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Employment Law Update
October 2010Issue 47
Welcome to the latest issue of the Steptoe & Johnson Employment Law Update.
The Employment Law Updates are aimed at providing information on recent developments in UK employment law. It is our desire to provide you with not only an update of the law, but also a practical insight in managing workplace issues on a proactive basis.
To achieve our objectives and to continuously improve the Updates, it is important that we receive feedback from you. With a view to this, please e-mail any comments or suggestions which you may have relating to the Updates to employmentgroup@steptoe.com. We look forward to hearing from you.
To view any of the topics in this issue, please click on the relevant link below.
- The Equality Act 2010 – will it make a difference?
- Increases in the minimum wage
- Compulsory retirement for Partner at 65
- Default retirement age – Government Consultation
- Retracting notice of dismissal
- Bribery Act 2010: Consultation on Guidance
- Workplace mediation for Trade Union Representatives
- Salary sacrifice schemes
- Sex discrimination – apportionment of damages for psychiatric injury
- Redundancy during maternity leave and suitable alternative vacancies
- Redundancy – Protective Awards
- Work related stress
- Disability Discrimination
- Holiday pay and sick leave
- Unfair dismissal and pension loss
- Worker status
- TUPE – Collective Agreements
- Effective date of termination
- Information and Consultation of Employees Regulations 2004
- Flexible working
1. The Equality Act 2010 – will it make a difference?
The Equality Act 2010 came into effect on 1 October 2010 although there are some provisions which are yet to be implemented. It aims to consolidate and harmonise the extensive existing law contained in Acts, Statutory Instruments, Codes of Practice and European Directives and extend it in a limited way.
The Equality Act will repeal the current discrimination legislation but the Government has not yet published transitional provisions governing which regime the old, the new or both, will apply to claims which are currently in progress.
The protected characteristics are age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief (or lack or religion or belief), sex and sexual orientation.
One contentious provision not yet in force is one allowing voluntary positive action in recruitment and promotion where two candidates are as qualified as each other.
Detailed guidance on the Equality Act is being rolled out gradually by the Equality and Human Rights Commission, including the recently published 311 page Statutory Code of Practice on Employment. Copies are available from the Commission’s website. www.equalityhumanrights.com
Key point: Employers should consider whether this consolidation may require a review of current procedures, amendments to employment documentation and/or diversity training. Employers should also be aware of the new prohibition of asking pre-employment health questions of a job applicant save in limited circumstances.
2. Increases in the minimum wage
The increases in the National Minimum Wage take effect from 1 October 2010. The new hourly rates will be £5.93 for workers aged 21 and over, £4.92 for workers aged between 18 and 20, and £3.64 for workers aged under 18 but above school age who are not apprentices. Apprentices will receive £2.50 an hour if aged under 19 or in their first year of apprenticeship.
3. Compulsory retirement for Partner at 65
Seldon v Clarkson, Wright & Jakes Secretary of State for BIS 2010 EWCA Civ 899
In the first Court of Appeal decision on the justification of a retirement age it has held that a rule requiring Mr Seldon, who was a partner in Clarkson, Wright & Jakes, to retire at 65 was a proportionate means of achieving the legitimate aims of workforce planning and providing associates with promotion opportunities so it was not discriminatory. In this case Mr Seldon had agreed and accepted the terms of a partnership deed which provided for a mandatory retirement age of 65 and he was of equal bargaining power with the partnership.
Key point: 65 was a fair and proportionate cut off point. This case however concerned a partnership and the lawfulness of that retirement age may not necessarily apply in an employment context.
The Government intends to remove the default retirement age of 65 for all employees from October 2011 and is currently consulting on this – see below. If the default retirement age is removed, employers will have to decide whether to have a retirement age at all. If 65 is retained it will need to be objectively justified as per the Seldon case. If there is no fixed retirement age then employees will leave at their own choosing unless they are dismissed for a fair reason. The Government states that most employees work on for only 2 years’ more and work performance up to the age of 70 is not affected. Some employers already operate as if there were no default retirement age without problems.
