Thursday, 17 December 2015

Another challenge to tribunal fee regime

A Significant employment law decision expected in 2016 –Employment Tribunal fees, R (on the application of Unison) v Lord Chancellor and another (Supreme Court). 2016 will see Unison have one last attempt at challenging the introduction of fees for bringing an employment tribunal claim. Case to be heard in the Supreme Court. While it was rejected by the Court of Appeal, it did say the decline in claims is “sufficiently startling”. For more information see:

Wednesday, 29 July 2015

At last Government to simplify tax on settlements

It looks as if The Government is at last to simplify a delineated system of ascribing tax to settlements. We all know that tax and employment tribunal decisions have been at odds in the past and in order to advise clients you have to tip toe around case law and guidance of Byzantine complexity. Well fortunately, The Government have decided to launch a consultation.

The best bit is that the proposal as it stands (para 10) will remove the distinction between the tax and NICs treatment of contractual and non-contractual termination payments. This will hopefully remove the majority of the complexity and misunderstanding within the existing system.

This blanket exemption it is proposed will be set at a lower threshold than £30,000. It is reported at 4.16 that:

'One approach the government is considering is to create a new exemption which increases proportionately with the number of years of service the employee has completed. This would create a new fairer exemption which will proportionately reward long serving, lower paid employees.'

We shall wait and see whether there is devil in the detail.

Responses to the consultation can be emailed to:

Tuesday, 14 July 2015

Companies to publish gender pay gap information

The Government has confirmed that it will legislate under S.78 of the Equality Act 2010 to require companies with 250 or more employees to publish gender pay gap information. It has published a consultation paper on the detail of the regulations to be made under S.78, seeking views on the level of gender pay information to be required and the frequency of publication.

It asks whether the information should be the overall difference between the average earnings of men and women as a percentage of men's earnings, or whether it should be broken down by full-time and part-time employees, or by grade or job type. It also asks whether employers should be required to provide additional, contextual information, explaining any pay gaps and setting out what remedial action they intend to take; and how often employers should be required to publish such information. Under S.78 EqA, the information can be required to be published annually at most.  

The consultation closes on 6 September 2015. The regulations are expected to be made in the first half of 2016, although implementation may be delayed to give businesses time to prepare.

Link to consultation document:

Wednesday, 3 June 2015

Updated list of prescribed people/bodies for whistleblowing purposes

The Department of Business, Innovation and Skills has updated its list of prescribed persons and bodies to whom individuals can make a protected disclosure see this download

Monday, 1 June 2015

New law introduced in May under the Small Business, Enterprise and Employment Act 2015

The first commencement order made under the Small Business, Enterprise and Employment Act 2015 has been published. From 26th May 2015, this brought into effect the following:

Section 153 which inserts a new section 27A into the Employment Rights Act 1996 to prohibit clauses that prevent exclusivity in zero hours contracts and a new section 27B which gives the Secretary of State power to make further provision dealing with the anti-avoidance aspects.

Section 152 which inserts section 19A into the National Minimum Wage Act 1998, to provide that the financial penalty in a notice of underpayment will be set at 100% of the arrears owed to each worker to who the notice relates, subject to a maximum of £20,000 per worker. Previously the £20000 limit applied to each notice of underpayment.

Section 149 which inserts section 49B in the ERA 1996 to provide the Secretary of State with a power through regulations to prohibit defined NHS employers from discriminating against a job applicant because it appears to the NHS employer that the applicant has made a protected disclosure.

Thursday, 28 May 2015

Case in point: John Yapp V Foreign and Commonwealth Office (FCO)

Courts may be reluctant to conclude that psychiatric injury is a foreseeable consequence of unfair treatment of an employee, unless there is some evidence of a pre-existing medical condition.

In the case of Yapp v Foreign and Commonwealth Office [2014] EWCA Civ 1512, the Court of Appeal had to decide whether an employee could claim compensation arising from a depressive illness, following alleged breaches of contract and the employer's common law duty of care.

Mr Yapp was the British High Commissioner in Belize who was summarily withdrawn from post in June 2008 after false and offensive allegations of sexual misconduct were made against him by a Belizean politician in opposition, Mr Eamon Courtenay. He not only lost his job with attendant allowances and benefits but became ill with clinical depression after being withdrawn from post and then subjected to a lengthy disciplinary process, during the course of which the allegations of sexual misconduct were dismissed unequivocally and following hostile media intrusion and inaccurate reporting repeated internationally, which caused immense distress to Mr Yapp and his family and in respect of which he brought a successful libel action against the Mail on Sunday.

