Employment Writes - February 2013

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Welcome!

EMPLOYMENT WRITES – February 2013 It’s February already… where does the time go? Well, if like me you are an employment law junky you will have been avidly studying the proposed Government changes to UK employment legislation. We are told that all these changes (and there are a lot of them) are going to make the administrative burden of being in business easier for us all. Time will tell if that is right, but one thing is for certain it’s going to be a busy year keeping on top of these developments and updating those Employee Handbooks!

There are changes to the parental leave rules coming in next month (with further changes in 2015), new Tribunal rules of procedure and new rules on collective redundancy consultation both due to be implemented in April, a new Tribunals’ fee regime in the Summer, a mandatory pre-claim conciliation process and the introduction of a new “employee share-holder” status to name just a few … Phew! It’s difficult to keep track.

In this edition we will focus on the proposed changes to the current TUPE regulations.

This is a must read, particularly for those who use or provide third party services.

We will also be looking at some of the latest case law on social media, which has become a particularly hot topic since the unfortunate tweet of Paul Chambers in 2010 (with his comment about blowing Robin Hood airport ‘sky high’).

We take a look at the surprising judgement of the ECHR in the cases of Ms Ewedia, and Ms Chaplin, and find out how much trouble a simple uniform change can cause an employer!

Finally, a cautionary note following the Supreme Court’s decision regarding legal professional privilege.

Charlotte Cooper Head of Employment E: Charlotte.cooper@plexus-law.co.uk

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TUPE stripped bare

The Government has issued a consultation document proposing a range of changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006, or “TUPE” as they are lovingly known. You may recall the furore when the long awaited 2006 TUPE regulations were finally published and the expectation that they would finally bring some clarity to a highly contentious area of employment law. Well, the latest proposals aim to strip back the 2006 regulations, removing the ‘gold plating’, so that they more closely resemble the European Directive. The key changes include the following: • removal of the ‘service provision change’ clause; • removal of the compulsory provision of employee liability information; • relaxation of the restrictions to changes to terms and conditions and dismissal; • extension of the definition of “economic technical or organisational reasons entailing changes in the workforce” allowing dismissals; • more flexibility with the information and consultation process; and • additional provisions for micro businesses.

We examine these changes in more detail below.

Service Provision Changes In 2006 amendments were made to TUPE to bring service provision changes expressly within their ambit. This meant that, in the majority of cases, TUPE would apply where services were outsourced, in-sourced or where the service provider changed.

There are some flaws however. A common frustration for companies unhappy with the standard of service they receive from a contractor is that if they change provider, then the same personnel could remain working on that contract, as they would simply TUPE transfer over to the new provider.

The Government would like to revert to the pre-2006 position, removing the “service provision change” clause. One impact of this is that there will be unexpected redundancy costs at the end of service contracts. It is therefore hoped that there will be a reasonable lead in time, so companies can adjust to the change.

Whilst hopefully there will be improvements in efficiency and competition, this change will undoubtedly increase uncertainty about whether or not TUPE applies.

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Provision of Employer Liability Information The Government proposes to repeal the requirement to provide “employee liability information” 14 days before the transfer date. Instead the provision of information will be a voluntary process left to the parties, supported by guidance.

A voluntary process may be workable where it is in the interests of the parties involved to co-operate with each other, but this proposal will cause significant difficulties where an incoming service provider is trying to elicit information from an outgoing contractor who is, frankly, not interested in helping a competitor company. This will result in a greater reliance on Service Level Agreements, compelling the provision of employment information.

Restrictions and Changes to Terms and Conditions The difficulty in changing terms and conditions of employment following a TUPE transfer has caused employers no end of headaches. Whilst the Government acknowledges this issue, simply allowing post transfer harmonisation would be incompatible with the European Directive.

The proposal is to allow a contract to be varied post transfer “if that variation could have been agreed: • had there not been a transfer; or • if the reason for the change is an economic, technical or organisational reason entailing changes in the workforce (“an ETO reason”).”

This provides very limited additional flexibility. Any changes falling outside these exemptions would still be void if the reason for the variation is the TUPE transfer itself.