4. Default retirement age – Government Consultation
BIS is consulting on the Government’s proposal to abolish the default retirement age of 65 with effect from 1 October 2011 following a phasing out of the statutory retirement procedures. The consultation proposes that transitional arrangements will commence on 6 April 2011. Employers with employees reaching retirement age in 2011 should be considering their options and arrangements now as they will need to justify objectively any retirement taking effect after 1 October 2011. No new statutory notices of intended retirement may be issued after 6 April 2011.
As a consequence businesses will have to review their pension and benefits schemes as well as management and employment practices as a whole. It is likely that many people will work beyond the age of 65 not only because they want to, but also because they have to, so new flexible working arrangements will be required. Consultation closes on 21 October 2010.
5. Retracting notice of dismissal
Willoughby v C F Capital plc UKEAT/0503/09
A party who has properly given notice of termination has no right to withdraw it save in special circumstances.
Capital entered into discussion with its employee, Ms Willoughby about the possibility of her switching to self-employment to avoid her redundancy. The exact terms of her self-employment had not been discussed and Ms Willoughby made it clear that she would need further details in writing in order to reach a decision. On 22 December just before the annual shutdown Capital provided Ms Willoughby with the details in the form of a written agreement on the assumption that she had already agreed these terms. The letter indicated she had agreed to move and terminated her employment contract with effect from 31 December.
Ms Willoughby responded that she would not be accepting the agreement, but she accepted she had been dismissed. Capital sought to retrieve the situation when the workplace reopened on 5 January indicating that there had been a misunderstanding. These overtures were rejected and she brought a claim for unfair and wrongful dismissal.
Capital resisted her claims. The Tribunal found that their letter of 22 December had terminated her employment but there were special circumstances namely there had been a genuine misunderstanding between the parties as to what had been agreed and Capital had sought to retract its position within a reasonable period of time as soon as it could after the shutdown. Ms Willoughby appealed this decision and the EAT agreed. The dismissal had been effective.
The fact that Capital was mistaken in issuing a letter of dismissal was not a special circumstance. Nor had the change of heart by 5 January been timely. The intervention of the shutdown was not a valid excuse. “Special circumstances” would be where words of termination were spoken irrationally or in anger, such as heat of the moment terminations or resignations.
Key point: An employer who uses unambiguous words of dismissal will dismiss an employee and terminate the contract of employment whatever their intention.
6. Bribery Act 2010: Consultation on Guidance
In September the Ministry of Justice published its consultation on guidance for commercial organisations to prevent bribery and draft guidance for the “adequate procedures” defence to the offence of failing to prevent bribery under s.7 of the Bribery Act 2010.
Although the guidance is aimed at businesses of all sizes, it will be of particular assistance to smaller and medium sized commercial organisations which may not previously have addressed this issue. S.7 of the Bribery Act 2010 will come into force in April 2011. It introduces a new offence under which a relevant commercial organisation is guilty of an offence if a person associated with it bribes another person intending to obtain and retain business or a business advantage.
It is a defence for the organisation to prove that it had in place adequate procedures designed to prevent those associated with it from undertaking such conduct. The draft guidance sets out 6 principles that are intended to give all commercial organisations a starting point for implementing a bribery free business regime, namely risk assessment, top level commitment, due diligence, clear and accessible policies, effective information, monitoring and review.
7. Workplace mediation for Trade Union Representatives
ACAS and the TUC have launched a new guide for trade union representatives on workplace mediation. ACAS have already issued a mediation guide aimed at employers. Complimentary copies of the guides are available on request.
Cycle to work arrangements and Bus passes
HMRC has published a document to provide answers to frequently asked questions on the salary sacrifice arrangements for cycles and bus passes.
Many employers have agreed to provide Cycle to Work arrangements. Employees can take advantage of a tax exemption that allows employers to loan bicycles to employees as a tax free benefit. The guidance now makes it clear that even if some employees are excluded from salary sacrifice arrangements for any reason the offer of a bicycle must still be open to them in order for the exemption to apply.
