Employment Law Bulletin – Issue 133 – 17 September 2012

Tuesday 18 September 2012

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Employment news

Consultation: settlement and limiting the compensatory award

The Government last week published a consultation document on the transition from compromise to settlement agreements. Potentially the most interesting idea contained in it is the suggestion that the government should publish "guideline tariffs", as to what sum an employer should offer an employee when he or she is dismissed. The same document also consults on proposals, contained within the Employment and Regulatory Reform Bill which is currently before Parliament, enabling the government to make a statutory instrument reducing the maximum compensatory award that could be paid in an unfair dismissal claim from c£72,000 to c£26,000. For more details, click here.

Consultation: Tribunal procedure

The Government has also published a consultation on the Underhill reforms of Employment Tribunal Procedure. These propose various changes including the consolidation of Case Management Discussions and Pre-Hearing Reviews into a single category of Preliminary Hearing, and an extension of the costs rules so that parties could be compensated for their costs of representation even where the representative is not a lawyer. For more details, click here.

Response to call for evidence

The Government has in addition published its response to its call for evidence on TUPE. The document proposes further policy development and stakeholder engagement, following which the Government will issue a further consultation document. Crucially, the government appears to have reached no clear position on its proposal to grant employers a blanket "harmonisation" defence to TUPE claims. For more details, click here.

Employment case law

Employment Appeal Tribunal

Worker status

Knight v Fairway & Kenwood Car Service [2012] EAT 0075/12
In order to bring a claim for wrongful dismissal in the Employment Tribunal, a claimant must be an employee or a worker of the respondent. To qualify as a worker, there must be a contract between the claimant and the respondent, and the contract must be a contract to do work personally. There must be some mutuality of obligation, although not necessarily the degree of mutuality that would be expected of an employee. The issue for the EAT was whether a taxi driver, described in contractual documents as self-employed, was engaged under sufficient mutuality, where the performance of his duties (once he had accepted them) was controlled by a taxi service but the decision of how many days to work each week was in his sole discretion. HHJ Shanks concluded that there was no obligation on the Claimant to work any minimum hours at all and accordingly the driver's position was that of an independent contractor rather than a dependent worker. For the full judgment, click here.

Reinstatement of re-engagement

The Manchester College v Hazel & Anor [2012] EAT 0642/11
Where a Tribunal finds that a worker has been unfairly dismissed but applying Polkey make no award of compensation, can the Tribunal still order that the worker should in any event be either reinstated or re-engaged? The EAT has held that reinstatement or re-engagement remain open on the - admittedly unusual - facts of a dismissal, six months after a TUPE transfer, where the employer had attempted to save money by making some redundancies and then harmonising the terms of higher-paid staff who had come into the business on the transfer, and the Tribunal had ordered re-engagement, on the workers' old terms and conditions but without pay protection (i.e. lower-paid colleagues will catch up with them as their salary increases through annual pay rises). For the full judgment, click here.


University of East Anglia v Amaikwu [2012] EAT 0361/12
Either party may apply to the Tribunal to have a hearing adjourned; ordinarily this is a matter in the discretion of the trial judge and any error of law shall be exceptional. The EAT did however order that a hearing should be adjourned in circumstances where the hearing could not be attended by a witness, the evidence of the witness was of crucial importance to the case, the application for adjournment was made promptly, the witness was unavailable because she was attending a family wedding in Albania (i.e. not something which could easily be rearranged), and (crucially) the hearing had been listed by the Tribunal of its own motion without having canvassed the parties for dates. For the full judgment, click here.

Admissibility of evidence

Gallop v Newport City Council [2012] UKEAT 0586/10
In general, settlement discussions between parties are privileged and cannot be relied on. In a case where a lay panelist's enquiries led to the discovery that a compromise offer had been made, the Employment Tribunal used this information to find that had the worker not been unfairly dismissed there was a 50 per cent chance that he would have left the employment under the terms of a compromise agreement. On that basis the Tribunal included loss of 50 per cent of a notional compromise agreement payment of £11,850, and reduced the awards for loss of earnings, pension loss and notice pay by 50 per cent. This entire procedure was found by the EAT to have been erroneous. The Tribunal should not have taken settlement discussions into account without a clear waiver of privilege by the Claimant. For the full judgment, click here.

NOTE: If the Employment and Regulatory Reform Bill is passed by Parliament in its present form, it will allow employers to rely on settlement offers made during the course of protected conversations, in practice, reversing the decision in this case.


Oni v NHS Leicester City [2012] EAT 0144/12
The Tribunal may order costs where a party has acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived (rule 40, Employment Tribunal Rules). In a case where a Judge recorded on the face of her judgment that a claimant had acted unreasonably in bringing a claim, she erred in law by going on to determine the respondent's costs application. The claimant argued successfully before the EAT that the Judge had pre-judged the issue, and to allow her to determine the costs application would offend against the rule against apparent bias. For the full judgment, click here.

Notices & coming events

The Institute of Employment Rights hold its conference "Employment Law Update" on 10 October 2012 with speakers from Thompsons, OH Parsons and Pattinson & Brewer among others. More details here.

Garden Court is hosting an inaugural Garden Court Human Rights Film Festival during October and November 2012. It comprises six film screenings exploring different human rights issues connected with the work we do, followed by panel discussions. For more details, click here.


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