Recent Decisions

Be clear about termination dates

Mr Radecki, a teacher, was suspended from his post by Kirklees Metropolitan Council, following concerns about his skills and experience. The Council instigated disciplinary proceedings, but these were subsequently put on hold after discussions had taken place about a possible termination of his employment by agreement. The Council drew up a draft compromise agreement stating that it was “without prejudice” and “subject to contract”. The draft agreement also provided that Mr Radecki’s employment would terminate on 31 October 2006. The Council removed Mr Radecki from its payroll on 31 October 2006, however, the compromise agreement was not signed and, in February 2007, Mr Radecki indicated that he was no longer prepared to sign it.

The Council wrote to Mr Radecki on 5 March 2007 informing him that, in accordance with the terms of the draft compromise agreement, his employment had been terminated on 31 October 2006. He disputed this and brought a claim for unfair dismissal, arguing that his employment had terminated on 6 March 2007 – that was the date on which he received the letter from the Council telling him that his employment had been terminated. Termination on this date would have enabled the claim for unfair dismissal to be heard within the statutory time limits.

Mr Radecki had been suspended on full pay for almost a year by the time his employment was terminated. The disciplinary proceedings had been put on hold in the expectation that the parties would be able to reach agreement on the terms of the compromise agreement.

The Court of Appeal decided that by stopping his pay on 31 October 2006, the Council had shown a clear intention to dismiss him. This was sufficient to terminate his employment with effect from that date. Mr Radecki’s unfair dismissal claim was, therefore, out of time, having been lodged after the expiry of the three month time limit for submitting this type of claim. 

The court’s decision was not based on the draft compromise agreement, but on the “stopping” of Radecki’s salary. The Court made it clear that the fact that the draft compromise agreement said his employment would terminate on 31 October 2006 was irrelevant. The agreement had never been finalised and, therefore, was not binding on either party. The termination took effect from the point where the pay was stopped, not the date given in the draft agreement.

Laurie Anderson, Solicitor, comments:

The Council was extremely fortunate that Mr Radecki’s unfair dismissal claim was held to be out of time by the Tribunal otherwise it would have been facing a substantial unfair dismissal or constructive unfair dismissal claim.

Employers should ensure that any decision to terminate an employment contract is clearly communicated to the employee. Employers should also take note that, in the absence of a signed compromise agreement, there is nothing to stop an employee presenting an unfair dismissal claim. It is essential, therefore, that any compromise agreement is finalised and signed as quickly as possible.

Additionally, employers must be extremely careful about suspending disciplinary proceedings in the hope of reaching agreement. There must be a long-stop deadline after which negotiations for the compromise agreement will end or, at least, provision made that any tribunal proceedings can resume in parallel.

The decision in this case could quite easily have been good news for Mr Radecki and the Council could have faced a hefty claim for arrears of salary.

Case referred to Kirklees Metropolitan Council v Radecki [ 2009] EWCA Civ 298

A full text of the decision is available on the British and Irish legal Institute website accessible here

Disability discrimination: “normal day-to-day activities” and night shifts

Mr Adams, a policeman in the Dumfries and Galloway force, suffered from ME and found that his symptoms became worse when working on night shifts, particularly between the hours of 2 and 4 a.m.

He joined the force as a constable in November 2005 and was employed until dismissed in February 2007. Soon after starting with the force, he developed various symptoms which included fatigue, weakness and flu-like feelings. In December 2005, his GP diagnosed that ME was a potential cause.

Mr Adams’s work schedule included two night shifts. However, after one month on the schedule, he had difficulty in completing his night shifts. He found that he had to walk slowly, needed assistance or a hand rail to climb stairs and, at times, needed to be driven home and also required help to undress.

From March 2006 until May 2006, Mr Adams was not scheduled to work any night shifts and was free from the ME symptoms during that time. In May 2006, he started on night shifts again and the symptoms returned. On some days, he could not finish his shift. The Constabulary adjusted his night shifts and allowed him to finish early. However, he continued to have problems in the last couple of hours of night shifts and his employment was terminated in February 2007.

