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Choice Autumn Chestnuts

Silverman Sherliker LLP

An Employment and Law Seminar

A Review of Recent Employment Law

Victoria J RussellSolicitor – Employment Law

Email: [email protected]

A Review of Recent Employment Law

1. Changes of Contract Terms Without Employee Consent

2. The Fairness of the Dismissal

3. The Without Prejudice Rule

CHANGES OF CONTRACT TERMS WITHOUT EMPLOYEE CONSENT

Bateman and Others v Asda Stores Ltd Employment Appeal Tribunal

Background:

• 18,000 employees on old pay structure.• Extensive consultation process about new pay structure.• 9,300 employees agreed to transfer voluntarily to new pay

structure.• 8,700 employees had their pay structure changed by Asda

anyway.• Asda relied on Company Handbook to make unilateral

decision to change pay structure anyway.



Claims:• Employment Tribunal Claims brought by 700 employees.• Claims included unauthorised deduction from wages, breach of

contract and, in some cases, unfair dismissal.• Six test cases heard by Employment Tribunal and then

Employment Appeals Tribunal.



Deciding Factors• Company Handbook said it reserved the right to amend the

content of this handbook from time to time to reflect the changing needs of the business.

Company Handbook said that sections relating to pay and the right to change terms formed part of the employees’ contracts of employment.

• No employee suffered a reduction in pay



Decision• Asda was able to rely on a provision in the Company

Handbook which reserved the right to vary contractual terms to introduce a new pay structure without the need to obtain express consent of employees affected by the change.

• Power to make unilateral change was not limited to non-contractual policies since the handbook included contractual matters including pay and hours.



In practice• Never make unilateral changes to pay structure.• Always need to consult on changes of pay structure or

those which cause the employee to suffer a detriment.• In this case there was no claim for breach of trust and

confidence- might have had a different outcome if there had been such a claim.

• However, case does show that widely drafted contractual variation clauses can be used as a last resort after the consultation process has been exhausted.

THE FAIRNESS OF THE DISMISSAL


Background

• Once the fact of a dismissal has been established, the Employer needs to demonstrate:

• What the reason/reasons were for the dismissal;• If the reason was one of the 6 accepted reasons for dismissal.

• The Employment Tribunal will investigate the real reason for the dismissal in any event.

• The burden is on the Employer to prove the reason and it can only rely on facts known at the time of the dismissal.


The six accepted reasons for dismissal according to the Employment Rights Act 1996:

1.Capability or qualifications

2.Conduct of employee

3.Retirement of employee

4.Employee was “redundant” (within legal definition)

5.Statutory requirement

6.“Some other substantial reason”

It is a question of law for the Tribunal to determine the accepted reason for a dismissal.

If Employer claims a different reason to that decided by the Tribunal, the Tribunal must find the dismissal to be unfair


Capability/Qualifications

• Capability is assessed by reference to an employee’s “skill, aptitude, health or any other physical or mental quality”.

• The capability must relate to the work the employee was employed to do. The dismissal may be fair even if the employee is still able to perform part of the job.

• A dismissal will relate to an employee’s qualifications if it relates to any “degree, diploma or other academic, technical or professional qualification” relevant to the employee’s position.


Conduct

• It is potentially fair to dismiss an employee for misconduct, which may be a single act of serious misconduct or a series of acts which are less serious.

• These could include: disobeying reasonable orders, breach of certain express or implied terms of contract, theft or dishonesty, unauthorised absence from work, disclosure of confidential information, competing, or preparing to compete.

• Must be able to establish that, at the time of dismissal, the employer believed the employee to be guilty of misconduct and had reasonable grounds for this belief based on reasonable investigation.


Retirement

• Retirement will be the only reason for the dismissal where:o The employee has no normal retirement age and the

operative date of termination falls on or after the date on which the employee reaches 65.

o The employee has a normal retirement date (which is 65 or over) and the operative date of termination falls on or after the date when the employee reaches that age.

o The employee has a normal retirement date below 65 and that retirement age has been objectively justified.


Redundancy

A dismissal is potentially fair when it is “wholly or mainly attributable to there being either:

• Business closure;• Workplace closure; or• Reduced requirement for employees.


Statutory Requirement

• A dismissal is potentially fair if the employee’s continued employment would contravene any duty or restriction imposed by or under any enactment.

• Employer must show that the employee’s continued

employment would actually contravene a statutory restriction.


“Some Other Substantial Reason” • No further guidance in statute as to what is meant by this term. • Designed to catch potentially fair dismissals which would not fall

into any of the other categories.

