June 2023

Continued Expansion for Hunter Law – Introducing our new Senior Associate

This month, we are delighted to welcome Elizabeth Harmer to the Hunter Law team to expand our capacity. She is based in Gloucestershire and offers a full range of employment law services and support to clients both locally and across the wider business.

Elizabeth qualified as a solicitor in 2008 and specialises in employment litigation, with particular focus on unfair dismissal and discrimination. She brings with her a keen eye for detail and a wealth of experience to help support clients through the tribunal litigation process. Her straight-talking, down to earth advice and reassurance, leaves clients in no doubt that they are in a safe pair of hands.

Contributory fault in unfair dismissal cases

When a tribunal looks at the question of remedy (i.e. how much?) in an unfair dismissal case, one of the elements they must consider is whether there has been any contributory fault by the ex-employee: has the claimant, by their conduct, contributed to their dismissal. If a tribunal finds that they have, then this can lead to a reduction being applied to any award. In extreme cases the tribunal can even reduce compensation by 100% to take account of the claimant’s contribution to their own dismissal (even though they have found it to have been unfair).

In Topps Tiles v Hardy, the Employment Appeal Tribunal was asked to review the approach that the Employment tribunal had taken to the concept of contributory fault. The Claimant had been dismissed for gross misconduct after shouting at a customer and allowing some drink to be spilled on them. The tribunal found that his behaviour arose from his disability and that his dismissal was unfair. It stated in its judgment on liability that the Claimant hadn’t contributed to his dismissal “because we do not agree that a reasonable employer would treat the Claimant’s handling of the episode, faulty though it was, as an act of gross misconduct”.

The EAT stated that, when assessing contribution, there is a 3-stage test:

Is there any blameworthy conduct by the claimant?
Did it contribute to dismissal?
If so, how much should the compensatory award be reduced by on a just and equitable basis?

Applying this test, the EAT decided that the tribunal had fallen into error. They had found culpable or blameworthy conduct (referring to the claimant’s conduct as “faulty”) but then came to the wrong conclusion on whether that conduct contributed to his dismissal. The tribunal had wrongly focused on the fact that the dismissal had been found to be unfair and, in error, concluded that this meant that the Claimant’s conduct had not contributed to it. The Claimant’s conduct obviously contributed to his dismissal. In fact, it was the whole reason for it. The tribunal had applied the wrong test.

Dismissal unfair where employer failed to consider furlough as an alternative to redundancy

When a redundancy situation arises, alongside legal obligations to select employees fairly and follow a fair process sits a requirement that employers consider if any alternatives to dismissal exist. In traditional cases this usually involves looking for alternative jobs and opportunities for redeployment.

In the context of the COVID-19 pandemic, the Employment Appeal Tribunal has held in the case of Lovingangels Care v Mhindurwa that this duty extended to considering furlough under the Coronavirus Job Retention Scheme (CJRS) as an alternative to dismissal.

In this case the Claimant was a live-in carer who, by virtue of restrictions put in place at the start of the pandemic, could no longer live-in. She was dismissed for redundancy and claimed unfair dismissal. The EAT upheld the employment tribunal’s decision that she had been unfairly dismissed as the employer had failed to properly consider the possibility of furlough under the CJRS as an alternative to a redundancy dismissal. The fact that the dismissal occurred during the COVID-19 pandemic did not mean that different rules should apply.

In redundancy cases employers are always under a general duty to consider alternatives to dismissal. Furloughing the employee under the CJRS was, at that time, an alternative which the employer should have considered. It did not do so and the dismissal was, therefore, unfair.

EU Law to remain on the statute books unless specifically revoked

The government has announced in a written statement to parliament that it is abandoning the sunset clause in the Retained EU Law (Revocation and Reform) Bill.

