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News & Blog

Employment Law Newsletter – January 2015

Welcome to our January 2015 Employment Law Newsletter, keeping you up to date with changes in employment law and informing you of recent case developments over the last month.

CASE LAW DEVELOPMENTS

Payment in lieu of notice following termination
In the case of The Sash Window Workshop Ltd and another v King UKEAT/0057/14 Mr King had been employed as a commission-only salesman for Sash Window Workshop Ltd until he was dismissed on reaching the age of 65. During the course of his employment Mr King was never paid for any absence due to sickness or for any holidays.

Mr King brought claims in the employment tribunal for discrimination and unpaid holiday pay.

The employment tribunal found that under the discrimination provisions of the Equality Act 2010 Mr King was deemed to be in employment although he was not an employee and his dismissal constituted age discrimination for which he was awarded a sum for injury to his feelings. They went onto state that Mr King constituted a worker in accordance with the Employment Rights Act 1996 and was entitled to unpaid holiday pay. He was awarded three different types of holiday pay:

- holiday pay accrued and not taken in the current leave year at the date of termination in accordance with the Working Time Regulations 1998;

- pay for leave that Mr King had requested and taken in the years before his termination claimed as unlawful deductions from his wages; and

- payment in lieu of untaken holiday in previous years, the tribunal relied on a previous Court of Appeal decision Larner where an employee was entitled to a payment in lieu on termination for untaken holiday in a previous year due to sickness. The tribunal found no difference between being unable to take paid leave due to sick leave or because the employer would not allow it.

The respondent appealed the third strand of holiday pay and Mr King cross-appealed as he felt he should receive a larger sum for the injury to his feelings as a result of the age discrimination.

Both appeals were allowed and the claim was sent back to the employment tribunal. It was found that the tribunal had failed to make sufficient findings of fact to show that if Mr King had asked for paid leave it would have been refused. They therefore should not have parted from the usual rule under the Working Time Regulations 1998 which states that unused leave expires at the end of the leave year. With regard to the award received by Mr King, the tribunal were found to have taken irrelevant factors into consideration.

This suggests that employees may be able to claim payment in lieu of untaken holidays in previous years if they have been unable or unwilling to take the leave in previous years due to circumstances that are beyond their control. This would go beyond the position established in Larner where it only applied to employees who were unable to take their leave due to sickness.

Abuse of process
In the case of James v Public Health Wales NHS Trust UKEAT/0170/14 Ms James, an employee of Public Health NHS Trust raised internal concerns with her employer regarding the behaviour and bullying by her manager. Ms James felt that raising those concerns contributed to her dismissal and caused her to suffer various disadvantages in the workplace.

Whilst Ms James was employed by the Trust she brought four separate claims in the employment tribunal. Three of those claims were for unlawful deductions from wages and one claim was for failure to provide itemised pay statements. Ms James settled each claim with her employer.

Ms James was later dismissed and brought a further two claims in the employment tribunal for unfair dismissal and whistleblowing. The Trust argued that the claim for whistleblowing should be struck out as she could have brought the claim with her earlier four claims in the employment tribunal. An employment judge struck out the claim for whistleblowing on the basis that it was unjust harassment and that there should be finality in litigation so it was in the public interest to strike out the whistleblowing claim.

Ms James appealed and the employment appeal tribunal granted her appeal on the basis that:

- the nature of the whistleblowing claim was significantly different to her previous claims in the employment tribunal;

- as the previous claims in the employment tribunal had settled and had therefore not proceeded to a final hearing, there had been no judicial determination so it would not constitute a re-litigation;

- there was no evidence of unjust harassment being caused toward the Trust;

- the employment judge had not properly considered Ms James reasons for bringing the application at that point; and

- the employment judge had considered delay to be a relevant factor when making his decision but delay is not a relevant factor when considering abuse of process.

