In the case of Samsung Electronics (UK) v Monte D’Cruz, the Claimant worked in the Print division of Samsung as one of four senior managers. Samsung proposed to reorganize by combining the four roles into a single head of department position.  The Claimant applied for the Head position, but was unsuccessful.  He and another ‘at risk’ employee applied for a lower position of a Team Leader role.  They were both unsuccessful and an external candidate was appointed.  The Claimant was subsequently made redundant and claimed unfair dismissal

The Employment Tribunal ruled that redundancy was the reason for the Claimant’s dismissal, but that the dismissal was unfair on two procedural grounds: firstly the consultation had been inadequate and secondly that Samsung’s approach to alternative employment was flawed, particularly regarding the objectivity of the criteria used for assessing the Claimant’s suitability for the Team Leader role. The Claimant was awarded over £60,000 in compensation.

The EAT disagreed with the Tribunal’s view regarding the consultation and confirmed that Samsung had provided relevant and adequate information to the Claimant at appropriate points in the process.

In respect of the appointment process for the Team Leader role, the Employment Tribunal was critical of Samsung’s decision to assess the internal candidates against ten mostly subjective competencies that were normally used as part of the annual appraisal process, including creativity, challenge, strategic focus, simplicity, self-control/empowerment, crisis awareness, and continuous innovation.  Samsung used these criteria rather than the person specification of the new post and the Employment Tribunal considered them to be too subjective. The EAT found that, whilst best practice would be for an employer to tell the applicants what assessment criteria would be used and how these would be judged, failure to do so would not render the interview decision unfair. The EAT was satisfied that there is no obligation on an employer to limit themselves only to those factors that are capable of objective measurement in considering applicants for alternative employment.

This case shows the difference in approach that may be used when deciding on selection criteria for redundancy selection, and the criteria that can be used in deciding whether a candidate is suitable for an alternative role.  In order to be reasonable, the redundancy selection criteria should be both objective and measurable, and not based on someone’s personal opinion.  However, when an employee at risk of redundancy is being considered for alternative employment, an employer has reasonable flexibility when assessing his/her suitability for the new role. The EAT has confirmed that employers are permitted to use subjective criteria, provided the decision is made in good faith.

The EAT decided that before making a costs order, an employment tribunal should in certain circumstances consider the issue of the potential paying party’s ability to pay costs, even if the paying party was represented by Counsel and the issue was not raised by the paying party or her Counsel.

Rule 41(2) of the Employment Tribunal Rules of Procedure states that when an employment tribunal considers whether to award costs or the amount of such costs, it ‘may have regard to the paying party’s ability to pay’.

In this case, the Claimant’s claims of breach of contract and race discrimination against the employer and six named individuals, were all dismissed.  The employment tribunal made an order that the Claimant should pay the entirety of the Respondent’s costs, which were estimated at £60,000 but could potentially be up to £95,000.  The Tribunal had not considered the Claimant’s ability to pay when reaching this decision, nor had the issue been raised by the Claimant’s legal representative.

The EAT stated that in exercising its discretion to order costs, the employment tribunal does not have to find a precise causal link between any relevant conduct and any specific costs claimed.  It endorsed Mummery LJ’s guidance in the Court of Appeal in Barnsley Metropolitan Borough Council v Yerrakalva that “the vital point in exercising the discretion to order costs is to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had“.

The EAT concluded that the tribunal had not erred in deciding to award costs. However, in the particular circumstances of the case, which included a potentially very large costs award and nothing to indicate that the Claimant could pay such an award, the EAT concluded that the tribunal had erred in law by not raising the issue of ability to pay before deciding on the costs application.  The matter was remitted to the same employment tribunal to consider the claimant’s means, to decide her ability to pay, and having done so make an appropriate costs order.

The EAT commented that tribunals should always be cautious before making a very large costs award, given the very serious potential consequences to a Claimant of such an order and because such orders may act as a disincentive to those bringing legitimate claims.

