LookOut - News and views on employment law
Welcome to LookOut, Anderson Strathern's regular update providing you with news and views on employment law.
In this edition we look at the recent furore regarding the wearing of poppies, controversial proposals for the reform of unfair dismissal law and the introduction of fees for lodging and pursuing tribunal claims as well as newly decided cases on holiday pay for employees on long-term sick leave and illegal contracts.
LookOut on…. news
Workplace poppy ban - unlawful discrimination?
Leaked report recommends sacking unfair dismissal rights
LookOut on…. legislation
Tribunal fees – support for business or a barrier to the right to justice?
LookOut on…. cases
Accrued holiday pay and sickness
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LookOut on….. news
Workplace poppy ban - unlawful discrimination?
In a year where there is an expectation that the annual Poppy Appeal might raise a record £40 million, some employers (and governing bodies) are refusing to allow their employees to wear poppies.
Football governing body FIFA's recent refusal to allow the English and Welsh national teams to have poppies on their strips during international matches has attracted widespread condemnation, with Prime Minister David Cameron branding the ban "appalling". FIFA claimed that allowing poppies on strips would jeopardise the "neutrality of football". Following the reputed intervention of the Duke of Cambridge FIFA relented and allowed poppies to be worn on black armbands to commemorate Remembrance Sunday. An own goal for FIFA?!
On a similar note, the BBC has reported that an online petition supporting the right to wear a poppy at work has attracted nearly 10,000 signatures. The petition originated from the employee of a popular "trendy" clothing store who was told that she could not wear the poppy on her uniform. The employer later amended its policy. This story is just one of a number which have appeared over the past few weeks regarding employers imposing a strict dress code that prevents employees wearing a poppy at work. The intervention of Royalty is one thing, but do employees have any employment law recourse in a tribunal?
The Claimant in Lisk v Shield Guardian Co Ltd (ET/3300873/11) brought a number of discrimination claims, including that he was subjected to religion and belief discrimination in terms of the Equality Act 2010 as his employer is alleged to have prevented him from wearing a poppy at work from 2 November 2010. Mr Lisk, who is a Christian and ex-serviceman, argued that he has a "philosophical belief" which requires him to wear a poppy. He made the point that wearing a poppy did not conflict with the rights of anyone else in the workplace. However, in a Pre-hearing Review, the Judge concluded that, however admirable, Mr Lisk's belief was too narrow to be characterised as a "philosophical belief".
AS view…
In recent years, Employment Tribunals have held that a genuine belief in climate change can amount to a philosophical belief, as can a belief in the sanctity of life which extends to a fervent anti-fox hunting belief. However, the Lisk case suggests that Employment Tribunals may be prepared to draw a line between an “admirable and strongly held” belief and a “philosophical” belief. Whether employers want to risk possible adverse publicity of the sort demonstrated in the recent news stories is another consideration altogether.
For further information contact Chris McDowall or Jill Bell.
Leaked report recommends sacking unfair dismissal rights
The media is awash with commentary on the proposals to lengthen the qualifying period for unfair dismissal and introduce fees for bringing Tribunal claims. An even more controversial approach is highlighted in a leaked government report, commissioned by the Conservatives, from private equity boss Adrian Beecroft who argues that the removal of unfair dismissal rights would make it easier for employers to dismiss employees they view as being lazy. In this way, he argues, underperformers could easily be replaced by more productive workers thus increasing competitiveness and growth. The suggestion is that unfair dismissal rights would be replaced by 'compensated no fault dismissal' calculated on a fixed formula similar to the current calculation of redundancy pay. Under Beecroft’s plans this would involve employees having the chance to put their case to the employer and asking for more opportunities to improve. However, there would be no requirement for employers to grant the request and, instead, a fixed payment would allow the employer to dismiss. The report argues that the current regime discourages employers from taking on new employees and ‘exacerbates the national problem of high unemployment’.
AS view…
Presently, dismissing employees for conduct or poor performance can involve a potentially lengthy process but it is not as impossible as the report tends to suggest. What seems to be advocated is the ability of employers to hire and fire at will breaking a long established position of employees being given warning regarding their performance and reasonable time to improve to a specified standard. Implementation of the recommendations in the report would represent a radical overhaul of unfair dismissal law in the UK. It seems unlikely that such a radical revocation of unfair dismissal law will materialise.
Although the removal of unfair dismissal rights from underperforming workers would, on the face of it, appear attractive to employers, there is a real possibility of there being unforeseen consequences and a potential increase in the level of spurious discrimination or whistleblowing claims as employees seek to fit what is really an unfair dismissal claim into another guise in order to have their claims heard. Recent media speculation is that Mr Beecroft’s controversial proposals will not be implemented but the Prime Minister is reported to be planning to introduce “protected conversations” in the workplace – allowing either the employer or the employee to request such a discussion with the other, during which they could speak their mind without fear of it being used against them in a tribunal at a later stage. The idea behind this is that employers could point out where employees are falling short in terms of performance without the fear of a constructive dismissal claim and employees could complain about their managers without fear of disciplinary action.
If employers deal with performance failings correctly they are already sufficiently protected from constructive dismissal claims as there is no breach of contract if there is a genuine concern about an employee’s performance and it is handled appropriately. Equally, employees can raise grievances about any concerns they have.
It is difficult to see how a “protected conversation” will make any substantive difference. It potentially would do little more than allow both parties to vent their frustrations with the other and it is questionable whether such a conversation would resolve differences within the workplace. Mediation is likely to be a more productive tool.
For further information please contact Pamela Keys or Andrew Brown.
LookOut on…. legislation
Tribunal fees – support for business or a barrier to the right to justice?
