The government has passed two major pieces of legislation, the Growth and Infrastructure Act 2013 and the Enterprise and Regulatory Reform Act 2013, each of which have considerable impact on employers. The changes are coming into force, at various intervals, during 2013 and early 2014. They include:-
- introducing compulsory conciliation via Acas before an employee can start an employment tribunal claim. The parties cannot be forced to participate in the conciliation, but unless the employee has contacted Acas and asked to conciliate, they won't be allowed to bring a claim. This will come into force in April 2014.
- introducing fees to start an employment tribunal claim. For all but the smallest claims, it will cost £250 to start the claim, with a further £950 payable by the employee when a hearing date is set. Beware - any employer who loses will probably be ordered to refund those fees as well as pay compensation (already in force). More details of this below.
- creating a new category of worker, known as 'employee shareholders'. In exchange for giving at least £2,000-worth of shares to the employee, a company can require prospective employees to give up some employment rights (including the right to claim most types of unfair dismissal, and the right to a redundancy payment). With various limitations, existing employees can also be asked to become employee shareholders. This comes into force in September 2013.
- bringing down the cap on the compensatory award for unfair dismissal - either limiting such awards to one year's salary for the employee, or to the current limit of £74,200 (already in force).
- introducing confidential pre-termination discussions, enabling employers and employees to have frank discussions about ending employment without fear of being held to account by a tribunal (already in force).
- various changes to whistleblowing legislation, in general making it harder for employees to claim, but removing the rule that the whistleblower must make their disclosure in good faith (already in force).
More details about some of these below.
Fees in Employment Tribunals
As widely reported, employees now have to pay to bring claims in tribunals.
The new tribunal fees provisions came into force on 29th July, bringing with them a significant shift in the spirit of the employment tribunal. An employee will have to pay up to £250 to start a claim, and a further £950 before a hearing takes place.
But two legal challenges to the introduction of fees have been launched; one in England, and one in Scotland. There are several grounds of challenge, one of which is that tribunal fees would indirectly discriminate against women, who typically earn less than men yet bring a greater proportion of tribunal claims. Both cases are due to be heard by the courts in October, with the government promising to reimburse any tribunal fees if the fee regime is held to be unlawful.
Of course tribunals have always cost the parties, whether in terms of legal fees, expenses or time. But what this new system of structured fees may do (if it survives the backlash) is force employees to think more like employers. Commercial realities won't always trump the moral obligation to take an employer to task, but they'll certainly help focus claimants' minds on whether or not it's all worth it. The government predicts a 25% drop in the number of tribunal claims; we suspect it will be more.
Compromise Agreements Abolished
An accurate headline - also completely misleading. 'Compromise agreements' were renamed 'settlement agreements' with effect from 29th July 2013.
You don't need to do anything, although it's sensible to change the title at the top of any standard agreements you use.
The government has also introduced something called a 'confidential pre-termination discussion'. Despite the complex name, it's a simple concept. From the end of this month, employers are allowed to open discussions with employees about exit packages without that, of itself, carrying the (small) risk of the employee going on to claim constructive dismissal.
Tribunals can no longer be told about such conversations in an unfair or constructive dismissal claim (although, arguably, this protection was already available where there was an existing dispute). However, they can be told about such conversations in other types of claim, such as discrimination (for example, if a pregnant woman alleged she'd been approached with an exit package because she was pregnant). They can also be told about such conversations if the employer has engaged in improper conduct, or placed undue pressure on them to accept the offer. It's a nice headline grabber for the government, to show how business-friendly it is, but it doesn't really change much in practice.
Investigations where crime alleged - Miller v William Hill
Q: What is a reasonable investigation?
A: It depends.
Reasonableness is all about context, and that includes consequences. Where an employer is investigating misconduct involving possible criminal activity, it should take extra care. That's because of the serious effects that these sorts of dismissals can have on employees - damage to their reputation and on their ability to work in the future, for example. So it's reasonable to investigate those things which could exonerate the employee, as well as those pointing to their guilt.
That's what the Employment Appeal Tribunal (EAT) held in Miller v William Hill. Ms Miller was the deputy manager of a betting shop. She was suspected of having taken money which should have been returned to customers whose bets were void. She claimed to have made the refunds, but her explanations didn't fit with CCTV footage. The employer didn't believe her and she was dismissed.
