Case round-up

first_imgRelated posts:No related photos. Our resident experts at Pinsent Curtis Biddle bring you a comprehensiveupdate on all the latest decisions that could affect your organisation, andadvice on what to do about themStar ratings * Our rating system is designed to help busy HR professionals prioritisetheir reading. Does this ruling have immediate implications for your practicesand policies? Is it a one-off decision based on unusual facts? Or is it one tokeep an eye on as it goes to appeal? Case round up will help you decide. Eachcase is rated from one to five stars; the more essential it is that you knowabout it, the more stars it will have. Lawson v Serco Ltd, EAT An important ruling on the ability of overseas employees to bring claims inthe UK * * * * Lawson, a British national domiciled in England, worked for Serco –a UK company with a UK head office – as a security supervisor on AscensionIsland. Lawson resigned and claimed automatic unfair dismissal, alleging that he hadbeen forced to work longer hours than permitted under the Working TimeRegulations 1998. The critical issue was whether the tribunal had jurisdictionto hear the complaint, and the EAT ruled that it did. In October 1999, the Employment Rights Act 1996 was amended to allow staffworking wholly or mainly outside the UK to claim rights under that Act, such asunfair dismissal. The ability of employees working abroad to bring claims in UK employmenttribunals now depends on complex rules governing the territorial scope oflegislation, the territorial jurisdiction of employment tribunals and theconflict of laws between competing jurisdictions. The EAT held there was no territorial limit on the scope of either the ERAor the WTR. The issue was not where Lawson worked or where the acts occurred,but the fact that his employer carried on business in the UK. This gave thetribunals jurisdiction to hear a complaint against Serco. Further, the ERAprovisions were mandatory and could not be excluded by an agreement that someother national law would apply. The decision makes clear that many ‘posted’ workers within and outside theEuropean Union can rely on UK statutory protection in claims before UKemployment tribunals, provided their employer carries business in the UK, or(in cases to which the Brussels Convention is relevant) is a UK company, or hasits central management in the UK. What you should do – UK employers with staff overseas should carry out an audit, with legalassistance, to identify which of these may be able to bring complaints in UKemployment tribunals – Protect against such liabilities by ensuring appropriate employmentpractices – particularly in relation to claims of unfair dismissal – You may face practical difficulties in defending such claims, for example,because witnesses would need to travel to the UK for a hearing. Thesedifficulties and costs can be reduced by seeking appropriate directions fromthe tribunal, such as provision for witnesses to be cross examined in writing,rather than attending a hearing in person. Alamo Group (Europe) Limited v Tucker and Others, EAT Transferee liable for transferor’s failure to inform and consult underTUPE * * * * Alamo bought an insolvent business from its receivers. The purchasewas a transfer of an undertaking under TUPE, but the transferor failed toinform and consult the affected workers as required under Regulation 10 ofTUPE. An employment tribunal made a protective award of two weeks’ pay peremployee against Alamo, on the grounds that the liability for the failure toinform and consult transferred under TUPE. Alamo appealed unsuccessfully to theEAT. Regulation 10 of TUPE obliges a transferor to inform staff affected by atransfer, via their representatives, of the fact that the transfer ishappening, the reasons for it, the effect on those employees and any measureswhich transferor or transferee propose to take in connection with it. Transferors and transferees must consult the representatives on measureseach proposes to take. Breach of these obligations, or the rules governing theelection of non-trade union staff, risks a protective award of up to 13 weeks’pay per employee. These awards are made by reference to gross pay (without anystatutory maximum), not lost earnings, and so can prove very expensive. The critical point here was the EAT’s conclusion that liability for thetransferor’s breach passed to the transferee under TUPE. The EAT ruled thatRegulation 5 of TUPE transfers all liabilities to the transferee unless theseare expressly excluded from transfer by TUPE itself (as is the case for certainoccupational pension schemes). This is hugely problematic for transferees. Ifliability transfers, what incentive does the transferor have to comply with itsobligations? Such arguments were rejected by the EAT in Alamo – “theprimary purpose of the regulations is to protect the employee, even if itfollows that the innocent transferee may on occasion have to bear theliability”. In some cases, transferees can mitigate the effects of this decision throughappropriate warranties and indemnities. However, in outsourcing situations(especially contractor changeovers) and purchases of insolvent businesses, suchprotection may be impossible to obtain. What you should do – Transferees must either ensure the transferor discharges its obligationsor take appropriate indemnity protection – Companies buying businesses should allow sufficient time before thetransfer to allow the obligations to be discharged – Those tendering for services in outsourcing situations should seek tonegotiate indemnities from the client organisation, especially in relation tofailures to consult by outgoing contractors – Purchasers of insolvent businesses are particularly vulnerable – thepotential liability for failures to consult should be reflected in the purchaseprice – Transferees should minimise their exposure by informing and consultingstaff after the transfer. Tribunals are likely to give transferees credit fortrying to mitigate the effects of the transferor’s breach when awardingcompensation. Qua v John Ford Morrison Solicitors, EAT The first EAT decision on time off for dependants * * * * The applicant, a legal secretary, was dismissed after a high levelof unauthorised absence. She had taken time off work to care for her son, whobecame ill as a result of a recurring medical condition. She contended herabsences were due to taking emergency dependants leave under the EmploymentRelations Act 1999, making her dismissal automatically unfair. The EAT heldthat the tribunal had misapplied the legislation. It remitted the case, givingsome useful guidance on the right to dependant care leave. The EAT stressed that to take advantage of emergency leave protection,workers must advise the employer – in advance if possible – of the reasons forthe leave and the amount of time they expect to need off work. The right allowsa “reasonable” amount of time off to deal with unexpected or suddenevents affecting dependants and to make any necessary long-term arrangementsfor