Redundancy after maternity leave

In Petch Ltd v English-Stewart [EAT/0213/12], Mrs English-Stewart was employed as a part-time marketing manager. Her job had been carried out by other employees in the marketing department during her maternity leave. Mrs English-Stewart was made redundant after she returned to work from maternity leave. She claimed unfair dismissal and unlawful sex discrimination.

Employment Tribunal

The employment tribunal (ET) upheld the claim because the dismissal was connected with Mrs English-Stewart’s maternity leave. She was the only employee who had been singled out to be made redundant.

Employment Appeal Tribunal

The Employment Appeal Tribunal (EAT) disagreed with the ET. Although the dismissal was connected with the maternity leave - there was a genuine redundancy situation. Hence, the reason for the dismissal was redundancy. And the ET should have asked if the redundancy dismissal was connected to the maternity leave - by looking at whether reg. 20(2)(b) of the Maternity and Parental Leave etc Regulations 1999 had been satisfied.

The regulation states:

(b) it is shown that the circumstances constituting a redundancy applied equally to one or more employees in the same undertaking who held positions similar to that held by the employee (i.e. Mrs English-Stewart) and who have not been dismissed by the employer;     

The EAT remitted the case to the ET to consider whether Mrs English-Stewart's job was similar to the jobs of the other employees in the marketing department.

Comment

The case illustrates that if a genuine redundancy situation arises as a result of an employee's job being absorbed by other staff while the employee is on maternity leave (or long-term sick leave) – it does not automatically mean that the employee’s redundancy dismissal is unfair or discriminatory.

In July 2012, the ACAS published a guide entitled Managing redundancy for pregnant employees or those on maternity leave. The guide is available on the ACAS website.

Statutory payment rates for 2013/14

The statutory payment rates for 2013/14 are as follows.

• The weekly rate of Statutory Sick Pay (SSP) is £86.70.

• The weekly rate of Statutory Maternity Pay (SMP) is 90% of the employee's average weekly earnings for the first six weeks - followed by the lower of 90% of average weekly earnings or £136.78 per week for the remaining weeks of the maternity pay period.
• The weekly rate of Statutory Paternity Pay (SPP) or Statutory Adoption Pay (SAP) is the lower of 90% of the employee's average weekly earnings or £136.78 per week.
• The payment of SSP, SMP, SPP, or SAP is subject to the employee's average earnings being at least £109.00 per week.

Source: Department for Work and Pensions

Tribunal awards will increase from 1 February 2013

From 1 February 2013, tribunal awards will be increased by the Employment Rights (Increase of Limits) Order 2012.

The main increases are:

• The maximum amount of a week’s pay will increase from £430 to £450.
• The maximum compensatory award for unfair dismissal will increase from £72,300 to £74,200.

• The daily limit on a guarantee payment will increase from £23.50 to £24.20.

In September 2012, the Government published a consultation paper about reducing the maximum compensatory award for unfair dismissal. The Government’s response to the consultation paper is expected in Spring 2013.

Court of Appeal clarifies holiday rules for sick workers

In NHS Leeds v Larner [2012] EWCA Civ 1034, the holiday year ran from 1 April to 31 March. Mrs Larner was sick from 5 January 2009 until she was dismissed on 8 April 2010.

The Court of Appeal ruled that Mrs Larner was entitled to be paid for her 2009/10 holidays - although she neither asked to take those holidays during 2009/10 – nor carry forward those holidays to the next holiday year [see para. 96].

The Court of Appeal also said that the facts in the Larner case were different from the facts in the Fraser case, i.e. there was no evidence that Mrs Fraser had been unable to take her holidays [see paras. 46 – 47]. Also see Holidays: use it or lose it.

Legislation for no-smoking signs to be simplified

No-smoking signs in workplaces in England

From 1 October 2012, a person (e.g. an employer) who occupies or manages smoke-free premises must ensure that at least one legible no-smoking sign is displayed on those premises.

The legal requirements for a no-smoking sign under reg. 2 of the Smoke-free (Signs) Regulations 2007 (SSR) will be abolished, e.g. from 1 October 2012, a no-smoking sign will not be required to be at least A5 size.

No-smoking signs in work vehicles

From 1 October 2012, a person who manages a smoke-free vehicle must ensure that at least one legible no-smoking sign is displayed in the vehicle.

The legal requirements for a no-smoking sign under reg. 3 of the SSR 2007 will be abolished, e.g. from 1 October 2012, a no-smoking sign will not be required to display a no-smoking symbol.

Source: The Smoke-free (Signs) Regulations 2012 [SI 2012/1536].

