Employment Newsletter October 2015

October 7, 2015

Welcome to the latest edition of CFR’s Employment Update highlighting recent interesting legal developments for employers. We hope you find this useful and would invite you to send this email bulletin to friends and colleagues.

Michael Black, Employment Director


SOCIAL MEDIA: CAN AN EMPLOYER REMOVE OFFENSIVE POSTS BY A FORMER EMPLOYEE?

What can an employer do if they discover that a former employee has been posting derogatory comments about the business or certain managers on social media? This can be a serious problem for many businesses, especially if the comments are viewable by the general public.

If similar comments were published by a current employee, the employer would be able to take disciplinary action immediately. Unfortunately, this is not the case where the posts are being published by a former employee.

However, an employer can take action in this situation. Once the employer is aware of the posts, they should send out a letter requiring their removal. The letter should contain a copy of the comments and should state that they are untrue, without any factual basis and offensive, derogatory and defamatory. The employer should demand the former employee to remove the posts immediately and give a written undertaking not to make similar or other offensive comments on social media or elsewhere.

If the letter does not have the desired effect, there are further steps that can be taken. An employer can:

  • Report the comments and their author to the website owner or host, who can delete the comments and close down user accounts;
  • Report the matter to the police; and/or
  • Issue civil proceedings against the former employee to force the removal of the comments.

The initial letter should state that these steps will be taken if the posts are not removed as requested. This should lead to the problem being resolved but, if the former employee is unwilling to comply, the best option is to contact the website host. This is a quick and simple way of getting the posts removed and, due to the potential legal liability involved, they should be willing to act.

CASE NOTE – CLFIS (UK) LTD V REYNOLDS

The Court of Appeal has held that, when deciding whether an individual has been dismissed for a discriminatory reason, the Employment Tribunal should consider only the mental processes of the sole decision maker, and not those of other colleagues who have informed his decision.

Facts

Dr Reynolds had worked for Canada Life from 1968 to 1992. In 2006 she was appointed Chief Medical Officer under a consultancy agreement with CLFIS (UK) Ltd, a company which was part of the insurance group. When she was aged 73, the UK General Manager, Mr Gilmour, decided to terminate the consultancy agreement. This decision was taken following a presentation by two managers who highlighted problems with her work. Dr Reynolds subsequently claimed age discrimination.

Employment Tribunal

Her claim was rejected by the Employment Tribunal. It was found that Mr Gilmour had decided to end the agreement alone, based on his own knowledge of Dr Reynolds’ work. The Tribunal held that he had come to this decision because he believed that she was not providing the service required and that she was incapable of making the required changes to her performance. This was therefore a nondiscriminatory reason.

Employment Appeal Tribunal

However, the EAT found that Mr Gilmour’s decision had been significantly influenced by the two managers and that the Tribunal should have assessed their potentially discriminatory mental processes as well.

Court of Appeal

The EAT’s judgment was subsequently overturned by the Court of Appeal. The Court held that this was not a situation where the decision had been made jointly. Rather, Mr Gilmour had acted alone, even though he had taken into account information provided by others. The focus was therefore on his motivation alone and the Tribunal had been entitled to conclude that there was an adequate, nondiscriminatory reason for his decision. Had the decision been made jointly, the Tribunal would have been required to consider the motivations of all of the relevant decision makers.

The EAT’s judgment would have significantly widened the burden of proof test in discrimination cases by allowing Tribunals to adopt a “composite approach” and find that an act is discriminatory because of the motivation of someone other than the decision-maker. However, the Court of Appeal confirmed that, for a claim to succeed, the individual employee who made the decision must himself have had a discriminatory reason.

The Court stated that, where a decision is based on information provided by another that is tainted by discrimination, the correct approach would be to treat the other individual’s conduct as a separate act. This act could then itself be the subject of a discrimination claim.

TRAVELLING WORKERS: ARE THEY WORKING?

The decision of the ECJ in Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another (c-266/14), has found that the time spent by a peripatetic worker (one who is not assigned to a fixed place of work), on travelling each day between their homes and the premises of the first and last customers designated by their employer is “working time” for the purposes of the Working Time Directive (the Directive).

“Working time” is defined in the Directive as any period during which the worker is working, at the employer’s disposal and carrying out their activity or duties in accordance with national laws and/or practice.

“Rest period” is defined as any period which is not working time. The Directive was implemented in Great Britain by means of the Working Time Regulations 1998 (WTR). Neither the Directive nor the WTR state whether travel to, from or between places of work should be considered working time. Non-statutory guidance suggests that “normal travel to and from work” are not.

