CPD2008 edition

Training in Law

prepared for

CPD Update

Fiona Church

Employment Law

ILEX CPD reference code: L42 CPD

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Published in 2008 by:ILEX Tutorial College LtdCollege HouseManor DriveKempstonBedfordUnited KingdomMK42 7AB

Preface

This update has been prepared by ILEX Tutorial College (ITC) to assist Fellows and Members of the Institute of Legal Executives (ILEX) in meeting their continuing professional development (CPD) or lifelong learning requirements for 2008. Fellows are required to complete 16 hours of CPD in 2008 and Members eight hours of CPD. It has been written for Fellows and Members currently practising in this area and it is assumed, therefore, that those using it have a level of knowledge equivalent to an ILEX Level 6 Professional Higher Diploma in Law pass.

Each update contains information on developments in law and/or practice in 2007 and early 2008. Studying each update and completing the accompanying self-assessment test will account for four hours of CPD. Fellows and Members are entitled to two free updates a year.

Details of the completion of the self-assessment test should be recorded by Fellows in their CPD logbooks using the reference code printed inside the front cover of the update. It is not necessary to return the completed self-assessment test to ILEX. All completed self-assessment tests should be retained, however, as ILEX may request their return for monitoring purposes.

Any queries about completion of the self-assessment test and any other CPD issues should be made to the Membership Operations Division on 01234-845733.

Introduction

This update is not intended to be an academic study of the law. It is for those Fellows already practising in this field, and therefore assumes a level of knowledge in this subject equivalent to an ILEX Membership Examination Level 6 pass. It is advised that you do not attempt this update if you are not currently practising in this field of law.

This update is provided for educational updating and tuition purposes. Decisions on legal practice should not be taken on the basis of this update, which is intended to clarify certain areas of difficulty. For further information on any of the subjects, please refer to standard reference works and sources of law. Ensure that you use the latest material, and that you are aware that other legal subjects may impinge on this one.

NB All references to Rules or Parts in this update refer to the Civil Procedure Rules 1998 (CPR) unless otherwise indicated.

Contents

i

Chapter 1: Tribunals

Chapter 2: The Contract of Employment

Chapter 3: Maternity, Paternity and Parental Rights

Chapter 4: Individual Rights

Chapter 5: Discrimination

Chapter 6: Equal Pay

Chapter 7: Dismissal – Fair and Unfair

Chapter 8: Redundancy and TUPE

Chapter 9: Other Legislation of Interest

Self-assessment Test

ii

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TribunalsChapter 1:

Law Reform1.1

The Tribunals, Courts and Enforcement Act 2007 received Royal Assent on 19 July 2007 and will be gradually implemented over the next two years. The Act’s main function is to bring together the range of tribunals into one simplified system.

From 1 December 2007, the chairmen of employment tribunals became known as “employment judges”.

The main changes made by the new Act will affect the administration of the tribunal service.

A new “two-tier” system of tribunals will be introduced. Each tier will be further sub-divided into operating “chambers” with interchangeable members.

A member of the EAT panel will be a “member of the upper tribunal” and a member of an employment tribunal panel will be a “member of the first tier tribunal”.

Other changes include simplification of the enforcement process for tribunal awards and mediation provisions which will allow members of employment tribunals to act as mediators. These changes do not have an implementation date as yet.

The application of the regulatory framework1.2

The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 introduced new procedural rules for employment tribunals. These have now been applied and tested and a number of cases have clarified their operation.

Starting the claim1.2.1

The Regulations tightened up the requirements for making a valid tribunal claim.

r1(3): All claims must be submitted on the prescribed ET1 form, otherwise the claim will be rejected and returned with an explanatory letter and a prescribed claim form for the claimant to use.

As long as the ET1 has been used it will be a valid application, even if some of the content gets reduced during the transmission process. In Grant v 1 in 2 Focus Sales Development Services Ltd EAT 0310-11/06 the claim was rejected for not being on the prescribed form. In fact, it had been sent on the correct form – but the process of sending it via fax machine had reduced its size. The EAT held that the form was still the prescribed form despite the reduction in size.

The Tribunal Secretary’s duty in such circumstances is to explain why a claim has been rejected so that the parties may resubmit using the acceptable form.

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r1(1) requires the ET1 to contain all relevant required information as listed in r1(4)(a)-(g). If the form is incomplete, the Tribunal Secretary cannot accept the claim and must refer it to an employment judge for a decision as to whether it can be accepted or rejected. It is essential that the employment judge acts in such a way as to ensure cases are dealt with justly.

In Hamling v Coxlease School Ltd [2007] ICR 108 a tribunal chairman rejected a claim because the ET1 did not contain the claimant’s address. The EAT overturned the decision on appeal since the information omitted was not “relevant” or “material” to the case and communication was to be via a solicitor whose details were provided.

Minor errors should also be allowed within a claim, provided they are corrected via an amendment application.

Time limits1.2.2

Proceedings must be started within the relevant time limit. A tribunal may extend this in unfair dismissal claims where it was not reasonably practicable for the claim to be presented within the time limit – s111(2)(b) Employment Rights Act 1996 (ERA 1996).

A number of cases have examined this issue, including:

Beasley v National Grid Electricity Transmissions EAT 0626/06 •where a case was dismissed for being 88 seconds late! There was no reason why it could not have been submitted on time and all relevant factors had been taken into account.

