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April Employment Law Update

April Employment Law Update

April is normally a very busy time for employment lawyers, as you will see from the following changes to employment law which came into effect on 6 April 2014, together with the cases below. April was also a busy month for me and included successfully representing a commercial client at a Judicial Mediation in which an agreed settlement was negotiated which saved my client over £30,000 in legal costs alone.  Sometimes it is good to talk!

Legal changes

6 April 2014

  • Abolition of discrimination questionnaires.

What does that mean now ? Acas has published good practice guidance on how employers should deal with questions regarding discrimination in the workplace after statutory discrimination questionnaires are abolished.

  • Mandatory pre-claim Acas conciliation.

There is now a four-step procedure for early conciliation (EC) through Acas before an employment tribunal claim can be commenced. Transitional provisions cover the period between 6 April and 5 May 2014 during which EC will be available to prospective claimants. EC will be mandatory for claims presented on or after 6 May 2014.

  • Increase to employment tribunal fees.

The Courts and Tribunals Fees (Miscellaneous Amendments) Order 2014 (SI 2014/590) will re-categorise a number of claims as “Type B” claims, which attract a higher fee. This is to remedy what the government has identified as a mistake in the original legislation which categorised certain claims incorrectly as “Type A”.

  • Financial penalties for losing employers.

Tribunals now have 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.

  • Abolition of the Percentage Threshold Scheme.

The Percentage Threshold Scheme enables employers to reclaim Statutory Sick Pay (SSP) from HMRC, where the total SSP paid in a month exceeds 13% of their Class 1 National Insurance contributions for that month. A draft Order abolishing the scheme, as part of the government’s review of health at work, was laid before Parliament and approved by the House of Lords on 12 February 2014. It is expected to take effect on 6 April 2014.

  • Abolition of SSP record-keeping obligations.

The Statutory Sick Pay (Maintenance of Records) (Revocation) Regulations 2014 (SI 2014/55) will abolish the obligation on employers to keep specified records of dates of sickness and SSP payments

  • Maximum compensatory award increase.

The maximum compensatory award for unfair dismissals where the effective date of termination falls on or after 6 April 2014 will be increased to £76,574 (or 52 weeks’ gross pay, if lower).

  • Increases to rates and limits.

Several statutory rates and payments will increase on 6 April 2014, including statutory sick pay, maternity pay, paternity pay, adoption pay, and the cap on “a week’s pay”.

  • Increased penalty for employing illegal workers.

The maximum civil penalty which may be payable under section 15(2) of the Immigration, Asylum and Nationality Act 2006 will increase from £10,00 to £20,000 where an employer is found to have employed adults who are subject to immigration control but do not have the right to work in the UK.

  • Changes to TUPE: post-transfer pension contributions.

The Occupational Pension Schemes (Miscellaneous Amendments) Regulations 2014 come into force on 6 April 2014. From that date, transferee employers will have the option to match the transferor’s level of employee pension contributions into a defined contribution scheme, even if they are less than the current minimum of 6%. This is to avoid the situation where employees could be in a more favourable position than they would have been if they had not transferred.

  • MPs added to list of “prescribed persons”.

The Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2014 amends the schedule to the Public Interest Disclosure (Prescribed Persons) Order 1999 to make members of the House of Commons (MPs) “prescribed persons” in England, Scotland and Wales to whom a whistleblower may, under certain circumstances, make a protected disclosure.

 

Employment Law cases round up

TUPE: employees transferred to parent company following share purchase by subsidiary

Normally a share purchase will not be a TUPE transfer, however The Employment Appeal Tribunal (EAT) has upheld a tribunal decision that employees had transferred under TUPE to a parent company following a share purchase by one of its subsidiaries.

The EAT decided that the tribunal had been entitled to find, on the facts, that the share sale triggered a co-extensive but separate transfer to the parent company. In this respect the tribunal had taken account of a statement of intent made by the parent company that employees would be moving over to it, the arrival of its integration team, and the fact that day-to-day control of the transferor’s business activities had passed to the parent company.

The EAT also upheld the tribunal’s finding that affected employees had been entitled to bring claims for failure to inform and consult in their own names. While there had been an employee representative committee, on the facts, the mandate of representatives who had served on the committee had expired some time before the share sale. The ad hoc committees that had continued thereafter had not been mandated by the affected employees to carry out TUPE consultation.

Not sure if TUPE applies ? Take specialist legal advice.

12-month non-competition restriction enforceable against financial adviser

The High Court has held that a 12-month non-competition post-termination restrictive covenant in an agreement between a financial adviser and his employer was enforceable. Under a “goodwill agreement”, the financial adviser had been paid for the goodwill in the client base he brought with him to the firm, but was prevented from working in any capacity in competition with his employer for 12 months after his employment terminated.

The court held that the non-competition restriction was enforceable because the goodwill agreement was akin to a business sale agreement into which the parties had entered with equal bargaining power. It further noted that 12-month post-termination restrictions were common within the financial services industry and were reasonable in cases such as this where there was an exceptionally strong relationship between the employee and their clients.

The court rejected the employee’s argument that the employer had failed to mitigate its loss as it had not put him on garden leave or sought injunctive relief. It concluded that a claim for breach of contract was appropriate in these circumstances where the employer did not want to cause further damage to its client relationships. It ordered the financial adviser to pay damages for the employer’s loss of profit for two years after his departure.

Christian nursery worker brings claim for religious discrimination against her former employer

A Christian nursery worker has brought a religious discrimination claim against her former employer, Newpark Childcare. Sarah Mbuyi alleges that she was dismissed from her position at a nursery in Shepherd’s Bush due to her beliefs, after she was asked whether she would be able to read books to children which featured same-sex parents, and replied that she would not be able to read them. Miss Mbuyi was also accused of harassing a lesbian co-worker with whom she had discussed her religious beliefs.

This case again highlights the conflict between the right to religious belief and the right not to be discriminated on grounds of sexual orientation.

http://www.telegraph.co.uk/news/religion/10776411/Christian-nursery-worker-sacked-after-refusing-to-read-gay-stories-to-children.html

If you need further advice on this blog, please send an email, or call me, on my mobile 07767 166705 or 01580 712718 (local office number) or 0207152 6550 (London office number).

 

http://osjlaw.co.uk/about-me/

© OSJ Law Limited

February Employment Law Update

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)…

The economy

Good news

  • 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!

Legal changes

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

http://www.acas.org.uk/media/pdf/l/1/9908-2901767-TSO-ACAS-TUPE_is_changing-ACCESSIBLE.pdf

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.

Commentary

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 [2013] 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.

Commentary

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.

TUPE

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.

Commentary

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.

 

If you need further advice on this blog, please send an email, or call me, on my mobile 07767 166705 or 01580 712718 (local office number) or 0207152 6550 (London office number).

http://osjlaw.co.uk/about-me/

© OSJ Law Limited