LEVEL 6 UNIT 19 THE PRACTICE OF EMPLOYMENT LAW SUGGESTED ANSWERS JANUARY 2016
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1 LEVEL 6 UNIT 19 THE PRACTICE OF EMPLOYMENT LAW SUGGESTED ANSWERS JANUARY 2016 Note to Candidates and Tutors: The purpose of the suggested answers is to provide students and tutors with guidance as to the key points students should have included in their answers to the January 2016 examinations. The suggested answers set out a response that a good (merit/distinction) candidate would have provided. The suggested answers do not for all questions set out all the points which students may have included in their responses to the questions. Students will have received credit, where applicable, for other points not addressed by the suggested answers. Students and tutors should review the suggested answers in conjunction with the question papers and the Chief Examiners reports which provide feedback on student performance in the examination. Question 1(a) Colin Yates is entitled to bring an unfair dismissal claim against Tangerine Retail UK Limited because he was an employee. He was a Business Consultant at Tangerine Retail UK Limited and worked there for five years. He does not fall within the excluded class of claimants. He will need to bring the claim within three months less one day after contacting ACAS for early conciliation. The potentially fair reason for dismissal is likely to be conduct under section 98(2)(b) Employment Rights Act 1996 in this scenario. He has allegedly harmed the company s reputation by posting inappropriate comments on a social media platform. The conduct reason can cover misconduct of virtually any type but would usually be misconduct within the employment. It would include for example, disobedience of orders, breach of the duty of fidelity, dishonesty and fighting. In Crisp v Apple UK Retail Limited (2011), an employee was dismissed for posting rude and inappropriate comments on Facebook. The employee received training in the company s internet policy and has breached it. His comments were held to have damaged the company s image. Question 1(b) For tribunal claims lodged on or after 6 May 2014, it is a legal requirement, unless an exemption applies, for a claimant to have made an Early Conciliation notification to ACAS. Tribunal claims will not be accepted unless the complaint has been referred to ACAS and a conciliation certificate issued. This certificate confirms that the Early Conciliation requirements have been met. It is an attempt to resolve the employment dispute as early as possible. If it is not possible to resolve the case ACAS will issue the unique reference number that the claimant has to put on the claim form. If a resolution is reached through ACAS, the Conciliator will record what has been agreed on an ACAS form (known as a COT3). A COT3 agreement is the term used to describe an ACAS settlement document. Both parties will sign this as a formal record of the agreement. The Page 1 of 8
2 COT3 will be a legally binding contract and the claimant will not be able to make a subsequent tribunal claim in that matter. Both parties have the right to reject conciliation but if they did proceed to use conciliation, then the clock is stopped on the time limit of 3 months less one day in which they normally can bring a claim. There are two ways in which the time limit may be extended: first, through the clock pausing from the day after Day A (which is the date of filing the EC form) to Day B (end of conciliation period), and if this extension does not leave the claimant with a full month from Day B, time will be extended to give them a month. Question 1(c) See ET1 Form for answers Question 2(a) Elena should be made aware that Francesca may bring an indirect age discrimination claim against Sensi Knowledge Laboratory Limited (SKL Limited). Age is a protected characteristic covered by the Equality Act 2010 (EA), specifically section 5(1). Indirect discrimination is defined in section 19 of the EA A person is indirectly discriminated if he/she is treated less favourably due to a provision, criterion or practice (PCP) which is discriminatory regarding the person s characteristic and the employer s objective reason cannot be justified. The objective reason can be justified as a proportionate means of achieving a legitimate aim defence (section 19(2) EA 2010). The question whether a claimant or persons sharing his characteristic is placed at a particular disadvantage by a PCP must be assessed at the time when the PCP is applied. The question is whether, at that time, it places them at a particular disadvantage. This will mean that Francesca may make a claim with technically unlimited damages. Indirect age discrimination can be justified objectively. The burden of proof is upon the employer to show that the action taken is a proportionate means of achieving a legitimate aim. This is likely to involve a balancing exercise between the discriminatory impact of the treatment in question and the legitimate aim of the employer. It will be for employment tribunals to decide how they will approach the issue of justification. On the justification issue, although SKL Limited might have a legitimate aim, if it cannot justify the requirement for a PhD as a proportionate means of achieving the aim, it may be committing indirect discrimination on the basis of age. In Games v University of Kent (2014), the candidate was 59 years old and was not shortlisted as he did not have a PhD. Whilst the Employment Appeal Tribunal held that the requirement for a PHD did discriminate against older applicants, and the employer had a legitimate aim of trying to recruit candidates of the highest calibre, the employment tribunal had not properly considered whether the aim was a proportionate means of achieving a legitimate aim. Question 2(b) The potential remedies for a successful claim in age discrimination include a declaration of employee s rights (section 124 EA); recommendation that employer takes action to alleviate effect of discrimination or compensation. Compensation for discrimination does not have a financial limit. Moreover, it can include an element of non-economic loss. This means that in discrimination claims, a claimant can seek to recover compensation for injury to feelings and personal injury (for example psychiatric injury) caused by the discrimination. Page 2 of 8
