Contract Bottling Ltd v Cave

We consider whether an employee can be dismissed for redundancy where their job remains, but the requirements of the business require a reduction in the number of different employees. We also look at UNISON’s application for Judicial Review of the decision to implement Employment Tribunal fees and remind you of the recent changes to whistleblowing law, which came into force on 25 June 2013.

Contract Bottling Ltd v Cave

This case considered whether an employee could be dismissed for redundancy in circumstances where the employee’s own job remained, but the requirements of the business rendered a reduction in different employees.

The Claimants worked in the accounts department. The Company needed to make cuts in its administration and accounting staff numbers for economic reasons. The Company created a single pool of ten employees, made up of more than one kind of employee (i.e. accounts manager, warehouse manager and quality control manager all lumped into the same pool). The Company applied a generic scoring matrix to those employees in the pool. It intended to make four staff members redundant and stated that it planned to retrain the remaining six higher scoring staff to carry out the necessary work. The idea behind this was that staff would be retrained to do work of a completely different kind to their own, for instance, a warehouse manager who would be retrained to do accounting work. The Claimants, who were dismissed by reason of redundancy, brought a claim in the Employment Tribunal for unfair dismissal. The Employment Tribunal held that such a wide pool was unfair, and stated that, amongst other reasons, the Company had focused on reducing the wage bill, rather than specifically identifying the requirements of the business. The Tribunal said that there had also not been any meaningful consultation.

The Tribunal held that the approach used did not fit with the first stage of the test set out in Murray v Foyle Meats [1999] IRLR 562, namely “a diminution in the requirement for employees to carry out work of a particular kind”. Accordingly, the dismissals were held to be unfair.

Upon appeal to the Employment Appeal Tribunal, the Company submitted that the Tribunal had failed to properly apply the two-stage test set out in Murray v Foyle Meats. Had they considered the test, they would have found that the Claimants were redundant. The EAT agreed with this submission and, applying the test they found that the Tribunal should have found the reason for dismissal as redundancy. The EAT held that the pool was fair. The Company had a genuine need to reduce the staff, and this had lead to the redundancy situation. Therefore, it said, the dismissals were attributable to the diminution. It did not matter that some of the people dismissed may not have been carrying out the type of work that was to be reduced. Those individuals had in effect, been “bumped” out of their jobs for redundancy reasons. That approach was legitimate on these facts.

However, the dismissals were eventually held to be unfair as very little thought was given to the redundancy scoring which appeared to be largely subjective. Additionally, the marking had been carried out by someone who was unfamiliar with the team and could not explain the scoring, or the way in which the decisions had been made.

The approach adopted by the EAT in this case provides welcome recognition of the commercial reality that many employers face when considering a redundancy situation. However, the case is also not a ‘green light’ to employers who wish to cut corners; the case highlights the importance of thorough and well thought-out redundancy procedures; objective and fair selection criteria and careful selection of whoever is put in charge of scoring.

UNISON application for Judicial Review of decision to introduce Employment Tribunal fees

As we mentioned in our May E-News, the Ministry of Justice has confirmed that from 29 July 2013, all claimants will have to pay fees for bringing Employment Tribunal and Employment Appeal Tribunal claims. These will consist of an issue fee and a subsequent hearing fee, the amounts of which will be determined by the type and complexity of the claim being brought. The aim of the new fee regime is to reduce the number of unmeritorious claims faced by employers, however, UNISON are applying for judicial review on the basis that “It is completely wrong for access to law and employment justice to be based on what you can or cannot afford”.

The Union makes its application on several grounds, perhaps the most persuasive of which claims that the fees will breach the law by making it too difficult to enforce rights derived from EU law, such as discrimination and working time. UNISON claim that the new regime will impose fees which will often be greater than the expected compensation and that people will not litigate to vindicate their EU rights, if the benefits of doing so are outweighed by the costs.

The Union states that the regime will breach the principle of “equivalence”, in that fees will be payable by claimants wishing to vindicate their EU rights, but not by those seeking to enforce their domestic rights.

Another central argument to the application is that the fees will amount to indirect discrimination because they will have a disproportionate adverse impact on women, who bring more claims than men. Given that women will not (if they earn an average income) be entitled to any remission of fees in a tribunal, UNISON claim that the Government will not be able to show that this is a proportionate means of achieving a legitimate aim.

Further, the Union states that there has been no proper assessment of the Public Sector Equality Duty, which considers the potential adverse effect of introducing fees in terms of the numbers and proportions of claims brought by individuals with protected characteristics.

In its response to the consultation on charging fees, the Government stated that it did not accept that the introduction of fees would be unlawful under EU legislation or that the approach would lead to direct or indirect discrimination.

It seems that UNISON will have their work cut out in seeking to convince the High Court to strike down the fees regime. Indeed, whilst the arguments regarding EU rights and “equivalence” are persuasive, it seems more likely that the Government would seek to introduce fees elsewhere, rather than forgoing them in the Employment Tribunal system. Once introduced, it seems likely that regime will be here to stay.

Whistleblowing: the new law
The law on whistleblowing changed significantly on 25 June 2013, courtesy of the Enterprise and Regulatory Reform Act 2013 (“ERRA”). Many see ERRA as an attempt by the Government to remedy the shortcomings of the previous legislation, however it remains to be seen whether it will have achieved these aims.

The key changes to the legislative framework include:

Introducing a requirement that the disclosure must, in the worker’s reasonable belief, be in the public interest

Removing the ‘good faith’ requirement for a disclosure to qualify as protected, but reducing compensation by up to 25% where a disclosure was not in good faith

Making employers vicariously liable for detriments by fellow workers, subject to the normal statutory defence.

If you have any questions relating to this article please contact:

Alex Gess
alexandra.gess@rlb-law.com
0207 227 6700


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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