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Top tips for surviving redundancy

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Redundancies have always been a way of life in the City, but in the current economic climate, when many organisations are merging, some have recruitment freezes and many others are considering relocating, being at risk of redundancy can be especially worrying.

Follow our top tips for redundancy to ensure you get the best chance of keeping your role, and the best compensation if you do not.

Our ‘Top Tips’ for redundancy scenarios

1. Do your homework

Check what your contract, company policies, and any relevant collective agreement says about redundancy. They might refer to a right to enhanced redundancy pay (over and above the statutory entitlement) or fixed consultation procedures. If so, make sure that your employer is doing what they are supposed to do. Enhanced redundancy terms for City employees are common and range from a multiple of 2 weeks per complete year of service upwards. Law firms tend to have less generous enhanced terms whereas the traditional banks with unionised workforces tend to be more generous. Also, check bonus, LTIP and share schemes – they might incorporate “good leaver” terms if you are dismissed for redundancy.

2. Phone a friend

Most employers allow employees to be accompanied at redundancy “at risk” or consultation meetings by a colleague or trade union representative although there is no legal obligation to do so, it’s good practice. If you aren’t told that you can be accompanied at an “at risk” meeting, then ask. If your employer’s notes are inconsistent with your own (or your companion’s), ask your employer to put a copy of your notes on file.

3. Question time

In order to fairly dismiss for redundancy, your employer should individually consult with you about the redundancy situation, consider alternative ways of saving the role and avoiding the redundancy, enable you to have time to respond, and enable you to apply for different roles within the business. If you have any questions during the consultation process, ask them.
Some key issues to look for (but there are more):
• Have you been told why your role is at risk? Does it make sense?
• Have you been told who else is at risk? Has one of your colleagues been “missed out”?
• Do you think that other people should have been included in the ‘at risk’ pool?
• Do you think that your employer should have considered “bumping” (i.e. removing others from their roles so that you can fill their vacancy)?
• If you are going through a competitive application process for roles, do you know the selection criteria and what other factors (such as past appraisals) are being taken into consideration?
• Do any selection criteria disadvantage you due to your particular circumstances e.g. disability or pregnancy/maternity leave?
• Have you been told about all existing vacancies (including roles that are junior/senior to yours)? Have you been given a fair opportunity to apply for those roles?
• Have you seen the selection criteria for alternative roles? Do you think they are fair?
• Is there a job vacancy that you haven’t been told about?

4. It’s a numbers game

If your employer is proposing to make 20 or more employees redundant in a period of 90 days, they have additional collective consultation obligations. If they fail to comply with these obligations, you may have an additional claim for up to 90 days’ pay.

5. Is there another reason?

Employers often view “redundancy” as the easiest way to eject an employee and retain the employees they really want. For that reason, a redundancy process can be used to cloak more sinister acts (even discrimination or the repercussions of whistleblowing). If this is the case, you may have additional, more valuable claims against your employer beyond a claim of unfair dismissal. If you suspect discrimination or other unlawful acts, or you think that redundancy is being used to “mask” another reason for your exit, make a careful note of anything that is said or done which supports your allegation. This can be used as evidence later down the line.

6. Appeal

As part of the redundancy process you should be given a right of appeal. Exercise your right to do so. Make sure your appeal is submitted in time and identifies the specific issues you have with the redundancy process and the decision.

7. Protected conversations and settlement agreements

In the City, a likely route is for your employer to circumvent the above procedures and offer you a settlement agreement on a confidential basis and ask you to seek independent legal advice on its terms. The written agreement will set out terms that will seek to buy you out of any contractual, statutory and other claims you may have (such as unfair dismissal ), by offering you compensation. The settlement agreement will ask you to waive any claims in return for signing the agreement. A standard contribution to legal fees for you to obtain advice on the terms and effect of the agreement is usual. Any negotiations on the terms of the agreement will be confidential and are unlikely to be admissible in any proceedings, unless your employer behaves in a particularly improper manner towards you during the protected discussions.

Brahams Dutt Badrick French LLP are a leading specialist employment law firm based in the City, Canary Wharf and Mayfair. We are experienced in advising on severance packages arising from redundancy processes and getting clients the best deals whilst protecting their reputations. If you would like any further advice on redundancy and the topics discussed in this article please contact us on 020 3828 0350 or at info@bdbf.co.uk.