• The employer only has to establish that there was “some other substantial reason” that could justify the dismissal. It is for the Tribunal to decide if it was reasonable to dismiss the employee in the circumstances.


“Some Other Substantial Reason”

A v B Employment Appeal Tribunal Background • Employee “A” civil servant, offered job relating to the

interests of children, but not working with children.• Allegations from “Metropolitan Police Child Abuse

Investigation Command” that employee posed a “continuing threat to children”.

• Employer was advised that the allegations against the employee carried a “significant risk of reputational damage”.

• Employee disciplined, but denied allegations.• Employer took advice from Metropolitan Police and dismissed

the employee for breach of trust and confidence.



A v B Employment Appeal Tribunal Claims

• Employee claimed unfair dismissal.• Employment Tribunal decided dismissal was fair.• Employment Appeals Tribunal upheld the Tribunal’s

decision that the dismissal was fair.



A v B Employment Appeal Tribunal Decision• Employment Appeal Tribunal accepted that although

the allegations were unproven, the serious reputational risk they posed to the public sector employee, if they should later be proved to be true, qualified as a “some other substantial reason” for dismissal.

• As in this case, provided that adequate safeguards were in place, and a proper procedures followed, a dismissal in such circumstances could be fair.



A v B Employment Appeal Tribunal In Practice• Reputational risk to the employer can qualify under “some

other substantial reason” for dismissal.

• Third party allegations can be relied on provided that it is from a reliable source and offers critical analysis.

• As with all dismissals, it is important to consider why dismissal is being contemplated and if it is the appropriate sanction.

WITHOUT PREJUDICE

WITHOUT PREJUDICE

Background

The Without Prejudice rule will generally prevent statements made

in a genuine attempt to settle an existing dispute, whether made in

writing or orally, from being put before the court as evidence of

admissions against the party which made them.

WITHOUT PREJUDICE

Rush & Tompkins Ltd v Greater London Council and others • “The contents of the without prejudice correspondence will

not be admissible to establish any admission relating to the [party's] claim."

• For these purposes, the term "admission" does not mean a formal admission, but rather a statement made by a party against his own interest.

WITHOUT PREJUDICE

Rush & Tompkins Ltd v Greater London Council and others

LabelAlways try to remember to use the Without Prejudice label where appropriate: • “To make clear beyond doubt that in the event of the negotiations being

unsuccessful that they are not to be referred to at the subsequent trial”. However, the presence, or absence, of the Without Prejudice Label will not be determinative.

• “The application of the [Without Prejudice] rule is not dependent upon the use of the phrase 'without prejudice' and if it is clear from the surrounding circumstances that the parties were seeking to compromise the action, evidence of the content of those negotiations will, as a general rule, not be admissible at the trial and cannot be used to establish an admission or partial admission."

WITHOUT PREJUDICE

In the Employment Appeal Tribunal:

• Without Prejudice rule is generally admissible but there are some exceptions to this rule.

• One exception to the without prejudice rule relates to “unambiguous impropriety”

• Previous case law established one exception to the without

prejudice rule where the exclusion of evidence “would act as a cloak for perjury, blackmail or unambiguous impropriety” Unilever v Proctor & Gamble Company

WITHOUT PREJUDICE

BNP Paribas v Mezzotero Employment Appeal Tribunal

Unambiguous Impropriety If an employer, in dispute with a black employee, says during discussions aimed at settlement in a meeting, expressed to being held without prejudice “we do not want you here because you are black” and tried to exclude these discussions in a Tribunal hearing for race discrimination because of the without prejudice rule, the remark would fall under the level of unambiguous impropriety.

(Obiter comments in BNP Paribas v Mezzotero by Cox J)

WITHOUT PREJUDICE


Background:

• Employee returned to work after maternity leave, raised a grievance.

• Asked to attend a meeting which was said by Employer to be “Without Prejudice”.

• Employer said it was not feasible for her to return to her old job and there were no alternatives.

• The Employer offered the Employee a redundancy package on account of it being “best for business”.

• Employee claimed sex discrimination.

WITHOUT PREJUDICE


Decision:• Employment Appeal Tribunal held that there was no dispute

between the parties about termination and so the without prejudice rule did not apply.

• Cox J decided that the case fell within the “unambiguous impropriety” rule in relation to a genuine and legitimate complaint of sex discrimination.

• It was held to be a cynical abuse of the without prejudice rule in order to hide discriminatory behaviour.

