Tribunal Guidance – Who Needs It?

By David Whincup on Posted in General

For the first time, the UK’s Civil Justice Council has recently issued some new draft guidance in relation to the conduct of cases where the Claimant is unrepresented.  Though the guidance is not limited to the Employment Tribunals, it is probably there that it will have most relevance.

The draft contains advice on what Court/Tribunal staff can and cannot do for an unrepresented litigant, how professional representatives should treat them and how Mackenzie Friends (people assisting the Claimant not as lawyer or witness) should conduct themselves.  Disappointingly, however, there is no guidance proposed for the unrepresented litigant himself, perhaps the person in all the process who is most in need of it.

The pointers to professional representatives include keeping to the timetables and other directions laid down by the Court/Tribunal, providing reasonable cooperation if the other party requires extra time for any given step, being polite and non-intimidatory, and being willing to speak to the Claimant before or after the hearing.  There is no formal sanction attached to the guidance but it is not hard to see an Employment Tribunal using overt breaches of it by a professional representative as the basis for drawing adverse inferences and/or making a costs order.  Similarly, the Mackenzie Friend is counselled to be both “courteous at all times to everyone else” and to “try to ensure that the way in which you assist does not cause any disruption or distract others.  This is particularly important when someone else is speaking to the Judge or the Judge is speaking”.  In other words, don’t interrupt, shout or wave your arms about.  All very sensible stuff, but why does the guidance not tell the Claimant himself these things?

Every Tribunal practitioner knows that some professional representatives can be dreadful in a whole range of ways, and that some unrepresented claimants behave with remarkable poise and competence given the undoubted stresses of running their own case.  Even so, would it be out of the question for a litigant in person also to be provided with a few basic rules in advance in the interests of the Tribunal’s overriding objective of disposing of cases swiftly and efficiently?  How about these to start with:

  1. Like the Respondent, you have to disclose documents even if they do not help your case.  Yes, really.
  2. You should take professional advice when encouraged to do so at key points, e.g. on jurisdictional issues or material settlement offers.
  3. You should not continue down any line of questioning which the Judge has already indicated is not taking you anywhere.  If he stops taking notes of what you are saying, stop talking.
  4. Trial by ambush is for television only, so make the specifics of your case clear before you get to the hearing.
  5. Rumpole of the Bailey is not a good role model for Tribunal appearances.  Nor is any character created by John Grisham.

Rangers score own goal over TUPE

By Squire Patton Boggs on Posted in TUPE

For a committed football fan such as this author, the mid-Summer (yes, apparently it is summer outside, though it is hard to tell through the rain) can be a depressing time. No more than a few days have passed since England’s usual exit from the last major footie tournament, but already fans are desperate for the new season to start.

The void is, however, being partly filled for some by tales surrounding the demise of Rangers FC. The Scottish club has, like few football clubs but many employers before it, got itself into some difficulty because of the Regulations governing employees’ positions in the event of a business transfer.

Having gone into administration following some tax goings-on probably best left unexplained here, and now facing liquidation, the Club is preparing to create a NewCo in order to gain readmission to the Scottish league, on other words, a clean new corporate entity freed from its debts and able to carry on the old feud with Celtic FC as if nothing had happened. The new owners, having paid a not insignificant sum, all things considered, for the assets (in this case, a stadium, training ground, staff and players, plan to transfer those assets into the NewCo, apply to be readmitted into the League, and start over. But there comes the hitch…

A number of the players, faced with the prospect of playing in a lower-standard league, have exercised their right under those Regulations to object to the transfer of their contract of employment to NewCo. This means that their employments are ended by the transfer and that they become free from extended-term contracts, free to negotiate moves to other Clubs, potentially improving their own earning capacity but also leaving the new owners of Rangers without several of their most valuable assets, both in financial and footballing terms.  The first, Steven Naismith, has just been lured to Everton.  Though there are issues in relation to his player registration which have led Rangers to cry foul, the short point is that his employment has unquestionably ended without any breach of contract by him.  It is hard to see FIFA successfully pulling rank on the Transfer Regulations.

