Employment Law

Frequently, especially in current economic conditions, Employers will want to know if they can cut costs by reducing the wages of its staff.  There is no hard and fast answer but a recent Employment Appeal Tribunal (EAT) decision in Garside and Laycock Limited –v- Booth gave some guidance for Employers in this situation.

Here Garside and Laycock Limited sought to avoid redundancies by cutting its work force’s salary by 5%.  Booth refused to accept the pay cut, and was dismissed as a result.  He claimed unfair dismissal, which the Employment Tribunal initially upheld upon the basis that it was reasonable for him to maintain his pay and conditions.  His employers appealed.

The EAT held that the Tribunal at first instance had erred in law.  Firstly it had wrongly considered the reasonableness of the Employee’s decision to reject the pay cut rather than whether the Employer was reasonable to dismiss the Employee for not accepting it.  Secondly the Tribunal had wrongly considered whether or not a dismissal for refusing a pay cut was fair depended upon whether or not the Employer was so desperate that the only way of salvaging the business was to propose cuts in pay and conditions.

The EAT sent the case back to the Tribunal for a fresh hearing, but gave guidance on the correct approach.  It said that the Tribunal must look at the circumstances (including the size and resources of the Employer) to see if it was reasonable to treat the refusal to agree a contractual variation as sufficient to dismiss the Employee.  At the same time the Tribunal should consider whether the dismissal was made in “accordance with equity”.  The EAT felt that this may be relevant if a management proposed to cut its own workers’ pay but not its own.  Similarly the process by which a pay cut was negotiated may be relevant where a Tribunal considers that it runs contrary to equity’s sense of fair dealing.

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

“Dismissing an employee for refusing a pay cut or contractual variation is often a tricky issue.  If an employer is going to do this fairly, then it must be reasonable in the circumstances to treat the refusal of the employee as sufficient to dismiss.  If for example a pay cut is proposed, the management have agreed to take a pay cut, the pay cut is necessary in order to keep the business afloat and the staff were involved in a consultation process – then there is a reasonable chance that a dismissal of an employee in these circumstances for refusing the pay cut may be fair.  Each case will depend upon its own circumstances and no employer should ever dismiss an employee for refusal to accept a contractual variation without first seeking legal advice.”

If you require advice on this matter then please contact either 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.

One issue that frequently arises in Disciplinary Procedures is whether or not an Employee subject to those proceedings has a right to legal representation at the Disciplinary Meetings.  The ACAS Code of Practice, although not binding, provides guidance that a Tribunal will usually expect an Employer to follow; namely that the Employee should be allowed a Trade Union Representative or work colleague to be present.

However in certain cases Employees have tried to argue, under the European Convention on Human Rights (Article 6) that they should be entitled to have legal representation.  Most of these cases have related to Disciplinary Meetings involving teachers or doctors, who as well as facing the risk of dismissal could also latterly be barred from their profession as a result of the alleged misconduct.

A recent example of this is the case of R –v- The Governors of X School.  Here a Teaching Assistant was accused of forming an inappropriate relationship with a 15 year old boy.  Initially the Disciplinary Panel found the Teaching Assistant guilty of gross misconduct and there was an immediate dismissal.  At the same time, the dismissal was notified to the Independent Safeguarding Authority (ISA) so it could determine whether to place the Teaching Assistant on the “barred list” preventing him from working with school children.

The Teaching Assistant appealed against the dismissal using the internal Disciplinary Procedure, and requested legal representation which was refused.  The Teaching Assistant then sought a judicial review.  The Supreme Court rejected his application, since it felt that the ISA would carry out its own full investigation and make its own judgement upon the conduct of the Teaching Assistant.  Hence the Supreme Court felt that the ISA would not necessarily just follow the school’s decision.  As a result the Supreme Court felt that in the particular circumstances that there was no breach of the European Convention on Human Rights by failing to allow the Teaching Assistant any legal representation at the school’s internal Disciplinary Meetings.  However one of the Judges did disagree and felt that legal representation should be available at the disciplinary stage in such circumstances.

Daven Naghen, head of the Employment Team at Maples Solicitors LLP commented as follows:-

“In most Disciplinary Processes, there would ordinarily be no right for an Employee to require legal representation.  However, particularly with professions like teachers and doctors, the answer may not be quite so straight forward since the disciplinary outcome may lead to that Employee being barred from his or her profession.  In such circumstances the Courts have held that the refusal to allow legal representation may not amount to a breach of the Employee’s human rights but I do not think that an Employer can necessarily be sure of this finding in every case.  In cases of this nature, the Employer should seek independent legal advice before accepting or declining an Employee’s request for legal representation at a Disciplinary Meeting.”

For advice on this subject please contact either 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.

The case of Sheffield City Council –v- Narouzi may be of concern to all employers.  Here the Employment Appeal Tribunal (EAT) held that the Employer (Sheffield City Council) was liable for acts of harassment carried out by a child in a Care Home against one of its employees.

In this case, the employee was Iranian and employed by the Council as a Residential Social Worker at a home for troubled children. One of the children was regularly offensive to him on the grounds of race; often mocking his accent and saying that he should go back home.

Upset by this behaviour, Mr Narouzi went on sick leave and subsequently brought a claim of harassment against the Council.  It was held that the Council, despite being informed of the harassment, did not act to prevent the behaviour.  As a result of the Council’s inaction, it was held liable for the harassment.  The Council’s appeal failed.

