Government reforms (1): National minimum wage – TUPE transferees beware

HMRC have announced changes in how they enforce National Minimum Wage (NMW) penalties against employers involved in TUPE transfers. See the HMRC update here (at page 4).

From July 2018, any liability for historic NMW underpayment or any penalties relating to the underpayment will be enforced against the new employer (i.e. the transferee).  This is irrespective of whether the new employer was responsible for the underpayment or not.

Previously any such back pay or penalties were sought from the transferor for arrears occurring prior to the transfer. This is now not the case.

Employers, in particular transferees in TUPE transfers, should ensure that the correct Employer Liability Information has been provided ahead of a TUPE transfer.  Also, that as much due diligence as possible is done before the transfer date. Future indemnities in commercial contracts should also be reworded to take into account the increased risk to businesses from this change of approach from HMRC.

 

ACAS guidance: Job references

ACAS has published new guidance on job references (available here), which helps clarify the rules around employment references for employers and employees.  While ACAS has previously given limited guidance on employment references in its advisory booklet on recruitment and induction, this is its first comprehensive guidance tailored to employers, particularly on more complex issues such as giving negative references.

The guidance covers matters such as:

  • what a reference must include;
  • whether or not a reference must be provided;
  • whether an employer can give a bad reference;
  • problems with references; and
  • job offers and references.

Tips provided in the guidance include:

  • employers must only seek a reference from a job applicant’s current employers with their permission;
  • references can include basic facts about the job applicant, answer specific questions from the potential employer and comment on the job applicant’s skills and abilities, character, and strengths and weaknesses. It is generally for the current/ex-employer to decide how much information it is willing to provide;
  • potential employers should remember a referee may not provide a reference or might inaccurately suggest the applicant is suitable. In these circumstances, it may help to discuss any concerns with the job applicant directly first;
  • a potential employer can offer a “conditional job offer,” which can be withdrawn if the employer’s conditions are not met. Receipt of a satisfactory reference is a commonly imposed condition;
  • employers are entitled to give a reference that states that the job applicant is not suitable for the job he or she is applying for, or that the reason for leaving the job is different from what is stated in the application;
  • employers providing references must ensure that the reference is accurate, fair, and not misleading. The job applicant may be able to claim damages in court if he or she can prove the reference was misleading or inaccurate and the applicant suffered loss as a result; and
  • if a potential employer is unable to obtain references from the nominated referees, it can seek alternative references or may choose to hire the job applicant with a probationary period to assess his or her suitability for the role.

Case update (3): Victimisation – acting in bad faith

Summary: Does an employee, for purposes of a victimisation claim, have to act dishonestly for an allegation to be made in bad faith?

Yes, held the EAT in Saad v Southampton University Hospitals NHS Trust available here.

Facts:  Mr Saad, the employee, was a trainee surgeon employed by the Southampton University Hospitals NHS Trust, the employer. During his period of training a number of performance issues arose.  Around the time that these issues came to a head, Mr Saad raised a grievance. The grievance included an allegation that his programme director said he was “…a terrorist looking person”. Mr Saad alleged this was abusive and discriminatory on racial and religious grounds. The employer rejected Mr Saad’s grievance and he was subsequently removed from the training programme and dismissed.

Mr Saad brought Tribunal claims for unfair dismissal on whistleblowing grounds and victimisation. Mr Saad relied on the grievance about the terrorist comment as both a protected disclosure (for whistleblowing purposes) and a protected act (for victimisation purposes).

Mr Saad’s claims were rejected by the Tribunal on the basis that he had not made the protected disclosure/act about the terrorist comment in good faith.  The Tribunal  found that the predominant purpose of Mr Saad’s grievance had been to delay and avoid the performance process.

Mr Saad appealed to the EAT.  He argued that the tests for good faith in making a protected disclosure under the whistleblowing legislation and race discrimination victimisation are different. The question for racial victimisation is whether the worker has acted honestly in giving the evidence which they have relied on as a protected act. The existence of an ulterior motive, whilst potentially relevant, should not be the focus of any enquiry.

The EAT upheld the appeal. The EAT found that the primary question for victimisation purposes is whether the worker has acted honestly in giving the evidence or information. The existence of an ulterior motive, such as to deflect criticism of performance, is not the focus. In Mr Saad’s case, the EAT found that he had subjectively believed that the alleged terrorist comment had been made.  Mr Saad he had therefore made the allegation against his programme director honestly and so had not made it in bad faith.

