In this quarters update we look at the Bill to remove EU law, recent case law judgements covering withholding company sick pay and discrimination, along with key information regarding Constructive Dismissal and the usual Training details and Partner Services.
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Legislation Updates / Case Law
Bill to Remove EU Law
The Retained EU Law (Revocation and Reform) Bill 2022-23 was published on 22nd September 2022, paving the way for a post-Brexit reform of UK law. The government announcement says the legislation will allow it to ‘amend more easily, repeal and replace’ law derived from the EU which has been kept as part of the Brexit arrangements. The Bill will also include a ‘sunset date’ by which all remaining EU Law will either be removed or absorbed into UK domestic law. The Bill comes into effect at the end of 2023 and has a transition period up to mid-2026. After this time, regulations derived from EU law including the:
- Working Time Regulations
- Agency Workers Regulations
- Fixed Term Employees Regulations
- Part Time Worker Regulations
- TUPE Regulations
will be removed from UK law unless they are written into new legislation. We will see what develops from this over the next few years.
Withholding Company Sick Pay based on a ‘Belief’ that Employee was not Genuinely Unwell amounted to Constructive Dismissal
An employee received an invitation to attend a disciplinary hearing, and the next day was signed off sick by his GP. While absent, he was examined by occupational health who did not suggest his sickness was not genuine. However, his employer believed that he was trying to avoid the disciplinary hearing and therefore paid him SSP only, instead of company sick pay. He brought a claim for constructive dismissal, alleging that the failure to pay him company sick pay was a fundamental breach of contract which entitled him to resign and claim constructive dismissal.
The employment tribunal found that the employer had the contractual power to
- suspend the claimant without pay if it thought his absence was not genuine, but this power had not been exercised.
- withhold company sick pay where, after investigation, the absence was found not to be genuine.
There was no investigation in this case and no other relevant contractual grounds on which company sick pay could be withheld. There was therefore a breach of contract. However, the tribunal found the breach was not fundamental. By withholding pay, the employer had not indicated an intention to end the employment relationship; rather, its aim in withholding pay was to encourage his participation in a disciplinary process, which of course required him to remain as an employee. In those circumstances, the tribunal found that the breach of contract in failing to pay company sick pay was not of a fundamental nature going to the root of the employment relationship so as to amount to a repudiatory breach of contract.
He appealed, and the Employment Appeal Tribunal (EAT) upheld the appeal. The EAT found that it was an error of law for the tribunal to adopt the approach that, for the breach of contract to be fundamental, the employer must have intended that it no longer wished to continue with the employment relationship. In adopting that approach, the tribunal was incorrect in law. The EAT stated that in order to establish constructive dismissal, what is required is that the employer demonstrates an intention to no longer comply with the terms of the contract that is so serious that it goes to the heart of the contract, entitling him to resign and claim constructive dismissal in response to that breach. In this case, there was a deliberate decision to withhold pay to which he was entitled, resulting in a significant reduction in earnings, in circumstances where there were other contractual provisions which would have allowed the employer to deal with suspicions about his absence. The EAT ruled that this was a fundamental breach.
Employee wins £96,208 pay-out after bosses refused to promote her because they thought she was ‘too old to quit’ and would stay ‘no matter how she was treated
An experienced designer has won almost £100,000 in compensation after winning her claims of unfair dismissal and age discrimination.
She was deemed a low ‘flight risk’ from the company compared to younger members of staff and would stay ‘no matter how she was treated’, an employment tribunal heard. As a result, she was repeatedly passed over for promotion in favour of other colleagues with less experience until she felt forced to resign
The tribunal heard she was a knitwear design specialist with more than 30 years’ experience in the fashion industry joining Superdry as a designer in 2015. In the first season, she was responsible for designing the range of men’s knitwear, with sales increasing by 63 per cent. Her performances were applauded by her bosses, who rated her overall ability as ‘master’ in 2017 and 2018.
But the risk of her leaving was assessed as ‘low’, whilst the impact of her leaving was assessed as ‘medium’. This flight risk assessment was neither discussed with her before it was made nor disclosed to her afterwards.
The tribunal heard that, when she first started working at the fashion brand everyone had the title of ‘designer’, but this changed in 2017 when two of her colleagues were promoted to ‘senior designer’. She raised this issue in an appraisal meeting with her manager in March 2017 but he told her she needed to undertake other responsibilities to reach the rank of senior designer.
