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September Employment Law Newsletter


We take a month’s break from newsletter production and what happens? Cases continue to pour through the tribunals, making our job of choosing a handful to report in this issue pretty tricky.

But the figures tell a tale of far fewer claims this year than last. The annual employment tribunal statistics say that in 2011/2012 there were just over 186,000, a drop of 15% from the previous year. This leaves open the question of whether charging fees for ET1s and hearings, raising the unfair dismissal qualifying period, and simplifying settlement agreements will bring the figures down even further next year.

We’ll see you here in 12 months’ time for the answer.

Subjectivity in Redundancy - Nicholls v Rockwell Automation Ltd

Mr Nicholls was made redundant. The process had involved criteria scored by one manager, checked by another who managed the employees on a day-to-day basis. Mr Nicholls had the lowest score.

At his unfair dismissal hearing the tribunal found that the redundancy was genuine and that the employer’s procedure had been reasonable and fair. But the tribunal went on to conclude that the dismissal was unfair because Mr Nicholls’ scores during the selection process were lower than they should have been. Some of the scores – ‘flexibility’, for example - had not been capable of objective assessment, the tribunal said. Compensation was reduced by one third to reflect the chance that even if Mr Nicholls had been properly scored he would still have been dismissed.

On appeal, it was argued that the tribunal had substituted its view of Mr Nicholls’ capabilities for the company’s. The Employment Appeal Tribunal agreed, overturning the unfair dismissal finding. The tribunal had been wrong to carry out a detailed critique of the scoring in determining whether or not it was reasonable for the company to have dismissed. It was also wrong for the tribunal to have substituted its view for the employer’s.

This case is a reminder that subjective criteria can be acceptable, despite the misconception in many companies that subjective criteria can never be used. It’s all about acting reasonably and being able to justify the scores given to employees.

Underpaid Wages and Fundamental Breach - Roberts v The Governing Body of Whitecross School

Mr Roberts was a teacher. Allegations were made against him at work and he went on sick leave with stress and depression. A few months into this leave, the school decided to reduce his contractual sick pay by 50%, believing that full sick pay applied only to physical, and not mental, injuries.

Mr Roberts brought a claim for deduction of pay. He won and the tribunal awarded him the additional 50%. Importantly, the Employment Judge did not make a finding as to whether or not the employer had had an honest belief that only half pay had been due.

In the meantime, Mr Roberts had resigned because of the pay issue and brought a constructive dismissal claim before a second tribunal heard. He lost. The tribunal held that the breach of contract was not fundamental because the school had honestly, although mistakenly, believed that only 50% sick pay was due. No fundamental breach meant no constructive dismissal.

Mr Roberts appealed to the Employment Appeal Tribunal (EAT) and won. The breach was fundamental, the EAT said. The second tribunal had erroneously relied on the first tribunal’s judgment which hadn’t made a finding on the honest belief point.

The EAT held that this wasn’t a case where there had been an error or mistake; in those cases it’s possible for the breach not to be fundamental. Here the school had a settled intention to reduce sick pay by half.

A fresh tribunal will now decide whether Mr Roberts resigned because of the school’s fundamental breach and whether or not he waived that breach.

Preparing to Compete isn’t Gross Misconduct - Khan and Hemming v Landsker Child Care Ltd

Mr Khan and Mr Hemming were managers at two of the company’s care homes.

The company discovered that these employees had been preparing to set up in competition with it, using knowledge and expertise they’d picked up during their employment. They had prepared a business plan and the costings used were very similar to those relevant to the company. The document also indicated that the two had looked into acquiring properties for their new business and this, the employer believed, showed the seriousness of their intentions.

They were suspended and went on to be dismissed. Planning to set up in competition and using the employer’s resources in doing so was gross misconduct, the company said. The claimants, who had denied firm intentions to compete, brought unfair dismissal claims.

The tribunal held that it was reasonable of the company to have concluded that the claimants were guilty of gross misconduct. Dismissal was within the band of reasonable responses.

The Employment Tribunal Appeal overturned that decision, making it clear that not every case of preparing to compete is necessarily gross misconduct. It’s not gross misconduct merely to make plans to set up in competition. Nor is every piece of information the employer owns confidential information within its legal meaning. Here, the tribunal had failed to address two questions:

The case is now back with the same tribunal to reconsider the claim.

