Stormy weather, I’m at the end of my tether!

Photo by J W on Unsplash

We know summer is finally here when people are enthused about the prospect of attending the ever growing list of open air music festivals across the UK and Ireland.

Everyone involved in these events always hopes that the sun will come out, but the reality is that you have to prepare for the likelihood of bad weather. Most of the time, revellers will be able to put up with poorer conditions and it is unlikely that the event will be cancelled.

On occasion, the predicted weather can be very poor, not to say downright dangerous and festival organisers are left with the agonising decision of having to make the call to cancel the event.

This happened at the beginning of August when the Houghton Music Festival in East Anglia was cancelled due to severe weather warnings. Now clearly, by making this decision, the Festival organisers were implementing their duty of care to the artists, the workers and the music lovers.

A link to the story on the Sky News website can be found below:

https://news.sky.com/story/houghton-festival-in-east-anglia-cancelled-due-to-severe-weather-warnings-11780064

I was more interested in the contractual implications of cancelling the event. More specifically: does the cancellation of an event result in frustration of contract? In other words, will the frustrating event lead to termination of the contract?

The Festival organisers were very quick to say that the fans were entitled to seek a refund of the ticket price (no doubt minus the booking fee). Admittedly, I was less interested in this aspect of the story. In particular, I was mulling over the impact of cancelling the Festival on local businesses – particularly the local hotel/accommodation/B&B industry.

In 2016, research published by UK Music (Wish You Were Here) demonstrated a number of things:

  • the number of people attending UK music festivals had risen from 27.7 million to 30.9 million between 2015 and 2016;
  • the number of people travelling between different parts of the UK had increased; and
  • the number of foreign tourists willing to attend UK music festivals had risen by 20% in 2016.

(Source: The Guardian available at https://www.theguardian.com/music/2017/jul/10/uk-music-industry-gets-boost-from-12-rise-in-audiences-at-live-events)

So, what if you’re in the business of running a hotel, B&B or renting out a property on Airbnb and the bad news is announced that the local music festival has been cancelled, where do you stand legally?

Is the contract that you entered into with prospective guests capable of enforcement or has it been cancelled due to frustration?

It really depends on the circumstances …

What if the accommodation provider is aware of the fact that the guests have specifically booked rooms or a property in order to attend the festival? Some hotels go even further and might put together event all inclusive packages for guests – so called ‘special offers’ which might include things like all meals provided, spa treatments and even transport to and from the festival site.

This is quite different from a situation where the guest books rooms or hires a holiday property and does not disclose to the accommodation provider the purpose of his or her visit to the local area.

In the famous case of Krell v Henry [1903] 2 KB 740, Lord Justice Vaughn-Williams was of the opinion that frustration of contract was not limited to either the destruction or non-existence of the subject matter of the contract. It will be important to identify the substance or the purpose of the agreement. The cancellation of an event can frustrate the performance of a contract where that event is an absolutely material term of the agreement.

In Krell, the pursuer was the owner of a flat in the central London district of Pall Mall. The pursuer’s flat was on the route of the proposed coronation procession of the new King, Edward VII, which was scheduled to take place on 26 and 27 June 1902. The pursuer had advertised his flat for rent during the daytime on 26 and 27 June for the purpose of viewing the procession. The defender, who was anxious to view the procession, responded to the advertisement and entered into an agreement to hire the flat on the days specified. An announcement was made on 24 June stating that the procession was to be cancelled owing to the King’s illness. The defender refused to pay the balance of the rent for the flat by reason that events had frustrated performance of the contract. The pursuer brought an action against the defender for payment of the balance of the rent.

The English Court of Appeal stated that the cancellation of the event frustrated the contract and discharged the parties from their obligations under it. The clinching argument in the defender’s favour was that both parties clearly entered into the contract with the same intention. The reason behind the hire of the flat was, therefore, a material term of the contract.

Had the defender failed to communicate his motivation for hiring the flat, then the contract would have remained capable of enforcement by the pursuer. Lord Justice Vaughn-Williams was of the opinion that frustration of contract was not limited to either the destruction or non-existence of the subject matter of the contract. It was also important to identify the substance or the purpose of the agreement. In other words, did the parties share the same intentions?

The illness of King Edward resulted in a second legal action. This time, however, the English Court of Appeal took a completely different approach to the issue of frustration of contract.

