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Jesper Christensen (Partner)T +44 (0)20 7783 3545 E jesperchristensen@bdbpitmans.com

WAS EMPLOYEE’S EMPLOYMENT TERMINATED BY RESIGNATION OR DISMISSALNotice of termination of employment should be clear and unambiguous and properly understood by both parties. In East Kent Hospitals University NHS Foundation Trust v Levy, the Employment Appeal Tribunal (the EAT) had to consider whether an employee had given clear and unambiguous notice of resignation, or whether she had been dismissed by her employer.

Ms Levy was employed by East Kent Hospitals University NHS Foundation Trust as an administrator in the records department. She had a difficult relationship with some of her colleagues, and concerns had been raised about her absence record. Ms Levy was successful in an application for a position in the radiology department, subject to pre-appointment checks. On 10 June 2016, after receiving her conditional offer from the radiology department, Ms Levy handed a letter to her manager which stated simply ‘Please accept one month’s notice from the above date.’ The manager responded on the same day accepting her ‘notice of resignation’; noting that her last working day within the records department would be 8 July 2016; and wishing her success in her future employment.

Shortly afterwards, Ms Levy was informed that the radiology department was withdrawing its offer due to her poor absence record. She

asked her manager to accept a retraction of her resignation, but he refused to do so. In a letter dated 24 June 2016, Ms Levy received confirmation of her last day of employment and was informed that the Trust was seeking to recover 88 days’ holiday pay. Her manager also completed a staff termination form. When Ms Levy brought a claim for unfair dismissal, the Trust argued that she had not been dismissed, but had resigned on 10 June 2016.

The Employment Tribunal held that Ms Levy had been dismissed. Her letter of 10 June was not clear and unambiguous. However, given the surrounding context of this letter, a reasonable observer would have concluded that she was not terminating her employment, but giving notice that she intended to accept what was at that time a conditional offer of a new internal role. For example, her manager knew that she was unhappy in the records

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...THIS CASE ILLUSTRATES THE IMPORTANCE OF ENSURING THAT ANY COMMUNICATION RELATING TO RESIGNATION OF EMPLOYMENT IS CLEAR AND UNAMBIGUOUS. ...

department; that she needed to work to support her family and her father; and that she had received the conditional offer. In addition, on receipt of the notice letter, Ms Levy’s manager had not completed the staff termination form or dealt with matters such as holiday pay. In contrast, once he had decided subsequently that her employment should cease, he had dealt with these issues promptly. The Tribunal concluded that Ms Levy’s manager did not understand her 10 June letter to be resignation from her employment, and that she had been dismissed by the Trust’s letter of 24 June 2016.

The EAT dismissed the Trust’s appeal. The language used in Ms Levy’s letter of 10 June was ambiguous and the Employment Tribunal had been entitled to find that, viewed objectively, the Trust had reasonably understood that the notice related to her role in the records department, not her employment by the Trust.

This case illustrates the importance of ensuring that any communication relating to resignation of employment is clear and unambiguous. It is also worth noting that a Tribunal will consider how notice would be construed objectively, that is, by a reasonable recipient in the light of the particular circumstances known to the recipient at that time. Employers should therefore always establish why an employee is resigning, the length of notice, and the date of termination.

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REMOVAL OF OUTDATED CONTRACTUAL TRAVEL ALLOWANCE WAS NOT CONNECTED TO TUPE TRANSFERUnder the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), changes to employees’ contracts of employment will be void if the sole or main reason for the change is the transfer.

In Tabberer v Mears Ltd, the Employment Appeal Tribunal (the EAT) considered whether unilaterally removing a contractual travel time allowance which had existed since 1958 but no longer served any purpose was void under TUPE.

The claimants in this case were electricians, originally employed by Birmingham City Council, who worked on maintenance of social housing. Since 1958 they had received an Electricians’ Travel Time Allowance (ETTA) which compensated them for the loss of a productivity bonus caused by the need to travel to many different depots. Over time, productivity bonuses were phased out and most depots were closed, leaving only one in operation at the time of the claim. The electricians nevertheless continued to be paid the ETTA throughout various TUPE transfers until their transfer to Mears Ltd in 2008. Mears then stopped the allowance on the basis that the electricians no longer met the eligibility criteria. Some of the electricians brought a successful claim alleging that this constituted an unlawful deduction from their wages. Mears subsequently gave notice that from September 2012, the ETTA would cease to be a contractual entitlement.

