HR News Round-up 

 

 

 

 

 

 

 

 

 

 

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In recent weeks, we have reported that Employee-Shareholder contracts will be implemented; won’t be implemented... This month, the ‘will-they/won’t they’ dilemma has been resolved and we have learnt that they will be implemented with effect from September 2013. Last month, the concept of these contracts was thrown out by the House of Lords, who called the proposal ‘ill thought through, confused and muddled’; however after some somewhat hastily drafted amendments to the relevant clause were drafted, the Growth and Infrastructure Bill, of which this is part, received Royal Assent and was entered onto the statute books on 25th April 2013. 

 

The amendments to Clause 27 of the Act now require that: - 

 

These are in addition to earlier concessions implemented after the House of Lords first rejected the Bill which stated that; no-one would automatically lose employment benefits for failing to accept an employee shareholder job-offer and the granting of income tax relief on the vesting of the first £2,000 of shares. Despite now being implemented, it looks as though the clause will continue to receive a frosty reception; with a number of Solicitors stating that they will be happy to offer independent advice and that advice will be ‘don’t do it’!!! 

 

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It has been announced by ‘Monster’, the online recruitment firm that they will not support the advertisement of unpaid internships on its website. It is the first recruitment site to take such action and has stated that this type of work ‘exploits young job-seekers’. This follows the referral of 100 Companies, including Wigan and Reading Football Clubs, to the HMRC for investigation into whether their use of unpaid interns is in fact in breach of the law. 

 

Employers are able to offer unpaid ‘work experience’ to those seeking work, but where the ‘internship’ in fact amounts to an actual ‘job’ i.e. where the hours and duties are fixed and the role is on-going for a considerable period of time; they will be in breach of legislation if they do not at least pay a rate which is equivalent to the National Minimum Wage. The National Minimum Wage currently stands at £6.19 per hour for those aged 21 and over, £4.98 for those aged 18 – 20, £3.68 for those aged under 18 and £2.65 for Apprentices aged under 19 or in the first year of their apprenticeship; these figures will increase on 1st October 2013. 

 

The move by Monster has been universally greeted by those campaigning for the fair treatment of those undertaking internships and it is hoped that more recruitment sites will follow their example. Meanwhile, the HMRC have indicated that they will ‘name and shame’ the Companies under investigation if they are found to be in breach of the legislation with their intern schemes. 

 

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In this first case, both the Employment Tribunal and the Employment Appeal Tribunal held that a redundancy situation had occurred, despite the fact that the employee’s replacement had already been recruited. This case is Malekout v. Ahmed (t/a the Medical Centre); in summary, M had indicated to his employers that he was thinking of resigning and in response to this, Mr Kader was recruited as a ‘trouble-shooter’ to work alongside M and to replace him if he did in fact leave the Practice. M accepted that it was appropriate and would be beneficial to the Practice for Mr Kader to be in post at that time and consequently, a situation existed whereby two people were effectively fulfilling the one role of ‘Practice Manager’. 

 

As a trouble-shooter, Mr Kaders’ impact on the Practice was immediate and he identified a number of failings in management practice, where it was clear that M was not doing specific tasks. This resulted in an appraisal being conducted with M, the first one since his appointment into the role 13-years earlier and this highlighted that trust and communication had broken down between M and his employers and also raised serious concerns in M’s ability within the role. M then went on sick leave and during this time, the Practice conducted a restructuring exercise, dismissing M two weeks later on grounds of redundancy. 

 

M then brought a number of claims against his former employer, one of which was unfair dismissal by reason of redundancy. The Tribunal found that the decision to retain Mr Kader and dismiss M had in fact created a redundancy situation and that this had been the sole reason for M’s dismissal. The Tribunal held that the dismissal had been unfair, largely due to the lack of any consultation, but reduced the compensation awarded to M by 100%, to reflect the inevitability that he would have been dismissed in any event. 

 

M appealed this decision, but it was thrown out after a preliminary hearing; the EAT concluding that the Practice had employed Mr Kader because of the fear that M would resign and leave them without a Manager, it was therefore inevitable that with two people effectively doing one job, there would be a need to reduce the number of employees to one and consequently, there had been a diminution in the requirement for employees to carry out work of a particular kind within the meaning of the statutory definition of redundancy. The decision to reduce the compensation was also upheld by the EAT. 

