Employment Law

The European Court of Justice declared on the 18^th February 2014 that  women who become mothers through surrogacy cannot claim maternity leave. The declaration was made in the case of a woman refused paid maternity leave by her employer after the birth of her baby through a surrogacy arrangement.

It was held that an employer’s refusal to provide maternity leave in such a case “does not constitute discrimination on grounds of sex”

The woman involved had taken her case to a tribunal in Newcastle upon Tyne, claiming discrimination on grounds of sex and/or pregnancy and maternity under the Equality Act 2010. The tribunal ruled in 2011 that she was not entitled to maternity pay because that right rests with the child’s birth mother.

This decision does tend to go against the general principle that mothers should have the opportunity to bond with their babies and therefore be given time off work paid by their employers. However from April 2015 the law in Britain is set to change to enable people intending to become parents via surrogacy to claim paid leave.

Please contact Daven Naghen, Head of our Employment Team on 01775 722261 or by email on daven.naghen@maplessolicitors.com for information on any Employment related matters.

In recent editions of this Newsletter we have reported to you the outcomes of several cases involving employees looking to claim holiday or holiday pay when they were unable to take holiday in a particular holiday year due to long term illness.  A recent Court of Appeal decision from the summer of NHS Leeds –v- Larner has helped to clarify matters.

In this case the worker, a clerical officer for NHS Leeds, went on paid sick leave in January 2009 and did not return to work before she was dismissed in April 2010.  During 2009/2010 she did not request or ask to carry forward her accrued annual leave (four weeks in this case).

The worker claimed that she was entitled to a payment in lieu of the untaken leave.

Despite not requesting the leave before the end of the leave year, it was held that the worker had the right to take the leave at another time without having to make a formal request.  Her right to be paid for that leave crystallised upon the termination of her employment.

You may recall that previously we reported that in the case of Fraser –v- Southwest London St George’s Mental Health Trust that the Employment Appeal Tribunal had held that an employee on long term sick leave must request annual leave to be entitled to be paid for it.  The Larner case clarifies that in fact there is no need to request the annual leave so far as it relates to the four weeks of leave that a worker is entitled to pursuant to Article 7 of the Working Time Directive.

This case has pre-empted the changes that the Government are about to make to the Working Time Regulations in this country.  The Government proposes that only the core four week entitlement can be carried forward in this way, and not necessarily the additional eight days that workers have been entitled to since 2007.  These additional eight days can only be carried forward if the employment contract permits.

One significant issue does remain unresolved, and that is the time period to which the period of carry forward in the event of sickness applies.   European case law, KHS AG –v- Schulte suggests it is possible to limit the carry forward (possibly to eighteen months), but has left it to the discretion of each member state to make its own specific provision in this regard.

Daven Naghen head of the Employment Team says:-

“This case goes a long way to clarifying the problems which arise when workers claim holiday or holiday pay for a period of leave when they are absent through long term illness and are unable to take holiday.  Obviously this decision favours the workers, who do not have to make a request in order to make a claim subsequently.  However once significant issue still remains to be resolved, namely for how long can the worker’s entitlement be carried forward?  The English Courts really need to give us some guidance on this as soon as possible.  For now I would advise that employers err on the side of caution and allow this principle of carry forward for at least eighteen months as per the Schulte case.”

If you require any advice in respect to claims to holiday or holiday pay, then please contact Daven Naghen on 01775 722261 or email daven.naghen@maplessolicitors.com or write to Grant at 23 New Road Spalding Lincolnshire PE11 1DH.

The Ministry of Justice has published the annual Employment Tribunals and Employment Appeal Tribunal statistics for the period the 1^st April 2011 to the 31^st March 2012.   These statistics elaborate more on the general statistics that were released in June of this year.

Some of the headline figures of note are as follows:-

• 15% fall in the number of claims received.
• The number of claims in most jurisdictions fell, apart for slight rises in disability discrimination, religion and belief discrimination and failure to inform and consult on redundancy.
• Equal pay claims were least likely to reach a Hearing, as 81% were withdrawn or settled.
• Legal representation of claimants fell by nearly 50%.
• In only 21% of the cases of unfair dismissal upheld at a Tribunal Hearing did the claimants get awarded compensation.  The median award was £4,560.00, with only 2% of cases going over £50,000.00.
• Sexual orientation discrimination cases have the highest median award of £13,505.00.

Daven Naghen head of our Employment Team says:-

“It is encouraging news for businesses that the number of claims has fallen so significantly.  However businesses should be aware that employees are becoming increasingly aware of their employment rights and still feel there is little to lose by bringing a claim especially if they have been dismissed and face an uncertain future in the job market.  I suspect that much of the reduction relates to employers settling potential claims at an earlier stage (before proceedings are issued) as it is often commercially and economically sensible to do so.”

