UNISON LOSES COURT OF APPEAL CASE CHALLENGING TRIBUNAL FEES

The Court of Appeal has rejected Unison’s challenge of Employment Tribunal and EAT fees.


Since the introduction of Tribunal and EAT fees on 29 July 2013 there has been a steady decline in the number of claims issued.


In July 2013 the trade union Unison sought judicial review and a quashing of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013. It argued that the fees regime breached the EU principles of equivalence and effectiveness, had been implemented without due regard to the Government’s public sector equality duty, and gave rise to indirect discrimination.


The High Court first heard the claim in the autumn of 2013, and handed down judgment in February 2014. The High Court was unconvinced by the evidence before it regarding the impact of the Fees Order and preferred to ‘wait and see’ and allow any problems to be addressed by the Lord Chancellor.


Following the rejection of the first claim and statistics supporting a dramatic fall in Employment Tribunal claims Unison brought a second claim, which was heard in October 2014. However, in a judgment handed down in December 2014 the High Court held that the statistics were not enough to show that any individual had been prevented from bringing a claim by the level of fees. It also held that any indirect discrimination in the Fees Order was justified by reference to the Lord Chancellor’s stated aims of transferring a proportion (one third) of the running costs of Employment Tribunals and the EAT to service users who could afford it; improving efficiency by deterring unmeritorious claims and encouraging alternative methods of dispute resolution. Unison appealed both High Court decisions to the Court of Appeal.


Today the Court of Appeal handed down its judgment. The Court acknowledged that it has been a longstanding principle of EU law that, “persons who claim that their rights under EU law have been breached must have access to an effective remedy for that breach otherwise the rights in question would be illusory” but the Court rejected Unison’s argument that this principle had been breached by the Fees Order. Whilst accepting that evidence in respect of notional, rather than actual, Claimants could be relevant it was held that the provision in the remission regime allowing for “exceptional circumstances” meant that it could not be said that the fee system in general was so unaffordable so as to mean that there was no effective remedy under EU law.


The Court also dismissed arguments based on indirect discrimination agreeing with the conclusion that any potential discrimination could be objectively justified. It was also not accepted that the public sector equality duty had not been complied with and found that the Equality Impact Assessment undertaken by the Lord Chancellor had identified the possibility that the Fees Order would have a greater impact on people with a protected characteristic but concluded that this would be cancelled out by the availability of remission.


Unison have said that they will seek permission to appeal to the Supreme Court. The Government also continues with its review of the fees regime. However, for the time being, it looks like Tribunal fees are here to stay.


Fox Whitfield can provide advice and assistance on all types of Employment Tribunal matters (whether bringing / defending a claim) as well as exploring alternative methods of resolving employment disputes.


If you require further advice or assistance you can contact me (Dionne Dury) on 01173305980 or email me at dionned@foxwhitfield.com

Another Facebook Unfair Dismissal Case

FB logo Another Facebook Unfair Dismissal Case

In the recent Employment Appeals Tribunal Case of British Waterways Board v Smith the tribunal considered whether it was fair to dismiss an employee who had made derogatory statements about their employer on Facebook.

He had been an employee for 8 years and his employer had a clear social medial policy. That policy said that the employer considered the following to be gross misconduct:- “any action on the internet which might embarrass or discredit BW (including defamation of third parties, for example, by posting comments on bulletin boards or chat rooms)”

In 2012 his manager was aware that the employee had posted a number of derogatory comments about his employer and it’s managers.

Those comments were things like: –

“(i) chipper training today and supposed to go home after it w***** supervisor told the trainer to keep us as long as he could the f***** don’t even pay u for this s***”
“(ii) hard to sleep when the joys of another week at work are looming NOT”
“(iii) ha what joy, 2 sleeps til back to my beloved work NOT”
“(iv) good old bw cant wait to see all my friends again lol”
“(v) going to be a long day I hate my work”
“(vi) that’s why I hate my work for those reasons its not the work it’s the people who ruin it nasty horrible human beings”
“(vii) why are gaffers such p*****, is there some kind of book teaching them to be total w******”

Nothing was done at the time and the comments were not repeated.

