Russell Brown Employment Blog

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July 2010 - Removal of default retirement age from April 2011

The Government has this morning announced proposals to consign the default retirement age (currently 65) to the history books by October 2011 under proposals which it has published for consultation today.

Presently, the law allows an employer to retire a member of staff at 65 years of age, irrespective of their personal circumstances. Any attempt however to retire a member of staff before they have reached 65 will be unlawful unless an employer is able to objectively justify the decision to dismiss.

Currently, the Employment Equality (Age) Regulations 2006 implement a procedure which employers are obliged to follow prior to terminating an individual’s employment on retirement grounds. In simple terms, this involves writing to the employee not more than 12 months but not less than 6 months before their 65th birthday and informing them of their right to request that they work beyond 65 years of age (notice of intended retirement). There is however no obligation on an employer to agree to any request subsequently made by the employee and it is entirely at the discretion of the employer whether or not to terminate employment.

Under the Government’s proposals, it would plan to phase out the default retirement age from April 2011 by preventing an employer from issuing any notices of intended retirement after 6th April 2010. Any retirement taking effect after 1st October 2011 will then need to be objectively justified if it is to avoid being held unlawful.

The Government claims that the proposals will help and encourage people to work longer against the background of demographic change whilst at the same time removing the administrative burden of the statutory retirement procedures. It will also potentially inject much needed funds into the economy easing the strain on public finances by enabling more people to continue paying taxes whilst still claiming state pension.

Employment Relations Minister, Edward Davies, said “With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving swiftly to end discrimination of this kind. Older workers bring with them a wealth of talent and experience as employees and entrepreneurs. They have a vital contribution to make to our economic recovery and long term prosperity. We are committed to ensuring employers are given help and support in adapting to the change in regulations, and this consultation asks what kind of support are required”.

Not surprisingly, employer groups on the other hand are far less excited by the prospect of having no default retirement age citing the obvious problems of additional cost and less flexibility in managing the workforce. The period of consultation opens today and will run until 21st October 2010. A copy of the consultation can be found at www.bis.gov.uk/retirement-age. Amongst other things, the consultation seeks opinions upon whether the DRA could have unintended consequences in areas such as insured benefits (eg, private medical insurance and death in service benefits) and employee share plans. It also asks whether the Government could provide additional support to both individuals and employers who will be required to manage without the default retirement age or statutory retirement procedure such as future guidance or a formal code of practice on handling retirement discussions.

July 2010 - Salford Royal Foundation Trust -V- Roldan

The Facts

Mrs Roldan was a Filipino nurse employed in the Trust’s Neuro High Dependant Unit. In September 2007, a colleague made a complaint regarding Mrs Roldan’s handling of a patient which resulted in her being suspended.

The Trust appointed an Assistant Director to carry out an investigation into the matter. As part of her investigation, she obtained a witness statement from the only witness who claimed to have seen Mrs Roldan tapping the patient’s foot with force using a saturation probe and making the “V” sign to him. The witness also claimed that whilst these incidents were taking place, Mrs Roldan was looking around to see whether she was being watched.

At the disciplinary meeting, the disciplinary panel accepted the witness’ evidence rather than Mrs Roldan’s which they believed to be unreliable and inconsistent. As a result of this, Mrs Roldan was dismissed for gross misconduct.

Unfortunately for Mrs Roldan, the consequences of her actions did not stop there. As a result of losing her job, she also lost her work permit along with her right to remain in the United Kindom. Furthermore, in accordance with the Trust’s procedures, the matter was also reported to the police who commenced a criminal investigation.

Mrs Roldan chose to appeal against her dismissal and upon being informed that it had not been successful, she issued proceedings in the Employment Tribunal for unfair dismissal.

Employment Tribunal’s Decision

The Tribunal held that Mrs Roldan had been unfairly dismissed and in doing so felt that as the consequences of her dismissal included potential criminal charges and deportation, the Trust had to be especially even handed in the way it conducted its investigation. With this in mind, the Tribunal expressed concerns regarding the way in which the Trust had conducted the disciplinary investigation and referred to 3 specific examples:-

1. The Tribunal questioned why the Trust’s Assistant Director had only spoken to Mrs Roldan and one witness as part of the investigation. In response to this, the Assistant Director explained that the alleged incident had taken place in a side room with a closed door and blinds on the windows. In the witness’ statement however, she had claimed that in the course of mistreating the patient, Mrs Roldan was looking through the window in order to check that no one was watching her. The Tribunal therefore expressed concern at the Trust’s failure to investigate this particular contradiction.

2. The Tribunal was also troubled by the fact there were lengthy notes recording investigatory meetings between Mrs Roldan and the Trust’s Assistant Director but no similar notes in respect of the Assistant Director’s interview meeting with the only witness.

