In this issue;
Case Study - Dismissal letters later withdrawn still effective
As an alternative to redundancy, C F Capital plc (the Company) had discussed with the Claimant, Miss Willoughby, the possibility of bringing her employment to an end and re-engaging her on a self-employed basis. The exact terms had not been finalised, although both parties understood that a monthly retainer would be paid to the Claimant, along with commission.
The Claimant made it clear that before making a final decision, she would need further details from the Company. The Company failed to provide her with the requested information and on 22 December 2008, just before the Company’s annual Christmas shutdown, instead provided her with a written agreement on the assumption that terms had been agreed. Along with the agreement the Claimant was given a letter which stated that she had agreed to becoming self employed and that her contract of employment would terminate on 31 December 2008.
Upon receipt of the letter and agreement, the Claimant telephoned the Company and stated that she would not be accepting the agreement, but she did accept that her employment had been brought to an end. When the Company re-opened in January 2009, it sought to remedy the situation on the basis that there had been a misunderstanding and said that if the Claimant was not willing to be self-employed she could continue as before. The Claimant rejected the Company’s attempts to resolve the situation and issued a claim for wrongful and unfair dismissal. The Company defended the claim and argued that the Claimant had resigned from her position.
The Tribunal hearing the claim found in favour of the Company and stated that whilst the letter sent by the Company on 22 December 2008, "on its face" terminated the Claimant’s employment it should not be regarded as doing so by reason of "special circumstances". The Tribunal held that there had been a genuine misunderstanding between the parties about what had been agreed and that the Company tried to remedy the situation within a reasonable period of time, as soon as it could after the annual shutdown.
The Claimant appealed to the Employment Appeal Tribunal (EAT) and argued that the “special circumstances” exception should be limited to cases where a person had not intended to resign or dismiss and words were exchanged in the ‘heat of the moment’. In this case the Claimant said that the Company had not written the letter to her in the ‘heat of the moment’ and that at the time it was written the Company’s intention was to bring her employment to an end and offer her a self-employed contract instead.
The EAT agreed with the Claimant and held that the dismissal had been effective. As a general rule, an employer who uses unambiguous words of dismissal will dismiss the employee and exceptions to this rule are limited.
The EAT stated that tribunal had “failed to acknowledge that something exceptional was required for special circumstances" to be established. The fact that an employer or employee might in some way have been mistaken in issuing a letter of dismissal or resignation was not in itself, a ‘special circumstance’.
New Legislation Update - Additional Paternity Leave
In our March Bulletin we reported that new legislation had been introduced which would allow parents to ‘share’ the 52 week statutory maternity leave period, Additional Paternity Leave and Pay. The new legislation would apply to parents whose babies are born on or after 3 April 2011 and give fathers and civil partners the opportunity to take up to 6 months' paternity leave, in addition to their existing two week entitlement, providing that the mother had returned to work with a period of maternity leave untaken.
Recent comments by Theresa May, Minister for Women and Equalities, indicate that the Coalition Government may be thinking about revising the new legislation entirely. When asked in Parliament about whether the new legislation would be implemented she responded, “we are looking into how we can avoid constantly requiring businesses to effect innovations, and we are examining the timetabling of the additional paternity leave and flexible parental leave regulations.”
Currently the new legislation states that fathers will only be able to take additional paternity leave if the mother has returned to work, however the father’s right cannot take effect until the baby is 20 weeks old. Reports suggest that the Coalition Government is considering a more radical approach that would give parents more flexibility over how and when they share leave between them, possibly including both parents taking time off simultaneously.
If the legislation is implemented in April, employers will need to update their policies accordingly. However, given the comments made by Theresa May, it may be prudent to wait a while before taking action. Equally, employers need to be alert to the fact that there may already be some expectant parents hoping to take advantage of the new legislation, and to that extent, any updates and changes to the position should be communicated fully to employees.
Tribunal Claims increase again
Latest statistics released by the Tribunal Service show that claims issued during the year up to 31 March 2010 show a 56 per cent increase. This is the highest amount of claims ever received by the Tribunal Service.
Of particular interest to employers will be the fact that unauthorised deduction of wages claims increased from 33,800 to 75,500, redundancy pay claims increased from 10,800 to 19,000 and unfair dismissal claims increased from 52,700 to 57,400.
Given that claims are at a record high, you may wish to take advantage of our Risk Profile Questionnaire which will help you analyse if your business is exposed to claims. Please fill out the attached form and then one of our experts will contact you to discuss your results.
Withy King Employers Risk Profile Questionnaire
Ask the Expert - What is the legal position regarding sabbaticals?
Last month we introduced a new ‘Ask the Expert’ section where each month our clients and contacts can email us with any employment law queries they have. If you have a question you would like us to answer in next month’s bulletin please email us at asktheexpert@withyking.co.uk. Please make all questions general in nature and limited to approximately 250 words.
Q: One of my employees has approached me about whether he could take a 6 month sabbatical from work as he wants to go travelling. He is a good employee and if I don’t agree I think he will probably resign and go anyway. I think I could probably accommodate his request but are there any issues I need to be aware of?
A: There is no legal obligation to agree to this employee’s request, it is simply a case of you exercising your discretion and considering whether you can accommodate his absence from the workplace. Many larger businesses successfully operate sabbatical or career break schemes on the basis that companies realise that by offering such a scheme they are able to retain key employees over the longer term. If you decide to agree to the request then there are some key issues to consider and then have drawn up into the form of an agreement.
• How long will the sabbatical last?
• Can the sabbatical be extended or shortened by either party and, if so, in what circumstances and on what notice?
• Will the employee be paid during the sabbatical and, if so, at what rate?
• What will happen to the employee’s entitlement to any non-cash benefits during the sabbatical?
• How might the employee's pension arrangements be impacted? (Will the employer continue to make any contributions? Will the employee continue to contribute?)
• What effect will the sabbatical have on an employee's continuity of employment?
• What effect will the sabbatical have on the employee’s contractual terms such as confidentiality and restrictive covenants?
• Will the employee have a right to return to the job he left or just any job that the employer has available at the end of the sabbatical?
Finally, if you do agree the request then it would be worthwhile introducing a sabbatical policy which would assist you in dealing with any future requests in a consistent manner by setting out key eligibility criteria and requirements.
