Employment law breakfast seminar Thursday 5 June 2014 Justin Govier, Partner Jonathan Bruck, Senior Solicitor Erica Humphrey, Solicitor
Negotiating an exit Justin Govier Partner
Negotiating an exit prior to 29 July 2013 • Where to start? (Before 2 years !) • Without prejudice rules - genuine attempt to settle a dispute and no “unambiguous impropriety” • Often needed earlier than that, exploratory conversations • Artifjcial scripted conversations, manufacturing of disputes and wrong labelling of WP • “Cloak and dagger”
Pre-termination negotiations after 29 July 2013 • “Any offer made or discussions held before the termination of the employment in question, with a view to it being terminated on terms agreed” • Cannot be used as evidence in ordinary unfair dismissal cases • Unless improper behaviour • Non-monetary offers • Even if no eventual settlement • Still have WP principles (Portnykh -v- Nomura)
Limitations • Only ordinary unfair dismissal cases • Not automatic unfair dismissal, not discrimination, not breach of contract • Increase in multiple claims • Everyone has a protected characteristic • Risk assess
Acas code of practice and guidance • Guidance broad and general • Useful examples, but not all the answers • Need case law, although doesn’t always help • Trying to formalise an informal process
Some issues • Chronology – letter, meeting, agreement? • Should allow employee to be accompanied • Militates to letter fjrst • Allow time to consider offer (10 calendar days to consider proposed formal written terms of a settlement agreement) • Template letters – useful, current caution around amending • Create precedent letter
Improper behaviour • Harrassment, bullying, intimidation, offensive words, aggressive behaviour, physical assault (or threat), criminal behaviour, victimisation, discrimination • Undue pressure, e.g. not giving reasonable time for consideration of proposed written terms. 10 calendar days recommended (unless agreed otherwise) • Stating (before disciplinary process) that employee will be dismissed if offer rejected (as opposed to stating that disciplinary process will commence)
Not improper behaviour • Stating that the terms of a procedural termination will be less favourable • Not agreeing to provide a reference • Not paying for independent advice • Encouraging employee, in a non-threatening way, to re-consider rejection of offer • Often it’s not what you say, but how you say it • More pitfalls for SMEs
Has it been a success so far? • Legally – more clarity • Practically: - It is a process, less “cloak and dagger”, statutory seal of approval, nothing wrong with it - transparent, frank communication - Reduction in two-pronged approach - Internal procedures - Benefjts outweigh problems - Employees use as well
Getting the package right • Knowing your employee • Part HR professional / part psychologist • Non-fjnancial issues • Tactics (room to move) • Non-fjnancial deal breakers?
Factors • Management time going through process • Certainty • Immediacy • Confjdentiality • Non-derogatory clause • Announcement (customers, suppliers, employees) • Restrictive covenants • Legal fees • Avoiding test case for others • Public dispute • Recruiting replacement (e.g. “redundancy”)
Factors • Lump sum (accelerated receipt) • Dismissal in any event • Contributory conduct • Loss of earnings • One year cap • Job market • Reference • Tribunal fees • Punitive • Advice – legal and non-legal • Employee expectations (as opposed to realities) • Merits of the case
Employment law update Erica Humphrey Solicitor
Employment tribunal statistics 2012/13 • Fees introduced for claims fjled on or after 29 July 2013 • Up to £1,200 (£250 fjling and £950 hearing) • 79% fewer claims received: - Oct-Dec 2012 – 45,710 claims received - Oct-Dec 2013 - 9,801 claims received • 75% fewer than in the last quarter • Unison challenge – judicial review - (R (Unison) v Lord Chancellor and another [2014] EWHC 218 (Admin)
Unfair dismissal compensatory award • Basic award - £464 • Compensatory award – lesser of £76,574 or 52 weeks’ actual gross pay • Law fjrm challenge – judicial review - R (on the application of Compromise Agreements Ltd) v Secretary of State for Business, Innovation and Skills