Astra Zeneca UK Limited v HMRC Case C-40/09
In this case the European Court of Justice held that benefits provided under certain salary sacrifice schemes are subject to VAT once applied to employees. Astra Zeneca operated a scheme whereby employees could sacrifice part of their salary for a £10 voucher to be used in various stores. The value of the vouchers were deducted from their pre-tax salary at £9.00. The case concerned output VAT and the ECJ decided that VAT was in fact payable on the supply of vouchers to the employees. HMRC has not yet said whether it intends to seek to recover the VAT arrears over the last 4 years or will simply require employers to change the VAT treatment going forward.
Key point: Employers should consider whether or not their salary sacrifice schemes of this type are now a viable benefit, but care must be taken if there is to be a restructuring of any contractual benefits.
9. Sex discrimination – apportionment of damages for psychiatric injury
Thaine v London School of Economics UKEAT/0144/10
Ms Thaine was employed as a painter and decorator by the LSE. She was the only female employee in her department and was a victim of sexual harassment. Her psychiatric health deteriorated and she was unable to work. Following her dismissal she successfully brought a claim against the LSE for sex discrimination. The tribunal held that the discrimination had been a material and effective cause of her ill health. However, a number of external factors had contributed to her ill health including the break up of her relationship with her boyfriend and concern over her mother’s health. The tribunal assessed the extent to which the unlawful discrimination of her had contributed to her ill health as 40% only. She appealed but was unsuccessful. The EAT found that the LSE had materially contributed to the harm but the Tribunal had been correct to reduce the award by 60%.
Key point: The proper approach in this type of case is for the tribunal to ask did the conduct for which the employer was materially liable contribute to the harm, and if so, to what extent should liability for that harm fairly be attributed to the employer? Employers should be careful therefore to consider other non-employment related causes for a Claimant’s injury to reduce the compensation payable.
10. Redundancy during maternity leave and suitable alternative vacancies
Simpson v Endsleigh Insurance Services Ltd and others 2010 AER 95
Ms Simpson worked as an insurance consultant in London and was made redundant while she was on maternity leave. She brought a claim for unfair dismissal. Endsleigh had transferred all their work to call centres. During collective consultation all insurance consultants were guaranteed a role in one of the new call centres if they were willing to transfer with a relocation package.
Ms Simpson expressed no interest in any of the vacancies. The tribunal dismissed her claim. Although there were 4 vacancies all based in Cheltenham, which it considered were potentially suitable for her, as she could not have relocated to Cheltenham, those vacancies were either not suitable or appropriate for her. The place in which she was to be employed, Cheltenham, was substantially less favourable to her than if she had continued to be employed under her previous contract in London. Therefore none of these jobs had been suitable alternatives. The Tribunal held that Endsleigh had not been obliged to offer them to her.
She appealed and the EAT dismissed her appeal. The EAT rejected her argument that Endsleigh should have offered her one of the potential suitable roles rather than simply sending her information and inviting her to apply. Under the Maternity and Parental Leave Regulations 1999 there is no requirement on the employee to engage in the process. It is up to the employer knowing what it does about the employee to decide whether or not a vacancy is a suitable alternative one.
Key point: As it is difficult for employers to decide whether to offer a position to employees on maternity leave, it would be prudent for employers making redundancies to engage in specific consultation with those employees, in addition to collective consultation, to discuss suitable alternative employment and other alternatives to redundancy as a precautionary measure, as those on maternity leave are protected under the Regulations, in preference to those who are working, by being entitled to be offered suitable vacancies ahead of those not on leave.
11. Redundancy – Protective Awards
Canadian Imperial Bank of Commerce v Beck UKEAT/0141/10
If an employer fails to consult on its proposed large scale redundancies with representatives of its affected employees then a tribunal may make a protective award to each of the employees for a specified period. The award is capped at 90 days’ pay but there is no statutory maximum on a week’s pay.
