Latest in Employment Law>Articles>Employment Law at 11- September 2019
Employment Law at 11- September 2019
Published on: 06/09/2019
Issues Covered:
Article Authors The main content of this article was provided by the following authors.
Seamus McGranaghan
Seamus McGranaghan

Topics covered in this month's webinar include:

  • Holiday Pay - arising from the recent PSNI decision
  • IR35 Changes
  • Using personal vehicles for business purposes
  • Referral to ECHR of Lee v UK
  • Performance-related bonus scheme

Scott Alexander, Head of Learning and Development at Legal Island, discusses your Northern Ireland employment law questions and topical HR issues with Seamus McGranaghan and Hannah McGrath from the employment team at O'Reilly Stewart Solicitors.

Poll Questions asked in this webinar include:

  • What percentage of your workforce is made up of European migrant labour that would need to apply or has applied for "settled status"? Is it 0%, less than 10%, 11% to 25%, 26% to 50%, or 51%-plus? Vote now.
  • So, the question is do you think Brexit will impact negatively on your organisation? Yes or no, vote now.
  • Do you currently use artificial intelligence in providing any of your HR services? Yes or no.
  • Do you believe the "gay cake" case has gone too far? Yes or no.

Don’t forget to visit the ‘Seamus Says – Employment Law Discussion’ section on the employment law hub, which provides answers to hundreds of employment-related questions addressed throughout this webinar series.

 

Transcript

Scott: Good morning, everybody. This is Scott Alexander from Legal Island. I'm here with Seamus McGranaghan from O'Reilly Stewart and Rolanda Markey, also from Legal Island. We're going to be going through a number of questions as we normally do in these webinars. You will see this little chat box in front of you, so you can of course send in questions when you like. We'll be doing a poll in a second.

Because this is our second anniversary, Seamus, you're offering five listeners a free consultation for 15 minutes with yourself, and they can write to you at the end. And again, we'll get the details of that later.        

Seamus: Yes, if you pop me an email, I think then that the process will be if I get a flurry of emails, I'll make a selection in terms of five people, and I’ll do that in a fair way. But if anyone wants to email me about anything, that's fine, and I'll do my best to get back to them.

Scott: Okay, grand stuff. So right, let's deal with the poll and then we'll get back to our questions. We've got quite a few questions come up in the situation. We usually do a poll, though. I don't know if you've noticed, but our polls that we've done have been in "The Irish News," in the "Belfast Daily," and "Ulster Business."

Seamus: "Ulster Business"?

Poll Questions

Scott: Oh, yes. So, these polls that you're taking part in, they've been picked up by a number of organisations. So do we have time to start the first one? Okay. What percentage of your workforce is made up of European migrant labour that would need to apply or has applied for "settled status"? Is it 0%, less than 10%, 11% to 25%, 26% to 50%, or 51%-plus? Vote now.

And the things are coming in through. We're collecting the stuff. Just to, and obviously Prita Patel revised, if you like, the immigration rules that will be applying in the U.K. So we covered that in the weekly review.

And we're looking here . . . nobody has over 50% migrant workers. A third have no workers, 40% less than 10%, 10% between 11% and 25%, and 20% of you have 26% to 50% European migrant labour who have yet to apply.

Seamus: And maybe it's just worthwhile mentioning that I do recall that we covered off previously on the settled-status cases.

Scott: Yep.

Seamus: So anyone can go back through the Legal-Island….

Scott: The website

Seamus:. . . website and find the in relation to that also.

Scott: Okay. Second question. Are you confident that Brexit will not impact negatively on your organisation? That's a beautifully worded question by me, because there are so many negatives. So are you neutral or positive about Brexit?

So, the question is do you think Brexit will impact negatively on your organisation? Yes or no, vote now.

We're looking at 60%, 60%-plus think it's going to be negative, 20% or so, no, and 20%-plus uncertain, thereabouts. Oh, it's evening up a little bit more as the votes come in. So, it's still over 50% with about 25% uncertain. So, there you go. We'll stop that question there.

We'll move on to the third question. The use of artificial intelligence is on the increase. There's a big report by the CIPD last week as well.

Do you currently use artificial intelligence in providing any of your HR services? Yes or no.

