Helen Hammond

All change… again… for pensions

Just as everyone thought they were getting to know what the plan was for Auto Enrolment and pensions, the Pension Regulator instigated changes to their system for when an employer’s duty begins. With effect from 1 October 2017, employers legal duties begin on the day their first member of staff starts work.

In plain English this means: If you become an employer for the first time on or after 1 October 2017, you will, immediately, have legal duties for that new member of staff – and they apply from the first day the member of staff started working for you. When you are about to employ someone, for the first time, you need to get ready for automatic enrolment.

The Pensions Regulator has published a good guidance note on this here. For advice on this and any other related matters you can contact Alison, as well.

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Watch your mouth – how employers can be discriminatory without realising it

Discrimination can come in many forms, but can be much subtler than you realise. When it comes to off-the-cuff comments, employers need to be careful of how things come across to other parties. This was the case with a recent claim made by a 59-year-old employee who was told she’d be more suited to a ‘traditional’ office. So where did the employer go wrong?

The background 

In February 2015 Ms Gomes (G) began working as an administration assistant for Henworth, which traded as Winkworth Estate Agents. G had been working for another agent in the Winkworth franchise since 2009, and had been transferred to Henworth from there.

A year later, in February 2016, G had a performance review with the company’s lettings director, who informed her that she needed to be more careful with her work. The meeting upset G, and she subsequently spoke to her line manager who spoke to Graham Gold, one of the directors.

Shortly after this G met with Gold, who told her that he felt she had not been paying attention to new methods of working, and had become preoccupied with an old piece of software that was now rarely used by the company.

A month later, in March 2016, Gold called G in for another meeting and told her: “This marriage isn’t working.” G claimed that, when asked about this comment, Gold said that G had typed and sent an erroneous letter to a solicitor, including referring to the deceased in question as ‘Mrs’ rather than ‘Mr’. Gold stated that, subsequent to this, a note would be placed on her performance record.

Additionally, Gold then told G she would be “better suited to a traditional estate agency” which G interpreted as Gold alluding to her being too old for that particular office. When G asked Gold what he meant by his comment, he suggested she “sleep on it and decide what you want to do,” which G interpreted as Gold recommending she consider leaving the company. According to G, at the time of the meeting she was planning to stay with the business until retiring at 65.

Not long after the meeting, G took sick leave for work-related stress and filed a grievance against Gold. The outcome of this grievance concluded that G should have more training opportunities, as well as stating that the original meeting with Gold had been carried out in an unsatisfactory manner. Gomes was not pleased with this outcome, however, and not only appealed but also tendered her resignation.

The tribunal allowed G’s claim for age discrimination, stating that the original comment ‘better suited to a traditional estate agency’ was unlikely to have been said to a younger employee, and was therefore a direct reference to her age. As well as this, the tribunal also allowed G’s claims for age-related harassment and constructive unfair dismissal.

The person put in charge of handling G’s grievance was also called into question, as they had compromised the meeting’s impartiality by allowing Gold to be present – despite Gold being the subject of the complaint.

In conclusion

This case is a harsh reminder that employers need to be careful with what they say to, or about, their employees. An age discrimination claim can arise from comments that allude to an employee’s age, even if it is not directly referred to – so think before you speak.

If you would like to discuss this within your organisation, please contact Alison.

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Tribunal awards – calculating a week’s pay

In a recent case the Employment Appeals Tribunal ruled that a week’s pay should include employer pension contributions, rather than just basic pay, for calculation of compensation for claims under the Employment Rights Act 1996.

Let’s take a look at the facts.

Ms Drossou (D), who worked for the University of Sunderland, was dismissed on the grounds of an irretrievable breakdown in working relations, of which the University claimed D to be the main cause. Subsequently, D brought a claim of unfair dismissal that was eventually upheld by the Tribunal.

As a result, the EAT ordered compensation from the University, calculating a week’s pay by including the employer pension contributions. On the normal grounds that payments are not paid to the employee but into the pension fund, this decision went against the longstanding practice of excluding employer pension contributions from the calculations of a week’s pay.

The Tribunal felt that this deviation from standard practice was necessary, and said that the law under the Employment Rights Act 1996 (‘the ERA’) does not state that the amount payable by the employer has to be payable to the employee (i.e. it could be payable to a third party such as a pension provider). Additionally, the EAT stated that “remuneration” in the context of the ERA means a reward in return for services, and employer pension contributions are no less a reward for service than basic pay. The University was not satisfied with the ruling, but when it appealed to the EAT the Tribunal’s decision was upheld.

So, what does this mean for employers?

For the time being (at least until we see whether this decision is appealed) employers need to increase their calculations in accordance with the potential value of claims. Employers facing unfair dismissal claims need to be careful. If the claimant’s base salary is below £80,541 – the current statutory cap for unfair dismissal compensation – the calculation of a week’s pay becomes highly relevant. Where the employee earns less than the statutory cap on a week’s pay (currently £489), the basic award will also be increased – as well as all other awards based on the ERA definition such as the eight-weeks’ pay for a flexible working rules breach.

