New ‘Vento’ Bands

The Presidents of the Employment Tribunals in England & Wales and Scotland have issued a joint Second Addendum, updating earlier Presidential Guidance issued on 5 September 2017, announcing the rates payable for the three bands that are used by Employment Tribunals when assessing the amount of compensation payable for injury to feelings in discrimination and whistleblowing cases. These are often called the ‘Vento’ bands, after the 2002 case in which the Court of Appeal gave guidance on this issue (Vento v Chief Constable of West Yorkshire Police).

The new rates take account of the Retail Prices Index and apply to claims presented on or after 6 April 2019. They are as follows:

  • Lower band – between £900 and £8,800. Awards in this range are appropriate where the act of discrimination is an isolated or one-off occurrence;
  • Middle band – between £8,800 and £26,300. Awards in this range are made in serious cases but where an award in the top band is not merited; and
  • Top band – between £26,300 and £44,000. Awards in this range are made in the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment. Only in exceptional circumstances will a compensation award for injury to feelings exceed the upper limit.

High Court Enforces Partnership Agreement Non-Compete Clause

Validly restricting the post-termination conduct of employees and partners involves striking a careful balance between business protection and personal freedom, and that is why professional drafting is indispensable. An instructive case on point concerned a partner in a professional services firm who was banned from joining a competitor for six months following his retirement.

After the firm approved the man’s retirement, he was placed on gardening leave for nine months prior to the date of his retirement. Thereafter, for a further six months, a clause in the firm’s membership agreement forbade him from joining as a partner or member any business in competition with the firm or other firms connected to it, either in the UK or overseas.

About a month after the end of his gardening leave, the man announced his intention to take up a post with a competitor. The firm was concerned that his senior role had given him access to its confidential information and sought an injunction to hold him to the terms of the membership agreement. The man argued that the non-compete clause was invalid in that it was too broad in its scope and unfairly prevented him from making a living. He also submitted that the six-month period, when combined with the period of gardening leave, was unreasonably long.

In granting the injunction sought, however, the Court noted that the dispute in respect of the validity of the non-compete clause had been referred for resolution by an arbitrator under the terms of the membership agreement. That arbitration could take place speedily, and in any event before the expiry of the six-month period.

The Court observed that the man had been paid a substantial sum of money whilst on gardening leave and was aware throughout that the firm was seeking to enforce the non-compete clause. The firm had presented an arguable case that the order was necessary to protect its legitimate interests in maintaining confidentiality. It had established a serious issue to be tried and the balance of convenience also fell in favour of the injunction being granted.

French Lawyer Tests Limits of UK Employment Tribunals’ Territorial Reach

The territorial reach of UK Employment Tribunals (ETs) is not without limit and the overseas presence of many British businesses can give rise to difficult jurisdictional issues. A recent case concerned a French lawyer who worked in the Paris office of an international law firm based in London.

The lawyer, a partner in the firm, launched ET proceedings after she was required to retire. She claimed that male colleagues had been paid more than her and that the circumstances of her departure revealed direct sex and race discrimination which amounted to victimisation. The ET, however, dismissed her claims on the basis that it lacked territorial jurisdiction to consider them.

In ruling on her challenge to that decision, the Employment Appeal Tribunal (EAT) noted that the firm, although based in London, has 24 offices worldwide. The Paris office was not a wholly independent business, but nor was it a mere outpost or satellite of the London HQ. She visited the London office every few months and, as a partner in a UK firm, she was required to register with the Solicitors Regulation Authority.

In dismissing her appeal, however, the EAT observed that the Paris office would, to its clients, have appeared practically indistinguishable from an independent French law firm. As a French national, the lawyer lived and worked in her homeland and was qualified to practise French law. Her ad hoc visits to London were generally brief and were of little relevance.  She was paid in Euros, into a French bank account, and she paid tax in France.

Overall, her connection to the UK was weak and there were no exceptional features that required the ET to assume jurisdiction. The EAT also dismissed her appeal against the ET’s rejection, again on jurisdictional grounds, of her separate discrimination claims against an individual partner in the Paris office.

ACAS Suffers Setback in Dispute With Its Own Employees’ Trade Union

Few would fail to appreciate the irony of the Advisory, Conciliation and Arbitration Service (Acas) being embroiled in a dispute with a trade union representing its own employees. However, the falling out provided the occasion for an important test case on the extent to which public employers are obliged to consult their staff.

The Public and Commercial Services Union complained that Acas had failed to consult its employees pursuant to a negotiated agreement. The Central Arbitration Committee (CAC) ruled that it had jurisdiction to consider the complaint under the Information and Consultation of Employees Regulations 2004. Acas’s challenge to that decision was later rejected by an Employment Tribunal.

