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March Employment Law Bulletin

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Not long now before we start to see some effects of the government’s shake up of employment tribunals and claims. The most publicised change is the increase in the unfair dismissal qualifying period from one to two years. This will apply from 6 April 2012, but only to people who started working for you on or after that date.

Look out for some other reforms which affect claims presented to the tribunal on or after 6 April 2012:


Court of Appeal on Suspension and Police - Crawford v Suffolk Mental Health Partnership NHS Trust

The two claimants, hospital nurses, were reported to have tied an aggressive dementia patient to a chair in an attempt to restrain him. They denied the allegation but, after investigation, were dismissed for gross misconduct.

The unfair dismissal case went all the way to the Court of Appeal where the claimants succeeded. But the really interesting part of this case is the Court of Appeal’s footnote to that judgment. Suspension of an employee should not be exercised lightly, the Court said. It warned against ‘knee jerk’ reactions in the face of alleged misconduct because of the psychological effect removal from the workforce can have on individuals.

Suspension wasn’t an unconsidered action in this case, the Court added, but it was difficult to believe that the relevant body could have thought that there was any real risk of treatment of this kind being repeated. The Court also suggested that close attention should be paid to unblemished service when assessing future risk (which perhaps it was in this case).

The second part of the footnote is in relation to reporting employees to the police, a decision which in this case the Court said it found astonishing. Being under a cloud of possible criminal proceedings is a very heavy burden for employees to face, it added.

The facts of this case were specific, relating to the consistency of treatment of patients with aggressive tendencies. But it’s useful to bear in mind the themes of the Court of Appeal’s comments and, in particular, its view on the seriousness with which suspension and police involvement should be taken.


It’s Okay to Select the ‘Cheapest’ in Redundancy - HM Land Registry v Benson

HM Land Registry (HMLR) was looking to reduce its workforce. It set aside £12m as a budget to cover this. But when more volunteers came forward than anticipated, HMLR embarked on a selection process. The criteria it used were aimed at making the maximum number of people redundant, within the £12m budget.

Ms Benson and other colleagues who were aged between 50 and 54, and who would have been entitled to early retirement on an unreduced pension, claimed indirect age discrimination. They said that their group was at a disadvantage because it would cost more to accept their applications than those in other age groups.

The tribunal decided that HMLR’s strategy did place Ms Benson and others at a disadvantage. Was it justified? The tribunal said not. While HMLR’s aims were legitimate, the means of achieving them was not proportionate. The “cheapness” criterion was the only practicable one in the circumstances but HMLR could have afforded the extra £19.7m it would have cost to accept all applications.

The Employment Appeal Tribunal upheld HMLR’s appeal. HMLR had a legitimate aim of reducing costs within its £12m budget. The selection criterion it had chosen was a proportionate means of achieving that legitimate aim. It wasn’t relevant that HMLR could have afforded to pay the additional £19.7m.

So not all measures which have a discriminatory effect are necessarily unlawful. But be cautious. It won’t always be possible to justify discriminatory criteria.


Evidence of Solicitation Needed - Towry v Bennett

When Mr Bennett and six colleagues left the financial advisory business Towry to join a competitor, they were sued for breach of covenant. Towry alleged that they had broken the non-solicitation and confidentiality clauses of their contracts and had unlawfully conspired with their new employer by planning to poach Towry’s clients.

The High Court dismissed Towry’s claims, ordering it to pay costs. While the non-solicitation and confidentiality clauses were enforceable, the judge found that solicitation hadn’t actually been proved. Towry had assumed that solicitation must have happened because of the level of business transferred to the new employer. But there had to be an element of directly or indirectly requesting, persuading or encouraging clients to move.

Here it was understandable that clients wanted to stick with their personal financial advisor. The burden of proving otherwise – that the clients hadn’t exercised free will - was on the employer. Solicitation couldn’t simply be inferred from the “tidal wave” of clients switching firms.

