NEWSLETTER THE ROLE OF HR IN DRAFTING DISCIPLINARY INVESTIGATION REPORTS EMPLOYMENT. October 2016

Transcription

1 NEWSLETTER EMPLOYMENT THE ROLE OF HR IN DRAFTING DISCIPLINARY INVESTIGATION REPORTS In Dronsfield v University of Reading the EAT has considered the role of HR and internal legal advisers in the preparation of a disciplinary investigation report. Jesper Christensen (Partner) E jesperchristensen@bdb-law.co.uk T +44 (0) Dr Dronsfield, an associate professor at the University of Reading, had a brief sexual encounter with a student. Although this in itself was not prohibited, he breached University guidance by failing to report this to management and by continuing to supervise her dissertation. Following a complaint by the student s ex-boyfriend, Professor Green was appointed to carry out an investigation with the help of Ms Rolstone, an HR partner. Professor Green s initial drafts of the investigation report included a number of passages supportive of Dr Dronsfield, but these were removed or watered down following discussions with Ms Rolstone and an in-house lawyer. Most significantly, a section which concluded that there was no evidence that Dr Dronsfield s conduct was of an immoral, scandalous or disgraceful nature was later deleted entirely. This was important because the statute regulating Dr Dronsfield s employment stated that good cause for dismissal required conduct of an immoral, scandalous or disgraceful nature incompatible with the duties of the office of employment. The final report concluded that Dr Dronsfield had breached his duty of care towards students, and a disciplinary panel subsequently dismissed him for failing to report a sexual relationship with a student. The Employment Tribunal dismissed Dr Dronsfield s claim for unfair dismissal. However, the EAT allowed his appeal and remitted his case to a fresh Tribunal. One of his grounds of appeal concerned the quality of the investigation report. The EAT was critical of the Tribunal for failing to ask whether the conclusions of the investigation were fully expressed in the report, given that opinions favourable to Dr Dronsfield had been removed; and whether it was reasonable to dismiss him having regard Bircham Dyson Bell LLP Broadway London SW1H 0BL

2 2 to what was omitted in the final version. It was not clear in this case whether, under the University s procedures, the investigation report was the joint responsibility of Professor Green and Ms Rolstone. However, the EAT noted that an investigating officer should usually have sole responsibility for their report, with HR taking an essentially supporting role. The EAT also criticised the decision not to contact the student during the course of the investigation, commenting that this was not recommended practice. This decision is in line with the 2015 case of Ramphal v Department of Transport, in which the EAT emphasised that HR must limit advice to questions of law and procedure, and not stray into issues of culpability. Reports by an investigating officer must always reflect their own enquiries and conclusions. As this case illustrates, care must be taken where a report goes through several drafts,...a SECTION WHICH CONCLUDED THAT THERE WAS NO EVIDENCE THAT DR DRONSFIELD S CONDUCT WAS OF AN IMMORAL, SCANDALOUS OR DISGRACEFUL NATURE WAS LATER DELETED ENTIRELY... particularly where changes are made to its conclusions. Failure to contact all relevant witnesses during the investigation may also affect the reasonableness of any subsequent dismissal.

