Expatriate Workers – Are You Properly Insured?

In a warning to expatriate workers that the small print of their employers’ insurance policies needs careful perusal before they move abroad, the widow of an IT specialist discovered that her husband was not covered when he died in a road accident after being sent to work in India.

The man had worked in England for a UK company and had benefited from an insurance policy which promised to pay out substantial sums to his loved ones if he died in service. However, the policy also stated that death benefits would only be paid if an employee was ordinarily employed and resident in the UK at the time of his death.

As part of the company’s expansion drive into the Indian market, the man had been given a post in Hyderabad and moved there with his family. He informed HM Revenue and Customs that he was leaving the country for at least one full tax year and the latter confirmed that he would be regarded as a non-UK resident for tax purposes. He was fatally injured six months after moving to the subcontinent.

His widow sought a declaration that he was covered by the policy and that death benefits should therefore be paid to her as his sole heir.  However, in dismissing her claim, the High Court found on the evidence that he was neither ordinarily resident, nor ordinarily employed, in the UK at the time of his death.

Low Pay Commission Recommends Three Per Cent Increase in the National Minimum Wage

The Low Pay Commission (LPC) has recommended to the Government that the adult rate of the National Minimum Wage (NMW), which applies to workers aged 21 and over, should rise by 3 per cent to £6.70 per hour from 1 October 2015.

The LPC’s report also recommends:

  • an increase of 3.3 per cent to £5.30 per hour in the youth development rate, which applies to 18-20 year olds;
  • an increase of 2.2 per cent to £3.87 per hour in the NMW rate for 16- and 17-year-olds; and
  • an increase of 2.6 per cent to £2.80 per hour in the apprentice rate of the NMW, which applies to apprentices under 19 or over 19 and in the first year of their apprenticeship.

The recommended increase in the accommodation offset, which is the maximum daily sum employers who provide accommodation can deduct towards those costs, is 27 pence, taking it to £5.35 per day from 1 October 2015.

The Government has also published details of a further 70 employers who failed to pay their workers the NMW, bringing the overall total named and shamed so far to 162. 

Can An Unpaid Worker Be An Employee? Judges Say Yes

A businessman who worked full time as a director of a start-up company – but was paid not a penny for his toil as the business fought to establish itself – was nevertheless entitled to full employment rights, the Court of Appeal has ruled.

The man had invested heavily, both in money and time, in trying to make the new venture a success. His fellow director was paid £60,000 a year for his work, but he received no remuneration at all before his directorship was terminated.

He launched Employment Tribunal (ET) proceedings, claiming constructive unfair dismissal and unauthorised deductions from wages. The case had a tortuous procedural history and numerous hearings culminated in a ruling of the Employment Appeal Tribunal (EAT) that he was not an employee. That decision effectively stymied his compensation hopes.

In upholding his challenge to the EAT’s ruling, the Court of Appeal found that the fact that he had never sought payment for his services did not mean that he was not an employee. He had brought both skills and money to the company on the basis that he would be reimbursed for his efforts once the company became established.

Although there was no express agreement that he would be paid, there was an implied term in his contract that he would receive a back-dated salary when the company could afford it. In those circumstances, he was both an employee, within the meaning of the Employment Rights Act 1996, and a worker, within the meaning of the the Working Time Regulations 1998. The Court’s decision opened the way for him to pursue his claim to a full ET hearing.

Sacked Nurse’s Unfair Dismissal Claim Back on Track

A mental health nurse who was accused of inappropriately touching colleagues and behaving in an unacceptably sexualised manner has been given a fresh chance to prove that her dismissal was unfair.

The nurse strongly denied the accusations but was dismissed for gross misconduct by the charity for which she worked. An Employment Tribunal (ET) later found that the charity’s disciplinary investigation into her case was seriously flawed but nevertheless ruled that her dismissal was fair.