We've got 10% yes, 8% yes . . . not many . . . 20%. Oh, they're coming through now. So about a fifth of you use artificial intelligence in your HR provisions.  I suspect that in five years, it will be about 100%, so we'll find out. So that's exactly it, 20% against 80%.

Second-last question,

Do you believe the "gay cake" case has gone too far? Yes or no.

News this week that it's been referred to the European Court of Human Rights. And do you think it's gone too far?

That's a quite remarkable response I think. It was up to 85%. It's now down to 75% of you think it's gone too far. So there you go, that's a lesson for Mr. Lee. We'll come back to that one later. We'll have a question in on it.

The final question is a bit of a sneaky one.

Have you ever attended Legal-Island's Annual Review of Employment Law?

And the reason we're asking that is that it's a little plug, because the early-bird offer finishes next Friday. So if you haven't booked, get in by next Friday and you can get early-bird off, and it's an extra £20 off if you book online and pay there.

And over half of you have — well, that's very good. If you haven't, then you don't know what you're missing. But if you go along, I'm sure it will add to that number next year if we ask the same question.

Working Time Regulations

Let's get onto the questions. First of all, we were asked to clarify, Seamus, last week's question:

"Does Regulation 20(4) of the Working Time Regulations Northern Ireland 2016 affect ability to bring a breach-of-contract claim for holiday pay or overtime?"

Seamus:Yes, the background to this clarification comes from, you know, we covered holiday pay in detail in both our July and our August webinars. And the August one, there was a query in and around the ability then for time limits to bring claims and the three-month time limit applying in the Tribunal.

We discussed around the options for employees also to be able to bring in claims in the court system and bring civil claims for breach of contract. So, there was just a clarification point in relation to that, that under the 2016 regulations, that Paragraph 4 in relation to that, I'll just read out what it says.

 It says that a right to a payment under Paragraph 1, which details the right for the payments themselves, does not affect any right of a worker to remuneration under the worker's contract, and it actually defines it as contractual remuneration. And Paragraph 1 does not confer a right under that contract. So the basics are that there isn't a right in the legislation to bring a claim, an additionality to that, through the court system for the additional days.

The interesting aspect of that is whenever we discussed the Court of Appeals' decision in relation to Agnew, that there have been that backing up almost of the Tribunal's earlier decision. And certainly that, there wasn't any distinction, really, between whether or not you were using your 20 days or your additionality under the regulations and the directive and the comparative there.

So, it really is, then raises the question of how you treat those days differently and how do you decide which days might be your statutory rights and which are your contractual rights. So it does raise a fundamental issue there, and it's interesting also that obviously for a breach-of-contract claim, to bring a breach-of-contract claim in the Tribunal, your contract has to have been terminated, so either you've resigned or you've been dismissed.

Scott: I suppose this one was about people who might have been away for a year, looking to make a back-pay claim. Now, they wouldn't be able to go through the Tribunal . . .

Seamus: No.

Scott: . . . but ordinarily, they'll have a number of years to get into the civil courts. And could they take a claim under the Working Time Regulations about unpaid holiday pay? That clause there says no, you can't, it's not a breach-of-contract claim. You should have taken it to Tribunal within the three month . . .

Seamus: Yes, within three months, yes.

Scott: . . . hard lines. But there is this element of — well, the Working Time Regulations doesn't cover contractual pay. But then you've no right under the Working Time Directive to the average overtime pay . . .

Seamus: Overtime pay, yes.

Scott:  . . . calculation in your contractual payment. It's only to the first 20 days, and of course, the Working Time Regulations complicates things further by giving you an extra eight days. So those 28 days are definitely under that one there, excluded from being a breach-of-contract claim. But there is this other element. But the other element doesn't get you the extra money. And then it's complicated by the fact that Agnew says, "Well, you can't differentiate between the two.

Scott: And you get a little bit every time you're off. So there may be something in there, but it's not going to be a great claim for anybody.

Seamus: No. Certainly, I think that the lines are blurred, and we have a grey area in terms of all of this. But from a straightforward reading of the legislation, it looks like it's complex. And if you were to bang on the door of the court, you might actually be turned away on the basis of the legislation that's in place.

