Employer not obliged to
pay compensation if employee breaches
warranty
The High Court has held
that an employer does not have to pay compensation
under a compromise agreement where the employee is
in breach of a warranty contained within the
agreement.
In Collidge v
Freeport plc, Mr Collidge, the claimant, was
the founder and chief executive of Freeport.
After allegations about Mr Collidge were
considered by the Board, the parties entered into
a compromise agreement.
Under the terms of the
agreement, Freeport was obliged to pay
compensation to Mr Collidge subject to and
conditional upon a number of warranties. One of
the warranties required Mr Collidge to warrant
that there were no circumstances of which he was
aware, or of which he ought to be aware, which
would constitute a repudiatory breach by him of
his contract of employment, which would entitle or
would have entitled Freeport to terminate his
contract without notice (i.e. summarily). Before
Freeport made a payment to Mr Collidge under the
compromise agreement, matters came to light which
indicated that Mr Collidge was in breach of this
warranty. Freeport refused to make the
payment and Mr Collidge brought a claim for breach
of contract.
The High Court
confirmed that Freeport was not obliged to pay the
settlement monies. Its obligation to pay was
conditional upon the statements contained in the
warranty being true. There were held to be
numerous circumstances of which Mr Collidge was
aware which would have entitled Freeport to
terminate his employment without notice. It
followed that Freeport was under no obligation to
pay the monies to Mr
Collidge.
Time extension based on
belief that procedure is being followed
Under the statutory
dispute resolution procedures, if, at the time the
limitation period for a claim expires, an employee
believes that a procedure is being followed,
statutory or otherwise, the time limit for
presenting that claim will be extended by 3
months.
In Harris v
Towergate London Market Ltd, an employee was
dismissed by her employer on the grounds of
redundancy. She subsequently attended a meeting
with management and her trade union representative
to raise her concerns about the method of
assessment and pool for selection. The employee
failed to appeal her dismissal for redundancy
under the company procedure, but after her
employment ended, she submitted a 'grievance'
letter to the employer concerning her selection
for redundancy. She then issued a claim in the
tribunal for unfair dismissal. The claim was out
of time and she sought the benefit of the 3 month
extension under the statutory dispute resolution
procedures.
The Employment Appeal
Tribunal (EAT) commented that the approach taken
by the tribunal at first instance was flawed, as
it focused on whether there was an appeal against
the employer's decision to dismiss when
considering whether the 3 month extension applied.
This departed from the statutory test under the
dispute resolution regulations. Under these
regulations, if an employee presents a complaint
to the tribunal after the expiry of the normal
time limit, but has reasonable grounds for
believing when that time limit expired, that 'a
dismissal or disciplinary procedure, whether
statutory or otherwise' was being followed, the
time limit for presenting that complaint is
extended by 3 months.
The EAT examined the
type of procedure that the employee would need to
believe was being followed to take advantage of
the extension. It noted that the phrase was not so
wide so as to include any procedure: it must be a
dismissal procedure, that is a procedure capable
of being utilised by a person who is or is about
to be dismissed. The procedure must involve some
sort of formality. Logically, a step in the
procedure following a dismissal is an appeal
against the dismissal. But it does not exclude a
more general procedure between the parties, aimed
at resolving a dispute over a dismissal. In this
case, the employee consulted her union because she
wanted to challenge the dismissal. She referred to
her 'entitlement' to a meeting and to being
accompanied by her union representative in her
'grievance' letter, which pointed to her belief
that there was a procedure to enable her to
challenge the criteria. The employee therefore did
believe that there was a procedure she could
attach herself to, and could take advantage of the
extension of time.
Consultation on annual
leave - Government
response
The Government has this
week published its response to the consultation on
'Increasing the holiday entitlement'.
The Working Time
Regulations 1998 currently entitle workers to 4
weeks' paid annual leave in each leave year. A
worker who normally works 5 days per week will
therefore be entitled to 5 x 4 = 20 days' paid
annual leave.
An initial consultation
was conducted in June-September 2006, with a view
to increasing the statutory minimum annual holiday
entitlement for a full-time worker from 20 to 28
days, to reflect the number of permanent bank
holidays. On the basis of the responses to the
initial consultation, the Government launched a
further consultation in January this year and
sought views on the draft regulations.
As a result of the last
round of consultation, some changes have been made
to the draft regulations, including:
- to delay of the introduction of the second
increase from 4.8 to 5.6 weeks until 1 April
2009. The Government's preferred approach
in the January 2007 consultation had been to
introduce half of the additional holiday
entitlement from October 2007, and the remaining
half from October 2008. On further consideration
of the cost pressures, in particular for the
health and social care sector, the Government
intends to delay the second increase in holiday
entitlement from 1 October 2008 until 1 April
2009. The initial increase will come into effect
on 1 October 2007, as originally proposed.