The decision in Krell v Henry can be contrasted with the decision below:

Herne Bay Steamboat Co v Hutton [1903] 2 KB 683 the pursuers had entered into a contract to hire a steamship to the defender for two days. The Royal Navy was assembling at Spithead to take part in a naval review to celebrate King Edward’s coronation. The King was to review the fleet personally. The defender wished to transport paying guests from Herne Bay to Spithead to see the naval review. Due to the King’s illness, an official announcement was made cancelling the review. It would still have been perfectly possible for the defender to take his passengers on a cruise to see the assembled fleet. The defender, however, refused to use the vessel claiming that the contract had been frustrated. The pursuers brought an action against the defender for the balance of the fee of £250 owed by the defender who was refusing to pay for the hire of the boat.

The contract was not discharged by reason of frustration. The main purpose of the contract could still be achieved i.e. to take paying guests for a cruise around the fleet.

Conclusion

The difference in approach taken by the Court of Appeal in both cases is sometimes difficult to understand. In Krell v Henry, both parties had clearly intended that the purpose of the contract was to view the procession. Reinforcing this fact, was the fact that the defender was only entitled to use the flat during the daytime. In Herne Bay Steamboat Co v Hutton, the purpose of the defender in hiring the steamship was to see the naval review, but this was not the purpose of the owners who were not the slightest bit interested why the vessel had been hired. Lord Justice Vaughn-Williams compared the situation to someone who hires a carriage to go and see the Epsom Derby, but the outbreak of some unforeseen epidemic means that the races are cancelled. This makes no difference to the owner of the carriage who will still expect to be paid for the hire of his vehicle.

Copyright Seán J Crossan, 28 August 2019 

Social media and dismissal

Photo by Alex Haney on Unsplash

Regular readers of this Blog will know that I have written several articles over the last few months about the legal consequences of social media (mis)use and the effects on relationships in the work place. Comments or images posted on social media by employees can have serious reputational consequences for their employers.

The Israel Folau case

In a blog published on 11 April 2019 (Social Media Misuse), I discussed the story about Israel Folau, the Australian rugby player who had posted homophobic comments on social media. Folau has now been dismissed by Australia for these remarks.

Please see a link to the story on the Sky News website:

Israel Folau: Australian rugby star sacked over anti-gay social media post
http://news.sky.com/story/israel-folau-australian-rugby-star-sacked-over-anti-gay-social-media-post-11721930

The employer must, of course, be able to prove reasonably that the employee’s misuse of social media will cause it to suffer reputational damage.

In Taylor Somerfield Stores Ltd ETS/107487/07 an employee was dismissed after posting a video on Youtube which involved a mock fight using Somerfield carrier bags in the work place. The video was uploaded to Youtube for a mere 3 days and only 8 people had viewed it – 3 of whom were managers conducting the disciplinary investigation. The Employment Tribunal was firmly of the view that the dismissal was unfair because the employer was not able to prove that it had suffered serious reputational damage.

As I have emphasised in previous blogs, employees will be very naive if they think that it is a competent defence to say that the social media posts occurred outside working hours. Employers are still very much entitled to treat such behaviour as an example of a breach of work place discipline. In serious cases of social media misuse, employers will be entitled to consider dismissal of employees on the grounds of misconduct (as per Section 98(4) of the Employment Rights Act 1996).

Admittedly, this area represents something of a tightrope for employers to walk: they will have to operate a clear and comprehensive social media policy and employees must be made aware of any restrictions or expectations.

In the unreported Employment Tribunal decision of Grant and Ross Mitie Property Services Ltd (2009), the employer had a policy which restricted employee internet access. Unfortunately, for the employer, the phrase which permitted employee’s personal use of the internet to times that were “outside core working hours”, was deemed by the Tribunal to be ‘vague’ and lacking in certainty. This meant that the employees who had been dismissed because the employer was of the view that they had breached its policy on internet use had been unfairly dismissed.

There is also the matter of the rights that employees reasonably have to privacy and freedom of expression (as per their Article 8 and 10 rights respectively to be found in the European Convention, the Human Rights Act 1998 and the Scotland Act 1998) (see Bărbulescu v Romania Application no. 61496/08 5 September 2017; and Smith v Trafford Housing Trust [2012] EWHC 3221 (Ch)).

