In recent months we have been privileged to have sitting with us in our Labour & Employment team Anela Lucic, Employment attorney at leading Swiss commercial lawyers Vischer. After an eye-opening glimpse into English employment law and practice, here is Anela’s brief summary of the Swiss position.
If you’ve been following our blog, you already know that the topic of employer-mandated arbitration agreements has been a hot issue in recent years for government agencies and in the state and federal courts. Most notably, in May of last year, the United States Supreme Court issued its highly-anticipated decision in Epic Systems v. Lewis, in which it confirmed that employers may require employees to enter into mandatory arbitration agreements as a condition of employment without violating the National Labor Relations Act (“Act”). As you may recall, Epic Systems arose out of dispute in which the National Labor Relations Board (“NLRB” or “Board”) took the position that employer-mandated arbitration agreements requiring that employees waive the right to engage in class or collective litigation are unenforceable because Section 7 of the Act protects an employee’s right to engage in protected concerted activity, which the NLRB argued includes litigating employment-related disputes as class or collective actions. The Supreme Court rejected this position, finding that class and collective litigation are not substantive legal rights, but rather procedural creations of the Federal Rules of Civil Procedure and the Fair Labor Standards Act (“FLSA”), and as such, are not rights traditionally protected by the Act. Our more in-depth review of the Epic Systems decision is here. Continue Reading
Learning point 3: do not be afraid to manage workers who have raised whistleblowing concerns
The date is rapidly approaching when Colorado will join the growing list of states choosing to “ban the box” on criminal history inquiries by employers. Continue Reading
The EU Settlement Scheme designed to protect the rights of EU, EEA and Swiss citizens and their families already resident in the UK by 31 December 2020 is based on the citizens’ rights section of the UK government’s Withdrawal Agreement with the EU. However, the Withdrawal Agreement has been considered and rejected by the House of Commons on three occasions, the EU has consistently said it cannot be renegotiated and new Prime Minister Boris Johnson has promised that the UK will leave the EU on 31 October 2019 “no ifs, no buts”. So now what?
There are many things about our jobs which we all find irksome from time to time but right up there for me (#firstworldproblems) is gratuitous use in legal correspondence of the heading without prejudice “subject to costs”.
What this is supposed to mean is that the correspondence is intended to be without prejudice and so kept out of the Tribunal until a decision on liability has been made (so far so good), but that it may thereafter be relied upon in support of an application for costs. As we know, however, costs awards in the ET are (some say regrettably) very hard to obtain. The level of unreasonableness required is very high. Rule 76(1)(a) of the 2013 Constitution and Rules of Procedure Regulations says that you have to be “vexatious, abusive, disruptive or otherwise unreasonable” in the bringing or conduct of the claim, so this goes way beyond merely having a weak case or losing after the other side said you would. Rule 80, concerning wasted costs orders, requires the legal representative to have committed some “improper, unreasonable or negligent act or omission” causing loss to the other side.
So either way, what this reference implies is that either I am about to be improper or vexatious, or that the other party’s offer is so compelling, so reasonable, so incontrovertible, that any disagreement on my part will necessarily make me negligent or my client unreasonable and so potentially sound in costs. This is exceptionally irritating largely because it is exceptionally rarely true – the law is not an exact science and employment law less so than most.
Costs are rarely awarded in ordinary circumstances because of the Employment Tribunals’ original mandate as the “little man’s court”, where unrepresented individuals could have a good faith crack at obtaining redress without fear of adverse costs consequences and where lack of legal experience or training would be mitigated by the assistance (but not favouritism) of the Judge. Errors, misrepresentations, misunderstandings, delays and all the other possible consequences of anxiety, ignorance or lack of experience or education of a party are necessary consequences of that remit. Therefore, none of them will usually trigger a costs award. Even outright lying will not do so automatically, merely if it materially increases the other side’s outlay [here].
Therefore you generally need something more, some sign that the other side positively understood the consequences of its actions but went ahead anyway. If you are in a position where there is a genuine possibility that Rules 76 or 80 might apply, you should provide the other side with a detailed explanation of why – what it is about their conduct which you say is vexatious, unreasonable, negligent, improper, or why their position has no reasonable prospects of success, etc. It is proving that knowledge on their part, far more than repeated references to “subject to costs” which will be most persuasive to the Employment Tribunal. In other words, simply adding “subject to costs” at the top of your correspondence will achieve little or nothing.
Moreover, there is an active down side to sprinkling that phrase wantonly over all your without prejudice correspondence, especially if it is to a claimant who is unrepresented or otherwise vulnerable, and still more if it is a discrimination matter. Using costs as a threat where there is no realistic possibility of their being awarded (which is pretty much all the time) could easily be seen by itself as the unreasonable conduct of proceedings by the employer, and in discrimination cases, also as retaliatory victimisation.
It is not negligent or unreasonable or vexatious to pursue a subjectively weak case. It may be all or any of those things to pursue an objectively hopeless one, but you will need to be very sure you are right about that as employer before making costs threats becomes a good idea.
Earlier this week, the National Labor Relations Board announced that it is proposing three new changes to its rules, all of which concern the procedures for unions to represent certain workers. Continue Reading
Learning point 2: remember that you are in control of the whistleblowing investigation
If a worker raises concerns about something which might represent serious wrongdoing in the workplace, the first step is to get a clear understanding of what they are complaining about.
The Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2019 introduced to the House of Representatives on 4 July passed the House at the end of the month and is now before the Senate. The Bill forms part of the Government’s broader agenda on industrial relations reform to increase the regulation of unions in the wake of the Royal Commission into Trade Union Governance and Corruption.
The first Supreme Court judgment on employment competition in a century was handed down recently – and it is good news for employers.