Happy New Year! We hope that it is a prosperous and healthy new year for you all.
Our first breakfast seminar of the year will take place on Thursday 3 March 2016 and will explore the following - “Changing terms of employment – how, why and when?”
Keep an eye on your inbox for your invitation to this event. However, if you would like to register now then please do email firstname.lastname@example.org
As we embark on a new year it seems appropriate to begin by looking forward into 2016, and hence we summarise the key changes to employment law which will take place in the next few months:
Gender pay reporting
By the Spring of 2016 all private and voluntary sector employers with 250 or more employees will be required to report on their gender pay difference for the purpose of showing whether there are significant differences between the pay for men and women. This requirement is already in place for the public sector. We still await details of how this reporting will take place, but we do know that there will be a requirement to publish the difference between bonuses for men and women.
It is expected that the law will be in place by the end of March 2016, and then employers will have some time to prepare before the Regulations come into force. It is possible that this will be phased in, with smaller employers having more time to prepare.
National Living Wage
This will be introduced on 1 April 2016. It will initially be set at the rate of £7.20 per hour, and will only apply to those who are aged 25 years or above. The aim is to increase it to £9.00 per hour by 2020. Do note that this is not the same as the Living Wage which is an amount that employers can opt to pay voluntarily. The National Living Wage will be compulsory.
From 6 April 2016 migrant workers who have spent five years working in the UK will have to earn more than £35,000 pa to stay longer in the UK. This new rule will apply to those who have a tier 2 visa, but those who are on the shortage occupation list, and scientists or researchers in PhD level occupations will not be affected.
National Insurance Contributions
From 6 April 2016 employer National Insurance Contributions for apprentices under the age of 25 years will be abolished.
Trigger’ systems for absence
A long awaited decision from the Court of Appeal has now been received in the case of Griffiths v Secretary of State for Work and Pensions . The employee was disabled, suffering from post-viral fatigue syndrome and fibromyalgia. She had a significant amount of time absent due to sickness, and this ‘triggered’ a written warning under the company procedure. She raised a grievance and asked for two adjustments to be made. Firstly, she asked for a period of absence (due to post-viral fatigue) from February to May 2011 to be excluded from her absence record (which would mean that she would no longer trigger a warning). Secondly she asked that the number of days of absence which would trigger a warning be increased in future. Her requests were refused. She claimed disability discrimination due to a failure to make reasonable adjustments.
The Employment Tribunal and the Employment Appeal Tribunal rejected her claims on the basis that a substantial disadvantage had not been shown by the employee, and that it was not reasonable to make the requested adjustments.
The Court of Appeal has rejected the appeal against the EAT decision, however, with different reasoning. It did not agree that the employee had been unable to show a substantial disadvantage, and found that the scheme clearly was disadvantageous for disabled employees. However, it did agree that the adjustments requested were not reasonable, and hence the claim of disability discrimination was rejected.
- You can operate a ‘trigger system’ for giving a disciplinary warning.
- You must consider whether there is any reasonable adjustment that can be made. This does not mean allowing excessive periods of absence, but could require you to make some more minor adjustments to the scheme.
To learn how Human Capital Management technology could assist in transforming HR into strategic business partners and reduce employee absence rates, please see the Open Symmetry article at The Power of HCM Systems
Working out pro-rata benefits
An interesting case has been reported from the Court of Justice of the European Union. The case looked at how to address the provision of benefits when an employee moves from full-time to part-time work, or vice versa.
In Greenfield v The Care Bureau Ltd  the employee worked on a part-time basis, but with a variety of working patterns. There was a period of time when she was working for just one day each week. During this time she took seven days of paid annual leave, which the employer saw as equivalent to seven weeks of leave. As a result she was told that her leave for the year had all been taken.
She then moved to a new working pattern of 12 days on, 2 days off each fortnight. She worked this pattern for a while and then her employment ended. She argued that she was entitled to payment inlieu of the leave that she had accrued during this period (she had not taken any leave). However, the employer argued that her leave had already been taken.
The Court of Justice of the European Union has ruled that annual leave must be calculated in accordance with the working pattern that is being worked at the time. Hence, each period of working must be considered separately, and leave that has accumulated in one period of working is not connected to a new working pattern in a later period of working.
The employer should calculate the leave that has been accumulated in each period separately.
- If you have an employee who moves from one working pattern to another calculate the outstanding annual leave at the end of this period.
- Make it clear to the employee what leave remains for the remainder of the annual leave year.
- Treat each period with a different working pattern separately.
- If leave taken in one period exceeds the leave accrued in that period, that time must be deducted from the newly accumulated rights in the next period.
Moving within a group – is it a transfer?
We understand that there is a transfer of undertaking when an employee works for part of a business that moves from one owner to another. However, is there a transfer of undertaking when the ‘transfer’ involves part of a business moving from one organisation in a group to the group as a whole?
In the case of Hyde Housing Association Ltd and another v Jones  the employee worked for Martlet Homes Limited. Whilst the employee was working for Martlet it became part of the Hyde Housing Association Ltd. The employee was dismissed and then offered work within the Hyde Housing Association group. The contract stated that the new employer would be Hyde Group, meaning that he would be jointly and severally employed by all members of the group. He argued that the dismissal was automatically unfair because his employment was transferring from one organisation to another.
