what's in the news

1. Misconduct

The Employment Appeal Tribunal has reminded employers of the issues they should consider before dismissing staff for misconduct. In a separate case, the Employment Appeal Tribunal has held that it is not necessary for an employee’s conduct to be ‘reprehensible’ in order for conduct to be a potentially fair reason for dismissal.

What does this mean?
Dismissal for misconduct will be fair only if (1) the employer has carried out a reasonable investigation into the alleged misconduct of the employee; (2) the employer believes, at the time of dismissal, that the employee is guilty of the misconduct alleged; (3) there were reasonable grounds for the employer having such a belief; and (4) dismissal was a reasonable response in the circumstances.

What should employers do?
Employers should always take specific legal advice before dismissing an employee whether for misconduct or for some other reason. However, employers should be aware that if they believe the employee is guilty of the misconduct their belief does not necessarily need to be correct if there were reasonable grounds for the belief and dismissal was within the range of reasonable responses.
 
2. Discrimination

A Polish female doctor who was subjected to discrimination on grounds of her sex and race has been awarded just under £4.5 million in compensation. The tribunal held the employer and three senior staff members jointly and severally liable to pay the compensation.

What does this mean?
The case serves as a reminder that in cases of discrimination there is no cap on the amount of compensation a tribunal can award and that individuals in an organisation can be found liable to pay compensation as well as the organisation itself.

What should employers do?
Employers should take steps to prevent discrimination and harassment in the workplace.  This may be by ensuring that clear written policies relating to discrimination and harassment are in place, by providing staff with training in these areas and by promoting a culture of compliance with such policies.

3. Disability discrimination

The Employment Appeal Tribunal has held that in a claim for disability discrimination it is necessary for the employee to establish that he was disabled at the time when the alleged discrimination took place.

What does this mean?
A person is disabled for the purpose of employment legislation if he has a physical or mental impairment which has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities. An impairment is regarded as being substantial if it has lasted or is likely to last at least 12 months. An employee who is experiencing a substantial adverse effect on his day-to-day activities at the time of the alleged discrimination will not, therefore, be regarded as being a disabled person if his symptoms were not expected to persist for 12 months or more.

What should employers do?
Employers should bear in mind that GPs are not always aware of the legal definition of disability and even where they are it will ultimately be for a tribunal, not a GP, to decide whether a person is disabled or not. For this reason legal advice should be obtained where there is doubt as to whether a person is disabled.

4. Upcoming changes

• On 1 April statutory maternity, paternity and adoption pay is to increase to £135.45 per week.
• On 6 April the personal allowance will increase to £8,105, the threshold at which employees pay the higher income tax rate of 40% reduces to £34,371 and the lower earnings limit for primary class 1 national insurance contributions increases to £107. From that date HMRC will have the power to ask an employer to pay a security where there is a serious risk that it will not pay income tax or class 1 national insurance contributions that it has deducted from an employee’s pay.
• On 6 April statutory sick pay is to increase to £85.85 per week.

5. Pensions

From 6 April people in defined contribution pension schemes will no longer be able to contract out of the state additional pension.
 
6. Legal fee indemnities

The High Court has held that an indemnity in a compromise agreement did not oblige the employer to pay a former employee’s legal expenses associated with a criminal investigation into action alleged to have been taken by him when he was an employee.

What does this mean?
Even if the terms of an indemnity relating to the payment of legal fees are wide ranging, it  may only protect an employee from legal professional expenses arising from the ‘ordinary occupational hazards’ of the job and  not cover criminal allegations made against the employee personally.

What should employers do?
Compromise agreements and indemnities intended to cover an employee’s legal expense for addressing criminal allegations should always be explicitly drafted and legal advice should be obtained.
 
7. Overtime

The Employment Appeal Tribunal has held that a worker does not suffer a detriment where he refuses to sign a 48-hour week opt-out, and is then refused an opportunity for overtime by his employer, if the employer is found to have acted reasonably in requiring an opt out from all those working rest days to avoid breach of working time legislation.

