UK: Employment Update — November 2011

Last Updated: 3 January 2012
Article by Mark Symons and Angela Shields

1. Directors liability for discrimination

The Employment Appeals Tribunal has held that directors of an organisation can be liable for discrimination.

What does this mean?

Directors who discriminate against their staff could find themselves personally liable to pay compensation. This is in addition to any compensation the organisation may have to pay.

What should employers do?

Employers should take steps to prevent discrimination in the workplace.  This may be by ensuring that clear written policies relating to discrimination and harassment are in place, by providing staff with training in these areas and by promoting a culture of compliance with such policies. Organisations should also consider putting insurance schemes in place to protect Directors against claims in such circumstances.

Pitmans provide in house workshops or webinars to assist in compliance.

2. Changes to unfair dismissal rules

The Government has announced that the qualification period for the right to claim unfair dismissal will be extended from one to two years from 6 April 2012.

What does this mean?

From 6 April it will be easier and less costly for employers to dismiss staff who have been employed for less than two years. In turn this may make it less risky for businesses to take on staff in the first place.

What should employers do?

Employers should be aware that the change will not impact on the right of employees to claim unfair dismissal if they have less than two years' service where the reason for dismissal is one which is 'automatically unfair' such as whistleblowing nor will it affect discrimination claims. For this reason it is advisable for employers to take specific legal advice before dismissing an employee whatever their length of service.

3. Stress in the workplace

A survey carried out by The Chartered Institute of Personnel and Development has revealed that stress is, for the very first time, the most common cause of long-term sickness absence.

What should employers do?

Employers have a duty to assess and take measures to control risks from work-related stress. They should have a policy in place for dealing with stress, carry out return to work interviews to establish the reason for absences and ensure that line managers receive training so that they know how to respond to signs of stress.

4. Reasonable adjustments

The Employment Appeals Tribunal has held that a refusal by an employer to spend very large sums on adjustments for a disabled employee was not discriminatory.

What does this mean?

Employers are entitled to take into account the cost of making adjustments for their disabled staff when deciding what, if any, adjustments to make. Employers can also take into account how effective a change will be in avoiding the disadvantage the disabled worker would otherwise experience, the practicality of making the change, the resources and size of the organisation and the availability of financial support.

What should employers do?

Employers should cost and keep a record of the costing of any adjustments they consider in case they need to demonstrate at a later stage that the cost of making an adjustment is more that can reasonably be expected of them. However, caution is advised when relying on cost as a reason for refusing to make an adjustment and especially where it is the only reason for the refusal. Therefore employers should seek legal advice before making a final decision to refuse to make such an adjustment on grounds of cost.

5. Retraction of dismissals and resignations

The Court of Appeal has held that where an employer provided an intended, unambiguous written notice of termination to an employee, the employer was not subsequently entitled to unilaterally withdraw the notice of dismissal on the basis that the notice was premature and/ or a mistake. In this case the employer mistakenly believed, at the point of dismissal, that they had a mutual agreement for an alternative

arrangement where the claimant would become self-employed after the dismissal.

What does this mean?

Once an employer has given an employee notice of dismissal, or an employee has given notice of resignation, the notice can only be withdrawn if both parties consent to the withdrawal.

What should employers do?

In such circumstances, employers should ensure that they are in full possession of the facts and have agreed all relevant matters with the employee and have clear evidence of that agreement in writing before taking action.

6. Variation of contracts following a TUPE transfer

The Employment Appeals Tribunal has held that following a TUPE transfer an agreed variation to an employee's salary resulting from a mistaken belief that there was an error in pay which needed to be corrected was valid and effective.

What does this mean?

An agreed variation of an employment contract is only effective following a TUPE transfer if the transfer itself was not the sole or principal reason for the variation.

What should employers do?

This was an unusual case involving a genuine mistaken belief that had no relationship with the TUPE transfer and therefore broke the link between the transfer and the variation in question. If seeking to change terms and conditions of employment, employers should ensure that the reason for seeking to make the change is not connected to the transfer.

7. Ill-health early retirement

The Deputy Pensions Ombudsman has said that a local authority employer cannot rely 'blindly' on its medical advisers when deciding if an employee is eligible for an ill-health early retirement pension.

What does this mean?

It is for a local authority employer, not a medical practitioner, to decide whether one of their employees is eligible for an ill-health early retirement pension.

What should employers do?

When deciding whether an employee is eligible for an ill-health early retirement pension a local authority employer should base its decision on all of the appropriate evidence and not just the advice contained in a medical report.

8. Intellectual property infringement

Employers can be liable for intellectual property infringement by their staff. With this in mind the Intellectual Property Office has published guidance for businesses on how they can tackle intellectual property infringement in the workplace. The guidance provides practical advice on how to spot intellectual property rights infringement issues, and how employers should deal with them. Click here for a copy of the guidance.

Sally Britton a partner specialising in Intellectual Property can assist you in this area. Over the last 12 months Sally has seen numerous infringements by employees which could have been avoided by basic training and raising of awareness. For further information please contact Sally.

9. Conduct and capability overlap

The Employment Appeals Tribunal has held that where a dismissal letter cited 'misconduct' as the reason for dismissal but a subsequent response by the employer to a claim for unfair dismissal cited 'capability' as the reason, an earlier tribunal was not prevented from dealing with the claim on the basis of misconduct. This was because the decision to dismiss had at all times been based upon the same set of facts and the change of label, therefore, caused no prejudice to the employee.

What does this mean?

Incorrectly citing the wrong ground for a dismissal will not necessarily be fatal to a case as long as the facts upon which the dismissal is based are clear and the claimant is not disadvantaged.

What should employers do?

It is far better to get the labels right in the first place as this will be a better deployment of employers' resources. Employers should therefore take specific legal advice if they are unclear about the appropriate use of legal terminology.

10. Mitigation of loss

The Employment Appeals Tribunal has held that where a wronged employee rejected an offer of a new position, which would have addressed the difficulties which had given rise to her discrimination claim, she was not entitled to receive any compensation for loss of earnings.

What does this mean?

Courts and tribunals expect claimants to take reasonable steps to mitigate their losses. If they fail to do so they will ordinarily be deprived of compensation for any losses suffered as a consequence of their failure to take such steps as are reasonable.

What should employers do?

An employer who is faced with a claim may, in some instances, reduce the likelihood of having to pay compensation for loss of earnings by offering alternative employment to the employee in question. However note that in this case, the alternative employment was deemed 'suitable' for the claimant.

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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