IR35 Rules

Scott: Okay. The second question that we have here is on IR35 and the changes thereto. For those that don't know, Seamus will explain in a minute.

"But do these only apply to contractors and workers in case they're third party? We employ the services of locums, who are self-employed. Does it apply in that case?"

Seamus: Hopefully, I'll be able to give some clarification. I guess it is very complex and it's certainly not one of the lighter topics that you would be looking at. But just by way of background, IR35 was originally brought in in 2000 and it was designed essentially to assess whether a contractor was a genuine contractor, or rather that, as the Revenue call them, a "disguised employee" for the purposes of paying tax.

Essentially, there was an attempt made by the Revenue to tackle alleged problems of abuse by contractors. So, what a lot of people were doing, where they were registering themselves as limited companies or as the Revenue called them, as personal services companies, or PSCs.

They were utilising a tax loophole there, essentially, that they were able to put themselves through as a limited company and then they weren't having to deduct any tax or national insurance from their payment. They were losing out on various aspects as well because they didn't have the status of an employee, but the tax benefits were certainly of assistance to them.

So, you can see always the good old adage of death and taxes, and Revenue and Customs looked at this. What essentially, they did — and there's obviously a bit of history to it. You can go onto Revenues and Customs website. There are various types of toolkits, as they call them, to distinguish whether or not you're an employee or whether you're self-employed or a contractor and what it is.

But they took this process of trying to shut down the failure and the abuse that was happening of some people not to pay tax and national insurance. So, they were saying, "Look, I'm self-employed. Do not make any deductions of tax and national insurance." And then whenever they filed their end-of-year tax returns with tax and national insurance then the Revenue are assuming that they haven't been making their payments as they should have been.

Scott: This is really individuals who are employing themselves, if you like, through a limited company.

Seamus: Yes.

Scott: It's similar but it's not the same as a lot of contractors working on a building site, and they're all claiming to be self-employed, but may not have IR35 status. They're just saying, "I'm self-employed."

Seamus: Yes.

Scott: But they haven't set themselves up as a limited company, a slightly different . . . But these ones are people who set themselves a limited company and effectively pay themselves a little bit of money out of the profits of the company.

Seamus: Out of the profits.

Scott: And therefore, their argument, "Hey, I don't have to pay full tax as an employee."

Seamus: Exactly and trying to shut that down. So, things have progressed. Certainly in 2017, Revenue and Customs changed the position specifically in around public authorities, and specifically looking at, this question is about locums. So, we're possibly talking about the likes of GPs, dentists, opticians, those sorts of rules. Maybe wrong on that. Hopefully not. But the idea behind it is pretty much all the same. So, in 2017, Revenue and Customs said that it wouldn't be possible any longer to pay contractors via PSC without deductions at source.

So the position was changed, essentially, that the onus was very much put on, in the public sector, for the employer, the hirer, the engager — whatever way we want to term that — to make the assessment and to make the deductions as and how they should have been. So that process has been happening in the public sector for 2017. These more recent changes are now moving into the private sector. These are going to be coming . . .

Scott: …..in April next year.

Seamus:. . . April 2020 is what we're looking at. So I think it's a good opportunity for organisations, businesses, companies to start to review presently how they process payments in relation to their self-contractors. Because the key thing on this is that if they don't make the deductions properly and as how Revenue and Customs might determine later on, it will fall to the responsibility of the company to make those payments.

That can create a huge difficulty. You're talking about retrospective payments and possibly claims from Revenue and Customs for a substantial amount of monies. If you think of, if you have maybe 30 or 300 people on the building site and you've been processing them all as . . .

Scott: As self-employed.

Seamus:. . . self-employed and not making any deductions for them, you could imagine the significance of getting such a hefty bill through the door from Revenue and Customs. So, it's not at all that the rules are changing in any way. It's more that the responsibility under the rules is changing. And it's very clear that it's moving over to the business, to the company. Whether you call them the hirer or the employer or the engager. . .

Scott: It's whoever pays the money.

Seamus: . . . whoever pays the money has the responsibility to make those deductions. So you really need to be making sure that you're applying the guidelines carefully. And I would have thought that in such circumstances that you're making a written note of why your considerations are that they're self-employed or they're not.

