English and Wales Employment Law Questions - Case Study Example

English and Wales Employment Law Questions Number Department Question # 3(a) Whether Sandy Kyaw and IvyElen would retain their employment under the Transfer of Undertakings Law Under English common law, transfer of business is considered as a technical alteration of the terms and conditions of the engagement of the former company. As such there would be no obligation on the new employer to retain past employment contracts. But under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), employees have vital protections during transfers. As such, Kyaw and Ivy have substantial employment protections. This is because the sale of Ruby Jewellery Ltd as a going concern does not constitute a transfer of the company assets only; rather it is about the sale of the business in its entirety. TUPE 2006 has reformed the common law doctrine by providing that any relevant transfers of business as evidenced in this case will not warrant automatic dismissals of the employees unless the new employer proves that the termination of Kyaw and Elen’s employment contracts was not driven by the transfer of the business. Under TUPE Regulations the two employees can only lose their employment under the new organization if: under Regulations 3(1) (b) and 3(3), the new employer demonstrates that there has been a substantial change in the services they were providing or under Regulation 3(3) (a) (i), in the event there is material alteration in their organized grouping under the new arrangement. Providing adequate evidence to support a dismissal of the two employees will be extremely hard, considering that Regulation 2(1) has expanded the scope of collective arrangements that would safeguard employment contracts under sale of business as a whole. The provision envisages employment terms and conditions created through common bargaining processes as well as broader employment relations measures as sufficient protections against unnecessary dismissals of an employee. This implies that even if Kyaw and Elen were recruited individually with no collective arrangements tying them together in the former company, their employment contract would still be protected by collective disputes resolution mechanisms, employment shifts and leave, joint sessions with union representatives, integrated redundancy negotiation processes and job security programs available for all employees as a group. As such, the case of Kyaw and Elen would likely go the same way as Eddie Stobart Ltd v Moreman [2012] IRLR 356 where under TUPE Regulations the employer (Eddie Stobart Ltd) was unsuccessful in his appeal against the Employment Tribunal ruling upholding continuation of the validity of the employment contract is following a transfer of the business (McMullen, 2014). In both scenarios, it was established that pursuant to Regulations 3(1) and 3(3) the employees in question were part of an organised grouping of staffs mandated to carry out largely similar functions under the new arrangement. By contrast, in a similar case of Argyll Coastal Services Ltd v Stirling & Ors UKEATS/0012/11/BI, the Tribunal ruled differently in upholding an appeal by the employer against the verdict of employment tribunal, which had held that the employment contract was transferrable to the new arrangement. In the first instance, majority of the plaintiffs were staffs on a vessel hired by the Defence Ministry to undertake some project in the Falkland Island, while the other two plaintiffs were working from the office. The employment contract was then taken over by a Dutch firm after re-tendering, prompting the dismissal of the crew members. The Tribunal stayed their employment pursuant to Regulation 3(1) (b) and granted the claims under Regulations 3(3) (a) (i) and 3(4) (c), prompting the first respondent to appeal. The appeal was allowed on the basis of TUPE Regulation 4, which leaves room for valid dismissals if under the new arrangement an employee restructuring alters the activities and the collective grouping of workforces or their principal purpose within Great Britain (not the Falklands). In respect of Regulation 3(1) (iii) would validate the transfer of the employment contracts of Kyawu and Elen if the tasks which they performed remained the same after the transfer. Similarly, the two employees would retain their employment under Regulation 4(1) of TUPE on the basis that theirs is an existing relevant transfer (Prassl, 2013). In addition, the two employees’ contracts are subject to a going concern, in which case, TUPE should apply by virtue of the variation of the employer under a relevant business transfer arrangement as provided under Regulation 3(1). As such, the ruling in Seawell Ltd v Ceva Freight (UK) Ltd & Anor UKEATS/0034/11/BI in which the employee could not meet the collectiveness test because of his great proximity to the employer would not apply. In light of this argument, the outcome of Spijkers v Gebroeders Benedik Abattoir CV (1986) C-24/85 is arguably the best authority to support the two employees’ claims to retain their jobs. The