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Employment Law Bulletin September 2016

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News round up

Although August is always a quieter holiday month there are three important developments to bring to your attention in the form of the naming and shaming companies not complying with National Minimum Wage, a consultation on termination payments and greater detail on the introduction of the apprenticeship levy as well as our essential case law update.

Find out what Senior Associate, Deborah Warren, would be doing if she wasn’t an employment lawyer in our light hearted Q&As. 

National Minimum Wage

The government has published a list of almost 200 companies which have breached the National Minimum Wage (NMW) requirements by not paying the correct amount to their employees.

In total these companies owe £465,291 between them. Those who breach the National Living Wage (NLW) will also start being added to this list soon.

In most cases, the employer is not making an active decision to avoid paying the NMW. Most employers make errors in calculating the amount of pay (maybe due to the employee earning a variable amount or by misunderstanding what is defined as working time).

If you have any doubt about the correct calculation of the NMW or NLW please contact us. It is very damaging for a company’s reputation to be on the ‘named and shamed’ list and we will help you to ensure that you are compliant with the legislation.

Termination payments

For some time there has been debate about whether tax is due on termination payments of up to £30,000. It has largely been presumed that such payments are not taxable if they are compensation for the loss of employment, but there is confusion in this area and the government has pledged to tighten it up.

Consultation has now started on proposals to be implemented from April 2018. The main proposals are:

We will keep you updated as these discussions progress.

Apprenticeship levy

We now have some more clarity about the apprenticeship levy. All companies with an annual wage bill of £3million or more will have to pay the levy at a rate of 0.5% of their wage bill from April 2017. It has now been confirmed that companies with a wage bill of less than £3m will have to pay 10% of the cost of training an apprentice, but businesses with fewer than 50 employees will not pay anything towards the cost of an apprenticeship offered to a 16-18 year old.

What is expected when making reasonable adjustments

If an employee is disabled, there is a requirement to make reasonable adjustments to assist that employee to work. A ruling from the Employment Appeal Tribunal in the case of South Staffordshire and Shropshire Healthcare NHS Foundation Trust v Billingsley [2016]contains some useful guidance about how to approach the question of a reasonable adjustment.

In this case the employee suffered from dyspraxia which had a negative impact on her ability to absorb, process and retain information meaning that she made a lot of errors. Following a review by a private consultant it was identified that some tuition and technical aids might help. This was arranged, her performance improved, but then her manager left and her performance deteriorated again. She was dismissed. She claimed unfair dismissal and disability discrimination, and the EAT agreed that the employer had not done enough to make reasonable adjustments.

The following points were made, leading to some useful guidelines:

Actions:

Be clear about the outcome of an appeal

If an employee is dismissed they can appeal against that decision. If you then decide to overturn the decision about the dismissal make it clear what that revised decision is.

In Folkestone Nursing Home Ltd v Patel [2016] the employee was dismissed because of sleeping on duty and not completing daily record sheets. He appealed, saying that he had only slept during an unpaid break, and that he had not had time to complete all the records. His appeal was successful, but the letter confirming this outcome only referred to the allegation about him sleeping during a break. It did not address the issue about the records. The employee did not accept that this had resolved all the issues, did not return to work, and claimed unfair dismissal. The employer argued that he had not been dismissed because the appeal had been successful.

The Employment Appeal Tribunal confirmed that the employee had not been dismissed, because the appeal letter had revived the contract of employment.

Actions:

No interference with investigation reports

Another case has emphasised the importance of ensuring that an investigation report is not altered, once it has been completed. In Dronsfield v University of Reading [2016] a university lecturer entered into a relationship with a student. There was a rule in place that all such relationships must be disclosed so that measures could be put in place to ensure fairness and impartiality of assessment decisions. Dronsfield did not disclose the relationship and was dismissed. An investigation was carried out, and the report contained some information that was supportive of Dronsfield. However, following interventions from the HR department and in-house legal team the report was altered and the positive comments were removed.

The Employment Appeal Tribunal has given the opinion that the alterations made to the report mean that fairness has been compromised, and the Employment Tribunal has been asked to think again about whether the dismissal can be fair.

Actions:

Is it indirect discrimination to insist employees work shifts?

It is certainly true that some jobs have to be managed on a shift pattern, because they need to provide a service outside of the traditional 9-5 pattern. Is it discriminatory to insist that an employee works shifts that might be inconvenient?

In XC Trains Ltd v CD [2016] CD worked as a train driver, and was a single mother with three children aged under 5 years. XC Trains employed 559 train drivers, and just 17 of these were women. The drivers worked 35 hours a week, on a shift pattern which included working a set number of Saturdays. CD had been allowed to work 4 days in every 8, but then asked not to work on Saturdays, and not to have very early or late shifts. This was refused, and she claimed indirect sex discrimination.

