Employment Newsletter November/December 2012

Dear Employer
It seems to be a busy time in the national press, not least the announcement of a new Governor of the Bank of England. Let us hope that the change will be a positive one for businesses. As we approach Christmas, we hope that you have had a successful year and that you are able to enjoy some festivities at work. Certainly, some employees in Birmingham have had cause to celebrate recently.
Women workers have won a victory in Birmingham where more than 170 former Birmingham City Council staff have won the right to claim compensation for unequal pay. The ruling is significant because it opens the way for equal pay claims to be brought in the County Court where the time limit is six years, rather than in the Employment Tribunal where the time limit for such claims is six months. It means that they can pursue claims going back six years. See below for the implications of this for other employers.
Meanwhile, if you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk
We wish you a Happy Christmas and a very successful New Year.
Kind regards
The Employment Law Team
Some Recent Cases in Employment Law
Equal pay claim success
One of the implications for employers of the success of the women in the Supreme Court’s judgment is that employers will be left vulnerable to equal pay claims for a much longer period than they were previously. This is because of the difference in the timescales for claims brought in an Employment Tribunal and in a civil court. Another implication is that there are no costs awards (except in very rare cases) in Employment Tribunal cases, so that the loser does not have to pay the winner’s costs. However, that is quite different in County Court or High Court cases, where it is quite common for an order to be made that the loser pays the winner’s costs. Of course, all employers can avoid such claims if they ensure that the sexes receive equal pay for equal work and also that each sex is entitled to receive the same bonuses. In some cases in the Birmingham case, women were receiving £20,000 less than the men. The difference lay less in the salaries than in the bonuses that the men received.
Interestingly, from October 2013 quoted companies will be made to carry out gender audits and report publicly on the number of women and men they hire.
TUPE : Service provision changes
The TUPE regulations can apply where there is a service provision change, for example, where a company terminates its service contract (e.g. cleaning) with one firm and awards the contract to another. A situation can arise where employees working for the old service provider can be transferred by law to the new one. The Employment Appeal Tribunal (EAT) has held that TUPE does not apply to a service provision change connected with a “single specific event or task of short-term duration”. In this case, a one-year contract between a local authority and a coach operator to transfer schoolchildren was properly characterised as “short-term”, given that such contracts were usually awarded for three or four years or longer. The award of such a contract did not attract TUPE protection.
Briefly, Mr Cook worked as a coach driver for Liddell’s Coaches. In 2010, Liddell’s won several contracts to transfer schoolchildren who had been moved from their school when it was discovered that the school was unsafe. The children were to be taken in by other schools in the area while their school was rebuilt. Before these contracts expired at the end of the 2010/11 school year, Liddell’s tendered for further one-year contracts. By this time, the new school was on schedule to be completed by the end of the next school year. Liddell’s won only one of the re-tendered contracts and three were awarded to another company, AC Ltd. When Liddell’s terminated Mr Cook’s employment in July 2011 it asserted that his employment transferred to AC Ltd. AC Ltd denied this and Mr Cook brought a claim at an Employment Tribunal.
The Tribunal found that the “single specific event” under the TUPE rules was the re-building of the school and that given that transport contracts were typically awarded for three to five years rather than just one, the 2011/12 contract was of short-term duration. That meant that there was no service provision change and liability for Mr Cook’s dismissal rested with Liddell’s Coaches. Liddell’s appealed. The EAT (although criticising elements of the Tribunal’s decision) found it had reached the right one. (Liddell’s Coaches v Cook & Others)
Emails: content is not property
In a recent case, the High Court has rejected the argument that the content of emails is property. In this case, following a hostile takeover the employer company obtained a court order restraining Mr Adkins, its former CEO, from knowingly deleting or otherwise interfering with emails he had sent or received while acting on behalf of the company. Mr Adkins applied to set the order aside on the basis that the company had no proprietary claim to the content of the emails. The Court concluded that, although it could not be said to be settled law, it was clear that the amount of authority on the subject pointed strongly against there being any proprietary right in the creation of information, and this must also apply to the content of an email. In the Court’s view, the information contained in emails is already protected, either by the equitable jurisdiction or a contractual right (e.g. a clause in the employee’s contract of employment) which restrains the mis-use of confidential information. Alternatively, where applicable, the law of copyright provides protection. As practical considerations militated against the existence of a proprietary right, the Court concluded that the company’s application to inspect the emails held by Mr Adkins could not succeed on the ground on which it was based. (Fairstar Heavy Transport NV v Adkins & Anor).
What’s in the pipeline
Government Consultation on employee owner status
Consultation has recently ended on the detail of implementing “employer owner” status. Under the proposals, the Employment Rights Act 1996 will be amended to create a third employment status of “Employer Owner” in addition to that of employee or worker. “Employer Owners” would receive between £2000 - £50,000 worth of shares in return for losing employment rights such as unfair dismissal and redundancy pay. Some of the main points are as follows:
• Companies will be able to offer employment on the employee owner basis either to existing employees or to new employees only.
• All types of shares will be eligible for use under the contractual “employee owner” share arrangement. It is anticipated that employers will apply restrictions on the shares they issue, e.g. whether or not they carry rights dividends, voting etc.
• An employer may contractually require an “employee owner” to surrender the shares if they leave, are dismissed or made redundant.
• If shares are surrendered, the employer must buy back the employee shares at a “reasonable value”.
• The shares will be exempt from Capital Gains Tax but will be subject to Income Tax and N I contributions under the normal rules that apply for shares acquired by reason of employment.
• The Government seeks views on whether “in certain circumstances” an employer should be able to buy back shares at less than market value, e.g. where an employee was dismissed. An employee owner who considers themselves to have been unfairly dismissed would be unable to seek compensation from a Tribunal nor receive the full market value for shares which are meant to compensate them for the loss of this right.
• Certain employment claims will be unaffected by the ownership of shares. This includes dismissal-based discrimination claims.
Flexible Parental leave and the right to request flexible working for all
Nick Clegg has announced that from 2015 the UK will have a new system of flexible parental leave. The Government will also legislate to extend the right to request flexible working to all employees from 2014.
The outcome will be that:
• 52 weeks of maternity leave will remain the default position for all employed women
• Fathers will remain entitled to two weeks’ paternity leave and pay
• If the mother returns to work before the end of the 52-week period, up to 50 weeks of untaken maternity leave can be taken as flexible parental leave, to be shared by the woman and her partner. If the mother notifies in advance that she will return early then the balance of the leave may be taken by the parents concurrently. However, no more than 12 months can be taken in total, with no more than nine months paid
• Each parent will need to meet the qualifying criteria for leave and/or pay in their own right
• Flexible parental leave must be taken in a minimum of one-week block. The parents must agree their individual pattern of leave with their employer. If it cannot be agreed, the leave defaults to a single block to commence on a date specified by the employee
• A new right will allow men to take unpaid leave to attend two ante-natal appointments
• Parents who adopt will also be eligible for the new flexible parental leave on equal terms with biological parents.
The Employer Traps and Other Tips
Protecting confidential information
As demonstrated by the Fairstar v Adkins case, there is no property in the content of an email. Although a degree of protection may be offered by the law, it is safer to protect your confidential information by express means, e.g. a suitable clause in your employees’ contracts. If your contracts do not currently provide for this, take advice.