Counting the Kost(al)…

So the Court of Appeal (CA) has overturned both ET and EAT in the “inducements” case known as Kostal UK Ltd v Dunkley and ors.

See my employment law update for more details about the decision.

I always did think that EAT was brave, upholding the ET decision.  Two letters from management and dozens of workers get £7K individual payouts?

At first blush that’s a surprising windfall, and I suspect the Court of Appeal have been more than a little put off by the six-figure shock to the system that knocked Kostal off its lofty perch.

The CA says that s.145B has to concern a permanent attempt to subvert the collective bargaining process.

But that’s not what s.145B says.

And what of the employer who reads this and says… “so as long as we only go over the Union’s head every now and then, we’ll get away with it”?  Because that’s where we end up.  An army of Respondent lawyers (the same ones who tell us that everything is inside the band of reasonable responses!) arguing that nothing is permanent.  The Union was only kicked into the long grass for a week or 2, because negotiations had broken down.  Of course the company will be back to the negotiating table next time.  At least until the Union shows signs of not bending the knee… since then it’ll be back to direct approaches to the workforce.  But not on a permanent basis.  Obviously.

With respect I’m going to disagree with the CA.  If they had wanted to tone down the decision as little, it would have been easy enough to halve the awards by saying that really the two inducements were part and parcel of the same thing.

But as it stands, instead, we have yet another right to support collective action diluted till it has no teeth at all.

The most successful EU countries seem to have the best collective bargaining arrangements.  It’s no coincidence that pay and workers’ rights generally have all suffered under a neo-liberal vision of individualism that has consistently resisted the collective.  It’s dogma, and it’s not working.

Employees don’t have a level playing field with their employers. S.145B and its ilk – and frankly there ain’t many of them – exist to support Unions trying to redress that balance.  I’d like to see the Supreme Court help them do that.

Paul Scholey - Senior Partner


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The Price of Justice

It seems such a long time ago now that Claimants had to pay fees to bring their claims. It was 26 July 2017 that the fees regime was abolished as being unlawful.  We remember it well, here at Morrish Solicitors – the moment the email arrived confirming the Unison decision, our employment team erupted with a spontaneous cheer!

The decision of the Supreme Court made it clear that the fee regime prevented access to justice, was indirectly discriminatory and was contrary to EU law.

Yet on 18 April 2019 it was reported that the Employment Appeal Tribunal (EAT) in the case of Wray v Jewish Care had refused to grant an extension of time to a Claimant who hadn’t been able to lodge his claim because of that unlawful fee regime.

Mr Wray presented his claims out of time because he was of limited means and did not have strong literacy skills. At the time he was obliged to lodge it, he would have had to pay £250 and he said he couldn’t afford it. He was nearly or slightly overdrawn and so he decided to wait.

In early August 2017 he learned of the Supreme Court’s decision that fees were unlawful and he went on to lodge his claim in early September 2017, the limitation date having expired on 18 July 2017. He was nearly two months late.

And the EAT said this was 2 months too late.

Where Mr Wray went wrong was that he didn’t prove to the Tribunal that he was genuinely dissuaded from pursuing his claims because of the fee payable. He’d waited too long. He also hadn’t properly evidenced his financial means.

So, in spite of an access-to-justice preventing, unlawful fee regime, each case will still turn on its own facts – and now, so long after the Unison decision, we suspect that we will see no more of these “late” cases anyway.

But something is wrong, here.  The Supreme Court excoriated the politicians – what use access to justice, they asked, if no-one could afford to exercise it?  It was always clear that swingeing fees of over £1000 were going to deter individuals from pursuing justice.

Now that the Supreme Court have confirmed what we all knew, it seems ironic that a technical approach means that those denied access to justice by unaffordable fees are now denied it by a narrow decision on practicability.

Daniel Kindell - Partner and Employment Solicitor

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Sleep in shifts - the pay debate!

After a satisfying hard day’s graft at work and having successfully completed another torturously packed train journey home, it is always a lovely feeling to be able to share the company of loved ones during an evening. We get to have a hot shower, put on some comfy pyjamas and enjoy some delicious dinner whilst binge-watching as many thrilling tv shows as possible. However, some loved ones who work within the care sector, they have to be ‘available for work’ and sleep at facilities provided by their employer. They are not afforded the same flexibility or freedom, even though, like me, they have a massive backlog of shows ready to be consumed. Having tried to pacify them many a time during vociferous rants, I was extremely shocked to find out that they were not remunerated properly for ‘sleep-in’ shifts and for every hour they spent awake at work, and that they were earning less than the National Minimum Wage (“NMW”). 

