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01 | BE AWARE
BE AWARE
MAY 2012
The monthly employment law newsletter from DLA Piper UK LLP
ContEnts
02 The Expert View
04 Case of the Month
05 On the Horizon
07 News in Brief
08 HR Matters
09 Be Inclusive
10 At a Glance
10 Your Say
11 Key Contacts
02 | BE AWARE
thE ExpERt VIEW
social media in recruitment and the workplace
Headlines have been made recently by stories about US businesses requiring job applicants to hand over their Facebook login details so that they can collect candidate information from the social media site before making a recruitment decision. This practice, which is causing a storm in the US and has led to several states seeking to introduce legislation to prohibit it, is not yet commonplace this side of the Atlantic. In this article we consider the reasons why UK employers might not want to follow suit.
What potential legal liabilities can arise from using social media in recruitment?
Potential legal liabilities can arise from simply accessing an individual’s social media profile, irrespective of the use to which the information is subsequently put. According to the Information Commissioner, the practice breaches the Data Protection Act, which prohibits organisations from holding excessive information about an individual. Having full access to a job-seeker’s Facebook account would also give access to information not just about the job-seeker but about third parties to whom they are connected. Accessing such information would be in breach of the Data Protection Act as those individuals are unlikely to have given consent to having their data processed in this way.
Accessing social media during recruitment could also put an organisation at risk of discrimination allegations if the employer discovers, and rejects the job applicant because of, information about, for example, sexual orientation, caring responsibilities, health, religion, belief or age. Employers are also at risk of employees resigning and claiming constructive dismissal if log-in details are handed over for recruitment vetting but the employer later accesses the Facebook account for other purposes.
should employee use of social media be regarded as private?
Although requiring log-in details to gain access to a job applicant’s Facebook account seems rather heavy handed, there are a number of legal risks inherent in employee use (and misuse) of social media which make it important for employers to know what their staff are up to online. For example, an organisation’s reputation or brand might be damaged by an employee posting derogatory comments or controversial opinions, confidential information might be deliberately or inadvertently disclosed, an employer can be held liable for an employee’s “cyber-bullying”, and there can be significant loss of productivity when employees spend excessive amounts of work time on social media sites.
Kate hodgkiss Partner Scotland, Londont +44 (0)20 7796 [email protected]
02 | BE AWARE
The monthly employment law newsletter from DLA Piper UK LLP | 03
Monitoring employees’ use of social media is essential for a business to be able to control these risks. However, such monitoring can create its own risks if it is done in the wrong way or for the wrong reasons. Any monitoring must not intrude into employees’ private lives, breach their data security or interfere with the trust and confidence which lies at the heart of the employment relationship. A crucial issue is that employees must be aware of the methods used and the extent and purposes of monitoring which their employer is carrying out.
how can employers use social media in the recruitment process?
In terms of monitoring social media profiles during the recruitment process, the Information Commissioner’s guidance is that “vetting” should only be used where a recruitment decision imports significant risks to the employer, clients, customers or others and there is no alternative available. Trawling social media sites to sift applicants is, in reality, a form of vetting and, to avoid comeback, employers should make sure they give clear guidance to managers about how social media can and cannot be used in recruitment.
What about monitoring social media use during employment?
Monitoring sites visited and time spent on social media sites in working hours will rarely be contentious, provided employees have been informed that their usage will be monitored and the reasons for doing so. Monitoring content, however, is more intrusive and will require tighter safeguards. Employees’ work related use of social media can be monitored provided that data
protection principles are complied with and, as part of this, it will be important to consider if there are less intrusive alternatives. The really tricky area is monitoring an employee’s personal social media activity. The Courts’ attitude to this so far remains largely untested but it is clear that the key to effective legal monitoring and control of social media usage is a well drafted and business specific social media policy. This should include:
rules on social media activity during working hours; ■
rules on the use of personal social media accounts; ■
rules on social media including a reminder that social ■
media activity is not necessarily private and the employer may discipline for inappropriate activity which breaches the policy whether work related or personal; in/outside the workplace and on personal/company IT equipment; and
an explanation that the organisation monitors social ■
media use and how and for what purposes this monitoring is carried out.
