The government has passed two major pieces of legislation, the Growth and Infrastructure Act 2013 and the Enterprise and Regulatory Reform Act 2013, each of which have considerable impact on employers.
The changes are expected to come into force, at various intervals, over the next twelve months. They include:-
- introducing compulsory conciliation via Acas before an employee can start an employment tribunal claim. The parties cannot be forced to participate in the conciliation, but unless the employee has contacted Acas with the details of their claim to consider whether pre-claim settlement is an option, they won’t be allowed to bring the claim.
- introducing fees to start an employment tribunal claim. For all but the smallest claims, it will cost £250 to start the claim, with a further £950 which is likely to be payable by the employee when a hearing date is set. Beware – any employer who loses will probably be ordered to refund those fees as well as pay compensation.
- penalties of up to £5,000 for employers who are found to have breached employment rights, where there are aggravating factors (halved if paid within 21 days).
- creating a new category of worker, known as ‘employee shareholders’. In exchange for giving at least £2,000-worth of shares to the employee, a company can require prospective employees to give up some employment rights (including the right to claim most types of unfair dismissal, and the right to a redundancy payment). With various limitations, existing employees can also be asked to become employee shareholders.
- bringing down the cap on the compensatory award for unfair dismissal – either limiting such awards to one year’s salary for the employee, or the existing cap of £74,200. This is likely to be reviewed again in the future.
- various changes to whistleblowing legislation, in general making it harder for employees to claim, but removing the rule that the whistleblower must make their disclosure in good faith.
We’ll cover these in more detail in forthcoming bulletins, as and when they come into force.
Watch out for those Long Notice Periods
Hennigh Berg v Blackburn Rovers Football Club
Football players and company directors are notorious for having long notice periods. When the new manager of Blackburn Rovers accepted his new job, in November 2012, his contract said he would be employed until June 2015 – nearly three years. It also said that if he was dismissed earlier, he would be paid his salary until June 2015.
Less than two months later, he was dismissed. He sued for the rest of his salary, a measly £2.25 million. Blackburn Rovers argued that he was not entitled to the salary as a fixed sum, and he had to give credit for anything else he earned between 2012 and 2015. The High Court said that the contract was plain – the club had agreed to pay any salary which would have fallen due, and Mr Berg was awarded £2.25m for about six weeks work.
The lesson? Make sure your termination clauses are well drafted. It is rarely advantageous to have long notice periods in longer fixed term contracts; standard notice periods are almost always better.
Accept v Consiliul Naţional pentru Combaterea Discriminarii
Another case, another football club (spot the trend?). A prominent figure in Steaua football club in Romania said that he would see the club closed down before it accepted a gay football player on the team.
He didn’t have any direct authority over recruitment or other matters relating to the club, but he was closely associated with its management. The Court of Justice of the European Union (previously called the ECJ), found that the individual's comments were enough to give rise to a presumption that the club’s refusal to appoint a gay player was because of his sexual orientation. The player was therefore guaranteed to win a discrimination claim unless the club could prove a credible (and non-discriminatory) reason for not taking him on.
Remember that public statements made by senior people in your organisation, or those closely associated with it, can have far-reaching consequences. In this case, a throwaway comment by a manager meant that the club became vulnerable to discrimination claims.
You say Potato, I say Discrimination
Durrani v London Borough of Ealing
Discrimination can mean different things. To a HR professional, or a lawyer, it normally means less favourable treatment on grounds of a protected characteristic. To an employee, it can be a catch-all phrase covering any kind of treatment they think is unfair. “You’re discriminating against me”, from a disaffected employee, might be a formal allegation of discrimination – but it might not be.
So when an employee sent in a grievance complaining of bullying and harassment, and mentioning ‘discrimination’ (which was later clarified as discrimination in the sense of being used as a scapegoat but not on grounds of race), this was not regarded by the Employment Appeal Tribunal as a proper allegation of discrimination within the meaning of equality law. Therefore it could not form the basis of a victimisation claim when the employee was dismissed two weeks later.
