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LookOut - news and views on employment law

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When reaching a decision regarding whether or not a single store is an establishment, the ET was guided by the facts of the case and drew from the reasoning in previous cases where the definition of an establishment was analysed.

Welcome to LookOut, Anderson Strathern's regular update providing you with news and views on employment law.

LookOut on… news

Changes to statutory maternity, paternity, adoption and sick pay rates

Employers back coalition internship campaign

LookOut on … cases

What is an “establishment” for collective consultation purposes?

Vicarious liability

Public sector workers able to rely on EU Directive in relation to holiday entitlement

Warning against holding disciplinary hearings in an employee’s absence

LookOut on… news

Changes to statutory maternity, paternity, adoption and sick pay rates

The Department for Work and Pensions has announced new statutory rates to take effect from 9 April 2012 as follows:

  • Statutory maternity, paternity and adoption flat rate to increase from £128.73 to £135.45 per week; and
  • Statutory sick pay rate to increase from £81.60 to £85.85 per week.

The new rates will apply to those employees earning more than £107 per week (an increase from £102 per week).

Employers back coalition internship campaign

Big business has recently come out in support of Nick Clegg’s campaign to improve internship and work-placement quality and provision in the UK. Internships and work-placements have moved up the political agenda since The Chartered Institute of Personnel and Development (CIPD) released its guide for employers in 2009: ‘Internships that Work’.

Since then the CIPD and the Institute of Chartered Accountants in England and Wales (ICAEW) have launched the Government’s Common Best Practice Code for High-Quality Internships. Employers have been increasingly criticised for providing poor quality or unpaid internships often with little or no recruitment transparency or process. Over 100 employers, including leading multi-nationals and legal firms, have this month promised to openly advertise all work experience places in an effort to increase uptake for young people from modest backgrounds who are perceived to lack access to the necessary contacts. Many employers have also agreed to pay their interns wages or other remuneration or to provide accommodation or expenses on the back of the advice contained within the guidance.

AS View…

Although the promotion and well structured provision of internships and work-placements can be beneficial for employers and prospective employees alike, they can raise a number of employment law issues.

For example, no specific exemption exists for interns from the National Minimum Wage (NMW) regulations. This means they will be entitled to be paid the NMW if they are classed as workers instead of volunteers. In a tribunal case last year the Tribunal awarded an intern over £1000 in wages and holiday pay. The intern, despite agreeing at the outset that her 6 month stint would be unpaid, successfully argued that she was a worker and, of particular importance, was performing work at a level above that normally associated with an unpaid internship.

Employers operating such schemes should be aware of other potential risks including:-

  • vicarious liability for damages claims arising from the acts or omissions of the intern in the workplace;
  • exposure to Equality Act discrimination claims; and
  • disclosure by interns of potentially sensitive commercial or confidential information.

The guidance underlines the need for a clear and concise internship, work-placement or volunteer policy and highlights the dangers associated with requiring interns and the like to carry out tasks with increasing levels of responsibility in the absence of such clarity at the outset.

For further information please contact a member of our Employment Law team.

LookOut on ……cases

What is an “establishment” for collective consultation purposes?

The recent decision of Union of Shop, Distributive and Allied Workers (USDAW) v WW Realisation 1 Limited (in Liquidation) , considered the definition of an “establishment” when deciding whether Woolworths properly complied with their collective consultation duties under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, when it made all of its employees redundant. The duty to collectively consult about proposed redundancies is triggered when the employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. A failure to collectively consult can result in protective awards of up to 90 days’ actual pay per employee affected.

The Employment Tribunal (ET) held that each individual Woolworths store was a distinct establishment as opposed to Woolworths as a whole operation being a single establishment. In reaching this decision the ET considered that;

  • Each Woolworths’ store was physically a distinct premises;
  • Each Woolworths’ store had a purpose to serve the customers who visited that particular store;
  • Each Woolworths’ store had, and was headed by, its own Store Manager;
  • Each of the employees worked at a particular Woolworths’ store; and
  • The employees were not peripatetic and were not subject to mobility clauses in their contracts.

As a result, the duty to collectively consult was engaged for all stores with more than 20 employees and, since the collective consultation requirements has not been met, protective awards were made for the employees in those stores. Employees in stores with less than 20 employees were not entitled to a protective award as the collective consultation requirement was not triggered. As there had been some degree of consultation, the ET awarded protective awards of 60 days’ gross pay, rather than the maximum award of 90 days.

The ET declined to make a reference to the European Court of Justice regarding the interpretation of the legislation.

AS View…

When reaching a decision regarding whether or not a single store is an establishment, the ET was guided by the facts of the case and drew from the reasoning in previous cases where the definition of an establishment was analysed. Care must always be taken when assessing whether there is a legal obligation to collectively consult and particular attention must be paid to the likely “establishment” in each case. Getting this wrong can be very costly given the level of protective awards, particularly where large numbers of employees are involved.

For further information please contact Rhona Wark or Alun Thomas.

Vicarious liability

In two recent cases (Weddall v Barchester Healthcare and Wallbank v Wallbank Fox Designs Ltd) the Court of Appeal considered when an employer is liable for an employee’s conduct, following assaults in the workplace. Although each case will turn on its own facts, the court emphasised the importance of considering the closeness of the link between the employee’s illegal act and the employment in determining if an employer is vicariously liable.