Whilst we can accept that the world of professional football is in many ways detached from the vagaries of everyday life at work, there is an important lesson here for all employers. When considering the purchase of another business, it is essential to ensure that you are going to retain the best talent, and have the benefit of their knowledge and expertise. If key people decide they want to move on, then it could scupper the buyer’s integration plans, and worse, its exit strategy of selling up for a profit. In addition, if an employee objects to the transfer, there will be no transfer of his contract, and so the buyer will not get the benefit of any restrictive covenants contained within it. Every employee is entitled to object to the transfer of their employment, so prospective buyers should make sure the key employees are not off-side and likely to walk away.

Do You Want the Good News or the Bad News? – Employment Tribunal Statistics 2001/12

By David Whincup on Posted in General

The UK Ministry of Justice has now published statistics for its Tribunals system for 1 April 2011 to the end of March this year http://www.justice.gov.uk/downloads/statistics/tribs-stats/ts-annual-stats-2011-12.pdf.  The Report deals with the Immigration and Social Security Tribunal as one might expect, but also some little-known crackers like the Estate Agent Appeals Tribunal (does this mean some estate agents are appealing?), the Gangmasters Licensing Appeals Tribunal, the War Pensions and the Armed Forces Compensation Chamber.

The Employment Tribunal Service is also covered in detail.  It received 186,300 applicstions in 2011/12, down by a full 15% from the previous year.  Much the biggest proportion of that drop was in multiple claims (2% only for individuals), hopefully leading to the conclusion that the majority of the public sector equal pay claims possible have now already been brought.

However, within that 186,300 number, there were 321,800 “jurisdictional claims” (an employee claiming unfair dismissal, discrimination and unlawful deductions is bringing three jurisdictional claims, even though they may all be included within one Tribunal application).  Of those jurisdictional claims, slightly under a third were for unfair dismissal, breach of contract or a statutory redundancy payment.  16% related to unlawful deductions and a whopping 29% were brought under the Working Time Regulations.  This looks anomalous until it is realised that the great bulk of these airline cases which are resubmitted every three months.  The bulk of the remaining 24% are likely to be discrimination and whistle-blowing issues.

Although 321,800 new jurisdictional claims were brought in 2011/12, these reports suggest rather worryingly that only 230,000 were disposed in the same period.  Of these, a third were settled through ACAS intervention.  Just over a quarter were abandoned by the Claimant or settled other than via ACAS.  12% succeeded in Tribunal and 28% failed.  In other words, less than 1 in 3 jurisdictional claims going to an Employment Tribunal and scarcely 1 in 8 of those brought are actually upheld.

The most disturbing part of the Report is in relation to disposal times for jurisdictional claims.  Progress is measured by assessing the time after submission of the ET1 claim form by which 25%, 50% and 75% of those claims have been disposed of.  If you bring a relatively simple claim, e.g. working time, unfair dismissal or unlawful deductions, you have a 25% chance of your case being heard within three to four months.  You have a 50% chance of getting rid of it within six months and a year after they are lodged.  However, more complex claims can take longer – only 25% of equal pay claimants could expect to see their case heard within one to two years of starting it and a very disappointed 1 in 4 will still be waiting for a hearing after 4 or 5 years.  Race and sex discrimination claimants stand a 1 in 4 chance of not getting a hearing for 3 or 4 years, although half should have been dealt with within 2 years, and a quarter within 6 months.

The equal pay delays are explicable in part by the number of interim procedural steps and hearings which can be required in such cases.  However, there seems no logical reason for the wide discrepancy in disposal times for discrimination cases – 75% of race or sex cases will have been dealt with after 3 or 4 years, but the same proportion of disability claims dealt with is reached in 1 year, and of age, religious belief and sexual orientation claims within “only” 2 years.

Warsaw adds polish to immigrant worker rules

By Malgorzata Grzelak on Posted in General

Up to now, any employer employing a non-EU/EEA foreigner in Poland was obliged to first make sure that he held a valid work permit. Residence permitting issues were handled by the individual, with varying degrees of support from the employing company, yet always ultimately the responsibility of the individual. Now this balance is likely to change due to new legislation concerning the penalties for employing a foreigner not residing legally in Poland. 