Rehabilitation periods for criminal convictions

The Legal Aid, Sentencing and Punishment of Offenders Act 2012 confirms that the rehabilitation periods for criminal convictions will be reduced: see Spent Convictions.

Sunday Trading (London Olympic Games and Paralympic Games) Act 2012

The Department of Business Innovation & Skills (BIS) has published a guide on the Sunday Trading (London Olympic Games and Paralympic Games) Act 2012. The guide is available on the BIS website.

Age discrimination must be justified

In Homer v Chief Constable of West Yorkshire Police [2012] UKSC 15, West Yorkshire Police introduced a requirement that a legal advisor must have a law degree in order to enter the highest pay grade. Mr Homer, aged 61, was unable to obtain a law degree before he retired. Mr Homer claimed that the requirement amounted to unlawful indirect age discrimination.

The Supreme Court ruled that the requirement amounted to indirect age discrimination. But it remitted the case to the tribunal to reconsider whether the discrimination was lawful or justified.

Retirement Age

In Seldon v Clarkson Wright and Jakes (A Partnership) [2012] UKSC 16, Mr Seldon claimed that a retirement age of 65 amounted to unlawful direct discrimination. 

The Supreme Court (SC) said that the retirement age had three legitimate aims, i.e. staff retention; workplace planning; and performance management. Staff retention and workplace planning were directly related to the legitimate aim of sharing employment between generations of workers [see para. 56]. Performance management was directly related to the legitimate aim of avoiding the need to dismiss older workers on the grounds of poor performance [see para. 57].

The SC remitted the case to the tribunal to determine if the retirement age of 65 was a proportionate means of avoiding the need to dismiss older workers on the grounds of poor performance [see para. 68]. But the SC warned that if the employer already had performance management procedures in place - it may not be legitimate to avoid managing the performance of its older workers [see para. 61].

The Supreme Court also provided a list of legitimate aims that may be used to justify a direct age discrimination claim [see para. 50(4)].

Qualifying period for unfair dismissal

The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 [SI 2012/989], confirms that the qualifying period (QP) for unfair dismissal and a statement of reasons for dismissal will increase from one year to two years.

The two-year QP will apply to an employee whose employment began on or after 6 April 2012.

From 6 April 2012, an employment judge can sit alone for an unfair dismissal claim: Employment Tribunals Act 1996 (Tribunal Composition) Order 2012 [SI 2012/988].

When should the consultation begin?

In USA v Nolan [C-583/10], the Court of Appeal asked the ECJ if an employer should begin consulting with employee representatives about redundancies:

• When the employer starts to think about closing a workplace or
• When the employer has decided to close a workplace.

The Advocate General has ruled that:

• The consultation should begin when an employer has decided to close a workplace.

• The Court of Appeal should determine the date on which the employer decided to close the workplace and whether the consultation began “in good time” for the purpose of s. 188(1A) of TULR(C)A 1992.

The decision of the ECJ is awaited. The ECJ usually agrees with the ruling of the Advocate General.

Age discrimination was justified

In Woodcock v Cumbria Primary Care Trust [2012] EWCA Civ 330, Mr Woodcock was entitled to an enhanced retirement pension (ERP) on his 50th birthday. The cost of providing an ERP to Mr Woodcock was considerably higher than the cost of making him redundant.

Cumbria Primary Care Trust (CPCT) gave a redundancy dismissal notice (RDN) to Mr Woodcock - before the first consultation meeting had taken place – to ensure that the notice expired before his 50th birthday. The duration of the RDN was one year.

Mr Woodcock claimed that the timing of the RDN was due to his age - and therefore - he was a victim of unlawful age discrimination. His treatment could not be justified by CPCT.

The Court of Appeal disagreed. CPCT had a legitimate aim, i.e. dismissing Mr Woodcock who had become redundant and the timing of the RDN was a proportionate means of achieving the aim. A part of the aim was to avoid the extra cost of providing an ERP to Mr Woodcock [see paragraphs 66 – 70].

Also see Age discrimination: "cheapest employee" criterion was lawful

Permanent contracts offered to fixed-term employees

In Huet v Universite de Bretagne occidentale [C-251/11], Mr Huet became a permanent employee - after he had worked as a Researcher - on successive fixed-term contracts for six years. However, Mr Huet was permanently employed as a Research Officer with lower pay than a Researcher. The ECJ was asked if Mr Huet’s permanent contract and his previous fixed-term contract must have the same terms of employment (e.g. the same pay and job title).

The ECJ replied no. However, the terms of the permanent contract - taken as a whole - should not be less favourable than the terms of the previous fixed-term contract - if the employee’s job has not changed.

