Employment Law Coffee Break | Acas uplift for sham redundancy, agency staff and strikes, and a podcast on employment status issues

25% compensation uplift applied to sham redundancy

A recent case in the Employment Appeal Tribunal has upheld that the Acas code of practice on disciplinary and grievance procedures will apply to a dismissal disguised as a redundancy and failure to follow the code in good faith in these circumstances can result in an uplift of up to 25% in compensation. In this case the employer had instigated a reorganisation in which more roles were to be created, but notwithstanding this, the employee's dismissal was labelled a redundancy. The redundancy exercise was found to be a sham as the decision had already been taken to dismiss the employee; her subsequent grievance and the process followed was also found to be as much of a sham as the redundancy exercise.

The code provides basic practical guidance to employers, employees and their representatives and sets out principles for handling disciplinary and grievance situations in the workplace. A failure to follow it does not, in itself, make a person or organisation liable to proceedings. However, Employment Tribunals will take the code into account when considering relevant cases.

Tribunals will also be able to adjust any awards made in relevant cases by up to 25 per cent for unreasonable failure to comply with any provision of the code. Here the employer sought to argue that, as the reason given for the employee's dismissal was redundancy, the code did not apply.

This case makes clear that employers cannot bypass the code nor be following a fair process in good faith by calling a dismissal for misconduct or poor performance something else. The purpose of a poor performance or conduct procedure is to give the employee the chance to improve their performance or behaviour and to have a fair opportunity to explain their position; where an employer has already made up their mind and follows a sham process, or labels a dismissal for performance as a redundancy, an Employment Tribunal is likely to apply an uplift where the true motivation becomes apparent.

Employers looking to terminate the employment of an underperforming employee or one whose behaviour is problematic should ideally follow a fair procedure commensurate with that in the code. Where this is not possible, employers should consider holding a protected conversation or, where an existing dispute exists, a without prejudice discussion to explore possible terms of exit which would usually be agreed in a Settlement Agreement. (Protected conversations and without prejudice discussions meeting the criteria cannot be used in evidence in most unfair dismissal proceedings.)

Using agency staff to break strikes in the UK – rhetoric or reality?

Against the backdrop of imminent strike action, recent press reports suggest that the UK government is planning urgent amendment of legislation which prevents companies from using agency workers to replace striking workers. This measure would operate alongside other actions the government appears to be considering relating to requiring a minimum number of rail staff to work during a strike.

It is unclear how serious the government is in its proposals to change the law around strikes and agency workers. Whether these measures are genuine legislative plans or merely political comment designed to put unions off the idea of striking is unclear. It is also unclear to what extent major staffing companies would get involved in any such supplies even if the law is changed to allow them.

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Employment status issues for contingent workers

Please listen to our latest Global Workforce Solutions Takeaway podcasts in in which Olivia Sinfield, Partner at Osborne Clarke, UK, talks to Jorgo Tsiris, Partner at Osborne Clarke, the Netherlands, and Thomas Leister, Partner at Osborne Clarke, Germany, about current employment status issues in different countries for contingent workers.

The first discusses the legal distinctions between employees, workers and self-employed contractors in Germany, the Netherlands and the UK, particularly in light of new working trends - such as the growing gig economy - that have emerged as a result of the Covid-19 pandemic.

Listen to Podcast (Part 1)

In the second half, Olivia discusses with Jorgo and Thomas the legal consequences of incorrectly categorising employees, workers and self-employed contractors across Germany, the Netherlands and the UK, as well as advice on minimising the risk of misclassification in each jurisdiction. 

Listen to Podcast (Part 2)