In challenging the latter ruling before the Employment Appeal Tribunal (EAT), Acas argued that it fell outside the ambit of the Regulations. It pointed out that it is largely funded by the Department of Business, Innovation and Skills and that, as a Crown Non-Departmental Public Body, it is entirely staffed by civil servants. It argued that its activities are governmental in nature, rather than economic or competitive, and that its position could be equated to that of a regulator.

In dismissing the appeal, however, the EAT noted that one of the roles performed by Acas is to advise employers on good employment practices, and that such services are paid for. Although that made up only a small part of Acas’s activities, it was nevertheless a remunerated provision of services to a customer. That economic activity was neither ancillary nor so small as to be irrelevant, and was sufficient to bring Acas within the Regulations.

The EAT noted that an economic activity, within the meaning of the Regulations, does not require that payment for goods or services be made by a consumer or end user. It therefore mattered not that Acas is largely dependent on government grants. The EAT also found that an economic activity may include the supply of goods and services by a monopoly in any given market.

The sole point on which the EAT differed from the CAC was in finding that the highly important conciliatory role performed by Acas under the Employment Tribunals Act 1996 is not an economic activity. That role was carried out in the exercise of public powers and thus fell outside the Regulations. That conclusion, however, did not affect the overall outcome of the appeal.

Increases in National Minimum Wage Rates

Published Monday 1st April 2019, 10:00 AM

Employers are reminded that new National Living Wage (NLW) and National Minimum Wage (NMW) rates apply from 1 April 2019. These are as follows:

  • The NLW, which applies to those aged 25 and over, will increase from £7.83 to £8.21 per hour;
  • The NMW for 21- to 24-year-olds will increase from £7.38 to £7.70 per hour;
  • The NMW for 18- to 20-year-olds will increase from £5.90 to £6.15 per hour;
  • The NMW for 16- and 17-year-olds will increase from £4.20 to £4.35 per hour; and
  • The apprentice rate of the NMW, which applies to apprentices aged under 19 or those aged 19 or over and in the first year of their apprenticeship, will increase from £3.70 to £3.90 per hour.

The accommodation offset will increase from £7.00 to £7.55 per day for each day during the pay period that accommodation is provided.

Shifting Sands of Airport Worker’s Claim Broke Golden Rule of Litigation

Airport departures board 2One of the golden rules of litigation is that issues to be resolved must be established at the outset so that all sides understand the case they have to meet. That sadly did not happen in an employment case in which an airport worker who claimed to be a victim of disability discrimination shifted his ground at a late stage.

When lodging his complaint with an Employment Tribunal (ET), the security guard stated that he was disabled due to a heart condition, atrial fibrillation. He claimed that he had been overlooked for promotion due to that disability and that his employer had failed to make reasonable adjustments in not providing him with sufficient work breaks.

At a preliminary hearing, his claim that he was disabled by reason of his heart condition was rejected. However, he succeeded in an alternative argument that he was disabled due to suffering from depression. He had not sought to amend his claim to include that allegation, but the ET permitted him to argue the point despite the employer’s objections.

In upholding the employer’s challenge to that decision, the Employment Appeal Tribunal (EAT) found that the ET was plainly wrong to treat the issue before it as being whether the man suffered from the mental impairment of depression. That argument had been sprung upon the employer very shortly before the hearing.

There had been no attempt to change the list of issues that were to be resolved and the reasonable adjustments contended for related solely to atrial fibrillation. That was the case that the employer had prepared itself to meet and the ET’s decision had thrown the proceedings into disarray. There being nothing of substance left in the proceedings, the EAT dismissed the man’s claim.

Reasonable Employers’ Views on the Gravity of Misconduct Deserve Respect

Fire DoorEmployment Tribunals (ETs) are not entitled to substitute their own view of the gravity of an employee’s misconduct for that of a reasonable employer. In one case, however, an ET fell into precisely that trap when it found that two distribution centre workers’ breaches of their employer’s fire safety policy were not serious.

In order to be certain as to exactly who was on the premises in the event of a fire, the employer required all of its staff to sign a fire sheet on arrival and departure. The more senior of the two workers had, on a daily basis and for several months, signed in and out for the other. Following a disciplinary process, gross misconduct findings were made against both men and they were summarily dismissed.

After the workers launched proceedings, an ET found that their breaches of their employer’s health and safety policy were not serious and, by a majority, upheld their unfair dismissal claims. The fire sheet could not be said to have been falsified in that there was no suggestion that the more junior worker was not in the building when his colleague signed him in, or that he was still in the building when he was signed out. There had been no furtiveness on either man’s part and their sole fault was that one of them signed the sheet when the other was not standing next to him.

In upholding the employer’s appeal against that decision, the Employment Appeal Tribunal (EAT) found that the ET had substituted its views on what was important for the purpose of the fire sheet policy and what amounted to a serious breach. The ET had repeatedly focused not on the employer’s assessment of the seriousness of the workers’ conduct but on its own opinions.