But, more importantly, the decision may impact protective awards. If employers fail to inform and consult under TUPE or, in a redundancy process, under the Trade Union and Labour Relations (Consolidation) Act 1992, then they could face large increases in the total compensation payable. The final amount will depend on the number of affected employees, the generosity of the pension provision and the size of protective award made up to the 13-week maximum. But if each employee has a 10% employer pension contribution and they all get an award of 13 weeks, then the total payable increases considerably.

For more information on this please contact Alison.

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President of the Employment Tribunals announces increase in the Vento Bands

Employers have been hit with a timely reminder that they need to make sure they’re taking all possible steps to prevent workplace discrimination. After a recent consultation, the President of the Employment Tribunals has announced that, in the event that they suffer from workplace discrimination, employees can now receive higher compensation for ‘injury to feelings.’

So, what’s it all about?

Compensation for ‘injury to feelings’ is split into four categories – known as Vento Bands – and these vary depending on the discrimination’s severity. From 11 September 2017, the increased Vento bands will be:

  • £800 to £8,400 for less serious cases;
  • £8,400 to £25,200 for serious cases; and
  • £25,200 to £42,000 for the most serious cases.

As well as this, the Employment Tribunal can award over £42,000 in exceptional cases, but it’s still unclear as to how it defines this. Most important, however, is that compensation under this category could be unlimited.

Stick and stones may break your bones, but, in this case, words can definitely hurt. Employers need to stay up to date with their equal opportunities and anti-bullying and harassment policies – as well as implementing regular diversity training – if they’re going to avoid costly discrimination cases.

For more information or help with any Employment Tribunal matters please contact Alison.

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Pensions update: Was a disabled employee treated unfavourably?

In Williams v The Trustees of Swansea University Pension & Assurance Scheme and another the Court of Appeal stated that a disabled employee was not treated unfavourably (and therefore discriminated against) when his enhanced pension on ill-health retirement was based on the salary he earned when working part time due to his disability, rather than his full time salary.

Background

Mr Williams, the employee, suffered from Tourette’s syndrome, obsessive compulsive disorder and depression. Before eventually taking ill-health retirement (at 38) he reduced his hours with his employer, Swansea University, in order to better cope with his condition and his pay was reduced accordingly.

Mr Williams was allowed, by the University, to take his accrued pension benefits immediately and without any actuarial reduction for early receipt, rather than having to wait until his normal pension date nearly twenty-nine years later. This meant he was treated as though he had accrued nearly twenty nine years further pensionable service and his benefits were advanced.

Mr Williams brought a disability discrimination claim at the Tribunal under s 15 of the Equality Act 2010. Mr Williams argued that, by using his actual part time salary rather than a full time equivalent, the calculation of the enhancement to his benefits amounted to “unfavourable” treatment and therefore unlawful discrimination.

In the initial hearing the Tribunal upheld his claim. The University then successfully appealed to the EAT. Following this Mr Williams appealed to the Court of Appeal.

The Court of Appeal agreed with the EAT because:

  • under the pension scheme rules the only employees entitled to retire early and to receive an enhanced pension were those who retired through ill-health and who were necessarily disabled within the meaning of the Equality Act 2010;
  • Mr Williams had been treated advantageously in comparison to non-disabled colleagues and there is no authority for the proposition that a disability discrimination claim can succeed simply because an individual thinks he should have been treated better;
  • that Mr Williams was working part-time hours because of his disability could not be enough to require the employer to justify the treatment; and
  • there is no authority for the proposition that a disabled person who is treated advantageously because of their disability, but not as advantageously as a person with a different disability, has a valid claim that they have been treated “unfavourably”.

This decision confirms that, even if it could have been more advantageous, treatment that is advantageous does not amount to unfavourable treatment.

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Update – Parental Bereavement Leave

On 19 July 2017 the Parental Bereavement (Pay and Leave) Bill was introduced to Parliament. The Bill is expected to have a second reading in October with the hope that it will become law in 2018.

Summary

  • This aims to establish a new right for employed parents to paid leave to grieve on the death of their child.
  • It is likely that the amount of leave will be at least two weeks and attract the same rate of pay as other types of family leave such as maternity, adoption paternity and shared parental leave. This is currently the lower of 90% of an employee’s gross weekly earnings and £140.98 per week.
  • At present (except in relation to stillbirth or miscarriages in respect of which maternity or paternity leave may still apply), the law only allows for “reasonable” unpaid time off to deal with an emergency relating to dependants, including his or her death, and it is down to each employer to determine what is ”reasonable” in the circumstances.

ACAS has published a good practice guide on Dealing with Bereavement in the Workplace (available here).

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Was the suspension of a teacher a neutral act and, if not, did it amount to a breach of the implied term of mutual trust and confidence?

The High Court case of Agoreyo v London Borough of Lambeth, available here, is clear on this matter.  In August 2017 they set out that suspension is not a neutral act and an improper suspension can amount to a breach of the above implied term. They also said that a breach could amount to a ‘repudiatory breach’, i.e. be sufficient in itself to destroy the employment relationship and entitle the employee to bring a claim.

