News round up

Joanna Smart takes a look at some key employment law developments which took place in April, most notably the fact that the anticipated decision of the Supreme Court in Seldon v Clarkson Wright and Jakes was published on 25 April.  In addition Joanna also looks at the changes which have now been brought in regarding unfair dismissal cases in the tribunal; the key quarterly statistics which have been released regarding the cases being brought in tribunal; a recent case where it was argued that sleeping on the job constituted a "refusal" to accept an employer's contravention of the Working Time Regulations 1998; and a further case which has clarified the position on when exactly a contract of employment is terminated, and thereby what constitutes the effective date of termination for the purposes of bringing a tribunal claim within time.

The Supreme Court has published their decision in the case of Seldon v Clarkson Wright and Jakes

We first reported on this case in August 2010 back when the case was heard in the Court of Appeal.  We subsequently published a reminder of the case in January of this year. 

The court has ruled that the three aims put forward by Wright and Jakes for the compulsory retirement age of 65; staff retention; workforce planning (both of which related to the legitimate social policy aim of sharing out professional employment opportunities fairly between the generations); and limiting the need to expel partners by way of performance management, were legitimate.

However, the case has been remitted back to the employment tribunal so that they can decide on the issue as to whether it was proportionate for the partnership deed of Clarkson Wright and Jakes to provide for the mandatory retirement of the partners at the end of the calendar year when they reached the age of 65.  In short, whether the choice of a mandatory age of 65 was a proportionate means of achieving the aims.

In addition to the above decision, the Supreme Court also took the opportunity to conclude more generally that in order to justify a policy it is not sufficient for an employer to show that it has an aim which is capable of being a public interest aim; they need to show that it is actually a legitimate aim in the particular circumstances of the particular employment.

They held, therefore, that “there is therefore a distinction between justifying the application of the rule to a particular individual, which in many cases would negate the purpose of having a rule, and justifying the rule in the particular circumstances of the business”.  The judgement then goes on to warn that “all businesses will now have to give careful consideration to what, if any, mandatory retirement rules can be justified.”

We will put together a detailed exploration of this decision and the potential impact going forward and will include this in our May edition.

 

Changes to Unfair Dismissal cases: April 2012

• Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012
  
  The qualifying period for unfair dismissal has now increased from one to two years. Therefore, an individual can now only bring a claim for unfair dismissal in the employment tribunal if they were employed for a period of 2 years or more before their dismissal.
  
  This order also increases the qualifying period for entitlement to written reasons for dismissal from one year to two years.
  
  Importantly, however, these changes will only affect employees whose employment started on or after 6 April 2012.
  
  
• The Employment Tribunals Act 1996 (Tribunal Composition) Order 2012
  
  In substantive employment tribunal hearings, cases have ordinarily been heard by a panel made up of one judge and two lay members.  However, as of 6 April 2012, Judges will now sit alone on unfair dismissal cases (unless a decision is taken otherwise).   This will affect all cases heard on or after 6 April 2012.

Quarterly Tribunal statistics: 1 October to 31 December 2011

The latest statistics show (compared to the same quarter in 2010) that there has been:

• a 40% increase in overall claims to employment tribunals (a total of 56,000 cases in the period);
• no change in the number of single claims; and
• a 65% increase in multiple claims

Sleeping on the job

A recent EAT case has upheld a tribunal’s decision that employees asleep at work were not automatically unfairly dismissed, despite their argument that by sleeping they were "refusing" to accept their employer's contravention of the Working Time Regulations 1998 (WTR) (in particular, regulation 12 which states that workers have the right to take an uninterrupted rest break of at least 20 minutes if their day's working time is more than six hours).

In the case of Ajayi and another v Aitch Care Homes (London) Ltd the employees (who were night support workers at a care home) were dismissed after being found asleep during a night shift, despite being told by their employer that they were expected to be alert at all times and that sleeping on duty would usually lead to dismissal.

The employees were dismissed. They did not have the requisite qualifying service to bring an "ordinary" unfair dismissal claim. However, they claimed that they were automatically unfairly dismissed under Section 101A, Employment Rights Act 1996 (ERA).  This provides that employees will be regarded as automatically unfairly dismissed where the reason or principal reason for dismissal is that they refused (or proposed to refuse) to:

• Comply with a requirement which their employer imposed (or proposed to impose) in contravention of the WTR 1998, or
• Forego a right conferred by the WTR 1998.