Implications:  This decision is unhelpful for employers as it makes it easier for employees to establish a protected act. It will be difficult for employers to rely on an employee’s ulterior motives to undermine their claim that a protected act was in good faith. The key to whether there is whether the worker honestly believes the information that forms the protected act, not their reasons for providing it.

Case update (2): Unfair dismissal – Failure to postpone

Summary:   Did an employer’s refusal to postpone a disciplinary hearing, due to the unavailability of the employee’s trade union representative, make the dismissal unfair?

Yes, says the EAT in Talon Engineering Limited v Smith available here.

Background:  Workers have a statutory right to be accompanied at disciplinary hearings by either a work colleague or their trade union representative under section 10 Employment Relations Act 1999. Workers can propose an alternative date for the hearing if their chosen companion is unavailable. Provided the alternative time proposed by the worker is reasonable, and within five working days of the originally proposed date, the employer must postpone the meeting.

Facts:   The employee, Mrs Smith, was employed by Talon Engineering Ltd, the employer, for over 21 years before her summary dismissal for gross misconduct. She had been invited to a disciplinary hearing, which was then postponed for three weeks as a result of a period of sick leave followed by annual leave. The rescheduled hearing was due to take place on 29 September 2016, but Mrs Smith’s trade union representative was unavailable on that date and for a further two weeks. The employer refused a further request to postpone the hearing, on the basis that it would result in an unacceptable delay and that it was only required to agree to a postponement of up to five days under the provisions of section 10(5) Employment Relations Act 1999 (right to be accompanied to a disciplinary hearing).

The disciplinary hearing went ahead in the absence of both the employee and her trade union representative, and the decision was reached to summarily dismiss her. This decision was upheld on appeal.

Mrs Smith brought a Tribunal claim for unfair dismissal. The Tribunal upheld her claim.  It decided that although the employer had shown a potentially fair reason for her dismissal, its decision to dismiss her was procedurally unfair because of its refusal to postpone the disciplinary hearing.

The employer appealed to the EAT.  It argued that, under the right to be accompanied rules, it did not have to accept a postponement which was more than five working days after the original date.

The EAT dismissed the employer’s appeal and endorsed the Tribunal’s view that no reasonable employer would have refused to postpone the hearing to allow Mrs Smith’s trade union representative to attend. The employer had been unduly hasty in not accommodating a short delay to enable Mrs Smith to be represented by her chosen companion.

The unavailability of the trade union representative for a period of more than five working days does not mean, for the purposes of a claim of unfair dismissal, that an employer is entitled to proceed with the disciplinary hearing in the absence of the employee. The Tribunal was entitled to conclude that it was unreasonable for the employer not to postpone the hearing for a further short period of time. The provisions of section 10 Employment Rights Act 1999 do not prevent a Tribunal from using its discretion to reach a finding that a dismissal was unfair.

Implications:

Employers should take care when deciding whether to postpone a disciplinary hearing. This decision highlights the risk in proceeding with a disciplinary hearing in circumstances where an individual’s chosen representative is not available, even if this is for more than the five days permitted by law. Whilst a decision to proceed will mean there is no breach of the statutory right to be accompanied, a decision to dismiss may still be regarded as unfair. Employers should always consider a request for a postponement of a disciplinary hearing on its merits, even if it is for a period of more than five days.

There will be cases where it is reasonable to proceed in the absence of the employee, for example where the employee is being difficult or trying to inconvenience the employer.   However, in this case, the Tribunal considered dismissal in the employee’s absence to be a gross overreaction by the employer, particularly in view of the employee’s length of service and previously unblemished record.

Government reforms (2): Parental bereavement leave

What do we already know?

We updated you in our October 2017 Newsletter Government reforms (2): Family friendly – Parental bereavement leave that the Parental Bereavement (Leave and Pay) Bill had been published.  We let you know that when this became law, it would give bereaved parents the right to time off work following the death of a child and introduce statutory parental bereavement pay for the first time.

What’s new?

The Parental Bereavement (Pay and Leave) Bill received royal assent on 13 September 2018 to become the Parental Bereavement (Leave and Pay) Act 2018. It is expected that the new rights will come into force in 2020.

