A new Supreme Court replaced the House of Lords as the highest and final appeal court in the United Kingdom as of the 1st October 2009.

The House of Lords recently held in Stringer v HMRC (2009) that employees on sick leave are entitled to accrued holiday pay and can carry over their holiday entitlement to following years if they are too ill to take it (or if their employment terminates without having had the opportunity to take it, they are entitled to be paid in lieu instead). This decision follows a ruling in January 2009 by the European Court of Justice (ECJ) which confirmed that employees are entitled to accrued holiday pay throughout the entire period they are off sick. Nevertheless, under the Working Time Regulations 1998, employees were obliged to either take there annual holiday leave within 12 months or lose it, and the regulations effectively limited claims for unlawful deductions from wages to the 3 previous months worth of deductions from the point of bringing a Tribunal claim. Hence, following the ECJ decision in Stringer, there was a clash with the Working Time Regulations which the House of Lords has now deliberated upon. The House of Lords confirmed that the ECJ’s decision superseded the Working Time Regulations. Consequently, claims for unlawful deductions of wages are now no longer limited to just the previous 3 months worth of unlawful deductions. Instead, employees can now claim for all unlawful deductions that have been made by their employer that form part of a series of deductions, so long as they commence Tribunal proceedings within 3 months of the final (and therefore most recent) deduction being made.

The Statutory Dismissal and Grievance Procedures were abolished in England and Wales from the 6th April 2009. From this date, should an employer be contemplating dismissing an employee, then they are now expected to adhere to the new ACAS Code of Practice. Whilst compliance with the new Code is not compulsory, should an employer or employee unreasonably fail to comply, then an Employment Tribunal has the power to increase or decrease any compensation award by up to 25%.

Given this, it is advisable for employers to comply with the new Code. Under the new Code, employers should undertake a thorough investigation in order to determine the full facts before initiating any disciplinary proceedings. They should also permit an employee to be accompanied to any investigation hearing by a work colleague or Trade Union representative, and any period of suspension should be on full pay. Ultimately, should the employer deem that disciplinary proceedings are warranted following the investigation, then they should provide the employee with written notification. In the notification letter, the employer should set out the full case against the employee (including enclosing pertinent documentation), invite them to a disciplinary meeting, and advise them of the potential consequences of the disciplinary proceedings (e.g. dismissal). At the disciplinary hearing, the employer should again permit the employee to be accompanied by a work colleague or Trade Union representative, and the hearing should be objective and fair and conducted in a manner that allows the employee to set out their defence in full (including calling witnesses should they so wish). After the hearing, the employer should provide the employee with written notification of the outcome and they should also advise the employee in the letter of their right to appeal. The same principles that applied to the disciplinary hearing also apply to the appeal hearing, and the appeal process should be handled by a more senior manager. After the appeal hearing, the employee should again be advised of the outcome in writing. This very short summary is by no means exhaustive, and readers should therefore consult the new ACAS Code of Practice for further details.

As stated, should the employer or employee unreasonably fail to comply with the new ACAS Code of Practice, then the Employment Tribunal has the power to increase or decrease the compensation awarded by up to 25%. Nevertheless, should the Employment Tribunal find that the dismissal would have been fair had a fair procedure been followed, then in line with the case of Polkey v A. E. Dayton Services Ltd (1988), they also have the power to reduce or even eliminate any compensation award.

The Employment Appeal Tribunal recently held in the case of Alemo-Herron v Parkwood Leisure (2009) that where the transferor in a TUPE transfer negotiates a pay increase under a collective agreement with a Trade Union post TUPE transfer, then the transferee is bound by the collective agreement to honour the pay increase.

In June 2008, in the case of London Borough of Lewisham v Malcolm (2008), the House of Lords held that the correct comparator in disability discrimination cases is to compare the manner in which the disabled person was treated to the way in which a non-disabled individual would have been treated in the same situation. This represented a reversal of the position that had been established a decade ago by the Court of Appeal in Clark v Novacold (1999). Nevertheless, the Malcolm case was a housing case and there was a degree of uncertainty over whether it also applied to employment law cases as well. However, in the case of Child Support Agency v Truman (2009), the Employment Appeal Tribunal has just held that the method set out in the Malcolm case does also apply to employment law cases.

