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Employment Law Case Update - March 2014

Employment Law Case Update - March 2014

Burnetts' team of employment law solicitors examine the latest case law developments.

March 2014

Using Warnings

There have been numerous cases which have looked at how and when employers can look at previous disciplinary warnings during a subsequent disciplinary process. The case of Rooney v Dundee City Council explored whether an employer can take a previous final written warning into account when making a decision to dismiss even though an appeal against that warning was still outstanding.

Mrs Rooney was a cashier supervisor at Dundee City Council and had worked there for 26 years. In September 2010 she was given a ‘final written warning’ for accepting a customer payment of £10,000 by credit card without carrying out the requisite money laundering checks, contrary to previous instructions. Mrs Rooney appealed but for various reasons (including severe weather/unavailability) the appeal was never heard. 

In December 2011, 8 days before the final written warning was due to expire, Mrs Rooney was found guilty of misconduct after she failed to process a £1,300 corporate float transaction before a 15:30 deadline on a Friday afternoon. Importantly, missing the deadline meant that cash was not balanced on the Friday evening and payments were not credited until the following Monday morning. 

At the disciplinary hearing the deciding officer considered both incidents and made the decision to dismiss Mrs Rooney. The Council did not believe the second incident justified dismissal on its own but decided that, taking into account the ‘live’ final written warning, dismissal was appropriate. Mrs Rooney complained about the ‘live’ warning and an internal investigation into that was conducted but, when Mrs Rooney appealed, her dismissal was upheld. 

Mrs Rooney subsequently brought an Employment Tribunal claim against the Council for unfair dismissal. The Employment Tribunal dismissed Mrs Rooney’s claim on the basis that the actions of the Council (including taking into account the existence of the warning) were well within the ‘range of reasonable responses’.

The Employment Appeal Tribunal (“the EAT”) has now upheld that decision confirming that it is valid for an employer to take a live warning into account even in circumstances such as this where the validity of the warning is being challenged.  The EAT clarified that in such circumstances, the employer needs to take into account the fact that the previous warning is being challenged but if there is no evidence to suggest that the warning was ‘manifestly inappropriate’ or ‘in any way invalid’ then the existence of a challenge to the warning is no reason to discount or ignore that warning even when the outcome of the appeal against the original warning is unknown.

It will be rare in practice for an appeal to be unresolved before a new disciplinary hearing takes place but, when events do progress quickly, this decision provides employers with the comfort of knowing that they can proceed without waiting for the original appeal to be resolved. However, the EAT did stress the importance of dealing with appeals efficiently (even in situations where it is difficult to arrange an appeal date) to prevent any subsequent dismissal process becoming more complicated than necessary.

Anyone with concerns about how to use a previous warning during a subsequent disciplinary process should contact Natalie Ruane at Burnetts on 01228 552222

TUPE – harmonisation following restructure

In the latest stage of the ongoing saga of Hazel & Another v Manchester College, the Court of Appeal (CoA) has upheld an earlier decision that two lecturers were not dismissed for an economic, technical or organisational reason (an “ETO Reason”) that entailed a change in the workforce when they were dismissed after refusing to agree to new terms of employment including a reduction in their pay.  This made their dismissals unfair.

Manchester College provides offender learning in prisons.  As part of a change of service providers in August 2009, the College took over, in accordance with the Transfer of Undertaking (Protection of Employment) Regulations 2006 (“TUPE”), the employment contracts of around 1,500 staff including the two employees in question.

Following the transfer, the College decided that it needed to save money.  In the first instance the College sought volunteers for redundancies.  When that didn’t achieve the necessary savings, the College sought to reduce costs further by harmonising terms and conditions across 37 different types of contracts of employment.  

When the two employees objected (mainly because of the wage reduction that they would suffer as a result of the harmonisation), the College entered into a period of consultation with them. That consultation didn’t result in agreement so the College opted to terminate their old contracts and offer re-engagement on the new terms including the lower salaries.  The two lecturers accepted the new contracts but then sued for unfair dismissal on the grounds that their old contracts had been terminated in circumstances which amounted to an unfair dismissal.

