Employment Briefing: January 2015

Published byMartin Stephen

29th December 2014

• Contact the Team
• Unsigned Changes to an Employment Contract can still be valid
• Redundancy and Maternity: Care is needed when selecting employees for redundancy
• Fee Recovery in Employment Appeal Tribunal Cases
• The Meaning of Disability
• Unlawful Deduction Claims capped at 2 Years

Welcome to our first Employment Briefing of 2015

What will 2015 bring in terms of new employment legislation, policies and practice? Some measures are already in the pipeline but with a General Election fast approaching, it’s anyone’s guess as to what will, and will not, carry forward after May. We’ll be keeping an eye on all the pre and post-election rhetoric and promises to keep you informed.

December is a favourite time for employment decisions and legislation changes to be published. We’ve rounded up the most significant and summarised them for you. As ever, if you have any questions or points for discussion, please get in touch.

Contact the Team

If you have an employment issue, please contact the team:

Martin Stephen:                   mss@wjm.co.uk     0141 248 3434
Liam Entwistle:                    lae@wjm.co.uk       0141 248 3434
Andrew Wilson:                   ajpw@wjm.co.uk     0131 524 1500

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Unsigned Changes to an Employment Contract can still be valid

In Wess v Science Museum Group, an unsigned variation to an employment contract was found to be impliedly agreed by the employee. Ms Wess had continued to work for her employer for 9 years without objecting to the change, meaning she had agreed with the changes made to her employment terms.

The Science Museum Group had sought to shorten the notice period required to terminate Ms Wess’s employment contract from 6 months to 12 weeks. A new contract was sent to her but was never signed and returned.

The Tribunal ruled that the employer had made an offer of future employment on the basis of the amended contract. By continuing to work for the employer, Ms Wess had impliedly agreed to the unilaterally imposed change.

This case does not mean that a failure to object to a change of terms will result in an implied variation of the terms of employment in all situations. This is particularly the case where there is no obvious and immediate impact on the employee as a result of the change, for example the withdrawal of medical insurance cover.

Where the change is of significance to the employer, it is generally advisable to ensure that any agreement or objection is clearly identified early on to allow any issues to be addressed.

If you are thinking of changing your employment contracts, a brief chat with the WJM Employment Team could save you challenges later. We’ll be able to advise you on the contents and the how the process of change within your workforce should be administered.

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Redundancy and Maternity: Care is needed when selecting employees for redundancy

Regulation 10 of the Maternity and Parental Leave Regulations 1999 provides that where a woman on maternity leave is placed at the risk of redundancy, she has a right to be offered a suitable alternative vacancy. Any failure to do so will make her redundancy automatically unfair.

In Sefton Borough Council v Wainwright, the EAT considered at what point the duty to offer a suitable alternative vacancy arises during the redundancy process.

While Mrs Wainwright was on maternity leave, the Council sought to combine Mrs Wainwright’s role with that of a man on the same grade. The Council’s plan was for either Mrs Wainwright or her male counterpart to fill a newly created, stand-alone role.

Both Mrs Wainwright and her colleague were interviewed for the new role and the Council concluded that the latter was the stronger candidate. Mrs Wainwright was given three months’ notice of her dismissal. She was advised of her right to be considered for redeployment, but did not express any interest in the vacancies that became available.

Mrs Wainwright then claimed her dismissal was automatically unfair since the Council was required to offer her the newly created role under Regulation 10. The Council did not argue that Mrs Wainwright was suitable for the role, but claimed that Regulation 10 would only come into play after Mrs Wainwright was overlooked for the new role and was advised she may be dismissed as a result.

The Tribunal found in Mrs Wainwright’s favour, prompting the Council to appeal.

The EAT rejected the Council’s appeal against the finding of automatic unfair dismissal. The EAT found that, under Regulation 10, Mrs Wainwright ought to have been offered the newly created role since there were no other suitable alternatives at the time. Mrs Wainwright’s existing role was no longer available to her and could not be saved when she was put at risk of redundancy. As a result, the newly created role ought to have been offered to her without a competitive selection process.

The EAT did, however, uphold the Council’s appeal against the finding of discrimination. Simply because Mrs Wainwright’s selection for redundancy took place while she was on maternity leave did not mean she was necessarily selected because of it. Nor did it inevitably follow that a breach of Regulation 10 automatically means there has been a breach of section 18 of the Equality Act 2010 (the provisions which relate to pregnancy and maternity). The case has been reverted back to the Tribunal to reconsider this point.

This case shows how challenging it can be to make changes through redundancy when one or more of the potential candidates are on maternity leave. Businesses and organisations often need to change operational procedures to cope with change, which may involve re-deployment or redundancy. With maternity leave lasting up to one year, many employers will be in the same situation as Sefton Borough Council – and that’s when you call us. We’ll help guide you through the maze of regulations surrounding maternity and redundancy.