As the Bill was originally drafted, almost all EU law would automatically be revoked at the end of 2023, unless a statutory instrument was passed to preserve it. That position is now being reversed, so that EU law will remain binding in the UK unless it is expressly repealed. The Bill will be amended to contain a list of the retained EU laws that the government intends to revoke on 31 December 2023 – but anything not on that list will remain valid. The list has been published and does not include any of the significant employment legislation. The only ones with relevance which are currently on the list for revocation on 31 December 2023 are:

The Community Drivers’ Hours and Working Time (Road Tankers) (Temporary Exception) (Amendment) Regulations 2006
The Posted Workers (Enforcement of Employment Rights) Regulations 2016; and
The Posted Workers (Agency Workers) Regulations 2020

However, from 1 January 2024, UK courts will no longer be bound by decisions of the Court of Justice of the European Union, and will no longer be able to give those decisions priority over what UK legislation says. The most important impact is that – unless the government does something – it is very likely that the caselaw on holiday pay which has arisen over the last ten years will cease to be binding, and employers will no longer need to factor in commission and overtime when calculating holiday pay (unless your employment contracts require you to do so). We will keep you updated.

An Introduction to Garden Leave

The phrase ‘garden leave’ crops up often when you are talking about employees who are leaving a business, but it is not always clear what is meant by the term. Here is an explanation of the concept:

Garden leave describes the situation when an employee who is leaving employment spends some or all of their notice period away from work (and, crucially, away from confidential information and clients). The idea is that they are placed in their ‘garden’.
Garden leave can be very useful to employers in helping them to preserve trade secrets, introduce key clients and contacts to any replacement and provide a period when the employee is not ‘visible’ to clients.
You should not place an employee on garden leave without their agreement. This is usually done through an express term in the employee’s contract of employment.
If there is no express term, and the employee does not voluntarily agree to be placed on garden leave, the employer is at risk that the employee could argue that they have a contractual right to work and that forcing them to go on garden leave is a breach of contract.
The terms of garden leave should be set out in the contract of employment. It is usual for any period of garden leave to be on full pay. Whether any other contractual benefits continue will depend on the wording of the garden leave clause. If it is silent then they are likely to remain payable in full.
Garden leave is linked to the contractual notice period so it generally lasts for the duration of the notice period. It cannot continue any longer without agreement.
Garden leave has a close connection with post-termination restrictive covenants. Both involve keeping an employee away from competitive activity, clients and employees for a period of time. However, it is much easier to retain control of a departing employee on garden leave as they remain employed.
It is usual for any restrictive covenants in the employment contract to be reduced by one day for each day that the employee is on garden leave. This is because the employee is not actively in the business and interacting with employees and clients during this period. The Courts are not likely to see a doubling in the length of practical restriction (i.e. garden leave period plus full restricted period) as being reasonable or enforceable.

Garden leave has an important role to play in controlling the exit of key employees and making sure there is a smooth transition to any replacement. To take advantage of this, employers are urged to check their contracts of employment (especially for senior and sales staff) to make sure that they have an express contractual term giving them the option to place employees on garden leave.

Five things you should know about Statutory Sick Pay

Dealing with sickness absence takes up a lot of management and HR time. It can be difficult to navigate all the different considerations involved. One of those considerations is sick pay. Here are five things you should know about statutory sick pay:

Statutory Sick Pay (SSP) is the minimum payment which must be made to employees who are off-work due to sickness. The rate of SSP is set each year by the government and is currently £109.40 per week.
SSP is payable to employees. Workers and self-employed contractors are not eligible.
Employees are not usually paid SSP during the first three ‘waiting’ days (including non-working days) of any absence. The main exception to this is if the employee has received SSP in the previous 8 weeks and completed the three ‘waiting days’ for this earlier absence.
SSP is payable for up to 28 weeks of absence. Employees must give their employer a fit note from the 7^th day of absence onwards in order to continue to be eligible for SSP.
Although employers are required to pay SSP to eligible employees, they are not able to recoup this cost from the government.

Refusing to pay wages leads to constructive dismissal

Employees have a contractual right to receive pay for work done in accordance with their contract of employment. Refusing to pay wages to an employee is usually a fundamental breach of contract by the employer (the notable exception being where the employer has a right to deduct from wages in the contract and is deducting from pay in line with this).

If the employee responds to a failure to pay by resigning, then they could potentially bring a claim of constructive unfair dismissal. This is what happened in the recent case of Kalkan-v-TFC Holdings London Limited. Mr Kalkan was not paid by his employer. He was told that this was because his employer was in financial dispute with his wife’s employer. Mr Kalkan refused to return to work. His employer later offered to pay the wages, but Mr Kalkan refused this offer. He claimed constructive dismissal.

