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Employment Law Bulletin May 2016

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This month’s bulletin looks at the new rates of National Minimum Wage along with key case law developments relating to the Bribery Act 2010 and whistleblowing.

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In this issue we will explain some recent decisions on the potential discriminatory pitfalls for employers in relation to workplace ‘nicknames’ and in determining if an employee is suffering from a disability. We also examine the law on restrictive covenants and the dismissal process in light of recent case law.

We are delighted that Joanna Dodd will be returning to the Employment team on 1 June 2016 following her maternity leave, and we look forward to welcoming Jo back.

We will also be keeping busy hosting a number of events:

 - On 14 June 2016, we are hosting a seminar addressing the broad issues of the ageing population. The event will feature speakers from key organisations within the healthcare sector including BUPA and Tunstall. This will be of interest of anyone working within or closely with the healthcare sector.

 - On 28 June 2016,  Sarah Tahamtani will host our What is TUPE? seminar.  The event will provide an overview of TUPE and determine the varying circumstances in which it may apply and if it applies, the effect it has in practice, the protection it affords employees and the obligations it imposes.

- On Monday 4th July Jo Dodd will be speaking at a seminar organised by the National Centre of Diversity which will explore the Gender Pay Gap Reporting Regulations.  

Spaces are still available at these events but these are limited so please register your interest with jenny.rennocks@clarionsolicitors.com

And finally there is also still time for you to enter a team to take part in the Clarion Leeds 10k Corporate Challenge on Sunday 10th July. We are delighted to have over 500 corporate runners signed up to take part with many more in the process of signing up. It’s the perfect opportunity for team building and boosting morale whilst supporting a very worthy cause.To receive more information on the Challenge and to learn how to enter a team please email jenny.rennocks@clarionsolicitors.com.

 

News about the National Minimum Wage

Last month we had the introduction of the National Living Wage, and now we are able to report on the new rates that will apply to the National Minimum Wage from 1 October 2016. The increases will be:

Age            Current rate         From 1 October 2016

21 years+      £ 6.70                   £ 6.95
18-20 years   £ 5.30                   £ 5.55
16-17 years   £ 3.87                   £ 4.00
Apprentices   £ 3.30                   £ 3.40

There is no indication that the National Living Wage, introduced at £7.20 per hour for those aged 25 years and above, will be increased in October.

It is also important to note that the government has announced that the next review of the National Minimum and Living Wage will move to April each year, rather than being in October. The next review, therefore, will be in April 2017.

 

Bribery Act 2010 conviction: £2.5m Penalty Imposed

There has been the first conviction of a company under the ‘corporate offence’, which is one of the offences in the Bribery Act 2010. To understand this further, let us look at the four offences under the Bribery Act 2010:

The corporate offence occurs when an organisation does not stop someone who is operating on its behalf from being bribed or accepting a bribe. An organisation can defend such a situation if it can show that it had adequate procedures in place to stop the bribery offences occurring.

‘Adequate’ procedures should:

The Sweett Group was convicted of a breach of the corporate offence and was fined £2.5m. A Middle East subsidiary of the company offered bribes to secure a contract, and the company was not able to defend this because the procedures it had in place were inadequate.

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Using nicknames in the workplace

A case has recently been reported which raises some interesting points about the use of nicknames in the workplace. In Dove v Brown and Newirth Ltd [2016] Dove was a long serving employee who was dismissed at the age of 60 years when  a large amount of his work was reallocated to the head office. He claimed age discrimination.

To support his claim, Dove pointed to two key issues. Firstly, he was referred to by the nickname of ‘Gramps’ by his colleagues. His boss, who was much younger than him, had originally given him the nickname. Secondly, some customers had commented that he was rather ‘long in the tooth’ and that they did not like his ‘traditional approaches’.

His claim of age discrimination was successful, and he was awarded just over £63,000. The Employment Tribunal ruled that the employer had been unacceptably swayed by the opinion of customers, and the nickname of ‘Gramps’ indicated an ageist attitude in the organisation.

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Not knowing that an employee is disabled

An interesting ruling, that is important to note, is Gallop v Newport City Council [2016]. In this case, the employee had suffered from a number of episodes of stress and had been absent from work. The employee had been referred to occupational health on a number of occasions, who gave the opinion that the employee was certainly suffering from stress but was not disabled as defined in the Equality Act 2010.