In the current economic climate we are finding that more and more dismissed or disgruntled employees are bringing Tribunal claims against their employer or former employer notwithstanding the merits of their claims.  If a claim succeeds against your business it can bring disastrous consequences.  For example the compensatory award element of an unfair dismissal claim will rise to a maximum of £72,300 in February – how could your business cope if it faced such an award?

To help safeguard your business we can effectively insure your business against Employment Tribunal claims and the insurance also covers the payment of your own legal costs!  The premium depends on a number of factors but mainly your annual wage roll.  The premiums can be as little as £159 per annum, which equates to £3.06 per week.  To help with cash flow, the premium can be paid in twelve equal monthly instalments with no additional charge.

Daven Naghen, head of our Employment Team commented as follows:-

“This is a fantastic product for our clients and we already have a number of clients who enjoy the benefit of it.  I can offer you a free no obligation quotation so you can decide if it is right for your business.”

Our clients also think the product is excellent, for example Susan Kennedy, Managing Director of S K Cleaning Limited has enjoyed the benefit of the insurance (called Employment Guard) for nearly two years and says “My only regret is that I did not take up the Employment Guard Scheme earlier as this would have saved me years of worry, but at least now I have total piece of mind knowing that I have the scheme in place”.

If you want to discuss the possibility of your business getting insurance cover against Employment Tribunal claims, then please contact Dave Naghen on 01775 722261 or email Daven on daven.naghen@maplessolicitors.com or contact him at 23 New Road, Spalding, Lincolnshire PE11 1DH.

The Government has confirmed its intention to introduce charges for Claimants who lodge an employment tribunal claim with effect from the summer of 2013.  The proposals are still to be finalised but currently there looks as though there shall be two levels of fees:-

A fee remission scheme will be available for those who will find it difficult to pay.

Daven Naghen head of our Employment Team says:-

“I think that the introduction of such fees will be some good news for employers, as this cost may dissuade claimants from making claims or at least will concentrate their minds on settlement at an early stage so such costs can be avoided.  However beware since many claimants on low incomes may not be required to pay the fees under a remission scheme similar to that currently used in the County Courts.  Therefore a claimant who say remains unemployed after dismissal is likely to be eligible for full fee remission, and therefore will not face the payment of a fee in order to bring a claim.”

If you want any advice in respect of any tribunal claim then please contact Daven Naghen on 01775 722261 or email daven.naghen@maplessolicitors.com or write to Grant at 23 New Road Spalding Lincolnshire PE11 1DH.

What are Restrictive Covenants?

Businesses often include post-termination obligations into an employee’s contract of employment, whereby an employee agrees not to do certain things after he or she leaves the business.  These are called Restrictive Covenants.  There are broadly speaking four types of Restrictive Covenants:-

1. Non-competition clauses

These seek to prevent the ex-employee from working for a competitor or a directly competing business, usually within a specific geographical area for a set period following the termination of employment. 

2. Non-solicitation clauses

These bar the ex-employee from soliciting clients, or potential clients, for a set period following the termination of employment. 

3. Non-poaching of employees clauses

These prevent an ex-employee from recruiting former colleagues for a set period following termination of employment.

4. Confidential information clauses

These prohibit the use of any confidential information (e.g. trade secrets, customer details etc) acquired by an employee during his or her employment. 

Are they Enforceable?

The starting point is that all of these clauses are anti-competition and in restraint of trade, and therefore void.  If an employee challenges the validity of such clause, the employer must prove that the clause is justifiable.  To do this the employer must show that the clause does no more than is reasonable to protect his legitimate business interests. 

What is “reasonable” and what is “a legitimate business interest” are complex questions and the answers shall vary from case to case. 

For example a claim which prevents an employee from working for a competitor for a period of 12 months anywhere within the United Kingdom may be enforceable against a national sales director but is unlikely to be enforceable against a hairdresser who only deals with clients from the immediate locality.

Another example may relate to a clause prohibiting the solicitation of clients.  If the ex-employee had introduced the client originally to the business, it is unlikely that a clause prohibiting the solicitation of such clients by the ex-employee could be enforceable. 

In short some times they are enforceable and some times they are not, legal advice is always necessary on such matters especially with regards to the drafting of such clauses.

Maples advise that generally speaking in appropriate cases Restrictive Covenants should be included in an employee’s contract of employment.  Even if the clause is not enforceable, the Restrictive Covenant may give some protection to your business as it provides leverage in negotiating a settlement with an ex-employee or for persuading the ex-employee not to attempt to solicit clients etc since the ex-employee may not want to take the risk on a high cost legal action. 

If you require advice on Restrictive Covenants then please contact Daven Naghen on 01775 722261, daven.naghen@maplessolicitors.com or at 23 New Road, Spalding, Lincolnshire PE11 1DH or Gemma Mayer on 01775 722261, gemma.mayer@maplessolicitors.com or at 23 New Road, Spalding, Lincolnshire PE11 1DH.