There are a number of situations in which employers are required to consult collectively with their employees. Redundancy is the most obvious (governed by the Trade Union and Labour Relations (Consolidation) Act 1992 or TULRCA). But similar obligations arise when transferring a business under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). There are also separate requirements under the Information and Consultation of Employees Regulations 2004.
What is a collective redundancy situation?
Under TULRCA, a collective redundancy situation arises when an employer proposes to make 20 or more employees redundant at one “establishment” (the unit to which employees have been assigned) within a 90-day period.
The obligation to consult applies even if some employees are being offered different jobs, but the terms and conditions are so different that the employer is effectively dismissing and re-hiring the employees. It also applies to voluntary redundancies.
Who must be informed and consulted?
Employers have to consult appropriate representatives of employees who are likely to be made redundant. If they recognise a trade union, then they must talk to an official of that union. If not, then they have to either talk to other existing representatives or offer employees the chance to elect their own. If the employees don’t elect representatives, then the employer has to consult with the individuals directly.
What is the minimum period for consultation?
Employers have to start consulting their employees “in good time”, but at least 30 days before the first of the dismissals takes effect, if they intend to make between 20 and 99 employees redundant within 90 days or less. If, however, they intend to make 100 or more people redundant within that timeframe, then they have to start consulting at least 90 days beforehand.
What information do employers need to disclose?
Employers must tell the representatives who they want to make redundant and why. They also have to explain how they propose to select them and the period over which the dismissals will take place. They also have to set out how they propose to calculate the redundancy payments (if that is over and above what the law requires them to do).
The whole point behind the consultation process is to discuss ways in which the employer can either avoid or reduce the numbers of redundancies. So it should be genuine and undertaken with a view to reaching agreement with the representatives.
If the employer can show that there were “special circumstances” which meant it was not “reasonably practicable” to consult, they only have to take such steps as are reasonably practicable in the circumstances.
This defence will only succeed, however, if the employer can convince an employment tribunal that the collective redundancy situation arose from a sudden and unforeseen emergency.
TUPE TRANSFERS
What obligations apply under TUPE?
If the business in which an employee works is sold to a new employer or there is a “service provision change” (contracting out, re-tendering or contracting back in of services) the TUPE regulations are likely to apply.
This gives representatives of employees affected by a TUPE transfer the right to be informed about the fact that the transfer is to take place, when it is to take place, the reasons for it, and the legal, economic and social implications of the transfer for any affected employees.
They must also be consulted about any measures which the old or new employer envisages taking in relation to the affected employees.
Employers are under no specific legal obligation to inform and consult if the transfer is not covered by the TUPE regulations, including transfers by share take-over and transfers of limited assets only (for example, the sale of equipment).
What information and consultation rules apply?
The regulations require both the old and new employers to inform and consult representatives of every employee affected by the TUPE transfer regardless of whether they will transfer to the new employer or not.
Both employers therefore have a responsibility to tell the employees when the transfer is going to happen and why, the implications of it and whether they are likely to take any action which will affect them.
They have to consult representatives (either from the recognised union or if the employer does not recognise a union, other appropriate representatives) of the affected employees with a view to getting their agreement to the proposed changes.
INFORMATION AND CONSULTATION REGULATIONS
What does the law say?
The Information and Consultation of Employees Regulations 2004 apply to businesses with 50 or more employees. Subject to a request from at least ten per cent of employees the regulations place an ongoing obligation on the employer to inform and consult their workforce via representatives about a range of issues including:
• the economic position and development of their business
• developments relating to employment prospects within their business, and
• decisions likely to lead to substantial changes in work organisation or in contractual relations, including redundancies and transfers.
Employers have to start negotiating a new agreement as soon as “reasonably practicable” after receiving a request from employees (or of notifying employees that they themselves want to start negotiations on an agreement).
The regulations allow employers in certain situations to potentially withhold information which, if disclosed, could seriously harm the employer’s business.
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Employers often make a job offer conditional on completing a medical questionnaire. In Cheltenham Borough Council v Laird, the High Court said that the onus was on the employer to ensure the questions were not ambiguous, while the duty on the employee was to answer the questions to the best of their ability and not wilfully to withhold facts.
What happened?
Before being confirmed in the post of Managing Director at Cheltenham BC, Mrs Laird had to complete a medical questionnaire. As a result of her answers, she was deemed “fit” by Occupational Health Services and started work on 4 February 2002.
In May local elections were held which resulted in a change of political control from Conservative to Liberal Democrat. An atmosphere of mutual distrust developed between Mrs Laird and the new leader. She was suspended in late 2004 and a disciplinary panel was set up to hear complaints that had been made against her. However, a psychiatrist’s report in May 2005 stated that she was could not undergo the investigation because of poor health. This report also revealed that she had a history of depression which had been treated with anti-depressants. In March 2006 Mrs Laird retired on ill health grounds.
The Council then obtained a copy of her medical questionnaire which did not mention depression or stress-related illness. It brought proceedings against her for negligent and fraudulent misrepresentation, and claimed damages of almost £1 million for the time and expense incurred in investigating the disputes and for the cost of her ill health retirement.