The ET had misunderstood important parts of the evidence and had also erred in finding an unreasonable inconsistency between the workers’ treatment and that of another who kept his job after signing in for a colleague on a single occasion. In the circumstances, the case was remitted to a fresh ET for rehearing.

Government Consults on Tighter Rules for NDAs

Confidentiality clauses have a right and proper place in the employment context. They can be used primarily in two ways – either as part of an employment contract, where there is a need to protect business secrets for example, or as part of a settlement agreement, in order to allow both sides in an employment dispute to move on with a clean break. However, they can be open to abuse, as recent newspaper reports have revealed.

In an attempt to crack down on the use of non-disclosure agreements (NDAs) and confidentiality clauses by employers to cover up incidents of sexual and racial harassment in the workplace, the Government has issued a consultation document on ways to tighten up the rules that apply to them.

In addition to the existing legal limitations that apply to confidentiality clauses, the proposals seek views on further limitations and how best to enforce them. These include:

  • Legislating that workplace confidentiality agreements cannot be used to prevent workers reporting harassment or discrimination to the police or prevent disclosure in any criminal proceedings;
  • Requiring that a clear, written description of a person’s rights are made available before they sign a confidentiality clause in an employment contract or a settlement agreement, so that they fully understand their rights; and
  • Extending the law to ensure workers agreeing to confidentiality agreements receive independent legal advice making clear their nature and what the limitations are.

The consultation closes on 29 April 2019.

Working Time Regulations 1998 – Authoritative Court of Appeal Guidance

The Court of Appeal has given important guidance on the correct interpretation of the Working Time Regulations 1998 (WTR) in ruling that a railway signalman’s rights were not breached by his employer’s failure to afford him a 20-minute uninterrupted break in every six hours he worked.

Railway Line 2The signalman provided relief cover at a number of single-manned signal boxes. He worked eight-hour shifts but had no rostered breaks and was expected to take rest periods during gaps in the timetable. He complained that the lack of contractual provision for 20-minute continuous breaks breached his rights under the WTR. His claim was initially rejected by an Employment Tribunal (ET), but that decision was subsequently reversed by the Employment Appeal Tribunal (EAT).

In ruling on the employer’s challenge to the EAT’s decision, the Court noted that the WTR provides special rules for railway workers. By Regulation 21, they are exempt from the requirement under Regulation 12 that workers be afforded at least 20 minutes of uninterrupted rest during each six-hour shift, and that they be permitted to be away from their work stations during such periods. However, by Regulation 24, railway employers are required, save in exceptional circumstances, to allow workers to take equivalent periods of compensatory rest.

In upholding the appeal, the Court noted that the word ‘equivalent’ in Regulation 24 cannot have been intended to impose on railway employers an identical obligation to that which would have applied under Regulation 12. Instead the intention must have been that the rest periods afforded to railway workers should have the same value in terms of contributing to their general wellbeing.

There was no basis for the proposition that only an uninterrupted 20-minute break can provide a benefit to railway workers equivalent to that enjoyed by other workers. There was no reason to suppose that such a continuous break would always be better, say, than two uninterrupted breaks of 15 minutes. The ET had reached the commonsense conclusion that the rest breaks afforded to the railwayman passed the equivalence test. In those circumstances, his claim was dismissed.

Hiring Agency Workers? Do You Understand Your Legal Responsibilities?

Engaging agency workers offers ease and flexibility, but employers who believe that they thereby divorce themselves from all legal responsibility are sadly mistaken. In a guideline case on point, a transport company was ordered to compensate agency workers who were paid less than their directly employed colleagues.

For a period of almost two years, the company failed to comply with its duties under the Agency Workers Regulations 2010 to afford equal pay to workers it had hired from an agency. After acknowledging its error, the company equalised the agency workers’ pay and remitted sums to the agency which covered the previous underpayments. Those sums were, however, retained by the agency and not passed on to the workers before it went into involuntary liquidation.

After complaints were lodged by two of the agency workers – who acted as lead claimants – an Employment Tribunal (ET) found that the agency and the company, as hirer, each bore 50 per cent responsibility for the breaches of the Regulations. The ET declined to order the company to pay compensation to the workers on the basis that it would not be just and equitable to do so. That ruling was, however, subsequently reversed by the Employment Appeal Tribunal.

In dismissing the company’s challenge to that decision, the Court of Appeal noted that the agency workers’ rights to equal pay were enforceable against both the agency and the company. They suffered an actionable loss on each and every occasion that they were underpaid. The agency’s failure to pay the sums due, even when put in funds to do so by the company, did not break the connection between the workers’ losses and the company’s breaches: it simply meant that they continued.

The company had chosen to use agency workers in the first place and was partly responsible for the original underpayments. The workers were also in a much weaker bargaining position than either the company or the agency. In those circumstances, they were entitled to be compensated for the underpayments on a pound-for-pound basis. The Court’s ruling rendered the company liable to pay 50 per cent of the compensation due to the workers. The amount of their awards will be assessed at a further ET hearing.