Under previously established case law it is clear that dismissals as a result of harmonisation cannot be considered as part of an ETO Reason entailing changes in the workforce.  

In this case, the College tried to get around that established case law by arguing that the dismissal of the employees was not part of a harmonisation programme but rather as part of an overall cost saving strategy which included redundancies. That larger programme had resulted in changes in the workforce and thus, the College argued, there could be an ETO Reason for the dismissals/termination of the original contracts.  If successful this argument would have provided a defence to the unfair dismissal claims.

Unfortunately for the College, the CoA gave this argument little credence and found that, in relation to the two employees in question, the principal reason for the dismissal was their refusal to accept new harmonised terms.  The CoA held that this reason was connected with a TUPE transfer and was not an ETO Reason entailing changes in the workforce.  The fact that redundancies were considered first was not relevant.  

A further aspect of the CoA case was that the College had appealed against an earlier order to re-engage the employees on their old contracts.  The College argued that this remedy was not available as the employees had already been re-engaged on the new contracts.  The CoA rejected this argument and decided that the earlier order should stand meaning that the employees could be returned to their old contracts but with the strict proviso that their salaries would not be increased until the harmonised salaries caught up to theirs.

This interesting case was decided under the old TUPE Regulations. As we highlighted in last month’s bulletin, TUPE has now been amended so that, although changes to terms and conditions are void if the sole or principal reason for the change is the transfer itself (unless there is an ETO Reason), changes “connected to the transfer” might now be permitted. 

The new rules on TUPE related dismissals are similar in that such dismissals are automatically unfair if the sole or principal reason for the dismissal is the transfer itself but dismissals which are merely for a reason “connected to the transfer” might now be fair provided the employer has a fair reason for dismissal and follows a fair procedure.  
Whilst this technical change might help employers in the same position as Manchester College, it is important to note that the case law stating that harmonisation is unlawful still stands so, although the new rules might assist organisations to defend themselves against the unfair dismissal arguments, extreme caution should be exercised whenever employers are looking to change terms and conditions following a TUPE transfer. 

Anyone needing assistance in that scenario should contact Natalie Ruane at Burnetts on 01228 552222.

January 2014

More developments concerning the right to be accompanied

We mentioned in the December E-Bulletin that Acas are consulting over changes to the Acas code relating to the rights of the employee and the employer when the employee asks for a companion during a disciplinary or grievance hearing following the decision in Toal v GB Oils.

In Toal, the employee asked to be accompanied at a grievance hearing by Mr Lean, a certified Union official.  However, the employer refused to allow Mr Lean to attend so Mr Toal selected another companion. The grievance decision went against Mr Toal so he appealed.  When the appeal also failed, Mr Toal brought a claim against GB Oils Ltd for breach of Section 10 of the Employment Relations Act 1999 (Section 10).

During the original Employment Tribunal hearing, it was accepted that Mr Toal had waived his rights to bring such a claim by selecting another companion. When the Employment Tribunal’s decision was challenged on appeal, the Employment Appeal Tribunal (the EAT) decided that the right to be accompanied is an absolute right and cannot be waived. The EAT went on to state that, the only limitations on who the employee could be accompanied by are those laid down in Section 10. That is to say that, as long as the chosen companion is a Trade Union official, an official who a Trade Union has certified to have experience as a companion at hearings or a fellow employee, then the employee can pick whoever he or she likes.

This is at odds with the Acas guidance which has suggested up to now that ‘it would not normally be reasonable for workers to insist on being accompanied by a companion whose presence would prejudice the hearing nor would it be reasonable for a worker to ask to be accompanied by a companion from a remote geographical location if someone suitable and willing was available on site’.

The EAT found in Toal that this guidance was incompatible with Section 10 rending the ACAS guidance void and giving employers very little power to object to an employee’s choice of companion.