What does this mean?
Employers can justify decisions to refuse an opportunity for overtime if the reason for the refusal is to enforce a reasonable and necessary policy designed to ensure that its employees who exercise their right not to opt out of the 48 hour week maintain that right.

What should employers do?
Employers should be prepared to justify their decisions on overtime and should ensure that they comply with their duty to take reasonable steps to ensure the 48-hour limit is complied with.
 
8. Redundancy

The Employment Appeal Tribunal has held that an employee can act reasonably in refusing an offer of suitable alternative employment even if a hypothetical reasonable employee would have accepted the employer’s offer.

What does this mean?
When considering whether a refusal of suitable alternative employment is unreasonable, it is necessary to consider whether the employee in question acted reasonably in refusing the offer. This will involve a consideration of whether the reason, given by the individual, constituted a sound and justifiable reason for turning down the offer.

What should employers do?
Employers should take specific legal advice when making staff redundant, particularly in relation to the issue of refusal of suitable alternative employment.
 
9. Redundancy

The Employment Appeal Tribunal has held that an unspecific challenge by an employee to redundancy assessment criteria did not entitle the employee to see interview notes relating to an application for an alternative position within the business prior to the decision to dismiss.

What does this mean?
An employer is under no duty to provide a copy of interview notes where an employee has not made any specific complaint or challenge to the scoring or interviewing process undertaken.

What should employers do?
Employers should  keep in mind that an employee may be entitled to obtain the notes of his/her interview on a redundancy related job application, though generally only if making such a specific challenge.

10. Vicarious liability

The Court of Appeal has ruled on two cases involving the question as to whether an employer is liable for an assault carried out by an employee on a fellow worker in response to lawful instructions. In one case, the employer was found vicariously liable where the employee  attacked his manager in response to a reasonable instruction given by his manager. It was held the attack was sufficiently related to the employment in time and space.  In the other there was no vicarious liability where the employee, was telephoned at home and asked to work an extra shift, cycled to work drunk and attacked the manager there. Although the attack happened on the Employer’s ground, the attack was unconnected to the employee’s employment.

What does this mean?
An employer will be vicariously liable for the actions of their employees where such actions are carried out in the course of their employment. For this purpose there needs to be a sufficiently close connection between the act and the employment.

What should employers do?
Employers should screen their employees’ backgrounds, ensure that they have adequate liability insurance cover in place, and clearly define their employees’ approved areas of responsibility and the scope of their work.

11. Annual leave

The Court of Justice of the European Communities has held that annual leave entitlement cannot be subject to preconditions, such as of attendance at work,  for workers who have been granted sick leave. A requirement on those workers to actually work a certain number of days before the entitlement even arises, for example, will breach the Working Time Directive.

What does this mean?
Any worker, whether he be on sick leave following an accident at work or due to any other sickness cannot have his entitlement to at least four weeks’ paid annual leave affected.

What should employers do?
Employers should ensure that all of their workers receive paid annual leave. The statutory minimum annual leave entitlement is 5.6 weeks or 28 days (pro rata for part-time workers).

12. TUPE Payments

The Court of Appeal has held that payments made under TUPE will be taxable as employment income when they are pay to employees on the transfer of a business. In this case the payments were made to compensate the employee’s for their loss of pension right and also as a way of discouraging industrial action.

What does this mean?
Employers need to be careful about paying a lump sum to their employees because if their employment is one of a number of reasons for their payment then the full amount will be taxable.

What should employers do?
Employers should ensure that where payments are made to their employees for various reasons, they apportion an amount to each reason. Tax and national insurance contributions can then be calculated accordingly.

For further information on this article, please contact Pitmans Employment team.

Mark Symons
Partner, Head of Employment
T: +44 (0) 118 957 0340
E: msymons@pitmans.com