We have not arranged any seminars in the immediate future.
If you would like to be notified about future Employment Law seminars or if there is a topic that would interest you, please phone 0151 709 5816 and ask to speak to Claire or email her at Claire@lodgelaw.co.uk
ANDREW JACKSON & CO
Solicitors
EMPLOYMENT LAW NEWSLETTER: MAY 2014
Financial Penalties in the Employment Tribunals
On 6th April Section 16 of the Enterprise and Regulatory Reform Act 2013 was brought into force.
This adds a new section 12A to the Employment Rights Act 1996 which gives Employment Tribunals the power to order employers to pay a penalty if the employer has breached any of the worker’s rights to which the claim relates and has one or more aggravating features.
The amount of the penalty is 50% of the amount awarded to the employee subject to a minimum of £100 and a maximum of £5,000.
The Tribunal must have regard to an employer’s ability to pay in deciding whether to order the employer to pay a penalty.
There is nothing in the Act which says what would amount to an aggravating features, but the guidance notes published by the government suggest that relevant factors might include the size of the employer, the duration of the breach of the employment right and the behaviour of the employer and of the employee, whether the action was deliberate or committed with malice rather than a genuine mistake, whether the employer had a dedicated human resources team, or where the employer had repeatedly breached the employment right concerned.
If the Tribunal makes a financial award, all these factors will only result in a “yes or no” decision by the Tribunal in deciding whether to impose a penalty.
In the situation where a Tribunal finds against the employer, but makes no award (e.g. where they allow the parties to agree compensation between themselves following a judgment that the Employer is liable) the Tribunal can use its discretion to set the amount of the penalty (subject to the £100 minimum and £5,000 maximum).
This represents just the latest in a series of changes which mean the employer who loses at an Employment Tribunal hearing could end up paying out far more than the employee has lost.
1. First of all, if the Employment Tribunal makes a compensatory award in an unfair dismissal case, the recoupment provisions apply. This means that if the Tribunal makes a compensatory award for unfair dismissal, the employer will pay part of that to the DWP in respect of benefits paid to the employee. If the parties settle (even if it is after the Tribunal have found the employer liable), there is no need for anything to be paid to the DWP, but if the Tribunals give the parties the opportunity to do this in future, it will not necessarily avoid the Tribunal ordering the Employer to pay a financial penalty.
2. Secondly, if an employer is found liable and has not complied with section 1 of the Employment Rights Act (provision of written particulars of employment), the Tribunal can award 2 or 4 weeks gross pay to the employee.
3. Thirdly, if the Employee was dismissed in breach of the ACAS code of Practice, the Tribunal can award up to 25% more to the employee.
4. Now, the Tribunal can also impose a financial penalty.
5. The Tribunal can also order the employer to pay the Fee incurred by the employee in bringing the claim, which could be as much as £1,200.
To take a hypothetical example, suppose an employee on £400 per week who has worked for the employer for 5 years is awarded 15 weeks loss of earnings. They are out of pocket by £4,550, as they received £1,450 in Job Seekers Allowance. Suppose they had to pay the Employment Tribunal fees of £1,200 because of their partner’s earnings.
If they win their unfair dismissal claim the Tribunal could make the following orders:
1. A basic award of £2,000
2. A compensatory award of £6,000
3. An extra £2,000 for breaching the ACAS Code of Practice
4. An order to refund the employee £1,200 Employment Tribunal fees
5. A further £1,600 for failure to provide written terms and conditions
6. A financial penalty of £5,000
TOTAL = £17,800
This shows how it can be extremely beneficial for an employer to attempt to negotiate in appropriate cases, and this example is a clear illustration of how the new legislation is encouraging the parties to settle or failing that securing up to £6,200 (including the Tribunal fees paid by the employee) for the public purse.
This is the legislative provision and guidelines have been published.
Extension of the Right to Request Flexible Working
Under section 80F of the Employment Rights Act 1996 Employees have the right to request flexible working if they have been employed for 26 weeks and have childcare responsibilities or responsibilities to care for an adult relative and there is a specified procedure which an employer must follow when such a request is made.
From 30th June 2014 all employees who have been continuously employed for 26 weeks or more will have a right to ask their employer for a change to their contractual terms and conditions of employment to work flexibly.
The requirement to follow the regulations when considering an application for flexible working will be replaced by a requirement to “deal with the application in a reasonable manner.”
From 30th June if an employer receives a request from an employee for flexible working, the request should set out the change that the employee is seeking, when they would like it to take effect, the effect that the employee thinks the change will have on the business and how that effect can be dealt with.
