EMPLOYMENT LAW

1. Lecturer: RowinGurusami 25th February 2012 EMPLOYMENT LAW

2. Lecturer: RowinGurusami The body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organisations. Mediates many aspects of the relationship between trade unions, employers and employees Largely a creature of Statute rather than Common Law. Leading Employment Law Statutes include the Employment Rights Act 1996, the Employment Act 2002 and various legislative provisions outlawing discrimination on the grounds of sex, race, disability, sexual orientation, religion and, from 2006, age. EMPLOYMENT LAW

3. Lecturer: RowinGurusami ‘An individual who has entered into, or works under a contract of employment’ (Employment Rights Act 1996) Someone under a contract of service Someone under a contract for services Tests: Control Test Integration Test Economic Reality Test What is an employee?

4. Lecturer: RowinGurusami Court will look at reality of situation (Ferguson v. John Dawson & Partners [1976]) In case of doubt, court looks at agreement between parties (Massey v. Crown Life Assurance [1978]) Control Test – Whether the employer has control over the way in which employee performs duties (Walker v. Crystal Palace Football Club [1910]) Integration Test: Whether employee is so skilled that he cannot be controlled in performance of his duties The test in Cassidy v. Ministry of Health [1951] was whether the employer appointed the employee, selected him for the task and so integrated him into the organisation. EMPLOYEE OR INDEPENDENT CONTRACTOR?

5. Lecturer: RowinGurusami Multiple (Economic Reality) Test: Whether employee was working on his own account. Fall v. Hitchen [1973]: No exhaustive list of relevant considerations Control to be considered Other factors such as providing own equipment, hires own helpers, degree of responsibility for investment and management EMPLOYEE OR INDEPENDENT CONTRACTOR?

6. Lecturer: RowinGurusami Multiple (Economic Reality) Test Market Investigations Ltd v Minister of Social Security (1968) Woman doing market surveys at fixed rate Own working hours Could work for other organisation Rigid work rules (interview instructions, delay for work) Court held she was an employee EMPLOYEE OR INDEPENDENT CONTRACTOR?

7. Lecturer: RowinGurusami Relevant Factors: Control Provision of own equipment Whether hiring own helpers Degree of financial risk Method of payment (regular?) Mutuality of obligation Opportunity of profit from sound management of organisation And so on.... EMPLOYEE OR INDEPENDENT CONTRACTOR?

8. Lecturer: RowinGurusami Temporary or Casual Workers O’Kelly v. Trusthouse Forte Plc (1983): Company under not obligation to offer work to waiter Home workers or outworkers Usually considered as self-employed, but in Nethermere (St Neots) Ltd v Taverna and Gardiner (1984), Court held workers developed a ‘mutuality of obligation’ through working regularly over a continuous period. EMPLOYEE OR INDEPENDENT CONTRACTOR?

9. Lecturer: RowinGurusami Agency Workers Courts will consider length of service (Franks v Reuters Ltd [2003]) and control that client of agency has over worker (Motorola v Davidson and Melville Craig [2001]) Franks v Reuters Ltd [2003]: Length of employment does not imply contract of employment but is a factor in determining employment status EMPLOYEE OR INDEPENDENT CONTRACTOR?

10. Lecturer: RowinGurusami What right are available to individuals and how they are treated for tax purposes ERA 1996 and EA 2002 provides protection to more than employees. Drafted to cover ‘workers’. Social Security Taxation Employment Protection Tortious Acts Implied Terms VAT Bankruptcy Health and Safety WHY DOES IT MATTER?

11. Lecturer: RowinGurusami Contract of service or apprenticeship, whether express or implied, and (if express) whether it is oral or in writing Just like any other contract – requires offer and acceptance, consideration and intention to create legal relations Contract of employment consists of: Express Terms Terms implied by courts Terms implied by statute CONTRACT OF EMPLOYMENT

12. Lecturer: RowinGurusami ERA 1996 requires employer to provide employee with written statement of certain particulars of employment within two months of commencement of employment Name of employer and employee Date employment began Pay rate and intervals Hours of work Holiday and holiday pay Sick leave and sick pay Pension and pension schemes Length of notice of termination Title of job Details of disciplinary procedures EXPRESS TERMS

13. Lecturer: RowinGurusami Employee’s duties: Fundamental duty of faithful service Duty to obey lawful and reasonable orders (Pepper v Web [1968]) Duty of mutual co-operation (Secretary of State for Employment v ASLEF [1972]) Duty to exercise reasonable care and skill (Lister v Romford Ice & Cold Storage Ltd [1972]) Duty of good faith (Sinclair v Neighbour [1967]) Duty to render personal service Duty to account for all money and property received during course of employment (Boston Deep Sea Fishing and Ice Co. v. Ansell [1888]) COMMON LAW DUTIES