The employees brought further claims, arguing that this variation was void under TUPE. These arguments were rejected by the Employment Tribunal, which held that the reason for the contractual variation was not the transfer to Mears Ltd, but the fact that the ETTA was an outdated and unjustified allowance.

On appeal, the EAT agreed with the Tribunal’s findings. Although the company had to deal with the ETTA at the time of the 2008 TUPE transfer, it was an issue that would have confronted management regardless of any transfer. It was relevant that, prior to 2008, managers had already concluded that the ETTA

Brian Gegg (Partner)T +44 (0)20 7783 3570 E briangegg@bdbpitmans.com

...OVER TIME, PRODUCTIVITY BONUSES WERE PHASED OUT AND MOST DEPOTS WERE CLOSED, LEAVING ONLY ONE IN OPERATION AT THE TIME OF THE CLAIM....

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Caroline Yarrow (Partner)T +44 (0)20 7783 3538 E carolineyarrow@bdbpitmans.com

CAN TUPE APPLY TO THE TRANSFER OF PUBLIC HEALTH FUNCTIONS? In Nicholls v London Borough of Croydon, the Employment Appeal Tribunal (the EAT) had to consider whether the transfer of a Primary Care Trust’s public health team to a local authority was a transfer of an economic entity covered by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), or whether it fell within the public administrative authorities exception.

TUPE applies where there is a transfer of an economic entity that retains its identity. TUPE may apply to staff who are carrying out economic activities within a public administration. However, TUPE specifically excludes from its scope a reorganisation of public administrative authorities or a transfer of functions between public administrative authorities (Regulation 3(5)). Cases dealing with the distinction between economic activities and the exercise of public functions are rare, mainly because many transfers arising out of public sector reorganisations are covered by statutory staff transfer schemes or the Cabinet Office Statement of Practice on Staff Transfers in the Public Sector.

The claimants in this case were employed in the public health team of Croydon Primary

Care Trust. Their work mainly involved commissioning third parties to provide health advice to the public, as well as research, training and maintaining the public health library. In 2013 the team was transferred to the London

...CASES DEALING WITH THE DISTINCTION BETWEEN ECONOMIC ACTIVITIES AND THE EXERCISE OF PUBLIC FUNCTIONS ARE RARE...

was outdated and unjustified but had continued to pay it. This was therefore a pre-existing belief. Removing the ETTA in order to be fair to all job groups was also an issue which arose regardless of the transfer. The Tribunal had correctly concluded that the variation was not for a reason connected with the transfer.

This is a useful example of a permitted change to terms and conditions after a TUPE transfer. In this case, it was clear that

the reason for the contractual variation was not the transfer, and that this reason would have applied regardless of the transfer. It was not motivated by a desire to harmonise terms and conditions, as is often the case, but to remove the unfairness caused by one group of staff receiving an outdated allowance. This illustrates that Tribunals will look at the wider context when establishing the reason for the change and what caused the employer to act as it did.

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Borough of Croydon under a statutory staff transfer scheme. To a large extent, this scheme mirrored TUPE in providing protection for transferring employees. However, unlike TUPE, it placed a two year time limit on the right to claim automatic unfair dismissal. The claimants were dismissed when they refused to agree to new terms and conditions. Since they were time-barred under the statutory scheme, they brought unfair dismissal claims under TUPE, arguing that there had been a transfer of an economic entity.

The Employment Tribunal found that most of the team’s work could be carried out by private sector organisations operating in the same market, which was a strong indicator of economic activity. However, it went on to conclude that the employees’ activities in improving public health involved the exercise of public authority rather than an economic activity, meaning that TUPE did not apply to the transfer. On appeal, the

EAT ruled that the Tribunal had not adequately explained how it concluded that the employees were exercising public administrative functions whilst also finding that private companies were involved in similar work. The case was remitted to a fresh Tribunal for reconsideration of this issue.

Whilst we await the Employment Tribunal’s further decision in this case, the EAT’s judgment provides a useful detailed review of case law in this area and identifies key questions for determining whether an entity is involved in exercising public powers or carrying on an economic activity. For example, if there is a market for the relevant goods and services, providing those goods and services is likely to be an economic activity even if they are provided free of charge. It is also relevant to consider whether the activity is capable of being carried out, at least in principle, by a private undertaking with a view to profit.