I have also pointed out in previous blogs, the importance for employers in carrying out disciplinary proceedings which comply with current ACAS Guidance. Using the (current) ACAS Guidance is a critical risk management exercise for employers:

https://beta.acas.org.uk/investigations-for-discipline-and-grievance-step-by-step

Employers who act recklessly or swiftly and ignore proper procedures may well have cause to regret their actions down the road. As Sir Robert Megarry VC, the eminent English judge, remarked decades ago in John Rees [1970] 1 Ch 345:

When something is obvious, they may say, why force everyone to go through the tiresome waste of time involved in framing charges and giving an opportunity to be heard?As everybody who has anything to do with the law well knows, the path of the law is strewn with examples of open and shut cases which, somehow, were not; …

The above remarks are as valid in 2019 as they were in Sir Robert Megarry’s day.

Atherton v Bensons Vending Ltd ET/2411749/2018

This is a recent decision of the Manchester Employment Tribunal which raises some very interesting issues about employee use of social media specifically and the conduct of disciplinary proceedings more generally.

Darren Atherton (aged 55) worked for Bensons Vending Ltd, a small company. As a result of his employer making changes to its discretionary Christmas bonus scheme, Atherton made some very negative comments about the company’s Managing Director, Ken Haselden via a colleague’s Facebook page:

Comment 1

We’ve all just bought Ken a new dog with our Christmas bonus!!!”

Comment 2

“He spends a few grand on a new dog then we get told ‘no bonus this year’ but we can have a bottle!!! 

Comment 3

“Well, he can stick his bottle where the sun doesn’t shine because I refuse to be insulted in this way!!!

Atherton’s colleague, Simon Minshull had initially objected to the changes to the bonus scheme by posting comments on his Facebook page:

Comment 1

Just when you thought staff morale couldn’t get any worse, hey f***ing presto #insult #disgusted.”

Comment 2

The only difference between McDonalds and where I work is McDonalds has only one clown running the show.” (This second comment was accompanied by a picture of Ronald McDonald).

The changes to the bonus scheme were part of a cost cutting and efficiency savings exercise by the company and, from any reading of the above comments, Atherton and Minshull clearly disagreed with this new approach by their employer.

Negative remarks about the Managing Director were also made by Atherton and another colleague in the workplace. Several colleagues informed Haselden about these remarks stating that they had been very aggressive and vitriolic in nature.

Atherton’s colleague, Simon Minshull, was subsequently questioned about the posts on his Facebook account by Haselden. Minshull stated that he did not agree with them – they were Atherton’s opinions – and he apologised for any offence caused to Haselden. He was later suspended for the Facebook posts, but critically this suspension was lifted in the light of his swift apology to Haselden (and the fact that it was established that he had not made these comments). Minshull was permitted to return to work upon the conclusion of the disciplinary proceedings against him.

Atherton was called to a meeting with Mr Haselden in December 2017 to address the allegations which had been made against him and to investigate the social media posts. This was not a disciplinary meeting, but more in the way of an investigatory meeting. The actual disciplinary meeting took place in January 2018.

Dismissal without notice pay

The outcome of the disciplinary meeting was that Atherton should be dismissed without notice pay for gross misconduct in terms of Section 98(4) of the Employment Rights Act 1996. This was despite the fact that Atherton had a clean disciplinary record (until now) and had enjoyed a good relationship with his employer. Atherton’s comments on Facebook were “extremely derogatory” and Mr Haselden stated that he would find it “extremely difficult” to continue working with him. Atherton appealed against his dismissal, but the decision was upheld.

The fairness of the disciplinary proceedings

As part of his claim against the employer, Atherton challenged the fairness of the disciplinary proceedings taken against him. In particular, he objected to the fact that Haselden conducted the disciplinary meeting against him. Atherton’s contention was that he would not receive a fair hearing because Haselden was personally involved in the matter and, therefore, could not be relied upon to act objectively. This type of issue frequently arises where smaller employers are concerned. In an ideal world, a manager (such as Haselden) who has been involved personally in an issue involving alleged breaches of work place discipline should not be a participant in the disciplinary panel. This is, of course, easier in practice to ensure in larger organisations where there is a pool of experienced managers who will have had no personal involvement in the matter (or in other words: a particular axe to grind).

The appeals process

In situations involving smaller employers, this is where the appeals process takes on a critical significance. Appeals can often be used to cure actual or perceived defects in the conduct of the original disciplinary meeting. Although Haselden (with two others – an operations manager and a company engineer) had conducted the disciplinary meetings, he had not involved himself in the actual appeals hearing. This part of the company’s disciplinary procedure had been conducted by a Ms Pedley, a trained auditor and, as stated, above, Atherton’s dismissal was upheld.

