Employment Law: Case update – July 2014
There have been some interesting case developments recently. Bhavna Patel shares these together with her thoughts on them.
Employee Affirmed Contract
In Cockram v Air Products PLC the Employment Appeals Tribunal ruled that Mr Cockram had affirmed his contract by giving and working 7 months’ notice. He had therefore waived his right to claim constructive dismissal.
Mr Cockram’s contract required him to give 3 months’ notice to terminate his employment. He decided to terminate his employment when his grievance concerning his line manager’s comments were rejected. He regarded his line manager’s and employer’s conduct as unacceptable and in breach of contract. He stated that “[he needed to] work for a reasonable period” as he had no other work secured. After his employment terminated he claimed constructive unfair dismissal.
The Employment Tribunal struck out Mr Cockram’s claim. It took the view that Mr Cockram had given much longer notice than his contractually requirements for his own financial reasons, and by doing so he had accepted his employer’s breach. The same view was also taken by the Employment Appeals Tribunal, however they did add that all the relevant circumstances of a case must be considered, including the length of notice given and the reason why notice is given. Further, where the employee gives notice in excess of their contract, they are providing additional services and receiving remuneration and benefits, it was in their view to be inconsistent with the actual breach that has taken place.
Whilst constructive unfair dismissal claims are difficult to win, as the complainant must prove the employer was in fundamental breach of contract, the claim will fail if the breach has been accepted. This is welcoming news from an employer’s point of view since any notice in excess of what is deemed reasonable will fail.
Belief in Public Service Protected By Equality Act 2010
In the case of Anderson v Chesterfield High School an Employment Tribunal considered whether a commitment to public service was protected belief. It was also required to assess whether it played a part in employee’s belief.
Mr Anderson was an officer at a school. He had been active in politics for many years and became the leader of Liverpool City Council. When Mr Anderson was elected Mayor, his employer terminated his public duties leave arrangement. As of consequence Mr Anderson claimed that he was discriminated against, since his dismissal was in his view motivated as a result of his “philosophical commitment to public service for the common good”.
The Employment Tribunal accepted that Mr Anderson’s belief was protected by the Equality Act 2010. In particular, his belief: (i) for public service was evident to them and not disputed by his former employer; (ii) had been held for a substantial amount of time and was unlikely to change; (iii) went to heart of human life and behaviour; (iv) was logical, persuasive and cohesive; and (iv) was worthy of respect in a just society.
Whilst the Employment Tribunal rejected Mr Anderson’s discrimination claim on the grounds that another person on the same amount leave for reasons other than public service would have been treated the same, it did find that his dismissal was unfair. Mr Anderson had neither been consulted before his employment ended nor offered a right to appeal.
The case demonstrates the wide scope definition of “belief”. Other beliefs include:
Environmental and belief in climate change
Anti-fox hunting in most cases
Belief in higher purpose of public service broadcasting
A belief in it being wrong to lie under any circumstances
Spiritualism; life after death and the ability of mediums to contact the dead
It also highlights the importance of due process and clear reasons needing to be given for the decision to dismiss.
Employer’s Dismissal Decision Was Reasonable Despite Appeal Panel’s View
The Employment Appeals Tribunal in the case of Kisoka v Rung Ratnpinyotip t/a Rydevale Day Nursery held that given the small size of the employer the independent panel that had been instructed to review the Claimant’s appeal to dismissal was not duty bound to follow the decision. Whilst the Respondent was perfectly entitled to appoint a panel given that there was no one independent to hear the appeal it did not mean the panel would make the final decision.
This case illustrates the degree of flexibility that most employers will have in dealing with the disciplinary process. Care however should be taken. The employer concerned was a small employer with little or no elaborate appeals process that one tends to find in large organisations. Furthermore, the appeal’s panel’s decision was such that it had made certain incorrect assumptions in reaching its decision even though the evidence indicated the employer’s reasonable belief that the employee concerned was responsible for the fire. The Claimant in the case had been accused of deliberately starting a fire in the nursery. Her employer had taken into account her explanations including all other material factors such as the CCTV footage which established that the employee was the person who could have been near the vicinity of the fire. In view of this, and in particular the CCTV footage, the employer had, despite the appeal’s panel view, reached a reasonable conclusion that the employee had started the fire and should be dismissed.
Statutory Holiday Pay Should Include Commission
The European Court of Justice has recently ruled, in Z J R Lock v British Gas Trading Limited, that a worker’s statutory holiday pay should not be limited to basic salary as his commission formed part of remuneration.
Mr Lock was a salesman on basic salary with variable commission. It formed on average 60% or so of his total salary. His salary was paid in arrears. Mr Lock’s commission was not decided on time worked but sales achieved. As Mr Lock could not earn commission whilst on leave he issued proceedings for “lost holiday pay” after taking leave in December 2011 to January 2012.
Even though the case confirms any commission that is intrinsically linked to the performance of tasks must be taken into account in the calculation of statutory holiday pay, it did not confirm how it should be calculated. The Court suggested a Tribunal is able to formulate what is due with reference to national law. As and when the matter is determined, it is very much likely that a reference period of 12 weeks, pursuant to the Working Time Regulations 1998 (“WTR 1998”), will be used. Whilst Mr Lock does not fall within the specified categories set out in the WTR 1998, it will interpret the law purposively for the sake of consistency.
There are, incidentally, two cases scheduled to be heard in the Employment Appeals Tribunal. These being:
Neal v Freightliner Limited – an Employment Judge has held, that in light of the Supreme Court decision in British Airways PLC v Williams & Others, a worker’s overtime payments should to be taken into account when calculating holiday pay.
Fulton & Another v Bear Scotland Limited – an Employment Judge surmised that a worker who regularly worked overtime as a matter of course was entitled to have overtime reflected in his pay. Also, it was held that the worker’s standby and emergency call-out duties also had to be taken into account.
I am alert to the fact that the cases I have touched upon will be cause of concern, as employees may for instance, work more overtime in order to build-up to holiday pay increases. As a result, it’s recommended that commission, overtime and holiday practices be fully reviewed.