Back to School! – Employment Law Update David Ludlow Michael-Jon Andrews Andrew Peters Ben Collingwood 23 rd September

1. Back to School!– Employment Law Update David Ludlow Michael-Jon Andrews Andrew Peters Ben Collingwood 23rd September 2010

2. Unfair Dismissal Buckland v University of Bournemouth [2010] EWCA Civ 121 (2010) IRLR 445 • Professor marking exam re-sits • Moderated but then moderated for a 3rd time without knowledge of Professor • Professor protested - inquiry absolved him and criticised board of examiners • Resigned after enquiry – 5 months notice – until end of academic year

3. Unfair Dismissal (2) • ET - University committed fundamental breach. Even if breach curable, inquiry insufficient measure • EAT - University committed fundamental breach but inquiry ‘cured’ it • CA – Agreed with ET, a breach cannot be cured by employer before it is accepted by the employee

4. Unfair Dismissal (3) Also confirmed 4 stage test for constructive unfair dismissals • Was there a breach of the implied term? – Malik v BCCI • Did breach entitle resignation? – Western Excavating v Sharp • Was there a fair reason for the dismissal? – s98 ERA • Was dismissal for that reason and substantially and procedurally fair? The band of reasonable responses test in deciding if there was a breach was rejected as being a legal requirement although reasonableness not rejected as a tool in deciding if a breach has occurred.

5. Unfair Dismissal (4) Consequence for Employers • More difficult to show there has not been a breach • More difficult to show conduct in band of reasonable responses • Sedley LJ argued that there should be a more robust view regarding affirmation - Professor waited 8 months before terminating contract

6. Employment Status (1) Status of “worker” • Community Dental Centres Ltd v Sultan-Darmon [2010] • George Sultan-Darmon a dentist engaged by CDC claimed unlawful deductions of wages • CDC contracted to supply dental services to the NHS. • Case turns on interpretation of s230(3) ERA – definition of “worker” • Workers a creature of statute and have some but not all of the protections afforded to employees • Example: employees and workers benefit protection from discrimination but only employees have rights of unfair dismissal • “any… contract … whereby the individual undertakes to perform personally any work or services for another…”

7. Employment Status (2) Some key terms • Self employed independent contractor dentist with full clinical freedom • Freedom to chose patients • No freedom to choose hours and rostered for on “on-call” duty • Tax and NI dealt with by Dr Sultan-Darmon and modest expenses set off against earnings • Entitled to undertake private work • Obligation to appoint locum in cases of absence (ill health, mat leave etc..) for 5 days

8. Employment Status (3) ET held not an “employee” – no mutuality of obligation but was a “worker” • No guarantee of work or work of a certain level • No obligation to treat patients assigned although commercial sense to do so Claimant appealed to EAT only on “worker” issue EAT held that; • If no mutuality of obligation exists, there is neither employee or worker status because no obligation to do “any work or services for another” at all • An unfettered right of substitution will always be fatal to an argument that an individual is a worker Consequences for Employers • Makes is slightly easier for well drafted consultancy agreements to fall outside the liability of employment legislation. • Employer needs to put in appropriate safeguards in the contract that the substitute is suitable.

9. Holiday and Sick Pay– a worker’s rights during sickness absence • In the case of Stringer the ECJ decided: • workers on sick leave must continue to accrue holiday rights • workers may be allowed to take their statutory holiday during sick leave (it is up to the particular member states to decide) • if workers are prevented from taking their holiday because of sickness, they must be allowed to take it following their return to work, even if this means carrying it over to the next leave year • Where a worker’s prearranged holiday clashes with sick leave, the worker can choose sick pay (if any) or holiday pay • The Working Time Regulations 1998 do not allow holidays to be carried over – the “use it, or lose it” principle. However, in Shah v First West Yorkshire Limited (2009), the Tribunal allowed holidays to be carried over!

10. Holidays and Sick Pay– payments upon termination • Long term sickness absence • In Khan v Martin McColl (2010) the Tribunal decided that a worker could only carry forward if they had requested holidays and been denied • Options for Employers: • Refuse to allow a rescheduling of holidays • Reinstate full leave entitlement and allow a carry over • Payments upon Termination and a deduction from wages claim • Options to prevent a series of deductions claim: • Ensure worker takes holiday in current leave year • If dismissing, pay for the current year only

11. Maternity Leave Issues • Practical issues arising prior to / during maternity leave: • Time off for antenatal appointments (reasonable & paid) • Statutory Maternity pay for up to 39 weeks • Right to return to same job (following ordinary maternity leave) • Right to return on terms and conditions no less favourable (following additional maternity leave) • Priority for alternative employment in redundancy cases • Right to request flexible working on return to work after the birth • Protection from dismissal, detriment or discrimination by reason of pregnancy / maternity leave

12. Paternity Leave- current regime and proposed increases • Since April 2003 qualifying employees have been entitled to: • Either one whole or two consecutive weeks paternity leave • Statutory paternity pay for up to two weeks (currently £124.88) • Leave must be taken within 56 days of childbirth or adoption placement • Eligibility: • 26 weeks employment at 14th week before the expected week of confinement • Father or married to, civil partner or partner of child’s mother • Have or expect to have responsibility for child’s upbringing • Proposed Additional Paternity Leave • For babies due on or after 3 April 2011 • An eligible employee will be permitted to take a maximum of 26 weeks where the spouse / partner has returned to work with some of their maternity / adoption leave untaken

13. Whistleblowing Update • Public Interest Disclosure Act 1998 (“PIDA”) • Policy/Purpose: • Safe and acceptable for workers to disclose wrongdoing • Protection from detriment/dismissal • Forewarning for Ers of any malpractice; opportunity to remedy.