Mr Adams brought a claim for disability discrimination which was upheld in the first instance by an Employment Tribunal. The Constabulary appealed the decision without success.

Mr Adams argued that his ME was an impairment that affected his mobility and had an effect on his ability to carry out “normal day-to-day activities” as set out in section 1(1) of the Disability Discrimination Act 1995 (DDA). The tribunal decided that “normal day-to-day activities” included walking, climbing stairs, driving and undressing and that these remained “normal day-to-day activities” when they were being carried out at work between 2 and 4a.m.

In the appeal, the Constabulary argued that these could not be considered to be “normal day-to-day activities” since Mr Adams was only doing them because he was in a specialised job which required him to work at that time of night. Had he not been a policeman, it would be necessary to show that working at that time of day was normal for the majority of the working population.

The appeal tribunal disagreed and said that night shift working is common in the UK, not only among offshore, healthcare and emergency service workers but also, potentially, among hotel workers, haulage drivers and even factory workers. The tribunal was convinced that, even though these workers might not constitute the majority of workers in the UK, there are enough people working night shifts for working between 2 and 4 a.m. to be a “normal day-to-day activity” within the meaning of section 1(1) of the DDA.

Rhona Wark, Partner, comments:

Interesting to note how emphatic the appeal tribunal was on the issue. While there are aspects of a policeman's job that require special skills to execute, the activities, in Mr Adam’s case, were very ordinary and took place at a time of night when there are many other people doing the same type of thing – a logical conclusion, it has to be said.

Case referred to Chief Constable of Dumfries and Galloway [2009] UKEAT 0046 08 0304

A full text of the decision is available on the British and Irish legal Institute website accessible here

Unfettered right of substitution

Mr England Junior and Mr England Senior, a father and son team, worked as self-employed partitioning and ceiling erectors. Between October 2007 and February 2008, they worked exclusively for MPG Contracts Limited which had provided them with written contracts. They submitted invoices to MPG and these were paid by MPG under deduction of tax. MPG set all rates of pay and allocated work to them. The Englands were, during this period of time, subcontracted by MPG to Bovis. Both claimed that they were entitled to holiday pay over the period of the contract and, at an employment tribunal, the issue of whether they were “workers” under the Working Time Regulations had to be considered.

The Employment Rights Act provides that a worker is “an individual who has entered into or works under a contract of employment; or any other contract whether express or implied whereby the individual undertakes to do or perform personally any work or services for any other party to the contract”. The same definition is contained in the Working Time Regulations.

Under the Working Time Regulations, workers are entitled to four weeks annual leave in each year. The DTI guidance on the Regulations clearly states that they do not apply to those who are self-employed, running their own businesses and are free to work for different clients and customers.

At the first hearing, the tribunal decided that both father and son were workers under the Working Time Regulations and entitled to holiday pay. However, the appeal tribunal looked at things differently. It considered that the questions that had to be asked were:

1. Was there a contract to perform work or services?

2. If so, was it a contract to perform that work or those services personally?

This is determined by establishing whether or not there is an unfettered right to provide a substitute in the contract.

3. If there is such a right, were the father and son providing the services in the course of running a business undertaking to MPG as a customer?

The tribunal noted that the right to provide a substitute will not necessarily point to an obligation to provide personal services, there may be a difference where the contractor is unable to do the work as opposed to being “unwilling” to do so. However, in this case, the contract stated that the Englands were free to subcontract work awarded to them subject to MPG being satisfied on the subcontractors’ qualifications and skills. The fact that the subcontractor (the Englands) was free to engage labour to fulfil the contract with MPG was wholly inconsistent with a contract for personal services. This clearly indicated that there was an unfettered right of substitution in the written contract. The appeal tribunal also indicated that you have to look at what happens in practice so as to be sure of the parties’ intentions. Nothing in the implementation of the contract, in the Englands’ case, undermined the right of substitution which they enjoyed. Consequently, the Englands were not workers within the Working Time Regulations and their claim had to be dismissed.

