November 2011 Employment Law Update

November 2011 Employment Law Update

If you would like to discuss any employment issues please contact Julie Taylor on 01635 508181

1.  WARNING: Directors can be personally liable for discrimination as well as the Company

The Employment Appeals Tribunal has made it clear that company directors can be liable for discrimination in addition to their company. This means that directors who are found to have discriminated against an employee could find themselves personally liable to pay compensation on top of any compensation the company has to pay.

For employers, this is another factor underlining the importance of taking steps to prevent discrimination in the workplace.

Action points include:-

• Ensuring that clear written policies dealing with discrimination and harassment at work are in place – Please contact us if you would like assistance with this.  
• Providing staff with appropriate equality training.  
•  Promoting a culture of compliance with internal policies. 
• Considering insurance schemes to provide protection for Directors against claims.

2. New unfair dismissal rules: Are they really going to help business?

The Government has announced that the qualification period for the right to claim unfair dismissal will be extended from one to two years from 6 April 2012.

Potentially this means that from 6 April 2012 it should be easier for employers to dismiss staff who have been employed for less than two years and arguably this could reduce the risk for businesses when taking
 on staff in the first place.            

HOWEVER, employers need to be aware that this change will not affect the right of employees to claim unfair dismissal where the reason for dismissal is ‘automatically unfair’ even if they have less than two years’ service. Therefore, it is advisable for employers to take specific legal advice before dismissing an employee whatever their length of service.

3. FEELING STRESSED OUT?

According to the Chartered Institute of Personnel and Development stress is now the most common cause of long-term sickness absence.

Employers need to be aware of this as they have a duty to assess and take measures to control risks from work-related stress. Therefore, employers should:

• ensure that they have a policy in place for dealing with stress;
• always carry out return to work interviews to establish the reason for absences;  and
• make sure that their managers receive training so that they can respond to signs of stress.

4. It’s all about being reasonable…

The Employment Appeals Tribunal has held that a refusal by an employer to spend very significant amounts of money on adjustments for a disabled employee did not amount to discrimination.

This decision demonstrates that employers are entitled to take into account the cost of making adjustments for their disabled staff when determining what, if any, adjustments need to be made. In addition, employers can take into account:-

• how effective the proposed adjustment will be in avoiding the disadvantage that the disabled worker would otherwise experience;
•  the practicalities of making the change; 
• the available resources and size of the business; and
• the availability of financial support

Employers need to ensure that they are aware of their obligations to make reasonable adjustments for employees. This case highlights that employers should fully cost any adjustments considered and keep a record of this in case they later need to demonstrate that the cost of making the adjustment is more than can reasonably be expected of them.

HOWEVER, extreme caution is still advisable when seeking to rely on cost as a reason for refusing to make an adjustment, especially where it is the only reason for the refusal. Employers should seek detailed legal advice before making a decision to refuse to make adjustments for a disabled employee on grounds of cost.

5. TUPE and agreed variations?

The Employment Appeals Tribunal has determined that, following a TUPE transfer, an agreed variation to an employee’s salary resulting from a mistaken belief that there was an error in pay was valid and effective.

An agreed variation of an employment contract is only effective following a TUPE transfer if the transfer itself was not the sole or principal reason for the variation.

It should be noted that this was an unusual case involving the genuine mistaken belief that the agreed change had no relationship with the TUPE transfer and consequently there was no link between the transfer itself and the variation. Where TUPE applies, it still remains the case that employers should ensure that the reason for seeking to make changes to employment contracts is not connected to the transfer and specific legal advice is recommended.

6. Risk Management: Intellectual property infringement

As employers can be liable for intellectual property infringement by their staff, the Intellectual Property Office has published some guidance for businesses on tackling intellectual property infringement in the workplace. This includes practical advice on how to spot infringement issues and how employers should deal with them. A copy of the guidance can be found here.

7. Will the real reason please stand up?

The Employment Appeals Tribunal has held that where a dismissal letter gave ‘misconduct’ as the reason for dismissal but a subsequent response by the employer to a claim for unfair dismissal stated ‘capability’ as the reason, the previous tribunal was not prevented from dealing with the claim on the basis of misconduct. This was only because the decision to dismiss had always been based upon the same set of facts and therefore the change of label caused no prejudice to the employee.

This clarifies that citing the wrong reason for a dismissal may not automatically be fatal to a case in circumstances where the facts upon which the dismissal is based are clear and the claimant is not disadvantaged.

ULTIMATELY, it is obviously preferable to get the labels right in the first place and employers should take appropriate legal advice if they are uncertain about the correct legal wording.

8. Mitigation & compensation

The Employment Appeals Tribunal has determined that, where a wronged employee rejected an offer of a new position that would have addressed the issues which led to the employee’s discrimination claim, the employee was not entitled to receive any compensation for loss of earnings.

This decision highlights the expectation of courts and tribunals for claimants to take reasonable steps to mitigate their losses. Where the claimant employee fails to do so, they will usually be deprived of compensation for any losses suffered as a consequence of their failure to take such steps.
Therefore, potentially an employer who is faced with a claim may reduce the likelihood of having to pay compensation for loss of earnings by offering alternative employment to the particular employee.

HOWEVER, it is important to note that the alternative employment offered in this case was deemed ‘suitable’ for the claimant.

Please note that these comments are  intended to summarise the employment issues of the moment, not to provide detailed legal advice, so if you need assistance with any employment issues you may have please contact Julie Taylor.