Employment Review - November 2018

Welcome to the November edition of Freeths’ Employment Law Update

This month we take a look at how refusing to postpone a disciplinary meeting to allow a companion to attend may make a dismissal unfair and whether the removal of a contractual benefit following a TUPE transfer was void under TUPE. We also consider whether an employer was fixed with constructive knowledge of disability where the employee provided only vague reasons for his sickness absence, and we round up with some “news in brief”.

• Does refusing to postpone a disciplinary meeting to allow a chosen companion to attend make a dismissal unfair? In Talon Engineering v Smith, the EAT considered this very question.
• Withdrawal of a contractual entitlement to a travel allowance was not void under TUPE Whether a variation of contract is connected with a transfer will be a question of fact. A change which occurs immediately following a transfer will not necessarily be because of, or connected to, the transfer.
• Claimant could not establish disability discrimination when he held himself out as not disabled In this case the employee had not presented sufficient evidence to show he was disabled and as such, it was not reasonable for his employer to have known he was disabled.
• News in brief We report on the changes to IR35 as announced in the recent Budget, as well as a few interesting facts and figures

Does refusing to postpone a disciplinary meeting to allow a chosen companion to attend make a dismissal unfair?This question was considered in the recent case of Talon Engineering v Smith.Mrs Smith was employed by Talon Engineering Ltd (Talon) for over 20 years. She sent "unprofessional emails", calling an unnamed colleague disparaging names to a contact (also a friend) outside the company, and then attempted to delete the emails. Talon found the emails, and determined that Mrs Smith had brought the company into disrepute and committed a breach of the bullying and harassment policy. She was invited to a disciplinary meeting, which was postponed due to her sickness and annual leave. A rescheduled disciplinary was set up, but her Trade Union representative was not available. He asked for the meeting to be rescheduled by 10 days, but Talon refused, asserting that as he could not attend within 5 days of the date, they could reject the request. Mrs Smith refused to attend without her representative, and Talon dismissed her in her absence.

 An appeal confirmed the decision to dismiss.Mrs Smith was successful in her claim of unfair dimissal in the Employment Tribunal and the EAT also upheld this decision on appeal, concluding that no reasonable employer would have dismissed Mrs Smith, particularly in light of her long service and that Talon was "unduly hasty" in not agreeing to a short postponement.

The case gives cause for concern for those employers who apply a strict time limit to postponement requests from employees. Many employers have drafted their policies according to the '5 day postponement rule' under the Employment Relations Act 1999 (which provides that a postponed hearing should be rearranged to a new date which is within 5 working days of the original date fixed). However fairness remains an overriding concern, and whether the employer acted within the range of reasonable responses is the test that an Employment Tribunal will apply.

If a request for postponement exceeds the 5 day rule, there is a risk that applying an automatic “no” in response to the request will lead to a finding of unfair dismissal. We therefore suggest that employers apply some flexibility to their approach – so that they can be seen to consider a request for a longer postponement, and take into account the circumstances. In some circumstances it may still be appropriate to proceed with the hearing, but in other cases it may not.

Withdrawal of a contractual entitlement to a travel allowance was not void under TUPEIn Tabberer & Others v Mears Ltd, the EAT found that the removal by an employer of a contractual allowance that they deemed to be ‘outdated and unjustified’ was not void under TUPE following a transfer.

The Claimants were electricians, formerly employed by Birmingham City Council, who had been entitled to an ‘Electricians Travel Time Allowance’ (ETTA). This allowance was held to be contractual and had originated in 1958 before the Claimants began working for the Council and continued to be paid through a series of transfers, until 2008 when the Claimants transferred to the Respondent. ETTA provided compensation for the loss of productivity bonus caused by the need to travel to different depots. The Respondents deemed the payment of ETTA to be ‘outdated and unjustified’ because it was no longer relevant to the Claimants’ working practices. As a result, they gave notice to vary the Claimants’ contracts to stop the payment of ETTA.

The Claimants argued that the variation to their contracts was void under Regulation 4(4) of TUPE as it was connected with a transfer.The key point to be determined was whether the reason for the variation related to the transfer, and whether the transfer was the sole or principal reason for the change. Both the Employment Tribunal and EAT disagreed with the Claimants and found that the Respondent had removed the bonus for a reason not connected to the transfer: "The Respondent had learned of this apparently entirely unjustified payment at around the time of the transfer, but that would be no different to a new manager coming into the workplace and learning of such an entitlement; as it happened, this was on the occasion of a relevant transfer, but that was not why the Respondent considered ETTA should cease to be paid".

The reason for the variation and whether that reason was connected with a relevant transfer are questions of fact. However, this is a useful example of a change which coincides with a transfer not being because of or connected to the transfer.

Claimant could not establish disability discrimination when he had held himself out as not disabledIn the case of Mutombo-Mpania v Angard Staffing Solutions Ltd, the EAT upheld a decision that:

• an employee who suffered from hypertension, but had advised his employer that he did not have a disability, was not a disabled person; and
• the employer could not reasonably have been expected to know that he was disabled.

Mr Mpania was employed as a flexible resourcing employee by Angard Staffing Solutions (Angard) which supplies casual staff to the Royal Mail Group. On his application form, Mr Mpania indicated that he was not disabled and did not disclose any disability on the health form he also completed.