Wolverhampton University v Elbeltagi EAT 0167/07• where the ET failed to review the whole time period during which the claim could have been submitted. The claimant argued that it had not been reasonably practicable to submit on time due to a lengthy period involving appeals and attempts to negotiate a resignation. However, on conclusion of all this there was a three-day period during which a claim could have been submitted and the ET failed to take this into account.

Late claims may be allowed in discrimination cases if it would be “just and equitable to do so”. This is slightly less strict than the provisions for unfair dismissal above. In Department of Constitutional Affairs v Jones [2007] EWCA Civ 894, the Court of Appeal held that an employment judge had correctly applied his discretion in allowing an out-of-time disability discrimination complaint to proceed, even though the delay was mainly caused by the claimant’s own refusal to admit to having a disability.

Strike out and bias1.2.3

Striking out a claim or response is not a regular occurrence and may only be applied on the grounds set out in r18(7) Employment Tribunal Rules of Procedure 2004.

In Ezsias v North Glamorgan NHS Trust [2007] ICR 1126 the Court of Appeal gave guidance on the application of the ground that the case “has no reasonable prospect of success”, stating that this will only apply in extreme cases where an employment judge can say that the disputed facts will inevitably or almost inevitably be resolved against the claimant. However, in this case, the

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employment judge’s decision to strike out appeared to be biased as she had decided the issue before giving the parties proper notice of it or an opportunity to make submissions.

Appeals1.2.4

Appeals must be instituted within 42 days – r3(3) Employment Appeals Tribunal Rules 1993. The EAT has a discretion to extend this limit in exceptional circumstances. Four cases taken together in 2007 restated this principle – Muschett v London Borough of Hounslow; Khan v London Probation Service; Ogbuneke v Minister Lodge and ors; Tallington Lakes Ltd v Reilly and another – EAT 0281/07; 0285/07; 0400/07; 1870/06.

In Lipscombe v Forestry Commission [2007] EWCA Civ 428 the Court of Appeal allowed the EAT to deal with a new point of law brought forward by the claimant which had not previously been considered. There were exceptional circumstances which allowed this.

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The Contract of EmploymentChapter 2:

Issues relating to employed status2.1

Agency workers2.1.1

The law relating to agency workers has been clarified in James v London Borough of Greenwich [2008] All ER (D) 54 the Court of Appeal gave clear judgment that a tribunal will rarely be entitled to imply a contract of employment between a worker and the end-user in an agency situation, even where the worker had worked with the end-user for some years. The Court of Appeal held that the ET had correctly applied the test of necessity in assessing whether a contract of employment should be implied between the agency worker and the end-user. The court also approved the guidance handed down by the EAT in the previous hearing.

The EAT guidance was as follows:

Consideration must be given to whether the way in which a contract is •performed is consistent with the agency arrangements or whether it is only consistent with an implied contract of employment between the worker and the end-user.

Where express contracts both explain and are consistent with the nature •of the working relationship, it is not then necessary to explain the relationship by reference to an implied contract even if such a contract would also not be inconsistent with the relationship.

When agency arrangements are genuine and accurately represent the •actual relationship between the parties a tribunal will rarely be entitled to imply a contract between the worker and the end-user.

Working for a particular client for a considerable length of time does •not automatically imply a contract between the end-user on the ground of necessity.

A tribunal has more scope to imply a contract where the agency •agreements are superimposed on an existing contractual relationship between the worker and the end-user.

The court also commented that Dacas v Brook Street Bureau (UK) Ltd [2004] IRLR 358 is not authority for the proposition that a contract of service between the end-user and the worker in tripartite agency arrangements is inevitable in a long-term agency worker situation.

The court made clear that the question of whether an agency worker is an employee of the end-user is a question to be decided in accordance with the common law principles of implied contract.

The Government has enacted the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations which came into force on 1 April 2008. These offer improved protections for agency workers.

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The Contract of Employment

Directors2.1.2

In Nesbitt and Another v Secretary of State for Trade and Industry [2007] IRLR 847 the EAT held that the fact that someone holds a majority shareholding and directorship in a company does not affect his status as an employee unless the company is simply a pretence and the employment contract a sham. In this case, the fact that the claimants owned all the shares but one in a company was not enough cause to deprive them of employee status with that company. They satisfied a variety of criteria for “employment”. They had contracts of employment, they received all their remuneration by way of salary, they behaved like employees and there were no other factors that might indicate they were not employees.

Office holders2.1.3

In New Testament Church of God v Steward [2007] IRLR 178 the Court of Appeal held that a church minister was an “employee” within s230 ERA 1996. The Church attempted to prove he was not an employee by citing authorities which indicated that the duties of a minister of religion are inconsistent with an intention to create legal relations. However, the Court of Appeal distinguished this case on its facts. The minister was subject to various standards and guidelines laid down by the Church, income tax and national insurance were deducted from his salary and his contract described him as an “employee”.

Illegality2.2

In Enfield Technical Services Ltd v Payne and Grace v BF Components Ltd [2007] IRLR 840 the EAT considered whether arrangements in employee contracts which inaccurately represented to HM Revenue & Customs that they were self-employed rendered the contract illegal. The EAT held that for a contract to be unenforceable due to illegality it is not enough that the arrangements deprive H M Revenue & Customs of the tax which is due. There must also be some form of misrepresentation or deliberate attempt to conceal the true facts of the relationship. On the facts of this case there was no illegality because, even though the employees had wrongly characterised their employment relationships, they had done so in good faith so there was no misrepresentation or attempt the conceal the truth.