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04 | BE AWARE
CAsE oF thE MonthEddie Stobart Ltd v Mr J Moreman and others
FACtsEddie Stobart Limited (Stobart) operated a meat warehouse. Originally they had contracts with five suppliers at the site but by 2009 only two remained: Forza, who supplied meat to ASDA; and Vion, who supplied meat to supermarkets. Different retailers had different arrangements for when orders would be placed, the result of which was that night-shift employees worked primarily on the Forza contract and day-shift workers worked primarily on the Vion contract.
In 2009 the site closed and it was Stobart’s belief that Vion arranged for the work to be taken over by another logistics business, FJG Logistics Limited (FJG). Stobart took the view that this was a service provision change (SPC) under TUPE as the work in question had been carried out by an organised grouping of employees whose principal purpose was to carry out the work required by the Vion contract, and accordingly the contracts of those employees transferred to FJG. Stobart identified employees who spent 50% or more of their time performing Vion work and notified them that they would transfer. FJG did not accept that there had been an SPC. The employees brought tribunal claims and at a pre-hearing review the employment judge determined whether to strike out.
DECIsIonThe employment judge held that there had been no SPC from Stobart to FJG. He said that the fact that the workers spent the majority or indeed all of their time on a particular task for a particular customer was not of itself evidence of an organised grouping of employees. The organisation of work was not by reference to the customers, but by reference to the shift system. The fact that many of the staff found themselves working exclusively on work necessitated by the Vion contract was a function of the time of day that Vion’s customers chose to place their orders, not of the organisation
of the work so that there were teams dedicated to that contract. The employees could not say that they regarded themselves as being assigned to one contract. There was no reasonable prospect of success in establishing the existence of an organised grouping of employees.
On appeal, the EAT agreed. The requirement of an organised grouping necessarily connotes that the employees be organised by reference to the requirements of the client in question. It does not apply to a situation where a group of employees may without any deliberate intent or planning be found to be working mostly on tasks which benefit a particular client. If the grouping does not reflect any existing organisational unit there are liable to be real practical difficulties in identifying which employees belong to it. The EAT considered it important that on a transfer employees should know where they stand.
IMpLICAtIonsThis is a surprising decision. The BIS Guidance observes that the “organised grouping” condition is meant to confine TUPE to situations where the outgoing service provider has in place a team of employees that are “essentially dedicated” to carrying out the activities that are to transfer, which would suggest that the mere fact of actually doing the work in question is sufficient. This case clearly states that something more is needed, although it is not entirely clear what. There is some implication that the employees must know that they are working on, for example, Contract A. This will move a lot of employees in the logistics industry out of the protection of TUPE, where it is rare to have identified, client-dedicated teams. The most important practical implication is that employers who have employees working on contracts where the expectation is that if the contract went elsewhere, the employees would transfer with it, should ensure that there is a clear organised grouping of employees on that contract, for example by designating and referring to them as ‘Contract A workers’ or in some way identifying them as a ‘team’.
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The monthly employment law newsletter from DLA Piper UK LLP | 05
on thE HORIZON
Employment tribunals Act 1996 (tribunal Composition) order 2012
On 6 April 2012 The Employment Tribunals Act 1996 (Tribunal Composition) Order 2012 (2012/988) came into force. The Order amends section 4(3) of the Employment Tribunals Act 1996 which provides for proceedings to be heard by an employment judge sitting alone.
Variation of Unfair Dismissal qualifying period
On 6 April 2012, The Unfair Dismissal and Statement of Reasons for Dismissal (Variation of Qualifying Period) Order 2012 (2012/989) came into force. The Order increases the qualifying period to claim unfair dismissal from one year to two years. It also amends section 92(3) of the ERA 1996, to increase the qualifying period for entitlement to written reasons for dismissal, also from one year to two years.
no-fault dismissals
On 15 March 2012, the Government issued a call for evidence on no-fault dismissals. The Government is proposing that micro-business (10 or fewer employees) would be allowed to pay employees to leave rather than go through lengthy procedures and face potential unfair dismissals claims. At present there is no proposal on the level of payment an employer would have to make and the employees would still be able to bring claims for discrimination and automatically unfair dismissal. The call for evidence also seeks views on whether the ACAS Code on discipline and grievance could be simplified, and whether an alternative to the Code should be implemented for small businesses. The call for evidence closes on 8 June 2012.