Collective Agreements The Government is considering introducing provisions to allow collective agreements to be varied 12 months following the transfer. This will however have limited effect within the UK, as collective agreements are not usually legally binding in themselves, but are a source of terms for individual contracts. If terms from a collective agreement have been incorporated into individual contracts, the law currently says that they will continue to have effect whether or not the underlying collective agreement has been varied.

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Protection against Dismissal The Government proposes to amend the current TUPE wording to more closely reflect the Directive’s wording. This would have the effect of removing from the automatic unfair dismissal protection those scenarios “connected” to a transfer, just covering those dismissals “by reason of the transfer” in circumstances where there is not an ETO reason.

Substantial change to the material detriment of an employee Currently, if an employee resigns as a result of a substantial change in their working conditions, then that is treated as a dismissal, (which will be an automatic unfair dismissal unless there is an “ETO reason”). The Directive however refers to a “termination” rather than a “dismissal”.

The proposal is to bring TUPE in line with the Directive, so that the scope for bringing an unfair dismissal claim is removed where the change in working conditions is not a breach of contract or a constructive unfair dismissal.

‘ETO reason’ The definition of “entailing changes in the workforce” (part of the “ETO reason” definition) does not include a change of location, meaning that a dismissal caused by a change of location following the transfer will be automatically unfair. It is proposed to amend TUPE so that a change of location of the workforce will fall within the meaning of “entailing changes in the workforce”.

A further change allows dismissals to take place lawfully, earlier in the process. At the moment redundancies made before the transfer by the transferor are automatically unfair if the transferor is relying upon a transferee’s “ETO reason”. The proposed change will allow dismissals in these circumstances.

Information and Consultation Obligations It is common for overlapping information and consultation obligations to arise in respect of both TUPE and redundancies, which can cause problems with timing. The Government have proposed changes which will allow the redundancy consultation process (relating to redundancies due to take place post TUPE transfer) to begin pre-transfer. This will not be a ‘requirement’, but will provide some additional flexibility.

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Micro Businesses The Government recognises that the information and consultation process for smaller businesses is a significant burden. It makes far more sense for smaller organisations to talk directly to the affected individuals themselves. On that basis the proposed amendments allow micro businesses (which are businesses with 10 employees or fewer) to inform and consult employees directly rather than appointing representatives. The consultation paper provides an inconsistent definition of micro businesses so hopefully this will be resolved in the final legislation.

The Government also plan to issue new guidance on TUPE to address some of the unclear elements of the provisions.

The TUPE consultation will close on 11 April 2013, with the changes due to take effect in October. We will be compiling a response on behalf of our clients. Please get in touch with me at charlotte.cooper@plexus-law.co.uk if you want your views to be included.

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Focus on Social Media - @!#*% Twitface Social media presents both opportunities and risks for business. For many organisations the risk is managed by a blanket ban on its use in the workplace. However, with the increased use of social networking sites such as Facebook and Twitter, the interface between an employee’s ‘work’ and ‘personal’ lives is becoming increasingly blurred.

Employers need to be aware of the risks posed to their organisations by hapless employees, in the privacy of their homes, posting very public comments about their fellow work colleagues, their employer or their provocative opinions.

The issue is that employers can be ‘vicariously liable’ for their employees’ acts of discrimination, even if this is outside of work time, where the activity in question is classified as being “in the course of employment”. Employers also face the problem of what to do with employees who post derogatory comments about them, or who express opinions causing damage to their reputations.

Case law on these issues, offering some guidance, has been slowly developing. We examine some recent decisions in more detail.

Can Facebook comments be a ‘continuing act’ for discrimination purposes? – Yes, says the EAT in Novak v Phones 4 U Ltd (UKEAT 0279/12) Novak, a Manager at a Phones 4 U store, fell down the stairs at work and went off on long term sick leave. A number of colleagues made fun of the Claimant’s accident on Facebook. The postings concerned the accident and remained on Facebook for a 4 month period. Further Facebook entries were made, again about Novak’s fall.

Novak brought an Employment Tribunal claim against his employer for disability and race discrimination, harassment and victimisation. He alleged that Phones 4 U had failed to take steps to stop the discriminatory acts, namely the postings on Facebook. However, Novak’s claim in relation to the first set of postings was potentially “out of time”, because the comments had been made more than 3 months previously, unless they could be linked as a ‘continuing act’ to the second set of postings, which were “in time”.

