Unfair Dismissal Can Blight Your Lifetime Earnings

Unfair dismissal can blight your career indefinitely but, with the right legal advice, you can be compensated for every penny you lose in earnings. One case that proved the point concerned a finance director who was persecuted for whistleblowing and found herself out of a job in middle age.

The woman blew the whistle on the chief executive officer of the company for which she worked in respect of a share deal. She ultimately resigned, but her complaint that her constructive dismissal was automatically unfair, within the meaning of the Employment Rights Act 1996, was upheld by an Employment Tribunal (ET).

The ET ruled, however, that a two-year cut off should apply to her future loss of earnings claim. That was on the basis of medical evidence that she would by then have achieved optimum recovery from the trauma of her dismissal.

In upholding her challenge to that decision, the Employment Appeal Tribunal (EAT) noted that the woman was in her fifties and was unlikely ever again to achieve such a senior position, nor such a high level of remuneration. Her recovery was not expected to be complete even after two years of rehabilitation.

The work that she was likely to find in the future was at best that of a financial controller. In the circumstances, the EAT found that her loss of earnings arising from her dismissal would continue throughout her working life. The case was sent back to the same ET for the value of her claim to be reassessed upwards.

Sacked Maritime Armed Guard Has Compensation Hopes Boosted

When losing parties read an Employment Tribunal (ET) decision, fairness demands that it should be clear to them exactly why they have failed. In one case where that did not happen, a maritime armed guard who was sacked after failing to get on with a client won a fresh chance to prove that his dismissal was unfair.

The Ex-Royal Marine was employed to provide armed security services on board vessels at risk of piracy. After he attended an induction day with a new client, the latter stated that it did not wish to work with him. The company that employed him assured him that it would investigate the matter further, but did not do so before his fixed-term contract expired.

He complained to an ET that he had not received the benefit of a disciplinary hearing at which he would have had the opportunity to explain himself, and his employer had failed to seek out alternative employment for him. The ET, however, found that his dismissal was fair in that it fell within the range of reasonable responses open to the company, and accepted the employer’s arguments that it was not its practice to see if there was alternative work in other sections of the company and that the market was contracting.

In ruling on the man’s challenge to that decision, the Employment Appeal Tribunal (EAT) found that the ET had reached a permissible conclusion that, in a contracting market, there was no evidence that alternative vacancies existed at the time within the company or its associated businesses.

However, in upholding his appeal, the EAT noted that the company had specifically told him that it would investigate his falling out with the client further. There was, in the circumstances, no sufficient basis for the ET’s assumption that the company had actively decided not to proceed with that investigation in the belief that it would not have altered the outcome, rather than simply allowing the matter to drift. The ET’s decision was therefore unsafe and the case was sent back to a freshly constituted ET for reconsideration.

Think-tank Report Says UK Agency Workers Are Exploited

Christmas 2016 will see an estimated 340,000 UK workers employed for temporary work via agency contracts which provide only minimal legal protection against unfair treatment in the workplace.

This revelation is part of the research from a new think-tank report conducted by the UK Resolution Foundation that reveals details of its eighteen-month investigation into how British agency workers are treated. Findings of the report show that many agency-contracted workers are shockingly underpaid compared to their non-agency colleagues despite performing the same duties.

The report entitled Secret Agents: agency workers in the new world of work intends to create awareness of the discriminatory nature of non-agency work in a manner similar to how other recent reports have brought attention to issues that negatively affect workers who are employed via zero-hours contracts. There is considerable overlap between the two work forms, as14% of agency workers are also employed via zero-hour contractual agreements.

The Resolution Foundation’s senior policy analyst, Lindsay Judge, has noted how addressing agency issues is often neglected: “While zero-hours contracts are often in the news, agency workers are the ‘forgotten face’ of the modern workforce, despite being just as prevalent across the labour market.”

Agency workers now account for a very significant volume of the UK workforce. In London nearly 20% of the city’s workforce are on non-agency contracts, and many of these workers lack the employment rights non-agency staff are accustomed to, such as sick payments and parental leave.

