Supreme Court Ruling Limits Recovery of Breach of Contract Damages
By Hazel Oliver
The UK's Supreme Court has handed down a major judgment (PDF) on damages for breach of an employment contract in the joined cases of Edwards v Chesterfield Royal Hospitals NHS Trust and Botham v Ministry of Defence. Both cases concerned whether a dismissed employee can claim damages arising from breach of a contractual disciplinary procedure.
Background
In the case of Johnson v Unisys Ltd [2001] IRLR 279, the House of Lords (predecessor of the Supreme Court) had ruled that an employee cannot recover compensation for the "manner of dismissal" by means of a breach of contract claim, but must instead bring an unfair dismissal claim in the Employment Tribunal where the statutory limit on compensation would apply. (This is the so-called "Johnson exclusion".) Subsequently, in Eastwood v Magnox Electric plc [2004] IRLR 733, the House of Lords clarified that a claim for an employer's breach of the implied duty of trust and confidence during a disciplinary process could be made where this breach was both prior to and independent of any later dismissal.
Continue Reading...Consultation on Fees in Employment Tribunals
By Hazel Oliver
The UK's Ministry of Justice has issued a public consultation document on the Government's proposals for introducing fees in the Employment Tribunals and the Employment Appeal Tribunal (EAT). This is not a consultation on whether or not to introduce fees, as that has already been decided. Rather, the consultation is about the proposed structure and arrangements for charging fees. There are two alternative proposals for fee structures, Option 1 and Option 2, which are outlined below.
Major Employment Law Shake-up Unveiled
The UK Government has announced wide-ranging plans for what it claims to be "the most radical reform to the employment law system for decades". The proposals were set out by the Secretary of State for Business, Dr Vince Cable, in a speech to the EEF manufacturers' organization. Some of the measures had been previously floated but others were novel, including:
- amending the UK's whistleblowing legislation so that complaints by employees about a breach of their own employment contract will no longer constitute a protected disclosure;
- seeking views on introducing compensated no-fault dismissals for "micro employers" with fewer than ten employees;
- simplifying and "slimming down" the processes required to carry out a fair dismissal, including potentially working with the conciliation service Acas to change their Code of Practice on Disciplinary and Grievance Procedures;
- consolidating the myriad regulations relating to the national minimum wage; and
- streamlining the current regulatory regime for the recruitment sector.
Green Light for Unfair Dismissal Reform and Tribunal Fees
The UK Government has confirmed that it will be increasing the qualifying period for claiming unfair dismissal from one to two years and introducing fees for bringing employment tribunal claims.
These were two of the most significant proposals contained in a consultation document on reforming employment tribunals and the resolution of workplace disputes, published by the Department for Business, Innovation & Skills (BIS) last January. At the Conservative Party conference on 3 October 2011, the Chancellor of the Exchequer, George Osborne, announced that both reforms are to be implemented. This pre-empted the Government's formal response to the consultation, which is expected shortly.
Continue Reading...The U.K. Bribery Act's Impact on U.S. Employers
The United Kingdom's Bribery Act of 2010 became effective on July 1, 2011, and has a major impact on U.S. employers with business operations in the U.K. The Act sweeps away antiquated and piecemeal British bribery laws to create a regime of criminal offenses described by the Director of the Serious Fraud Office as, "the toughest bribery legislation in the world." Despite this, the U.K. government has emphasized that compliance with potentially stringent legislation should be a matter of common sense: a mixture of risk assessment and proportionality.
For a practical discussion of the main compliance issues from an employment perspective and guidance as to where U.S. organizations, used to complying with the Foreign Corrupt Practices Act and the patchwork of U.S. anti-bribery laws, should focus their attention, continue reading U.K. Bribery Act "On-Line" as of July 1 - U.S. Employer Impact, by Philip Berkowitz and David Goldman of Littler Mendelson and Ellen Temperton of Lewis Silkin.
Photo credit: MBPhoto, Inc.
