February Employment Law Update
February has been a mixed month in terms of good and bad news on the employment and economy front. (Let’s leave the weather out of it)…
- Official figures confirm that the UK economy grew by 0.7% in the final three months of 2013, helped by rising business investment.
- House prices rose by 0.6% in February, a 9.4% increase on the same month in 2013, Nationwide says.
Less good news
- Real earnings fall to 2002 levels. The Office for National Statistics has revealed that the weekly earnings of full-time workers in the UK fell each year, in real terms, between 2008 and 2013.
Employment law changes
In terms of employment law changes, needless to say a lot has been happening as always on both the changes in law and case law. Within this February update, I have tried to select the most relevant and interesting changes for both Employers and Employees alike to give readers and quick snapshot of what’s going on. I hope you enjoy it!
Limits on tribunal awards to increase from April 2014
Tribunal compensation limits will increase on 6 April 2014 under the Employment Rights (Increase of Limits) Order 2014.
The maximum compensatory award for unfair dismissal will rise from £74,200 to £76,574. However, since 29 July 2013 there has been an additional cap of one year’s salary on the compensatory award for unfair dismissal.
The maximum amount of a week’s pay, used to calculate redundancy payments or various awards including the basic or additional award of compensation for unfair dismissal, also rises from £450 to £464.
Acas early conciliation: operational from 6 April 2014, mandatory from 6 May 2014
Currently ACAS conciliation is optional for employers and employees involved within an employment tribunal claim. However, from 6 May 2014 Early Conciliation will be mandatory for claims presented on or after 6 May 2014.
Transitional provisions cover the period between 6 April and 5 May 2014 during which Early Conciliation will be available to prospective claimants.
The Early Conciliation Rules of Procedure are set out in the Schedule to the Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations (SI 2014/254) and will take effect from 6 April 2014.
Changes to the draft Rules provide that, as an alternative to submitting a completed Early Conciliation form online or by post, prospective claimants will be able to telephone Acas who will fill in the form. It will not be possible to deliver an Early Conciliation form by hand. The mandatory required information, omission of which risks rejection of the EC form, is now limited to the name and address of both the prospective claimant and respondent. The provisions in the draft Rules regarding the consequences of settlement have been removed.
New Acas guidance on TUPE 2014 changes
Following the recent changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE), Acas has published a short guide, 2014 changes to TUPE, to assist employers who are dealing with TUPE transfers. The guide summarises the new rules which came into force on 31 January 2014 and provides illustrative examples of how some of the changes will apply.
Acas is also in the process of developing new guidance on TUPE generally, which will be available in the coming months.
For further details see
Source: Transfer of undertakings (TUPE), Acas, 31 January 2014.
Tribunals: financial penalties for losing employers
On 11 February 2014. New Paragraphs 3(e) and (h) of the Order bring section 16 of the Enterprise and Regulatory Reform Act 2013 into force on 6 April 2014.
Section 16 inserts a new section 12A into the Employment Tribunals Act 1996 to give tribunals the power to order that a losing employer pay a financial penalty in specified circumstances. This will apply in cases presented on or after 6 April 2014.
Employment law cases
Whistleblowing (in snowy conditions!)
The Employment Appeal Tribunal has upheld a tribunal decision that three e-mails raising concerns about the dangers of driving in snowy conditions amounted to a qualifying disclosure for the purposes of the whistleblowing provisions of the Employment Rights Act 1996. (Norbrook Laboratories (GB) Ltd v Shaw UKEAT/0150/13.)
The Employment Appeal Tribunal held that although each e-mail was not a qualifying disclosure on its own, the three e-mails taken together amounted to such a disclosure. It did not matter that the last e-mail did not did not have the same recipient as the earlier two because the earlier communications were “embedded” in the later communication.
The Employment Appeal Tribunal held that the e-mails communicated information about danger to the health and safety of individuals within section 43B(1)(d) of the Employment Rights Act 1996 and were not simply an expression of an opinion.
What are the implications of this case ?
This case highlights the risk of not taking the concerns of an employee seriously enough, particularly when they raise issues which could amount to whistleblowing. To avoid whistleblowing claims, employers should ensure they have a clearly defined policy and procedure for dealing with employee’s who “blow the whistle” and ensure that they don’t suffer any detriment or exclusion for doing so.
Redundancy and collective consultation – “the Woolies Case”
When Woolworths became insolvent and went into administration, all of the trade union members who lost their jobs claimed 90 days gross pay on the basis that they argued that Woolies had not carried out the required collective consultation procedures before they were dismissed.
In the tribunal, those staff working in shops where 20 or more employees were employed succeeded but those staff working in shops where less than 20 employees were employed failed in their claims. This was because the tribunal decided that there has not been a proposal to dismiss as redundant 20 or more employees “at one establishment”, namely each shop.
The unsuccessful staff appealed to the Employment Appeal Tribunal, which disagreed with the previous tribunal’s decision on the basis that it decided that the legislation regarding collective redundancies applied whenever 20 redundancies or more dismissals within 90 days takes place anywhere is the employer’s business, even if they are all at different locations.
Because of another case in Northern Ireland which was linked to these issues, the government (in the form of the Secretary of State) appealed against the judgement of the EAT and stayed the case pending this.
The Court of Appeal then decided to refer the case to the European Court of Justice.
As with many areas of employment law whether or not the duty to collectively consult with staff about redundancies where more than 20 employees are at risk has remained a grey area. The Woolies case has highlighted this and will hopefully lead to a definitive answer which will avoid expensive claims for 90 days gross pay per employee against employer’s who fail to follow the correct collective redundancy consultation procedures. Watch this space!
Restrictive Covenants – do they work ?
In the case of East England Schools CIC(trading as 4myschools) v Palmer and another  EWHC 4138 (QB), the High Court has held that the restrictive covenants in the employment contract of a recruitment consultant were enforceable.
The restrictive covenants included a 6 month non-solicitation and non-dealing restrictive covenant which prevented the employee from soliciting or dealing with candidates or schools with whom she has dealt with in the 12 months prior to the termination of her employment, for a period of 6 months after termination.
This was because they decided that the employer, which was an educational recruitment consultancy has a legitimate interest to protect, namely the connections which the employee had made whilst employed by them. This was despite the fact that recruitment information was widely available on social media.
The employer was awarded £7040 in damages.
This case will give encouragement to employers seeking to reply upon the restrictive covenants within their employment contracts to prevent former employees from damaging their business. However, whether or not any other restrictive covenant clauses will be enforceable will depend upon all the circumstances and can only ultimately be determinable by a court.
A recent Court of Appeal case (Hazel and anor v Manchester College) has confirmed a previous employment tribunal’s decision that two employees were unfairly dismissed when they refused to accept a pay cut as part of a “harmonisation process” following a TUPE transfer. The court held that although the employees were dismissed for an ETO reason (economic technical or organisational reason) connected with the transfer; it was not one that entailed “changes in the workforce” meaning that the dismissals were automatically unfair under Reg 7 of TUPE.
The Court endorsed the employment tribunal’s decision to order the re-engagement on the employee’s previous salaries.
Employers’ should take care when considering making any changes to the terms and conditions of employment of any employee’s following a TUPE transfer as it could lead to successful tribunal claims against them. Following this case, harmonisation of terms or process will not qualify as an ETO exemption, so employers beware.
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