Issue 94 - September 2007

An employer's contribution to an employee's illness does not make a subsequent capability dismissal unfair...
...provided the employer acted reasonably in all the circumstances. Such circumstances will include the fact that the employer was responsible for the ill health.

This was already the general position but the Court of Appeal has now helpfully confirmed what the employer's approach should be.

In McAdie v Royal Bank of Scotland the employee suffered work related stress after the 'authoritarian and unsympathetic' way her grievance was dealt with by Mr G and procedural delays. Ms M apologised for procedural delays but not Mr G's conduct following a subsequent grievance raised by the employee. Unsatisfied the employee invoked the second stage of the internal grievance procedure. In dealing with this Ms M, again, acknowledged the delays without accepting the complaints about Mr G's conduct. The employee was offered a return to work in different roles at a location of her choice. She informed the employer that the only resolution she felt appropriate was for her to leave the bank with compensation.

In June 2004 after 10 months of sickness absence the employer began its long-term sickness absence procedure. The employee continued to insist that she leave with compensation rather than return to work. In December 2004 the employee was given notice of termination on grounds of ill health.

The employee's claim for unfair dismissal was originally upheld by the Employment Tribunal but later dismissed by the EAT and the Court of Appeal. The rationale for the decision was that whilst a tribunal should not ignore the fact that an employer has caused an employee's ill health, the fact that the employer has caused the ill health cannot prevent the employer from ever effecting a fair dismissal.

Health Warning: In cases such as these employers will be expected to show they have gone that extra mile in trying to find alternative employment and / or putting up with a longer period of sickness absence. Of course, on the facts of McAdie who openly and absolutely refused to return to work the bank were in a strong position to dismiss fairly - they had few or no other options!

Statutory Annual Leave Changes
The Work and Families Act 2006 gave the Government the power to increase statutory annual leave entitlement from 4 to 5.6 weeks. For those working five days per week this means 8 extra days of annual leave entitlement per year.

The Working Time (Amendment) Regulations 2007 bring the first leg of changes increasing the entitlement to 4.8 weeks on 1 October 2007. The additional 0.8 weeks (or 4 days for the five day worker) comes into effect on 1 April 2009.

A helpful tool to calculate the pro-rata changes for leave years which straddle the changes or workers with varying hours can be found on the Business Link website in the 'employing people' pages. (www.businesslink.gov.uk)

Payments in lieu of the extra 0.8 weeks can be made during the transitional period which runs until 1 April 2009. Thereafter payments cannot be made in lieu unless the worker's employment has been terminated.

The additional entitlement may also be carried over (unlike the current 4 week entitlement) subject to specific agreement in writing between the worker and the employer or any workforce or collective agreement in place.

Where employees' leave is increased as a result of the changes the employer will be obliged by s4 Employment Rights Act 1996 to provide a written statement containing details of the change to their employment particulars.

Changes to Minimum Wage
The National Minimum Wage Regulations 1999 (Amendment) Regulations 2007 come into force 1 October 2007 meaning the following increases:

• NMW increases from £5.35 to £ 5.52
• 18 to 21s increase from £4.45 to £4.60
• Under 18s increase from £3.30 to £3.40

Quick Fire!
In Optare Group Ltd v TGWU a redundancy consultation, where 17 employees were selected for redundancy, was held to be in breach of the collective redundancy requirements which apply where 20 or more employees are made redundant within a 90 day period because three additional employees had applied for and accepted voluntary redundancy.

HMRC v Thorn Baker Ltd 2007 considered the application of Regulation 19 of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. The Court of Appeal concluded that an agency worker on a fixed term contract for not more than three months is not entitled to SSP.

In Deadman v Bristol City Council the Court of Appeal held that there was no breach of contract in a situation where an employee's stress arose from the employer's manner of conducting an investigation and informing the employee of a renewed investigation by leaving a letter on his desk. The Court of Appeal held that there was no contractual term to act sensitively and it was not reasonably foreseeable that the employee would suffer psychiatric illness as a result.

The provisions of the Racial and Religious Hatred Act 2006 come into force on 1 October 2007. The Act creates a new criminal offence of stirring up racial hatred against a person on grounds of religion. It may well be worth including a warning to employees about this in your equal opportunities policy.

The Commission for Equality and Humans Rights (CEHR) will assume the powers and functions of the three current equality commissions - the CRE, EOC and DRC on 1 October 2007.

The information Commissioners office has published a guidance NOTE on what constitutes personal data under the DPA which can be found on the ICO website. (www.ico.gov.uk)

Correction...
ACAS announced in July that there had been a substantial decrease in the number of claims to Employment Tribunals. In our previous Bulletin we discussed this in context. However the figures in the ACAS annual report for the period 1 April 2006 to 31 March 2007 were incorrect. ACAS has now re-issued its annual report, which shows that there were 105,177 applications to tribunals which is notably higher than the 84,039 claims originally reported. Thinking that there had been a reduction in the number of claims we suggested that this could be put down in part to the effectiveness of the much unloved Statutory Dispute and Dismissal Procedures (SDDPs). Now that the true figures are out, perhaps the case for the retention of the SDDPs is even weaker! ACAS' error was due to a miscalculation of the number of Equal Pay claims, so our earlier observations on particular types of claims and regional differences remain, on the whole, valid.

News from the team
The Employment Team is delighted to announce the arrival of Katie Davis, formerly of Prettys Solicitors in Ipswich and the impending arrival of Deborah Ives on 1 October 2007. Katie has experience of advising employers in both the public and private sector and is a great addition to the team. Deborah was a Partner at Howes Percival Solicitors in Norwich until embarking upon an HR Consultancy career a few years ago. Deborah will continue to provide consultancy services and will act as a lawyer for Birketts LLP on a part-time basis. These further additions to an already expanding team, mean that Birketts LLP now boasts one of the largest employment teams in the region and has a wealth of experience for clients to draw upon.

Early Bird Workshops
Last but not least a reminder that our next Early Bird session will be held on 21st & 28th September 2007 in Norwich and 25th & 26th September 2007 in Ipswich and will look at Data Privacy and Corporate Immigration. If you would like to come along please contact Kristina Elliott on 01473 406250 or email kristina-elliott@birketts.co.uk.

If you have any questions about this, or any other employment law related matter, please get in touch with any member of the team using the details below.

• JOLYON BERRY t: 01473 406356
• JEANETTE WHEELER t: 01603 756427
• KATIE DAVIS t: 01603 756432
• LOTTIE HAMMOND t: 01603 756419
• LISA HAYWARD t: 01473 406316
• MATTHEW NEWNHAM t: 01603 756412
• SONYA O'REILLY t: 01603 756413

The content of this document is for general information only. As always, specific professional advice should be taken on each individual matter © Birketts Solicitors 2007. Birketts LLP is constituted as a limited liability partnership in accordance with the Limited Liability Partnerships Act 2000. Where we refer to a 'partner' of Birketts LLP, whether in this brochure or in any other correspondence or communication with you, the term 'partner' means a member of Birketts LLP, and shall not be construed as indicating that the members of Birketts LLP are carrying on business in partnership within the meaning of the Partnership Act 1890.

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