The report also reveals that workers employed via agencies are from a much broader range of age groups than the 18-30 bracket that agencies are often believed to employ.

Lindsay Judge feels “it is important that the discussion of the non-traditional parts of work in modern Britain consider the relatively lower pay that agency workers receive compared to identical employees in similar jobs.”

This view is supported by Frances O’Grady, the general secretary of TUC, who states that “agency workers are often paid less than their permanent colleagues, even when they do exactly the same job […] We need the government to toughen the law to create a level playing field for agency workers.”

The report also highlights how agency contracts are often used for long-term rather than short employment, contrary to past reports of how such contracts are usually temporary and short-term.

The Resolution Foundation has spoken ahead of the report’s publication, claiming the organization is not biased towards the nature of agency work, and fully recognises how there is often a need for such contracts as workers often search for flexible employment to support their lifestyle arrangements.

However, the report does draw attention to the fact that a considerable number of workers on agency contracts are not choosing to work this way, and that 60% of workers would rather be fully employed if given the choice.

In 2011 approximately 200,000 UK workers were on agency contracts that existed across a range of industries, from office temps to hospital nurses. This figure has more than quadrupled to around 865,000 since then. The Resolution Foundation’s report estimates this number will increase to more than a million by 2020.

The largest sector for agency employment is the health and social care sector, which has a staggering 18% of the UK’s agency staff.

The report shows that despite more men being employed via agency work (54%), women account for 85% of the workers employed during the recorded increase that has occurred in the UK over the past five years,

An imbalance in the number of ethnic workers on agency contracts is also evident in the report’s findings, as 20% of agency workers are non-white despite accounting for only 2.7% of the workforce.

There has been a surge in agency related case coming to tribunal in recent months, including high profile grievances involving household names like Deliveroo, Uber and Sports Direct. These cases all involved grievances relating to the unfair treatment of staff.

One area of concern regarding agency contracts is the legal loophole often referred to as the ‘Swedish derogation’. This allows employers to pay temp workers less than their fully-employed peers as long as the agency is paying them continuously for a period of at least four weeks during times when the business is unable to find work for those workers.

Dorchester Hotel Criticised Over New Grooming Rules for Female Staff

The Dorchester is certainly one of the most luxurious hotels in the UK, but no business should be powerful enough to dictate how female staff groom their bodies as the renowned hotel intends to do.

A list of the rules the business expects its female staff to abide by has caused a considerable backlash due to the excessive demand they involved. The content of the new regulations was leaked by staff of The Dorchester after they received an email from the hotel’s managers outlining the changes.

The five-star hotel claims the changes are justifiable as they are was researched in relation to recent customer complaints over the hygiene of staff members, but the nature of the demands is deeply unfair; with content including how women are not to report for work if they have ‘oily skin’, ‘bad breath’ or ‘garish makeup’. There are also suggestions that women manicure their fingernails, shave their legs and wear formal dresses.

A dress code policy is necessary for a business to ensure its desired image is projected, however, the extent of the detail requested by the Dorchester shows an objectification of female workers which could be considered discriminatory as it dictates a notion of what femininity is rather than it being an individual’s personal expression.

The dress codes involved can also be considered impractical for performing certain tasks, such as preventing a waitress’s ability to move comfortably while working.

There is also concern that other rules in the list such as removal of hair could encroach on religious freedom of expression which workers are entitled to. The rights of workers against discrimination is protected under the 2010 Equality Act, which supports employee ‘protected characteristics’, including age, sexuality, religion, gender and disability.

A requirement like a manicure is also an unfair obligation as the financial expense of the beauty products involved is not supported by The Dorchester. Any rule involving the use of beauty products should at least be provided to employees; especially as workers in the hospitality industry often struggle financially.

Furthermore, workers from certain ethnic background may find that following The Dorchester’s rules an issue due to their natural skin and hair types being unsuitable for the desired modifications. The rules appear to require female workers to conform to a westernised expectation of femininity.