Under the new legislation employers, contractors and subcontractors that employ or contract work to non-EU/EEA foreigners must obtain confirmation that the foreigner is in Poland legally before allowing him to commence work. The new Act requires that a copy of this document be retained for the duration of the employment relationship or contracted work, but sensibly the employer should retain it afterwards too, just in case of any post-termination proceedings or control audit.

An entity that employs foreigners at the moment the new legislation comes into force is required to obtain the document confirming that a citizen of a third country is in Poland legally within 45 days i.e. by 4 September 2012 and then to keep it in that employee’s files. It should also take care to scrutinise the document before filing to check its validity period and for signs of possible forgery. If this requirement is fulfilled and the foreigner is registered for social security purposes where required under other applicable Polish legislation, the employer will not be held liable for the consequences should it later become apparent that he has has been employed in Poland illegally.  

And the penalties proposed may be severe for the company. The penalty for contracting work to foreigners in Poland who do not hold legitimate documentation is a fine, restricted freedom (suspended sentence or similar sanctions) or a prison sentence of up to three years. The Act also provides that the employer can be banned from competing for public tenders, and banned from receiving certain types of EU funds or perhaps ordered to return them. Labour agencies which are found employing foreigners who are in Poland illegally are removed from the register maintained by the Local Administrative Office (marszałek województwa), which will prevent them from operating. And this is all in addition to the individual’s claims for compensation, presumptions of employment of at least 3 months or presumption of compensation equal to 3 times minimum monthly wage in Poland if the person is claimed not to have been an employee but contractor.

A small change in the list of pre-employment documents to be verified? Maybe, but a very important one.

Used car salesmen and recruitment – the missing link?

By David Whincup on Posted in General

Hot on the heels of the UK High Court’s decision in Attrill (see post on 16 May), Reuters reports the same issue arising in the US.  This time it is in relation to recruitment rather than retention, but the same principles apply.

A Wall Street arbitration panel ruled last month that Morgan Stanley Smith Barney must pay $5 million to two brokers for making false promises when recruiting them from rival brokerage UBS.  Those promises related to upward career progression within specified timescales plus the concomitant financial gain, in particular a promise of a promotion within six months, which was still unfulfilled after 4 years.  That commitment was visible from documents within MSSB’s own possession and was both clear and unconditional enough to found a decent breach of contract claim, very much the same problem as sunk Dresdner in Attrill.

Just like retention, recruitment often involves an element of over-selling, whether by the employee of himself or (less often) of life at the company by the recruiting managers.  Many such promises by employers relate to intangibles such as morale, ethos and environment, and they are no more enforceable at law than the employee’s wholly false promise at interview that he is a good team player or really calm under pressure.  This is not an employment law concept but the application of an old Latin tag, commendatio non obligat, the principle of law which protects used car salesmen and others with a tendency to hype or “sales puffery” from liability should their “good little runner ” turn out not to be.  On that basis, there could be no claim arising to a new employee from his would-be employer’s assertion that “it’s like one big family here” if what he actually means is that the working day is riven by arguments, resentment and mutual backstabbing.  Have you ever heard of the Borgias?  However, if the employer’s promise at interview or via the recruitment agency is clear and its prospective financial consequences ascertainable, then a breach of contract claim could certainly get off the ground.

Your best solution as employer? Obviously you cannot simply tell the unvarnished truth that any issues of progression or remuneration in your company are in the uncaring hands of a faceless group of senior management who could not tell any particular junior employee from a hole in the ground.  That would be legally unimpeachable, but not exactly employer-of-choice material.  Instead, just make sure that the actual written contract states clearly that its terms override anything which may previously have been said to the employee about pay, title, promotion, resources, etc., and that any such prior representations are of no effect once the contract is signed.  Very simple, very effective (unless and until some over-eager manager feels compelled to repeat them post-signing) and very surprising how many employers still do not do it. 