Laurie Anderson, Solicitor, comments

This case serves as a timely reminder about the thorny issue of holiday pay for those working as subcontractors or employing subcontractors. Indeed, it is a timely prompt for everyone to look carefully at contracts engaging subcontractors and their skill level for contracts. Some consideration should be given to whether or not a given subcontractor is required personally for the work or whether any competent tradesman or personnel of skill substituted by it would be sufficient.

Case referred to MPG Contracts Limited v. Mr A England (Junior) Mr A England (Senior) [2009] UKEAT 04880 80 805

A full text of the decision is available on the British and Irish legal Institute website accessible here

Stress claim succeeds on employer’s breach of duty of care

Mrs. Connor, a Headmistress of a Primary School in Surrey, successfully sued her employers, Surrey County Council, for failing to put measures in place to prevent stress leading to her ill health so far as was within its power to do so.

Mrs. Connor joined her school as a Deputy Headmistress in 1994 and was promoted to Headmistress in 1998. She continued in that post until September 2005 when she had to stop working due to ill health. The school was multicultural, but most of the pupils were Muslim. Under Mrs. Connor’s leadership, between 1998 and 2002, the school’s assessment levels improved. In 2003, new members were appointed to the Board of Governors. The conduct of at least two of those new members caused Mrs. Connor considerable problems.

The members causing the problems sought to monopolise meetings with a view to introducing their own agenda which was to increase the role of the Muslim religion in the school. One of the individuals, in particular, made offensive verbal attacks, at meetings, and bombarded Mrs. Connor with numerous requests for information. He made various informal and formal complaints of racism and generally sought to cause difficulties for Mrs. Connor within the local community. A petition against the Headmistress was also circulated by them.

Mrs. Connor brought a claim against Surrey County Council for (1) psychiatric injury caused by negligence; (2) breach of the Protection from Harassment Act 1997; (3) breach of the duty of trust and confidence; and (4) breach of the statutory duty under the Management of Health and Safety at Work Regulations 1999.

In its decision, the High Court upheld her claim for negligence and awarded her almost £400,000. Following a detailed analysis of the atmosphere and low moral in the school, the High Court held that from June 2004, the Council ought to have considered that Mrs. Connor was at risk of psychiatric injury from stress and that it was its duty to prevent the situation which caused the illness continuing so far it was within its power to do so. There was also specific legislation in place governing the way the school should be governed and authorising the local authority to take action where required - it had failed to use those powers. The Council had been prevented from doing so, in this particular case, due to various delays and misunderstandings over the procedure to be followed and because a decision had been made to set up a mediation and further independent enquiry into the issue. All of these steps had put the necessary intervention on hold and amounted to a disregard for the health and welfare of Mrs. Connor and her staff.

Rhona Wark, Partner, comments:

Whilst work related stress claims always turn on the specific facts in each case and, invariably, require a detailed examination of the circumstances leading up to the illness. This decision should be noted by employers generally for a number of reasons:

1. If the employer has specialist support services available for employees, it must actively consider how to deploy them. Employers need to be aware that simply providing access to these services may not be sufficient. Having access to occupational health services, a consultant to arrange for support or stress counselling is insufficient if an employer fails to act to protect those who are vulnerable.

2. If a stress related harassment claim arises as a result of disagreement between different parties, any employer should take care to ensure that each side’s concerns are investigated.

Here, the Court was not impressed by the employer’s failure to intervene in the affairs of the governing body. This failure stood in marked contrast to the Council’s willingness to act on the various concerns raised by one of the governors in the face of his refusal to participate fully in any of the processes or accept the findings of the reports and enquiries made.

It is also important that employers take care to comply with the principles of “natural justice” when carrying out any report or complaints procedure relating to employee rights. Natural justice requires you to be open and clear about the terms of any enquiry. The report into the school itself was completely and wholly inadequate in that (1) the final enquiry was not disclosed to staff; (2) the scope of the enquiry was extended without any indication of this being given to the witnesses; and (3) the report did not state who the witnesses were or identify what documents had been examined.

The full report of the decision has not been published as yet.

