Gordons Legal Employment Update – 19th August 2016
Friday 19th August 2016
Please find below details of recent Employment Law updates and news from the past week or so.
New online form for workers to report complaints
This month the government has put in place a new online form for individuals to use if they need to make a complaint or raise concerns about certain areas of their employment. The form will allow individuals to report concerns about the national minimum wage, employment agencies, working time limits and the minimum wage when working in farming or agriculture.
The idea is to make the process of enforcing certain employment rights and obligations via government departments such as HMRC and HSE, easier for individuals.
At the moment the form has been temporarily withdrawn for functional updates however the intention of the form is that it should make reporting information faster and easier for individuals. However the forms do require certain security details to be entered such as a national insurance number, so some critics have said it is actually easier to complete and send the original downloadable form.
Comment: This is a useful reminder that employees have other less daunting avenues open to them than just the Employment Tribunal to enforce certain employment rights, which can be both costly and stressful. Merely the completion of an online form however may be a much more attractive option not to mention having no fee requirement!
Striking out employment tribunal cases – only as a last resort
In the recent disability discrimination case, Arriva London North Ltd v Mr C Maseya the Employment Tribunal (ET) struck out the Respondent’s defence and found in favour of the Claimant. The ET did this because it found that the proceedings were conducted in a scandalous and unreasonable manner. Arriva was found to have pursued a “false defence” and failed to comply with its duty to disclose despite the fact the company was represented.
The EAT set aside the Employment Tribunal’s decision on the basis the ET had not addressed the proportionality of the sanction of a strike out and this was an error of law. The EAT said as a matter of law, striking a claim out under r.37(1)(b) Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 should only be used as a last resort.
The EAT said tribunals must ask themselves when looking to strike out whether a party’s conduct has rendered a fair trial impossible. The EAT said that the rule should not be applied if for example missing documents can be later produced or any deficiency in a pleading can be rectified, if this was the case then it would not necessarily be rendered an unfair trial and thus r.37 (1)(b) should not be applied.
The EAT went onto emphasise that even if a fair trial was no longer possible because of what has occurred the ET should still look into other possible sanctions which are available rather than just striking the case out. The appeal was ultimately allowed and a full tribunal hearing was ordered.
Comment: This is a good example of how the EAT will not take a decision to strike out a case lightly. In this type of situation it should only be allowed if a fair trial is genuinely rendered impossible because of what has occurred, which in reality is a high benchmark. The key point to remember is that there is a large number of rules and regulations to be followed when conducting tribunal litigation. If you require any assistance contact a member of the employment team.
The role of HR and in-house legal teams in a disciplinary procedure
The case of Dronsfield v University of Reading provides useful guidance on the nature of advice from HR teams and in-house legal professionals when dealing with a disciplinary matter relating to an employee. In this case Mr Dronsfield was a professor at Reading University who was having a sexual relationship with a student and did not report this to the university. As an employee he was bound by the universities policies and procedures and this included guidance on relationships between staff and students. Under the guidance, he had to inform the university of the personal relationship to ensure any assessment of the student in question would be unbiased.
A disciplinary process took place as the relationship had not been reported to the university as a result of which Dronsfield was dismissed without notice. He brought a claim for unfair dismissal. The ET found that his dismissal was fair but the professor appealed and the EAT overturned the decision of the ET. During the appeal the EAT found that an investigatory report which was done as part of the disciplinary process had been influenced and amended by the HR team and also the university’s in-house legal team. In particular the report omitted various findings in Dronsfield’s favour. The EAT felt that standards of objective fairness had been compromised and even though the author of the report had signed it off the ET did not try and find out why the author had changed his view. The case was sent back to the ET to determine if the dismissal was unfair.
Comment: Decisions which are made by the disciplinary investigating officer must be their own decisions and judgements whatever advice they may have received along the way to the decision. Advisors and disciplining officers should understand the boundaries and respect the fact that the ultimate decision must be the disciplining officer’s and not the advisors. It is also worth remembering that if there are various draft outcomes shuttling around before the final version is arrived at, then without legal privilege these documents will be disclosable and the disciplining officer may be called upon to explain any sudden changes of position. We propose to cover this issue in more detail in our forthcoming update seminar.
Non-Payment of minimum wage – companies shamed
Many of the major newspapers reported last week on the government’s report on companies who are not paying their employees the minimum wage. Almost 200 companies who have not been paying their staff the minimum wage and living wage were featured including some football clubs, recruitment firms, care homes and hairdressers. The report showed that a total of £466,219 was due in arrears to employees. The “naming and shaming” scheme was introduced in 2013 and this is the longest list yet.
The Department for Business, Energy and Industrial Strategy confirmed all monies due to employees had been paid back to them. The department has said in order to crack down on companies repeatedly breaking the law in this area they will continue to name and shame them. Of the worst offenders was a restaurant in London and a recruitment agency in Derby, owing thousands of pounds in back pay to their employees.
In the same vein, reports this week have emerged on the Sports Direct workers who are to receive £1million back payments after the company has admitted to not paying staff the minimum wage at their Shirebrook site in Derbyshire, since as far back as 2012. The Unite union has said that each employee could receive as much as £1,000 and the payments will start to be paid as early as the end of this month under a settlement deal struck by the union, HMRC and Sports Direct.
Comment: This is unsurprising although the detail behind the case is worth noting: the shortfalls arose due to delays caused by security checks as workers tried to leave the site at the end of their shifts. Their working time was therefore longer than they were being paid for.
New legislation on termination payments
The government has published its response to the consultation which was launched in July 2015 on how termination payments are treated for the purposes of tax and National Insurance Contributions (NICs), the response includes draft legislation designed to implement the changes. The changes, some of which are listed below are expected to take effect in April 2018.
- All payments in lieu will be taxable whether or not contractual – effectively anything that the employee would have received if they had remained in employment and worked out their notice will be subject to tax and NICs.
- income tax and employer NIC rules are to be realigned so that both will be payable on any termination payment that exceeds £30,000. HMRC has decided to retain the employee NIC exemption where the payment exceeds £30,000.
- Removing the foreign service relief exemption for termination payments
The government has invited responses to the draft legislation to be received by the 5 October.
Comment: These proposals are in very early stages, but it is still worth noting the intended government changes in the law for the future. It may be worth inviting your payroll teams to consider the consultation and complete the questionnaire as it will be they who will ultimately need to deal with any complexities which may result particularly in terms of NICs.
If you require any further information on the above developments please do not hesitate to get in contact with a member of the Employment Team, on the following number 0113 227 0100.