Employment law
employee wages to provide them with accommodation, subject to a statutory cap (otherwise known as ‘accommodation offset’) and not be in breach of NMW law. Ant Marketing Limited (AML), a telemarketing business, required all new operatives to undertake mandatory, paid induction training. Due to the expense of this training, operatives were expected upon commencement of employment to sign a training agreement which instructed they would remain in the service of AML for at least twelve months. If the operative left before this period ended, or did not complete the training, they would be liable to repay some of the training costs. Some of the workers for AML were also tenants in a number of local flats, which, although not owned by AML, were owned by a separate company with the same managing director. As a result of this, some of the workers asked for their rent to be deducted from their wages and paid to the separate company. The organisation was later issued with NMW underpayment notices by HM Revenue & Customs (HMRC) as a result of the deductions for training fees and accommodation costs. AML appealed to the ET against the notices. When considering the training deductions, the ET dismissed AML’s appeal, because these fell within the remit of regulation 13. As the training was a mandatory requirement for the operatives, it was therefore the same as if they had been asked to purchase and wear uniforms to conduct their role. The appeal was upheld, however, when looking at the accommodation issue. Although the rent paid through deduction did exceed the accommodation offset cap, the crucial point was that the flats were not technically owned by AML itself, but a separate company owned by its managing director. Both AML and HMRC appealed against the two rulings respectively. AML argued that the ET had misinterpreted regulation 13, disputing that recouping training costs was a deduction. However, the EAT upheld the tribunal’s ruling and agreed that the training was mandatory, meaning it was no different to essential tools or uniform needed to conduct a role. In relation to the accommodation issue, HMRC argued that the ET should have taken a ‘purposive’ approach to the
interpretation of regulation 10. The EAT also dismissed this argument, finding that if they were to interpret this regulation the way the HMRC outlined, they would have been effectively re-writing the legislation. This ruling sends a clear message regarding the issue of recoupment of training costs, that NMW law could be breached if the training is deemed essential to the role. This will depend on the circumstances of each case and organisations should proceed with care in these situations. Tai Tarian Limited v Howell Lyn Christie The EAT has ruled that the ET erred by finding evidence from an external witness was unreliable and in finding the decision to dismiss unfair. Under the Employment Rights Act 1996, in order to demonstrate that the decision to dismiss an employee is fair, the employer needs to clearly show the reason for the dismissal. It also needs to be established that the employer’s actions leading up to the decision to dismiss fell inside the ‘band of reasonable responses’ to the situation. ...proceed with care when relying on evidence from anonymous sources The claimant in this case had worked as a carpenter for the organisation for fourteen years. The employer, Howell Lyn Christie (HLC), was informed by a client that the employee had made a number of homophobic remarks whilst on a job in their property. This included him allegedly telling the story of how a junior employee had been trapped in a room with a homosexual male whilst working for another client, and how the claimant had kept him in there for his own amusement. Two separate interviews were conducted with the client that had made a formal complaint, and the claimant was suspended. At an investigation meeting, the claimant denied the allegation and was not given any information as to who the client was. He continued to deny the allegations, claiming his role as a foster carer may have made a parent want
‘revenge’ against him. The claimant was later dismissed for gross misconduct, with the investigating officer only referring to the second interview from the client in making the decision. On appeal, the claimant cited character references that he believed proved he was not homophobic. He also called into account discrepancies in the two statements from the client, stating these made the evidence unreliable. The decision to dismiss was upheld, with HLC’s appeal officer noting that although she did not believe the claimant was homophobic, this did not mean the incident did not take place. One of the main reasons behind this decision was that the client had been aware of the story concerning the junior employee; she questioned how else she would have known this. Crucially, she had attempted to interview the client herself but had been refused this. The ET upheld a claim of unfair dismissal. HLC’s decision had ultimately fallen outside the band of reasonable responses by persisting in relying on an anonymous account, despite the fact that there were discrepancies in the two statements from the client, and the client had refused to provide further evidence. HLC appealed on a number of grounds. The EAT upheld the appeal, labelling many of the tribunal’s findings as ‘perverse’, and remitted the case to a fresh tribunal. To the EAT, the ET had concluded that because the appeal officer did not believe the claimant was homophobic, she must not believe he had made the comments. This did not necessarily follow, and the tribunal had failed to provide an explanation as to why her belief could not be genuine. The EAT also took issue with the argument that the reliance on the client’s statements, without having further evidence from her, was unreasonable – the client had simply refused to provide evidence at that time, and the ET had failed to consider if she would have not done so later. Organisations should proceed with care when relying on evidence from anonymous sources. Whilst this case went the way of the employer for now, the new ET may still, after reassessing the facts, conclude that it was unreasonable for the employer to make the decision that it had. n
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| Professional in Payroll, Pensions and Reward |
Issue 63 | September 2020
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