The employer must then consider the request and arrange to meet the employee as soon as possible.
At the meeting, the employer should discuss the request in private but the employee should be allowed to be accompanied by a work colleague or a Union representative if they wish.
The employer must then consider the request. If the employer rejects the request it can only be on the basis of one or more of the following business reasons:-
1. The burden of any additional costs is unacceptable to the organisation
2. An inability to reorganise work among existing staff.
3. Inability to recruit additional staff
4. The employer considers the change will have a detrimental impact on quality
5. The employer considers the change would have a detrimental effect on the business’s ability to meet customer demand
6. Detrimental impact on performance
7. There is insufficient work during the periods the employee proposes to work
8. Planned structural change, for example where the employer intends to reorganise or change the business and considers the flexible working changes may not fit with these plans.
The employer should inform the employee of the decision in writing. If the request is accepted either as proposed or subject to some modifications then the implementation of the proposals should be discussed. If the request is rejected then the employee should be informed they have a right to appeal the decision.
There should be a fresh discussion of the application at the appeal stage.
The whole process should be dealt with within 3 months, or to a later date by mutual agreement.
An employee has the right to bring a claim to an Employment Tribunal if the employer does not deal with the application in a reasonable manner, or did not notify the employee of the decision within 3 months (or the date which they have agreed if the 3 months is extended), or that none of the 8 specified business reasons applies.
Although anyone can apply for flexible working, if a person with caring responsibilities for either a child or disabled adult applies then, in addition to the above claim, an employee could claim that they have been indirectly discriminated against contrary to the Equality Act. Such a claim would fail if a Tribunal accepts that the reason for refusal of the request was a proportionate means of achieving a legitimate aim.
The legislation is here.
ACAS have produced a draft code of practice.
There is a guide produced by ACAS.
July 2014
Decline in Employment Tribunal Claims
Recent news has highlighted a decline in the number of people taking claims to employment tribunals since fees were introduced last year.
The latest figures broken down by regions shows drop of between 51% in London to 67% in Wales. Whilst organisations such as the Welsh TUC and The Law Society of Scotland claim this is pricing workers out of justice, Employers organisations suggest it is the weaker claims which are not being brought. The government has focussed on justifying fees through requiring users of Employment Tribunals to contribute to the cost of Employment Tribunal as part of their objective of controlling public expenditure. See BBC Articles on claims in Wales and Law Society of Scotland’s call to urgently review fees. According to the HMCTS annual report fee income generated in the first 8 months following the introduction of fees is on target to raise about £6.7 million to offset the annual cost of about £74 million. This is short of the government’s own estimate of £10 million, but could be affected by a number of claims being submitted earlier than they might have been immediately before fees were introduced.
Increase in Sex Discrimination Claims?
An Article in the London Evening Standard suggests that the number of sex discrimination claims has risen when compared with this time last year and is at its highest level in 4 years, whereas an Article in the Independent draws the opposite conclusion!
June 2014
TUPE
The Information Commissioner’s Office has published Guidance Notes on Disclosure of Information under TUPE.
Earlier in June ACAS published new guidance on handling TUPE transfers as well as a flowchart.
When a Tribunal can order the losing party to pay the successful party’s fees?
The Employment Tribunal and Employment Appeal Tribunals have the power to order the Respondent to pay the amount paid for Tribunal fees to the person who brought the claim or appeal. a recent Appeal Judgment in the case of Horizon Security Services Ltd v PCS Group laid down guidelines for the Employment Appeal Tribunal giving them a broad discretion in considering whether or not to require the unsuccessful party to pay for the fees incurred. Although in general it would be expected that if the appeal was successful, the losing party would have to pay for the fees, this may not always apply, for example where the appeal was only partly successful or where the means of the paying party would render it unjust.
Forthcoming Legislation
The Small Business, Enterprise and Employment Bill has recently been published which will:-
1. Introduce an “Enforcement Officer” to assist in enforcing unpaid Employment Tribunal awards. They will be able to issue a “penalty notice” of 50% of the unpaid award. This will be paid to the government as a “fine” and not to the employee who is owed the award. (s136)
2. Make any term in a “zero hours contract” which prevents an employee working for someone else void. (s139)
3. A power will be introduced to limit the number of postponements available to a party and an obligation on the Tribunal to consider making a costs award if the postponement application is late. (s137)
4. The Treasury will be given the power to require repayment of some or all of a termination payment in a public sector exit in some circumstances. (s140-142)
5. A framework will be introduced to require prescribed persons under the whistleblowing legislation to publish details of disclosures made to them. (s135)
The BIS has made an announcement regarding the enforcement of forthcoming legislation in relation to zero hours contracts
Employment Tribunal statistics
The Ministry of Justice has recently published employment Tribunal statistics for the first quarter of 2014.
