Employment Law and Practice

A. In order to determine the types of claim Anne Roberts might be entitled to bring and to identify the company these claims should be brought against, it is necessary to consider the impact that business acquisitions may have on all employees. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) state that any liabilities arising out of dismissal are automatically imposed on the transferee. Furthermore, if the claim is in connection with the transfer, the obligation will be imposed on to the transferee, which in this case is East Anglia Products Ltd.

TUPE regulates business transfers in that it entitles all employees to transfer from one owner to another and retain their existing terms and conditions. This is set out in regulation 4(1) of TUPE 2006. Regulations 4(4) and 4(5) of TUPE 2006 further state that any changes that the new employer wishes to implement into the existing employment contract of affected employees will only be allowed if these changes are not related to the transfer. If the employer is wishing to change the employment contract, he needs to show that the reason for such change is not transfer related, but is an economic, technical or organisational reason. Such reasons might include changes in the workforce or redundancy.

In Wilson v St Helens BC [1998] IRLR 706 it was established that the transfer related amendments to the existing employment contract would be considered void, even if the employee had agreed to such changes. New employer may wish to standardise employment contracts across the board, however, following Berriman v Delabole Slate Co Ltd [1985] IRLR 305, this would not be considered a sufficient reason as it is transfer related and therefore any dismissal occurring as a consequence of such change would automatically be seen as unfair dismissal. This is also supported by regulation 7(2) of TUPE 2006, which states that any dismissal occurring as a consequence of the transfer will be automatically unfair, unless the employer can show that the reason for dismissal is economic, technical or organisational one.

From the facts of this case, it would appear that the main areas of concern for Anne are her working hours, remuneration, lack of possibilities for promotion, and the requirement for occasional travel. According to her existing contract of employment, Anne was employed as a marketing and development manager. Although an employee may reasonably expect a promotion at some stage during their employment, there is nothing of that nature stipulated in her contract of employment. It is unlikely that Anne would be successful in claiming that East Anglia should have offered her a promotion, especially since it would appear that Joseph King has more experience in dealing with larger client databases. Her role has not changed on transfer to East Anglia.

In clause 3.4 of Anne’s existing contract of employment it is stated that she may be required to travel on business anywhere within the EU. Since this clause had been incorporated into her contract from the start of her employment, she will not be successful in claiming that East Anglia had attempted to modify her contract of employment. Even though she had not in the past been required to travel, this does not change the fact that she may be required to do so under her existing contract of employment.

Clause 4 of the contract states that Anne’s working hours are 9 am to 5 pm Monday to Friday. There is no mention of her hours having to be flexible in any way, which would suggest that East Anglia’s attempt to increase her hours in order to standardise working hours across the board, would not be permitted. This would be seen as an attempt to vary existing contract of employment, however the reasons of standardising the hours would not be considered economic, technical or organisational reasons, as they are transfer related.

Finally, in reducing Anne’s salary with the view of bringing it in line with the salary of Head of Marketing, East Anglia had varied Anne’s contract of employment. Clause 5.1 of her contract states that at the start of her employment, Anne’s remuneration was £45,000. In accordance with clause 5.2 of her contract, her salary had been increased during her 8 year employment period to £55,000. Reduction of her salary cannot be considered as an adequate economic, technical or organisational reason, as it appears that the aim is purely to bring it in line with salaries of existing East Anglia employees and therefore to reduce the cost.

Anne’s claims in respect of longer hours and remuneration are likely to succeed as they are transfer related. East Anglia might attempt to show that there is a valid economic, technical or organisational reason, however on the facts of this case, it does not seem likely that standardising employment contracts of transferred employees would be considered a valid economic, technical or organisational reason.

B. Regulation 4(9) of The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) states that an employee has a right to resign and claim constructive dismissal where the transfer involves a considerable change to the terms and conditions of employment and such changes are to employee’s detriment. Constructive dismissal is not automatically unfair, however the tribunals will take into consideration the facts of the case in determining whether changes made to the contract of employment and the detriment suffered by the employee are substantial.

It could be argued that changes made to Anne’s contract of employment are substantial and her dismissal appears to be automatically unfair. There does not appear to be an economic, technical or organisational reason as changes in terms and conditions are not adequate. Regulation 7(2) of TUPE states that economic, technical or organisational reason needs to involve some change in the workforce. Therefore, a transferee who instigates a constructive dismissal by changing terms and conditions of the transferred employees in order to harmonise them with those of his existing employees would be unable to rely on an economic, technical or organisational reason.

