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September 2011 Updates

Wasted costs

In Godfrey Morgan Solicitors Ltd v Cobalt Systems Ltd, the Employment Appeal Tribunal handed down guidance on wasted costs hearings.

The Claimant withdrew his claim at the last minute, prior to a merits hearing. His solicitors were found to be deficient in:

  • Failing to advise him earlier that there were no prospects of settlement
    of the claim.
  • Delaying in communicating the fact of the Claimant having withdrawn his
    claim to the Respondent.

The Respondent sought, and won, a wasted costs order against the Claimant's solicitors for not advising the Claimant properly, and for delaying in informing it of the Claimant's withdrawal of his case.

At the costs hearing, privilege was waived and the Claimant and his solicitor were cross-examined.

The Claimant's solicitors unsuccessfully appealed against the wasted costs order on various bases.

The Employment Appeal Tribunal set out guidance on the conduct of wasted costs hearings. The Employment Appeal Tribunal suggested that cross-examination of a representative would generally be inappropriate, disproportionate and/or unnecessary, but it may be fair and proportionate (as in this case) where a representative is no longer acting, privilege has been waived and a hearing fixed, and there are differing accounts of central facts to resolve.

There was also no reason why the parties could not make submissions to the Tribunal at the costs hearing (as in this case).

Annual Employment Tribunal statistics

The Employment Tribunal and Employment Appeal Tribunal statistics for 2010-2011 have been published.

In summary:

  • They show an 8% fall in the overall number of claims received when compared with 2009-2010.
  • The number of unfair dismissal and redundancy pay claims has fallen slightly.
  • The number of part-timer worker discrimination claims has almost trebled.
  • The number of age discrimination claims has risen by a third.
  • With regard to awards:
  • The median compensatory award for unfair dismissal was £4,591.
  • The median awards for discrimination claims were around £5,000-£6,500. This excludes age discrimination, where the median award was much higher at £12,697.
  • The highest award for discrimination was £289,167 (for sex discrimination) compared with £729,347 (for disability discrimination) in 2009-2010.
  • The highest award for unfair dismissal was £181,754. This is in excess of the statutory cap and it is likely that the dismissal was related to a complaint of whistleblowing or health and safety.

The statistics also reveal a slight increase in the number of appeals received by the Employment Appeal Tribunal.

Acas (Advisory, Conciliation and Arbitration Service) guidance on social networking

Acas has produced some Guidance Notes on Social Networking, i.e. the use of Facebook, Twitter and Linkedin to communicate informally with friends or business contacts. This often takes the form of ?posts' that are accessible by an individual's network of contacts, or even the general public, depending on the individual's privacy settings.

It offers advice on how to handle the impact of social networking on the management of performance, recruitment, disciplinary and grievance issues.

The section called "How to Draw up a Social Networking Policy" includes practical tips and an explanation of the legal considerations involved.

Given the rise of social networking, and the potential workplace issues linked to it, it's something that all employers should be giving consideration to, particularly with regards to its ability to decrease staff productivity and generate cyber-bullying.

Unfair dismissal

Is an employer which is considering an appeal against a dismissal entitled to find that the dismissal was fair but on entirely different grounds from the original decision to dismiss? Yes and no, according to the Employment Appeal Tribunal in the case of Perry v Imperial College Healthcare NHS Trust.

The employee in this case worked for two different NHS Trusts, in different jobs, working different hours in each. In one job, she was required to travel. The other job was clinic based. Due to medical problems with her mobility, she was signed off sick from her first job but continued with her other job.

When her first employer found out that she was doing the other job, she was dismissed for gross misconduct on the basis that she had defrauded them by receiving sick pay. When she appealed, the employer realised that the decision was unsupportable. Nevertheless, the appeal panel confirmed her dismissal on completely different grounds, namely that she should have informed her first employer that she was capable of doing other work to which it could have redeployed her.

The Employment Appeal Tribunal found that, in this particular instance, the decision made by the appeal panel did not justify summary dismissal. On the facts, the decision was not within the range of reasonable responses, and so, on that basis, the dismissal was held to be unfair.

Had the employer had found an adequate alternative basis on which to uphold the dismissal, however, the dismissal could have been found to be fair.

