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Empire HR September Bulletin

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Frank Cozzo
Frank Cozzo

The Court of Appeal upheld a dismissal for breakdown of trust where the employment tribunal considered all relevant facts. However, a breakdown of trust cannot be a convenient label for dismissal without lawful reasons. The duty to make reasonable adjustments for a disabled employee does not necessarily end when the employee goes on sick leave. An employment tribunal awarded compensation to an employee who was victimized after complaining of racist behavior. For a transfer of staff to occur under TUPE, there must be a deliberate grouping of employees organized for the specific client work. Selection criteria for redundancy must be applied consistently and objectively.

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SEPTEMBER 2012 ‘BREAKDOWN OF TRUST’ DISMISSALS Can a ‘breakdown of trust’ always be a substantial and sufficient reason for dismissal? No, said the Court of Appeal in Leach v OFCOM. The Court of Appeal held that the employment tribunal considered all relevant facts and was entitled to find that the breakdown of trust by the Claimant was a substantial and sufficient reason for his dismissal. The Court further stated that although mutual trust and confidence is at the heart of employment relationship, breach of it is not a ‘convenient label to stick on any situation’ to dismiss an employee in the absence of other lawful reasons. In deciding the reason for dismissal and whether it was substantial and sufficient to justify the dismissal, an ET has to examine all relevant circumstances. The claimant also argued that the dismissal had breached his human rights under the European Convention on Human Rights (ECHR).  However, the Court of Appeal rejected these arguments. DISABILITY DISCRIMINATION Does the duty to make reasonable adjustments end when an employee goes on sick leave? Sometimes, but in Olenloa v North West London Hospitals, the EAT emphasised that such a conclusion must be based on specific facts. The employee made a tribunal claim alleging that he was disabled and that his employer had failed in their duty to make reasonable adjustments as required under the Disability Discrimination Act 1995 but the tribunal decided that the employer no longer held that duty once the employee went off sick. The employee appealed the decision and the Employment Appeal Tribunal found that the first tribunal had made an error of law and that the duty to make reasonable adjustments does not end once an employee goes off sick. The reason for this is that if the employer had made the reasonable adjustments, they may have prevented the employee from going off sick or enabled him to return to work. If an employee suffers from a disability that comes under the Equality Act 2010, they will have an obligation to that employee to make reasonable adjustments. The question to ask is whether the adjustments will be effective, affordable and practicable? Employers should also be aware that the duty to make reasonable adjustments does not necessarily begin once you have hired a person, as you may be required to make reasonable adjustments for recruitment and selection processes.
RACE DISCRIMINATION PAY-OUT A former postal worker has been awarded undisclosed compensation after an employment tribunal ruled he had faced discrimination in Mr A Musa v Royal Mail Group. Abdul Musa was supported by the Equality and Human Rights Commission (EHRC) in his claim of victimisation after he complained of racist behaviour among colleagues at a Royal Mail depot in Blackburn. Mr Musa made complaints of race discrimination, which led to a worker being sacked, after which he claimed he was “sent to Coventry” by other employees and when an internal investigation was held into his complaints, it led to disciplinary cases being taken against a number of other workers. Mr Musa was then dismissed in 2007 after being seen by Royal Mail as a “problem”. The EHRC stated that: “The Equality Act protects people from being victimised for making complaints about any form of discrimination in the workplace. It also says employers have a responsibility to take complaints seriously and to put a stop to discrimination.” TUPE: ORGANISED GROUPING OF EMPLOYEES In a recent case with an Aberdeen company, Seawell Ltd v Ceva Freight (UK) Ltd & another, an EAT ruled that just because an employee works 100% of his time for a single client, he is not necessarily assigned to an organised grouping of employees for the purposes of a service provision change and therefore his employment does not necessarily transfer under TUPE. The claimant was employed by Ceva Freight (UK) Ltd, which provided logistics and freight forwarding arrangements for Seawell. Seawell then terminated the arrangement and took the service back in-house. Seawell was not the only client of Ceva, but Mr Moffat spent 100% of his time on their contract, with other employees spending smaller percentages of time on the contract and the rest of their time on other contracts. An ET found that either the claimant himself could comprise of an organised grouping of employees or, alternatively, if the organised grouping of employees included Mr Moffat and colleagues, Mr Moffat was assigned to that organised grouping of employees as he spent 100% of his time on the service. On this basis they deemed he transferred under TUPE. The EAT however disagreed. There was no basis for finding in this case that there was a group of employees specifically organised for this particular contract. An organised grouping of employees indicates a deliberate putting together of a group of employees for the purpose of the relevant client work. There was no such conscious employee grouping on the facts of the case and as such there was no service provision change and no relevant transfer.
