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Employment Law Bulletin May 2015


All the political parties have included pledges in their manifestos which relate to employment law. Common themes are zero hours contracts, national minimum wage, childcare funding, equality, trade unions, employment tribunal reform, apprenticeships and migrant workers.

We will of course update you of the changes to expect, once the election result is known and as they are formally announced.

Our next seminar is taking place on Tuesday 2 June and is entitled "Growing and Protecting Your Business in an Upward Economy”.  Aligning employee incentives and objectives with business strategy and targets delivers success. The speakers will share strategies on how to put effective strategies in place using case studies and their first hand experience.   If you would like to reserve your place please email heather.oates@clarionsolicitors.com. 

Meaning of “establishment” for collective redundancies

As covered in our bulletin last week, the ECJ has now confirmed in the long running Woolworths case that an “establishment” is the entity at which the employee is assigned to carry out their duties, and not the employer’s business as a whole. This means that dismissals at each establishment should be considered separately for collective consultation purposes. There’s therefore no longer a requirement to keep a central record of all dismissals made across all sites within a rolling 90 day period. It will still be a question of fact for each case, but it’s likely that each site can be treated as a separate establishment.

Warnings cannot be relied on if given in bad faith

If an employee has a final written warning on their record, and then commits a further act of misconduct before that warning has expired it would be usual for the employee to be dismissed. In Way v Spectrum Property Care Ltd [2015] the Court of Appeal ruled that a warning cannot be relied on if it has been issued in bad faith.

In this case Way, and several other employees, had sent inappropriate emails. The employer decided what sanction to impose on each employee, depending on the level of inappropriateness. Some employees were dismissed. Way already had a final written warning on his record and, although his emails had not been the most inappropriate, he was dismissed. He argued that the warning on his record had been issued in bad faith. The warning had been given for helping someone he knew gain employment in the organisation without disclosing his connection. He argued that the manager who gave him the warning was also involved in obtaining employment for the individual and was trying to hide his involvement by giving a warning to Way.

The Court of Appeal ruled that a warning given in bad faith cannot be relied on, and has sent the case back to the Employment Tribunal to determine if the warning was given in bad faith. If it was, the Tribunal will then need to decide the impact of this on the decision to dismiss.


Defining public interest in a whistleblowing situation

The Enterprise and Regulatory Reform Act 2013 altered the requirements to bring a protected disclosure. The disclosure must now be made in the public interest. This requirement was put in place to exclude disclosures that related to a breach of contract when only the employee making the disclosure is affected. Does ‘public interest’ also exclude situations when a number of employees are affected, but no-one outside the company?

This question was answered in the case of Chesterton Global Ltd v Nurmohamed [2015]. The whistleblower was a Director in the employer’s Mayfair office and he disclosed that the employer was overstating the costs for the office and hence driving down the bonuses that he and 100 of his colleagues were entitled to receive. 

This disclosure was in the public interest. Although an individual contractual dispute would not be in the public interest, this situation had much wider impact. 


The employer’s responsibility for stress in the workplace

We all get stressed from time to time, but when are you responsible for an illness that results from the stress that an employee experiences? The principles that the Courts follow when deciding the employer liability were set out in a case back in 2002, and have recently been applied in Easton v B&Q plc [2015].

Easton was a manager of one of the B&Q stores, and was seen to be a very successful manager. He became ill due to stress, and claimed that this was due to the negligence of his employer, and importantly that it had not carried out a risk assessment in relation to stress. After being absent for around five months, he returned to work on a phased basis to a less busy store. However, he became ill again.

The 2002 case emphasised the importance of determining whether the injury was reasonably foreseeable by the employer. In the Easton case, the Judge said that the employer is not required to make intrusive enquiries and can take at face value what an employee says. If an employee, as with Easton, returns to work then it can be assumed that the employee is implying that he believes that he is fit to work. 

Easton had worked for many years without any psychiatric problems. When he returned his employer did know that he had suffered an illness, but there was nothing to indicate that a relapse was likely. The employer had a stress management policy which required employees to notify the employer of any problems. Easton had not done enough to explain the problems to the employer, and a general risk assessment would not have been of any real help. Hence, it was concluded that the employer was not liable for Easton’s illness. 


Valid reason for different levels of pay

Men and women should be paid the same amount to do the same work, unless there is good reason for there to be a difference in the level of pay. What might that reason be? This was recently answered in the case of Moss v Reliance Mutual Insurance Society Ltd [2015]. 

Moss (a woman) worked as an Actuary, and was paid less than a man who was doing similar work. She argued that this was a breach of equal pay legislation. She also made separate claims of sex discrimination and constructive dismissal. All of her claims failed.

Specifically looking at the equal pay claim, the employer gave two reasons for the different rates of pay. Firstly, she had not got recent experience, unlike her male colleague, because she had been out of work for two years before taking on the job. Secondly, her male colleague had some specific skills, that she did not have, which were in demand. These reasons were accepted as justification of the differences in pay.


Small Business, Enterprise and Employment Act 2015

A number of Bills became law before Parliament was dissolved pending the General Election. There are two that have a particular impact on employment law, with the first being the Small Business, Enterprise and Employment Act 2015. The content of the Act is not actually in force yet, a further order is needed for that to happen. However, it is important to note the key points, and we will inform you when commencement dates are announced:

Exclusivity clauses in zero hours contracts
Zero hours contracts are an increasingly high profile political issue, and this Act addresses one specific issue. It makes it unlawful to prohibit an individual who is working on a zero hours contract from also working for another organisation.

Gender pay reporting
By Spring 2016 at the latest, all private and voluntary sector employers with 250 or more employees will be required to report on the difference in pay between genders in their organisation.

Anyone who makes a protected disclosure (‘whistleblows’) can make their disclosure to a prescribed person (eg the HMRC or the HSE). These ‘prescribed persons’ will be required to produce an annual report summarising the disclosures that they have received.

Fines for not paying a Tribunal award
A fine will be imposed on employers who do not pay a Tribunal award or sums due under a COT3 settlement. There will be a warning notice, and if the amount is still not paid a fine of 50% of the unpaid amount, subject to a minimum of £100 and a maximum of £5000 will be imposed. If this is paid within 14 days of the penalty notice the fine will be reduced by 50%.

Tribunal postponements
The number of postponements to an Employment Tribunal will be limited to two. Any additional requests, or any requests made within seven days of the hearing, will only be granted in exceptional circumstances. If this happens then the Tribunal will be obliged to consider a costs award against the party requesting the postponement.

National Minimum Wage underpayment
At present, the maximum fine for not paying the NMW is £20,000 per notice of underpayment regardless of the number of employees who have been underpaid. This will change so that the maximum fine will be £20,000 per individual who has been underpaid.

Exit payments in the public sector
If a high-earning individual in the public sector leaves with an exit payment they will be required to pay all or part of it back if they return to the public sector within a short period of time.

Deregulation Act 2015

The other Act which has an impact on employment law is the Deregulation Act 2015. The key points to note from here are:

Recommendations in discrimination cases
From 1 October 2015 Employment Tribunals will no longer be able to make wide recommendations (relating to the organisation generally) if an organisation loses a discrimination case. From then the recommendation must focus on the individual claim that was brought, and not on the wider organisation.

Health and safety and the self-employed
Self-employed workers will be exempt from health and safety law where their work poses no potential risk of harm to others. There will be further Regulations to spell out the detail of this.


If you have any questions regarding any of the content of this bulletin please do contact a member of the employment team.

If you would like to sign up to receive this bulletin by email every month then please email heather.oates@clarionsolicitors.com