It never seems to be quiet in the world of employment law and, despite the Jubilee festivities, the last month has been no exception! With further significant changes being proposed to employment legislation by the coalition Government, the Queen’s Speech and a number of interesting cases to report on Facebook dismissals and TUPE – we hope that you will find the following summaries helpful.
The Queen’s Speech
Once again, this year’s Queen’s Speech provided a glimpse into the future shape of employment legislation. Two Bills are particularly worth watching out for as they progress through Parliament. Among other things, they are likely to implement changes to the employment dispute resolution rules and introduce a new parental leave regime.
The Children and Families Bill will, among other things, carry forward the plans for a new parental leave system about which the Government consulted last year. The new regime would allow a greater range of options to enable both parents to share leave entitlement more equally. The Bill may also provide the platform for extending the right to request flexible working to all employees, rather than just parents of school-age children or those caring for adult dependants. This has been planned for some time, but had been put on ice due to the poor state of the economy.
Then there is the Enterprise and Regulatory Reform Bill which aims to encourage growth by cutting red tape for businesses. In a multi-pronged attack, the bill also introduces measures to encourage the early resolution of workplace disputes (resolved via ‘settlement agreements’ it is goodbye to compromise agreements). And there will be changes to the tribunal system aimed at improving efficiency. There is no mention anywhere of the possibility of helping micro-employers by creating a limited exemption from the unfair dismissal rules. This more controversial proposal has been the subject of a Government call for evidence earlier this year, and it is not known whether it will feature in the Bill when published. Details will emerge which will put flesh on the bones of those announced measures. For now, it’s a case of watching and waiting.
Facebook fury and a fair dismissal
This Northern Ireland case is an example of the ever-growing number of issues caused by social networking.
Mr Teggert posted offensive sexual comments about a female colleague on Facebook. These provoked online comments from Mr Teggert’s Facebook friends, some of whom also worked with Mr Teggert at Teletech. This was reported to Teletech and, after a disciplinary hearing, Mr Teggert was dismissed for gross misconduct. The reasons were that the Facebook post amounted to sexual harassment and brought Teletech into disrepute.
Mr Teggert unsuccessfully appealed the decision and brought a claim for unfair dismissal and for violation of his human rights. He lost. Some of the key points of the tribunal’s decision are:
- Mr Teggert’s actions satisfied the definition of harassment
- Harassment can occur where comments are directed to others
- The employer’s decision to find Mr Teggert guilty of bringing the company into disrepute was seriously flawed, but he would have been dismissed on the harassment charge in any event, and that dismissal would have been reasonable
- Articles 8 (the Right to Respect for Private and Family Life), 9 (Freedom of Thought, Conscious or Religion) and 10 (Freedom of Expression) did not help Mr Teggert. He had abandoned his right to make private comments when he posted them on Facebook. Belief didn’t extend about another person’s promiscuity. Freedom of expression had to be exercised responsibly
Whilst the decision is not binding on UK employment tribunals, it stands as a useful indiction of the way Courts are thinking.
New rulings help employers weigh-up when TUPE applies
A string of cases over the last 12 months should help employers trying to interpret TUPE regulations, which dictate the circumstances where a company must take over the employment obligations of another employer.
TUPE stands for Transfer of Undertakings Protection of Employment Regulations and their purpose is to protect employees jobs when a business is transferred. If a business is sold, then the new owner of the business has to honour the employment contracts of the seller’s employees – the buyer steps into the shoes of the seller, so far as the employees are concerned.
The rules may also apply when there is a ‘service provision change’. This arises when a company cancels or does not renew a long term contract for the supply of services and either takes the services in-house or awards the contract to another service-provider. When this happens, TUPE may mean that the employees of the original service-provider become employees of the new service-provider, or if the contract is going in-house, then they may become employees of the company to which the services were provided.
It is this aspect of TUPE regulations which still come as a shock to some employers, particularly smaller ones, who discover the strange outcomes that can arise when it is applied to service provision changes. A major customer decides it is not getting a good service from Company A and so it awards the contract to Company B. It must come as a shock for Company B to discover they might have to take on the very employees who provided such a poor service when they were working for Company A.
But it isn’t cut and dried as to exactly when TUPE will apply following a service provision change. Now, a number of cases have clarified the conditions that must be satisfied for TUPE to apply when a service provision change has taken place.
In Seawell v Ceva Freight (UK) Ltd, Ceva provided freight forwarding services to Seawell. One of Ceva’s employees worked solely on the Seawell contract and when the contract was cancelled with Seawell taking the service back in-house, Ceva claimed that TUPE applied and that Seawell were liable for unfairly dismissing Mr Moffat, the employee concerned. At the first hearing, the Employment Tribunal agreed and ordered Seawell to pay Mr Moffat £25,000. But on appeal, the Employment Appeal Tribunal found that this was wrong, saying that for TUPE to apply in a service provision change scenario, there must be a clear and formal grouping of employees brought together for the purpose of the client’s contract. An employee who happens to spend all his time working on a single client’s contract is insufficient grounds for TUPE to apply.
Similarly in Eddie Stobart Ltd v Moreman and others, Eddie Stobart provided storage and transport services to ASDA, among other supermarkets. Staff were organised into shifts, one of which, because of the timings of orders from ASDA, worked principally on the ASDA contract. When ASDA awarded the contract to another company, Eddie Stobart dismissed the workers on the ASDA shift in the belief that the new company was now responsible for the employees under TUPE. However, both the Employment Tribunal and Employment Appeal Tribunal held that TUPE did not apply, because that shift did in fact deal with other clients as well as ASDA. Those employees could not be regarded as a recognised team working for a particular client.
The other aspect that must be satisfied for TUPE to apply on a service provision change is that the service activity taken in-house or contracted to another supplier must remain the same. In Johnson Controls Ltd v Campbell, taxi administrator Johnson Controls lost their contract with UKAEA, as the company decided that its own staff would place bookings direct with the taxi companies. One of the employees was made redundant by Johnson Controls, as he was not taken on by UKAEA. He subsequently sued both Johnson Controls and UKAEA, but the tribunal found that under the new regime, the taxi booking services had been significantly remodelled and that therefore TUPE did not apply.
Employers who think they are running teams who may be affected by TUPE if contracts were terminated need to respond to the decisions of these cases by reviewing their current employment contracts.
Fulfilling an important contract that requires taking on employees, who will service that contract exclusively, requires major investment. It is equally to both employer and employees to make sure they have the protections they are entitled too. If a team is taken on to service ‘Client X’, their contracts of employment should say so, and they should be formally labelled and recognised as the ‘Client X’ team.
That way there is a good chance that if the employer subsequently loses the contract, the team will be in a more secure position and the company will not be hit by the double whammy of losing income from the contract, as well as being liable to make redundancy payments to the team who serviced the contract.
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