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Expected and Unexpected Examples of GDPR Enforcement in Action

On 25 May 2018, one of the most highly anticipated laws of our time came into force. The General Data Protection Regulation (GDPR) has celebrated its first birthday. We are now all used to clicking on OK to consent notifications on every website we go to. Although these can be frustrating, following the Cambridge Analytica scandal, which opened people’s eyes to data harvesting by corporations, it feels good to have control over how our personal data is used.

Twelve months on, this article examines how the GDPR has worked, using two examples – one that was expected and another that is a little left-field.

Big tech issued fines for GDPR breaches

The harsh fines which can be levied for GDPR breaches are well-known. Non-compliance risks a fine of up to €20 million or 4 per cent of an organisation’s global turnover.

Technology companies have been the first to be hit with fines. In January 2019, Google was fined €50 million (£44 million) by the French data protection authority CNIL . Two NGOs, None Of Your Business (NOYB) and La Quadrature du Net (LQDN), accused Google of “not having a valid legal basis to process the personal data of users of its services, particularly for ads personalization purposes”. The CNIL stated that Google had failed in its transparency obligations to explain exactly how it uses people’s data. In addition, the CNIL said that the users’ consent with the processing of their data for advertisement personalisation is not obtained validly.

“First, the restricted committee observes that the users’ consent is not sufficiently informed. The information on processing operations for the ads personalisation is diluted in several documents and does not enable the user to be aware of their extent.”

“Then, the restricted committee observes that the collected consent is neither ‘specific’ nor ‘unambiguous’.”

Also, Google had not made easily accessible guidance on matters such as the reasons for data processing, and the length of time data is stored by the company, as required under the regulations.

In November 2018, A German chat site was fined €20,000 (£17,809) following a major data breach. Knuddels.de suffered a breach that saw 330,000 users’ information, such as email addresses and passwords placed on Mega.nz and Pastebin.com.

LfDI Baden-Württemberg, the regional data protection authority stated: “By storing the passwords in clear text, the company knowingly violated its duty to ensure data security in the processing of personal data in accordance with GDPR Article 32(1)(a).”

It is interesting to note that the privacy watchdog commented on the excellent cooperation and full transparency of Knuddels.de during the investigation. It was also noted that post-breach, enhanced security measures had been put in place. This seems to have resulted in a smaller fine than may have been imposed had the company behaved less favourably.

Verdict – Expected

Big tech was always going to be at the forefront of GDPR breaches simply by virtue of the fact that they handle so much data. However, other organisations have also been hit with fines. For example, the Central Hospital of Barreiro Montijo in Portugal was fined €400,000 after staff used fake profiles to illegally access patient data.

Apple, Amazon, Netflix, and Spotify are currently being investigated by the Austrian privacy regulator for non-compliance with Article 15 of the GDPR. So expect more eye-watering fines to be issued in the near future.

Prince Harry wins a privacy battle against Splash News and Pictures on GDPR grounds

The Duke of Sussex (aka Prince Harry) won a substantial claim against photography agency Splash News and Pictures after they used a helicopter to take pictures inside the home rented by him and his wife. Photographs published by various news outlets in both print and online on 11 January 2019 were said to have “very seriously undermined” the couple’s security.

The Duke of Sussex’s legal team argued the media outlet’s actions caused a breach of the couple’s right to privacy according to Art. 7 and 8 of the European Convention on Human Rights (ECHR) as well as a breach of the General Data Protection Regulation (GDPR) and Data Protection Act 2018 (DPA).

Article 5 of the GDPR requires all data controllers and processors to handle personal data (such as names, pictures and stories relating to them) fairly and in a transparent manner while also using it for a legitimate purpose.

Verdict – Not expected but hugely welcome to celebrities and royalty

Ever since the tragic death of Princess Diana, celebrities and royalty have fought hard to control their right to privacy. The GDPR appears to have provided them with a powerful weapon to conduct that battle. When obtaining pictures or footage of a person, the data controller needs a reason to use them. This can be in the form of consent (for example, the person in question was attending a pre-arranged movie premiere or charity function where press photographs are permitted). If no consent was given, which is the case with most paparazzi photos and footage, the controller must prove they have a legitimate interest, or it is in the public interest to use the material. In the case above, the way the photos were collected would make it very difficult to successfully argue that the media organisation’s legitimate interest or the interest of the public outweighed the right to a person being able to enjoy a level of privacy in their own property.