In this case, the Bank had been in breach of the statutory provisions and the tribunal held that a protective award of 90 days’ pay was appropriate for Mr Beck. The tribunal then had to decide whether the protective award should be calculated by reference to his basic salary, which would have amounted to some £45,000 or should include an assessment of what his true remuneration was at the date of the dismissal, namely his salary plus his eligibility for a substantial but discretionary bonus. Mr Beck argued that as a protective award is an effective sanction, without taking into account his discretionary bonus then the deterrent value of the protective award was largely lost.
Mr Beck’s annual salary at £125,000 was much less than his likely discretionary bonus, but as his right to a bonus had not crystallised at the time of the time of the dismissal, the appeal Tribunal was right to hold that this bonus should not form part of his week’s pay.
Key point: The case is a reminder that collective consultation in a redundancy exercise if not carried out properly can be costly for an employer.
The CIPD in conjunction with the Health & Safety Executive have produced a Guide detailing how employers can tackle stress through good people management. The guidance also provides information on identifying stress related problems and how to deal with them. Complimentary copies of the Guide are available on request.
JP Morgan Europe Limited v Chweidan 2010 UKEAT0286/09
Mr Chweidan was an executive director in structured credit and sales. His bonus for 2006 was $800,000. He injured his back severely in a skiing accident in March 2007 but managed to work. In September 2007 his manager proposed a bonus of $400,000 which was later increased to $450,000 which did not please Mr Chweidan. By January 2008 a report from occupational health accepted that he was disabled within the meaning of the Disability Discrimination Act 1995.
In February 2008 he was considered for redundancy and placed on garden leave. In March 2008 he issued a grievance in relation to his bonus and his selection for redundancy on the grounds that JP Morgan’s conduct amounted to age and disability discrimination. He was given notice of dismissal in April 2008 and his employment terminated in July 2008. His grievance was rejected.
The tribunal found that he had not suffered disability related discrimination under s.3A(1) of the Act by the fact that his reduced working hours prevented him from widening his client base, as a result of which he was paid a lower bonus than appropriate and that he had been unfairly dismissed. However he had a claim for direct discrimination under s.3A(5) of the Act. The EAT overturned this on JP Morgan’s appeal, holding that it was difficult to see how a claim of direct discrimination could succeed where a claim of disability-related discrimination failed. The Appeal Tribunal remitted the issue of whether the Claimant had suffered direct discrimination in relation to his bonus and unfair dismissal or otherwise.
Key point: If the tribunal was muddled in applying S3A(1) and 3A(5) what chance have employers of making the right decision? Maybe in time the Equality Act 2010 will make life easier.
14. Holiday pay and sick leave
Khan v Martin McColl ET/1702926/09
Mr Khan’s employment was TUPE transferred to McColl’s in 2007. McColl’s guaranteed that none of the transferring employees would lose any holiday entitlement that was not used before the transfer. Mr Khan had two weeks’ accrued but unused holiday at that point which the tribunal held was carried into the 2008 leave year. He was also entitled to 4 weeks’ in 2008, taking 6 weeks’ in all. He did not take or apply for any holiday in 2008 or 2009 but went on long-term sick leave in May 2008 and did not work again prior to his resignation in 2009.
On termination of his employment McColl’s paid him in lieu of holiday which had accrued during 2009 prior to his resignation. He brought claims for unlawful deduction from wages and under the Working Time Regulations in respect of the four weeks’ holiday from 2008 together with the 2 weeks’ holiday that he had carried forward from 2007. The tribunal held that as Mr Khan did not request any holiday he was not denied the right to take holiday. Mr Khan had received his holiday pay for 2009 and he was not entitled to anything further.
Key point: This is a first instance tribunal decision only but employers should consider making a payment on termination in lieu of the holiday accrued during the last employment year only which may result in no further holiday pay being due to the employee, if challenged.
