Case update (2): Working time regulations & personal injury

What do we already know?

We updated you in our September 2016 Newsletter Case update (1): Request to rest on the EAT’s decision in Grange v Abellio London Ltd that employees do not need to actually request a rest break (under the Working Time Regulations) before making a claim that their employer has refused rest breaks.

The EAT sent the case back to the Tribunal for it to consider whether as a matter of fact rest breaks had been denied in respect of different time periods.

What’s new?

The above case has been re-considered by the Tribunal and EAT.  The employee, Mr Grange, was awarded £750 for the “discomfort and distress” caused by the employer’s refusal to allow rest breaks over 14 working days.

For further detail please read on.

Summary:  Can employees claim personal injury compensation in the Employment Tribunal where working time breaches damage their health?

Yes, says the EAT in Grange v Abellio London Limited available here.

Facts:  Mr Grange, the employee, was employed by Abellio London Ltd (Abellio). Initially, his working day lasted eight-and-a-half hours with half an hour being unpaid and treated as a rest break. Several years later his working day was reduced to eight hours, so that employees would work without a break and finish half an hour earlier.  This is despite the fact that the Working Time Regulations (WTR) entitle workers to an unpaid rest break of 20 minutes when working for more than six hours per day.

In 2014 the employee raised a grievance stating that he had been forced to work without a meal break for the previous two and a half years which had affected his health.

Following his grievance being heard and rejected, the employee brought a Tribunal claim that Abellio had refused to permit him to exercise his entitlement to a rest break throughout different periods of his employment and had breached the WTR.

The Tribunal dismissed his claim on the basis that there was no deliberate act of refusal by the employer.

Mr Grange appealed successfully to the EAT which held that there could be a refusal if the employer makes working arrangements that fail to allow workers to take rest.

The EAT sent the case back to the Tribunal for it to consider whether as a matter of fact rest breaks had been denied in respect of different time periods.

At this hearing the Tribunal held that for jurisdictional issues there were only 14 days in which Abellio was in breach of the WTR. It heard evidence from Mr Grange (who didn’t provide medical evidence) that, due to a bowel related medical condition, the lack of rest breaks had caused discomfort that was more than a minor inconvenience.

The Tribunal considered that a just and equitable award was £750 for the “discomfort and distress” caused by the employer’s refusal to allow rest breaks over 14 working days

Both parties appealed; Mr Grant arguing that limiting his claim in time had not been previously raised and Abellio on the basis that the WTR does not allow an award of damages for personal injury and, alternatively, that £750 was an excessive award.

The EAT dismissed Mr Grange’s appeal on jurisdiction because, once raised either by a party or the Tribunal itself, the Tribunal is bound to consider a question of jurisdiction.

It also dismissed Abellio’s cross-appeal in respect of the damages award noting that there is no case law or legislation dealing with rest breaks which preclude an award of damages for personal injury.

Neither did the EAT view the award as excessive. Low value claims could be dealt with on a common-sense basis, without the need for medical evidence. Mr Grange had given evidence and been cross examined on how the lack of rest breaks had affected his health so the Tribunal had enough evidence to make an award of £750 for ‘discomfort and distress’.

Implications:  Employers should be aware that, where an employee has suffered any impact on his or her health as a result of a failure to allow rest breaks, or any other breach of the WTR, employers could be liable for damages. In Mr Grange’s case, the compensation awarded was relatively modest. However, it is possible that, in cases where significant injury has been caused, the damages could be much more significant. Employers should therefore ensure that work is organised so that employees can enjoy the daily and weekly rest breaks to which they are entitled, as well as taking their annual leave.

 

Government Reforms (2): Modern slavery

What do we already know?

We updated you in our February 2016 Newsletter Government reforms (1): Modern slavery disclosure obligations that organisations which:

  • have a worldwide turnover in excess of £36 million per year;
  • supply goods or services; and
  • carry on business, in whole or in part, in the United Kingdom;

need to comply with the UK’s Modern Slavery Act 2015 (MSA) disclosure obligations, including publishing an annual slavery and human trafficking statement for each financial year (‘MSA statement’).

What’s new?

The Home Office has released guidance (available here) designed to help organisations identify if they need to publish a modern slavery statement and provide best practice on how to produce a statement.