A separate publication of Findings from a Survey of Employment Tribunal Applications 2013 has also been published. It has found that:-
1. 21% of small employers had been involved with an Employment Tribunal claim in the last 2 years
2. 67% of employers used a representative, whereas 33% of employees used a representative.
3. In 79% of cases a settlement was achieved, whereas 17% went to a full hearing
4. The median Employment Tribunal Award was £3,000
Agency Workers Regulations
The regulations apply to agency workers who are defined in the regulations as workers who:
So, if a business or organisation is provided with temporary workers by an agency and that business supervises those workers but does not contract directly with the workers, those workers are likely to fall within the ambit of the regulations [and the business or organisation will be the “hirer” under the regulations].
Those workers who are not covered by the regulations include:
Also, workers who are engaged directly by a business through an in house temporary staffing bank are unlikely to be covered by the regulations. Note that such staff may fall within the ambit of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations.
What Rights are provided to an Agency Worker?
Agency workers will be entitled to the same basic working and employment conditions as they would have been entitled to if they had been recruited for the same job by the hirer directly.
From the start of his or her engagement the agency worker is now entitled to
The Regulations state that “collective facilities and amenities” include canteen and “similar facilities”, childcare facilities and transport services.
A comparable worker is defined as an individual who at the time of any alleged breach of the regulations:
After the agency worker has worked for the hirer for 12 continuous calendar weeks in the same role, the agency worker acquires further rights. There are detailed regulations as to how the qualifying period is to be calculated (e.g. what time taken off during an assignment must be counted towards the qualifying period or the circumstances in which breaks in an assignment will not have the effect of setting the qualifying period back to day one).
The worker will be entitled to the same terms and conditions as a person who has been recruited directly by the hirer in relation to the following:
Pay includes bonuses, commission, holiday pay or, as the regulations state, ‘other emoluments referable to the employment.’
However, the definition of pay does not include:
Access to Employment
During the period of his or assignment the agency worker has the right to be informed by the hirer of any ‘relevant’ vacant posts with the hirer, and to be given the same opportunity as a comparable worker to find permanent employment with the hirer.
Right to Receive Information
The regulations contain procedures which the worker can follow to request a written statement from the agency or the hirer if the worker believes that his or her rights under the regulations have been infringed.
Unfair Dismissal / Detriment Claims
An agency worker who is an employee can make a claim for unfair dismissal if he or she is dismissed for
An agency worker (both employees and ‘workers’) can make claims if they suffer a detriment for doing one of the above. In the case of a worker a detriment can include the termination of his or her contract.
Holidays and Holiday Pay
Who is entitled to paid annual leave?
Most ‘workers’ are entitled to paid holiday under the Working Time Regulations. Note that it is workers and not just employees who are entitled. The term ‘worker’ (as legally defined) includes employees but it can sometimes also include people who are described as self-employed.
How much holiday is someone entitled to?
The Working Time Regulations permit all ‘workers’ to a minimum of 5.6 weeks’ holiday in any holiday year. So, for someone who works 5 days per week, that person is entitled to 28 days’ holiday per year (i.e. 5 x 5.6).
Under the statutory scheme, the maximum entitlement is for 28 days holiday per year. So, if someone works 6 days per week, his/ her entitlement is still 28 days.
The statutory entitlement to annual leave includes Bank Holidays.
Workers in their first year of employment accrue their holiday entitlement at a rate of one twelfth of their annual entitlement on the first day of each month of their first year.
What happens when someone leaves?
If someone’s contract is terminated (for whatever reason) they are entitled to a payment in lieu of their statutory annual leave which has accrued to the date of the termination of the contract, less any holiday actually taken.
For example, if someone leaves on 30th June and the holiday year started on 1st January and that person has taken no holidays, he or she would be entitled to a payment equivalent to 14 days’ pay (i.e. half his or her entitlement). If that person had not worked bank holidays and been paid for those days, then he or she would be entitled to a payment equivalent to 9 days’ pay (14 days accrued holiday less 5 bank holidays taken).
Can an employer state when holidays are to be taken?
The short answer is yes. However, there are some limits on the employer’s discretion.
