On Notice
June 2008
Authors:
Noel Deans
+44 (0)20 7360 8187
noel.deans@klgates.com
Paul Callegari
+44 (0)20 7360 6497
paul.callegari@klgates.com
Jackie Cuneen
+44 (0)20 7360 8184
jackie.cuneen@klgates.com
Lisa Goodyear
+44 (020.7360.8256
lisa.goodyear@klgates.com
Susannah Jarvis
+44 (020.7360.8271
susannah.jarvis@klgates.com
www.klgates.com
We start this month’s edition of On Notice with news of a potentially significant change
to the rights of agency workers, announced by the Government on 20 May 2008. Next,
their days may be numbered but the statutory grievance procedures continue to give rise to
litigation and we report on two EAT cases, which address the question of what a “step one”
grievance letter needs to contain to satisfy the statutory requirements under the standard and
the modified grievance procedures. We also report on a decision dealing with the question
of what uplift Tribunals should apply to damages where the employer has conceded that
it failed to comply with the statutory dismissal procedures. Finally, we summarise another
EAT decision regarding changes to terms and conditions of employment.
Agency workers to get equal rights after 12 weeks’ service
On 20 May 2008 the Government announced that it had reached an agreement with the TUC
and the CBI over plans to give agency workers the right to receive the same “basic work
and employment conditions” as permanent staff after 12 weeks’ service. This is a significant
development, and one which has been welcomed by trade unions. The Government intends
to introduce legislation dealing with this in the next parliamentary session. Future editions
of On Notice will report on what the legislation entails once the process begins.
For further information on this development, please contact Noel Deans.
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Requirements for a step one letter under the modified
grievance procedure
In Clyde Valley Housing Association Ltd v MacAulay, the EAT has re-iterated the level of
detail required for a valid step one letter under the modified grievance procedure (which
applies where the employee has left employment and both parties agree in writing to use
this procedure). Under the modified grievance procedure the employee must set out not
only “the grievance” but also “the basis for it”. A failure by a claimant to comply with step
one of either the standard or the modified grievance procedure bars the employee from
subsequently bringing a claim.
In the Clyde Valley case the Claimant, Ms MacAulay, resigned from her employment with
the Clyde Valley Housing Association (CVHA). The parties later agreed to use the modified
grievance procedure. Her solicitors wrote to CVHA’s solicitors setting out a grievance on
her behalf. In essence, it stated that she had been “treated in the most oppressive, unfair and
degrading manner”, had been harassed and intimidated by her managers who had embarked
on a “wholly unjustified and oppressive disciplinary investigation” and that she had been
forced to resign because her employer had embarked on a course of conduct likely to destroy
trust and confidence.
CVHA contended that Ms MacAulay’s letter was not a valid step one letter. The EAT agreed
and dismissed Ms MacAulay’s claim. The EAT recognised that there was a significant
difference between the standard and modified procedures regarding the content of the step
one letter. Under the standard procedure only the general nature of the complaint need be set
out. Under the modified procedure, however, the “basis” of the grievance also needed to be
set out. This requires the employee to set out the evidence on which the grievance is based.
Ms MacAulay’s letter contained no such evidential basis in that it contained no specification
On Notice
of the acts, conduct and events relied upon. It merely
made a generalised complaint about the character of
those as yet unspecified acts.
Whether Parliament intended different standards to
apply to the two procedures is uncertain. However, the
fact that such a distinction exists is further evidence of
the unnecessarily legalistic nature of the procedures
which themselves form the basis of disputes rather than
acting as a catalyst for the resolution of disputes. That
was certainly not Parliament’s intention and illustrates
why the procedures will soon be repealed.
For more information on this case please contact
Paul Callegari.
Requirements for a step one letter under
the standard grievance procedure
The Clyde case (above) can be contrasted with the
recent EAT decision in Bottomley v Wakefield District
Housing which re-iterated that the requirements for a
step one letter under the standard grievance procedure
are minimal. It does not even have to have been sent
to the right employer!
In this case, Ms Bottomley was employed by Wakefield
HA. She had previously been employed by the local
authority but was transferred to Wakefield HA under
TUPE. 18 months after the transfer, Ms Bottomley’s
solicitors sent a statutory grievance to her former
employers, the local authority, indicating that she
believed that she was receiving less pay than men doing
jobs rated the same or lower than her. Three months
later, she brought proceedings against Wakefield HA
as Respondent.
The Employment Tribunal struck out the claim on the
ground that Ms Bottomley had not complied with step
one of the standard grievance procedure because the
letter had been sent to the wrong employer.