3 3 WHISTLEBLOWING DISMISSAL WAS UNFAIR DESPITE DECISION- MAKER BEING UNAWARE OF PROTECTED DISCLOSURES Last year the Court of Appeal confirmed in CLFIS (UK) Ltd v Reynolds that a dismissal can only amount to direct discrimination if the person making the final decision to dismiss has discriminatory motives. Jamie Henderson (Associate) E jamiehenderson@bdb-law.co.uk T +44 (0) It is not sufficient to rely on discrimination by the managers who have provided information to that decision-maker. In the recent case of Royal Mail Group Ltd v Jhuti, the EAT considered whether the same principle applied to a whistleblowing case where the dismissing manager was unaware that the employee had made protected disclosures because this information was withheld by the employee s manager....mr WIDMER WITHHELD RELEVANT S FROM MS VICKERS AND LIED ABOUT THE PROTECTED DISCLOSURES... Ms Jhuti reported suspected breaches of Royal Mail and Ofcom rules to her manager, Mr Widmer. His response was to question Ms Jhuti s understanding of the rules, and to request that she retracted her concerns via . Mr Widmer then placed her on a performance improvement plan, setting her constantly changing and unattainable targets. Ms Jhuti eventually complained to HR, but was told that Mr Widmer was a respected manager and asked to consider whether Royal Mail was the right place for her. She raised a grievance concerning bullying and harassment due to her disclosures and then went on sick leave. Royal Mail offered Ms Jhuti a termination package which she declined. Ms Vickers, a manager with no prior knowledge of this background, was appointed to review the situation whilst Ms Jhuti was on sick leave. Mr Widmer withheld relevant s from Ms Vickers and lied about the protected disclosures, so she accepted his assertions that Ms Jhuti was a poor performer and dismissed her on the grounds of poor performance. Following an unsuccessful internal appeal, Ms Jhuti brought a whistleblowing claim. The Employment Tribunal held that Ms Jhuti had made protected disclosures and been subjected to bullying and harassment by Mr Widmer as a result. However, following the principle in CLFIS (UK) Ltd v Reynolds, the Tribunal concluded that there was no automatic unfair dismissal because Ms Vickers was unaware that protected disclosures had been made. Her decision to dismiss was based solely on her belief that Ms Jhuti was a poor performer.

4 4...MS JHUTI HAD MADE PROTECTED DISCLOSURES AND BEEN SUBJECTED TO BULLYING AND HARASSMENT BY MR WIDMER AS A RESULT... The EAT disagreed, finding that the principle in CLFIS (UK) Ltd v Reynolds applied only to cases of direct discrimination and not to whistleblowing cases. Where a decision-maker is kept in the dark about the true facts and manipulated by a manager with responsibility for the employee, the motivations of that manager must be taken into account and attributed to the employer. Ms Jhuti had made protected disclosures to Mr Widmer which he realised were serious and significant; he had subjected her to detriments from the moment she had made those disclosures; and he had deliberately lied to Ms Vickers. On that basis, the EAT concluded that Royal Mail could not avoid liability and Ms Jhuti had been automatically unfairly dismissed. This case illustrates the importance of carrying out a detailed investigation before making a decision to dismiss, and being alert to the possibility of manipulation by a manager who is seeking to engineer a dismissal. No qualifying period of employment is needed before bringing a whistleblowing claim, so it is good practice to check routinely whether protected disclosures have been made. It is also worth noting that awards for automatic unfair dismissal on the grounds of a protected disclosure are uncapped.

5 5 THE DUTY TO MAKE REASONABLE ADJUSTMENTS MAY EXTEND TO PAY PROTECTION In G4S v Powell, the EAT considered whether an employer s duty to make reasonable adjustments under the Equality Act 2010 extended to continuing to pay a higher salary when a disabled employee was moved to a more junior role. Caroline Yarrow (Partner) E carolineyarrow@bdb-law.co.uk T +44 (0) Mr Powell, a cash machine engineer, had a back condition which amounted to a disability. Following a period of sick leave, he returned to work in the less skilled role of key runner, involving transporting equipment to the engineers. He was allowed to retain his higher salary and expected the role to be long-term. After 12 months, G4S was considering discontinuing this role for organisational reasons. Mr Powell was informed that the role had not been permanent and that he would be dismissed on medical grounds if there were no other suitable vacancies. G4S then decided to make the key runner role permanent but with a 10% pay reduction to reflect the fact that it did not require engineering skills. Mr Powell refused to accept the reduction and was dismissed. An Employment Tribunal ruled that Mr Powell s dismissal was unfair and discriminatory, agreeing with his argument that G4S had failed to make a reasonable adjustment when they refused to protect his pay in the key runner role. The EAT rejected G4S s appeal, concluding that there was no reason why protecting pay in this way could not be a reasonable adjustment to counter a disabled employee s disadvantage. The EAT was particularly critical of G4S s argument that keeping Mr Powell s pay at the higher level would cause discontent amongst his colleagues. The objectives of the legislation plainly envisage an element of cost to the employer when making adjustments, and pay protection was just one form of cost. In addition, making reasonable adjustments often involves treating a disabled employee more favourably than their colleagues. Whilst the EAT confirmed that enhanced pay will only rarely be a required adjustment, in this case it was reasonable and easily affordable for G4S....HE RETURNED TO WORK IN THE LESS SKILLED ROLE OF KEY RUNNER, INVOLVING TRANSPORTING EQUIPMENT TO THE ENGINEERS... This decision does not mean that pay must always be protected when a disabled employee is given a more junior role. Each situation must be considered individually to assess whether this would be a reasonable adjustment, taking into account such