3 Claimants can also seek to recover aggravated damages for the way in which the respondent has acted for example if they have acted in a high handed, malicious, insulting or oppressive manner towards the claimant. This is on top of any award for loss of earnings, interest, future earnings and other economic losses. Loss of earnings may be reduced to reflect the percentage of a job applicant in obtaining a job. For example, if there are ten applicants for a position, then the claimant in a successful discrimination claim would only be awarded 10% of the loss of earnings. The courts had attempted to rein in the amounts of compensation claimants were being awarded for discrimination. In Vento v Chief Constable of West Yorkshire Police (2003), the Court of Appeal set out guidelines for how much compensation should be awarded in respect of injury to feelings. The CA categorised illegal discrimination into three bands - lower, middle and top and set out what it thought the award should be in each case. A more recent case has now reviewed these guideline amounts and increased them in line with inflation Simmons v Castle (2012). The bands and updated guideline amounts are as follows: Lower band (for the least serious cases, e.g. a one-off or isolated incident of discrimination) - up to 6,600 Middle band (which is used for serious cases that do not merit an award in the highest band) - 6,601 to 19,800 Top band (for the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment) - 19,801 to 33,000. (The guidelines suggest that only in the most exceptional case should an award of compensation for injury to feelings exceed 33,000). If Elena has to pay compensation in this instance, the award will probably fall within the lower band since it is a single incident. Question 2(c) It is important to have a disciplinary and grievance procedure at work as failure to comply with such procedure may lead to an unfair dismissal claim by an employee. When deciding whether or not to dismiss an employee, it is important that an appropriate procedure is adopted. A fair procedure is important in employment law. The procedure to be adopted for an unfair dismissal should follow the ACAS Code. The Code is not legally binding but the Tribunal will use it to judge the issue of fairness in relation to any procedures adopted. Procedure is important in deciding unfairness. Regardless of conduct or alleged conduct, an employee is entitled to, amongst other things, have an opportunity to attend a disciplinary hearing and to appeal against a dismissal. If employers have failed on a technicality, this can lead to a successful claim for unfair dismissal. Before an employee is dismissed, he/she should have an opportunity to put his case and a disciplinary meeting should be held. An investigation should have been conducted into the issues. Once a decision has been made, he should be advised of the outcome and appeal procedure in writing. Failure to follow such a procedure may lead to an increase of 25% uplift in compensation by the employment tribunal. Elena needs to decide what rules are needed for the disciplinary policy: for example, on inappropriate behaviour and how serious different offences are. This includes deciding what constitutes gross misconduct, meriting instant dismissal. The discipline procedure should clearly state what disciplinary actions can be Page 3 of 8
4 taken and who has the authority to act. It should not include dismissal for a first offence, unless there has been gross misconduct. The rules should be explained to all employees. Applying the law to the facts, the employee concerned in this scenario has been late to work several times during the past month. It would be advisable to introduce a clear lateness policy. This should set out: The required standards of timekeeping, i.e. working hours, shift patterns, any flexi-time or flexible working arrangements Any consequences of persistent lateness What disciplinary action will be taken under the disciplinary procedure How time keeping will be monitored If and how they will have to make up any time they have missed Who they should report lateness to if they know are going to be late and by when. The policy should be properly communicated to all employees, and enforced fairly and consistently. With the grievance policy, the employee should set out their grievance in writing so it can be investigated. The grievance should then be discussed at a meeting and action agreed. Dissatisfied employees should have the right to appeal to someone who was not originally involved. Question 3(a) There are four types of restrictive covenants: non-competition; non-dealing; non-solicitation and non-poaching. Prima facie, a restrictive covenant is void for public policy reasons, i.e preventing someone from working. In order for a restrictive covenant to be enforceable, GC Finance Limited will need to show two factors: first, that there is legitimate business interest to protect. Secondly, that the scope and duration of the restrictive covenant is reasonable. If the drafted clauses do not meet the criteria they will not be valid and are unenforceable. The two new employees will be able to ignore them. In deciding the reasonableness of a covenant, the court will consider the period of time the covenant is to be effective for and secondly the geographical area it will cover. It is not a hard and fast rule in relation to what will amount to a valid restraint; each case needs to be considered on its own facts. A good comparison is shown by cases such as Fitch v Dewes (1921) and Fellows v Fisher (1976). A restriction of 12 months in Thomas v Farr (2007) was held to be reasonable. If a clause is drafted too widely and is found to be in restraint of trade, the court may be able to apply the blue pencil text to sever the part of the clause that is too wide. The remainder of the clause will remain enforceable. Question 3(b) The Employee shall not own, manage, operate, consult or be employed in a business substantially similar to, or competitive with, the present business of the Company or such other business activity in which the Company may substantially engage during the term of the employee s employment. This non-compete clause shall extend for a radius of 10 miles of the Company's location from time to time and shall be in full force and effect during the period of employment and for 12 months following employment termination, notwithstanding the cause or reason for termination. Page 4 of 8