3. The witness’ statement also made reference to another incident which had taken place two months earlier involving Mrs Roldan. This incident however had not been referred to by the Trust in its letter inviting Mrs Roldan to the disciplinary meeting yet it had been referred to in the Trust’s dismissal letter confirming its decision to terminate Mrs Roldan’s employment for gross misconduct, which indicated this being an influencing factor in the decision to dismiss.

Employment Appeal Tribunal Decision

The EAT upheld the Trust’s appeal and stated that the apparent conflicting evidence involving the closed window blinds was nothing more than a distraction. The fact was, the witness had seen what had occurred which was enough to establish a finding of gross misconduct. It felt that the missing minutes of the meeting between the Trust’s Assistant Director and the witness, should not have had any bearing on the issue of fairness and that whilst the allegations had not been clearly set out in the Trust’s letter inviting Mrs Roldan to the disciplinary meeting, they were nevertheless clearly set out in the witness statement thus providing Mrs Roldan with the opportunity to respond to them both at the disciplinary meeting and at the appeal meeting.

Court of Appeal Decision

Mrs Roldan appealed against the EAT’s decision before the Court of Appeal which concluded that the case turned on the conflict of evidence point. It felt that the Trust should have tested the witness’ evidence particularly given that where a person’s story begins to unravel, other parts of it may do so too. The Court of Appeal therefore held that the dismissal was unfair and in particular referred to the fact that Mrs Roldan’s career would have been blighted by the dismissal.

What can we learn from the Decision?

There are two points for an employer to bear in mind when conducting disciplinary proceedings as a result of the Court of Appeal’s decision. Firstly, when faced with a conflict of evidence, an employer should remember it is not obliged to believe one employee over another and sometimes it may be perfectly acceptable for an employer to conclude that they are unable to resolve the conflict and therefore decline in upholding the allegations. This is particularly important given the test applied by Employment Tribunals when establishing the fairness of a decision which involves an employer being able to demonstrate that it held a genuine belief of guilt on reasonable grounds after a reasonable investigation.

Secondly, where an employee faces potential criminal charges or other similarly serious consequences such as deportation, an employer is now obliged to carry out an extremely careful and detailed investigation. Essentially, the Court of Appeal’s decision creates an authority to suggest that where a dismissal could blight an individual’s career, a Tribunal will be expected to carry out a detailed analysis of an employer’s handling of the matter.

June 2010 - The Dawn of High Value Dismissal Claims

Introduction

Employees who have been unfairly dismissed often pursue claims through the Employment Tribunal and in doing so can recover compensation for loss of earnings currently subject to a cap of £65,300. For some highly paid employees however this does not adequately compensate them for their lost earnings which results in them pursuing a separate claim for damages for breach of contract which is not subject to any cap in damages.

Damages for these types of claims are normally limited to the income which the employee would have been entitled to receive up to the end of their notice period. There is an exception to the general rule however where an employer has dismissed an employee without following its contractual disciplinary procedure. In these situations, employees can recover damages for the income they would have earned during the period the disciplinary procedure would have taken place, in addition to their notice pay. Often however this only results in additional compensation of a few days’ or weeks’ pay being added to the value of the claim.

This limit on compensation has recently been challenged however in the case of Edwards v Chesterfield Royal Hospital NHS Trust. In this case it was argued that any award of damages should not be restricted in such a way but that instead it should reflect the more serious damage caused to a person’s professional status and career.

Facts of the case

Mr Edwards was employed as a Consultant Trauma and Orthopaedic Surgeon by Chesterfield Royal Hospital NHS Foundation Trust (“the Trust”) before he was summarily dismissed in February 2006 on the grounds of his alleged gross personal and professional misconduct. Mr Edwards appealed internally against the Trust’s decision but his appeal was rejected.

Mr Edwards issued proceedings in the Employment Tribunal for unfair dismissal but subsequently withdrew his claim and brought a claim in the County Court for breach of contract. He argued that the Trust had failed to follow its contractual disciplinary procedure and that had it done so he would not have been dismissed and as a result of which he had been prevented from continuing as an employee of the Trust and from obtaining similar employment elsewhere. Consequently, he was claiming in excess of £4 million comprising expenses, loss of earnings to retirement and future loss of pension.

The Trust argued however that even if it had failed to follow its own disciplinary procedure which it disputed, any award should be limited to what Mr Edwards would have earned during his notice period. In line with well established legal principles the County Court awarded Mr Edwards damages to reflect the income he would have earned during the three month contractual notice period. Mr Edwards appealed this decision to the High Court.

High Court

The High Court rejected Mr Edward’s claim that he was entitled to recover damages to compensate him in full. The Court reiterated the general rule that losses in such cases are limited to the income the employee would have earned during their notice period. The Court did go on to say however, that in this situation the Trust could not have given three months notice until it had completed the disciplinary procedure and therefore Mr Edwards was entitled to recover the income he would have received during the period that the disciplinary procedure would have taken in addition to his three months notice.