Reasonable adjustments - disability

Does there need to be a good or real prospect of an adjustment alleviating the disadvantage suffered by a disabled employee for that adjustment to be a reasonable one? Not necessarily, said the Employment Appeal Tribunal in Leeds Teaching Hospital NHS Trust v Foster.

The Claimant suffered from stress, which was caused by his role within the security department. It was therefore a disadvantage for him to continue working there. It would have been a reasonable adjustment to put him on the redeployment register. It was not necessary to find that there would have been a good prospect of a redeployment opportunity becoming available and the Claimant being well enough to work. There need only have been a prospect of that at the date of the decision to put him on the register being taken.

Assessing costs in Employment Tribunals

The Employment Appeal Tribunal has decided in Shields Automotive v Grieg that a Tribunal should take into account a Claimant's capital when considering whether or not to make a costs award against them.

While a Tribunal was not bound to consider a paying party's means, if it did, it was required to take account of his whole means, including his capital in the former matrimonial home.

The Employment Appeal Tribunal also heard fresh evidence from the Claimant's estranged wife. She refuted the nature and extent of his outgoings and the information that the Claimant had given regarding disposal of capital prior to the hearing.

The Employment Appeal Tribunal held that, given the Claimant's misleading evidence, no Tribunal could properly assess the Claimant's means. Therefore, it was appropriate for no account to be taken of his means. The Employment Appeal Tribunal ordered the case be remitted to the Tribunal for the Claimant to pay the whole of the Respondent's expenses and ordered remission of the assessment of the expenses to the Auditor of the Sheriff Court.

Varying terms and conditions of employment

The Employment Appeal Tribunal has decided, in Slade v TNT (UK), that an employer did not necessarily act unfairly when, after negotiations to change terms of employment (which included an offer to "buy out" certain existing terms) failed, the employer terminated existing contracts with an offer of re-employment on the new terms, which did not include the buy-out payment.

The Respondent employed loading bay operatives who enjoyed an "end of sort" (EOS) bonus. For legitimate reasons, they sought to remove that bonus. Negotiations followed, which included an offer of a buy out payment. The Respondent warned that, if the deal was declined, existing contracts would be terminated and an offer of re-employment made.

The Employment Tribunal decided that there was "some other substantial reason" for the dismissals and that the employer had acted fairly.

The Employment Appeal Tribunal considered the Tribunal had correctly focused on the reasonableness of the employer's decision, balancing the advantages to the business with the effect on the Claimants. Applying the band of reasonable responses test, the Employment Appeal Tribunal considered that it was not right to say that the only reasonable response for the employer would be to offer re-engagement on terms which included the lump sum buy-out payment. It was open to a reasonable employer to conclude that it should not offer a lump sum on re-engagement when it was not going to achieve any of the benefit of the agreement for which the lump sum had been offered in the first place.

Government proposals for employment law reform

The Government has published proposals to deregulate business. Within the field of employment law, the Government is proposing to:

  • Introduce fees for anyone who wishes to bring a Tribunal claim.
  • Consult on the removal of the provisions in the Equality Act which impose liability on employers for third party harassment which they do not take reasonable steps to prevent.
  • Increase the length of service required for someone to be able to bring an unfair dismissal claim from one year to two years.

Discrimination ? vicarious liability and aggravated damages

The Employment Appeal Tribunal has decided in Bungay v All Saints Haque Centre that an organisation's agent can make it vicariously liable for acts of discrimination under the Equality Act 2010, even though they have not been authorised to unlawfully discriminate.

The Respondents in this case were members of the Board of a religious centre. An Employment Tribunal held that they had caused the unfair dismissal of the Claimants, who were employees of the centre, and that they had unfairly discriminated against them on the grounds of their faith. The Respondents were allowed to run the centre even though they did this in a discriminatory manner. However, under agency principles, their acts were treated as being done by the centre.

The Tribunal also found the Board members were jointly and severally liable with the centre for discrimination damages on the basis that they were the "prime movers" in the campaign of discrimination.

They also held that aggravated damages could be awarded in respect of the Board members' post-employment conduct in taking a high handed approach to disciplinary proceedings and making unfounded allegations to the police, which cause the Claimants much distress.


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SRA number 404293