Duty of fidelity2.3

In Helmut Integrated Systems Ltd v Tunnard and Others [2007] IRLR 126 the Court of Appeal held that a senior salesman, who failed to inform his employer that he was developing a product which he intended to market in competition after he had left, had not breached his duty of fidelity. The duty did not prevent him from competing with his employer once he had left, nor did it prevent him from preparing for future activities he intended to undertake after he had left.

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The Contract of Employment

Restrictive covenants2.4

In Thomas Farr plc and Another [2007] ICR 932 the Court of Appeal held that a covenant preventing the claimant from working in similar employment for 12 months in any place where the previous employer had conducted business in the past year was reasonable to protect sensitive information which might be divulged.

In Bechett Investment Management Group Ltd and Others v Hall and Others [2007] IRLR 793 the Court of Appeal held that a 12-month restriction on financial advisers dealing with clients of their former employer was reasonable when the employee’s seniority and importance within the company was considered.

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Maternity, Paternity and Parental Chapter 3: Rights

Maternity, paternity and adoption pay3.1

The current weekly statutory rate for maternity, paternity and adoption pay is £117.18.

Maternity pay is payable for 39 weeks.

Flexible working provisions 3.2

These were extended to the carers of adults under the Work and Families Act 2006.

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Individual RightsChapter 4:

Guarantee pay4.1

The current statutory rate for guarantee pay is £20.40 per day.

Statutory sick pay4.2

The current statutory rate for sick pay is £75.40 per week.

The national minimum wage4.3

The current rates for the national minimum wage are:

Main (adult) rate for workers aged 22 and over: £5.73 per hour•Development rate for workers aged 18-21: £4.77 per hour•16-17 year olds: £3.53 per hour•

The Employment Bill introduced to the House of Lords on 6 December 2007 aims to clarify and strengthen the enforcement framework for the national minimum wage. The maximum penalty for offences will increase from £5000 to an unlimited amount.

The Working Time Regulations 19984.4

A case that has been awaiting clarification from the European Court has now received the Advocate-General’s opinion. In Stringer and others v HM Revenue & Customs (Case C-520/05) the Advocate-General’s opinion was that:

The right to the statutory minimum paid holiday should continue to •accrue during periods of sick leave.

A worker should not be able to take this paid holiday during a period •in which he is on sick leave, but is entitled to designate a future period of paid annual leave.

On termination of employment, a worker on sick leave is entitled to •a payment in lieu of statutory holiday that has been accrued but not taken. This is the case where the worker was on sick leave for all or part of the leave year in question.

The ECJ’s final ruling will be given later in 2008.

In a further case – Schulz-Hoff v Deutsche Rentenversicherung Bund (Case C-350/06) – the Advocate-General’s opinion was that workers absent on sick leave throughout an entire leave year should be able to take their minimum annual leave on their return to work.

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DiscriminationChapter 5:

Introduction5.1

A report last year commissioned by the Government, Fairness and Freedom: The Final Report of the Equalities Review, published on 28 February 2007, made 10 recommendations for future development of discrimination and equality practice. These have helped to form some of the key points within the Single Equality Bill which went to consultation in July 2007.

Described as “the 10 steps to greater equality” they are:

Defining equality•Building a consensus on equality•Measuring progress towards equality•Transparency about progress•Targeted action on persistent inequalities•A simpler legal framework•More accountability for delivering equality•Using public procurement and commissioning positively•Enabling and support organisations in all sectors•A more sophisticated enforcement regime.•

The proposals include a single equality Act covering sexual orientation, gender, ethnicity, disability, religion and belief, transgender and age, plus obligations on employers to provide equalities data.

On 12 June 2007 the Government published a consultation document including proposals for a Single Equality Bill. The consultation closed in September 2007. There are two clear aims of the review:

Preventing discrimination happening in the first place•Consulting on whether there are significant gaps in the provision.•

The current array of legislation is seen as a possible barrier to fairness and has grown in a rather piecemeal fashion over the years. It is hoped that we will see some improvement to this confusing situation.

Recent developments5.2

Sex discrimination5.2.1

On 6 April 2008 the Sex Discrimination Act l975 (Amendment) Regulations 2008 came into force. These amend the definition of s4A SDA 1975 in response to the High Court decision in Equal Opportunities Commission v Secretary of State for Trade and Industry [2007] EWHC 483 that the current provisions were incompatible with the EC Equal Treatment Directive. The regulations remove the phrase “on the grounds of her sex” and substitute “related to her sex or that of another person”. As a result, a person complaining of harassment under this Act is only required to show that the alleged treatment was connected or associated with sex and not that it took place because the complainant was a woman (or a man).

The regulations add a further provision to impose liability on an employer for failing to protect employees from harassment by third parties, such as a customer or client. This had been a significant gap in the existing legislation. The new s6(2B)-(2D) provides that an employer who fails to take reasonably

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practicable steps to protect employees from third-party harassment where such harassment is known to have occurred on at least two other occasions will be vicariously liable for those acts.

Disability discrimination – key cases5.3

Discrimination by association 5.3.1

Coleman v Attridge Law and Another [2006] ET 2303745/05 has been referred to the ECJ for a ruling on whether discrimination by association with a disabled person is prohibited.

