Rogers & Norton News

Employment Law Bulletin February 2014

Monday, February 3, 2014


So, the new TUPE is in. Last month’s bulletin covered some of the main changes which have now (as of 31 January) taken effect.

And every new piece of legislation deserves a catchy title and an appropriate acronym. So here goes. Say a big hello to The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014. Or CRATUPEAR.

We kid you not.


Agency Worker Protection Limited
Moran v Ideal Cleaning Services

Agency workers are not employees. But over the years the distinction between the two has blurred. Agency workers with at least 12 weeks’ service are now entitled to the same basic employment rights and working conditions as if they had been recruited directly. It’s valuable protection that goes some way towards levelling the playing field between these temporary workers and the employees they work alongside.

But the Employment Appeal Tribunal (EAT) has decided that workers on “indefinite” or “permanent” assignments are not covered by the Agency Workers Regulations and so don’t get employee-equivalent rights. It’s a pretty significant shift in the general understanding of the law.

The case involved ten workers who were employed by Ideal. From the very beginning they were put on assignment at a company called Celanese. These assignments were long-term (the Claimants had worked there for between six and 25 years). Contracts were open-ended, they specified Celanese’s premises as the place of work and employment was terminable on notice.

When the Claimants were made redundant they argued that they were entitled to better conditions, including higher rates of pay. They didn’t succeed. The EAT held that as the Claimants were working for Celanese on a permanent basis there was nothing temporary about the arrangement and so they were not covered by the Agency Worker Regulations. These Claimants’ contracts could not be terminated by some condition expiring (for example, the end of a fixed-term or completion of a task) and so the legislation didn’t apply.

This might not be the final word on the subject. There’s a chance that the Claimants could be knocking on the door of the Court of Appeal.


Pay Up or Else…

February brings with it the introduction of hefty penalties for employers who don’t pay their workers the National Minimum Wage (NMW). The crackdown could see the worst offenders being fined £20,000, rather than the previous maximum of £5,000.

Employers face being named and shamed too. The Government says that it is working with HM Revenue and Customs to investigate and prosecute employers who have seriously flouted their NMW responsibilities.

If you need an incentive to review the payments you make to workers, this is it.


Restrictive Covenants
East England Schools v Palmer

The information age is making it harder for employers to justify the restrictions they try to put on ex-employees. Take information about clients, for example. How can an employer claim to be protecting its business interests by preventing an ex-employee from using information which is now often freely available via social media?

But the High Court has held that employers still sometimes deserve protection. So it’s worth investing in well-worded restrictive covenants.

Ms Palmer worked for a recruitment consultancy in the education sector. Under her restrictive covenant, for six months after her employment ended she wasn’t allowed to solicit or deal with the job candidates or client schools that she had dealt with in her last 12 months.

Was that enforceable? The facts seemed to suggest not:

1. that particular market is driven by candidates, rather than consultancies;

2. the ultimate recruiters owe little loyalty to the consultant; and,

3. lots of the information about clients is publicly available anyway.

So was there actually anything for the employer to protect?

Yes, the Court held. It was fundamental to Ms Palmer’s role that she built relationships with recruiters and candidates. That relationship could distinguish this consultancy from its competitors. As well as that, she would also have been privy to important information that would not have been publicly available.


Protected Disclosures
Norbrook Laboratories v Shaw

A protected disclosure can alert employers to the fact that they may be breaching, or could at some later time breach, their legal duties.

They’re made by employees who are concerned about issues including health and safety and criminal activity. And, to be classed as protected, these disclosures must contain information rather than just allegations. Employees who are dismissed for having made protected disclosures (or ‘blown the whistle’) have the right to claim automatically unfair dismissal, with unlimited compensation and no two-year qualifying period. To avoid that risk, employers must be sensitive to any and all communications in which employees raise concerns – as this case highlights.

