Claimant not allowed to refer to pre-termination negotiations in unfair dismissal claim

  • S.111A of the Employment Rights Act 1996 gives some protection to employers who have a conversation with employees with a view to negotiating their exit where no active dispute is in place.
  • If settlement is not reached, S.111A confirms that the conversation, and any evidence of “pre-termination negotiations”, will be inadmissible in any unfair dismissal proceedings should settlement not be reached, so long as nothing is said or done in the conversation that could be regarded by the employment tribunal as “improper”.
  • The Employment Appeal Tribunal (EAT) in Gallagher v McKinnon Auto and Tyres Ltd held that “protected” discussions between the parties that took place preceding the Claimant’s dismissal were inadmissible in proceedings.
  • The EAT considered the examples of improper behaviour listed in the ACAS Code of Practice on Settlement Agreements and provided clarification on what constitutes “improper” conduct.
    • The Code specifically refers to undue pressure in the context of a disciplinary process where an investigation has not commenced but an employee is told they will be dismissed if they reject a settlement offer.  The EAT explained that was different to the Claimant’s circumstances, as he was told a redundancy process would commence if he did not accept the offer, but he was not told that he would be dismissed.
    • The Claimant was given 48 hours to accept the offer.  The EAT said that this was not improper, as the 48 hours given was to accept the verbal offer, not a written agreement.
    • It further noted that whilst it could be said to be unfair for the Respondent to use the return to work meeting in which to make this offer, doing so did not constitute impropriety, and in light of the other circumstances of the case (such as the meeting being conducted calmly, the Claimant being provided with a swift breakdown of the figures) the Respondent’s behaviour could not be said to be “improper”.

This case serves as a reminder to employers that whilst it is possible to have without prejudice and “protected” conversations with employees, there are pitfalls and exceptions which may leave the contents of those discussions exposed and subject to scrutiny later. To avoid that, we’d recommend putting together a clear plan with legal advisers regarding any pre-termination negotiations to ensure that the protections are in place and there is no part of their conduct which would be seen as improper.

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Redundancy: Are employers always obliged to consult collectively even where collective consultation obligations do not apply?

Short answer:  No.

However:

  • A previous decision by the Employment Appeal Tribunal (EAT) in De Banks Haycocks v ADP RPO Ltd said that it was good practice for employers to have a “general workforce consultation” even if the statutory collective consultation obligations did not apply to that process, in order for any resulting redundancy dismissal to be deemed to be fair.
  • The effect of this decision would mean that every redundancy consultation process would require employers to have some form of “group consultation” with employees alongside the individual consultations, which would inevitably lengthen the process.

Thankfully, the Court of Appeal has overturned the EAT’s decision, confirming that whether a fair redundancy process (including a proper consultation) was carried out was highly fact specific and does not always require a “group consultation” to have taken place.

Although this case has confirmed that a general workforce consultation does not always need to be carried out as a standard part of a redundancy consultation (unless collective consultation obligations apply), employers should be mindful that:

  • What is considered a fair process will be fact specific and could differ depending on the circumstances.
  • Although there are certain core principles that underpin a fair consultation process (such as having meaningful consultation with employees on the means and ways to avoid redundancies, and consulting them early enough in the process that their views could influence matters), employers should always carefully consider the most appropriate and fairest consultation process in the circumstances, which could, to a degree, involve some form of group consultation.

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Employment Status

There have been two recent updates on this topic, which we frequently get asked about.  The decisions highlight that there is no “one-size-fits-all” approach that can be taken when ascertaining employment status and, even where individuals carry out the same/a similar role, their own set of circumstances must be taken into account in determining their status.

1. Bandi & Others V Bolt Operations Oü And Another

  • The employment tribunal found that the taxi company’s drivers are workers rather than self-employed.
  • Key factors:
    • Bolt controls the driver’s working arrangements – there is nothing to suggest that Bolt provides “agency” for drivers to enter into contracts with passengers;
    • They are required to undertake work personally;
    • They are not running a business in which Bolt is a customer.
  • It also held that drivers are working when they are in the territory in which they are licensed to operate and have the Bolt app switched on, and should be paid for the entire time they are logged on to the app, provided they are not “multi-apping”.
  • As a result of this decision, Bolt drivers will now be entitled to workers’ rights, such as holiday leave (and pay), rest breaks, and minimum wage. Bolt’s representatives have said that as a result, drivers could be entitled to compensation of over £15,000.
  • This decision follows the UK Supreme Court decision in Uber that held Uber drivers were not self-employed but were workers. Although there is a scope for gig economy workers (see Deliveroo) to be found to be genuinely self-employed, each case will be decided on its individual facts.

2. Johnson v GT Gettaxi

  • The Employment Appeal Tribunal (EAT) found that a driver using a black cab app was not a worker.
  • The Claimant driver was a qualified black cab driver and used the Respondent’s app, which allowed members of the public to order black cabs rather than hailing them. Both the Employment Tribunal and the EAT decided the taxi driver in question was not a worker of the Respondents, and that he carried out business on his own account. The following factors pointed toward the Claimant being genuinely self-employed:
    • There was virtually no degree of control of the Claimant by the Respondent; the Respondent did not control how the Claimant did the job (he was free to follow any route to get the passenger to their destination, unlike Uber drivers) and he was not penalised for rejecting jobs offered on the app.
    • There was no restriction in place by the Respondent that prevented the Claimant from making arrangements directly with passengers from the app for future jobs.
    • He was not forbidden from being able to “ply” for hire in the traditional way (i.e. by getting hailed on the street) or by signing up for other apps, to gain further income.

 

Note for employers:

Always exercise caution when engaging individuals on a “self-employed” basis.  All factors should be considered (degree of control over the individual, requirement of personal service etc) in determining if the individual is truly “self-employed”.

If you have any queries about employment status in respect of your organisation or as an individual, please don’t hesitate to get in touch with the Employment Team employment@mcmsolicitors.com  at McKee Campbell Morrison for a free initial chat.

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