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Employment Update: 7 March 2012


United Kingdom

Employment Update: 7 March 2012

In this issue:


Redundancy selection pool of one

The Employment Appeal Tribunal (EAT) has confirmed that a redundancy dismissal was unfair where the employer used a selection pool of only one employee. Although the employee was successful in her claim of unfair dismissal, the EAT reviewed the law and principles in this area, providing useful guidance for employers carrying out redundancies.

In Capita Hartshead Ltd v Byard, Ms Byard was one of four actuaries. Following the loss of a number of Ms Byard’s clients, her employer failed to find new work for her and considered the possibility of redundancy. Ms Byard’s line manager believed that the bulk of work that had diminished was identifiable with her and not any of the other actuaries. The employer considered that a selection pool consisting of just Ms Byard was ‘feasible and responsible’ and went through a consultation process with her. Ms Byard was subsequently dismissed on the grounds of redundancy and claimed unfair dismissal.

The tribunal upheld her claim. The majority considered that the decision to limit the size of the pool to Ms Byard when there were other actuaries who could have been included was unfair. In addition, having a pool of one also ‘took a lot of the value away from the resultant consultation period’. It also noted that the risk of clients moving their business away if the actuary was to change was ‘slight’ and there were cases where there was no damage to the client relationship resulting from an enforced change of actuary. The employer appealed.

The EAT upheld the tribunal’s decision and highlighted the principles which apply where the issue in an unfair dismissal claim is whether the employer has selected the correct pool:

  • It is not for the tribunal to decide whether it would have been fairer to act in another way. The question is whether the dismissal was within the range of conduct which a reasonable employer could have adopted.
  • The reasonable response test is applicable to the selection of the pool from which redundancies are to be drawn.
  • There is no legal requirement that a pool should be limited to employees doing the same or similar work. The question of how the pool should be defined is primarily a matter for the employer to determine. It would be difficult for the employee to challenge it where the employer has genuinely applied its mind to the problem.
  • The tribunal is entitled, if not obliged, to consider with care and scrutinise carefully the reasoning of the employer to determine if he has ‘genuinely applied’ his mind to the issue of who should be in the pool for consideration for redundancy.
  • Even if the employer has genuinely applied his mind to this, then it will be difficult, but not impossible, for an employee to challenge it.

The EAT confirmed that the tribunal had adopted precisely this approach and concluded that the employer had not genuinely applied its mind to who should be in the pool for consideration for redundancy. The employer also criticised the tribunal for directing themselves that where the number of candidates in the pool for redundancy is the same as the number to be made redundant, or where there is a pool of one, this deprives the tribunal of assessing the reasonableness of that selection and is accordingly unfair. However, the EAT said that it was clear that the tribunal had identified this as an additional reason and the majority would have held that the dismissal was unfair in any event.

This decision provides a valuable summary of the issues that employers should consider in relation to selection for redundancy. The key phrase, “genuinely applying" your mind, is a useful reminder for employers of the importance of approaching redundancy processes and selection pools with care and documenting the processes where appropriate. It is worth remembering that the tribunal will scrutinise an employer’s reasoning and it will be difficult, but not impossible, for an employee to challenge a selection pool if the employer has genuinely applied its mind to the issue.

Dealing with allegations of misconduct

The Court of Appeal has recently provided helpful guidance for employers when handling employee misconduct, particularly where an employee’s career is at stake. A footnote to the judgment also provides employers with food for thought in relation to suspension and police involvement in misconduct cases, emphasising that employers must take extreme care when considering either step.

In Crawford and another v Suffolk Mental Health Partnership NHS Trust, two nurses were accused of tying a patient with dementia to a chair with sheets. They were asked about the incident and suspended pending further investigation. The reason for the suspension was the ‘alleged assault of a client’. The Trust decided that the police should investigate the incident and delayed its internal investigation until the police had responded. A month later, the police concluded that no further action should be taken. The internal investigation began and formal disciplinary action was taken against the nurses. In the course of one of the nurse's disciplinary hearing, conducted by a manager, Mr Mansfield, he and an HR adviser carried out an experiment with the chair and sheet to test Mrs Crawford’s explanations. She was not informed of this experiment. The nurses were subsequently dismissed for assault, negligence and professional misconduct. The nurses appealed. The appeal panel reviewed Mr Mansfield’s decision but did not rehear any evidence.