Mr Shaw was the manager of a sales team. He was worried about the dangers of staff driving in snowy conditions and sent separate emails to a number of managers. In his three emails he:

- asked if there were relevant policies and if risk assessments had been carried out;
- asked for guidance on what to do, given that there was pressure on his team to be on the roads in dangerous conditions;
- informed HR of the danger and pointed out the duty of care.

When Mr Shaw was later dismissed, he claimed that it was because he had made a protected disclosure. But had he?

The answer was yes. Even though each individual email was not a protected disclosure, collectively the emails were. In this case, it was relevant that one of the people who received an email would have been aware of the fact of an earlier email. It was also relevant that Mr Shaw’s emails didn’t merely make allegations or give his option – they set out information (he was drawing his employer’s attention to a dangerous situation), and that was important to the decision about the status of his disclosure.

A reminder then not to regard single communications as failing to meet the criteria of a protected disclosure. Think instead about the course of correspondence.


Pool for Comparison
Naeem v Ministry of Justice

Claims for indirect discrimination hinge on comparisons between the treatment of one group of people as against others. But the correct comparator isn’t always obvious, as Mr Naeem found out.

He was a Muslim prison chaplain employed by the Ministry of Justice (MOJ) since 2004. His pay scale was based on length of service. Before 2002, the MOJ only employed Christian chaplains. Mr Naeem argued that that put him and other Muslim chaplains at a disadvantage because they could only progress through the pay scale from 2002. He brought a claim for indirect discrimination.

The Employment Appeal Tribunal (EAT) looked carefully at the pool for comparison. Should it have included the Christian chaplains who were employed before 2002? The EAT said not. Under the Equality Act 2010 there must be no material difference between a Claimant and the comparators except for the protected characteristic. So, given that there were no Muslim chaplains employed before 2002, the correct comparator would be a non-Muslim chaplain who started in 2004.

Mr Naeem had been treated in the same way as any chaplain who began work at the MOJ in 2004, and so there had been no indirect discrimination.


Pre-Termination Discussions
Portnykh v Nomura International Plc

‘Without prejudice’ conversations are a human resources hotspot. What can be said freely in the lead-up to an employee’s termination without fear of it being repeated during a tribunal hearing is, at best, confusing.

But what about where the employer is prevented at tribunal from referring to discussions which it didn’t think were properly without prejudice? (Those relaxed conversations which were not influenced by the threat of an impending tribunal claim, for instance?) The Employment Appeal Tribunal (EAT) has highlighted how details of the most amicable discussions where there is no actual dispute can be inadmissible in evidence.

Ms Portnykh was dismissed for gross misconduct. There were then some negotiations between her and Nomura about whether redundancy could be the reason for her dismissal, and a draft compromise agreement was prepared. When these negotiations broke down she brought an unfair dismissal claim.

One of the issues was whether correspondence relating to the negotiations and marked ‘without prejudice’ could be referred to during the claim. Nomura wanted to rely on that correspondence in its defence but Ms Portnykh argued – successfully – that it was inadmissible.

The EAT held that there doesn’t have to be an ‘actual’ dispute between the parties in order for discussions to be truly without prejudice; the rule can apply where there is a ‘potential’ dispute too. And there doesn’t have to be a claim in progress or a hostile environment in order for there to be a ‘dispute’. It’s enough that there is the potential for litigation.

In this case, discussions about redundancy and ex-gratia payments clearly pointed towards there being either a dispute or a potential dispute.


And Finally….
HR Director taken Hostage

If you think being a HR professional is tough in the UK, take a moment to think about our colleagues over the channel.

Earlier this month, hundreds of employees at a Goodyear factory in Amiens, northern France, took the HR Director and another employee hostage in protest at the imminent closure of the factory. This is not uncommon in France where, until a few years ago, agreements made between management and workers were enforceable in courts even when the manager agreed under duress.

Fortunately, it all ended well. The two hostages were freed a few days later after police intervened.