6 6...AN ADJUSTMENT MAY CEASE TO BE REASONABLE IF CIRCUMSTANCES CHANGE...IF THE BUSINESS SUFFERS A DOWNTURN OR THE ROLE IS NO LONGER REQUIRED... factors as the cost of maintaining the higher pay; the overall resources and financial position of the business; and whether the adjustment to duties is permanent. The EAT also confirmed that an adjustment may cease to be reasonable if circumstances change, for example, if the business suffers a downturn or the role is no longer required. Nevertheless this decision may encourage employees to argue that they should continue to receive their existing salary if their duties are reduced to accommodate a disability. It is important to ensure that the precise terms of pay protection arrangements and any changes to contractual duties are agreed and properly documented.

7 7 EMPLOYMENT TRIBUNAL RULES THAT VOLUNTARY OVERTIME AND ASSOCIATED PAYMENTS MUST BE INCLUDED IN HOLIDAY PAY Following the ECJ s decisions in Williams and others v British Airways plc and Lock v British Gas Trading Limited, there has been a steady stream of Tribunal cases in which workers have challenged their employers calculation of holiday pay based on basic salary alone. Zoe Merrikin (Solicitor) E zoemerrikin@bdb-law.co.uk T +44 (0) Employment Tribunal decisions are not binding on other Tribunals, and each case has to be considered on its own facts. However, these decisions provide useful guidance on whether to include payments such as commission, overtime, attendance bonuses and travel allowances. In the recent case of Brettle v Dudley Metropolitan Borough Council, an Employment Tribunal has held that voluntary overtime, and other payments associated with rotas worked voluntarily, should have been included in statutory holiday pay. This claim for unlawful deductions from wages was brought by five lead claimants in respect of 56 employees who were employed on varying shift patterns to carry out housing repairs for the Council. The claimants had fixed contractual working hours and all worked additional voluntary overtime. They also volunteered to be placed on standby and call-out rotas for out-of-hours emergency work. Additional payments were made in respect of voluntary overtime, voluntary standby and call out time, and mileage allowance. The claimants argued that the Council had calculated their holiday pay incorrectly by basing it on contractual hours only....the CLAIMANTS SHOULD HAVE RECEIVED THE ADDITIONAL ELEMENTS IN THEIR HOLIDAY PAY BECAUSE THEY FORMED PART OF THEIR NORMAL REMUNERATION... The Tribunal concluded that most of the claimants should have received the additional elements in their holiday pay because they formed part of their normal remuneration. Although the out of hours standby, call-out allowances and overtime payments related to time worked voluntarily, failing to include them in holiday pay where workers received them consistently and regularly might deter them from taking leave. Even though the rotas were voluntary, once an employee s name was on the rota, they were required to attend the workplace or to be available on standby. In the Tribunal s view, this meant that