Firstly, the employer must allow statutory holiday entitlement to be taken.
Secondly, a worker can request a period of holiday by giving notice to the employer. This notice must be given twice the number of days in advance of the period of leave as the worker proposes to take. For example, if the worker asks for to 2 weeks’ leave, he or she must give notice of intention to take that leave at least 4 weeks in advance of the first day of that leave.
If such a notice is given, the employer can refuse the period of leave by giving notice equivalent to the number of days which the worker has proposed to take. So, if the worker wanted 2 weeks’ leave, the employer must give notice refusing the request for leave at least 2 weeks in advance of the first day of the proposed period of leave.
Thirdly, if an employer wants to instruct a worker to take leave, he or she can give notice to the worker instructing the worker to take leave provided that the notice is twice the number of days of the period of leave which is to be taken.
Some employers stipulate times of the year when employees must take holiday (e.g. if there is a shut down in the summer or between Christmas and New Year). This is acceptable provided that the notice provisions are complied with. One way of ensuring that notice provisions are complied with is to stipulate in a contract that annual leave is to be taken at certain times.
Fourthly, workers and employers can agree when holiday is to be taken and do not have to follow the notice provisions. An employee might ask for leave at short notice, and the employer can agree. If an employer does not adhere to such an agreement that could amount to a breach of contract.
Special rules apply to workers in their first year – see above.
What happens to employees or workers who are on long term sick?
Employees or workers on long-term sick leave still accrue their statutory holiday entitlement. This means that if, say, an employee has been on sick leave for a long time, and his or her contract of employment is terminated because he or she is no longer considered capable of work, then the employer will have to pay a sum in lieu of any holiday which has accrued during the sick leave period. This will include holiday which accrued during the sick leave period but in the previous holiday year.
How much holiday has to be paid?
Calculating holiday pay for people who work the same hours and are paid the same amount each week or month should not be difficult, as they are entitled to the pay which they would normally receive had they been in work.
It is a little more complicated for those workers who do not have set contractual hours or who, for example, are paid on a piece work basis.
There are specific rules as to how to calculate a week’s pay (Employment Rights Act 1996 Sections 221-224) in such circumstances. In summary, it is often necessary to calculate an average based on the worker’s previous 12 weeks wages.
Contractual Entitlements
So far only statutory entitlements have been discussed. Many employers provide more generous holiday entitlements than those provided for in the Working Time Regulations. Care, therefore, should always be taken to ensure that you are adhering to the employee’s or worker’s contract.
A contractual term, which allows for fewer days’ holiday than the statutory minimum, or entitlements less generous than provided for by the Working Time Regulations, will not be enforceable.
It is generally advisable to set out details relating to holidays in a contract, particularly if you want to set down rules restricting when holidays can be taken.
Women on maternity leave
Contractual and statutory annual leave accrues whilst a woman is on statutory maternity leave.
Automatic Unfair Dismissal
If an employee is dismissed for attempting to enforce a right under the Working Time Regulations, or for refusing to forgo any rights under those Regulations, the employee is likely to have a claim for unfair dismissal (this will also apply to employees who do not have one year of continuous service).
A worker who suffers a detriment for trying to enforce a right under the Working Time Regulations or for refusing to forgo any such rights can make a claim to a Tribunal. In the case of a worker who is not an employee this can include a claim that his or her contract was terminated for seeking compliance with the Working Time Regulations.
Can holiday pay be clawed back?
An employer can only claw back holiday pay upon termination of an employee’s or worker’s contract (if more holiday has been taken than has accrued at the date of termination) if there is a written agreement permitting this.
The government has abolished the default retirement age of 65, so unless an employer has given notice of retirement before 6th April 2011, it is only in exceptional circumstances that an employer can justify compulsory retirement. An employer can only justify dismissal because the employee has reached a certain age if the employer’s contractual retirement age can be objectively justified. Objective justification has to be a proportionate response to a legitimate aim. In practice this is likely to be difficult for an employer to justify.
Dismissal for retirement may be justified up to 30th September 2011
If there is no normal or contractual retirement age, then an employee cannot be dismissed fairly because they have reached a certain age unless the employer has given notice of retirement before 6th April 2011 to take effect up to 30th September 2011 (or 30th September 2012 where the employee has been granted an extension) and the employee was age 65 on or before 30th September 2011.
