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Latest Brief - 30 April 2015

Woolworths Collective Consultation Decision

The European Court of Justice has today given its decision in the Woolworths case, tackling the thorny issue of what is meant by an “establishment,” for the purposes of collective redundancy consultation.

An employer must collectively consult where it is proposing to dismiss as redundant 20 or more employees at one establishment within a 90 day period.  There has, however, been some controversy over the meaning of an establishment, following an earlier ruling by the Employment Appeal Tribunal. 

The good news for employers is that the ECJ has now confirmed that “establishment” refers to an individual workplace (or more technically, the entity to which the redundant workers are assigned to carry out their duties), rather than the employer’s business as a whole.

This means that when counting the number of affected employees, a company only needs to collectively consult at the individual establishments where it proposes to make 20 or more employees redundant – there is no need for it to add together dismissals at other establishments across the rest of the business. It is also not essential for the individual site to have an independent management function, for it to be considered an establishment.

So in this case, Woolworths was entitled to treat each store as a separate “establishment”, meaning it did not need to collectively consult, other than where each individual store had 20 or more employees at risk of redundancy.

 

This decision will still need to be formally implemented by the Court of Appeal, but is a welcome clarification for employers. 

Latest Brief - Week Ending 24 April 2015

Reliance upon earlier warnings to justify dismissal

There has been another case following on from the Court of Appeal decision in Davies v Sandwell Metropolitan Borough Council relating to reliance on earlier warnings.  The Court held in Davies that it was acceptable for an employer to rely on a final warning as long as it had been issued in good faith, where there was at least prima facie grounds for imposing it and that it had not been manifestly inappropriate to issue it. The Tribunal were not obliged to reopen the circumstances of the earlier warning in these circumstances. 

In Way v Spectrum Property Care Limited the Court of Appeal has recently held that an employer could not rely upon a warning given in bad faith to justify the dismissal.  Lord Justice Christopher Clarke said “In my judgment a warning given in bad faith is not, in circumstances such as these, to be taken into account in deciding whether there is, or was, sufficient reason for dismissing an employee. Therefore, an employer would not be acting reasonably in taking into account such a warning when deciding whether the employee's conduct was sufficient reason for dismissing him; and it would not be in accordance with equity or the substantial merits of the case to do so.”

Zero hours contract worker awarded £19,500

Zero hours contracts are often discussed in the news, highlighting the lack of protection for these workers.  However, in Southern v Britannia Hotels Ltd and another, an employment tribunal has awarded £19,500 to a zero hours worker for injury to feelings resulting from gender harassment. While the harassment was not of the very worst type, there were aggravating features. The claimant was young and had fragile mental health. Also, despite raising the issue with senior managers, the inadequate investigation of the complaints and the way in which it was dealt with increased the effect of the harassment on the claimant. 

Latest Brief - Week Ending 13 March 2015

Holiday Pay and Overtime Update Changes to the law from July 2015

The law will change from July this year, limiting how long employees can go back if they make a claim for previous years’ underpaid holiday, through an unlawful deduction from wages claim.  

At the moment, if an employee has a claim for unlawful deduction from wages, provided he can prove there has been a “series of deductions”, and he brings a claim within 3 months of the last in a series of deductions, there’s no limit on how long he can go back in a claim for back-pay. So in theory, he might be able to claim back to 1998 when the Working Time Regulations (which deal with holiday) came into force.

That rule about being able to claim back-pay for a number of years will change in July this year: any claims for back-pay which are filed from 1st July 2015 will only be able to go back a maximum of 2 years.

In both cases, as the law stands at the moment, there would still be a ‘get out’ to break the series of deductions (and so break how long employees can actually claim back in practice), if there has been a gap of more than 3 months between any unlawful deductions.  

If there might not be a 3 month gap between any holiday pay underpayments, employers may want to consider waiting until July 2015 before making an announcement to employees about the change to the holiday pay calculation.  That way, particularly if there has not so far been any complaint from employees about holiday pay, but formally announcing it might trigger some reaction, if there is any challenge, at least there will a 2 year back-stop on any claims.