‘Resignation’ is Voluntary – But Not If You’re a Civil Servant

The word ‘resignation’ denotes voluntary departure from employment – but it bears a different meaning if you are a civil servant, the Court of Appeal has ruled in an important decision for any worker affected by privatisation of public services.

A veteran prison officer’s employment had transferred to a company when the prison where she worked was privatised. She opted to retain her existing benefits under the civil service pension scheme, which included a right to retire on a full pension at the age of 55. However, she was subsequently informed by the Cabinet Office that she was only entitled to take her preserved pension when aged 60.

Her complaint to the Pensions Ombudsman was rejected on the basis that the word ‘resignation’, within the rules of the scheme, equated to ‘loss of office’ and embraced involuntary transfers of employment. That decision was, however, later overturned by a judge who ruled that the word should be given its ordinary meaning.

In allowing the Cabinet Office’s appeal, and restoring the ombudsman’s decision, the Court found that, in the context of the rules, voluntary and involuntary departures from civil service employment fell within the definition of ‘resignation’. The normal meaning of the word could not justify a departure from the clear wording of the rules.

On privatisation of the prison, the Cabinet Office had assured staff that they would be afforded all the protections enshrined in the Transfer of Undertakings (Protection of Employment) Regulations 2006 and that their terms of service would therefore be unaffected. However, that could not change the outcome of the case.

Holiday Pay and Commission

Gas BoilerFollowing the decision of the Court of Justice of the European Union (CJEU) in Lock v British Gas Trading Limited that an employee’s holiday pay must take account of his commission payments, the Employment Tribunal (ET) has decided that it is possible to read words into the Working Time Regulations 1998 (WTR) in order to overcome the incompatibility between domestic law and EU law.

The case concerned a British Gas salesman whose commission income on sales greatly exceeded his basic salary. During his periods of annual leave, he was unable to generate commission, with the result that his remuneration was reduced on his return to work. The impact on his livelihood discouraged him from taking holidays and he brought an ET claim for unlawful deduction from wages. The ET referred the matter to the CJEU, asking whether, in such circumstances, Article 7 of the EU Working Time Directive (WTD), which the WTR were designed to implement, required commission to be included in holiday pay and, if so, how it should be calculated.

The CJEU found that any reduction in a worker’s remuneration in respect of his paid annual leave that would be liable to deter him from actually exercising his right to take that leave is contrary to the objective pursued by Article 7. How the commission-based element of holiday pay should be calculated was for the national court or tribunal to decide, however, taking into account the rules and criteria set out by the case law of the CJEU and in the light of the objective pursued by Article 7 of the WTD.

In the light of the CJEU’s ruling, the ET found that it was necessary to incorporate into the WTR additional words in order to achieve correspondence with the WTD. Those words were to the effect that the man, and others in the same position, were entitled to have their holiday pay calculated on the basis that they had continued to earn commission whilst on leave. The ET expressed confidence that its decision was in line with the underlying intention of Parliament to accurately transcribe the WTD into UK law.

There was no difference in principle between payment for non-guaranteed overtime (Bear Scotland Limited v Fulton) and payment in respect of commission so far as holiday pay was concerned, and implying fresh words into the WTR did not go against the grain or the underlying thrust of the domestic legislation.

Collective Redundancy Consultation for Employers Facing Insolvency

The Government is carrying out a consultation exercise seeking views on consultation with employees where a business is facing insolvency, or has moved into an insolvency process, to see if outcomes for both employees and employers could be improved.

The consultation invites stakeholders’ views and evidence on:

  • their understanding of the current requirements, their purpose and benefits;
  • factors that facilitate and/or inhibit effective consultation;
  • the role of directors and insolvency practitioners; and
  • ensuring timely notification and effective consultation.

The response form can be found here.

The deadline for responses is 12 June 2015.

Judges Stamp on ‘Health and Safety Gone Mad’

Employers are under a duty to carry out careful assessments of risks run by workers going about their jobs. However, that does not extend to analysing such everyday matters as walking up and down stairs, the Court of Appeal has ruled.

A receptionist suffered ligament damage to her wrist when she fell on a flight of stairs whilst delivering mail between floors of an office block. In awarding her £6,000 in damages, a judge found that her employer had failed to assess the health and safety risks involved in carrying out the task she was required to perform.

The judge reached that conclusion reluctantly, observing that it was a case of ‘health and safety gone mad’. He rejected as dishonest the woman’s primary case, that she was over-burdened with post and tripped on a sticky patch on the staircase, but nevertheless ruled that he was constrained to uphold her claim.

In allowing the employer’s appeal, the Court noted that it was simply a case of the woman having misjudged her footing and that the only way in which that risk could have been averted was by preventing her from using the stairs. Although her employer was arguably in breach of its duty to carry out an assessment, it could not be said that any such failure had caused her accident.

