The Supreme Court last year, in Autoclenz Lyd v Belcher [2011] ICR 1157, made clear that written contractual terms inconsistent with ‘employee’ status may be disregarded where they do not reflect the parties’ actual agreement. Hence a clause negating any obligation on car valets to provide personal service was ignored in deciding whether they were employees.

Now, the Employment Appeal Tribunal (‘EAT’), in Quashie v Stringfellow Restaurants Limited  UKEAT/0289/11/RN, has ruled that an exotic dancer was an employee and, therefore, eligible to bring an unfair dismissal claim. She would, incidentally, also be able to claim holiday pay and other employment rights.

This judgement has come as a big surprise to the entertainment industry and many outside it. It will affect the employment rights of thousands of dancers across the UK, in an industry previously largely free of employment regulation.

For there to be an employment relationship, the cases establish that there are three essential ingredients:

•  the employee must perform the service personally (and not, for example, through a substitute or limited company);
• there must be a sufficient degree of control by the employer; and
• there must be a mutuality of obligation, whereby the employer must supply work and the employee do work.

If any one of these three elements is missing, the individual is not an employee.

The employment tribunal decided that Miss Quashie ticked the first two boxes. She was required to work personally and there was sufficient control by Stringfellows over how she provided her services, as she was required to comply with strict ‘club rules’. The employment tribunal found, however, that there was not the necessary mutuality of obligation to sustain an employment relationship.

The EAT disagreed. Ms Quashie was employed even when she was not working because she had contractual obligations to attend work, to notify Stringfellows of holidays and to attend weekly meetings without pay.  She was an employee.

This case is particularly useful in exploring what ‘mutuality of obligation’ really means and will make it more difficult for employers and individuals, where the service is personal and there is a high degree of control, to escape the ‘employment’ net.

If you are an employer or individual at risk, please give me a ring.

Geoffrey Bignell, Chairman, Just Employment Solicitors

When employers make redundancies, they usually know the staff they least want to keep. This was certainly true for me, when I was at The Law Society and needed to lose 10 posts in 1990.

But employment law requires a sophisticated ‘objective’ process to identify the jobs to go. The employer must first choose a reasonable pool from which the redundant jobs are to be selected; define and apply ‘objective’ selection criteria to identify the jobs to go; consult those affected; and explore alternative employment for prospective leavers.

So it is very convenient if the leaver-to-be is a pool of one, because no further selection process is necessary. Two recent Employment Appeal Tribunal decisions illustrate the boundaries of an employer’s discretion in choosing a pool of one.

In Halpin v Sandpiper Books EAT 6.2.12 (0171/11), the employer had one salesman in China and decided to close the China office, making him redundant. Mr Halpin argued that other London employees with interchangeable skills should have been in the pool with him. The EAT disagreed, holding that limiting the pool to one was a logical decision.

In Capita Hartshead v Byard EAT 20.2.12 (0445/11), Mrs Byard’s work as an actuary had reduced. The workload of her actuarial colleagues had barely diminished. So Mrs Byard was placed in a pool of one and made redundant. The employer argued it might lose clients if the actuary changed.

The EAT summarised the principles as follows:

·  The ‘reasonable response’ test applies to selection of the pool: is the selection within the band of reasonable responses?

·  The employer must ‘genuinely’ apply his mind to the question of who should be in the pool

·  There is no legal requirement that the pool should be limited to employees doing similar work [Taymech v Ryan EAT 15.11.94 (663/94)]

Here the employer’s choice of a pool of one was unfair, because it did not genuinely apply its mind to the issue of who should be included in the redundancy pool. Two other actuaries at the same location should have been included.

These judgements leave employers with considerable discretion, although employment tribunals will look more carefully when the size of the pool and the number of redundancies is identical.

Geoffrey Bignell, Chairman, Just Employment Solicitors

Mr D’Cruz’ job as ‘Head of OS Reseller’ was redundant in a restructuring to combine four senior roles into one ‘Head of Sales – Print’. He was interviewed for the new job but not appointed. He accepted that he was not the best candidate. He was then interviewed, in the second stage of the restructuring, for the new role of ‘Business Region Team Leader’. This job was similar to his old job. Again he was not appointed, as he scored on ten competencies below the required score of 75. An outsider was appointed.

The employment tribunal thought the ten competencies were ‘subjective’; that Mr Monte-D’Cruz should have got the ‘Business Region Team Leader’ job; and so the dismissal was unfair.