Some of the helpful information that's on there, it talks about all the things that we'd be familiar with in terms of looking at whether someone is an employer or worker. Are they working at a certain place, or if they're a locum, are they at a specific practice? What equipment are they using? Are they using their own equipment or are they using equipment that's provided to them? Are they working specific shift patterns? The other thing is are they in charge of leading a team or are they part of the team?

But the clear things are always this right to substitution and the ability for a contractor to send somebody else in to do the work. And that's going to remain of particular importance. And I think that we would need to be thinking about those things of supervision, direction, control, substitution being a real key one.

If I have a contract with you, Scott, and I have another contract along the way that I'm going to get double the money from and I say to you, "Scott, I can't make it in that day, but I'm going to send Rolanda along instead to do it," and if that's fine, that's a good indication that you're self-employed and that I'm going to fall outside of IR35.

But we're talking about that mutual obligation. If you're falling within it and if the tests that you apply, and if you use the Revenue and Customs test, I think the majority of the time you're going to fall within IR35. They want their . . .

Scott: They want their money.

Seamus: They want their money. So I think it's definitely going to create a position where there's going to be a greater cautious approach. Businesses are going to want to pay the money and make those deductions at the time. They're not going to have to want to worry about it further down the line.

And I can see that there will be certain pressures that will be on businesses. I could imagine self-contractors arriving with letters from their accountants saying, "This person should be processed as a self-employed worker" and things like that. So I can see that it can create a bit of anxiety for . . .

Scott: It’s probably not going to be enough that you just take the word of an accountant.

Seamus: No.

Scott: You would be expected to do some kind of due diligence here.

Seamus: Absolutely. And I think the key thing is, making your notes, making your records, and retaining those, possibly before, within that tax year and then after that, maybe under GDPR, shredding them at that point. But certainly, the onus is going to fall on you. Revenue and Customs are going to pick this up by their sort of annual inspections that they're going to do. And you can be guaranteed from April 2020 that they're going to be focussing on it.

Scott: And that the self-employed contractors, as they are at the moment, will be looking for more money if they're going to be getting taxed.

Seamus: Absolutely.

Scott: Okay. If you have any questions on that or anything else, you can send them through the little chat box or contact us later as well and we'll deal with them next month. But if you want them dealt with today, send us a little thing through the chat box.

Mark McAllister, funnily enough, since I mentioned the Annual Review - he'll be dealing with the IR35 and any updates at the Annual Reviews of Employment Law in November.

Business Cover on Car Insurance

Seamus: Yes.

Scott:  If an employee does not normally use their car for business purposes but they are required to make ad hoc journeys for which we repay in business mileage, for example, to obtain training or to work in a location they do not normally work in to provide cover, do they need to have business cover on their insurance?

Seamus: I think this is an interesting question. I think that a lot of us don't primarily use our cars and our vehicles for work duties. We maybe commute to work in the car. We might even commute to the train station or the bus stop, whatever it is, and commute from work into that. But it's an interesting one. It's an important one as well.

There are a number of cases that have happened where the employee is using the vehicle, or an accident has happened at the time when they've been using the vehicle for work and they don't have business insurance. So, the long and the short of it is that if you are using your vehicle in any way for work purposes, you should have business insurance.

Just from a brief bit of research that I did in relation to it, there seems to be that there are three different types of insurance that you can obtain. There's social policies just for driving on a social basis. There's social and commuting, which permits you to drive socially, and then commuting to and from work. And then there's business driving, which is essentially if you're using your car for more than just going to and back from work, then the recommendation is that you obtain this business cover.

I think it's fairly obvious when you're doing commercial driving. If you're a salesperson on the road and you're driving around the country, making sales, then clearly you should have that business insurance. It'd be the sort of softer, maybe quieter aspects of that. It's the "I run an errand here for the boss" or "I'm going to go to the airport and pick up a colleague who's coming in from England." That can be termed as business use as well.

And the risk is always that if an accident unfortunately happens during that time, there could be a refusal by your insurer to indemnify you. So, I think where you're using your car for any business use, you should be obtaining that business driving insurance.

