Advisers from Pinsent Curtis Biddle answer
questions
Christopher Mordue on grievance procedures
Q The new statutory discipline, dismissal and grievance procedures come
into force in April 2004. Is there anything employers should be doing to
prepare?
A The new statutory procedures under the Employment Act 2002 will be
one of the most fundamental employment law reforms for many years, impacting on
the day-to-day management of all employment disputes. Breach of the procedures
will significantly affect both liability and compensation in tribunal cases.
The importance of these reforms makes it essential employers prepare well in
advance. Some details of the new procedures and how they work will only be
clear once the regulations are published. But the basic scheme is reasonably
clear and there are a number of steps employers should now be considering.
The new procedures will apply to all employees and become part of their
contract of employment. The discipline and dismissal procedure applies to all
forms of disciplinary action, even oral warnings, and to all dismissals. Breach
by the employer will mean that any dismissal is automatically unfair. What’s
more, compensation will be increased by at least 10 per cent and possibly by 50
per cent.
The statutory grievance procedure will need to be followed by all employees
before they make any complaint to an employment tribunal. Breach of the
procedure will lead to any damages awarded (for example, an award for
discrimination) being increased by 10 to 50 per cent.
In advance of these changes, employers need to carefully review their
existing procedures to ensure compliance with the new statutory scheme. They
need to consider how (if at all) they will reflect the contractual status of
the new procedures in their contracts of employment and procedural documents.
They also need to carefully review and reconsider how they deal with employment
disputes in practice. For example, the new procedures require employers to
start the dismissal or disciplinary process by explaining, in writing, the
circumstances that have led them to consider dismissing or disciplining the
employee. Employers also need to carefully review how disciplinary and
dismissal hearings are conducted, what information is provided to the employee
and at what stage, and the length of time taken for each stage.
Employers must also consider whether they need any new dismissal procedures,
in particular, for dealing with performance issues, ill-health terminations and
redundancies, and whether they need to adopt any new grievance procedures to
deal with specific types of complaints. For example, many employers already
have specific procedures for dealing with allegations of sexual or racial
harassment and it may be appropriate to introduce specific procedures for other
types of complaint.
The new statutory scheme threatens to punish basic procedural errors very
harshly. Therefore, it is vital for employers to effectively communicate the
new statutory procedures to line managers. This can be accomplished through training
and written guidance on how to deal with disciplinary cases, grievances and the
various forms of dismissal. This training and guidance should also cover other
relevant employment law risks, such as unfair dismissal law more generally and
discrimination complaints.
Employers should also prepare for far heavier use of their grievance
procedures once the new rules take effect. One issue is of time and resources –
are there enough trained managers at each level of the grievance procedure to
hear the grievances? Will appeals impact particularly heavily on the time of
senior managers, who might then have to give evidence in employment tribunal
cases? If so, could the procedure be changed to spread the time burden more
effectively?
A further change to be introduced under the Employment Act 2002 relates to
the statutory statement of main terms and conditions of employment. Currently,
there is no real sanction for a failure to provide this statement or for a
failure to keep it up-to-date. From next April, employers will face a ‘fine’ of
up to two weeks’ pay for such breaches. Employees will have no free-standing
claim for this amount. However, if the employee wins any kind of tribunal case,
the tribunal must then assess whether or not the obligation to provide and
maintain an accurate statement has been breached and, if so, can impose the
fine.
Claire Newberry on sex discrimination
Q We seconded employees to a joint venture company; the joint venture
partner provided the management team. Now, one of our female employees has
resigned and complained of sex discrimination by a manager. It seems she raised
a grievance against her supervisor and the manager dealt with her grievance
less favourably than he dealt with another raised against the same supervisor
by a man – who is also one of our employees. Are we liable for the actions of a
manager who isn’t even one of our employees?
A Your company may well be liable for the actions of the manager,
even though it does not employ him. In a recent and similar case (Victor-Davis
v Hackney London Borough Council, 2003, All ER (D) 318, Feb), the manager was a
contractor and not an employee of the council. As soon as the council formed
the view that the contractor manager had behaved inappropriately, it took
appropriate steps to deal with the situation. The council assumed that without
knowledge, it would not be held liable for the inappropriate acts of the
contractor manager. The tribunal agreed. However, it was overruled by the
Employment Appeal Tribunal.
The EAT provided guidance in dealing with such situations. The proper
approach to determine your company’s liability is to consider whether or not
the manager was acting on authority conferred by your company when he allegedly
committed the discriminatory act. Your joint venture partner provided the
entire management team. It would appear that in carrying out normal management
activities, the manager was acting on authority conferred (explicit or implied)
by your company. Handling a grievance may be classed as normal management
activities, so your company may well find itself liable for a discriminatory
act committed by a non-employee.
