AT A GLANCE, KEY DEVELOPMENTS THIS MONTH
- Contracts of Employment: Beware of incorporating contractual provisions in Handbooks
- Contracts of Employment: General flexibility clauses should not be used to make significant contractual changes
- Contracts of employment: No unilateral variation where clause was not clear and unambiguous
- Discrimination: Defending a PCP
- Categories of worker: Company director and shareholder was an employee
- EAT Procedure: Appeal out of time despite ET error
- Unfair Dismissal: Summary dismissal for earlier misdemeanour
- Discrimination: Non payment of bonus held to be discriminatory
- Unfair dismissal: Employer must carry out a reasonable investigation
- Human Rights: Right to free expression
- Human Rights: No breach of right to fair trial when fresh ET hearing possible
- Constructive Dismissal: Delay too long
- TUPE: Single employee was an organised grouping for purposes of TUPE 2006
- New statutory rates
- National Minimum Wage Regulations – date for coming into force
- Updated Fit Note guidance
- Data Protection Act: Requirement to provide criminal record became illegal
This month we report on three cases dealing with the employer’s right to unilaterally vary contracts of employment. It bears repeating that any right to unilaterally vary a contractual term should ideally be mutually agreed. Whilst it is common to include clauses reserving the power to amend certain terms, such a right must be spelled out in clear and unambiguous terms. A general right to vary will rarely be enforced, although all three cases make reference to Bateman v Asda Stores UKEAT/0221/09 in which Asda was able to rely on a right to vary clause to alter pay terms.
Sparks and others v Department for Transport  EWHC 181: Contracts of Employment
In Sparks and others v DfT, the High Court held that terms relating to attendance management were ‘apt for incorporation’ into employees’ contracts and could not be unilaterally altered by the DfT.
Norman and others v National Audit Office UKEAT/0276/14: Contracts of Employment
The EAT in Norman and others v National Audit Office found that an Employment Tribunal had erred in concluding that a term in the letters of appointment of Ms Norman and others enabled the employer to vary the contract unilaterally; the term was unclear and ambiguous. Clause 2 in the offer letters provided: ‘detailed particulars of conditions of service [found in the relevant sections of the HR manual] are subject to amendment; any significant changes affecting staff in general will be notified […]’ followed by notification details.
Hart v St Mary’s School (Colchester) Ltd UKEAT/0305/14: Contracts of Employment
In Hart v St Mary’s School, the EAT again decided that a clause purporting to reserve to the employer the right to vary the contractual terms did not confer upon the employer a unilateral power of variation. In this case, Ms Hart, a part-time learning support teacher, worked three days a week. Following a timetable change she was required to work over five days and the School relied on two clauses; one (cl 1.4) which stated that ‘the fractional part …may be subject to variation depending on the requirements of the School Timetable’ and the other stating that the teacher should work all hours as may be necessary in the reasonable opinion of the principal for the proper performance of her duties. The EAT held that this provision allowed for some variation but not for a substantial unilateral variation. Further the words in cl. 1.4 were not sufficiently clear when looked at in context. The imposition of a five day working week was found by the EAT to be sufficient of a breach as to be repudiatory.
Employers making fundamental changes should be wary of imposing changes in reliance of a general right to vary. These cases indicate that the decision in Bateman referred to above should be treated with caution.
Braithwaite and others v HCL Insurance BPO Services Ltd  UKEAT/152/14/0502: Contracts of Employment; Equality Act 2010 and Discrimination/discrimination claims
A common problem in the context of transfers of businesses is the harmonisation of terms across the business. This case is not a TUPE transfer case as such (the tribunal had held that the dismissals that had occurred were not TUPE transfer related dismissals) but it addresses the problems with standardisation of terms. In Braithwaite and others v HCL Insurance, Ms Braithwaite and other employees were previously employed by a business called Liberata and had transferred under TUPE 2006 to HCL. As a result, HCL’s employees had different terms and conditions. HCL was experiencing losses so it decided, following consultation, to introduce a single set of terms for employees that would not provide entitlement to certain benefits. Employees were required to agree to the new terms or be dismissed. Some employees refused to accept the new terms and were dismissed. Ms Braithwaite claimed that HCL had applied a provision, criterion or practice (the PCP was the requirement to agree the new terms) which was indirectly discriminatory on the grounds of age because the removal of contractual entitlements to benefits such as PHI, carer days etc. put older workers at a particular disadvantage as they were the employees who had built up the greater entitlements by virtue of longer service.
