This is the latest employment update for Paris Smith's employment team delivered in October 2013.

1. Employment Law Conference
“2013 – Another Busy Year for
Employment Law”
Clive Dobbin & David Roath
LLP Partners
2 October 2013

2. Topics
 Changes in legislation –
Clive Dobbin, Paris Smith LLP
 Case Law update –
David Roath, Paris Smith LLP

3. Changes in Legislation
Clive Dobbin
LLP Partner
Paris Smith LLP

4. Changes in Legislation
 Tribunal Reform
 Unfair Dismissal compensation
 Settlement Agreements
 Pre-Termination Negotiations
 Employee shareholders
 To come

5. Tribunal Reform
 Tribunal Rules
 New ET1/ET3
 Tribunal Fees

6. Employment Tribunal Fees
 Claimants must now pay fee to commence tribunal
claim
 Applies to claims presented on or after 29 July 2013
 2 stage fee structure
 Issue Fee
 Hearing Fee

7. Employment Tribunal Fees
 Type A claims – e.g. unpaid wages, redundancy
payments, PILON, breach of contract, equal pay,
non-consultation under TUPE
 Type B claims – e.g. unfair dismissal and
discrimination
 If various claims, fee will be the fee which relates to
the highest level claim

8. Employment Tribunal Fees
Type A
Type B
Issue Fee
£160
£250
Hearing Fee
£230
£950
 Hearing fee payable 3-4 weeks prior to hearing (to
be determined)

9. Employment Tribunal Fees
 Fees for specific applications: Set aside default judgement £100
 Judicial mediation
£600 (payable by Respondent)
 Counter-claim
£160
 Application for a review
£100
Type A
£350
Type B
 For application, need to issue application, will then be
issued notice requiring payment of fee
 Only when fee is paid will application be considered

10. Employment Tribunal Fees
 Civil Courts fee remission system will apply to
employment tribunals
 New fee remission system coming into force on 7
October 2013
 2 tests – disposable capital test and household
income test
 Tribunal will have discretion to order unsuccessful
party to reimburse fees incurred by successful party

11. Unfair Dismissal
Compensation Cap
 Unfair dismissal compensation cap
 Cap applies to unfair dismissal compensatory
award
 Applies where effective date of termination is on or
after 29 July 2013
 Future increases will take effect from 6 April, rather
than 1 February

12. Unfair Dismissal
Compensation Cap
 Lower of: £74,200
 52 weeks’ pay
 A week’s pay calculated in same way as under
Employment Rights Act
 Excludes from calculation pension contributions, benefits
in kind and discretionary bonuses

13. Settlement Agreements
 Compromise Agreements renamed Settlement
Agreements
 Change effective from 29 July 2013
 In agreements references to ‘Compromise Agreement’
need to be changed to ‘Settlement Agreement’
 Get your agreements reviewed?

14. Pre-Termination Negotiations
 Evidence of ‘pre-termination negotiations’ inadmissible in ordinary
unfair dismissal proceedings
 ‘Pre-termination negotiations’ – any offer or discussion of proposed
settlement terms
 Purpose – to make it easier to have discussions with regard to a
proposed termination
 Overcomes problems with case law on whether a current dispute

15. Pre-Termination Negotiations
 Limits
 Applies to ordinary unfair dismissal claims only (not
automatically unfair dismissal claims)
 Doesn’t apply to discrimination claims
 Doesn’t apply to breach of contract claims
 Can employee just claim constructive dismissal via a
breach of contract claim?

16. Pre-Termination Negotiations
 Limits (cont)
 Doesn’t apply where improper behaviour
 ACAS Code & ACAS Guide now published
 Examples of improper behaviour
 Discrimination, harassment and victimisation
 Not being given a reasonable time to consider offer (Code
suggests a minimum of 10 days)
 Employee being warned, if does not sign agreement, disciplinary
proceedings will be commenced and employee will be dismissed

17. Employee Shareholders
 Employees give up certain rights in return for being given shares
 Shares should be worth at least £2,000
 Can be new employees or current employees
 For applicants, can make offer conditional on new status
 For existing employees, protected against being dismissed, or
being subjected to any other detriment, because do not agree to
new status

18. Employee Shareholders –
Rights Given up/Varied
 Unfair dismissal
 Redundancy payment
 Right to request flexible working (other than if request made
on return from parental leave)
 Right to request time off for study/training
 Return from maternity leave (notice period increased from 8
to 16 weeks)
 Can still bring other claims (e.g. discrimination)

19. Employee Shareholders
 Safeguards
 Employee must be given a statement of particulars,
including: The rights being given up
 Whether any voting rights attach to shares
 Whether shares carry right to any dividends
 Whether entitled to participate in distribution of
surplus assets on a winding up

20. Employee Shareholders –
Statement of Particulars (cont)

Statement of particulars (cont)
 How rights differ to other (largest class of) shares
 Whether shares are redeemable, and at whose
option
 Whether there are any restrictions on transfer
 Whether shares subject to pre-emption, drag along
or tag along rights