Strike out in the Employment Tribunal
In the case of Harris v Academies Enterprise Trust and others UKEAT/0097/14 and UKEAT/0102/14 Mr Harris was a teacher who brought a claim for whistleblowing, discrimination, victimisation and harassment against the Academies Enterprise Trust, the Head Teacher of that Trust and two other colleagues.

The tribunal provided a date for exchange of witness statements but the respondent failed to comply. The tribunal considered striking out the respondent’s response to the claim but concluded that striking out the response would cause greater prejudice to the respondent’s than it would to Mr Harris as the respondent’s would have a finding of discrimination against them without the chance to respond.

Mr Harris appealed this decision in the employment appeal tribunal on the basis that there had been a failure to apply the overriding objective and consider civil cases such as Mitchell. The employment appeal tribunal dismissed the appeal and found that the employment judge was correct to look at the consequences of striking out the respondent’s response in deciding whether the action was proportionate. It was also found that it would be a mistake to apply the overriding objective in the Civil Procedure Rules in employment tribunals in the same way it is applied in the civil courts. However it was found that the employment tribunal should have regard to the reasoning of cases from the civil courts such as Mitchell even though they are not required to apply an identical test.

This provides some clarity as to the application of the Civil Procedure Rules and the cases in the civil courts in the employment tribunals. It shows that although the overriding objective as set out in the Civil Procedure Rules and the cases associated with Mitchell do not directly apply in the employment tribunal they must be considered in certain circumstances.

Challenge to employment tribunal fees fails
In the case of R UNISON v The Lord Chancellor and another (No 2) [2014] EWHC 4198 (Admin) the High Court considered a second judicial review claim brought by the public sector trade union UNISON on the basis that the fees a claimant is required to pay in order to bring a claim are unlawful.

UNISON argued that there had been a drop in the number of claims being brought at the employment tribunal because the claimants could not pay the required fee.

The High Court found that although there had been a drop in claims brought, UNISON could not show whether the drop in claims was due to the claimant’s inability to bring a claim caused by the fee or due to their unwillingness to bring a claim. The High Court also found that the introduction of fees was not indirectly discriminatory against women.

The High Court went on to state that the introduction of fees was justified as it had three legitimate aims in placing the running costs of the system onto those who benefit from it, filtering out claims without merit and encouraging alternative means of settling disputes.

UNISON has been allowed to appeal and have announced that they will do so.

Employer’s deductions to pay for training costs allowed
In the case of Commissioners for HM Revenue and Customs v Lorne Stewart plc UKEAT/0250/14 an employee entered an agreement with her employer that they would pay for her attendance at a training course but if she left her employment within two years of attending that course they would be able to deduct the cost of the course from her final pay.

The employee voluntarily resigned within the two year period and her employer deducted the cost from her final salary payment.

The deduction of the cost of the course meant that the payment appeared to fall below the national minimum wage. HMRC issued a notice of underpayment and it was found that the deduction fell within an exception in the national minimum wage legislation and was therefore allowed.

The decision was upheld by the employment appeal tribunal but it is important to note that the deduction was to be ignored because the employee had voluntarily resigned. They would not have reached the same decision if the employee had been made redundant.

Social media misuse by an employee
In the case of Game Retail Ltd v Laws UKEAT/0188/14 Mr Laws worked for a games retailer. During the course of his employment Mr Laws started to use a personal twitter account which was followed on twitter by 65 of the games retailer’s stores. Concerns were raised about Mr Law’s tweets being offensive and abusive and he was summarily dismissed for gross misconduct.

Mr Laws brought a successful claim in the employment tribunal for unfair dismissal. The games retailer then successfully appealed to the employment appeal tribunal who found that the judge in the employment tribunal had failed to consider whether Mr Laws twitter use was really private as he was followed by 65 stores on twitter and also followed 100 stores on twitter.

The employment appeal tribunal found that Mr Laws had failed to put in place privacy settings to restrict access and stated that the employer did not need to establish that the tweets posted had offended anyone, only that they may be read and may cause offence to customers and staff.