At this point, Atherton also raised the difference in treatment between himself and Simon Minshull (who had kept his job after disciplinary proceedings against him had been concluded). Pedley refused to comment on individual cases on the grounds of confidentiality. She stated in her letter to Atherton upholding the dismissal that:

Length of service and clean disciplinary record are taken into consideration during all grievance procedures. However, given the
nature of the comment and the reluctance to remedy the grievance the
relationship between yourself and senior management has broken down
irretrievably”.

The Employment Tribunal’s decision

The Tribunal held that Atherton had been fairly dismissed in terms of Section 98(4) of the Employment Rights Act 1996.

He had made extremely derogatory comments via Facebook about Haselden. They were “personal” and they suggested “some impropriety” on Mr Haselden’s part (though more in the nature of “penny-pinching impropriety” suggesting Scrooge like behaviour rather than any financial misdeeds). Any member of the public who knew the company and reading Atherton’s comments on Simon Minshull’s Facebook site, would have a very negative view of Haselden. It was accepted by the Tribunal that Haselden would, therefore, potentially suffer reputational damage. It was also accepted that in a small company, it would be very difficult for Atherton and Haselden to work with one another again (the employment relationship had irretrievably broken down).

The Tribunal also addressed Atherton’s claim that the disciplinary procedure had been biased or lacking in objectivity because of Haselden’s involvement in the decision to dismiss him from employment. This indeed could have been a problem for the employer and may have prejudiced proceedings against Atherton. That said, however, the saving grace for the employer was the fact that Ms Pedley had been kept in reserve for an appeal hearing.

The Employment Tribunal Judge made the following observations about Pedley’s involvement in the appeal stage:

Ms Pedley is by profession an auditor and had clearly gone through the matters in great detail. Notes (page 95 and onwards) show how she dealt with the matter. … Because of that safeguard of the deployment of Ms Pedley, who I am satisfied went about her task objectively and exhaustively and independently, although regrettably for the claimant she came to the same conclusion, I am not satisfied that the determination by Mr Haselden at the dismissal stage rendered the dismissal unfair. The appeal was thorough, it was a re-hearing. Ms Pedley considered all the points that were being raised and came, I am satisfied, to an independent conclusion.”

As for the difference in outcomes between Atherton and Simon Minshull, a key justification for this was that Minshull had “apologised shortly after being challenged regarding his Facebook comments even though he had been suspended.” This was something that Atherton had failed to do – apologising only at the disciplinary meeting in January 2018. Furthermore, it was significant that the nature of Atherton’s comments were specifically directed against Haselden, whereas Minshull’s comments (although also negative) were much more generalised.

The failure to pay notice pay

This was an aspect of the employer’s decision that the Employment Tribunal disagreed with. Atherton, therefore, had a right to receive his entitlement to notice pay. In this sense, he had been wrongly dismissed by his employer. The Employment Tribunal judge stated very clearly that in order for an employee to lose his entitlement to notice pay there the employer must be able to demonstrate that the gross misconduct complained of crosses over a “very high hurdle”. In the judge’s opinion, the employer had not been able to overcome this hurdle and, therefore, Atherton was entitled to claim notice pay.

A link to the Employment Tribunal’s judgement in Atherton Bensons Vending Ltd can be found below:

https://assets.publishing.service.gov.uk/media/5c4712dfe5274a6e6b6716e1/Mr_D_Atherton_v_Bensons_Vending_Limited_-_2411749_2018_-_Reasons.pdf

Conclusion

What have we learned about the decision of the Employment Tribunal in Atherton Bensons Vending Ltd?

Quite a lot actually:

  1. Employees will have to be extremely careful when posting material or comments on social media platforms – irrespective of whether this is about the employers or not.
  2. The case is yet another good example that misconduct committed inside or outside the work place or working hours can have reputational consequences for the employer. It can also lead to relationships in the work place breaking down irretrievably (especially in smaller organisations).
  3. Employers do not have a free hand to police employee use of social media. There must be clear guidelines laid down by the employer as to what constitutes acceptable and appropriate behaviour. At the same, employees have reasonable expectations that their rights to privacy and expression (as per the European Convention on Human Rights) will be upheld.
  4. The conduct of disciplinary proceedings by the employer is a critical issue. We have noted that potential conflicts of interest can occur in smaller employers or organisations where a manager can be investigator, dismissing officer and appeals officer. How does the employer address these issues and ensure objectivity in the disciplinary process?
  5. As with Atherton and Minshull, the employer was entitled to treat them differently: Atherton was dismissed while Minshull retained his job. There was nothing inconsistent or inherently unfair about this when the personal circumstances and behaviour of the two employees was examined.
  6. Finally, even in situations where gross misconduct has been proved by the employer, and the dismissal is deemed to be fair (in terms of Section 98(4): Employment Rights Act 1996), it will not necessarily mean that the employee loses his or her right to notice pay. The employer will have to overcome an extremely high hurdle in order to be entitled to invoke such a disciplinary sanction. As we have seen in Atherton, the Tribunal was not convinced that the employer had been able to prove that this was an appropriate punishment: the dismissal was fair; the failure to pay notice was not.