In August 2018 the design team was restructured with roles of trainee designer, assistant designer, designer, lead designer and design manager. A HR advisor at Superdry, told the tribunal that in order to be promoted to lead designer, a candidate would need experience of working across multiple categories without needing much support and guidance from senior colleagues. She claimed she had all of the experience necessary, as she managed work in the men’s and women’s knitwear and knitwear accessories categories, even taking over extra responsibility in the busiest time of the year when one of her colleagues went on maternity leave. In April 2020, she was placed on furlough until July 2020.and on her return to work, she was told that she would be designing the Autumn Winter 2020 knitted accessories range, for both men and women. She told the tribunal this felt like a demotion as she would be on ‘key fobs and beanies’.
She handed in her notice in July 2020, whereupon she was told she would have to work a three month notice period ‘as the design department was short-staffed’, which she said she found ‘demoralising’. She told the tribunal that, in the lead up to tendering her resignation, she had felt much frustration and emotional stress, and decided that ‘enough was enough’. She said that she had made herself ill with the stress of the previous year, and couldn’t continue to work in an environment where unreasonable pressure was placed on her, combined with the refusal of management to give her the recognition that she felt her skills and experience deserved. She described feeling ‘humiliated and degraded’ when junior members of staff asked why she was not a lead designer.
The tribunal heard she was further demoralised when, in September 2020, a woman with 20 years less experience had been recruited as a lead designer shortly after two other similarly ranked designers had been made redundant. She described it as ‘galling’ that she had been denied what she felt was her rightful elevation to lead designer, having resigned in distressing circumstances, only then to be invited to celebrate the new recruit. After she resigned, she raised a formal grievance about the way she had been treated, but this was dismissed and as part of the process she was described as ‘scatty’.
Employment Judge David Hughes said this comment was ‘loaded with subjectivity, the sort of term that verges on a term of abuse and which the Tribunal would not expect to be used to describe a younger, male colleague‘. Regarding her lack of promotion, the judge found that the employer did this in significant part because of her age and did not accept the reasons for not promoting her. ‘To fail to promote on the basis that she could not work cross-category (when she could, and did), that she couldn’t work with minimal referral (which she could, and did) and that she lacked managerial / leadership experience (she did not) is a set of facts from which the Tribunal could infer that she was discriminated against. We find that the decision makers decided not to promote… because they judged that there was little risk of her leaving the business no matter how she was treated. We find that they probably thought this in significant measure because of her age. We find that a similarly valuable designer who was significantly younger than her probably would have been promoted.’
Constructive Dismissal
Constructive dismissal is where an employee resigns and shows they were forced to do so by the conduct of their employer. In most cases, employees require at least 2 years’ service with their employer in order to bring such a claim (except in certain circumstances such as protected disclosures etc.). The steps leading to a constructive dismissal claim are:
- The employer commits a ‘repudiatory breach’ of the contract of employment. The repudiatory breach of an employee’s contract must be so serious that it justifies the employee resigning. Examples of a fundamental breach of this nature would include imposing a change to a fundamental term of the employment contract on the employee, without their agreement, or serious instances of bullying by the employer.
- The employee resigns in response to this breach. The resignation may be with or without notice, but it is usually expected that the employee would resign without notice if they claim their contract has been breached in such a serious way that they cannot reasonably be expected to continue working.
- The employee does not delay in resigning. If the employee does delay it can be argued that they have ‘affirmed’ the breach and therefore cannot claim constructive dismissal.
It is noted that constructive dismissal claims are notoriously difficult for employees to win at tribunal.
However, an example of where constructive dismissal could apply is where a manager’s conduct may be so poor as to breach the implied duty of trust and confidence, which is fundamental to the employment relationship.
In a recent employment tribunal (ET) case, a Care Home employee:
- experienced symptoms related to Covid-19 and was advised to self-isolate, receiving an isolation note from his GP
- continued to feel unwell, and received a second note from his GP advising him to isolate for a further period (he had self-isolated for a total of 7 weeks).
- had a Covid 19 risk assessment from his employer stating he was ‘high risk due to his underlying health conditions of diabetes, a heart condition and high blood pressure’.
