Can 'cheapness' be a selection criterion for redundancy?

The answer may well be yes as the recent EAT’s recent decision in HM Land Registry Appellant –v- Mrs S M Benson and Other Respondents UKEAT/0197/11/RN (handed down on 10 February 2012) in respect to age discrimination.

The HM Land Registry had a budget of £12 million to reduce their headcount so they offered employees a voluntary redundancy/early retirement scheme, with enhanced benefits. One of the selection criterion used was, what the tribunals referred to as ‘cheapness’ i.e. selecting employees whose entitlements under the scheme would be the lowest, to allow them to make redundant as many people as possible within the budget identified. This meant that a certain category of people were not selected for redundancy – these consisted primarily of the 50+.

Unusually (in my experience anyway) the claim was brought by 6 employees (the Claimants) who were not selected for redundancy, 5 of them complained of indirect age discrimination and one of them complained about sex discrimination.

So you all understand indirect discrimination the legal definition is where the employer applies a Provision, Criterion or Practice (PCP) which is neutral on the face of it, but disadvantages people with a protected characteristic (age,disability, gender reassignment, marriage & civil partnership, pregnancy & maternity, race, religion or belief, sex and sexual orientation), unless the employer can justify the PCP as a proportionate means to achieving a legitimate aim.

Dealing with Indirect Age Discrimination
The tribunal, at first instance, held for the Claimants. However the EAT reversed the position primarily on the basis that had the criterion not been used then than the redundancy bill they would be footing would be 150% of the budget allocated by the HM Land Registry (the Respondent). Therefore the PCP was a proportionate means to achieving a legitimate aim.

Further they considered the fact that the Respondent needed to make a balanced judgement in respect to the experience of the work force. This makes sense to me - after all no employer can effectively function without the right level of experienced employees.

What employers must remember is that this is a case were the ‘cost’ of making employees redundant was only one of the criterions used for selection. The principle remains that costs alone may amount to indirect age discrimination however in the majority of the cases costs will only be one of the factors considered.

The reason why I personally think it is a strange case is that it was brought because employee’s were not selected for redundancy, I am fully aware that some of those in public office (notably police officers) bring actions to remain in office. This decision may have some effect on those actions; it will all depend on whether the tribunals believe whether the force used costs plus some other factor to retire those with 30 years’ service. The likely argument that the force will use is that due to budget constraints they needed to enforce retirement for officers with over 30 years’ service. However the tribunals make decisions on a case by case basis therefore officers/police federation representatives will need to be very careful how cases are presented.

For business owners with an allocated budget for the redundancies ensure that you do not select any employee using costs alone as the criterion and always ensure that you take legal advice before any decision of this nature is made.

Dealing with indirect sex discrimination

One of the Claimant’s in the above mentioned case mentioned complained of indirect sex discrimination, this was on the basis that she was not included in the selection process because she was on a career break straight after maternity and not due to return until 2013.

She was initially informed about the redundancy schemes however she was subsequently excluded because she would be returning after 31 March 2010 (a selection criterion which was decided by the Respondent at a later date and one which she was not notified of).

The EAT did not uphold the Respondents appeal in respect to the indirect sex discrimination PCP being a proportionate means to achieving a legitimate aim. They failed to inform the Claimant that she was excluded from the redundancy selection on the grounds that she did not return from her career break until 2013. This ultimately led to the Claimant being robbed of the opportunity to give the Respondent a notice to return to work prior to 31 March 2010.

So those of you with plans for redundancy plans should ensure that careful consideration is given to employees on maternity leave/career breaks straight after maternity leave.

Again as a lawyer having worked with a number of institutions (such as the police) this case may be the reverse of what the claimant may want to achieve – i.e. the officer may want to remain in service as opposed to be made redundant with enhanced pension benefits.

If you are going through a similar procedure and would like a 30 minute free telephone consultation please contact me on 07841011980 or info@scelegal.co.uk to book an appointment.

　

Can confidentiality and post termination restrictions be enforced through the courts?

Some employers are sceptical about inserting confidentiality, non-solicitation and post termination restrictions into an employment contract because they may be seen as amounting to a restriction on trade. While this may be true carefully worded clauses which are reasonable can protect your ‘trade secrets’ and ‘highly confidential data’ from breach by senior employees or employees placed in a position of trust.

The recent case of QBE Management Services (UK) Ltd v Dymoke & Others [2012] EWHC 80 (QB) highlights this point. In this case three senior managers (‘the Defendants’) resigned to join a competing business, shortly after, 8 junior employees resigned to join them. All the employment contracts contained confidentiality, non-solicitation and post termination restrictions. QBE in the first instance obtained interim injunction enforcing garden leave obligations and post termination restrictive covenants against the Defendants together with orders of early disclosure.

The disclosure revealed that the Defendants had:
- been instrumental in setting the competing business up;
- solicited QBE’s clients & employees prior to their resignation; 
- abused confidential information and
- concealed their activities from their employers.

Where a person has obtained a ‘head start’ as a result of unlawful acts, the court has power to grant an injunction which restrains the wrongdoer, so to deprive them of the fruits of their unlawful act. This is known as ‘springboard relief’. QBE successfully obtained the relief of a ‘springboard injunction’ restraining the Defendant’s from launching their company pending a speedy trial.

The disclosure in this case was key to this case as it revealed that the Defendants were aware that their venture could only work if they had qualified and suitable employees and further this would be crucial to gaining credibility and the right financial backers. They targeted key staff and attempted to disguise this through the use of head hunters during the recruitment process.