Copyright Seán J Crossan, 20 May 2019

TUPE or Redundancy?

Photo by Ian Tormo on Unsplash

Readers of this blog will know that TUPE and redundancy are two employment law issues which have featured regularly in the last month or so.

So, today, we have a story which combines both.

Jobs lost as courier SGM Distribution goes into liquidation

SGM Distribution, a courier company, based in North-East Scotland (Aberdeen and Letham to be precise) has gone into liquidation. Thankfully, 51 of the DGM employees have had their employment transferred to another employer. These fortunate individuals will, of course, have their core terms and conditions of employment protected by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended).

Sadly, 16 of DGM’s employees will be having their employment terminated by reason of redundancy. Redundancy is a potentially fair reason for dismissal in terms of Section 98(2)(c) of the Employment Rights Act 1996 – assuming that such an exercise has been carried out properly by the employer.

The definition of redundancy is contained in Section 139(1) of the Employment Rights Act 1996:

For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to—

(a) the fact that his employer has ceased or intends to cease—

(i) to carry on the business for the purposes of which the employee was employed by him, or

(ii) to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business—

(i) for employees to carry out work of a particular kind, or

(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

have ceased or diminished or are expected to cease or diminish.

Conclusion

Those former DGM employees unlucky enough to be made redundant are having their contracts terminated. On the other hand, the vast majority of the former DGM employees will maintain their continuity of employment (on their existing terms and conditions) with their new employer. They have a right not to experience any detriments to their terms and conditions of employment as a result of this transfer of an undertaking. Entirely positive changes to their contracts e.g increased pay, holiday entitlement, flexible working arrangements and enhanced family friendly working benefits would be most welcome. In terms of the TUPE Regulations, the new employer has limited scope for implementing negative changes to the employment contracts of the transferred employees. Any attempted changes must be for economic, technical or organisational reasons – not an especially profitable area for employers.

Postscript

Just when you find one story about the implications of TUPE or redundancy, another pops up. Please see a link to a relevant story from BBC Northern Ireland involving the Canadian company, Bombardier:

Bombardier to sell NI operations

The Canadian aircraft manufacturer employs about 3,600 people in Northern Ireland.

Copyright Seán J Crossan, 2 May 2019

More hell on the high street (or redundancy again)

Photo by Becca McHaffie on Unsplash

The difficult trading conditions on the UK high street don’t seem to be easing with news that Debenhams, one of the country’s biggest retailers, will close 50 of its stores. This will affect about 1,200 employees of Debenhams, many of whom will be facing up to the threat of redundancy.

Debenhams have just announced the names of the first 22 stores which will close in 2020.

Debenhams names 22 stores to close

The struggling department store chain plans to close the shops next year, affecting 1,200 staff.

Redundancy

Redundancy can be potentially fair reason for dismissal… if handled correctly by employers.

Only employees can be made redundant. 

Remember: S230(5) Employment Rights 1996 defines who is an “employee”.

The definition of redundancy can be found in Section 139(1) of the Employment Rights Act 1996:

(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to-

(a) the fact that his employer has ceased or intends to cease-

(i) to carry on the business for the purposes of which the employee was employed by him, or

(ii) to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business-

(i) for employees to carry out work of a particular kind, or

(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

The relevant legal provisions governing redundancy are quite extensive and can be found in:

● Trade Union and Labour Relations (Consolidation) Act 1992 

● Employment Rights Act 1996

● Information and Consultation of Employees Regulations 2004 

● Transfer of Undertakings (Protection of Employment) Regulations 2006

● Collective Redundancies and Transfer of  Undertakings (Protection of Employment) (Amendment) Regulations 2013

The really critical provisions of UK employment law which govern redundancy handling are to be found in the following:

● Sections 188-198 of the Trade Union and Labour Relations (Consolidation) Act 1992 

(Section 188 is further supplemented by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999).