On 31 January 2008 the Advocate-General gave his opinion in this matter.

The claimant is the primary carer for her disabled son and she alleged disability discrimination because she was treated less favorably than employees with non-disabled children.

The Advocate-General’s opinion is that such discrimination is prohibited under the Equal Treatment Framework Directive 2000/78 which has the effect of preventing an employer from relying on disability to treat some employees less well than others. If someone is the object of discrimination because of a characteristic listed in Art 1 of the Directive, then they are protected even if they do not possess the particular characteristic themselves. It is enough if the person is mistreated because of “disability” it does not have to be “her disability”.

This opinion was quite wide-ranging and clearly incorporates several other areas of discrimination – referring as it does to those aspects listed in Art 1. This may mean that the UK has to amend the disability discrimination provisions and possibly other discrimination provisions in due course.

However, it is important to note that the Advocate-General’s opinion is not binding and we must await the decision of the ECJ itself before relying on it.

“Normal day-to-day activities”5.3.2

Following a decision of the ECJ in Chacon Navas v Eurest Colectividades SA [2006] IRLR 706 “normal day-to-day activities” must be interpreted as including activities relevant to professional life.

Applying this, the EAT in Paterson v Commissioner of Police of the Metropolis [2007] ICR 1522 concluded that taking high-pressure examinations in order to gain promotion constituted a “normal”, if infrequent, day-to-day activity. The claimant police officer, who was at a disadvantage because of dyslexia when sitting such exams, was disabled within the remit of the Act.

Age discrimination5.4

The Heyday Case (Secretary of State for Trade and Industry (National Council on Ageing) [2006] EWHC 5485) is taking some time to prepare for the ECJ – do not expect a quick decision. In the meantime, the President of the Employment Tribunals has issued a practice direction staying all claims pending the decision of the ECJ. This is expected in 2009.

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The employment equality regulations5.5

We are now starting to see the first cases through in relation to the employment equality regulations.

Sexual orientation5.5.1

In Ditton v CP Publishing [2006] 25.5.06 s/101638/06 an employee was awarded nearly £120,000 for sexual orientation discrimination after being dismissed after only eight days’ employment. He had been called a “wee poof” and told that he was “psychologically imbalanced” when his employer discovered he was gay.

In English v Thomas Sanderson Blinds Ltd [2008] EAT 0556/07, decided in February 2008, it was held that protection from harassment afforded to claimants under the Employment Equality (Sexual Orientation) Regulations 2003 does not apply to those who are subjected to homophobic abuse but are known to be heterosexual. In this case, the employee was subjected to harassment by colleagues and homophobic “banter” following a manager finding out that he had attended boarding school and lived in Brighton. The ET decided that the employee would only be protected under the regulations if he was gay, or if he was harassed for not following instructions to discriminate against another on the grounds of sexual orientation. The ET drew on the use of the phrase “on racial grounds” within the Race Relations Act 1976. The employee was not able to prove he was harassed “on grounds of sexual orientation”. The EAT agreed with the ET’s approach. The EAT then examined whether the employee might be covered within the provisions of the EC Equal Treatment Framework Directive 2000/78 and felt that this would be the case, following similar logic to that employed in EOC v Secretary of State for Trade and Industry, [2007] EWHC 483 (see above). The logical conclusion, therefore, is that the provisions of the regulations are too narrow and do not fully implement the concept of harassment from the Framework Directive. The employee has been given leave to appeal to the Court of Appeal – should he lose the case then it is likely that the regulations will need to be amended. This could have wider effects as the other employment equality regulations are structured almost identically.

Age discrimination5.5.2

In Martin v SS Photay and Associates ET Case No. 1100242/07 a cleaner who was dismissed two days after her 70th birthday was found to have been discriminated against. The dismissal letter specifically referred to age as one of the reasons for the termination and, although the employer argued that it had dismissed her due to health concerns, it had not sought medical advice. No statutory retirement procedure had been carried out as required by the EE(A) R 2006 and the dismissal could not be shown to be “a proportionate means of achieving a legitimate aim”.

Religious discrimination5.5.3

Williams-Drabble v Pathway Care Solutions Ltd and Another [2005] unreported, was reported as one of the first successful religious discrimination cases under EE(RB)R 2003. The ET held that an employer indirectly discriminated against a practising Christian employee by changing her work rota to incorporate Sunday working. It was held that she suffered a

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disadvantage by being prevented from attending her regular church service. The employee, a residential social worker, had made it clear when applying for her post that she was unable to work on Sundays.

The tribunal considered that a “provision, criterion or practice” had been imposed which put her at a disadvantage because of her religion. The employer was unable to justify the rota change as being a proportionate means of achieving a legitimate aim. Previous practice had shown that the employer had been able to work around the employee’s requirements so that she had been able to get to church.

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Equal PayChapter 6:

Introduction6.1

Both the Equality and Human Rights Commission and the TUC have called for reform of the Equal Pay Act 1970. The Act is seen as outdated and creates an intolerable time delay for women wishing to make a claim. There are thousands of cases currently in the system waiting to be heard. The EHRC has called for the introduction of representative actions to reduce the number of individual claims.