Since Anne has resigned with immediate effect, it is necessary to consider the implications of regulation 4(10) of TUPE which states that should the employee resign without notice, that employee will not be entitled to wrongful dismissal damages in respect of wages for the notice period. The employee may still be entitled to compensation for the notice period under unfair dismissal claim.

Anne would be able to claim constructive dismissal as the terms and conditions of her existing contract of employment had been implemented without a valid economic, technical or organisational reason. It would appear that East Anglia failed to conduct a proper consultation prior to proposing amendments to employee’s contracts. This could be seen as an adequate basis for unfair dismissal claim. In order to maximise any potential future award of damages by the tribunals, Anne would need to make all reasonable efforts to mitigate her losses as far as possible.

C. In order to determine whether Chris’s claims might be successful, it is necessary to consider the way in which Chris was dismissed as well as any potential claim he may be entitled to.

For a claim in wrongful dismissal to succeed, Chris would need to show that he was an employee who had been dismissed. From the facts of this case, it is clear that Chris is the employee, however it is necessary to consider whether he had in fact been dismissed. The employment tribunal would need to determine whether Bill Jackson’s words were meant as dismissal. In doing so the tribunal will look at how a reasonable person would have interpreted those words in those particular circumstances. This was considered in Tanner v Kean [1978] IRLR 160 where it was held that the words said by the employer had not constituted a dismissal of an employee. If the tribunal finds that Bill’s words were to be interpreted as dismissal, this would be considered summary dismissal. Other elements required for a successful claim in wrongful dismissal are that there has been a breach of contract and that the employer is not entitled to summarily dismiss the employee. It would appear that Bill failed to follow a correct disciplinary procedure, which could amount to breach of contract. Furthermore, it could be argued that Chris’s actions, although perceived as disruptive, would not amount to gross misconduct. As such, he should not have been summarily dismissed. Providing these conditions are all met, Chris would be entitled to claim wrongful dismissal, under which the employee does not have to be in employment for any specific amount of time.

Under the claim of unfair dismissal, the employee would need to have been in employment for a minimum of 12 months, must have been an employee, must have been dismissed, and must not be within an excluded class. Dismissal could be deemed fair provided that it is based on employee’s conduct, which will normally relate to misconduct within employment. In this case it could be argued that Chris’s conduct was disruptive and his attendance was poor. Taking into consideration the steps taken by the employer to ensure that all employees have received extensive training on the new systems, it could be argued that they had taken all necessary steps in ensuring smooth transition from the old system of work to the new one. Therefore, Chris’s actions could amount to misconduct, however it is unlikely that it would be considered to be gross misconduct.

The employer has an obligation to ensure that a correct disciplinary procedure is followed prior to dismissal of an employee. This will be sufficient evidence for tribunals in deciding whether employer’s actions were fair. The employer needs to show that they have carried out an investigation into any claims brought against the employee. The employee should be notified in writing of any investigation of the alleged misconduct being carried out. This should then be followed by a meeting in order to give the employee a chance to defend himself. After the meeting the employee should be notified of his right to appeal a decision involving disciplinary action. However, in cases of gross misconduct, the employer has the right to dismiss the employee without warning.

Since Bill had arranged a meeting with Chris with an intention to discuss his attitude, attendance and poor time keeping, he should have advised Chris of these issues prior to their meeting. This could be considered a disciplinary procedure, therefore entitling Chris to be accompanied to the meeting as well as to be given an opportunity to raise any issues or grievances he may have with the changes in the workplace. Bill’s statement that the outcome of their meeting will decide Chris’s future at the company signified that the meeting could be considered to be a part of the disciplinary proceedings. However, since none of the required steps were followed, Chris could be successful in claiming unfair dismissal.

D. Providing that Chris succeeds with his claim of wrongful dismissal, he would be entitled to payment of wages for the notice period. From the facts of this case it is unclear what his notice period is, however the standard required notice period appears to be one week’s notice for each complete year of service.

Under the claim of unfair dismissal, the employee is entitled to claim damages, such as, reinstatement into their old position at the company, re-engagement into a similar position with the employer, or financial compensation. Financial compensation is the most common damage awarded to the employee and it consists of basic and compensatory award. The calculation for basic award takes into account employee’s age, salary and length of service. In this case, Chris has been in employment for 16 years, and has worked since the age of 38. Therefore, the calculation for his basic award would be as follows:

1 week’s salary for each completed year at the age of 22 or over, and 1.5 week’s salary for each completed year at the age of 41 and over.