Court of Appeal

Mr Edwards challenged the High Court’s decision on the basis he did not believe his losses should be limited to his contractual notice period and the period required for the contractual disciplinary proceedings. He claimed that the level of damages should reflect the wider damage to his professional status and loss of future employment prospects.

The Court of Appeal found there had been an express breach of contract by the Trust and that Mr Edwards was entitled to recover damages at large. The Court could see no reason why he should not be entitled to recover damages for the Trust’s breach of contract and went on to say that had he responded more quickly he could have obtained an injunction against the Trust to prevent them from breaching the disciplinary procedure.

Notwithstanding the above however, the Court made it clear that whilst Mr Edwards was entitled to claim damages for breach of contract he would still need to prove that the Trust breached his contract and demonstrate that his losses were caused by the breach i.e. the Trust’s failure to follow the correct disciplinary procedure. In the circumstances, the claim will now proceed to a further hearing to consider its merits and the size of any compensation Mr Edwards will receive if successful.

Comment

The Court of Appeal’s decision in Edwards may lead to significantly increased compensation payments where employees have been dismissed in breach of their employers’ contractual disciplinary procedures. Likewise, where an employee can show their employer is about to breach the contract by not following the contractual disciplinary procedure, the employee may be able to obtain an injunction stopping the employer from taking disciplinary action.

With the above in mind, employers with contractually binding disciplinary procedures will need to take great care to ensure they follow the correct processes when dealing with disciplinary issues, particularly with high earning individuals. Employers should also take care when drafting contracts of employment and staff handbooks ensuring that they do not make their disciplinary procedures contractual in the first place.

June 2010 - 2010 Fifa World Cup

Excitement is building in anticipation of the 2010 FIFA World Cup which is due to kick off on Friday 11th June 2010. As a result of this, many employees will be looking to book annual leave in order to make sure they do not miss all of the action. Some employers will already have put in place arrangements to deal with requests, others however will have to contend with unhappy employees whose requests for leave have been rejected, unauthorised absences and other problems often associated with the World Cup.

Only one of England’s initial group stage matches falls on a weekday on Wednesday 23rd June 2010 with a kick off time of 3.00 pm GMT and if England progress to the latter stages, their games will be played on weekends or weekday evenings. As a result of this, most employers are less likely to face problems associated with requests for time off but instead employees possibly wishing to leave early in order to arrive at home in time to watch an evening kick off or turning up to work hungover after celebrating (or commiserating) England’s performance.

As a result of the above, the tournament does give rise to a number of issues which employers may be required to contend with over the next four weeks, some of which we have attempted to address in this newsletter.

Rules relating to annual leave requests

Most employers will set out their rules and procedures governing requests for time off work in the staff handbook. This document will provide employees with guidance on matters such as how to make a request and how much notice must be provided. In the absence of such procedures however, the Working Time Regulations 1998 (Regulations) state that in order to make a request for annual leave, an employee must provide their employer with advance notice equivalent to twice the number of days he or she wishes to take off. As a result of this, an employee wishing to take one day off work must provide their employer with 2 days’ notice. Although there is no express right to take annual leave to watch matches, employers should give clear reasons why annual leave requests are rejected (eg staffing difficulties) in order to avoid grievances from employees

Rest break issues

Many employers will allow staff to leave early and make up their time. Employers are however advised to avoid employees foregoing their rest breaks or taking them at the end of the working day so they can leave early. The Regulations entitle workers to a 20 minute break for every shift lasting more than 6 hours. Although the Regulations do not specifically address the point, guidance from the Department for Business Innovation & Skills states that workers should not be allowed to “take” their break at the beginning or end of a shift.

Discrimination issues

Employers should also be alert to resentment from certain employees such as working parents who have previously made unsuccessful flexible working requests or those who have asked for time off for the observance of religious holidays which could give rise to allegations of sex discrimination or discrimination on the grounds of religion or belief. Where football fans are given preferential treatment, this could be used as evidence to support claims of less favourable treatment. The same principle also applies to the different treatment of employees on the grounds of their race, meaning that employers must not forget that employees who support a different national team should be granted the same rights as those who support England.

Phoning in sick

A common problem for employers is the employee who takes a “sickie” in order to watch a match or because he or she is suffering from a hangover. Unless the sickness extends beyond the self certification period, it will be very difficult for an employer to prove that the employee was not ill. Staff should therefore be put off the idea by being reminded that any absence will require them to personally phone their manager on the day of sickness and attend a return to work interview on their first day back in work. This will often have the effect of making staff think twice before taking a day off work.

Conclusion

The timing of the majority of England games should hopefully minimise the impact of the tournament on working practices. By having regard to the issues above, employers should be able to limit the less favourable effects of the World Cup on their business.