More Related Content Similar to Annual employment law update (20) More from Blake Morgan (20) Annual employment law update2. Have employers been strung up by
Stringer?
(Stringer & Others v HM Revenue & Customs)
Lisa Wallis
Solicitor
3. Working Time Regulations 1998
Regulation 13 (9)
– statutory minimum annual leave entitlement (four weeks) can
NOT be carried over into the next holiday year
– workers can NOT be paid in lieu of annual leave, except on
termination
Time Limit
Regulation 30
– claim must be brought within three months from the date at
which the refused right would have begun to have been
exercised
© Blake Lapthorn 2009
4. Employment Rights Act 1996
Regulation 13
– right not to suffer unauthorised deductions
Time Limit
Regulation 23
– claims can be brought within three months of the last in a
series of deductions
© Blake Lapthorn 2009
5. Questions
Ainsworth & Others v Commissioners of Inland Revenue
Does a worker’s entitlement to statutory annual leave accrue
whilst on long term sick leave?
Can a claim for unpaid holiday be brought as a series of
unlawful deductions from wages?
© Blake Lapthorn 2009
6. Chronology of case
Employment Tribunal
Ainsworth & Others v Commissioners of Inland Revenue
– held: holiday pay accrues while on sick leave
Claims can be brought as an unauthorised deduction under
ERA 1996
Employment Appeal Tribunal (February 2004)
Ainsworth & Others v Commissioners of Inland Revenue
– upheld decision of Employment Tribunal
Court of Appeal (April 2005)
Commissioners of Inland Revenue v Ainsworth & Others
– held: holiday pay does not accrue whilst on long term sick leave
House of Lords (December 2006)
Stringer & Others v HM Revenue & Customs
– referred case to European Court of Justice
© Blake Lapthorn 2009
7. Chronology of case
European Court of Justice (March 2009)
Stringer & Others v HM Revenue & Customs
Held:
– holiday pay does accrue during sickness absence,
regardless of how long the employee is off sick
– there is nothing to prevent a worker from taking paid holiday
while on sick leave (even if covered by a medical certificate)
– opportunity must be given to take the paid leave at some
point, even if that means carrying the paid leave over into
the next or subsequent holiday year
– it is for each EU state to determine when that leave should
be taken
© Blake Lapthorn 2009
8. House of Lords (June 2009)
HM Revenue & Customs v Stringer & Others
House of Lords Ruling
1. Annual leave does accrue and can be taken while a worker is
on long term sick leave
2. Claims for unpaid holiday can be brought as a series of
unlawful deduction from wages under the ERA 1996 as well as
under the WTR 1998
© Blake Lapthorn 2009
9. What if a worker is on annual leave and falls sick?
Pereda v Madrid Movilidad SA
ECJ ruled:
A worker who is on sick leave during a period of previously
scheduled annual leave must have the right, on his request, to
take that annual leave at another time
If business interests preclude the worker from taking the
rescheduled leave in the same leave year, the normal rules
against carry-over must be relaxed
© Blake Lapthorn 2009
10. Practical advice for employers
Following Stringer
Deal with requests for holiday from any worker, in the current
holiday year (whether on long term sick leave or not)
Amend policies to allow workers on long term sick leave to
designate part of that period as paid annual leave before expiry
of the relevant leave year
Review any current workers on long term sick leave and discuss
with them their holiday entitlement and how this will be handled
Following Pereda
Deal with situations involving carry-over on a case by case basis
Revisit notification of sickness procedures
© Blake Lapthorn 2009
12. Equality Bill
Aims
– to harmonise
– to strengthen
Contents
– employment
– goods and services
– public bodies
Focus
– employment law changes
© Blake Lapthorn 2009
13. Overview
Protected characteristics
– age
– disability
– gender reassignment
– marriage and civil partnership
– pregnancy and maternity
– race
– religion or belief
– sex and sexual orientation
© Blake Lapthorn 2009
14. Overview (2)
Direct discrimination
– ‘because of’ not ‘on the grounds of’
associative discrimination
perceptive discrimination
dual discrimination
NB: not marriage and civil partnership (or maternity and
pregnancy for dual discrimination)
© Blake Lapthorn 2009
15. Overview (3)
Indirect discrimination
– disability discrimination
– gender reassignment
Harassment
