January 2012
Authors:
Noel Deans
noel.deans@klgates.com
+44.(0)20.7360.8187
Paul Callegari
paul.callegari@klgates.com
+44.(0)20.7360.8194
Daniel J. Wise
daniel.wise@klgates.com
+44.(0)20.7360.8271
Update: Employment Law Reform
Further information has been unveiled in relation to the Coalition Government's
plans to introduce wide ranging reform of employment law. It has now been
confirmed that a number of the proposals will come into force from April 2012,
including:
a.
b. increasing the maximum that can be recovered by way of a costs order from
£10,000- £20,000;
c.
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a 2 year qualifying period for unfair dismissal claims;
witness statements being taken as read (rather than having to be read out by
the witness); and
d. unfair dismissal claims being heard by a judge alone, without any lay
members.
There are also a number of further significant proposals due to be implemented as
law later this year or in 2013 (see December 2011 newsletter). Of particular interest
is the introduction of fees for claimants to bring a claim in the tribunal, which is
expected to be introduced in December 2013.
The Government also continues to consult in a number of other areas, which are
likely to be of great interest to employers, such as the proposed changes to family
leave, flexible working and statutory holiday. Vince Cable has also announced an
extension of the right to request flexible working to all employees.
Bad References
The question of whether to give a reference, and if so, what information to include in
the reference is often one which troubles employers, especially where the reference
is likely to be a 'bad' reference.
The Court of Appeal recently confirmed in Jackson v Liverpool City Council that
there is no duty to employees to provide a reference but where they do provide a
reference, the employer must ensure that it is true and accurate, and that it does not
give an unfair or misleading impression of the employee.
The Court considered the Council's reference which referred to an alleged 'issue' with
an employee's record keeping. It was alleged that the reference was unfair, given the
"issue" had not been investigated.
Whilst this case may provide some comfort to employers, it is also a useful reminder
of the fact that care must be taken to ensure that the reference is factually accurate
and does not provide an unfair or misleading impression of the employee.
On Notice
Whistleblowing: the burden of proof
Where an employee is dismissed or suffers some
form of negative treatment (detriment) as a result of
making a protected disclosure, i.e. reporting
wrongdoing or dangerous practises in an
organisation, they can potentially bring a claim for
whistleblowing against their employer.
A recent Court of Appeal decision in the case of
NHS Manchester v Fecitt has highlighted the care
that must be taken by employers when dealing with
an employee who has made a protected disclosure.
The claimants were nurses who reported concerns
about one of their colleague's qualifications to their
line manager. The matter was investigated and no
further action was taken by NHS Manchester against
the colleague. The claimants were dissatisfied with
this outcome and made the working atmosphere for
the individual unpleasant. NHS Manchester
subsequently redeployed two of the claimants and
the third was given no further work. The claimants
therefore issued a whistleblowing claim alleging that
they had been subjected to a detriment as a result of
making a protected disclosure.
The Court of Appeal rejected the claims for
whistleblowing, accepting the Council's argument
that the detriment was not in any way influenced by
the protected disclosures they had made, but in order
to improve the working environment. However, the
Court also confirmed that where the employee is
subjected to any detriment, it is up to the employer
to prove that the protected disclosure did not
influence their behaviour towards the employee in
any more than a "trivial" way. This is a higher test
for employers than if the employee had been
dismissed following the making of a protected
disclosure, when the employer must simply show
that the protected disclosure was not the "reason or
principal reason" for the dismissal.
Employers should therefore act with caution in
dealing with any employees that make a protected
disclosure, and ensure they can prove that there was
little or no connection between the disclosure and
any subsequent detriment suffered by the employee.
TUPE: when is a change to terms and
conditions following a TUPE transfer
permitted?
Employers are restricted in the extent to which they
are able to vary contracts of employment following
a TUPE transfer. If the principal reason for the
variation is the transfer, and it cannot be justified as
being an economic, technical or organisation reason
entailing changes in the workforce, then the
variation will be void.
Harmonisation with existing employee contracts is
not an acceptable reason for a variation. However,
two recent EAT decisions show that if
harmonisation is the consequence, but not the
intention, of the variation then such amendments are
valid.
In Smith v Trustees of Brooklands College the HR
director of the Brooklands College genuinely
believed that the transferred employees received an
unusually high pay package because of an
administrative mistake. He therefore reached an
agreement with the transferred employees to
introduce a phased reduction in their pay, bringing it
into line with Brooklands College's current
employees. The EAT held that although the clear
result was harmonisation, it was not the reason for
the variation, which was the HR director's mistaken
belief.
The claimants in Enterprise Management Services v
Dance worked for a maintenance company which
provided services to the Ministry of Defence and
were transferred to EMS under TUPE. A few
months prior to the transfer, EMS had introduced a
change to working hours and a performance related
pay system in order to improve productivity and
efficiency, which they also imposed upon the
transferred employees following the transfer. The
EAT held that the transfer was not the reason for the
variation to the employees' contracts, the reason was
the employer's desire to increase productivity and
efficiency amongst all staff.
These cases are encouraging for employers as they
move towards a slightly more flexible approach to
this issue. It nevertheless remains for the employer
to establish that the object of any variation was not
harmonisation or some other unacceptable reason
January 2012
2
On Notice
linked to the transfer. These decisions should not
therefore be read as a complete relaxation of the law
in this area.
In brief

New compensation limits will apply as of 1
February 2012:
a.
The limit on the compensatory award for an
"ordinary" unfair dismissal will increase
from £68,400 to £72,300
b. The maximum award for a week's pay for
the purposes of calculating statutory
redundancy payments and for the basic
award in an unfair dismissal claim will
increase from £400 to £430.

The EAT's decision in Ventrack Metals Ltd v
Fairley serves as a useful reminder that Polkey
deductions can be made even where an
employer's procedural failings are extensive.

In Dabson v David Cover & Sons Ltd the EAT
held that marks awarded by an employer as part
of a redundancy consultation exercise should
only be investigated in exceptional
circumstances, where there was an absence of
good faith or obvious error.
January 2012
3