“Genuine material factor”6.2

In Grundy v British Airways plc [2007] EWCA Civ 1020 the court reviewed whether the tribunal had carried out an appropriate analysis when concluding that a genuine material factor in the case had an adverse disparate impact on women. The Court of Appeal held that there is no “one size fits all” approach to assessing disparate impact. The tribunal in this particular case had been entitled to focus on those disadvantaged by the arrangements called into question.

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Dismissal – Fair and UnfairChapter 7:

Law reform7.1

The Employment Bill 2007-8 was introduced and went to the Committee Stage in the House of Lords on 4 February 2008. It is expected to receive Royal Assent in 2008, however, the majority of the provisions are not expected to come into force before 2009.

Following on from the Gibbons review of the statutory disciplinary procedures and the Government consultation, “Success at work: Resolving disputes in the workplace”, the Bill contains provisions on repealing the statutory dispute resolution procedures and amending tribunal powers and conciliation by ACAS. You are advised to keep up to date on the Bill’s progress.

The Employment Bill proposes to repeal the statutory dispute resolution procedures and make a number of other changes in relation to dispute resolution.

The Bill repeals ss29–33 Employment Act 2002 and Schs 2–4 to the same Act, removing all statutory procedures, including the automatically unfair dismissal provision.

The House of Lords has proposed some amendments to the bill – including measures to prevent tribunal claims being lodged unless there is a certificate to prove that conciliation has failed. There are also suggestions on the status of agency workers.

Breaches in procedure will be dealt with under the pre-2004 case law, and in particular Polkey v AE Dayton Services Ltd [1998] will come to the fore. Under the Polkey principle, if the ET finds that following the correct procedure would have made no difference to the outcome, the dismissal will usually be deemed unfair, but the tribunal should still reduce the compensation payable. In appropriate cases the reduction may be to nil.

The ACAS Code of Practice is being substantially revised and will be re-issued once the Bill has been enacted.

ETs’ discretion to increase or decrease awards for failure to follow the statutory procedures will be repealed along with the procedures themselves. There will be a new discretion for ETs to increase or decrease any award of compensation by up to 25 per cent where an employer or employee fails unreasonably to follow the relevant statutory code.

Remedies for unfair dismissal7.2

The current rates for the statutory upper limit on the week’s pay is £330.

The maximum basic award is therefore £9,900 for ordinary cases. If the dismissal is related to reasons associated with membership of a trade union, health and safety, acting as an occupational pension scheme trustee, acting as an employee representative or working time, the minimum basic award is £4,400.

The maximum compensatory award is currently £63,000.

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Redundancy and TUPEChapter 8:

Redundancy8.1

The statutory trial period8.1.1

In Optical Express Ltd v Williams [2007] IRLR 936 the EAT confirmed that when an employee resigned two weeks after the four-week statutory trial period had expired, she had lost her right to redundancy pay.

The duty to consult8.1.2

Until recently, it had generally been thought that the obligation to consult only covered the process of the redundancy procedure itself and that it did not impose any duty on an employer to consult on whether there was a good business reason for the redundancies.

In September 2007, in UK Coal Mining Ltd v National Union of Mineworkers (Northumberland Area) and Another [2007] EAT 0397/06 the EAT held that this is not so when a business is closing down. The EAT ruled that “. . . the obligation to consult over avoiding proposed redundancies inevitably involves engaging with the reasons for the dismissals, and that in turn requires consultation over the reasons for closure”.

Transfers of undertakings8.2

Service provision change8.2.1

Hunt v Storm Communications Ltd and Others ET Case No. 2702546/06 involved the application of the service provision change element of TUPE 2006. The ET held that a service provision change had occurred where a client company changed its specialist provider of PR services. A single employee – who spent about 70 per cent of her time working on that particular account – amounted to an “organised grouping of employees” whose “principal purpose” was carrying out the relevant activities on behalf of the client. She therefore transferred under TUPE 2006 to the new provider of the service. This case is expected to go to appeal.

Change in legal control8.2.2

For some time it has been accepted that a change in the legal control of an employer – for example, where shares have been transferred – does not give rise to a TUPE 2006 situation. However, in The Print Factory (London) 1991 Ltd v Millam [2007] ICR 1331 the Court of Appeal held that an ET had been entitled to find that a share sale, where the employee’s company was purchased by another company, gave rise to a TUPE 2006 transfer. The degree of integration of the two businesses in question was such that a relevant transfer had taken place.

This case appears to reverse what was felt to be a previously clear situation. A significant number of such share sales occur on a regular basis. It remains to be seen how this will develop.

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Redundancy and TUPE

Objecting to a transfer8.2.3

In New ISG Ltd v Vernon and Others [2007] EWCH 2665 the High Court held that an employee who had not known of the identity of the transferee until after the transfer had taken place was entitled to object under reg4(7) once they found out who the transferee was. This happened two days after the transfer date when the employee resigned. This meant, in effect, that the employee had never been employed by the transferee and prevented the transferee from enforcing restrictive covenants contained in the employee’s original contract with the transferor.

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Other Legislation of InterestChapter 9:

The Corporate Manslaughter and Corporate Homicide Act 2007 came into force on 6 April 2008. This introduces the offence of corporate manslaughter, which is committed where senior management failure leads to a breach of duty of care, resulting in death.

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Notes

Self-assessment Test

Name: ...........................................................

Date: .............................................................

Membership No: ............................................

Employment Law

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Self-assessment Test

Please answer all of the following questions by selecting the appropriate letter. Select only one letter per question. Preferably, this test should be completed from memory.