- to enable payment in lieu of the additional
holiday entitlement (the additional 0.8 weeks)
to continue until 1 April 2009. This is a
temporary measure to help employers with
transitional arrangements, such as recruiting
and training any additional staff to cover the
increased holiday entitlement.
- to provide an incentive for early compliance
with the regulations, whereby employers that
already meet the full requirements of the
regulations as at 1 October 2007 (giving the
equivalent of 28 days' holiday, without payment
in lieu and any carryover for no more than one
year) will be taken outside of the regulations,
as long as they continue to meet those
requirements.
Consultation on Single
Equality Act - launched this week
The Government has
issued a consultation paper
outlining its proposals for amendments to the law
and the creation of a Single Equality Act, to
simplify and improve existing legislation to
modernise discrimination law. The consultation
closes on 4 September 2007.
The proposals have
been developed as part of the Discrimination Law
Review and, in the employment field, views are
sought on a number of wide-ranging issues,
including the following:
- whether to retain the existing requirement
for a comparator in direct discrimination
claims;
- whether there should be a single definition
of disability discrimination;
- whether the definition of indirect
discrimination should be harmonised;
- whether to broaden the concept of
"reasonable adjustment" beyond disability
discrimination; and
- promoting the use of alternative dispute
resolution.
UK tops the developed
nations for working longer hours
One quarter of UK
employees work more than 48 hours a week, more
than any other developed nation, according to a
recent study published by the International Labour
Office (ILO).
The study focuses on
working time in over 50 countries, and explores
the implications for working time policies in
developing and transition countries. The ILO
estimates that one in five workers around the
world - over 600 million persons - are still
working more than 48 hours a week. Amongst
developing countries, Peru topped the list for
workers who put in more than 48 hours a week. In
developed countries, the UK was followed by
Israel, Australia, Switzerland and the USA for
working excessive hours.
The ILO says that the
results of the study are worrying, but suggests a
number of policy points to advance an improvement
in working time. These include:
- reducing long working hours to lessen the
risk of occupational injuries and illnesses, and
their associated costs to workers, employers,
and society as a whole;
- adopting family-friendly working time
measures, such as flexi-time, emergency family
leave and part-time work; and
- promoting the development of high quality
part-time work.
Mental illness - second
largest cause of sickness absence
Mental
ill health is one of the largest causes of time
lost due to sickness absence in the UK, second
only to sickness absence caused by musculoskeletal
conditions, according to a new report, 'New
directions in managing employee absence' from CIPD
and Active Health Partners.
The
findings are drawn from an analysis of the real
absence records of 30,000 employees working across
40 different organisations. The report highlights
the huge impact that mental health problems have
on the workplace, and provides the following
statistics:
- each mental health related sickness absence
lasts, on average, 21 days
- each absence due to depression lasts, on
average, 30 days
- each absence due to stress lasts, on
average, 21 days
- each absence due to anxiety lasts, on
average, 21 days
The report also
examines the impact of other factors e.g. age,
gender and occupation, in identifying how long a
person with a particular mental ill health
condition may be absent from work. Of those
absences as a result of mental health:
- private sector employees were absent for an
average of 20 days, compared to an average of 24
days in the public sector;
- men take on average 20 days, compared to 22
days for women; and
- employees up to the age of 25 were absent on
average for 17 days, those aged between 25 and
54 were absent on average for 21 days, and those
between 55 and 65 were absence on average for 36
days.
Project to protect
vulnerable workers
The
Trade and Industry Secretary Alistair Darling has
outlined plans for a Vulnerable Worker Enforcement
Forum, to bring together experts from unions,
business, enforcement and advice bodies, to look
at the best way to protect the vulnerable in the
workforce.
The
Forum will:
- consider evidence from unions, advice
bodies, business groups and others about the
problems faced by vulnerable workers, including
migrant workers, to establish the nature and
extent of abuse of workplace rights and
legislation;
- consider whether these workplace abuses can
be tackled effectively through existing
enforcement and support mechanisms or whether
improvements to existing mechanisms, or new
approaches, are needed; and
- identify options for improving the
effectiveness of the enforcement regime, and
raising overall levels of compliance in ways
which do not increase burdens for good
employers.
Mr
Darling also announced two pilot projects in
Birmingham and London, which will last for two
years, and identify ways that vulnerable workers
and their employers can better understand their
rights and access help, advice and
information.