Rosemary Connolly and Jenine McCourt, Partners at Rosemary Connolly Solicitors, Warrenpoint and Belfast write regular emails on GB case law that they think will interest employment lawyers and HR professionals. Sometimes they will discuss the importance of cases that we have already reported on via or weekly review emails. Other times they will refer you to entirely new cases that you might not have seen before. Highlighted on this occasion are:

1. Publicis Consultants UK Lid v O’Farrell [2011] UK EAT (Redundancy)
2. Nottinghamshire Healthcare NHS Trust v Hamshaw & Others [2011] EAT (TUPE)
3. NHS Leeds V Larner (Paid Annual Leave) [2011] UK EAT (Annual Leave)
4. Garside & Laycock Litd v Booth [2011] UK EAT (Unfair Dismissal)

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REDUNDANCY
1. Publicis Consultants UK Lid v O’Farrell (Redundancy : Fairness) [2011] UK EAT 0430 10 2705

This case concerned the nature of a payment made to an employee who had been dismissed for redundancy with four days notice. The Employment Tribunal had upheld the employee’s claim that the company was in breach of contract for failure to pay the required three months notice pay as stipulated in her contract of employment.

Ms O’Farrell had been employed as a director within the company, and on dismissal had been given a letter stating that payment will be made of statutory redundancy pay of £700, holiday pay of £3490, and an ‘ex gratia’ payment of £20,625 equivalent to three months’ gross salary.

The company appealed, and claimed that she had already been paid the appropriate amount.

The EAT examined the construction of the letter of dismissal. The proper approach is noted by Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society. The starting point in any exercise of the construction of documents must be with the words the parties have used. The ordinary construction of the word ex gratia is a payment made free of any legal obligation to pay it and it “imports the sense of something being paid by way of gift of favour”.

The EAT dismissed the employer’s appeal, finding that it is tolerably plain what the letter said, the payments to which that letter referred was a payment made free of any legal obligation to pay it, rather than as a payment the company was otherwise ordinarily and contractually obliged to make.

In light of this decision, an employer should consider carefully the language used as regards any payment made to an employee, and should bear in mind that the contra preferentem principle was advanced in this instance meaning that a document will be construed in a light that most advantages the employee.
http://bit.ly/qGXKuM


TUPE
2. Nottinghamshire Healthcare NHS Trust v Hamshaw & Others [2011] (EAT/0037/11)

12 Claimants had been employed as care workers by the Nottingham NHS Trust at Hillside House, a care home for adults with learning disabilities. In March 2010 the home was closed, with the residents being re-housed into their own individual homes. The Claimant care workers were offered employment by a new service provider either Perthyn or Choice Support (Second and Third respondents). They were informed by the Trust that this would constitute a transfer within TUPE and their employment would continue with the new provider. The new providers argued it did not constitute a relevant transfer.

The claimants then brought claims for unfair dismissal together with pay in lieu of notice, outstanding holiday pay and redundancy pay on the basis that there was not a relevant transfer.

The EAT confirmed that there was no TUPE transfer. The economic entity did not retain its identity as the unit was closed and the clients took up residence in their own properties where they received support from the Care workers. The care assistants and residents transferred but the premises, equipment, resources and organisation did not. Also it was not regarded as a service provision change where there is simply a change in contractor. The services provided were not fundamentally the same. The care offered was intended to promote independence in carrying out household tasks, with a substantial difference in staff duties.
http://bit.ly/nV1ALy


ANNUAL LEAVE
3. NHS Leeds V Larner (Paid Annual Leave) [2011] UK EAT 0088 11 2907

The EAT held that the Tribunal was correct to find that the claimant, Ms Larner, was entitled to be paid for annual leave which she had no opportunity to take in the year 2009-2010 as she was on paid sick leave. Ms Larner was dismissed in April 2010 with immediate effect on grounds of incapability due to ill health. The employer argued that, since no request was made before the end of the pay year, the entitlement to leave was lost at the end of the pay year both as a matter of contract and under the Working Time Regulations 1998. Ms Larner’s particulars of employment required that a request was made in writing to carry forward any annual leave.

The EAT considered that “as Ms Larner was signed off sick for the whole of the pay year 2009 2010 she is therefore presumed not to have been well enough to exercise what the Luxembourg court in Pereda v Madrid Movilidad SA has described as her “right to enjoy a period of relaxation and leisure,” so as a matter of law, contrary to what a layman might have thought, she did not have the opportunity at any time during 2009 2010 to take her annual leave.” She had this right without having to make a written request to carry forward leave and as she was dismissed, she should receive pay in lieu of this.

It was left open as to what the position might be in the case of a fit employee who fails to make any request for leave during the whole of a pay year, but it is suggested that they lose the right to take annual leave, certainly if the contract so provides, because that worker will have had every opportunity to exercise the right to leave.
http://bit.ly/paeBt4


UNFAIR DISMISSAL
4. Garside & Laycock Litd v Booth [2011] UK EAT 0003/11/CEA

The appellant company had been undergoing trading difficulties in 2009 and as a consequence decided to ask its employees to accept a proposed 5% reduction in pay. The Respondent employee was only member of the workforce who ultimately refused to accept such a cut to his pay packet. He was dismissed on 5 October 2009 from his job as a welding maintenance worker which he had held for the previous seven years. This dismissal was found to be unfair at the Tribunal and the company appealed to the EAT.

The EAT remitted the matter to Tribunal to determine whether the dismissal was fair, to begin on the basis that the employer has already established a substantial reason for the dismissal (that they were facing financial difficulties and needed to reduce costs). A focus should be placed on whether the employer was reasonable, not upon whether the dismissed employee was unreasonable in refusing to accept the pay cut. In order to be reasonable, an employer should take account of the views of an employee, but a decision on the fairness of a dismissal will not rest on what an employee regards as unreasonable.

Counsel for the company stated that the employer went out of its way to accommodate the reluctance of the Claimant to accede to the pay cut. There had been a consultation with the workforce and a number of meetings prior to a vote taken by all employees. That vote had been overwhelming and after the decision to reduce pay there had been a number of individual meetings with the Claimant, together with an appeal process following his dismissal of which there had been no criticism.
http://bit.ly/qzfK52

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Legal-Island would like to thank Jenine McCourt, who provided the main content of this email. Jenine is a partner in Rosemary Connolly Solicitors with offices in Warrenpoint and Belfast. Jenine works exclusively in employment law and can be contacted on 028 4175 3121 or 028 9066 0823.
http://www.solicitorsni.net/default.asp

Note: Jenine will be making a presentation on equality law at 'Essentials of Employment Law' (6 October)
http://bit.ly/piOxEk

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Legal-Island
16 August 2011

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