15. Unfair dismissal and pension loss
Sibbit v The Governing Body of St Cuthbert’s Catholic Primary School UKEAT/0070/10
The case illustrates the approach to be followed by a tribunal when using the Guidance to Tribunals on Assessment on Compensation for Pension Loss in making the decision as to whether it is a simplified the substantial loss approach which should be followed.
Ms Sibbit was a teacher and was dismissed on the grounds of gross misconduct by the school when she was 58. She was intending to retire within 12 months’ of her dismissal. Then she would have had one further year’s pensionable service. The tribunal found her to be unfairly dismissed and awarded her pension loss in accordance with a simplified loss. She appealed saying her loss should be calculated on the substantial loss approach.
The guidelines state that the substantial loss approach may be chosen in cases where the person dismissed has been in the Respondent’s employment for a considerable time, where the employment was of a stable nature and unlikely to be affected by the economic cycle and where the person dismissed had reached an age where he (or she) is less likely to be looking for new pastures. Ms Sibbit met these criteria according to the EAT and the figure awarded to her for pension loss was increased accordingly from £5,427 to £9,797.
Key point: The case is a useful reminder for employers of what compensation could be agreed and paid for loss of future pension rights using the pension data and Tables.
Community Dental Centres Ltd v Sultan-Darmon 2001 AER 99
This case concerns a dentist contracted to provide dental services to a Primary Care Trust. He had entered into a contract with CDC which was described as a licence agreement and contract for service. It specifically stated that his status was a self-employed independent contractor dentist with full clinical freedom and accepting full clinical responsibility.
The dentist brought a claim at the end of the agreement for wages and unlawful deductions. The tribunal found that he was not an employee as there was not sufficient mutuality of obligation. However, it concluded that it was more likely than not that he met the statutory definition of worker on the basis that he carried out services personally. Therefore he was entitled to pursue his claim before the tribunal.
CDC appealed and their appeal was allowed. The tribunal could not simultaneously conclude in different parts of its decision that there had been and then there had not been an obligation to perform services personally. A worker, within the statutory meaning, has to satisfy three conditions. There had to be a contract between the parties, that contract had to be one in which an individual undertook to perform work personally for another and that other should not be a client or customer or a professional business carried on by the individual. CDC argued that the tribunal’s finding that there was no mutuality of obligation when considering whether he was an employee was also determinative of him not being a worker. The Employment Appeal Tribunal agreed. The dentist had a right of substitution, so he was not required to do any work or perform personally any work or service. Therefore he could not be a worker.
Key point: The case is a useful résumé of the authorities on who is a worker, which is an important distinction as workers have less statutory protection than employees.
17. TUPE – Collective Agreements
Worrall and others v Wilmott Dixon Partnerships Ltd 2010 AER84
This case concerned the enforceability of a provision – clause 3.2 – in collective agreement with the employer which provided that an employee electing to take voluntary redundancy would be entitled to an increase of 5 years’ service in calculating his pension. This provision was contained within the employer’s Personal Handbook. A number of TUPE transfers took place and subsequent legislation amended the Superannuation Regulations so that by 2006 that provision was abolished being replaced with the power to add a payment of up to 104 weeks’ pay.
Mr Worrall applied for voluntary redundancy and sought the additional 5 years’ service. His employer refused and his grievance was unsuccessful. He therefore brought a test case for breach of contract on behalf of 45 other employees relating to the enforcement of the provision in the collective agreement. The EAT held that clause 3.2 had not been incorporated into Mr Worrall’s contract by reference and therefore his employer had no obligation to grant him and his fellow employees the extra years.
On a TUPE transfer an incorporated Collective Agreement is frozen at the transfer so the transferred employees cannot benefit from future changes to the original agreement. However if legislation affects the original agreement then it also affects the transferred agreement. In this case the 2006 Regulations would have deprived Mr Worrall of an enhanced pension under clause 3.2 if that clause had been incorporated into his contract.
Key point: Under TUPE all collective agreements relating to the transferring employees transfer to the Buyer under Regulation 5. The effect of this is that Buyers are only bound by the terms in force at the date of the transfer, not by any subsequent changes or new collective agreements to which they are not a party. They will however be bound by legislative changes that have an effect on the terms of a transferred collective agreement.
