What is in Store for Employment Law
Published: 21 December 2015
As we near the closure of another year in the world of employment law, we thought we would give you a flavour of the varied types of cases and regulations that have helped shape this year, and are likely to create more twists and turns as we roll into 2016.
We will start with the highest Court in the land, the Supreme Court, where an interesting case was decided as recently as November. This judgment related to Share Purchase Agreements, restrictive covenants and penalty clauses in contracts.
Whilst this doesn’t immediately scream ‘Employment Law’ the two cases in question (Cavendish Square Holding BV v El Makdessi and ParkingEye Ltd v Beavis  UKSC 67) are pertinent in relation to penalty clauses in employment contracts and the different contexts in which they may arise (specifically in relation to golden parachutes, repayment of training costs, clawback clauses and atypical restrictive covenants). This judgment is also relevant to employers who have penalty clauses in their employment contracts, and attempt to clawback monies on termination of employment.
In the Employment Appeal Tribunal (EAT), the judges have also been busy looking at the interpretation of the ACAS Early Conciliation process.
In November, the EAT held in Science Warehouse Ltd v Mills UKEAT/0224/15 that it is unnecessary for a Claimant to go through the Early Conciliation process (EC) again simply to amend their ET1 for the purpose of adding a further claim to the proceedings after the original conciliation process have been concluded and an had been ET1 presented to the tribunal. The EAT held that the legislation does not require a prospective claimant to undergo the EC process for each “claim” or “cause of action” as Parliament had intentionally used broader terminology. It also found that the legislation referred to “prospective claimants” not existing claimant. . Further, a prospective Claimant is only required to provide details of the parties' names and addresses to ACAS; not details of the potential claims.
This may appear to be a lot of unnecessary quibbling but the judgement is important as is removes the burden of extra paperwork and legal fees from the parties.
However, employers should be mindful of the potential for further added claims to an existing ETI claim, and it would be prudent to challenge any application to amend the ET1 at Preliminary Hearings where possible.
The EAT also looked at the effect of TUPE transfers, this time, deciding that there is no TUPE transfer where transferor remains as employer
The EAT overturned an earlier Employment Tribunal decision that there had been a transfer under TUPE, in circumstances where the Claimant's employment had supposedly transferred from one employer to a group of companies on a joint and several basis (where one of that group of companies was the originalemployer).
The Claimant had objected to the new joint employment contract offered to him upon a restructure of the group, as he continued to work in substantially the same way as he had before the purported transfer. The business unit he worked in was still operated by his original employer, albeit now as part of a group of companies. When he was later dismissed, and re-engaged on the joint employment contract, he brought a claim for unfair dismissal.
As a preliminary issue the Employment Tribunal had to decide whether or not there had been a relevant transfer under TUPE from the original employer to the group of companies, and held that there had been. The group appealed to the EAT on the basis that there cannot be a transfer under TUPE where there are multiple transferees, and (in the alternative) that a transfer was not possible where one of the transferees was also the transferor. The EAT held that TUPE did not preclude a transfer to multiple transferees, provided the economic unit retained its identity. However, there was no relevant transfer as there was no change to the identity of the employer. The Claimant's original employer retained liability for his employment, and so the legal position remained unchanged. (Hyde Housing Association Ltd and other v Layton UKEAT/0124/15.)
This case has significant implications for employers who re-structure their businesses within the group of companies, and employers should seek specific advice when planning a transfer of staff within their group.
The Home Office has also been busy looking at strengthening the law so that it has a wider impact on employment relations in the UK generally.
The Home Office has published its guidance on section 54 of the Modern Slavery Act 2015, which requires businesses with a global turnover above £36 million, to publish a slavery and human trafficking statement each financial year. The obligation applies to organisations whose financial year ends on or after 31 March 2016. To ensure that the statement is relevant and current, organisations are encouraged to report within six months of the financial year end.
The guidance sets out the basic requirements of section 54, advice on what can be included in the statement and includes helpful case studies on various topics that may be included in the statement. By increasing transparency in supply chains, section 54 aims to ensure that the public, consumers, employees and investors know what steps an organisation is taking to tackle slavery and human trafficking. It also aims to create a level playing field between large businesses that act responsibly, and those that need to change their policies and practices relating to slavery and human trafficking.
The significance of this Home Office guidance is very useful for multi nationals who operate in the UK, with businesses in parts of the world where modern slavery and human trafficking is not uncommon. Therefore employers should carefully review their supply chains and procurement process to avoid falling foul of this Act.
The government has also published its response to the Apprenticeships Levy: Employer owned apprenticeships training consultation, giving further details on the levy and the arrangements for apprenticeship funding in England. The Chancellor also made a statement about the apprenticeships levy as part of his Autumn Statement.
The levy will be set at a rate of 0.5% of an employer's paybill, to the extent that it exceeds £3million, and will be collected by HMRC through PAYE. Employers in England will be able to access funding through the Digital Apprenticeships system. Although the apprenticeship levy will apply across the whole UK, apprenticeships are a devolved matter in Scotland, Wales and Northern Ireland and the government is liaising with the devolved administrations over their arrangements for giving employers access to the fund.
All employers with Apprenticeship schemes should take note of these developments especially those who are taking on Apprentices for the first time. It would be prudent for the Accounts departments of any employer to take advice on this.
Finally, to finish end the year with a warning over the Christmas and New Year celebrations. You should know that even lawyers get into trouble at work.
As recently as the 10th November, a Corporate Partner at the law firm Goldberg Segalla, was been dismissed after referring to "scouse scum" during an interview after a football match between Chelsea and Liverpool. The interview was posted online by Neeks sport, a YouTube fan site. Mr O'Connell has since apologised.
We strongly urge all employers and employees to mind their language during this festive season and adhere to the policy on the use of social media as well as other company policies which could lead to misconduct. Merry Christmas and Happy New Year to you all!
For advice and information on the above or any specific employment law matter please email Cyril Dennemont, partner or call him on