The Employment Appeal Tribunal disagreed. Mr Justice Underhill observed that:

• The ‘merits of the reorganisation as such were not a matter for consultation’
• ‘Selection criteria’ is ‘not quite the right language’ when looking at the chance to apply for a different job. This was not a situation where one or more job-holders were being selected for redundancy.
• There was no obligation to inform Mr D’Cruz in advance about such ‘selection criteria’
• ‘Not all aspects of the performance or value of an employee lend themselves to objective measurement’
• There ‘there is no obligation on an employer always to use criteria which are capable of such measurement, and certainly not in the context of an interview’
• ‘The fairness of a decision to dismiss in cases of this kind cannot depend on whether the minutiae of good interview practice are observed’
• ‘What assessment tools to use in an interview of this kind….is prima facie a matter for the discretion of the employer’
• ‘Good faith assessments of an employee’s qualities are not normally liable to be second-guessed by an employment tribunal’

You may think this is all good common sense. If you are making redundancies, or you are unhappy about your job being made redundant, please contact me now.

Geoffrey Bignell, Chairman, Just Employment Solicitors.

It goes without saying that many staff will just assume that they are entitled to the extra day off. However, are Employer’s obligated to provide time off on the 5th June 2012? Legally, employers do not automatically have to give staff another paid holiday, simply because there is another public holiday. Whether or not an employee will be entitled to take an additional paid holiday on this date will depend on the specific wording of their contract of employment in relation to public holidays.

The legal obligation on employers is to allow workers the minimum 28 days’ annual leave set out in the Working Time Regulations 1998 (pro rata for part-timers). What this means in terms of days off, and whether an employer is more generous than the law requires, is entirely a matter for the employment contract. For example, if the contract of employment states that an employee is entitled to a set number of holidays per year (as long as it is not below the statutory minimum), then employees working under the contract will not be entitled to an extra day on top of their stated contractual allowance and it will be a matter for the employers discretion whether they grant employees the day off for the Jubilee bank holiday in addition to their usual contractual entitlement.

This will also be the position where contracts of employment specify particular bank holiday dates. However, where a contract of employment states that the employee is entitled to all bank holidays, employers may be bound to grant the additional day.

Clare McDairmant, Solicitor, Just Employment Solicitors.

The partnership deed had a retirement age of 65. But as Mr Seldon reached his 65th birthday, he realised that he could not afford to retire. He asked his partners if he could carry on working, as a consultant or salaried employee. The partnership refused and Mr Seldon was retired. He brought a claim in the employment tribunal for age discrimination.

He was unsuccessful in the tribunal, the Employment Appeal Tribunal and the Court of Appeal. He appealed to the Supreme Court: Seldon v Clarkson Wright and Jakes [2012] UKSC 16.

It was clear that Leslie Seldon suffered direct discrimination on grounds of age, but was such discrimination justified (and, therefore, lawful) as a proportionate means of achieving a legitimate aim?

The Supreme Court considered whether the partnership had a legitimate aim for retiring Mr Seldon. The Court found that three of the partnerships aims were legitimate, namely:

1. Ensuring that associates are given the opportunity of partnership after a reasonable time, thereby ensuring that they do not leave the firm

2. Facilitating the planning of the partnership and

3. Limiting the need to expel partners by way of performance management .

The case returns to original employment tribunal to decide whether choosing the age of 65 years was a proportionate means of achieving these aims.

The message to employers and partnerships is very clear. Any specific retirement age is acceptable in principle, but must be justified on a case-by-case basis, so that the same aims cannot be achieved using a less discriminatory approach. Justification will not be easy and is best set out in a well-drafted employment contract or partnership deed. Most employers and partnerships will surely decide to do without any age-related retirement age.

Helen Phillips, Solicitor, Just Employment Solicitors.

The simple answer is yes, you can be fairly dismissed for what you post online. If the post is capable of constituting gross misconduct, the employer’s disciplinary rules are clear and a proper procedure is followed, dismissal can be fair.

Posting inappropriate comments online, e.g. discriminatory views, can lead to dismissal. It does not matter if comments are made on a home computer, as employers can discipline employees for conduct that occurs outside of the workplace if it affects their ability to do their job – Singh v London Country Bus Services Ltd [1976] IRLR 175).

Criticising your employer online can also lead to dismissal. To justify dismissal, an employer would have to show that the comments are likely to damage their reputation or business.

Employers must consider whether the ‘post’ was private. A tribunal held in Crisp v Apple Retail UK Limited (unreported ET/1500258/2011) that, when an employee posted derogatory posts on Facebook about his employer, he had no reasonable expectation that the posts would remain private. Dismissing an employee who reasonably expected that their Facebook posts would be private can still be justified by an employer as protecting their own rights e.g. their reputation.
Action taken to discipline an employee should be reasonable and employers should be careful not to overreact. For example, if the employee apologises and immediately removes the post then dismissing him could be unfair – Stephens v Halfords plc (unreported ET/1700796/10).

Employers should have a clear policy on social media use and employees should be very careful about what they post on Facebook.

Geoffrey Bignell, Chairman, Just Employment Solicitors

One of the joys of being an employment solicitor is calculating schedules of loss for claimants in employment tribunal claims; and ‘counter-schedules’ on behalf of employers. Always interesting, claimants include everything possible (as a negotiating ploy, on the principle that ‘if you don’t ask, you don’t get’) and employers challenge everything possible, to reduce their liability. So what are the legal principles?