The Government has also updated its guidance for organisations on how to ensure that slavery and human trafficking is not taking place in its business or supply chains (available here)

Also, for help structuring a modern slavery statement see Ethical Trading Initiative’s Modern Slavery Statements Evaluation Framework available here.

Case update (1): Personal liability of company directors

What do we already know?

We updated you in our June 2016 Newsletter Government reforms (1): Modern slavery – dont ignore it! that a UK ‘chicken-catching’ business (DJ Houghton Catching Services Ltd) had been found civilly liable for victims of trafficking and modern slavery. It was the first legal ruling against a British gangmaster business for modern slavery offences.

The High Court ordered the company to pay £1M compensation to Lithuanian workers for:

  • failure to pay the agricultural minimum wage;
  • charging of prohibited work-finding fees;
  • unlawfully withholding wages; and
  • depriving the workers of facilities to wash, rest, eat and drink.

The workers had been sent to catch chickens at farms across the country, and were subjected to appalling living and working conditions. They were forced to work shifts without respite, slept in the back of a mini bus, and worked immensely more hours than those recorded on their payslips.

What’s new?

Two directors of DJ Houghton Catching Services Ltd (Mr Houghton and Ms Judge) have been held personally liable for breaches of the employment contracts of a second group of former employees’. The two directors were held personally liable because they deliberately acted unlawfully to the obvious detriment of the company and acted outside of their authority.

The contractual breaches included the failure to pay applicable minimum wages, charging of unlawful ’employment fees’, failure to pay holiday pay and the arbitrary withholding of wages.  This decision opens the way for the workers to claim compensation directly from the couple and the amount owed will be decided at a subsequent hearing.

For further detail please read on.

Summary: Can the directors of a limited company be personally liable for its breaches of an employment contract?

Yes, held the High Court in Antuzis v DJ Houghton (available here).

Facts:  The Lithuanian claimants were employed in the UK by DJ Houghton Chicken Catching Services Ltd (the company) to work at various farms across the UK as chicken catchers. Their working conditions were dreadful. They worked long hours, being deprived of sleep and toilet breaks. They were paid less than minimum wage and often had pay withheld or docked for unknown reasons. No attempt was made to pay their holiday pay or overtime and they were prevented from taking holidays and bereavement leave.

The Lithuanian employees brought claims for breaches of their employment contract against the company.  However, by the time the employees brought their claims, the company was in a precarious financial position. Even if they won their claims against the company, therefore, they would receive little compensation. In the circumstances the employees also named as defendants the two senior managers of the company, Mr Houghton (director) and  Ms Judge (company secretary), which meant the employees had a greater chance of recovering their losses from them.

The High Court held that the directors were personally liable for the contractual breaches. Although the Court accepted the legal principle that a director is not ordinarily personally liable for inducing breach of contract where the director acts “bona fide within the scope of his authority”, it concluded that Mr Houghton and Ms Judge were not acting in this manner. They knew that their actions amounted to a clear breach of their duties under section 172 (duty to promote the success of the company) and section 174 (duty to exercise reasonable care, skill and diligence) of the Companies Act 2006. The High Court held that “what they did was not in the best interests of the company or its employees. On the contrary (…) they wrecked its reputation in the eyes of the community.” The Court found beyond doubt that they did not believe that the employees’ remuneration arrangements were lawful and were therefore personally liable for the breaches of contract.

Implications:  The case is a useful reminder that, whilst a company can indemnify directors against third party claims and purchase insurance to limit the risks associated with carrying out director duties, there are still situations where personal liability for directors cannot be excluded.

However, although this decision is worrying news for company directors, it does not open the floodgates to personal exposure for directors whenever their company finds itself in breach of its contracts of employment.  It is only where there is unlawful deliberate action to the obvious detriment of the employer that the exposure arises. This is the case even if the breach is of an obligation also imposed by statute such as the minimum wage or Working Time Regulation holiday pay or rest periods.

Government Reforms (3): BREXIT – Government Guidance

The Home Office has published guidance on:

1. EU Settlement Scheme

The guidance (available here), provides information on the documents necessary to prove a person’s relationship to an EU citizen, submitting evidence of the EU citizen’s identity and nationality, as well as evidence of the EU citizen’s continuous residence in the UK.

