Employment bulletin August 2013
Are you up to date with the changes from 29 July? We report on employer-friendly TUPE and disability cases and employee-friendly redundancy and companion cases.
29 July 2013 was a very important date in terms of employment law and practice. Several major changes came into force:
- Confidential settlement offers – see our July bulletin for details.
- Settlement agreements – ‘compromise agreements’ are now called ‘settlement agreements’.
- Fees in employment tribunals – our May bulletin contains more information.
- Unfair dismissal cap – see our July bulletin for details.
Woolworths’ administration was an early sign of the depth of the recession that the UK was to face in 2008. The legal fallout from it continues.
All employees were made redundant and claims were brought for protective awards for failure to consult collectively. The result was somewhat arbitrary from the employees’ perspective – if they worked at a store employing 20 or more employees they received a protective award; if they worked at a smaller store (as 3,233 did) they did not receive the award. The case turned on the definition of “one establishment” as the law requires collective consultation where 20 or more employees at “one establishment” are to be made redundant within a 90 day period.
The question for the EAT was whether this was consistent with the relevant European Union directive which is worded differently. UK courts are obliged to interpret UK law in accordance with relevant EU directives. Therefore, the EAT concluded that the words “at one establishment” had to be ignored. This meant all of the employees were entitled to a protective award.
This is a hugely significant case for large, multi-site employers and the Secretary of State, who is liable for paying protective awards in the case of insolvent employers. The Department for Business Innovation and Skills (BIS) is seeking permission to appeal this decision. In the meantime, employers should look across their entire workforce when assessing if they need to consult collectively.
Common sense would suggest that you cannot be bound by something to which you have not agreed. Many of you may say common sense and employment law do not always go together! However, common sense has won the day in the European Court of Justice (ECJ), at least in respect of collective agreements in a TUPE transfer situation.
Employment contracts often refer to collective agreements under which pay and conditions are negotiated with the relevant trade union/negotiating body.
Although it’s clear that collective agreements transfer under TUPE, there has been a long-running legal argument as to whether those agreements are “static” (i.e. in effect frozen at the date of the transfer) or “dynamic” (meaning that subsequent changes under the collective agreement would be binding on the new employer even though it was not party to the negotiations). British law had decided they were dynamic which clearly caused many employers significant difficulties. The ECJ has disagreed and concluded that collective agreements transfer in a static state because a dynamic interpretation prevents an employer conducting its business and interferes with its fundamental right of freedom of contract.
The ECJ reminded us that the law is designed to arrive at a fair balance between the interests of the employees and the new employer. Although many would argue it generally fails to do so, this decision does appear to have found that balance.
One of the fundamental rights of employees is the right to be accompanied by a fellow employee or trade union representative to a disciplinary or grievance meeting. The employee has to request to exercise this right reasonably.
Until now, we have understood that the requirement of “reasonableness” applies to the choice of companion. Indeed, the ACAS Code of Conduct gives an example of an unreasonable request based on the desired companion being in a remote geographical location. However, the EAT expressly disagreed with the ACAS Code and concluded that the employee has an absolute right to decide on their choice of companion so long as they are a fellow employee or trade union representative.
If an employer refuses to allow an employee to exercise their right to be accompanied, the employee can claim compensation of up to two weeks’ pay. The EAT was very clear that this is not a penalty, but compensation for the loss or detriment suffered by the employee.
It might be tempting to ignore this decision on the basis that the maximum value of the claim is quite limited. However, we expect to see employees arguing that a refusal to allow them their choice of companion is also evidence of an unfair process and therefore something that potentially renders the dismissal unfair. Obviously unfair dismissal is a much more valuable claim.
Last March we reported on the case of B&B owners with deeply held Christian beliefs who refused to allow gay civil partners to stay in a double room. This was unlawful discrimination on the grounds of sexual orientation.
The Court of Appeal has recently heard a similar case and confirmed that such refusal is still unlawful if the gay couple are not civil partners. The fact that the B&B may also be a family home (as in the recent case) is no defence.
Whether an adjustment for a disabled employee is reasonable depends on the facts, which means it is hard to set down rules as to what employers must do.
In a recent case, a university librarian claimed that a reasonable adjustment for her would have been to appoint her to a role rather than to have made her go through the competitive interview process.
In 2004 an employee persuaded the then House of Lords than it was a reasonable adjustment in his case to disapply a competitive interview process. However, the EAT reached a different decision with respect to the university librarian because she did not meet some of the essential requirements of the new role. The EAT agreed with the university that it would not have been appropriate to appoint her to a role which she did not have the skills to do.
The different decisions in these cases are a good reminder as to how tricky it can be to assess if an adjustment is reasonable.