8 8 the payments were intrinsically linked to the work required to be done under the contract of employment. The Tribunal also ruled that these additional payments only had to be included in relation to the four weeks leave under the Working Time Directive, not the extra 1.6 weeks leave under the Working Time Regulations or any additional contractual leave. Given the significant number of current holiday pay cases, we can expect more clarity from the higher courts in due course. In order to minimise the risk of claims, all employers should be reviewing their holiday pay arrangements in order to establish what constitutes normal remuneration and to identify any potential issues. VEXATIOUS JOB APPLICANTS NOT PROTECTED BY EU DISCRIMINATION LAWS Some employers will have come across individuals who apply for jobs with the sole purpose of pursuing discrimination claims if their applications are rejected. In the German case of Kratzer v R + V Allgemeine Versicherung, the ECJ has considered whether such applicants are protected by EU discrimination laws. Mr Kratzer, an experienced lawyer, had applied for many jobs in Germany with the sole objective of taking legal action when his applications were unsuccessful. In this particular case, he applied for a graduate trainee position with R + V Allgemeine Versicherung. When his application was rejected, he demanded 14,000 euros for age discrimination. R + V then invited him to an interview,...that THE REJECTION OF HIS APPLICATION HAD BEEN AUTOMATICALLY GENERATED AND WAS A MISTAKE... Tim Hayes (Associate) E timhayes@bdb-law.co.uk T +44 (0)

9 9 explaining that the rejection of his application had been automatically generated and was a mistake. Mr Kratzer declined and suggested a discussion about his future employment once the compensation was settled. When he discovered that all four posts had been awarded to women, despite an equal split between male and female applicants, he then claimed an additional 3,500 euros for sex discrimination. His case was referred to the ECJ to rule on the question of whether EU directives protected an individual who obtained the status of job applicant in order to claim compensation for discrimination, rather than employment. The ECJ ruled that this practice is incompatible with the fundamental objective of the directives to ensure equal treatment in relation to access to employment, selfemployment or to occupation. The ECJ also confirmed that such applicants are not victims or injured persons within the meaning of the directives, and that EU law cannot be relied on for abusive or fraudulent purposes. This case provides welcome clarification that vexatious job applicants are not protected by EU discrimination laws, although clearly there must be compelling evidence before an employer can accuse an applicant of not being genuine. TAX ON TERMINATION PAYMENTS TO CHANGE IN APRIL 2018 On 10 August 2016 the Government published consultation on draft legislation to simplify the tax and National Insurance (NICs) treatment of termination payments. Nicholas Le Riche (Partner) E nicholasleriche@bdb-law.co.uk T +44 (0) This follows the consultation on termination payments held in summer 2015 and subsequent announcements in the 2016 Budget. The main changes include: removal of the distinction between contractual and non-contractual PILONs, so that all PILONS will be treated as earnings and therefore subject to tax; all other post-employment payments which would have been treated as general earnings if the employee had worked their notice period will be subject to tax and Class 1 NICs; due to conflicting case law, the legislation will clarify that the exemption from tax for payments for injury excludes injury to feelings; and foreign service relief will be abolished, except in relation to seafarers. The Government has confirmed that the first 30,000 of a termination payment will remain exempt from income tax and that there are no plans to increase the amount of this exemption. Payments relating solely to termination will also continue to have an unlimited employee NICs exemption. The new rules are expected to apply from April 2018.

10 10 AND FINALLY... Ian Wasserman (Associate) E ianwasserman@bdb-law.co.uk T +44 (0) DESPITE THE DELAY, IT IS LIKELY THAT THE NEW REQUIREMENTS ON GENDER PAY GAP REPORTING WILL STILL COMMENCE IN APRIL The Cabinet Office and Home Office have published a Code of Practice on the new English language requirement for public sector workers in customer-facing roles which is due to come into force on 1. The Code advises public authorities on how to set the appropriate standard of English, provides guidance on dealing with workers who do not meet the necessary standard, and outlines the procedure that must be followed if a member of the public makes a complaint. Public sector employers are advised to review contractual documentation as well as other HR policies and practices to ensure that the new language requirements are included. For example, disciplinary procedures may need to be updated to specify action that will be taken if workers fail to meet the fluency requirements. The Government Equalities Office has confirmed that publication of the final draft of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 has been delayed. It was originally expected that these regulations would come into force on 1. Despite the delay, it is likely that the new requirements on gender pay gap reporting will still commence in April 2017, with the first gender pay gap reports due by the end of April On 18 August 2016 the Government published a consultation paper outlining similar proposals for gender pay gap reporting in the public sector.