Handling redundancies

Employees should be selected for redundancy in a fair way.

The employees who are at risk for potential redundancy will be part of a group of individuals known as the redundancy pool.

Employers can manage situation in a number of ways. 

How?

● LIFO

● Volunteers 

● Disciplinary records

● Staff appraisal – skills, experience etc (redundancy matrices or re-applying for your job).

What is LIFO? 

Last in, first out – was the most commonly used method, but it could fall foul be regarded as indirect discrimination e.g. too many young people are made redundant. So there are limitations to this approach.

Redundancy selection criteria must be objective. 

Many employers will have contractual redundancy policies. Must stick with this: see John Anderson v Pringle of Scotland [1998] IRLR 64.

Appeals should be permitted.

Individuals will still be an employee until effective date of redundancy.

Avoiding redundancies

Redundancy could be avoided by:

● Short-time working

● Lay-offs

The employer needs to consult with employees or their representatives.

Both sides may not reach agreement, but consultation has occurred. 

 It has to be a meaningful exercise – not a paper one.  

Additional rights

Employees have additional rights in redundancy situations:

● Consultation with employer

● Notice period

● Suitable, alternative employment 

● Time off to find new employment

Selection for redundancy

Selection for redundancy is automatically unfair in relation to:

● Protected characteristics e.g. age, disability, gender, maternity and pregnancy etc

● Trade Union participation or acting as employee representatives

● Jury service

● Whistle-blowing & health and safety cases

● Asserting statutory rights

● Occupational pension trustees

Statutory redundancy pay

Statutory redundancy pay is most common payment. Only those employees who have 2 years or more continuous service are entitled to claim statutory redundancy pay.

It is worked out according to the following formula:

● half a week’s pay for each full year employees were under 22

● 1 week’s pay for each full year employees were 22 or older, but under 41

● 1 and half week’s pay for each full year employees were 41 or older

Length of service which can be used to calculate the amount of redundancy pay is capped at 20 years and the amount of weekly pay is capped at £525 (the maximum statutory amount claimable is £15,750) from 6 April 2019.

Employers can be more generous with redundancy pay or they can include employees with less than 2 years’ continuous service.

No tax is payable on redundancy pay less than £30,000.

Employees can calculate their entitlement to statutory redundancy pay by clicking on the link below:

https://www.gov.uk/calculate-employee-redundancy-pay

Notice of redundancy

Proper notice of redundancy must be given. Section 86 of the Employment Rights Act 1996 contains the relevant notice periods for termination of the employment contract.

The maximum period of notice for those employees with 12 years or more continuous service is 12 weeks.

Sometimes contractual periods of notice can be longer, but not shorter than the those laid down by the Employment Rights Act 1996.

That said, notice can be shorter if the employment contract permits employer to make a payment in lieu of notice. 

Employees will receive full entitlement to redundancy pay, notice pay, holiday pay & other entitlements.

Collective redundancies?

This situation arise where more than 20 employees are going to be  made redundant in a 90 day period. Fixed term contract employees do not need to be included in collective consultation, except if contract ending early because of redundancy.

The Debenhams’ situation is likely to be classified as a case of collective redundancy.

There must be consultation with with Trade Union or employee representatives.

Consultations must cover:

● ways to avoid redundancies

● the reasons for redundancies

● how to keep the number of dismissals to a minimum

● how to limit the effects for employees involved, e.g. by offering retraining

Length of consultation period?

No time limit for how long this period should be, but the minimum is:

● 20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect

● 100 + redundancies – the consultation must start at least 45 days before any dismissals take effect

These minimum periods apply if employers are contemplating making collective redundancies within a 90 day period. 

The UK Coalition Government (2010-15) substantially reduced redundancy consultation periods.

Failure to consult employees?

Dismissals will almost certainly be unfair. 

In a collective redundancy situation, employers should notify the Redundancy Payments Service (RPS) by filling out form HR1. It is a (strict liability) criminal offence not to complete the HR1.

A link to a template HR1 form can be found below:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/782487/NEW_HR1.pdf

Failure to pay redundancy payments or payment of the wrong amount?

Affected employees have 6 months (minus 1 day) to lodge an Employment Tribunal claim.

Insolvent employers?

The State will ultimately pay out from the National Insurance Fund (employee’s should complete and submit an RP1 Form).