The reference to the ECJ came from a Spanish court, after a group of workers who installed security systems throughout Spain complained that their employer, Tyco, was breaching the working time rules by not treating their first and last journeys of the day as working time. The Spanish court noted that under Spanish national law, time spent travelling between a worker’s home and workplace is not working time, with the rationale being that a worker is free to choose where to live, and therefore to choose the distance they live from the workplace. However, in this instance, because the workers were told by mobile phone what route to follow and where the work was to be done, they were no longer able to choose how close they live to their place of work.

The question referred to the ECJ was whether the time spent travelling by a peripatetic worker at the beginning and end of the day constitutes “working time”, or a “rest period”.

Carrying out their activity or duties

The ECJ held that it was relevant that the first and last journeys of the day made by these workers were regarded as working time before the regional offices had been abolished. They held that it was only the departure points, not the nature of the journeys that changed. Therefore, these workers must be regarded as carrying out their duties during the time spent travelling to and from customers at the beginning and end of each day.

At the employer’s disposal

For a worker to be “at the employer’s disposal” they are required to be physically present at the place determined by the employer and to be available to the employer in order to be able to provide the appropriate services immediately if required.

Although the workers were free to choose the route they travelled, their employer was able to change the order of the customers or cancel appointments at any time. If that happened, the workers would be required to react to those instructions.

In any event, the workers were not able to use their time freely or pursue their own interests during that travelling time. Consequently, they were “at their employer’s disposal”.

At work

If a worker does not have a fixed place of work and is held to be carrying out their duties whilst travelling, that worker must be regarded as working on that journey. The fact that those journeys might start and finish at the worker’s home is irrelevant. Having lost the ability to determine the distance between their homes and the usual place of the start and finish of their working day, the employees could not be required to bear the burden of their employer’s choice to close the regional offices.

Consequences of the Court’s ruling

This ruling could have a significant impact on working hours and pay – particularly pertinent given the government’s recent living wage announcement.

It is understood that the immediate effect of this decision will be on UK workers employed by the State, however it appears that there will likely be an early challenge to domestic law, at which point the Working Time Regulations may well be interpreted in a manner consistent with the above decision. It would therefore be sensible for employers to seek early legal advice and consider practically addressing this issue, particularly when reviewing or re-negotiating terms and conditions, so as to ensure compliance with the Working Time Regulations and National Minimum Wage obligations.

It is also suggested that employers put in place the necessary monitoring procedures to avoid any abuse by employees.

UNFAIR DISMISSAL: THE BAND OF REASONABLE RESPONSES

The recent Court of Appeal decision in Robert Newbound -v- Thames Water Utilities Limited [2015] EWCA is a reminder that although an employer’s decision must only be within the band of reasonable responses to be fair and a Tribunal cannot substitute its own view for that of the employer, the “band of reasonable responses” is limited.

The test to be applied in misconduct dismissals is long established and dismissal for misconduct will only be fair if:

  • The employer has carried out a reasonable investigation into the alleged misconduct;
  • The employer believes at the time of the dismissal that the employee is guilty of the alleged misconduct;
  • There were reasonable grounds for the employer having such a belief; and
  • Dismissal was within the band of reasonable responses in the circumstances.

In assessing whether a dismissal is fair or unfair, a Tribunal must not substitute its own view for that of the employer and the Court of Appeal in Newbound considered whether the Tribunal had erred in finding that no reasonable employer would have dismissed in the circumstances.

Facts

The Newbound case concerned an employee who was dismissed after 34 years’ service for entering a sewer to carry out an inspection without the necessary breathing apparatus. Mr Newbound, a colleague Mr Andrews, and a contractor were tasked with carrying out a sewer inspection. Following a gas test, they concluded that they did not need to use the breathing apparatus. Mr Newbound was dismissed for gross misconduct following an investigation however Mr Andrews was given a written warning on the basis that he had less experience and had shown more remorse.

Decision

Mr Newbound brought a claim of unfair dismissal which he won at Employment Tribunal stage on the basis that no reasonable employer would have dismissed him. In the alternative, the Employment Tribunal found that the dismissal had been unfair based on a comparison with the treatment of Mr Andrews.

The Employment Appeals Tribunal (EAT) overturned the decision on appeal however and held that the Employment Tribunal had substituted its own view for that of the employer, rather than applying the band of reasonable responses test, and had failed to consider the reasonableness of the gravity with which the employer viewed the misconduct in question.

On further appeal to the Court of Appeal, the Employment Tribunal’s original decision was upheld. The Court of Appeal held that the Employment Tribunal had made four important findings of fact as follows:

  • The safe system of work rules were new;
  • Training had not been completed;
  • Mr Newbound had previously been allowed to exercise his discretion in relation to whether to use breathing apparatus; and
  • Mr Newbound’s earlier decisions had not resulted in disciplinary action as his employer had given him considerable discretion in relation to how he had carried out his work.