The High Court said that the questionnaire had to be construed objectively. In other words read in the way that any “reasonable person” in Mrs Laird’s position would have done. If it was ambiguous (so that more than one meaning could be given to a particular question) then an answer that correctly addressed either of those meanings would be true. The onus was on the Council to ensure the questions were clear and unambiguous. Mrs Laird’s duty was simply to answer the questions to the best of her "ability and knowledge" and not wilfully to withhold material facts.
The Court looked at the four main questions which had given rise to the dispute. When asked: “Do you normally enjoy good health?”, she answered “yes”. The court held that this was accurate because she was not normally depressed and a reasonable person in her position would have regarded herself as normally enjoying good health.
In response to the question about whether she had a physical or mental impairment, she answered “no”. Again, the Court said that this at least constituted “a” correct answer as she was not depressed at the time of filling in the form and did not have an impairment under the Mental Health Act or the Disability Discrimination Act.
In reply to the question “reason for last medical treatment”, she described treatment for her lower back. Although she had subsequently picked up a repeat prescription at the doctor’s, the Court decided that the question was not directed at whether she was taking any medication, and could easily be understood to be asking when she had last seen a doctor.
Finally, when asked “Do you have an ongoing medical condition?”, she again answered “no”. This was also accurate because it was the vulnerability to depression that was ongoing, not the actual depression.
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The effective date of termination (EDT) in section 97(1) of the 1996 Employment Rights Act in relation to a contract terminated without notice is the “date on which the termination takes effect.” In Gisda Cyf v Barratt, the Court of Appeal said that this was when the employee actually read the letter of dismissal and not the date when it arrived at her home.
What happened?
Ms Barratt attended a disciplinary hearing held on Tuesday 28 November 2006, at the end of which she was told she could expect to receive a letter on Thursday 30 November telling her the outcome of the hearing.
Gisda duly posted a letter of summary dismissal by recorded delivery on Wednesday 29th which was delivered the next day. However, by this stage Ms Barratt was in London visiting her sister (who had just had a baby) and the letter was signed for by someone else. She did not inquire about the letter while she was away and did not read it until 4 December. She lodged a claim for unfair dismissal and sex discrimination on 2 March.
The company argued that her claim was out of time because the termination of her contract took effect on 29 November when it wrote and posted the dismissal letter. Alternatively, it argued that termination took effect when Ms Barratt first had a reasonable opportunity to learn of her dismissal. That was before 3 December, because she could have phoned from London to inquire about the letter, which Gisda had told her would arrive at her home address on 30 November.
The employment tribunal followed the approach laid down in Brown v Southall & Knight. That is, when an employer tells an employee by letter that they have been summarily dismissed, the EDT is the date when they actually read the letter and knew of the decision or, at any rate, had a reasonable opportunity of reading it.
And the EAT agreed, concluding that: "Where a decision to dismiss is communicated by a letter sent to the employee at home, and the employee has neither gone away deliberately to avoid receiving the letter nor avoided opening and reading it, the effective date of termination is when the letter is read by the employee, not when it arrives in the post"
And the Court of Appeal agreed with both tribunals. It held, by a majority, that the EDT was 4 December 2006 and that Ms Barratt’s claim for unfair dismissal was therefore in time. It made the following points:
- that the EDT was “a statutory construct specifically designed and defined for the purposes of a legislative scheme of employment rights based on a personal contract
- that the critical triggering act is that of the employer, and the manner and timing is outside the employee’s control
- there is a need for fairness in the dismissal process. “The proposition that an employee may be summarily dismissed and that time may begin to run against the employee before the employee actually knows of the dismissal sits uncomfortably with a personal contract and with the scheme of the legislation that an employee is entitled not to be dismissed unfairly and to have 3 months, and no less, in which to present a complaint of unfair dismissal”
- that there must be a good reason to depart from a judgment (Brown) that had been followed for 30 years.
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The Government announced recently that it would be consulting soon on regulations to give families new leave rights that will, it claims, give more choice and flexibility to parents as to how they use maternity and paternity leave.
Families will have the choice to transfer up to six months leave to the father should they want to, which can be taken by the father once the mother has returned to work. This new provision will be available during the second six months of the child’s life, giving parents the option of dividing a period of paid leave entitlement between them.
Some of the leave may be paid if taken during the mother’s 39 week maternity pay period and paid at the same rate as Statutory Maternity Pay (currently £123.06).
Parents would be required to “self certify” by providing details of their eligibility to their employer. Employers and Her Majesty’s Revenue and Customs would both be able to carry out further checks of entitlement if necessary.
In order to give employers time to adjust the new right will be introduced for parents of children due on or after 3 April 2011. The Government estimates that take-up of additional paternity leave will be less than six per cent and that it will affect 0.7 per cent, or one in every 137, of all small businesses.
Currently, employed fathers are currently entitled to two weeks paid paternity leave and mothers to 52 weeks maternity leave, of which up to 39 weeks are paid. Employed parents are also entitled to a total of 13 weeks unpaid parental leave until the child’s fifth birthday. Parents of children aged 16 and under have the right to request flexible working. These rights will not be affected by the introduction of additional paternity leave.
To read the press release, go to:
http://www.wired-gov.net/wg/wg-wlabel-dti.nsf/wfArticle?ReadForm&unid=F209D6001D8DF6D78025763200413C4E
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