Corporate Pensioners in Age Discrimination Test Case

Corporate pensioners often feel that they are given a raw deal when compared to active employees and, in an important test case, employment tribunals are being asked to consider whether such alleged differences in treatment can amount to unlawful age discrimination.

A multinational company had faced industrial action after it decided to link employee pension increases to the Consumer Price Index, rather than the more generous Retail Prices Index as it had done hitherto. In order to resolve the dispute, the company paid lump sums to current employees, but not to those who had already retired.

A group of pensioners argued before an Employment Tribunal (ET) that the failure to pay them the same lump sums as active employees amounted to age discrimination, banned by the Equality Act 2010. Following a preliminary hearing, the ET accepted that it had jurisdiction to consider their complaints.

In overturning that ruling, however, the Employment Appeal Tribunal (EAT) found that the ET had applied the wrong legal test. The ET had failed to ask itself, in accordance with Section 108(1) of the Act, whether the alleged difference in treatment arose out of and was closely connected to the employment relationship which formerly existed between the pensioners and the company.

The ET had also failed to consider whether the allegations of discrimination were of conduct which would have contravened the Act had it occurred during the employment relationship. In those circumstances, the jurisdictional issue was sent back to a freshly constituted ET for reconsideration.

Working Abroad? Is Your Employment Properly Protected?

British workers who take jobs abroad often achieve higher earnings and are exempt from UK taxation. However, as one construction industry worker found out to his cost, such benefits frequently entail the sacrifice of the legal protection afforded by British employment laws.

The commercial manager worked for an English company but carried out most of his work in the Middle East, where he was recruited. Following his resignation, he launched Employment Tribunal (ET) proceedings, claiming unfair dismissal and that he had been persecuted for whistleblowing. The ET, however, ruled that it had no power to consider his complaints on the basis that his employment was more closely connected to the Middle East than to Britain.

In rejecting the man’s challenge to that decision, the Employment Appeal Tribunal (EAT) found that the ET had applied the correct legal test when considering the limits of its international jurisdiction. The EAT noted that, when seeking non-resident status for tax purposes, the man had informed HM Revenue and Customs that he only travelled back to the UK for family visits and the occasional meeting. Although that statement was not necessarily decisive, it was a factor which the ET was entitled to take into account.

New National Minimum Wage Rates

Published Thursday 1st October 2015, 05:00 AM

Employers are reminded that the following changes to the National Minimum Wage (NMW) rates came into effect on 1 October 2015:

  • the adult NMW rate increased from £6.50 to £6.70 per hour;
  • the NMW rate for workers aged 18 to 20 increased from £5.13 to £5.30 per hour;
  • the NMW rate for 16- and 17-year-olds increased from £3.79 to £3.87 per hour; and
  • the apprentice rate of the NMW, which applies to apprentices aged 16 to 18 and those aged 19 or over who are in the first year of their apprenticeship, increased from £2.73 to £3.30 per hour.

The accommodation offset increased from £5.08 to £5.35 per day.

Mistreated Police Worker Due Big Compensation Payout

A civilian police worker whose claims of psychiatric disability were disbelieved by her bosses, and who was sacked on the basis of vague allegations, has won the right to substantial compensation for the mistreatment she endured.

The woman had worked in a police force’s finance department for 23 years but had a history of suffering anxiety, stress and depression. She also had a heart problem and had undergone surgery six months before her dismissal. Whilst she was on sick leave, suspicions were raised that her psychiatric problems were not genuine and she had been placed under covert surveillance by her employer.

Her claims to have suffered extreme bullying at the hands of her superiors were met by demands that she return to work. A disciplinary hearing in respect of a number of unparticularised allegations was ultimately convened and she was dismissed with immediate effect for alleged gross misconduct.

In upholding her unfair dismissal claim, an Employment Tribunal (ET) described the covert surveillance as very heavy handed. Although her employer had genuinely believed that she might be falsely claiming to be sick, her disproportionate treatment had worsened her condition. There were also a number of procedural flaws in the disciplinary process leading up to her dismissal.

The ET, however, rejected her disability discrimination claim. In upholding her challenge to that decision, the Employment Appeal Tribunal (EAT) found that the ET had erred in its interpretation of Section 15 of the Equality Act 2010. Her disability was an effective cause of the unfavourable treatment she suffered and a finding of discrimination was thus inevitable. The amount of compensation due to her in the light of the EAT’s ruling had yet to be assessed.

