This month we remind you of the changes following the annual review of statutory rights and consider the implication of two important decision on the extent employer are responsible for the actions of individuals in the business and the provision of child care vouchers when employees are on maternity leave.
We also wanted to let you know how proud we are to be sponsoring the Leeds 10k Clarion Corporate Challenge again - especially as the event celebrates its 10th birthday. This well-established event has become one of the region's largest corporate challenges - and it continues to grow in popularity.
Many of the businesses that enter the Challenge, year on year, find that it helps build team spirit, encourages a sense of health and wellbeing and boosts morale, as you can see from what two businesses who are taking part have to say:
"It is a great way to get to know other employees in the region outside of the work environment, keep fit and healthy, and have a bit of fun too!!" Handlesbanken
"Leo Group are looking forward to taking part in the 10k Corporate Challenge for our fifth year not only for health and fitness purposes, but for team building for colleagues and most importantly to raise money and awareness for charitable causes."
To receive more information on the Challenge and to learn how to enter a team please email firstname.lastname@example.org.
Increases in statutory rates
To ensure you are up to date with the existing and new statutory rate changes for 2016 please follow this link to our easy reference table of statutory payments.
Please note that there are changes to the Statutory Week's Pay and Compensatory award that you need to be aware of.
Other changes in April 2016
By way of reminder, the National Living Wage was introduced on 1 April 2016. This applies to all employees and workers who are aged 25 years or more, and is paid at the rate of £7.20 per hour.
Employer National Insurance Contributions for apprentices aged under 25 years are abolished.
Skilled migrant workers who are working under a tier 2 visa (general and sportsperson categories) and who are not working in a PhD level occupation or a scarce skill occupation, will have to earn at least £35,000 to apply to settle in the UK. If they do not earn this amount they will not get a visa beyond 5 years.
Postponements in Employment Tribunal hearings
New rules have been introduced about postponements in the Employment Tribunal. You should note the following:
- If either you or the claimant has already been allowed two postponements in the same case then a further application for postponements will only be allowed in exceptional cases.
- If either you or the claimant makes a request for a postponement less than seven days before the date of the hearing, or at the hearing itself, it will only be allowed in exceptional circumstances.
- If either party is granted a late postponement the Employment Tribunal is required to consider the imposing of a cost order or a preparation time order against the party. A late postponement is defined as being one which has been applied for less than seven days before the hearing.
If you are involved in Employment Tribunal proceedings and we are representing you, we will ensure that any request for a postponement is made in a timely manner and we will advise you if there are any specific risks associated with requesting a postponement at a particular point of the proceedings.
Important rulings on vicarious liability
You are responsible for any actions that your employee takes in the course of their employment. This is why, for example, discrimination claims are typically taken against the organisation rather than the individual person who discriminated against someone. The Supreme Court has recently ruled in two cases relating to vicarious liability, and there are some important points to note from their rulings.
In the case of Mohamud v Morrisons Supermarkets plc  a customer went to a garage kiosk run by Morrisons to ask if it was possible to print some materials from a memory stick. The Morrisons employee who was working in the kiosk was racially abusive to the customer, and then followed him out to the forecourt and attacked him. The customer brought a claim against Morrisons, but they argued that they were not liable because it could not be argued that what their employee had done was ‘within the course of their employment’.
In the case of Cox v Ministry of Justice  the employee was a Catering Manager in a prison. She was responsible for a team of people, including employees and prisoners, who had been chosen to work in the prison kitchens. One of the prisoners who had been chosen to work in the kitchens was unloading some supplies and dropped a bag of rice on Cox’s back causing her an injury. The Ministry of Justice argued that they were not liable because the prisoner was not their employee.
In both cases the Supreme Court has ruled that the employer was liable. This gives two important points to note. Firstly, your vicarious liability is not just limited to employees. You could also be liable for others who work on your behalf – agents, volunteers, contractors etc. Secondly, you are still vicariously liable even if you do not support what the employee has done and they have acted outside of their remit.
- Think about anyone who is operating on behalf of your company, but who is not an employee. Have you got some way of checking what they are doing?
- Consider whether you should make provision in your commercial contracts with third parties, such as contractors, to indemnify you in respect of their conduct or that of their employees.
- If an employee does act in a way that is unacceptable to you take disciplinary action, to give a clear signal what is and is not acceptable in your organisation.
Take care when using information about past convictions
If an individual has been convicted of a crime that conviction becomes ‘spent’ in a specified period, depending on the sanction which has been imposed. However, there are some convictions that will always have to be declared, due to the nature of the work that the individual is carrying out.