Equality Act 2010
On 14 February 2012, an Order amending the wording of section 147 Equality Act 2010 was published. Section 147 sets out who is an independent adviser for the purposes of advising on the terms and effect of a compromise agreement. The section has caused controversy because it appeared to preclude from acting as an independent adviser, anyone who was acting for a party to the complaint, which would include a party acting for the employee. The Order has rectified this and came into force on 6 April 2012.
Modern workplaces
On 16 May 2011, the Government published its proposals for a new system of parental leave. The consultation process closed on 8 August 2011. BIS confirmed on 15 February 2012 that due to on-going discussions within the Government, its response would be delayed until the spring of 2012. Full details of the proposals are available in our Be Inclusive alert.
protection of Freedoms Bill
On 11 February 2011, the Government announced that the centralised vetting and barring scheme for those working with children and vulnerable adults would be scaled back. The plans are contained in the Protection of Freedoms Bill and propose several changes to the scheme. These include a merger of the Criminal Records Bureau and the Independent Safeguarding Authority and a restriction in the checks carried out to those working most closely and regularly with children and vulnerable adults. Criminal records checks will be transferred between jobs to cut down on bureaucracy. There will also be penalties for those who knowingly request unlawful criminal record checks. The bill has now passed through the report stage at the House of Lords. A date for the third reading is yet to be announced.
Enactment of Extra-statutory Concessions order 2011
Since 6 April 2011, HMRC’s Extra-Statutory Concession A81 (which provided that no tax charge would be made on legal costs where payments by the employer were (a) made direct to the employee’s solicitor (b) to discharge fees incurred only in connection with termination and (c) made under a specific term in the settlement agreement) has been formalised in the Enactment of Extra-Statutory Concessions Order 2011. Unfortunately, the provisions of the Order are narrower than those of the original concession as they apply only to compromise agreements made under section 203 Employment Rights Act 1996 (ERA) and do not cover agreements made under, for example, the Equality Act 2010 or a COT3 agreement. HMRC had indicated initially that it would not be amending the Order to address this anomaly. However, on 6 December 2011 HMRC published the consultation paper “Extra-statutory concessions – fifth technical consultation on draft legislation” which includes a proposal to replace
2012
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06 | BE AWARE
“compromise agreement” with “settlement agreement” – this would then widen the scope of the provision. The consultation closed on 28 February 2012. For now, HMRC has said that it will accept that an agreement (whether to compromise claims under the ERA 1996, the Equality Act 2010 or any other legislation, and whether negotiated with the assistance of an ACAS conciliation officer, or not), is a compromise agreement for the purpose of the exemption from tax provided that it meets the ERA conditions.
Resolving workplace disputes
In January 2011, the Government issued a consultation paper, “Resolving Workplace Disputes” which sets out its proposals in relation to unfair dismissal law and the employment tribunal system. The consultation closed on 20 April 2011. The Government’s response was published on 23 November 2011. Full details of the Government’s proposals are available in our Be Alert. On 10 February 2012, the Government published draft legislation increasing the qualification period for unfair dismissal from one to two years’ service with effect from 6 April 2012. The legislation came into force on 30 March 2012. The Government also published draft legislation allowing employment judges to sit alone when hearing unfair dismissal cases at tribunal level. The legislation came into force on 6 April 2012.
Employment tribunals and Employment Appeal tribunal fees
On 14 December 2011, the Ministry of Justice published a consultation asking for views on fee charging structures for the employment tribunals and the Employment Appeal Tribunal. Two proposals have been suggested (1) an issue and a hearing fee, the costs for which would be dependent on the type of claim; or (2) an issue fee only which would depend on whether the amount the claimant judges their claim to be worth is above or below £30,000. If the former option is chosen, it would be implemented in 2013, whilst the latter option would not be implemented until 2014. The consultation closed on 6 March 2012. For more detailed information, see our Be Alert.
parental leave
A new Parental Leave Directive, adopted by the EU Council in 2010, provides for an increase in the minimum parental leave following the birth or adoption of a child from three to four months. At least one of the four months will not be transferable between parents. The Government has confirmed this will not be implemented by the original proposed date of 8 March 2012, and instead will be introduced in March 2013 as part of its Modern Workplaces reforms.