Whistleblowing: State of Mind Is All Important!

In whistleblowing cases, the employee’s state of mind is the decisive factor and that was certainly so in the case of a college lecturer who was dismissed after being accused of making groundless allegations against a colleague.

The lecturer faced criticism of her performance on the basis of student feedback and was said to have defended herself by accusing a colleague of giving his students advance notice of examination questions. The colleague was subsequently acquitted of malpractice and the lecturer was dismissed for gross misconduct on the basis that her allegations against him had been vexatious.

An Employment Tribunal (ET) subsequently found that it had not been the lecturer’s intention to get her colleague into trouble and that her remarks about him were made in good faith and with a view to vindicating her own position. However, in dismissing her whistleblowing claim, it found that she had no reasonable belief that he was undermining the integrity of the examination system.

Allowing her appeal against that ruling, the Employment Appeal Tribunal (EAT) found that the ET had failed to clearly address issues as to the reasonableness of the lecturer’s belief and whether the allegations she made were public interest disclosures within the meaning of the Employment Rights Act 1996.

The employer’s challenge to a finding of unfair dismissal in the lecturer’s favour was also allowed. The EAT found that the ET substituted its views for those of the college and had failed to apply the objective standard of the reasonable employer. In those circumstances, the remaining issues in the case were remitted to a freshly constituted ET for reconsideration.

Whistleblowing Solicitor Wins Compensation Fight

A whistleblowing solicitor who resigned after she was dressed down in front of colleagues and her performance inappropriately criticised has won the right to compensation after a tribunal ruled that she was constructively dismissed unfairly.

The woman had blown the whistle in respect of aspects of the financial management of the firm for which she worked and in respect of an inappropriate joke about Arab Muslims which had been internally emailed by a member of the management team.

After she raised her concerns, her performance was unfairly criticised in front of her team and others. An Employment Tribunal (ET) found that the reason for that was that she had made the protected disclosures. She later handed in her notice in a resignation letter which contained a number of complaints about her treatment.

The ET found that the disclosures were not the principal reason for her dismissal. However, in upholding her claim, it went on to rule that her overall treatment had led to a breakdown of her relationship of trust and confidence with her employers. The fact that the firm did not have up-to-date whistleblowing procedures in place also amounted to a fundamental breach of contract.

The firm challenged the ET’s decision before the Employment Appeal Tribunal (EAT) on the basis that it was insufficiently reasoned and displayed errors of law. It was submitted that the woman would have resigned in any event and that the breaches of contract found by the ET were not serious. However, in dismissing the appeal, the EAT found that the ET was entitled to reach the conclusions it did on the evidence.

Government Investigation into Tipping

The Business Secretary, Sajid Javid, has launched an investigation into abuse of tipping, as part of the Government’s initiative to make sure workers are paid fairly.

The announcement follows recent media reports that some major restaurant chains are withholding a proportion of the money left by customers for waiting staff in order to cover administrative costs.

The consultation seeks information on current practice in relation to tips, gratuities, cover and service charges and also welcomes views on the Government’s role in improving practice in this area. It will then decide if action is needed to ensure that employers do not withhold from tips anything other than credit card administration and payroll charges.

The consultation closes on 10 November 2015.

Mobile Employees Win Landmark Working Time Debate

Car DashboardIn a groundbreaking decision which will benefit hundreds of thousands of employees who have no fixed place of work and travel directly between their homes and customers’ premises, the European Court of Justice (ECJ) has ruled that time spent on the road is working time which must be taken into account when calculating entitlement to rest periods.

The case concerned a Spanish security equipment company which managed a web of operatives across the country from its central office in Madrid. Employees, who used company-owned vehicles, were despatched from their homes to customers’ premises by mobile phone as the need arose. In some instances, workers travelled long distances and for several hours to serve clients.

In those circumstances, an issue arose as to whether time they spent driving between their homes and their first and last customers each day was working time within the meaning of Directive 2003/88/EEC. That question was referred to the ECJ for a preliminary opinion by the Spanish High Court and was considered of such importance that the UK government intervened in the case, laying particular stress on the potential cost implications for employers.

