HR Two Minute Monthly - September 2013

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Summary: Here is this month's summary of employment law developments.

Dismissal for gross misconduct not automatically within the range of reasonable responses

The EAT has held in Brito-Babapulle v Ealing Hospital NHS Trust that dismissal is not the automatic consequence of a finding of gross misconduct.  In assessing fairness of a dismissal, the ET should take into account not just the nature of the misconduct, but look at mitigating factors such as length of service, the consequences of the dismissal and any previous unblemished record.

The Claimant worked for the NHS under a contract that allowed her to have private patients.  While on sick leave from the NHS and in receipt of her full contractual sick pay, the Claimant continued to treat private patients.  The NHS disciplinary panel found that this amounted to gross misconduct and dismissed the Claimant.  The ET upheld the finding of gross misconduct and concluded that dismissal must always be within the range of reasonable responses once gross misconduct is found.

While accepting that it was not perverse for the ET to find that there had been gross misconduct, the EAT held that there had been an error of direction by the ET in concluding that dismissal must always then be within the range of reasonable responses.  The ET should have had regard to all the circumstances, including mitigation when assessing whether the employer’s behaviour was reasonable.

Employers should ensure that consideration is given to the sanction in cases of gross misconduct, including any mitigating factors which would point towards a decision other than dismissal.

No right to carry over the 1.6 weeks’ leave when cannot take due to sickness absence

Where a worker is prevented from taking the additional 1.6 weeks’ leave under the Working Time Regulations 1998 (WTR) due to sickness absence, the EAT has confirmed in Sood Enterprises Ltd v Healy that the Working Time Directive does not require carry over.

This question had been left unanswered following the case of NHS Leeds v Larner in which the Court of Appeal held that the WTR should be interpreted to allow workers on long term sick leave to carry over their accrued 4 weeks’ statutory holiday to the extent that they are unable or unwilling to take it in the current leave year due to sickness absence.  However, the Court of Appeal did not consider whether the additional 1.6 weeks’ statutory holiday entitlement could be carried forward.

Referring to the ECJ’s decision in Niedel v Stadt Frankfurt am Main, the EAT stated that Niedel is authority for the proposition that it is for national law to set requirements as it thinks fit for additional leave.  The EAT concluded that under the WTR the 1.6 weeks’ could only be carried over if there was a relevant agreement between the parties.

This case is consistent with the Government’s Consultation on Modern Workplaces which proposes a carry over of 4 weeks’ annual leave and not 5.6 weeks.

Court of Appeal guidance on level of investigation into allegations of dishonesty

In Stuart v London City Airport Ltd, the EAT and the ET came to different conclusions on the minimum level of investigation which fairness required in Mr Stuart’s disciplinary process for suspected theft.  The EAT held that the ET’s decision that the dismissal was fair was perverse on the basis that other evidence was available and further investigation should have been carried out given that this was an allegation of dishonesty.

The Court of Appeal accepted that there is a spectrum of gravity of misconduct which needed to be taken into account in deciding what fairness required in a particular case and that an allegation of dishonesty was at the higher end of the spectrum.

However, it held that the EAT was wrong to find that the ET’s decision was perverse and restored the ET’s decision that the employee had been fairly dismissed.  The Court of Appeal pointed out that the question of reasonableness or fairness is inevitably a matter of judgement and evaluation on which views may differ in any particular case.

We can take from this case that both the EAT and the Court of Appeal should be slow to overturn the decision of an ET which has asked the right questions and come to a considered conclusion.  While the Court of Appeal came down on the side of the employer in this case, each case will depend on its own facts.  If an ET in future decides that more investigation should have been done, the EAT and Court of Appeal should also be slow to overturn this decision.

Two approaches for taking account of absences caused by a disability

In Commissioners for Her Majesty’s Revenue & Customs v Whiteley, the employee claimed that HMRC failed to make reasonable adjustments to allow for her asthma when subjecting her to consideration under their absence policy.  The absence policy provided that employees could be subjected to disciplinary proceedings for absences of more than 10 days in any 12 month period.  The EAT upheld the HMRC’s appeal on the basis that the ET had misconstrued the medical evidence in this case.