TUPE – Measures
Todd v Strain and ors EAT 12 August 2009
In this case the EAT held that changes to pay arrangements following a TUPE transfer were measures in connection with the transfer and the transferee’s failure to inform and consult the workforce about them was a breach of the regulations. Although the arrangements were administrative they were not an inevitable consequence of the transfer. TUPE did not prescribe that a measures effect must be disadvantageous to employees in order to trigger the requirement to consult.
Mr Todd was the owner of a care home which was transferred to CC in January 2008. In November 2007 Mr Todd called a meeting without notice to inform staff that an offer had been made for the home that could not be refused but that everyone’s job was safe. No detailed information was given at the meeting which was only attended by about a third of the staff. There was no further consultation with staff prior to the transfer. Thirty-two care home employees subsequently complained to a tribunal that Mr Todd and CC had failed to inform and consult under TUPE.
The tribunal held that Mr Todd had failed to inform and consult about measures and had failed to arrange for the election of appropriate employee representatives. The measures they should have consulted about related to the payments to staff for work done in the days up to the date of the transfer and the change to their normal payment date. The failure was a serious one and each employee was awarded 13 weeks’ pay, the maximum compensation allowable.
The tribunal also decided that CC was not at fault and only Mr Todd was liable to pay the award. Mr Todd appealed.
Although the sums were small the EAT upheld the Tribunal’s finding that Mr Todd had failed to inform and consult. The measures were not so trivial that they would not be caught by TUPE. The employees were low paid and the changes did cause worry. TUPE does not prescribe that a measure’s effect must be disadvantageous to the affected employees to trigger the requirement to consult. However the EAT overturned the decision to award 13 weeks’ pay and substituted an order for 7 weeks’ pay. Although there was a complete failure to observe the obligations this was not a case where no information had been provided. Furthermore the measures in question were not of any great significance. The EAT also held that in accordance with Regulation 15(9) which provides for joint and several liability CC was also liable to pay the compensation awarded despite the fact that it had not been at fault.
Key point: The decision seems very unfair to CC and reveals a thin line between changes that are inevitable and which do not trigger the information and consultation obligations and those which do. If in doubt employers should err on the side of caution and consult to avoid the risk of a claim and Buyers should seek confirmation if not a warranty that this has been done and an indemnity in the event that it has not.
TUPE – Equal Pay and the GMF defence
Buchanan and another v Skills Development Scotland Co Ltd ETS/113105/08
Two female employees working for SDS compared their pay with that of a male comparator and found he was paid over £12,000 more than they were. They and their comparator had transferred under TUPE from different employers to a predecessor company in 2002 and then to SDS in 2008. SDS continued to make pay increases and bonuses to the comparator.
In answer to the employees’ equal pay claims SDS contended that the comparator’s terms and conditions were protected under TUPE by the 2002 transfer and this was therefore a genuine material factor defence to their claim. This was not accepted by the tribunal. It found that no evidence of SDS’ obligations under TUPE to make the post-April 2002 awards and it did not accept that from April 2004 the TUPE protection requirements amounted to a significant or relevant reason for the difference in pay. An employer can rely on historical reasons for pay differentials but the tribunal did not believe that the TUPE transfer in this case was the genuine reason for this disparity.
Key point: This is a first instance decision but a transferee may not be able to continue to rely on TUPE as a genuine material factor as its relevance will diminish over time. It may have to freeze an employee’s pay until others catch up without triggering any claim from the employee. Proper due diligence prior to an acquisition is essential to highlight any potential equal pay issues.