The Tribunal dismissed this argument and Novak appealed.

The Employment Appeal Tribunal found in favour of Novak. It held that two employees had been involved in both sets of postings, and although they were made 7 weeks apart, overall there was clearly a connection in terms of individuals, subject matter and timing.

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This case highlights the dangers of using Facebook as a means to have a ‘private discussion’. It demonstrates the importance of a workplace Social Media Policy, which should be communicated clearly to staff and enforced in circumstances of breach. Where such a policy is in place it is then possible for employers who find themselves in similar situations to rely upon the “reasonably practicable steps” defence; that they had taken all ‘reasonable practical steps’ to prevent the discrimination from taking place.

Vulgar comments on Facebook amount to harassment – Teggart v TeleTech UK Ltd NIIT 00704/11.

In this 2012 decision, the Northern Ireland Industrial Tribunal found that vulgar comments posted about a female colleague amounted to harassment and a decision to dismiss for gross misconduct was upheld, despite a flawed investigation process.

Teggart was employed as a Customer Services Rep by TeleTech in its Belfast Call Centre.

TeleTech received an anonymous complaint about an obscene comment on Teggart’s Facebook page concerning the promiscuity of a female colleague. This anonymous complaint was never pursued. TeleTech spoke to the ‘victim’, who was distressed at the comments. A meeting was held with Mr Teggart during which he admitted to posting the comment. He was charged with gross misconduct for (1) harassing a fellow employee; and (2) bringing TeleTech into serious disrepute and was subsequently dismissed.

He appealed, arguing that the comments were intended to be a joke; that he regularly mocked people on Facebook; it was not intended to harass anyone but to generate a vulgar distaste for the ‘victim’. He also alleged that his human rights had been breached.

His appeal was dismissed and he brought a Tribunal claim.

The Tribunal found that the TeleTech finding of harassment was a reasonable conclusion.

Teggart’s postings were unwanted and violated the victim’s dignity and created a degrading and humiliating environment. The Tribunal however found fault with TeleTech’s conclusion that Teggart had brought the Company into ‘serious disrepute’, as there were no statements from members of the public or the anonymous complainant to this effect.

Notwithstanding that, the Tribunal upheld TeleTech’s decision to dismiss Teggart based on the harassment charge alone.

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The Tribunal also stated that Teggart’s human rights weren’t infringed. When posting his comments on Facebook, Teggart abandoned his right to privacy. The protection for his beliefs did not extend to the belief about the promiscuity of another person. Finally, the right of freedom of expression did not entitle Mr Teggart to make comments which damaged the victim’s reputation and infringed her right not to suffer harassment.

This decision highlights the importance of the correct application and analysis of disciplinary policies when making disciplinary decisions. The Tribunal made it clear that employees will struggle to establish that they have a reasonable expectation of privacy in relation to comments made on Facebook. However, in the case of Smith below, the High Court reached a very different conclusion.

Can religious employees express views on gay marriage on Facebook? Yes, says the High Court in Smith v Trafford Housing Trust [2012] EWHC 3221 Smith was employed as a Housing Manager by the Trafford Housing Trust. The Trust had an extensive Equal Opportunities Policy. Smith was also contractually bound by a Code of Conduct which stated that (1) employees were advised to show commitment to the Trust and maintain its positive image; (2) to act in a non judgmental manner with colleagues and customers; and (3) not to engage in activities which might bring the Trust into disrepute, either at work or outside of work, including by making derogatory comments about the Trust or engaging in unruly or unlawful conduct on websites such as Facebook.

Smith posted a link on his Facebook wall to an article entitled ‘Gay Church ‘Marriage’ set to get the go ahead’. Smith added the comment “equality too far”. One of his work colleagues challenged him of Facebook by saying ‘does this mean you don’t approve?’ Smith replied: “no, not really. I don’t understand why people who have no faith and don’t believe in Christ would want to get hitched in church. The bible is quite specific that marriage is for men and women. If the state wants to offer civil marriage to same sex then it is up to the state; but the state shouldn’t impose its rules on places of faith and conscience.”