The guidance explains that where an individual has:

  • valid permanent residence card confirming right of permanent residence in the UK, the individual will not need to provide evidence concerning his or her family relationship to an EU citizen under European Economic Area Regulations.
  • valid biometric residence card (BRC) as the family member of an EU citizen, which does not confirm the right of permanent residence in the UK, the BRC will be accepted as evidence of relationship to that person if issued because of that relationship, which is continuing.

However, an individual must provide other evidence of the family relationship to an EU citizen, resident in the UK if:

  • the BRC was not issued to prove family relationship to an EU citizen;
  • the BRC was issued to provide to prove the family relationship to an EU citizen, but individual is now relying on a family relationship with a different EU citizen; or
  • no BRC.

 

2. Right to work checks for EU, EEA and Swiss employees

The guidance (available here) provides information for employers on right to work checks and the immigration status of EU, EEA and Swiss citizens and their family members working in the UK after Brexit. The guidance states that employers should conduct these checks in the same way they do now until 1 January 2021.

The guidance contains information on:

  • right to work checks;
  • employing EU, EEA and Swiss citizens if the UK leaves the EU with a deal;
  • employing EU, EEA and Swiss citizens if the UK leaves the EU without a deal; and
  • immigration to the UK from 1 January 2021.

Case update (3): Discrimination – Whose religion or belief?

Summary: Can disability discrimination arise out of a mistaken belief?

No, says the EAT in iForce Ltd v Wood available here.

Background:  Discrimination arising from disability occurs when A treats B unfavourably because of something arising in consequence of B’s disability, and A cannot show that the treatment is a proportionate means of achieving a legitimate aim.  However, this does not apply if A can show that A did not know, and could not reasonably have been expected to know, that B had the disability.

The Tribunal needs to consider two issues: Did A treat B unfavourably because of an identified ‘something‘?  And if so, did that ‘something‘ arise in consequence of B’s disability? It is not necessary to show that A knew of the causal link between the ‘something’ and the employee’s disability.

The Equality and Human Rights Commission’s Code of Practice explains that the consequences of a disability include anything which is “the result, effect or outcome” of a person’s disability. These may or may not be obvious. A consequence may involve several links – for example, a condition which leads the employee to suffer pain may lead to being short tempered which results in an angry outburst for which the employee is disciplined.

Facts:  Ms Wood, the employee, had been employed to work in iForce Ltd, the employer’s, warehouse since 1993. She was diagnosed with osteoarthritis in 2012. Both she and her employer agreed she was a disabled person.

Ms Wood and her GP perceived that her symptoms worsened in cold and damp weather and in November 2016 it was agreed that, because of the effects of the cold weather when travelling to and from work, she would work a slightly earlier shift on a temporary basis.

In the same month, iForce introduced changes to working practices which required warehouse staff to move from bench to bench to follow the work, rather than staying in the same workspace all shift.

Ms Wood declined to work at the benches nearest the bay doors to the warehouse, saying they were colder and exacerbated her symptoms.

iForce carried out an investigation that showed no material difference in temperature between the end and inner benches.

iForce concluded that her refusal to work at those benches was unreasonable and she was given a final written warning after a disciplinary hearing at which Ms Wood had referred to the temperature, to draughts and to damp conditions. (The final written warning was later reduced to a first written warning.)

iForce also held a wellbeing meeting with Ms Wood to discuss the effect of temperature on her symptoms and broader issues of the impact of her disability.  Although no noticeable difference in temperature between the benches was found, as a result of the meeting the company purchased a wind chill temperature thermometer and thermal underwear for Ms Wood.

Once installed, the wind chill thermometer also showed no discernible difference between benches.

Ms Wood brought a Tribunal claim for discrimination because of something arising in consequence of her disability.

The Tribunal upheld her claim. The Tribunal decided that the warning was unfavourable treatment, and that this arose in consequence of Ms Wood’s disability: the warning was given because she refused to comply with an instruction to work on benches near the loading doors, which in turn arose because she believed that it would adversely affect her condition (although this was a mistaken belief).

iForce appealed to the EAT.

The EAT upheld iForce’s appeal and found that Ms Wood had not been discriminated against.  The EAT held that there should be a connection between the refusal to work on the benches and the disability, and the connection had not been established.  Ms Wood was unable to show that the warning she was given for refusing to move was less favourable treatment because of “something arising from her disability“. Although the causal link between the “something” and the underlying disability may be a loose one and may involve several links, there must be an actual connection, not just a perceived connection on the part of the employee.

