Employment Law Briefing

Employment rights include wages, holiday, equal treatment and not to be sacked unfairly or in breach of contract. Lawyers can help with drafting contracts, discipline and grievances, tribunal claims, discrimination, compromise agreements, redundancy and TUPE if your business is taken over.

Tactics

Employees often overestimate how easy it is to win but employers also underestimate how much trouble they can end up in if they do not settle - see the cases below.

The most expensive cases to pay out on are discrimination against long serving senior staff that makes them ill, eg a male banker bullies a female banker giving her a nervous breakdown. The cheapest cases to pay out on are for junior new staff where there was merely a procedural defect.

The average tribunal award is £4,000, meaning if the employer loses the employee gets a refund for their time and stress but no real compensation for the complaint, and the employer has paid a lawyer an average of £5,000 and suffered bad publicity and lost staff for the day as witnesses, and now has to pay again to compensate the employee. If the employer wins they pay their lawyer what they would have paid the employee, but spend management time on the case, and the employee will have wasted a year of their life fighting the case. The problem for the employee is they want justice and the chance of a big award, which might be worth fighting for, and the problem for the employer is they might encourage copycats if they throw money at every disgruntled employee and without advice they may end on the wrong end of a large award. In other words, to reach the doors of the tribunal normally requires one or both parties to have lost sense of reality. In all but the most expensive or ridiculous claims the sensible thing to do is settle before it takes over your life or business.

Employers receive 40,000 unfair dismissal claims a year. 69% are settled. of the other 31%, 19% are thrown out and 12% win. So employees may know they have an 81% chance of extracting cash. On the other hand, few sensible employees want to fight all the way to a hearing, as 69% walk away with nothing despite 75% being represented - since most such cases were too weak to settle and many claimants press ahead for their day in court oblivious to the law and evidence.

Only 1 in 500 employers are awarded costs against employees, so employees know they can get away with spurious claims. Employees have the same problem that costs are not normally available in tribunals and only 1 in 1000 employees are awarded costs. The average such award is £1,000, so not much of a deterrent.

Realistically employers usually have a choice of paying off someone with a few months wages or keeping them on board unproductively whilst stringing out grievances and discipline and going sick. A quick offer of an apology, good reference and tax free lump sum should persuade any sane employee it is worth avoiding the risk of losing to just sign a compromise agreement, clear their desk into a bin liner and be on their way. The employer's job is to make the employee feel like they won, hence the apology and money.

Sometimes the employee has the upper hand. There may be unprivileged documents flying around between employment consultants. The employer may have made a procedural error. The employee may persuade the tribunal to allow access to confidential documents or to call half the staff as witnesses, effectively shutting the business for a couple of days.

Sometimes the employer has all the luck. The employee might be suing the wrong person, or may have missed the deadline. They might not have found a lawyer. They might have skipped the grievance procedure. The employer might find a job they can offer to stop the clock ticking for loss of earnings. The tribunal might agree to ordering the employee to pay a deposit of up to £500, which in two thirds of cases triggers a withdrawal. Although the employee can ask questions in advance, so too can the employer, to smoke out weaknesses. The employee may call witnesses instead of waiting for the employer to call them, meaning he cannot cross examine them. He might not have tried hard enough to find a new job.

Case studies

Lost holiday

Mary's boss told her she lost her holiday because is has to be taken by the end of the year but they were too busy to let her take it at Christmas. She can claim unpaid wages and constructive dismissal as her boss broke the bond of confidence between employer and employee.

Intern

Sarah is an intern at a fashion house, sometimes ironing for shows until midnight. When she got to the end of the month and no wages appeared she was told it is only work experience. Although there are government apprenticeship schemes, internships were impliedly abolished by the National Minimum Wages Act 1996. She can whistleblow breach of Working Time Regulations, health and safety, non payment of wages and a national minimum wage and tax evasion offence and when she is inevitably sacked she can claim unfair dismissal without needing the usual one year's service. She can serve a production notice to investigate unpaid wages and the employer will be fined 50% of the wages it tried to avoid. HMCR can raid the office, serve a notice of underpayment and name and shame the employer. Because there was no written agreement, she can claim a reasonable wage rather than the lower national minimum wage and can claim an extra four weeks gross wages as a penalty for failure to supply written particulars of employment. If HMCR visit for one offence they may decide to carry out a PAYE audit which costs the employer £20,000 in accountancy and legal fees to defend, with the risk of unpaid wages for all the other interns if they find out.

Equal pay

Jim is the only male hairdesser in the salon. Talking to the girls he found out he gets paid less. The manager says it is because customers prefer banter with women. He can claim his missing back pay using the Equal Treatment Directive. Depending how the salon handle his complaint he may be able to claim constructive dismissal.

Notice pay

Dave had no employment agreement and was sacked on the spot in his fourth month of a new job. His boss said "you can whistle for your notice pay". He can claim one week's notice pay.

Gross misconduct

John was sacked without investigation for alleged £10 theft after four years loyal service. A colleague got away with a slap on the wrist the other week for £1,000 dodgy expenses because they play golf with the owner. Although theft is gross misconduct, the tribunal might have decided no reasonable employer would sack one person for a tenner whilst turning a blind eye to a £1,000 fraud, in which case it would be unfair dismissal. But because he was sacked without investigation it was automatically unfair, so the employer will have little choice but to pay him lost wages while he finds a new job, which may be years as he left under a cloud.

Unfair redundancy

Joe has worked for the same place for ten years and started seeing the boss's daughter but then had a messy breakup. The next month he was suddenly told he is being made redundant, which was strange as they are opening a new branch and hiring extra staff. Unfortunately for Joe an employer can still make a redundancy if they need less staff for a particular job even if they are expanding elsewhere. But he will still win a claim for unfair redundancy because there was no consultation. Tactically though, it may make sense to ask what enhanced redundancy package is on offer as it might give him more to bank that before the tribunal deadline and then claim a few months wages for unfair dismissal.

