CLB Employment Solutions
June 2010

Welcome to a another special edition of our newsletter, this month announcing the launch of our entirely redesigned website.

We have a bumper midsummer newsletter for you this month so please enjoy at your leisure.

We have attempted yet again to second guess the new Government's approach to legislative change in the Employment Law arena and this, at first glance anyway, appears to be good news for businesses who deal with service changes under TUPE.

The 2006 TUPE Regulations introduced the concept of the 'service change' to formal legislation. In short, when a company's employees are performing a service under contract to a client or third party (a cleaning contract for example), subject to the usual TUPE rules, if the contract to which the employees are assigned is then lost by that employer and awarded to another company, the employees will transfer to the company who has won the contract. To say this causes problems is an understatement worthy of Chekov. Not only does the 'winner' of the new contract inherit the problems and the liabilities associated with the existing employees (including length of service and redundancy payment obligations) but the terms and conditions of their employment contracts cannot be altered. This creates huge problems for those in the service industries affected, most notably employees on vastly different rates of pay and conditions. Every employer wants to know how to harmonise terms post transfer, the simple answer is that it is done with great difficulty, at expense and with resistance from employees.

The new Government says it wants to repeal the service provision changes in TUPE; great, but what will be the practical consequence? In reality, there will be no practical change. A transfer is still a transfer if it meets the technical requirements of the TUPE Regulations, be it a business purchase or a service change. To repeal the service change requirements to a level that meant that employees in the situation described above would, de facto, not transfer would mean a complete reversal of TUPE which would, in turn, mean serious consequences for the UK Government in front of the European Court (see item 4 below, scary stuff). If it attempts a partial repeal, all the Government will achieve is to create uncertainty. If it intends to prevent the circumstances as seen in the case of Royden & Others v Barnetts then it will need a legal brain far greater than mine to plot a course around existing TUPE legislation and the vast body of UK and EU authorities on the subject.

We'll keep you up to date with any important developments between newsletters on our updated blog and if you have enquiries about the items featured or require any further information then don't hesitate to contact us on 08000 320 974 or by e-mail to

Will Burrows

If you're not a subscriber call our sales team now FREE on 08000 320 974 or contact sales manager Laura McDonald direct on 07794 552 896 or by email to

Don't forget to check our blog to keep right up to speed with employment law news that's relevant to you and your business.
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This month's news:

1. The Coalition government and employment law

Our newsletter last month outlined employment law related proposals in the General Election manifestos of each of the three main political parties. Now of course these have no direct relevance. Instead the new Coalition Government Agreement states that there will be a review of "employment and workplace laws, for employers and employees, to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive".

What that means in practice is far from clear. However some key points are emerging:-

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2. The ever widening reach of discrimination law

A most important part of the Equality Act 2010 is section 13 which extends discrimination law to cover discrimination by 'association'. Subject to the caveat in item one above the main parts of the Act are likely to come into force in October 2010 and April 2011. In general the Act has the support of all the main political parties and therefore implementation of most of it, including this 'discrimination by association' provision, will not be affected by the recent change of government.

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3. Proposed cuts in civil servants redundancy pay ruled unlawful

Crown and civil servants are not eligible for statutory redundancy pay. However under the Civil Service Compensation Scheme (CSPS) they generally have equivalent or better rights.

In early 2010, after consultation, the government and five of the six public sector unions (FDA, Prospect, GMB, Unite and the Prison Officers Association) came to agreement on amendments to the CSPS to take effect from 1 April 2010.

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4. What happens if the authorities fail properly to apply EU law?

Some 15 years ago, as all law students should know (!), the European Court laid down the principle that an EU Member State could be required to pay damages to any individual who suffers loss as a result of that Member State's failure properly to transpose a European Directive into domestic law.

This was established in 1995 in a case in which a Sr Francovich won the right to claim damages against the Italian government. The Italian government had failed properly to implement an EC Directive relating to the protection of employees in the event of insolvency of their employer.

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5. Unfair dismissal and misconduct

A couple of recent unfair dismissal cases have thrown new light on unfair dismissal law.