Practice Questions

Scenario 1

Townley Borough Council has recently been re-structuring its services and service departments. Jenny James has worked at the council in its recreation and leisure department for three years as a “temporary” clerk. She was assigned to the job by Regular Recruitment Ltd, an employment agency. She sends time-sheets each week to Regular Recruitment Ltd, who then process her pay. She is given instructions at work by the Head of Leisure Services, Fred Brown, and has to have his approval for holidays or other time off. She is expected to follow the Council’s staff handbook rules and is given regular appraisals by her boss. The Council have also paid for her to attend training courses. The Council have now told Jenny that as a result of the re-structure she will no longer be required. Jenny has asked them what redundancy pay she is entitled to and they have replied that they are not responsible for any such payment.

Whilst reviewing the leisure services areas, the Council has also decided to dispense with its current provider of cleaning services and pool maintenance at the local swimming baths. Users have complained about grubby changing rooms and less than satisfactory water quality in the pools. The Council has ended its contract with Kwik Klean Ltd and has appointed Perfect Pools Ltd to take on the contract. Two cleaners based at the Townley Pool have asked whether they will now be taken on by Perfect Pools Ltd.

During the course of the re-structure, the Council have been under considerable press scrutiny as there have been many false rumours about the potential for pool closures and loss of public amenities. The Council has now received a telephone call from the Townley Evening Chronicle, a local paper, informing them that Perfect Pools Ltd is, in fact, partly owned by Fred Brown’s wife. They are threatening to run a story about local government officials abusing their power and awarding contracts to their relatives.

Question 1

Does the Council have any responsibility for redundancy pay for Jenny James? She has, after all, been working there for over two years and is a fully integrated member of the team?

No, she is an agency worker. (a)

Yes, the circumstances of her working practices indicate an employment (b) relationship with the Council.

No, she is self-employed. (c)

No, the agency should pay her redundancy pay. (d)

Question 2

Do the cleaners have the right to be taken on as employees by Perfect Pools Ltd?

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No, there is no obligation under the new contract to do this. (a)

Yes, a (b) TUPE transfer has occurred.

No, Kwik Klean Ltd. will have to make them redundant. (c)

It will depend whether they were good workers or not. (d)

Question 3

Upon investigation, it appears that Fred Brown’s wife does partly own Perfect Pools Ltd. Fred had not told anyone at the Council about this and has not declared any interest. He was instrumental in the awarding of the new contract.

Has Fred done anything wrong – it is his wife’s business after all?

No, Fred’s wife’s business is nothing to do with the Council. (a)

Yes, Fred has breached his common law duty of fidelity. (b)

Fred has no duty to disclose personal information to his employer. (c)

If Fred isn’t competing with his employer then it shouldn’t cause any (d) problem

Scenario 2

IT Solutions Ltd. is a specialist computer software firm. It produces a range of bespoke software solutions for banks and building societies. This is a highly lucrative industry and very competitive, so it is standard practice for the company to include a restrictive covenant within all employment contracts to the effect that the employee may not work in similar employment anywhere in the UK, within a 12-month period after leaving. In this way, the company hopes to protect its interests and intellectual property. Gerome Geeke is a software engineer at the company. He has recently been head-hunted by a rival firm who wish him to start work right away. Ranjit Johal is a print operative working in the photocopying department. She has just got a higher paid job with EasyPrint, a high street copy shop. Jean Green, a technical manager, has decided on a career change. She is going to teach IT at the local FE college. All three have given the required notice to the company. All three have received a standard letter reminding them of the clause within their contract relating to “similar employment” restrictions.

Question 4

What is the likelihood that Gerome will be prevented from working for his new employer for 12 months?

Not likely at all – he can work where he pleases. (a)

He will be allowed to work for them – he isn’t going to take any (b) information with him when he leaves.

Quite likely, the clause is not unreasonable and he has an important role (c) within the company.

The new company is not based in the UK, therefore he should be okay (d) to work for them.

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Question 5

Ranjit is astonished to receive her letter. She is certainly going to do the same work as before – but she cannot see how this would be a threat to IT Solutions Ltd. Does she have to give up the job with EasyPrint?

Yes, the clause is clear. (a)

No, the job is not a threat to IT Solutions Ltd. or their business. (b)

Yes, she is doing “similar work” within the UK. (c)

No, the clause only applied to senior level employees. (d)

Question 6

When Jean starts work at the local college, she is astonished to find that some of their IT systems are rather outdated. She offers to help modernise the systems, using her many years of knowledge and experience gained at IT Solutions Ltd. She is astounded to receive a letter requiring her to “cease and desist” from this work as it is perceived to be in breach of the restrictive covenant in her contract. Jean is not operating in any commercial sense and this is not business which IT Solutions Ltd. would have gained or wanted. Is she doing anything wrong in using her expertise?

Yes, clearly she is exploiting knowledge gained “on the job” at IT (a) Solutions Ltd.

No, she has learned this as a natural consequence of her working and (b) has not deliberately set out to disadvantage IT Solutions Ltd.