It does seem to me that there's a bit of a premium on that. You will have to pay extra. And I think it's right that what you're using your car for, the purposes of your work or your business, that you have a good conversation with your employer about that and see if they will make the additionality in terms of the contributions.

Saying that, a lot of companies do pay business mileage, as this question talks about business mileage. You generally get 40, 45 pence in the mile for that. Sometimes an employer will say, "Well, if that will cover the wear and tear of your car and it will also cover any insurance that you have to pay." But the key thing is that if you're claiming any business mileage, my rule of thumb would be make sure you have the business insurance to go along with it as well.

Impact of Lee v United Kingdom Case to ECHR

Scott: Okay. Thank you very much, Seamus. We're going to move on to the gay cake. The Lee and Ashers as it was is no longer, has been referred to the European Court of Human Rights.

How is this different to the case, taken to the UK Supreme Court, and how might the decision impact in Northern Ireland when it's delivered?

And it says here, "I assume it could be some time before we see the decision," and we can agree on that.

Seamus: Yes, I think that probably is right. We'll all be familiar with the gay cake case, as it's known. We had an original decision in the county court. There was a decision into the Court of Appeal and then subsequently on to the Supreme Court. Made a very exciting time here when the Supreme Court paid a visit to us here in Northern Ireland.

The case that is being taken to the European Court of Human Rights, there are differences in relation to the case. It's interesting from the poll that people are saying that the case has gone too far. And possibly a lot of that is to do with the massive expense of the case in terms of the costs that have been racked up legally.

Scott: Yes, well, it was a case that was for, £500 or something was awarded in the County Court.

Seamus: Yes. And I was just looking, and I think the total price of the case was something like £38.40 or something like that. And you do think about proportionality and you talk about the use of public funds and things like that. But in essence, a lot of the listeners probably don't need to worry about that aspect in the sense that the case going forward is not a case that will involve the bakers of the cake, the McArthurs . . .

Scott: McArthurs.

Seamus: . . . and the company itself. It won't involve the Equality Commission in Northern Ireland here. This is a case that is being brought against the UK (as the UK signed up to the European Convention on Human Rights), which just for clarification purposes, that even after Brexit, that has no impact. This decision will clarify law here for us in the UK.

But the case has been taken against the UK as a member state. And essentially, the position is that the purpose of the case is that you have Mr. Lee, who's alleging that the decision of the Supreme Court is unfair on the basis that it doesn't protect his rights in relation to discrimination.

So the case as it was taken forward related to the fact that he put an order in for the cake and that it was refused. And there was a big distinction made in the Supreme Court decision about how it wasn't the refusal of the service of baking the cake or making the cake, it was more to do with the message that was on the cake in terms of the icing of the cake and things.

Scott: It wasn't to do with Mr. Lee or his sexuality was the argument of the the Supreme Court. It was actually to do with the fact that there was a message which offended the genuinely held beliefs of the McArthurs.

Seamus: Yep. And I was just looking back there. One of the quotes was that the bakers could not refuse to supply their goods to Mr. Lee because he was a gay man or supported gay marriage. But that was very different from obliging them to bake and supply a cake iced with a message with which they profoundly disagreed.

So, in terms of moving it forward, it's been taken by a law firm in Belfast city centre here on behalf of Mr. Lee. My understanding is that there are a number of steps that take place in relation to that. I understood from everything that I can see, there was an acceptance of the case by the European Court on the 15th of August.

But from my reading of it, there appears to be a number of difficult and tricky steps to get the case right through to the point of whenever there's a decision going to be issued, and even how the court come about making the decision. They can do it on the papers or they can have a hearing. All those things will have to be decided in due course. So I would say it will, it could be a fair amount of time before we receive any decision in relation to it.

Certainly, I did go onto the European Court's website, and it provides some breakdown of the cases that are heard for individual states. And there are surprisingly quite a lot of them in each year that I heard them. You're looking at somewhere along the lines of between 5 and 10 cases each year, where there are decisions given relating to the UK itself. And those range from probably cases that are very important in terms of member state decisions itself and urgency behind them.

Scott: There’s a lot of them on criminality . . .

Seamus: There is.

Scott: . . . and death in custody and stuff like that.

