Employment law breakfast seminar Thursday 5 June 2014 Justin - - PowerPoint PPT Presentation

Employment law breakfast seminar

Thursday 5 June 2014

Justin Govier, Partner Jonathan Bruck, Senior Solicitor Erica Humphrey, Solicitor

Negotiating an exit

Justin Govier Partner

Negotiating an exit prior to 29 July 2013

• Where to start? (Before 2 years !)
• Without prejudice rules - genuine attempt to settle a dispute

and no “unambiguous impropriety”

• Often needed earlier than that, exploratory conversations
• Artifjcial scripted conversations, manufacturing of

disputes and wrong labelling of WP

• “Cloak and dagger”

Pre-termination negotiations after 29 July 2013

• “Any offer made or discussions held before the termination
• f the employment in question, with a view to it being

terminated on terms agreed”

• Cannot be used as evidence in ordinary unfair dismissal cases
• Unless improper behaviour
• Non-monetary offers
• Even if no eventual settlement
• Still have WP principles (Portnykh -v- Nomura)

Limitations

• Only ordinary unfair dismissal cases
• Not automatic unfair dismissal, not discrimination, not breach
• f contract
• Increase in multiple claims
• Everyone has a protected characteristic
• Risk assess

Acas code of practice and guidance

• Guidance broad and general
• Useful examples, but not all the answers
• Need case law, although doesn’t always help
• Trying to formalise an informal process

Some issues

• Chronology – letter, meeting, agreement?
• Should allow employee to be accompanied
• Militates to letter fjrst
• Allow time to consider offer (10 calendar days to consider

proposed formal written terms of a settlement agreement)

• Template letters – useful, current caution around amending
• Create precedent letter

Improper behaviour

• Harrassment, bullying, intimidation, offensive words,

aggressive behaviour, physical assault (or threat), criminal behaviour, victimisation, discrimination

• Undue pressure, e.g. not giving reasonable time for

consideration of proposed written terms. 10 calendar days recommended (unless agreed otherwise)

• Stating (before disciplinary process) that employee will

be dismissed if offer rejected (as opposed to stating that disciplinary process will commence)

Not improper behaviour

• Stating that the terms of a procedural termination will be less

favourable

• Not agreeing to provide a reference
• Not paying for independent advice
• Encouraging employee, in a non-threatening way, to

re-consider rejection of offer

• Often it’s not what you say, but how you say it
• More pitfalls for SMEs

Has it been a success so far?

• Legally – more clarity
• Practically:
• It is a process, less “cloak and dagger”, statutory seal of

approval, nothing wrong with it

• transparent, frank communication
• Reduction in two-pronged approach
• Internal procedures
• Benefjts outweigh problems
• Employees use as well

Getting the package right

• Knowing your employee
• Part HR professional / part psychologist
• Non-fjnancial issues
• Tactics (room to move)
• Non-fjnancial deal breakers?

Factors

• Management time going through process
• Certainty
• Immediacy
• Confjdentiality
• Non-derogatory clause
• Announcement (customers, suppliers, employees)
• Restrictive covenants
• Legal fees
• Avoiding test case for others
• Public dispute
• Recruiting replacement (e.g. “redundancy”)

Factors

• Lump sum (accelerated receipt)
• Dismissal in any event
• Contributory conduct
• Loss of earnings
• One year cap
• Job market
• Reference
• Tribunal fees
• Punitive
• Advice – legal and non-legal
• Employee expectations (as opposed to realities)
• Merits of the case

Employment law update

Erica Humphrey Solicitor

Employment tribunal statistics 2012/13

• Fees introduced for claims fjled on or after 29 July 2013
• Up to £1,200 (£250 fjling and £950 hearing)
• 79% fewer claims received:
• Oct-Dec 2012 – 45,710 claims received
• Oct-Dec 2013 - 9,801 claims received
• 75% fewer than in the last quarter
• Unison challenge – judicial review
• (R (Unison) v Lord Chancellor and another [2014] EWHC

218 (Admin)

Unfair dismissal compensatory award

• Basic award - £464
• Compensatory award – lesser of £76,574 or 52 weeks’ actual

gross pay

• Law fjrm challenge – judicial review
• R (on the application of Compromise Agreements Ltd) v

Secretary of State for Business, Innovation and Skills

Case law update: calculation of holiday pay - commission

• EU law – “at least four weeks’ paid leave”
• Working Time Regs - a ‘week’s pay’
• Williams and others v British Airways Plc [2011] – “normal

remuneration” includes any payment “intrinsically linked” to the performance of tasks

• Lock v British Gas Trading Limited [2012]
• AG opinion: commission was intrinsically linked to his role

as a salesman

• Suggested that is averaged over the last twelve months

Case law update: calculation of holiday pay - overtime

• Neal v Freightliner Ltd [2012] – EAT
• Faulton and another v Bear Scotland Ltd [2012] – EAT
• Watch this space…

Case law update: collective redundancy

• The Woolworths case (USDAW v Ethel Austin Ltd (in

administration) and another case UKEAT/0547/12)

