UK: HR Bytes

Last Updated: 5 October 2011
Article by Kemp Little’s Employment Pratice Group

Welcome!

Although the summer was a bit of a wash-out, dealing with the impact of the riots which hit London and other areas of the UK in August gave some HR practitioners plenty to think about. Low economic growth and one of the highest unemployment rates in decades were among factors said to have caused the unrest. We have included our commentary on the employment law implications of the riots at the end of this month's edition.

On a not unrelated subject, the Agency Workers Regulations are coming into force on 1st October. The Regulations are designed to ensure that agency workers – many of whom are in low-paid roles with little security – receive (after a qualifying period) the same basic employment conditions as equivalent employees. We have prepared an Agency Workers FAQs document, and a table summarising which types of worker are covered by the Regulations. If you would like to receive copies of these, please email events@kemplittle.com

What's new this month?

Legal Developments

  • HGV drivers who let their licenses expire were fairly dismissed
  • Car valeters were in reality employees
  • Can a worker on sick leave for a year receive holiday pay on termination?
  • What reasonable adjustments need to be offered to an employee on sick leave?
  • In principle, it may be fair to dismiss an employee for refusing to accept change to terms and conditions

Other news

  • Agency Workers Regulations due to come into force
  • The CIPD claims that the Tribunal system is "broken" by vexatious claims
  • Age discrimination awards rise by 20%

Comment

  • Our thoughts on the employment law issues surrounding the August riots

Publications

  • The rise of social media and the impact on the employment relationship - read more

Legal developments

HGV drivers who let their licenses expire were fairly dismissed

In Wincanton plc v Atkinson and another UKEAT/0040/11, the EAT overturned a tribunal's decision that an employer had unfairly dismissed two lorry drivers who had mistakenly allowed their HGV licences to expire, and had therefore been carrying dangerous loads with no licence or insurance. The tribunal had placed too much emphasis on the fact that there had been no adverse consequences from the employees' mistake. In the EAT's view, it had been within the band of reasonable responses for the employer to dismiss the employees, taking account of the potentially "horrific" consequences of their mistake, even if those consequences never actually materialised.

This is a useful case for employers suggesting that they are entitled to take account of "serious adverse consequences" that might arise from the employee's negligence, and are not prevented from fairly dismissing the employee just because those consequences fail to materialise.

Car valeters were in reality employees

In Autoclenz Limited v Belcher and others [2011] UKSC 41, the Supreme Court has upheld a Court of Appeal decision that car valeters, whose contracts described them as self-employed and contained a substitution clause, were in reality, employees. It confirmed that, when determining an individual's employment status, employment tribunals may disregard terms included in a written agreement where they do not reflect the genuine agreement of the parties. The focus of the Tribunal's enquiry should be on the "actual legal obligations of the parties".

The decision also shows that it is technically possible for an individual to be self-employed for tax purposes, but an employee or worker under employment law, and vice versa. HMRC determined the valeters to be self-employed for tax purposes, while the Supreme Court decided that they were employees under employment law.

If you would like further advice on the distinction (for tax and employment purposes) between contractors and employees, please contact a member of the team.

Can a worker on sick leave for a year receive holiday pay on termination?

The answer, briefly, may be yes. Although it seems counter-intuitive, in NHS Leeds v Larner UKEAT/0088/11, the EAT has upheld a tribunal's decision that a worker, who had been on sick leave for an entire leave year and had not taken any holiday during that period, was entitled to a payment in respect of that year's unused statutory holiday entitlement on the termination of her employment. The claimant's failure to request holiday during the relevant leave year did not mean that she lost the right to payment.

The Tribunal compared the claimant's situation with that of the worker in the ECJ case of Pereda v Madrid Movilidad SA; owing to sickness, she had not been well enough to exercise her "right to enjoy a period of relaxation and leisure". In the circumstances, her holiday entitlement carried over to the next leave year, even though she did not expressly request carry over.

This judgment was relatively short and, unfortunately, it failed to address some of the important issues in great detail. This is a grey area of law which remains a bit of a minefield for employers.

What reasonable adjustments need to be offered to an employee on sick leave?

In Salford NHS Primary Care Trust v Smith UKEAT/0507/10, the EAT has held that it was not a reasonable adjustment for an employer to have to offer an employee who was on long term sick leave a career break. Neither was it a reasonable adjustment to require the employer to put forward a proposal for rehabilitative non-productive work that the employee could put to her GP in order to get signed back to work.

The court was surprised at the suggestion of a career break, as this was something that could have potentially put the employee at a disadvantage because she was at that time on sick leave at half pay; a career break would have been unpaid and could also have prejudiced her future chances of taking ill-health retirement.