case involved the interpretation of Dutch and EU employment law in establishing whether the transfer of the business retained or waived the employment security entitlements of employees. The Strasbourg Court ruled that the determining factor is whether the business in question remained relevant after the transfer. The argument related to the need to examine a variety of factors in an integrated manner, including the state of clientele, goodwill, premises and the affected employees. As such, the mere transfer of assets by sale as Mr Spijkers had claimed could not suffice itself. In light of the ruling, the employment contracts of the two employees would remain valid under the new arrangement by virtue of the ‘going concern’ under TUPE. The same case has seen the transfer of the Ruby customers and the relevant activities to the new entity. The TUPE Regulation 7(1) also protects the employment contract of the two employees, where their dismissal is not related to their conduct during or after the transfer of the business. As such, the provision states that they can only be validly dismissed on economic, technical or organisational (ETO) grounds such as a restructure of the staffs, in which case, the dismissal will not constitute automatic unfairness under Regulation 7(2) of TUPE. As such, Kyaw and Elen can be dismissed if the new entity is facing financial problem (Economic) or where it has undergone (Organisational) restructuring to the extent that their positions are fairly redundant. An issue such as a change in job description (Technical) is also a valid reason for redundancy. Otherwise, Kyaw can face dismissal on the grounds of conduct under the Employment Rights Act 1996, section 98(2) if she persists with reporting to work late, because the reason is remote from the transfer of the business. Her dismissal would then allow her to bring unfair dismissal claims against the employer under common law. For Bob, being an executive itself delineates him from the collective benefits that ordinary employees such as Kyaw and Elen are entitled to during or after the transfer. The argument was supported by the ruling in Edinburgh Home-Link Partnership v The City of Edinburgh Council, & Ors UKEATS/0061/11/BI, where the tribunal ruled that the functions of the directors were substantially strategic in nature for the organization and thus, they had minimal interactions with the other staffs and or the service providers. Like the directors, Bob is not entitled to a transfer of the employment assets under TUPE because he is not part of an organised grouping. Unlike Bob, Elen’s employment interests are safeguarded by TUPE Regulations 3(1) (b) and 3(3) because her cleaning services are subject to outsourcing (McMullen, 2014). Therefore, unless there are adequate ETO grounds which if applied uniformly would lead to her dismissal she is likely to succeed with an unfair dismissal prayer against the employer, considering that she has been an employee for more than 24 months. In defining ETO, the courts and employment tribunals have naturally dismissed changes to the terms of employment as it was evidenced in Hazel and Huggins v Manchester College [2014] EWCA Civ 72. In this case, the Court of Appeal set aside the employer’s appeal against a ruling by a Tribunal, which had determined that, the termination of the employment of HMP Elmley Kent, Mrs Huggins (“H&H”) and Mrs Hazel was a case of unfair dismissal. Similarly, the Tribunal found adequate grounds for automatic unfair dismissal claims in General Vending Services Ltd T/A GVS Assist v Schofield UKEAT/0137/13/MC, when the employees refused fresh terms and conditions in their employment contract. In awarding claims, liability for unfair dismissal of the two employees would remain with Ruby before the transfer or Sapphire if they are affected after the transfer. This would be fair and just to the two entities. Question # 3(b) Susan Boyle’s termination Wing Pie can validly retire Ms Boyle if it can prove that the exercise is fair and defensible. Otherwise, subjecting her to compulsory retirement would be viewed as an act of discrimination against her on the basis of age. Victims of age discrimination can bring the claim under section 5(1) of the Equality Act 2010, which classifies it as a protected characteristic. As such, the employer is arguably discriminating against Ms Boyle under section 13(1) of the Act by virtue of the latter’s less favourable treatment of the latter party because of her perceived inefficiency due to old age. In spite of the protection, Wing Pie can validly dismiss Ms Boyle under section 13(2) of the Act if it has proportionate reasons for doing so. The only valid reason for her dismissal would be her failure to meet the legitimate test of undertaking her duties properly and within a reasonable time. The suspension of Paragraph 8 of Schedule 9 of the Equality Act 2010 means Ms Boyle has the right to remain in employment until she reaches 70 years old. As such, if her dismissal is driven by her age, the employer would be liable for direct discrimination claims. Parliament considered age