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Fee Recovery in Employment Appeal Tribunal Cases

People appealing to the EAT must pay £400 to lodge a claim and then a further £1,200 hearing fee. Two recent cases examined the extent to which the fees are recoverable.

In Look Ahead Housing v Chetty, the ET ruled that the claimant employees had been unfairly dismissed and had suffered race discrimination. The employer appealed to the EAT, claiming that the loss awarded had been improperly calculated. During the appeal, both sides agreed a revised figure and all other elements of the appeal were rejected. The employer then claimed that the employees ought to be liable for half of the lodging fee and hearing fee. This was rejected by the EAT on the basis that the employer could have instead asked the Tribunal to reconsider its decision or it could have sought the claimant’s agreement on the matter.

The EAT then set out criteria to be applied in considering whether lodging and hearing fees are recoverable:

• If the party who brings an appeal fails on every aspect of their appeal, they should not recover their appeal fees.
• If an appeal is partially successful, the EAT will consider whether it was necessary to incur the expense of an appeal or whether it could have been avoided by the appellant taking other reasonable steps.

Further guidance comes from the Palace Fields Primary Academy case. This found that even if the appellant is successful, there is no presumption that they can recover fees from the unsuccessful party.

The claimant was a teacher who had been dismissed for gross misconduct. The ET found the dismissal was fair, prompting the claimant to appeal.

The teacher argued that there had been procedural shortcomings by the employer, namely a failure to disclose witness statements or minutes of a meeting to the claimant. Further, despite being told these statements and minutes would not form part of the disciplinary panel’s deliberations, they were considered. The EAT allowed the appeal and the case was referred back to the Tribunal.

The teacher sought recovery of all fees paid. However, the EAT only awarded half of the hearing fee, and none of the issue fee. It pointed out that it had a wide discretion as to whether to make such an award and that this was an attempt to “do justice between the parties.” It went on to state that the appeal was only “partially successful” because the matter had been reverted back to the employment judge for further consideration rather than being reversed altogether.

These cases serve as a reminder of the wide discretion the EAT has in this area where an appeal is not entirely successful.

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The Meaning of Disability

Employees who are deemed disabled are protected against discrimination by the Equalities Act 2006. It can often be difficult to define if an employee is disabled within the meaning of the Act and this can be a pivotal issue for an Employment Tribunal (ET) to determine. Recently, the ET examined whether someone suffering from anxiety and depression could be considered to be disabled.

It was not disputed that the claimant, Mr Saad, suffered from a depressive and general anxiety disorder. However, the ET ruled that his condition did not meet the criteria for disability: his impairment did not have a substantial adverse, nor a long term effect, on his ability to carry out normal day-to-day activities. This is the test set out in the Act for determining whether or not someone is disabled.

The Employment Appeal Tribunal (EAT) held that the ET was entitled to reach that conclusion. The ET had properly assessed the effects of Mr Saad’s impairment in the work environment, including the claimant’s ability to concentrate, communicate with colleagues and access his workplace.

Further, the ET had properly considered the meaning of "long-term" (defined as a condition which is expected to, or has lasted for a year). In addition, the ET had been mindful of the fact that adverse effects could be long-term even if they fluctuated over time.

Although fact sensitive, the case is a practical demonstration of the test used to determine if someone falls within the definition of “disabled”. It also provided an insight into the scrutiny a Tribunal ought to apply when making a decision.

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Unlawful Deduction Claims capped at 2 Years

Late in December the Government announced details of the new Deduction from Wages (Limitation) Regulations 2014. Undoubtedly a response to the recent holiday pay cases, these reforms limit the time in which claims can be made to 2 years.

The new Regulations’ effect is to prevent claims being raised for unlawful deductions from wages where the alleged deductions took place more than 2 years prior to the claim being made. The measures will apply from 1 July 2015. Some categories of unlawful deductions claims are excluded, such as claims for Statutory Maternity Pay, Statutory Sick Pay and guarantee payments, which remain unaffected.

In the holiday pay decisions, a key aspect was that failure to pay the required holiday pay should not be considered an unlawful deduction from salary. However, no appeals on have yet been made. Even if an appeal is successful, the new Regulations will, in any event, prevent claims going back more than two years.

The Regulations also explicitly state that the right to holiday pay under the Working Time Regulations 1998 is not a contractual right. This will prevent workers from bringing contractual claims for unpaid holiday pay.

These new Regulations will provide some comfort to employers, who may have feared a deluge of cases for unpaid holiday pay dating back many years. Employers should, though, bear in mind that the new measures do not come into law until 1 July 2015. In the interim period, employees could raise a claim for unpaid holiday pay in the hope that an appeal is successful.

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