...IF THERE IS A MARKET FOR THE RELEVANT GOODS AND SERVICES, PROVIDING THOSE GOODS AND SERVICES IS LIKELY TO BE AN ECONOMIC ACTIVITY EVEN IF THEY ARE PROVIDED FREE OF CHARGE...

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GUIDANCE ON TIME LIMITS FOR APPEALS WHERE A JUDGMENT IS SENT TO THE WRONG PERSON OR ADDRESSUnder the Employment Appeal Tribunal Rules 1993, the 42 day time limit for appealing an Employment Tribunal judgment starts to run from the date on which it was sent to the parties (Rule 3(3)).

Case law has established that extensions of time will only be granted in very exceptional circumstances. In two joined cases, Rana v Ealing LBC and Bonnie v Department for Work and Pensions, the Court of Appeal considered when the Employment Appeal Tribunal (the EAT) time limit for an appeal starts to run where the Tribunal sent its judgment to the wrong person or address.

In both cases, the Tribunal erroneously sent written reasons to firms of solicitors who were no longer acting for the employee. This resulted in both employees lodging their appeals outside the 42 day time limit. Whilst acknowledging that some of the delay was not the employees’ fault, the EAT refused to grant an extension of time. The employees appealed to the Court of Appeal.

The Court of Appeal held that a judgment was still ‘sent to the parties’ for the purposes of Rule 3(3) if it was wrongly sent to someone other than a party or their representative. However, because of the potential unfair prejudice caused by this interpretation, the EAT should use its general discretion to extend time under Rule 37 of the EAT Rules to allow the affected party the full 42 day period for appealing. The guiding principle had to be that the party affected by the Tribunal’s mistake should not be put in a worse position than if the Tribunal had done its job properly. Time should therefore start to run on the date that the Tribunal correctly re-sent the judgment, or the date the party received it from another source, such as their opponent. Applying these principles, each employee was granted an extension of the time limit to lodge their appeal.

The Court of Appeal also emphasised that if an affected party becomes aware of an error by the Tribunal, it must take reasonable steps to obtain a copy of the judgment as soon as possible. Its decision only relates to cases where the Tribunal has made a mistake. In other circumstances, the 42 day limit will be strictly applied from the date on which the judgment was sent to the parties.

Ian Wasserman (Senior Associate)T +44 (0)20 7783 3574 E ianwasserman@bdbpitmans.com

...THE 42 DAY LIMIT WILL BE STRICTLY APPLIED FROM THE DATE ON WHICH THE JUDGMENT WAS SENT TO THE PARTIES...

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Tim Hayes (Senior Associate)T +44 (0)20 7783 3790 E timhayes@bdbpitmans.com

HMRC LOSES FOOTBALL REFEREE EMPLOYMENT STATUS CASE The First-tier Tribunal has held that, for tax purposes, lower division football referees are not employees of Professional Game Match Officials Limited (PGMOL), the representative body which oversees the management of refereeing of professional football. Although this case deals with employment status under tax law, which is separate from employment law, there is significant overlap in the relevant principles.

PGMOL engages 60 referees on a self-employed basis to officiate for lower division football matches. A dispute arose because HMRC issued income tax and national insurance assessments on the basis that the referees were employees of PGMOL. Applying the key tests for employment status set out in the case of Ready-Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance, the First-tier Tribunal agreed with PGMOL that the referees are self-employed. Key findings included:

• the working arrangements lack mutuality of obligation. Although PGMOL’s Code of Practice requires referees to be readily and regularly available, this is in practice more of an expectation since both the referees and PGMOL can withdraw from engagements at any time without being in breach of contract. In addition, there is no right of substitution;

• the necessary framework of control is lacking. Referees are required to adhere to PGMOL’s Match Day Procedures, Fitness Protocol, and Code of Conduct. However, they are not obliged to follow a specific training

programme or attend training meetings; they can express geographical preferences for matches and refuse appointments; they have full authority on match day; and regulatory breaches are dealt with by the Football Association, not PGMOL.

• the arrangements do not otherwise suggest an employment relationship, although there are some factors which point towards employment. For example, the referees are integrated into PGMOL; PGMOL is primarily responsible for paying them; they are supplied with match and training kits, and suits to be worn to games; and they cannot obviously be described as being in business on their own account.