The Dorchester’s grooming rules has already been criticised by several organisations. Chief executive of the Fawcett Society, Sam Smethers, believes ‘employers should concentrate on what enables people to do a good job and what drives productivity’ rather than their looks.

In an anonymous interview with the Daily Mail, a Dorchester worker stated the treatment of she and her colleagues is ‘like something out of the dark ages and downright offensive. It’s not as though you choose to have oily skin, and a lot of women, especially teenagers, cannot help it […] The women are all pretty livid but worry that if they complain or rebel they’ll be sacked on the spot.”

It also cannot be overlooked that the new rules are focused on female employees rather than male. Any new dress code or grooming policy should certainly apply to male employees where an equivalent can be made possible. However, no new rules have been suggested for men.

Roland Fasel, the Dorchester’s general manager, has spoken in defence of the new rules as an effort to ‘uphold world-leading hospitality standards, including grooming, in line with many other brands.’

Employee Claims Sex & Race Discrimination for Not Bowing to Her Employer

The globally renowned Korean business Dongbu Daewoo Electronics has been taken to tribunal by a female employee who claims she was subjected to acts of sex and race discrimination.

Mrs Misook McDonald, who is representing herself at tribunal, was allegedly demoted from her job as a financial manager because she did not bow to her boss Mr Ho Seung Yoo, who is employed as chief financial officer.

Mrs McDonald claims she was called into the director’s office at the Berkshire branch of the electronics giant to be reprimanded by Mr Yoo for her ‘disrespect’ at not bowing to him at the beginning and end of each day. She was later demoted from her position as financial manager.

Mrs McDonald also claims that on another occasion she was told to prepare coffee for a number of guests despite this task not being part of her daily duties. When she refused Mr Yoo allegedly responded with the discriminatory question “Isn’t that what female workers should do?”

Both Mr Yoo and Dongbu Daewoo Electronics deny all allegations.

A case of this kind is of particular interest as there are elements of cultural contrast involved, specifically in regard to British and Korean attitudes. In the latter country bowing is generally considered an act of respect comparable to a handshake or verbal greeting, but such a gesture is not familiar to the British workplace.

Although Dongbu Daewoo Electronics is a Korean business, a form of greeting synonymous with the culture of that nation does is not required to translate to its offices in another nation, especially if the employees are not citizens of that nation. Mrs McDonald is of mixed race, with a Scottish father and Korean mother.

The tribunal heard that she was made to feel an outcast at the Berkshire offices and did not receive a warning prior to being demoted to position of administrator. Mrs McDonald stated at tribunal that she believes her employers felt they could behave this way because she is an Asian female:

“I know if I had been an older British white Caucasian male, Mr Yoo would have seen me very differently and would not dare to push me around so easily […] “I expressed that I felt discriminated just because I am viewed as a Korean female and younger, hence lower in status that I can be looked down upon and pushed aside”.

Her allegations of race discrimination are rooted in her assertion that she was demoted so another employee could take her place. She originally received a lot of praise from her employers as she was the only bilingual employee in the office; speaking both English and Korean. This changed when a Korean national with stronger language abilities was employed and she was given the lower admin role.

“I know he was glad to utilise me when I was the only bi-lingual person but when a better speaking Korean employee came along, I was not his preferred choice. I am also not considered ‘pure’ as my father is English.”

Mrs McDonald claims she did not bow to Mr Yoo because she wanted to avoid him and thus stop further harassment. The alleged discrimination eventually led Mrs McDonald to take leave from work due to stress.

She informed her managing director Mr Chong Park about what had happened, but a private investigation into the the matter did not find grounds to support her grievance. The mediator employed for the investigation stated there was “no reason to favour one account over another” since Mr Yoo denies all the allegations, claiming he was taken by surprise at the claims: “Mrs McDonald never complained about being called into my office whilst at work until she lodged her grievance.”