A dismissal for retirement can be fair as long as:-
1. The employee has reached age 65 by the retirement date which must be no later than 30th September 2011; and
2. The employer gave between 6 months and 12 months notice before 6th April 2011;and
3. The employer informed the employee of their right to request an extension to their retirement date; and
4. If the employee made a request to extend their employment, the employer has considered any request, offered the employee a meeting to consider the request and offered the employee an appeal against a refusal to extend the time and a meeting to hear that appeal.
If the employer gives less than 6 months notice, or that notice was given on or after 6th April 2011 then unless the employer has a contractual retirement age which can be objectively justified, and acts reasonably in relying on that reason, the dismissal will be unfair and amount to unlawful age discrimination.
Is the solution to have a contractual retirement age?
The difficulty with having a contractual retirement age is it must be able to be objectively justified. If the demands of a particular job are such that older employees find it more difficult to do the job effectively, imposing a retirement age would be potentially discriminatory, because peoples faculties are likely to deteriorate at a different rate, so why should age alone be the determining factor? It is quite possible that a contractual retirement age in such circumstances would be unlawful.
There may be circumstances where, for example, there are safety implications to the employee, other workers or the public, and that regular testing or assessment of the employee cannot sufficiently reduce that risk. If objective evidence shows that the safety risks of continuing with that employment significantly rise around a certain age, which cannot be sufficiently eliminated by testing then a contractual retirement age may be justified. The ultimate question is, “Is a contractual retirement age a proportionate means of achieving a legitimate aim?”
Practical aspects of dealing with anolder employee
So what can an employer do about an employee who has reached retirement age?
There is nothing wrong with an employer asking an employee about their plans when they are approaching 65. Clearly when people are approaching the age they are entitled to their pension, many will want to retire, and an employer is entitled to ask in advance so that plans can be put in place to replace the employee.
If an employer believes that an employee is less effective because of their age, then they will have to consider whether or not a capability procedure is appropriate. In other words, an older employee should be treated the same as any other employee, and if their work is not up to standard, they can be put through a capability procedure the same as any other employee.
The employer must be able to specify in what way their work is not up to standard, if they cannot be specific, they risk unfairly dismissing the employee and a claim of unlawful age discrimination.
ACAS have a very comprehensive publication which is available online called, “Age & The Workplace: Putting the Equality Act 2010 and the removal of the default retirement age 2011 into practice.” It is available at: http://www.acas.org.uk/CHttpHandler.ashx?id=588&p=0
If an employee is not doing their job in the way the employer requires the employer should investigate whether that is due to any lack of application (in which case disciplinary proceedings could be contemplated) or whether it is due to the employee’s lack of ability in one or more of the tasks required.
If the employer considers it to be due to any lack of ability, the employee must be informed of:-
1. How their work does not measure up
2. The standards expected
3. A timescale to improve at the end of which the employee will be assessed
4. What support & training will be given
As long as the employee is made aware in sufficient detail to enable them to know precisely what improvement is expected of them, and as long as they have been given a reasonable amount of time and a reasonable amount of support to enable them to improve, the employer is entitled to consider dismissal at the end of the improvement period if the employee has still not reached the standards expected.
At this point the employer should:-
1. Invite the employee to a meeting and let them know in advance:
(a) The specific shortfalls in their work
(b) That the decision could be dismissal
(c) The evidence to show that the work is below standard
(d) The right to bring a Union rep or work colleague to the meeting
2. If the employee is found not to have reached the standard required either:
(a) Allow a further period to improve
(b) Dismiss the employee
3. Inform the employee they can appeal
4. If there is a vacancy which is suitable to the employee’s abilities this should be offered
5. If dismissal is the conclusion, give the correct contractual notice
Although “capability” is a separate category from “conduct,” an employer should still follow the requirements of the ACAS code of practice which is at: http://www.acas.org.uk/media/pdf/h/m/Acas_Code_of_Practice_1_on_disciplinary_and_grievance_procedures.pdf
John Halson Solicitors specialise in Employment Law. If you have any Employment Law issues please do not hesitate to contact one of our solicitors for assistance, either by phone (0151 524 4540), email or via our website (www.rightsatwork.co.uk)
This raises a number of problems and issues
Do I need to continue to pay them full pay?
An employee who is suspended is normally suspended on full pay. In principle, when an employee is suspended it is because the employer chooses not to provide them with work. Where the employee remains willing and able to work they are entitled to full pay. However, if their GP certifies them as unfit for work they are no longer able to work and in principle, can be treated as off work sick rather than still suspended on full pay. This can be clarified in the employment contract or disciplinary procedure.
Can I still insist they attend a disciplinary hearing?
