May 2, 2018

UK - CABLE: Current Awareness Bulletin

Clyde & Co's UK employment team brings you CABLE, a bulletin keeping you up to date with recent legal developments

When does notice to terminate employment take effect?

Where an employee is dismissed on written notice posted to his or her home address, does their notice period start to run from the date the letter was delivered, or from when he/she has read it or had a reasonable opportunity to do so? The Supreme Court (the UK's highest court) has decided that it is the latter.

In April 2011, Mrs Haywood was told she was at risk of redundancy. She had a 12 week notice period, but her employment contract didn’t say how that notice was to be given or when it would take effect. On 19 April 2011, Mrs Haywood went on holiday and the next day her employer sent her a letter by recorded delivery and ordinary post giving her notice to terminate her employment. She read it on her return from holiday on 27 April.

If the notice took effect when she came back from holiday and read the letter, Mrs Haywood would have been 50 years' old on the date her notice period ended and entitled to a more generous pension than if her notice period started to run when the letter was delivered.

The majority of Judges in the Supreme Court decided that where an employee's contract doesn't say how notice is to be given or when it takes effect, notice only starts to run when the letter giving notice is actually read by the employee (or he/she had a reasonable opportunity to read it). It does not take effect when the letter was actually delivered or would have been delivered in the ordinary course of the post. In Mrs Haywood's case this meant her notice period did not start to run until 27 April, when she read the letter after she came back from her holiday and so she was entitled to a more generous pension.

Newcastle upon Tyne Hopsitals NHS Foundation Trust v Haywood

PRACTICAL POINT

Employers should check their employment contracts to see what (if anything) they say about how notice is to be given and when it takes effect, and keep this in mind when terminating employment.  If their contracts don't say anything about this, it may be a good idea to consider including wording. 

Varying terms and conditions of employment relating to pay

Not all proposed contractual variations need to be signed by employees to be effective.  Sometimes an employee by his conduct will convey his agreement with the variation.  As this case demonstrates it can, however, be risky to rely on conduct alone.

In a claim against Nottingham City Council following an enforced pay freeze, the Court of Appeal found the employees had not accepted new terms relating to pay.  Continuing to work without protest after the freeze took effect was ambiguous and did not necessarily imply acceptance of the new terms. 

Employees of the Council had a contractual right to pay progression. The Council wanted to end this right and offered its employees the option either to receive £100 in return for their consent to a change in terms, or to consent to a dismissal and immediate re-engagement on new terms. 90% took the first option and most of the rest were dismissed and re-engaged on the new terms. The Council then imposed a two year pay freeze. Certain employees brought claims for unlawful deductions from wages.  The Council argued that the employees had accepted the variation in terms by continuing to work after the pay freeze without protest.

The Court of Appeal said that the employees were not to be taken to have accepted the variation particularly as it had been wholly disadvantageous to them and had been put to them as something for which their express agreement would be required. The Court noted that protest by the unions might be sufficient to negate any inference of acceptance despite the fact that the employees had said nothing. 

Abrahall & Ors v Nottingham City Council

PRACTICAL POINT

Always try to obtain express employee consent to a variation in terms, particularly if it involves pay or a change which does not have an immediate impact.  If consent is not forthcoming, do not assume that because the employee continues to work on the new terms that the variation is accepted.  Dismissal and re-engagement can be an option to secure new terms provided a proper procedure is followed.

Unfavourable references

The High Court has dismissed a claim for negligent misstatement brought by an employee against his employer after the reference which it issued contained opinions formed following an investigation into the employee's conduct. The employee argued that the employer should have first satisfied itself that the investigation was reasonably conducted and procedurally fair. However, the Court said that where an opinion is derived from an earlier investigation the referee had to do no more than take reasonable care in considering and reviewing the underlying material so that he or she could understand the basis for the opinion. Unless a "red flag" such as an obvious irregularity prompted further inquiry, there was no duty to examine the procedural or substantive fairness of the underlying investigation.

Hincks v Sense Network Ltd [2018] EWHC 533 (QB)

PRACTICAL POINT
Many employers choose to keep references to minimum factual details of dates of employment and posts held because misleading or inconsistent references can risk claims for negligence, discrimination or breach of the implied term of trust and confidence.  Having a reference policy can help minimise those risks. Where an employer is under regulatory requirement to give a reference, it is important to ensure sufficient documentation is kept on the employee's file to be able to meet those requirements.

Injury to feelings award bands increased

Joint Presidential Guidance issued by the Presidents of the Employment Tribunals in England & Wales and Scotland update the so-called "Vento" bands of awards for injury to feelings. The guidance is not binding but tribunals must have regard to it.

For claims presented on or after 6 April 2018, the Vento bands are:

  • a lower band of £900 to £8,600 (less serious cases)
  • a middle band of £8,600 to £25,700 (cases that do not merit an award in the upper band)
  • an upper band of £25,700 to £42,900 (the most serious cases)
  • with the most exceptional cases capable of exceeding £42,900

In Scotland, the figures may be lower as it is not yet clear whether the 10% increase to general damages, introduced in England and Wales in 2012, applies (see paragraphs 5 and 12 of the earlier Presidential guidance). 

Key dates for May

1 May 2018 The Supreme Court hearing in Lee v McArthur and Ashers Baking Company (whether a ''Christian business'' bakery had directly discriminated against a gay man on the grounds of his sexual orientation by refusing to bake him a cake with the caption "Support Gay Marriage")
25 May 2018 The GDPR, due to be implemented by all EU member states
31 May 2018 An end to the Fit for Work Service in Scotland

New legislation

Right to payslips - With effect from 6 April 2019 all workers (not just employees) will have the right to be given a written itemised pay statement at or before the time at which any payment of wages or salary is made to them. This will help workers establish whether they have been paid correctly (the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2) Order 2018 SI 2018/529).