Employers: watch out. Trying to pay notice pay as an ex gratia payment could land you in trouble.

That is what happened in the case of Publicis Consultants Uk Ltd v Ms O’Farrell in a case that was heard before the Employment Appeal Tribunal last month.

The issue in dispute was the company’s description of a payment equivalent to three month’s gross salary as an “ex-gratia” payment. She was contractually entitled to three month’s notice monies but was dismissed for reason of redundancy with only four days notice.  Although she was paid the ex-gratia monies, a statutory redundancy payment and her holiday monies she sued for, amongst other claims, breach of contract.  The employer tried to say that they had effectively paid the notice monies by way of the ex-gratia.

The EAT upheld the ET’s decision that the letter from the employer setting out the payments made no mention of a notice payment and thus the company was in breach of contract.

This is quite  a harsh result on the employer.  The company were probably trying to do the employee (and themselves) a favour by paying her the notice monies on an ex-gratia basis so that she could be paid without income tax or employees’ national insurance being deducted. It would make the redundancy package look more appealing when, in reality, they were just paying her for the notice period. There was a PILON clause in her contract of employment meaning that any Payment In Lieu Of Notice would have to be paid net of tax and NICs.  HMRC presumably would have been interested in that arrangement – many employers avoid this sort of manoeuvre precisely for this reason.

Because the employee also had other claims against the company, including for unfair dismissal, the dispute went all the way to a final hearing at the ET. The actual issue in question here could have been prevented had the parties entered into a legally binding compromise agreement which would have prevented the challenge or, more fundamentally, the communication from employer to employee should have been worded much more carefully.

Thanks to Daniel Barnett and his excellent case updating service for bringing this case to my attention.

Related posts:

1. Bonus – what bonus?
2. Will SRP be increased?
3. Redundancy – know your rights!

When is an Ex-Gratia Payment a Notice Payment? originally appeared on Jobsworth by Michael Scutt on 29/06/2011.

There have been some interesting reported cases over the last couple of weeks on a broad range of topics.  For instance,

Legal Representation at Internal Disciplinary Hearings

In G v X School, a Court of Appeal case, it was held that a teaching assistant was entitled to legal representation at an internal disciplinary/grievance hearing in circumstances where that person’s right to practise in the profession was at risk.  In this particular case G was a teacher accused of sexual contact with a pupil at the school where he taught.  He was dismissed following investigation but was not allowed to have legal representation at the internal disciplinary hearing.  Subsequently the school reported him to the relevant regulatory body for consideration of whether he should be barred from working with children.   The case of Kulkarni v Milton Keynes General Hospital NHS Trust [2009] was followed and it was held that Article 6 of the ECHR required G to have legal representation because of the effect his dismissal would have on the decision of the ISA.  Note in both these cases they were against public authorities and the same result would not necessarily be the case if the employee was working in the private sector.  For example a banker facing a disciplinary hearing for an alleged offence of dishonesty would probably not be entitled to rely on this case even though his dismissal would be reported to the FSA and could lead to him losing his registration to practise.

Age Discrimination

The Employment Equality (Age) Regulations 2006 prohibit behaviour that subjects someone to less favourable treatment on the basis of a person’s age.  However, it can be permissible to discriminate against someone on the ground of their age if there is a “genuine occupational requirement”. The case of Wolf v Stadt Frankfurt Am Main heard before the European Court of Justice (ECJ) held that it was lawful for an upper age limit of 30 to be applied by the Federal state of Hesse in Germany on recruiting firemen.  However, in another German case before the ECJ, Petersen v Berufungsausschuss fuer Zahnaertze fuer den Bezirk Westfalen-Lippe it was not justifiable for a maximum age of 68 to be imposed on doctors and dentists practising in the state medical system where it was alleged that the rule was necessary to protect patients from a decline in performance as doctors and dentists got older: no such age limit existed in the private sector.   In other words, age limits on occupations can be imposed, but there will need to be a good reason for doing so.

