HR in Law Employment Law Update

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HR in Law Employment Law Update
Friday 15 May 2009

• Paul Callegari
• KL Gates LLP

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Areas to be covered

• ACAS Code and Guide - a summary of the new regime
• Flexible Working - recent changes
• Seldon v Clarkson Wright Jakes retirement age
  of partners
• Royden v Barnetts Solicitors - transfer of
  solicitors under TUPE

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1. ACAS Code and Guide
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1. Introduction

• The old procedures were intended to efficiently
  resolve disputes.
• They proved a huge headache for employers and
  caused expensive satellite litigation in
  tribunals.
• New procedures on 6 April 2009 are intended to
  simplify the regime.

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2. The new Code

• Tribunals have discretion to increase or decrease
  awards by up to 25.
• Adjustment for unreasonable failure to comply
  with any provision of the Code.
• Query how readily the discretion will be used and
  the levels of adjustment applied.

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2. Application

• The Code applies to misconduct and poor
  performance issues.
• It does not apply to redundancies or the
  termination of fixed term contracts.
• The Code applies to warnings as well as other
  disciplinary sanctions.
• May be difficulties where non applicable and
  applicable reasons for the dismissal overlap.

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2. Flexibility?

• Dismissal will no longer be automatically unfair
  for a failure to follow the procedures.
• The Code recognises a lower burden for smaller
  employers.
• Intended reduction in satellite litigation.
• Guidance is very full but the Code is simplistic
  and allows for employer flexibility.
• Only a failure to comply with the Code triggers a
  possible adjustment to the award.

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3. Key Principles

• Prompt action
• Consistent Treatment
• Necessary Investigation
• Opportunity to put employees case
• Allow employees to be accompanied
• Allow appeals

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4. Disciplinary Procedure

• Establish the facts investigations are still
  good practice.
• Inform the employee of the problem - a
  description of issue included in the letter to
  the employee.
• Right to be accompanied - inform of right to be
  accompanied to any disciplinary hearing (not
  investigatory meeting).
• Hold a meeting - take employee through the
  evidence, possible right for both employer and
  employee to call and cross examine witnesses.
• Decide on appropriate action written
  warning/final warning/dismissal.

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4. Disciplinary Procedure Other issues

• Suspension (whether paid or unpaid) should be as
  brief as possible.
• Scope to hold the meeting in the employees
  absence for a persistent failure to attend.
• Right of Appeal - opportunity to appeal about any
  decision including warnings.

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5. Grievance Procedure

• Let the employer know the nature of the grievance
• In writing
• Hold a meeting and allow the employee to be
  accompanied
• Proper investigation and promptly hold meeting.
• Decide on appropriate action decision in
  writing.
• Right of Appeal

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5. Grievance Procedure Other issues

• Collective Grievances the code does not apply.
• Overlapping grievance and disciplinary
  procedures postpone disciplinary process unless
  related to similar issues.

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5. Grievance Procedure Other issues

• Grievance unnecessary before making a claim.
• Complicated extensions to 3 month time limit now
  removed.
• Post termination grievances unnecessary, but
  refusal to deal may cause an uplift in award.

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6. Employee Consultation

• Consultation is good practice when formulating
  disciplinary and grievance procedures.
• Unnecessary if a procedure is already in place.
• Safe approach to send staff emails attaching the
  amended procedure and asking for any comments.

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7. Employer Action Points

• Undertake review of current disciplinary and
  grievance procedures.
• Appeals cover warnings and dismissals.
• Grievances should be submitted formally.
• Overlapping procedures suspension or deal
  concurrently?
• Whether or not to deal with post-termination
  grievances?

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7. Employer Action Points

• Train managers on the changes if possible.
• Take advice on anything that seems complex or out
  of the ordinary.

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2. Flexible Working
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2. Flexible Working

• Extension of right to request flexible working
• From 6 April 2009 employees with parental
  responsibility for children up to the age of 17
  (previously up to the age of six) are able to
  apply for a contractual change in their working
  arrangements.
• Employers must consider any application according
  to the well established flexible working criteria.

