In this
update:
Employer affirms
contract and cannot justify dismissal
The
Court of Appeal has confirmed that where an
employer had knowledge of an employee's breach
which it later sought to rely on to summarily
dismiss the employee, it should have reserved
its position in relation to the breach. If the
employer delays too long before accepting the
breach and terminating the contract (i.e. it
"affirms" the contract), it cannot rely on the
breach to justify the dismissal.
In
Cook v MSHK Limited and Ministry of Sound
Recordings Limited, Mr Cook was employed by
MSHK Limited (MSHK) and was a managing director
of Ministry of Sound Recordings Limited
(Recordings). His contract contained
post-termination restrictions which prevented
him from soliciting key employees, artists,
suppliers and customers. It did not prevent him
from competing with the employer. When Mr Cook
resigned, MSHK claimed that he said that he
would not be undertaking any activities at his
new employer which competed with MSHK.
Questions
arose during Mr Cook's notice period as to
whether he had been telling the truth about his
new role. When Mr Cook returned to work after a
stress-related absence, MSHK commenced
disciplinary proceedings against him and he was
summarily dismissed. MSHK said that his conduct
amounted to a breach of the implied duty of
mutual trust and confidence. For example, he had
lied by saying that his new role would not
compete with MSHK and he also attempted to
obtain a £100,000 company loan after tendering
his notice. MSHK and Recordings issued
proceedings against Mr Cook, seeking a
declaration of the lawfulness of his dismissal.
They also sought damages and compensation for
breach of fiduciary duty.
The
High Court struck out some of the alleged
breaches relied on by MSHK and Recordings but
allowed others to proceed to full trial. These
included the allegations that Mr Cook had failed
to inform MSHK of his intention to compete and
his acceptance of the £100,000 loan, in respect
of which MSHK had expressly reserved its rights.
Mr Cook appealed, arguing that the contract as a
whole had been affirmed and the employer should
be prevented from relying on any of the alleged
breaches. MSHK and Recordings argued that they
had treated Mr Cook with sympathy and
thoughtfulness during his sick leave and
although it was open to them to
reserve their position with regard to all
his various breaches, this could have damaged
the relationship of trust and confidence.
The
Court of Appeal allowed Mr Cook's appeal in
relation to the first allegation, preventing
MSHK and Recordings from relying on this as a
reason for justifying his dismissal, as they had
not reserved their position. However, it allowed
the allegation in relation to the loan to stand,
where MSHK did reserve its position. The case is
a reminder that where employers do not act
immediately in response to alleged breaches by
employees, they should take care to reserve
their position going forward.
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Agency workers face
discrimination and poor treatment
Many
agency workers face discrimination and poor
treatment at work according to a recent survey,
published by the TUC to coincide with the end of
the Government's consultation on the Temporary
Agency Workers Directive.
The
YouGov survey, commissioned by the TUC,
interviewed over 2,700 people who are temps or
who have done agency work in the past year. The
survey showed the following:
-
Less
than one in four (23 per cent) said they worked
through an agency 'because they enjoyed the
lifestyle'
-
Nearly
one in three (32 per cent) said they would
rather have a permanent job but couldn't find
one
-
One
in four said (25 per cent) said their
assignments were usually six months or more.
The
survey also revealed the level of discrimination
that agency workers face compared with directly
employed workers:
- 33
per cent said that directly employed staff were
paid more than temps for doing the same
work
- 28
per cent said that they lost out on overtime and
unsocial hours payments
- 46
per cent received less holiday
entitlement
- 75
per cent said that they were entitled to less
redundancy pay than directly employed
staff
- 70
per cent reported that they were entitled to
less maternity pay than directly employed
colleagues.
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Gender pay gap widens
According to a recent
report by the Women and Work Commission, women
are still paid on average 22.6 per cent less per
hour than men, an increase from the figure of
21.9 per cent in 2007. The full-time gender pay
gap has also risen from 12.5 per cent in 2007 to
12.8 per cent.
The Commission's report looked at
four key areas: education and culture; access to
continued learning and development; balancing
work and family life and the public sector. The
report states that while progress has been made
in supporting women to access skills and
training to help them to up-skill and re-skill,
the Government has failed to break down
stereotypes in the education system and support
families to balance work and family
life.
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Gap between public and private
sector absence
A
sharp decline in employee absence in the private
sector has seen the gap between public and
private sector absence widen from 2.6 days per
employee per year to 3.3 days, according to the
CIPD's recent annual Absence Management Survey.
The
survey of more than 600 employers shows that
while private sector absence has fallen from 7.2
days to 6.4 days per employee per year, public
sector absence has remained high, averaging 9.7
days compared to 9.8 days for the previous year.
The
overall level of workplace absence across all
sectors of the economy now averages 7.4 days per
employee per year. The CIPD notes that, whilst
this is a welcome improvement on the 8 days
recorded a year earlier, the figure represents a
loss of 185 million working days at an overall
cost to the UK economy of £17.3 billion. Closing
the gap between levels of absence in the public
and private sectors could reduce the total
number of working days lost by around 20 million
each year. Reducing public sector absence to the
level now managed in private sector services
would also cut the annual cost of public sector
absence from £4.5 billion to £3.8 billion.
The
CIPD also states that levels of general absence
may have gone down overall due to employers
taking active measures to tackle absence during
difficult economic times, with four in ten
saying that they have recently increased their
focus on reducing absence levels and costs as a
result of the impact of recession.
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ACAS Annual Report - findings
ACAS has
published its annual report for
the year ending 31 March 2009. The key findings
of the report include the
following:
-
The
number of claims citing redundancy pay as the
main ground rose from 2,891 in 2007/08 to
3,938.
-
The
number of claims citing unfair dismissal as the
main ground rose from 33,352 in 2007/08 to
43,028.
-
The
total number of claims conciliated by ACAS fell
from 151,249 in 2007/08 to
138,535.
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Tribunals
Service – judicial mediation
The Tribunals Service has published its
2008-09 report and
accounts. The report notes, in particular,
that results from the Tribunals Service's pilot
on judicial mediation, were very positive.
Judicial mediation, which offers an alternative
approach to settling disputes whereby a tribunal
judge assists parties in reaching settlement,
was rolled out for certain types of cases to all
Employment Tribunal regional offices in England
and Wales in January 2009. Work is currently
underway to develop a similar scheme in
Scotland.
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