14. Is it a Qualifying Disclosure? (1) S.43B(1) - “Qualifying Disclosure” = any disclosure of information which, in the reasonable belief of the worker making it , tends to show wrongdoing is being committed / likely: • Criminal offence • Failure to comply with legal obligation • Miscarriage of justice • Endangerment of health & safety • Damage to environment • Concealment of any of the above

15. Is it a Qualifying Disclosure? (2) Hibbins –v- Hesters Way Neighbourhood Project [2008] • The wrong disclosed does not have to have been committed by the Er • Disclosure of a wrong committed by any third party can qualify BP Plc –v- (1) Mr P Elstone (2) Petrotechnics Ltd [2009] • In order to qualify, disclosure does NOT have to: • relate to the current Er or its business; nor • be made to the Er itself • The only requirement is that the detriment is suffered in the worker’s current employment Cavendish Munro Professional Risks Management Ltd –v- Geduld [2009] • Must communicate “information”, not mere allegation of failure. • “Information” = The wards have not been cleaned for 2 weeks. Yesterday, sharps were left lying around. • “Allegation” = You are not complying with health and safety requirements.

16. Is the whistleblower’s belief that it is a qualifying disclosure reasonable? Babula –v- Waltham Forest College [2007] • Eee does not have to be correct in his belief that he is making a qualifying disclosure. • Just need reasonable belief: • Does Eee believe his disclosure meets the definition? • Is that belief objectively reasonable? • Is the disclosure made in good faith?

17. Was disclosure made in Good Faith? Street –v- Derbyshire [2004] • Must disclose in good faith • Protection may be lost where the predominant motivation for disclosure was an ulterior motive, unrelated to purpose of PIDA Aryeetey –v- Tuntum Housing Association [2008] • Where disclosure is found to be made in good faith, and the worker continues to make disclosures to other parties as part of a vendetta, it may be possible to find bad faith before remedy is decided Daleside Nursing Home –v- Mathew [2008] • If worker brings up protected disclosure, Er likely to investigate truth of evidence and good/bad faith of disclosure • If untruth or bad faith – worker risks difficult to defend costs application by Er

18. Summary of Advice to Employers • Employers should take potential whistleblowers seriously. • Consider carefully whether a qualifying disclosure has been made. Information about the wrongdoing of a former employer or any third party can qualify! • Do not disregard a disclosure even if you know that the worker is mistaken. All that is required is a reasonable belief by the worker. • Investigate thoroughly in order to expose any possible ulterior motive which may show the absence of “good faith”.

19. Exploitation: the National Minimum Wage • From October 1st • Principal rate from 21 years - £5.93 • Young workers 18 to 20 years - £4.83 • Under 18 workers - £3.64 • NEW for ‘apprentices’ - £2.50 per hour

20. Bribery in the workplace – Bribery Act 2010 • Comes into force April 2011 • Outlaws payment of business bribes • Even if abroad • Unlimited fine for employees, directors and commercial organisations • Defence of ‘adequate procedures’ – obtain MOJ Guidance

21. Bribery in the workplace – Bribery Act 2010 • Practical response • Review or establish procedures • Risk assessment • Put in place a policy • Risk management procedures, auditing of compliance • Training • Monitoring • Whistleblowing procedures

22. The Territorial Scope of Employment Law Unfair dismissal/ Redundancy rights • Employment Rights Act says must be employed “in Great Britain” • But Serco case has widened scope • Peripatetic exception • Enclave abroad exception • Posted abroad exception • Halliburton case says list is not exhaustive • E.g. MOD –v- Wallis (substantial connection to Great Britain) • E.g. Duncombe case says overseas Fixed Term workers and others relying on European rights (Part Time workers) can invoke UK unfair dismissal rights

23. The Territorial Scope of Employment Law- Discrimination (1) Current discrimination legislation says: • Employment “at an establishment in Great Britain” Or • Working abroad for purposes of a GB business AND ordinarily resident in GB • Once again European rights “piggy back” (MOD –v- Wallis & Grocott) Equality Act 2010 (October 2010) makes no provision • Unfair dismissal rights test • With EU piggy backing for discrimination

24. The Territorial Scope of Employment Law- Discrimination (2) Maternity/ Paternity/ Adoption pay • Payable to employees working in the EU and EEA • and abroad Maternity/ Paternity/ Adoption leave • EU and EEA definitely • And abroad probably Holiday pay • European law trumps UK holiday regulations

25. The Territorial Scope of Employment Law- Unfair competition restrictions • International workforce: think about applicable law • Based on employees’ domicile • US corporate clients exposed if US contracts • EU corporate clients?

26. TUPE • UK TUPE Regs go further than “transfer of an economic entity which retains its identity” • UK Service Provider changes have had a significant impact on business where ‘activities’ are contracted out, contracted in or reassigned. • Constructive dismissal claims • Material detriment claims • Retention of identity is not relevant to a service provider transfer • Extra territoriality- Holis Metal -v- GMB

27. Any Questions?