Comment

In the UK, the ECJ’s decision will apply to fixed-term employees who have become permanent employees because they have worked on successive fixed-term contracts for at least four years.

Changes to tribunal procedures from 6 April 2012

The following changes will apply to an employment tribunal claim that is made on or after 6 April 2012: Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2012 [SI 2012/468].

• A witness statement will be taken as read unless the tribunal directs otherwise.
• A costs order can include a payment for the expenses of a tribunal witness
• The maximum amount of costs for a vexatious tribunal claim will rise from £10,000 to £20,000
• The maximum amount of a deposit for an unmerited tribunal claim will rise from £500 to £1,000

No TUPE transfer: dayshift employees were not dedicated to the client

Eddie Stobart Ltd (ES) stored and delivered meat products for its clients, Forza and Vion. Forza and Vion were meat suppliers and supplied meat products to retailers (e.g. ASDA). The retailers would place their orders for meat products at different times for next-day delivery. As a result of this, the nightshift employees at the ES depot (in Manton Wood) mainly worked on tasks required by the Forza contract; and the dayshift employees mainly worked on tasks required by the Vion contract.

FJG Logistics Ltd (FJG) won the Vion contract. The dayshift employees claimed that they had been TUPE transferred to FJG – since they were an organised group of employees whose principal purpose was to work on the Vion contract.

The EAT disagreed. The dayshift employees were not organised by reference to the requirements of the Vion contract (e.g. they were not organised as the Vion team). The dayshift employees mainly worked on the Vion contract - because Vion's work had to be done during the dayshift - in order to deliver the meat products ordered by Vion's customers.

Eddie Stobart Ltd v FJG Logistics Ltd [EAT/0223/11]

Age discrimination: “cheapest employee” criterion was lawful

In HM Land Registry v Benson [EAT/0197/11], HM Land Registry (HMLR) asked its employees to apply for voluntary redundancy (VR) or early retirement (ER). The VR/ER scheme had a budget of £12 m. HMLR selected the “cheapest employees” (subject to the retention of necessary skills and a proper balance between staff grades) - in order to maximise the number of staff reductions. The “cheapest employees” were the employees who would receive the lowest amounts of redundancy pay.

Five employees who were aged over 50 years unsuccessfully applied for ER. HMLR considered them to be “expensive employees” because they would have received an immediate unreduced pension. The employees claimed that the use of the “cheapest employee” criterion was unlawful indirect age discrimination. The tribunal upheld their claim.

However, the EAT disagreed. The “cheapest employee” criterion was a proportionate means of reducing HMLR’s staff within the budget of £12 m. Therefore, the discrimination was lawful because it had been justified by HMLR. The tribunal had found that HMLR did not have any other alternative to using the "cheapest employee" criterion.

HMLR was not required to show that it had to reduce its staff within a budget of £12 m – because it had no more money - in order to justify the discrimination. However, the EAT warned that whether a “cheapest employee” criterion (or a similar criterion) could be justified will depend on the facts and circumstances of each case.

Indirect sex discrimination

The EAT found that HMLR’s failure to notify a female employee on a career break - that she would have to return to work in order to apply for VR – was unlawful indirect sex discrimination.

Comment

In Woodcock v Cumbria Primary Care Trust, the EAT expressed doubt as to whether para. 72 of Cross v British Airways correctly stated that discrimination could not be justified “solely on considerations of cost”.

Redundancy: suitable alternative employment

Devon Primary Care Trust (DPCT) employed Mrs Readman as a community matron. In 2007, she was made redundant but she was offered a job of hospital matron. Mrs Readman refused the job because she did not want to work in a hospital.

Mrs Readman did not receive a redundancy payment because DPCT believed that she had unreasonably refused an offer of suitable alternative employment.

Tribunal

The tribunal agreed with DPCT. Mrs Readman’s skills as a community matron could be easily transferred to the job of hospital matron. The main difference between the two jobs was that Mrs Readman would be supervising the care of patients in a hospital and not in their homes.

EAT

The EAT overturned the tribunal’s decision. The tribunal wrongly asked if a reasonable employee would have accepted the job. It should have asked if Mrs Readman had unreasonably refused the job.

Mrs Readman’s desire not to work in a hospital was a sound and justifiable reason for refusing the job. Therefore, she was entitled to a redundancy payment. Since 1985, Mrs Readman had not worked in a hospital because she did not want to do so. Although Mrs Readman may have preferred to “take the money and run” – it was not the main reason why she had refused the job.

Readman v Devon Primary Care Trust [EAT/0116/11]