Yes, she should not be offering competition to IT Solutions Ltd. (c)

No, IT Solutions Ltd. would not have got the work anyway. (d)

Scenario 3

Amanda Terry, Jamie May and Catherine Belard all work for Caring Counselling, a team of counsellors who offer a therapeutic counselling and psychoanalysis service. Amanda has worked for the team for five years. She has always had excellent annual appraisal reports and has been promoted twice. Recently, she has been caring for her elderly mother, who has had two hip replacements and is suffering with dementia. This has meant that she has had to take emergency leave several times and has also been late on some mornings as she has had to wait for the home help and district nursing services to arrive before she can safely leave her mother. She has now had a letter warning her that she is proving to be “unreliable” and that this situation cannot continue. Jamie is a gay man in a settled relationship. He recently issued invitations to his civil partnership ceremony to several of the staff. He has been called into the office and told that this is “not appropriate” and that he should not openly flaunt his sexuality as the counselling team find it distasteful. Catherine has a disabled daughter who requires regular hospital treatment. She has requested that her employers allow her to leave early on a Thursday afternoon every two weeks so that she may take her daughter to the hospital appointments. The counselling team have refused this request saying: “It isn’t as if you are disabled yourself, so we don’t have to make any allowances for it.” Catherine is very disappointed.

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Question 7

Amanda feels that her situation would improve if she could work more flexibly – perhaps part-time. Can she request this from her employer?

No, the right to request flexible working only applies to parents of (a) children.

Yes, the right to request flexible working applies to children and other (b) relatives.

Yes, carers of children and other adults can request this. (c)

No, Amanda cannot expect her employer to accommodate this. (d)

Question 8

Jamie does not feel that he has been flaunting his sexuality. He feels that the employer’s behaviour is discriminatory. What remedy might he have for this?

Jamie must raise this as a grievance with his employer. (a)

Jamie can bring a case for direct discrimination and claim (b) compensation.

Jamie can claim compensation for indirect discrimination. (c)

Jamie can claim compensation for harassment. (d)

Question 9

Does Catherine have any rights under the Disability Discrimination Act 1995 or the Equal Treatment Framework Directive 2000/78?

No, she is not disabled. (a)

Yes, she can claim that she has been discriminated against because of (b) her daughter’s condition.

The employer does not have to consider her daughter’s condition. (c)

The law is undecided on this. (d)

Scenario 4

Trevor has worked for the Building Construction Co Ltd. for 10 years as a plasterer. He has always been a good worker and has regularly been praised for his excellent work. Last week he came onto the building site and was confronted by graffiti on the wall of the room he had been working in. The graffiti said “Trev’s wife is having an affair with Fred”. Fred is the site manager. Trevor was outraged to see the graffiti and went looking for Fred. On confronting him, Fred said “Yes, we had a fling. So what?” This provoked Trevor into hitting Fred, whereupon Fred dismissed him on the spot and told him to collect his tools and go. Trevor was escorted from the site by security guards. Trevor has seen a solicitor and wishes to claim unfair dismissal – claiming that Fred had no right to dismiss him and that he was not given a fair chance to defend himself as the managers are not aware of the reason for the fight. He has asked the

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area manager to have a meeting, but this has been refused on the ground that it would be “pointless” as the decision has been made and, clearly, Trevor and Fred cannot work together again.

Question 10

Trevor has asked his Solicitor to produce an ET1 form immediately so that he can go to Tribunal as soon as possible. Advise Trevor whether this is the correct procedure.

The correct procedure would be to raise a grievance with the employer (a) first.

Trevor can put an application to the Tribunal in straight away. (b)

The employer should start a disciplinary procedure to ratify the (c) dismissal.

The employer was entitled to summarily dismiss Trevor. He has no (d) case.

Question 11

Trevor’s solicitor has now prepared the paperwork for Trevor’s ET1 to go in. This has taken some time to produce as Trevor has been ill and suffering with stress as a result of his marriage breakdown and the dismissal. The paperwork is ready to go and is put into the post department for despatch – there is a week to go until the three-month time limit for applications expires. Unfortunately, the letter drops out of the mail basket and falls onto the floor. It is not noticed by the postal clerk for several days but is then found and posted first class to the Tribunal offices. Trevor is astounded to receive a letter from the Tribunal stating that his claim has not been submitted in time and therefore the claim will not be heard. Can he appeal to the Tribunal for more time?

The claim has arrived too late – there is nothing that can be done. (a)

Trevor could make a case on the grounds of his stress-related illness, (b) which has delayed matters.

The solicitor is at fault. Trevor should sue him. (c)

The Tribunal must make allowances for postal delays. (d)

Question 12

Following representations on the basis of Trevor’s illness, the Tribunal has extended the time limit to allow the claim to proceed. Trevor wishes to claim damages for unfair dismissal. What is the maximum compensatory award available to the Tribunal should they decide in his favour?

£60,600. (a)

£63,000. (b)

£65,000. (c)

£62,500. (d)

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Question 13

Trevor is 30 and has worked for the company for 10 years. What basic award would he receive if his claim is successful?

£3,300. (a)

£3,135. (b)

£3,000. (c)

£3,465. (d)

Question 14

Trevor’s solicitor is arguing that his employer’s failure to comply with a dismissal and disciplinary procedure amounts to automatically unfair dismissal under the Employment Act 2002. Is this correct?

Yes, the solicitor is correct to assert this. (a)

No, the employer summarily dismissed him for unacceptable behaviour (b) – they are allowed to do this.

There is no requirement to follow a DDP in cases of gross misconduct. (c)

The failure to implement a DDP would simply increase the compensation (d) awarded.

