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Specialist Employment Law Solicitors in Abingdon
For Oxford, Oxfordshire, Berkshire, London & the Thames Valley

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March 2020 Newsletter for Employers

Disciplinary hearing pitfalls

Often employees raise new points in disciplinary or appeal hearings which need to be investigated. The disciplinary/appeal manager needs to take care how they react to this. Of course, the new point should be investigated. But who should carry out the investigation? And what happens to the new information which it produces?

It is not the role of the disciplinary decision maker or the appeal manager to conduct this further investigation. Further investigation should be undertaken by the investigation manager.

Crucially, a copy of the outcome of the investigation (usually meeting notes or a new witness statement) should then be sent to the employee so they are given the opportunity to comment on it. This could be at a reconvened the disciplinary hearing, or it may be sufficient to give the employee the chance to write in with any comments. Then, the new evidence and the employee’s comments should be given to the disciplinary decision maker/appeal manager to take into account when making their decision.

If this process is not followed, the employee may claim that they would have made some key new argument in their defence if they had only seen the new evidence, and that this would have changed the decision made. Even if this is not true, there may still technically be an unfair dismissal.

When investigating disciplinary proceedings, some employers adopt the practice of having the investigation manager draw up an investigation report. This report usually summarises the evidence. Often, the investigating manager will also include their conclusion on whether or not the employee is guilty of misconduct. This practice was highlighted in the case of Drosfield v University of Reading.

There is nothing wrong in principle with putting together an investigation report as long as it fairly reflects the evidence collected and both the disciplinary decision manager and the employee are given the same documents relating to the investigation. However, I would not encourage this practice as it can provoke debates, which I have seen in employment tribunal hearings, about whether or not the summary in the report is fair. It seems far more straightforward and risk free to just put together the witness statements and any relevant documents and leave them to speak for themselves.

If the employer does use the report option, the ACAS guide on disciplinary proceedings makes clear that the investigator should restrict their comments to recommendations on whether the employer should take disciplinary action. The investigator should not suggest possible sanctions or prejudge the outcome of the disciplinary hearing.

Employment Law Plus has a wealth of experience in advising organisations on how to conduct disciplinary processes fairly, including framing the disciplinary allegations, deciding what evidence needs to be collected, and clearly explaining the disciplinary decision taken.

Confidential advice from a solicitor

Some time ago, we reported on the case of Curless v Shell International, an alarming decision for employers and their solicitors. The Appeal Tribunal decided that advice given by a solicitor to their client about dismissing an individual for redundancy should be disclosed to the Tribunal because it ‘cloaked’ a discriminatory dismissal – the employee had already made a disability discrimination complaint, and so the solicitor’s advice could be interpreted as helping the employer to hide an unlawful act of victimisation for that complaint behind a sham redundancy process.

It will come as a relief to employers and their solicitors that the Court of Appeal has overturned that decision and decided that the solicitor’s advice should remain confidential. The Court commented that the solicitor’s advice was the sort of advice which employment lawyers give day in day out. Therefore, the advice should not be shown to the Employment Tribunal when it made its decision on the redundancy dismissal.

It is important for employers to bear in mind that this confidentiality which applies to advice from solicitors does not extend to advice from internal HR departments or external HR consultants. In litigation, any relevant written advice provided by such categories of adviser would have to be disclosed to the claimant, which could be very prejudicial to the defence of the claim.

Employment Law Plus provides commercial, expert advice on any prospective termination of employment situations, to allow the employer to manage risk in the context of its business objectives.

Widening scope of protection for beliefs

Workers can bring claims against employers if they suffer discrimination because of philosophical beliefs, as well as religious beliefs. Recently employment tribunals have had to decide if various beliefs should be protected:

  • A belief that sex is immutable (Maya Forstater v GBD Europe). The tribunal decided that this belief should not be protected.

  • A belief in the right to own copyright (Gray v Mulberry Co (Design) Ltd). The tribunal decided that this belief should not be protected.

  • A belief in ethical veganism (Jordi Casamitjani v League Against Cruel Sports). The tribunal decided that this belief should be protected.