– third party harassment
Victimisation
– removes need for absolute comparator
© Blake Lapthorn 2009
16. Disability discrimination
‘Normal day to day activities’
– eight functions removed
Associated discrimination
‘Discrimination arising from disability’
Indirect discrimination
© Blake Lapthorn 2009
17. Equal pay and positive action
Equal pay
– ‘genuine material factor’ defence
– secrecy clauses
– publication of pay differences
Positive action
– recruitment and promotion
© Blake Lapthorn 2009
18. Progress of Equality Bill
House of Commons
House of Lords
Royal Assent - Spring 2010
Majority in force - Autumn 2010
Public duties - Spring 2011
© Blake Lapthorn 2009
20. Definition of disability
Physical/mental impairment
Substantial adverse effect
Long term
Normal day to day activities
© Blake Lapthorn 2009
21. Direct discrimination
On grounds of disability
Less favourable treatment than non-disabled with same relevant
circumstances/abilities
No justification
© Blake Lapthorn 2009
22. Disability related discrimination
For a reason related to disability
Less favourable treatment than treats others to whom reason
does not apply
Employer cannot show treatment is justified
© Blake Lapthorn 2009
23. Duty to make reasonable adjustments
Provision criteria or practice or physical feature of premises
Places disabled person at substantial disadvantage
Duty to take reasonable steps to prevent
No justification
© Blake Lapthorn 2009
24. Harassment
For a reason related to disability
Engages in unwanted conduct
Violation of dignity
Creates an intimidating, hostile, degrading, humiliating or
offensive environment
© Blake Lapthorn 2009
25. Victimisation
Less favourable treatment because;
– brought proceedings
– given evidence/information in proceedings
– alleged contravention of DDA
– other reason relating to DDA rights
© Blake Lapthorn 2009
26. Scope
Wide definition of employment
Advertisements
Applicants/ex-employees
Associative discrimination
© Blake Lapthorn 2009
27. Employment Tribunals
No service requirement
Unlimited compensation
– loss
– injury to feelings
– personal injury
© Blake Lapthorn 2009
28. Long term sickness
Individual consultation
Medical opinion
Alternative employment
Reasonable adjustments?
Can we wait?
© Blake Lapthorn 2009
29. When can an employer dismiss?
Need for work to be done
Availability of other labour
Cost
Likelihood of return
Capability upon return
Conflicting medical opinions
Reasonable adjustments?
© Blake Lapthorn 2009
30. Intermittent absence
Unrelated
– individual consultation
– warnings of consequences and timescale
Related
– individual consultation
– medical consultation
– warnings of consequences and timescale
© Blake Lapthorn 2009
31. Intermittent absence (2)
Absence not misconduct
Procedural fairness
Investigation
Consultation
Warnings
Reasonable adjustments
Alternative employment
Avoid undue haste
© Blake Lapthorn 2009
33. Identify nature of term
Contractual or non-contractual?
If non-contractual
– no further issue as non-binding
– can be varied by employer at any time without need for
employee consent
If contractual
– is it a fundamental or non fundamental term
would breach go to root of contract and be incompatible
with continuance of employment relationship?
answer will dictate remedies available to employee and
therefore approach by employer
© Blake Lapthorn 2009
34. Does contract authorise change
General flexibility clause
– not carte blanche
– only minor and non fundamental terms
Express flexibility clause
– contractual right to make change
– operation of clause subject to implied terms
© Blake Lapthorn 2009
35. Incorporated terms
Statutory
Collective
Other points to consider
Discrimination effect
Terms inherited under TUPE
© Blake Lapthorn 2009
36. Routes to variation
Where non contractual provisions or authorised by contract
– notify
– explain
– implement
– take careful note of objections
© Blake Lapthorn 2009
37. Routes to variation (2)
Where contractual provisions and not authorised by contract
– consent required
– so ask!
– if yes, celebrate and implement before anyone changes their
mind
– confirm in writing
© Blake Lapthorn 2009
38. If no agreement…
Review stage
– are managers aware of potential cost?
– has it been balanced against the potential benefit?
– are managers aware that implementing change without
employees’ agreement could require collective consultation?
– do managers accept that implementing change without
employees’ agreement could lead to dismissals?
