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May 2013 case update

case updatesContinuity of employment – beware an early start

Summary: Can an employee’s start date be brought forward by, for example, attending a meeting at the employer before the date specified in the contract?

Maybe, says the EAT in Koenig v Mind Gym Ltd available here.

Facts: Miss Koenig was employed by the Mind Gym Ltd. On 14 August 2009, she entered into a contract which stated that her employment, and her period of continuous employment, would begin on 1 October 2009. In fact, Miss Koenig:

The Mind Gym had told Miss Koenig that it would benefit her, the client and the Mind Gym’s project if she attended the meeting on 29 September 2009 and that it would be “useful” for her to go. However, Miss Koenig was not paid for attendance at the meeting and the Mind Gym regularly sent those who were not actually employees to observe client meetings.

Miss Koenig was dismissed on 29 September 2010. As a result, she was one day short of having sufficient continuous service to bring an unfair dismissal claim. However, she brought a claim arguing that she had sufficient service by virtue of attending the 29 September meeting.

The Tribunal dismissed her claim. Miss Koenig appealed. The EAT dismissed the appeal and held that the question of when work starts under a contract is one of fact and is for the Tribunal to decide. The ‘pre-employment’ activity had to be evaluated and it would be a matter of fact and degree whether it was sufficient to change the start date of employment.

In this case it was of importance that Miss Koenig was not paid for attending the client meeting, and that, ultimately, it was entirely her own choice to attend.

For any number of reasons, an employee might start work before or after the start date listed in their contract of employment. In either eventuality, it will be prudent for both parties to revisit the contract of employment and agree the correct start date.

Implications: This case serves as a reminder to employers to clarify an employee’s start date, particularly when asking a new recruit to attend meetings or events prior to the date specified in the contract. The date on which continuous employment began could be brought forward (so that unfair dismissal rights are accrued earlier). Also, if a new recruit is to attend work before the official start date then it would be best to make such attendance non-compulsory and unpaid.

Post-employment victimisation protected, or is it….?

Summary: Can an ex-employee bring a claim of victimisation where the alleged act has taken place after the end of employment? Yes, says the EAT in Onu v Akwiwu available here, but no says the EAT in Rowstock Ltd and another v Jessemey, available here.

The final decision is due to be taken by the Court of Appeal in Jessemey sometime between July 2013 and January 2014, so watch this space…

Facts: The above confusion arises because the section of the Equality Act 2010 which clearly prohibits post-employment discrimination and harassment, specifically excludes victimisation from its scope. However, the victimisation provisions themselves only extend to discrimination before or during employment.

Both EAT panels agreed that there was no intention to remove protection against post-employment victimisation in the Act. However, the EAT in Jessemey decided it was impossible to interpret the Act in a way that would be consistent with maintaining that protection, given that it has been expressly excluded. The EAT acknowledged in Onu v Akwiwu that it should usually follow its previous decision in Jessemey, but in this case they were persuaded it was wrong. It instead decided that the Act can be interpreted to cover post-termination victimisation claims.

Implications: There are currently two conflicting decisions on post-employment victimisation. In light of this the EAT have granted permission to appeal so that the Court of Appeal can give a definitive answer. Mr Jessemey’s appeal is due to be heard by the Court of Appeal between July 2013 and January 2014.

Given that, in any event, there is at least one decision which supports the prohibition of post-employment victimisation, employers should exercise caution and avoid treating employees or ex-employees unfavourably on the basis they have raised discrimination complaints, including when giving job references.

TUPE – are you affected?

Summary: Should employees who worked in a distinct part of an undertaking that was not transferred and only indirectly affected by the transfer of another part of the business have been informed and consulted about a transfer of the other part? No, says the EAT in I-Lab Facilities Ltd v Metcalfe and others (available here).

Facts: I-Lab Facilities provided services to the film and TV industry. It had two parts to its business:€œrushes” (initial production) work and “post-production” work. The two parts of the business had the ability to share resources and clients but the core activities of each part remained distinct – with their respective employees working in different premises, doing different types of work and with different working hours.

When I-Lab began to experience financial difficulties, it initially told staff that they would be bought by another company and would transfer to that. However, in the event, I-Lab only managed to sell the “rushes” part and the rushes employees transferred to the new employer under TUPE. The decision was taken to close down the post-production part of the business, and the employees of this part were dismissed.

The dismissed post-production employees brought a claim in the Tribunal, alleging (amongst other things) that I-Lab Facilities had failed in their duty to inform and consult with them under TUPE as “affected employees” of the transfer.

The Tribunal upheld the post-production employees’ claim. I-Lab appealed.

The EAT upheld the appeal, in I-Lab’s favour. It clarified that the sale of one part of a business will not render those employed in other parts of a business that did not transfer as being “affected employees” for TUPE purposes. This remained the case despite the fact that employees in the insolvent business were initially told that their business would transfer. There can be no complaint of a breach of the obligations to inform and consult about a transfer which doesn’t actually take place.

For a non-transferring employee to be an affected employee for TUPE purposes, the employee would have to be directly affected by the transfer itself, as opposed to, for example, an indirect consequence. The example given of an indirect consequence is where the sale of one part of a business is what renders the other part less viable.

Implications: This is helpful confirmation that (i) employees cannot bring complaints for a breach of the obligation to inform or consult unless a TUPE transfer actually takes place and (ii) that, for a non-transferring employee to be ‘affected’ and trigger the information and consultation requirements, the transfer has to have a direct affect on that employee.

However, employers should be wary of applying this case too broadly, as an employee who does some work in or for the undertaking being transferred will still likely be an ‘affected employee’ even if most of their work is carried out for a distinct part of the business. A common example of this is where the transfer of part of a business results in the reduction in work of central support services, such as finance, HR or administration.

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