TUPE – the ETO defence
Nationwide Building Society v Benn 2010 UKEAT/0273/09
Mr Benn and the other employees’ claims for unfair dismissal against the Nationwide arose from their resignations from employment following their transfer from the Portman Building Society to the Nationwide in August 2007. The former Portman employees contended that their terms of employment were altered as to their detriment. Their job role and responsibilities were downgraded when they were assimilated into the Nationwide. The Nationwide bonus scheme which was to, or did replace the Portman Bonus Scheme was substantially less beneficial to them. These acts constituted fundamental breaches to their contracts entitling them to resign, as there had been a change to their working conditions to their detriment.
The Tribunal held that the reason for the constructive dismissal was an ETO reason entailing changes in some of the workforce’s job functions within the meaning of the Regulations and their dismissals were therefore not automatically unfair but they were held to be unfair for some other substantial reason. The EAT agreed. The employees had been dismissed constructively or by application of Regulation 4(9) (change amounting to a material detriment). The issue of the fairness of the dismissals was remitted to the same tribunal for reconsideration.
Key point: For an ETO reason to entail changes in the workforce there must be a change in job functions or numbers of the workforce. There can still be an ETO reason where the change in job functions only applies to that section of the workforce who had transferred.
18. Effective date of termination
Wedgewood v Minstergate Hull Ltd 2010 UKEAT0137/10
Mr Wedgewood was given notice that his contract would expire on 1 December 2008. On 26 November he was informed that he was being released but would be paid up to and including his notice period Monday 1 December. He brought a claim in the employment tribunal which was lodged by email on 28 February. Minstergate contended that this was outside the prescribed 3 months’ time limit because his effective date of termination was either 26 or 28 November. Mr Wedgewood submitted that the letter of 26 November did not alter the effective date of termination. The Judge held that the effective date was 26 November and Mr Wedgewood appealed.
The appeal was allowed on the basis that the effective date of termination was not altered simply by absolving him from working his period of notice. It could be altered by the parties agreeing expressly but that had not occurred in this case as the letter of 26 November did not alter the date.
The reason for Mr Wedgewood’s termination arose out of prospective redundancies in the accountancy department. Mr Wedgewood wanted to leave early because he was uncomfortable at having to continue to work and he had completed everything although he returned to work on Friday 28 November for a handover meeting. Although Mr Wedgewood was released from his obligation to work, the letter stated that he would still be paid up to and including the notice period date of Monday 1 December. The effective date of termination therefore was 1 December 2008 and the claim was in time.
Key point: The effective date of termination may not be amended merely by an arrangement that an employee would be absolved from working the full period of notice.
19. Information and Consultation of Employees Regulations 2004
Brown v G4 Security ( Cheltenham) EAT0526/09
The EAT imposed a penalty of £20,000 on G4 because they failed to conclude a valid agreement with employee representatives. The EAT took into account the employer’s mistake belief that it had complied with the Regulations and its prompt action when its breach had been established but refused to consider a plea of alleged financial hardship when imposing the penalty. G4 had failed to arrange a ballot of employees to elect ICE representatives in the belief that Mr Brown’s request in January 2009 to negotiate an agreement did not comply with Regulation 7 and therefore the ICE Regulations did not apply.
After proceedings were brought by Mr Brown, the Central Arbitration Committee confirmed that his request was a valid request and there was no pre-existing agreement. This meant G4 had no excuse not to arrange a ballot. On 20 October Mr Brown applied to the EAT for a penalty notice to be issued requiring G4 to pay a penalty to the Secretary of State for its non-compliance with the Regulations. The ballot finally took place in March 2010 and by April meetings with representatives elected in accordance with the ballot were due to take place.
Key point: Provided the employer can act diligently and not in a dilatory way after the determination as to the applicability of the Regulations any fine imposed by the CAC should be limited. G4’s breach was not merely technical but had persisted over 8 months and the entire workforce of 350 were affected so £20,000 was the proper fine.
The Government has announced that the right to request flexible working will be extended to all parents with children under 18 from April 2011. A consultation on how to extend this right to all employees and create a new system of flexible parental leave will be launched later in 2010. As an interim measure the Additional Paternity Leave Regulations 2010 which apply to parents of children due on or after 3 April 2011 will remain in force to encourage shared parenting.