Company charged under the Corporate Manslaughter and Corporate Homicide Act 2007 

Cotswold Geotechnical Holdings (Cotswold) is the first company in the United Kingdom to be charged with the criminal offence of corporate manslaughter, following the death of an employee killed while taking soil samples from a building site.

If convicted of the offence, Cotswold could face an unlimited fine.

The 2007 Act was introduced to make it more straightforward for the relevant authorities to successfully prosecute organisations where a management failing has led to a death. Under the 2007 Act, an organisation is guilty of an offence if the way in which its activities are managed or organised (by its senior management) causes a person's death. The death must be the result of a gross breach of a relevant duty of care owed by the organisation to the deceased (that is, conduct which falls far below what can reasonably be expected of the organisation in the circumstances).

Commentators expect that this case will be the first of many prosecutions. The construction and engineering sector may be particularly vulnerable, as it accounts for a significant number of work place deaths each year.

Rhona Wark, Partner, comments:

With the threat of prosecution under the Act a reality, it is essential that employers:

• ensure that health and safety leadership within the organisation meets the appropriate standards;
• review safety management systems and consider whether improvements can be made; and
• ensure that the organisation has a health and safety culture, so that everyone takes responsibility for improving health and safety.

In addition, there are a number of employment law considerations which should be borne in mind as a result of the new Act concerning disciplinary, grievance and whistle-blowing procedures.

Employers must have employee disciplinary and grievance procedures. Also, they must use and enforce those procedures in cases involving health and safety. An organisation that has policies and procedures but does not apply them may find that this will influence a jury’s view on the way in which an employer has managed or organised its activities. Strict policies should, therefore, be adopted for the application and enforcement of health and safety disciplinary procedures. Specifically employers must:

• adopt a policy;
• communicate it to all affected (especially the HR Department); and
• set up a system of board reporting to gather feedback on implementation of the policy.

Mirror image policies should also be imposed in connection with grievance procedures. For example, where health and safety issues arise as a part of a grievance, there should be a specific internal requirement that the issue is:

• considered and dealt with by health and safety management; and
• dealt with at a level (board if necessary) commensurate with the risk involved.

Similarly, any whistle-blowing policies should contain specific obligations to involve health and safety management where appropriate. There should be a review of the outcome of procedural cases and action taken and where necessary to change systems, policy and organisational structures. This will be particularly relevant for employers in the construction sector where, by the very nature of their employment, employees are placed at greater risk of injury and death than most other categories of employees.

The scope of the Act is not by any means limited to those employers as the Act applies in cases where certain types of duty of care are owed by an organisation under the law of negligence. Section 2 of the Act states that a duty of care is owed:

• to employees or other persons working for the organisation;
• as an occupier of premises;
• in connection with the supply of goods or services;
• in connection with the carrying out of any other activity on a commercial basis;
• in connection with the carrying out of any construction or maintenance operations;
• in connection with the use or keeping of the organisation of any plant, vehicle or other thing; and
• to persons held in detention or custody (not yet in force).

The effect is wide ranging and all employers should, as a bare minimum take the steps we suggest.

News

• repeals section 98A of the Employment Rights Act 1996 concerning procedural unfairness in unfair dismissal cases;
• inserts section 207A into Trade Union and Labour Relations (Consolidation) Act 1992 to enable employment tribunals to increase or reduce compensation where either party has failed to follow a relevant Code of Practice;
• provides the power for employment tribunal regulations to authorise the determination of proceedings without a hearing;
• removes the fixed ACAS conciliation period; and
• provides tribunals with the power to order compensation for consequential financial loss in certain types of monetary claim.

• fairness and transparency are promoted by developing and using rules and procedures for handling disciplinary and grievance situations. These should be set down in writing.
• where some form of formal action is needed, what action is reasonable or justified will depend on all the circumstances of the particular case.
• whenever a disciplinary or grievance process is being followed, it is important to deal with issues fairly.