The Employment Tribunal and the Employment Appeal Tribunal agreed that there was clearly a requirement in place (i.e. to work the shift patterns) that put women at a particular disadvantage because they were more likely than men to have childcare responsibilities and hence be unable to work the shifts. The Employment Tribunal concluded that this was indirect discrimination, but the Employment Appeal Tribunal has asked them to think again. The question is whether the requirement to work the shifts is a ‘proportionate means of achieving a legitimate aim’ – in other words, can it be justified? We wait to see what they conclude.


Actions:

Take care when managing a pregnant employee

As well as ensuring that a woman is not directly penalised for being pregnant, it is also important to ensure that there is no negative treatment which could amount to a breach of contract.

In Nicholson v Hazel House Nursing Home Ltd [2016] the employee had a contract to work 18 hours a week as a Care Assistant, but usually worked longer hours than this. When she became pregnant she suffered with morning sickness and asked to move to afternoon shifts. This was agreed, but her hours were also reduced which meant that she did not meet the required income to be entitled to Statutory Maternity Pay. Her employer did not inform her of this impact.

She was then asked to attend a training event which clashed with her 20 week scan. She was told that she would be suspended until she had completed the training, so to avoid being suspended she took annual leave and started her maternity leave early. She then found out that she was not entitled to SMP. She resigned and claimed constructive dismissal.

Her claim was successful. The treatment that she had suffered amounted to a breach of contract.

Actions:

Application of ACAS Code of Practice to a dismissal when a relationship breaks down

If relationships between you and an employee have totally broken down it might be appropriate to conclude that the employee must be dismissed. However, in the case ofPhoenix House Ltd v Stockman [2016] the employee argued that the dismissal was unfair because she wanted to try to make the relationships work. The employer argued that the relationships had broken down irretrievably.

This was found to be an unfair dismissal, because a reasonable employer would not have concluded that there was no possibility of making the relationships work. However, the Employment Appeal Tribunal ruled that the ‘Acas Code of Practice: Disciplinary and Grievance Procedures’ did not apply in this case, because it was a dismissal for ‘some other substantial reason’. Therefore, it was held that there could be no uplift to the compensatory award for non-compliance with the Code.

Actions:

Another case where the Acas Code did not apply

As noted, in the last case the Acas Code of Practice: Disciplinary and Grievance Procedures was found not to apply. It was also ruled that it did not apply in the case of Holmes v Qinteq Ltd [2016]. In this case the employee was a Security Guard who was unable to continue in his role due to ill health. He was dismissed, and this was found to be unfair because the employer had not sought an up to date medical report. The employee argued that the compensatory award should be uplifted because the Acas Code of Practice: Disciplinary and Grievance Procedures had not been followed. However, the Employment Appeal Tribunal ruled that the Code did not apply.

It ruled that the Code applies when the employee has done something for which she is culpable – so primarily cases relating to conduct, but also some relating to capability.

Actions:

A thorough appeal can make a flawed dismissal fair

The case of Khan v Stripestar Ltd [2016] reminds us of the importance of ensuring that an appeal against a decision to dismiss is carried out thoroughly. Khan worked in a garage, had bought a car from a customer and used the garage to repair the car without paying for this. He was dismissed following a disciplinary hearing that lasted around 6 minutes, at which he was not able to explain himself. An appeal then took place which was thorough, and involved interviewing the Technicians working in the garage to find out what happened. The dismissal was, therefore, found to be fair.

Actions:

Q&A with Deborah Warren, Senior Associate

Your first job?

My first job was waitressing at a local gastro pub. I worked on the weekends and in the evenings while I was at school, and later returned to the same pub to work during university holidays. I really enjoyed it - the best part was speaking to all the guests.

How did you get into the career you're in?

I first studied Psychology at the University of Leeds because I wanted to become a Clinical Psychologist. However, I did some work experience during my first year at university, and I knew that the job wasn’t for me.

To check whether the legal profession suited me, I did some work experience at various law firms in Leeds and Manchester in my university holidays, which convinced me.

I completed my Psychology degree, and then moved on to study law at the College of Law in Chester, before starting at Clarion. After that, employment law was an easy choice given the mixture of contentious and non-contentious work, and the amount of people contact.

What's the best piece of advice anyone has ever given you?

In the context of public speaking ‘dress up, stand up, speak up and then shut up!’

If you weren't doing what you're doing now, what would it be?

Probably a job which has a lot of people contact. However, in an ideal world possibly a ski instructor or a dog trainer.

Favourite thing about our beloved Yorkshire?

The great mixture of amenities and countryside available on our doorstep.

Three desert island items?

A fishing net, an industrial sized bottle of suntan cream, and a guitar (I couldn’t live without some music, even if played badly).

Favourite hobbies?

Skiing, dining out with friends, and going to live music gigs.

What would you like people to remember you for?

Being friendly, approachable and always happy to help!