Working Relations September 2018

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Highlights

September proved to be another interesting month for developments on privilege, as the Court of Appeal handed down its decision in Director of the SFO v ENRC. Also in the world of litigation, the Law Commission has launched a consultation on “Employment Law Hearing Structures”, looking at provisional proposals to reform the jurisdictions of the employment tribunals and civil courts in employment matters.

Key Developments

New Law Commission consultation on Employment Law Hearing Structures

The Law Commission has published a consultation paper, seeking views on provisional proposals to reform the jurisdictions of the employment tribunal, Employment Appeal Tribunal and the civil courts in employment and discrimination matters. The paper makes clear that it will not consider any major restructuring of employment tribunals or civil courts.

Specifically, key issues on which it seeks views include:

  • Should there be any extension to the limitation periods in employment tribunals (ie to six months)?
  • Should the £25,000 limit on the employment tribunal’s jurisdiction be increased?
  • Should employment tribunals be given concurrent jurisdiction over non-employment discrimination claims?

The consultation closes on 11 January 2019. Further details are available here.

Parental Bereavement (Leave and Pay) Act 2018 receives Royal Assent

The Parental Bereavement (Leave and Pay) Act 2018 has received Royal Assent. It will give employees who lose a child below the age of 18 the right to at least two weeks’ leave (irrespective of their length of service) and statutory bereavement pay. The Government intends to introduce supporting regulations, setting out the details as to how the leave will be taken and how much remuneration will be payable. The new rights are expected to come into force by April 2020.

SRA issues guidance on new pricing transparency rules

From December 2018, regulated law firms will be required to comply with new pricing transparency rules, including a requirement to publish the price of certain services prominently on their website. Those services include unfair and wrongful dismissal cases. The SRA has now issued guidance on the transparency rules, which includes example templates designed to assist firms in how to display pricing information.

Autumn Budget to take place on 29 October 2018

HM Treasury has announced that the Chancellor, Philip Hammond, will deliver the Autumn Budget to Parliament on Monday 29 October 2018. We anticipate that the Autumn Budget may address proposed changes to employment status legislation following the consultation and any proposed measures to tackle non-compliance with the intermediaries legislation (commonly known as IR35) in the private sector.

Further consultation paper on implementing extension of SM&CR to insurers

On 17 September 2018, the PRA published a further consultation paper (CP20/18) on implementing the extension of the senior managers and certification regime (SMCR) to insurers. Comments can be made on CP20/18 until 17 October 2018, so that final rules can be made in advance of the start of the new regime for insurers on 10 December 2018.

New Acas Guidance on Employment References

ACAS has published new guidance on employment references. The guidance covers basic questions such as whether a reference must be provided, what it should include and whether an employer can provide a bad reference.

National minimum wage report on compliance and enforcement

The government has published its national minimum wage report on compliance and enforcement in 2017/2018. The report highlights that the Government identified a record £15.6m of underpayments benefitting over 200,000 workers, and 678 employers were “named and shamed” for underpayment.

Key cases

Judgment overturned on privilege in internal investigations

The Director of the SFO v Eurasian Natural Resources Corporation Limited - Court of Appeal

This case arose out of claims to privilege made by ENRC over various classes of documents generated during its investigation into allegations of fraud at some of its subsidiaries. The SFO contested those claims to privilege and at first instance obtained declarations from the court that all but one category were not covered by either legal advice privilege or litigation privilege. The Court of Appeal has now reversed the first instance decision, which has been widely celebrated by lawyers and clients alike.

For the latest in this important case regarding the application of litigation and legal advice privilege to documents created during an internal investigation, please see our article “ENRC – Where does it really leave us?”.

You can also listen to our webinar where privilege expert and Simmons & Simmons Senior Partner, Colin Passmore, joined by colleagues Patrick Boylan and Adam Brown, provides analysis of this important decision on legal professional privilege and what it means for investigations.

