Our Monthly Employment Law Updates provide a summary of some of the most important cases, helping our clients to stay up-to-date on recent case law developments. These updates are primarily aimed at in-house employment lawyers but may also be of interest to HR professionals who wish to be updated on developments in employment law.
April’s Employment and HR update covers the following;
1. Disciplinary Investigations & Parallel Police Investigations
2. Updated Vento Guidelines
3. Long Term Disability Benefits within an Employment Contract
4. Personal Liability of Directors
5. The Modernisation of Tribunals
1. Disciplinary Investigations & Parallel Police Investigations
On 19 March 2019 The Court of Appeal clarified that an employer could continue with its disciplinary investigations into an employee’s conduct whilst the outcome of a police investigation was pending.
In the case of North West Anglia NHS Foundation Trust v Gregg, the claimant was a doctor who was being investigated for professional misconduct; he was the subject of a police investigation and an internal disciplinary investigation following a number of patient deaths. The claimant was suspended by the Trust on full pay.
Whilst the police investigations were ongoing, the Interim Orders Tribunal (“IPO” – part of the General Medical Council) suspended the claimant’s registration to practice. The Trust then stopped his pay, partly on the basis that his entitlement to pay was conditional on him being ready, willing and able to perform his duties as a doctor, and he was not able to do so whilst his registration to practice had been suspended.
The claimant was granted an interim injunction in the High Court, preventing the Trust from continuing with their disciplinary hearing until the police investigation had concluded. The injunction was granted on the basis that if the Trust continued with their disciplinary investigations, then this would breach their implied duty to maintain mutual trust and confidence (the duty to maintain trust and confidence is incorporated in to all employment contracts and puts a duty on the employer to not act in a calculated way, likely to destroy or seriously damage the relationship of trust and confidence between the employer and employee unless there is reasonable and proper cause to do so). The High Court also ruled that the Trust breached the claimant’s employment contract by stopping his pay during the period of suspension.
The Trust appealed and the Court of Appeal overturned the injunction, allowing the Trust to continue with their disciplinary investigations. The Court of Appeal found that the judge had previously applied the wrong test when deciding whether to grant the injunction; there was no breach of the implied term of trust and confidence as the conduct of the Trust was not calculated to destroy or seriously damage the relationship as they were merely following their contractually-binding disciplinary procedures and the Trust had reasonable and proper cause for their conduct. The court will normally only intervene and grant an injunction in such circumstances if an employee can show that if the disciplinary proceedings continue, there would be a real danger of injustice.
Whilst the Court of Appeal allowed the Trust to continue their disciplinary proceedings, they did agree with the High Court’s decision that the Trust was not entitled to withhold the claimant’s pay unless there were exceptional circumstances (such as an admission of guilt or an express right to do so within the claimant’s employment contract under such circumstances).
What this means for employers:
This is an important decision as it means that any internal disciplinary investigations undertaken do not have to be put on hold whilst awaiting the outcome of any parallel police investigations. However, employer’s must be mindful that if police investigations could be ongoing for some time, they should refrain from stopping their employee’s pay whilst undergoing their own disciplinary proceedings unless the employment contract specifically stipulates the circumstances in which payment can be halted or unless there are exceptional circumstances to do so (such as an admission of guilt from the employee).
Read the full judgment here
2. Updated Vento Guidelines
The Vento bands (awards given for injury to feelings in discrimination cases) have been increased for claims on or after 6 April 2019 as follows:-
- Lower band £900 to £8,800 for less serious cases;
- Middle band £8,800 to £26,300; and
- Upper band £26,300 to £44,000 in the most serious of cases.
What this means for employers:
Employers should note that these bands increase annually making successful discrimination claims more costly!
3. Long Term Disability Benefits within an Employment Contract
The Employment Appeal Tribunal (EAT) handed down judgment in the case of ICTS Limited v Visram on 27 March 2019 finding that where an employee had contractual permanent health insurance benefits until they ‘returned to work’, this entitlement would not cease due to the claimant being able to work in some capacity.
In this case, the claimant had been on sick leave for a considerable length of time. Under the terms of his employment, he was entitled to long-term disability benefits, dealt with by way of an insurance policy. In accordance with the policy, the insurers would pay the claimant until he returned to work, died or retired. After an unsuccessful attempt at a phased return to work by the claimant, he went back on sick leave until he was ultimately dismissed on the grounds of capability.
The claimant brought a claim for unfair dismissal and disability discrimination. The Tribunal upheld his claim, and stated during the hearing that the claimant was contractually entitled to the long-term disability benefits until he returned to his original role within the company or died or retired. The Tribunal did not accept the argument that the claimant’s entitlement ended when he was capable to return to work in any role and awarded compensation to the claimant on the basis that the benefits under the policy would have continued until death or retirement.
Assessing remedy, the tribunal held that “return to work” meant return to the work from which he had gone sick. There was no prospect of the Claimant ever being able to do that, so he was entitled to be compensated for loss of benefits until death or retirement.
The employer appealed the decision but the Employment Tribunal dismissed the appeal on the basis that the correct interpretation of ‘return to work’ had been applied in the context of the insurance policy terms.
What this means for employers:
This case highlights the risk on employers dismissing employees on long term sickness or returning employees from long term sickness where they have a contractual right to contractual permanent health insurance benefits. Careful consideration of the wording of the permanent health insurance terms is required prior to dismissal being considered as very large losses can flow from dismissal often up to retirement or death!
Read the full judgment at here
4. Personal Liability of Directors
On 8 April 2019 The High Court in the case of Antuzis v DJ Houghton Catching Services Ltd and others found that directors of a limited company can be held personally liable with regards to breaches of an employment contract.
In this case, the claimants argued that they were being exploited by their employer; working long hours and being paid less than the statutory minimum wage, not being paid their full wages due and not being entitled to holiday pay or overtime.
Generally, a director will not be personally liable for a breach of contract if they have acted in good faith with regards to the company and within the scope of their authority. However, if there is a statutory element to the breach then this may suggest the director had failed to comply with their duties to the company, making them potentially liable for bringing about the breach of contract.
The High Court found in this instance that the director did not honestly believe they were paying the claimants the minimum wage, overtime and holiday pay and therefore were personally liable for the breaches of contract.
What this means for employers:
This case is an important reminder of director’s duties in relation to a company and acts as a warning with regards to potential personal liability where a director is found not to be acting in good faith with regards to the company.
Read the full judgment here
5. The Modernisation of Tribunals
Sir Ernest Ryder’s report “The modernisation of Tribunals” has now been published in response to the significant increase in claims and therefore strain on the Tribunal system since Tribunal fees were abolished.
Whilst the proposals are not guaranteed, it is thought that they will be introduced over the next 24 months. Any way to potentially speed up and modernise the Tribunal system will be welcomed by claimant’s and employers.
The proposals:-
- emphasise the need for ‘open justice’ and will try to achieve this by recording all Tribunals as an alternative to or in addition to open hearings. The public will then be able to watch or listen to the recorded Tribunal. A protocol for producing transcripts of proceedings is to also be agreed;
- plan to introduce robust and reliable digital technology which will introduce digital case files and allow Judges to access and manage cases online;
- will look to introduce a bank of templates to be routinely used in order to improve efficiency (which would include orders, notices and any standard letters and documents).
Read Sir Ernest Ryder’s report here
For more information, please contact Tom Evans: tom.evans@dtmlegal.com/ 0151 230 1217