Employees can find out if their employer is insolvent by going to the following link:

https://www.gov.uk/get-information-about-a-company

A short film from ACAS about the core employments rights in relation to redundancy can be found below:

Copyright Seán J Crossan, 28 April 2019

Drunk and disorderly?

Photo by Bobby Rodriguezz on Unsplash

Misconduct

Several of my previous blogs have focussed on misconduct inside and outside the work place. In the most serious cases of (gross) misconduct, an employer could fairly dismiss an employee (Section 98(2)(b): Employment Rights Act 1996.

That said, employers are well advised to follow proper pre-dismissal procedures – usually in line with the latest ACAS Code of Practice on Discipline and Grievance at Work.

Summary (i.e. on the spot) dismissal can be an appropriate response to a breach of discipline by an employee, but I tend to caution employers against this. The eminent English judge, Sir Roger Megarry VC was quite correct to warn employers about the dangers of what they might perceive to be an open and shut case (see John v Rees & others [1969] 2AER 274, CD). It’s always better to be safe rather than sorry and by carrying out a procedure, the employer is minimising its exposure to risk i.e. the possibility of a successful unfair dismissal claim brought by the employee.

A typical disciplinary process usually consists of the following stages:

  • Stage 1: The investigation of the allegations
  • Stage 2: The disciplinary meeting
  • Stage 3: The appeal hearing

If the investigation uncovers clear evidence that the employee should be exonerated of all allegations of misconduct, the employer is legally bound to put a stop to the disciplinary process (see A v B [2003] IRLR 405; Salford Royal NHS Foundation Trust v Roldan [2010] EWCA Civ 522; Miller v William Hill Organisation Ltd UKEAT/0336/12/SM [2013])

It is also important to note that the employer must set out the disciplinary charges as clearly as possible so that the employee can prepare her case. The employer cannot, under any circumstances, play fast and loose with the disciplinary charges as this may undermine the integrity of the entire disciplinary procedure (see Strouthos v London Underground [2004] IRLR 636 CA and Celebi v Scolarest Compass Group UK & Ireland Ltd UKEAT/0032/10/LA [2010]).

If, however, matters proceed to a formal, disciplinary meeting, the allegations must be put to the employee and the evidence which supports them. The employee in turn has the right to present her case to the disciplinary panel or manager taking the proceedings. In terms of the Employment Relations Act 1999, the employee has a right to be accompanied by a colleague or a recognised trade union representative.

Should the disciplinary meeting arrive at a decision to dismiss the employee for misconduct, it is extremely important to allow an appeal (see West Midlands Co-operative Society v Tipton [1986] 1 ALL ER 513). An appeal can lead to the dismissal being upheld or overturned; and it can be used to cure any defects in the previous stages of the disciplinary proceedings.

Discipline at work

It’s very common (indeed essential) for employers to have detailed codes of practice or discipline which regulate the behaviour of employees inside and outside the work place. The content of disciplinary codes should be clearly communicated to employees. For new employees, this could be carried out as part of their induction process. For existing employees, a regular series of training seminars or development events could accommodate this aim. The urban myth that what happened outside the work place is no business of the employer is that exactly that: a dangerous myth. If staff misbehaviour outside working hours causes serious reputational damage to the business or the organisation, the employer is entitled to treat this as gross misconduct and to use the ultimate disciplinary sanction of dismissal.

Examples of gross misconduct might include any of the following:

  • Alcohol and drug abuse
  • Acts of bullying & harassment
  • Fraud
  • Negligent performance of duties
  • Theft
  • Persistent late-coming

The above list is by no means an exhaustive one, but it covers some of the most common examples of gross misconduct.

As I have discussed in a previous blog, It happened outside work (or it’s my private life!) (published on 7 February 2019), employers do not have an automatic right to meddle in employees’ private lives. The right to a private life is protected in terms of Article 8 of the European Convention on Human Rights (as implemented by the both the Scotland Act 1998 and the Human Rights Act 1998). Employers will have to walk a very fine line between what is a legitimate act to protect their business interests and what would otherwise be unwarranted interference in the private lives of employees.

Lloyd’s of London

So, bearing all of the above in mind, it was with some interest that I read today that Lloyd’s of London, the financial giant, was introducing a new code of conduct for employees. This is in the wake of some unpleasant allegations being disclosed about the business – sexual harassment claims and drunkenness and drug taking.

