in-depth

Technical update - August 2018

Andrew Macmillan

A temp agency under a different name

Issue

Temporary workers supplied by an employment business or agency have special rights under the Agency Workers Regulations 2010 (AWR), in particular they are entitled – after 12 weeks – to the same basic working conditions as comparable employees directly recruited by the hirer. This includes rights to the same pay, hours and holiday. In Brooknight Guarding Ltd v Matei the question was whether a business may be caught by the AWR even where it does not realise that it is a recruitment agency.

Facts

Brooknight Guarding offered various types of security services. Mr Matei, a security guard, had been employed on a zero hours contract and had been assigned to different sites for different clients as and when required, but he worked mostly for one particular client, Mitie Security Ltd. When he was dismissed after 21 months, he brought a claim that he had been entitled to the same basic working conditions as the security officers employed by Mitie in the same site as he had been working.

Decision

It was held that Brooknight Guarding was operating as an employment business under the AWR. It may have regarded itself as a security company but it had supplied Mr Matei to another company to temporarily work under its’s supervision and direction, which was sufficient to bring it within the scope of the AWR. This meant that Mr Matei was entitled to the same working conditions as comparable security guards in Mitie.

Action

Consideration should be given to the possibility that in supplying a worker to a third party, the AWR and other recruitment regulations may apply. However only those workers temporarily placed will have rights to claim parity of terms. If it was shown the worker had been placed with the other company on a permanent or indefinite basis then they would not be protected. In each case the contractual arrangements between supplier and hirer would need to be taken into consideration.

 

 

Waiving away a breach

Issue

An employee who promptly resigns in response to a fundamental breach of contract may be entitled to consider that they have been wrongfully dismissed. However if the employee delays, it may be taken that they have affirmed the contract and waived the breach. In Brown and others v Neon Management Services Ltd and another the question was whether an employee who resigned in response, still affirmed the contract by agreeing to work a long notice period.

Facts

The claimants were senior employees in the financial market and each had lengthy notice periods of between six and twelve months. Disagreements with their employer had arisen in relation to the commission they alleged was due to them. When the employer refused to pay, all three employees resigned but confirmed that it was their intention to work their full notice. During their notice the employer made unfounded allegations against them, at which point they resigned immediately.

Decision

It was held that whilst they had resigned in response to the employer’s breach of contract, working for such a substantial period during their notice would mean that it would not be possible to rely on the breach. However, they could rely on the further fundamental breaches by the employer during the notice period, which had resulted in their immediate resignation to establish that they had been wrongfully dismissed.

Action

Contingency plans should be in place to ensure a business is able to cope with the immediate resignation of senior personnel. If on the other hand the resignation is not immediate, it will be important to ensure that the employee is treated fairly while working their notice period. Making unfounded allegations and reporting the employees to a Regulator allowed the claimants in this case to avoid the restrictions that they would have otherwise been subject to under the terms of their contract.

 

 

Bad faith not a factor

Issue

In a claim of victimisation, the employee asserts that he or she has been the subject of unfavourable treatment because of allegations regarding discriminatory conduct. However, what if the allegations had not been made in good faith but were simply to delay a performance management process? The case of Saad v Southampton University Hospitals NHS Trust considered whether the claim should be struck out in these circumstances.

Facts

Mr Saad was a trainee cardiothoracic surgeon. Various performance issues arose during his training and around the time that these issues came to a head, he raised a grievance. This included alleged terrorist comments made by his programme director saying that he was “…a terrorist looking person”. Mr Saad alleged this was abusive and discriminatory on racial and religious grounds. His grievance was rejected and he was subsequently removed from the training programme and dismissed.

Decision

The Employment Appeal Tribunal held Mr Saad’s claim that he had been subject to victimisation and should not have been dismissed, even though the main reason he had raised the grievance was to delay and avoid facing the performance management process. The primary question for victimisation purposes was whether the worker has acted honestly in giving the evidence or information. The existence of an ulterior motive should not be a factor taken into account.

Action

This importantly clarifies that ulterior motives should not be the focus in assessing bad faith in victimisation claims. The key is whether the worker honestly believes the information, not their reasons for providing it. Whilst this will be welcomed by claimants, as the test will be easier to make out, it will mean that employers will have to focus more on the causation issue. The reason for the treatment should be clearly documented to show there is no connection to an allegation of discrimination.

 

 

Transfer or administrative reorganisation

Issue

A transfer of an administrative function between public authorities may not be covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). However the Secretary of State will make a Transfer Order, giving similar protection to the employees that transfer in those circumstances.  The issue in Nicholls and others v London Borough of Croydon and others was whether TUPE protection could apply even though the employees had transferred by way of the Transfer Order.

Facts

Croydon Primary Care Trust transferred its public health team to the London Borough of Croydon. The Order made by the Secretary of State in connection with the transfer provided the employees with some protection, but limited it to a period of two years. When the protection came to an end, the Council tried to force through changes to terms and conditions by dismissing the employees and offering to re-engage on new contracts. Claims were made for unfair dismissal relying on TUPE.

Decision

Whilst the purchasing or commissioning of health services was not an economic activity insofar as the work done, the public health team was also offered “non-state actors operating in the same market” it indicated that there was an “economic” activity being carried out. Importantly, the fact that the Transfer Order would prevent the employment contract coming to an end did not mean that TUPE could not apply. It was possible that it might apply and it was directed that the case should be considered again on that basis.

Action

This decision makes clear that there will be very limited circumstances in which transferred employees will not be able to rely on the protection provided under TUPE. The technical arguments against its application in this case were rejected, taking into account the wording of the EU legislation that TUPE is intended to implement in the UK. The consequences for the employer will be that they might be bound by the terms and conditions that had previously applied for a much longer period than anticipated.

 

 

Were delays in retirement decision discriminatory?

Issue

An employer will be under a duty to deal with an application for early retirement from an employee who has been absent with health problems in a reasonable manner. In the case of Dunn v Secretary of State for Justice and another the Court of Appeal had to consider whether the employer’s failure to do so could amount to disability discrimination.

Facts

Mr Dunn was a prison inspector employed by the Ministry of Justice. He became ill with depression and a serious heart condition. He applied for ill health early retirement. There was a long delay in dealing with the application and it was admitted that it was badly handled, and caused Mr Dunn distress. He claimed that he had been subject to disability discrimination.

Decision

It was held that there was no disability discrimination. There had been unreasonable delay in dealing with the application but this had been due to the bureaucratic processes, which had required the application to be considered by three different contracted out services, all of which relied on different information. There was no indication that a non-disabled applicant would have been treated differently.

Action

The claim of disability discrimination failed as unreasonable treatment alone could not justify a conclusion that a person without a disability would have been treated more favourably. There was no evidence that the employer’s decision makers had been motivated in any way by the employee’s disability. However, the claim could have been avoided had the employer reviewed its procedures which were described as ‘arcane and unwieldy’ and brought them up-to-date.

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Andrew Macmillan

Andrew Macmillan

Partner

Andrew is a specialist employment lawyer, with a particular focus on contentious work such as reorganisations, redundancies, employment aspects of insolvency, executive severance, employment relations issues and employment tribunal litigation.