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One Facebook friend, who was a colleague, complained that the remarks were offensive and homophobic. Smith was suspended and was charged with (1) posting comments on Facebook that had potential to cause offence; (2) posting comments that could be seriously prejudicial to the reputation of the Trust; (3) serious breach of the Code of Conduct and Equal Opportunities Policy; and (4) failing to take managerial responsibility.

He was found guilty of gross misconduct, but instead of dismissing him (due to his long service), he was demoted. Smith brought a claim in the High Court for breach of contract.

The question for the High Court was whether the postings on Facebook amounted to misconduct and therefore was his demotion in accordance with his contract.

The Court held that the Trust had not been entitled to find Smith guilty of misconduct and had acted in breach of contract by imposing the demotion. Smith’s remedy was however limited to his loss during his notice period, a sum of less than £100.

The Court considered that no reasonable person would think that Smith’s personal views expressed on his Facebook page were posted on behalf of the Trust. A brief mention of the Trust was not inconsistent with the general impression that his Facebook wall was personal.

The “moderate expression” of his views about gay marriage on his Facebook wall at a weekend, out of working hours, could not lead a reasonable reader to think the worst of the Trust for having employed him. Further, the Court held that Smith had not been promoting his beliefs and he had only stated his personal opinion in response to a question from a colleague. The Court rejected the argument that because 45 of Smith’s Facebook friends were colleagues, this imparted the necessary ‘work related’ context to the postings in breach of the Trust’s policies. It was also significant that Smith’s colleagues had chosen to make Smith one of their Facebook friends. As long as Smith expressed his own views lawfully on Facebook, it was for his Facebook friends to choose whether or not to receive them.

The Court concluded that a difference of opinion is bound to cause upset but that is the price of freedom of speech.

As a High Court decision, this ruling will be influential in future employment law cases on social media, conduct outside work and freedom of expression. It makes a number of statements about conduct outside work and how that should be regulated by employers.

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It is however in contrast to a number of earlier cases which indicated that Facebook should not be considered as a private forum and that even moderately offensive comments could bring an employer’s reputation into disrepute and warrant a gross misconduct dismissal.

The fact that there was not a clear policy about what an employee was and was not permitted to do and how those obligations extended beyond the workplace and into an employee’s personal or social life, seemed to be persuasive to the Court.

Case law in this area is starting to build gradually and there are some common themes, such as the importance of properly communicated policies dealing with social media and dignity and respect in the workplace. The context in which comments are made is also an important factor for employers to examine when deciding whether disciplinary sanctions are warranted.

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The trouble with v-neck blouses

Who would have known the trouble caused by a ‘V-neck blouse’? Neither British Airways nor the Royal and Devon Exeter Hospital could have predicted the uproar and the legal battles which have ensued through the UK courts, and then to Europe, fought by Ms Eweida and Ms Chaplin who both wanted to wear their religious crosses at work.

These disputes both arose as a result of the introduction of a new company uniform, changing a high neck blouse to a v-neck blouse, which then caused the crosses worn by both women to be displayed.

Ms Eweida, worked for British Airways on the check-in desk. British Airways had a strict uniform code which required any religious clothing item to be covered up by the uniform at all times. If this was not possible then approval had to be sought from management.

The aim of the policy was to maintain a certain image of the company and promote a recognisable brand.

Ms Eweida had previously concealed her cross under her clothing. Following the introduction of the new ‘v-neck blouse’ she decided to wear the cross openly as a sign of her commitment to her faith. Ms Eweida refused to remove the cross and chain or conceal them under a cravat when asked to do so. Following a warning, Ms Eweida was sent home on unpaid leave. She was subsequently offered administrative work, where she would not be required to comply with the uniform policy, but she rejected this offer.

As a result of mounting public pressure British Airways reviewed their uniform policy and decided to allow the display of religious symbols. British Airways however refused to compensate Ms Eweida for her lost earnings. Ms Eweida pursued a claim through the UK Tribunal system for indirect discrimination, under the Employment Equality (Religion and Belief) Regulations 2003. Her claim was rejected in the Employment Tribunal and in the appellant Courts. The EAT found that the uniform policy did not put Christians generally at a disadvantage and that even if it did, the policy was a proportionate means of achieving a legitimate aim.

