The new Acas guide includes case studies and provides a checklist for employers handling collective redundancies.  It aims to provide clarity for employers, employee representatives and employees in relation to collective redundancy legislation, the impact of case law and best practice.  It also includes an explanation of the meaning of “establishment” setting out case law on the issue and key questions for employers to consider when determining the meaning of establishment in different circumstances.

The full guidance can be found here

Background

Ms Ward was the social worker responsible for the care of Baby P from February 2007. Ms Christou was Ms Ward’s manager.  After Baby P’s death, the Council conducted a case review (in 2008) during which the two social workers were disciplined under the Council’s simplified disciplinary procedure (usually used for less serious disciplinary matters) and given written warnings for misconduct.

Following the Baby P criminal trials, the Council’s new Director of Children’s Services conducted an internal inquiry into the Baby P case and the actions of the social workers responsible for Baby P’s care.  The Director found the original disciplinary procedure against Ms Christou and Ms Ward to be ‘blatantly unsafe, unsound and inadequate’.  This finding led to a second set of disciplinary proceedings being implemented against the two social workers which culminated in their summary dismissal for gross misconduct in 2010.

Following their dismissal, the social workers brought claims against the Council for unfair dismissal on the grounds that the second set of disciplinary proceedings amounted to a breach of the doctrine of Res Judicata and an abuse of process.

The Legal Position

The doctrine of Res Judicata (a Latin term meaning “matter judged”) prevents a party from re-litigating any claim or defence already litigated or adjudicated or that could have been previously litigated or adjudicated. The doctrine is supposed to ensure the finality of decisions and provide parties with certainty as to the outcome of litigation.

The concept of abuse of process is similar to the doctrine of Res Judicata and established that parties cannot reopen a matter in later proceedings that was improperly dealt with previously due to negligence or accident.

Employment Tribunal Decision

The Employment Tribunal (ET) rejected all grounds for the social worker’s claims deciding that there would be situations where it would be appropriate for an employer to reopen a disciplinary case (such as where new information had come to light).   In addition, the majority of the ET considered that a second disciplinary procedure was fair in this case as the first procedure had been ‘inadequate’.  The Claimants appealed this decision.

Employment Appeal Tribunal Decision

The ET decision was upheld by the Employment Appeal Tribunal (EAT) who held that Res Judicata only applied where there was litigation or adjudication to determine a dispute and that the Council’s simplified disciplinary procedure was so far removed from any adjudicative process that the doctrine of Res Judicata could not apply in this case.  However, the EAT did make it clear that although a second set of disciplinary proceedings may not be subject to the doctrine of Res Judicata, disciplining an employee twice for the same offence would generally be deemed unfair except in exceptional circumstances.

The Claimants appealed the EAT decision.

Court of Appeal Decision

The Court of Appeal upheld the EAT decision, confirming that the Council’s internal disciplinary procedures did not amount to litigation or adjudication.  As such, it found that the Claimants’ argument (that the second set of disciplinary proceedings was unfair as it breached the doctrine of Res Judicata) failed.

In addition, the Court of Appeal considered whether the second disciplinary procedure was an abuse of process and found that in these circumstances it wasn’t as there were valid reasons for reconsidering the social worker’s actions such as the seriousness of the allegations and the possible risk to the public.

The Court of Appeal further held that dismissal after the second disciplinary procedure was within the band of reasonable responses open to the Council.

Commentary

This case suggests that employers will not be barred from instigating a second set of disciplinary proceedings against an employee. However employers should act cautiously when doing so as it is clear from the EAT and Court of Appeal decisions in this case that disciplining an employee twice for the same offence is likely to be deemed unfair in most cases. If employers are going to take this course of action, they should ensure that they have exceptional reasons for doing so.

The report found, among other things, that:

• Employers who had written employment policies were more confident that they were compliant with regulation than employers who operated more informally
• Micro, small and medium sized businesses with little internal HR expertise regarded employment regulation as complex and inaccessible
• Reducing regulatory burdens on small employers may not be effective in addressing their anxieties, since their perceptions of employment law often do not reflect reality, and they have an “inflated idea” of the risks of dismissing employees

Employment Relations Minister, Jo Swinson has commented:

“What this study shows is that we need to work with employers to help them better understand their rights and responsibilities leaving them free to focus on growing their business. Through the government’s Employment Law Review we are reviewing existing legislation with the aim of providing clarity and certainty for businesses to give them the confidence to manage their workforce effectively.”