The employee’s argument was unsuccessful. This was not a transfer of undertaking because the employer was the same in the work that the employee did before and after the dismissal. The fact that the employer’s liability for the employee was shared with other members of the group after the dismissal, did not mean that there had been a change in the identity of his employer for the purposes of TUPE.
- Make it as clear as you can to employees how your organisation is structured. Some organisations can certainly have a very complicated structure, but it is important that the employees understand how the organisation fits together – particularly if they are likely to be moved between different parts of the group.
- If the employee is moved from one part of the group to another, analyse carefully the ownership of the two parts of the group that the employee is working in before deciding whether or not TUPE is likely to apply. Seek our advice if you are unsure.
Continuity of employment
Another case which demonstrates the importance of understanding the ownership of a company is Schwarzenbach t/a Thames-Side Court Estate v Jones . In this case the issue was continuity of employment, rather than a transfer of undertaking.
The employee worked for a company which was a member of a large corporate structure from June 2011 to 31 May 2013, managing an estate on behalf of a family. His contract terminated and he was immediately employed directly by two members of the family (Mr and Mrs Schwarzenbach), from 1 June 2013. In January 2014 he was dismissed. To bring a claim of unfair dismissal he needed 2 consecutive years of employment, and clearly this latter period of employment did not meet that requirement. However, he argued that the two companies were part of the same overall employer, and hence he had continuity of employment.
The employee was successful in his argument. The structure of the company was rather complicated, with different parts of the company being registered in different countries. However, the Employment Appeal Tribunal found that Mr and Mrs Schwarzenbach were the ultimate beneficiaries of the original employer's corporate structure and so the overall ownership of the two companies was the same. As a result, the employers were “associated” and the employee had continuity of employment.
- Again, it is important to be sure of the structure of the company, and in particular the ownership. Try to ensure that employees understand how the different parts of the company link together.
- When an employee moves from one job to another you should ensure that their contract of employment gives both their continuity of service date (which is the date that they joined the company) and the date that the new employment starts. Always check that this has been calculated correctly.
Defining a reasonable adjustment
The Equality Act 2010 sets out that the employer must make reasonable adjustments to assist an employee to work if the employee is disabled. Employers are often concerned about the definition of the word ‘reasonable’. What is and is not reasonable?
It is certainly true that the word is rather subjective, but the case of Corry v Merseyrail Electric 2002 Ltd  shows that an employer is not expected to incur unreasonable costs.
The employee had applied for a job working in a railway station. He was successful in getting the job, subject to a medical. However, he had epilepsy and the outcome of the medical was a recommendation that he should not work alone or by a railway track. As around 90% of the job he had been recruited to do was track-side the offer of employment was withdrawn.
The employee claimed disability discrimination, but the employer argued that the only adjustments which were possible were not reasonable. These were ensuring that he always had a companion with him, or ensuring that he was based in a large station where help was always available.
The employer was successful in its argument, and the claim of disability discrimination was rejected.
- If you have a disabled employee your requirement is to make reasonable adjustments – but you are not expected to make adjustments that are beyond ‘reasonable’.
- Seek advice from appropriate bodies. Charities and organisations that support individuals with specific disabilities are a useful source of ideas.
- If you are planning to reject a suggested adjustment, on the grounds that it is not reasonable, seek our advice before making a final decision.
The importance of an investigation and the appeal stage
In a disciplinary or dismissal situation every step of the process is important. It is essential to ensure that the investigation is thorough, and also to ensure that the appeal is carried out correctly. Getting just one stage wrong could mean that the dismissal is unfair. It is also important to realise that an appeal can correct any errors that have occurred.
In Sharkey v Lloyds Bank plc  the employee worked as a Call Centre Operator. It was alleged that she had avoided taking difficult calls and had cut off difficult calls on a number of occasions. She claimed that she had not cut calls off, but that the system had failed causing the calls to end.
The manager who decided to dismiss did not understand the system in full, but just believed the allegations. However, the manager who heard the appeal explored the system in detail. This manager found that a ‘Y’ appeared against the call in the call log if it was manually cut off, but the ‘Y’ did not appear if the call failed due to a system failure. When looking at the employee’s log there were a number of ‘Y’s which indicated that the employee had deliberately terminated some calls.
The dismissal was fair. Although the investigation of the dismissing manager was inadequate this had been corrected by the appeals manager, who had gathered detailed information and hence had made a decision based on accurate information.
- Always ensure that an investigation is thorough. If the issues involve the use of technology seek the advice of someone who understands the systems.
- Ensure that the person hearing an appeal does not see it as ‘rubber stamping’ the dismissal decision. There must be a totally fresh look at the allegations and the responses.
Waiting to dismiss
If an employee is absent due to illness this can be disruptive to the smooth running of the organisation. However, we know that we must wait a reasonable amount of time for the employee to be well enough to return to work. How long must we wait?
This question was addressed in the case of Monmouthshire County Council v Harris . The employee was disabled with conditions that included depression. She was allowed to work from home for some days each week, to help her manage her condition and her work. However, a new manager put in place a new working pattern which meant that she could no longer work from home. This led to her becoming ill and hence starting a period of sickness absence. There was no prospect of her returning to work and eventually she was dismissed.
The dismissal was fair. The employee worked in a senior role in the Council, and it was not reasonable to expect the employer to accept the disruption to its work on an ongoing basis.
- If you have an employee who is long term absent due to illness take medical advice before taking any decision to dismiss.
- You do not have to wait forever for an employee to return, but do not act hastily.
- Always take our advice before taking the final decision to dismiss.