Although the Act has been passed, it will need to be implemented by separate regulations. These regulations will set out precisely how parental bereavement leave will work and to whom it will apply.

The Act provides that:

  • a bereaved parent is entitled to take at least two weeks’ leave which must be taken before the end of 56 days (beginning with the day of the child’s death) . The leave must be taken in blocks of one week but can be continuous or discontinuous;
  • leave can be taken in respect of each child, where the death of more than one child is involved. A child is a person under the age of 18 (and includes a stillborn child after 24 weeks of pregnancy);
  • the definition of a qualifying parent may be framed (in whole or part) by reference to the employee’s care of the child before he/she died (Regulations will provide more detail on the definition);
  • the rules about rights during maternity leave (and other family leave) also apply during bereavement leave, including the right to the same terms and conditions (other than in respect of pay) and (broadly) the right to return to the same role;
  • the process to be followed (the requirement to give notice and provide evidence) will be set out in Regulations; and
  • the rates of pay are also to be determined by the Regulations but in order to receive pay (rather than be able to take leave), a parent must have at least 26 weeks’ service and received pay above the lower earnings limit for the last 8 weeks.

CBI guidance: Health and wellbeing

The Confederation of British Industry (CBI) has published guidance (available here) on workplace health and wellbeing.  The CBI’s aim is for employers to better prioritise the health and wellbeing of their staff after finding that the scale of the UK’s mental health challenge is growing. The CBI considers that employers still need to do more to help remove the stigma around mental health.

Recommendations include creating a culture where both physical and mental health have equal focus in the workplace and taking targeted action through early interventions. The CBI said there are firms who do not yet know how to realise the ‘full potential of taking action’ and must adopt the ‘good practice that is already out there’.

In a survey, the CBI found that:

  • 63% of businesses see workplace health and wellbeing as an important business issue;
  • 52% of business leaders recognise the need for prevention, not just a cure; and
  • 71% of firms say they find it hard to take practical action as they are unclear on what is effective and they cannot see the benefits for others that have invested.

The guidance highlights steps that firms can take to support workplace mental health, which include:

  • working with external organisations to raise awareness of mental health;
  • considering the needs of individuals inside and outside the workplace when developing their approach to health and wellbeing; and
  • giving people the option to work flexibly to help those experiencing poor health return to work.

The CBI also sets out three steps which employers can learn from:

  • prioritising health and wellbeing from the top – this will demonstrate its importance as a workplace issue, ensuring it is a shared priority across the business;
  • targeting action towards early interventions – this will enable people to perform at their best; and
  • embedding good health and wellbeing—this will depend largely on creating a culture that reinforces positive messages and prioritises staff health and wellbeing.

The CBI also advises the Government to:

  • avoid any further increases in the insurance premium tax rate – to ensure that health insurance remains accessible to employees; and
  • assess how health-related benefits can support health and wellbeing in the workplace and alleviate pressures on the NHS.

 

 

Case update (1): TUPE – It’s ok to take a break

Summary:  Does a five month suspension of an undertaking’s activities preclude a TUPE transfer?

No, held the CJEU in Colino Siguenza v Ayuntamiento de Valladolid, available here.

Facts:  The employee, Mr Colino Sigüenza, was a teacher at a Spanish music school.  He was engaged by a contractor assigned to manage teaching operations on behalf of the local authority. The number of pupils at the school was falling and there were subsequent financial difficulties.  This led to the contractor dismissing all its staff, including Mr Colino Sigüenza.

On around 1st April 2013, two months before the academic year ended, the contractor ceased its activities. In August 2013, following a tendering process for the new academic year, the local authority assigned the school’s management to a new contractor which started activities in early September 2013. The new contractor did not engage any of the staff, including Mr Colino Sigüenza, despite using the same premises, equipment and resources.

Mr Colino Sigüenza claimed that his employment should have automatically transferred to the new provider under the EU’s Acquired Rights Directive (“ARD”), which has been implemented in the UK as TUPE.

At first instance, the Spanish court found that there had been no transfer of an economic entity which had retained its identity, as required by the ARD.  This finding was based on the 5-month gap between the Claimant’s dismissal, the winding-up of the initial service provider and the subsequent outsourcing of services.