In this case, the warning did not arise from the disability but Ms Wood’s mistaken belief that moving benches would exacerbate her condition. There could be no unfavourable treatment where there has been a mistaken belief.

Implications:  This is a useful case for employers which helps limit the link between a disability and unfavourable treatment.

This case also provides useful guidance that when there is concern that a person with a disability might be adversely affected by a new policy or practice, employers should investigate whether this is the case, rather than just taking the employee’s word for it. If the investigation shows that the employee would not be impacted, the employer will be in a stronger position to impose the policy/practice.

However, it is worth noting that if Ms Wood had been able to show that her judgement was impaired as a result of her disability, then the Tribunal might have been able to find a connection between her mistaken belief that the benches near the loading bays were cold and damp, and her disability.  That would have meant that the sanction of the warning for her unreasonable behaviour would have amounted to discrimination.

 

Government Reforms (1): Gender Pay Gap returns

What do we already know?

Gender pay gap reporting was introduced in 2017. The gender pay gap is the difference between the average earnings of men and women, expressed as a percentage of men’s earnings. The Government’s intention is to encourage employers to consider and, if required, take appropriate actions to reduce or eliminate their gender pay gaps. Employers with 250 or more employees are required to publish their data on their website and to report it to Government Online every year.

The deadlines for gender pay gap reporting for employers, relating to your March/April 2018 payroll figures, year were:

  • 30 March 2019 for public sector employers; and
  • 4 April 2019 for private and voluntary sector employers.

For more information please see our updates here.

What’s new?

The deadlines for this year’s gender pay gap reports (based on March/April 2018’s payroll) have now passed and, overall, there has been a slight reduction in the national average pay gap from 9.7% to 9.6% (in favour of men).  However, according to the Government’s statistics, less than 50% of firms have narrowed their gap since gender pay gap reporting became mandatory. 45% of those who published their data have seen an increase in their gap and 7% have seen no change.

Of the 10,428 firms who have reported their 2018 stats, 78% had a gender pay gap in favour of men. 14% had a gap in favour of women and 8% had no gap at all. There was little progress in the proportion of women in top paid jobs. In the 2017 figures (out a year ago) women accounted for 37% of the top quartile of earners. This figure increased to only 38% for the 2018 figures. Disappointingly, in certain sectors such as finance and insurance, health and social work and the public sector the pay gap has widened.

It is unclear how many employers have failed to publish their data. However, the Equalities and Human Rights Commission has confirmed that it will take enforcement action against the businesses that missed the 2019 deadlines. No employer has yet faced a fine for not reporting, but this does seem a likely sanction in the future, and repeated failure could result in an unlimited fine.  The other option, which is becoming increasingly popular, is to name and shame the worst offenders for failure to comply with their reporting duties.

Comment:  It is perhaps unsurprising given that there has been little progress on narrowing the gender pay gap.  This is because, even if employers have taken measures to narrow the gap, these are likely to take time to show results, given the time-lag between when the figures are taken and when they are published.  The 2018 figures just published are already a year old now, and hopefully by now they gaps will have improved for many employers.  These latest figures do, however, show that the pay gap will not be eliminated overnight and more needs to be done to tackle the problem.

There is plenty of guidance available for employers looking for ways to try and improve their figures for next year. In our update Government reforms (3): GEO – Gender Pay Gap guidance we look at two new pieces of guidance (available here and here) to help employers identify the potential causes of any gender pay gap within their organisation and develop an effective approach to tackle it.  The Government Equalities Office has also recently published an action note for employers on how to promote the progression of women at work (available here) and ACAS has also updated its guidance on Gender Pay Gap reporting available here.

Organisations such as the Fawcett Society (the UK’s leading charity campaigning for gender equality and women’s rights) and the Equalities and Human Rights Commission have urged employers to create action plans and strategies to close their gender pay gaps and to monitor their progress.  However, to date, the Government has resisted taking formal action on this and has said (in its response to the House of Commons BEIS Committee’s report) that it is not planning any immediate changes to the regime, but will wait until the statutory review which is scheduled for 5 years post-implementation (see response here).