 Mr Yapp was offered no other position by the FCO and never returned to work. In due course he retired.

 In May 2013 the High Court (Cranston J) found the FCO liable to pay damages to Mr Yapp for breach of contract and for breach of its duty of care to Mr Yapp following his summary withdrawal from post.
The High Court found that the FCO should have treated the allegations concerning Mr Yapp’s conduct with some caution and conducted an initial investigation before taking any action. By removing him from his position without any discussion, it had acted in breach of an express clause in his contract that assured him of “fair treatment” during any disciplinary proceedings and in breach of its implied duty of care towards him. In addition, the judge held that it was reasonably foreseeable that Mr Yapp would suffer psychiatric harm as a result of the FCO’s actions and held that he could recover damages for this aspect of his claim. Although the judge accepted that Mr Yapp had “an ostensible robustness”, it remained reasonably foreseeable that his depressive illness could result from a “knee-jerk withdrawal from post”. Damages were agreed between the parties at £320,000 and the FCO appealed.

Court of Appeal decision

The Court of Appeal agreed with the High Court that the FCO had acted in breach of contract in removing Mr Yapp from his position without first conducting a preliminary investigation and putting the allegations to Mr Yapp. Whilst the FCO did have the discretion under Mr Yapp’s contract to withdraw him from his post for “operational reasons”, there was still a requirement to confirm the reliability of the allegations being made before such withdrawal. Accordingly, the FCO had acted in breach of Mr Yapp’s contract and in breach of the implied duty of care. The case was remitted to the High Court to decide the level of damages.

The Court of Appeal also dismissed FCO’s appeal on the issue of whether its actions had caused Mr Yapp’s depressive illness. The Court was satisfied that the High Court could rely on a medical opinion, which found that the unfair treatment of Mr Yapp was one of the factors that had caused or contributed to his illness.

However, the Court of Appeal allowed the FCO's appeal on the issue of whether Mr Yapp’s illness was reasonably foreseeable. Accordingly, Mr Yapp was not entitled to be awarded damages for his depressive illness as the Court determined that it was too remote a consequence from the breach of contract.

The Court came to the conclusion that it was wrong to find that it was reasonably foreseeable that the FCO’s conduct in withdrawing Mr Yapp from post without having had the opportunity to state his case might lead him to develop psychiatric illness. According to the Court, it would be exceptional for an apparently robust employee, with no history of any psychiatric ill health, to develop a depressive illness as a result even of a very serious set back at work. The FCO could not have foreseen, in the absence of any sign of special vulnerability, that Mr Yapp might develop a psychiatric illness as a result of its decision. It therefore followed that the losses were too remote to be recoverable following the breach of contract.

This decision demonstrates that the courts may be reluctant to conclude that psychiatric injury is a foreseeable consequence of unfair treatment of an employee, unless there is some evidence of a pre-existing medical condition. However, it is important to bear in mind that this will remain a risk even without any evidence of pre-existing conditions, particularly if there has been a significant breach of contract or duty of care. Future judgments will be watched carefully for guidance. The Court in this case found that the employer’s actions caused the depressive illness and it would still be open to an employee to argue that any conduct was so unfair and unreasonable that it was foreseeable that the employee would develop such an illness as a result.

Tuesday, 26 May 2015

New rules on exclusivity but zero hour contracts are useful only for the few

Exclusivity terms unenforceable in zero hours comes into force under s 164(1). This section inserts the Employment Rights Act 1996, Pt 2A, which renders unenforceable any exclusivity term (see s 27A(3)) in a “zero hours contract” (see s 27A(1)) and provides power to the Secretary of State to make further provision in relation to “zero hours workers” (see s 27B(2)) in regulations.

At present, an individual subject to exclusivity terms in their zero-hours contract cannot seek work elsewhere, regardless of whether the employer offers only occasional, minimal, or even no hours of work but in my experience not many zero hour contracts contain this clause for the good reason that no one in their right mind would sign up to them. It is possible that in some areas of low employment the employers hold all of the cards and can engage workers in these onerous terms but surely these arrangements would be few and far between.

Zero hour contracts are not only flawed because the worker enjoys ongoing requirement to accept offers of work and no consequences but the on the flip-side the employer has a worker who does not have to accept the offer of work. No wonder then that this contractual white elephant is in danger of extinction and should be put out of its misery.