The Sixth Circuit Clarifies the Narrow Reach of McDonnell Douglas

By Squire Patton Boggs on Posted in Discrimination, Employment Policies

Earlier this week, the Sixth Circuit resuscitated the individual claim and proposed class-action of Plaintiff-Appellant Kathryn Keys (“Plaintiff”), an African-American female who alleged that her former employer, Defendant-Appellee Humana, Inc. (“Humana”) engaged in a pattern of discrimination against African American managers and professional staff. Keys v. Humana, Inc., No. 11-5472 (6th Cir. July 2, 2012).

Granting Humana’s motion to dismiss, the lower court held that the Plaintiff failed to allege facts sufficient to plead a prima facie case of intentional discrimination, citing to the burden shifting framework of McDonnell Douglas, which is used to evaluate claims of race discrimination based on circumstantial evidence.

Finding the lower court’s holding in direct conflict with Supreme Court precedent, the Sixth Circuit clarified that the McDonnell Douglas paradigm is an evidentiary standard and not a pleading requirement. See e.g., Swierkiewicz v. Sorema, 534 U.S. 506, 510 (2002); see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (the application of McDonnell Douglas at the pleading stage is “contrary to the Federal Rules structure of liberal pleading requirements”); Ashcroft v. Iqbal, 556 U.S. 662 (2009). Concluding the Plaintiff tendered more than “naked assertion[s]” in her Complaint and sufficiently pled a pattern of discrimination satisfying Civil Rule 8(a), the Sixth Circuit reversed and remanded the matter for proceedings consistent with its opinion.

This case comes less than a week after the Sixth Circuit handed down its hotly contested decision in Litton v. Talawanda School District, Case No. 10-3559 (June 26, 2012), where it held that once “the case proceed[s] to trial…we are no longer concerned with whether the plaintiff established a [McDonnell Douglas] prima facie case, but instead focus on the actual question of discrimination.” While it is unclear how far the Court will continue to narrow the reach of the burden shifting articulated in McDonnell Douglas, employers should take this as an opportunity to review current practices to determine if such practices cause disparate impact on employees within protected classifications.

The Divided Sixth Circuit Affirms a “Lamentable-But-Benign” Discrimination Claim

By Squire Patton Boggs on Posted in Discrimination, Employment Policies

A deeply divided panel upheld an award on Tuesday to Plaintiff Clifford Litton (“Plaintiff”), an African-American custodian who accused the Talawanda School District (“District”) of racial discrimination and retaliation when he was involuntarily transferred to a new school building and his request to transfer back was denied. Litton v. Talawanda School District, Case No. 10-3559 (June 26, 2012). The anomaly behind the Court’s decision rests in the fact that the jury awarded the Plaintiff damages, finding race had been a motivating factor behind the District’s actions, but concluded that the Plaintiff had not suffered an adverse employment action.

In disparate treatment cases lacking direct evidence of discrimination, courts apply the burden shifting framework from McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), the first step of which requires a plaintiff to establish a prima facie case of discrimination. A critical element of a prima facie case of discrimination is whether the plaintiff, in fact, suffered an adverse employment action.

Upon receiving the verdict, the District argued that because the Plaintiff failed to prove an element of his prima facie case, the court was required to find no unlawful discrimination. The lower court entered judgment for the Plaintiff, finding once “the case proceed[s] to trial…we are no longer concerned with whether the plaintiff established a prima facie case, but instead focus on the actual question of discrimination.”

The Sixth Circuit upheld the trial court finding it well settled that a court should “disregard a jury’s assessment of [a plaintiff’s] prima facie case and instead focus on ‘the ultimate question of discrimination vel non.’” Citing the Supreme Court’s precedent in Postal Serv. Bd. of Governors v. Aikens, 460 U.S. 711, 715 (1983), as adopted by the Sixth Circuit, the Sixth Circuit concluded that because the jury’s assessment of the Plaintiff’s prima facie case did not control its finding on the ultimate question of discrimination, the district court was “not only permitted to disregard the jury’s answer to the adverse employment action question, it was required to do so, and instead to evaluate the strength of the evidence as a whole.”