a protected characteristic, hence its classification as vulnerable to direct discrimination. This implies that parliament gave it maximum protection under the Equality Act 2010, hence the unlimited damages it attracts upon establishing that it has been violated. It, therefore, behoves employers to be reasonable and objective when dismissing their employees or refusing deserving candidates based on their age. The provision widens the parameters for ensuring equality in the treatment of employees. The Equality Act 2010 places the burden of proof upon the organization or the employer to show that their conduct was a balanced and thus aimed at realizing a legitimate objective. In Seldon v Clarkson Wright and Jakes (2012) UKEAT/0434/13/RN, the Supreme Court rejected claims by Mr Seldon that his treatment was an act in breach of direct age anti-discrimination law. The Court subsequently expanded the definition of legitimate business aims as those which are in the best interest of the public, rather than those which are unique to the organization. As such, the objectives of business strategic process and retention supported by the partnership were considered to be genuine, since they contributed significantly in achieving inter-generational equality. The Court noted also that these are permissible aims recognized by the Strasbourg Court. In arriving at the decision as to which side between the individual interests of the person enjoying fundamental age protections and public interest outweighed the other, English courts and tribunals are persuaded to protect the side with more legitimate interests and whose interests are likely to be jeopardized. The matter is a preserve of the tribunals, which will continue to observe different factors and their implications on a case by case basis in awarding fair and just reliefs. Regardless, employers will likely continue to bear the burden of unfair dismissals, considering that since the recent past courts have been pressing them to provide proofs on how they arrived at certain age-based dismissals in order to verify their fairness and make appropriate decisions therefrom. The ruling in Seldon v Clarkson Wright & Jakes and another (2012) IRLR 590 certainly emphasizes the challenge facing employers and which they may not resolve easily, especially when dealing with older staffs. The court ruled that safeguarding the dignity of geriatric employees is a legitimate responsibility of the employer and they should do so by refraining from reviewing their performance, despite the fact that such reviews are a common human resource management strategy in the current world. Yet, the last part of the ruling, mandating the employer to ensure that the services of the organization are of continued competence is practically impossible without regular assessments of the employee productivity. Regardless, the ruling shows just how the common law has evolved to give older employees like Ms Boyle tighter protection from discrimination. In what would support Ms Boyle’s case, Thompson v Bombardier Transportation UK Ltd [2012] EqLR 988, witnessed a victim of redundancy successfully bring direct age discrimination claims against the employer, when in a redundancy program, some of her points were deducted for not doing PA work. The Employment Tribunal ruled in favour of Ms Thompson’s (claimant), for being dropped by the employer (Ms Morgan and Bombardier). The employer had favoured a younger and more skilled employee. The decision was arguably not influenced by the legitimate interests of the public, which may have shifter the decision in favour of the younger more knowledgeable choice of the company. However, the court may have considered the fact that the claimant did not need any additional skills which her replacement had to carry out her tasks effectively. As such, other legitimate aims that would validly send Ms Boyle home encompasses economic issues such as corporate priorities and efficiency, employee health and welfare, her lack of certain skill-sets, facilitation of human resource organization and the necessity of reasonable preparation before retiring an employee, if the factors are taken together. Arguing cases based on one or a few factors from the list has resulted in conflicting outcomes. However, the common law is in the process of fine-tuning the employee dismissal parameters. This is especially true considering that English labour law has been undergoing constant improvement following the recent enactment of the Equality Act 2010. For employers to be safer from direct discrimination claims, they should ensure that they take all legitimate interests into consideration. This means every employer must have proper justifications for their actions in order to effectively withstand various claims brought by employees. Yet, some legitimate interests can outweigh others. For instance, in Bloxham v Freshfields Bruckhaus Deringer (2007) ET/2205086/06, it was established that the employer discriminated against the claimant, but the outcome of the action outweighed the legitimate interests of Mr Bloxham. Freshfields justified