Over a year later the employee raised a grievance and in the course of that grievance investigation the manager referred HR to the Facebook comments. HR took the view that they were gross misconduct. The employee was suspended and then dismissed for gross misconduct. He appealed but was not successful and so he brought a claim for unfair dismissal in the Employment Tribunal.

At the Employment Tribunal he won his claim. The Employment Tribunal said that the decision to dismiss fell outside the band of reasonable responses which a reasonable employer might have adopted. This was because the employer had not taken into account the mitigating factors of Mr Smith’s unblemished service record and that the employer had been aware of the comments for some time and taken no action. The employers successfully appealed that decision.

That decision was overturned by the Employment Appeals Tribunal, who found the dismissal was fair.

This case clarifies that in cases where an employer has failed to discipline an employee for an earlier act of misconduct they will not necessarily lose the opportunity to take action at a later date. In this case the misconduct took place two years before the dismissal and the employer had known about it.

Another surprising element to this case is that the employer had apparently deliberately searched for evidence against an employee who was in the process of raising a grievance. The employer was allowed to use the evidence they found of past misconduct to justify summarily  dismissing him and the tribunal found that did not make the dismissal unfair.

 

This is another case showing how it is becoming increasingly difficult for employees to challenge a dismissal for gross misconduct even when the employer’s action do appear to be manifestly unfair.

It is also a very useful reminder to employers of the importance of having an up to date social media policy, without that it is likely that the dismissal would have been an unfair dismissal.

Fox Whitfield can advise employers and employees on social media law and we can also supply up to date policies.

www.foxwhitfield.com

0161 283 1276

Employment Law Solicitors – Head Office based in Manchester with offices located throughout the United Kingdom.

Government launches consultation on mandatory gender pay reporting: Have your say

The Government has launched a consultation to establish the details of legislation required to be made in the first half of 2016 on gender pay reporting. The new legislation will make it compulsory for private and third sector employers (with 250 or more employees) to publish gender pay information.

You may recall from my article last month setting out what we can expect in the world of employment law following the Conservative’s election victory that one of David Cameron’s key pledges is to reduce the gender pay gap. Writing in the Times Newspaper following the Summer Budget, David Cameron said, “Transparency, skills, representation, affordable childcare – these things can end the gender pay gap in a generation. That’s my goal”.

Although statistics produced by the Annual Survey of Hours and Earnings in 2014 showed that when full time work is taken in isolation the gap between men and women’s pay has almost halved since records began in 1997, the Government believes that transparency will accelerate the reduction in the gap even further.

However, the legislation, which is due to be brought in around April 2016, is yet to be fleshed out. The consultation is giving employers an opportunity to have a say in the mechanisms of the new legislation.

More particularly, it is seeking views on the way that the information is collected; whether this should be providing an overall gender pay gap figure by calculating the difference between the earnings of men and women as a percentage of men’s earnings, providing figures broken down by full time and part time employees or broken down by job grade and title. The consultation recognises that in determining the metrics to be used there is a need to balance meaningful and comparable data against the need for individual confidentiality. It is also seeking employer’s views on the likely implementation costs and the actual / estimated time that is likely to be taken by the person responsible for analysing / publishing the information.

Another key question is whether additional narrative information should be voluntary or prescribed by the regulations and how regularly the information should be published; whether annually or, for example, every two or three years.

The consultation closes on 6 September 2015 and following the responses from the consultation we can expect to see a first draft of the regulations. Whilst it is difficult to predict what will be in the final regulations there is talk of them being phased, to give employers time to prepare.