Final words

What all these examples show is that regulators across Europe are prepared to act decisively to enforce GDPR principles. This means organisations cannot afford to ignore continuous compliance monitoring. Data maps must be kept current to ensure that if a breach occurs or a Subject Access Request is made, the location of affected data can be swiftly identified. It is also imperative to regularly review whether your organisation’s data processing activities mean a Data Protection Officer should be appointed, as provided for in Article 37. And finally, GDPR training and communication should be rolled out across all teams regularly.

If you have any questions regarding employment law and/or GDPR matters, please do not hesitate to call the BDBF team of employment lawyers on 020 3828 0350.

BDBF is a leading employment law firm in the City of London.

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London’s Tech Week Showcases Why UK Technology is Surging Ahead

According to the FT, while the UK is being buffeted by Brexit headwinds, the tech sector is now growing at one and a half times the rate of the wider economy. So significant is this growth that the UK is now considered the unicorn capital of Europe, having produced 13 firms valued at more than $1bn (£784 million) since 2018, taking its total to 72.

London Tech Week, celebrated last month, has shown why the UK is a world-class technology innovation hub at the forefront at the so-called fourth industrial revolution. The event has, in particular, focused on a number of key specialisms, including connecting global markets, cybersecurity, digital transformation, innovation, people and skills, social, and start-up scaleup.

For those who missed London Tech week but are still keen to have a glimpse of the future, the ‘AI: More Than Human review’ exhibition at the Barbican, which is running until the end of August 2019 is a great place to start. The experience is showcasing some of the very latest AI projects including Deepmind by Alphabet (the parent company of Google), Massachusetts Institute of Technology (MIT) and artists such as Mario Klingemann and Massive Attack. One particularly enlightening and thought-provoking exhibit by Joy Buolamwini is designed to show the in-built racial and gender bias within face recognition technology.

In this article, we will take a look at some of the most innovative tech businesses which we believe have the potential to be transformative, and dare we say, ‘disruptive’. In truth, there are so many innovative tech companies covering every conceivable sector and specialism, it is almost impossible to narrow these down; however, we recommend watching:

The Small Robot Company– Far from being toys, this agri-tech firm is trying to revolutionise farming by using small robots to undertake many of the tasks required in the growth of crops. According to their website, their robots will care for each plant individually, feeding and spraying automatically when needed, and providing nutrients and support. Their point of difference is that by providing bespoke care for each plant, not only will the yield be increased, but costs will be lowered by cutting wastage. Core to their offering is the ability for robots to collect data and analyse it using a ‘neural network’ which at present allows them to “tell wheat from weeds, and locate a plant to 2cm”. They are even proposing a Farming as a Service (FaaS) model, whereby farmers simply pay a set fee per month, and the company will manage all aspects of robot maintenance and replacement. They still have some way to go, having built three prototypes, but they have secured 20 initial clients, including the Natural Trust. A weeding robot is expected to commence trials in October 2019.
Moonbug– This UK / US company is tapping into the market of digital content for pre-schoolers. As any parent will attest to, it is almost impossible to manage the content children now interact with, in the forms of online videos and video games. Moonbug’s intention is to ‘inspire and engage’ children through storytelling; teaching them healthy values, building vocabulary, counting skills, emotional development, how to be a friend, and management of emotions. The company was only founded in 2018, but they have robust ambitions to revolutionise the children’s entertainment sector, in a manner which is safe but beneficial.
Darktrace– Darktrace is blending AI with cybersecurity, to detect cyber threats as they emerge, rather than relying on a database of known risks. They say they have modelled their AI technology on how the human immune system works, by learning what is ‘normal’ within the environment and therefore noticing threats which may otherwise go unnoticed. Their technology works on corporate networks and cloud-based environments. Given the rapid increase in crippling cyberattacks in recent years, and the known threat from cybercriminals and state actors, we believe Darktrace is on a rapidly upward trajectory. So much so, it is already worth £1.3bn after only five years in operation.
Improbable– Improbable is a $2bn UK computer gaming technology company. Their technology, SpatialOS, allows real-time computer game companies to quickly develop highly detailed virtual worlds, which can then be displayed using games consoles and computers.
Birdie– With the well-established challenges of caring for an ageing population, Birdie aims to improve the standard of care and safety for service users whether looked after by agencies and/or families. Birdie uses a series of internet-connected sensors placed around the home of the care service user which will detect falls and behaviour such as wandering – immediately alerting their carer. Their solution also automatically assesses integrated care report and sensor data, using AI to identify patterns of deterioration – automatically informing those who need to know. By bringing together the Internet of Things (IoT) with data analytics, we believe Birdie may have a winning formula.