Employment Newsnotes (Issue 51, Summer 2011)
Employment Newsnotes (PDF) is an occasional publication by Lewis Silkin covering recent UK employment law developments in an accessible, succinct and entertaining way. The latest issue includes articles on:
- Dangers for employers in relying on surveillance film in disciplinary proceedings
- Controlling employees' use of social media in the workplace
- How employers should go about implementing a pay cut lawfully
- The Government's proposal to introduce financial penalties for employers losing Employment Tribunal claims
- The latest cases concerning employees claiming discrimination on grounds of their 'philosophical belief'
- Interns - are they entitled to be paid the national minimum wage?
- The potential sanctions for businesses employing people who are working in the UK illegally
- The prospects of former News of the World staff being able to claim stigma damages
Important Supreme Court Ruling on Employment Status
The UK's Supreme Court has held that for a contract to be deemed a 'sham', it is not necessary to show that the parties intended to deceive. It is enough that the reality of the situation is very different from the written terms and conditions.
The case, Autoclenz Ltd v Belcher and others [2011] UKSC 41 (PDF), concerned 20 car valeters. They claimed that they were 'workers' within the meaning of the National Minimum Wage Regulations 1999 and the Working Time Regulations 1998 and so entitled to the minimum wage and statutory paid annual leave.
The valeters had each signed a written contract describing them as "a self-employed independent contractor" with an express acknowledgement that they were not an employee. They paid their own tax (and indemnified Autoclenz for any liability to tax and/or national insurance) and were required to purchase their own overalls from Autoclenz.
Continue Reading...Employer Liable for Negligent Statements in Email about Former Employee
The High Court has ruled that an employer could be liable to a former employee for negligent and damaging comments made in an email to his new employer - even though it was sent six years after the employment relationship had ended (McKie v Swindon College [2011] EWHC 469).
The case concerned Mr McKie, who worked at Swindon College between 1995 and 2002. He received an excellent reference when he left their employment. By 2008, he was working in a new role as director of studies at the University of Bath. Part of this role involved visiting various further education colleges, including his former employer.
Swindon's HR director sent an email to the University of Bath which stated that they did not want Mr McKie on their premises or dealing with their students. The reasons given included "real safeguarding concerns for our students", and also "serious staff relationship problems" during his previous employment. As a result of receiving this email, the University of Bath dismissed Mr McKie.
Continue Reading...New European Works Council Rules in Force
Significant changes to the UK legislation on European Works Councils (EWC) enter into force on 5 June 2011. The reforms are contained in the Transnational Information and Consultation of Employees (Amendment) Regulations 2010, which implement the requirements of the recast European Works Council Directive 2009/38/EC (PDF).
The recast Directive made a number of changes to the original EWC Directive (94/45/EC) following a review of its operation by the European Commission. The objectives were as follows:
- to increase the number of EWCs established;
- to improve the effectiveness of information and consultation in EWCs;
- to provide legal certainty; and
- to enhance coherence between European and national-level consultation.
The recast Directive must be implemented by all EU member states by the 5 June 2011 deadline, before the original Directive is repealed with effect from 6 June 2011. However, the new rules do not apply to existing agreements for transnational consultation that were entered into before 22 September 1996 (often referred to as "Article 13 agreements"), apart from in exceptional circumstances. Also generally exempt from most of the changes are EWC agreements that were created or revised between 5 June 2009 and 4 June 2011. All other EWCs will be subject to the new regime.
Further information on the changes and, in particular, their likely practical impact in the UK can be found in Lewis Silkin LLP's guide (PDF) to the recast EWC Directive.
Image credit: rzdeb
Plans for Flexible Parental Leave Unveiled
The UK Government's latest employment law consultation paper, Consultation on Modern Workplaces (PDF), sets out plans to introduce a new system of flexible, shared parental leave. This would build upon the Government's decision earlier this year to implement the previous Labour administration's legislation on additional paternity leave with effect from April 2011.
Other proposals covered by the consultation include:
- Extending the right to request flexible working to all employees.
- Amendments to the Working Time Regulations 1998 (WTR) relating to annual leave entitlement and its interplay with sickness absence.
- Mandatory equal pay audits for employers who are found by an Employment Tribunal to have discriminated on grounds of sex in relation to pay.