Managing Director Jailed After Worker Fatally Crushed

Breaches of health and safety rules in the workplace can lead to criminal convictions, heavy fines and even jail for senior management. In one such case, the nation’s most senior judge made an example of a company managing director after a worker was crushed to death under a heavy piece of machinery.

The worker died after an over-burdened forklift truck toppled over and the piece of cutting equipment fell on top of him. The director was subsequently convicted of gross negligence manslaughter and breaches of health and safety regulations. He was given an 18-month suspended sentence and his company was fined £150,000.

The case was referred to the Court of Appeal by the Solicitor-General on the basis that the sentence imposed on the director was ‘unduly lenient’. The Lord Chief Justice, Lord Thomas, agreed and substituted an immediate 12-month prison sentence. The worker’s death had been entirely avoidable and the judge emphasised that custodial sentences would almost invariably be called for in such cases, usually in the range of four to five years.

Contact us for advice on any health and safety matter.

Memory Sticks And Confidentiality Rights Don’t Mix

Short of searching members of staff, there would appear to be little an employer can do to prevent memory sticks being used for wholesale breaches of confidentiality. However, one company at least had the satisfaction of winning over £290,000 in damages from a former senior salesman who violated its trust.

The salesman had worked for the company for almost 14 years and was responsible for a portfolio of clients worth £3 million annually. However, following his resignation, it was discovered that he had downloaded swathes of highly confidential customer information and used it for his own commercial benefit. Following his departure, he had also breached non-solicitation clauses in his contract.

In ordering him to pay the company £290,099, the High Court found his evidence unreliable and evasive. He had deliberately and dishonestly sought to cover his tracks and his sworn statements to the Court were demonstrably untrue. He was also ordered to pay almost £70,000 in legal costs.

Government Increases the National Minimum Wage for Apprentices

The Government has announced that the National Minimum Wage (NMW) rate for apprentices will increase by 57p (20 per cent) from 1 October 2015, from £2.73 to £3.30. The Low Pay Commission (LPC) had recommended an increase of 2.6 per cent to £2.80 per hour.

The remaining NMW rates that will apply from 1 October 2015 are as recommended by the LPC:

  • The adult rate will increase by 20p (3 per cent) from £6.50 to £6.70 per hour;
  • The rate for 18- to 20-year-old workers will increase by 17p (3.3 per cent) from £5.13 to £5.30 per hour;
  • The rate for 16- and 17-year-olds will increase by 8p (2.1 per cent) from £3.79 to £3.87 per hour.

Zero Hours Contracts – Tackling Avoidance of the Forthcoming Ban on Exclusivity Clauses

The Government is currently legislating to render the use of exclusivity clauses unenforceable in zero hours contracts. In addition, following a consultation exercise, draft regulations have been drawn up outlining proposals for secondary legislation to prevent employers from sidestepping the ban.

The Government Response to the ‘Banning Exclusivity Clauses: Tackling Avoidance’ Consultation and a copy of the Draft Zero Hours Workers (Exclusivity Terms) Regulations 2015 can be found here.

Updated Statutory Guidance on Calculating the Minimum Wage

PayslipThe Government has updated its statutory guidance on calculating the National Minimum Wage (NMW).

This covers eligibility for the NMW, calculating the amount payable, the working hours for which the NMW must be paid and enforcing payment of the NMW.

The section on working hours for which the NMW must be paid covers sleeping between duties and has been updated to reflect recent case law on this aspect of the legislation. It provides an example of when the NMW is likely to apply and an example of when it is not.

The updated guidance can be found here.

Be Careful How You Use Your Employer’s Email Account!

footballWorkers tempted to use their employers’ email acounts for purposes which could cause offence should take note of a High Court case in which a senior manager at a Premiership football club lost the right to a £200,000 severance payment after sending pornographic images to a junior female colleague and others.

The technical director had worked for the club for seven years before he was made redundant as part of a restructuring exercise. He was told that his employment was to be terminated and he expected to receive a year’s salary and other benefits on his departure. However, during his notice period, the club discovered that, five years previously, he had sent obscene images of naked women to the female colleague and two male acquaintances who worked for other clubs.

The club summarily dismissed him for gross misconduct and declined to give him his severance package. The man accepted that sending the emails was ‘inappropriate’ and ‘not best practice’, but claimed damages from the club on the basis that his misconduct was ‘not sufficiently serious’ to justify instant dismissal.

In rejecting his claim, however, the Court noted the seniority of his position within the club and his awareness that his job would put him in the media spotlight. His duties included identifying and nurturing young talent through the club’s academy, in which some of the students were as young as eight.

He had given no reasonable explanation for forwarding the emails and his conduct was ‘simply incompatible’ with the duties he owed as a senior manager of the club. His behaviour amounted to a fundamental breach of the term of trust and confidence implied in his employment contract.