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2. Flexible Working (cont.)

• Eligible employees (continuous employment of 26
  weeks) have the right to request flexible
  working.
• Strict statutory procedural timetable to adhere
  to for both employee and employer.
• Onus is on employee to start the statutory
  procedure by including all of the prescribed
  information in the written application.

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2. Flexible Working (cont.)

• Key point for employers to remember - hold a
  meeting with employee within 28 days of receiving
  written request.
• Notification of decision within 14 days.
• Right of appeal for employee.

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2. Flexible Working (cont.)

• Grounds of refusal
• The burden of additional costs.
• Detrimental effect on ability to meet customer
  demand.
• Inability to re-organise work amongst existing
  staff.
• Inability to recruit additional staff.
• Detrimental impact on quality.
• Detrimental impact on performance.
• Insufficiency of work during the periods the
  employee proposes to work.
• Planned structural changes.

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3. Seldon v Clarkson Wright Jakes 2009 IRLR
267
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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267

• S was a partner with CW from 1972 until December
  2006.
• S became concerned that he would not be in a
  financial position to stop work at the end of
  2006 and entered into discussions with CW about
  the possibility of him working in a self-employed
  capacity.
• No consultancy role but CW offered ex gratia
  payment of 30,000 as a gesture of goodwill.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• The relationship became strained and S took legal
  advice. The offer was withdrawn when firm found
  out about legal advice.
• S was compulsorily retired in December 2006 and
  brought two claims
• A claim for direct age discrimination due to his
  compulsory retirement.
• A claim for victimisation based on CW's
  withdrawal of the offer of 30,000.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• The Age Regulations prohibit direct and indirect
  discrimination on grounds of age in the
  employment field.
• Key difference between the Regulations and other
  strands of discrimination law is that direct age
  discrimination can be objectively justified,
  where the treatment is a proportionate means of
  achieving a legitimate aim.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• Regulation 30 of the Regulations provides that
  setting retirement ages of 65 or above for
  employees will not be discriminatory.
• There is no such exception for partners so any
  provision in a partnership agreement must be able
  to be objectively justified.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• The Tribunal decided it was direct age
  discrimination but went on to consider whether
  compulsory retirement at 65 could be justified.
• The key question was what were CWs aims and were
  they
• Legitimate.
• A proportionate means of achieving the legitimate
  aim.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• The Tribunal found that the following aims are
  legitimate
• Ensuring that associates are given the
  opportunity of partnership after a reasonable
  period.
• Facilitating the planning of the partnership.
• Contributing to the congenial and supportive
  culture of the partnership (no need to expel
  senior people through performance management).

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• The Tribunal found that the following aims are
  not legitimate
• Turnover of partners should be such that each one
  can expect to become the senior partner in due
  course.
• Employees and partners should be enabled and
  encouraged to make adequate financial provision
  for their retirement.
• The protection of the partnership model of CW.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• Having decided that some of the aims were
  legitimate, the Tribunal went on to consider
  whether compulsory retirement is a proportionate
  means of achieving these aims.
• Balancing exercise" between the needs of CW and
  the impact of compulsory retirement.
• Tribunal unanimously decided that the compulsory
  retirement age is a proportionate means of
  achieving a supportive culture within the
  partnership.
• Also a proportionate means of encouraging
  associates and other professional staff to remain
  with the firm with a view to advancement.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• SW appealed to the EAT.
• The EAT held that the tribunal had been entitled
  to find that the principle of compulsory
  retirement at a particular age was justified and
  achieved certain legitimate objectives (including
  the maintenance of a congenial and supportive
  workplace culture (collegiality)).
• However, there was no evidential basis for the
  finding that CW had established that it was
  justified in fixing the compulsory retirement age
  for partners at 65 on the basis that performance
  would decline at around that age.
• As a result the EAT upheld the appeal on this
  particular ground.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• Although the EAT agreed with S that justification
  for fixing the compulsory retirement age at 65 to
  achieve that objective had not been established,
  the EAT did not accept Ss argument that an
  employer must always have concrete evidence to
  support its justification arguments.
• Tribunals should use their common sense and
  knowledge of human nature.
• For example, in respect of the other two
  objectives upheld by the tribunal, it was clear
  that knowing that partners would have to retire
  at a particular age would assist in the retention
  of associates and in forward planning.

