November 12 2007 Employment Law Enews

Welcome to the latest edition of steeles Employment Enews

EMPLOYEE DID NOT ACQUIRE RIGHTS

In the recent case of Jackson v Computershare Investor Services Plc the Court of Appeal has considered whether an employee was entitled to benefits based on the total length of her service, or only from the date of the transfer to her new employer, under the Transfer of Undertaking (Protection of Employment) Regulations 1981 (TUPE).

Facts

Ms Jackson was employed by Ci (UK) Ltd ("Ci") in 1999 but in June 2004 her employment was transferred to Computershare Investor Services Plc ("Computershare"). This was a transfer to which TUPE applied.

Ms Jackson became entitled to Computershare's severance terms, which provided one set of benefits for employees who joined prior to 1 March 2002 and another for those who joined after 1 March 2002.

Ms Jackson's employment was terminated and she claimed unfair dismissal and breach of contract, on the basis she was entitled to the enhanced benefits for employees who joined prior to 1 March 2002.

Held

The Court of Appeal agreed with the EAT that "joined" meant, as a matter of fact, when Ms Jackson actually joined Computershare in 2004 rather than the date she was employed by Ci (which counted for the purposes of her continuous employment). She was therefore not entitled to the enhanced benefits. TUPE operated to substitute Computershare for Ci so that the obligations of Ci in relation to Ms Jackson continued to have effect after the transfer.

Comment

Whilst this case was decided under TUPE 1981 the result would be the same under TUPE 2006. Therefore, TUPE cannot be used to confer additional rights on the employee or to improve their situation based on service pre-dating the transfer.

REDUNDANCY CONSULTATION

In the recent decision of UK Coal Mining Ltd v National Union of Mineworkers, the EAT overturned previous authorities and held that employers are under a duty to consult on the business reasons for making redundancies when the collective consultation provisions are invoked.

Facts

UK Coal Mining Ltd ("UK Coal") owned the Ellington colliery in Northumberland and employed 329 employees. The colliery made redundancies in 2003 and 2004 due to financial problems. In January 2005, water entered the colliery and within a couple of days the water level was too high for production to continue. On 26 January 2005 UK Coal decided to close the colliery on safety and economic grounds. Since this would result in the redundancies of more than 20 employees, the duty to collectively consult arose under the provisions of the Trade Union and Labour Relations (Consolidation) Act 1992.

UK Coal consulted with the unions regarding alternative employment, arrangements for calculating redundancy and dealing with apprentices, but soon went ahead with the first compulsory redundancies. The unions brought a claim for failure to consult.

UK Coal argued that the flooding of the mine was an unforeseen event which fell under the special circumstances exemption of the 1992 Act, meaning it was not obliged to carry out full consultation.

Held

The EAT agreed with the tribunal that there was no credible evidence that the reason for the dismissals was related to safety; it was economic. As such, the EAT found that UK Coal had failed to comply with its obligation to consult by giving a false reason for the closure of the mine. The special circumstances exemption did not apply, and the maximum protective award of 90 days was upheld.

Previously, the obligation did not require a business to consult about its business reasons for making redundancies in the first place. The EAT confirmed that there was now a requirement to consult about the reasons for closure itself. The EAT also stated that where the dismissals will inevitably or almost inevitably, result from the closure of the workplace, dismissals are proposed at the point when the closure is proposed, thereby triggering the duty to consult.

The EAT explained that they were departing from previous EAT decisions, which had arisen from different statutory provisions that were in force at that time.

Comment

The EAT acknowledged that it is the proposed dismissals (and the avoidance of those dismissals) that are the subject of the consultation and not the closure itself. If an employer plans a closure but believes that redundancies could be avoided, there would be no need to consult over the closure decision itself but this is not likely to apply in most cases since redundancies in this situation are usually inevitable.

This new requirement to consult over the business reasons for the redundancies may cause significant delays and additional costs to the collective consultation procedures.

COMPANIES COULD FACE PROSECTION FOR EMPLOYEE COLLISIONS

According to a recent survey, more than half of companies fail to check that employees using their own cars for work have insured them for business use. Only 26% ask their employees to produce an MOT certificate and 17% make enquiries as to whether they have been maintained regularly.

In addition, 33% of company cars are involved in a collision each year and there are 150 deaths and serious injuries each week in crashes involving someone driving on business (HSE, Pacts). These figures are quite startling and have led to a new campaign by police to reduce the number of fatal crashes involving work vehicles, by prosecuting companies who fail to make sure their employees drive safely.

Following collisions, police will investigate whether the company carried out basic checks, such as ensuring the vehicle has an MOT and valid insurance. They will also determine whether the employee's manager made excessive demands on them and required them to drive whilst tired. Companies requiring staff to drive during long working days could therefore be held liable if they crashed.

Superintendent Mark Bird of the Metropolitan Police traffic unit said "more and more we carry out follow up investigations with companies after collisions, to ensure that work-related road safety is embedded within company policies." He stated that an employer's duty for ensuring the employees' safety does not end when they leave the company's premises; employer's are responsible for the employees' welfare "when on the road for business purposes, whether they are driving a company car or not."

This will be even more critical when the new Corporate Manslaughter Act comes into force in April 2008, as this will make it easier to bring cases against companies that cause death through negligence.

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