 

Why this case is interesting is that the employer chose to make the dismissal on grounds of redundancy, when in fact it could have opted for any of the other fair reasons for dismissal i.e. capability (for reasons of poor performance and/or a better qualified replacement) or some other substantial reason (the restructure). The decision to categorise the dismissal as redundancy was accepted by both the Employment Tribunal and the Employment Appeal Tribunal and the employer was not required to justify their rationale for taking this approach, it was sufficient that a diminished requirement had arisen and this was a genuine reason for dismissal. 

 

The case is also fairly unique in that the Tribunal ordered a 100% Polkey reduction; forming the opinion that even if the process undertaken by the employer in reaching the decision to dismiss the employee had not been flawed, it would not have made any difference to the outcome i.e. even if the employer had gone through a fair process, taking a longer period of time to make their decision and to consult with the employee, it was inevitable that the employee would ultimately have been dismissed. 

 

However, although the approach taken by the employer in temporarily increasing the workforce to justify the redundancy of a problematic employee shortly afterwards has been successful in this particular case and given its unusual facts; employers are warned that Tribunals will be hard on them if they believe that the employer has developed a particular ‘HR strategy’ without good faith.  

 

 

Obesity in the UK is a commonplace issue in the media and news reports and figures suggest that 60.8% of adults and 31.1% of children are overweight and almost 25% of adults (22% female and 24% male) have a ‘body mass index’ in excess of 30, which means they are obese. There is no doubt that these facts have an overwhelming impact on our day-to-day lives and will undoubtedly, over time will become more of an issue in the workplace and for employers. 

 

Obesity itself is not a ‘disability’ and is therefore not protected by the Disability Discrimination provisions of the Equality Act 2010. However, a recent Employment Appeal Tribunal has ruled that associated medical conditions connected to obesity may mean that the individual is disabled. This particular case is Walker v Sita Information Networking Computing Ltd and when the initial Employment Tribunal ruled that Mr Walker was not disabled in accordance with the definition of the Act, Mr Walker appealed against that ruling. 

 

Mr Walker suffered from a ‘functional overlay’ of medical conditions, which included, but were not restricted to asthma, dyslexia, knee-joint problems, diabetes, high blood pressure and chronic fatigue syndrome and all of which were compounded by his obesity, weighing 21.5 stones. The Occupational Health specialist engaged by the Employer concluded that Mr Walker had a wide range of symptoms in which a significant contributor was functional and/or behavioural; but there was no evidence of any pathological process to explain the range of symptoms of any significant structural changes of a physical nature which would lead to significant impairment or disability. ‘Functional overlay’ is defined as ‘an emotional aspect of an organic disease. It may occur as an overreaction to an illness and is characterised by symptoms that continue long after clinical signs of the disease have ended’. It is not, however, a medical condition. 

 

Consequently, the initial Tribunal found that as there was no clear medically defined cause of Mr Walkers’ condition, that he was not disabled. The appeal was allowed by the EAT, who substituted a finding that Mr Walker was in fact, disabled. In applying its findings, the EAT accepted that where the definition of disability refers to a ‘physical or mental’ impairment, the purpose is not to confine it to conditions that can be given a medically-recognised label, one or the other, but to describe the nature of the impairment. In Mr Walker’s case, whether the ‘physical’ or ‘mental’ labels were considered, plainly both were satisfied. 

 

The EAT found that the tribunal had incorrectly held that a physical or mental impairment could only be established if it were possible to say that the impairment was caused by something physical or mental. The cause of such impairment was not the issue and the fact that someone’s impairment may lack an apparent cause was really a matter of evidence rather than a legal issue. If there is no evident cause of a supposed impairment, then a tribunal may conclude that the person does not suffer from it. However, in this case, there was no challenge to the evidence that Mr Walker was suffering from the impairments of which he complained. 

 

In concluding their findings, the EAT Judge stated that the fact that some is obese does not of itself, make someone disabled within the legal definition, but ‘it may make it more likely that someone is disabled’. This summary is key because it seeks to prevent the introduction of the concept of ‘weight discrimination’ through the back door and in fact, reiterates the current position whereby, for example, an alcoholic could be protected from discrimination, not because they are an alcoholic, which is an excluded condition within the Act, but because of perhaps their associated liver disease which has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities; which is the absolute crux of the legal definition of disability.