That decision was reached on the basis that she had also been accused of conduct which put a vulnerable patient at risk as well as using inappropriately sexualised examples in a one-to-one meeting with a service user. The latter incident was the immediate trigger for the disciplinary proceedings.

In allowing the nurse’s appeal, the Employment Appeal Tribunal found that the ET had erred in its approach to the multiple allegations. In artificially isolating one alleged incident from the others, the ET had failed to focus on the charity’s ‘actual reasons’ for her dismissal, rather than the reasons which it could have had. The case was sent back to a freshly constituted ET for reconsideration.

Annual Inflation-Linked Changes in Tribunal Awards

The Employment Rights (Increase of Limits) Order 2015, which details the annual inflation-linked changes in limits on the compensation amounts which can be awarded by employment tribunals, was laid before Parliament on 13 February 2015 and applies where the appropriate date falls on or after 6 April 2015.

The main changes are:

  • The maximum amount of a week’s pay for the purpose of calculating a redundancy payment, or for various awards including the basic or additional award of compensation for unfair dismissal, increases from £464 to £475; and
  • The statutory maximum compensatory award for unfair dismissal increases from £76,574 to £78,335.

In July 2013, a 12 months’ pay cap was introduced on the unfair dismissal compensatory award if this amount is less than the statutory maximum or overall cap. Where the employee’s annual salary exceeds the limit, the statutory maximum applies.

There is no statutory cap on the amount a tribunal can award in discrimination cases.

Undercover Police Officers Win Overtime Dispute

Undercover police officers whose jobs often entail making contact with informers at all hours of the day and night have had their right to fair overtime payments for the out-of-hours work they put in recognised by the Court of Appeal.

Officers engaged in ‘handling’ informers were only rostered to work during normal office hours. They were not required to sit at home and await calls during their time off. However, they could be contacted at any time via a secure automated system and, due to the nature of crime and the chaotic lifestyle of many of their charges, often had to telephone informers outside ordinary working hours.

Three retired officers argued successfully that, each time that they had to make out-of-hours contact with an informer, they were entitled to be paid four hours of overtime. The chief constable of the relevant force challenged that decision and pointed out that such calls often took only a matter of a few minutes.

In dismissing his appeal, however, the Court found that the officers were recalled to duty each time that they were required to contact an informer outside their rostered hours. Noting that the officers were ‘office holders’, rather than employees, and it was the Home Secretary who laid down their terms of service, the Court found that their interpretation of the Police Regulations was the right one.

Judges Can’t Mend Broken Working Relationships

Hospital CorridorThe power of judges does not extend to the mending of personal relationships, as a senior doctor discovered when the High Court refused to order his return to work almost four years after he was excluded from the operating theatre.

The surgeon had been excluded from all clinical areas of the hospital where he worked, including his own office. That came after a Royal College of Surgeons report described him as professionally arrogant, dismissive of others’ advice, over-confident in his own abilities and fundamentally lacking in insight.

In the years since, his abilities had been assessed and re-assessed and the General Medical Council (GMC) had found that most areas of his practice were ‘acceptable’. He had also scored highly in applied knowledge tests but the GMC did express concerns about his record keeping and ability to get on with colleagues.

The surgeon accepted that, given how long he had been away, he would need to be re-introduced gently to full clinical practice under supervision. However, a brief return to work had left some of his colleagues feeling ‘disconcerted and upset’ and attempts to find a placement for him at another hospital had proved fruitless.

The surgeon sued his NHS trust employers, claiming breach of contract. He asked the Court to direct his gradual return to work. In dismissing his claim, however, the Court found that his relationship with key colleagues had clearly broken down and that the Court was ‘simply not equipped’ to remedy that position.

Whilst acknowledging the ‘great human cost’ of the surgeon’s long-term absence from work, as well as the significant drain on public resources that entailed, the Court found that the trust was ‘reasonably entitled’ to view his continued exclusion as ‘necessary’. Even had the trust been found in breach of contract, the Court noted that it would not have ordered the hospital to take him back.