A recent case has challenged whether this approach of revealing old convictions is fair. In R (on the applications of P and another) v Secretary of State for Justice  two individuals argued that the disclosure of their past convictions was making it difficult for them to get a job. One individual was aged 47 years and had been accused of theft and breaking bail conditions back in 1999. The other individual was aged 51 years and had been convicted at the age of 17 of two thefts.
Under the Police Act 1997 the police have some discretion when deciding whether or not to reveal old convictions. However, they do not have this discretion if the individual has two or more convictions, as had occurred in both these cases.
The High Court has ruled that the current approach of revealing past convictions goes beyond what is legally required, and breaches the rights of individuals to a private life under Article 8 of the Human Rights Act 1998.
- At present, there has been no change to the law. However, you should be aware of this ruling, and take time to consider whether a past conviction is relevant when faced with an applicant with a criminal record, which will depend on the profession and role of course
Break down of trust led to a fair dismissal
If you suspect an employee of wrongdoing, and the employee does not co-operate with an investigation it could potentially be fair to dismiss for a breach of mutual trust and confidence.
In House of Fraser v Christofidou  a number of items had gone missing from the House of Fraser store. It was discovered that these were being sold on an eBay account, which was registered in the name of one of the employees. The employee said that the account had been set up by her ex-husband, but would not give his contact details to her employer, even though she was still in contact with him.
She was dismissed, and this was found to be a fair dismissal. Although the employer had not investigated who had set up the eBay account it had been unable to do so because the employee would not co-operate. This led to a breakdown of trust in the
- As always, in a dismissal situation you should always try your utmost to investigate every aspect of the situation.
- If the employee will not co-operate with an investigation make it clear to them that on e possible outcome is that you will have to rely on the information that you do have, and that this might lead to the dismissal.
Salary Sacrifice Schemes during Maternity Leave
Whilst an employee is on maternity leave she is entitled to all the terms and conditions set out in her contract of employment, apart from those relating to remuneration. An interesting question has recently arisen about entitlement to childcare vouchers.
In Peninsula Business Services Ltd v Donaldson  employees were entitled to receive childcare vouchers as part of a salary sacrifice scheme (i.e. their salary was reduced in return for receiving the tax efficient vouchers). The employer did not continue this right during maternity leave, arguing that the vouchers were part of pay and that it was a condition of entry to the scheme that the employee agree that it could suspend provision of vouchers during maternity leave. An employee brought a claim that this was discrimination on the grounds of maternity/pregnancy.
The employee was unsuccessful. The vouchers were part of a salary sacrifice scheme, and hence they could be classed as part of remuneration. If they had been offered in addition to salary (i.e. as a benefit) then the entitlement to receive them would continue during maternity leave.
- Review the terms and conditions of your salary sacrifice agreements and make sure that it is a requirement of entry that you are not obliged to provide childcare vouchers to employees, and that the employee is not entitled to receive the childcare vouchers in any period of maternity leave.
The Qualifying Service needed to bring a claim of Unfair Dismissal
To bring a claim of unfair dismissal an employee will usually need to have two years’ continuous service if the employee started work on or after 6 April 2012, and just one years’ continuous service if the employee started work before that date.
However, there are some situations in which the employee does not need any qualifying service to bring a claim. The following case illustrates this well.
In Parsons v Airplus International  the employee was dismissed after just five weeks, with the employer stating that this was because she was a ‘cultural misfit’. However, she believed that it was because she had made a number of protected disclosures (also referred to as whistleblowing). She sought interim relief in the Employment Tribunal, arguing that this was appropriate because her case was so strong. This has not been granted, but the case will proceed to a full hearing.
This case is a good reminder that there are situations when an employee can bring a claim of unfair dismissal with no qualifying service. The typical situations are:
- Dismissing an employee because they are, or are not, a member of a trade union
- Dismissing an employee because she is pregnant, or any reason relating to maternity
- Dismissing an employee working in the retail sector for refusing to work on a Sunday (unless they are specifically recruited with one of their working days being a Sunday)
- Dismissing an employee for activities carried out as a health and safety representative, or for raising concerns related to health and safety issues
- Dismissal for asserting a statutory right – e.g. for asking to take rest periods in accordance with the Working Time Regulations 1998
- Dismissing an employee because they have asserted their right to be paid in accordance with the National Minimum Wage or the National Living Wage
- Dismissal for making a protected disclosure – as allegedly happened in this situation
- Dismissal for disclosing fraud or corruption
In all these situations there is no qualifying period needed for dismissal, and in addition the dismissal will be automatically unfair. In other words, if it is shown that this is the reason for the dismissal you will not be able to defend your actions.
If you dismiss an employee because of their political affiliation there is no requirement to have any qualifying service, but the dismissal is not automatically unfair.
- If you are thinking of dismissing an employee and there is the possibility that it could be argued that the reason is linked to any of the above always seek our advice first.