EAT time limits

Rana v Ealing LBC; Bonnie v Department for Work and Pensions - Court of Appeal (Civil Division)

The Court of Appeal has confirmed that the 42-day limit for appealing an employment tribunal’s judgment starts from the date the written reasons were sent, irrespective of whether the written reasons were erroneously sent to the wrong recipient. However, if a mistake is made by the Tribunal that is of fundamental importance, the court can exercise its discretion to extend time to ensure the affected party is not placed in a worse position than if the error had not occurred - ie the affected party would be given a further 42 days from the date the error was corrected.

This judgment arose in circumstances where appellants brought claims in the Tribunal and were initially represented by solicitors. Despite the solicitors informing the Tribunal that they were no longer acting, the Tribunal sent the judgment to the solicitors rather than the appellants. This caused a delay, resulting in the appellants being out of time when they subsequently made their appeals.

The court made an additional point that if the appellant received the written reasons or judgment from another source, the extension should give the appellant 42 days from the date of that receipt. It should be noted that if the affected party is notified that a mistake has occurred, they should take reasonable steps to obtain of a copy of the written reasons or judgment. If reasonable steps were not taken, it is unlikely that they would be granted a longer extension.

Employee who gave notice of resignation anticipating internal transfer had not resigned

East Kent Hospitals University NHS Foundation Trust v Levy - Employment Appeal Tribunal

In this case, the employee had given in her notice after receiving a conditional offer in another department at the hospital. The new employment offer was withdrawn, and the Claimant tried to retract her notice. The employer refused to accept the retraction and instead, treated it as termination of her employment. The employee brought a claim for unfair dismissal.

The Tribunal held that the Claimant’s notice was not a “clear and unambiguous” resignation and instead she had been dismissed. The Trust appealed.

The EAT dismissed the Trust’s appeal. The EAT held that Tribunal had correctly applied the objective test when determining how a reasonable recipient would have understood the Claimant’s notice. There were “special circumstances” that affected how the Claimant’s letter should be interpreted including the Claimant’s need to work to support her family and father. Furthermore, the Claimant’s manager had not treated her initial letter as resignation: he referred only to the end of her time in the department and did not address issues such as her annual leave entitlement.

TUPE: Removal of outdated contractual allowance not void

Tabberer and others v Mears Ltd and others - Employment Appeal Tribunal

This decision by the EAT demonstrates a rare example of where a contractual variation following a TUPE transfer has been upheld.

A group of electricians had been entitled to a time travel allowance (ETTA) due to the need to travel between depots. These electricians were subject to a number of TUPE transfers, ultimately resulting in them being in the employment of Mears Ltd. Throughout this time, they continued to receive ETTA, although its necessity began to be questioned. Mears Ltd ultimately ceased paying ETTA on the basis that it was outdated.

The original claim of the electricians, that ceasing to pay ETTA amounted to an unlawful deduction from their wages, was upheld. Following this claim, Mears Ltd removed the contractual entitlement to ETTA. The electricians then brought a fresh claim under reg.4(4) TUPE, arguing that this contractual variation was void, as it related to their transfer.

It was decided by both the Tribunal and EAT that this contractual variation was not connected to the transfer but was based on the employer’s pre-existing belief that the payment was outdated and unjustified.

Employment status of salaried partners

Morrison v Aberdein Considine and Company - Employment Appeal Tribunal

The Claimant, a solicitor, had been a ‘salaried partner’ for many years in the Respondent law firm. She brought claims for unfair dismissal and a statutory redundancy payment which required her to have been an employee.

The Tribunal took the partnership agreement as a starting point and then looked at all of the surrounding circumstances to assess the true nature of the relationship. It concluded that the partnership agreement truly reflected the relationship between the parties and that the Claimant was a partner, not an employee.

The Claimant appealed, including on the basis that the Tribunal was wrong to scrutinise the partnership agreement before looking at other factors. The EAT dismissed the Claimant’s appeal - holding the Claimant’s assertion that she was an employee was contrary to the formal documentation. In the circumstances it was both permissible and logical to use the partnership agreement as a starting point to determine employment status.

Future developments

Recent changes

Training and events

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.