© Blake Lapthorn 2009
39. If still want to proceed…
Two potential routes
Unilaterally impose changes
Termination of employment and offer of re-engagement on new
terms
© Blake Lapthorn 2009
40. Unilaterally imposing change
Always breach of contract
Always gives employee right to a remedy
No defence for employer to show had sound business reasons
or acted reasonably in circumstances
Employee who rejects change can:
work on new terms (whilst making rejection of them clear) and
bring claim for breach of contract
where practical continue to work on old terms and refuse to work
on new
where fundamental breach, resign and claim that been
constructively dismissed
© Blake Lapthorn 2009
41. Terminate employment and offer re-engagement on
new terms
Not wrongful dismissal
Potentially unfair dismissal
Need to show:
– potentially fair reason; and
– that acted reasonably in dismissing on those grounds
– some other substantial reason
– sound business reason
© Blake Lapthorn 2009
42. Factors when assessing reasonableness to dismiss
Employer’s motives for introducing change
Employees’ reasons for rejecting
Whether reasonable warning given
Whether change and full effect explained
Whether impact assessment undertaken and alternatives
considered
Had employer responded reasonably to objections and
made concessions where possible
Had there been a reasonable and genuine consultation
process
© Blake Lapthorn 2009
43. Procedure
Ascertain nature of consultation
– if 20 or more employees collective consultation under
TULRCA
– individual if less
Commence consultation
Consult with a view to reaching agreement
Listen to the feedback
Consider whether the changes can be varied
Need to show genuine and reasonable consultation process
© Blake Lapthorn 2009
44. Set a deadline for acceptance
If agreement not reached at end of process:
Follow individual dismissal process
– invitation to meeting
warn could result in notice of dismissal and offer to re-
engage on new terms at end of notice period
– hold meeting
– write to serve notice of termination of employment and offer
of re-engagement on new terms
– Right of appeal
© Blake Lapthorn 2009
46. Introduction
What is a Compromise Agreement
Risks of constructive unfair dismissal
Without Prejudice discussions
© Blake Lapthorn 2009
47. Compromise Agreements
Difference between statutory rights and contractual rights
Employees can agree to give up their contractual rights
Normally employees cannot contract out of their statutory
rights
A Compromise Agreement is needed in order for an
employee to give up their statutory rights
© Blake Lapthorn 2009
48. Compromise Agreements
Careful drafting is vital for a Compromise Agreement to be
valid and enforceable
It must relate to the particular complaint
Include certain statutory requirements
Other drafting pitfalls include:
– tax issues
– restrictive Covenants
– bonuses due after termination
– shares/share Options
© Blake Lapthorn 2009
49. Compromise Agreements
Lunt v Merseyside Tec Ltd 1999 EAT
– sex discrimination claim not covered
Palihakkara v BT plc 2007 EAT
– only covered claims arising out of her termination of
employment not claims which arose during her
employment
© Blake Lapthorn 2009
50. Compromise Agreements
Need to carefully manage the negotiation of a
Compromise Agreement
Set deadlines!
Do not forget about the ongoing procedures
Is the employee to remain in the workplace?
Protect company interests and other employees
Take legal advice to help assess the possible financial/tax
implications of offering a Compromise Agreement
© Blake Lapthorn 2009
51. Kirklees Metropolitan Council v Radecki 2009
CA
During Compromise Agreement negotiations R was
removed from payroll on 31 October 2006. R was
unaware at the time
CA held: Date of dismissal was 31 October
Stopping pay amounts to a fundamental breach of
contract
The employee does not need to be aware of such a
repudiatory breach
© Blake Lapthorn 2009
52. Avoiding a Constructive Unfair Dismissal
claim
The implied duty of trust and confidence is incorporated
into every employee’s contract of employment
Suggesting a Compromise Agreement to an employee
could be a breach of that implied duty of trust and
confidence
A fundamental breach of the implied duty of trust and
confidence entitles an employee to resign and claim
constructive unfair dismissal
© Blake Lapthorn 2009
53. Avoiding a Constructive Unfair Dismissal
claim
Advisable to only offer a Compromise Agreement once
disciplinary procedures have been commenced
Keep discussions/correspondence separate to any
ongoing procedure or ‘open’ discussions
© Blake Lapthorn 2009
54. Avoiding a Constructive Unfair Dismissal
claim
Billington v Michael Hunter and Sons 2003 EAT
– B given written warning with regard to her performance
– at further informal meeting to discuss performance
concerns B was invited to resign on favourable terms
– held: this was a ‘vote of no confidence’ and B did have
a potential claim for constructive unfair dismissal
© Blake Lapthorn 2009
55. Without Prejudice discussions
Legal advice privilege means employers can seek legal
advice without the content being admissible in a Court or
Tribunal – no need to state Without Prejudice
Without Prejudice is intended to give legal privilege to
communication between parties where there is a dispute
Based on public policy argument of allowing parties to
speak freely in order to settle disputes
BUT there must be genuine Without Prejudice discussions
which means they must:
– have the purpose of settling a dispute
– not fall under the umbrella of ‘unambiguous
impropriety’
Do not waive the protection of Without Prejudice
discussions
© Blake Lapthorn 2009
56. BNP Paribas v Mezzotero 2004 EAT
M raised a grievance on returning from maternity leave. At
the grievance meeting BNP said it was Without Prejudice
and it was best if her employment terminated. M claimed
direct sex discrimination and victimisation.
EAT held: without Prejudice protection did not apply
because:
– there was no existing dispute
– the discriminatory conduct of BNP amounted to
unambiguous impropriety
© Blake Lapthorn 2009
57. Blake Lapthorn is an English law firm regulated by the Solicitors Regulation
Authority under SRA number 448793 whose rules can be accessed via
www.sra.org.uk
This presentation is protected by copyright and is not a substitute for detailed
advice on specific transactions and problems and should not be taken as
providing legal advice on any of the topics discussed.
A full list of our partners is available on our website at
http://www.bllaw.co.uk/about_us/a_to_z_of_partners.aspx or at any one of our
offices http://www.bllaw.co.uk/offices.
If you have questions on this presentation or on other related topics, please
contact: marianne.pieterse@bllaw.co.uk
© Blake Lapthorn 2009