    These are all decisions of employment tribunals, not higher courts so they do not have to be followed in a different case by a different employment tribunal. However, there is every reason to assume that ethical veganism is a belief which should be protected by law.

    After the ethical veganism decision, there was much speculation in the media about what this meant for employers. Media coverage advised that employers should ensure that they serve vegan food at works events and that they do not require workers to use leather seats. This is good cautious advice, although I am not sure how many leather seats there are in workplaces these days!

    Mr Casamitjani has not yet won his claim for belief discrimination because he must prove that his employer subjected him to detrimental treatment because of his ethical veganism. It is often at this stage that discrimination claims fall apart.

    So what should employers do, if anything?

  • Always provide a worker with a clear, documented reason for a dismissal, even if they have less than two years’ service (which means they cannot bring an ordinary unfair dismissal claim). Allow the worker to comment on the proposed dismissal before making the decision. This will make it much easier to defend a later claim that the dismissal was for some unlawful reason such as religion, belief or whistleblowing.

  • If a worker expresses a belief in anything, be alert to the fact that this could be a religious or philosophical belief which could give them protection. This would make the scenario more risky and the employer should get legal advice before proceeding with any proposed action detrimental to the worker.

  • And make sure there are vegan sandwiches at a training lunch buffet…

    Employment Law Plus assesses areas of risk around employee relations situations and advises on risk reduction while taking into account commercial considerations.

  • Who is protected in a TUPE transfer?

    There is usually a “TUPE transfer” when a business is transferred to another owner or the organisation insources or outsources a certain activity, like cleaning. This means that the employees in the transferred business get certain key protections.

    All the cases on TUPE transfers so far have been about employees of the business. However, the TUPE Regulations give a wide definition of who will be protected, so that there has always been the potential for ‘workers’ to be protected too. ‘Workers’ are a class of people in the workforce who are not employees, but who are not self employed either, for example, casual staff will usually be workers unless the organisation decides to label them as employees.

    In the case of Dewhirst v Revisecatch Ltd and City Sprint, an employment tribunal has decided that ‘workers’ are protected by TUPE. The claimants in this case were cycle couriers. This decision does not determine what other employment tribunals will decide because it is not an appeal court decision. However, it is perfectly reasonable for a tribunal decide that ‘workers’ are also covered under TUPE, given the wording of the TUPE Regulations.

    Employers facing a TUPE transfer would be well advised to take into account any workers attached to the business change, as well as employees. Although workers cannot bring an unfair dismissal complaint, if they are not included in the collective information and consultation process required on the transfer, they could claim up to 13 weeks’ pay. This is the claim which the workers made in the Dewhirst case.

    Employment Law Plus advises on how to handle TUPE transfer situations, including organising collective information and consultation.

    Changes to IR35 rules (off-payroll working rules)

    At the February meeting of the South Oxon HR Network, we had a very clear presentation from Simon Husband and Jemima King, Partners, at Richardsons Chartered Accountants, on what IR35 is and what changes are coming in on 6 April.

    They explained that, for tax purposes, a worker is either employed or self-employed. This is different from the employment status position in employment tribunals where someone can be employed, a worker or self-employed.

    Key considerations when deciding if a person is employed or self-employed are:

  • Mutuality of obligation: Whether there is an obligation to offer or accept tasks.

  • Substitution: A self-employed person can supply different personnel to carry out the work.

  • Financial risk: An employee does not take on the risk of losing money on the deal, for example, by having to put work right in their own time. A classic self-employment arrangement is where a fee is charged for a deliverable.

  • Control: An employee is told by their line manager what to do.

  • Number of assignments: If someone has 20 clients, they look more like a self-employed person than if they have one client. However, it is possible to be an employee of some of these clients and in a self-employed relationship with others, depending on the factors above.

    The risk from getting a decision on status wrong is that, if HMRC finds that a worker is an employee, and they were paid “gross”, HMRC will treat the payment made as the net of tax payment and demand tax on the grossed up sum, plus penalties and interest. This liability can go back 6 years (or longer). Ouch!