Case law update: calculation of holiday pay - commission • EU law – “at least four weeks’ paid leave” • Working Time Regs - a ‘week’s pay’ • Williams and others v British Airways Plc [2011] – “normal remuneration” includes any payment “intrinsically linked” to the performance of tasks • Lock v British Gas Trading Limited [2012] - AG opinion: commission was intrinsically linked to his role as a salesman - Suggested that is averaged over the last twelve months
Case law update: calculation of holiday pay - overtime • Neal v Freightliner Ltd [2012] – EAT • Faulton and another v Bear Scotland Ltd [2012] – EAT • Watch this space…
Case law update: collective redundancy • The Woolworths case (USDAW v Ethel Austin Ltd (in administration) and another case UKEAT/0547/12) • Collective consultation when: - Proposing to make redundant 20 or more employees - “at one establishment” - Within a period of 90 days or less - 100+ employees = 45 days’ consultation - Fewer than 100 employees = 30 days’ consultation • EAT: the words “at one establishment” should be disregarded • Referred to the ECJ
Case law update: disciplinary and grievance • Blackburn v Aldi Stores Ltd (2013) (EAT) - Failure to provide impartial grievance could amount to a fundamental breach of contract • Miller v William Hill Organisation Ltd (2013) (EAT) - Reasonable belief in the employee’s guilt - Where an employee dismissed for criminal or serious misconduct, level of investigation must be “careful and conscientious” - Should focus no less on any potential evidence that may… at least point towards innocence…as he should on the evidence directed towards proving the charges against him
Case law update: disciplinary and grievance • Stuart v London City Airport (2013) (CA) - Employee fairly dismissed for theft even though acquitted in a criminal trial • Brito Babapulle v Ealing NHS Hospital (2013) (EAT) - A fjnding of gross misconduct will not inevitably make dismissal a reasonable response
Early conciliation Jonathan Bruck Senior Solicitor
Early conciliation • Mandatory for claims presented after 6 May 2014
The issues • Claimant (C) must notify Acas of intention to make a claim • “stop the clock” on limitation • Up to one calendar month (extension for further 14 days by agreement) • Claims for relevant proceedings cannot be presented before early conciliation complete and early conciliation certifjcate
Acas notifjcation • Early conciliation notifjcation form • Names, addresses and contact details • Group claim form • More than one Respondent (R) – different time limits! • On-line, phone, post • Acas records receipt (Day A) • Email receipt / date stamped
Upon notifjcation • Early Conciliation Support Offjcer attempts to contact C within 24 hours • Obtains details (using checklist) • Allocates conciliator
Options for claimant • Demand Certifjcate from ECSO (who will presumably try to persuade otherwise?) • If certifjcate issued, clock restarts • Agree that Acas can contact R (Acas database for large employers)
Options for Respondent • Contact usually within 48 hours • Refuse involvement • Discuss settlement with conciliator
Certifjcate • Issued at any time that conciliator concludes settlement is not possible (or 2 weeks if ECSO cannot contact C) • Same conciliator if claim issued - helpful
Expectations • Acas will not advise on timing • Acas obliged to accept, even if out of time • Certifjcate is not a validation of claim
Early conciliation Effect on time limits • Day A = day Acas receives EC form/phone-call from C • Day B = day C is deemed to receive EC certifjcate (or actual receipt date if earlier) • Deemed receipt: - date certifjcate emailed by Acas - 2 working days after Acas posts certifjcate (assuming 1st class used) • Time limit for claiming extended to 1 month after Day B if time would otherwise expire between Day A and Day B + 1 month
Early conciliation Example • C dismissed with effect from 8 May 2014 & wants to claim UD • Normal time limit would expire 7 August 2014 • C emails EC form to Acas on 5 June 2014 (Day A) • Acas makes contact with C on 9 June 2014. C agrees to Acas contacting R but R is not willing to agree a settlement • Acas issues EC certifjcate and emails it to C on 13 June 2014 (Day B) • When does the UD time limit expire? - ERA 1996: ‘In working out when a time limit set by a relevant provision expires, the period beginning with the day after Day A and ending with Day B is not to be counted’ - therefore the 8 days between (and including) 6 June 2014 and 13 June 2014 do not count - time limit extended by 8 days to 15 August 2014
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