21. Employee Shareholders –
Safeguards (cont)
 Requirement for employee to obtain advice
 Employer must pay for the reasonable costs of
obtaining advice (even if individual doesn’t become
an employee shareholder)
 7 days must pass between advice and agreement

22. Employee Shareholders Benefits
 First £2,000 of shares free from income tax and NI
 Future gains exempt from capital gains tax (on
shares worth, when given, up to £50,000)
 Does not apply if individual has a “material interest”
 Also income tax exemption applies to payment of
legal fees for advice

23. Employee Shareholders
 Not a huge enthusiasm during consultation period
 If going to take advantage of it: Consider articles
 What rights attach to new shares (e.g. dividends and
voting rights)
 Deal with what happens when employee leaves
 Make sure you get the procedure correct

24. Changes in Legislation –
October 2013
 October 2013 - 3rd party harassment rules

25. Changes in Legislation –
January 2014
 TUPE reforms
 Service provision changes - to remain, but new service must be
‘fundamentally or essentially the same’
 Employee liability information – to remain, period of time
extended from 14 days to 28 days prior to transfer
 Easier to change location
 Can renegotiate terms from collective agreement one year after
transfer, provided overall change is no less favourable to
employee

26. Changes in Legislation
 April/Spring 2014
 ACAS mandatory pre-claim conciliation
 Financial penalties on employers who lose tribunal
claims
 Abolition of discrimination questionnaires

27. Case Law Update
David Roath
LLP Partner
Paris Smith LLP

28. Gross Misconduct
Unfair dismissal
 To be a fair dismissal, employer must:1. Have fair reason to dismiss
2. Act reasonably in dismissing for that reason
 Decision to dismiss must be within the band of
reasonable responses

29. Gross Misconduct
Does finding of gross misconduct mean that dismissal will
inevitably be reasonable?
Brito Babapulle v Ealing Hospital NHS Trust
 Finding of gross misconduct
 Decision to leap straight to dismissal not correct
 Consider all potential mitigating factors such as: Length of service
 Unblemished record
 Consider both stages (and show in decision letter)

30. Unfair Dismissal
 Use of covert video surveillance
 Will it make a dismissal unfair?
 Privacy under Article 8
 Data Protection Act

31. Unfair Dismissal
City and County of Swansea v Gayle

ET found Council’s use of covert surveillance to be “too
thorough”

Unjustified interference with Article 8

Ignorant of Data Protection Code

32. Unfair Dismissal
City and County of Swansea v Gayle

EAT overturned decision

Employer cannot be criticised for being too thorough

Article 8 not engaged – filming outside sports centre, employer’s
time and fraudster

Even if it was, action legitimate

Surveillance did not impact on fairness

Ignorance of Data Protection Code did not affect fairness

33. Court Video Surveillance
 Use only where necessary
 Use reputable firm
 Consider Data Protection issues

34. Redundancy
 Loss of right to statutory redundancy payment
 Employee unreasonably refuses an offer of suitable
alternative employment
 Is alternative suitable (objective test)?
 Is refusal reasonable?
 Employee’s reasons subjective – does employee have
sound and justifiable business reasons to refuse?

35. Redundancy
Devon Primary Care Trust v Readman

Tribunal must focus on employee’s reasons for refusal
and the circumstances of the employee in question

Band of reasonable responses test does not apply

Preference for money not decisive (but should be taken
into account)

36. Holiday Pay
 What rate of pay should an employee be paid when on
holiday?
 Should overtime worked in previous 12 weeks be taken into
account?
 WTR uses calculation from Employment Rights Act (ERA)
 Workers must be paid at the rate of a week’s pay for each
week’s leave

37. Holiday Pay – Position under
ERA
Employee with normal hours and where pay does not vary
with the amount of work done:
Holiday pay is based on basic salary

Overtime worked is not taken into account
Where no normal hours or pay does vary according to
amount of work done or time of work:
Pay is based on average pay over the previous 12 working weeks

38. Holiday Pay
European Court of Justice decisions
 Robinson Steele v RD Retail Service
 Workers on holiday should receive their “normal remuneration”
 Williams and others v British Airways
 Remuneration “intrinsically linked to performance of tasks”
should be included when calculating holiday pay
 Allowances over basic pay were intrinsically linked

39. Holiday Pay
Neal v Freightliner

Normal hours

Worked regular overtime (but not guaranteed or compulsory)

ET rules that: Overtime duties “intrinsically linked”
 UK law not in line with European Directive

Neal awarded pay based on overtime worked as well

EAT decision needed

40. Accrued Holiday

Regulation 14 WTR

Payment of accrued holiday should be: calculated in accordance with relevant agreement; or
 pay the worker would have received if they had taken a
period of paid leave

Can the sum to be paid be a token amount (such as £1?)