The employment tribunal dismissed the employees' claims. It held that the employees were dismissed by the employer because they were asleep on duty.  With regard to section 101A ERA it found that the employees had not "refused" to comply with a requirement that was contrary to the WTR or to forego rights granted by their regulations. Crucially, it was held that such refusals must be communicated to the employer.

The employees appealed to the EAT.

The EAT upheld the tribunal's decision. They agreed that a refusal purposes of section 101A ERA has to be explicit and cannot be implied from employees' conduct.

What is key about this particular decision is that the employer was in fact in breach of the WTR (they were held to be "wholly unencumbered with any appreciation of their statutory obligations" and "oblivious" to workers' rights to rest breaks) but that did not mean that the employees were protected under section 101A ERA.  This was because they did not expressly refuse to accept the lack of such breaks in their shifts.

The employees were unable to bring "ordinary" unfair dismissal claims. If they had been able to bring such claims, the tribunal would have had to consider whether their dismissals for falling asleep at work were reasonable where the employer was in breach of regulation 12 WTR.

When is the effective date of termination?

A recent EAT case (Horwood v Lincolnshire County Council) has clarified the position on when a contract of employment is terminated, and thereby what constitutes the effective date of termination (EDT) for the purposes of bringing a tribunal claim within time.

In the case, the employee, Mrs Horwood, sent a letter to a number of managers within Lincolnshire County Council, clearly indicating her resignation “with immediate effect” on Thursday 28 January 2010.  They were sent by special delivery and therefore arrived at her employer’s offices on Friday 29 January; in line with normal practice they were date-stamped by the administrative staff.

One of the letters was sent to Mrs Horwood’s Practice Manger who saw it on Monday 1 February.  The response to the letter, acknowledging the resignation, was sent the following day (2 February) and stated that “Your resignation will commence from the date of this letter, 2 February 2010”.  This date was also referred to as her leaving date by the Council’s pension department when they wrote separately to her.

Mrs Horwood subsequently lodged a claim in the employment tribunal; this was dated 28 April 2010 and, having been sent by first class post, arrived at the tribunal on 29 April 2010.

The Council argued that the claim was out of time; they alleged that her EDT was 29 January 2010 (when her letter was opened and date-stamped) and so her claim had to be brought by 28 April 2010.

The subsequent decision by the tribunal at a pre hearing review (PHR) was that her EDT was the date on which her letter was opened and date-stamped (29 January 2010) as this was sufficient to show that her resignation had been communicated to her employer. They did not hold that the reference to a different date by the Council varied the EDT at all.

Mrs Horwood appealed to the EAT who dismissed the case and held that the tribunal had been correct in their findings, as above.

The EAT’s decision helpfully provided further clarification on this issue, most importantly on the different approach between employers communicating dismissals to their employees and vice-versa (where an employee communicates their resignation). They held that the needs of the employee differ in these two situations:

• Dismissal by employers. The EAT stated that where an employer summarily dismisses an employee, the employee is entitled to be informed or to have a reasonable chance of finding out that they have been dismissed before the time for bringing an unfair dismissal claim starts to run. This is to protect their rights in bringing a claim, should they wish.
• Resignation by employee.  The EAT clarified that case law indicates that the basic principle is that employers need to know where they stand when an employee leaves, through: "... communication by words, or by conduct, such as to inform the other party to the contract that it is indeed at an end. … unless there has been proper communication from the employee of the fact that they are regarding themselves as no longer employed, by words or conduct, their employment relationship has not terminated." (Edwards v Surrey Police).

The words used by Mrs Horwood in her letter had made it very clear she wished her resignation to be effective immediately; i.e. as soon as the letter was opened and date stamped.

An important thing to note from this case is that where an employer summarily dismisses an employee by letter, case law (most notably the Supreme Court's decision in Gisda Cyf v Barratt) has shown that the employer cannot be certain of the EDT, as it is dependent on the date on which the employee reads the letter or having a reasonable opportunity of discovering its contents.  The most effective way to resolve this uncertainly is, where possible, to communicate a summary dismissal in person.  This can then be further confirmed in writing.