• Held that the employer conduct fell within the umbrella of unambiguous impropriety and as an exception to the without prejudice rule within the abuse principle

WITHOUT PREJUDICE


In Practice:

This case opened the floodgates for employees pursuing discrimination claims, to allow an exception to the without prejudice rule, diluting the requirements of the unambiguous impropriety exception in discrimination cases to permit employees to refer to without prejudice negotiations in the course of proceedings.

It has now been followed by the Woodward and Santander case which has helped to close these floodgates.

WITHOUT PREJUDICE

Woodward v Santander UK plc Employment Appeals Tribunal

• Employment Appeals Tribunal confirmed that discrimination is

not a special category when it comes to considering exceptions to the without prejudice rule.

• In order for a court to allow a party to put into evidence details of without prejudice discussions between the employer and former employee, there must be clear evidence of abuse.

WITHOUT PREJUDICE


Background: • Miss W dismissed in 1994, brought proceedings for unfair

dismissal & sex discrimination.• Claim was settled although there was no agreed reference.• Miss W found it difficult to obtain new employment, suspected

that she was being provided a poor reference.• In 2002 she challenged Santander about this and then brought

a claim in the Employment Tribunal. • Miss W tried to rely on without prejudice settlement

negotiations relating to Santander providing a reference which Santander had refused.

WITHOUT PREJUDICE


Decision • Miss W was not entitled to introduce evidence of the without

prejudice negotiations.• Although Miss W suspected impropriety, she had no actual

evidence of it.• There should not be varying degrees of unambiguous

impropriety; the refusal to provide a reference did not amount to unambiguous impropriety.

• The exception to the without prejudice rule should be interpreted narrowly otherwise a party could comb through the correspondence or discussions to point to equivocal words or actions in support of an inference of discrimination.

WITHOUT PREJUDICE


In Practice • The case reiterates the policy of the without prejudice rule that

parties should not be discouraged from settling their disputes by fear that something said in the course of negotiations may be used to their prejudice in subsequent proceedings.

• This case provides for employers in that discrimination claims are not a blanket exception to the general rule of without prejudice negotiations.

• Provided that actions do not amount to blatant discrimination, employers can negotiate freely. There is a high threshold and pointing out evidence from which inferences can be drawn is not sufficient.

Getting the Redundancy Process Right

Martin DonoghuePartner – Employment Law


What is Redundancy?• A legal reason for dismissal.

• Three classic examples:

– Business Closure– Workplace Closure– Other requirement for fewer

employees

What should I do?• Is it necessary?• Follow the correct process.

– Fewer than 20 proposed redundant within 90 days.

– Possible shortcut where a whole team/level goes.

– 20 or more redundant within 90 days.– DTI notice.

What should I not do?• False economy.• Smoke and mirrors.• False shortcuts.• Treat employees differently.• End up without necessary skills.

Age Discrimination Update

Nicholas LakelandHead of Employment Law


The Employment Equality (Age) Regulations 2006 Replaced by The Equality Act 2010

The basics:1. No direct or indirect discrimination.2. No victimisation.3. No Harassment.

The Employment Equality (Age) Regulations 2006

Replaced by The Equality Act 2010BUT

An Employer can discriminate if the Employer is able to show that it was a “proportionate means of achieving a

legitimate aim” (s13 (2) of the Equality Act 2010)

Recent Case LawThe Incorporated Trustees of the National Council on Ageing (Age Concern England) -v-

BERR&

R (Age UK) -v- BISS

• Challenge to the default retirement age of 65.

Recent Case Law

Seldon -v- Clarkson Wright & Jakes

• Forced retirement of partner in a law firm at age 65.

• Justification.• Low hurdle set by Court of Appeal.

Recent Case Law

Rolls Royce -v- Unite the Union

• Length of Service criterion in a redundancy selection policy.

• Justification.

The Future

• Government intends to scrap default age of retirement of 65 for employees from end of 2010.

• What next?

Key Contacts

Nicholas C J LakelandPartnerSilverman Sherliker LLPncjl:@silvermansherliker.co.uk

Martin D DonoghuePartnerSilverman Sherliker [email protected]

Victoria J RussellSolicitorSilverman Sherliker [email protected]

Dave ThompsonHR ConsultantSilverman Sherliker Specialist HR [email protected]

SILVERMAN SHERLIKER LLP

SOLICITORS

7 BATH PLACE . LONDON EC2A 3DR

FAX: 020 7739 4309 . E-MAIL [email protected] . DX 137779

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wwww.silvermansherliker.co.uk

Tel: +44 (0) 20 7749 2700Fax: +44 (0) 20 7739 4309

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Documents

employment tribunal

employment appeals tribunal

new pay structure

old pay structure

employee consentbateman

contractual terms

v asda stores

unilateral changes