The Court of Appeal rejected the employer’s argument that employers should be given a very wide margin of appreciation where the alleged misconduct concerns a breach of health and safety requirements.

The Court highlighted the fact that Article 98(4)(b) of the Employment Rights Act 1996 (Article 130(4)(b) of the Employment Rights (Northern Ireland) Order 1996 in Northern Ireland) directed Employment Tribunals to decide the question of whether the employer had acted reasonably in deciding to dismiss the employee “in accordance with equity and the substantial merits of the case”. Therefore, the Tribunal’s consideration of the case was not merely to be “a matter of procedural boxticking”. The Court noted that the “band of reasonable responses” is not “infinitely wide” but that in this case the employer was stretching the band to an infinite width.

Comment

It is often assumed that employers will be given significant freedom in deciding whether to dismiss for gross misconduct. However, this case highlights that the band of reasonable responses is not limitless and the employer had wrongly assumed that its discretion would be even wider in the case of a health and safety dismissal. Furthermore, the fact that the EAT and the Court of Appeal disagreed in their assessment of the Tribunal Decision illustrates the difficult task faced by employers in judging whether their decisions will stand up to judicial scrutiny.

HOLIDAY PAY: NI COURT OF APPEAL RULES THAT VOLUNTARY OVERTIME MAY BE INCLUDED

Since the implementation of the Working Time Directive, the European and UK courts have steadily been expanding the definition of holiday pay. In a recent case, the Northern Ireland Court of Appeal has further added to the types of remuneration which can be included within paid statutory leave. Employers are therefore becoming increasingly concerned about the rise in payroll costs going forward and the risk of backdated claims for unpaid holiday pay.

Article 7 of the Working Time Directive provides that EU member states must ensure that workers have the right to at least four weeks’ paid annual leave. The European Court of Justice has interpreted statutory holiday pay as “normal remuneration”. 1 This means that the worker is entitled, not only to his basic salary, but also to remuneration “intrinsically linked to the performance of the tasks which he is required to carry out under his contract of employment and in respect of which a monetary amount, included in the calculation of his total remuneration, is provided”.2

Under UK law, the Working Time Directive is implemented by the Working Time Regulations 1998 and by the Working Time Regulations (Northern Ireland) 1998, under which a distinction is drawn between those employees with “normal working hours” and those with “no normal working hours”. It was initially thought that “normal working hours” would only include overtime which is guaranteed i.e. where the employer is contractually obliged to provide overtime (and pay for it) and the worker is obliged to work it. However, Bear Scotland Ltd and others v Fulton and others3 widened the definition to include non-guaranteed overtime i.e. overtime that the employee is obliged to work if required, but the employer is not obliged to provide.

Bear Scotland did not deal with voluntary overtime (where an employee cannot be required to work it and the employer does not have to provide it). Nevertheless, in Patterson v Castlereagh Borough Council4 , the Northern Ireland Court of Appeal held that there was no reason in principle why voluntary overtime should not be included in paid statutory leave. It will be a question of fact for each tribunal to determine whether or not such voluntary overtime is normally carried out by an employee.

However, it should be noted that this case may be of limited application. The Court of Appeal warned that its decision should be regarded with some caution because the principle had not been fully argued by the parties. Furthermore, it is not guaranteed that voluntary overtime will satisfy the test for “normal remuneration” established by the ECJ i.e. that there must be an intrinsic link between the performance of the tasks which a worker is required to carry out under the contract and the remuneration received. This point was not dealt with by the Court of Appeal.

Nonetheless, these recent cases on holiday pay have created potential problems for businesses, which may now be at risk of large claims for backdated holiday pay from employees. However, in Bear Scotland, the Employment Appeal Tribunal emphasised that an underpayment in respect of leave which occurs more than three months before a complaint is made to the tribunal will only fall within the tribunal’s jurisdiction if the underpayment forms part of a “series of deductions”. This series will be broken where there is a gap of more than three months between periods of annual leave, meaning that such claims will be limited to employees who have taken annual leave consistently without more than three months between each holiday period.

Backdated holiday pay claims have now been further curtailed by the fact that employees bringing holiday pay claims after 1 July 2015 will only be able to claim unpaid wages for up to two years. This change was introduced by the Government in response to concerns from employers following the decision in Bear Scotland. It therefore appears that, in practice, it will be difficult for employees to

1 Robinson-Steele v RD Retail Service Ltd [2006] ICR 932

2 Williams and others v British Airways plc [2011] IRLR 948

3 UKEATS/0047/13

4 [2015] NICA 47

claim large amounts of unpaid holiday pay. This should help to ease the fears of employers, although it is likely that there will still be significant uncertainty for businesses when it comes to devising holiday pay policies.