The EAT disagreed and held that step one had been
complied with. The employment judge had required
too much of the step one letter. The grievance made it
clear that she was making a complaint about equal pay.
Those were matters that required some response from
Wakefield HA, even if it was only to point out that it
did not employ the comparators and that it had nothing
to do with the local authority. Once Wakefield HA had
read the grievance, even though it had been wrongly
directed to the local authority, the “wrong recipient”
point disappeared.
For more information about this case please contact
Lisa Goodyear.
Level of uplift to be applied to damages for
failure to comply with statutory procedures
Where an employer has failed to comply with the
statutory dismissal procedures, Employment Tribunals
are required to apply an uplift to damages of 10% and
may, at their discretion, apply an uplift of up to 50%.
In McKindless Group v McLaughlin the EAT
emphasised the need for Claimants to provide evidence
when seeking an uplift greater than the minimum 10%.
The Claimant, Mr McLaughlin, had been unfairly
dismissed by McKindless Group which conceded at
the start of the hearing that the dismissal had been
automatically unfair because it had failed to follow
the statutory procedures. As a result, Mr McLaughlin
sought an uplift to his compensatory award of 50%.
Since the employer had conceded liability, there
was no evidence before the Employment Tribunal
providing any explanation as to why the employer had
failed to comply with the procedures. The Tribunal
awarded an uplift of 50%, noting that the concession
had been made late and that there were no “exceptional
circumstances which would make any increase unjust
or inequitable”.
However, the EAT decided that this was the wrong
approach. The relevant legislation (Section 31 of
the Employment Act 2002) provided for a minimum
uplift of 10%, but gave discretion to award a greater
uplift up to 50% if it was just and equitable to do so.
According to the EAT, the timing of the concession
was an irrelevant consideration as it was an extraneous
circumstance relating to the way in which the litigation
was conducted. The decision whether to make an uplift
greater than 10% must be exercised on the basis of
evidence before the Tribunal, for example as to the
reasons for not complying with the statutory procedure.
There was no evidence one way or the other on this
point. There is no obligation on a Respondent to
June 2008 | 2
On Notice
explain the failure to comply. Rather, the Tribunal
must establish facts that make it just and equitable to
increase the uplift above 10%. Based on this, the only
appropriate uplift to apply in this case (where no such
facts could be established) was 10%.
This decision has been criticised because it effectively
means that the employer who makes no attempt to
comply with the procedures and concedes liability is
likely to end up having to pay less damages than the
employer who tries to comply (but fails to do so) and
defends the claim on that basis. This is because as
soon as the employer produces evidence in defending
the claim regarding why it failed to comply with the
relevant procedures, the Tribunal can use that evidence
to justify increasing the uplift beyond 10%.
However, as a decision of the EAT it is binding
on Employment Tribunals and, for these reasons,
employers would be well advised to consider conceding
liability in a situation where their compliance with the
statutory procedures is open to challenge.
For more information on this case contact
Jackie Cuneen.
Changing terms and conditions of
employment
The EAT has decided a case regarding whether
employees are dismissed by reason of redundancy
when the same employer makes an offer to them
to be immediately re-engaged on different terms
and conditions.
In Martland and ors v CIS Ltd the Claimants were
employed by CIS as financial advisors. In 2005 CIS
wanted to change the terms and conditions of all
its financial advisors. Having tried unsuccessfully
to achieve the changes with the agreement of the
recognised trade union, CIS terminated the Claimants’
contracts and offered them new contracts on the new
terms. The Claimants refused the new terms, claimed
they had been unfairly dismissed and claimed that they
were entitled to a contractual redundancy payment
because they had been made redundant.
The Employment Tribunal decided that the dismissals
were not by reason of redundancy and the EAT agreed.
The crucial question was whether the new terms
and conditions meant that the Claimants were being
required to carry out “work of a particular kind” which
was different to the work they had carried out under
their existing contracts. The EAT said that they were
not. They were still carrying out work of a particular
kind (which there had been no reduction in the need
for them to do) but simply performing it in a different
way. There was no redundancy situation. Rather the
dismissals had been, as CIS had submitted, for some
other substantial reason.
This decision will be welcomed by employers who
are forced to resort to dismissal and re-engagement in
order to achieve a variation to terms and conditions of
employment. Had the EAT decided otherwise, it would
have exposed employers in this situation to potentially
expensive statutory and contractual redundancy
payments to their employees.
For more information on this case, please contact
Susannah Jarvis.
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