Articles | Employment bulletin December 2016

This month: how past warnings can undermine a dismissal, plus the tragic case of festive celebrations gone wrong.  On the lighter side, try our Christmas quiz, with a prize for the winner…

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David Clay

David Clay

New Year Employment Seminar 

11 January 2017

 

New Year Employment Seminar

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Join us for the fifth edition of our popular New Year seminar focusing on recent and forthcoming changes in employment law. In 90 minutes we will tell you everything you need to know, and do, to avoid any employment law own goals in 2017. This is an essential seminar for all employers, internal counsel and HR professionals.

 

We will provide comprehensive notes, there will be opportunities to ask questions and network and breakfast is provided.

 

Read more for further details and to book your place at this free event. We are now close to capacity so please contact us shortly to avoid disappointment.

Impact of the Autumn Statement on employment law

Can we expect major changes in 2017?

Impact of the Autumn Statement on employment law

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The Chancellor has presented his Autumn Statement to Parliament discussing the economic forecast, the deficit and how to support infrastructure and innovation. The statement addressed a number of issues that will have employment consequences for employers, employees and workers, most notably through changes to taxation. This is what we can expect over the coming months and years:

 

  • As we reported in October (read more), the government will increase the rates of the National Minimum Wage with effect from April 2017. The headline National Living Wage figure, for those aged 25 and over, will rise from £7.20 to £7.50.

 

  • Also from April 2017, a significant number of salary sacrifice schemes will be subject to the same tax as cash income. The salary sacrifice scheme is being scaled back and will become limited to enhanced employer pension contributions to registered pension schemes; childcare benefits (such as provision of workplace nurseries); bicycles and safety equipment under the cycle to work scheme; and low emission cars. However, all arrangements in place before April 2017 will be protected until April 2018, while existing schemes related to cars, accommodation and school fees will be protected until April 2021.

 

  • The removal of tax reliefs for individuals entering Employee Shareholder Status (ESS). ESS was introduced in September 2013 as a new category of worker status. Employees could waive certain employment rights, in return for a minimum of £2,000 of shares in the employer’s business. At present ESS shares qualify for some income tax and capital gains tax relief, however the government now plans to abolish these reliefs in response to evidence that ESS is being used for tax planning.

 

  • As we reported in September (read more), there will be changes to the taxation of termination payments. The exemption from income tax and national insurance (NI) for termination payments up to the current threshold of £30,000 will remain the same, but from April 2018 employer NI contributions will be payable on termination payments above this amount.

 

Employers should ensure they are prepared for the changes to minimum rates of pay and salary sacrifice arrangements next spring. We will update you on the future of ESS and the associated tax reliefs when significant developments occur.

Dismissing for misconduct?

Beware of past warnings

Dismissing for misconduct?

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Employees with over two years’ service have the right not to be unfairly dismissed. To dismiss fairly, employers must have a potentially fair reason, follow a fair process and act reasonably in deciding to dismiss for that reason. A recent case in the Employment Appeal Tribunal (EAT) focused on flawed past warnings and their potential to undermine a subsequent dismissal.

 

The case centred on Mr Bandara, a Senior Producer at the BBC. In August 2013 Mr Bandara was subjected to disciplinary proceedings in connection with two separate matters; one concerned him shouting at a senior manager back in March 2013 and the other concerned his decision to prioritise coverage of an event in Sri Lankan history instead of the birth of Prince George. The disciplinary chairman found both incidents amounted to gross misconduct and issued a final warning. Shortly afterwards, the BBC commenced further disciplinary proceedings related to alleged bullying and refusal to obey instructions, resulting in Mr Bandara’s dismissal. Mr Bandara brought an unfair dismissal claim.

 

The EAT held that the earlier finding of gross misconduct and issuing of a final warning for relatively minor incidents had been ‘manifestly inappropriate’. However, this did not necessarily render the subsequent dismissal unfair. The key issue was the extent to which the BBC had relied upon that inappropriate warning in reaching its decision to dismiss.

 

The EAT returned the case to an employment tribunal to consider this point, noting that if the employee had been dismissed on the basis that he was already subject to a (flawed) final warning then it would be difficult to see how the dismissal could be reasonable, whereas if the existence of the final warning was not integral to the employer’s decision then the dismissal could still be fair. It was not appropriate to consider hypothetical questions such as whether the dismissal would have been fair had the BBC imposed a first (rather than final) warning.

 

In light of the decision, employers should consider whether there is anything ‘manifestly inappropriate’ about any past warnings before communicating a dismissal decision. Flawed past warnings are unlikely to cause a problem where it is clear that the new misconduct justifies summary dismissal in any event and past warnings have been explicitly disregarded, but in less transparent cases employers should seek advice on their options.

 

A Christmas to forget

Is an employer liable for an assault at Christmas drinks?

A Christmas to forget

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Employers can be liable for the actions of an employee when they are acting in the course or scope of their employment, even when incidents occur outside of the workplace or normal working hours.

 

In a topical decision (based upon a depressing set of facts) the High Court considered when an employer is liable for the actions of an employee at Christmas drinks.

 

Mr Major was a director, shareholder and employee of Northampton Recruitment and organised and paid for the firm’s Christmas party at a local golf club. Considerable alcohol was consumed and around 15 of the 24 guests, including Mr Major and Mr Bellman, the company’s sales manager, went for further impromptu drinks at a hotel.

 

At 3am in the morning, in an unprovoked attack, Mr Major assaulted Mr Bellman, punching him twice rendering him unconscious with blood coming from his ears. Mr Bellman suffered a skull fracture and career-ending injuries, including lasting impacts on his verbal reasoning and speech.

 

Mr Bellman sought to hold Northampton Recruitment vicariously liable for the assault, as the only likely source of compensation for the attack.

 

The High Court determined that the company was not liable for the acts of Mr Major, despite him being the Managing Director and that work related comments had been made during the assault.

 

The Court placed great emphasis on the time and place of the incident (an impromptu drink after the official event), rather than the nature of the interaction (a heated discussion about work). There was no expectation on employees to attend the drinks at the hotel and it was a personal decision for everyone to attend. There was insufficient connection between Mr Major’s position and the assault.

 

Employers should still exercise caution and keep a close eye on all work Christmas events. Employers may be vicariously liable for not only physical assaults, but a wide range of incidents, including discriminatory behaviour. If this incident had occurred at the earlier golf club event, or shorty afterwards, the outcome may well have been different.

Employment Christmas Quiz

Champagne for the winner!

 

Employment Christmas Quiz

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Seasons Greetings. To celebrate the Christmas period we have put together an employment quiz. The winner will receive a bottle of champagne! (If there is a tie we will draw lots).

 

Please complete the quiz (click here) by 20 December to be in with a chance of winning. We will notify the winner on 21 December and the prize will be available for collection before Christmas.