Mr Jessemey was dismissed by his employer on the grounds of retirement shortly before his 66^th birthday and brought a claim for age discrimination and unfair dismissal. Shortly after issuing proceedings, Mr Jessemey’s employer provided an unfavourable reference to an employment agency and as a result of this Mr Jessemey also brought a claim for victimisation.

The Tribunal found that Mr Jessemey’s dismissal was automatically unfair and discriminatory on the grounds of age but whilst it considered that the poor reference had been given as a result of the tribunal proceedings being issued, it had no jurisdiction to award any remedy for this because s.108 (7) of the Act expressly excludes post-employment victimisation.

Mr Jessemey appealed against the Tribunals’ rejection of the victimisation claim arguing that Parliament cannot have intended for the Act to prohibit post-employment victimisation claims and that the Act should be interpreted as providing protection against such victimisation owing to the requirements of EU law. The EHRC, intervening on Mr Jessemey’s behalf, argued that s108 (7) of the Act was a “legislative blunder” and that if the Tribunal’s decision was upheld, UK law would not be compliant with EU law and the Act would require amendment.

The EAT dismissed Mr Jessemey’s appeal, and adopting a literal interpretation of the legislation held that the Act expressly disapplies the concept of victimisation where the employment relationship has ended. Whilst the EAT considered it to be “highly unlikely” that Parliament ever intended to legislate away (or fail to make provision for) any redress for post-employment victimisation, it considered that interpreting the Act in the way the Judge had in Taiwo would mean deciding that the Act means the exact reverse of what it says. The EAT therefore concluded that the Tribunal’s decision to reject the claim for post-employment victimisation must be upheld but recognised the matter as one of importance and for this reason granted permission to appeal to the Court of Appeal.

In seeming to exclude post-employment victimisation from the protection of the Act, section 108 appears to contain a drafting error – most cases of “post-employment discrimination” under the previous discrimination regime involved alleged acts of victimisation, often relating to ex-employers’ conduct in respect of references. There was no logical reason to remove this protection and failure to include this in the Act leaves the UK open to challenge on the basis that the Act does not comply with EU law.  Watch this space!

The Claimants were employed as a nurse and a support worker respectively by Mental Health Care at a residential hospital. Mental Health Care recognised a need to close one of its wards which would result in 19 employees being made redundant. It identified the pool as the nursing and support staff at the hospital and 58 employees were placed at risk of redundancy.  They then commenced consultation.

As part of the consultation, a selection process was undertaken which included a competency test and the consideration of the sickness absence and disciplinary record of each of the employees. The weighting of this process was such that the competency tests carried greater weight than the other criteria. The competency test used included a written test, individual interview and group exercise and was normally used for the recruitment of employees. The competency tests were carried out by the HR staff, none of whom had experience of working with the employees and they did not obtain assessments from the employees’ managers.  It appeared that this was because they considered there to be insufficient reliable material on which a fair assessment of past or current performance could be based. Whilst Mental Health Care admitted that the tests produced some surprising results with many good employees selected for redundancy, they proceeded to make those employees redundant. The Claimants were made redundant and brought claims for unfair dismissal.

In the first instance the Tribunal held that the Claimants had been unfairly dismissed. Mental Health Care appealed to the EAT. The EAT stated that it was unusual for an employer conducting a redundancy selection exercise on the basis of competence to base its decision entirely on competency tests without any reference to past appraisals or the views of the employees managers. The EAT confirmed that it agreed with the Tribunal’s findings that there had been confusion and a lack of consistency in the way the selection criteria had been applied and there had been some anomalies in the scoring system.

The EAT considered that it had been incorrect for Mental Health Care to choose an elaborate and HR driven method which deprived it of the benefit of input from managers and others who actually knew the staff at risk. The EAT considered that when surprising results were produced these should have been questioned rather than followed and in doing the latter, Mental Health Care had put a “blind faith in process” which had led to them losing touch with common sense and fairness. The EAT dismissed the appeal.

This case highlights the importance not only of ensuring that redundancy selection processes are carried out correctly and fairly with reference to performance but also that appraisals and performance assessments are carried out frequently to ensure this historical information is available for consideration.  It also indicates the importance of the views and assessments of line managers and that these should be taken into account in the selection process.