Mr Yoo also rejects any responsibility for sexist or racist behaviour. In regards to Mrs McDonald’s claim of discrimination for refusing to bow he said the following:

“Bowing is considered a custom in Korea but nobody in our UK office is required to bow. Some of our Korean staff choose to bow but as I say nobody must bow, it is entirely voluntary.”

Speaking at tribunal the company’s Managing Director, Mr Park, also denied that employees were expected to bow to their manager. However, he did claim that he initially had some concern at Mr Yoo’s conduct when the chief financial officer first came from South Korea to Berkshire to begin a four-year contract in 2015, stating that he wondered “is he normal or is he mental?” Such a reaction from Mr Park suggests there was either a degree of culture clash occurring, or that Mr Yoo’s conduct in the workplace has been at least been unconventional at times.

 

As branch director, Mr Park confirmed his support for Mr Yoo’s decision to implement a change of role for Mrs McDonald, claiming the alteration was largely in job title only and was due to a need to prevent redundancy across the office: “Mr Yoo designed the presentation which included the job chart to show the CEO and HQ that we had met their request. Nobody’s job role actually changed at that stage.”

Mr Yoo denies that Mrs McDonald was regularly given duties beneath her position, and says that his request for coffee was due to her past actions suggesting she would not object to it:

“When initially Mrs McDonald joined our company, every morning she brought me a cup of coffee or tea, every single morning. […] It was quite strange to me […] however, I just accepted it”.

He claims her generous attitude convinced him she would be comfortable performing a similar action for others and that he reluctantly requested this: “I asked her to make some coffee for my guests, I was really sorry for asking that of her at the time.”

The tribunal continues.

Homelessness Charities in Transfer of Undertakings Test

Four charity workers whose roles were shifted from one employer to another during a consolidation exercise will suffer no ill effects in terms of their pay and conditions after convincing a tribunal that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applied to their cases.

The four were employed by charity A, which provided accommodation to homeless people under a contract with a local authority. With a view to achieving economies of scale in its provision for the homeless, the council carried out a competitive contract tendering exercise that was won by charity B.

In those circumstances an issue arose as to whether charity B was obliged, by operation of TUPE, to employ the four on the same contractual terms as before. An employment judge (EJ) found that it was, but charity B challenged the decision before the Employment Appeal Tribunal (EAT).

There were certain differences in the ways that the two charities operated. Amongst other things, charity B provided accommodation in large hostels, whereas charity A had dispersed homeless people around a number of houses. The latter had provided its services to those who were over 18, whereas the former imposed an age limit of 25. Charity B also applied a lower maximum period during which services would be provided to individuals.

In dismissing the appeal, however, the EAT noted that there was no dispute that the four, who worked as a team, constituted an organised grouping within the meaning of TUPE. The EJ had followed the correct legal test in finding that the roles that they performed before and after the transfer were fundamentally the same.

Should The UK Allow Payment for Whistleblowers? 

The negative connotations attached to whistleblowing can have disastrous impact upon a worker’s career after they make their disclosure should no legal protection scheme exist for them. Many of these whistleblowers will faced with the possibility that potential future employers form a negative view of their character based on the decision to disclose an workplace grievance.

Some alterations have occurred in certain working sectors, such as those made earlier this year for child care workers, as well as those made for businesses that are regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). However, there are still crucial issues involving whistleblowing that are yet to be resolved

Beginning in September 2016 a series of new measures were introduced; most notable of which is a requirement for businesses to employ an employee who will act as a ‘whistleblowing champion’ to bear responsibility for encouraging and supporting staff members with work related grievances. This change in law also means that internal whistleblowing policies within businesses must also be put in place so that every disclosure receives the same treatment.

The British government spoke decisively about the need to establish ‘effective protections’ for whistleblowers at the 2016 Anti-Corruption Summit. This included frank discussion about the reward systems used by the FCA and PRA. However, no revision of this kind was agreed upon.

