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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.

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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.”

 

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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.

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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.

 

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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.