UK: Case Update - July 2012

Last Updated: 1 August 2012
Article by Michael Powner

Time limits

Time limits for tribunal claims are generally short (3 or 6 months) and fairly rigorously imposed. As a result, it is essential for both parties to be clear on the date on which the employment ended (or the act complained of took place) and what the correct time limit is.

In Andrews v Kings College Hospital Trust Mrs Andrews, a part-time clinical nurse, brought a breach of contract claim against the Trust after her employment had terminated. Breach of contract claims pursued in a tribunal should be brought within 3 months of the termination of employment unless it is "not reasonably practicable". Mrs Andrews brought her claim out of time, but she had done this because the head of payroll and pension services at the Trust told her she had six months within which to bring the claim.

Whilst a mistake as to time limits is not usually an acceptable excuse, in this case the EAT found that the mistake was not that of Mrs Andrews or an adviser, but was made by an authoritative person within the Trust with whom Mrs Andrews had been dealing throughout her grievance which related to her claim. As such, they allowed her an extension of time. If Mrs Andrews' advisers had been at fault it is unlikely that the EAT would have reached this conclusion, and this highlights that employers should avoid giving indications on time limits, particularly if the individual is not represented.

Ill on holiday? Claim it back...

There have been many cases brought since the introduction of the Working Time Regulations 1998 (WTR) over how the right to paid annual leave is managed. One strand of these cases has looked at what happens if a worker is sick when on annual leave. The most recent European judgment on the issue in Asociacion Nacional de Grandes Empresas de Distribucion makes clear that if a worker becomes ill whilst on holiday, the period of illness can be reclaimed and taken as holiday at a later date. As a result, workers who are either ill before a scheduled holiday, or who fall ill during it, can reclaim holiday and even carry it over to the next holiday year if they are not able to take it in the same holiday year.

Whilst the WTR don't currently allow for this (amendments have been proposed) tribunals have to interpret them in light of European law which has led to some tribunals allowing the carry over of holiday.

Employers therefore need to consider whether to include, within their sickness absence reporting procedures, a requirement that where a worker claims to be ill on holiday and wishes to reschedule this, they must provide medical evidence of their illness for the duration of the period they are seeking to reclaim. However, this raises its own practical difficulties as, depending on where the worker is holidaying, they may not be able to obtain medical evidence. Employers will need to consider each request carefully and consistently.

Change of client? No service provision change

The service provision change (SPC) sections of TUPE have not brought the clarity they were designed to provide and Taurus Group v Crofts is the latest in a line of cases focusing on the SPC provisions.

Mr Crofts was employed by Reliance as a security officer at student accommodation, known as the Glasshouse. Ownership of the Glasshouse passed to the Mansion Group and Reliance lost the security contract to Taurus. Reliance told Mr Crofts his employment had transferred, but Taurus disputed this and Mr Crofts brought claims against both for unfair dismissal. The EAT found that, under the SPC sections of TUPE, the "client" needed to retain its identity before and after the SPC. In this case, as there had been a change in ownership of the building, the client was not the same before and after and the SPC provisions did not apply.

This is not the final word on this as a case on this point is due to be heard by the Court of Appeal in October. Additionally, even if the SPC provisions do not apply, it should not be forgotten (although not argued in this case) that there may still have been a TUPE transfer under the original business transfer provisions which also still apply.

Employment Reform

Following the Queen's speech early in May, the framework for the anticipated employment law reforms became clearer. Aspects have been included in the Enterprise and Regulatory Reform Bill (the Enterprise Bill), and aspects are expected to be included in the Children and Families Bill which has yet to be published. The Enterprise Bill is more wide ranging than purely employment matters, but in this update we will focus on the key employment aspects.

Early conciliation: The Enterprise Bill introduces a requirement that all potential tribunal claims be lodged with ACAS prior to proceedings being issued. ACAS will attempt to conciliate, but where early conciliation is either refused, or fails, then the conciliation officer will issue a certificate to that effect and the claim can proceed to tribunal.