Seamus: Yes.

Scott: So most what's the man to do with a message on a cake?

Seamus: On a cake, yes.

Scott: So I suppose . . .

Seamus: And that's not in any way reducing the importance of this case or anything like that, but there's a lot of . . .You got a good overview of things that I wouldn't even have dreamed of that they were …….

Scott: They wouldn't normally impact on our listeners or employers to that extent. They tend to be about, I suppose, the forces of the state and such like. And there is an awful lot about the armed forces or police and such like. And this one here, is it because Ashers is a limited company and they don't have human rights and therefore his perspective was denied by a limited company? Because the McArthurs aren't part of this case.

Seamus: They're not part of it and you're right in the sense that Mr. Lee's an individual. The case was taken, that was a limited company that they were taking against that. And the argument is that the limited company, it doesn't have the same legal rights as an individual would have. So, there is an aspect of the case that certainly is focussing on that.

Just in one of the articles from "The Guardian," I think that the legal team said that they were not arguing that the Supreme Court ruling should be overturned because baking the cake didn't apply the bakery supporting expressly that the message of the cake. And they were contending that there was — no reasonable person would equate producing the cake for an individual, private customer with the bakery supporting pro-gay marriage or a message on it to that effect.

So there is an aspect certainly and it's interesting, Mr. Lee talks about that he's also taken this case on behalf of businesses as well and the protection of businesses going forward. So it seems to cover everything that . . . and moving it in a different direction as to what it was at the Supreme Court. So it's definitely a different type of case. Ultimately, the decision, I think, will take a while before we see anything coming from there, any clarification.

Scott: Okay. Well, we'll look forward to that whenever it comes through. The next one, this is quite a long question, folks, so listen up.

Performance Related Pay

We run a performance-related bonus scheme for all employees based on employee attendance as well as company performance, effectively a profit-share scheme for all staff. Absences are taken into account. So if you don't join the company until the 1st of July, you may only receive or earn 50% of any achievable bonus. Or if you leave before the end of the year, you might receive zero bonus. You have to be employed at the time the bonus is calculated.

Or — and this is the important part — if you are sick or on maternity leave or a career break, all of those days are discounted for bonus purposes. I.e., if you're absent for three months of the bonus year, you may only receive three-quarters of the possible bonus. So far, so clear.

Is it lawful in relation to disability and maternity-related absences or should we ignore some or all of those absences for the purpose of calculating an individual's bonus?

We don't reduce bonus for holidays because everyone, more or less, gets the same holidays each year. So if you take six weeks off for holidays on a 52-week year, presumably that's 46 weeks you have to be there. And if you're off a week, you might only get 45, 46ths of their bonus or whatever.

Seamus: You get a reduction. It's interesting. One of the important aspects of the question is that this is a profit-sharing scheme for staff, so there may be a different bonus scheme as well for individual performance or something like that. But the one that we're talking about is this profit-sharing scheme across the sort of staff and complement.

And there are three aspects here that they talk about. They talk about absence for a career break and for maternity leave and for sickness. So maybe just cover off the easy one first of all, the career break. And sort of my view in relation to that is that if there's absence on the basis of a career break, that it should be discounted in terms of your entitlement to bonus and things like that.

Scott: You're volunteering for it and you're making no contribution at all.

Seamus: Yes. And the second one then in relation to maternity leave  - the law is pretty settled in relation to that now at this point. And that the fact that on maternity leave, you're entitled to your contractual benefits apart from those that are relating to wages and salary, that the bonus falls under that and it would be an entitlement for the employer to deduct those days for absence in relation to maternity. So, I don't think that there's much issue arising in relation to that.

Scott: Maybe the compulsory period?

Seamus: Yes, certainly, your two weeks' compulsory maternity leave, you can add that in. And I suppose that's important about, in relation to when you look at the contract and when the bonus is going to be paid out to individuals. If it just so happens that you're falling within that agreement, then that's fine.

And more interesting, when there's the sickness. I think it's fair enough. I think where someone is sick and they're looking at it on the basis of you deduct the four weeks' holidays or whatever it is off the 52 weeks, and then you're deducting after that. It's quite a smart way to encourage people not to take sick leave unless they need it. And then there will always be those sort of genuine periods of sickness, where they're also saying during that period, "We're going to discount that, too."