Auto-enrolment into pension schemes
New laws coming into force in October 2012 under the Pensions Act 2008 will require all employers to automatically enroll eligible jobholders into a pension scheme. Employers will be able to voluntarily start enrolling their employees from July 2012. A revised timetable was published by the Department for Work and Pensions on 25 January 2012 to ease the burden on smaller businesses during implementation. All new employers will have to have begun auto-enrolment by February 2018.
Queen's diamond jubilee
The Government has announced a special four-day jubilee weekend which involves putting back the late May bank holiday to Monday 4 June 2012 and adding an additional Jubilee bank holiday on Tuesday 5 June 2012.
The Employment Group has a series of Flyers exploring in more depth many of the legislative developments contained in “On the horizon”. For further details please speak to your usual DLA Piper contact or click here.
2012
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The monthly employment law newsletter from DLA Piper UK LLP | 07
nEWsIN BRIEFEquality Act age provisions delayed
The Government Equalities Office (GEO) has announced that implementation of the Equality Act’s provisions prohibiting age discrimination in the provision of services and public functions “…is unlikely to come into effect before October 2012”.
The GEO explains: “Ministers are still considering the scope for and content of any exceptions from the ban, in the light of responses to a consultation in 2011. The Government considers it preferable to spend time to get the decision right. Businesses and others affected will also have more time to prepare and adjust as necessary. The way forward will be set out in due course.”
One effect of the postponement is that the scope of the public sector equality duty as regards age will be limited in comparison with all the other protected characteristics. Section 149(1) requires a public authority “in the exercise of its functions” to have due regard to the need to “eliminate discrimination...and any other conduct that is prohibited by or under this Act”. Since age discrimination in the exercise of public functions is not unlawful for the time being, this part of the equality duty will only relate to employment and occupation so far as age is concerned. Click here for more information.
BIs to publish information on average value of awards and listing time
BIS will now publish information on the average values of awards and the amount of time taken to reach a hearing. This is now included in the guidance for tribunal application and response forms. It is hoped the information will give parties a greater understanding about what to expect from the tribunal process. Click here for more information.
new guides for placements and internships
The Chartered Institute of Personnel and Development (CIPD) and Job Centre Plus have jointly produced guidance supporting the Government’s initiative to ‘Get Britain Working’. The Minister for Employment, has encouraged employers to sign up to the CIPD’s new ‘quality charter’ which sets out what employers should put in and what participants should expect to get out of the placements. The full guide and charter can be viewed here.
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08 | BE AWARE
hR MATTERSJennifer Waterhouse Solicitor Sheffield t +44 (0)114 283 [email protected]
We are fast approaching bank holiday season and our company is therefore thinking about how it should deal with employees who will be on maternity leave during this period. Will these employees be entitled to the benefit of bank holidays falling during their maternity leave? If so, when should these employees be entitled to take days off in lieu of these bank holidays and can we pay them in lieu instead? Also, should we deal with the additional bank holiday for the Queen's Diamond Jubilee any differently?
Under the Working Time Regulations 1998, all workers in the UK are entitled to 5.6 weeks (28 days) paid annual leave (Statutory Entitlement). Although an employee’s statutory and contractual holiday entitlement accrues during maternity leave, the position in respect of bank holidays is a little more complicated because there is no statutory right to take bank holidays (paid or otherwise). Whether or not your employee is entitled to bank holidays that fall within their maternity leave period will depend on whether bank holidays form part of their Statutory Entitlement. This is determined by looking at how much holiday your employee is entitled to under the terms of their contract.
Where bank holidays are included as part of your employee’s Statutory Entitlement, for example, their contract provides for 20 days holiday plus eight days bank holidays, she will be entitled to time off in lieu of any bank holidays that fall within her maternity leave period.