The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 will come into force on 6 April 2012, to amend the Employment Rights Act 1996. It will increase the minimum qualifying period of continuous employment necessary to claim unfair dismissal, and entitlement to written reasons for dismissal, from one year to two years.

However, this will not affect all employees across the board, Employers could have two classes of employees with differing rights to claim unfair dismissal. This is because these changes will not affect employees whose period of continuous employment began before 6 April 2012.

Employers will need to be aware of this distinction and, in particular, consider if an employee may be able to claim the period of employment began before 6 April 2012, if:

• an employee transferred into the organisation with an existing period of continuous employment (e.g. under TUPE) or has other service which counts such as from an associated employer;
• there is a gap in employment which breaks continuity and what the effect of this break is in terms of calculating continuous service; not all breaks of service break continuity;
• an employee performed services for the employer in another manner (e.g. purportedly as a consultant) but that this could be argued to be a period of continuous employment.

Further, some dismissal rights do not need a qualification period. For example, an employee dismissed for whistle-blowing, or asserting a statutory right (such as the right to take time off to care for dependants) may claim automatically unfair dismissal, without any need for a qualifying period. Similarly, an employee who can establish that a dismissal was connected to unlawful discrimination will also be protected.

When an employer wants to make changes to the terms and conditions of employees, it should firstly go through a process of consultation with the affected employees to seek consent to the proposed changes. Imposing changes without any form of consultation is likely to constitute a repudiatory breach of contract and may give rise to claims for constructive dismissal.

If, after a period of consultation, all or some of the employees do not consent to the proposed changes to terms and conditions, the employer has three options:

1. Not proceed with the change; or

2. Unilaterally impose the change to the existing terms and conditions; or

3. Following fair warning, dismiss with notice those employees who do not consent, and offer them employment on the new terms and conditions to commence immediately once the notice period under the old contract has expired.

In this case the employees were asked to take a 5% pay cut. After consultation, Mr Booth and one other employee would not agree to the pay cut. As pay was involved in the proposed contractual change, the employer quite correctly followed option 3. If the employer had just imposed the change, the employees would have been able to bring a claim for unlawful deduction from wages in relation to the 5% pay cut on the basis that his contractual wage had been cut without his consent. He would also have had grounds to resign and claim constructive dismissal.

Mr Booth refused the new contract he was offered and was subsequently dismissed for some other substantial reason (SOSR). The fairness of such a dismissal is decided in accordance with Section 98(4) of the Employment Rights Act 1996.

The Employment Tribunal found that the reason for dismissal was SOSR, but upheld Mr Booth’s unfair dismissal claim on the basis that his employer had failed to show that the dismissal was fair in all the circumstances.

The Employment Appeal Tribunal (EAT) allowed the appeal and remitted the case to a fresh Tribunal to determine whether the dismissal was fair. In reaching its decision the EAT gave a reminder to employers as to some of the key issues in a case like this:

1. Employers do not have to show that the contractual change is crucial to the survival of the business. The key is being able to demonstrate that there is a legitimate business reason for the change;

2. When considering the factors which are relevant to the fairness of a dismissal such as this, the Tribunal should focus on the reasonableness of the employer’s decision and not the reasonableness of the employee’s refusal to agree the change;

3. The requirement to determine the fairness of dismissals “in accordance with equity” as required by section 98(4)(b) of ERA 1996 includes considering whether the employer had considered other options, and also whether the whole workforce were affected by the pay cut.

As with many issues in employment law, the key point for employers is to demonstrate that they have behaved reasonably in the circumstances. It is certainly not impossible to lawfully make changes to employees’ existing terms and conditions of employment, but planning in advance and conducting genuine consultation with the workforce should be central to any such proposed changes.

Whilst it was, well, blatantly obvious that no Tribunal would reach that conclusion, lawyers made a huge fuss over it, to the extent that two top employment law QCs couldn’t agree, although DBIS insisted there wasn’t any problem; which of course there wasn’t.
Well, the Government has now fixed the non-existent problem, with the Equality Act 2010 (Amendment) Order 2012, which comes into force on 6th April 2012.  It amends the offending section 147 to remove the (non-existent) controversy. That’s that then.