On his return to work, he noticed that staff working in the kitchen were not wearing facemasks and said he would raise the matter with the matron, and added jokingly that if this was not actioned he would make a complaint to the Care Quality Commission (CQC). On hearing this, the manager spoke to the employee to explain the guidance on PPE, discuss his sick leave, and also questioned him about his conversation. The employee stated he felt scared, initially denying it but then when his manager became angry and started shouting at him he admitted that he had made the remarks. The manager, according to the employee:
- continued to shout at him, pointing his finger in his face;
- questioned him on whether his absence was for a genuine reason and was accused of lying to his GP about having Covid and falsifying doctors’ notes;
- told him he was “not a loyal employee”, and that he was ungrateful, referring to previous help the claimant had received from the company such as loans and holidays;
- warned him that going forward he would be “on his back every five minutes”.
After the meeting, the employee went to his locker and took out his belongings, and as he was clocking out of his shift he told his manager that he was leaving. In response, and in front of other members of staff, his manager told him that he did not care.
Following the meeting, the manager sent a letter to the employee, referring to the meeting and issuing an “informal warning” in respect of
- unsatisfactory conduct for falsifying sick notes and absenteeism from work; and
- talking to a colleague about reporting the home for breach of PPE when he should have discussed this with management.
Following this, the claimant sent his resignation letter to the care home which said he “was treated appallingly” and asserting that he had been constructively dismissed. The claimant brought a tribunal claim asserting the same.
The ET heard that the employee felt “belittled and hurt” by his manager’s threats. The manager denied the employee’s version of events. Under cross examination the manager said:
- he believed that the standard version of Covid lasted only lasted for 14 days. For this reason, he believed that the employee had falsified the reasons referred to within his sick notes and was not telling the truth to the NHS or his doctor in relation to experiencing Covid symptoms;
- he did not know the reason for the employee’s resignation but believed it could possibly be related to embarrassment on the employee’s part in relation to his length of absence from work when others had risked their lives to continue working.
The ET had to consider whether there was ‘reasonable and proper cause’ for the manager’s conduct. In considering this, the ET found that there was no investigation into allegations of dishonesty and there was no reason to suspect dishonesty on the employee’s part. The manager’s reference to his certainty of Covid-19 lasting only 14 days was unsupported by any medical evidence beyond his assertion. The ET also noted that:
- while it may be reasonable for an employer to raise serious allegations with employees, there was “no reasonable and proper cause for the manager to shout or to point his finger in the employee’s face, which the ET said were aggressive behaviours.
- there was no reasonable and proper cause for the manager to make the employee fear his working life would be made difficult by his manager being “on his back every five minutes”.
As a result, the ET ruled that
- the manager’s actions constituted a fundamental breach of the implied term of trust and confidence;
- the employee had resigned in response to the repudiatory breach;
- the care home was unable to identify a fair reason for the dismissal.
Training
Operational Managers are key to a Company’s success, and how they work with and manage their teams is an essential part of this.
We have recently introduced an additional ‘1 to 1 HR Coaching for Managers’ module, Managing Recruitment. The full list can be seen below, all are delivered remotely via Microsoft Teams:
- Being an Effective Manager / Responsibilities of a Manager;
- Dealing with Misconduct (Discipline), Poor Performance (Capability) and Grievances;
- Managing Attendance / Sickness Absence;
- Managing Performance / Developing People;
- Dealing With Conflict;
- Managing Recruitment.
Each module is focussed on the key elements involved, and takes around 1 to 1½ hours, with Managers also completing a workbook containing a number of questions and scenarios which is then analysed and feedback provided to ensure an in-depth understanding of the subject(s).
We also provide the following classroom based training courses (when social distancing rules allow) to help Managers deal with issues and people correctly to enhance your business:
- Influencing Styles and Persuasive Negotiating;
- Managing Conflict;
All of our courses can be tailored to suit your exact needs and delivered at your premises if required.
More details on all of the above can be found on our website.
Partner Services
We have long-term partnerships with key providers which enables us to provide other recommended services to our clients covering:
- Legal Services;
- Financial Services;
- Health Insurance and Staff Healthcare Benefits;
- Health and Safety.
Visit our website to see full information on our partners and their services.