Welcome to this month's briefing for HR teams and in-house employment counsel – bringing you this month’s employment law highlights in an easy-to-read package.

Podcast: wages and suspensions

In this month’s podcast, Matthew talks to Isobel Lewis about the recent Manchester City v Mendy ruling that a footballer was entitled to be paid even when suspended by the regulator. The amounts at stake, and the nature of the parties, mean the decision received a lot of tabloid coverage, but the fundamental legal issues apply to all employers, especially in regulated markets.

Negotiating exit packages

Before the introduction of pre-termination negotiations in 2013, the only way of holding off the record settlement discussions and being confident that anything said will not be admissible in evidence in any future litigation should the discussions fail, was to ensure that they are “without prejudice”. A genuinely without prejudice discussion enables the parties to negotiate freely and, if necessary, make frank admissions without fear that the other party will be able to rely on those admissions later. The difficulty is that the protection of without prejudice is only available where a legal dispute exists between the parties. That is straightforward where litigation has already started, but the position before litigation is less clear cut. If the employee has merely raised a grievance, if disciplinary procedures are under way, or if a redundancy process is being carried out, it can be very difficult to establish with certainty whether or not there is enough of a dispute for any negotiations to be properly without prejudice. 

The concept of a “pre-termination negotiation” or PTN tries to offer a solution. Provided the company follows the prescribed model, the meeting will be off the record, and inadmissible in any future unfair dismissal litigation. Pre-termination negotiations can be particularly useful in cases of poor performance and redundancy, where no legal dispute has arisen, but the employer wants to offer an agreed termination as an alternative to a lengthy and potentially disruptive procedure. Acas has produced a statutory Code of Practice to support the PTN regime. Importantly, the legislation provides that the inadmissibility rule falls away in cases of ‘improper behaviour’, which the Code confirms will include:

• all forms of harassment that include intimidation through the use of offensive words or aggressive behaviour;
• physical assault and other criminal or wrongful behaviour;
• victimisation of people because they have invoked or sought to invoke a statutory right;
• discrimination; and
• putting undue pressure on a party, e.g.:
  • not allowing an employee a “reasonable period” to consider the offer (the guidance indicates that this should be a minimum of 10 calendar days);
  • reducing the value of a financial offer during the offer period; or
  • saying the employee will be dismissed if the offer is rejected, before any dismissal process has begun.

In a recent case, the EAT had to decide how these rules applied where an employee was at risk of redundancy. He was offered an enhanced payment and asked to confirm within 48 hours whether this was agreed. The employer indicated it would go ahead with a normal redundancy procedure if the offer was rejected. The original Employment Tribunal found that the employee’s claims that the offer meeting had been aggressive and abusive were not substantiated. Although the Tribunal found the company had reached a firm view that the employee’s role was redundant, the EAT was content that this did not equate to a definite statement that he would be dismissed if settlement was not reached, because the consultation process might have identified other solutions, such as a suitable alternative vacancy. Equally, in context, the 48-hour deadline was simply to give an indication on the financial package on the table, subject always to concluding a statutory settlement agreement. That was also not improper.

Lawyers like to say that every case turns on its own facts. That is very true of this case. Although helpful to employers, exit discussions should therefore be conducted in a calm and reasonable manner, where employees are not presented with a binary choice between dismissal and settlement – the company must be prepared to embark on the procedure (eg disciplinary or performance improvement) with an open mind if settlement is rejected. 10 days to consider the formal settlement offer remains wise, although in some cases an employer is entitled to ask for an indicative response in a faster time frame.

Redundancy exercises and consultation

We have noted in two recent bulletins a marked trend in the EAT to emphasising consultation, even in non-collective redundancy exercises. One case has now reached the Court of Appeal, which has taken a somewhat more measured view. The EAT had effectively concluded that some form of workplace consultation was a fundamental aspect of a fair process even where the statute regulating collective redundancies (where the trigger is 20 or more proposed redundancies in a 90-day period) is not engaged. The Court of Appeal moderates this finding. While underlining that each redundancy is different and should be evaluated in its totality, the Court concludes that collective consultation with trade unions or employee representatives is only required where the statute sets that out. In other non-collective redundancy exercises employees should still be consulted, that consultation must be early enough to be meaningful, and should give the employee the opportunity to express their views on any issue that may affect the risk of their dismissal or its consequences, whether it is peculiar to them as an individual or common to the affected workforce as a whole. 

Redundancy exercises and maternity

All HR teams know that women on maternity leave enjoy special protections where their roles are identified as redundant. Successive governments have built on this principle so that the protection now applies from notification of pregnancy to 18 months from birth. In essence, the protection is triggered when a woman’s role in that extended protected period is identified as redundant. The legislation then obliges the employer to offer the woman – which is not the same as allowing her to apply for – any suitable alternative vacancy that exists.

A recent EAT decision had to examine whether a vacancy existed so as to engage the special protection where 21 team leader roles were being reduced to 16. The conclusion was that it did not. At no point were any of the retained 16 roles vacant, so the employee on maternity leave who had been (fairly) scored in the bottom five was not entitled to be preferentially slotted into one of them. The position would have been different if the 21 team leader roles were being fundamentally restructured into, say, 10 account manager roles, 5 assistant roles and 3 senior management roles. In that scenario, all the roles in the new structure would be vacant, so a woman entitled to special protection would indeed need to be offered one of them (assuming it was suitable).

Deciding whether a redundancy exercise is really a slimming of numbers or an amalgamation/restructuring of roles can be very difficult, especially where (as is common) both are being done at the same time. We are, of course, on hand to assist clients navigate this complicated area.

Employment Rights Bill – update

We’ve already outlined the main changes in the Employment Rights Bill currently before Parliament, but a very substantial series of amendments, from both opposition and the Government, have now been tabled. The most significant is an extension to the time limit for bringing claims in the Employment Tribunal. With a couple of exceptions, this is currently three months from an act of discrimination for discrimination and harassment claims, or three months from the end of employment for unfair dismissal claims. The newly-amended Bill would see that period doubled to six months, potentially meaning an increase in claim volume, and a longer wait for employers to be able to close their files.

UK visitors: Electronic Travel Authorisation 

The UK Government is rolling out the Electronic Travel Authorisation (ETA) scheme in a number of phases. The scheme is similar to the US ESTA system so individuals should check if they are required to apply for an ETA before visiting or transiting through the UK. 

Our immigration team have created a helpful guide which sets out if you need to get an ETA, the phases of the scheme, what you can do with an ETA and how to apply for one, linked below.

Read the ETA guide