Post Employment Victimisation Unlawful - or is it?
Onu v Akwiwu
The Employment Appeal Tribunal (EAT) has decided that the Equality Act 2010 covers victimisation that happens after employment has ended. Except it had already recently decided that the Equality Act 2010 doesn't cover victimisation that happens after employment has ended.
It had been the position that employees were only protected from victimisation during the course of employment. Then along came Ms Onu’s case, turning the tables. So now things are less certain, and it looks as though the Court of Appeal will decide if this latest decision that post-employment victimisation is covered too is the right approach.
Ms Onu was a migrant domestic worker who brought various tribunal claims against her employer. One of these was for race victimisation that she said had taken place a few months after her employment had ended (the employer was alleged to have telephoned Ms Onu’s sister making threats that stemmed from the tribunal claims Ms Onu had brought).
The EAT said it would be wrong if Ms Onu was not protected by equality law. But this conflicted with a previous decision of the EAT just two months earlier, where a different judge decided that equality law did not cover victimisation that took place after employment had ended. So the law is unclear and everyone is going off to the Court of Appeal in the hope of clarity.
Our advice? It’s simple really: don’t treat employees or former employees badly (whether they’ve brought a claim against you or not).
SOSR and the Acas Code
Lund v St Edmunds School
Employers should never be too far away from their copy of the Acas Code of Practice on Disciplinary and Grievance Procedures.
Apply the Code whenever there’s a disciplinary or grievance issue at work, and even in some situations which the Code isn’t expressly said to cover – “some other substantial reason” dismissals, for example. That’s the message from the Employment Appeal Tribunal (EAT) which has considered the Code’s wider application. It’s important, because if an employer fails to comply with the Acas Code, then compensation can be increased by up to 25%.
The case involved Mr Lund who was dismissed after the school he worked in lost confidence in him. He’d had problems using computer equipment and was said to have alienated his colleagues and affected morale. A tribunal found that his dismissal was for “some other substantial reason”, but it was procedurally unfair because Mr Lund hadn’t been warned that he might be dismissed, nor had he had a chance to appeal. It was also substantively unfair because the school hadn’t properly addressed the problems Mr Lund was having with the computer system.
Questions for the EAT were: did the Acas Code apply to a “some other substantial reason” dismissal, and was the tribunal right not to increase Mr Lund’s compensation to reflect the school’s breach of it? The answers were yes, and no.
Even though Mr Lund wasn’t dismissed for conduct - which would clearly have required compliance with the Code - it was his conduct which had led to the school contemplating a (“some other substantial reason”) dismissal, and so the Code should have been followed. Because the school had failed to do this, Mr Lund’s compensation should have been increased.
Dismissal sprung on Difficult Manager
JJ Food Service v Kefil
No management style is identical, but there are certainly types.
Mr Kefil was said to have an “over-authoritarian manner”. Members of staff complained about his behaviour and he was eventually called to a disciplinary hearing and dismissed.
Mr Kefil won his unfair dismissal case, primarily because he hadn’t been warned that he might be dismissed. He had received an informal warning but, crucially, he had not been told what might happen if things didn’t improve. Coupled with the fact that Mr Kefil had not received any management training that, said the Employment Appeal Tribunal, justified the tribunal’s finding of unfair dismissal.
The case is a reminder that all employees, whoever they are and whatever their style, have a right to know where they stand when it comes to disciplinary issues. It’s no good assuming that a person can read between the lines, or even that they can see their own faults. Clarity - and training - is everything.
It’s rare that any of us, whatever we do for a living, will happily concede that the actors performing our jobs on TV are doing exactly what we do, in the way we do it.
We were amused to see lawyer-speak touched on in the press a few weeks ago as part of some coverage of the Bar Council’s guidance for people who want to represent themselves in court. Alongside a photo of the 90’s TV legal icon, Ally McBeal, were the words:
“You might be tempted to speak like lawyers on TV. Resist the temptation. Lawyers do not really speak like that. Some bad lawyers do, but judges hate it.”
We couldn’t concur more. As it were.