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A monthly checklist of new and pending laws, regulations, codes of practice and rulings that could have an impact on your business
Guidance: Acas publishes guidance on dealing with requests for information about potential discrimination
New Acas guidance will help employers in handling requests for information from employees who have a potential discrimination claim.
The new guidance Asking and responding to questions of discrimination in the workplace: Acas guidance for job applicants, employees, employers and others asking questions about discrimination related to the Equality Act 2010 follows the imminent abolition (from 6 April 2014) of the statutory questionnaire procedure which employees could use to request this information.
The guidance makes clear that employees can still request information about discrimination in the workplace, and employers should deal with such requests 'seriously and promptly'. It helpfully sets out three steps for employers to follow.
Under the new rules, a tribunal can take into account an employer's response, or lack of, to any other request for information. It also reminds employers and employees that a tribunal can order disclosure of information during the progress of a claim in any event.
Procedure: Power of Employment Tribunal to impose financial penalties on employers
Employers who lose a case in the Employment Tribunal could be hit with a penalty of between £100 and £5,000 if it breaches any of a worker's rights and the breach has one or more aggravating features.
Under The Enterprise and Regulatory Reform Act 2013 (ERRA), the Employment Tribunal (ET) will have discretionary power for the first time to impose the financial penalty (payable to the Secretary of State) from 6 April 2014.
The power can be used irrespective of the remedy awarded to the employee. However, in the case of a financial award, the penalty must be 50% of that award (to be capped at £5,000). The ET must take into account an employer's ability to pay the penalty.
The Act does not set out the factors to be taken into account in relation to the presence of "aggravating features". This means it will be for the ET to decide on the facts of each case. Explanatory Notes to the Act helpfully sets out guidance on what could be taken into account. Large, well-established organisations, for instance, may more likely attract a penalty than a small employer.
Honest mistakes by employers will be less likely to attract a penalty than dishonest or malicious behaviour.
Employers now have to consider the possibility of a financial penalty when deciding whether or not to fight a claim by an employee, and should take specialist advice.
Case law: directors' diversion of commercial opportunity for their own benefit was a breach of their duties
Directors and shareholders should ensure they know enough about directors' duties to know when a proposed act or omission by one or more directors may amount to a breach of directors' duties.
In a complex dispute, two directors of a company diverted an opportunity to develop farmland to another business they had set up for the purpose. The first company successfully claimed they were in breach of their fiduciary duties owed to it as directors.
The court ruled that their actions conflicted with the interests of their company and they were in breach of their fiduciary duties to the company. They did not have informed consent for their actions from the shareholders of their company, which would have excused them from their breach.
The situation was made worse because they had tried to hide what they were doing – for example, by giving their new business a very similar name to that of the company. The fact that they used a new business to take advantage of the opportunity rather than doing so in person made no difference, as the new business was holding the benefit of the contract on trust for them. They were still personally in breach of their fiduciary duties.
Legislation: employers start planning for new rules on shared parental leave
Employers are advised to start planning ahead for the new rules on shared parental leave to be introduced from April 2015.
Mothers can currently take up to 52 weeks' maternity leave. Fathers are entitled to two weeks' 'ordinary' paternity leave, and an 'additional' 26 weeks provided the mother has returned to work and certain other criteria satisfied.
Under the new rules, a mother and father can share up to 50 weeks' shared parental leave between them, and 37 weeks' pay. The proposed changes also include:
- Employers will be able to require employees to take leave in a single continuous block.
- Employees must tell employers eight weeks in advance how they will apportion their parental leave.
- Employees can change their minds twice during their leave.
- Where leave taken is six months or less, employees have the right to return to the same job. Otherwise they must be offered at least a similar job.
Case law: tribunal gives guidance on when a job is suitable and appropriate for employee returning from maternity leave
Employers considering whether a job is suitable and appropriate for an employee returning from maternity leave should look beyond her job title and description to the job she had actually been doing. They must also consider special features such as her professional qualifications.
An employee worked as a mental health nurse in a prison. She was a qualified nurse and for 15 years around 95 per cent of her job had been nursing. She did not work weekends and received annual nursing training. When she returned from maternity leave prison nursing work had been outsourced to the NHS. She was offered alternative work as an ordinary prison officer without any nursing, and would have to work weekend shifts.