Whether your organisation will be affected by the new regulations or you simply want to ensure that your policies and practices are providing equality to your workforce and assisting in closing the gender pay gap, myself or another member of the Fox Whitfield team have a wealth of experience dealing with discrimination and equal pay cases. We can also assist you in carrying out a qualifying equal pay audit.

If you would like further information or advice on this or any other employment related matter please contact me on 01173305980 or 07766562730. Or you can email me at dionned@foxwhitfield.com

Protecting your Business from Your Employees with Restrictive Covenants

Update 30 July 2015: –

Top Gear: Clarkson, Hammond and May and their executive producer Andy Wilman to present a new show on Amazon.

Amazon Prime Video EU vice-president Jay Marine said: “Customers told us they wanted to see the team back on screen, and we are excited to make that happen.

“We can’t wait to see what Jeremy, Richard, James and the team will create in what is sure to be one of the most globally anticipated shows of 2016.”

The Restrictive Covenants in their contracts prevented them from making a show for a terrestrial UK broadcaster for two years. When it was drafted this may have been enough to protect the BBC but times have changed and the streaming of Television has grown. As a result the BBC was not protected from the team being able to launch a directly competitive program.

This does show how essential it is for employers to review Restrictive Covenants on a regular basis to ensure that they are still relevant and appropriate for the employees and the market they are operating within.

Recently a large law firm audited the contracts of their client and found that almost half had not audited the contracts of their senior employees to ensure they had adequate protection.

Given the current buoyant jobs market it is more important than ever to ensure that employees have up to date contracts in place to give businesses the best chance to prevent the loss of confidential information and clients if their senior employees leave.

Fox Whitfield are specialists in the both the enforcement of, and tactical evasion of restrictive covenants and confidentiality.

Paul Whitfield is the Principal Solicitor at Fox Whitfield and can be contacted on 0161 283 1276 or paulw@foxwhitfield.com

 

In the News today: –

Top Gear: Clarkson, Hammond and May ‘blocked from ITV show by BBC
http://www.telegraph.co.uk/news/celebritynews/11722706/Top-Gear-Clarkson-Hammond-and-May-blocked-from-ITV-show-by-BBC-contracts.html

This illustrates the importance and potential power of Post Termination Restrictive Covenants. Fox Whitfield are specialists in the both the enforcement and tactical evasion from the enforcement of restrictive covenants and confidentiality.

In this article we look at the law and practice surrounding this area of law.

Why do businesses need protecting from their own employees?

 The knowledge and relationships that employees develop can be some of the most valuable assets of a business. Employees can cause serious damage to a business by exploiting this to set up their own competing businesses or to gain a position with a competitor.

For the time they are employed employees have implied contractual obligations that restrict them to some degree. Employees must serve their employer with fidelity and in good faith and keep confidential information confidential. These obligations will fall away once employment ends unless the employer has put in place other restrictive covenants in their contracts of employment.

For example Fox Whitfield recently had a case where a senior employee had left to join a competitor to whom he passed confidential pricing information to enable them to secure contracts from his employer. As he did this during his employment this was a breach of contract and we were able to prevent him and his new employer from dealing with those customers. Had he waited to hand over the confidential data until the day after his employment ended there would have been little his employer could have done unless they were protected though the employment contract.

 

 What is a Restrictive Covenant?

A restrictive covenant is a contractual agreement that prohibits an employee from doing something, usually after they have left the business.

The most common types of restrictive covenants aim to prevent employees from:-

 

  • Making use of confidential information obtained during their employment;
  • Soliciting business from customers;
  • Dealing with customers;
  • Poaching other employees to join them.

 

Without express contractual terms an employer would normally not be able to stop an employer doing any of those things after their employment ended.

 

Are Restrictive Covenants Enforceable?

It is often said restrictive covenants are a waste of time as they are not enforceable. That is not the case. They are difficult to enforce but if they have been properly written they can be and this can provide invaluable protection to a business.