In his speech at the Conservative Party conference, Chancellor George Osborne announced his proposal to introduce fees for bringing Employment Tribunal claims. He said:
“…we respect the right of those who have spent their whole lives building a small business not to see that achievement destroyed by a vexatious appeal to an employment tribunal…
…we are going to introduce for the first time ever a fee for taking a case to a tribunal that litigants only get back if they win.
We’re ending the one-way bet against small business.”
It is anticipated that the reform will come into effect in April 2013 and will mean that claimants will have to pay an upfront fee of around £250 to raise a claim, followed by a further £1000 when the case is listed for a hearing. These fees will be returned to the claimant only if he or she wins their case. Whilst exact figures are not known at this time, it is thought that fees will be higher for those claims over £30,000, and that those with no or a low income may have the fees waived or reduced.
AS view…
The Government’s stated reason for this proposed reform is clear: to protect small businesses from the cost associated with vexatious Employment Tribunal claims. We believe that the fees regime will apply to all Tribunal claims whether they are lodged against a small business or a multi-national. Whilst the introduction of fees will undoubtedly make many think twice before lodging a claim, (which is unarguably important given the serious impact of the process on both claimants and respondents), it seems that there may be direct consequences as a result – with the genuine but hard up claimant being an unwitting victim of the changes. Those claimants who cannot afford to pay the fees associated with lodging a claim, but who have a genuine claim to make, could be barred from exercising their right to justice in the Employment Tribunal, leaving the tribunals as a forum only open to the well heeled, which they were introduced in the 1970s specifically to avoid. Whilst there is a clear need to develop ways to deal with the issue of vexatious claimants we wonder whether there might be a better way to protect access to justice for those whom, arguably, the right to present their case is most important. The Government is set to consult upon the fees proposals and LookOut will keep you updated on developments.
LookOut on.… cases
Holiday pay and sickness absence
The Employment Appeal Tribunal ("EAT") in the case of Fraser v Southwest London St George’s Mental Health Trust has issued a judgment which will come as some relief to employers. Following the long running saga of the Stringer case (in which the Supreme Court eventually held that an employee on long term sickness absence accrues holidays even whilst sick for a whole leave year), many employees whose employment was terminated raised claims for payment in respect of the holiday period which they had accrued during their period of sickness absence.
In Fraser the employee was absent due to sickness for four years before her employment was eventually terminated. She had received no pay for the final two years of her employment as her sick pay had been exhausted. On the termination of her employment she raised a claim for payment for the holidays which had accrued during the last two years of her employment, namely, 8 weeks’ pay. Applying Stringer, it was clear that Mrs Fraser had accrued the leave but the question was whether she was entitled to 8 weeks’ pay for that accrued leave under Regulation 16(1) of the Working Time Regulations 1998 (“WTR”). Crucially, Mrs Fraser had not given her employer any notice of her intention to take her holidays as is required by Regulation 15 of the WTR. The question for the EAT was whether an employee can claim holiday pay under the WTR where no notice to take the leave had been given to the employer. The EAT held that an employee is only entitled to pay in respect of a holiday entitlement if the employee has actually taken the leave and has given the employer notice of the intention to take that leave. It followed that Mrs Fraser had no entitlement to holiday pay for the holidays which she had accrued in the last two years of her employment as she had not given notice of her intention to take that leave.
AS view….
The EAT’s decision appears to bring us full circle back to the position that prevailed prior to the Stringer judgment as the EAT held that the decision in the case of Kigass (which pre-dated Stringer) was correct after all. The EAT’s decision means that, whilst annual leave accrues during a period of sickness absence, the employee who has not given notice of intention to take the leave is not entitled to payment in respect of that period, even upon termination of employment. Employees who are off sick long-term (and Unions advising them) would be well advised to request annual leave to which they are entitled under the WTR to ensure payment for it, and we can expect to see absent employees “clocking in” to take holidays every year. Whilst the decision looks to be good news for employers, for the time being it remains to be seen whether this decision will be appealed.
For further information please contact Alan Glazer or Barry Nichol.
Like many other forms of contracts, the validity of a contract of employment is challengeable if the contract in question is illegal. Contracts that are illegal come in many forms including: contracts to commit crimes or civil wrongs, contracts tending to promote corruption or contracts which are illegal by statute. The recent case of Okuoimose v Credit Facilities Management (UK) Ltd dealt with the issue of whether a “reasonable belief” that a contract was illegal would provide a defence to an employee’s claim for non payment of wages.
The Claimant in this case was a Nigerian woman married to a Spanish man. She was entitled to reside and work in the UK as a result of the Immigration (European Economic Area) Regulations 2006. The Claimant’s passport stamp however stated that her right of residence expired on 8 July 2010. The Claimant was suspended without pay on that date and the employer sought proof that the Claimant was entitled to work in the UK. They dismissed the Claimant on the grounds of illegality on 20 August 2010. The Claimant was able to provide a letter from the UK Border agency dated 16 August 2010 stating that she would be “treated for immigration purposes as a family member of a legally resident EEA national and, as such, you are free to live and work in the UK.” After seeing proof of the Claimant’s entitlement to work in the UK, the Respondent reinstated the Claimant.
The Claimant then went off on sick leave and raised an unlawful deductions claim for the wages she had not been paid during her suspension. The Employment Appeal Tribunal overturned the decision of the Employment Judge (who had held that the contract was illegal). Judge McMullen held that the contract was legal during the relevant period and that the deciding factor was not whether the employer believed that the contract was illegal but whether it was actually illegal.
AS view…
The crucial point to take from this case is that, regardless of whether an employer reasonably believes a contract to be illegal, in order to use the “illegality defence” the contract actually needs to be illegal in practice. An employer’s erroneous belief will not excuse payment of the sums due under the contract.
For further information please contact Rhona Wark or Lizzy Campbell.
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.
