Employment Bulletin - October 2005

Difficult Employees / Colleagues

There is likely to be one in every office and workplace. Someone who by personality is just impossible to work with, upsets the emotional dynamics of the team and makes your job seem a constant chore. Often, technically capable but someone, given the choice you would avoid if you could. No doubt we have all come across the extremely difficult employee / colleague. If you suspect you may yourself be the person we are describing, beware! Read on…

This month saw an important decision in the case of Perkin v St Georges Healthcare NHS Trust [2005] EWCA Civ 1174. The case centred upon whether, the very technically competent Mr Perkin could nevertheless be fairly dismissed because of his personality. He was dismissed for this reason which his employers said amounted either to conduct or some other substantial reason. There were also issues about the procedure adopted which was unfair. However, the Appeal Tribunal held that had employers followed a fair procedure, Mr Perkin would have been dismissed in any event and also that he contributed to his dismissal 100% because he was a difficult character and his personality was such that it interfered with his ability to work with his colleagues effectively. A disappointed Mr Perkin therefore received no compensation.

When dismissing an employee an employer must establish one of the potentially fair reasons in s.98(2) Employment Rights Act 1996 which comprise:

1. Capability or qualifications.
2. Conduct.
3. Redundancy.
4. Continuation of employment would contravene an enactment.
5. “Some other substantial reason” to justify the dismissal.

It is the second and last of these reasons which were of interest to the Court of Appeal which held that personality could amount to some other substantial reason even where, as in Mr.Perkin’s case, the employee is technically able to carry out his/her job. The court rejected the argument on behalf of Mr Perkin that personality could not amount to some other substantial reason.

Extended Family Friendly Proposals

As promised in its election manifesto, the Government has now published a draft bill in relation to the creation of more “Family Friendly Rights” from April 2007.

The main provisions of the bill are:

1. The period of statutory maternity pay and maternity allowance will be increased to nine months. The Government intends to extend this period to 12 months by 2009/2010. There will also be extended eligibility for mothers who qualify for ordinary maternity leave to qualify for additional maternity leave.

2. Allow fathers to pick up ‘unused’ maternity leave entitlement if the mother returns to work after six months of her maternity leave – this would give the father up to three months paid paternity leave.

3. In situations where the employee is a carer of an adult, the definition of which is to be consulted upon in early 2006, the Government proposes to extend the flexible working rights.

4. The period of notice which employees returning from maternity leave must give will be extended to two months so both employees and employers can plan for the employee’s return to work.

5. To allow reasonable contact between the employer and employee during maternity leave and allow employee to return to work for a few days during their paid leave period without the leave being ended. These will be known as “keeping in touch days”.

Companies and businesses may regard the above provisions as yet a further burden upon them. Recognising this, the Government is promising to introduce provisions to help businesses with the administration of statutory maternity, paternity and adoption pay.

Working Tax Credit Payments and Claimants

In an attempt to secure the privacy of recipients and save business costs, Working Tax Credit will be paid directly into the employee’s bank account rather than through the company payroll from 7 November 2005. Existing claimants will continue to receive Working Tax Credit through the payroll until December 2006.

Compromise Agreements

Compromise (or severance) agreements are one of the main mechanisms enabling an employee lawfully to contract out of pursuing employment claims. However, there are restrictions upon how far they can be used by employers to achieve that and those restrictions have been highlighted in the case of Hilton Hotels v McNaughton. The claimant instituted a claim on the ground that she had been excluded from the respondents’ pension scheme during a period of part-time employment. The claimant had previously left the company having signed away any claims in a compromise agreement.

When the claimant sought advice on the compromise agreement at the time it was made, her solicitor did not advise, or indeed investigate the possibility of her being able to claim for part-time pension loss under the Equal Pay Act 1970. She had been excluded from her employer’s pension scheme whilst she was working part time

The Employment Appeal Tribunal found that because the claimant was not aware of her right to such a claim at the time of the compromise agreement, she could not have contracted away such rights and therefore was not precluded from bringing a part-time pension claim under the Equal Pay Act 1970.

There has been some criticism of this decision especially from employers in that it seriously dents the benefits of a compromise agreement. It also leads to uncertainty about the application of such agreements which in the longer term can only lead to more employment disputes, the very objective that compromise agreements were intended to reduce.

Public Sector Pensions

This next employment law issue has made the headlines this month because Trade Unions and the Government have agreed a deal over the future of pensions in the education, health and civil service public sector pension schemes.

In brief, the highlights of the agreement are :

1. The retention of the current status quo in terms of pension and retirement for current staff; (i.e. retirement on full pension at age 60 or sooner);

2. For future staff a new standard retirement age of 65;

3. For future staff, there will be retained the ability to retire at 60 but this will be on the basis of a reduced pension unless sufficient additional pension contributions are made.

To take a look at the framework principles for public service scheme negotiations in more detail click on: www.dti.gov.uk/news/pensionreform.html.

Reasonable Adjustments under the Disability Discrimination Act 1995

In Greenhof v Barnsley 2005 WLR having been off work sick due to clinical depression, Mr Greenhof returned to work only to be offered a lesser technical role and not the managerial role that was originally intended for him to as his employers thought it would be less stressful for him. As a result of this, Mr Greenhof resigned stating that he had lost trust and confidence in his employers as a result of their behaviour. It was accepted that he was disabled and therefore adjustments should have been made as required by the Act.

Mr Greenhoff claimed both unfair dismissal and disability discrimination. He was partially successful before the employment tribunal which held that he had not been unfairly dismissed but that he had been discriminated against on disability grounds as the adjustment made was not reasonable in the circumstances.

Mr Greenhof took the matter to the Employment Appeal Tribunal which allowed the appeal and found that Mr Greenhof had been both unfairly dismissed and discriminated against on grounds of disability.

The Appeal Tribunal posed the question as to whether the employer had conducted itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between the employer and the employee. Such conduct would amount to a repudiatory breach of the employment contract and allow the employee to resign and claim constructive dismissal.

In this case the Employment Appeal Tribunal held that although there may be some cases where a failure to make reasonable adjustments might not be a repudiatory breach, this was not one of those cases and the failure in this case did breach the term of mutual trust and confidence and Mr Greenhof was unfairly dismissed.

The significance of this case is to underline the relationship between disability discrimination and constructive dismissal – in many cases a failure to make reasonable adjustments is likely also to constitute repudiatory conduct amounting to constructive dismissal if the employee resigns as a result.

Age discrimination

17 October 2005 marked the deadline for responses to the Government’s “Coming of Age Consultation” on the draft Employment Equality (Age) Regulations 2006 which are aimed to be in force by October 2006.

The DTI website provides guidance and states that the Regulations will:

1. Prohibit unjustified age discrimination in employment and vocational training.

2. Will impose a duty upon employers to justify why they are keeping retirement age below the age of 65 and even change this policy.

3. Employers will be obliged to consider an employee’s request to continue working past retirement.

4. Give older workers the same rights as younger workers by removing the age limits on unfair dismissal, redundancy rights, Statutory Sick Pay, Statutory Maternity Pay, Statutory Adoption Pay and Statutory Paternity Pay.

5. To assist employees in planning their retirement, employers will have to give employees at least six months notice of their retirement date.

Further information is available if you click on www.dti.gov.uk/er/equality/age.htm.

We will of course update you before the Regulations come into force.

« Back to Newsletter archives