The obvious point, and we've talked, we've had some discussion about this before, is where someone is absent and on sickness duty, a disability arising, and they may be, if they have disabilities where they have flare-ups throughout their year, or alternatively, that they have certain times of the year where they need time off for treatment that they get and things like that. So red flag up, cautious approach in terms of that.

But I think just from my sort of general review and general understanding of things, is that where the employee is absent due to illness and there's a disability there and there have been reasonable adjustments made in relation to that, it seems to me that I would lie on the side of it that it's fair for the employer to make those deductions in relation to the payment of bonus.

I think you do have to take each case on its sole individual circumstances. The employer always has to be reasonable and rational in terms of arriving at those views. And there may be some certain disabilities that would result in your treading very carefully about how you're dealing with the process.

But certainly where you've made reasonable adjustments in respect to the disability, and I think just we were talking in advance of this and we were saying that if you were prevented from doing this, it would almost prevent you from ever fairly dismissing someone from their employment just because they have a disability.

Scott: Yes. So if you have to discount all absences of a disabled person, you would never be able to dismiss anybody for incapability . . .

Seamus: Incapability means it's just . . .

Scott: . . . on those grounds. But at the same time, if you look at cases involving disciplinary action or action on grounds of capability where disabled employees are dismissed, the case law tends to suggest that you have to take some account or discount some of the absences. You can't exclude 100% of all the absences, because the employer has no control. You can't ignore 100% of the absences or count them all and in this case, take away the money. Because that would mean that there's no reasonable adjustment made at all for a disabled person who will, you would imagine, have more disability-related absences than a nondisabled person.

Seamus: Yes.

Scott: Oh yes, fair enough. So there seems to be this "how much do you give?" And your argument is, "Well, we've already made some reasonable adjustments. That will be taken into account."

Seamus: Yes, if the adjustments have been made. And it's a difficult one because then you're going to a continuity factor. How do you apply that for different employees that have either the same disabilities or different disabilities? Will you have one person coming forward, saying, "Well, look, I'm being treated less favourably because somebody else with a disability, they've got 85% of the bonus and I only got 50% of the bonus"?

Your justification's always important in relation to it, but it's a tricky area in the sense that I just don't think that there's one straightforward, uniform rule. And you need to look at it on each individual cases - individual basis.

But if you've made the reasonable adjustments in relation to the person's disability, I think the important point is maybe to set about clearly to the employee what the position will be on the bonus, and maybe even having that where it is communicated in writing to say, "Look, these are the circumstance that we're dealing with. We're not going to be able to discount every single absence that you have, but this is how we'll look at it instead," and agreeing that with the employee so that it is a fair process. And at least on that basis, each side knows where they stand. And you would hope that it would reduce any conflict that would arise whenever we come to pay the bonus out.

I think that's probably the sensible way of trying to deal with it. And that's fingers crossed that everybody is going to be fair with it.

Scott: Is going to be fair and reasonable? Okay, okay. Another disability-related case here.

Dealing with New Evidence Arising at an Appeal Hearing

"After dismissing an employee, the employee introduced new evidence at the appeals stage involving their disability. It's the first time we've heard of this alleged disability. To be frank, we're not even sure one exists. But assuming it's genuine, do we have to take it into account?"

It's not a very trusting employer, this one. "We made our decision on the evidence before us. Should we have to take account of this new evidence? Surely it's the employer's decision at the time of dismissal, based on the evidence available to us at the time that counts in Tribunal."

Seamus: Yes. So the question is really around the aspects of appeal. And whenever you're dealing with appeals, it can be very frustrating whenever somebody comes to you with new evidence. Naturally, you can be very sceptical about that, because your issue is, "Well, why didn't you raise it at the time? Why are you only raising now that we've taken the decision," maybe, if it is a decision, "to dismiss?"

First protocol for me is always check the LRA Code of Practice on Disciplinary and Grievance. It does specifically say, it has a number of bullet points when it talks about appeal. And there's not a huge amount of information to look at in the Code of Practice. You do it very quickly. But it does say that one of the issues is if the evidence comes to light.