However, what is the position where your employee’s contractual holiday entitlement is more generous and exceeds the Statutory Entitlement? Take, for example, the case of an employee whose contract of employment states that she is entitled to 25 days holiday plus 8 bank holidays. In this case, the employee will, as above, be entitled to time off in lieu of her 25 days’ leave and three of the bank holidays (totalling 28 days Statutory Entitlement), but should she be allowed to take time off in lieu of the further five bank holidays? The answer to this depends upon whether or not bank holidays are characterised as a right to “remuneration” or as a contractual benefit to time off. This is important because rights to “remuneration” do not continue during maternity leave, but other contractual benefits do.
This is not something that has been tested by the courts. Arguably, holiday pay in respect of bank holidays is no different to any other form of “remuneration” and you may therefore be able to assert that the employee is not entitled to the benefit of any bank holidays that fall outside of the employee’s Statutory Entitlement. However, this is a risky approach to take because the employee may have a claim for pregnancy/maternity discrimination in such circumstances on the basis that she has been treated unfavourably for exercising her right to maternity leave. She may be able to assert that had she been at work she would have had the benefit of the bank holiday and as such she has been discriminated against because of being on maternity leave. This Statutory Entitlement argument was successful in Merino-Gomez v Continental Industries del Caucho SA and it is difficult to see why it would not extend to all entitlement.
The safest approach is to give your employees the benefit of any bank holidays that fall during maternity leave, regardless of whether or not their contractual holiday entitlement exceeds the Statutory Entitlement.
You should therefore allow employees to take time off in lieu of any bank holidays that have accrued during their maternity leave upon returning to work, even if this means taking time off in the following leave year, as annual leave cannot be taken at the same time as maternity leave. An alternative option would be to offer employees a payment in lieu because although strictly speaking payments in lieu are not permissible other than on termination of employment, this may suit both parties and is therefore unlikely to be challenged.
As regards to the additional bank holiday for the Queen’s Diamond Jubilee, you should first look at your contractual provisions on annual leave. You should look at whether the employee’s contract entitles them to x days’ holiday inclusive of bank holidays, x days’ holiday plus the 8 or the usual bank holidays, or x days’ holiday plus bank holidays. If the latter, they will be contractually entitled to the extra day and, as above, if it falls during their maternity leave should be entitled to time off in lieu upon their return to work. However, whatever approach you take in general, our advice would be to treat those on maternity leave the same.
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The monthly employment law newsletter from DLA Piper UK LLP | 09
Cost alone cannot justify discrimination
Any less favourable treatment of an employee by an employer because of a protected characteristic will amount to unlawful direct discrimination, unless the treatment is objectively justified. To be justified the employer’s actions must meet a “legitimate aim” and be a “proportionate” means of meeting that aim. Determining whether there is objective justification should be approached in two stages:
Is the aim of the treatment legal and non-discriminatory, ■
and one that represents a real, objective consideration? (For example, properly evidenced health and safety considerations may satisfy this element); and
If the aim is legitimate, is the means of achieving it ■
proportionate – that is, appropriate and necessary in all the circumstances? This involves a balancing exercise, weighing up the discriminatory impact of the provision, etc. on the individual as against the employer’s reasons for applying it.
A recurrent consideration for employers is the extent to which cost might be relied upon as a justifying factor. The established view is derived from the EAT’s decision in Cross and others v British Airways plc, in which it was held that the avoidance of cost is not, in itself, a legitimate aim; however, cost can be put into the balance with other factors. This is often referred to as the “cost-plus” approach. In the recent case of Woodcock v Cumbria Primary Care Trust, the Court of Appeal considered whether cutting short an employee’s redundancy process, to avoid an imminent pension liability, was justified. The EAT in Woodcock had cast doubt upon the established view that cost alone can never justify age discrimination. A subsequent EAT decision, Cherfi v G4S Security Services Ltd, also indicated support for abolishing the ‘cost-plus’ approach. The Court of Appeal in Woodcock came close to stating that cost alone can justify some types of discrimination but in fact followed ECJ case law which states that an employer cannot justify discriminatory treatment solely because the elimination of such treatment would involve increased costs. Whilst the saving
or avoidance of costs alone will not, without more, justify discrimination, on the basis of this case it seems that not much more will be needed in practice. However, the decision should be treated with some caution as it was heavily reliant on the particular facts.