The statutory dismissal & grievance procedures are abolished on the 6th April 2009. At the same time, the new ACAS Code of Practice on Disciplinary and Grievance Procedures will come into effect and the Tribunal will have the power to increase any award by up to 25% where they deem that an employers failure to adhere to the ACAS code to be unreasonable.

The new compensation rates that will apply from the 1st February 2009 to dismissal and other cases have just been announced. The new rates in dismissal cases are as follows:-

The Basic Award
The basic award is calculated according to a formula based upon age, length of service, and average gross weekly pay. The figure for average weekly pay is capped at £350 per week maximum and only the most recent 20 years will be taken into account in terms of length of service. The basic award is calculated in detail as follows:-

• Years of service below 22 years of age, the weekly pay is multiplied by 0.5

• Years of service between age 22 and 41, the weekly pay is multiplied by 1

• Years of service from age 41 onwards, the weekly pay is multiplied by 1.5

Accordingly, the maximum basic award is 20 years at £350 x 1.5 = £10,500.00. 

Where an employee is dismissed for a reason connected with their role and they were an employee representative, an occupational pension trustee, a trade union member or representative, or a safety representative (or were in the process of becoming a safety representative), then the absolutely minimum basic award is £4,700.00, although this may be reduced in certain circumstances (see Unfair Dismissal Page of website)

The Compensatory Award
The maximum compensatory award from the 1st February 2009 will be £66,200.00.

The basic and compensatory awards when combined produce an overall maximum award of £76,700.00.

In the case of The Royal Bank of Scotland (RBS) plc v Harrison (2008), the Employment Appeal Tribunal (EAT) have clarified the position with respect to employees right to parental leave in relation to unexpected emergencies under s57A(1)(d) of the Employment Rights Act 1996. In the Harrison case, the employer, RBS, refused parental leave on the grounds that the right to time off to care for dependants only arose, they argued, in “a sudden and unexpected emergency”. They then pointed out that the employee concerned, Mrs Harrison, had had two weeks notice of the problem and contended that in these circumstances, she was not entitled to parental leave. The EAT, however, like the Employment Tribunal which first heard the case, disagreed.  They held that the emergency need not be sudden, only unexpected. Whilst there had been 2 weeks notice of the problem, the fact remained that the problem was unexpected. The only relevance the 2 weeks notice had in this case and the time factor has in general, is in relation to whether the time off is necessary. Any noticed received of a problem obviously provides the employee with time to make alternative arrangements. However, in this case, Mrs Harrison had tried to make alternative arrangements, but these endeavours had proved unsuccessful. In view of this, the EAT held that Mrs Harrison had been entitled to parental leave as her emergency was unexpected, and it was necessary for her to take the time off to address the issues arising out of the emergency.

In the recent case of Commissionaires Management v Hughes (2008), the Employment Appeal Tribunal clarified the following aspects of the Working Time Regulations 1998: -

• Alternative rest breaks should be provided where a scheduled rest break cannot be taken at the appointed time

• Tribunal claims must be brought within the normal stipulated time periods. Breaches prior to this will be deemed out of time even where an employer has been in breach of the regulations on an ongoing basis over a period of time.

• Whilst there is an entitlement to a single rest break after 6 hours, there is no entitlement to an additional rest break for working 12 hours

ACAS has announced that it is revising its code of best practice with respect to dismissal and grievance procedures in anticipation of changes that are likely to come into place as a result of the Employment Bill that is currently going through Parliament.

The Court of Appeal recently held in the case of Haine v Day (2008) that where there has been a failure to consult by a company prior to its going into liquidation and where a Tribunal subsequently makes a protective award as a result, then it is recoverable as a provable debt post liquidation.

The question of whether someone is redundant (and therefore entitled to a redundancy payment) in circumstances where they were dismissed and then re-engaged on new terms and conditions arose in the recent Employment Appeal Tribunal (EAT) case of Martland v Cooperative Insurance Society (2008). The EAT held that it was not a redundancy situation and that the employees concerned had been dismissed for “some other substantive reason”.

The very difficult question of when a controlling shareholder is also an employee has been looked at in two recent cases in the Employment Appeal Tribunal: Clark v Clark Construction (2008) and Neufeld v A&N Communication in Print Ltd (2008). Essentially, the Employment Appeal Tribunal has held in both cases that each case has be looked at as a whole on its own facts. The fact that the individual is a controlling shareholder may raise doubts as to whether they are also an employee, but does not of itself prevent them from being an employee.

In the case of Kutzel v Roche Products Ltd (2008), the Court of Appeal recently held that where an employee challenges the reason given by the employer as the real reason for their dismissal and the employee contends that another reason was the real reason, the fact that the employee contests what the real reason was and advances some other reason does not transfer the burden of proof to the employee. Instead, the burden of proof remains with the employer to prove that they dismissed the employee for the reason they gave.

The Employment Act 2002 introduced fixed conciliation periods which limited the period ACAS had to conciliate to a defined limited period. However, the Government has now indicated that it will be abolishing fixed conciliation periods. Accordingly, from the beginning of April 2008, ACAS will now be looking to conciliate in all cases throughout the duration of each case.

We are looking to recruit a newly qualified - 2 year pqe solicitor with at least a years experience of handling employment law matters both on the employee and employer side. Position comes with excellent salary and prospects and the vacancy is at our Wavertree, Liverpool office. Should you be interested in applying for the position, then please email your CV and a covering letter to info@theemploymentlawsolicitors.co.uk

In the recent Court of Appeal case of Richmond Adult Community College v McDougall (2008), the Court examined the question of when a disability condition, once symptoms have ceased, can be regarded as “likely to recur” to render it a condition classifiable as a disability for the purposes of the Disability Discrimination Act 1995 (DDA 1995). Where symptoms have ceased, an employee is not regarded as disabled for the purposes of the DDA 1995. However, under the DDA 1995, the employee would be regarded as disabled if the symptoms are “likely to recur”. But when can a condition be regarded as “likely to recur”? In the Richmond case, the Court held that matters which take place subsequently to the alleged act of discrimination (i.e. such as a recurrence of symptoms) cannot be taken into account when assessing the position. The assessment must instead be based upon the state of knowledge at the time of the alleged act of discrimination and if the assessment was that the condition was unlikely to recur, then the employee cannot be regarded as disabled even if they later suffer a recurrence.

In the case of Jackson v Computershare Investor Services (2007), the Court of Appeal recently held that The Transfer of Undertakings (Protection of Employment) Regulations (i.e. TUPE) does not bestow extra rights upon employees with the effect of enhancing their employment position. The Court stated that TUPE does no more than preserve existing employment rights.

The Employment Appeal Tribunal (EAT) recently held in the case of Homeserve v Dixon (2007) that when employers write to employees inviting them to a disciplinary meeting as per the statutory disciplinary and dismissal procedures, there is no requirement for the employer to expressly state in the letter that they are contemplating dismissal. The EAT ruled that potential dismissal was implied in such letters by virtue of the fact that the employee is being formally invited to a disciplinary hearing.

The year 2006/07 has witnessed a surge in claims according to the Tribunal Service. This is in large part due to a large rise in the number of equal pay and sex discrimination claims and the introduction of age discrimination legislation which came into force in October 2006. Overall, the number of claims rose from 115,039 to 132,577, an increase of 15%. Proportionately, unfair dismissal claims made up the largest number (33.56%), closely followed by equal pay claims (33.20%) which increased by 155% compared with 2005/06. In contrast, the number of appeals to the Employment Appeal Tribunal fell by 22%.

The Court of Appeal recently upheld the decision of the Employment Appeal Tribunal in the case of McAdie v Royal Bank of Scotland (2007). The Court held that even where an employer is responsible for an employee’s illness or injury, this fact does not preclude an employer from dismissing the employee fairly on the grounds of long term incapacity. Nevertheless, employees do still have the option of suing the employer in the civil courts for having caused their illness or injury. Moreover, where the injury or illness is regarded as a disability under the Disability Discrimination Act 1995, the employer is under an obligation to determine whether reasonable adjustments can be made which would facilitate the employees return to work. Only when it has been determined that no reasonable adjustments can be made, should the employer contemplate dismissal on the grounds of long term incapacity. Even then, following the McAdie ruling, the employer should “go the extra mile” to determine whether some means can be found to enable the employee to return to work.

The Employment Appeal Tribunal has recently held in the case of TGWU v Safeway Stores (2007) that an ET1 Claim Form can be amended to facilitate a new cause of action provided that it relies upon facts already pleaded, even if limitation has expired on the new cause of action.

ACAS recently announced that it will be extending its services to encompass some Employment Appeal Tribunal cases such as cases which may be referred back to the employment tribunal and those involving an ongoing employment relationship.

The Employment Appeal Tribunal (EAT) has recently held in the case of Blundell v St. Andrew's Catholic Primary School (2007) that in the situation where female employee's are entitled to return to the same job upon completion of their maternity leave, to constitute the same job, then the 3 key factors that determine whether it is the same job are the nature, capacity and place of the job. In the case itself, the Claimant was a primary school teacher and the job she returned to was as a primary school teacher, but with a different set of pupils. Accordingly, the EAT held that as she was returning as a primary school teacher, then for the purposes of the law she was returning to the same job.

In the recent case of Lawrence v HM Prison Service (2007), the Employment Appeal Tribunal (EAT) held that Claimant’s do not have to bring a grievance prior to lodging a tribunal claim where they allege discrimination which emanates from a dismissal (i.e. where the Claimant is bringing both an unfair dismissal claim and a discrimination claim, and the discrimination claim pertains to an allegation that the dismissal was discriminatory).

The EAT has also held in the case of London Borough of Hounslow v Miller (2007) that where Claimant’s lodge a tribunal claim in circumstances where they should first have sent a grievance letter to their employer and waited 28 days before lodging their claim with the tribunal, the claim must be rejected by the tribunal.

The High Court has held that the Government has failed to properly incorporate the provisions of the European Equal Treatment Directive into the Employment Equality (Sex Discrimination) Regulations 2005. In particular, it held that the harassment definition was too narrow (it does not include harassment from clients, for example) and there was a lack of clarity over maternity leave rights (for example, women’s rights re promotion during maternity leave). The Government has been ordered to report back to the Court on its proposals for rectifying the position.

In the recent case of James v Redcats (2007), the Employment Appeal Tribunal had to consider the question of what constitutes an employee as compared with a self-employed contractor. The most important question to ask, Justice Elias stated, was “whether the obligation for personal service is the dominant feature of the contractual relationship or not. If it is, then the" individual concerned is more likely to be an employee.

The Employment Appeal Tribunal has recently held in the case of Airbus UK v Webb (2007) that an employer is not entitled to take expired disciplinary warnings into account when determining whether to dismiss an employee. In the Judgment, Elias P stated that “a tribunal is obliged, and not merely entitled, to ignore expired warnings”.

Judgment was handed down in the case of Madarassy V Nomura (2007) by the Court of Appeal on the 26th January 2007 and it has serious implications for those wishing to bring discrimination claims.

The Sex Discrimination Act 1975 was amended in 2001 to improve the chances of bringing successful discrimination claims. In the case of Igen v Wong (2005), the Court held that under the 2001 amendments, once an employee has established facts which constitute a “prima Facie” case against their employer of having being discriminated against, the burden of proof transfers to the employer thereby placing the onus upon the employer to prove that there had been no discrimination. It was thought following the Igen case that when endeavouring to establish a “prima facie” case, the employee need not conclusively prove their entire case. All that was required, it was thought, was that the main facts of the case be proved, as once proved, then the employers conduct could very well amount to discrimination. Accordingly, it was considered only fair to transfer the burden of proof onto the employer to prove that their conduct was otherwise. However, in the Madarassy case, the Court of Appeal has now held that the employee does have to conclusively prove their entire case to establish a “prima facie” case. Hence, what has effectively happened is that the intended effect of the 2001 amendments have been overturned and there is now only what amounts to a nominal transfer of the burden of proof onto the employer. How could there be any kind of genuine transfer when the onus is firmly upon the employee to first conclusively prove their entire case.