Clearly, the intention is to try and reduce the number of claims reaching tribunal, but unless ACAS has sufficient funding to allocate proper time and resources to this, the real impact may not be as significant as hoped for. It may also result in unintended satellite litigation as parties argue over whether the pre-claim requirements have been met, and the knock-on effect on time limits.

Compensatory awards for unfair dismissal: The Enterprise Bill gives the Secretary of State the power to limit unfair dismissal compensatory awards in one of three ways:

  • To allow for a specified amount of between 1 and 3 times median annual earnings (currently £26,200); or
  • To specify a multiple of a week's pay (not less than 52), although it is not clear whether a week's pay in this context would be subject to the statutory cap; or
  • To select the lower of the above two options.

Interestingly, the Enterprise Bill also allows for different amounts to be specified in relation to different descriptions of employers. This may result in a highly paid executive, working for a very small company, only being entitled to reduced compensation for unfair dismissal.

Financial Penalties: The Enterprise Bill introduces a provision to allow employment tribunals to levy a financial penalty (payable to the Exchequer) on employers found to have breached employment rights. The penalty will be 50% of the award made by the Tribunal (subject to a minimum of £100 and a maximum of £5,000) and will be reduced by 50% if paid within 21 days.

Whistleblowing: There was concern that the ability to "blow the whistle" by employees in relation to their own employment contracts was not what was intended by the whistleblowing legislation. To rectify this, the Enterprise Bill specifies that a "qualifying disclosure" must be made in the public interest. There is no definition of public interest, but the explanatory notes do state that if a worker does not receive the correct amount of holiday pay (which may be a breach of the terms of his contract of employment), this is a matter of personal rather than public interest.

Settlement agreements: Compromise agreements will be renamed "settlement agreements" in the hope that this will more accurately reflect their function and will encourage greater use of them. It is anticipated that the requirements will also be changed, but we do not have any detail yet.

Settlement offers: An amendment to the Enterprise Bill was put forward in June to allow for certain discussions to take place between an employer and an employee concerning termination, without fear that these discussions could be taken into account in subsequent unfair dismissal proceedings. This provision will not apply in cases of automatic unfair dismissal, or where the tribunal considers what was said was "improper", which will include discriminatory comments.

It seems extremely likely that this will cause difficulties in practice, as parties argue over whether a particular conversation should, or should not, be excluded. Increased litigation is clearly not the intention behind the proposals, but seems inevitable!

The Children and Families Bill has not yet been published, but it is anticipated that this will introduce a new maternity and parental leave regime which will include unpaid leave for fathers to attend antenatal appointments, and an 18 week period of maternity leave reserved for the mother and then a new 34 week period of shared parental leave available to either parent. It is unclear how the system will work in practice.

Latest news

  • The government has launched a consultation paper on reducing the number of days required for statutory collective consultation where 100 or more employees are being made redundant. The proposals will reduce the 90 day minimum consultation period to either 30 or 45 days; introduce a new non-statutory code of practice to address key issues and review existing government guidance to ensure it is accurate and accessible.
  • The government has announced the proposed fees for tribunal claims which will be charged in two stages and at two levels and introduced in the summer of 2013. The fee for straightforward claims (e.g. unpaid wages) will be £160 to issue and £230 at the hearing stage. For more complex claims (e.g. unfair dismissal, discrimination, equal pay) the fee will be £250 to issue and £950 at the hearing stage. There will also be a fee structure where there are multiple claimants and the government is looking at extending the remission system so that those on low incomes are excused payment.
  • Mr Justice Underhill has finished his fundamental review of the tribunal rules and has made recommendations for change and proposed a new set of rules. One significant change is for an early paper sift stage. l It has been reported that a government source has confirmed that the "no-fault" dismissal proposals have been shelved.

KEY POINTS TO TAKE AWAY

  • Employers should ensure they start to prepare now for the introduction of autoenrolment regardless of when their staging date is.
  • Employers should avoid giving advice to employees on time limits for claims.
  • Consider whether any amendments should be made to sickness policies to require medical evidence to be provided where employees ask to reschedule holiday due to illness.
  • Settlement offers/discussions will not be able to be referred to in tribunal proceedings for unfair dismissal under government proposals except in claims of automatic unfair dismissal or if anything "improper" is said.

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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