Disability discrimination

Molly is the only one in the office who is not allowed a lunch break. The boss told her that is because she is heavier than the rest so works slower. Her boss knows she has a thyroid problems that makes her put on weight as it was on her medical form when she joined. She can claim constructive dismissal for the humiliation, and anyway can claim disability discrimination and unpaid wages for the unpaid overtime, plus she can complain about the breach of Working Time Regulations. Then if she is mysteriously sacked in the near future she is likely to prove it was revenge for her whistleblowing so she automatically wins unfair dismissal.

Trade secrets

James was sacked without notice despite his contract saying he gets one month. Now he wants to use his old customer lists in his new job but the boss who sacked him says they are a trade secret and he signed a confidentiality clause so he will see him in court. In reality nobody will see anyone in court because the employer's lawyer will refuse to take the case. First, a customer list is not a trade secret so the duty to keep trade secrets which continues after employment is irrelevant. Second, the confidentiality clause, although worded to survive termination, is unenforceable because the employer broke the contract. Although the employer could sue under database regulations, breach is hard to prove and James will say he has it all in his head and in a free country he can ring who he likes.

Job descri ption

Sue's contract says she is responsible for London sales. Today her boss asked her to handle sales in Essex while a colleague is away. There is only one deal on the table and it requires a bribe to the procurement manager. Apparently, Chris, the Essex account manager usually takes the client to lapdancing clubs with a brown envelope of cash. What doesn't end up tucked in a dancer's G string is given to the client. Sue can argue such a trip would be harassment but the more successful argument would be that the "bung" is a crime so it is not a lawful instruction and she can refuse. She could not refuse lawful reasonable instructions though, so if a normal sale comes up tomorrow she will have to handle it as employers are allowed to stretch job descri ptions sightly. If she likes her job she will probably ride out the temporary storm but if she thinks she might have to leave she should whistleblow the bribery and when she is sacked she can claim automatic unfair dismissal. The employer would settle generously as it would be ruined by the bribery scandal getting out.

Health & safety

Mike was in the factory when a bucket fell on his head. No harm was done but his boss did not want to know. Refusal to hear a grievance can be constructive dismissal. Now he has whistleblown health and safety if he is sacked a tribunal might decide it was because of that and so he was automatically unfairly dismissed.

References

Misha is African and gave her recent employer as a reference but they refused to supply one. Eventually they caved in and supplied one but it was a "kiss of death" with all the negatives and no positives, which is strange as they kept her on for eight years with pay rises and promotions. She did not get the job and she was told it was because the reference was unsatisfactory. All the white ex colleagues she knows got glowing references. She can apply under the Data Protection Act for a copy of the reference then use that to claim negligent mistatement in court for lost earnings. As there is a suggesting of discrimination she can also claim victimisation in tribunal for injury to feelings.

Changing contracts

Joanne says she has been forced a new contract. The old one said she only works days but now she works one evening a week. There was a consultation for a month beforehand and she got a £500 pay rise to make up for it. Everyone else is OK with it. Unless she suffers discrimination such as child care problems it may be unreasonable to refuse the new terms in which case she can be fairly dismissed if she refuses.

Holiday allowance

Tom wants to book an 8-day Christmas holiday but he has just been told he has run out as his 20 days holiday allowance includes bank holidays. Under the Working Time Regulations he is entitled to 5.6 weeks which is usually 28 days, including bank holidays. It depends how much he wants the job, but eight days is a lot to lose so he may decide to just take the holiday as there is no other time he could take it and if he is sacked for complaining about working time that is automatic unfair dismissal. If he is sacked for taking unauthorised holiday he will probably successfully argue that no reasonable employer would fail to authorise the holiday the law requires so the instruction not to take it was not reasonable and can therefore be ignored.

Docking pay

Ruby's till was short by £4.56 last week. Her boss told her today he has docked her pay as although he knows she is honest it is company policy. There is nothing about that in her contract and this week's pay slip was £4.56 short but did not say why. She can claim failure to provide an itemised pay slip and unpaid wages, as deductions can only be made with written permission and must be specified on a payslip. As she is a retail worker being docked for a cash shortage she is also entitled to a written bill on pay day and recovery cannot be made until the next pay day after that. If it is not quickly refunded or it happens again she can resign and claim constructive dismissal as non payment of wages destroys the bond of trust between employer and employee.

Monitoring

Roy used the office phone when nobody was around last week to make an appointment with an STD clinic. Now he is getting funny looks and hearing whispers. He subsequently found out calls are recorded so somebody must have played it back and leaked it. Under monitoring regulations he should have been warned. The main thing he can sue for is compensation for the humiliation from wrongful use of private information under the Human Rights Act. If he reasonably feels he has no choice but to resign he can claim constructive dismissal.

Withdrawing offers

Wendy accepted a job offer on Monday but on Tuesday got a call saying there is a change of plan and sorry they have to withdraw the offer. It is too late, the offer was accepted and contract was made. They will have to pay her one week's notice.

Withdrawing perks

Gary's manager told him off yesterday because he parks his car in the staff car park which under his contract is supposed to be reserved for visitors. He has been allowed to do so since five years ago when he was asked to move office as a sort of thank you. The written agreement has been amended by conduct. There is no guarantee it is unreasonable to prioritise visitors over Gary so he may only be entitled to car park expenses. A calm discussion may result in a grossed up salary increase so even after tax he is left with the extra cost of the council car park down the road. Or he might ask to drop it in return for the next window seat that comes available in the office.