February Case Round-Up

In this month’s E-News, we consider the impact of an employee’s delayed resignation and continued acceptance of sick pay, on their constructive unfair dismissal claim; the extent to which employers can unilaterally change the terms of their staff handbooks and finally, we review the changes to statutory compensation limits.

What impact does the continued acceptance of sick pay have on a constructive unfair dismissal claim?

This was considered by the Employment Appeal Tribunal (EAT) in the case of Colomar Mari v Reuters Limited (UKEAT/0539/13). Ms Colomar Mari was a system support analyst who went off work sick with stress and depression in 2008 and then again from 24 August 2010, until her resignation on 8 April 2012. She brought a claim in the Employment Tribunal (ET) alleging her employer breached her contract of employment by: –

  • Being asked to do work which was below her level of expertise (i.e. being demoted);
  • Poor treatment by her colleagues;
  • The unsatisfactory way in which her grievance had been handled.

Ms Colomar Mari resigned alleging that the conduct amounted to a fundamental breach of contract and brought a claim for constructive unfair dismissal.

Ms Colomar Mari’s employer, Reuters, argued that her claim could not succeed because she had waived any alleged breach of contract by her delay in resigning. This issue was considered by the ET, which determined that in the 19 months between going off sick and resigning, the Claimant had: –

1. Made repeated requests for access to her work email;
2. Accepted 39 weeks’ sick pay;
3. Engaged with disciplinary and welfare discussions regarding her employment; and
4. Made requests in relation to permanent health insurance.

The Claimant alleged that she had been too ill to resign until April 2012. However, the ET held that because of her conduct (at points 1-4 above), she had affirmed the contract of employment and her constructive dismissal claim was dismissed.

The Claimant appealed to the EAT on the grounds that she had not accepted the terms of the demotion and therefore not affirmed her contract of employment. Further, she alleged that the ET’s decision that she was not incapable of resigning because of her medical condition was perverse, particularly given that the ET appeared to have disregarded the medical evidence of the jointly instructed psychiatrist.

The EAT held that the decision regarding the medical issue was not perverse, as there was substantial evidence that the Claimant was capable of resigning earlier. The EAT also decided that the ET had gained a comprehensive picture in relation to the Claimant’s condition and were not obliged to form the same view as the expert psychiatrist, who had only met with the Claimant for a 1-hour consultation.

This case highlights that, even where employees are on sick leave, their conduct whilst on sick leave (including their ongoing acceptance of sick pay), may be sufficient to affirm the contract. Further, the case reinforces the long-established principle that employers will be able to rely on an employee’s delay in resigning, when seeking to establish that an alleged breach has been waived and that an employee was not constructively dismissed.

Finally, the case also demonstrates that care should be taken when relying on expert medical reports, as the Employment Tribunal may form a different view based on the evidence presented.

Can employers unilaterally change the terms of a staff handbook?

The High Court considered a claim brought by seven Claimants employed by different agencies within the Department for Transport (DoT) in the case of Sparks v Department of Transport (2015) EWHC181(QB).

The DoT agencies each had a “departmental staff handbook”, which was based on a standardised DoT Handbook across the business. The handbooks were separated into Parts A (containing largely contractual provisions) and Part B (containing largely guidance provisions). The handbook stated that “all of the terms that were apt for incorporation, were to be incorporated into the employees’ contracts of employment”.

The attendance management procedure was contained in Part A of the handbook. Whilst the terms of the attendance management procedure were largely consistent across the agencies, the number of days of absence required before an informal process was triggered, varied from 8 – 21.

The DoT consulted with its staff about implementing a standardised attendance management procedure across all agencies, but the consultation was unsuccessful.

The DoT subsequently informed its staff that it would be unilaterally imposing the change and the Claimants applied to the High Court for a declaration that their contracts had not and would not be changed by DoT ’s unilateral imposition of the new terms. Further, they applied for a declaration that DoT had committed an anticipatory breach of contract in imposing the new procedures and would be committing further breaches of contract if they sought to apply the new procedures going forward.

Despite the lack of clarity about which parts of the handbook were contractual and which were not, the High Court found in favour of the Claimants on the basis that the attendance management procedures were sufficiently clear and precise to be incorporated into the employees’ contracts of employment. As such, the High Court found that DoT was not entitled to change these terms unilaterally.

In practice, this case highlights the difficulties of having a staff handbook, which is both contractual and non-contractual in its effect. In general, employers will be much better placed to have an entirely non-contractual handbook, which can be amended as and when required to suit the needs of the business. Whilst this will not negate the need for consultation, it will reduce the exposure to breach of contract claims when changes are implemented.

In the News

The Government has announced that it will be increasing a number of compensation and pay awards, with effect from 5-6 April 2015, as follows:

  • the limit on compensation for unfair dismissal will increase from £76,574 to £78,335;
  • the limit on a week’s pay will increase from £464 to £475;
  • the standard rate for Statutory Maternity Pay (SMP), Statutory Adoption Policy (SAP) and Statutory Shared Parental Pay will increase from £138.18 to £139.58 per week;
  • the rate for Maternity Allowance will increase from £138.18 to £139.58 per week; and
  • the rate of Statutory Sick Pay will increase from £87.55 to £88.45 per week.

If you would like any additional information about these changes, please contact:

Sejal Raja
sejal.raja@rlb-law.com
020 7227 7410

February 2015
© RadcliffesLeBrasseur


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.