Final words

While Brexit continues to pose an ongoing challenge to UK business, it is refreshing to see that by focusing on continued innovation and creating the optimal conditions for this to occur, the UK remains a pivotal player in the world of technology. Given the talent of our best and brightest minds, we have every reason to believe that our tech firms will continue to help solve some of the world’s most pressing issues, including cybercrime and global warming, leading to further growth and success.

BDBF are employment law specialists.

Contact us on 020 3828 0350 for employment law advice.

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NEW ACAS GUIDANCE ON NEURODIVERSITY IN THE WORKPLACE

Acas has published new guidance on handling neurodiversity in the workplace. Neurodiversity refers to different ways the brain can use and interpret information. This includes attention deficit disorder, autism, dyslexia, dyspraxia etc. The guidance explains what neurodiversity is and highlights the different types of neurodivergence as well as the unique difficulties they may bring. It also explains the importance of employers taking steps to support neurodiversity in the workplace. Employers should note that they may be obliged to treat certain types of neurodivergence as a disability and make necessary reasonable adjustments.

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SEXUAL ORIENTATION DISCRIMINATION COULD BE INFERRED WHEN GAY HEADTEACHER WAS FOUND TO HAVE BEEN DISMISSED DURING A FLAWED DISCIPLINARY PROCESS

Mr Aplin was an openly gay headteacher at a primary school. He met two 17-year-old boys on the Grindr app and the three of them had consensual sex. The local authority investigated and found no criminal offence had taken place nor were there any child protection issues. However, the primary school conducted its own disciplinary investigation into whether:

The above conduct had brought the school into disrepute;
Whether Mr Aplin’s conduct outside of work had undermined his ability to fulfil his role; and
Whether he displayed a gross error of judgment such as to undermine the school’s confidence in him.

The investigating officer, Mr Gordon, found that child protection issues were, in fact, involved despite the local authority confirming that this was not the case. He provided various papers/evidence to the school governor panel, which Mr Aplin was not privy to, but which were connected to the local authority investigation. He took it upon himself to advise the panel, which was not his role, being a fact finder.

The school subsequently dismissed Mr Aplin who appealed the decision. During the appeal process, again, Mr Aplin was not provided with all of the evidence before the panel. He was also informed at a late stage that he could instruct a legal representative as the school was instructing a barrister. Mr Aplin, therefore, resigned claiming that flaws in the disciplinary process had amounted to constructive unfair dismissal.

Mr Aplin subsequently issued a claim in the employment tribunal for unfair dismissal and sexual orientation discrimination. The Employment Appeal Tribunal upheld the tribunal’s finding of constructive dismissal. The tribunal had held that the entire process was so flawed that it constituted a breach of trust and confidence. It was also held that the investigating officer displayed a striking lack of objectivity in approach when presenting the evidence and this demonstrated unconscious bias. There was sufficient material for an inference of sexual orientation discrimination to be drawn.

The Governing Body of Tywyn Primary School v Aplin UKEAT/0298/17

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A DISABLED EMPLOYEE COULD NOT RELY ON HER MISTAKEN BELIEF ABOUT WHAT ADJUSTMENTS NEED TO BE MADE

Ms Wood worked for iforce Ltd, a logistics company, at one of its warehouses packing items at a fixed workbench. She had osteoarthritis, a degenerative condition and a disability, which worsened in damp, cold weather. In 2016, the company changed its working practices so that Ms Wood would need to move between benches and “follow the work”, rather than stay at one bench throughout.

Ms Wood, however, refused to work at the end benches near the loading doors as she believed that it would be colder and damper there; hence, making her condition worse. Yet, following intensive investigations by iForce, it was found that there was no material difference in temperature, humidity or wind chill factor throughout the warehouse. The company concluded that Ms Wood’s refusal to follow instructions was unreasonable and issued her with a final written warning (downgraded on appeal to a written warning).