14. Lecturer: RowinGurusami Employer’s duties: To take reasonable care of his employees Duty of mutual trust and confidence (Isle of Wight Tourist Board v. Coombes [1976]) Duty to pay reasonable compensation Duty to indemnify the employee Duty to provide a safe system of work (Latimer v AEC Ltd [1953]) Duty to give reasonable notice of termination of employment Duty to provide work (William Hill Organisation Ltd v Tucker [1998]) Provision of reference (Cox v Sun Alliance Life [2001]) COMMON LAW DUTIES

15. Lecturer: RowinGurusami Mainly concerns pay, maternity leave, work-life balance generally, time off, health and safety and work time Most rights provided to employee who has one year’s continuous service Pay: Equal Pay Act 1970 states that ‘employment terms should be at least as favourable as those given to an employee of opposite sex.’ Covers terms such as sick-pay, holiday pay and working hours (applying to all forms of full-time and part-time work) Other factors considered: Length of service, location (time of the day does not matter) National Minimum Wage Act 1998 (£5.73 per hour) STATUTORY DUTIES

16. Lecturer: RowinGurusami Time off work: Trade union officials [ss 168-169 Trade Union and Labour Relations (Consolidation) Act 1992] Redundant employers to find new work Allowing to perform public duties (e.g. Magistrate) Maternity Leave: Maternity and Paternity Leave and Pay Right to return to work on the same terms STATUTORY DUTIES

17. Lecturer: RowinGurusami Flexible working: To be eligible: Have child under 6 years Have continuously employed for 26 weeks Have responsibility of child’s upbringing Can be refused only if: Burden of additional cost Detrimental effect on ability to meet consumer demand Inability to re-organise work STATUTORY DUTIES

18. Lecturer: RowinGurusami Health and Safety: Health and Safety at Work Act 1974 (Health and Safety at Work Regulations 1999) To ensure health, safety and welfare of employees, as far as is practicable Provide and maintain plant and systems of work safe and without risk Ensure safe use, handling, storage and transport of articles Provide adequate training, instruction, supervision Adequate access in and out Provide safe and healthy work environment STATUTORY DUTIES

19. Lecturer: RowinGurusami Health and Safety: Health and Safety at Work Act 1974 (Health and Safety at Work Regulations 1999) To ensure health, safety and welfare of employees, as far as is practicable Provide and maintain plant and systems of work safe and without risk Ensure safe use, handling, storage and transport of articles Provide adequate training, instruction, supervision Adequate access in and out Provide safe and healthy work environment STATUTORY DUTIES

20. Lecturer: RowinGurusami Can only be varied if contract expressly gives that right, or if all parties consent to variation Varying terms without changing contract (e.g. Existing express clause) Changing existing contract (Consent) Signing a new contract Varying Terms of employment contract

21. Lecturer: RowinGurusami When employment terminated by notice, there is no breach of contract (unless contents are notice are in breach) Rules: Period of notice no less than statutory minimum. Statutory rules only prescribe the minimum period. May be given without specific reason If contract mentions notice to be given only in specific circumstances, then no others should be entertained. (McClelland v Northern Ireland General Health Services Board [1957]) TERMINATION BY NOTICE

22. Lecturer: RowinGurusami Statute imposes a minimum period of notice of termination to be given on either side, depending on employee’s length of service: s86 of ERA 1996 Continuously employed for 1 month or more but less than a year: not less than a week’s notice Continuously employed for 2 years or more but less than 12 years: one week’s notice for each year of continuous employment Continuously employed for 12 years or more: not less than 12 weeks’ notice If employee gives notice, minimum one week if employed one month or more PERIOD OF NOTICE

23. Lecturer: RowinGurusami If employee dismissed in any way, he/she may request his employee gives him/her a written statement of the reasons for dismissal and it must be provided within 14 days. Dismissal: Termination of an employment of contract by employer Summary Dismissal Constructive Dismissal Wrongful Dismissal (Common Law) Unfair Dismissal (ERA 1996) DISMISSAL

24. Lecturer: RowinGurusami Summary Dismissal: Where employer dismisses employee without notice If employee has committed a serious breach of contract, employer incurs no liability Will depend on circumstances (Wilson v Racher 1974 decision contrary to Pepper v Webb 1969) SUMMARY DISMISSAL

25. Lecturer: RowinGurusami Constructive dismissal occurs when employer repudiates some essential term of contract (e.g. Change of duties ) and employee resigns. Employer liable for breach of contract Employee must show: Employer committed serious breach of contract Left because of breach Has not ‘waived’ the breach Breach must be serious one (Western Excavating (ECC) Ltd v Sharp 1978) CONSTRUCTIVE DISMISSAL

26. Lecturer: RowinGurusami Where employer summarily dismissed employee without notice, there may be claim for damages at common law for W.D. Case must be brought before County Court or High Court Claimant must show dismissal in breach of contract Usually only damages for loss of notice period awarded (Johnson v Unisys Ltd 2001) WRONGFUL DISMISSAL