So did the Sixth Circuit create a claim for benign discrimination?  It appears so.  In a strongly worded dissent, Chief Judge Batchelder reminded the Court that Title VII does not ban mere discrimination, but only adverse discrimination. This requirement “is not merely some vestigial prima facie element that fades into the background as the case progresses, it is at the heart of the claim itself.” Moreover, the Chief Judge rejected all of the cases cited in the majority opinion, finding that none of the cases support the notion that the “ultimate question of discrimination disregard[s] whether the discrimination was[,] in fact[,] adverse.” Such a holding, the Chief Judge declares, would be “[n]onsensical,” as “[t]he whole purpose of Title VII, as stated clearly by its text and controlling case law, is preventing harmful discrimination, not the lamentable-but-benign discrimination that the jury found Litton experienced.”

While we wait to see whether the Sixth Circuit will reconsider this matter en banc, employers should remain vigilant in documenting employment decisions to help defend against claims of discrimination. At the very least, this best practice may bolster an employer’s chances of curtailing litigation at the summary judgment stage, and prevent a similar post-trial anomaly.

US Supreme Court Strikes Down Bulk of Arizona’s Immigration Law

By Gregory A. Wald on Posted in Business Immigration, Employment Policies

On June 25, 2012, the US Supreme Court, in a 5-3 decision, issued its much anticipated decision in Arizona v. United States [pdf], striking down three provisions of the Arizona law S.B. 1070, and upholding a fourth.  The case arose from the State of Arizona’s appeal of an injunction blocking four parts of the immigration law.  The four provisions are summarized as follows:

•Section 2(B) requires local law enforcement to verify the immigration status in any lawful stop, detention, or arrest any time in which they have “reasonable suspicion” that someone is unlawfully present.  This has been labeled as the “show me your papers” provision;

•Section 6 authorizes warrantless arrests for individuals presumed (based on “reasonable suspicion”) to have committed a deportable offense;

•Section 3 creates a state crime for failure to carry immigration status papers at all times (this provision mirrors a longstanding but seldom enforced federal law); and

•Section 5 creates a state criminal penalty for those found working while unlawfully present.

Enforcement of these four contested provisions of the law, officially known as the Support Our Law Enforcement and Safe Neighborhoods Act, had been enjoined by a temporary injunction issued by the US District Court for the District of Arizona in 2010.  The Court declared that three provisions were preempted by federal law and cannot be enforced.  However, the controversial “show me your papers” provision, requiring state officers to make a “reasonable effort” to determine the immigration status of anyone they stop, detain or arrest, and as to whom there is “reasonable suspicion” of unlawful presence in the US, was not found to be preempted by federal law and will now be enforced by Arizona law enforcement officers.

How this law will be enforced is the subject of much discussion and controversy. In fact, in its majority opinion, the Court indicated that its decision does not foreclose other preemption and constitutional challenges after the law goes into effect.  Shortly after the decision, a spokesman from the Maricopa County Sheriff’s office declared that officers will not be expected to allow contact with ICE to impede investigations, and communication with federal officials will not mean suspects are unnecessarily detained.   Phoenix Police Chief Daniel Garcia attempted to make similar reassurances declaring that Phoenix was prepared to “err on the side of protecting civil rights.”  Moreover, US Attorney General Holder indicated that the federal government is going to be watching how Arizona and other states implement the “show me your papers” laws.  In a post-decision statement, he stated:

I want to assure communities around this country that the Department of Justice will continue to vigorously enforce federal prohibitions against racial and ethnic discrimination.  We will closely monitor the impact of S.B. 1070 to ensure compliance with federal immigration law and with applicable civil rights laws, including ensuring that law enforcement agencies and others do not implement the law in a manner that has the purpose or effect of discriminating against the Latino or any other community.