their care. What action is deemed ‘necessary’ will depend on the nature ofthe incident and the extent to which anyone else could help out. The right does not cover time off to enable the employee to provide care fora sick child herself, only to deal with the immediate crisis. Controversially,the EAT suggested that in the case of a recurrent medical condition likely toinvolve relapses, the illness may cease to be unexpected, and so may nottrigger the entitlement to leave. The effect of the absence on the employer is irrelevant when consideringwhether the worker is taking ‘reasonable’ time off. Reasonableness must bejudged on the facts of each case. Where leave is frequently taken, the totalamount of time taken off can be considered when deciding what is reasonable. What you should do – Publicise policies on family-friendly leave rights, stressing theimportance of notification when leave is to be taken – Dismissing staff for taking leave can be very dangerous – discuss theproblem with them and see if alternative solutions exist – Be alert to the risks of sex discrimination claims as female employeesstill tend to bear the burden of caring for dependants. Murray v Newham Citizens’ Advice Bureau, EAT Useful guidance from the EAT on justifications for disabilitydiscrimination * * * Murray applied for an advice worker job with the Citizens’ AdviceBureau (CAB). He had been diagnosed as a paranoid schizophrenic after stabbinghis neighbour, and was receiving treatment and appropriate medication. The CABwas concerned the stressful work environment could trigger further violentepisodes, and suggested Murray be considered for a less stressful bureau. He objected,as his psychiatrist had assured him that stress was not a material factor inhis illness. His complaint of disability discrimination failed at tribunal. TheEAT upheld his appeal, and remitted the case for rehearing. The critical issue was whether the CAB could justify its rejection ofMurray’s application on the grounds of its fears of a violent episode, despitefailing to investigate the medical position. The EAT confirmed employers mustjustify their decisions on the basis of what was known to them at the time.Tribunals should consider whether it was “within the band of reasonableresponses” for the employer to decide not to seek further information. Ifso, the tribunal should then assess whether the decision not to offer the postwas for a reason that was material or substantial. Interestingly, the EAT heldthat a prospective employer of a person with a disability cannot be expected tocarry out the same rigorous investigations as would be expected from an actualemployer. What you should do – Scrutinise your recruitment policies and practices for risk ofdiscrimination, as these are prime areas for litigation – Ensure managers are aware of the need to be adequately informed about thepossible effects of a disability before discounting or rejecting a candidatebecause of it – Consider introducing a mechanism for managers to ask candidates beforeinterview whether they have any disabilities which could hamper them atinterview or affect their ability to do the job. This allows time for the disabilityto be investigated and for reasonable adjustments to be considered. Case of the month by Christopher MordueScottish court paves the way for huge holiday back-pay claimsMPB Structures v Munro, ScottishCourt of SessionA troubling decision for employers who distribute holiday pay through rolled uphourly rates* * * * * Munro worked for a buildingcompany. His hourly rate of pay included an allowance of 8 per cent for holidaypay. The employer used the rolled-up hourly rate to reduce the administrativeinconvenience of calculating holiday pay each time leave was taken. The Courtof Session upheld an EAT decision that this was not permitted at all under theWorking Time Regulations 1998.Under Regulation 16(1), an employee is entitled to be paid atthe rate of a week’s pay (as calculated under the Regulations) in respect ofeach week of annual leave. The court said this required staff to be paid forholidays as and when they were taken. Paying in advance could discourageworkers from actually taking their leave, and was contrary to the purpose ofthe regulations.The court went on to rule that the employer had made nopayments for Munro’s annual leave under the regulations. The rolled-up rate wasintended to exclude Regulation 16(1), and so was void. He was entitled to bepaid in full for the holiday he had taken, without giving credit for the moneyhe had already received under the rolled-up rate.Many employers use rolled-up hourlyrates to pay holiday pay, particularly for staff whose hours fluctuate fromweek to week. The main reason is to avoid calculating entitlements separatelyfor each worker and for each period of leave. This decision is hugelyproblematic for these employers, as it deprives these payments of any legaleffect. They not only face the administrative burden of calculating and payingfor holiday pay, but also significant retrospective claims. These could bebrought as an unlawful deduction from wages, allowing the recovery of‘non-payment’ for periods as far back as the introduction of the right to paidannual leave on 1 October 1998.The Scottish Court of Session is equivalent to the Court ofAppeal in England and Wales. While not strictly binding on tribunals outsideScotland, the decision in Munro may prove extremely persuasive. There is nocorresponding English authority on this issue. When the Court of Appealconsidered the use of rolled-up hourly rates in Blacktown v Gridquest Ltd t/aSelect Employment, it refused to deal with the points raised in Munro,confining itself to ruling that in that case the employer could not rely on arolled-up rate because there was no mention of the holiday pay element in thecontract itself. Employers in England and Wales must either await further caselaw developments, or take steps to remove rolled-up rates and reduce theirexposure to claims.What you should do– Employers in Scotland using rolled-up rates should takeurgent steps to devise other methods of paying for annual leave– Employers in England and Wales should consider whether thesignificant risks attached to rolled up rates are worth their administrativeconvenience– Any alternative system of paying for annual leave mustprovide for payment as and when leave is taken – Employers should seek advice on how to calculate pay forholidays taken by staff with variable hours of work. In most cases, the amountof a week’s pay will be calculated by reference to average earnings over theprevious 12 weeks– Calculations may be made easier by using IT solutions – Requiring leave to be taken in whole weeks may reduce theadministrative burden – it avoids the need to calculate holiday pay for up to20 separate days of leave (bear in mind this may require changes to contracts). Previous Article Next Article Comments are closed. Case round-upOn 1 May 2003 in Personnel Todaylast_img read more

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