The first shows that an employer has a wide discretion as to whether to postpone internal disciplinary proceedings when there is an ongoing police investigation into the same allegations.

The second case shows that the seriousness of the consequences for the employee of a finding of unfair dismissal can be taken into account in deciding whether an employer's investigation into alleged misconduct was fair and adequate and therefore in deciding whether a dismissal was unfair.

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6. A possible loophole in unfair dismissal law

The case noted here was at employment tribunal level only. It is therefore not legally binding as a precedent and anyway may well be subject of an appeal. Nevertheless it is sufficiently interesting to merit a mention in this newsletter. At its simplest (and it must be said at once that this is a considerable over-simplification) the case suggests that in appropriate circumstances it may sometimes be possible for an employer to engineer an arrangement which enables him to dismiss employees who he thinks are overpaid without those employees being able to claim unfair dismissal.

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7. Limits on employers' liability for wrongful acts of employees

Until the late 1990s the basic test for deciding whether an employer should be held liable for the wrongful act of an employee was to consider whether the employee had used an unauthorised method to do a job he was authorised to do (in which case the employer would be "vicariously liable") or whether the employee was simply doing something which was unauthorised (in which case the employer would not be "vicariously liable") The rather quaint legal description for an employee acting without authority is that "he was on a frolic of his own".

In April 2010 there was a case in the Scottish Court of Session (Inner House, analagous to the Court of Appeal in England and so a senior court) which has shown that in spite of this tendency there are limits.

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8. Out of court settlements in disputes between employers and employees

As is well known, the basic general rule is that 'out of court settlements' of employment disputes are not legally binding in the sense that they cannot exclude an employee's right to take the matter in question to an Employment Tribunal. There are some exceptions to this rule. These require specified conditions to be fulfilled. If the conditions are fulfilled then agreement to accept an amount in full and final settlement will be the end of the matter. The agreement will be valid and the courts and tribunals will not entertain a claim based on the same subject matter.

Over the years there have been many examples of cases in which employees have sought to bring cases to employment tribunals even though they have signed 'out of court' settlements agreeing not to do so. As will be apparent from the notes above such cases are bound fail if the statutory conditions for valid compromise agreements have been complied with so the employee concerned will generally argue than one or other of the conditions referred to above was not properly fulfilled.

This is what happened in a case in May 2010.

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9. Sexist behaviour could end up costing Sussex Police £575,000

Firearms officer Barbara Lynford was awarded £275,000 by an employment tribunal in 2007 after she was subjected to sexist behaviour when working in a team based at Gatwick Airport. She was the only woman in the 18-strong unit and staff left images of topless women lying around and made comments about Ms Lynford's appearance. They were also accused of calling her a "whoopsie" and "lipstick" and of describing passengers as "milfs" and "gilfs" - derogatory terms for mothers and grandmothers they found attractive.

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10. "Whites need not apply"

Bristol City Council has caused a furore by banning white people from applying for a traineeship because it wants to boost staff diversity. According to a report in the Daily Telegraph the two-year training opportunity is only open to people from black or ethnic minority backgrounds because the "normal recruitment process was not rectifying" under-representation. The Council claims it can circumvent race discrimination laws because the traineeship does not guarantee a job at its conclusion.

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11. Biffa gives binmen Blackberrys

Refuse collectors Biffa have issued 1500 binmen with Blackberry mobile phones "so that they can get more done on the move", according to a report in the Daily Telegraph.

The Blackberrys will be used to collect data from customers, download maps and confirm the whereabouts of the binmen using geopositioning data.

According to the Telegraph the devices could also be used for taking photographs of overfilled bins and residents who have put general waste in their recycling bins.

12. Boots boss earns £2.1 million in nine months

Former HBOS boss Andy Hornby has not had a bad first nine months at the helm of High Street retailer Boots.

According to recently published accounts he received £600,000 of his £850,000 annual salary, a bonus of £805,000, a £240,000 cash payment in lieu of pension contributions, oh, and a 'signing on fee' of £400,000.

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