The company argued that the workers were entitled to choose their own routes and travel itineraries and were thus not at its disposal whilst travelling between home and customers’ premises. It treated hours spent on the road as rest periods which did not count towards the nine-hour maximum working day envisaged by the Directive. Employees’ time at work was calculated on the basis of the time of their arrival at the premises of their first daily client and their departure from the last.

In ruling on the issue, the ECJ found that, where workers do not have a fixed or habitual place of work, time spent travelling between their homes and the premises of clients designated by their employer is working time. Travelling was an integral part of the employees’ duties and they could not be expected to bear the entire burden of the company’s strategy of dispensing with regional offices.

The company’s interpretation of the Directive, if correct, would distort and jeopardise the objective of promoting the health and safety of workers by ensuring that they enjoy minimum rest periods and that at least 12 hours elapses between the end of one working day and the start of the next. That conclusion could not be called into question by the UK government’s concern that employers would be placed under a greater financial and administrative burden. Remaining issues in the underlying litigation would now be resolved by the Spanish court in the light of the ECJ’s ruling.

Rugby World Cup 2015 – Are You Ready?

The Rugby World Cup 2015 commences on Friday, 18 September 2015, with a match between England and Fiji, with the final due to be played at Twickenham on 31 October 2015.

Employers who have not already done so should ensure they have policies in place to deal with any issues that could arise and that employees fully understand them. Whilst you are under no obligation to make adjustments to cater for employees who wish to watch or attend the matches, if you are able to offer some degree of flexibility during such events, it is an opportunity to improve employee motivation and morale – but be sure to take a fair and consistent approach.

Matches are scheduled to take place on weekday afternoons and evenings as well as at weekends, so rugby fans who work shifts or who work outside normal office hours will be affected as well as those who work from nine to five. A full list of the fixtures can be found here.

Make sure staff fully understand your policy regarding last-minute requests for annual leave and that you communicate what disciplinary action will be taken in the event of unauthorised absences or if employees attend work but are incapacitated because of too little sleep or too much alcohol. It is always a good idea to hold back-to-work interviews when employees are off sick as not only does this help employers identify any action that can be taken to improve an employee’s working conditions but it can also deter malingerers.

If you are considering adopting flexible working arrangements for the duration of the competition, these should not discriminate against staff who support teams other than England. Nor should any arrangements made have an adverse effect on workers who have no interest in rugby.

As matches will also be available online, it is important that employees are fully aware of your Internet policy. If you are considering relaxing your usual rules during the competition, make sure you have the necessary bandwidth to do so without this affecting system performance. There may also be an increase in the use of social networking sites, so make sure your policy is clear as to what is and what is not acceptable use of the Internet. If you are monitoring Internet usage, you are required by law to make this clear to all employees.

Also, staff should be aware that any racist conduct or comments will not be tolerated.

Further information on the Rugby World Cup can be found here.

Guidance from the Advisory, Conciliation and Arbitration Service on dealing with major sporting events can be found here.

For individual advice tailored to the needs of your business, contact us.

Long-Term Sick Leave and TUPE – Tribunal Gives Guidance

Workers whose contracts are shifted from one employer to another are protected by law against the consequences of commercial deals over which they have no control. However, the complications involved in such transfers were highlighted by the case of a telecommunications worker who had been on sick leave for five years.

The man worked as part of a close-knit team within a telecommunications company (company A) whose sole purpose was to service an outsource contract. The team, which had its own internal management structure, was acknowledged to be an organised grouping within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

Although the man had been permanently unfit for work since 2008, he had remained on the team’s books and had continued to be paid by company A. The outsource contract was transferred to another telecommunications company (company B) in 2013 and it was accepted that that amounted to a service provision change and that the team’s employment contracts had transferred to company B.

An issue thus arose as to whether the man’s employment had shifted along with other members of the team notwithstanding his long-term inability to work. An Employment Tribunal answered that question in the negative, with the result that he continued to be employed by company A.

In dismissing company A’s challenge to that decision, the Employment Appeal Tribunal found that, as the man had made no contribution to the economic activity of the team for an extended period, he had not been assigned to that grouping at the time of the transfer. His continued administrative connection to the team was insufficient to amount to an assignment within the meaning of TUPE.