Gordons Legal Employment Update – 10 April
Tuesday 10th April 2018
Terminating an Apprenticeship
A recent case has highlighted the risks of dismissing apprentices in redundancy exercises instead of others. Daniel Kinnear (“K”) was employed by Marley Contract Services (“M”) as an apprentice roof tiler. He started his apprenticeship in October 2014 on a contract which was due to end in November 2018. When he had finished his training he would get a certificate confirming his completion of a Modern Apprenticeship in Construction Roofing Occupations. However, in July 2016, K was told that he was going to be made redundant. He appealed this decision with the company to no avail.
Although K made every effort to find alternative work, work was in short supply and he could not find a new employer to finish his apprenticeship with. In addition to this, as K was over the age of 21 this meant that he was entitled to a higher rate of pay than younger workers and those in the first year of their apprenticeship, making him less attractive to other employers.
K brought a claim in the Employment Tribunal (“ET“) for breach of contract and claimed damages based on the payment of wages he would have received had he been allowed to complete his apprenticeship.
The ET found that R paid no attention to the fact that K was an apprentice and that his contract entitled him to be trained and employed until his apprenticeship finished. The ET calculated that his contract still had 122 weeks left to run and he would have been paid £24,217 during this time. The ET also considered that K could be disadvantaged in the labour market for years to come, both in terms of potential future losses, as he did not have his roofing qualification, and because he had trained with, and used, R’s own roofing products. As a result K was awarded £25,000, the maximum an ET can award in breach of contract cases.
Early termination of an apprenticeship contract can lead to the same or potentially greater claims than may arise from the termination of any other employment contract. This case is a reminder of the risks of terminating apprentices, and the importance of always following a fair redundancy process.
Time Limits on Minimum Wage Claims
In the recent case of Coletta v Bath Hill Court, the Claimant successfully claimed that the Respondent had failed to pay him at national minimum wage rates for some 15 years. The Respondent said that the Claimant could only go back six years because Section 9 of the Limitation Act 1980 (“LA”) sets the time limit for bringing a claim to recover sums under statute at six years and there was a double limitation period for unauthorised deduction of wages claims: a claim must be presented within three months of the (last) deduction and it must relate to deductions arising in the six years prior to the date of claim.
The Claimant appealed the decision and said that claims for unauthorised deductions are subject to a period of limitation by virtue of subsections 23(2) and (3) of the Employment Rights Act 1996 (“ERA”) and that Section 39 of the LA stated that, where other time limits are set out elsewhere by other legislation, the limitation period under the LA shall not apply (meaning that, essentially, time limits set out in other law take priority).
The Employment Appeals Tribunal (“EAT“) allowed the appeal and said that the Claimant had brought his claim in respect of the series of deductions made from his pay within three months of the last of the deductions in the series, as prescribed by subsection 23(3) of the ERA and was therefore entitled to recover the sums that were properly due to him, as provided by the National Minimum Wage Act 1998 (“NMWA”), without the imposition of a cap of six years.
This judgement could be costly for employers, it essentially means that where a claimant is successful in arguing that they have not been paid the full amount they are entitled to under the NMWA, there is no limit on how far back they can go in claiming the monies they are owed.
Redundancy is a potentially fair statutory reason for dismissing a worker, so long as the employer follows a fair procedure and considers all the circumstances of the dismissal.
Where a redundancy situation arises because the business no longer needs any employees, or as many employees, to do certain work, the employer may wish to retain a more senior, skilled or long-serving employee whose work has reduced and dismiss another employee who is not apparently redundant. This practice is called ‘bumping’. The more senior, skilled or long-serving employee of the two employees will be kept on and essentially move into a less senior position at the expense of the more junior employee who will be ‘bumped’ out of the business.
Previously, employers were under no obligation to consider ‘bumping’ unless the employee facing redundancy raised it. However, the EAT found in the case of Mirab v Mentor Graphics (UK) Ltd that if an employer fails, in a redundancy situation, to consider the ‘bumping’ of a more junior employee to make way for a more senior employee of their own initiative (without the employee in question raising the issue themselves), then the dismissal of that senior employee independent may be considered unfair.
Even though it may be natural to make a more senior, long-serving, more experienced individual redundant as part of a cost saving solution, this judgement means that employers potentially open themselves up to the risk of claims for unfair dismissal. Whilst this judgement does not create a hard and fast rule, employers should, as ‘best practice’, consider making a more junior person in the business redundant rather than a more senior one. This approach helps to ensure the fairness of the redundancy process, in line with the reasonableness test under s.98(4) of the ERA.
In the recent case of SoS BEIS v Parry and The Trustees of the Williams Jones’s School Foundation, the question was raised that, if an ET1 contains no particulars of claim, can it be sensibly responded to. The answer was ‘sometimes, yes’.
Very briefly, the Claimant was dismissed and was rehired by her employer the following day in a different role. The Claimant brought a claim and ticked the ‘unfair dismissal’ and ‘arrears of pay’ boxes on the ET1 form. In section 8.2 of the ET1, her solicitors did not set out his details of claim but wrote “Please see attached”. The attached particulars were for a different case.
Tribunal staff referred the claim to a judge to decide whether it should be rejected under Employment Tribunal rule 12(1)(b). The judge accepted the claim. The Respondent appealed, but the Employment Appeal Tribunal (“EAT“) held that acceptance of the claim by the first judge was perverse, but rule 12(1)(b) was beyond the powers of the Judge to overrule. The Respondent appealed again to the Court of Appeal who dismissed the appeal, commenting that the school knew that the Claimant had been dismissed; therefore, it could have sensibly responded to the ET1 even without particulars. Further particulars could subsequently be provided in due course/once ordered.
Employment Tribunal Rules are meticulous and it is important that they are complied with and that claims are brought, and defended, properly and thoroughly. If you have any questions or concerns about any forms, court documents or any parts of a claim, please do not hesitate to contact Gordons Employment Team for advice.