UK domestic legislation, section 67 of the Employment Rights Act 1996 provides that terms and conditions for alternative work must be 'not substantiallyless favourable' than the worker's existing terms and case law (British Airways Ltd v Moore) has held that denial of flying allowances to air stewardesses breached this requirement. This goes further than the ECJ ruling.

With regard to maternity suspension, an employee in the UK must receive a week's pay which, according to the method of calculation, should meet the Gassmayr requirements.

Cap on overperformance bonus

The Court of Appeal in GX Networks Ltd v Greenland has issued a timely reminder to employers to take care when drafting bonus schemes. The clause at issue stated 'the sales director has the discretion to cap an individual's Q4 bonus at 100% if required although such cases will be by exception only and require HR and Finance agreement'.

Ms Greenland was a sales executive who achieved 305% of her sales target, entitling her to a bonus of approximately 4.5 times her salary. GX argued that it should be subject to a cap as if she had achieved 130%. The Court of Appeal dismissed GX's argument that the way to control overperformance was to apply the exceptional method of a cap. The court held that 'by exception' must mean exceptional circumstances which were not present in this case. Exceptional performance could not be an exceptional circumstance. Employers should take note from this case when drafting bonus or similar schemes. Any ambiguity or vagueness in drafting will be construed against the party who drafted it. Bonus schemes and targets should be regularly reviewed to ensure that the scheme satisfies the employer's requirements from time to time.

Breach of ICE Regulations

The EAT has applied a penalty of £20,000 to G4 Security for its failure to take steps to reach a negotiated settlement following a valid employee request under the Information and Consultation of Employees Regulations 2004. The EAT noted that G4's breach had not been technical and that whilst G4 had asked for its financial circumstances to be taken into account it had failed to adduce any evidence of financial hardship.

Applicable law for construing contract

The High Court has applied the Rome Convention to ascertain the applicable law in Chunilal v Merrill Lynch International Incorporated. In this case, Mr Chunilal was a UK national who was resident in Hong Kong and who worked for a Delaware incorporated company under a contract negotiated in New York. The contract was silent as to applicable law but Mr Chunilal sought to argue that the UK courts were the appropriate forum to hear his claim. In accordance with the Convention, the High Court asked whether Mr Chunilal could demonstrate that English law was chosen with reasonable certainty (by referring to the facts or the terms of the contract). It also asked what was the law of the country where Mr Chunilal habitually worked. There were no facts or terms which indicated that English law had been chosen and it was not therefore the appropriate forum.

And finally...

European Commission requests UK to strengthen ICO's powers

The European Commission has requested that the UK strengthen the Information Commissioner's Office so that it complies with the EU's Data Protection Directive. At present the ICO cannot monitor whether third countries' data protection is adequate nor can it perform random checks on people using or processing personal data. Further, UK courts can refuse the right to have personal data rectified or erased. These powers and rights are protected under the Data Protection Directive. The matter has been referred by the ICO to the Ministry of Justice.

Equality Act implementation confirmed and Agency Workers regulations under review

The government has confirmed that the main provisions of the Equality Act will come into force on 1 October 2010. The Government Equalities Office has published some guidance and more will follow.

On 5 July 2010 BIS advised that the Agency Workers Regulations (due to come into force on 1 October 2011) are being reviewed.

Vetting and Barring under review

The government has announced that the vetting and barring scheme is being reviewed and there is no longer a requirement for individuals working with children or vulnerable adults to register with the Independent Safeguarding Authority. It will still be a criminal offence to employ barred individuals and two lists will still be maintained by the ISA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions