SME concessions fail to promote interests of most employees.

Employers with fewer than 250 staff will be exempted from having to give staff the right to request time off for training. This is just the forerunner of what could be a series of measures designed by the UK government to assist smaller employers.

Mark Prisk, the Business Minister at a meeting with the Federation of Small Businesses in Liverpool yesterday, made the announcement that there will be a thorough review of the effect of regulations on small businesses.

Whilst it is to be welcomed that measures are being looked at to aid business recovery in the UK, there is a danger that the rights of individual workers will be seriously eroded. It is worth noting that SMEs account for the employment of approximately 51% of all employed workers in the UK. Measures which take rights away for employees will, therefore, affect the majority of the working population.

An exemption from having to give workers the right to request time off for training is one thing, but if there are reductions in the more basic employment rights, such as changing the right to claim unfair dismissal so that a qualifying employee must have 2 years' continuous service, the progress that has been made over many years in protecting employees could be reversed.

Employment rights have been established for good reasons. There has to be a balance between the right of free enterprise on the one hand and the right of individuals to have some form of security of job tenure and freedom from oppression.

Some say that the scales have tipped too far in favour of workers. Others argue that the law should remain as it is and that it is for employers to learn to act reasonably, fairly and without discrimination when managing their staff.

In times when there is a scarcity of national funding to inject into UK businesses to aid recovery, is this simply a case of the Government wanting to be seen to be doing something to assist SMEs and playing with legal restrictions as some kind of token gesture at the expense of employee rights in the longer term?

Employment Lawyers Want Reforms to the Employment Tribunal System

11 days ago Andrew Berk asked a question on LinkedIn (Employment Lawyers Networking & Referral Group):

"What reform(s) to the Employment Tribunal System Would You recommend?"

Lawyers responded with the following suggestions and concerns:

• increase to £75,000 the power of the tribunals to deal with contractual claims
• do ETs have the expertise to deal with the range of issues that one sees across the employment/commercial contract sphere?
• there are too many cases brought which have no reasonable prospect of success; a more robust approach to awarding costs would help address this , especially where a party has made reasonable attempts to settle and the other party has refused, been obstructive or delayed entering into negotaitions. The cap on. costs which can be made by a Tribunal without having costs assessed , should be removed
• There ought to be an equivalent Part 36 jurisdiction in ET proceedings.
• I would like to see the tribunal's jurisdiction extended to cover freestanding bullying and harassment outside of discrimination.
• It's controversial, but how about this - a Claimant who is dismissed for alleged poor performance or misconduct and whose dismissal letter and references record that,should be able to go to an ET and if successful, get those documents expunged from their record with a "Tribunal ordered" document or record to replace them.
• My experience of Judicial mediation has been very positive but all too often one party will not agree to using it only to settle at a later stage - unreasonable refusal should also have some sort of penalty ?
• To introduce a more robust costs regime (and I include a Part 36 type procedure as part and parcel of that) would only serve to increase costs for both parties. It inevitably carries the danger of detailed assessment by either an Employment Judge (and they are busy enough already) or by a District Judge with little or no knowledge of the complexities of an Employment case. The tools are there, the ET just needs to be willing to use them.
• Surely, there should be some sort of Pre-Hearing Review mechanism (without the stigma) for each case (although it may not be administratively workable) so that each case is reviewed at an earlier stage so that any possible issues i.e. limitation/jurisdiction, poor merits etc are dealt with and claims and responses without any reasonable prospect of success are thrown out.
• In my view the current rules are fine, they're just not used effectively by the Tribunals. I agree completely about the failure to punish those parties who do not comply with Orders.

So there we have it. In a matter of a few days we see different views from various practitioners. This debate itself shows the difficulties that face the architects of new legislation on how the tribunal system should function for the better. The lack of consensus is to be encouraged, for it demonstrates the varied creativity of the professionals in this arena. To get the best ideas, you need to start with lots of ideas (ref. Thomas Edison).

Let's have more views, please.