Recently, the Court of Appeal (CA) provided its much-anticipated decision in the case of Royal Mencap Society v. Tomlinson-Blake, with regards to the fraught issue of the NMW in the “sleep-in” context. The landmark decision saw the CA overturn the ruling of the Employment Appeal Tribunal (EAT) which had held that carers working sleep-in shifts were entitled to the NMW for every hour of their shift, regardless of whether they were awake and carrying out relevant duties, or asleep. In overturning this decision and a significant body of case law, the CA has held that sleep-in workers are only entitled to the NMW when they are awake and "actually working". They are not entitled to the NMW when they are asleep, even if facilities for sleeping are provided by the employer as they are then only "available for work". So, it has removed minimum wage protections from care and support workers on sleep-in shifts

As has been emblematic in the care sector, Mrs Tomlinson-Blake received a flat rate payment of £22.35 plus one hour's pay of £6.70 for a nine-hour-long sleep-in shift. She contended that this pay fell below the NMW as, when accounting for every hour spent at work, her wage equated to around just £3.23 per hour. The EAT originally rejected Mencap's argument that Mrs Tomlinson-Blake was not awake and carrying out her duties for the majority of her shift and was therefore not entitled to remuneration for those hours.

This decision will also naturally be very disappointing for individual care workers and to many, puts the sector even further away from the position it desperately needs to be in, that of being able to offer decent jobs and to stem the growing exodus of its workforce as opposed to now potentially becoming a disaster for the sustainability of social care.

The latest position from the CA is, of course subject to any further appeal to the Supreme Court. Unison were granted permission to appeal in February 2019. This one continues to rumble on. Until it concludes, I shall continue to mollify loved ones on a daily basis and provide the sounding board they need to vent.

Atif Tanvir - Morrish Solicitors


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‘Day One Rights’. Section 1 and the Good Work Plan

The contract of employment both creates and governs the relationship between employer and employee so it’s surprising that it was not until 1963, with the introduction of the Contracts of Employment Act, that employees were given the legal right to written particulars of employment.

This right then evolved into what is now S.1 of the Employment Rights Act 1996, with the qualifying length of service period increasing from the original 5 weeks to the current 8 (or 4 weeks if employment ends before 8 weeks).

Although the introduction of this right was a major step forward in employment rights and the proposed reduction of the requisite continuity to 1 day from 6^th April next year is seemingly another positive step, it remains a right that is often difficult to enforce and with limited remedies when breached.

Until the introduction of S.38 of the Employment Act 2002 the only legal action open to an employee for breach of S.1 was that afforded by S.11 of the ERA 1996. This allows an employee to ask an Employment Tribunal to determine what written particulars were intended in line with evidence and arguments put forward by both parties. Though this can be quite useful where there is a dispute as to terms of the contract which, once clarified, can support an associated claim, for instance the eligibility for/amount of a bonus, contractual leave etc, making use of the S.1 rights in the absence of a claim that might flow from the determination is a paper exercise only. 

S.38 at least created a financial incentive for employers to comply with their obligations.

But no general solution to this situation is provided by the S.38 remedy in that it is not a ‘free standing’ claim, that is, in order to be granted the award (equivalent to 2 to 4 weeks wages) a breach of S.1 must be part of at least one other successful claim, for instance: wages, discrimination, dismissal etc. Consequently the S.1 right is of very little practical use in encouraging employers to honour that right when asserted in isolation.

Underpinning this right with an award that could be sought without being part of a larger claim is not however something that the current government has included in the draft legislation that implements its Good Work Plan. Neither is there mention of how the ‘day one’ right to a S.1 statement will be any easier to enforce under S.38. I do not imagine that the current government intends to encourage Claimants to take action against their employer after ‘day one’ or even week one of working without written particulars, yet even with the obstacles outlined above, this is a possibility. Unfortunately, S.38 in its current form may actually work against such a claim in that a Tribunal can choose not to make an award if it believes that to do so would be ‘unjust or inequitable’ (S.38(5)). Taking into account the fact that employers are currently given up to 2 months to provide the particulars it would seem logical that the less time the Claimant gives the employer to meet its S.1 obligation, the more likely it is that a Tribunal would deem it ‘unjust or inequitable’ to make a S.38 award.