Restrictive covenants are enforced though the High Court. The starting point for all restrictive covenants is that they are void as they are in restraint of trade. The Courts will only enforce restrictive covenants that are necessary to protect the employer’s legitimate business interests and that go no further than is reasonably necessary to protect those interests.

Overly restrictive covenants will not be enforceable. It is generally better to have a narrowly written short restriction that can be relied upon than to have a wide restriction that lasts for a long time that may not be worth the paper is it written on.

 

 Legitimate Business Interests

 The legitimate interests which can be protected by restrictive covenants are:

 

  • Client/customer connections.
  • Confidential information.
  • Stability of the workforce.

 

“No further than is reasonably necessary” depends upon several factors:-

 

  • The seniority of the employee.
  • The amount of confidential information the employee has and how important it is that it remains confidential.
  • The value of the client relationships.
  • The geographical location of the employer’s legitimate business interests.
  • How long it would take a replacement to rebuild client relationships.

 

For example it might be reasonable to restrict a dentist from setting up a competitive practice within 5 miles of their current place of work for 12 months. That is if the employer can show the majority of their patients live in a 5 mile radius and generally come to the practice once a year for check up. However, 12 months would probably be too long a restrictive covenant for a hairdresser who sees their clients several times a year.

Generally speaking it is hard to justify restrictions of longer than 6 to 12 months.

It is very important to ensure that these clauses are tailored to your business and the employees to ensure they have the best chance of being enforceable.

 

Garden leave and Notice Periods

The simplest, and often most enforceable, way to restrict employees is though the use of notice period and garden leave. A garden leave clause in a contract of employment allows an employer to require the employee to spend all or part of their notice period at home. This means the employee cannot start work for another employer, breach confidentiality or approach customers during this time. The cost of this is that an employee must be paid for the period of garden leave.

Garden leave must be set out in the contract of employment and would need to be reasonable in terms of its duration.

 

Remedies for breach of Restrictive Covenants

The most common remedy sought to enforce Restrictive Covenants is an injunction.

An injunction is a court order that stops an individual from doing something, generally from continuing to breach their contract. If done properly it can be in place very quickly and can stop an employee in their tracks. Claims to recover financial losses caused by the breach of contract may also be possible.

Injunctions are expensive to obtain and employers should write to the individual first and give them an opportunity to agree to stop breaching the contract.

 

Deterrent Effect

Restrictions often have a useful deterrent effect, deterring competitors from poaching employees who may be unable to compete. Most cases do not get to court as an agreement about the restrictions can be reached. The contractual restrictions will be a starting point for negotiations.

 

Team moves

Groups of employees leaving together can be a very serious issue and restrictive covenants can be very useful in limiting the damage from this sort of attack. The Courts have recently enforced them in several cases to prevent the teams from actively competing for a period of time.

Once an employer becomes aware that there may be a team planning to leave, it is important to act quickly to try and minimise the damage. For employers looking to recruit teams, careful planning and execution will be necessary as there are many pitfalls to avoid.

 

Practical tips

  • Draft restrictive covenants carefully and tailor them to the particular circumstances.

 

  • For existing employees introduce new restrictions with a pay review or promotion.

 

  • If you think there is a breach gather as much evidence as possible and seek immediate legal advice. Delay can mean no injunction.

 

  • Restrictions must be regularly reviewed and new contracts issued on promotions with appropriate restrictions.

 

Paul Whitfield is the Principal Solicitor at Fox Whitfield and can be contacted on 0161 283 1276 or paulw@foxwhitfield.com

 

General Election 2015: The outcome and a look at what this means for UK employment law

With the Conservatives securing a majority win in the general election last month what does this mean for UK businesses in 2015/2016 and UK employment law in the next five years.

In this article Dionne Dury, from our Bristol office, summarises some of the key pledges made by the Conservative party and steps already taken by the new Government to deliver on its promises.