A successful claimant is entitled to a ‘basic award’, equal to a statutory redundancy payment (unless he or she has already received a statutory redundancy payment) plus a ‘compensatory award’ which is ‘such amount as the tribunal considers just and equitable in all the circumstances, having regard to the loss sustained by the complainant in consequence of the dismissal…’ [section 123(1) Employment Rights Act 1996]

You could write whole books on unfair dismissal compensation (the IDS Handbook on remedies runs to 220 pages). My point here is to ask why an ‘employer-friendly’ coalition Government increased the compensation limits on 1 February?

The maximum basic award went up a whopping 7.5% from £12000 to £12900; and the compensatory award went up (according to the relevant RPI measure) by 5.6% from £68,400 to £72,300. The vast majority of employers cannot afford pay rises on this scale, so why are they paying such increases to redundant and unfairly dismissed staff?

It would be more to the point, to help both claimants and employers dealing with higher claims, if the Government increased the limit of £30000 tax exemption on termination payments. This limit has been static since 1989, when it was worth £60,000 in today’s money.

What do you think?

Geoffrey Bignell, Chairman, Just Employment Solicitors

The 2012 budget statement announced proposals to attack the tax status of some personal service companies:

‘The Government is bringing forward a package of measures to tighten up on avoidance through the use of personal service companies and to make the existing IR35 legislation easier to understand. This will include HMRC strengthening specialist compliance teams, simplifying the way IR35 is administered, and consulting on proposals which would require office holders/controlling persons who are integral to the running of an organisation, to have PAYE and NICs deducted at source.’

Following publicity over public servants paid via personal service companies, the Government aims to ensure that directors and senior ‘staff’ are treated like employees for tax purposes.

If this might affect you, you may want to take advice now.

Geoffrey Bignell, Chairman, Just Employment Solicitors.

by James Haley, Solicitor, Just Employment Solicitors

Unfair Dismissal: the qualifying period before an employee can claim unfair dismissal goes up to two years for staff starting on or after 6 April. The Government claims that this will encourage employers to recruit. But its own (BIS) survey shows that only 1% of employers are put off recruiting by regulations on dismissal.

The new rules will knock out only 4% of unfair dismissal claims. There are still plenty of special cases where an employee can claim unfair dismissal from day 1, so employers are advised to check first with us before you dismiss. It is better to be safe than sorry.

Benefit Rates: benefit payments go up, so that statutory maternity, paternity and adoption pay goes up from £128.73 to £135.45 a week; and statutory sick pay from £81.60 to £85.85 per week.

The limit for calculating statutory redundancy pay went up from £400 to £430 on 1 February.

Apprenticeship Agreements: these must now include all the information that goes into a normal employment contract.

Employment Tribunal Procedures: changes here are intended to save public money and to be employer-friendly. So witness statements will normally be ‘taken as read’, not read out (saving time); unfair dismissal cases can be heard by a judge sitting without lay members; parties (usually claimants) can be ordered to pay a deposit of up to £1,000 (previously £500) to continue with a weak claim; and also to pay the legal costs of the winning party up to £20,000 (previously £10,000).

If you need more information, please contact me.

]]> http://www.justemployment.com/2012/04/04/unfair-dismissal-april-employment-law-changes-do-they-affect-you/feed/ 0 http://www.justemployment.com/2012/03/18/employee-references/ http://www.justemployment.com/2012/03/18/employee-references/#comments Sun, 18 Mar 2012 21:19:14 +0000 Clare McDairmant http://www.justemployment.com/?p=1583 Continue reading →]]> It is a common misconception that an employer must provide a reference for a former employee. This is not the case as there is generally no obligation for an employer to provide a reference.

If an employer does agree to provide a reference, the reference must be true, accurate and fair Spring v Guardian Assurance [1995] 2 AC 296.  If an employee suffers financial loss because the reference is not “true, accurate and fair,” they can sue their former employer.

In the case of Jackson v Liverpool City Council [2011] EWCA Civ 1068 CA, the Court of Appeal held that the following reference was fair because the reference made it clear that the allegations were not investigated.

‘There were some issues identified by his team manager in respect of recording and record keeping. This was addressed by supervision and would have led on to a formal improvement plan to assist Mark to make improvements in this area. Mark left the service before this process was instigated.’

When there has been a dispute between an employee and their employer, it is a good idea for the employee to agree a reference in advance with the employer. This can be done by way of a Compromise Agreement, whereby an employee agrees not to bring any claims against the employer in return for an amount of agreed compensation and a reference.

However, an employer must proceed with care as the reference cannot be untrue. If it is (and the new employer suffers a loss through its reliance) this could lead to a claim by being brought against the employer.

Helen Phillips, Solicitor, Just Employment Solicitors