Consequently, the irony of making the S.1 right ‘a Day One Right’ without any changes to support that right runs directly counter to the assurances set out in the Good Work Plan. Within the “Good Work - A response to the Taylor Review of Modern Working Practices” we are told “when a worker’s rights are breached’ the reforms will provide “quick and effective redress” (p16) I would argue that the ‘reform’ to S.1 rights will provide neither. 

Christina Moore - Morrish Solicitors

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Holiday Rights

We all love holidays.  I am personally about to go on a particularly long one.  I would be extremely annoyed if my employer said no - you’re not allowed to go, but not only that, come 1 January when my new holiday year starts, your entitlement is lost. 

It is a good job therefore that the European Court of Justice steps in to make sure holiday rights are upheld. 

In 2 recent cases in the German courts, which I will simply refer to as Kreuziger and Shimizu, the German employers refused to allow employees to receive a payment in lieu of untaken annual leave when they had not taken it all during their employment.  In both cases, neither employee had actually requested paid annual leave - they had simply sat tight and waited for their employment to end, following which they asserted a right to a payment in lieu of untaken leave.  Mr Shimizu in particular asked for 51 untaken days’ leave dating back 2 holiday years.  The question was, if the individuals were entitled and had time to take their leave, should they still be allowed a payment in lieu when their employment ends?  This was referred to the ECJ.

The ECJ decided that a worker does not automatically lose accrued but untaken holiday entitlement at the end of the holiday year just because they failed to seek to take that entitlement.  Good news therefore for those who would rather work and receive payment in lieu. 

However, if the employer provides ‘sufficient information’ to the worker to encourage them to take holiday before the end of the reference period it might then be lawful to refuse to make a payment in lieu. 

We are not aware of any cases in the UK where it has been argued a worker should lose the right to payment in lieu because they did not try to take their leave before termination, but in theory the situation could arise.  Thank goodness I have booked all my holiday for the rest of the year. 

Daniel Kindell - Partner

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Bellman – more on vicarious liability

Bellman v Northampton Recruitment Ltd [2018] EWCA Civ 2214

Following a recruitment agency’s Christmas party, to which all employees and their partners were invited, a number of the guests including Mr Major, the Managing Director (“MD”) of the agency, and Mr Bellman, an employee of the agency and the Claimant, continued their celebrations at a hotel bar where some of the employees were staying at the agency’s expense. This was not a planned extension of the party but the agency did pay for the taxi fares to get there and the majority of drinks.

The group continued to drink alcohol and discuss a variety of topics. At around 2.00am the conversation turned to work. 45 minutes later, when challenged about his decision to appointment a new employee, the MD summoned all present employees and lectured them about the fact that he was the owner of the company; he was in charge and he made the decisions. The MD said this new employee was in the correct place. The Claimant, in a non-aggressive manner, verbally challenged this. The MD proceeded to punch the Claimant twice in response, causing him traumatic brain injury.

The High Court held that the agency was not vicariously liable for the MD’s actions. It considered the drinks at the hotel were impromptu. They were not a seamless extension of the Christmas party. Those present when the incident occurred were there in the context of “entirely voluntary and personal choices” – they were there to engage in a heavy drinking session. The fact that a work-related topic was raised was not enough.

The Court of Appeal has now disagreed. The CA has confirmed that the correct approach was set out by the Supreme Court in Mohamud v WM Morrison Supermarkets Plc [2016] UKSC 11 which is the following two stage test:

1.   What “field of activities” has been entrusted by the employer to the employee? This question is to be addressed broadly.

2.     Was there a sufficient connection between the “field of activities” and the wrongful conduct to make it right for the employer to be held vicariously liable under the principal of social justice?

The CA agreed that the MD’s role had been widely drawn. He was the “directing mind” of a relatively small “round the clock” company with no set hours and responsibility for all management decisions. He spent much of his time working on the agency’s business and was in overall charge of all aspects of it.

