Reward insight
struggled with concentration and could not work late evenings. In late 2013, his employer started making requests for the employee to work later which led to an assumption he would work late. The employee felt he might lose his bonus, or be sacked, if he didn’t work later hours. He raised a complaint with his employer but was told he could leave if he was unhappy. The employee resigned and made a claim for constructive unfair dismissal and a failure to make reasonable adjustments. The ET deemed the employee was disabled because of the continuing effects of his bike accident. When deciding whether there was a PCP which placed the employee at a disadvantage, the ET found the employer’s progression from requesting the employee to working late to assuming this would happen created an expectation. This, however, the ET held was not a requirement and therefore not a PCP. On appeal, the EAT judged the ET had erred by adopting too narrow an approach as a ‘requirement’ is less flexible than a PCP. The EAT determined an expectation or assumption placed on an employee could constitute a PCP as, especially in the workplace, employees can feel obliged to work in a particular way even if this is damaging towards their health. The EAT allowed the appeal and found the expectation could be classed as a practice operating in the workplace. On appeal, the Court of Appeal highlighted that the question for a tribunal to look at was whether the pattern of requests to work late, and the later expectation that the employee would work later evenings, constituted a PCP. This was different to looking at whether the employee was ‘coerced’ or ‘forced’ to work by a requirement. The Court found the pattern of repeated evenings which created a pressure on him to agree to the requests sufficient to create a ‘practice’ within the meaning of a PCP. Keeping Kids Company (in compulsory liquidation) v Smith and others Under the Trade Union and Labour Relations (Consolidation) Act 1992, employers are required to carry out collective consultation where they are proposing to dismiss as redundant twenty or more employees at one establishment requests made it clear the employer expected the employee to work late
within a period of ninety days. Though there is a ‘special circumstances’ defence where there are special circumstances which make it not reasonably practicable for the employer to carry out consultation, the employer is still required to take reasonably practicable steps to attempt to comply with the obligation. ...changed the charity’s position as it brought everything to an end Employers that breach the consultation obligation can be liable for a protected award of up to ninety days’ pay per employee. The EAT considered whether the company which was in financial difficulties that led to compulsory insolvency had breached the consultation obligation. Keeping Kids Company (KKC) was a children’s charity reliant on substantial donations from individuals and corporate sponsorship. After suffering financial difficulties in late 2014, the government made a conditional grant of £4 million to help the charity stabilise itself in early 2015. The charity made a further application for a one-off grant of £3 million on 12 July 2015, which included a business plan outlining company restructure. The restructure proposed closing Bristol operations, making staff redundant at a number of groups in London and reducing staff costs by 58%, although there was no specific identification of which roles would become redundant. The grant was approved on 29 July 2015 to allow KKC to reorganise and transform. On 30 July 2015, a police investigation into allegations against KKC relating to safeguarding issues was publicised. The government informed KKC the grant agreement was terminated on 3 August and demanded immediate repayment of any unspent grant money. The Chairman sent an email to all staff on 5 August 2015 stating KKC was closing with immediate effect and all employees were dismissed by reason of redundancy from this date. Employees in Bristol and London made a claim for a protective award due to KKC’s failure to carry out collective consultation. The ET had to determine whether the obligation to collective consultation arose, whether there was a special circumstances
defence and, if not, the extent of the protected award to be ordered. By a majority, the ET decided there were sufficiently firm proposals to make staff redundant by 12 June which triggered the obligation to consult promptly from this date. The proposal affected any or all of KKC’s employees as it depended on whether the grant application was successful or not but, as a minimum, 58% of employees were affected. The fact that KKC did not know which employees were affected did not mean the obligation did not arise. Even though there was no guarantee of solvency, and the financial circumstances were precarious from 30 July, this did not form a ‘special circumstance’ defence for KKC in relation to the pre-existing failure to consult, although it may have prevented further consultation taking place. The ET awarded a protective award of ninety days’ pay per employee. KKC appealed. The EAT reiterated that the obligation to collectively consult arises when the employer is proposing to dismiss the required number of employees by reason of redundancy. The EAT considered the ET had correctly determined the obligation to consult was triggered by 12 June 2015 as the funding proposal, which contained redundancy proposals, only had two possible outcomes: immediate insolvency where all employees were at risk, or large-scale redundancies to dismiss over half the staff. As consultation is required to be carried out ‘in good time’ by looking ahead at the realistic time-scale to allow this to be a meaningful process, the ET was also correct to conclude that this meant promptly from 12 June 2015. The EAT also dismissed arguments that KKC had a special-circumstance defence in relation to the outstanding grant application and the circumstances of 30 July 2015. Although the July events were an unexpected and sudden disaster, the EAT commented that this did not apply a defence to the breach of obligations but rather applied a defence in respect of any continuing obligation from that date. The EAT upheld KKC’s appeal against the protective award of ninety days’ pay as the ET had failed to take in to account that the events of 30 July might prevent further consultation and had changed the charity’s position as it brought everything to an end. The assessment of the protected award was remitted back to the tribunal. n
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Issue 40 | May 2018
| Professional in Payroll, Pensions and Reward |
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