Videos of Employment Tribunal Process

The Employment Tribunals Service has now published two videos online to show briefly how a case runs in practice.

Viewers can see what a typical tribunal hearing room looks like, how witnesses book in with the tribunal clerk, take the oath or make an affirmation, read out their statements and undergo cross-examination.

Financial details of payout under compromise agreement to CEO of Council were disclosable

Craven District Council has been forced to disclose the financial details of a compromise agreement it entered into with a former Chief Executive Officer, because this information concerned the use of public funds. This was the recent decision of the First-tier Tribunal (Information Rights).

It was accepted by the tribunal that the majority of the information in the compromise agreement was exempt from disclosure under section 40(2) of the Freedom of Information Act 2000, because there was a strong expectation of privacy in connection with a compromise agreement. It would be unfair to require disclosure.

However, the Tribunal did not consider it reasonable to expect that information relating to the use of public funds could be kept back from the public on the strength of a confidentiality clause in the compromise agreement. The Tribunal was influenced by the fact that the former CEO was the most senior officer at the Council. In addition, they took into account the circumstances in which the CEO had left the council: there was an ongoing financial crisis at the time,an £800,000 overspend and a requirement to save £2.5 million.

ACTION POINT

One of the motivating factors for an employer to settle matters with a disgruntled employee is to avoid publicity. Negotiated figures sometimes reach higher levels when the employer is confident that the monetary terms are protected from disclosure by a confidentiality provision in the settlement agreement.

With this latest case, publicly funded bodies are reminded that when considering what can be withheld from public knowledge, it is not as clear cut as they might otherwise have thought.

Top 3 Employment Law Focus Areas in 2011

There are so many issues in employment law at present that it is far from easy to pick what are arguably the 3 top areas to receive focus this year. Nevertheless, I have given it a crack and here are my top 3:

1. Agency Workers Regulations (AWRs)

This has to be my number 1 foucs area. It will have huge commercial impact for those companies that use temporary workers and for the agencies that supply them.

The AWRs are due to come into force in October 2011. The key feature is that after a qualifying period of 12 weeks agency workers will be entitled to receive the same pay as comparable workers within the client business or organisation.

I know that agencies who supply temps and companies that hire them are looking at ways of minimising the adverse commercial effect of the AWRs. This is going to be a difficult task; the AWRs contain anti-avoidance provisions.

Businesses have for a long time looked upon the availability of agency workers as a means of keeping a lid on labour resource costs. At a time when UK plc is looking to pull itself out of recession, increased workforce costs are most unwelcome and restrictive. We will have to wait and see what ingenious solutions arise.

2. The abolition of the default retirement age

The UK workforce was used to the situation for many years where their employer could dismiss them and there would be no unfair dismissal claim if the employee was over the retirement age. Then the Age Regulations permitted "retirement" as a fair reason for dismissal, provided a fairly complex procedure was followed. So long as the employer followed that procedure, the employee could not complain of being dismissed on retirement.

All this will change from October 2011. From that point on, age alone cannot be a fair reason for dismissal. What can an employer do, then , if it has concerns that the age of the employee may affect their ability to do the job properly?

If an employer wants to dismiss fairly an employee over the retirement age for poor attendance or poor performance, they are going to have to follow a fair capability procedure or fair performance procedure. They will also need to show that they do not in a discriminatory way just apply those procedures to older staff. The procedures will have to be used throughout the workforce, whatever the age.

3. TUPE and administrations.

In a post on my blog on 24 Febraury 2011 I dealt with the recent case OTG Ltd v Barke and others.

The upshot of that case is that a sale of a business by an administrator, whether the sale is by way of a pre-pack or other administration process, will be caught by the Transfer of Undertakings (Protection of Employment ) Regulations 2006 so that employees will transfer to the buyer and any pre-transfer dismissals will be connected to the transfer and so automatically unfair.

This situation may appear to be good news for employees. But I feel it is likely to be disastrous for both employees and businesses. The requirement to take on a workforce which the previous employing company has been struggling to sustain is likely to be a deterrent to many buyers. The result could well be that administrators are unable to sell the business and are left with no alternative than to make all staff redundant, break up the business and sell off its assets.