In the meantime, employers may be starting to turn their attention to the Government proposal to require employers to report on the ethnicity pay gap (see our October Newsletter Government reforms (1): Mind the ethnicity pay gap).  A Government consultation on introducing such a duty closed at the end of January 2019 and its response is awaited. In the meantime, a number of large employers have signed up to a pledge to report voluntarily, organised by Involve, which has published a Framework for Ethnicity Pay Gap Reporting to assist employers – available here.

April 2019 Newsletter

It’s April and we hope you had an egg-cellent Easter break and were not too shell-shocked to be back to work.  It’s difficult to ovoid (sorry) egg puns once you get going.

To help you get cracking (sorry again) we’ve hunted out the most up-to-date HR/Employment Law news for you.  We feed back on the results of the latest Gender Pay Gap reports and look at how employers can help reduce their pay gaps. We also update you on the latest Government guidance on Modern Slavery and the EU Settlement Scheme.

In our case update we look at when directors may be personally liable for breaches of their employment contract, the awarding of personal injury compensation in the Employment Tribunals for failure to provide rest breaks, and whether disability discrimination can arise out of a mistaken belief.

 

What Luke has been doing recently…

The last couple of months for me and the team has mostly been Tribunals, Tribunals, Tribunals.  We are currently dealing with a number of claims that is unprecedented since the long ago days of 2013, before the Tribunals fees rules came in.  As Anne-Marie’s blog a few days ago comments, employers of all shapes and sizes need to put ET claims firmly back at the top of their list as a key risk.

One silver lining with so many more claims is that most are weak, and so are able to be settled for a modest amount of money fairly soon after you have submitted your defence.  Our carefully calibrated fixed fee for handling ET claims takes that into account and we’d be very pleased to tell you more if you get hit with a claim and would like to know about the cost of fighting it.

 

A roundup of this month’s news: 

 

Government Reforms (1): April changes – Are you ready?

It’s nearly April and, as usual, this month sees a spring clean for employment law.  Although we’ve covered the majority of these changes in previous newsletters and alerts, we thought it was worth a quick reminder:

1 April 2019

Increase in National Living and Minimum Wage

The new rates are as follows:

  • Age 25 and over: National Living wage increase from £7.83 to £8.21 per hour;
  • Age 21 to 24 (inclusive): increase from £7.38 to £7.70 per hour;
  • Age 18 to 20 (inclusive): increase from £5.90 to £6.15 per hour;
  • Age 16 or 17 (inclusive): increase from £4.20 to £4.35 per hour; and
  • Apprentice rate: increase from £3.70 to £3.90 per hour.

Changes to auto enrolment rates

The minimum contribution rates will increase to 3% for employers and 5% for employees.

4 April 2019

Gender pay gap reports due

Date by which all applicable private sector employers must publish their gender pay gap data for the snapshot date of 5 April 2018.

The report must be published on the Government website and a searchable UK website that is accessible to employees and the public.

6 April 2019

Itemised pay slips

The right to receive a written itemised payslip will apply to ‘workers’ as well as employees.  The payslips of workers and employees paid by the hour must clearly set out the number of hours for which they have been paid.

All payslips must include:

  • the gross amount of the wages or salary;
  • net amount of wages or salary payable;
  • amounts of any variable or fixed deductions, and the purposes for which they are made; and
  • total number of variable hours worked (when workers and employees get a different wage depending on the hours they have worked).

Government guidance on this new right is available here.

Assuming you already pay your (casual) workers via payroll, you will no doubt already give them itemised pay slips in the same way as your full employees.

But it is another useful reminder for us to say: are you entirely confident as to the differences between any casual workers and any zero hours employees you may have working for you?  And between casual workers and the genuinely self-employed?  It is a complex area, often neglected because of all the other things on your plates, but actually quite high risk as we see more and more focus on employment status.

Would you like us to have a look at your set-up and advise you on what would be the best arrangements?

6 April 2019

Increases in statutory payments and Tribunal awards

The limits on compensation awards will increase. The changes are as follows:

  • The maximum limit for a statutory week’s pay (used to calculate statutory redundancy payments and the basic award for unfair dismissal) will increase from £508 to £525.
  • The maximum compensatory award for unfair dismissal will increase from £83,682 to £86,444.
  • The maximum basic award for unfair dismissal will become £15,750 (up from £15,240). That makes the maximum total basic and compensatory awards for unfair dismissal £102,194 (generally subject to a limit of 52 weeks’ actual pay).
  • The minimum basic award for certain automatically unfair dismissals will increase from £6,203 to £6,408. (i.e. those due to due to health and safety, employee representative, trade union, or occupational pension trustee reasons).