Was the tribunal right to find that the dismissal was fair? The EAT said not. One of Ms Miller's main arguments on appeal was that William Hill should have looked at the entire CCTV footage (to see if there was evidence backing up her defence) and not just the few segments the internal audit department had identified as indicating guilt. The EAT agreed with her. It would not have taken long, and it wouldn't have been costly, for the company to have done that. Its failure meant that the investigation was not as thorough as the circumstances warranted, and was therefore unfair.
Unfair to dismiss for ill-founded complaints - Woodhouse v North West Homes Leeds Ltd
Mr Woodhouse raised ten grievances and brought eight tribunal claims against his employer over a four-year period. They all alleged race discrimination and almost all were found to be without merit.
His employer eventually dismissed him, believing that he had lost trust and confidence in the company. A tribunal claim followed in which Mr Woodhouse alleged that he had been dismissed for doing 'protected acts'. (Making a claim under, or alleging a breach of, the Equality Act can amount to a protected act. Dismissing someone because they have carried out a protected act amounts to victimisation.)
The tribunal found for the employer. There had been no victimisation. The employer hadn't treated Mr Woodhouse less favourably because of his race; any other employee who had raised a similar number of ill-founded complaints would also have been dismissed. The dismissal had been for 'some other substantial reason' (trust and confidence) and not because of protected acts.
However, the Employment Appeal Tribunal (EAT) decided otherwise. Even where an employee raises grievances which are not made out, they are protected from being victimised (as long as the grievances were raised in good faith). The question is whether or not the employee had been dismissed because he had complained of discrimination, which Mr Woodhouse had. But if the grievances had been made in bad faith then things would have been different; they wouldn't have amounted to protected acts and there couldn't be victimisation.
So where an employee raises a discrimination-based grievance (or series of grievances), don't just focus on their validity. If the employee really does believe that they had been mistreated, and they don't have an ulterior motive, then dismissing them - or taking any detrimental action against them - is likely to be victimisation.
Talk with us about dealing with employees who raise multiple complaints to avoid bigger headaches down the line.
The new grey(ish) whistleblowing test
The new whistleblowing provisions are in. As of 25th June the law is clearer about the circumstances in which whistleblowers are protected from dismissal or mistreatment in the workplace.
We'd love to say things are now black and white but, as is so often the case, there are a few shades of grey.
Here are some of the main points:
- to trigger whistleblowing protection, the employee must reasonably believe that their disclosure is in the public interest.
- 'public interest' isn't defined, but will not normally cover whistleblowing about a breach of the employee's own employment contract. That sort of complaint should be raised as a grievance.
- disclosures do not have to be made in good faith any more - they will now be protected even if motivated by spite or money.
- protection now extends to actions against the whistleblower by another employee. It used to the case that only the employer's actions mattered. Now, a whistleblower can bring a tribunal claim stemming from a detriment, or bullying or harassment brought about by a colleague.
Talk to us about updating your whistleblowing policy to take account of the changes.
Surveillance not a breach of human rights - County and Borough of Swansea v Gayle
The Employment Appeal Tribunal (EAT) was asked to decide if covert surveillance that captured an employee's misconduct was a breach of privacy, and if he had been unfairly dismissed.
Mr Gayle worked for Swansea Council. He was suspected of playing squash when he should have been at work, and so the Council used a private investigator to film him. The recording was used in evidence against Mr Gayle and he was dismissed.
He brought an unfair dismissal claim, also arguing that the Council had breached Article 8 of the European Convention on Human Rights - the right to respect for private and family life. The EAT found against him. The dismissal was fair. Employers are entitled to know where their employees are and what they are doing while they are being paid. There had been no breach of Article 8 either; Mr Gayle had been filmed in a public place and therefore should not have expected privacy.
As tempting as it may be to leap into action that will catch employees red-handed, don't. Carefully weigh up the pros and cons of commissioning and using this sort of surveillance. In Mr Gayle's case where the misconduct amounted to a type of fraud, it was found to have been justified - but it won't always be.