The Toal case has now been followed in the case of Roberts v GB Oils Ltd. Interestingly, this case was against the same employer and involved the same potential companion.
Although reservations were expressed, the EAT agreed that the employee could select whoever he or she wanted to be their companion as long as the companion met the criteria set out in Section 10. However, the EAT went on to say in this more recent case that, if the rejection of the companion was justified on the facts of the case, compensation for the breach should be reduced potentially down to nothing.

The decision in Roberts will therefore provide some level of comfort to employers who have refused particular companions as a result of the ACAS guidance or who wish to do so in the future. However, employers always need to remember that the Employment Tribunal might not agree that their decision to refuse to allow a particular companion to attend was justified so evidence and a clear rationale for doing so will need to be in place before any such decisions are taken.

Employers who would like advice on dealing with the employee’s choice of companion should contact Natalie Ruane at Burnetts on 01228 55 22 22.

Religious Dismissals

The latest decision in a line of cases centring around religious discrimination has been brought before the Employment Appeal Tribunal (EAT) in Grace v Places for Children. In this case, the EAT dismissed the appeal of a Christian Nursery manager who alleged that she had suffered unlawful religious discrimination in the workplace.

Ms Grace is a devout practising Christian who was employed as a Nursery Manager at the employer’s Islington Nursery for a period of approximately nine months. During her employment Ms Grace had ‘manifested’ her religious beliefs in the workplace on three notable occasions which included; conducting an unauthorised training session for staff members which gave rise to complaints from some attendees; reacting to a pregnant colleague’s recounting of a dream in such a way that the colleague was left extremely scared and believed that she would suffer a miscarriage; and informing another colleague that something was going to happen in the nursery which would have a massive ‘ripple effect’ which led to many of the staff members complaining that they felt uneasy or frightened in the workplace.

The employer, Places for Children, believed that these three instances amounted to inappropriate and unprofessional behaviour towards other members of staff and consequently, Ms Grace was summarily dismissed for gross misconduct.

Ms Grace brought her claim to the Employment Tribunal alleging that she had been subjected to unlawful direct discrimination because of a protected characteristic, her religion. Ms Grace argued that her dismissal was really connected to her offer to hold Bible sessions and to her willingness to discuss Christianity with colleagues during break times.

The Employment Tribunal dismissed her claim. It found that the employer had explained that it had a duty to facilitate individual prayer, but not group prayer, had never expressed opposition to groups meeting to discuss the Bible, had no restrictions on discussing religious matters during breaks and had not specifically stated that conversations about God were unsuitable in the workplace. Places for Children believed that Ms Grace had blurred the boundaries between her work and non-work matters, which had an adverse effect on the welfare of the staff. Consequently, the Tribunal found that Ms Grace was not treated as she was because of her religion, but rather because of the way she manifested or shared it; therefore her treatment did not constitute direct discrimination because of her religion. Ms Grace appealed this decision.

The Employment Appeal Tribunal (EAT) dismissed the appeal. The EAT held that the Employment Tribunal was entitled, on the facts presented, to find that Ms Grace was not dismissed or treated less favourably because of her religion. The EAT held that she had not been dismissed for making her religious beliefs apparent but because she had manifested her religious beliefs in the workplace in a way which was inappropriate and upsetting for her fellow colleagues. Ultimately, her dismissal was not because of her religion, rather it had been caused by her unacceptable behaviour whilst at work.

This case reinforces the message that, although there is no clear boundary between holding and manifesting a religious belief, dismissals can be justified where manifesting the religious belief has a disruptive or negative impact in the workplace.  However, for this “defence” to succeed the employer will need to be able to prove that any disciplinary action is due to an employee’s inappropriate conduct whilst at work and not because of their religion or belief.

About the author

Natalie Ruane profile photo

Natalie Ruane

Natalie is a Partner and leads the Employment Law & HR team and specialises in education.

Published: Tuesday 4th March 2014
Categorised: Education, Employment

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