Stack v Ajar-Tec Ltd  EWCA Civ 46 : Categories of Worker & Working Relationships
In Stack v Ajar-Tec Ltd Mr Stack, a director and major investor and shareholder in Ajar Ltd who carried out unpaid work for it brought claims for unfair dismissal and unlawful deductions from wages when he was removed as a director following a disagreement with his fellow investors. To bring these claims, he had to show that he was both a worker under section 230(3) Employment Rights Act 1996 (for the unlawful deductions claim) and an employee under section 230(1) (unfair dismissal). Mr Stack had entered into business with two other investor/shareholders. Their discussions as to terms included mention that all three would share equal ‘remuneration’. One individual received a salary from the start but although Mr Stack worked about 80% of his time for Ajar, he was not paid.
Carroll v Mayor’s Office for Policing and Crime UKEAT/0203/14: Enforcement: Employment Tribunals, etc/EAT procedure
Time for lodging an appeal with the EAT runs from the date on which written reasons are sent to the parties (Rule 3(3)(a)(i) EAT Rules 1993), not the date of receipt. There is a discretion to extend time but this is exercised only in exceptional cases. In Carroll v Mayor’s Office for Policing and Crime the EAT upheld a Registrar’s decision that the time limited by rule 3(3) started to run when an ET sent out a judgment and written reasons even though it had been wrongly addressed both in terms of the identity of the person to whom it had been addressed as well as the address itself (it was mistakenly sent to Mr Carroll’s trade union representative). That was so even though under rule 86 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, the document had not been “delivered”.
Williams v Leeds United Football Club  EWHC 376: Unfair Dismissal
In Williams v Leeds United FC, Mr Williams was given 12 months notice of termination of his employment with the Club in 2013. After notice was given forensic investigators discovered evidence that Mr Williams had used the Club's e-mail system on 28 March 2008 to forward an e-mail together with pornographic images to a male friend at another football club. The Club dismissed him with immediate effect. Some months after the dismissal the Club discovered that Mr Williams had also forwarded the e-mail and the pornographic images to a junior female employee and another male friend at another football club. It argued that the conduct, taken as a whole, amounted to gross misconduct entitling the Club to dismiss the Claimant summarily. It also contended that, in so far as it discovered some of the acts of misconduct after the dismissal, it was still entitled to rely upon those acts to justify the summary dismissal, relying on the principles established in Boston Deep Sea Fishing and Ice Company v Ansell (1888) 39 Ch. D.
Land Registry v Houghton and others UKEAT/0149/14: Equality Act 2010 & Discrimination
The Land Registry in Land Registry v Houghton operated a discretionary bonus scheme which included a term that an employee who received a formal warning in respect of sickness absence during the relevant financial year would be ineligible to receive the bonus. The Land Registry had put in place reasonable adjustments that would adjust the trigger points that would lead to a warning but Ms Houghton and others received warnings. They brought claims for discrimination arising from disability.
Shreshtha v Genesis Housing Association Ltd  EWCA Civ 94: Unfair Dismissal
Mr Shrestha, was employed by Genesis Housing Association Limited, as a floating support worker. As part of this role he travelled by car to see clients at their homes. He was entitled to expenses for the mileage travelled. For that purpose he was required to complete an online claim form, giving the reading from his car's mileometer (rounded to the nearest mile) at the start and end of each journey, from which was calculated the mileage for each journey and the total for each month. An audit of his claims for a three-month period in 2011 led to a disciplinary procedure in which it was found that that he had been over-claiming mileage expenses fraudulently, as a result of which he was dismissed for gross misconduct.