Employment Law Newsletter – May 2014

Welcome to our May 2014 Employment Law Newsletter, keeping you up to date with changes in employment law and informing you of recent case law developments over the last month.


Consultation Implied Terms of Trust and Confidence

An interesting Judgment was given in the case of IBM UK Holdings Limited –v- Dalgleesh which was in actual fact a pensions case. However within the Judgment there was reference made to employers who hold themselves out as maintaining particular ethical standards. There was a clear indication that such employers may find Courts considering such statements in the context of the implied term of trust and confidence.

In the Judgment it was stated that despite the case being predominantly based on pension law, they also considered whether IBM’s failure to consult properly was a breach of the implied contractual term of trust and confidence. It concluded that IBM’s employees were entitled to have expected consultation to take place in line with IBM’s statement of principle.

IBM’s statement of principle included “never make misrepresentations… Honesty based on clear communication is integral…”

Therefore organisations who have mission statements or set out their Company ethos in writing need to take those particular standards that they set themselves into consideration when making decisions, as well as specific internal policies and procedures.

TUPE Claims for Failure to Consult

The EAT has held in Alan –v- Morrisons Facilities Services Limited that employees cannot bring a direct claim against a transferee for failure to provide information to a transferor. As a result employees can only bring an action for the failure to provide information under Regulation 13 of TUPE against their own employer.

In practice what is likely to happen is that employees would bring a claim against their own employer, the transferor for breaching the relevant regulations. The transferor would then give notice to the transferee and make them a party to the proceedings. In such circumstances the employees would have to establish that the transferor was in breach of their obligations and the transferor in turn would have to show that it was not reasonably practicable for them to perform their duties because the transferee had failed to provide information to them. In this particular matter, the case against the transferor had settled and therefore the employees were prevented from bringing any action against the transferor so that as a result the claim against the transferee failed.


In the case of Panayiotou –v- Kernaghan in the EAT, the question arose as to when establishing the reason for subjecting an employee to a detriment/dismissal, could a protected disclosure be separated from connected events.

Mr Panayiotou was a Police Officer. He had raised protected disclosures relating to his colleagues treatment of victims. The investigation that followed upheld his concerns.

Mr Panayiotou however continued campaigning as he felt that some of the wrongs he had identified in his view had not been rectified. The Police Force found him increasingly difficult and time consuming to manage. In the end they dismissed him on the basis that he had incompatible outside business interests.

The Tribunal criticised the way in which Mr Panayiotou had been treated, but they found that Mr Panayiotou’s disclosures were not the reason for the mistreatment or his dismissal. It was found that they were caused by his campaign and his employer’s escalating frustration. Although they were related to the disclosures themselves the Tribunal was able to draw a distinction.

Employers however should be careful when subjecting individuals to a detriment who have raised protected disclosures as this case illustrates it can be a very fine line.

Enhanced Redundancy Pay – Custom and Practice

The EAT in the case of Peacock Stores –v- Peregrine and Others has held that an employer who routinely made enhanced redundancy payments became contractually bound to do so. There was evidence before the Tribunal that showed consistent practice of the employer over numerous years paying enhanced redundancy payments. However in more recent years they had applied this practice less consistently. The Employment Appeal Tribunal held that the Company had got to a stage whereby the enhanced redundancy payment had become inferred by custom and practice into the contracts of the employees and a departure from that term by the employer represented a breach. Unless it had been a breach that had been agreed to by the employees affected.

Therefore despite the inconsistent practice in more recent years, the term continued to apply to the recent redundancies and the employees were entitled to the enhanced payment.

This comes as a stark warning to employers to act consistently or document why a particular decision is made on individual cases/employees.

The other useful tool in these circumstances is to pay the enhancement through a Settlement Agreement.


ACAS Early Conciliation

The ACAS Early Conciliation Rules came in to force on 6th April 2014 and having been optional for their first month, they are now mandatory as of 6th May 2014. If you require any guidance on these please contact a member of the Employment Team.

Statutory Sick Pay – no longer reclaimable

We effect from 6th April 2014 employers are no longer able to reclaim Statutory Sick Pay from the Government. Prior to this employers could reclaim any amount of Statutory Sick Pay which exceeded 13% of its National Insurance Contributions in the month. It is estimated that the Government will be saving £50,000,000 a year which they will put towards a new Health and Work Service, which is due to be introduced in 2015. Its aim is to help employees and employers put together plans to facilitate a return to work where an individual has been on long term sick leave.


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 specialist employment solicitors on 0161 832 3304.

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