This case highlights how difficult it can be to definitively assess employment status. Whilst acknowledging that some aspects of the arrangements in this case point towards an employment relationship, the First-tier Tribunal concluded that there is insufficient mutuality of obligation and control and confirmed that referees can therefore be taxed on a self-employed basis. For employment law purposes, however, PGMOL has agreed that referees will have ‘worker’ status in future football seasons.

...THE WORKING ARRANGEMENTS LACK MUTUALITY OF OBLIGATION...

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AND FINALLY...The Law Commission has published a consultation paper, ‘Employment Law Hearing Structures’, which reviews the jurisdictions of the Employment Tribunals, Employment Appeal Tribunal and the civil courts in employment and discrimination matters, and makes recommendations for their reform. The consultation contains a list of 54 questions with some provisional recommendations for change. For example, the Law Commission recommends that the £25,000 limit on contractual damages should be increased, and asks for views on the appropriate increase. It also proposes that an informal specialist list should be established within the High Court to deal with employment-related claims, and that Tribunals should have the power to make orders for contributions between respondents in discrimination cases. Other issues for consideration include whether Employment Tribunals should be given concurrent jurisdiction over non-employment discrimination claims, such as those relating to the provision of services; and whether Tribunals should be given the power to enforce their own judgments. However, the Law Commission also stresses that no major re-structuring of the Employment Tribunals system is proposed. Responses must be submitted by 11 January 2019.

The CIPD and Mind have jointly published an updated guide on mental health to improve the support given to those experiencing stress and mental

health issues at work. Mental ill health is now the main cause of long-term sickness absence for 22% of organisations. However, research carried out by the CIPD found that only 32% of organisations train line managers to support staff with poor mental health. This new guide contains detailed practical advice for managers on prevention, early intervention, dealing with disclosure and poor performance, and supporting employees to return to work.

The Parental Bereavement (Leave and Pay) Act 2018, which received Royal Assent on 13 September 2018, will provide a new right to paid leave for bereaved parents. This Act was introduced as a Private Member’s Bill but was supported by the Government. It is expected to come into force in 2020 once the detailed provisions have been set out in regulations. All employed parents will be entitled to a day

Zoe Merrikin (Solicitor)T +44 (0)20 7783 3611 E zoemerrikin@bdbpitmans.com

...UPDATED GUIDE ON MENTAL HEALTH TO IMPROVE THE SUPPORT GIVEN TO THOSE EXPERIENCING STRESS AND MENTAL HEALTH ISSUES AT WORK...

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one right to two weeks’ leave if they lose a child under the age of 18, or suffer a stillbirth after 24 weeks of pregnancy. Subject to meeting the eligibility criteria, employed parents will also be able to claim statutory parental bereavement pay for this period of leave.

The Work and Pensions Committee has launched an inquiry into whether recent Employment Tribunal rulings on employment status have resulted in any change to rights granted to the gig economy workers involved, such as those

engaged by Uber, CitySprint and eCourier. The inquiry will hear evidence from workers, companies and trade unions in order to assess whether employers are complying with their legal obligations and to establish whether any immediate changes are needed to the law or to methods of enforcement. Its conclusions are due to be published before the end of this year.

The Institute of Business Ethics has published its 2018 survey on employees’ attitudes towards ethics in the workplace, based on employees in the UK, France, Germany, Ireland, Italy, Portugal, Spain and Switzerland. 78% of respondents think that their organisation acts with honesty, although this ranges from 69% in Germany to 88% in Ireland. 30% of employees were aware of misconduct at work during the past year. This mainly involved people being treated inappropriately or unethically, misreporting hours and safety violations. Employees in the UK

were the most likely to have reported misconduct, whilst respondents in Portugal were the least likely to have done so. 23% of employees said their organisation provides incentives to encourage employees to behave ethically, usually by including ethics in performance reviews. The survey also highlights the positive impact on employees of having a comprehensive ethics programme, such as written standards of ethical business conduct, training, a means of reporting misconduct confidentially and providing a helpline.

...THE PARENTAL BEREAVEMENT ACT 2018 WILL PROVIDE A NEW RIGHT TO PAID LEAVE FOR BEREAVED PARENTS...

...30% OF EMPLOYEES WERE AWARE OF MISCONDUCT AT WORK DURING THE PAST YEAR. ...

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