in-depth

Technical update - March 2018

Andrew Macmillan

12.07% may not be the answer

Issue

The Working Time Regulation 1998 (WTR) provides the right to take 5.6 weeks paid leave every year. Calculating that entitlement for casual workers can be a problem though if they work only as and when required. One solution that has been widely adopted is to add 12.07 per cent to a worker’s earnings. This is calculated by taking the 5.6 weeks entitlement that is accrued over 46.4 weeks and dividing one by the other, which equals 12.07. However, the case of Brazel v The Harpur Trust calls into question this common means of calculating holiday pay.

Facts

Mrs Brazel was employed as a “visiting music teacher”, working as required at the Bedford Girl’s School. She had a zero hours contract of employment, which provided that she would be entitled to the statutory minimum 5.6 weeks paid annual leave per year. Like all the other visiting music teachers, paid leave was granted three times a year at the end of each term when 12.07% of her total accrued pay from the term was added to her wages. Mrs Brazel challenged the practice.

Decision

It was directed that the employer should apply the statutory provisions that specifically set out how holiday pay was to be calculated. That meant an employee with normal working hours should be paid their ‘normal’ pay for any holiday. If there were no normal hours, or their pay varied, then the calculation required that a 12-week average should be used from the period immediately before their holiday was taken. In the circumstances her entitlement to holiday should not have been limited to 12.07 per cent.

Action

The use of the 12.07 per cent holiday pay calculation had been seen as a relatively easy way in which employers could comply with their statutory obligations and has been widely adopted by employers with term-time only staff. Following this case it appears that only in circumstances where the employment is brought to an end following each assignment, will the calculation now be appropriate. In all other cases the calculation will have to be based on the 12-week average.

 

 

Do you have reasonable knowledge of disability?

Issue

An employer will not fail in its duty to make adjustments if it did not, and could not, reasonably know of an employee’s disability. In the recent case of Toy v Chief Constable of Leicestershire Police it was held that the employer did not have the required knowledge even where the employee stated he believed he was disabled during a disciplinary hearing.

Facts

Mr Toy, a former Police Community Support Officer, had failed to pass the training to become a Police Officer. This led to the instigation of a formal three-stage procedure to terminate his contract. During the second and third stages Mr Toy stated that he believed he may be suffering from dyslexia. The Chief Constable still decided to bring his service to an end. Mr Toy claimed disability discrimination.

Decision

The Chief Constable had been aware of Mr Toy’s previous employment history; he had also passed all national selection tests, undertaken academic studies and had not during this period, nor before, mentioned the possibility of being dyslexic. In those circumstances it was held that the Chief Constable did not know and could not reasonably have known that Mr Toy was disabled.

Action

Despite this decision, employers should be cautious of taking action when health conditions are raised. If there is medical evidence to explain the conduct it will usually need to be looked into. It should also be noted that this case was a disability discrimination claim concerning reasonable adjustments. If the claim had been in relation to unfair dismissal it may have been decided that it was outside the band of reasonable responses to not investigate further whether the employee was disabled.

 

 

Decision date

Issue

It would clearly be unlawful discrimination to dismiss an employee on grounds that she is pregnant or intends to take maternity leave. However, an employer could not be liable for discrimination if it was not known that the employee was pregnant. In the case of Really Easy Car Credit Ltd v Thompson the issue was whether liability could be established if the employer became aware of the employee’s pregnancy after making the decision to dismiss, but prior to telling the employee.

Facts

On 3 August, whilst Miss Thompson was still in her probationary period, her employer decided to dismiss her. One of the reasons had been that she seemed to be emotionally volatile. The next day before anything had been said to her about dismissal, Miss Thompson informed the employer that she was pregnant. The dismissal letter, dated 3 August, was given to her on 5 August 2016. Miss Thompson alleged that she was being dismissed because she was pregnant.

Decision

On the findings of fact, the employer had made the decision to dismiss on 3 August 2016 and that decision was untainted by any knowledge or belief in Miss Thompson’s pregnancy. There was no duty on the employer to reconsider the decision the following day after it had been made aware that Miss Thompson was pregnant. The fact the employer had been influenced by her emotional volatility did not necessarily indicate the decision could be regarded as connected to pregnancy.

Action

In a discrimination claim, the key issue is what is in the mind of the decision maker. The fact that the decision to dismiss was made at the point in time when the employee’s pregnancy was not known meant that the claim of discrimination could not succeed. The test is different when assessing whether a dismissal is fair, as the whole process will be taken into account.

 

 

Bumping to make room

Issue

Redundancy is a potentially fair reason for dismissal. An employer will still have to follow a reasonable procedure though, which will involve taking steps to try and identify alternative work that may be suitable for the employee at risk. In some cases that might even extend to ‘bumping’ another employee out of a position to avoid a redundancy. The circumstances when that might be appropriate were considered in the recent case of Mirab v Mentor Graphics (UK) Limited.

Facts

Poor sale results had led to a review of the whole division and it was decided that Mr Mirab’s role of Sales Director was no longer required. He was provided with lists of vacancies from within the UK and Worldwide. Consultation meetings were held with him during which he asked whether he was going to be considered as one of the Account Managers he had managed, but was told that no additional role had been authorised. Mr Mirab was made redundant and claimed it was an unfair dismissal.

Decision

The first instance decision dismissing his claim was set aside on appeal. In particular it was held that the employer’s failure to consider bumping those in subordinate positions should have been taken into account. It was relevant to the question of whether the redundancy procedure fell in the ‘band of reasonable responses’. There was no rule that it only had to be considered if the employee had raised the option of working in a subordinate position.

Action

Offering to bump out an employee in a more junior role who may have less service, so as to allow the employee at risk of redundancy to remain, may be controversial. However as this case reminds us, it might form an important part of a fair redundancy process. It will not always be appropriate but it is an option that should always be considered.

 

 

Be careful what you say

Issue

The risk that a manager’s comments could be recorded and then used to support claims in an Employment Tribunal is not new.  Employers’ objections to such evidence being admitted have had little success in general. However in the recent case of Fleming v East of England Ambulance Service NHS Trust, there was added  twist to such deliberations, as secret recordings included not only comments about the employee, but also privileged conversations between the employer and its legal advisers.

Facts

Following a failure to attend absence management meetings, Mr Flemming had been called to a disciplinary hearing. He secretly recorded the comments of the panel during the breaks by leaving his phone in the room. Some inappropriate comments were made about him but there also a reference to the advice given by the Trust’s solicitors and a call for further advice was made to the solicitor. Mr Flemming was dismissed and brought claims relying on the content of the recording.

Decision

The initial decision was that the inclusion of the privileged legal advice in the recording rendered the whole recording inadmissible. However, the Employment Appeal Tribunal overturned that ruling. The parts of the recording that covered legal professional privilege could not be referred to or relied on for any purpose. However the remainder of the recording would be allowed into evidence. In this case, the public interest in the Tribunal hearing all relevant evidence outweighed the public interest in preserving the privacy of private deliberations of an internal disciplinary panel.

Action

Management should always be alert to the possibility that their comments will be recorded or overheard. Where there is already a dispute with the employee, this risk will increase. The above case is a reminder that preventing the admission of that evidence is difficult. In practice, the Tribunal will have to strike a balance that will take into account the nature and quality of the deliberations on the one hand, and the value and weight of the evidence on the other.

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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.