Smoking Policy – Time to Update for E-Cigarettes

schoolE-cigarettes are becoming more and more popular and, as is common when an innovation occurs, the law struggles to keep up.

In a recent case, the Employment Tribunal (ET) had to consider a claim for constructive dismissal brought by a school canteen worker who contended that her employer was wrong to bring disciplinary proceedings against her for smoking an e-cigarette in view of the pupils before she started work in the morning.

The disciplinary proceedings were brought after the headteacher of the school complained to the firm that employed her.

The woman resigned before the disciplinary hearing, which was to decide if her ‘vaping’ at work was a serious enough offence to justify dismissal. The school’s smoking policy had not been updated to include e-cigarettes, which are not covered by anti-smoking laws.

Because she had resigned before any decision had been made on whether or not her behaviour could constitute misconduct serious enough to warrant dismissal, the woman’s claim failed. The ET noted, however, that had she been dismissed, the school’s smoking policy would have had an impact on the decision.

The best way to deal with any problem is to prevent it arising. We can help you to update your employment policies and contractual terms to take account of innovations such as the above as well as any changes in employment law.

Public Sector Workers Score Important Win

In a vitally important decision for public sector workers, the High Court has ruled that a government department had no lawful right to unilaterally change the terms of its employees’ contracts to their detriment without first obtaining their consent.

Staff handbooks given to all Department for Transport (DfT) employees laid down detailed procedures for dealing with absences on sick leave. After 21 days of such leave in any 12-month period, workers would first be talked to informally. However, if attendance issues continued, written warnings and even dismissal could result.

The DfT had purported to vary those procedures by, amongst other things, reducing the 21-day ‘trigger point’ to just five days. Formal proceedings would also commence after a much shorter period of absence than previously. The changes were made without obtaining the agreement of the large number of workers affected.

In challenging the variations on behalf of their members, three trade unions pointed out that the handbooks specifically informed employees that their contracts ‘cannot be changed detrimentally without your agreement’. Ruling in favour of the workers, the Court found that the relevant parts of the handbook which dealt with attendance management were incorporated in their contracts.

The changes made by the DfT were clearly ‘detrimental’ to its employees and the Court found that it had no right to impose them unilaterally. The variations had no effect and any attempt by the DfT to implement them in individual cases would amount to a breach of contract.

Collective Redundancy Consultation – Advocate General’s Opinion on the Meaning of ‘Establishment’

In May 2013, in a decision involving the protective awards payable to employees made redundant by Woolworths and Ethel Austin, the Employment Appeal Tribunal (EAT) ruled that the words ‘at one establishment’ in Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 should be deleted in order to give effect to EU Council Directive 98/59EC, which it is intended to implement. As a result, protective awards were payable to former employees who had worked at stores with fewer than 20 members of staff (USDAW and Another v Unite the Union and Others).

The effect of the EAT’s ruling would be that the duty to consult would be triggered when 20 or more employees were to be dismissed as redundant within a 90-day period from a business as a whole, irrespective of the number of people employed in each individual workplace.

The employers appealed to the Court of Appeal, which sought the opinion of the Court of Justice of the European Union (CJEU).

In the opinion of Advocate General Wahl, the Directive does not require – nor does it preclude – aggregating the number of dismissals in all the employer’s establishments for the purposes of verifying whether the threshold has been met.

In his view, the term ‘establishment’ denotes the unit to which the workers made redundant are assigned to carry out their duties, which it is for the national court to determine.

It is up to member states whether or not to increase the level of protection afforded to workers being made redundant, provided that this would be more favourable on each occasion that the level required by the Directive. It is for the national courts to verify that this is the case.

The Advocate General’s opinion is not binding on the CJEU but it is followed in approximately 80 per cent of cases. The CJEU’s decision is due later this year.

We will keep you informed of developments in this important case.