The increases are based on a 3.3% increase to the retail prices index (RPI) as at September 2018.

The new rates take effect where the ‘appropriate date’ for the course of action, such as the date of termination in an unfair dismissal claim, falls on or after 6 April 2019. In cases where the date of termination falls before 6 April 2019, the old limits will continue to apply.

6 April 2019

Increase in penalties for aggravated breach of a worker’s employment rights

Tribunals have the power to impose a financial penalty against employers that are in breach of employment rights where that breach has one or more aggravating factors.

The maximum compensation will increase from £5,000 to £20,000.

 Tax changes

The personal allowance will increase to £12,500 and the higher rate tax threshold to £50,000.

Class 2 NICs will be abolished.

 

6/7 April 2019

Increases to the statutory rates for maternity, paternity, shared parental pay, adoption and sick pay

Statutory rates for everything other than sick pay will increase from £145.18 to £148.68 or 90% of average earnings if lower.

Statutory sick pay will increase from £92.05 to £94.25.

 

April 2019

Apprenticeship levy

Employers may transfer up to 25% of their apprenticeship levy to support apprentices in their supply chain.

 

Case update (3): Discrimination – Whose religion or belief?

Summary: Was an employee directly discriminated against because of her religion or belief when she was dismissed on discovery that she was cohabiting with her boyfriend?

No, says the EAT in Gan Menachem Hendon Ltd -v- de Groen available here.

Facts:  Ms de Groen was a teacher at the Gan Menachem Hendon Ltd nursery, which followed ultra-orthodox Chabad principles. Ms de Groen went to a work-related barbecue with her partner and openly discussed that they live together. Ms de Groen was called into a meeting with the nursery’s headteacher and managing director and told she risked damaging the nursery’s reputation in the eyes of the pupils’ parents. Ms de Groen was told that while her private life was of no concern to the nursery, could she please say that she no longer lived with her partner so that they could relay this to any concerned parties. Ms de Groen refused to lie and asked for an apology.

Following a second meeting and a disciplinary hearing held in Ms de Groen’s absence, she was dismissed for allegedly presenting herself in a manner that contravened the nursery’s ethos, culture and religious beliefs.

Ms de Groen brought claims for both direct and indirect discrimination on the grounds of sex, religion and belief. Ms de Groen was successful in all her claims at the Tribunal. The nursery appealed.

The EAT upheld Ms de Groen’s claims for sex discrimination and harassment.  However, the EAT overturned the decision in relation to religion and belief. The Equality Act 2010 does not extend the protected characteristic of religion or belief to the religion or belief of the alleged discriminator (the claimant’s employer). The EAT was clear that the purpose of the Equality Act is to protect an individual with a protected characteristic from less favourable treatment because of that characteristic (not that of the alleged discriminator).

The nursery would have treated any employee in the same way, regardless of their particular religious views or beliefs. It was not the religion or beliefs of Ms de Groen that resulted in the treatment.  A claim of unlawful discrimination on the grounds of religion and belief must be based on a protected characteristic which the claimant possesses, which the alleged discriminator believes they possess, or which a person associated with the claimant possesses.

Implications: This is a useful confirmation by the EAT that it is the employee’s protected characteristic (not that of the alleged discriminator) that is relevant when determining whether discrimination has occurred or not.  Helpfully, the EAT also confirmed that the Act can protect individuals of the same religion as their alleged discriminators where there is a difference of opinion about the application and practice of that religion.

However, it is worth noting that Ms de Groen still won her claims of direct sex discrimination and harassment.  This is a good reminder to employers to ensure that they respect their employee’s rights and values, regardless of their own particular religious opinions and practices.

Case update (2): Rules of suspension

What do we already know?

We updated you in our September 2017 Newsflash Warning – take care with suspension! on the High Court’s decision in Agoreyo v London Borough of Lambeth. 

The High Court decided that a school acted in breach of the implied term of mutual trust and confidence when it suspended a teacher who was alleged to have used unreasonable force in trying to get two pupils with serious behavioural issues to behave.  The High Court said that the central issue is whether a suspension is reasonable and/or necessary.