The employment tribunal found in his favour. They held that failing to pay Mr Kalkan was a fundamental breach of contract. Mr Kalkan had responded to this breach by refusing to come back to work – effectively resigning. The fact that his employer tried to backtrack and pay Mr Kalkan at a later date had no impact – the breach could not be undone. By this time the claim had already crystallised as Mr Kalkan had accepted the breach by leaving.

The perils of banter

Employment tribunal claims based on ‘banter’ are on the rise. It is reported there were 66 claims in 2022. The rise in cases based on ‘banter’ are a reminder that what might be amusing to some can be offensive to others. This leads to a risk of discrimination claims (particularly harassment) if the banter relates to one of the protected characteristics such as sex, age, race or religion. It also leads to an increased risk of constructive unfair dismissal claims where an employee resigns, claiming that workplace banter breached the implied term of mutual trust and confidence.

These risks also apply to conduct outside of working hours and even on social media platforms outside of work. Employers can be liable for harassment in such cases. The breadth of circumstances where ‘banter’ could lead to liability for employers is demonstrated by the recent news that the Chartered Management Institute is warning employers to cut down on alcohol at work parties following a new poll suggesting a third of managers have seen harassment or inappropriate behaviour at parties.

Claims for harassment focus on the impact of behaviour and language on the particular employee. There is little account taken of the potential over-sensitivity of the individual bringing the claim. Harassment does not even need to be directed at the person who is harmed; it is sufficient that they have been exposed to the behaviour, even if this is as a by-stander.

The best way to protect your business from liability in these cases is to:

take a pro-active approach to training on bullying and harassment and focus on workplace values of equality and diversity.
make all employees aware of their obligations.
adopt a robust position and stamp out any inappropriate behaviour.

By taking these steps, employers will hopefully avoid claims arising or, if they do, will be able to put forward a defence that they took all reasonable steps to avoid the behaviour occurring.

Special considerations when employing young workers

Businesses who employ 16-18 year olds need to be aware that there are certain special considerations that come with employing the youngest members of the job market. These include:

That they can only work up to 40 hours a week
They are usually entitled to 2 days off work each week
That they have to have at least a 30-minute break each day if their working hours are at least 4.5 hours.
That they are not usually able to work night shifts
That they are entitled to be paid at least minimum wage (£5.28 per hour for under 18s and apprentices)
That, if they are working for you under the age of 18, it should be either as an apprentice or as an employee working at least 20 hours per week whilst also being in part-time education or training.
That employers are required to keep records of the working hours of any young workers with records being kept for at least 2 years.

Employee off sick for 15 years claims discrimination for not being given a pay rise

A senior IT worker on sick leave since 2008 tried to sue a tech giant for discrimination because he hadn’t been given a pay rise. Ian Clifford brought tribunal proceedings against IBM alleging that he had been treated unfavourably for something arising from his disability. The ‘something’ relied upon was his 15-year absence due to sickness. The unfavourable treatment was a failure to increase his salary over this period, comparing himself to employees who were not disabled and were able to work.

Mr Clifford remained employed by IBM, despite being permanently unable to work due to health reasons, to facilitate payments under a health insurance scheme through which he was paid 75% of his salary (guaranteed until the age of 65). Unsurprisingly, his claim of disability discrimination failed before the tribunal.

The Judge said: “The claim is that the absence of increase in salary is disability discrimination because it is less favourable treatment than afforded those not disabled”. He concluded that “this contention is not sustainable because only the disabled can benefit from the plan…It is not disability discrimination that the plan is not even more generous…It is more favourable treatment, not less.”

Thankfully, a sensible decision was reached in this case. Pay rises are generally used to reward increased experience, contribution to the employer’s business and to recognise loyalty. Mr Clifford had not worked actively for 15 years. He remained employed by IBM merely to facilitate an insured benefit. Insurance schemes such as the one through which Mr Clifford continued to be remunerated are a significant and valuable benefit to employees who become incapacitated during their working lives. Many are not as lucky as Mr Clifford.

Disclaimer: This post is for information purposes only. Reasonable steps have been taken to provide accurate information, but no responsibility is taken by the author (Hunter Law Ltd) for any consequences arising from its usage.

This post is not intended to and does not constitute legal advice and you should instruct a solicitor formally should you require this.