1 week x 2 years x £510 (gross salary) = £1,020

1.5 weeks x 14 years x £510 (gross salary) = £10,710

Total: £1,020 + £10,710 = £11,730

Chris would also be entitled to a compensatory award. Compensatory award is defined in section 123(1) of Employment Rights Act 1996 as an award intended to financially compensate the employee for any loss occurring as a result of dismissal. In determining the extent of an award, the tribunal will consider various factors, such as loss of wages, future loss of wages as well as the manner in which the dismissal occurred. The maximum award available for unfair dismissal is £65,300.

Question 2

A. In order to determine whether Cass has any right to insist that she should be given the job of administrator, it is necessary to consider the implications of redundancies under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) and the rights of employees on or returning from maternity leave.

Under TUPE Regulations, the transferor must provide the transferee with information about the transferring employees at least 14 days before the transfer. This information must include, among other things, information on any collective agreements affecting those employees. If the transferee is proposing redundancies, consultation must take place prior the transfer.

When carrying out redundancies, the employer needs to ensure that there is a genuine redundancy situation and a fair procedure is followed in order to avoid liability for unfair dismissal. Furthermore, when selecting employees for redundancy, the employer will need to demonstrate that the pool of selection was correctly defined and that the employer has applied fair and objective selection criteria.

Employees on maternity leave can be included in the redundancy process. However, it is important that the employees are kept informed of their position, that they receive the same information in writing as other employees, and that they are actively involved in the consultation process. Failure to consult with absent employees could result in claims of unfair dismissal.

Regardless of whether the employee is returning from an ordinary maternity leave or an additional maternity, the employee has the right to return to their job. However, there are certain requirements that the employer needs to fulfil where there is a redundancy situation. Regulation 10 of the Maternity and Parental Leave Etc Regulations 1999 (“MAPLE”) states that where there is a redundancy situation and it is no longer possible for an employer to continue to employ the employee under her existing contract of employment, the employee is entitled to be offered a suitable alternative employment before the original contract ends. Furthermore, that suitable employment must be the type of work the employee is suitable to do and the terms of the new contract of employment cannot be considerably unfavourable to the employee. If the employee is dismissed by reason of redundancy and the employer had failed to comply with this provision, then the dismissal would be deemed automatically unfair.

However, if there is a redundancy situation and no suitable alternative vacancy exists, the employee returning from maternity leave can be dismissed by reason of redundancy and the dismissal will not be automatically unfair. A dismissal is likely to be unfair if the employer gave no consideration to whether suitable employment existed within its organisation. This principle was established in the case of Vokes Limited v Bear [1973] IRLR 363. However, the case of Quinton Hazell v WC Earl [1976] IRLR 296 clarified that the employer does not need to make every possible effort to look for an alternative employment, it would be sufficient if the employer can show that they made reasonable efforts.

Whether an alternative employment is suitable was discussed in Community Task Force v Rimmer [1986] IRLR 203 where it was held that there is an automatic right to be offered an alternative employment, where there is a vacancy. Furthermore, if there is only one vacancy available, this must be offered to the employee on maternity leave who has a right to be offered any alternative employment before any other employee who might also potentially be dismissed by reason of redundancy.

The obligation to seek alternative employment is ongoing throughout the consultation process, and continues through any notice period, and until the employment is terminated.

On the facts of this case, it could be argued that Cass is entitled to insist that she should be offered the administrator’s job. As she is returning from maternity leave, her enhanced right to be offered suitable alternative work means that although the job might have been earmarked for another employee, the employer is required to offer this position to Cass over the other employee.

The employer would be required to assess whether the job is suitable for the employee, and in doing so they would need to consult with the employee. The job needs to be suitable and appropriate, in that the job itself, hours of work and remuneration are not substantially worse than employee’s previous job. It would appear that the administrator’s job is not substantially less favourable than Cass’s previous job. The hours of work and her salary would remain the same, therefore making the job suitable for Cass.

B. In order to determine whether Cass could still have a claim even where she had not taken up the alternative employment, it is necessary to consider the employer’s obligations under the Maternity and Paternity Leave Etc Regulations 1999 (“MAPLE”).

In the event that the alternative employment has not been given to Cass and has been instead given to the other employee, then the dismissal would be automatically unfair as per regulation 20(1)(b) of the MAPLE Regulations 1999. Since the alternative employment in this case could be considered as suitable for Cass, the employer had failed to comply with regulation 10 of MAPLE Regulations, as it did not follow the correct procedure in ensuring that employees returning from maternity leave have enhanced rights in being offered alternative employment.