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

“This is a serious warning to all employers.  If you become aware or ought to be aware that your staff are being harassed at work on the grounds of race, sex, religion etc by third parties such as clients, customers and suppliers etc then you must act.  You have a duty to protect the employee and try to prevent the harassment.  If you do not act, or fail to do what is reasonable then you may face a big claim.  If a client, customer or supplier is harassing a member of your staff then at the very least you will have to warn that third party against such future conduct and possibly also warn them that you may have to end your business relationship if the offending conduct continues.  If the offending conduct then continues you may then have to end the business relationship to avoid a possible harassment claim.  However each case will depend upon its own facts.  You should seek legal advice if this sort of scenario arises within your own business.”

If you need advice on such matters then please contact either 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.

Many of the main provisions of the Equality Act 2010 came into force on 1^st October.  The purpose of the Act is to harmonise discrimination law into one Act.  Some of the important changes introduced by the Act this month include the following:-

• Making employers expressly liable in certain circumstances for harassment by third parties in the work place
• Extending the concept of positive action to allow employers to recruit or promote someone from an under-represented group, but only where they have a choice between two or more equally suitable candidates
• Outlawing employers’ pre-employment health enquiries unless they are made for prescribed reasons
• Making pay secrecy clauses unenforceable
• Introducing new powers for Employment Tribunals to make recommendations which effect the whole work force rather than just the Claimant

If you need any advice or assistance regarding the Equality Act 2010 then please either ring Daven Naghen or Gemma Mayer on 01775 722261 or email daven.naghen@maplessolicitors.com or gemma.mayer@maplessolicitors.com

The Government has announced plans to tackle long-term sickness absence with a new independent assessment and advisory service to ensure employers receive bespoke, independent advice where sickness lasts more than 4 weeks. This service will provide a state funded assessment by occupational health professionals for employees who have been on sick leave for four weeks to “support” appropriate intervention, it will also provide employers and employees with advice on overcoming barriers to a return to work as well as case management for employees with complex needs who require an ongoing support to enable their return to work.

The Government announced a new cap on the compensatory award for unfair dismissal of one year’s pay, subject to the current cap of £72,300.

It is also announced that settlement offers will be inadmissible as evidence in any subsequent unfair dismissal claim subject to certain safeguards for employees. For example an employee who resigns, rather than accepts a settlement offer would be unable to use the offer is an unfair dismissal case unless he could show that the employer’s behaviour was improper. The Government believes this will help reduce the likelihood that responsible employers will face constructive unfair dismissal claims as a result of offering settlement.

The cap and settlement agreement proposals are contained within the Enterprise and Regulatory Reform Bill, which the Government expects to receive Royal Assent in

Spring 2013. The provisions regarding settlement offers are not likely to come into effect until the summer of 2013.

If you need advice on any of these areas of employment law then please contact Daven Naghen on 01775 722261 or email daven.naghen@maplessolicitors.com or write to Dav at 23 New Road, Spalding, Lincolnshire PE11 1DH.

During the month of February the Government has been consulting on its proposed reforms for Early Conciliation (EC) in Employment Tribunal claims.

Currently, save for the risk of an adverse costs order for unreasonable conduct (which are quite rare), a Claimant in Tribunal proceedings is under no obligation to try and settle his or her claim with his or her employer. The Government believes that if a Claimant is forced to refer a matter to ACAS (an independent conciliator) prior to being allowed to issue proceedings, that more Claimants may try to negotiate and settle claims before issuing them (saving time and expense for everyone – including the Tribunals).

Under current proposals, save for a number of limited exceptions, the Claimant would not be able to commence a Tribunal claim unless he or she had referred the claim to ACAS for EC to be considered and this involves providing “prescribed information”. Although the Claimant would be under a duty to refer the matter to ACAS, he or she would be under no obligation to agree to undertake conciliation – the Claimant can still refuse to negotiate. However the referral to ACAS may persuade the Claimant to look into settlement before proceeding further.

If a Claimant refuses to agree to EC, then he or she can proceed with the Employment Tribunal claim. If the Claimant agrees to EC, the Respondent (namely the employer) can still refuse to negotiate. Like the Claimant, the Respondent would be under no obligation to negotiate (save for running the risk of an adverse costs order for unreasonable conduct).

If both parties agree, up to one month is allowed for EC (although it can be extended in certain circumstances). If settlement is reached it becomes binding, but if there is no settlement then the claimant can go off to the Tribunal.

The regulations will enable limitation periods to be extended to enable EC to take place.

Daven Naghen, head of our Employment Team thinks that these proposals are likely to be of some good to businesses as Dav says “Even though the Claimant will be under no obligation to negotiate, the referral to ACAS means the Claimant will be afforded the opportunity at an early stage to negotiate with the employer through an independent party. Some Claimants don’t negotiate prior to the issuing of proceedings as they are intimidated or frightened at the prospect of doing so with his or her employer especially as the employer is often considered to be at an advantage (as the employer may have access to legal advice or HR assistance/resources). Hence Claimants often wade into Tribunal proceedings, and then the parties can become entrenched in their position and the matter cannot be resolved by negotiation. By having to contact ACAS at an early stage, Claimants will have the opportunity to try and resolve the matter through an independent third party and I believe many Claimants would gladly want to pursue EC. Hence employers and businesses may be able to “nip matters in the bud” before expensive and time consuming Tribunal proceedings follow.

I am concerned about whether ACAS will have the resources to cope with EC if Claimants readily take it up, especially as there will only be a small window of time for negotiations.

It will also be interesting to see if Tribunals do make adverse costs orders against parties who refuse to engage in EC”.

If you want to know more about EC, or about resolving disputes at the work place then please contact Daven Naghen on 01775 722261, or email daven.naghen@maplessolicitors.com or write to Dav at 23 New Road, Spalding, Lincolnshire PE11 1DH.