Also important to bear in mind that the appeals stage does form part of the statutory procedure. And if there's a failure on any of the 1, 2, 3, and if there's failure on any of that, and yes, it is about the failure to offer a right of appeal.

But if someone puts an appeal in and then you refuse to hear it on the basis that you're saying, "Well, we're not going to look into this because you should have raised those issues at the time," there's a potential that your dismissal could be held to be automatically unfair. And then there's also this sort of, the rest of the tribunal can increase any award by 10% to 50% on that basis.

Scott: You've got other problems here, of course, is that presumably, this person is dismissed for attendance or some other reason. But it wasn't a disability at the time.

Seamus: No.

Scott: And as soon as you then go to an appeal and you say, "We're not going to deal with your disability allegations," it becomes potentially a disability discrimination case, which means there's no limit on the award and there's injury to feelings as well as uplifts, because you failed to follow procedures.

Seamus: You're adding a third level into this, really, where you're saying there's the potential now that we have a disability discrimination claim arising. I think that the basic position should always be in these cases that where there is new evidence presented, that you do carefully consider the evidence.

Now that's not to say, I mean, the risk that I see arising from this question, and I can understand the frustration on it, is really this aspect of, well, an appeal is not a second bite. It's not a second go, it's not a rehearsal of the disciplinary. But just because there's new evidence that has arisen doesn't necessarily mean that it is a full rehearsal.

You should be looking at the evidence. You should be considering the new evidence. Is it relevant, number one? I think that you can ask why the evidence wasn’t raised at the time. And then you consider the evidence and then you make a decision as to whether or not that new evidence would have changed or impacted upon the decision that was made at the time to dismiss.

The interesting aspect of this as well, is in terms of there being an alleged disability, you need to have some awareness that not all employees are, specifically and around the issues of those invisible disabilities, like the mental health issues. Or if there are — I'm not saying that alcoholism is a . . .

Scott: Disability.

Seamus: . . . is a disability at all, but there can be symptoms that arise from alcoholism that result in disabilities. But there may be those aspects that the employee just does not want to tell the employer about and will not tell the employer about until they have to. And so if there is, for instance, there is a mental health issue, the employee might be very hesitant to inform the employer about it and may only come at the point where they've been dismissed to say, "Look, I'm just letting you know that maybe there were performance issues because I've got a mental health issue."

Now, the employer's entitled to ask for evidence. But that needs to be considered. And you could see how, if you refused to, and you took a strong approach, saying, "I'm not dealing with that," and as a result of the appeal, "I'm just not going down that road," and you ended up at the Tribunal, you could see how the Tribunal would be, if you were sitting in the witness box and the panel were saying to you or you were being cross-examined on it, "Well, you got this new evidence. You were told that there was a disability that needed investigated." And you could see how that case could unfold into something that you never imagined at the dismissal stage.

And as you say, you could be looking at unfair dismissal, coupled with a potential disability discrimination claim as well. So my view would be treat it with caution. Yes, it's frustrating, but I think that what's really important as well is to . . . the other point of the LRA Code of Practice highlights is retaining your notes during your disciplinary process so that the person that's dealing with the appeal can go back and look at those notes and say, "Well, how would this information actually impact upon the decision that was made?" Because it might not impact upon it at all. It depends on the allegations that we're looking at.

Scott: It may not be that we're actually asked about do you have a disability at the discipline . . .

Seamus: And they said no.

Scott: They said no. So . . .

Seamus: Yes, they didn't declare it. So, to me it's a loaded question, and there could be so many negative things that come out of that.

Scott: Okay. We were going to finish with another question in there, but I don't have enough time to go through it. It's about whistle-blowing and financial wrongdoings. It's a wee bit more detailed. And so, we'll hold that one back till the next time.

Thank you to Seamus and Rolanda. Just a reminder, if you want to get in touch with Seamus and get a free consultation, then drop him a line. I think his details are on the screen at the moment.

The next hearing is on the 4th of October. So tell your friends, and hopefully we'll see you on the 4th. Take care. Bye-bye.

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Disclaimer The information in this article is provided as part of Legal Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article. This article is correct at 06/09/2019