The employer can ask the employee to get a letter from their GP to say they are unable to attend a disciplinary hearing. However, it may be that the disciplinary hearing is what is causing the employee stress, so the result may be the same.
No, as an alternative to contacting the GP the employer is entitled to require the employee to see an occupational health doctor chosen by the employer to determine if the employee is well enough to attend for the disciplinary hearing. If the employer has already made arrangements with an occupational health service, this can be done at short notice. If the occupational health report certifies the employee as fit to attend a disciplinary hearing the employer can insist it goes ahead.
What if the employee doesn’t turn up?
If the employee fails to attend the disciplinary, the employer can give the employee the option of either attending the appeal hearing, sending a representative or sending in something in wrting, If the employer needs to replace the employee that is a good reason for not delaying the appeal hearing while waiting for the employee to be well enough to attend.
The employer will then need to weigh up the situation. If the employee’s work can be covered without any problem, and there is no urgency to conclude the disciplinary process, they may wish to wait until either the employee is well enough to return, or until the employer concludes that the length of sickness absence is such that the employee should be dismissed for long term sickness and a “capability procedure” can then be instigated.
The employer is having to pay and administer either company sick pay or Statutory Sick Pay during the employee’s absence.
The only advantages to the employer waiting until the employee has been off sick long enough to dismiss them under the capability procedures is the time and administrative inconvenience of pursuing the disciplinary procedure, and the fact that it is usually procedurally easier to dismiss for long term sickness, and more difficult for an employee to win a claim of unfair dismissal.
The employer does not simply have to put the disciplinary hearing on hold. An alternative is to provide for the disciplinary hearing to be dealt with differently. If the employee is unable to attend the first date set for the disciplinary hearing, they can be given a choice of other ways to deal with it. The following would be a comprehensive choice of alternatives for the employee:-
1. The disciplinary officer could telephone the employee and go over the allegations, giving the employee the opportunity to respond to the allegations without having to physically attend the meeting.
2. The employee could send in written submissions to the disciplinary hearing.
3. The employee could send a representative (a Union representative or a work colleague) to attend in their absence and put their case forward.
4. The disciplinary officer can conduct the disciplinary through email exchanges with the employee on the day set for the disciplinary hearing.
5. Any combination of the above.
The employer should emphasise that if they do not hear from the employee, the hearing will go ahead in their absence based on the information and documents available.
The employer should provide the employee with more notice of the hearing than normal to allow time to prepare written submissions and arrange representation in their absence.
Following the decision, the employee should be given the right to appeal, and when an appeal date is set, they should be given the opportunity of either attending personally or using any of the alternatives previously suggested for the disciplinary.
Whether or not the employee turned up to the original hearing, an appeal should still amount to a full hearing of the disciplinary allegations from the start.If the employee makes no contact and the employer is satisfied that they have received notice, the hearing can proceed in their absence. The disciplinary officer should still consider all the evidence and make a finding on the evidence available, including looking at the employee’s past work and disciplinary record before deciding the sanction. The employee should also be notified in writing of the decision and given the right to appeal.
John Halson Solicitors specialise in Employment Law. If you have any Employment Law issues, please do not hesitate to contact one of our solicitors for assistance, either by phone (0151 524 4540) or email via our website (www.rightsatwork.co.uk)
Dismissals in the First Year of Employment
Employees must normally have one year’s continuous period of employment to qualify for the right to make a claim for unfair dismissal.
Beware, however, of the following:
· There are exceptions to the rule requiring a one-year qualifying period in unfair dismissal claims.
· Other types of claim do not have similar qualifying periods.
· The rules relating to continuity of employment or the date a contract is brought to an end might mean the employee has one year’s continuous employment where this was not apparent.
Exceptions to The One-Year Qualifying Period
In some claims for unfair dismissal an employee does not need to have one year’s continuous service. These include dismissals where the principal reason for dismissal is or relates to the employee:
· Being summoned for or being absent to attend jury service
· Being pregnant or taking maternity, paternity, adoption or parental leave
· Being a health and safety representative or making complaints or asserting certain rights in relation to health and safety
· Refusing to work Sundays (certain shop and betting workers only)
· Asserting rights under the Working Time Regulations
· Acting as a trustee of a relevant occupational pension scheme
· Being a representative for consultation relating to a TUPE transfer or collective redundancies (Where it is contemplated that 20 or more employees are at risk of redundancy)
· Making a Protected Disclosure (i.e. whistle blowing)
· Asserting a statutory right
· Enforcing a right under the National Minimum Wage Act 1998
· Enforcing a right relating to tax credits
· Asserting a right to flexible working
· Exercising a right to be accompanied (disciplinary, grievance and retirement procedure meetings)
· Asserting a right as a fixed term employee
· Being or not being a member of a trades union and exercising certain rights as a trades union member.