The CA took the view that there was a sufficient connection between the field of activities and the assault. Of significance was the manner in which the assault arose. After 45 minutes of discussions about business matters the MD believed his authority had been challenged. He then purported to exercise his managerial control by summoning his colleagues and lecturing them about his authority. When he felt his authority was challenged again he asserted the authority granted to him by the agency, by punching the Claimant. Even if the MD had removed his managerial hat at the beginning of the impromptu drinks, he chose to don it again and misuse his position when his managerial decisions were challenged.

Lord Justice Irwin was keen to emphasise that the facts of this case were unusual and it was not authority for the proposition that employers became insurers for violent acts by their employees.

Since this judgment the approach in Mohamud v WM Morrison Supermarkets Plc [2016] UKSC 11 has once again been confirmed as correct and adopted in WM Morrison Supermarkets Plc v Various Claimants [2018] EWCA Civ 2339.  In this latest case the CA has upheld the view of another High Court judge, in finding that Morrisons are liable for the unlawful actions of an employee who deliberately leaked employee personal data.  Interestingly, that liability attached despite the fact that the employee’s motive was to damage the employer. The answer, says the CA, if employers are concerned about the costs associated with this sort of problem, is to insure against it.

The law on vicarious liability has moved on enormously in recent years. The focus on the connection with work and the principle of social justice – is it right to hold the employer liable for the employee’s act? – has now replaced the old tests and many of the old cases would now be decided differently. Whilst there will still be cases where an employer might escape liability because the employee is truly “on a frolic of their own” it seems that they will be fewer and further between.

Tony Rippon - Employment Solicitor

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Fairness: with knobs on

There is a really interesting report this week of a decision by the Employment Appeal Tribunal that looks at a number of current issues about fairness both in general terms and procedurally, the approach of the ETs in making decisions about what is fair and the relevance of the right to be accompanied at a disciplinary/grievance hearing.  Some useful guidance and all worth thinking about.  The case is Talon Engineering v Smith.

Mrs Smith was dismissed because of an email exchange in which she described an “unnamed” colleague as a “knob” and a “knobhead”.

General unfairness

The Employment Tribunal took the view that the derogatory reference to a colleague was essentially “venting to a close friend”.  The colleague was unnamed.  The course of email correspondence between the Claimant and her friend showed that the two of them shared “lots of personal information in very chatty and informal emails”. 

The Judge said “it is not clever and it is not funny… but the Tribunal was entitled to conclude that it did not amount to serious gross misconduct that puts the business reputation of the Respondent at risk”. 

I think that is a pretty sensible conclusion given the context.

Substitution mindset

The Respondents argued on appeal that the Tribunal had failed to judge reasonableness by the standard of the reasonable employer.  Instead, they said, the Tribunal had substituted its own view for the views of the employer.  Tribunals are not allowed to do that. 

The Tribunal had thought that dismissal was a “gross overreaction” – bearing in mind, not least, that the Claimant had 21 years’ service with an unblemished record.  

The Judge quoted an earlier authority (Kefil) to this effect: “substitution mindset is all too easy to allege… employers who do not like the result which a Tribunal has reached… seek to argue that the very fact of the result… must indicate a substitution”. 

It is refreshing to see that here EAT was clear: “the Tribunal has been punctilious in assessing matters by reference to a reasonable employer and not their own views”. 

This is a reminder to employers that not every decision on fairness that goes against them is going to be appealable to EAT on the basis of “substitution mindset” – a useful and indeed refreshing reminder. 

The right to be accompanied

The Respondent had adjourned the disciplinary proceedings on one occasion because the Claimant was ill. 

The Claimant sought a further adjournment, for two weeks, because her trade union official was unable to attend on the new date. 

The Respondents declined the second request.  The ET took the view that the Respondents had acted in a manner that was “entitled and hasty”. 

It seems that the mere fact of this failure to adjourn would have rendered the dismissal unfair in and of itself.

That is also a useful decision for Claimants and Trade Unions – it gives real teeth to the right to be accompanied.  I think one has to have regard to all surrounding circumstances and I think that here the fact that the adjournment was sought for a relatively short period (a fortnight) was relevant.  The Judge in the EAT made it clear: sometimes the employer simply cannot be expected to wait any longer.  Nevertheless, some useful guidance on adjournments in this decision.

There is also something in the case about “Polkey” reductions but I have probably said enough for now. 

An interesting, robust and straightforward decision that tackles quite a few of the practical issues that we see in our employment team on behalf of Claimants on a day to day basis. 

Paul Scholey - Senior Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.