The key pledges:

Equality

The Conservative manifesto made a bold statement stating it would transform, “policy, practice and public attitudes to get disabled people into employment”. Unfortunately, the manifesto was not clear on how it intended to achieve this so watch this space!

What was clear from the manifesto was an intention to address the gender pay gap and support greater female representation on boards.

The party has already made steps towards achieving this goal with legislation requiring larger employers (of 250 employees or more) to disclose information on gender pay gaps. This legislation was laid before Parliament before it was dissolved for the election and must be implemented by April 2016.

National Minimum Wage (NMW)

The party also pledged to support an above-inflation rise in the NMW to £6.70 per hour by autumn this year (compared to the current rate of £6.31) and to achieve an increase to £8.00 per hour by 2020.

It has also been proposed that the tax-free allowance will be increased to £12,500 so that by the end of 2020, “people who work for 30 hours a week on the increased National Minimum Wage will no longer pay any Income Tax at all”.

Zero hour contracts / provisions under the Small Business, Enterprise and Employment Act (SBEEA)

A pledge was made to prohibit exclusivity in zero hour contracts and the party has kept to its promise.

On 26 May 2015 a number of provisions, including the prohibition of exclusivity in zero hour contracts, were implemented under the SBEEA.

As well as providing a useful definition of zero-hours contracts, as being a contract under which a worker offers to undertake work on behalf of the employer on request, there being no guarantee of work, the Act confirmed that any provision in such a contract purporting to prevent the worker from undertaking work for a different employer or requiring the employer’s consent to do so, is unenforceable.

It remains to be seen whether a ban on exclusivity will address the perceived unfairness of these types of contracts.

The Act also introduced new penalties for employers who fail to pay Tribunal awards or settlement sums and fines for non-payment of National Minimum Wage. The National Minimum Wage Act 1998 has been amended so that the maximum £20,000 penalty for non-payment applies in respect of each worker who is underpaid NMW. Previously, the maximum penalty applied per under-payment notice to the employer, so this rise represents a potentially large increase.

The SBEEA has also provided clearer definition on the meaning of “small businesses” being, a headcount of fewer than 50 and a specified threshold for turnover and balance sheet and “micro businesses” being, a headcount of fewer than 10 and a specified threshold for turnover and balance sheet.

Tribunal reform

Despite the opposition parties calling for Tribunal reform or a reduction in the current Tribunal fee levels, the Conservative party made no such pledges in their manifesto and supported the retention of Tribunal fees.

However, this month saw the long awaited Government review of the Tribunal fee and remission scheme. The review is expected to continue for several months.

Statistics published by the Ministry of Justice at the beginning of this month showed a sustained reduction in the number of Tribunal claims lodged since the introduction of the scheme in 2013. The reduction suggests that the ACAS Early Conciliation process is encouraging parties to resolve their disputes. However, it is also possible that the reason for the reduction in the number of claims being issued is the fees themselves and this begs the question of whether employees are being given the appropriate access to justice?

UNISON’s appeal against the High Court’s rejection of their judicial review proceedings challenging the fees regime was heard on 16 and 17 June. The outcome of that appeal is unlikely to be known until the autumn but it will clearly impact on the outcome of the Government’s review. Even if the appeal is unsuccessful it is still possible that the Government decides in a reduction in fees.

Today (30 June 2015) Andy Burnham, the front runner in the Labour leadership race said that all upfront Employment Tribunal fees should be scrapped.

EU Referendum

The promise of a referendum on the UK’s continued membership of the European Union has significant implications for employment law. Some commentators believe that we are “governed by Brussels” with 90% of our laws coming from the continent. Whether or not this is the case, it is clear that a large proportion of employment law has an EU connection and a vote in favour of leaving would clearly have huge implications for UK employment law.

Keep watching this space for updates and changes as they occur.

For further information or advice on these or other employment related matters you can contact Dionne Dury on 01173305980, 07766562730 or dionned@foxwhitfield.com