their actions by stating that the pension changes were necessary to preserve the interests of the majority of the staffs, most for who were younger. The tribunal considered the employer’s move as an act of creating fairness across generations. In light of these arguments, Ms Boyle’s employer is likely to remain defenceless if he or she proceeds with her dismissal on the basis of health, safety or corporate efficacy. Perhaps, the only justification for dismissing her would be to replace her with two or three younger employees who bring about a feeling of ‘intergenerational fairness’ as it was evidenced in Bloxham. Otherwise, Wing Pie should limit Susan Boyle’s workload, if she is incapable of delivering adequate results under reasonable circumstances. The employer should then inform her that some of her tasks would be performed by a staff mate who would be taking a reasonable proportion of her allowances to that effect. Question # 4(a) Response to Unfair Dismissal Claim [Defendant’s Law Firm] Case #: Particulars of Response 1. It is true that the Claimant held the position of a coach driver with the Respondent and has worked there for 25 years. It is therefore right for the claimant to bring such claims against the respondent for having worked for the respondent continuously for a “substantial” period of time as the court ruled in Eddie Stobart Ltd. As such, he meets the minimum thresholds of time required for the application. 2. 2. It is correct that the Claimant got on well with colleagues and had not received any written or verbal warnings. The history of good conduct shown by the employee made it difficult for the respondent to apply the provisions of paragraph 19 of the ACAS Code 2008, which required him as the employer to handle any disputes and or enforce any disciplinary interventions through the internal mechanisms set up by the company or through other informal procedures at the respondent’s disposal. 3. On 13 May 2014, the Respondent received a complaint letter from a customer. The customer alleged that the Claimant was using his mobile phone whilst driving on the motorway. The customer also sent a photograph of the Claimant using his mobile phone whilst driving. It is therefore in the fair and just interests of the respondent that he does not have to produce evidence on the balance of probabilities that the claimant is incompetent and badly behaved. The photograph meets the common law threshold for sufficient evidence, and thus the respondent reasonably believes that the claimant’s conduct matches both descriptions. Whereas a conclusive decision on the conduct of the employee required investigation, the respondent’s receipt of the clear photograph and a brief correspondence with the customer in question (the witness) constitutes reasonable investigation under ACAS 2008. 4. The Respondent has a strict company policy that no driver should use a mobile phone whilst driving. Only hands-free kits are permitted whilst driving. This policy is given to all employees in the company. As such, the claimant’s conduct breached Paragraph 19 ACAS Code 2008, replicated in the company written policy concerning the use of mobile phones. The policy served as a written cautionary, which the respondent reinforced with verbal warnings, constant induction and further supervision as required under the law. By violating the fundamental safety procedure for all driver-employees within the organization, the claimant technically stood liable for the consequences of his actions including summary dismissal. 5. The customer alleged that the Claimant spent a long time on his mobile and she was worried about the other customers’ safety. He said that since they were on the motorway, the driver was driving fast. The respondent could not institute disciplinary measures as provided under in Paragraph 24 of ACAS Rules because the claimant spent more than reasonable time on the mobile phone while driving the truck. In addition, the respondent acted within the Rules by taking the “appropriate action,” which was, according to him, a justified dismissal. 6. The customer’s photograph is clear evidence that the Claimant used his mobile phone whilst driving along a motorway. This is clearly unacceptable behaviour. The Claimant has breached the Company’s mobile phone policy and risked customers’ health and safety. He has misplaced his hands-free kit as well. In light of these, the respondent’s action was based on the ruling in Shrestha v Genesis Housing Association Ltd [2005] EWCA where it was established that the law does not obligate the employer to conduct thorough investigation on his or he employee’s statements about his misbehaviour, because the latter could provide insufficient information relating to their misbehaviour. As such, the conduct sufficiently warranted a drastic action. 