Employment Review - April 2009
In this month’s Review we look at the end of the statutory dispute resolution procedures and the transitional arrangements relating to the new regime; we report on a case which dealt with the difficult issue of whether employees should be entitled to legal representation at internal disciplinary hearings; we report on various other changes which took place in April and also consider the latest statistics revealing the significant increase in Employment Tribunal claims last year.
Vanessa DiCuffa
Disciplinary and Grievance Procedures - Transitional Arrangements
Right to legal representation at an internal disciplinary hearing
Massive increase in tribunal claims
Paid Holiday
Flexible working hours
Increase in Statutory Maternity and Sick Pay
Equality Bill
Disciplinary and Grievance Procedures - Transitional Arrangements
The end of statutory dispute resolution
The introduction of the Employment Act 2008 has repealed the statutory dispute resolution procedures introduced by the Employment Act 2002. The rules on procedural unfairness have also been repealed. The rules had provided that where an employer had complied with the statutory dismissal procedure but there was some other procedural defect, the dismissal would still be fair if the employer could show that, irrespective of that procedural defect, it was more likely than not that the employee would have been dismissed in any event. There will now be a return to the old law on procedural fairness under the leading case of Polkey v A E Dayton Services.
The “Polkey principle”
In the case of Polkey v A E Dayton Service the court held that if there had been any procedural failure in conducting a dismissal (i.e. a failure to comply with a company policy or failure to comply with the ACAS Code), a dismissal would be “technically unfair”. However, the amount of compensation awarded at the Court’s discretion could be reduced by up to 100% - a so-called Polkey deduction - if the employer demonstrated that the procedural failure made no difference to the outcome, i.e. that the employee would have been dismissed in any event.
The new provisions
6 April 2009 marks the key date in the end of the much criticised statutory dispute resolution procedures which led to over-complicated procedural requirements and an accelerated litigation process. The draconian punishments for non-compliance led to many employees failing to bring legitimate complaints or employers finding themselves in a situation where they faced an automatic unfair dismissal ruling. In many cases both parties would end up seeking legal advice to avoid falling into the trap of non-compliance. Further, there was the potential for increases and decreases in compensation awards of up to 50%.
The old regime will be replaced by a new power for employment tribunals to increase or reduce tribunal awards by up to 25 per cent for unreasonable failure to follow the new ACAS Code of Practice on Discipline and Grievance. For an adjustment to be made under the new regime the tribunal proceedings must fall within a list set out in Schedule A2 of the Trade Union and Labour Relations (Consolidation) Act 1992 and the claim must be one to which the ACAS Code applies. If these criteria are met only an unreasonable failure to comply with the code will result in an award being adjusted.
However, the old regime will still be relevant for a short period and the new provisions will come into force via complicated transitional provisions.
Transitional provisions
The transitional provisions mean that care will need to be taken at the moment to check whether the new or old rules will apply. There are differing transitional arrangements for disciplinary and dismissal issues and for grievances and we have summarised those in the flow charts below.
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DISMISSAL & DISCIPLINARY PROCEDURES – BEFORE 6 APRIL 2009 HAS THE EMPLOYER |
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GRIEVANCE PROCEDURES – DID THE ACTION OR OMISSION FORM THE BASIS OF THE GRIEVANCE |
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What should you be doing about this?
We recommend that you check your existing disciplinary and grievance policies/procedures and any guidance issued to check whether they are compliant with the new ACAS Code. In addition, training may be needed for those involved in handling disciplinary and grievance issues.
Right to legal representation at an internal disciplinary hearing
One of the questions we regularly get asked is whether employees have the right to bring along a lawyer to an internal disciplinary hearing.
The High Court has recently decided that in certain situations an employee will have the right to be represented by a lawyer at an internal disciplinary hearing. In the past this right was reserved for workplace colleagues or union officials.
In R v The Governors of X School, a school took disciplinary action against a music assistant for breach of trust after it was revealed he had kissed a 15 year old student. The school had a duty to report the employee to the Secretary of State for Children’s Schools and Families who would then determine whether the employee should be entered onto a register of persons not fit to work with children.
The employee requested that his lawyer attend the school’s internal disciplinary hearing but this was refused.
The employee argued that by not permitting legal representation, the school had breached his human rights under Article 6 of the European Convention of Human Rights (ECHR) (the right to a fair trial) and requested a judicial review by the Court.
The Court decided that because of the serious nature of the allegations of misconduct and the severity of the consequences of a direction being made by the Secretary of State he was entitled to an ‘enhanced measure of procedural protection’ and this meant that he was entitled to legal representation at both the disciplinary hearing and appeal. The Court decided that the employee could not fairly be expected to represent himself and being accompanied by a Trade Union official or colleague would not have been adequate. The Court also indicated that the fact that the employee had a potential claim for unfair dismissal would not be an adequate alternative remedy.
What action should you take?