The background

Mrs Agoreyo (who was the employee) worked as a primary school teacher for the London Borough of Lambeth.  A number of her pupils had significant behavioural issues and she had made numerous requests to the school for additional support.  However, before all the measures could be put in place Mrs Agoreyo was suspended. This followed three incidents where she had to use a degree of force to get two of these pupils to behave. The allegations suggested that the degree of force used went beyond those considered reasonable under the Education and Inspections Act 2006.

The suspension letter said:

  • the employee was suspended on normal pay;
  • suspension was a precautionary act pending a full investigation into allegations, during which the employee would be given full opportunity to provide her account of events; and
  • the suspension was a “neutral action and not a disciplinary action” and was to “allow the investigation to be conducted fairly”.

However, what sets this case apart, was that, before the decision to suspend, the employee was not asked for her comments on the allegations. Similarly, her employer failed to suggest that it had considered other alternatives to suspension.

Mrs Agoreyo resigned and brought a claim against the employer in the County Court for breach of contract. She argued that suspension was not reasonable or necessary.

Whilst the initial County Court hearing felt that London Borough of Lambeth was bound to suspend Mrs Agoreyo, after receiving reports of the allegations against her, and had “reasonable and proper cause” (to protect the children), Mrs Agoreyo appealed to the High Court.

The High Court disagreed. They felt that the employer was not bound to suspend Mrs Agoreyo and did not feel that it was obvious that there were no other alternatives. Furthermore, the employer had clearly stated in its suspension letter that its purpose was not to protect children but to ensure a fair investigation.

The High Court found that:

  • there was no evidence of any attempt to understand the employee’s version of events prior to the decision to suspend;
  • there was no evidence of any consideration of alternatives to suspension; and
  • the letter of suspension did not explain why an investigation could not be conducted fairly without the need for suspension

As a result they concluded that, given the potential stigma associated with suspension and the potential impact on future career prospects, suspension was not a neutral act, at least in the context of a qualified professional in a vocation, such as a teacher.

The suspension amounted to a breach of the implied duty of trust and confidence.

Employers must remember that even (in cases where the conduct is extremely serious, suspension must never be a knee-jerk reaction and the employer must carefully and pro-actively consider what the true purpose of a suspension would be and whether there might be any alternative.

Our advice is always to contact a qualified professional to help support and guide through disciplinary investigations and matters. You can contact Alison here.

 

 

 

 

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Holiday Pay & Voluntary Overtime

Back in September 2016 the case of Brettle v Dudley Metropolitan Borough Council decided that voluntary overtime payments should be included in calculating holiday pay, provided that overtime is worked with “sufficient regularity” to constitute “normal pay”.

In July 2017, the Employment Appeal Tribunal upheld this decision and set out that payments for normally worked, voluntary, overtime must be included when calculating holiday pay for the first four weeks of holiday.  The case that upheld this was Dudley Metropolitan Borough Council v Willetts and Others, available here.

In this case the EAT explained that, given holiday pay needs to correspond with “normal remuneration”, any voluntary overtime payments that are paid over a sufficient period of time on a regular basis fall within this definition.

This did leave some questions open, however.  For example, the EAT offered little guidance on the level of regularity or frequency required for a payment to qualify as “normal remuneration”.  We can only ‘watch this space’ but we’ll post a longer summary in a few weeks… so watch this space.

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The Supreme Court has ruled that employment tribunal fees are unlawful

The government suffered a heavy defeat on 26th July after the Supreme Court ruled that employment tribunal fees are unlawful and the government will now have to repay up to £32m to claimants, relating to claims dating back to April 2013.

Brought forward by the Unison union Lord Reed, the judgment said that the fees were unlawful because of their effects on access to justice. Introduced in 2013 and costing between £390 and £1200, the fees have been said to prevent access to justice for workers unable to fund their case.

“The making of the Fees Order was not a lawful exercise of those powers, because the prescribed fees interfere unjustifiably with the right of access to justice under both the common law and EU law, frustrate the operation of Parliamentary legislation granting employment rights, and discriminate unlawfully against women and other protected groups.”

While the fees were brought in by the government to reduce the number of malicious and weak cases, after 3 years there had been a 79% reduction in cases brought forward.

Discrimination cases cost more for claimants because of the complexity and time hearings took. The Supreme Court found this was indirectly discriminatory because a higher proportion of women would bring discrimination cases.

Unison general secretary Dave Prentis has said: “This is absolutely a tremendous victory, it’s probably the biggest victory of employment rights in this country.”

So what now?

In order to deal with this massive backlog of repayment and claims the Presidents of the Employment Tribunals have issued Case Management Orders.

The Order states that all cases and applications arising from the Unison case, or applications for reimbursement of fees, shall be made in accordance with administrative arrangements to be announced by the Ministry of Justice and HMCTS shortly… We wait to see what happens next!

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