The employee returned to work, and following allegations of bullying and due to his absence, he was dismissed. He claimed unfair dismissal and disability discrimination. The employer argued that it could not have discriminated on the grounds of disability because it did not know that he was disabled. Although it turned out that he was disabled, the employer had been advised that there was no disability and had operated on that basis.

Although the Employment Tribunal and the Employment Appeal Tribunal found in favour of the employer, the Court of Appeal disagreed. It ruled that, to be required to answer an allegation of disability discrimination, the employer had to have actual or constructive knowledge that the employee was disabled. This means that, if the employer knew that the employee had a physical or mental impairment that was having a substantial and long-term adverse effect on the ability to carry out normal day to day activities it did not matter if the employer knew whether or not this amounted to a disability.

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What is a protected disclosure?

An individual makes a protected disclosure, also referred to as whistleblowing, if they are raising an issue that they believe to be true and that is in the ‘public interest’. To be protected against a detriment, the disclosure must be made to the employer or to an appropriate regulatory body.

The question of ‘public interest’ has raised some debate in recent times, and the case ofMorgan v Royal Mencap Society [2016] adds to this debate.

In this case, the employee made a disclosure that she was working in cramped working conditions, as were other employees, and that this could damage her health and safety. She claimed that this was a protected disclosure, and that she had suffered a detriment for raising the complaints, which included being put on an improvement plan.

The employer argued that this was not a protected disclosure, because it was not in the public interest. The Employment Appeal Tribunal disagreed. The matter was one that was in the interest of other employees, and hence it could be argued that they, or other members of the public, might be interested in it and hence it was a protected disclosure.

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Setting up an information and consultation process

The Information and Consultation of Employees Regulations 2004 require an employer to set up some group or body to consult with employees and to give them information, if at least 10% of the workforce request this. This only applies to organisations with at least 50 employees. This does not apply if the organisation already has a pre-existing consultation agreement in place. The pre-existing arrangement must cover the employees who are making the request, as was shown in the case of University of London v Morrissey [2016].

The University already had consultation arrangements in place with two trade unions. However, these arrangements only covered around 25% of the workforce, because a significant number of the employees were not in a trade union. A request was received to set up a consultation body. In response, the University asked for two more representatives from the two trade unions. However, that was not meeting the requirements of the Information and Consultation of Employees Regulations 2004. All that this did was extend the representation that 25% of the workforce already enjoyed- it did not meet the needs of the 75% of the workforce who were not a member of the trade union.

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A reasonable restrictive covenant

We always recommend that you consider whether it is appropriate to include a restrictive covenant in an employee’s contract of employment. Without such a covenant you do not have a robust way of stopping your employee from engaging in activities that might damage your business in the months immediately after the employee leaves your organisation. However, the covenant must be reasonable if it is to be enforced.

In Bartholomews Agri Food Ltd v Thornton [2016] an employee had left the organisation and made contact with customers of his former employer, which was in breach of the restrictive covenant in his contract of employment. The employer sought to enforce the covenant, and to do so it had to show that the covenant was no wider than necessary to protect the business.

The employer was unsuccessful. The covenant restricted the employee from contacting all customers of the employer and associated companies, regardless of whether the employee had carried out any work for them or had any knowledge of them. This was too wide to be enforceable.

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Enforce a restrictive covenant

Leading on from the last case, it is reassuring to note that a restrictive covenant which is reasonable can be enforced. In M&E Global (Staffing) Solutions Ltd and another v Tudge and others [2016] the employees had a restrictive covenant in their contract of employment which meant that they could not work for a direct competitor for six months after their employment ended or ‘poach’ any employees of their former employer during this time. Two employees left the company and it was believed that they were working for a competitor, they were using confidential information that they had gained from their former employer, and they were ‘poaching’ employees. Their former employer successfully sought an interim injunction to prevent them from doing so.

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Ensure you give clear reasons for dismissal

The recent case of Cousins v The Forum@Greenwich [2016] has highlighted the importance of managing the grievance and dismissal process separately.  In this case, the employee had experienced difficulties in her relationship with the Chair of the Trustees from the start of her employment. She raised a grievance which included an allegation of race discrimination. This was addressed, with diversity training being recommended for the Chair. However, the Chair also raised concerns about the employee’s performance. After the Chair stepped down from the post, the concerns about the employee’s performance persisted and eventually she was dismissed on the grounds of capability.

The employee unsuccessfully argued that she had suffered discrimination and victimisation. The employer was able to show that the issues relating to race discrimination had been addressed and resolved. The capability issues had been managed and addressed separately, and it could be shown that they were not related to the allegations of discrimination in any way.

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