Ms Wood issued proceedings in the employment tribunal, complaining of disability discrimination. The EAT held that in order for her to succeed there had to be some causal connection between the refusal to work at benches near the loading doors and her disability. That connection had not been established. The tribunal had not found that that iForce was requiring Ms Wood to work in colder and damper conditions that might impact upon her disability. In fact, it had found that Ms Wood was mistaken in her belief of this. The tribunal’s reasoning had found no basis for finding a causal connection between Ms Woods’ disability and the erroneous belief that had led to her to refuse instructions.

iForce Ltd v Wood UKEAT/0167/18

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DISABLED EMPLOYEE SHOULD HAVE BEEN OFFERED A DEDICATED PARKING SPACE

The Claimant, Ms Linsley, had ulcerative colitis, which is classified as a disability. The condition can make individuals need to go to the toilet urgently, flare up and be aggravated by stress.

Ms Linsley worked at the HMRC and drove to and from work in her own car. HMRC has a national policy on the use of its car parks. Priority is provided to staff who require a parking space as a reasonable adjustment, whether or not they are blue badge holders.

Throughout the years, Ms Linsley underwent various occupational health assessments that stated she would benefit from a dedicated parking space which she was provided with for a number of years at various HMRC sites since 2012. In November 2016, she moved to a new site in a different role and requested a dedicated parking space. However, instead, she was offered a parking space near the toilets if she failed to get a parking space near the building (and toilets) on a first come, first served basis. Alternatively, she could park in an unauthorised zone, incurring a small sanction which the employer would ensure would not apply to her, but she would also be required to move her vehicle later.

Ms Linsley was aggrieved that she did not receive a dedicated parking space and in early 2017 went off sick with stress. Reports from Occupational Health highlighted that stress was a trigger for her symptoms and as HMRC had not put in place the recommendations, this exacerbated her symptoms.

Ms Linley subsequently brought a claim for disability discrimination alleging that HMRC had failed to make reasonable adjustments. The EAT upheld her claim concluding that HMRC had failed to apply its own policy and it appeared that the relevant managers had acted in ignorance of it, which was not a good reason for failing to apply the policy. HMRC should have been aware that from around 2012 looking for a parking space was a source of stress. Employers are unlikely to be able to show that they have discharged their duty to make reasonable adjustments if they fail to follow their own policies unless they had a cogent reason for not doing so.

Mrs M Linsley v Commissioners for her Majesty’s Revenue and Custom: UKEAT/0150/18/JOJ

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Employment Law Changes To Look Out For In April 2019

April 2019 is set to be an eventful month, one where the UK may or may not leave the European Union, tens of thousands will line up to run the London Marathon, and most of us will look forward to a much-needed break at Easter. There are also several employment law changes HR directors and employers need to prepare for. They are as follows:

Employment Tribunal compensation limit change

The limit on the amount of compensation awarded by the Employment Tribunal for unfair dismissal will rise from £83,682 to £86,444. The upper limit which can be paid out will be either £86,444 or 52-weeks’ actual pay if that is less than the statutory cap.

The maximum statutory redundancy payment (and basic award for unfair dismissal) will increase to £15,750.

The National Living Wage to increase

On 1 April 2019 the National Living Wage (formally known as the National Minimum Wage) will increase by 4.9% for all age groups, calculated at.

£8.21 per hour for workers aged 25 and over (up from £7.83).
£7.70 per hour for workers aged 21 to 24 (up from £7.38).
£6.15 per hour for workers aged 18 to 20 (up from £5.90).
£4.35 per hour for workers aged under 18 (up from £4.20).
£3.90 per hour for apprentices (up from £3.70).

Failure to pay the National Living Wage can result in being publicly named and shamed and a maximum penalty of £20,000 being imposed. Most employers do not intentionally pay less than the minimum wage, but laxities in HR systems can mean employees’ birthdays are missed and therefore their wage does not increase when they reach an age where the amount paid should change. Other common reasons for failing to pay the National Living Wage include; not classifying workers correctly (i.e. registering them as self-employed instead of employed) or not counting the entire time the employee spends working (for example, locking up the premises). It is imperative that business owners ensure their HR policies and procedures are up-to-date and alive to changes in employee circumstances which may trigger a change in the amount they should be paid.

Gender pay gap reporting deadline

Private companies with more than 250 employees must publish their reports regarding gender pay gaps on 4 April 2019.

The gender pay gap in 2018 was found to be 8.6%.

To comply with gender pay gap reporting obligations, you must publish your organisation’s report in an accessible place on your website and ensure it remains in place for at least three years. Gender pay gap results should also be uploaded to the Government’s reporting website.

Workers entitled to itemised pay statements

From 6 April 2019 those classified as ‘workers’ will be legally entitled to receive an itemised pay statement. These were previously only required for employees.