Time for a review of your contracts? Towry’s didn’t contain non-dealing clauses, which are stronger than non-solicitation clauses. Had they done, the company would have been better protected or would at least have had a better shot at winning in court.


Employee Challenges Single Person Pool - Capita Hartshead v Byard

Number of redundancies contemplated: one. Number of employees in the selection pool: one.

It’s always a tricky situation. Historically, it’s been difficult for employees to challenge the employer’s decision not to place others in the pool where the employer has genuinely addressed its mind to the problem. But in this case, the employee successfully argued that the pool into which she alone was placed should have included others.

Ms Byard was one of four actuaries employed by Capita. When the Scheme Actuary work (mostly carried out by Ms Byard) was lost, Capita decided that it would declare her role redundant, rather than pool her job with the remaining actuaries. Capita said that because of the personal nature of an actuary’s work, clients would not want to move to a new actuary. Ms Byard was made redundant and brought an unfair dismissal claim.

The decision not to pool Ms Byard with the other actuaries was unfair, said the tribunal. There were other employees who could have been included in the pool, and being in a pool of one while at risk of redundancy devalued the redundancy consultation process.

The Employment Appeal Tribunal upheld this decision. While it’s for the employer to determine the pool, the tribunal was entitled to hold that the employer’s decision here was flawed.

So some hope then for employees in Ms Byard’s situation. For employers, a reminder to tread carefully.


Remarks at Disciplinary Come Back to Bite - Nelson v Claphams Solicitors

Ms Nelson was a legal secretary. The day after she resigned from Claphams she sent an email to her sister which ended with the words “told everyone about what happened they were all appalled. Telling everyone in Clarkston [where the firm is based] that I meet and they are all disgusted….she’ll be sorry…..”

Almost a week after she had resigned, Claphams allowed Ms Nelson to retract her resignation. A month later, the hard copy email was discovered at a photocopier in the office and Ms Nelson was invited to a meeting. She wasn’t given prior notice of the allegations or told about the potential outcome.

During the meeting Ms Nelson implied that someone had taken the email from her handbag. She had written it in a fit of rage, she said, but didn’t apologise or retract her comments.

The firm concluded that Ms Nelson had been deliberately dishonest about the email having been in her bag. There was a breakdown of trust and she was dismissed.

The procedural failures meant that Ms Nelson won her unfair dismissal claim at tribunal. But the tribunal reduced her compensation by 80%. She appealed, arguing that comments made during a disciplinary process did not justify this reduction.

The Employment Appeal Tribunal upheld the tribunal’s decision. The comments could be taken into account when assessing contributory fault and the tribunal was entitled to reach its conclusion.


Heavy Penalty for Employment Status Mix-up - Weight Watchers v HMRC

Weight Watchers (WW) appealed against HMRC’s decision to classify the company’s leaders - people who run WW meetings around the country - as employees.

Leaders’ contracts stated that they were independent contractors who had to pay their own tax and national insurance contributions. They had to personally conduct their own meetings at times, dates and places specifically approved by WW, or to find a suitably qualified replacement who would then be paid directly by WW.

WW lost its appeal. Some of the key considerations which swung this decision in favour of leaders having employee status were:

Why was this all such a big deal for the company? It’s now got a tax bill of more than £23m, going back nine years. A hefty price to pay.

And Finally....

Day two. 10.30am. Terry is in the witness box.

News this month that we could be another step closer to legal cases being televised. The subject was raised in a Westminster Hall debate with conservative MP John Whittingdale arguing for this sort of broadcasting. It could increase understanding and serve justice well, he said.

Relax. The viewing public won’t be feasting on footage of your unfair dismissal cross-examination. It looks as though television cameras would only be allowed into the Court of Appeal and only then to film the judgments. But if successful, it could lead to cameras in the criminal courts too.

Arguments will continue to be thrashed out about how more general courtroom broadcasting could engender disrespect for the court system, encourage witnesses and lawyers to show off, or lead to jurors or witnesses being tampered with. Just how will this one pan out?

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