Employer pension contributions count towards a week’s pay

Facts

In the Employment Appeal Tribunal (“EAT”) and in the matter of University of Sunderland (“University”) v Ms K Drossou, the University of Sunderland appealed against the finding that employer pension contributions are to be considered when calculating the claimant’s weekly pay.

Ms Drossou worked for the University and was dismissed as a result of an irretrievable breakdown in working relationships. Ms Drossou was considered to be the primary cause of the breakdown.  The employment tribunal found that she had been unfairly dismissed and ordered the University to reinstate her. The University did not comply with the order and the tribunal awarded compensation instead. The EAT departed from the usual practice of excluding pension payments in calculating the weekly wage on the basis that section 221(2) of the RTA 1996 does not state that the amount payable by the employer under the contract of employment has to be payable to the employee and remuneration in section 221(2) means a reward in return for services and pension contributions are no less a reward for service than basic pay. The University appealed this finding.

Decision

The appeal was dismissed. The EAT agreed with the tribunal with respect to the above reasons. The EAT drew the distinction between section 221(2) and section 27(1) of the RTA 1996. The latter specifies that the sums must be payable to the worker whereas those words are absent in section 221(2).

Comments

Pension payments have not been taken into consideration when calculating a claimant’s weekly wage on the basis that the payment is not received directly by the employee but paid into a pension fund. This decision has increased the potential value of a claimant’s weekly pay. This decision will be important for employers who pay a high employer contribution rate. It is yet to be seen whether there will be further litigation following this decision or whether the correctness of the EAT’s judgment will be challenged.

IMPORTANT: This blog is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice.

For further information on this or any other employment related matters please contact Rupert Farr on: 020 7952 6216 or rupert.farr@blaketurner.com.

The Housing Grants, Construction and Regeneration Act 1996

The Housing Grants, Construction and Regeneration Act 1996 introduced statutory adjudication to the construction industry in addition to contractual adjudication which already featured in a number of standard form contracts.

Statutory adjudication provides for a 28 days fast track dispute resolution procedure.

In the almost 20 years since adjudication has been available through this piece of legislation, Lewis Cohen has represented a number of claimants and respondents in the process dealing with a number of issues including final account disputes, claims for delay and disruption and claims for defective workmanship and negligent design.

Not only does Lewis have a breadth of knowledge from his experience in this field but he recently studied for two years on the RICS Diploma course and is now a qualified adjudicator.

Adjudication, by its nature, remains a private dispute resolution procedure unless the decision is taken to court for enforcement.

Lewis has experience in successfully enforcing adjudicator’s decisions in the Technology & Construction Court.

Given the fast track nature of adjudication, this requires a flexible response when defending claims and Lewis and his team are able to offer immediate advice and a rapid response when acting for both the claimant and the respondent.

Sexual and racial discrimination case

Blake Turner Solicitors recently acted in a discrimination case for an employer who faced a claim of sexual and racial discrimination for an employee who had worked there for less than six weeks.

Despite obtaining a Deposit Order against the Claimant at an early stage in the proceedings (on the basis that the Claimant had low prospects of success), the Claimant decided to pursue the matter all the way to the full Tribunal hearing.

After one aborted hearing in August, the employer was successful in defeating all heads of the claim.  As the judgment was based on the same findings as the Deposit Order, the Claimant was deemed to have behaved unreasonably in continuing with the proceedings.

As a result we made an application on behalf of our client for a Costs Order against the Claimant.  Costs Orders in Tribunal proceedings are extremely rare and are very much the exception to the rule.  Indeed they are only obtained in 0.07% of cases.  We were successful in obtaining the Order after a day’s hearing before the same Tribunal which heard the case.

For further information on this or any other employment related matters please contact Rupert Farr on: 020 7952 6216 or rupert.farr@blaketurner.com

Former employee sent to prison for deleting evidence in breach of court order

Facts
In OCS Group UK Ltd (“OCS”) v Dadi and others, a former employee of the claimant was committed to prison for six weeks for breaching an injunction to preserve evidence pending trial of an action against Dadi for breach of confidence.

Mr Dadi had worked for OCS. OSC lost a contract to one of its competitors – OmniServ. Mr Dadi was transferred to OmniServ under TUPE. Before the TUPE transfer, OCS brought a claim against Mr Dadi on the basis that Mr Dadi had conspired with one of the other defendants, Mr Ahitan, by emailing confidential information belonging to OCS to his personal email account over a period of time. Mr Ahitan worked for OmniServ but previously worked for OCS as Mr Dadi’s manager.