The Court of Appeal confirmed that the tribunal correctly held that the nurses had been unfairly dismissed. It observed that the tribunal was entitled to look particularly carefully at the procedures given that the nurses’ ability to pursue their chosen careers was at stake. It was open to the tribunal to conclude that Mr Mansfield’s experiment was an unfair procedure. The Court also noted that it cannot be enough for an employer to say that although a fair procedure was not adopted, the responsibility for failing to remedy it lies at the door of the employee for failing to alert him to the error.

Interestingly, Laws LJ outlines his concerns about the case in a footnote to the judgment, which contains some valuable commentary for employers. He comments that it appears to be an almost automatic response of many employers to allegations of this kind to suspend the employee concerned. He notes that even where there is evidence supporting an investigation, that does not mean suspension is automatically justified. It should not be a knee jerk reaction and it will be a breach of the duty of trust and confidence towards the employee if it is. He also notes that consideration could have been given in this case to whether there was any real risk of the treatment being repeated, particularly in light of the unblemished service of the relevant staff. He also states that he finds it ‘little short of astonishing’ that it could ever have been thought appropriate to refer this matter to the police. Employers should not subject employees to the burden of possible criminal proceedings without the most careful consideration and genuine and reasonable belief that the case, if established, might justify the epithet ‘criminal’ being applied to the employee’s conduct.

Whilst this case is a helpful reminder of the importance of thorough disciplinary procedures, the footnote to the judgment also highlights concerns about the use of suspension and the involvement of the police in misconduct cases. These are key issues for any employer to consider when dealing with misconduct in the workplace.

Employment tribunal reform - changes from 6 April 2012

Following the Government consultation on 'Resolving Workplace Disputes', the Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2012 have been laid before Parliament. These will introduce changes to the Employment Tribunal rules, for claims issued on or after 6 April 2012. The changes include the following:

  • The maximum deposit order (which a judge can order when a claim or response has little reasonable prospect of success) will increase from £500 to £1,000.
  • A tribunal may order a party to pay in respect of costs (or for preparation time where the party is unrepresented). The limit on costs and preparation time orders will increase from £10,000 to £20,000.
  • Any witness statements should be taken as read and stand as evidence in chief of the witness concerned unless the Employment Judge or tribunal directs otherwise.

Calls to freeze National Minimum Wage?

The Telegraph has reported that David Cameron is considering calls to freeze the National Minimum Wage.

The Low Pay Commission recently sent its report on minimum wage rates to ministers to Downing Street and the Department for Business, Innovation and Skills (BIS). However, the Telegraph reports that, in its own evidence to the Commission, BIS warned that increases in the minimum wage made employers more reluctant to hire. It also stated that the Commission should “consider concentrating their attention on the effect of a rise in the adult National Minimum Wage on employment”.

The Government is due to announce this year's National Minimum Wage rates within the next two months.

Age discrimination in the provision of services and public functions

The Government Equalities Office has confirmed that the Government has decided to delay a decision on implementation of its proposed ban on age discrimination in the provision of services, which it had envisaged bringing into force in April 2012.

Ministers are still considering the scope for and content of any exceptions from the ban. Any ban is unlikely to come into effect before October 2012 and the Government will set out a way forward in due course.

Social mobility toolkit

A Social Mobility Toolkit for the Professions, providing a framework to measure the progress of social mobility within the professions, has been launched by Professions for Good and researched by Spada. It provides recommendations for organisations of all sizes, as well as professional bodies and regulators, on how they can track and foster social mobility.

The initiative entailed surveying 300 professionals and drew on the expertise of 50 representatives from universities, membership bodies, NGOs, regulators and Government departments. The 52-page toolkit examines the economic, business and moral case for social mobility and also explores the state of social mobility in the UK.

The toolkit is intended to be practical. It provides best-practice advice on how to collect and process data on social mobility and explains how organisations can diversify the socio-economic profile of their members and employees.

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