developments In this issue October 2011

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1 October is the employment update service brought to you by Bristows' employment team. Disability discrimination and reasonable adjustments: latest developments The EAT has recently dealt with a series of cases which provide some guidance for employers when dealing with a request made by a disabled employee for reasonable adjustments to be made. There was no direct disability discrimination or failure to make reasonable adjustments when the Foreign & Commonwealth Office (FCO) withdrew the offer of a post in Kazakhstan because of the cost of providing a deaf employee with a team of lipspeakers. In Cordell - v- FCO 2011 the EAT held that, when considering what is reasonable, Employment Tribunals have to make decisions on the basis of what is just and right in their capacity as industrial juries. The budget that the FCO had in place to make reasonable adjustments was a relevant factor to be taken into account when putting the figures into context. The fact that the FCO was prepared to make payments towards school fees to employees whose children needed to attend boarding school was a strong point in the employee s favour, but was still only indicative when considering whether the cost of an adjustment was reasonable. Reasonable adjustments should be aimed at helping an employee to return to work. In Salford NHS Trust -v- Smith 2011, the EAT rejected the finding of the Tribunal that it would have been a reasonable adjustment for the employer to have offered the employee a career break or a period of non-productive working. The EAT found that neither suggestion would have alleviated the effect of the policy, criterion or practice (PCP) which had put the employee at a disadvantage nor would moving the employee from long-term sick pay with benefits to an unpaid career break have enabled her to return to work. An adjustment does not need to have a good or real prospect of alleviating the effect of a PCP in order to be a reasonable adjustment. In Foster -v- Leeds Teaching Hospital 2011, it was held that it would be sufficient if there was a prospect that the adjustment would succeed in alleviating the impact of the PCP. If an employer has to exercise a certain degree of control over an employee to comply with legal requirements, does this amount to sufficient control for the purpose of employment status? In Johnson-Caswell -v- MJB Partnership Ltd (MJBP) 2011, the Employment Tribunal held at a Pre-Hearing Review that Mr Johnson- Caswell was an employee of the company and not an independent contractor. The fact that he was controlled as a result of higher obligations In this issue Disability discrimination and reasonable adjustments: latest developments If an employer has to exercise a certain degree of control over an employee to comply with legal requirements, does this amount to sufficient control for the purpose of employment status? Can a notice of dismissal be retracted on grounds of mistake? Not normally says the Court of Appeal First conviction under the Bribery Act 2010 Employers must be able to show damage to their reputation to justify the dismissal of an employee for comments made on a social networking site Dismissal and offer of reengagement on new terms - did the failure to include a "buy-out" payment previously offered in negotiations render the dismissals unfair? Previous issues Click HERE for previous issues of Up Close and Personnel About the team Click HERE to find out about Bristows' Employment practice

2 imposed by the FSA did not detract from the fact that there was sufficient control by the company to be consistent with employment status. Mr Johnson-Caswell worked for MJBP as an Independent Financial Adviser under a contract which stated that he was self-employed. He paid his own tax and national insurance and was paid on a commission-only basis. He also delegated some of his work to other IFAs. However, he was obliged to comply with the requirements of his regulated employer in relation to training and supervision so that MJBP could meet FSA requirements. The EAT held that MJBP exercised sufficient control over Mr Johnson- Caswell to satisfy the test in Ready Mix Concrete (South East) Ltd -v- Minister of Pensions and National Insurance The fact that these obligations were imposed because of the regulatory requirements of the FSA did not detract from the significant control exercised over him by MJBP. This was sufficient, taken with other relevant factors such as personal service, to justify a finding that Mr Johnson-Caswell was an employee of MJBP. As this is only an Employment Tribunal decision it is not binding on other Tribunals. However, it is a cautionary reminder to employers in the financial services industry that the requirement for self-employed consultants to comply with FSA regulations may lead, in the context of similar commercial arrangements, to the IFA being held to be an employee. The case may also have a wider application as it appears to take a different approach to training to that taken by the Supreme Court in Autoclenz -v- Belcher The Supreme Court accepted in Autoclenz that training in the handling of hazardous chemicals would be provided to all individuals, whatever their status, for health and safety reasons and so was not a determinative factor when deciding whether an individual was an employee. Can a notice of dismissal be retracted on grounds of mistake? Not normally says the Court of Appeal In Catherine Willoughby -v- C.F. Capital PLC 2011, the Court of Appeal re-affirmed the normal rule that a notice of resignation or dismissal cannot be withdrawn except by consent. The "special circumstances" exception is very limited and applies predominantly in cases where the notice has been given in the heat of the moment. In early December 2008 Ms Willoughby was informed by her employer that redundancies might be necessary in her team and was asked to consider a possible move to self-employed status. Ms Willoughby expressed an interest in such a move and asked for detailed terms to be sent to her. On 22 December 2008, and before the information was provided, the employer wrote to her attaching an agency agreement and stating that her employment would terminate on 31 December After taking legal advice, Ms Willoughby rang her employer on 5 January 2009 to say that she would not be accepting the agency agreement and that she had been advised to pack up her things on the grounds that her employment had been terminated. Ms Willoughby s line manager subsequently telephoned her the same day expressing surprise at what he saw as a change of heart, saying that if there had been a misunderstanding then her situation would remain unchanged and she would continue to be employed. However, Ms Willoughby maintained that she had been dismissed and brought claims for wrongful and unfair dismissal. The Employment Tribunal found that without more, the letter from the employer stating that Ms Willoughby s employment would be terminated would amount to a dismissal. However, it found that there were special