• Collective consultation when:
• Proposing to make redundant 20 or more employees
• “at one establishment”
• Within a period of 90 days or less
• 100+ employees = 45 days’ consultation
• Fewer than 100 employees = 30 days’ consultation
• EAT: the words “at one establishment” should be disregarded
• Referred to the ECJ

Case law update: disciplinary and grievance

• Blackburn v Aldi Stores Ltd (2013) (EAT)
• Failure to provide impartial grievance could amount to a

fundamental breach of contract

• Miller v William Hill Organisation Ltd (2013) (EAT)
• Reasonable belief in the employee’s guilt
• Where an employee dismissed for criminal or serious

misconduct, level of investigation must be “careful and conscientious”

• Should focus no less on any potential evidence that may…

at least point towards innocence…as he should on the evidence directed towards proving the charges against him

Case law update: disciplinary and grievance

• Stuart v London City Airport (2013) (CA)
• Employee fairly dismissed for theft even though acquitted

in a criminal trial

• Brito Babapulle v Ealing NHS Hospital (2013) (EAT)
• A fjnding of gross misconduct will not inevitably make

dismissal a reasonable response

Early conciliation

Jonathan Bruck Senior Solicitor

Early conciliation

• Mandatory for claims presented after

6 May 2014

The issues

• Claimant (C) must notify Acas of intention to make a claim
• “stop the clock” on limitation
• Up to one calendar month (extension for further 14 days by

agreement)

• Claims for relevant proceedings cannot be presented before

early conciliation complete and early conciliation certifjcate

Acas notifjcation

• Early conciliation notifjcation form
• Names, addresses and contact details
• Group claim form
• More than one Respondent (R) – different time limits!
• On-line, phone, post
• Acas records receipt (Day A)
• Email receipt / date stamped

Upon notifjcation

• Early Conciliation Support Offjcer attempts to contact C within

24 hours

• Obtains details (using checklist)
• Allocates conciliator

Options for claimant

• Demand Certifjcate from ECSO (who will presumably try to

persuade otherwise?)

• If certifjcate issued, clock restarts
• Agree that Acas can contact R (Acas database for large

employers)

Options for Respondent

• Contact usually within 48 hours
• Refuse involvement
• Discuss settlement with conciliator

Certifjcate

• Issued at any time that conciliator concludes settlement is not

possible (or 2 weeks if ECSO cannot contact C)

• Same conciliator if claim issued - helpful

Expectations

• Acas will not advise on timing
• Acas obliged to accept, even if out of time
• Certifjcate is not a validation of claim

Early conciliation

Effect on time limits

• Day A = day Acas receives EC form/phone-call from C
• Day B = day C is deemed to receive EC certifjcate (or actual receipt date if

earlier)

• Deemed receipt:
• date certifjcate emailed by Acas
• 2 working days after Acas posts certifjcate (assuming 1st class used)
• Time limit for claiming extended to 1 month after Day B if time would
• therwise expire between Day A and Day B + 1 month

Early conciliation

Example

• C dismissed with effect from 8 May 2014 & wants to claim UD
• Normal time limit would expire 7 August 2014
• C emails EC form to Acas on 5 June 2014 (Day A)
• Acas makes contact with C on 9 June 2014. C agrees to Acas contacting

R but R is not willing to agree a settlement

• Acas issues EC certifjcate and emails it to C on 13 June 2014 (Day B)
• When does the UD time limit expire?
• ERA 1996: ‘In working out when a time limit set by a relevant

provision expires, the period beginning with the day after Day A and ending with Day B is not to be counted’

• therefore the 8 days between (and including) 6 June 2014 and 13 June

2014 do not count

• time limit extended by 8 days to 15 August 2014

Early conciliation

Another example

• C dismissed with effect from 8 May 2014; wants to claim UD
• Normal time limit would expire 7 August 2014
• C emails EC form to Acas on 5 August 2014 (Day A)
• Acas makes contact with C on 8 August 2014
• C agrees to Acas contacting R
• Acas makes contact with R on 12 August 2014
• R is not willing to agree a settlement
• Acas issues EC certifjcate and emails it to C on 13 August 2014

(Day B)

• Time limit for UD claim expires 13 September 2014 (one month

after Day B)

Settlement

• If COT3 to settle all claims then no certifjcate
• If COT3 to settle some claims then certifjcate for rest
• New ET1

Issues for Respondents

• Checklist
• Jurisdiction
• Exemptions
• Timing
• Name of Respondent

Relevant proceedings

• Most claims
• Can go through EC but then add new claims
• C has mix (e.g. unfair dismissal and right to be accompanied),

therefore exempt, goes through EC anyway and seeks to rely on clock stop?

Other Exceptions

• Joint claims, someone else complied
• If R contacted Acas fjrst (no clock stopping unless C presents

form)

• Mixed proceedings
• Unfair Dismissal Interim Relief

Conclusion

• Timing issues might present headaches for C and litigation
• Will C’s try it on anyway?
• Will Rs conciliate in fees regime?
• Individual cases will depend on the parties and conciliator
• Concern over Acas resources (new conciliators appointed)
• 10 days delay already experienced
• Longer period of uncertainty for Rs
• R may still not receive advance notice of claims