Furthermore, if a staff member’s renumeration varies depending on the number of hours worked, their payslip must clearly set out those extra hours. An example of this is where a worker or employee is paid a fixed salary but can work overtime on an ad-hoc basis at an hourly rate. In such a case, the overtime worked needs to be shown on the pay statement. This change is aimed at making renumeration transparent and provides an ability to quickly check the total number of hours work should a worker dispute their pay statement.

Certain statutory pay amounts increase

Statutory maternity, paternity, adoption, and shared parental pay increases to £148.68 per week from 7 April 2019. And from 6 April 2019, statutory sick pay increases to £94.25 per week.

Changes to statutory redundancy

Any employees made redundant must pay those with two years’ service an amount based on the employee’s weekly pay, length of service and age. The maximum amount the weekly pay is subject to will be £508 from 6 April 2019.

Start preparing for the end of freedom of movement

If / when the UK leaves the European Union, employers who wish to recruit talent from an EU country will need to be aware that prospective employees will be subject to similar restrictions that are currently in place for non-EEA nationals.

If you have any EU citizens employed in your organisation, they should be made aware that if they meet certain conditions, they can apply for Settled Status, which will allow them to live and work in the UK indefinitely.

If you have any questions regarding how these new changes may affect your business, please do not hesitate to call us on 020 3828 0350.

BDBF are employment law specialists in the insurance and financial services sectors.

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TRIBUNAL RULES THAT STANCE ON SCOTTISH INDEPENDENCE IS “PHILOSOPHICAL BELIEF” FOR DISCRIMINATION PURPOSES

An employment tribunal has held that a Councillor’s belief in Scottish Independence can amount to a “philosophical belief” for the purposes of the Equality Act 2010.

SNP leader, Chris McEleny, brought a discrimination case against the Ministry of Defence in 2018 claiming that he had been unfairly targeted due to his views on Scottish Independence. He claimed that he had had his security clearance revoked after national security officials had interviewed him about these views together with his opposition to the Trident nuclear system and his mental health.

In a written statement, the Judge held that Mr McEleny’s situation met the legal requirements to constitute a philosophical belief. The judge was persuaded that the Claimant’s belief that Scotland, rather than any other Country, should be independent was of sufficient weight and importance to human life and behaviour to be philosophical in nature.

By the same analogy, one could view Brexit as a belief that Britain should be independent of the EU and equally the reverse that Britain should remain in the EU.

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PERSONAL INJURY DAMAGES PAYABLE FOR FAILURE TO PROVIDE REST BREAKS UNDER THE WORKING TIME REGULATIONS 1998

The Employment Appeal Tribunal (EAT) has held that personal injury compensation is available for a failure to provide rest breaks under the Working Time Regulations 1998.

The Claimant, Mr Grange, was employed as a bus driver and then as a worker who monitored and regulated bus services. The Claimant brought a claim in the employment tribunal claiming that his employer had refused to permit him to exercise his entitlement to a rest break throughout various periods of his employment.

On appeal, the EAT found that as a matter of law the employer’s refusal did not have to amount to an active response to a positive request. Denial of the right could take place through the arrangement of the working day. The tribunal had found that there were 14 days where the employer had been in breach and the Claimant gave evidence stating that the lack of rest breaks amounted to more than discomfort due to a bowel condition and he was therefore awarded £750 compensation.

It was held that tribunals are authorised to award damages for personal injury under the Working Time Regulations. The EAT considered previous case law in this area and highlighted the difference between awards for injury to feelings (which did not apply) and personal injury damages. It was clear from EU authority that the objective of the regulations is to protect the health and safety of workers, and it would be natural for them to allow such awards. A formal approach was not required for assessment of damages. The tribunal was held to be empowered to deal with low-value cases on a common-sense approach without the need for medical evidence.

Grange v Abellio London Ltd EAT/0304/17

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LEGITIMATE TO SUSPEND A TEACHER FOR MANHANDLING PUPILS

The Claimant, Ms Agoreyo, an experienced teacher, commenced work as a primary school teacher for the London Borough of Lambeth in order to teach a class of up to 29 five and six-year-old children, two of whom demonstrated challenging behaviour.

