Employment Bulletin August 2004

Do you want the good news or the bad news? The good news is that last few months have seen few statutory changes in the employment field. The bad news is that there have been a number of key cases that you should be aware of and there are number of very large changes coming into force on 1 October 2004. In summary:

Statutory Dispute Resolution

From 1 October 2004 the new Disciplinary and Grievance procedure rules are coming into force. After that date, failure to follow these rules can result in unfair dismissal claims that you cannot defend, as well as an increase in the award of compensation. This will apply to all employers irrespective of size.

It is essential that before that date, all Employers review their disciplinary and grievance procedures to ensure that they comply with the new rules. Steps should also be taken to give staff who deal with personnel practical training.

We will be running workshops on 2 and 9 September 2004 to help you put the changes in to place…so please seek help to ensure you are not caught out.

Awards for Injury to Feelings

Readers of our last bulletin may recall there was ongoing uncertainty as to whether or not an award for unfair dismissal could include compensation for injury to feelings.

The Court of Appeal in the case of Dunnachie v Kinston upon Hull City Council declared in February that these aspects should be compensated. The good news for Employers is that this decision has now been overruled by the House of Lords, who have confirmed that damages for non-economic losses are not recoverable in unfair dismissal cases.

This means that in unfair dismissal cases, Tribunals will once again be focusing on the pure financial loss of the Employee, simply aiming to put them in the position they would have been in financially had they not been dismissed.

Be aware that this is in contrast to discrimination, victimisation and harassment cases where it is still perfectly valid for an Employee to claim additional damages for injury to feelings due to the way that they have been treated.

Offering Money to an Employee To Leave

Until recently, making an offer of money was thought to be a simple method of getting rid of Employees. The choice would often be given to resign with some money (and possibly a good reference) or risk being dismissed. If the discussions surrounding the offer said to be ‘Without Prejudice’ it was thought that they would be private and could not be disclosed to an Employment Tribunal later.

Two recent cases have shown that this is now a very risky path to take, unless great care is taken to preserve the true ‘Without Prejudice’ nature of the meeting. If it is not protected then anything said could be considered by a Tribunal and could be used to prove the Employee’s case. In a worst-case scenario, the Tribunal could rule that the sheer fact that an offer has been made breaks the relationship of trust and confidence. This could amount to a constructive unfair dismissal.

The cases have set the following guidelines to be followed if an Employer wishes to make a ‘Without Prejudice’ offer:

1. There must be a genuine dispute between the parties. Disciplinary proceedings must therefore have been commenced against the Employee;
2. The Employee must be informed of the nature of the “Without Prejudice” discussion before it starts and asked if they agree to speak on this basis. This should be recorded in writing. No discussions should be held if the employee does not agree to talk privately;
3. The Employer must not behave unfairly while speaking ‘Without Prejudice’. You should ensure that you do not discriminate against the Employee, make threats, nor indicate that the outcome of the ongoing dispute or disciplinary procedure is pre-determined;
4. Finally, if the Employee agrees to the settlement proposal, a compromise agreement must be put into place. This agreement will preclude the Employee from bringing any Employment Tribunal proceedings.

Maternity Obligations

A recent decision of the EAT has highlighted the dangers of failing to advise those on maternity leave of internal job vacancies. The Employee in this case successfully claimed constructive dismissal on the grounds that the Employer had fundamentally breached the implied duty of trust and confidence in failing to notify her of a vacancy for which she was not even qualified! This raises the question of what other information you should pass to an Employee who is on maternity leave?

The gut reaction is to arrange for them to be sent details of any posts that become available. Employers must however be mindful of the need to avoid being perceived as harassing women by sending them information on jobs that they would be unlikely to apply for.

A pragmatic solution is to have a pre-maternity leave meeting with the Employee to establish whether there are any issues the Employee is concerned about and to agree the level of contact that they would like to have with the Employer during their absence.

This is an opportunity to offer to notify them of vacancies, pay rises, redundancies and significant organisational changes. You should ask if they would like to continue to receive any updates or promotional material that they normally receive regularly while at work. You should also offer to review their work at the same time as other employees.

Similarly, a return to work meeting is advisable, to bring the Employee up to date with changes at work, introduce new staff and to ascertain what additional training or support they may wish to receive.

Holiday Pay

If an Employee works additional hours as overtime in the weeks before they take annual leave, should the increase in their salary be reflected in their holiday pay? The recent case of Barnsey v Albon Engineering said not – holiday pay need only be an amount equivalent to the pay for their contractual working hours. This gives all the more reason to have a clear contract of employment setting out contractual hours.

Be aware that ACAS has now produced a useful advice leaflet on holiday provisions. This can be accessed at www.acas.org.uk.

Eastern European  Workers

On 1 May, the European Economic Area expanded to include ten new Eastern European countries, giving the nationals of those countries the right to work in the UK. Many of these workers are migrating to the South West to take up seasonal service and agricultural work.

Employers need to be aware that these workers need to comply with a ‘workers registration scheme’ in order to work legally. This means within one month of gaining employment they have to register with the Home Office. On receipt of this information, the worker will receive a Registration Card and their Employer will be sent a Registration Certificate, confirming they are legally entitled to work. Employers can be held liable if they employ workers who do not register. If you require further information, please do seek advice.

Disability Discrimination Act

From 1 October 2004 all business must comply with the DDA, large or small. For further details see our briefing note ‘Disability Discrimination from October 2004’.

For further information on any of the above, please contact
martin.follett@follettstock.co.uk or verity.slater@follettstock.co.uk