The Court of Appeal reviewed the authorities on the use of cost to justify discrimination and concluded that, although there is some degree of artificiality about the ‘cost plus’ approach, an employer cannot justify discriminatory treatment solely because the elimination of such treatment would involve increased costs. However, the Trust’s treatment of Mr Woodcock could not properly be characterised as no more than treatment aimed at saving or avoiding cost. It was a legitimate aim to dismiss Mr Woodcock for redundancy, and a legitimate part of that aim to ensure that the timing of the dismissal saved additional cost. Proportionality required striking an objective balance between the discriminatory effect on Mr Woodcock of giving notice prior to formal consultation and the needs of the Trust.
It is not entirely surprising that the Court of Appeal stopped short of endorsing a view that cost alone can justify discrimination, i.e. that an employer cannot justify discriminatory treatment solely because the elimination of such treatment would involve increased costs. However, the Court appears to have set a very low threshold for what will be required in addition to cost considerations in order to justify discrimination.
The case should certainly not be taken as giving employers carte blanche to accelerate the dismissal of older workers in order to avoid incurring additional pension liability. It was a significant factor in Mr Woodcock’s case that the underlying reason for dismissal was a genuine redundancy situation, and there had been informal consultation over a lengthy period. The court may also have been influenced by public policy considerations as costs in the public sector are a sensitive issue due to the current economic climate.
sandra M WallacePartner Birmingham t +44 (0)121 262 5913 [email protected]
BE INCLUSIVE
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10 | BE AWARE
Now Future
Unfair dismissal basic award £12,900
Unfair dismissal compensatory award £72,300
Maximum statutory redundancy pay £12,900
Cap on a week’s pay £430
Rate of SMP, SPP, SAP £135.45
Rate of SSP £85.85
National minimum wage
21 and over £6.08 £6.19 (October 2012)
18 – 20 £4.98 £4.98 (no change)
16 – 17 £3.68 £3.68 (no change)
Apprentices £2.60 £2.65 (October 2012)
At A GLANCE
YoUR sAY
59% of respondents to our April
Your Say question said that they
are not reviewing their policies and
procedures in light of the likely
disruption from the Olympics.
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11 | BE AWARE
tim Marshall partner, LondonHead of UK Employment Groupt +44 (0)20 7796 6617 F +44 (0)20 7600 1738 [email protected]
Alan Chalmers partner, sheffieldt +44 (0)114 283 3259 F +44 (0)114 272 5672 [email protected]
Mary Clarke partner Manchester, Liverpoolt +44 (0)161 235 4016 F +44 (0)161 235 4116 [email protected]
TraiNiNg
nicholas Jew partner, Birminghamt +44 (0)121 262 5881 F +44 (0)121 262 5798 [email protected]
Guy Lamb partner, Leedst +44 (0)113 369 2504 F +44 (0)113 369 2599 [email protected]
Kate hodgkiss partner scotland, Londont +44 (0)20 7796 6732 F +44 (0)20 7153 7706 [email protected]
EMPLOYMENT LaW EXPErTS
sandra M Wallace partner, BirminghamHead of Equality and Diversity
t +44 (0)121 262 5913 F +44 (0)121 262 5798 [email protected]
EQUaLiTY aND DiVErSiTY
aDVaNCEwww.dlapiper.com/advance
Rachel Cook head of External trainingt +44 (0)161 235 4562 F +44 (0)161 235 4505 [email protected]
BENChMarkiNghr BENChMarkErwww.hrbenchmarker.com
Bill taylorConsultant
t +44 (0)20 7796 6118 F +44 (0)20 7153 7706 [email protected]
KEYContACts
This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended and should not be used as a substitute for taking legal advice in any specific situation. DLA Piper will accept no responsibility for any actions taken or not taken on the basis of this publication.
DLA Piper uk llp is authorised and regulated by the Solicitors Regulation Authority. DLA Piper scotland llp is regulated by the Law Society of Scotland.
Both are part of DLA Piper, a global law firm operating through various separate and distinct legal entities.
For further information please refer to www.dlapiper.com. Copyright © 2012 DLA Piper. All rights reserved. | APR12 | 2300091
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