Of interest is the EAT’s comment that there are at least two possible approaches in which employers can make allowances for absences caused by a disability: (i) the detailed approach which requires the employer to look at the periods of absence and attempt to analyse (with expert evidence if necessary) which absences are attributable to the disability and which are not; and (ii) to ask and answer with proper information what sort of periods of absence someone suffering from the disability would reasonably be expected to have over the course of an average year due to their disability.

While the second approach is likely to be more attractive to employers, care should be taken as to whether this approach is reasonable in each particular case.

Post-dismissal conviction relevant to future loss in unfair dismissal compensatory award calculation

In Cumbria County Council and Governing Body of Dowdales School v Bates, a teacher who was found to have been unfairly dismissed was, post dismissal, sentenced to 6 weeks’ imprisonment.  The EAT held that the Claimant’s conviction and sentence may have substantially reduced his pension loss and the ET determining the compensatory award should have considered whether following this conviction the Claimant would have been dismissed at that point.

The calculation of the compensatory award was remitted to a fresh ET.

Court of Appeal guidance on dealing with evidence from frightened witnesses

In Duffy v George, the Claimant asked the ET to make an order that she should not be required to attend the hearing of her sexual harassment claim.  The ET refused to make the order, informed her that she need not attend but that her absence might affect the weight attached to her evidence.  The ET upheld the Claimant’s claim in respect of two instances of sexual harassment.  The appellant argued that he had suffered a disadvantage by not being given the opportunity to cross examine the Claimant.

The EAT held that an ET is not necessarily wrong to proceed with a hearing and make a finding adverse to a Respondent where the Claimant does not attend and cannot be cross examined.

The Court of Appeal concluded that the ET made a procedural error by not first holding a pre-trial review for directions to consider the options available if the Claimant did not want to attend, to ensure that a fair and just hearing could still take place.  The Court suggested that one option would be for the ET to hold separate hearings at which each could give their evidence in the absence of the other and that another option would be for the parties to submit questions for the ET to put to the other party.

Settlement negotiations should be expressly stated to be “subject to signed contract”

In Newbury v Sun Microsystemsthe High Court found against an employer and held that negotiations created a binding contract without the need for a subsequent written agreement.  Following this case, employers should not only make it clear that settlement negotiations are “without prejudice”, but that they are “subject to signed contract”.

Employee who commits gross misconduct wins unfair dismissal and victimisation claims

In order for a dismissal to be fair, the employer needs to have a fair reason and follow a fair process.  It is clear from Carmelli Bakeries Ltd v Benali that even if an employee commits gross misconduct, a dismissal may still be procedurally unfair.  However, an employee’s contributory conduct may reduce the amount of unfair dismissal compensation.

This case also held that it is victimisation to dismiss someone who is regarded as a ’problem employee’ because he has previously raised discrimination issues, when the employer would have shown leniency to someone else.

Proposed TUPE changes likely to come into force in January 2014

The Government response to the TUPE consultation is expected early this month and, according to a spokesman from BIS, the proposed TUPE changes are likely to come into force in January 2014. One key change is likely to be the repeal of the service provision change TUPE transfer.

Employee Shareholder status

HMRC has updated its Share and Assets Valuation Manual (SVM) to take account of the implementation of employee shareholder status on 1 September 2013.  It is possible to apply to HMRC for a valuation check in advance of employee shareholder shares being granted.

BIS published guidance on employee shareholder status on 1 September 2013.

Judicial review of tribunal fees

The High Court has granted permission for the trade union, UNISON’s, application for judicial review of the Ministry of Justice’s decision to introduce fees in the ET and the EAT.  By way of reminder, UNISON is arguing that it will make it “virtually impossible” for workers to exercise their employment rights.

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