OCS obtained an injunction against Mr Dadi which prohibited him from disclosing or making use of any of OCS’s confidential information, required him to provide information to the court about what discourse he had made of that information, required him to preserve hard copy and electronic documents, and, prohibited him from disclosing to anyone else (except his legal representatives) the existence of the order or the possibility of proceedings being commenced.

The standard notice on the front page explained that breach of the order would be a contempt of court which could result in imprisonment.

OCS’s lawyer personally served the order and read out the notice. Immediately following this, Mr Dadi telephoned Mr Ahitan and informed him of the injunction. He also deleted several emails from his personal email account. The following day, Mr Dadi deleted a further 8,000 emails and told various family members about the injunction.

OCS applied for Mr Dadi to be committed to prison for contempt of court.

Decision
Mr Dadi was sentenced to six weeks in prison for contempt. The court emphasised their strong disapproval of his conduct and imposed the prison sentence also to act as a deterrent. The court took into account that the acts were “deliberate and contumacious breaches”.

The breaches had significantly prejudiced OCS and cost them considerably in forensic examination to salvage information that should have been left untouched.

Comments
It is not unusual to see a sentence such as this for breach of an injunction but it is not often these powers are being used in an employment context. This case highlights the importance of complying strictly with injunctions aimed at preserving evidence. The court will have little sympathy with pleas of naïveté especially if an employee goes to great lengths to cover their tracks. The notice on the front of the order is there for a reason.

IMPORTANT: This blog is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice.

For further information on this or any other employment related matters please contact Rupert Farr on: 020 7952 6216 or rupert.farr@blaketurner.com.

Supreme Court rules Employment Tribunal fees are unlawful

Facts

In 2013 the Government introduced employment tribunal fees of up to £1200 in order to reduce the number of weak and vexatious cases brought by litigants. As a result, this has led to a 79% reduction of cases brought in the Employment Tribunal in the last three years.

The trade union, UNISON, brought a case seeking judicial review of the fees arguing that the fees prevented workers accessing justice and were therefore unlawful. The fees were originally brought in for the objective of transferring part of the cost burden from the taxpayer. Fees ranged from £390 to £1200 depending on the complexity and time spent on the issues.

Decision

The lower courts dismissed UNISON’s claim but the Supreme Court has ruled that the Government was acting unlawfully and unconstitutionally when the fees were introduced. The Government have committed to reimburse all fees if it is found they acted unlawfully. It is expected that £32m will need to be repaid to Claimants.

Fees will be stopped immediately and the process of reimbursement will begin. The taxpayer will now be forced to pick up the bill.

Discrimination cases cost more for claimants because of the complexity and the time the hearings took. The Supreme Court held that the fees were indirectly discriminatory because a higher proportion of women would bring discrimination cases.

Comments

This case has provided a fundamental change for claimants who were previously obliged to pay fees for bringing a claim against an employer. The change in law with regard to fees will now make it easier for employees to bring claims against an employer. The ruling has been described as, “a major victory for employees everywhere.” It remains to be seen whether there will be a large increase in cases brought to the Employment Tribunal but it will certainly not lead to a decrease!

IMPORTANT: This blog is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice.

For further information on this or any other employment related matters please contact Rupert Farr on: 020 7952 6216 or rupert.farr@blaketurner.com

Whistleblowing and Public Concern at Work

Facts

Whistleblowing and Public Concern : N was employed as a director of the Mayfair office of CG Ltd, a firm of estate agents. On three separate occasions, N informed the senior managers that there were inaccuracies in the company’s accounts and that the figures were being manipulated to benefit shareholders. He believed costs and liabilities had been deliberately misstated and inaccurate figures were used to calculate commission payments to over 100 senior managers; including himself.

N was subsequently dismissed. He brought claims including automatically unfair dismissal for having made a protected disclosure.

The employment tribunal found that N had a reasonable belief that the disclosures were made in the public interest and upheld N’s claim. Although N had a personal motivation in raising the allegations, the tribunal were satisfied that he had the other managers in mind and they encompassed a sufficiently large section of the public to engage the public interest. CG Ltd appealed on the basis that in order for a disclosure to be in the public interest, it must serve persons outside of the workplace. The Court needed to consider the meaning of the words “in the public interest.” The appeal was subsequently dismissed.

Comments

The Court has concluded that disclosure can be made in the ‘reasonable belief it is in the public interest’ if it relates to a contractual dispute affecting a group of employees and not just the wider public.

The crux of the decision is that whistleblowing protection may be available even where an employee’s primary concern is his own employment. The decision should be a reminder to employers in both the public and private sector and they should take care before disciplining or dismissing employees who have made complaints which could involve a public interest element.

IMPORTANT: This blog is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice.

For further information on this or any other employment related matters please contact Rupert Farr on: 020 7952 6216 or rupert.farr@blaketurner.com.