For example, if an employee is dismissed for a being absent due to pregnancy related illness then she can make a claim for unfair dismissal even if she is in her first year of employment as the principal reason for her dismissal related to her pregnancy.
Another example is an employee who is dismissed for complaining that he / she has not been paid. The employee could claim unfair dismissal without having one year’s service because he/she was dismissed for asserting the statutory right not to suffer deductions from wages.
The exceptions to the one-year qualifying rule are all circumstances in which an employee can claim “automatic” unfair dismissal. If a Tribunal is satisfied that the reason for dismissal was one of circumstances listed above then the dismissal is deemed to be unfair.
Note that the legislation is quite specific as to when some of the above circumstances will apply.
Selection for redundancy based on one of the circumstances listed above would be unfair.
Claims Not Requiring a Qualifying Period
Claims for unlawful discrimination do not require a qualifying period of employment. Dismissal on grounds race, sex, disability, age, sexual orientation or religion or belief can lead to a claim that the dismissal was discriminatory.
Perhaps particular caution should be given to dismissal for absenteeism or sickness.
Dismissal for time taken off for a pregnancy related illness amounts to sex discrimination. Dismissal for time off because of a disability related illness could amount to disability discrimination. Dismissal for being absent to look after a dependent could, in some circumstances, be discrimination on grounds of sex disability or age.
Employees are still entitled to contractual or statutory notice (if not dismissed for gross misconduct). Employees are also entitled to any accrued but untaken holiday pay.
Calculating One Year’s Continuous Service
In most cases this will be a straightforward exercise.
However, if the employee transfers from one employer to another under TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) the employee’s service with the previous employer counts towards his/her continuous period of service.
An employee’s continuity of service may be preserved if, for example, the employee has been absent on account of:
· a “temporary cessation of work”;
· dismissal followed by re-instatement;
· certain military service;
· certain industrial action;
· sickness, injury, maternity, paternity, adoption or parental leave;
· by arrangement or custom.
An employee employed on successive fixed term contracts can, in effect, add the period of each fixed term contract together to calculate his / her continuous period of employment.
If an employee is given notice of dismissal before completing his / her first year of employment but the notice expires after the completion of the first year of employment, the employee will have the qualifying period to make a claim for unfair dismissal.
Where the employee is dismissed without notice shortly before completing his/her first year of employment, the employee may be deemed to have the qualifying period for making an unfair dismissal claim, if the employee would have completed one year’s service had the statutory minimum notice (one week) been given.
Practical Points
It is worth meeting with the employee before taking any decision to dismiss. This can ensure that there is no misunderstanding as to the reasons for dismissal. It gives an opportunity for the employee to make representations which can reduce the risk of a discriminatory dismissal.
If there has been a transfer of the organisation (e.g. an acquisition, merger or the winning of a contract to provide services) or if there has been a gap in the employee’s employment, take care to calculate employee’s period employment is correctly.
Consider what will be the deemed date of dismissal, particularly if the employee is being dismissed close to the completion of his / her first year of employment.
March 2011 Newsletter
In January, Andy Gray was dismissed and Richard Keys resigned from their jobs as Sky Sports presenters following sexist remarks made at work.
Sex Discrimination & Sexual Harassment
A previous newsletter has set out the provisions of the Equality Act 2010. This newsletter looks at the practical implications.
Dealing with a grievance
An employee may raise a grievance of sex discrimination or harassment. The employer should investigate the allegation to establish the facts. The conclusion of the grievance may lead to disciplinary action
The employer may, however, initiate disciplinary action where sexist comments have come to the employer’s attention without being the subject matter of a grievance.
If an employee raises an allegation of sex discrimination as a grievance, the employer, at any time during the investigation of the grievance, may decide that it should be dealt with under the disciplinary procedure. If this is the case, the person who raised the grievance should be informed, they may be interviewed further if more information is required, and they should be offered a meeting to conclude their grievance after the disciplinary process is concluded.
Alternatively the employer can choose to investigate the full facts in the context of a grievance, and once it has been concluded, start a disciplinary procedure. In this instance, the investigation into the facts of the case will be concluded although a disciplinary meeting will still need to be held to decide what the disciplinary sanction should be. However the employer should ensure that the employee accused was given an opportunity to fully defend themselves against the allegation during the grievance procedure, and if the employee brings up any new evidence at the disciplinary meeting that should be taken into consideration.