Under employment law, women returning from maternity leave should be offered the same job they had before or, if not reasonably practicable, another job which is "both suitable … and appropriate … in the circumstances". She claimed the job offered was not suitable and appropriate.
The employee argued that her job description required her to carry out 'prison officer duties as directed', and she was used to working with prisoners. She had always been paid as a prison officer and would continue to be so and she would continue to receive nursing training. Her new role was therefore suitable and appropriate.
The Employment Appeal Tribunal (EAT) found that the job she had performed for 15 years was not available on her return from maternity leave, and the new role was different as it did not involve nursing. It also involved weekend working for the first time. The EAT remitted the matter back to a fresh tribunal to consider.
Case law: small businesses may be able to rely on external advice when dismissing an employee
A small and/or owner-managed employer may fairly dismiss an employee on the advice of an external HR consultant in certain circumstances, following a recent ruling.
The owner of a small business dismissed a senior manager for gross misconduct involving "a senior manager engaging in sexual activity with a member of his staff on the company's premises after hours, accompanied by a conversation which revealed, at the least, a complete lack of respect for his boss".
The owner (and managing director) took the advice of an external HR consultant and dismissed the manager, rejecting an appeal on the basis of advice from another consultant in the same agency.
The Employment Appeal Tribunal ruled that it was fair and reasonable for a small employer with no employment law expertise to obtain and make decisions based on advice from an external consultant. It also found that the dismissal was within the band of reasonable responses for an employer in the circumstances.
The fact that the managing director made the ultimate decision to dismiss was inevitable in the circumstances, given the nature of the business. Therefore, the decision to dismiss was not unfair or unreasonable on grounds he should not have been involved in both the decision to dismiss and the subsequent appeal.
Case law: court gives guidance on when use of trade mark is merely 'token' and the mark can be revoked
Businesses owning UK registered trade marks will welcome guidance on when use of a mark is merely 'token'. If it is 'token' a business risks the mark being revoked on grounds there has been no 'genuine use'.
UK trade mark owners should make sure they are making genuine use of them at least once every five years and are able to produce solid evidence of this use.
In a recent case, a company applied to register a UK trade mark 'Tommy Nutter' in relation to certain items of clothing. The mark had already been registered in the relevant class in the UK by clothes company Crombie, so the applicant also applied to revoke that existing mark on grounds it had not been in genuine use for a continuous period of five years. There is genuine use if there has been real commercial exploitation of the mark, given all the relevant facts and circumstances.
The court determined a number of factors that showed the mark to be 'token', including the fact that Crombie only displayed one garment, at most, on a Tommy Nutter hanger in each of its stores.
The court ruled that no reputation or goodwill attached to Crombie's goods in the minds of potential customers as a result of its use of the Tommy Nutter mark because, for instance, its acts to develop the brand were all carried out in-house.
Case law: staff member's suggested change to report on employee made subsequent dismissal unfair
Employers should make sure that reports relied on by staff making employment law decisions are not changed by staff members in a way that could affect the conclusions reached by the decision-makers. If they don't, they risk their disciplinary procedure being found to be unfair.
A consultant psychiatrist was reported to be working on confidential patient matters on the train, which was potentially misconduct. Under her employer's disciplinary procedure - a contractual procedure set out in the employee's terms of employment - issues of conduct or capability should be investigated and an internal case manager would then decide whether there was evidence of misconduct to be put before a conduct panel.
The employer's HR department appointed an investigator who later submitted a draft report saying the employee had breached confidentiality. A staff member in the HR department reviewed the report and suggested changes which made the case against the consultant more compelling. Many of these were included in the final report. As a result, disciplinary procedures were started against the employee for gross misconduct.
The Supreme Court drew a distinction between changes made to be sure the report covered everything necessary and was clear, and changes influencing the conclusions reached by those to whom the report was submitted. In this case the changes fell into the second category.
The employer had therefore breached the consultant's implied right to a fair disciplinary procedure – a right which applied whether the disciplinary procedure was contractual or not.
© Atom Content Marketing Ltd: 2014