Although the case addressed only Arizona’s law, many states are impacted by the decision as they have enacted or are considering similar legislation.  Alabama, Georgia, Indiana, South Carolina, and Utah have all passed laws modeled after S.B. 1070.  Further, 24 other states have similar bills introduced in their legislatures.  Although the ultimate fate of these laws has not yet been completely determined, any provisions modeled after Sections 3, 5(C), and 6 of S.B. 1070 are unlikely to be enforced.

In the wake of the decision, employers should be aware that although states cannot create new immigration laws or attempt to bolster the penalties for existing federal immigration laws, many states can and will encourage their police to determine the immigration status of individuals who are detained.  Moreover, several states can be expected to push the limits of this ruling, encouraging their officers to enforce existing federal law under the auspices of consultation and communication with the federal government.  In addition, last year’s Supreme Court decision in Chamber of Commerce v. Whiting  upheld state enactment of laws requiring employers to register with the federal government’s web-based E-Verify program for I-9 employment authorization verification purposes.  At present, 9 states require (or are in the process of implementing legislation that will require) private employers to register in E-Verify and another 6 states require state contractors to register.  Employers should ensure that they are complying with all federal laws and E-Verify requirements, especially when employing foreign national employees in states that have enacted immigration legislation and E-Verify requirements.

U.S. Supreme Court Upholds Healthcare Law

By Squire Patton Boggs on Posted in Employment Policies

Today in a landmark decision, the United States Supreme Court decided that the Patient Protection and Affordable Care Act (PPACA) is constitutionally permissible.  In a closely divided 5 – 4 decision, the Court ruled that the so-called “individual mandate” was constitutional as a tax.

Based upon the Court’s ruling, the PPACA will continue.  Although some of the provisions are already in effect, many more become effective in 2014.  Accordingly, employers should proceed with implementing PPACA’s reforms.  For instance, employers with more than 50 full-time equivalent employees in 2014 will be required to provide “minimum essential coverage” to all full-time employees and their dependents, or pay a penalty.

We will continue to closely monitor the PPACA and expect more developments regarding this law.

Protected conversations – don’t say we didn’t tell you

By David Whincup on Posted in General

“I told you so” has always been one of the least attractive things one adult can say to another, but I did and I was right, so there.  

Earlier posts on this blog have expressed a degree of scepticism as to whether the Government’s “protected conversations” concept could ever be translated into clear and cogent statutory drafting.  Today we see from the wording proposed for this purpose in the Enterprise & Regulatory Reform Bill that we were right – it can’t.  As a minimum, it hasn’t so far, though substantial revisions are almost inevitable given the volume of flak which the proposed drafting will attract for both its lack of scope and its almost total incoherence. 

The starting point is a statement that in determining an unfair dismissal claim an Employment Tribunal may not take account of “any offer made or discussions held before the termination of the employment in question with a view to it being terminated on terms agreed between the employer and the employee”.  OK so far, but an initial review quickly reveals some obvious problems in the drafting:  

First, the suggestion is that the protected conversations regime applies only to ordinary unfair dismissal claims. Therefore anything involving allegations of discrimination or automatic unfair dismissal (e.g. whistleblowing) – in other words, just the circumstances most likely to lead an employer to want to have a protected conversation – would fall outside it.   

Second, similarly, any act giving rise to more than one claim (for example, a discriminatory dismissal, or a constructive dismissal claim for both unfair dismissal and breach of contract) creates the spectre of the settlement offer being admissible in relation to one part of the proceedings but not the other, which is a patent nonsense.  

Third, and most worryingly, the exclusion of without prejudice discussions will apply “only to the extent that the Employment Tribunal considers just” in relation to anything said or done “which in the Tribunal’s opinion was improper or was connected with improper behaviour”.  Two obvious problems jump out here – first, what on earth might be “improper” in the eyes of the Employment Tribunal?  Second, how can you only partly take account of a settlement offer?  Surely it is either in the proceedings or not?  

So nul points for protected conversations thus far.  We will now have to await next developments in the Bill’s progress, even if we do so with the same faint sense of impending disaster as an England fan at the European Championships.

LexBlog