REDUNDANCY SELECTION CRITERIA In Mitchells of Lancaster (Brewers) Limited v Tattersall, Mr Tattersall was employed as a Property Manager. The Senior Management Team (SMT) comprised of five people, including Mr Tattersall. During the first half of 2010, the Company’s trading position deteriorated and the directors were anxious to make savings. At a board meeting in June 2010, it was decided that a proposed restructure was required. Each of the SMT roles was discussed and it was concluded that cutting the role of property manager would have the least detrimental impact on the business because it was a role that did not generate revenue. The business skills of each manager were also discussed. Mr Tattersall was informed that his role was at risk, and after a series of individual consultation meetings, was ultimately dismissed by reason of redundancy. His appeal was unsuccessful. He then raised a claim and the tribunal found that he had been unfairly dismissed for a number of different reasons. The tribunal held that the dismissal was for the potentially fair reason of redundancy; however the tribunal concluded that the dismissal itself was unfair. The selection criteria were unacceptable because they were entirely subjective and based on the views of the other directors; however, as there was a one in five chance that Mr Tattersall would have been selected for redundancy anyway, compensation was reduced by 20%. Mr Tattersall appealed. The Employment Appeal Tribunal upheld the fairness of the dismissal and disagreed that the selection criteria were unacceptable – just because the criteria were matters of judgment, did not mean that they could not be assessed in an objective way. However, evidence suggested that there was no process that gave Mr Tattersall the opportunity to persuade the company, or them to consider, that any of the roles other than his should be selected for redundancy. The failure to properly consider the other four managers for redundancy rendered the procedure unfair and a reduction in compensation was also recommended as there must have been a significantly greater likelihood of him being selected. Employers should take care that they have robust and transparent criteria when selecting for redundancy and keep records of decisions to show they have been applied consistently and objectively. If in doubt, take specific advice (e.g. from Empire) before making the selection. ZERO HOURS CONTRACTS Companies are increasingly making use of zero hours contracts, not giving their employees guaranteed hours but expecting them to be available to work with a few hours’ notice. They say they are being fair and are providing valuable experience to staff, but unions, and some workers, are opposed. The growth of these contracts seems to be connected to the recession, as employers seek new ways to take on staff cheaply without any commitment. According to the Office of National Statistics, the number of people on zero hours contracts has more than doubled since 2005 and now 161,000 people are employed in zero-hours jobs.
NUMBER WORKING BEYOND THE STATE PENSION AGE DOUBLES The number of older workers working beyond State Pension Age (SPA) has almost doubled in the last two decades to 1.4 million. With an ageing population and the post-World War II ‘baby boom’ generation reaching SPA, the population of older people and older people in employment has increased, resulting in the number of workers above SPA rising at a faster rate than the population. There may be a number of factors influencing the decision for more people to work past SPA such as improved health and well-being, financial pressures, people living longer and wanting to remain active, and workers over SPA are more likely to be self-employed or work part-time. This shows that those who remain in employment work fewer hours, possibly helped by the financial support of their state pension and/or other pension arrangements, which allows them to fit work around other activities. Older workers are also more likely to stay on in smaller firms and tend to remain with the same employer. 62% had worked with the same employer for ten years or more, with 8 out of 10 working for the same employer for five years or more. There may be many reasons for these differences such as the fact that smaller firms are less likely to offer a workplace pension which may result in individuals having to work longer for financial reasons. With the changes in pension legislation, this may start to change over the next few years. LEGISLATIVE CHANGES FROM 1 OCTOBER 2012 National Minimum Wage New Rates: 21 and over: Increase to £6.19 18-20 years: £4.98 – no increase 16-17 years: £3.68 – no increase Apprentices: Increase to £2.65 Pensions auto-enrolment begins: From 1 October until February 2014, employers with 250 or more employees will have to enrol eligible employees automatically, and make mandatory employer contributions, into a qualifying workplace pension scheme or the National Employment Savings Trust (Nest). Health and Safety (Miscellaneous Revocations) Regulations 2012 come into force: The Regulations revoke seven statutory instruments relating to health and safety.
