People law in brief - October 2011

With Halloween coming up at the end of the month there are certainly some scary surprises for employees in store if the Government gets their way. I have used this month’s Focus Point to take a detailed look at the Government's latest controversial proposals to reform the Employment Tribunal system to make it harder for employees to bring Tribunal claims.
 
It will be of little comfort to employers that as well as Halloween October also brings an increase to the National Minimum Wage. Employees aged 21 and over will from 1 October 2011 have to be paid a minimum of £6.08 per hour.

In Briefcase News I also look at the nightmare consequences for an employer who inadvertently dismisses an employee as well as reminding you of the spectre of employee sick pay and annual leave entitlement in What this Space... 

And finally I would like to extend a warm invitation to Taylor&Emmet's Annual Employment Law Review on 8 December 2011. This is a free event designed to highlight the most important changes in case law and legislation in 2011 as well as taking a look at what changes to expect in 2012. This event has been very popular in the past so to be sure of a place book early using the panel on the left hand side of this page to avoid disappointment.

Focus point

For the last 18 months, the new Coalition Government has been conducting an Employment Law Review to ensure that domestic legislation allows businesses to trade in a difficult economic climate and balances the rights of employees against the rights of their employers. 

The Government "inadvertently" let the cat out of the bag a week or so early when the proposed changes became widely reported after the Chancellor, George Osborne, mentioned the reforms in his speech at the Conservative Party conference. The reforms include an increase to the qualifying period for unfair dismissal from one year to two years with effect from 6 April 2012. It is perhaps unsurprising that these proposals have been put forward, given that last year the amount of Tribunal claims submitted rose by 56% to an unprecedented 236,000, leaving the Tribunal system struggling to cope.

The Government are hoping that the implementation of these proposals will boost the UK economy.  It is anticipated that the change in legislation will save businesses approximately £6 million per year.
 
At present, employees can only bring a claim with less than 12 months’ service if they were dismissed for asserting a statutory right, in discriminatory circumstances, or for a reason connected to health and safety.  It is envisaged that the Government’s proposals may therefore have the unintended consequence of increasing the number of vexatious or misconceived discrimination claims being brought by unscrupulous employees seeking to bring unfair dismissal claims through the back door.

Whilst there has not yet been official confirmation, it is anticipated that transitional provisions will apply, and that current employees with more than one year but less than two years service may not be affected by the legislation.
 
In addition to raising the qualifying period of employment, it is envisaged that from December 2013, there will also be the introduction of Tribunal fees.  It is currently proposed that employees will be required to pay £250 when submitting a claim and then a further £1000 when the claim is listed for hearing. These fees would be refunded to the Claimant should they win their claim, but forfeited if they lose.

Whilst this is likely to deter some employees with potentially spurious claims unfortunately, this could mean that genuine Claimants on low incomes cannot afford to bring claims in the Tribunal. The final consultation on Employment Tribunal fees is due to be publicly reported next month but some experts anticipate that a fee waiver scheme will be recommended in order to allow access to justice for those on low incomes.  

Briefcase news

A recent decision in the Court of Appeal, CF Capital v Willoughby has highlighted the importance to employers of ensuring a good level of communication between employer and employee when it comes to altering the terms on which an employee is engaged.

In this case, the employer gave the employee notice of dismissal on the basis that the parties were in agreement about the terms of a new agency contract, under which the employee would switch from employment to self-employment.  Unfortunately, the employee was not actually in agreement to this variation, and it transpired that she was unwilling to accept the new contract.  The employer at this stage attempted to retract the notice of dismissal. However, the employee chose to claim wrongful and unfair dismissal.

Rejecting the employer's "Special Circumstances" argument, the Court found that the employee was entitled to conclude that the giving of notice was a conscious, rational decision by her employer and to take what was communicated at face value.

The case confirmed that notice of termination can very rarely be withdrawn without the other parties express consent.  It highlights the consequences to employers of proceeding on the basis of what could potentially be a misunderstanding.  The Tribunal noted that this could have been avoided, if the employer had communicated the content of their discussions and sent the employee a written letter containing the proposed new agreement before terminating her employment. 

An important decision made this month for employees came in the case of Pine v DAS Legal Expenses Insurance Company Limited where the High Court confirmed that an employee was entitled under the Insurance Companies (Legal Expenses Insurance) Regulations 1990 and the terms of her legal expenses insurance to instruct a public access barrister direct, rather than using a solicitor.  The Claimant in this case sought a declaration that she was entitled to choose a Barrister of her own accord without having to instruct a solicitor first, as DAS had claimed.  The terms of her insurance policy specifed that an employee is entitled to instruct a “lawyer” to pursue the case on her behalf. 

 A "lawyer" for the purposes of the Insurance Regulations 1990 is a person entitled to pursue his professional activities under one of the denominations laid down by Council Directive 77/249/EEC.  These are identified as an "Advocate", "Barrister" or "Solicitor".

In addition, this month the first successful prosecution and conviction under Section 2 of the Bribery Act 2010 has taken place.   A former magistrates' court clerk has been prosecuted under the Act for accepting a bribe with the intention of improperly performing his functions.  The clerk accepted a bribe of £500 in exchange for omitting to record an individual’s road traffic offence. 

An individual guilty of a Section 2 offence could face a maximum of ten years' imprisonment, a fine, or both.  Sentencing of this individual is due next month. 

Watch this space...

In the continuing saga that is employee sick pay, permission to appeal has been granted in NHS Leeds v Larner 2011, whereby the employer is appealing against the EAT’s decision that a worker who had been on sick leave for an entire year was entitled to a payment in respect of that year’s holiday pay on the termination of her employment. 

And finally...

Don't forget that on Tuesday 1 December 2011 the Employment Law team at Taylor & Emmet are running a seminar on Getting to Grips with Disciplinary Investigations. 

The seminar is designed to equip people managers to approach disciplinary issues with confidence and to get it right first time.  It will cover the difference between conduct and capability issues, a step-by-step guide to conducting a disciplinary investigation, potential outcomes and when a dismissal may be a fair one, and how to tackle different or sensitive issues which may arise during the process, including grievances. 

The cost is £125 per delegate and is on a first come, first served basis but you can take advantage of our buy one get one half price offer. We hope to see you there.

 If you would like to see more detail about the this course of the other training offered by Taylor & Emmet please follow the link to T & E Advance on the left hand side of this page.