What’s new?

The Court of Appeal has overturned the High Court’s decision.  The Court of Appeal has confirmed that the school did have ‘reasonable and proper cause’ to suspend the teacher. Further, there is no requirement for a suspension to be ‘necessary’.

Summary:  Can an employer suspend an employee without breaching the implied term of trust and confidence if it has ‘reasonable and proper cause’ for doing so?

Yes, says the Court of Appeal in London Borough of Lambeth v Agoreyo available here.

Facts:  Ms Agoreyo, the employee, worked as a primary school teacher for the London Borough of Lambeth. She taught a class of about 29 children, aged between five and six years old. Two of her pupils had some serious behavioural issues and the employee made numerous requests to the school where she worked for additional support. This was eventually acknowledged by the school which started to put in place supportive measures for the employee.

However, before all the intended support measures had been put in place, the employee was suspended. This followed three incidents in which the employee used a degree of force to get the two pupils to behave. The allegation against the employee was that she had used unreasonable force. (Teachers are permitted to use reasonable force under the Education and Inspections Act 2006).

The suspension letter said all the usual things, including:

  • the employee was suspended on normal pay;
  • suspension was a precautionary act pending a full investigation into allegations, during which the employee would be given full opportunity to provide her account of events; and
  • the suspension was “neutral and not a disciplinary action” and was to “allow the investigation to be conducted fairly”.
  • However, before the decision to suspend, the employee was not asked for her comments on the allegations, nor did the employer provide any evidence to suggest that it had considered other alternatives to suspension.

Later that day the employee resigned and brought a claim against the employer in the County Court for breach of contract.  She claimed her suspension was a ‘kneejerk’ response and thus a breach of the implied term of trust and confidence.

County Court decision

The County Court held that the employer was bound to suspend the employee after receiving reports of the allegations against her and that the employer had “reasonable and proper cause” to suspend the employee on grounds of its overriding duty to protect children. The employee appealed to the High Court.

High Court decision

The High Court allowed the appeal and held that it had not been ‘necessary’ to suspend the employee, particularly as:

  • suspension took place only a few days after additional supportive measures had been put in place (and had not yet been fully implemented);
  • there was no evidence of any attempt to understand the employee’s version of events prior to the decision to suspend;
  • there was no evidence of any consideration of alternatives to suspension; and
  • the letter of suspension did not explain why an investigation could not be conducted fairly without the need for suspension

Therefore the suspension was a breach of trust and confidence.

Court of Appeal decision

The Court of Appeal overturned the High Court’s decision. The Court of Appeal held that the High Court had made errors of law by introducing a test of ‘necessity’.

The Court of Appeal reaffirmed the established view that there is no test of ‘necessity’ when considering suspensions; the employer need only show that it had a ‘reasonable and proper cause’ to suspend the employee. The Court of Appeal held that the County Court had applied this test correctly.

Implications: This is a helpful decision for employers as it means consideration only needs to be given to whether there is ‘reasonable and proper cause’ to suspend an employee (rather than whether it is ‘necessary’).

However, whether an employer has ‘reasonable and proper cause’ to suspend is highly fact specific.  We recommend that an employer takes the following steps when deciding to suspend:

  • identify whether there is an express power to suspend employees in the employment contract. Although you will still need to think through whether there’s proper cause to exercise that power, it will be easier to defend a suspension in reliance on an express power;
  • refer to your employee handbook to check whether it says anything about the circumstances in which suspension may be appropriate, and comply with any agreed procedures;
  • carefully consider what the true purpose of the suspension would be and fully document the reasons for the suspension;
  • avoid suspension as a “knee jerk” reaction by considering the alternatives, such as reassigning the employee to another area of the business for a limited period, or putting them on a special project;
  • wherever possible, speak with the employee before making a decision to suspend to understand their feedback on the allegations;
  • consider what you can say on a neutral basis to the employee’s colleagues and your clients where appropriate. If possible, agree the response with the suspended individual;
  • make sure you keep the employee informed about the investigation process regularly; and
  • review whether suspension remains appropriate on an ongoing basis. Even if suspension were originally justified, an employee may subsequently claim that its length has caused them damage and would entitle them to claim constructive dismissal or breach of trust and confidence.