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April/May Employment Law Newsletter

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There's news that employment law may not be quite as burdensome as all that.

That’s one finding to take out of a new report commissioned by the Department for Business Innovation and Skills and which records the views of 40 businesses. The ‘Employer Perceptions and the Impact of Employment Regulation’ report says employers generally think that employment regulation is needed and that it’s fair. Those that think differently tend to fear or misunderstand the law. It’s called the “perception reality gap”.

As insightful and thorough as a report of this scale could be (let’s not pretend it’s definitive), it makes interesting reading. The government is proceeding with its reforms to employment law to make it harder for employees to claim (including bringing in compulsory pre-claim Acas conciliation and introducing fees of up to £1,200 for an employee to bring a tribunal claim). However, the date for these reforms has just been pushed back from this month, when they were expected to come in, to various dates from summer 2013 to autumn 2014.

Relying on secret recordings - Vaughan v London Borough of Lewisham

Ms Vaughan brought various claims against her employer. She wanted to rely on 39 hours of covert recordings she had made of contacts and meetings – including disciplinary hearings – between her and the Council. She claimed that the recordings would prove that the employer’s notes were inaccurate, although she didn’t go into more detail.

The tribunal refused to allow this evidence. The tapes would first need to be independently transcribed and that would have a disproportionate effect on costs, the tribunal said.

The Employment Appeal Tribunal (EAT) held that the tribunal had been right not to allow the evidence because Ms Vaughan had not established its relevance. The tribunal did not have anything to go on; Ms Vaughan hadn’t been specific about what the tapes revealed.

But the EAT went on to be a little critical of the Judge’s reasoning and to make some useful points:

  1. recordings needn’t necessarily be independently transcribed before a decision on admissibility can be made. As a first step Ms Vaughan should have given the Council her own transcript, along with the tapes and the Council could then have decided whether or not to dispute the accuracy.
  2. the fact that these recordings were covert was distasteful but doesn’t mean they were inadmissible. If Ms Vaughan were to now make a more focussed application identifying parts of the recordings to be admitted in evidence then the outcome could be different. That second bite of the cherry would be allowed if in the interests of justice.


Employee Shareholders

Employee shareholders (previously called ‘employee owners’) were announced by George Osborne in the 2012 autumn budget as a new type of employment status. At its most basic, in exchange for being awarded at least £2,000-worth of shares in the employer, the employee would give up a bundle of employment rights, including the right to claim (most types of) unfair dismissal and the right to a redundancy payment.

Branded by some as unworkable, unnecessary and unwanted, the future of employee shareholder status looked uncertain when the House of Lords rejected it in two consecutive votes. Late last month, the legislation was passed in a watered-down form. We'll give you more information in a future bulletin, but it's looking like employee shareholder status may not be that attractive for employers after all.

Third Party Pressure to Dismiss - Bancroft v Interserve

It’s long been the case that where a third party – a client, supplier or customer, for example – requires an employer to dismiss an employee, this can be potentially fair as “some other substantial reason”. But does an employer have to be satisfied that the request is justified? Not always, but it is a factor, says the Employment Appeal Tribunal (EAT).

Mr Bancroft was employed by Interserve as a chef at a bail hostel which was contracted to provide catering services to the Home Office. The contract allowed the Home Office to require the removal of contractor staff without giving reasons.

Mr Bancroft had a difficult relationship with his manager who eventually wrote to the Home Office requesting that Mr Bancroft be dismissed. The Home Office replied asking for a permanent solution to be put in place and Mr Bancroft was suspended.

Interserve didn’t try to persuade the Home Office to change its mind but it did offer Mr Bancroft another job, which he rejected. He was eventually dismissed and claimed unfair dismissal.

The tribunal found against him; Interserve had done everything it reasonably could. But the EAT disagreed. Injustice to the employee, and the extent of that injustice, is an important factor in the fairness of a dismissal. The tribunal should have taken into account the fact that Interserve had not considered the difficult relationship between Mr Bancroft and his manager.

The case was sent back to the tribunal to make all findings of fact and to then decide whether the dismissal was fair or not.


Solicitor’s Mistake is no Excuse - El Kholy v Rentokil

After Mr El Kholy had been dismissed from work on 4 October 2011, he instructed a solicitor to help him appeal the decision. He was told on 6 January 2012 that his appeal had been rejected. On 23 January 2012 a second solicitor lodged his tribunal claim. This was too late, because the normal time limit for unfair dismissal claims is three months from dismissal. The tribunal refused to extend time because Mr El Kholy had not established that it wasn’t ‘reasonably practicable’ to have presented his claim in time.

The Employment Appeal Tribunal rejected Mr El Khloy’s appeal. Even where a solicitor’s mistake leads to a claim being presented out of time, that doesn’t mean that it was not reasonably practicable to have presented it in time. He was free to sue his solicitor for negligence, but he had lost the right to sue his employer.


Early Retirement Scheme Becomes Unstuck - HM Land Registry v McGlue

HM Land Registry (HMLR) was offering its workforce early retirement. Ms McGlue expressed interest in this but, because she was on a career break at the time, she was turned down. (Managers had decided between themselves that employees who were on a career break and who were not due to return before a set date should be excluded from consideration).

Ms McGlue claimed indirect sex discrimination. She said that a provision, criterion or practice had applied to her as part of a group which was excluded from being considered for early retirement. That criterion disadvantaged her.

The tribunal upheld her claim and awarded her £71,000 in compensation, which was the amount she would have had under early retirement. She was also awarded £12,000 for injury to feelings and £5,000 for aggravated damages.

HMLR appealed the remedy decision, arguing that Ms McGlue had suffered no financial loss because she had continued to be employed by HMLR. Ms McGlue’s response was that, had she taken early retirement, she would have found a similarly paid job and so would have had the benefit both of an ongoing salary and the early retirement sum.

The Employment Appeal Tribunal (EAT) rejected HMLR’s appeal; the tribunal was right to award the compensatory and injury to feelings awards. But the EAT reduced Ms McGlue’s aggravated damages award by £5,000 because there was no basis for it.


New Eltham Conservative Club v Mr & Mrs Hazel

Mr and Mrs Hazel were employed by the Club as stewards. There were money problems and they were made redundant.

They won their unfair dismissal case at tribunal. Mr Hazel, who was four years away from retirement, was awarded compensation from the date of dismissal to the date he would have been due to retire. The Club appealed that decision, arguing that the tribunal should have reduced that amount to take account of the possibility that Mr Hazel could have been properly dismissed at the time he was actually dismissed, or some time before he retired.

The Employment Appeal Tribunal agreed. On the basis of the liability findings the tribunal ought to have considered and factored in that possibility. The case was sent back to the tribunal to reconsider the compensation.


And Finally…. - Esparon v Roucou and another

Surprises come in all shapes and sizes. For Ms Esparon and Mr Frederick, it was an unexpected demand for £220,000.

Ms Roucou claimed to have been employed by the couple, and she brought a number of complaints against them. No defence was filed and the tribunal issued default judgment, awarding her compensation of just over £220k. Shortly after, Ms Esparon and Mr Stephenson received a letter from Ms Roucou’s solicitor telling them that enforcement proceedings were to begin. That, the couple claimed, was the first they had heard of the claim. As it turned out, the tribunal paperwork had been sent to the wrong address.

An application to have the default judgment reviewed was refused because it was out of time and it wouldn’t be just and equitable to extend time. The couple appealed, successfully. The Employment Appeal Tribunal (EAT) held that it was arguable that:

These factors, the EAT said, were all relevant and the tribunal had misdirected itself by not considering them. So the case will be defended after all.