Question 15

At the Tribunal hearing, Trevor’s employer admits that there were failures in procedure and that the instant dismissal was probably unjustified. They offer him his job back, plus compensation for lost wages while he has been away. Trevor does not wish to accept this. Is he obliged to?

Yes, it is a fair offer. (a)

No, he does not have to accept it. (b)

The Tribunal will not award compensation when such an offer is on the (c) table.

Trevor can have his job back plus compensation for the stress caused. (d)

Question 16

List the main changes introduced by the Tribunals, Courts and Enforcement Act 2007.

Question 17

Which regulations offer improved protections for agency workers?

Question 18

What are the main reforms introduced by the Employment Bill 2007-8?

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Question 19

What are the “10 steps to greater equality”?

Question 20

What is the current weekly rate for statutory maternity, paternity and adoption pay?

Question 21

What are the current minimum wage rates?

Question 22

If an employee innocently misrepresents their employment status to H M Revenue & Customs, does this render the contract void for illegality?

Question 23

On what grounds may a Tribunal strike out a potential claim or response?

Question 24

What amendments to the Sex Discrimination Act 1975 were introduced by the Sex Discrimination Act 1975 (Amendment) Regulations 2008?

Question 25

Which regulations introduced the new procedural rules for Employment Tribunals?

Question 26

Is it possible for a minister of religion priest to be an “employee”?

Question 27

Who may claim the right to flexible working?

Question 28

In redundancy, what is meant by the “duty to consult”?

Question 29

What is the current status of Coleman v Attridge Law and Another and the Heyday Case?

Question 30

How is a “genuine material factor” to be assessed in equal pay cases?

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Practice Questions

Question 1

(a) is the correct answer. James v London Borough of Greenwich gave clear guidance for assessing who employs an agency worker.

Question 2

(b) is the correct answer. This is a service provision change under TUPE 2006. Hunt v Storm Communications Ltd and Others.

Question 3

(c) Fred should have declared this as there is a risk he might make “secret profits” through his family company.

Question 4

(d) is correct. Thomas Farr plc and Another and Bechett Investment Management Group Ltd and others v Hall and Others.

Question 5

(b) is correct. There is no legitimate business interest to protect here and it is unlikely that Ranjit will be able to give away trade secrets or compete with her previous employer.

Question 6

(b) is correct. United Sterling Corporation v Mannion – the employee is using “know how” gained on the job, which is not confidential and therefore cannot be protected.

Question 7

(c) is the correct answer. The Work and Families Act 2006 extended the right to request flexible leave in s80F Employment Rights Act 1996 to carers of adults as well as children.

Question 8

(b) is the correct answer. This would be direct discrimination under the Employment Equality (Sexual Orientation) Regulations 2003.

Question 9

(d) is the correct answer. Coleman v Attridge Law and Another has not been decided yet. The ECJ have yet to give a decision, although the Advocate-General has given an opinion.

Question 10

(b) is the correct answer. Although Trevor has tried to raise a grievance, the employer has rejected this. He can therefore go to the Tribunal immediately without exhausting the GDP procedures.

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Question 11

(a) is the correct answer, even though harsh. Beasley v National Grid Electricity Transmissions.

Question 12

(b) is the correct answer. £63,000.

Question 13

(c) is the correct answer. £3,135. Based on 1 x ½ weeks’ pay @ £165 + 9 x 1 week’s pay @ £2,970 = £3,135.

Question 14

(a) is the correct answer. The employer has failed to comply with a DDP under the Employment Act 2002 and Trevor has more than one year’s qualifying service.

Question 15

(b) is the correct answer. The claimant’s wishes are taken into account when offering reinstatement.

Question 16

Title of “employment judge” introduced.

Two-tier system of Tribunals.

Simplification of awards process.

Addition of mediation provisions.

Question 17

The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2008.

Question 18

Repeal of the statutory dispute resolution procedures.

Conciliation provisions.

Revised ACAS Code of Practice.

Question 19

These are the 10 recommendations made in the report, Fairness and Freedom: The Final Report of the Equalities Review 2007.

Question 20

£117.18

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Question 21

Adult: £5.73

Development rate: £4.77

16-17 year olds: £3.53

Question 22

No – only if there is a deliberate intent to conceal the true facts of the relationship to avoid tax payments. Enfield Technical Services Ltd v Payne and Grace v BF Components Ltd.

Question 23

r18(7) Employment Tribunal Rules of Procedure 2004. Ezsias v North Glamorgan NHS Trust – the case must have “no reasonable prospect of success”.

Question 24

Equal Opportunities Commission v Secretary of State for Trade and Industry. Amendments were made to s4A SDA 1975, removing “on the grounds of her sex” and substituting “related to her sex or that of another person”. New s6(2B)-(2D) re harassment of employees by third parties.

Question 25

Employment Tribunal Rules of Procedure 2004

Question 26

Yes, if their contract gives clear indications to this effect – New Testament Church of God v Steward.

Question 27

The Work and Families Act 2006 extended the right to request flexible leave in s80F Employment Rights Act 1996 to carers of adults as well as children.

Question 28

UK Coal Mining Ltd v National Union of Mineworkers (Northumberland Area) and Another appears to extend the duty to consult to include not only the fact of the redundancies but also the reasons for them.

Question 29

They are both awaiting the decision of the ECJ and this is likely to take some time.

Question 30

Grundy v British Airways plc advised that there is no “one-size-fits-all” approach.

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