In order for this amendment to make its way into legislation it would also need to be agreed by the House of Commons.  The House of Commons have however indicated that this proposed amendment is opposed and the Government do not intend to exercise the power to extend the Act to specifically include caste at the present time.

Instead, the Government Equalities Office and Department for Communities and Local Government have appointed “Talk for Change”, a community interest company, to engage with communities affected by caste discrimination and to run an educational programme. The aim of this programme is to raise awareness of the channels of help and redress that are already open to those who feel they have been discriminated against or harassed as a result of caste. The Government confirmed they have also been in discussions with the EHRC who will be examining the nature of caste prejudice and harassment, and the extent to which the problem might be addressed by legislative or other solutions. The findings will be published later this year.

Under the Equality Act 2010 an employer has a potential defence to an equal pay claim if he can show that the pay differential complained of is attributable to a material factor other than sex. If it can be established that the difference in pay is indirect sex discrimination, an employer would need to show objective justification in order to avoid liability. This means that the employer must show the difference in pay corresponds to a legitimate aim and is an appropriate and necessary means of achieving the objective pursued.

The Claimants, Kenny and ors, were female civil servants employed in clerical roles in the Irish Police Force. In addition to these female employees, male Garda officers also carried out the same duties. The Claimants’ trade union lodged claims for equal pay on the basis that the female workers were paid a clerical officers rate which was lower than that of their male counterparts. It was found by the Irish Labour Court that the proportion of men and women in the relevant groups amounted to obvious indirect sex discrimination but that this was objectively justified as the deployment of the male Garda officers met the operational needs of the Police and the need to have certain clerical roles carried out by Garda officers for industrial relations purposes. This was also in accordance with an agreement made with the police representative bodies. It was held that it was both appropriate and necessary to pay those police officers properly according to their rank and therefore the claim for equal pay was rejected.

The Claimants appealed to the Irish High Court and it in turn referred questions to the ECJ including whether, and to what extent, the interests of good industrial relations can legitimately constitute one of the grounds of justification when there is obvious sex discrimination in relation to pay.

The ECJ held that the interests of good industrial relations may be taken into account as one factor among others in a national court’s assessment of objective justification however, could not be the only basis for justifying discrimination. The ECJ confirmed that it was up to national courts to determine the extent to which industrial relations concerns may be taken into account when attempting to justify an obvious case of indirect discrimination in pay. This decision supports the UK Courts’ approach to the extent in which an employer can rely solely on cost to justify discriminatory treatment under the Equality Act 2010. An employer cannot justify such treatment solely with reference to cost-saving reasons but that cost can be weighed in the balance with other factors.

In the 2006 ECJ case of Werhof v Freeway Traffic Systems, it was decided that collective agreements could only have a ‘static’ effect meaning that incoming employers would not be liable for any changes to collective agreements post transfer. Following this decision, the Court of Appeal held in Parkwood Leisure Ltd v Alemo-Herron, that an incoming employer was not bound by any terms negotiated as part of a collective bargaining process after the relevant transfer.  On appeal, the Supreme Court concluded that if an incorporated term had a dynamic effect in the contract with the outgoing employer then this would also be the case with the incoming employer. The Supreme Court referred the case to the ECJ to rule on whether the Acquired Rights Directive (the Directive) (being the EU law which TUPE implements) actually requires national courts to adopt a static interpretation approach and prohibits the transfer of dynamic contract rights or whether the UK was free to construe a dynamic approach provided it was not precluded by EU law.

The Advocate General has now published his opinion on this referral stating that responsibility for introducing national legislation to implement the Directive and interpretation of that legislation rests with individual member states. He has confirmed that member states are not precluded from implementing more generous provisions nor from interpreting their national laws more generously than the Directive requires. This suggests that the Directive does not prohibit dynamic interpretation and incoming employers should be aware that they may be bound by the terms of any collective agreement incorporated into contracts of employment. Careful due diligence will therefore need to be carried out as dynamic interpretation will largely depend on the wording of contracts and collective agreements.

The Advocate General’s opinion whilst valued, is not binding on the ECJ but it is likely that this will be followed. Whilst we are still awaiting judgment from the ECJ, the static interpretation remains good law and the matter will not be concluded until the decision is handed down and the Supreme Court has applied this to UK law. The debate about the dynamic or static approach has already been raised in the UK consultation on TUPE and therefore it may prompt the UK, in advance of the judgment, to narrow the scope of the TUPE Regulations. This could involve limitations on the protection of collective agreements or restricting the period for which TUPE protection lasts.