    IR35 comes in where an individual supplies their services to the end client via a company. That may be a limited company the individual has set up for this purpose, called a personal service company (PSC). Just because an individual supplies their services through a company, it does not necessarily mean that they must be taxed as an employee. It is a question of making an assessment as to whether characteristics of the person’s relationship with the end client are ones of employment or self employment. What would the relationship look like if the PSC were removed from the equation? The factors listed above will be considered.

    If the decision is that the arrangement is in fact employment, IR35 will apply to require the payments to be taxed as if it was employment. None of this is changing.

    What is changing is who makes the decision whether or not the arrangement is one of employment, who is responsible for deducting tax, and who is liable for the tax if they get the decision wrong. These changes have already come in where the end client is in the public sector. However, even when the changes hit the private sector, it will only impact where the end client is a large business. Small business end clients, to which the changes will not apply, have at least two of the following: a turnover of no more than £10.2m, a balance sheet of no more than £5.1m and no more than 50 employees.

    So what are the changes for large businesses? The end client decides whether or not IR35 applies, not the PSC. The end client operates PAYE (or if there is an agency involved, the agency does it). If the end client decides the supplier is self-employed, when HMRC deems them employed, the end client will be liable for the unpaid taxes.

    For small businesses, the current position continues that it is the service provider who decides if IR35 applies, and the PSC which is liable for further tax if they get it wrong.

    NB Since this presentation, the government has announced that these changes will go ahead, but that firms would not face fines for errors relating to off-payroll in the first year, except in cases of deliberate non-compliance.

    This is an introductory summary and businesses should get advice from their accountants.

    Newsflash: The government has postponed the introduction of new IR35 rules by 12 months due to covid-19

    For the slides, click here

  • Happy, healthy conflict

    At the February meeting of the South Oxon HR Network, Melanie Greene, occupational psychologist and owner of Inspire Transformation, gave us a compelling presentation on Happy, Healthy Conflict: How to have Difficult Conversations at Work.

    Melanie made the important point that addressing conflict makes for a far better work situation than avoiding it. She gave us advice on how to address conflict in a positive way. Both managers who would prefer to avoid conflict and those who have a fiery reaction to it need to control their responses.

    She explained that the ancient parts of our brains are constantly looking out for risks and threats. Receiving negative feedback from a manager is seen by the brain as a threat. Unfortunately, when this threat materialises, many employees are already at a high emotional temperature - caused by a long commute, family challenges or long working hours etc. Therefore, when some new situation comes up provoking a threat response, the worker’s emotional temperature can go off the scale.

    For a more constructive reaction to negative feedback, it is important to dampen down the level of emotional response in the worker’s brain; we can’t change behaviour if we don’t change what is going on in the brain.

    Building rapport is key to this. Without rapport, a subordinate is likely to see praise as patronising, and negative feedback will provoke a threat response. So, managers should be thinking, ‘Who do I need to build better rapport with?’ One way to do this is by being a really good listener. Another way is to be aware of personality types. There can be a really big mismatch between introverts and extroverts.

    Managers can also dampen the threat response by building empathy with the employee by ‘matching’ them. This does not mean mirroring. It means matching their energy level. If the worker is very angry and the manager remains calm, the worker is likely to feel that they are not understood. The manager should show heightened energy through more demonstrative body language. If the person is depressed, the manager should calm their emotional response to match them. Melanie assured us that, if we match the other person’s energy level, their emotional response will start to subside.

    Melanie explained that it is also important to be conscious of when we are inappropriately reacting like controlling parents, nurturing parents, or children in our interactions. Acting like a parent or child means that we are emotionally driven, whereas we should be striving to act like adults, managing our emotions to be calm and rationale. If we don’t deal with the fearful child within us, we can often turn into a controlling parent.

    The answer to dealing constructively with conflict therefore starts with us.

    For the slides,click here

    Next meeting of South Oxon HR Network in April

    The next meeting planned for 22 April, on the subject of mental health in the workplace, has been postponed due to covid-19. It will be rearranged later in the year. For an invitation, complete our online form here.

    Please contact us if this newsletter raises any issues in your organisation

    This newsletter is not intended to be a comprehensive explanation of the law. Please contact us for full advice before taking a business decision.

    ELP Newsletter March 2020. jill-kelly-fw

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