Questions and answers

The employment law team at Addleshaw Booth answer questions on workplace

Paid holiday entitlement

Q:  We operate in the public
sector and one of our workers was recruited two months ago and is entitled to
the minimum statutory leave of four weeks. He now wants to take a day’s holiday
but we’ve told him that he does not accrue any rights to holiday leave until he
has been continuously employed for 13 weeks. Is that right?

A:  Not any more. According to
the Working Time regulations a worker’s right to paid holiday is conditional
upon the worker having been continuously employed for 13 weeks by the same
employer. However, a recent European Court of Justice decision, Bectu v
Secretary of State for Trade & Industry, has decided that this condition is
contrary to European law. This means that workers in the public sector can
directly enforce their to holiday entitlement from day one against their
employer, the state. However, it remains the case that if the worker wants to
take a day’s holiday then he must comply with the notice requirements and give
two days’ notice. The company may come back within one day to refuse that

Malcolm Pike

Monitoring e-mails

Q:  We are aware that a number of
staff have been spending time accessing pornographic material on the Internet,
downloading images from particular workstations and e-mailing them to each
other in contravention of our e-mail/Internet policy. We have a good idea of
the identity of the culprits, but we would like to monitor their e-mails
privately as part of our investigations into gross misconduct. Is this a safe
course of action?

A:  The Telecommunications
(Lawful Business Practice) (Interception of Communications) regulations 2000
permit monitoring without consent in circumstances which would cover an
investigation of abuse of the e-mail policy. However, an important precondition
of carrying out monitoring is that you should already have taken reasonable
steps to inform your employees of the scope of any monitoring you intend to
carry out. You will need to check that your e-mail/Internet policy reserves the
right to carry out monitoring for this purpose and, importantly, check that the
policy has been communicated effectively to your employees. This is to ensure
that any monitoring you carry out is carried out lawfully. The risk with
monitoring unlawfully is that it will flaw your investigation and render it
unfair. Any subsequent misconduct dismissals would therefore, potentially, be
procedurally unfair.

Colin Tweedie

Tax implications

Q:  Are there any tax implications
which arise when repeating in a compromise agreement restrictive covenants from
the service agreement?

A:  If you simply affirm in a
settlement existing enforceable restrictive covenants then there should be no
problem. However, if you insert new restrictions, for example due to an earlier
breach of contract by the company which render the original restrictive
covenants unenforceable, or because the existing ones are too wide, these will
be chargeable to tax. Apart from the restrictive covenants, if the settlement
includes a termination payment it is likely to attract the £30,000 tax
exemption. In order to prevent the whole payment attracting tax, a separate sum
should be allocated as consideration for any new covenants.

Michael Leftley

Acas arbitration scheme

Q:  We are currently handling an
unfair dismissal claim from a former employee, M. Her solicitor has written to
us inviting us to consider settling the matter under the Acas arbitration
scheme. This is something we are prepared to consider but we would like to know
what procedure we would need to follow and whether it will prevent M returning
to the employment tribunal.

A:  The scheme is voluntary
and will only apply if both parties enter into a written arbitration agreement.
This may take the form of an agreement conciliated through Acas, or a statutory
compromise agreement. In addition the parties must sign a waiver form
(available on the Acas website) waiving any rights they would have had if the
case had been referred to an employment tribunal and resolved there.

Once both parties have agreed in the appropriate manner to submit to the
scheme the relevant documentation (the arbitration agreement, originating
application and defence) is lodged by the parties or their representatives with
Acas within six weeks and Acas will appoint an arbitrator. Once the parties
have agreed to refer their case to arbitration they cannot later bring the same
claim before an employment tribunal.

Robert Riley

Compromise agreement

Q:  We recently terminated the
contract of employment of J. A compromise agreement was agreed settling
"all claims howsoever arising". J is now claiming sex discrimination
alleging harassment by one of her managers, a complaint never previously
raised. Surely she was under a duty to mention the complaint before signing the
compromise agreement? Is the compromise agreement effective in excluding the
right to bring this claim?

A:  There is no such duty on
an employee to disclose potential claims before signing a compromise agreement.
Moreover, a blanket agreement covering "all claims howsoever arising"
is not permitted. The problem you now face has been caused by the fact that J,
whether deliberately or otherwise, had not disclosed the existence of this
potential claim when the compromise agreement was signed.

To guard against this happening again in the future it is worth considering
reviewing the terms of your compromise agreement to include a warranty whereby
employees undertake to disclose all known claims (which can then be
compromised). While a failure to comply with such a warranty would not prevent
a member of staff from bringing a claim in respect of an undisclosed complaint,
the warranty would act as a deterrent because breach of it would entitle the
employer to sue on the warranty.

Joe Glavina

Request for references

Q:  Recently we carried out an
investigation into various allegations of misconduct against one of our senior
managers, G. Subsequently, G offered his resignation before we had completed
the pending disciplinary proceedings and we accepted. G has now found
alternative employment and we have received a request for a reference from G’s
prospective future employer. Must we continue with and complete our
investigations before we are in a position to provide an accurate and fair
reference and are we able to make unfavourable comments about G?

A:  You do not need to provide
a full and comprehensive report on all the material facts surrounding the
investigation since your duty is only to provide a fair and accurate reference.
It follows that you do not need to complete the investigation in order to
provide a reference but you do need to be very careful to confine any
unfavourable comments to those matters which had been investigated before G
resigned and which provided reasonable grounds for statements about him. In
future, if you are agreeing to provide a reference try to agree the exact
wording, after careful discussion, and record that wording in writing in a
compromise agreement or other severance terms. This approach should help avoid
time consuming and costly disputes about job references.

Andrew Chamberlain

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