The case also confirms established guidance that the reasonable adjustments duty only covers "substantive" adjustments rather than "procedural" steps such as consultations, investigations and trial periods, which do not in themselves alleviate the disadvantage.

In principle, it may sometimes be to dismiss an employee for refusing to accept change to terms and conditions

In Garside and Laycock Ltd v Booth UKEAT/0003/11, the EAT has held that a tribunal erred, when deciding that a dismissal for some other substantial reason was unfair, where the employer made a unilateral reduction to the employee's pay. The tribunal focused on the reasonableness of the employee's refusal to accept the changes rather than the reasonableness of the employer's decision.

When an employer wants to make changes to the terms and conditions of employees, it will often go through a process of consultation, seeking agreement to the changes. Imposing changes without any form of consultation is likely to constitute a repudiatory breach of contract and may give rise to claims for constructive dismissal.

If, after a period of consultation, all or some of the employees do not agree to proposed changes, the employer may in principle be able to dismiss those employees fairly for some other substantial reason (SOSR), offering employment on new terms and conditions. An employment tribunal will consider a number of factors when deciding whether such a dismissal is fair, including the employer's reasons for making the change and whether or not a process of consultation was undertaken.

This case confirms that employers do necessarily not have to show that their business reason for making a change was special or extraordinary. Further, while the employee's refusal to consent to a change may be a factor to weigh in the balance when considering reasonableness, the main focus should be on the reasonableness of the employer's decision.

In cases where an overwhelming majority of the workforce accept the change (implicitly acknowledging the legitimacy of the employer's position), the individual employee may struggle to show that his dismissal for refusing to accept the change was unfair.

Other News

Agency Worker Regulations due into force on 1st October 2011

On 1 October 2011, the Agency Workers Regulations will come into force, entitling agency workers to the same basic employment conditions as permanent recruits after 12 weeks in the same role.

One-third of medium-to-large businesses questioned in a recent survey admitted that they may try to wriggle out the increased costs caused by the Regulations by terminating agency workers' contracts before the 12-week qualifying period is reached.

The survey estimates that the cost to businesses of providing equal benefits for temporary workers will be £1.3 billion per year, an average cost per worker of £1,755.

The CIPD claims that the Tribunal system is "broken" by vexatious claims

More than two out of three employers (69%) say they have no effective protection against employees making wholly unjustifiable claims to employment tribunals.

This is a key finding from a survey of employers' experiences of managing workplace conflict, published by the CIPD's Conflict Management survey report. This shows three in five respondents (61%) have experience of an employee claiming unfair dismissal and 'tagging on' a discrimination claim in the hope of getting more compensation.

It will be interesting to see how these findings feed in to the Government's thoughts about the need to reform the Employment Tribunal system (reported in the February 2011 edition of HR Bytes).

Age discrimination awards rise by nearly £20,000 in a year

The average award for age discrimination claims has risen by nearly £20,000 since last year, bringing the average to nearly three times that in 2009/10, according to Tribunal Service statistics.

Successful age discrimination cases resulted in an average pay-out of £30,289 for the year ending 31 March 2011.

Comment

The employment law issues surrounding the riots

The 4 days of riots which hit London and other areas of the UK in early August came as a shock to UK businesses with lots of companies sending staff home from work early in anticipation of further violence. The continued economic downturn and high unemployment were said to have contributed to the unrest.

Small businesses were worst affected by the violence and looting but a survey by the British Retail Consortium found UK retailers lost over 7,500 hours of trading and more than 11,000 members of their staff were affected by the violence. The research shows thousands of staff were subjected to verbal and even physical assault and now feel vulnerable at work.

BRC director of business, Tom Ironside, said: "The thousands of people who work in shops have been the forgotten victims of the riots. The scenes of violence and looting which broke out [in August] were frightening even for the majority of us who were watching them on television or reading about them in the papers."

From an employment law perspective, the main consideration for employers in this type of situation is how to find a balance between keeping their business going in adverse conditions and protecting the health and safety of their staff. Options employers should consider include reduced or changed working hours and allowing staff to work from home.

Publications

The rise of social media and the impact on the employment relationship

The huge growth of social media in recent years has changed the way employees network and share data, with positive and negative implications for the employer/employee relationship. In this article we discuss how employers should manage the risks associated with employees' use of social media without losing the benefits. Read more

Kemp Little charity of the year

Kemp Little LLP's charity of the year, Shelterbox , has just launched its "Shelter, Warmth and Dignity" appeal.

Shelterbox is an international disaster relief charity which aims to provide shelter to those affected by natural disasters worldwide. They are currently working in response to the floods in Pakistan, the refugee crisis in Somalia following drought and famine there, and in Japan following the earthquake and Tsunami. Their appeal aims to help the 35 million people affected every year by disasters across the world.

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.

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