Employment Law Legal Update 28/04/2008

In this edition we focus on the EATs decision on the definition of Redundancy and new report from the National Director for Health -‘Working for a Healthier Tomorrow'and Grievances in the work place.

APPEAL DECISION ON DEFINITION OF REDUNDANCY

The Employment Appeal Tribunal (EAT) has recently considered whether employees can be dismissed by way of redundancy when the same employer makes an offer for them to be immediately re-engaged on different terms and conditions.

Facts:

The Claimants were employed by the Cooperative Insurance Society (‘the Society') as Financial Advisors. In 2005, it was proposed that changes would be made to the Claimants terms and conditions of employment. The Society attempted to do this by agreement with the Claimants' trade union. However, the variations could not be agreed and the Society consequently decided to terminate the Claimants' contracts of employment and re-employ each of them on new terms and conditions.

Seven of the some 123 employees affected by the situation were chosen as test cases and appeared before the Tribunal as the Claimants. Some employees accepted the news terms and conditions and remained in employment but some did not and left the Society. All of the employees had been lawfully dismissed. Those employees that left the Society claimed that they had been dismissed by reason of redundancy, claiming a contractual redundancy payment which was worth significantly more than their statutory entitlement.

The Society denied these claims, stating that the dismissals were not by reason of redundancy, but for some other substantial reason. The Employment Tribunal (ET) accepted these submissions, dismissing all of the claims. The Claimants appealed against this decision, arguing that there had been a reduction in the need for them to do a ‘particular type of work' and it therefore followed that they had been made redundant.

Held:

The EAT upheld the ET's decision that the dismissals were not by reason of redundancy. It was clear that the reason for the dismissals was the requirement for a change in the Claimants' terms and conditions. The EAT held that in determining whether there had been a reduction in the need for the Claimant's to do a ‘particular type of work', it was sufficient to consider the generic type of job. In other words the fact that the Claimants continued to be employed as insurance salesmen, despite the variation of their terms and conditions, entitled the EAT to find that their jobs were still substantially the same.

Comment:

There has been consideration by the ET of the true definition of ‘redundancy' in the past. However, this decision from the EAT will be binding on future cases and therefore clarifies the definition from a more persuasive position.

'WORKING FOR A HEALTHIER TOMORROW'

Dame Carol Black, the National Director for Health and Work, has recently produced her report ‘Working for a Healthier Tomorrow'. The report sees the first ever review into the health of the working population. Employment rates and life expectancy are higher than ever. Despite this, sickness absence and unemployment due to ill health is currently costing the economy over £100 billion (which, ironically, is greater than the NHS' annual budget) and this is reflected in the 175 million working days lost to illness in 2006.

Dame Black hopes that a new vision can be created for health and work in Britain and states that the three main objectives for realising this vision are:

• The prevention of illness and promotion of health and well-being
• Early intervention for people who develop a health condition

An improvement in the health of people out of work so that everyone withthe potential to work has the support they need to do so.

The report recognises that in order to achieve these objectives, changes in the way Government, employers, trade unions, individuals and healthcare professionals approach work and health will be required.

Both employers and employees need to realise the importance of preventing ill health and of the role that they can play in promoting a healthy lifestyle. In order to do this, the report suggests that a ‘robust model', setting out the benefits of investing in health and well being is required. 40% of businesses do not have a sickness-absence management policy in place, yet early, regular and sensitive contact with employees during sickness can assist with an early return.

Health and safety representatives, trade union safety representatives and health and well-being consultancy services are all suggestions for playing key roles in a business' investment into this area. Importantly, the report also touches on the fact that ill health can be directly related to job satisfaction and outlines the importance that line managers can have in relation to providing ‘satisfaction, reward and control', recognising health problems and making adjustments where necessary.

The report suggests that a change in the perception of ill health is required. The current perception is ‘...namely, that it is inappropriate to be at work unless 100% fit and that being at work normally impedes recovery.' An ‘electronic fit note' could be seen to replace the paper sick note in the future, focussing on what employees can do as to opposed to what they cannot do, as well as improving relations between employers and GPs. The fit note could also discuss how and when the employee will return to work.

A copy of the full report can be found at http://workingforhealth.gov.uk/documents/working-for-a-healthier-tomorrow-tagged.pdf. The report awaits the Government's response to the issues raised within it but has received positive comments to date and all employers could benefit from considering its recommendations. If sickness absence is an area of concern for you and your business and you would like practical advice on the issue or guidance on drafting policies to cover absence in the workplace, please contact our employment team on noremp@steeleslaw.co.uk.

REQUIREMENTS OF STEP ONE GRIEVANCE ARE MINIMAL

The EAT has recently considered, once again, whether the requirements of the Statutory Grievance Procedure (SGP) had been complied with from the Claimants' point of view. Again, as is consistent with previous decisions, we see the EAT applying a wide interpretation of the SGP.

Facts:

The Claimants were employed by Wakefield Metropolitan District Council (‘the Council') and transferred to Wakefield District Housing (‘Wakefield') on 21 March 2005 under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

In 2006, the Claimants' solicitors incorrectly served questionnaires relating to equal pay on the Council, despite the fact that the Claimants were then employed by Wakefield. The Claimants' solicitors provided details of the Claimants' grievances relating to unequal pay together with details of male comparators who had not transferred to Wakefield. A copy of this correspondence was sent to the Chief Executive of Wakefield who did nothing in response as he was of the opinion that the grievances did not comply with step one of the SGP by, amongst other things, being addressed to the Claimants' former employer. The Claimants commenced equal pay claims against the Respondent (Wakefield) in January 2007 which were subsequently struck out by the Employment Tribunal (ET). The ET held that the Claimants could not have validly raised a step one grievance against the Respondent as their actions could not have reasonably been interpreted as having been directed to them or requiring any action by them.

Held:

The Employment Appeal Tribunal (EAT) overruled the ET's decision stating that the Claimants had clearly set out their grievance in writing and had sent it to the Respondent in accordance with the SGP. Although the Claimants had addressed their grievance to a former employer and were using comparators employed by that employer, the EAT held that the requirements of a step one grievance are minimal and this was clearly a grievance as it related to the Respondent's current actions in paying the Claimant's less than their comparators. The EAT held that it was not necessary for the grievance to state that its recipient was required to take any action in relation to it. The fact that the comparators were no longer appropriate as they were not employed by the Claimant's employer did not preclude the grievance from complying with the SGP. The Respondent should have held a meeting with the Claimants even if their grievance would have been rejected on the basis that the comparators were no longer appropriate.

Comment:

The EAT places a wide and non-technical interpretation on the SGP in order to assist a Claimant in bringing a claim. This case again highlights the importance of considering whether any complaint by an employee has been raised in accordance with the SGP, even if the technical details of the potential grievance need to be considered further.

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