In the event that the alternative employment had been offered to Cass and she had subsequently refused to accept this employment, her dismissal could still be deemed automatically unfair. Although the employer has, in offering the employment to the employee returning from maternity leave, complied with regulation 10 of MAPLE, by refusing employment and being dismissed, Cass’s dismissal could be automatically unfair under regulation 20(2) of MAPLE if the selection for redundancy was based on either pregnancy, childbirth or maternity leave.

It would appear that in this case Cass refused to accept the offer of alternative employment. On that basis, it could be presumed that the employer had complied with regulation 10 of MAPLE. It is therefore necessary to consider regulation 20 of MAPLE in order to determine what qualities were taken into consideration during the selection for redundancy period as well as whether the employer had correctly consulted and informed the affected employees. Failure to comply with the requirements to consult about proposed redundancies could lead to a complaint for unfair dismissal, and a possible discrimination.

If the employer is considering redundancies, they must ensure that they have given the employees an opportunity to consider all options. Employees are entitled to select a representative and to be consulted and informed during the process. It is unclear whether such process was undertaken by East Anglia, however it would appear that Cass was not included in this process of consultation and information. From the facts of the case it appears that Cass was notified of the employer’s intention to make her redundant shortly before she was due to return to work. The employer is required to provide relevant information at least 14 days before the transfer, however it would appear that Cass has not been informed of this until after the transfer.

East Anglia would also need to show that they have been fair in selecting employees for redundancy. Regulations 20(2) and 20(3) of MAPLE clarify the situations where dismissal will be deemed unfair. Regulation 20(2)(a) states that any dismissal based on redundancy will be considered unfair. Furthermore, regulation 20(3) states that if the reasons that an employee is being selected for dismissal are connected with pregnancy, childbirth or maternity leave will be considered unfair.

From the facts of this case, it would appear that Cass could bring a claim of unfair dismissal. During the redundancy selection process, Cass was not consulted nor informed of any planned or proposed redundancies. She does not seem to have been represented and it would appear that the selection for redundancy was based on her being on maternity leave. Furthermore, if an employee is dismissed on grounds of redundancy, they may be entitled to bring a claim of unfair dismissal if they have been in continuous employment for more than one year. Since Cass has been in continuous employment for five years, she would be entitled to bring a claim of unfair dismissal.

Research Diary

Planning

I started by considering questions in EMA 01 and attempted to identify the relevant topics. Firstly I identified that the first question is dealing with TUPE and decided to re-read my notes on the subject. I also re-read etma 02 together with tutor’s comments before re-reading relevant sections in the manual and Painter & Holmes. I identified that the second part of the first question was dealing with claims of wrongful and unfair dismissal and on further consideration of this question, I felt that it might be necessary to consider it as a separate subject unrelated to TUPE Regulations. The second question in EMA dealt with the issues of redundancy and maternity leave. I consulted the manual and Holmes & Painter before identifying which relevant electronic sources might be helpful.

In the past I found using Harvey on Industrial Relations and Employment Law extremely useful, so have decided to utilise this source the most. I have also used Halsbury’s Laws of England as well as Westlaw, which I found to be excellent source of case law.

Searches

The following searches produced useful results:

18th March 2011

“Transfer of Undertaking” and “employment contract”

Lexis Library – Harvey on Industrial Relations and Employment Law

Four relevant sections were shows as results, I found the first “Overview” to be a great starting point in identifying relevant sections of TUPE and employer’s obligations

23rd March 2011

“Unfair dismissal” and “disciplinary”

Lexis Library – Halsbury’s Laws of England

I found the relevant information under the employment section, where I could access information on unfair and wrongful dismissal

28th March 2011

“Community Task Force v Rimmer”

Westlaw

I wanted to read the decision of this case in full, and have easily located it on Westlaw. The results also produced cases which refer to the case in question, which was helpful in determining the relevance of this case.

Critical evaluation

I found that spending time analysing questions is helpful when trying to identify relevant topics. I found that websites such as ACAS are very helpful tool in identifying basic issues and provide a good starting point for further research through legal databases. I also found that it is necessary to read questions carefully and consider every fact, as few facts I initially missed led me to conduct a search that was not relevant to the question. On re-reading the questions I found that the issue requires quite a different search and conducting such search produced more relevant results. I also found that Lexis Library is not as user friendly when attempting to find relevant cases, in particular where the exact case name is not known.

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