Compensation for Annual Leave - NHS Leeds v Larner

Mrs Larner was on sick leave for the whole of the 2009/2010 pay year. That meant that she couldn’t take her holiday leave entitlement over that period. She was still on sick leave when her employer terminated her employment in the following leave year.

Was the employer obliged to pay her compensation for the holiday leave she had missed out on because she had been sick? The employer argued that it wasn’t; she hadn’t asked to take the holiday leave or to carry it over.

The tribunal and Employment Appeal Tribunal found against the employer. An employee who is on sick leave does not have the opportunity to rest and so has the right to have their annual leave carried over to the next year, irrespective of whether or not the employee asks for that to happen.

The employer appealed, arguing that as Mrs Larner hadn’t made a formal request to take her leave or to carry it over, her right to that annual leave had extinguished on dismissal.

The Court of Appeal dismissed the employer’s appeal. It held that a worker who isn’t able to take annual leave because they are on sick leave must be allowed to take it later, in the next leave year if necessary. The worker doesn’t have to request to take this leave or to carry it forward.

The upshot was that when Mrs Larner’s employment ended she was entitled to compensation for the paid annual leave she hadn’t been able to take.

Remedying a Potential Breach - Assamoi v Spirit Pub Company (Services) Ltd

Mr Assamoi was a head chef who had had a rocky relationship with his immediate manager. After a complaint about slow kitchen service, three staff members including Mr Assamoi were suspended. He went on to be exonerated and brought a grievance against his manager for raising what he claimed were spurious and malicious disciplinary allegations against him.

Shortly after, Mr Assamoi was asked to sign a new standardised contract. He believed that that contract meant a demotion, fewer working hours and therefore less pay. He resigned and brought an unfair constructive dismissal claim.

The tribunal found against him; there hadn’t been a fundamental breach of contract. Mr Assamoi appealed.

The Employment Appeal Tribunal (EAT) considered whether or not an employer can remedy a repudiatory breach of contract before an employee resigns. Here the employer had taken action to prevent the situation escalating into a breach of trust and confidence between the employee and employer. That’s different from a situation where an employer is apologising in response to a fundamental breach that has already taken place; once that breach has happened, it can’t be cured.

Here, the manager’s behaviour was not serious enough to amount to a breach of trust and confidence. The employer had properly investigated the situation and had taken steps to protect Mr Assamoi.

Breakdown of Trust Not Always Sufficient - Leach v OFCOM

Mr Leach was International Policy Advisor for OFCOM. While he was going through the recruitment process for that job, but before he was appointed, he was arrested in Cambodia on suspicion of child abuse. The case was dismissed because of insufficient evidence.

Mr Leach didn’t tell OFCOM about the Cambodia situation. It only found out about it when SOCA alerted it to emails sent by Mr Leach to public bodies, complaining about the lack of support he had had from UK authorities. OFCOM issued him with a written warning for sending the emails and offered him counselling.

OFCOM was later told by the Metropolitan Police Child Abuse Investigation Command that Mr Leach posed a continuing threat or risk to children. There was press interest in the case and that was potentially damaging to OFCOM. The allegations were put to Mr Leach and he was dismissed without notice. Dismissal was for ‘some other substantial reason’ – more specifically, breakdown of trust.

Mr Leach’s unfair and wrongful dismissal claims were dismissed by both the tribunal and the Employment Appeal Tribunal. He went on to appeal to the Court of Appeal arguing that he should not have been dismissed from a job that didn’t involve children for alleged but unproven offences. He also argued that nothing he could have said at the disciplinary hearing would have made a difference to OFCOM’s reputational risk.

The Court of Appeal found against him. His dismissal was justified. Perhaps the most salient point to emerge from this decision is the Court’s commentary on employers’ use of ‘breakdown in trust and confidence’ as a reason for dismissal. It is not a convenient label to attach to any situation in which an employer feels let down by an employee, the Court of Appeal said. There needs to be a reason which is substantial and sufficient to justify dismissing.

And Finally...

It isn’t the first and won’t be the last time that football has divided opinion in the workplace. But one business in the North East is now almost £44,000 lighter after being held liable for the harassment of one of its employees who suffered ‘atrocious bullying’. The headlines were grabbed by one particular aspect: sales rep branded ‘gay’ because he didn’t like football.

Diversity training, quick.