5 Question 3(c) 1 Eligibility 1.1 You are entitled to make a flexible working request provided: 1.2 you are an employee of the Company, and : (a) you have been continuously employed by the Company for a period of not less than 26 weeks; and (b) you have not made any earlier flexible working requests during the previous 12 months. 2 Procedure 2.1 Any application must be made in writing 2.2 The Company will hold a meeting with you at a mutually convenient time and place to discuss your flexible working request within 28 days after receiving your application. Alternatively, if on receiving your application the Company agrees to your application without needing to discuss it with you, then you will be notified within this period in writing and informed of the contract variation agreed to and the date from which the variation is to take effect. 2.2 The Company will consider your application carefully, looking at the benefits of the requested changes for you and the Company and weighing these against any adverse business impact of implementing the changes. 2.4 If the Company is minded to accept your request, or accept it with modifications, a further meeting may be arranged at a mutually convenient time and place to discuss how and when the changes might best be implemented. 2.5 A written, dated notice of the Company s decision will be given to you within 14 days after the meeting or final meeting, or: within three months of the date on which you made your application if that is earlier, or within such extended period as has been agreed between you and the Company (as explained at paragraph 2.2 below), if that extended period expires earlier. 2.6 The Company will only refuse your application, or offer to accept it on a modified basis (as compared to the original changes requested), if one or more of the following business reasons applies: the burden of additional costs detrimental effect on ability to meet customer demand inability to re-organise work among existing staff inability to recruit additional staff detrimental impact on quality detrimental impact on performance Page 5 of 8
6 2.6.7 insufficiency of work during the periods the employee proposes to work planned structural changes 2.7 If the decision is to agree to your application, or to agree to it with modifications, the notice will inform you of: the flexible working pattern agreed to the consequent contractual variation, and the date on which the variation is to take effect. 2.8 If the decision is to refuse your application, the notice will: state which of the business reasons (of those listed above at paragraph 2.6) is or are the grounds for the refusal; provide sufficient explanation as to why those grounds apply; and explain the appeal procedure. Once agreed, any change will become a permanent change to the employees terms and conditions of employment and they will not be entitled to revert back to their old work pattern (subject to any review arrangements agreed). Question 4(a) Schedule 1 Adviser s certificate For the attention of Julien Archambault Biddenham Wine Company Limited 19 Primrose Road, Biddenham, MK40, 5DV Copy to: of of Isabel Pembridge Jacksons Solicitors 35 High Street, Biddenham, MK40 1WS Private and confidential Date Provisional exam date of 12 January 2016 Dear Sirs I, Benedict Watson of Kempstons of The Manor House, Bedford, MK42 7AB Page 6 of 8
7 confirm that I have given independent legal advice to Hercule Charbonneau of 2 Walton Close, Biddenham, MK41 7UY as to the terms and effect of the agreement between Hercule Charbonneau and Julien Archambault ( Employer ) dated today and in particular its effect on their ability to pursue their rights before an employment tribunal. I confirm that I am a qualified lawyer (as defined by section 203(4) Employment Rights Act 1996) and that there is, and was at the time I gave the advice referred to above, in force a contract of insurance or an indemnity provided for members of a profession or professional body covering the risk of a claim by Hercule Charbonneau in respect of any loss arising in consequence of the advice referred to above. I confirm that I am not employed by the Employer nor am I or Kempstons acting in this matter for the Employer or any associated employer. Yours faithfully Benedict Watson Kempstons Question 4(b) Under UK common law, the transfer of a business undertaking by one employer to another would automatically terminate the employee s contract, i.e. there is a dismissal. TUPE 2006 alters the legal position by providing that where there is a relevant transfer, there will not be any automatic termination of contract due to the transfer. If it is a sale as a going concern, TUPE applies because there is a change in the employer. Regulation 3(1) TUPE 2006 applies if there is a relevant business transfer (Reg 3(1)(1)) and that an entity has transferred (Spijkers v Gebroeders Benedik Abattoir (1986)). The key case in determining whether there is a business transfer is Spijkers v Gebroeders Benedik Abattoir (1986) ( Spijkers ). The case of Spijkers (1986) emphasised, as other cases have done, that there is no one single determining factor. It is necessary to examine all the facts to decide whether Biddenham Wine Company Limited is an entity capable of being transferred. In this case the practical points to examine include: The nature of the business remains Transfer of tangible assets There may be intangible assets (e.g. goodwill) The customers of Biddenham Limited may be transferred The activities carried on before and after the transfer are similar Page 7 of 8
8 The key factor established by Spijkers is whether the entity in question retains its identity. Applying to this scenario, if the sale is a going concern, the business would keep the identity of a wine merchant. TUPE would thus apply. Regulation 4(3) transfers employment contracts of individuals who were employed by the transferor immediately prior to the transfer and assigned to the relevant grouping of employees that is transferred. Regulation 4(3) would probably apply to Biddenham s employees since they were employed by the transferor (Biddenham Wine Company Limited) prior to the transfer. Therefore, Hercule will be transferred to Clarke s Wine Company Limited by virtue of TUPE. If however the sale is a sale of shares, then Hercule s contract will continue as before as TUPE does not apply. Page 8 of 8
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