In a surprising judgment last month, the European Court of Human Rights found in favour of Ms Eweida. They found that Ms Eweida’s insistence on wearing a cross, motivated by her desire to bear witness to the Christian faith was a manifestation of her religious belief and was therefore protected by the Equal Treatment Directive. They found that BA’s actions had interfered with her right to manifest her religion and that the wearing of a discrete cross could not have distracted from her professional appearance. Nor was

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there any evidence that this had any negative impact on the British Airways brand or image. The fact that BA later changed their uniform policy demonstrated that it was not of crucial importance.

In contrast, Ms Chaplin was employed as a Nurse at the Royal Devon and Exeter Hospital.

The Hospital had a uniform policy which stated that for health and safety purposes, jewellery should be kept to a minimum. Necklaces should not be worn to minimise the risk of injury when handling patients. When new v-neck tunics were introduced Ms Chaplin’s cross and chain became visible and she was asked to remove them. She refused to do so. Ms Chaplin was eventually moved to a non-nursing temporary position, which then became redundant.

Ms Chaplin brought claims of indirect and direct discrimination on religious grounds. She was unsuccessful in the Employment Tribunal and did not pursue her claim in the UK courts following the unsuccessful claim of Eweida. She did however appeal to the European Court of Human Rights. In contrast to Ms Eweida’s case, the ECHR did not uphold her appeal. They determined that the requirement for Ms Chaplin to not wear her necklace, in order to protect the health and safety of nurses and patients, was proportionate and therefore the Hospital did not violate her human rights.

This ruling will clearly have an impact on dress code policies. It will be an act of discrimination to prevent employees from wearing religious symbols unless there is a justifiable business reason to do so, for example for health and safety reasons, and that policy is a proportionate means of achieving that aim.

Ms Eweida has reportedly brought a further Employment Tribunal claim against BA, citing disability discrimination, on the grounds that BA have failed to make reasonable adjustments to accommodate her back condition and for failing to add her to the rota during the Olympic Games.

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The privileged few?

Legal professional privilege entitles a client to refuse to disclosure certain confidential documents and legal communications to third parties, including Courts and Tribunals.

‘Privilege’ applies to communications containing legal advice provided by lawyers, including in-house lawyers where that advice has been provided in their capacity as a lawyer and they are qualified to practice under the SRA or Bar Council rules. Privilege, however does not apply to advice given by other professionals who give legal advice.

This position was reaffirmed by the Supreme Court in a landmark judgement in R (Prudential plc and another) v Special Commissioner of Income Tax and others [2010] EWCA Civ 109. By a majority of five to two, the Court refused to extend the scope of legal professional privilege to other professions, in this case legal advice given by accountants on tax matters, namely about a scheme to avoid tax. The Court concluded that it was not for them to change the law on such matters, and any change would need to come from Parliament.

Readers are therefore reminded to be cautious about receiving and forwarding advice received from professionals who are not lawyers. As it stands such advice, if it is unconnected with the litigation, would need to be disclosed in legal proceedings.

“...be cautious about receiving and forwarding advice received from professionals who are not lawyers.”

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New Tribunal Rates

Where the appropriate date (i.e. such as the date of dismissal) is on or after the 1 February 2013, the new Tribunal limits are as follows: The maximum limit for gross weekly pay rises from £430 to £450.

The effect of this on Tribunal awards is as follows: • Failure to give statement of particulars – min £900 and max £1,800 • Breach of the right to be accompanied to disciplinary and/or grievance meetings – max £900 • Breach of Flexible Working Regulations – max £3,600 • Basic award for unfair dismissal purposes – max £13,500 • Statutory redundancy pay – max £13,500 The cap on the compensatory award increases from £72,300 to £74,200, (although this may be changing soon).

The maximum Statutory Guarantee Payment for periods of lay off increases from £23.50 per day to £24.20 a day. The maximum over any 3 month period increases from £117.50 to £120.00.

In next month’s edition we will be examining the new concept of the “employee share-holder” and we will be looking at the Government’s push to promote women to the Boardroom.

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