HEALTH & SAFETY MANUAL HANDLING Lifting bags of cash might seem to most as an enjoyable activity however in her workplace, the Nat West Bank in Cheriton, Kent, the need to lift two cash bags, each containing £500 in £1 coins (11kg) caused a bank cashier to injure her back. The cashier claimed Nat West had not given her health and safety training after doctors found two spinal discs had moved out of line and aggravation of a previously undiagnosed spinal condition. The cashier was awarded £18,500 in compensation and stated all the pain and time off work could have been avoided if she’d been trained to lift heavy items correctly. CARE HOME RESIDENT SUFFERED FATAL INJURIES A Care Home in Shropshire has been fined £100,000 and ordered to pay £5,479 in costs at Shrewsbury Crown Court after the court heard how a resident fell while on a shopping trip resulting in head injuries which proved fatal. The 79 year old resident walked to the shop using a wheeled walking frame with the help of a carer but she fell and sustained head injuries. After being admitted to hospital she died four days later from complications arising from her injuries. The subsequent investigation into the accident discovered the care staff had been required to use a wheelchair for the resident when she was taken outside the home and a documented care plan was available with the detailed instructions however, carers were accustomed to receiving only verbal instructions from senior management relating to the care requirements of residents. Steve Charmley, Shropshire Council cabinet member for health and safety said: “This fatal accident should never have happened. This is a tragic case of the death of an elderly lady, which was entirely preventable”, he added “this case shows that there can be tragic consequences if employers do not meet health and safety standards, carry out the necessary precautions and communicate effectively with their employees”. ROOF WORK Whether your business involves carrying out roof work or you simply engage contractors to do so on your work premises, revised HSE Guidance is available and is free to download from their website (HSG33). The Guidance is aimed at anyone planning, undertaking or supervising roof work which includes Directors of companies who are not involved in roof work themselves. Engaging contractors to undertake roof work for you gives you a responsibility to assess the suitability of the contractor before the work commences and to monitor the activity during the works to ensure safety standards are maintained. The Guidance is essential reading, not just for those in the construction industry but for the management of this high risk activity where the main risks are identified as falls through fragile materials and as a result of unprotected roof edges.
TRAINING AND DEVELOPMENT We will be running the following courses over the next few weeks: Lunch and Learn Sessions - 12pm to 2pm Introduction to Mediation: Wednesday 3rd October, Inverness Introduction to Mediation: Tuesday 23rd October, Aberdeen Witness Familiarisation Training: Wednesday 31st October, Aberdeen To book a place or for further details, please visit www.empirehr.com. Alternatively, you can email: bookings@empirehr.com or talk to the team on 01224 701383.

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Empire HR September Bulletin

  • 1. SEPTEMBER 2012 ‘BREAKDOWN OF TRUST’ DISMISSALS Can a ‘breakdown of trust’ always be a substantial and sufficient reason for dismissal? No, said the Court of Appeal in Leach v OFCOM. The Court of Appeal held that the employment tribunal considered all relevant facts and was entitled to find that the breakdown of trust by the Claimant was a substantial and sufficient reason for his dismissal. The Court further stated that although mutual trust and confidence is at the heart of employment relationship, breach of it is not a ‘convenient label to stick on any situation’ to dismiss an employee in the absence of other lawful reasons. In deciding the reason for dismissal and whether it was substantial and sufficient to justify the dismissal, an ET has to examine all relevant circumstances. The claimant also argued that the dismissal had breached his human rights under the European Convention on Human Rights (ECHR).  However, the Court of Appeal rejected these arguments. DISABILITY DISCRIMINATION Does the duty to make reasonable adjustments end when an employee goes on sick leave? Sometimes, but in Olenloa v North West London Hospitals, the EAT emphasised that such a conclusion must be based on specific facts. The employee made a tribunal claim alleging that he was disabled and that his employer had failed in their duty to make reasonable adjustments as required under the Disability Discrimination Act 1995 but the tribunal decided that the employer no longer held that duty once the employee went off sick. The employee appealed the decision and the Employment Appeal Tribunal found that the first tribunal had made an error of law and that the duty to make reasonable adjustments does not end once an employee goes off sick. The reason for this is that if the employer had made the reasonable adjustments, they may have prevented the employee from going off sick or enabled him to return to work. If an employee suffers from a disability that comes under the Equality Act 2010, they will have an obligation to that employee to make reasonable adjustments. The question to ask is whether the adjustments will be effective, affordable and practicable? Employers should also be aware that the duty to make reasonable adjustments does not necessarily begin once you have hired a person, as you may be required to make reasonable adjustments for recruitment and selection processes.