3 circumstances, as the employer had genuinely believed that Ms Willoughby had agreed to become self-employed and the dismissal notice was withdrawn as soon as practicable after it became aware of the mistake. The EAT overturned the decision. The employers appealed to the Court of Appeal which held that the general rule is that a notice of resignation or dismissal has effect according to the ordinary interpretation of its terms and, once given, cannot be withdrawn except by consent. The special circumstances exception covers situations such as a decision taken in the heat of the moment or where words are used under emotional stress which the other party knows or ought to have known were not meant to be taken seriously. Such circumstances may indicate to the recipient of the notice that the words used should not necessarily be taken at their face value. First conviction under the Bribery Act 2010 A former Court officer has become the first person to be tried and convicted under the Bribery Act Munir Patel was a court clerk who pleaded guilty to an offence under s.2 of the Bribery Act 2010 for requesting and receiving a 500 bribe for offering to "get rid" of a speeding charge. He also pleaded guilty to misconduct in public office for other similar offences. He is due to be sentenced on 11 November Employers must be able to show damage to their reputation to justify the dismissal of an employee for comments made on a social networking site In Whitham -v- Club 24 Ltd t/a Ventura 2011 an Employment Tribunal held that a decision by Ventura to dismiss an employee who had made negative comments about her working conditions on Facebook was outside the band of reasonable responses and was therefore unfair. Ms Whitham was the leader of a team which dealt with customer complaints and requests for contributions towards replacement parts outside warranty for Ventura s client, Skoda (part of the Volkswagen group). She had around 50 friends on Facebook and her settings were applied so that her friends could see the messages that she posted but they were not visible to members of the public or Facebook subscribers who were not her friends. On 14 September 2010 she posted the following on Facebook: "I think I work in a nursery and I do not mean working with plants." Immediately afterwards, in response to a comment from a colleague, she wrote: "Don't worry, takes a lot for the bastards to grind me down. LOL" An ex-employee of her employer then wrote:"ya, work with a lot of planks though!!! LOL" Ms Whitham responded with:"2 true." Two of Ms Whitham s colleagues (who were also her Facebook friends) reported this conversation to Ventura. A disciplinary process was started during which Ms Whitham sent a letter of apology to Ventura. However, she was dismissed for misconduct on the grounds that Ventura was concerned that her comments might have caused damage to its relationship

4 with Volkswagen. The Employment Tribunal held that Ventura s response was outside the band of reasonable responses. There was no evidence that the comments had affected the business relationship between Ventura and Volkswagen. They did not directly refer to either company and there had been no investigation into whether the comments had had a detrimental effect on the relationship. Ventura had also not taken into account either Ms Whitham s previous exemplary record or the fact that there were a number of personal problems which might have amounted to mitigating circumstances. This case makes it clear that, when considering whether to dismiss an employee for comments made on Facebook or other social networking sites, employers should carry out a thorough investigation before making a decision. It will not be enough to assume that the comments may have an effect on the reputation of the company or its relationship with clients. To help employers deal with some of the difficult issues arising from employees use of social networks, ACAS has issued useful Guidance which can be found on its website by clicking HERE. Dismissal and offer of re-engagement on new terms - did the failure to include a "buy-out" payment previously offered in negotiations render the dismissals unfair? Employers who seek to remove or reduce a contractual benefit may offer a one-off payment to "buy-out" the benefit. If the offer is rejected, and the employer decides to dismiss and offer re-engagement on the new terms, a failure to include the lump sum in the offer of re-engagement will not necessarily render the dismissal unfair. In Slade and Others -v- TNT (UK) Limited 2011, the employer sought for legitimate business reasons to discontinue a bonus and had offered to buyout the bonus with a lump sum. However, on failing to reach agreement in negotiations with the trade union, the employer issued a final offer and gave warning that failure to accept would lead to notices of dismissal being issued coupled with offers of re-engagement on new terms that excluded the bonus. The Employment Tribunal found that the employees were dismissed for some other substantial reason and that the employer had acted fairly. On appeal, in challenging the finding of fairness, the employees argued that the employer ought to have offered the lump sum as part of the terms of reengagement. The EAT considered that the Tribunal had correctly focused on the reasonableness of the employer s decision, balancing the advantages to the business with the effect on the employees. It also accepted that the employer had acted within the band of reasonable responses in taking the view that it would not offer a lump sum on reengagement when it was not going to achieve the benefit for which the lump sum had been offered, i.e. removal of the risks of industrial action and/or litigation arising out of a dismissal. The information contained in this document is intended for general guidance only. If you would like further information on the above, or advice on any other employment law issues, please do not hesitate to contact a member of our employment team - linda.farrell@bristows.com, If you would prefer not to receive Up Close and Personnel in future please employmentpractice@bristows.com with "Unsubscribe UCP" in the subject box.

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