27. Lecturer: RowinGurusami Dismissal not wrongful if justified Justifiable circumstances: Wilful disobedience of lawful order Misconduct Dishonesty Incompetence or neglect Gross negligence Immorality Drunkenness (specific situations only or if repeated: Williams v Royal Institute of Chartered Surveyors 1997) WRONGFUL DISMISSAL

28. Lecturer: RowinGurusami Only effective remedy available to wrongfully dismissed employee is claim for damages based on the loss of earnings Measure of damages is the sum that would have been earned if proper notice had been given Wronged party is expected to mitigate his loss (e.g. Seeking other employment) REMEDIES FOR WRONGFUL DISMISSAL

29. Lecturer: RowinGurusami Important element of employment protection legislation ERA 1996 s94 provides a right not to be unfairly (NOTE: fair can still be harsh) dismissed People not included are: Working outside Great Britain, unofficial strike action and other categories, e.g. Police. Conditions to obtain compensation: Continuously employed for one year Have been dismissed (determined by tribunal) Have been unfairly dismissed UNFAIR DISMISSAL

30. Lecturer: RowinGurusami Exceptions to continuous service rule: Matter concerns safety representative penalised for carrying out legitimate health and safety activities Where employee is being denied statutory right Where employee is pregnant Effective date of dismissal: If given by notice, the date on which notice expires If not by notice, the date on which termination takes effect When employee’s term not renewed, date on which term expired UNFAIR DISMISSAL

31. Lecturer: RowinGurusami Capability or qualifications of employee for performing work of the kind which he was employed to do (Lewis Shops Ground Ltd v Wiggins 1973 – nature and quality of incompetence) Conduct of employee Redundancy Legal prohibition Some other substantial reason justifying dismissal Automatic fair reasons (unofficial strikes, national security threat) FAIR REASONS FOR DISMISSAL: s98

32. Lecturer: RowinGurusami Victimisation of health and safety complainants or whistleblowers Pregnancy or use of maternity leave Trade union membership/activities (legal) Assertion of a statutory right Unfair selection for redundancy Dismissal on ground of retirement only fair if: Applies after default age of 65, and Written notice of intended retirement at least 6 months in advance and notified employee of his/her right to request to continue work. UNFAIR REASONS FOR DISMISSAL

33. Lecturer: RowinGurusami Dismissal also unfair if employer acted unreasonably in dismissing employee (s98) Reasonableness of employer: Has correct procedure been applied? (e.g. Warnings) Did employer take all circumstances into consideration? What would any reasonable employer do? Tribunal must set rights and interests of employee against interests of employer’s business and decide whether any reasonable employer could come to a different conclusion UNFAIR DISMISSAL

34. Lecturer: RowinGurusami Employee making a claim for compensation: Apply to tribunal within 3 months of dismissal Show he is qualifying employee and has in fact been dismissed Employer must prove what was the alleged principal reason for dismissal and that it was one of reasons listed in s96 or otherwise substantial reason of a kind Tribunal must decide if principal reason justified dismissal and whether employer acted reasonably in treating the reason as sufficient Dismissal is unfair if principal reason is not one of fair ones in s98 UNFAIR DISMISSAL

35. Lecturer: RowinGurusami Statement of grounds for action and invitation to meeting Nature of meeting Appeal Stage Requirements (EA 2002): Timing and location of meeting must be reasonable Meeting conducted in a way to allow both sides to explain their case If more than one meeting, employer to be represented by a more senior person at first meeting Under s98A, dismissal automatically unfair if procedures not complied with by employer DISCIPLINARY PROCEDURES

36. Lecturer: RowinGurusami Reinstatement Re-engagement Compensation (basic award, compensatory award, additional award) No re-engagement order if there had been breakdown in confidence (Wood Group Heavy Industrial Turbines Ltd v Crossan 1998) Compensation may be reduced if: Employee contributed to own dismissal (s123(6)) Employee unreasonably refused offer of reinstatement Just and equitable to reduce basic award (s123(1)) REMEDIES FOR UNFAIR DISMISSAL

37. Lecturer: RowinGurusami Dismissal treated as redundancy if: Employer ceased (or intends to cease) to carry on business for which employee has been employed, or The employer has ceased (or intends to cease) to carry on the business in the place where the employee was employed, or Requirements of business have ceased or diminished Key test is to see whether there has been reduction of employers’ requirements for employees to work at the place where concerned person is employed Redundancy pay is calculated on same basic as basic compensation for unfair dismissal REDUNDANCY

38. Lecturer: RowinGurusami Exceptions to right to redundancy payment: If person does not fit definition of employee by statute Not been continuously employed for 2 years Have been or could be dismissed for misconduct (Sanders v Neale 1974) Offer to renew contract is unreasonably refused Claim is made out of time (after 6 months) Employee leaves before being made redundant having been notified of possibility of redundancies REDUNDANCY