Employment Law Newsletter – May 2015

Welcome to our May 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.

There have been some interesting case law developments particularly with the ECJ as it has finally reached its decision in the Woolworths case (see below).


Woolworths and Ethel Austin Collective Redundancies

The ECJ has now handed down its judgment in the case of USDAW and another v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and another.

In this case former employees of the high street stores Woolworths and Ethel Austin have tensely awaited the ECJ decision on what amounts to an ‘establishment’ under the collective redundancy legislation. The ECJ have found that ‘establishment’ does not refer to the employer’s business as a whole but to the local employment unit where the workers are allocated to carry out their work.

It is now for the Court of Appeal to decide whether each separate branch of the high street stores known as Woolworths and Ethel Austin were individual establishments or not.

In accordance with collective redundancy legislation, if an employer plans to make redundancies of 20 or more employees at one ‘establishment’ in a period of 90 days or less the employer must inform and collectively consult with those employees. Failure to do so may entitle the employees to a protective award.

This decision will make it harder to trigger the need for collective consultation and will bring great disappointment to many former employees at the high street stores who, as a result of the more restrictive interpretation, will not qualify for a protective award.
The decision is however welcomed by many employers as it provides some much needed clarity on the position of collective redundancies and when the consultation process is triggered.

Costs in Employment Tribunals

In the case of Chadburn v Doncaster & Bassetlaw Hospital NHS Foundation and another the tribunal had to consider whether they should award costs against a claimant that had acted unreasonably when she made-up claims of discrimination against her employer. The tribunal decided to make a costs award against the claimant in the sum of £10,000.

The employment appeal tribunal upheld the decision of the tribunal despite the claimant having limited money to pay the costs. This was because the tribunal believed that the claimant’s financial position was likely to get better.

It is unusual for employment tribunals to make costs orders against parties as the general rule is that each party must bear its own costs (fees, charges and disbursements incurred). This is unlike the civil courts where the successful party has to pay the reasonable costs of the unsuccessful party.

This case does however remind us that the employment tribunal has a wide discretion to make a costs award if it believes a party has conducted itself in a particular way.

It also provides some clarity in an area where the tribunals have a very wide discretion and acts as a warning to claimants about the repercussions of lying about/ exaggerating their claims.

Harassment of a Zero Hours Contract Worker

In the case of Southern Britannia Hotels Ltd and another, the claimant was a 22 year old waitress with a history of mental health issues working on a zero hours contract in a hotel. The claimant alleged gender related harassment from her line manager who would touch her inappropriately, kiss her neck, make inappropriate comments and ask her personal questions about her sex life. The claimant also alleged bullying from another staff member.

The hotel carried out three sub-standard investigations into the allegations and the claimant eventually took sick leave from work.

The matter progressed to the employment tribunal where the tribunal found in favour of the claimant and found the hotel to be vicariously liable. The claimant received an award totalling £19,500 for injury to feelings. The tribunal thought that the claimant was a consistent and credible witness whilst her line manager was not. They also found that the hotel had not implemented its policies, that the investigations it carried out were flawed and that it was not able to rely on the statutory defence.

The tribunal considered the vulnerability of the claimant when making the award and particularly her young age and her history of mental health issues. The tribunal also commented in the judgment that the claimant felt like she had a lack of security due to her being on a zero hours contract and was afraid to complain as she was worried she may receive less work. This shows that when deciding how vulnerable claimants are, the tribunals may give greater consideration to the claimant’s status of employment.

This case acts as an important reminder for employers to ensure that they handle allegations of discrimination carefully and carry out appropriate investigations into all complaints, even those from workers on zero hours contracts.


Lord Browne on Sexual Orientation

The cross-bench peer Lord Browne shares his views on lesbian, gay, bisexual or transsexual people in senior roles stating that companies should set-out how many people in senior roles are lesbian, gay, bisexual or transsexual.

Lord Browne feels that providing this information will help to show people that ‘coming out’ can be a positive move for their career.

BIS Guidance

Do you need guidance on the changes to adoption leave and pay?

The Department for Business Innovation and Skills has published technical guidance for employers about the changes to adoption leave and pay that came into effect on 5 April 2015. The guidance is titled ‘Changes to Adoption Leave and Pay from 5 April 2015: Technical Guidance for Employers’ and can be found at the following link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/419080/bis-15-259-changes-to-adoption-leave-and-pay-from-5-april-2015-technical-guidance-for-employers.pdf.

The guidance, among other things, sets out that statutory adoption pay is to be paid for the first 6 weeks at the earnings related level and provides detail about the new parents who qualify for adoption and paternity leave and pay.

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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