1. Employment Law Update
Welcome to the February 2012 edition of our monthly
employment law update from the HR Division of Lander
Associates. We hope you found last months update useful.
February 2012
Annual leave and long term sickness absence
In KHS AG v Schulte, the European Court of Justice (ECJ) decided that an employee who is unfit for work over
several consecutive years can carry-over annual leave, but not indefinitely. National laws or practices may set a
time limit on the carry-over period of annual leave where a worker has been on long-term sick leave. The period
must be ‘substantially longer’ than the reference period in respect of which the leave is granted; and, in Schulte,
15 months was held to be an appropriate period.
Where leave is granted on an annual basis, carry-over will need to be longer than one year. The ECJ commented
that the period for carry-over must be ‘substantially longer’ than the reference period; any period less than 15
months may breach European law.
The Government’s ‘Consultation on Modern Workplaces’ proposes amending the Working Time Regulations to
provide that employees unable to take annual leave due to sickness absence (and who cannot reschedule the
leave in the current leave year) may carry the leave over.
Employee did not suffer detriment in not being allowed to work overtime after refusing to opt out
of Working Time Directive
In Arriva London South Ltd v Nicolaou an employee who had refused to opt out of the Working Time Directive
(WTD) was not permitted to work overtime. The company had a policy in which employees who had not opted out
were not allocated overtime in order to prevent employees working over the number of hours specified in the
Directive. The employee claimed that the refusal of overtime meant he suffered a detriment and was being
victimised because of his protected act (refusing to opt out of the Directive).
The Employment Appeal Tribunal (EAT) found that the company’s policy of refusing overtime to those employees
who had not opted out was “reasonable and necessary to ensure compliance with its statutory duty” under the
Directive. The protected act must be the material factor in causing the employer to victimise an employee. This
EAT found that the refusal of overtime and the failure to opt out were separate issues and did not amount to
victimisation.
Acas issues guidance on Olympic Games
Acas has published guidance for employers on dealing with employment issues surrounding the Olympic Games.
The advice includes adopting flexible work patterns as a short term measure and having a clear policy regarding
paid or unpaid leave for volunteering. The guidance, including a question and answer section, can be found at :
http://www.acas.org.uk/index.aspx?articleid=3392
Businesses pledge to advertise for work experience and pay interns
Over 100 companies including Barclays, Tesco, Marks & Spencer, Coca Cola, Nestlé, BP and E.ON have signed
an agreement on social mobility. They have pledged to advertise for all work experience places in order to combat
nepotism and aid social mobility. The firms backing the campaign will support interns by paying for expenses or
accommodation and treating internships as a job with a minimum wage. Under the same initiative, Nick Clegg has
proposed that the job application process be made anonymous with names and details of education institutions
removed from CVs in order to combat discrimination.
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2. Employment Law update
The ‘range of reasonable responses’
Where an employee is dismissed, the fairness or otherwise of the dismissal
depends on whether in the circumstances (including the size and administrative
resources of the employer's undertaking) the employer acted reasonably or Page 2
unreasonably in treating it as a sufficient reason for dismissing the employee.
Because the statute refers to the alternatives of "reasonably or unreasonably", the
fairness of the dismissal is ascertained according to the objective standards of the hypothetical reasonable
employer. In a case involving three joined appeals, each turning on the fairness of the dismissal, the EAT observed
that the limited scrutiny function reserved to the ET under the range of reasonable responses test applies equally to
the appeal courts.
Duties owed by senior employees to their employer
In Customer Systems v Ranson and others the High Court considered the case of senior employees who set up in
business in competition with their employer.
The judgment contains some helpful guidance on the principles that the court will follow in such cases-
there is nothing to prevent senior employees contemplating or even discussing such action with colleagues while
still employed. However, to discuss it with key clients of the existing employer will be in breach of their unwritten
fiduciary duty to put their employer's interests above their own so far as current clients were concerned. In fact, they
are under a duty to tell their current employer if they have such a conversation.
- When one senior employee, A, has resigned to start work for his new company, and encourages employee B to do
the same even though he knows that there is a non-compete restrictive covenant in employee B's contract of
employment, it does not matter that A thought the covenant might not be enforceable. If he took a chance on that,
he could nevertheless be liable to the old employer for damages for inducing a breach of employee B's contract.
- When a senior employee attends a job interview with the new rival company, he is not under a duty to his current
employer to tell him anything he is told in confidence at that interview provided that he himself does not do anything
to assist his prospective employer to compete with his existing employer at that stage.
No breach of contract claim for failure to follow express contractual disciplinary procedures
In the joined cases Edwards v Chesterfield Royal Hospital NHS Trust and Botham v Ministry of Defence, the
Supreme Court held that breaches of disciplinary procedures expressly incorporated into contracts of employment
do not give rise to breach of contract claims in their own right.
The Supreme Court decided this on the basis that the breach fell within the exclusion detailed by the House of
Lords in Johnson v Unisys Ltd (the ‘Johnson exclusion’) and further held that damage to the Claimants’ reputations
as a result of their employer’s actions before dismissal was also within the Johnson exclusion as it was not damage
separate from the manner of their dismissals.
In these cases, the Claimant’s were dismissed following disciplinary hearings at which they contended that their
employers failed to comply with contractual disciplinary procedures which resulted in them wrongly finding the
employees guilty of misconduct thereby damaging their reputations. The Claimant’s brought breach of contract
claims.
The Supreme Court found that where the alleged breach of contract relates to the manner of dismissal damages
flowing from the breach are not recoverable unless they relate to an issue that
happened before the dismissal and was independent of the dismissal.
Following this case, procedural errors in the way a dismissal is handled will This employment update is provided for
not give rise to a claim outside of the unfair dismissal rights and the relevant general information only and should not
compensation limits. be applied to specific circumstances
without advice.
visit www.landerassociates.co.uk for more information

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