No, according to ET in Podlasiak v Edinburgh Woollen Mill

Only ET decision, but shows direction of decisions

41. Holidays and Sickness
 Worker is entitled to 5.6 weeks’ annual leave
 4 weeks under Directive
 1.6 weeks additional provided by WTR
 Regulation 13(9) WTR prohibits carry over of unused leave
 NHS Leeds v Larner – employer must allow carry over for sick
employee
 Does 5.6 week entitlement carry over?

42. Holidays and Sickness
Sood Enterprises Ltd v Healy
 Carry over is limited to 4 weeks under Directive

43. Compensation
 Compensatory award in unfair dismissal cases
 Loss of salary and value of benefits (such as
pension)
 What if the employee has died?
 Can claim continue?
 Can claim include loss of insurance benefit?

44. Compensation
Fox v British Airways

Loss of death in service benefit recoverable

Unusual case

Often loss would be cost of securing alternative benefit

Breach of contract more common

Pay in lieu of notice (where no express right)

Watch insured benefits on termination: Death in service
 Private medical

45. Reasonable Adjustments

Equality Act

Duty on employers to make reasonable adjustments for disabled
employees

Provision, criterion or practice puts a disabled employee at a
substantial disadvantage in comparison with those who are not
disabled

Sickness/Attendance Policy

Must you discount all absences relating to disability?

46. Reasonable Adjustments
Commissioners for HMRC v Whiteley

W suffered from Asthma, which was often made worse by common viral
infections

ET ruled HMRC should have found that all absences due to infections were
“directly related” to her asthma, and should have discounted them altogether
when applying its sickness absence policy

ET wrongly interpreted medical evidence

Asthma sufferer would not necessarily suffer more infections, but disability
potentially exacerbated effects?

47. Reasonable Adjustments
Commissioners for HMRC v Whiteley
At least two possible approaches employers might adopt:
Consider the periods of absence in detail and (if necessary, with
expert evidence) assess precisely the level of absence that is
attributable to disability

Consider what level of absence someone with a particular
disability would reasonably be expected to have over the course
of an average year due to that disability

48. Collective Redundancies
 Requirement to consult collectively
 Propose to dismiss as redundant 20 or more employees at
one establishment within a period of 90 days or less
 100 or more redundancies – 45 days before the first
dismissal takes effect
 Less than 100 redundancies – 30 days
 Separate establishments often useful for employer

49. Collective Redundancies
USDAW v Ethel Austin
 The words “at one establishment” must be disregarded
for the purposes of any collective redundancy exercise
involving 20 or more employees
 Multi site caught if 20 or more overall
 Conflicting EAT decisions
 Reference to ECJ

50. Grievances
 Implied term of trust and confidence
 Breach of contract (including implied term) can lead
to claim of constructive dismissal
 Can failure to follow grievance procedure amount to
breach of implied contractual term?

51. Grievances
Blackburn v Aldi Stores
 Right to an impartial appeal in respect of a grievance is an important
feature of the Acas Code and also the employer’s own procedure
 Failure to adhere to a grievance procedure is capable of amounting to or
contributing to a breach of the implied term of trust and confidence
 Breaches of grievance procedures “come in all shapes and sizes”
 Not all breaches of procedure will be breach of implied term

52. Confidential Information
 Employee owes duty of confidentiality whilst employed
(implied duty of fidelity)
 Usually express duty of confidentiality post employment
 Employee can be sued for breach of confidentiality
 What about new employer who benefits (without
inducing)?

53. Confidential Information
Pintorex Limited v Keyvanfar
 New employer vicariously liable for breach of confidentiality by
employee
 Director of new employer would also have been jointly liable for the
breach of confidence if he had been involved in a common design to
commit the breach of confidence or had dishonestly ignored the
breach
 As a new employer, you can’t encourage or induce breach, or turn a
“blind eye”

54. LinkedIn
 Who owns the account?
 Who owns the contacts?
 LinkedIn T&Cs
 Do you have a policy?
 Post termination restrictions

55. LinkedIn
Whitmar Publications Ltd v Garage

Employee had managed four LinkedIn groups on behalf of Whitmar

Claimed that the groups were personal to her and “just a hobby”

The court required the ex-employees:
To give Whitmar exclusive access, management and control of the
LinkedIn groups

Not to access or do anything that would inhibit or prevent Whitmar from
accessing the LinkedIn groups

56. LinkedIn
Whitmar Publications Ltd v Garage

A (small) piece in the puzzle

Whitmar did not have post termination restrictions

Have: Post termination restrictions
 Express duty of confidentiality – refer to LinkedIn contacts
 Rules over LinkedIn use

57. Thank You, Any Questions?
For further information and advice, contact:
Clive Dobbin, Partner
T: 023 8048 2370
E: clive.dobbin@parissmith.co.uk
www.parissmith.co.uk
Number 1 London Road, Southampton, SO15 2AE