The Victor-Davis case concerned sex and race discrimination, but the EAT’s
guidance could also be applied to non-discrimination cases. So, the conduct of
an agency manager, say, could saddle an employer with liability for
constructive unfair dismissal. All the more reason, then, for employers to
think carefully before conferring authority on non-employees. If this cannot be
avoided, then such arrangements need to be carefully structured so that
responsibilities are thoughtfully allocated, and that all three parties
(employees, managers and employers) know where those responsibilities lie.
Finally, an employer who confers authority to manage on a non-employee needs a
mechanism for addressing any management failures. In the case of your company,
this would be by having complaints about the manager dealt with by your joint
venture partner as a disciplinary/performance issue.
John McMullen on TUPE reforms
Q What is the position with regard to the reform of TUPE and when will it
happen?
A The reform of TUPE should be regarded as a jigsaw puzzle containing
a number of pieces. First, on 13 February 2003, the office of the Deputy Prime
Minister published details of a code of practice applicable to local authority
transfers of employees to a private or voluntary sector partner as part of a
contract to provide any local public service.
The code will ensure that contractors confirm their obligations to protect
the terms and conditions of transferring local government employees, including
the right to ongoing access to the local government pension scheme or to an
alternative good quality occupational pension scheme. The guide will also apply
to new joiners, who must be offered new terms and conditions that are overall
no less favourable than those of transferred employees. New joiners will also
have to be offered a reasonable pension provision which may either be
membership of the local government pension scheme, membership of a good quality
employer pension scheme or membership of a stakeholder pension scheme with an
employer contribution. Further information can be obtained from the official
website (www.odpm.gov.uk).
As for the TUPE regulations themselves, on 14 February 2003, the secretary
of state for trade and industry announced new regulations would be published in
draft during the first half of 2003, with a view to placing them before
Parliament in the autumn of 2003, coming into effect in spring 2004. But the
coverage of occupational pension rights under TUPE will be considered
separately and to a longer timescale as part of the pensions review being taken
forward by the Government’s Green Paper Pensions in the Workplace published on
17 December 2002.
The TUPE revisions, it is promised, will include giving more comprehensive
coverage to service contracting operations (not including those involving high
level ‘professional services’) with the aim of improving the operation of the
market and promoting business flexibility; introducing a requirement on the old
employer (transferor) to notify the new employer (transferee) of the employment
liabilities that will be transferring, thus increasing the transparency of the
transfer process and combating "sharp practice"; clarifying the
circumstances in which employers can lawfully make transfer-related dismissals
and negotiate transfer-related changes to terms and conditions of employment
for economic, technical or organisational (ETO) reasons; and introducing new
flexibility into the regulations application in relation to the transfer of
insolvent businesses, promoting the ‘rescue culture’.
Christopher Booth on dependants leave
Q Over the last three months, my PA has been absent from work on a dozen
or so occasions in order to look after her son, who has been diagnosed with
haemophilia. While I am sympathetic about her reasons for being absent, and I
am aware that employees have a right to time off to look after dependants, I
need my PA at work.
A An employee is entitled to take a reasonable amount of time off
during working hours in order to take action that is necessary:
– to provide assistance when a dependant falls ill, gives birth or is
injured
– to make arrangements for the provision of care for a dependant who falls
ill
The right does not apply unless the employee tells her employer the reason
for their absence as soon as reasonably practicable and how long they expect to
be absent.
In Qua v John Ford Morrison Solicitors, EAT 884/01, the EAT gave some
guidance on the determination of a ‘reasonable’ amount of time off in order to
take action which is ‘necessary’.
– Factors taken into account will include the nature of the incident that
has occurred, the relationship between the employee and the dependant, and the
extent to which anyone else was available to help
– In determining what is the reasonable amount of time off, this is a
question of fact for the tribunal in every situation, but the disruption or
inconvenience caused to an employer’s business by the absence are irrelevant.
However, an employer can take into account the number and length of previous absences
as well as the dates when they occurred, in order to determine whether the time
off on a subsequent occasion is reasonable and necessary
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– The right to time off to "provide assistance" does not enable
employees to take time off to provide the care themselves, beyond the
reasonable amount necessary to enable them to deal with the immediate crisis.
The statute envisages some temporary assistance
– The statute contemplates a reasonable period of time off to enable an
employee to deal with a dependant who has fallen ill unexpectedly. Once it is
known the dependant is suffering from an underlying medical condition – which
is likely to cause regular relapses – such a situation no longer falls within
the scope of the statute once arrangements have been made for the provision of
care for that dependant, unless there is some disruption of those arrangements
that necessitates input from the employee.