  • 2. RACE DISCRIMINATION PAY-OUT A former postal worker has been awarded undisclosed compensation after an employment tribunal ruled he had faced discrimination in Mr A Musa v Royal Mail Group. Abdul Musa was supported by the Equality and Human Rights Commission (EHRC) in his claim of victimisation after he complained of racist behaviour among colleagues at a Royal Mail depot in Blackburn. Mr Musa made complaints of race discrimination, which led to a worker being sacked, after which he claimed he was “sent to Coventry” by other employees and when an internal investigation was held into his complaints, it led to disciplinary cases being taken against a number of other workers. Mr Musa was then dismissed in 2007 after being seen by Royal Mail as a “problem”. The EHRC stated that: “The Equality Act protects people from being victimised for making complaints about any form of discrimination in the workplace. It also says employers have a responsibility to take complaints seriously and to put a stop to discrimination.” TUPE: ORGANISED GROUPING OF EMPLOYEES In a recent case with an Aberdeen company, Seawell Ltd v Ceva Freight (UK) Ltd & another, an EAT ruled that just because an employee works 100% of his time for a single client, he is not necessarily assigned to an organised grouping of employees for the purposes of a service provision change and therefore his employment does not necessarily transfer under TUPE. The claimant was employed by Ceva Freight (UK) Ltd, which provided logistics and freight forwarding arrangements for Seawell. Seawell then terminated the arrangement and took the service back in-house. Seawell was not the only client of Ceva, but Mr Moffat spent 100% of his time on their contract, with other employees spending smaller percentages of time on the contract and the rest of their time on other contracts. An ET found that either the claimant himself could comprise of an organised grouping of employees or, alternatively, if the organised grouping of employees included Mr Moffat and colleagues, Mr Moffat was assigned to that organised grouping of employees as he spent 100% of his time on the service. On this basis they deemed he transferred under TUPE. The EAT however disagreed. There was no basis for finding in this case that there was a group of employees specifically organised for this particular contract. An organised grouping of employees indicates a deliberate putting together of a group of employees for the purpose of the relevant client work. There was no such conscious employee grouping on the facts of the case and as such there was no service provision change and no relevant transfer.
  • 3. REDUNDANCY SELECTION CRITERIA In Mitchells of Lancaster (Brewers) Limited v Tattersall, Mr Tattersall was employed as a Property Manager. The Senior Management Team (SMT) comprised of five people, including Mr Tattersall. During the first half of 2010, the Company’s trading position deteriorated and the directors were anxious to make savings. At a board meeting in June 2010, it was decided that a proposed restructure was required. Each of the SMT roles was discussed and it was concluded that cutting the role of property manager would have the least detrimental impact on the business because it was a role that did not generate revenue. The business skills of each manager were also discussed. Mr Tattersall was informed that his role was at risk, and after a series of individual consultation meetings, was ultimately dismissed by reason of redundancy. His appeal was unsuccessful. He then raised a claim and the tribunal found that he had been unfairly dismissed for a number of different reasons. The tribunal held that the dismissal was for the potentially fair reason of redundancy; however the tribunal concluded that the dismissal itself was unfair. The selection criteria were unacceptable because they were entirely subjective and based on the views of the other directors; however, as there was a one in five chance that Mr Tattersall would have been selected for redundancy anyway, compensation was reduced by 20%. Mr Tattersall appealed. The Employment Appeal Tribunal upheld the fairness of the dismissal and disagreed that the selection criteria were unacceptable – just because the criteria were matters of judgment, did not mean that they could not be assessed in an objective way. However, evidence suggested that there was no process that gave Mr Tattersall the opportunity to persuade the company, or them to consider, that any of the roles other than his should be selected for redundancy. The failure to properly consider the other four managers for redundancy rendered the procedure unfair and a reduction in compensation was also recommended as there must have been a significantly greater likelihood of him being selected. Employers should take care that they have robust and transparent criteria when selecting for redundancy and keep records of decisions to show they have been applied consistently and objectively. If in doubt, take specific advice (e.g. from Empire) before making the selection. ZERO HOURS CONTRACTS Companies are increasingly making use of zero hours contracts, not giving their employees guaranteed hours but expecting them to be available to work with a few hours’ notice. They say they are being fair and are providing valuable experience to staff, but unions, and some workers, are opposed. The growth of these contracts seems to be connected to the recession, as employers seek new ways to take on staff cheaply without any commitment. According to the Office of National Statistics, the number of people on zero hours contracts has more than doubled since 2005 and now 161,000 people are employed in zero-hours jobs.