Traditionally, the serving of alcohol at business meetings in the City of London or long, boozy lunches were as much a fixture of the Square Mile as was St Paul’s Cathedral. Alcohol oiled the wheels of commerce it was thought, but it also encouraged people to behave recklessly within a work environment.

It would seem that, in other work places, employees seem to know that they can’t turn up for work under the influence of drugs or alcohol, but Lloyd’s obviously feels that it still has a problem with these issues and they need to be addressed. Admittedly, two years ago, the organisation did ban employees from drinking alcohol between 0900 and 1700 hours.

The new code of conduct at Lloyd’s will apply not only to its 800 employees, but also to any person who holds a pass to its London HQ (potentially such 40,000 individuals). Anyone attempting to enter Lloyd’s HQ who appears to be under the influence of drugs or alcohol (or both) will be denied admission to the premises.

A link to the BBC News article about the new code of conduct at Lloyd’s can be found below:

Lloyd’s of London insurance has a new code of conduct, but not everyone welcomes it.

Lloyd’s of London calls time on drink and drugs

Photo by Boris Stefanik on Unsplash

Conclusion

Misconduct by employees – both in and outwith the work place – can be used by employers as a potentially fair reason for dismissal in terms of Section 98 of the Employment Rights Act 1996. Employers must ensure that employees clearly understand what is expected of them in terms of their conduct. It is very important, however, that employers carry out proper procedures when contemplating dismissal as the ultimate sanction for breaches of the disciplinary code. By implementing a new code of conduct, Lloyd’s of London is carrying out a risk management exercise i.e. spelling out what is and isn’t acceptable behaviour in and outside the work place. This is very wise given the bad publicity which Lloyd’s has experienced in the past regarding allegations of employee misconduct.

Copyright Seán J Crossan, 9 April 2019

Mishandling redundancy?

Photo by Casey Botticello on Unsplash

An interesting story appeared in today’s Independent newspaper about allegations of racism directed against the office of Tom Watson MP, the Deputy Leader of the UK Labour Party.

The allegations (and they are allegations I would stress at this point) concern claims by a former employee of Mr Watson’s that she was unfairly selected for redundancy. Sarah Goulbourne, the former employee in question is alleging that she lost her post because of her race and/or ethnicity (she is of Afro-Caribbean descent). A person’s race is, of course, a protected characteristic in terms of the Equality Act 2010 and s/he has a right not to be subjected to unlawful discrimination or less favourable treatment.

A link to the story can be found below:


https://edition.independent.co.uk/editions/uk.co.independent.issue.270319/data/8841231/index.html

In terms of the Employment Rights Act 1996, redundancy can be a potentially fair reason for dismissing an employee – if handled correctly and fairly.

If, however, a person was selected for redundancy because they possessed a protected characteristic such as race, this would be extremely problematic for the employer. If racial discrimination could be proved by the ex-employee, the dismissal or termination of the contract on grounds of redundancy would almost certainly be automatically unfair.

Employers can access very useful advice about redundancy handling (and presumably how to get it right) from the ACAS website:

http://www.acas.org.uk/media/pdf/1/1/Redundancy-handling-accessible-version.pdf

It will be interesting to see if the case proceeds any further.

Copyright Seán J Crossan, 27 March 2019

Locking horns (Frustration of Contract Part 2)

Photo by Uriel Soberanes on Unsplash

In February, one of my blogs (Frustration of Contract) dealt with the circumstances surrounding the issue of frustration as a factor which could lead to termination of a contractual agreement.

One of the stories discussed in that particular blog was the dispute between Cardiff City FC and FC Nantes in respect of the tragic death of Emiliano Sala, the Argentinian footballer who had signed for the English Premiership club.

Despite Sala’s death, the French club was till demanding a portion of the transfer fee of £15 million. This led to speculation on my part as to whether frustration of contract could be an argument put forward by Cardiff.

The plot has since thickened an, today (25 March 2019), it has been reported that Cardiff City is now claiming that the transfer deal was never legally binding. The Premiership side asserts that the proper paperwork was not completed; the French side disputes this.

So, it looks as if the two clubs are going to be locking horns in what now seems to be an inevitable legal dispute.

A link to an article on the BBC website can be found below:

saw this on the BBC News App and thought you should see it:

Emiliano Sala: Cardiff set to claim transfer deal ‘not legally binding’

Cardiff City football are set to tell Fifa the deal to buy Emiliano Sala from Nantes for £15m was not legally binding.

Copyright Seán J Crossan, 25 March 2019