11 On 10 August 2016 HMRC published consultation on restricting the range of employee benefits-in-kind that attract income tax and NICs advantages when provided as part of salary sacrifice arrangements. As previously announced, the new rules will not affect employer pension contributions, employerprovided pension advice, employer-supported childcare, workplace nurseries, the cycle to work scheme, and schemes where salary is sacrificed in return for intangible benefits such as extra annual leave. However, it is proposed that other benefits-in-kind provided through salary sacrifice, such as cars, mobile phones or medical insurance, will be chargeable to income tax and employer NICs with effect from 6 April The consultation closes on 19. With effect from 8 August 2016, some employment appeals will be allowed to go from the EAT to the Supreme Court, leapfrogging the Court of Appeal stage. The appeal must involve a point of law of general public importance and fall within one of the specified categories. For example, the point of law may involve the construction of legislation, or be one on which the EAT is bound by a previous decision of the Court of Appeal or Supreme Court. On 12 July 2016 the European Commission approved the Privacy Shield framework for EU-US personal data transfers, which has now replaced the invalidated Safe Harbour regime. The Commission believes that the new framework will improve data protection standards and enforcement, increase safeguards on government access and ensure adequate redress mechanisms for EU citizens. The ICO has recently advised organisations to ensure that they have valid EU-US data transfer arrangements and to check whether US entities to which they transfer data will participate in the Privacy Shield. Public Concern at Work, the whistleblowing charity, has published a review of its activities over the last five years. According to the review, 80% of whistleblowers experience negative outcomes such as dismissal, victimisation or bullying; 12% of claims brought in 2011 to 2013 were successful; and there has been a stark increase in costs orders made against claimants. Calls to the charity s helpline from workers in the health, retail and financial services sectors have nearly doubled in this time frame. The review also calls for the Code of Practice produced by the Whistleblowing Commission to be put on a statutory footing. As part of the new Prime Minister s reshuffle, the Department for Business, Innovation and Skills (BIS) has merged with the Department of Energy and Climate Change (DECC) to form the Department for Business, Energy and Industrial Strategy (BEIS). BEIS will be headed up by Greg Clark. Responsibility for the Government s skills and apprenticeship policy will now fall within the remit of the Department for Education....BENEFITS-IN- KIND PROVIDED THROUGH SALARY SACRIFICE, SUCH AS CARS, MOBILE PHONES OR MEDICAL INSURANCE, WILL BE CHARGEABLE TO INCOME TAX AND EMPLOYER NICS WITH EFFECT FROM 6 APRIL

12 Bircham Dyson Bell LLP Broadway London SW1H 0BL T +44 (0) This publication is not meant as a substitute for advice on particular issues and action should not be taken on the basis of the information in this document alone. This firm is not authorised by the Financial Conduct Authority (the FCA). However, we are included on the register maintained by the FCA ( so that we can offer a limited range of investment services (including insurance mediation activities) because we are authorised and regulated by the Solicitors Regulation Authority (the SRA). We can provide these services if they are an incidental part of the professional services we have been engaged to provide. Mechanisms for complaints and redress if something goes wrong are provided through the SRA and the Legal Ombudsman. Bircham Dyson Bell LLP processes your personal data in connection with the operation and marketing of a legal practice and will occasionally send you information relating to the firm. If you would prefer not to receive this information or would like us to amend your contact details and/or mailing preferences, please notify us by databasecoordinator@bdb-law.co.uk. Bircham Dyson Bell LLP is a member of Lexwork International, an association of independent law firms. Printed on sustainable paper. FIND US ON