The CJEU disagreed with this approach and the Advocate General’s Opinion. It held that there could in principle be a transfer.  This was because the economic activity was asset reliant and the new contractor used the same premises, instruments and resources.   Further, whilst the gap in time was a relevant factor to be taken into account as part of any assessment, 3 months of this 5-month suspension represented the annual school holiday, during which the school would normally be closed. (However, the CJEU was also of the view that the dismissals were fair as they were for an ETO reason entailing changes in the workforce).

As a TUPE transfer was possible, the case was returned back to the national appeal court for a decision on this.

Implications:  This decision does not significantly affect the legal position in the UK, as TUPE already recognises the additional, broader concept of a ‘service provision change’ which would have applied in this case.  However, the decision is a helpful reminder that gaps in services or suspended activities – even if they last for a period of months – will not by themselves be sufficient to prevent the application of TUPE.

 

 

September 2018 Newsletter – Education sector

It’s September and if you need some help to get you back into work hopefully we can help with our HR/Employment law update. It’s a return to the old routine for the Government too and we look at changes to HMRC penalties for NMW breaches in TUPE transfer situations and new parental bereavement leave rights. ACAS has also provided us with new guidance on job references and the CBI on health and wellbeing in the workplace.

In our case update this month we look at the effect of a break in service  provision on application of TUPE, when a failure to postpone a disciplinary hearing can lead to an unfair dismissal, and whether an employee, for purposes of a victimisation claim, needs to act dishonestly for an allegation to be made in bad faith.

What we’ve been doing in the Education sector recently…

It definitely feels like the start of a new term here at Menzies Towers (some new members of staff, hello Tamsin and Melissa, buzzing around), and that summer glow starting to fade as we grab out jumpers (although not for me as I am enjoying the delights of St Tropez fake tan).

With our Education sector, there is inevitably that back to school feeling too with new staff, new students, new timetables to get heads around.  Some of our clients are contemplating mergers which will mean months of due diligence: others are having a good look at their collective bargaining agreements (some are so old you have to blow the dust off them), to check whether they are still fit for purpose (answer: usually not). Whatever it is on your plate at the moment (fingers crossed it is ‘something and custard’), we are here to help.

Anne Marie Boyle
Partner
or call 0117 325 0924

 

September 2018 Newsletter – Manufacturing & Engineering sector

It’s September and if you need some help to get you back into work hopefully we can help with our HR/Employment law update. It’s a return to the old routine for the Government too and we look at changes to HMRC penalties for NMW breaches in TUPE transfer situations and new parental bereavement leave rights. ACAS has also provided us with new guidance on job references and the CBI on health and wellbeing in the workplace.

In our case update this month we look at the effect of a break in service  provision on application of TUPE, when a failure to postpone a disciplinary hearing can lead to an unfair dismissal, and whether an employee, for purposes of a victimisation claim, needs to act dishonestly for an allegation to be made in bad faith.

What we’ve been doing in the Manufacturing & Engineering sector recently…

We have advised several of our manufacturer clients about problems with apprentices, the most common one being the apprentice “going off the boil” after a few months and/or failing to turn up to college on the relevant days. What we are finding however is that several clients are still engaging their apprentices on old fashioned apprentice contracts. Put simply it is very difficult and very expensive to terminate them, essentially you are obliged to employ the apprentice for the duration of the fixed term unless there are exceptional circumstances, this can result in some eye watering Tribunal awards. For the last few years there has been a different sort of contract known as the apprenticeship agreement that you can use. Provided that your contract complies with all of the statutory requirements then if you do have someone who goes off the boil or stops going to college for example then it is far less risky and expensive to terminate the agreement. For further details please contact us.

Simon Martin
Partner
or call 0117 325 0929

 

September 2018 Newsletter

It’s September and if you need some help to get you back into work hopefully we can help with our HR/Employment law update. It’s a return to the old routine for the Government too and we look at changes to HMRC penalties for NMW breaches in TUPE transfer situations and new parental bereavement leave rights. ACAS has also provided us with new guidance on job references and the CBI on health and wellbeing in the workplace.

In our case update this month we look at the effect of a break in service  provision on application of TUPE, when a failure to postpone a disciplinary hearing can lead to an unfair dismissal, and whether an employee, for purposes of a victimisation claim, needs to act dishonestly for an allegation to be made in bad faith.