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3. Seldon v Clarkson Wright and Jakes 2009 IRLR
267 (cont.)

• Furthermore, as CW were relying on these other
  grounds of objective justification (retaining
  associates, facilitating planning) the EAT
  remitted the case back to another tribunal to
  consider whether these justifications were
  sufficient to justify the retirement age
  requirement.

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4. Royden v Barnetts Solicitors Employment
Tribunal, 2009
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4. Royden v Barnetts Solicitors Employment
Tribunal, 2009

• TUPE service provision change case involving
  two firms of solicitors

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4. Royden v Barnetts Solicitors (cont.)

• TUPE the basics
• It applies to
• transfer of business (e.g. merger/asset purchase)
• service provision change

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4. Royden v Barnetts Solicitors (cont.)

• Service provision change is where
• "activities" cease to be carried out by one
  person on behalf of a client and instead are
  carried out by someone else (or by the client
  itself)
• AND
• "organised grouping of employees situated in
  Great Britain which has as its principal purpose
  the carrying out of the activities"

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4. Royden v Barnetts Solicitors (cont.)

• If TUPE applies
• all of the outgoing firm's employees who are
  "assigned to the undertaking" transfer
  automatically to incoming firm on same terms and
  conditions with full continuity of service
• dismissal of employees by reason of transfer is
  automatically unfair and liability passes to
  incoming firm

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4. Royden v Barnetts Solicitors (cont.)

• changes to terms and conditions are prohibited
• consultation obligations on both firms (up to 13
  weeks' pay per employee affected if failure to
  comply)
• outgoing firm has to provide "employee liability
  information" to incoming firm

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4. Royden v Barnetts Solicitors (cont.)

• BBS referred mortgage clients to LLW (a law firm)
  for a referral fee
• BBS re-tender referral work to B
• LLW in Birkenhead and B in Southport, Bradford
  and Manchester
• R and 6 employees resign and bring claims for
  constructive unfair dismissal on the basis that
  they have TUPE'd to B and the requirement to
  relocate offices is unlawful

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4. Royden v Barnetts Solicitors (cont.)

• Did TUPE apply?
• Yes - Service Provision Change
• Change of provider of mortgage referral services
  to client BBS although law firms servicing
  individual mortgage clients
• Organised group of employees whose principal
  purpose was referral work although none of LLW's
  staff worked exclusively on services

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4. Royden v Barnetts Solicitors (cont.)

• Were employees assigned to the services?
• relevant factors to consider percentage time
  spent on work, value and cost allocation of
  employee and terms of employment contract
• all the employees were carrying out some non-BBS
  work, some only spent 20 of time on work for BBS
  and one had a supervisory role for BBS and the
  other client work
• 2 out of 6 were found to have been assigned as
  their non-BBS work was peripheral

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4. Royden v Barnetts Solicitors (cont.)

• Was relocation requirement unlawful?
• Unlawful to change terms of employment where TUPE
  applies unless the change is unrelated to the
  transfer or there is an ETO (economic technical
  or organisational) reason for the change e.g. a
  reorganisation/ redundancy
• B could not rely on ETO because there also has to
  be a change in the headcount or duties of the
  employees

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4. Royden v Barnetts Solicitors (cont.)

• Implications for you?
• Transfer of Undertakings (PROTECTION OF
  EMPLOYMENT) Regulations 2006
• Whether you are the outgoing or incoming firm you
  can't ignore TUPE!

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HR in Law Employment Law Update
Friday 15 May 2009

• Paul Callegari
• KL Gates LLP