The Court stressed that this decision was limited to its particular facts and that its findings were not intended to have wider implications. Further, the employer was a public authority so the employee was able to rely directly on the ECHR which would not be the case for a private sector employee. Further, we understand that there is to be an appeal to the Court of Appeal. Nonetheless, the High Court acknowledged that the ECHR may provide employees with the right to be legally represented in circumstances where the employee is faced with serious allegations which might not only result in dismissal but also threaten their future employment prospects, reputation or ability to pursue their career. We believe on balance that those situations will be limited and in this case it was the possibility of a direction being made by the Secretary of State which was the key factor in the Court’s decision.
Massive increase in tribunal claims
The Tribunals Service has released the Employment Tribunal and EAT statistics for the period 1 April 2007 to 31 March 2008. The figures show a marked increase in tribunals work over the past few years. The total number of claims accepted by employment tribunals increased to a record high of 189,303, an increase of 43% on the 2006 - 2007 figures and an increase of 219% on the 2004 - 2005 figures.
The most prominent escalation took place in equal pay disputes which increased from 44,013 claims to 62,706 and where the number of claimants represented by lawyers changed from 79,313 in the previous year to 117,565.
The past two years of statistics show that tribunals have accepted in excess of 100,000 equal pay claims but have only managed to dispose of 9,471 creating a huge backlog of cases. If the rate at which equal pay claims are made continues to increase it is impossible to envisage the system continuing to operate in the current format.
55,712 claims have been brought under the working time directive, predominantly by airline staff eager to clarify the level of holiday pay they are entitled to under the Civil Aviation (Working Time) Regulations 2004 SI 2004/756.
This has sent the traditionally dominant jurisdiction of unfair dismissal down the rankings to third place with 40,941 claims - a fall of 8% on the previous year.
Claims made for age discrimination have grown in significance. A 200% increase to 2,949 claims during the period and the prospect of further increases resulting from age-related redundancy selection taking place during the current economic situation are leading analysts to believe this figure could jump substantially over the next few years.
The current economic climate has led to a sharp increase in unemployment and widespread redundancies across all sectors of the economy. It seems inevitable that these events will lead to a substantial rise in claims being processed by tribunals leading to the question of whether the tribunals will be able to cope.
Paid Holiday
The statutory holiday entitlement is changing. The holiday entitlement increased to 4.8 weeks from 1 October 2007 and further increased to 5.6 weeks from 1 April 2009. The holiday entitlement can include bank holidays. If you already receive paid time off for bank holidays in addition to your four week holiday entitlement your holiday entitlement has not increased.
Flexible working hours
The Flexible Working (Eligibility, Complaints and Remedies) (Amendment) Regulations 2009 SI 2009/595 came into force 6 April 2009. The Regulations extend the rights of carers of children under 17 to request flexible working hours. The right to request flexible working for carers of disabled children under the age of 18 is unchanged. Employers retain the right to refuse the request.The extension to flexible working rights was introduced in response to recommendations made in the Walsh Report, published May 2008.
Increase in Statutory Maternity and Sick Pay
The Social Security Benefits Up-rating Order 2008 came into effect from 6 April 2009 and increased payments due for statutory maternity, paternity and adoption pay from £117.18 per week to £123.06 per week and statutory sick pay which increases from £75.40 to £79.15 per week.
Equality Bill
The Equality Bill, which proposes to promote equality, fight discrimination in all its forms (including age discrimination) and introduce transparency in the workplace, which is key to tackling the gender pay gap, is now available.
The Bill is significant and imposes wide-ranging changes including imposing equality duties on public authorities, changes to disability related discrimination, extending the coverage of third-party harassment and prohibiting pay secrecy clauses in employment contracts.
What do you need to do about it?
Although the Bill has received much publicity, it is not currently law. The Government has stated that the Bill is due to take effect in 2010 and it is possible that some of its provisions may change following debate as the Bill progresses through Parliament.
Due to the size and complexity of the Bill we will report separately on its provisions and monitor its progress through Parliament. We believe it is important, however, for employers to start to get to grips with the new proposals and the intervening period should be used to plan for any changes that may actually become law.
This update is only a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist advice should be sought from a member of the Freeth Cartwright Employment Team in relation to any queries that may arise.
David Potter
Cumberland Court,
80 Mount Street,
Nottingham NG1 6HH
Tel: 0115 936 9389
Fax: 0115 859 9617
david.potter@freethcartwright.co.uk
Joanne Kay
Floor 2, West Point,
Cardinal Square,
10 Nottingham Road,
Derby DE1 3QT
Tel: 0845 634 1724
Fax: 0115 859 9617
joanne.kay@freethcartwright.co.uk
Julian Middleton
One Colton Square,
Leicester LE1 1QH
Tel: 0116 248 1115
Fax: 0845 634 2595
julian.middleton@freethcartwright.co.uk
Pat Jones
First Floor,
St James Building,
61-95 Oxford Street,
Manchester M1 6FQ
Tel: 0845 634 2561
Fax: 0845 634 2541
pat.jones@freethcartwright.co.uk
Vanessa DiCuffa
75 Colmore Row
Birmingham B3 2AP
Tel: 08456 342584
Fax: 08456 342576
vanessa.dicuffa@freethcartwright.co.uk
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