The employment appeal tribunal refused to make findings on the misuse of social media.

This case highlights the importance for employees to ensure that they establish social media accounts that are entirely separate from their place of work but more importantly for employers to highlight this to their employees expressly in the policies and procedures. If you would like a social media policy please contact us.

DEVELOPMENTS TO LEGISLATION

Shared Parental Leave and Pay
The Children and Families Act 2014 introduces a new chapter 1B in to Part 8 of the Employment Rights Act 1996 that entitles employees to take shared parental leave and a statutory shared parental pay in the first year of their child’s life or within one year of adoption.

The shared parental leave can also be taken in up to three separate blocks although the employer can agree to more.

Although the provisions came into force on 1st December 2014 they will only be available for parents who are expecting their child to be born or placed for adoption on or after 5th April 2015.

Please see our Shared Parental Leave Fixed Fee Policy at http://www.dbf-law.co.uk/blog/davis-blank-furniss-launches-shared-parental-leave-fixed-fee-policy-service/

It is also interesting to note that the Government’s Department for Business Innovation and Skills has created an online calculator to help parents calculate their entitlement to holiday pay and holiday leave. The calculator takes into account existing rights and will also take into account the new shared parental leave rights.

Small Business, Enterprise and Employment Bill
The Bill had its second reading in the House of Lords on 2 December 2014. The Bill is expected to progress to the committee stages in February this year.

Equality Pay (Transparency) Bill has its first reading
The Equality Pay (Transparency) Bill passed its first reading in the House of Commons on 16 December 2014. It will receive a second reading on 27th February 2015.

The Bill will provide the government with power under section 78 of the Equality Act 2010 to require employers with 250 or more employees to publish information regarding the gender pay gap.

We will continue to keep you up-to-date as to the progress of the Bill.

Tax free child care scheme received royal assent
The Childcare Payments Bill 2014-15 received Royal Assent on 17 December 2014 and will take effect from Autumn 2015.

The Bill allows 20% of certain childcare costs to be claimed by families who work and have children who are under five years of age.

EMPLOYMENT LAW PROPOSALS

Consultation
Working Time Directive
The European Commission has been conducting a review of the European Working Time Directive (2003/88/EC) since 2009.

In 2013 it was established that the European social partners were unable to agree on amendments to the Directive. On 1 December 2014 the European Commission published an online public consultation which requires the completion of a questionnaire.

The Consultation will close on 15 March 2015.

Draft Regulations to limit impact of Bear Scotland Ltd v Fulton and others
As set out in our December newsletter the government has created a task force to assess how to limit the impact of Bear Scotland Ltd v Fulton and others.

On 18 December 2014 it was announced that regulations to amend the Employment Rights Act 1996 have been placed before Parliament. The regulations aim to impose a two year limit on claims for unlawful deduction from wages in relation to holiday pay.

The government feels that the regulations will provide clarity for workers and will also limit the costs to employers.

Surveys
Survey on work-life balance
The Department for Business Innovation and Skills published its Fourth Work-Life Balance Employer Survey (2013) in December 2014. The last survey was published in 2007.

Some interesting observations include an increase in workplaces offering occupational paternity leave and an increase in men taking time off after child birth.

For further information please follow this link to the survey: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/386755/bis-14-1027-fourth-work-life-balance-employer-survey-2013-v8.pdf

In Other News
Requirement to make reasonable adjustments
In the case of FirstGroup PLC v Doug Paulley [2-14] EWCA Civ 1573 The Court of Appeal considered whether a bus operator, whose policy was only to request but not to require bus passengers to move out of the space reserved for wheelchairs, constituted a failure to make reasonable adjustments in accordance with the Equality Act 2010.

The Court of Appeal found that the policy was not in breach of the Equality Act 2010.

Contact Us
If you require any further clarification in relation to the above developments, or if you need any further assistance then please do not hesitate to contact our team of specialist employment solicitors on 0161 832 3304.

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