That result is neither in line with the interests of good commerce, nor a sustained level of employment. For me, this development will be a material one for administrations in 2011.

Confusion over alcohol policy meant unfair dismissal

In Liberty Living Plc v Allan Reid, the Employment Appeal Tribunal (EAT) (Appeal No. UKEATS/0039/10/BI) considered a matter where the employer company had a disciplinary policy which stated that an employee could be dismissed summarily for an act of gross misconduct and this included "being under the influence of alcohol... during working hours." The company also had an alcohol and drugs policy which said that "consumption of alcohol or being under the influence of alcohol while performing company business or in the workplace is prohibited." It went on to say that "violation of this policy can result in... discharge even for a first offence." The employee had one alcoholic drink in a bar away from the workplace during the working day.

The letter inviting him to the disciplinary hearing contained an allegation of "being under the influence of alcohol during working hours." The disciplinary policy was enclosed with the letter, but the alcohol and drugs policy was not enclosed. The Employment Tribunal (ET) found as a fact that the employee was unaware of the latter policy until it was sent to him before his appeal but after his dismissal.

The employee was dismissed summarily. He was told that the reason for his dismissal was that the consumption of any alcohol at all during the working day was gross misconduct. The dismissal letter told him under the heading that indicated he was being dismissed for being under the influence of alcohol that he was being dismissed both for consuming an alcoholic drink during the working day and for being under the influence of alcohol during working hours. At his appeal, the dismissal was upheld because he had consumed alcohol during working hours.

The ET decided that this was an unfair dismissal because the employee was not aware of the alcohol and drugs policy and the policy was confusing.

The EAT agreed with the ET decision. It was incorrect for the employer to say that the employee was alleged to have been under the influence of alcohol and that this covered one alcoholic drink. The only conclusion to be drawn was that the employer had not applied its own policies nor did the employer itself know what those policies were.

What can employers learn from this case?

The employer must have clear policies, know what those policies are and make sure that employees know the policies so that they understand what standards of conduct are required of them. Any dismissals based on unclear standards of conduct or where the employee is not aware of the policies are likely to be found to be unfair.

New use of claims under the PHA?

Following the Court of Appeal decision under the Protection from Harassment Act 1997 ("PHA") in Iqbal v Dean Manson Solicitors, we may now see a wider use of the PHA to protect reputations.

The Claimant used to be employed by the defendant firm of solicitors. A few years later he represented an individual who was being sued by the Defendant in the county court. In the course of the correspondence relating to that matter, the Defendant sent three letters (two copied to the court) which contained various allegations and were serious attacks on the Claimant's character.

The Claimant issued a civil claim under the PHA alleging that the letters constituted a course of conduct which amounted to harassment.

The Court of Appeal decided that each letter was capable of being described as harassing. The judges felt that the letters arguably amounted to “a deliberate attack on the professional and personal integrity” of the Claimant, designed to put pressure on him to decline to act for his client against the Defendant firm. This meant that they were arguably evidence of a campaign of harassment against the Claimant and therefore capable of causing alarm or distress and being unreasonable and oppressive in nature.

In considering if there was a "course of conduct", the Court of Appeal decided that a claimant did not need to show that every act complained of was harassment. It is the cumulative effect of the individual acts "as a whole" that actually counts.

What are the implications of this decision?

Some commentators now suggest that, rather than sue under other torts such as defamation, it might be better to bring a claim under the PHA. The Iqbal case draws a clear connection between attacks on an individual’s reputation (especially the professional person) and the protection provided by the PHA.

Libel claims typically require allegations that a defendant has deliberately attacked the claimant’s reputation by publishing untruths. But a PHA claim could be brought for publications even if they were truthful, provided the result was the prohibited behaviour - in effect, it is possible to be both honest and oppressive and unreasonable.

The judgement can be seen in full here:

http://www.bailii.org/ew/cases/EWCA/Civ/2011/123.html