In Weddall, a manager in the course of a telephone call, requested that the employee work a night shift, which he refused to do. Some time later he appeared at work and assaulted his manager. The court concluded that the employer could not be held liable for the employee’s actions. The court held that the employee was acting for his own reasons and that the earlier telephone call was just an excuse or pretext for his actions. Some time had passed between the telephone call and the employee’s deliberate decision to attend the workplace to assault his manager.

In direct contrast, in Wallbank, the employer was held vicariously liable. Here, an employee was asked to fix a problem identified at work. His manager had intended to assist him and said “come on”. In direct response, the employee grabbed his face and threw him on to a table. The injuries sustained involved the manger being taken to hospital. Given the employee’s spontaneous response to the request put to him, this was considered sufficient to hold the employer responsible for his employee’s actions.

AS view…

The Court of Appeal undertook a thorough examination of a variety of cases including those from the House of Lords in reaching both decisions. Although it is acknowledged that each case will be decided on its own facts, the court provides a useful summary of how vicarious liability is to be applied. There must be sufficient connection between the employee’s employment and the duties he is asked to perform and the unlawful violence towards a colleague (or anyone else for that matter).

For further information please contact Andrew Brown or Pamela Keys.

Public sector workers able to rely on EU Directive in relation to holiday entitlement

When national courts apply domestic law they are bound to interpret it, so far as possible, in the light of the wording and purpose of the European Union directive concerned. Where such an interpretation is not possible then it is necessary to consider whether the directive in question has direct effect in the particular circumstances of the case. A directive will only have direct effect upon an “emanation of the state”, and only where it is clear, precise, unconditional, and does not give the member state substantial discretion in its application.

Under Article 7(1) of the Working Time Directive (WTD), member states are required to take measures to ensure that workers are entitled to at least four weeks’ paid annual leave. In the recent French case of Dominguez v Centre informatique du Centre Ouest Atlantique the European Court of Justice (ECJ) held that this provision is sufficiently precise and unconditional to have direct effect against an emanation of the state.

In its decision the ECJ confirmed that Article 7(1) would apply to “a body, whatever its legal form, which has been made responsible, pursuant to a measure adopted by the state, for providing a public service under the control of the state”, but that it “cannot itself apply in proceedings exclusively between private parties”.

AS view…

This decision means that public sector workers in the UK should be able to enforce their rights in terms of Article 7(1) in employment tribunals, regardless of how the Working Time Regulations 1998 (WTR) can be interpreted. The practical implication of this case is that, where there is any question over whether the WTR fully implement the WTD, public sector workers will be able to directly enforce their EU-derived rights in employment tribunals; the same will not apply for private sector workers. This is of particular relevance in relation to the rights of workers on long term sick absence who have been unable to take holidays, where, for example, regulation 13(9) of WTR expressly prohibits carry-over of the first four weeks’ statutory holiday to the next leave year, yet the ECJ has held that Article 7(1) of WTD requires holidays to be carried over in some circumstances.

For further information please contact Barry Nicol or Chris McDowall.

Warning against holding disciplinary hearings in an employee’s absence

The recent employment tribunal case Bridgeman v Family Mosaic Housing Association serves as a warning to employers considering holding a disciplinary hearing in an employee’s absence.

B was employed as a support officer to vulnerable adults. In April 2010 there was a serious incident relating to one of her clients. A disciplinary hearing was arranged, but postponed twice at B’s request. The outcome of the eventual hearing was that B was given a final written warning. There continued to be issues regarding her standard of work and she was criticised for inadequate risk assessments. Her senior manager prepared a report stating that there was the risk of a further serious incident due to lack of competence on her part. In January 2011, while B was off sick, the Association invited her to a disciplinary hearing. She advised that she was trying to get another fit note for her continued absence. On the day of the hearing, B said that she was too unwell to attend. She was considered to be being uncooperative and the disciplinary hearing went ahead in her absence. B obtained a fit note on 15 February 2011. In a letter dated 16 February 2011 she was informed that she was being dismissed. She was unsuccessful in her subsequent appeal and claimed unfair dismissal.

The employment tribunal held that the employer had genuine and reasonable grounds for dismissal. However, it went on to conclude that the decision to go ahead with the hearing was too hasty. The tribunal acknowledged that the ACAS Code of Practice says that employers do not have to wait indefinitely for an employee to attend a disciplinary hearing if he/she is suspected of malingering or has not kept in touch. However, the tribunal also stressed that the right to a disciplinary hearing is at the core of a fair dismissal process and it must not be dispensed with lightly. Whilst B had previously delayed disciplinary hearings, the latest disciplinary process was at its early stages and the employer did not have adequate information upon which to decide whether or not B was abusing the system. This was a substantial procedural failing. The tribunal found the dismissal to be unfair but decided that B would have been dismissed anyway and her compensation was limited to a basic award.

AS View...

In general, employers should try and adhere to the principle that an employee should not be dismissed without a hearing. Where the employee will not, or cannot, attend a hearing, the employer should only contemplate taking disciplinary action without the employee's input as a last resort and after giving the employee sufficient warning that the matter will be considered in their absence if they do not attend. Employers should also be careful not to be seen to be “bullying” the employee to attend a disciplinary hearing, especially if the absence is stress-related in the first place. That may pave the way for a constructive dismissal and/or disability discrimination claim. If in doubt about an employee’s motive for delaying a hearing, seek medical opinion on whether they are fit to attend.

For further information please contact Jill Bell or Murray McCall.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.