What's New
Constructive Dismissal
In Morrow v Safeway Stores (2001) the Employment Appeal
Tribunal (EAT) confirmed that if mutual trust and confidence between
employer and employee has broken down, this would always amount to a
repudiatory breach of contract, entitling the employee to resign and claim
constructive dismissal.
Basic Facts: Morrow, a
bakery manager, had been repeatedly criticised for failing to manage stock
levels. On another occasion she was told off in front of staff and
customers for not having promotional bread available for sale. Morrow
resigned and claimed constructive dismissal.
The Tribunal decided
that her manager was in breach of mutual trust and confidence, but that it
did not amount to a repudiatory breach. However the EAT disagreed and sent
the case back to Tribunal for further consideration
Sometimes it's not what you do but
the way that you do it that really matters!
Construction - Statutory
Annual Holiday Entitlement
In Byrne Bros. -V- Baird & Others (2001) the Employment
Appeal Tribunal (EAT) found that construction workers who were deemed to
be self-employed, were entitled to paid statutory annual holidays in
accordance with the Working Time Regulations (WTR). The men held CIS4
certificates and worked under a Sub-contract Agreement used by many
contractors in the construction industry.
On the basis of the wording
of the Agreement, the EAT accepted the men's case that:
- They were workers who personally
performing work for the company;
- They did not operate businesses
and Byrne Bros. were not clients in the traditional sense;
- There was a degree of mutuality
of obligation between the parties.
Does this important
ruling end the uncertainty for the construction industry over this issue
that has rumbled on since October 1999? Would a rewording of the Agreement
take things back to square one? We shall see. Meanwhile, as things stand,
in future cases might companies defending similar cases find applications
for costs being successful argued, on the basis that they sought to
defend a case that had no real merit! Watch this space.
Latest on Parental Leave
Revised Regulations extending Parental Leave came into force in January
2002. The new rules mean that parents with children who were under 5 years
on 15th December 1999 are entitled to 13 weeks off for each
child. Previously only parents of children born on or after that date
qualified for the right to time off. It is estimated that an extra 336,000
parents will benefit from this change.
It is to be noted
also that parental leave for parents with disabled children has been
increased from 13 to 18 weeks.
ACAS Arbitration Scheme
The long awaited ACAS Arbitration Scheme for handling straightforward unfair
dismissal claims came into operation in the Spring of 2001. To date
(February 2002) only about 8 cases have been dealt with under the
scheme!
The scheme is intended to be a simpler and cheaper
alternative to
Employment Tribunals and is designed to deal with simple unfair
dismissal cases ONLY.
Obviously it has not found
widespread favour and its future must now be in doubt.
Employment Bill 2001
This Bill is making its way through the Commons. Key proposals for reform
of Employment Tribunals were heavily trailed in the Dispute Resolution
consultative paper published last year. The Bill is expected to become law
early in 2003. The main provisions are:
Family Friendly
Initiatives
- Increased maternity leave and pay;
- Two weeks paid paternity leave for
working fathers;
- Six months paid and a further six
months unpaid leave for working adoptive parents;
- Reimbursement of maternity,
paternity, etc. payments ;
- Parents to have right to request
flexible working arrangements from their employer.
Initiatives to Resolve
Disputes (Reform of Tribunals)
- Introduction of new statutory
disciplinary & dismissal procedures that must be expressly
incorporated into Statements of Particulars, with stiff financial
penalties for employers who are found to be in breach;
- Employees to be placed under a duty
to raise grievances with employers before applying to a Tribunal;
- Fixed conciliation periods to
encourage settlements;
- A fast track system for handling
some Tribunal claims;
- Tribunals to have wider powers to
award costs.
Miscellaneous
- Questionnaire to inform equal pay
cases;
- Secretary of State to regulate on
preventing less favourable treatment for staff on fixed term contracts.
We will learn more
about the details of this Bill as it passes through the Commons. However,
the government are convinced that the staggering increase in Tribunal
claims over recent years is due to smaller companies not having adequate
disciplinary and grievance procedures in place; and also not issuing staff
with terms & conditions of employment as required by the Employment
Rights Act 1996.
To address these
shortcomings, the Bill proposes that employers will pay a penalty of 4
weeks pay AND/OR higher compensation (of between 10% and
50%) in cases where the Statement of Particulars was not issued and/or
where disciplinary/grievance procedures were inadequate.
It will be more important than every
for employers to issue staff with Statements of Particulars setting out
their terms & conditions of employment.
Taxing In Lieu Payments
Q We have agreed a
severance package with an employee, part of which includes a payment in
lieu of notice. Must we deduct tax from this payment or can it be paid to
him gross?
A
Look and see what the contract of employment says.If
the contract entitles you to dismiss him immediately and pay him money in
lieu of notice, then the payment is an "emolument" and is
subject to Tax under Schedule E.
If his contract makes no such
provision, termination in this way is technically a breach of contract and
any payment is treated as compensation for the breach. This means that up
to £30,000 can be paid tax free. Note that he is still only entitled to
his net salary, but it is a very common practice for employers to pay
gross as part of a severance package.
National Minimum Wage
On 1ST October 2002 the national minimum wage for adults
workers, aged 22 and over, increased to £4.20 per hour. The rate for
workers aged 18 to 21 increased to £3.60 per hour.
ACAS Code of Practice on Disciplinary and
Grievance Procedures
This ACAS Code came into effect on 4th September 2000, and implements
the new rights set out in the Employment Relations Act 1999. Chief amongst
these is the right to be accompanied by a trade union official or
work colleague at disciplinary and grievance hearings.
Also the
amount of information that is recommended that the employer makes
available to an employee in a disciplinary situation is increased.
Employer must review
their Disciplinary Rules and
Grievance Procedures in the light of the new Code, and ensure, in
particular, that the right to be accompanied are properly interpreted and
incorporated into the procedures.
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