November Employment Briefing

Published byMartin Stephen

25th November 2015

Temporary lay-off and TUPE

The recent case of Inex Home Improvements Ltd v Hodgkins & Others has introduced further scope into the definition of an “organised grouping” under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) when there is a Service Provision Change.

TUPE applies to organisations of all sizes and protect employees’ rights when the business or part of the business in which they are employed is sold or transfers to a new owner. The same rules apply when there is a service provision change. A service provision change occurs when work done in house is outsourced or where previously outsourced work is brought in house. TUPE operates to transfer the contracts of those affected employees who form an organised grouping to the new owner or the service provider or where the work is brought back in house, to the employer taking the work back. In Inex, the Claimants worked on a building project which was split into various tranches. Once a tranche of work was completed the workers were laid off until a new tranche commenced at which point they were re-employed. Inex, the claimant’s Employer, was expecting further work, however the contract for the further work was awarded to a different contractor.

Whilst it was held in the first instance that because the Claimants had been laid-off and so were not an “organised grouping” and as such, would not transfer under TUPE, this approach was rejected by the Employment Appeal Tribunal (EAT) which took the view that a temporary absence or cessation of work or a temporary cessation of the relevant activities did not in itself deprive employees who were involved in those activities of their status as an organised grouping of employees within TUPE. The case highlights the EAT’s adoption of a purposive approach to TUPE being the protection of employment. This purposive approach had previously been reserved for the interpretation of traditional business transfers.

WJM’s Employment Team advises: “When considering whether a business transfer is a relevant transfer under TUPE, it is paramount to ensure that a cautionary approach is adopted in considering whether a business transfer will be considered a relevant transfer under TUPE.”

Companies protected from discrimination

In the recent case of EAD Solicitors v Abrams, it was held by the EAT that just as a corporation can discriminate, a corporation can also be discriminated against on the justification that there was no reason to restrict the meaning of a “person” to an individual under the Equality Act 2010.

In this case, the Claimant, Mr Abrams, was a member of EAD, a limited liability partnership (LLP). For tax reasons, as he approached retirement, he set up a limited company to which he was the sole director and principal shareholder. His company took the profit share that Mr Abrams would have received as a member, in return for which it undertook to supply the services of an appropriate fee-earner to the LLP. Mr Abrams withdrew his membership from the LLP and his limited company took Mr Abram’s place. Although it was expected that that fee-earner supplied would be Mr Abrams, there was no requirement for it to be him. When Mr Abrams reached the age at which he would have retired from the LLP had remained a member, the LLP objected to his company remaining a member of the LLP and to the continued supply his services to the LLP.

Mr Abrams presented an age discrimination claim under the Equality Act which was upheld by the Employment Tribunal and subsequently upheld at the Employment Appeal Tribunal. The implication of this decision is a significant development in discrimination law. WJM’s Employment Team advises: “The key impact of this case is likely to be in the commercial and property spheres in relation to the provision of goods, services or facilities, or the disposal of premises. Abrams confirms that a company, LLP, charity, educational establishment or other non-natural person may sue if it receives detrimental treatment based on the protected characteristics of individuals associated with it.”

Three is a crowd – the interpretation of “public interest”

In the case of Underwood v Wincanton Plc the interpretation of “public interest” is widely defined to include a subset of persons who are employed by the same employer on the same terms, thereby making some contractual issues matters of public interest.

In this particular case the public interest test was satisfied when the disclosure was made by four employees. The Public Interest Disclosure Act 1998 introduced protection for whistle-blowers. In order to succeed a whistleblowing claim, a worker does not have to prove that the facts or allegations disclosed are true, or amount to a form of wrongdoing, provided that the worker believes that the relevant failure has occurred, or is likely to occur, and this belief is objectively reasonable. This is sufficient irrespective of whether the belief subsequently turns out to be wrong or the facts alleged does not amount to a relevant failure. Amendments introduced to the legislation require that the whistleblowing must be “in the public interest”.This does not require that the interest must be an interest to the public as a whole and a relatively small group may be sufficient to satisfy the public interest test.

Mr Underwood was a HGV driver with Wincanton Plc. Along with three of his colleagues, he submitted a written complaint regarding thee terms and conditions of their contract, specifically in relation to the way in which overtime was allocated amongst the drivers. Mr Underwood was subsequently dismissed. Following his dismissal, Mr Underwood brought a claim saying that that his complaint amounted to a protected disclosure, for which he was dismissed and that his dismissal was automatically unfair. In the first instance, it was held that he was not entitled to seek such protection on the grounds that a dispute between an employer and employee relating to the terms of employment existing between them is not something which the public are affected by or interested in.

The Tribunal found therefore found that Mr Underwood could not have held a reasonable belief that the matter was in the public interest. On Appeal, the EAT held that a dispute between an employer and a group of four employees relating to the terms and conditions of their contract of employment was capable of being a protected disclosure, entitling the employees to seek protection against unfair dismissal under whistleblowing legislation on the grounds that “public” could be constituted by a subset of the public, “even if that subset comprised persons employed by the same employer on the same terms”. This decision is under appeal and is scheduled to be heard in the Court of Appeal in October 2016 and it will be interesting to see whether the Court of Appeal take the same approach as the EAT.

WJM’s Employment Team advises: “Take caution when a complaint is made by more than one employee as it might be capable of being interpreted whistle blowing disclosure, made in the public interest.”

Consistency of Treatment in Unfair Dismissal

Does inconsistency of treatment make a dismissal unfair? Not necessarily says the Employment appeal Tribunal (EAT) in MBNA v Jones.

Two employees attended a corporate social event, before which both were warned about the standard pf behaviour expected of them. The two had been drinking and fell out. Mr Jones punched Mr Battersby in the face Late on Mr Battersby texted Mr Jones on a number of occasions “threatening to “rip your head off”. He did not carry out his threats. Following a disciplinary process Mr Jones was dismissed and Mr Battersby was given a final written warning. Mr Jones brought a claim of unfair dismissal and the Tribunal decided that the dismissal was unfair because of inconsistency of treatment. On appeal the EAT overturned the decision.

The Judge had not applied the correct test as set out in section 98(4) of the Employment Rights Act 1996, which recognises that there may be a range of reasonable ways in which an employer may react to the circumstances which give rise to a dismissal. He had also failed to consider whether there was a decision made in truly parallel circumstances which made it unreasonable for the employer to dismiss the employee.

The WJM Employment Team advises: “It is important to maintain consistency and for employers to act in a fair and proportionate way. This case does not alter our view.”

For more advice on any of these matters or to seek Employment Advice please contact a member of WJM’s Employment Team.