Disciplinary Action
An employer should consider whether or not it could lead to dismissal (i.e. is it potentially an offence of gross misconduct), and whether or not to suspend the employee.
If it should be obvious to the employee that it could be serious enough to merit dismissal then there is no problem classifying it as “gross misconduct” but it would be better if it could be backed up in the disciplinary procedure, staff handbook or employment contract which includes that kind of conduct as an example of “gross misconduct.” It is not uncommon for “sexual harassment” to be listed as an offence of gross misconduct. The employee should then be warned in their letter inviting them to a disciplinary hearing that dismissal is a possible consequence. If the type of offence is not one which has in the past been notified as one of gross misconduct, and if it is not obvious that it would be, then an employee who is dismissed because of it (unless they are already on a final written warning) can argue “unfair dismissal.”
Most disciplinary procedures or employment contracts give the employer the right to suspend, but even without this, there is likely to be an implied right to suspend the employee as long as the employee is paid normal pay during the suspension. The normal reasons for suspension are to enable the allegation to be investigated, or to protect the accuser until disciplinary proceedings are concluded. Suspension should not imply that dismissal is the likely sanction, nor should the absence of a suspension imply that dismissal will not follow.
The allegation should be properly investigated, by interviewing any relevant witnesses and preparing written statements, preferably signed by the witnesses. The employee could be interviewed as part of the investigation, but they don’t have to be as they will have the opportunity to put their case forward at a disciplinary meeting. The employee should then be invited to a disciplinary meeting by letter in which they are told:-
1. The allegation against them in enough detail for them to defend it (preferably with copies of any statements or written evidence)
2. If it could result in dismissal
3. Their right to be accompanied by a Union rep or work colleague
There is no need for the employer to require any witnesses to attend, the employer is entitled to rely on the written statements. However, the employee who is accused should be allowed to state his case and if he brings any witnesses with him they should also be heard. The employer can then conclude whether the allegations are proven and what the appropriate sanction should be.
To justify a dismissal the employer must consider the seriousness of the actual offence and any mitigating factors in favour of the employee.
If it is gross misconduct, the dismissal can be with immediate effect. If not, but where the employee is already subject to a final written warning they are entitled to their contractual notice. If a warning is given the employee should be informed of the type of warning and how long the warning will remain on their disciplinary record.
The employee should have the result confirmed in writing (whether or not it has been communicated to them at the disciplinary meeting) and should be informed that they have the right of appeal. Normally a deadline is given for appealing.Claims arising from sexist comments
Claims arising from sex discrimination
The employee who is the victim of the comments may make a claim to an Employment Tribunal that they have been unlawfully discriminated against either on the basis that the comments amount to sexual harassment or that they have subjected the employee to a detriment.
Harassment is defined in section 26 of the Equality Act as
When deciding whether particular conduct amounts to harassment, a Tribunal must consider the perception of the person making the complaint, the circumstances of the case and whether it is reasonable for the conduct in question to have the effect alleged.
If an employee cannot show the conduct amounted to sexual harassment, they may still be able to prove unlawful discrimination if they can show that they were subjected to a detriment because of their gender.Liability for sex discrimination
Liability for sex discrimination
An employee who claims sex discrimination can bring claims against either or both the employer and the individual whose conduct they complain about.They might do this if they want the perpetrator to have some personal liability, especially if there is a possibility that the employer could avoid liability or go into liquidation.Normally, under section 109 Equality Act, the employer is “vicariously liable” for the actions of their employees, so it is not a defence for an employer to say they knew nothing about it, even if the employee who complained never brought it to their attention.
However, there is a defence available to an employer to show that it took all reasonable steps to prevent that type of discrimination taking place. It is not easy for an employer to defend a claim on this basis, as Employment Tribunals do not want to make it too easy for employers to escape liability.
Normally a “Diversity” or “Equal Opportunities” Policy, which has been properly implemented, publicised to all employees and upon which management and supervisory staff are regularly trained would be needed for an employer to avoid liability for the discriminatory actions of its employees. Whilst this may be expensive and time consuming to adopt and implement, it could potentially save an employer from significant and expensive future claims.
Even when an employer cannot escape liability, the way an employer deals with a grievance will hopefully satisfy an employee who alleges discrimination to the extent that they do not pursue a claim. Even if they do, the award for “injury to feelings” is likely to be less for an employer who deals with the grievance properly.