7. The Respondent held a meeting with the Claimant on 14 May 2014. The Respondent asked the Claimant why he used his mobile phone whilst driving and provided opportunity for the Claimant to explain. The Respondent re-iterated the company’s strict mobile phone policy and dismissed him with immediate effect. In this case, the claimant was aware of the company’s caveat on mobile phone use while driving and could even recite the warnings during the meeting. As such, the respondent thought it was only reasonable to terminate the claimant’s employment contract because he willingly breached the fundamental rules of engagement in contravention of ACAS 2008 rules. 8. The reason for the dismissal is the Claimant’s unacceptable behaviour. It constitutes gross misconduct and as such summary dismissal was appropriate. As such, the respondent’s decision and subsequent action are consistent with compliance provisions under ACAS disciplinary Rules. In particular, the respondent is certain that being on mobile phone for longer than was reasonable while the car was moving fast amounted to “gross misconduct” on two grounds: the conduct was threatening (the lives of the customers and substantial financial loss to the company); and it amounted to a violation of the trust which the respondent had in the claimant. 9. The Respondent resists the claim of unfair dismissal on the following two grounds: The summary dismissal was driven by the claimant’s conduct (gross misconduct) under Employment Rights Act sub-section 98(2) (b). Talking on a mobile phone while driving at a high speed with passengers on board constitutes “some other substantial reason” that justifies the dismissal of the claimant under sub-section 98(1) (b) of the Act. Question # 4(b) Appeals against Tribunal Decisions Employment Appeals Tribunal is the body that is charged with handling appeals seeking legal interpretation of English employment law. Facts are, however, waived in appeals under Section 21 of the Employment Tribunals Act 1996. Interestingly, legal and factual issues are inexorably related and confusing. Regardless, an error in interpreting employment law suffices when a tribunal fails to delineate facts from law or where it makes a decision which is against the bodies of the evidence tabled at trial. However, in Yeboah v Crofton [2002] EWCA Civ 794, the Court ruled that conflicting bodies of evidence do not point to a legal error. As such, if Mr Sutcliffe reasonably believes that his legitimate interests have not been handled properly, he has six weeks from the day the tribunal issues the written decision, to submit an appeal. Mr Sutcliffe may submit a formal petition for a review of a Tribunal ruling within a period of two weeks of receiving the ruling and give sufficient reasons to support his prayers. Some of the substantial reasons which he may use include; a breach of the procedures on the part of the tribunal when arriving at the decision or where he has discovered fresh evidence. The appellant must meet the test for admissibility of fresh evidence as laid out in the case of Ladd v Marshall (1954) 3 All ER 745, where the court ruled that new, admissible evidence: a) could not be accessed through reasonable diligence at the hearing; b) could have had material influence on the ruling if it was made available at trial, and c) is clearly reliable, but not necessarily incontrovertible. However, meeting these tests is near impossible for many appellants including Mr Sutcliffe. This especially true considering that in lieu of the first condition, employment tribunals have the discretion to reasonably and diligently obtain any important evidence it needs at trial; in second condition, finding new evidence which can shift the outcome of mostly exhaustive and binding Tribunal decisions is equally a tall order because Tribunals often have access to any material evidence they require; and lastly, obtaining reliable evidence is also hard because Tribunals traditionally have the authority to obtain relevant evidence. As such Mark Sutcliffe is more likely to succeed when he makes a formal review request than when he appeals against the tribunal decision. The argument was evidenced in Adegbuji v Meteor Parking Ltd (2011) All ER, where it was decided that the EAT has near exclusive discretion to handle employment law appeal cases. Like the court’s doctrine of Res Judicata, which prevents courts with the same jurisdiction from handling a similar case, EAT will not handle disputes which are subject of a review. References Adegbuji v Meteor Parking Ltd (2011) All ER Argyll Coastal Services Ltd v Stirling & Ors UKEATS/0012/11/BI Bloxham v Freshfields Bruckhaus Deringer (2007) ET/2205086/06 Eddie Stobart Ltd v Moreman [2012] IRLR 356 Edinburgh Home-Link Partnership v The City of Edinburgh Council, & Ors UKEATS/0061/11/BI General Vending Services Ltd T/A GVS Assist v Schofield UKEAT/0137/13/MC Hazel and Huggins v Manchester College [2014] EWCA Civ 72 Ladd v Marshall (1954) 3 All ER 745 Seawell Ltd v Ceva Freight (UK) Ltd & Anor UKEATS/0034/11/BI Seldon v Clarkson Wright & Jakes and another (2012) IRLR 590 Seldon v Clarkson Wright and Jakes (2012) UKEAT/0434/13/RN Shrestha v Genesis Housing Association Ltd [2005] EWCA Spijkers v Gebroeders Benedik Abattoir CV (1986) C-24/85 Thompson v Bombardier Transportation UK Ltd [2012] EqLR 988 Yeboah v Crofton [2002] EWCA Civ 794 Read More