Disability Discrimination

The definition of disability contained in the Disability Discrimination Regulations 1995 is a complex one and requires that the impairment be permanent or lasts for at least one year.  The case of Patel v Oldham MBC, heard before the Employment Appeal Tribunal (EAT) decided that when assessing whether the impairment will last for 12 months or more, it is necessary to consider whether another illness is likely to develop or has developed for the purpose of Schedule 1 paragraph 2 of the DDA.   In other words, if the secondary condition develops, or is likely to develop, from the original impairment it can be aggregated onto the original condition for the purpose of the section.  In other words, don’t just consider the original illness/injury but consider what secondary consequences there could be. 

 If you need advice on any of the above issues, or on anything to do with employment law, please contact me at Dale Langley & Co – 0207 464 8433 – or michaelscutt@dalelangley.co.uk

Related posts:

1. Case Round Up 20th November 2009
2. Case Round Up Friday 6th November 2009

Case Round Up 25th January 2010 originally appeared on Jobsworth by Michael Scutt on 25/01/2010.

Just two this time.  An upsurge in work has meant I haven’t been blogging as assiduously as usual.  There also haven’t been very many interesting cases around – apart from these two below.

Diggins v Condor Marine Crewing Services [2009] EWCA Civ 1133

The Court of Appeal has ruled that an seaman employed by a company operating from and registered in Guernsey, on board a ship registered in Nassau, but which spent its time sailing between Portsmouth and the Channel Islands could bring a claim for unfair dismissal.  The Claimant lived in Suffolk.  The Court held that the important factor was where his duty began and ended – which was Portsmouth.   He can proceed with his claim for unfair dismissal.

Cook v MSHK Limited [2009] EWCA Civ 624

This case is authority for the proposition that where an employee commits a fundamental breach of contract, the employer must take action, which will usually be summary dismissal, without delay.  In this case the employer didn’t commence disciplinary proceedings quickly enough and was held to have affirmed the contract, thus losing the right to rely on that breach.  Alternatively, the employer should reserve its rights to take such action if the employee is subsequently absent on sick leave, as in this case.

 If you need any advice or have queries on these please call me – details on the side bar. 

Related posts:

1. Case Round Up Friday 6th November 2009
2. Case Round Up 25th January 2010
3. Extra-Mile Charity Loire Cycle Challenge 2009

Case Round Up 20th November 2009 originally appeared on Jobsworth by Michael Scutt on 20/11/2009.

There have been some noteworthy cases over the last couple of weeks, such as;

Grainger plc v Nicholson UKEAT/0219/09/ZT

Climate change can be a philosophical belief and thus capable of protection within the terms of the Employment Equality (Religion or Belief) Regulations 2003. Please see my previous post on this high profile case.

Autoclenz  Ltd v Belcher & ors [2009] EWCA Civ 1046

A case on the distinction between employee, worker or self-employed.  The Respondents were car valeters.  All the factors usually considered in determining whether a person was employed or self-employed suggested they were employees. The “contract” they signed said they were “sub-contractors” but that did not reflect the reality of the situation.  The CA held they were employees.

Attridge Law v Coleman UKEAT/0071/09/JOJ

The EAT has confirmed that “associative discrimination” is covered under the Disability Discrimination Act 1995 (DDA).  In other words, a mother who sought flexible working from her employers in order to care for her disabled son, but whose employment was subsequently terminated, can bring a claim under the DDA as a result of being treated less favourably.

X v Mid-Sussex CAB   [2009] UKEAT 0220_08_3010

Another DDA case. Volunteers are not protected by the DDA or the EU Framework Directive.   

Abbreviations

ET = Employment Tribunal

EAT = Employment Appeal Tribunal

CA = Court of Appeal

Please contact me for further details on 0207 464 8433 or at michaelscutt@dalelangley.co.uk

These summaries contain my understanding of the law.  They do not constitute legal advice and you should not act upon or rely upon anything contained in this summary (or anywhere in this blog) as legal advice.

Related posts:

1. Case Round Up 20th November 2009
2. Case Round Up 25th January 2010
3. Friday musings: The Apprentice

Case Round Up Friday 6th November 2009 originally appeared on Jobsworth by Michael Scutt on 06/11/2009.