One of the most interesting, and legally provocative, ideas put forward is the offer of financial rewards for whistleblowers. Such a model has been used extensively in the USA where whistleblowing actions are more frequent. The Securities and Exchange Commission (SEC) is a particularly prolific agency that has adopted a scheme of financial reward for whistleblowing.

Since its Whistleblower Programme was introduced in 2011, the SEC has spent over $100 million on rewards across 14,000 separate cases of whistleblowing from 95 countries worldwide.

Mary Jo White, Chair of the SEC, has spoken of the programme as “a game changer for the agency […].providing a source of valuable information to the SEC to further its mission of protecting investors, while providing whistleblowers with protections and financial rewards“.

These figures appear to show the scheme as a clear success for US government agencies and the individual whistleblowers concerned, so it’s no surprise that it has resulted in sharp debate as to whether Britain should adopt a similar programme. The Home Office recently discussed the potential benefits of such a change amid reports that the number of whistleblowing cases have already jumped in Britain, which some observers believe is a direct response to the possibility of gaining financial rewards began.

However, introducing a policy of this nature in Britain may be jumping the gun somewhat, as recent changes to employment law for the benefit of whistleblowers, such as employing champions and encouraging business transparency for workers, is yet to be fully explored. British and American employment differs considerably, as as such, there may not currently be a need to embrace financial rewards, especially as the promise of money may lead to many false claims being generated, which may ultimately reflect badly on both the whistleblower and the business concerned.

The Financial Conduct Authority promptly refuted the notion of money being a good means of encouragement in an analysis that concluded: “research shows introducing financial incentives for whistleblowers would be unlikely to increase the number or quality of the disclosures we receive.”

 

TUC Report Claims Tribunal Fees Prevent Workers Seeking Justice

An announcement by The Trade Unions Congress (TUC) has detailed how the number of UK workers actively reporting acts of discrimination and unfair dismissal in the workplace has dropped by a large margin since it was ruled in 2013 that claimants must pay mandatory tribunal fees. The statistics produced by TUC shows the total number of claimants has dropped to an average of 7,000 a month compared to the monthly average of 16,000 recorded beforehand the change just three years ago.

Although many legal observers fully expected to see a large drop in claims occurring, the scale of the decrease is far larger than was generally expected and has led to further calls by TUC to axe the fee system.

Ahead of the Autumn Statement, TUC’s General Secretary Frances O’Grady has derided how the need for payment has shortchanged workers. She remarked that workers are “being priced out of justice” and she is encouraging Theresa May to follow through on her promise to govern Britain under a fair employment law system that will continue throughout her timr as Prime Minister. O’Grady was quoted as calling the fee system May’s: “first real practical test’ and that she should ‘scrap those fees and ensure that all workers have access to justice.”

The TUC is not the only organisation expressing outrage at the current fee system. As recently as June 2016 the Justice Select Committee spoke of how negotiation is desperately needed to establish a fair financial solution to the employment tribunals fee situation . Finding such a solution is long overdue, and in response to the committee, TUC issued a reminder that the Justice Select Committee were due to has still not issued their report into the effect of tribunal fees which was due by the end of 2015. The committee responded by stating that the report will be produced soon.

 The current fee system dictates that all claimants, even those on minimum wage, have to pay the required costs as long as close family member of theirs possesses a savings account totaling at least £3,000. This payment is a mandatory requirement regardless of the required regardless of the Help with Fees plan that the government put in place in 2015 in a bid to reduce the cost for claimants with lower incomes.

Frances O’Grady asserts that the fee system constitutes clear evidence that UK workers are being oppressed: “These fees of up to £1,200, even if you’re on the minimum wage, are pricing out thousands each month from pursuing cases.”

The Ministry of Justice has challenged TUC’s report, reminding them that the fee system was implemented as a response against the £71 costs that tribunal cases were costing the UK taxpayer each year, many of which were regularly proven to be fraudulent.

The figures from TUC detail the extent of the decline since fees were originally introduced in 2013. Tribunal cases involving acts of sex discrimination have dropped 71%, and race discrimination reports have gone down 58%. Additionally, reports of disability discrimination have dropped 54%, and cases on the grounds of unfair dismissal have seen a 73% drop at tribunal.