  • 4. NUMBER WORKING BEYOND THE STATE PENSION AGE DOUBLES The number of older workers working beyond State Pension Age (SPA) has almost doubled in the last two decades to 1.4 million. With an ageing population and the post-World War II ‘baby boom’ generation reaching SPA, the population of older people and older people in employment has increased, resulting in the number of workers above SPA rising at a faster rate than the population. There may be a number of factors influencing the decision for more people to work past SPA such as improved health and well-being, financial pressures, people living longer and wanting to remain active, and workers over SPA are more likely to be self-employed or work part-time. This shows that those who remain in employment work fewer hours, possibly helped by the financial support of their state pension and/or other pension arrangements, which allows them to fit work around other activities. Older workers are also more likely to stay on in smaller firms and tend to remain with the same employer. 62% had worked with the same employer for ten years or more, with 8 out of 10 working for the same employer for five years or more. There may be many reasons for these differences such as the fact that smaller firms are less likely to offer a workplace pension which may result in individuals having to work longer for financial reasons. With the changes in pension legislation, this may start to change over the next few years. LEGISLATIVE CHANGES FROM 1 OCTOBER 2012 National Minimum Wage New Rates: 21 and over: Increase to £6.19 18-20 years: £4.98 – no increase 16-17 years: £3.68 – no increase Apprentices: Increase to £2.65 Pensions auto-enrolment begins: From 1 October until February 2014, employers with 250 or more employees will have to enrol eligible employees automatically, and make mandatory employer contributions, into a qualifying workplace pension scheme or the National Employment Savings Trust (Nest). Health and Safety (Miscellaneous Revocations) Regulations 2012 come into force: The Regulations revoke seven statutory instruments relating to health and safety.
  • 5. HEALTH & SAFETY MANUAL HANDLING Lifting bags of cash might seem to most as an enjoyable activity however in her workplace, the Nat West Bank in Cheriton, Kent, the need to lift two cash bags, each containing £500 in £1 coins (11kg) caused a bank cashier to injure her back. The cashier claimed Nat West had not given her health and safety training after doctors found two spinal discs had moved out of line and aggravation of a previously undiagnosed spinal condition. The cashier was awarded £18,500 in compensation and stated all the pain and time off work could have been avoided if she’d been trained to lift heavy items correctly. CARE HOME RESIDENT SUFFERED FATAL INJURIES A Care Home in Shropshire has been fined £100,000 and ordered to pay £5,479 in costs at Shrewsbury Crown Court after the court heard how a resident fell while on a shopping trip resulting in head injuries which proved fatal. The 79 year old resident walked to the shop using a wheeled walking frame with the help of a carer but she fell and sustained head injuries. After being admitted to hospital she died four days later from complications arising from her injuries. The subsequent investigation into the accident discovered the care staff had been required to use a wheelchair for the resident when she was taken outside the home and a documented care plan was available with the detailed instructions however, carers were accustomed to receiving only verbal instructions from senior management relating to the care requirements of residents. Steve Charmley, Shropshire Council cabinet member for health and safety said: “This fatal accident should never have happened. This is a tragic case of the death of an elderly lady, which was entirely preventable”, he added “this case shows that there can be tragic consequences if employers do not meet health and safety standards, carry out the necessary precautions and communicate effectively with their employees”. ROOF WORK Whether your business involves carrying out roof work or you simply engage contractors to do so on your work premises, revised HSE Guidance is available and is free to download from their website (HSG33). The Guidance is aimed at anyone planning, undertaking or supervising roof work which includes Directors of companies who are not involved in roof work themselves. Engaging contractors to undertake roof work for you gives you a responsibility to assess the suitability of the contractor before the work commences and to monitor the activity during the works to ensure safety standards are maintained. The Guidance is essential reading, not just for those in the construction industry but for the management of this high risk activity where the main risks are identified as falls through fragile materials and as a result of unprotected roof edges.
  • 6. TRAINING AND DEVELOPMENT We will be running the following courses over the next few weeks: Lunch and Learn Sessions - 12pm to 2pm Introduction to Mediation: Wednesday 3rd October, Inverness Introduction to Mediation: Tuesday 23rd October, Aberdeen Witness Familiarisation Training: Wednesday 31st October, Aberdeen To book a place or for further details, please visit www.empirehr.com. Alternatively, you can email: bookings@empirehr.com or talk to the team on 01224 701383.