Stobart is a warehousing and logistics service provider.  It took over a site in 2008 at which it serviced at least 5 clients.  Over time, 3 contracts were lost.  Of the two remaining contracts (being for meat storage and delivery) one client’s work was done mainly at night (by the night shift workers) and the other’s work mainly during the day, by different day shift workers.  The main contract (for the work during the night) was with a client called Vion.  Stobart closed the site, and FJG Logistics Ltd picked up the Vion work. Stobart took the view that the 35 employees who were engaged wholly (or for 50%+) of their time on Vion work on the night shift should transfer to FJG pursuant to TUPE.  FJG disagreed and refused to treat any of the employees as transferring to it.  The EAT agreed with FJG that there was no service provision change and therefore no employees transferred.  The consequence of this decision is that the employees had been dismissed by Stobart unfairly and with no notice.

The EAT said that there needs to be analytical distinction between an organised grouping of employees (TUPE, Reg 3 ((3) (a)), on the one hand and, on the other, whether employees are assigned to that organised grouping (Reg (4 (1)).

The EAT held that it is first necessary to identify whether there is an organised grouping of employees before asking the question of which employees are assigned to it.  The essential point in this case was that the employees were “organised” as to their shifts, not as to a particular customer, so there was not an organised grouping of employees which had as its principal purpose the carrying out of activities on behalf of a particular customer.  The EAT said that a paradigm example of an organised grouping of employees would be where there was a particular client “team” dedicated to the client. Such was not the case here.

Elias LJ said that it is almost an automatic response of employers to suspend in situations such as these, and to forbid them from contacting anyone, as soon as a complaint is made, and quite irrespective of the likelihood of the complaint being established.  Suspension should not be a knee jerk reaction, and it will be a breach of the duty of trust and confidence towards the employee if it is.  Suspension will often make the employee feel belittled and demoralised by the total exclusion from work and the enforced removal from their work colleagues, many of whom will be friends. This can be psychologically very damaging. Even if they are subsequently cleared of the charges, the suspicions are likely to linger, not least because the suspension appears to add credence to them.

Crucial to the reasonableness of a suspension is the particular circumstances of the case.  In this case the Court of Appeal did not believe that there was any real risk of patient treatment of this kind being repeated, given that it had resulted in these charges.  Also, attention should be paid to the record of the employee when assessing future risk.

Elias LJ also stated that, whatever the justification for the suspension, he found it little short of astonishing that it could ever have been thought appropriate to refer this matter to the Police.  In his view it almost defied belief that anyone who gave proper consideration to all the circumstances of the case could have thought that they were under any obligation to take that step.  He recognised that it is important that hospitals in this situation must be seen to be acting transparently and not to conceal wrongdoing, but they also owe duties to their long serving staff.  Being under the cloud of possible criminal proceedings is a very heavy burden for an employee to face.  Employers should not subject employees to that burden without the most careful consideration and a genuine and reasonable belief that the case, if established, might justify the epithet “criminal” being applied to the employee’s conduct.

Under the DDA 1995 (whose provisions on reasonable adjustments are substantially mirrored in the Equality Act 2010) the duty to make reasonable adjustments was triggered where a provision, criteria or practice (‘PCP’) applied by the employer, or any physical feature of the employer’s premises, placed a disabled person at a substantial disadvantage in comparison with non-disabled persons.  Once triggered, the duty obliged the employer to make such adjustments as were reasonable to prevent the PCP or physical feature having that effect.

The EAT’s decision is a useful reminder that reasonable adjustments are primarily concerned not with making the disabled person better, but with enabling him or her to remain in work or return to work.  The problem for the claimant in this case was that, given her unfitness for any productive work, neither of the proposed adjustments (rehabilitative work in the form of light duties, or a career break) would have mitigated the effect of the PCP- namely the expectation that she would perform her full role within the contracted hours.