These declines are certainly not due to improvements in the UK workplace. It’s the result of victims lacking the financial support to speak out; an issue that urgently needs addressing.

Concession Against Discrimination Granted to Social Care Whistleblowers

Following a recent government concession, whistleblowers who work in child social care roles will be granted protection against whistleblowing.

The goal of establishing a protection scheme for whistleblowers who seek employment within child social services was initially proposed by the Labour peer Lord Wills, and the plan was quickly sanctioned as part of the Children and Social Work Bill by ministers at its report stage.

This change is the result of ongoing concerns over the existence of a “critical gap” in current legislation that allows workers seeking employment in the sector to not be protected against blacklisting tactics should they have previously undertaken an act of whistleblowing.

Speaking in favour of the plan, Labour peer Baroness Wheeler explained that the importance of this bill is reflected in the fact that job seekers are not technically classed as workers under UK law, and are therefore not defended by existing UK whistleblowing laws.

Wheeler issued a statement as follows: “If an individual is labelled as a whistleblower, it can be difficult for them to get work because they can find themselves blacklisted, not through a formal centralised database but informally.”

Viscount James Younger of Leckie, who voted in favour of the bill, has also voiced support for creating this action for workers: “I agree that those working with the most vulnerable children in society need to be able to report concerns about what is happening in their organization […] Those safeguards would apply to the whole of Great Britain in line with other employment legislation”.

Despite such support the proposed change is not yet being taken any further as suggested by some. Viscount Younger, a Conservative peer in the House of Lords, did not agree to ratify the suggestion of a statutory code of practice for whistleblowing in childcare services to be created. Lord Younger claims such a move is “premature” and not required by the government as of now.

Business minister Margot James expressed approval at the outcome: “I am pleased to have been able to work with Lord Wills and take action to extend employment protections for these workers […] This will put more emphasis on employers to follow best practice and provides greater protection for their workers.”

This beneficial decision for social workers is not the only change to the Children and Social Work bill  to be brought for revision recently in the House of Lords. The suggestion of deleting a Clause 29, a part of the bill that grants ministers the power to maintain current social care legislation for at minimum period of three years, was successfully reviewed earlier this year.

The removal of Clause 29 of the bill was an idea put forwards following complaints that the rigid council social service rules currently in place are too restrictive and deny innovative ideas from being made possible. However, there is much opposition to this change as the ability to make such a change could result in the possibility of further changes that may cause changes to the rights that have been in place to protect children for years.

The cross-party Commons education select committee gave a negative verdict of the bill when presented with it over the summer of 2016, but peers did vote to approve the changes and removed the clause by a 245-213 margin, despite acknowledging that there was not make a persuasive case put forward for why such an alteration is needed.

A revision of whether the clause should be reinstated will now need to be referred to the House of Commons which could result in a decision that could cause tension with the House of Lords should the reversal be decided on.

 

Sacked Director’s Novel Wrongful Dismissal Claim Can Proceed to Trial

In a case that broke new legal ground, a former company director has been granted permission to pursue a wrongful dismissal claim in conjunction with unfair prejudice proceedings under Section 994 of the Companies Act 2006.

The man was sole director of a restaurant bookings company that merged with another. He entered into a service agreement with the merged company and agreed to serve as its chief executive officer. He was, however, subsequently dismissed and removed as a director of the company.

He issued a petition under Section 994, claiming that his removal as a director and the issuance of further shares after his departure unfairly prejudiced his position as a minority shareholder. Included in the petition was a claim for lost salary based on an assertion that his dismissal was wrongful.

The company and its majority shareholders applied to have the latter claim struck out on the basis that it was misconceived. The High Court acknowledged that the issue was a novel one and that there was no precedent for a wrongful dismissal claim to be issued in the context of an unfair prejudice petition. However, the Court could identify no objection in principle to that course and allowed the claim to proceed to trial.