He worked for approximately for one year, mainly on late shifts finishing at 10pm. He was then offered, and accepted, 8 weeks of night shifts over the Christmas period. Before this period of night shifts started, he emailed Angard stating that his health condition did not allow him to work regular night shifts and that he would like to be booked for shifts ending at 10pm. He did not provide any specifics connecting his health problems to his ability to do night work.

In the end, Mr Mpania did some night shifts but failed to turn up for 4 of the nights. Royal Mail informed Angard that they did not want him to return to work for them and his engagement was terminated. He bought Employment Tribunal claims, including claims of disability discrimination.

Disability discrimination law protects individuals with a physical or mental impairment and which has a substantial and long term adverse effect on their ability to carry out normal day to day activities.

An employer cannot be liable for most forms of disability discrimination unless it knew, or should have known, about the individual's disability. The exception to this is indirect discrimination (which was not in issue in this case).

At a preliminary hearing, the Employment Tribunal rejected his disability discrimination claims on the basis that he had not presented evidence to show he was a disabled person and that, even if he was disabled, it was not reasonable for the employer to have known that he was. The EAT upheld this decision on both points.In making its decision, the EAT considered evidence provided by Mr Mpania about the impact of his health condition on day to day activities, as well as factors which could have shown whether Angard was aware of Mr Mpania's disability – such as his referral to his 'health condition' and absences. These were then considered against factors which disproved constructive knowledge – Mr Mpania had completed an occupational health form and did not take the opportunity to make Angard aware of his condition. Mr Mpania had also previously worked night shifts during his employment by Angard.

The EAT found that Mr Mpania had failed to demonstrate that his health condition met the definition of disability under the Equality Act 2010. As a result the EAT found that the Employment Tribunal had "correctly concluded he had failed to discharge the burden on him to do so". It also concluded that even if Mr Mpania had been disabled, the Employment Tribunal's decision on whether Angard had, or should have had, knowledge of this disability was correct. As a result the appeal was dismissed.

This decision should provide some reassurance to employers that constructive knowledge of an employee's disability is not always automatic when vague descriptions of a 'health condition' are provided as a reason for absence. However, it also serves as a reminder that an employee may have a disability even where one has not been formally disclosed, and so employers should ensure they take all reasonable steps to find out an employee's disability status.

News in brief Budget 2018: IR35 changes extended to the private sector

In April 2017 the government introduced new rules to deter public sector employers and workers from using off-payroll working to reduce their tax liabilities. The changes to the rules – which are known as IR35 – meant that it was left up to public sector employers to determine whether national insurance contributions and income tax applied to the self-employed contractors working for them.

The Chancellor has confirmed in his Budget that changes to IR35 regulations will be extended to the private sector. However, the change will be delayed until April 2020 and will only apply to large and medium-sized organisations.

The implication of the extension to the private sector is that businesses will have to be far more stringent with their employment checks. Incorrectly identifying people as an employee, a worker or self-employed could have serious financial implications for organisations going forward. Ensuring that the contract between the parties accurately reflects the circumstances of an an individual’s engagement will be essential.

Other measures announced by the Chancellor included:

• increasing the national living wage from £7.83 to £8.21 from April 2019;
• reducing the fee that smaller employers must pay when they take on apprentices from 10% to 5%.

Employment Tribunal statistics

The latest quarterly statistics published by the Ministry of Justice for the period April to June 2018 show:

• there has been an increase of 165% in the number of single Employment Tribunal claims lodged compared to the same period in 2017 (the last quarter when fees were in force);
• there has been an increase of 344% in the number of multiple claims lodged compared to the same period in 2017.

Record £15.6 million underpayment of National Minimum Wage

In the last year, 200,000 workers were paid less than the minimum wage. This is the highest figure since the introduction of the National Minimum Wage nearly 20 years ago.According to HMRC, the sectors most likely to under pay staff are social care, commercial warehousing and the gig economy.

Aviva is the first employer to announce 6 months full paid parental leave for all employees

 Since 2015, Shared Parental Leave has been available which allows up to 50 weeks of leave - 37 weeks of which is paid (currently £145.18 a week or 90% of average weekly earnings, whichever is lower) - to be shared by parents if they meet certain eligibility criteria. Aviva has raised the standard of family friendly treatment of its staff by introducing a right for all new mothers and fathers to take a period of 6 months' fully paid leave, meaning that parents who both work for Aviva will no longer have to share the leave, as they will each have their own allowance.It is the first employer in the UK to make such a move and will offer the terms without regard to how the employee became a parent (including adoption or surrogacy).

Government announces changes to the Apprenticeship Levy 

The Chancellor has announced that the government is going to make a number of changes to the controversial Apprenticeship Levy to make it more flexible and better suited to meeting the skills gap, as follows:

• from April 2019, employers will be able to transfer a quarter of their annual Apprenticeship Levy fund to another business in their supply chain (since July employers have been able to transfer 10% to non-levy paying organisations);
• the government will invest an extra £5 million to help the Institute of Apprenticeships offer more training options to bridge some of the gaps;
• the government has also said there will be greater investment in apprenticeships in science, technology, engineering and maths, but no specific details are available as yet.