The facts of the case were that S was signed off sick in March 2007 with a chest infection and diagnosed with CFS in September.  The Trust accepted that S was disabled for the purposes of the DDA.  During her absence she had several meetings with her manager to see how to get her back to work.  She also met with occupational health on several occasions.  The Trust warned S on several occasions that her prolonged absence may lead to her eventual dismissal on the grounds of capability. In January 2008 occupational health advised that the Trust should focus on getting S ‘back to work in some capacity (as distinct from doing productive work)’.  He suggested a reduction in hours, phased return, change of role, but that she was currently ‘unfit for work of any kind’.  In February 2008 occupational health suggested a career break to protect her employment while she recovered.  The Trust said it could not support a career break.

By April 2008 S had informed the Trust that she neither wished nor was able to return to her post as a specialist occupational therapist, and that she did not want to return to her former workplace in any capacity as it was ‘too busy’.  She could not identify a suitable location to return to, and declined offers of administrative work because of limited IT skills.  She refused to take up the Trust’s offer of IT training.  The Trust invited S to a meeting in June which she did not attend.  The Trust invited her to a further meeting, stating that of she did not attend it might have to consider ‘employment options including termination’.  In response S resigned stating that the Trust had not accepted the medical advice of her GP or occupational health, and that she had no confidence in the Trust facilitating her eventual return to productive work.  She argued that the Trust had failed to make reasonable adjustments to facilitate her return and that she had been constructively dismissed.

At first instance, the Tribunal took the view that the Trust should have made attempts to give S something by way of rehabilitation, even if not productive work, e.g. light duties for two or three hours, two days a week.  Accordingly, the Tribunal held that S had been constructively dismissed.  The Trust appealed.  The Tribunal did not believe a career break was a reasonable adjustment – S appealed on this point.

The EAT upheld the Trust’s appeal, and dismissed S’s appeal.  It agreed with the Tribunal that the PCP in this case was the expectation that S would perform her full role within the contracted hours, and that she was therefore placed at a substantial disadvantage because, due to her disability, she was unable to multi-task, deal with clients or set up emotional barriers, and could not work in a noisy environment.  Any proposed reasonable adjustments had to be judged against the criteria that they must prevent the PCP from placing her at that substantial disadvantage.

The EAT referred to an earlier EAT decision which held that a phased return to work could be a reasonable adjustment, but that this was not authority for the proposition that rehabilitation was a reasonable adjustment.  The EAT held that the Tribunal was wrong to hold that it would have been a reasonable adjustment for the Trust to suggest some ‘light duties’ for S as a form of rehabilitation, since rehabilitation would not mitigate the effects of the PCP.  The EAT held that the Trust had acted appropriately, by, for example, offering IT training, which S had declined.  The Trust had ascertained that there was no job that S was capable of doing at the time, whether part-time or otherwise.  Moreover there was no chance of her returning to her original post.  Nor had S disagreed with any of the letters detailing the Trust’s efforts to find her a suitable job.  S had decided not to attend two meetings to discuss possible adjustments.

In addition the EAT held that offering a career break would not have amounted to a reasonable adjustment.  In the EAT’s view, if the Trust had proposed a career break, S would have had legitimate cause for complaint at being moved from long-term sickness absence with benefits (including, at the time, half pay) to an unpaid career break, which would bot have prevented the disadvantage caused by the PCP, or alleviated her inability to multi-task, deal with clients, or set up emotional barriers.

The EAT held that the Tribunal had erred in finding that S had been constructively dismissed, as not only had the Tribunal’s erroneous finding been based on the Trust’s failure to make reasonable adjustments, but also because it could find no breach of the implied term of trust and confidence by the Trust.

The increased amounts will apply where the event that gives rise to the entitlement to compensation or other payment (for example the effective date of dismissal or redundancy) occurs on or after 01 February 2012.

It starts by assuming that employees will fall into one of two groups: those who plan to take time off (to attend or volunteer at the Games) and those who don’t have any plans to take time off, and who either may want to watch some of the Games while at work or who have no interest in the Games at all.

There is useful information for both employers and employees.