The Defendants also used confidential information to contact the brokers to entice them to provide the new company with future work.

The judge regarded this as an overwhelming case and one where the springboard relief was clearly available, and available for all breaches not just for the breach of confidence. The judge concluded that the breaches had allowed the Defendants to get up and running before the crucial renewal window for some 70% of the marine insurance business in February 2012. Therefore alongside damages he ordered a further springboard injunction to prevent the Defendants launching their company until April 2012 – being 12 months after the date of the resignation of the Defendants.
This is a useful judgement for employers as it tightens the standards of good faith and loyalty expected of an employee.

What should you do as an employer?

Ensure all employees in key positions or those that are given access to sensitive business information and are involved in strategic business positions have reasonable confidentiality, non-solicitation and post restrictive termination clauses in their employment contracts to protect your trade secrets and highly confidential information.

If you have any questions in respect to any of the above or in breach of contract claims in general please contact me on 0113 350 4030 or samira.ali@scelegal.co.uk for a no obligations 30 minute consultation.

Update on the Employment Law Reforms

The draft Unfair Dismissal of Reasons for Dismisal (Variation of Qualifying Period) Order 2012 (www.legislation.gov.uk/uksi/1999/1436/contents/made) have been published and set out that employees employed on or after 6th April 2012, the qualifying period for unfair dismissal (and requests a statement of reasons for dismissal) increases to two years.

Employees whose period of continuous employment began on or before 5th April 2012 will still be subject to the one year qualifying period.

Quote of the week

In the words of Walt Disney; “You can dream, create, design and build the most wonderful place in the world, but it requires people to make the dream a reality”.

This quote reminds me that no matter how old you are, you can always be a Disney fan!

What quote inspires you? I would love to hear from readers and followers! 

I hope everyone has a great evening!

How to deal with employees and adverse weather conditions

I think the majority of us would agree that we love the snow and it is great to go out and build a snowman or go sledging (I was out sledging at Temple Newsam today with my friends 21 month year old). However problems arise when employees come into work late or cannot physically get into work due to disruptions with transport, school closures and severe weather warnings. This situation gives rise to the following questions:

1. What are the rights of employees and
2. How can employers ensure that they apply a fair policy given the circumstances of an individual and taking into account their business needs.

Here’s a guide to help you all get it right.

What rights do employees have if they cannot get into work?

If employees cannot genuinely get into work due to the snow (our current adverse weather condition) then employers should not try to convince them to ignore severe weather warnings or ask them to walk to work (you may all laugh but a friend of mine was once told that he should continue walking until he finds a bus that’s running and he ended up walking for 3 hours in the snow!)

Technically (unless an employment contract states otherwise) an employee is not entitled to be paid for work unless they fulfil their contractual obligations (i.e. turn up for work) however before an employer decides that any absence will be unpaid they should consider the options below.

What options are available for employers?

There are three options available for an employer:

1. Allowing the employee to work from another location: larger institutions will have several locations, perhaps look at whether the employee can work from a location nearer their home address or providing it is appropriate allow the employee to work from home.
If the employee has a blackberry and remote access through their PC or laptop then working from home should seriously be considered. Clearly a concern for employers will be whether the employee takes ‘working from home’ to mean building a snowman – this could be overcome by having a ‘Working from Home Policy’ and some level of contract during the course of the working day.

2. Flexible working or leave: Give employees the option to take annual leave (however employers should not impose this), make the time up or take the time as unpaid leave particularly if the reason for not being able to come into work is to take care of a dependant.

Employees with childcare responsibilities, older or disabled relatives are given the statutory right to take time off to deal with ‘unforeseen events’ (such as school closures) for dependants this does not however provide them with the right to take extended leave but only to take off a reasonable amount of time to allow employees to deal with unforeseen event. Employers should look at a combination of paid and unpaid leave (employers should be guided by the employee contract of employment/statement of particulars).

3. No pay for periods of lateness and/or absence: Employers should use this as the last resort and they should inform all employees that this is going to be the case (employers please ensure that you check all employment contracts to ensure that any deductions do not amount to being an unlawful deduction of wages, or it may give rise to constructive unfair dismissal claims).

What happens if an employer closes the office due to the adverse weather condition?

If this is the case then employees should be paid their full contractual pay as they could not fulfil their contractual obligations.

What if employees are abusing the policy put into place?

If employers think their employees are taking what may be termed as a ‘snowballing day’ then the matter should be investigated under the company disciplinary procedure and if proven this could be regarded as an unauthorised absence. However before any employer instigates disciplinary action please take legal advice to ensure that you do not open yourself up to a claim for unfair dismissal.
Practical considerations for employers:

- Ensure you implement any policy in respect to adverse weather conditions fairly and consistently, while taking into account the particular needs and circumstances of individual staff members.
- If it is reasonable and practical offer employees that are able to attend work overtime and/or holidays in lieu to ensure that your business needs are continually met.
- Recognise employees who have managed to attend work – beating the snow (this can be as inexpensive as a small gift voucher or perhaps an employee of the month award).
- If you do not have an ‘Adverse Weather’ or ‘Working from Home’ policy, get one in place either by amending current contracts and/or sickness absence policies or putting new policies in place.
- Always consider how your actions will affect the morale of your work force – after all a successful business is one with a happy workforce!

If anyone would like to contact me in relation to any of the above please feel free to do so on either 01133 504030 or 07841011980 or info@scelegal.co.uk. Enjoy the snow and I look forward to receiving any comments/questions.