• establish the facts of each case – necessary investigations into potential disciplinary matters must be carried out without unreasonable delay. In cases of misconduct, where possible, different people should carry out the investigation and disciplinary hearings. An investigatory meeting should not by itself result in any disciplinary action;
• inform the employee of the problem – if there is a disciplinary case to answer, the employee should be notified of this in writing with sufficient information provided about the alleged misconduct/poor performance. The employee should be notified of the time and place of the meeting and their right to be accompanied;
• hold a meeting with the employee to discuss the problem – employees should be given reasonable time to prepare their case and meetings should be held without unreasonable delay. Every effort should be made by all parties to attend the meeting;
• allow the employee to be accompanied at the meeting – employees have a statutory right to be accompanied by a companion where a disciplinary meeting could result in a formal warning or the taking of some other disciplinary action. A companion must be fellow worker/colleague, appropriate trade union representative or an official employed by a trade union;
• decide on appropriate action – The employee must be informed in writing if any disciplinary or other action is to be taken. Misconduct can result in a written warning, a final written warning or dismissal if the nature of the misconduct is serious enough. First and final written warnings must set out the nature of the misconduct/poor performance and give a timescale for any improvements to be made. The employee should also be told the period of time in which the warning will remain current; and
• provide employees with an opportunity to appeal – employees must be permitted to appeal decisions. And these must be heard without unreasonable delay. The employee must inform the employer of his or her grounds of appeal in writing. Appeals should be impartial and, where possible, heard by a manager not involved previously with the case. Employees should be informed of the outcome in writing.

• a new method of calculating arrears of the national minimum wage will be introduced;
• the existing enforcement and penalty notices will be replaced with a new single notice of underpayment;
• the mode of trial of criminal offences under the National Minimum Wage Act 1998 will be changed;
• new enforcement powers for NMW compliance officers will be introduced and HM Revenue & Customs powers to investigate criminal offences under the NMWA 1998 will be strengthened;
• restrictions in the NMWA 1998 and the Employment Agencies Act 1973 which currently prevent officers who are enforcing either pieces of legislation from sharing information that they obtained from inspections will be removed; and
• new provisions into the Trade Union and Labour Relations (Consolidation) Act 1992 that set out the circumstances in which a trade union may be able to expel or exclude an individual on the basis of their membership or former membership of a political party will be inserted.

Partnerships

The Employment Act 2008 will enable individual partners to be prosecuted where offences under the 2008 Act have been carried out by a partnership in Scotland and any of the partners are culpable.

Tribunal proceedings regarding statutory annual leave entitlement

The Employment Tribunals Act 1996 (Tribunal Composition) Order 2009 will enable proceedings for payments relating to leave entitlement, including claims under the Working Time Regulations 1998, to be heard by an employment judge sitting alone.

Increases to Statutory Sick Pay, Maternity, Paternity and Adoption Pay

From 6 April 2009, the weekly rate of Statutory Sick Pay was raised to £79.15 from £74.40 and the weekly rate of Statutory Maternity, Paternity and Adoption Pay was raised to £123.06 from £117.18.

Employment Tribunal statistics

The Employment Tribunal and Employment Appeal Tribunal recently published statistics on the number of tribunal claims raised in 2007/08. The number of tribunal claims increased by 43%, rising from 132,577 claims in 2006/07 to 189,303 claims in 2007/08.

There were substantial increases recorded in claims regarding working time, equal pay and those related to trade union membership. There were 62,706 equal pay claims, making this the most common claim with unfair dismissal only the third most common with 40,941 claims. Due to the age discrimination legislation introduced last year, there was, as predicted, a significant increase in age discrimination claims from 972 in 2006/07 to 2,949 in 2007/08. Provisional figures for claims in the months of April 2008 to February 2009 were also released highlighting an increase in redundancy claims from 7,313 in 2007/08 to 9,220 in 2008/09 up to February.

Both equal pay and working time claims showed a sharp fall by 20,290 and 34,434 claims respectively in the year up to February 2009. The number of equal pay claims has undoubtedly been affected by the recession and workers being increasingly reluctant to bring claims against their current employers in the uncertain employment climate.