October 15 2007 Employment Law Enews

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Redundancy trial periods

In a recent decision the Employment Appeal Tribunal (EAT) has provided a useful reminder of the scope of the statutory trial period that applies following redundancy.

An employee under notice of redundancy who accepts an offer of alternative employment with the same employer is entitled to a statutory four-week trial period in order to decide whether the job is suitable. If the employee gives notice to terminate employment during this trial period, they will still be treated as having been dismissed by reason of redundancy on the date their original contract terminated. The employee will be entitled to a redundancy payment provided they did not act unreasonably in refusing suitable alternative employment.

The parties are only permitted to agree a trial period of longer than four weeks if the extended period is required to retrain the employee for employment in the new job.

Facts

In Optical Express Limited v Williams, the employee was made redundant and was offered alternative employment as manager of an optical store. She had previously worked in the management of dental practices and made it clear that she did not consider the offer to be suitable alternative employment. However, she accepted the offer of a four week trial period. During the trial period, both Ms Williams and her solicitor sought confirmation that she would remain entitled to a contractual redundancy payment if she decided not to accept the new job. She resigned two weeks after the trial period ended and was refused a redundancy payment.

Held

Ms Williams' claim for constructive dismissal was rejected, but the tribunal upheld her claim for a redundancy payment on the basis there had existed, alongside the statutory trial period, a "common law" trial period. However, the EAT rejected this finding and upheld the employer's appeal. The EAT held that there is a "very sensible, comprehensible and straightforward statutory system" in place and where a statutory trial period has been offered and accepted it is impossible for a common law trial period to run alongside it.

Comment

The statutory trial period applying following a redundancy is limited in scope and can only be extended in limited circumstances. Employers may choose to extend the trial period if more that four weeks is required for the employee to assess the suitability of the new job, but employees will only then be entitled to a contractual redundancy payment and will lose their automatic entitlement to a statutory payment. If an employee does not want to continue in the new job they must give notice within the trial period in order to remain eligible for a statutory redundancy payment.

Sickness absence form was not a grievance

The ambit of what exactly constitutes a "grievance" for the purposes of the statutory grievance procedure has been considered by the EAT in numerous cases and has generally been given a broad interpretation. In this recent case, the EAT was satisfied that a sickness absence form completed by the employee was not sufficient to constitute a grievance.

Facts

In Dick Lovett Ltd (t/a Porsche Centre Swindon) v Evans, the employee brought claims for sex discrimination and equal pay on the grounds she had been refused a pay rise because of or for reasons connected with her pregnancy.

Ms Evans claimed she was told by Dick Lovett during a meeting with him that she would not be getting a pay rise, as a result of which she left work distressed and was absent for a week.

In her absence form she stated: "Following on from meeting with Richard and Mark, went home very upset. Didn't sleep and suffered numerous nose bleeds." After her return to work, Ms Evans had a meeting with her employer and explained that the reason she was upset was because she had been told that her pregnancy had in some way affected her pay rise.

Ms Evans relied on the absence report, together with her comments made on her return to work, as constituting a grievance under the statutory grievance procedure. At a preliminary hearing, the tribunal agreed that she had fulfilled step one of the procedure.

Held

The EAT upheld the employer's appeal. A tribunal must look at how a reasonable employer, with the knowledge of the employer at the time it received the grievance, would have understood it. Therefore events that occur after the creation of a document cannot be used to interpret that document and in addition, the document should at least give some indication of a grievance.

Comment

It will no doubt come as a relief to employers that the ambit of what constitutes a grievance has not been even further widened as a result of this case. The EAT suggested however, that if Ms Evans had stated that she was unhappy with the pay rise at the first meeting, prior to her completing the absence report form, the form might then have subsequently constituted a grievance.

No grievance required for discriminatory dismissal

As illustrated by the case above, an employee is required to submit a formal grievance to the employer before he or she is entitled to bring a claim of discrimination at the tribunal. A recent case has confirmed that a grievance is not necessary where it is alleged a dismissal is based on discriminatory grounds.

Facts

In ADM Milling Limited v Hodgson, the employee was made redundant while she was on extended maternity leave. Mrs Hodgson subsequently lodged a sex discrimination claim with the tribunal but did so without first raising a grievance with her employer. Mrs Hodgson's employers contended that, as the statutory grievance procedure had not been invoked, the tribunal did not have jurisdiction to hear Mrs Hodgson's claim.

Mrs Hodgson relied on Reg 6(5) Employment Act 2002 (Dispute Resolution) Regulations 2004: there is no requirement to raise a grievance prior to bringing a tribunal claim where the grievance is that the employer has dismissed or is contemplating dismissing the employee.

Held

The tribunal referred to the earlier case of Lawrence v HM Prison Service [2007] IRLR 468 where it was held that there was no obligation on the employee to raise a separate grievance in relation to the particular grounds on which he was alleging that his dismissal was unlawful (namely, disability discrimination). The EAT agreed with the tribunal and held that as Mrs Hodgson's complaint was about the dismissal it did not require a grievance to be lodged, irrespective of the fact the claim was one of discrimination rather than unfair dismissal.

Comment

The EAT in this case saw no reason to overturn the principle established in the Lawrence case. A tribunal will therefore have jurisdiction to consider a discrimination claim concerning a dismissal without the need for the employee to raise a grievance.

This article copyright © 2007 Steeles Law llp. All rights reserved.