The code comprises basic principles and focuses on how employers should consider requests in a reasonable manner. The code does not provide good practice examples of managing requests in the workplace and this will be contained in a separate non-statutory guide which is to be published at the same time as the code.

The code sets out the key principles on handling requests in a reasonable manner and not only has it been devised to assist employers but will also be taken into account by employment tribunals where relevant.

These key principles are:

1)       Talk to employees as soon as possible after receiving written requests

2)       Advise employees of their rights to be accompanied by a work colleague at any discussion regarding their requests. This should be done in advance of discussions

3)       Discuss requests with the employees to obtain a clearer view of the changes they are looking for

4)       Carry out discussions in a private place where these will not be overheard

5)       Approach requests with the presumption that they will be granted unless there is a business reason for not doing so

6)       Consider requests carefully weighing up the benefits of the changes for the employees against the cost of implementing these changes. In doing so, employers should not discriminate against employees

7)       Inform employees of the outcome in writing as soon as possible

8)       If  requests are accepted, with or without modifications, discussions should be held with the employees as to how and when the changes might best be implemented

9)       If requests are rejected this has to be for one of the specific business reasons set out in the legislation and employees must be given an opportunity to appeal the decision

10)   All requests, including appeals, must be considered and dealt with within a period of three months’ from receipt of the original request unless otherwise agreed with employees.

The draft code can be found here:

http://www.acas.org.uk/index.aspx?articleid=4105

Reverend Piper was employed as a chaplain and dismissed by Maidstone & Tunbridge NHS Trust for gross misconduct.  The Trust’s disciplinary procedure which formed part of Reverend Piper’s contract provided that transfer to an alternative post may be substituted for a dismissal – however, if an employee did not agree to this transfer then dismissal was the only alternative.

Reverend Piper appealed against his dismissal and the Trust decided to substitute the dismissal for a lesser sanction of a final warning, demotion and transfer of work location. This lesser sanction was refused by Reverend Piper and he proceeded to make a claim in the Tribunal for unfair dismissal.  The Trust defended the claim on the grounds that the Reverend Piper had not been dismissed and the Tribunal therefore had no jurisdiction to hear the claim. The Tribunal accepted the Trust’s arguments and dismissed the claim.

On appeal, the EAT held that the Trust was not entitled under their policy to impose a lesser penalty on an employee without their agreement.  As Reverend Piper had not agreed to the lesser sanction, the original dismissal stood and therefore he was entitled to proceed with his unfair dismissal claim.

This case is very much specific to its facts because of the wording of the disciplinary policy.  Most employers will want the certainty of a demotion not being subject to the employee’s consent which will mean ensuring the disciplinary procedure is contractual and removing reference to consent being required.  However, for employers, the practical issues arising out of this are:

• If a dismissal is overturned on an appeal and an employee is reinstated, the employee will (unless their contract states otherwise) be entitled to back-pay and for their continuity of employment  not to have been broken. An employer’s failure to pay back-pay could result in a claim for unlawful deduction from wages, breach of contract or constructive dismissal.
• If the employee has lodged an unfair dismissal claim at the Tribunal and there is an internal appeal pending, the employer should notify the Tribunal of this and reserve its right to plead that the Tribunal has no jurisdiction to hear the claim should the appeal be successful and the original dismissal expunged. This will be the case regardless of whether the dismissal stood at the time the claim was lodged.
• If an appeal is allowed but the employee fails to return to work following reinstatement, the employer will need to clarify the employee’s position before taking action in accordance with the appropriate procedures.
• Where demotion is grossly out of proportion to the disciplinary offence the employee may have grounds to refuse to return to work and claim they have been constructively dismissed.
• If a disciplinary procedure is non contractual, the position regarding reinstatement on appeal is less clear and it is difficult to see how, where it does not have a right to do so under its contract with the employee, an employer can unilaterally replace a dismissal with an alternative sanction of its choosing e.g. a demotion.  Employees may argue that a unilateral demotion amounts to an offer to re-engage the employee on new terms and the original dismissal stands – if this is the case the employee will be able to bring a claim for unfair dismissal.
• There have been some suggestions that an employee may have consented to the substitution of an alternative sanction by embarking on an appeal. The issue of consent is however fact sensitive and this would need to be considered on a case by case basis.