It was alleged that on two occasions the Claimant used unreasonable force towards the two children as follows:

She dragged one child on the floor out of the classroom in the presence of another member of staff and the rest of the children whilst the child cried “help me”;
She dragged another child very aggressively a few feet down the corridor whilst shouting at him;
She also told this child to leave the classroom for failing to follow instructions. When he refused, she shouted “if you don’t walk then I will carry you out!” and then picked up the child who kicked and screamed in the presence of other children.

The Claimant was subsequently suspended pending investigation of these allegations and she resigned whilst on suspension.

The Claimant challenged the lawfulness of her suspension as being a repudiatory breach of the implied duty of trust and confidence. She did not argue that the allegations against her should not be investigated, but that the suspension was not reasonable or necessary for the investigation to take place.

The Court of Appeal held that Lambeth had been bound to suspend the Claimant after receiving reports of the allegations against her. Given that there had been reasonable and proper cause to suspend her, the suspension had not breached the implied term of trust and confidence.

It was held that the assessment of whether there was reasonable and proper cause for a suspension, like other issues of reasonableness, was a question of assessment. The allegations of misconduct were serious and had to be investigated. As the employer had to safeguard the interests of very young children, Lambeth had reasonable and proper cause to suspend the Claimant. The appeal court held that the question is not whether suspension was “necessary”. Further, it considered that whether the suspension was to be viewed as a neutral act was “ultimately not a relevant question nor a particularly helpful one”. The crucial question in such cases was whether there had been a breach of the implied term of trust and confidence and that depended on whether there had been reasonable and proper cause for the suspension. This was a highly fact-specific question, not a legal question.

Mayor and Burgesses of the London Borough of Lambeth v Agoreyo [2019] EWCA Civ 322

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BAD LEAVER PROVISION WHERE SHARES AND LOAN NOTES WERE FORFEITED WAS FOUND NOT TO BE UNCONSCIONABLE OR A PENALTY

The Claimant worked for a company that was acquired by way of a sale of shares. As a condition of the acquisition, the purchaser required that the seller provide equity to key employees to ensure continuity post-acquisition. The Claimant was therefore given a 2% shareholding.

The Claimant sold her shares to the new company pursuant to a share sale agreement which provided for both initial and deferred consideration. The deferred consideration included staged cash payments and an entitlement to earn-out shares and loan notes, which were subject to good leaver/bad leaver provisions.

A bad leaver included an employee who voluntarily resigned so they would forfeit their loan notes in whatever way the Remuneration Committee may determine in good faith, and would be required to sell back their share at the lower of acquisition cost or fair value.

The Claimant subsequently resigned and sought to challenge the bad leaver provisions by arguing breach of contract and unauthorised deduction from wages. It was claimed that the bad leaver provisions were unenforceable as they were (1) unconscionable, (2) in breach of the rule against penalties and (3) amounted to a contravention of the Modern Slavery Act 2015 as the covenant not to become a bad leaver amounted to forced or compulsory labour.

The EAT ruled that the Claimant could not bring a claim under the unauthorised deductions from wages provisions. The Employment Rights Act 1996 excluded claims for any payment to the worker otherwise than in his capacity as a worker. The shares and loan notes were provided to the claimant in her capacity as seller of shares, not worker.

The EAT held that there is a three stage test for setting aside an unconscionable bargain: (1) one party must have been at a serious disadvantage whether through poverty, ignorance, lack of advice or otherwise; (2) the other party must have exploited that disadvantage in some morally culpable manner, and (3) the resulting transaction must be overreaching and oppressive. The EAT found that the Claimant did not meet even the first criterion – she had warranted in the share sale agreement that she had taken professional advice; further, the bad leaver provisions were, in fact, reasonable. In any event, setting aside the agreement would have put the Claimant in the position of never having received the shares, which was not what she was seeking.

There was also no bad faith in treating the Claimant as a bad leaver even though the Remuneration Committee had discretion under the Articles to re-classify her as a good leaver. The bad leaver provisions, to which the Claimant had agreed, made it clear that an employee who gave notice to terminate employment was a bad leaver, and no exceptional circumstances had arisen such as to call into question the employer’s decision to apply the default treatment of a voluntary resignation as making her a bad leaver.

Finally, in terms of the alleged penalty, the EAT held that the rule against penalty clauses was not relevant in this case because the consequences of being a bad leaver did not depend on the Claimant being in breach of contract/covenant. The company simply relied on the provisions of the Articles, which set out the conditions that needed to be satisfied to secure payment and these had not been met.

Nosworthy v Instinctif Partners Ltd [2019] UKEAT/0100/18

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