Author Archive for Usefully Employed

Contingency fees in the ET to be abolished?

Published
by
Usefully Employed
on June 27, 2008
in Employment Tribunal and Lawyers
. 0 Comments

No-one’s daring to say so, but a press release by the Ministry of Justice is reviewing the whole caboodle. Some solicitors are getting worried.

A contingency fee is where the solicitor’s fee is a percentage of what he recovers for the client. In my experience it’s pitched between 33% and 50%. Recover £30,000 for your unfair dismissal, write out a cheque for £15,000-odd to your solicitor.

They should not be confused with conditional fees, where the solicitor charges his normal hourly rate (plus an uplift) if you win, and nothing if you lose.

Contingency fees only really exist in employment tribunals, and what’s more they only exist at all by accident (there are some other times they crop up, like CICA claims). All work that solicitors do is considered either contentious or non-contentious. If it’s in court, it’s contentious, if it’s not, it isn’t. There are long-standing and strict rules that contingency fees are not allowed in contentious proceedings. You cannot say to a client that you’ll pursue their road traffic accident in the county court for a third of whatever they get. Oddly however employment tribunal claims are not specified as contentious. This means that they are non-contentious, and the rule does not apply. The idea that employment tribunals are non-contentious, when they have pleadings, disclosure, statements, orders, judges, judgments, and claims running into the millions is just plain weird. I’ve never seen any suggestion that their exclusion from the definition of contentious is anything other than an anomaly. That’s the word the Bar Council use anyway, at the same time as forbidding barristers from taking work on that basis.

There are arguments for and against. Conditional fees are a bit useless for most tribunal claims as there are no routine costs orders. Costs paid would still therefore come out of awards rather than being paid separately by the loser. The obvious worry for the Claimant is that they win £5,000 and pay out the same or more to their solicitor. This hasn’t been helped by the increasing technicality of employment law and procedure, meaning the tribunal (despite the best efforts of the judges) isn’t the place for the litigant in person that it would like to be. Good firms, like the one I linked to above, are able to help a lot more claimants access the tribunal than they could otherwise.

The attraction of paying a percentage is obvious, you’re guaranteed not to be left out of pocket at the end. But the conflict of interests is strong, and takes a very professional solicitor to overcome. This is because the solicitor effectively funds any work that’s undertaken. Let’s say the claim gets as far as the ET1, and an offer of £10,000 to settle is put in by the employer. If the client accepts it, then the solicitor has made a very easy £3,333 (we’ll assume a one third fee). But the client holds out, and realistically states that he might well be awarded twice that sum. No offer above the £10,000 is forthcoming, and the client does indeed win £20,000 at a full hearing. The solicitors are thus paid £6,666. But they’ve had to do the ET1, all the disclosure, negotiation, maybe make or respond to the odd interim application or attend a CMD or PHR, draft witness statements, and provide representation for the hearing itself. Even simple unfair dismissal cases can be listed for two days. The profit element of the £6,666 thus starts to look very low compared to the £3,333 for just meeting the client, banging out a couple of letters and an ET1.

So whereas in conditional fees there’s a commercial pressure on the solicitor to advise settlement to avoid the risk of losing the case and not being paid at all, in contingency cases there’s the second pressure of settling early before significant work has been done.

I’ve been unfair using the word solicitor - almost all of whom can be trusted to give professional and realistic advice on settlement that is in their clients’ best interest. But fee mechanisms mustn’t just be fair in practice, they must also be seen to be fair. There is also a huge rise in non-solicitor companies offering employment tribunal representation; indeed it was they who opened the contingency fee floodgates. These companies are least now subject to some form of regulation, but the clear conflict of interest present in a contingency fee arrangement leaves a very unsavoury taste in the mouth.

Answers as to what should replace contingency fees on a postcard please…

Announcement on equal pay and positive discrimination

Published
by
Usefully Employed
on June 26, 2008
in Discrimination
. 1 Comment

The new Equality Bill will, in addition to consolidating the diverse statutes that currently cover the area, introduce:

  • A prohibition on age discrimination in providing goods and services;
  • A statutory basis for positive discrimination on (apparently) gender and race;
  • Staged compulsory disclosure of gender pay gaps, perhaps with forced audits.

The first of these is of limited employment law relevance, although much in the same way that disability discrimination extends to goods and services provided to workers, potentially there is some scope for claims. Some workplaces may have to examine the services they provide to see if some discriminate against older or younger workers.

The other two areas are fairly major - and it’s difficult to properly comment until the draft bill is published. Positive discrimination is rightly a touchy subject. Many in the UK feel as though it already goes on, this chap is an extreme, but spend too long in a pub, or trawl any site which has user-generated comment, and you’ll soon be thrown the opinion by someone that white males are somehow being marginalised and those from minorities have ‘an easier ride’. I don’t agree with that view, you understand, but government must realise that it’s gradually turning from an extreme point of view to a mainstream one. This is very dangerous, and must be addressed.

Harriet Harman talks about the proposals on the Today programme, here.

Comparators in Disability Discrimination

Published
by
Usefully Employed
on June 25, 2008
in Discrimination
. 0 Comments

Nearlylegal links to (of course) a housing case, Mayor and Burgesses of the London Borough of Lewisham v Malcolm, UKHL, but there is some interesting comment on choice of comparator in discrimination. This is relevant to employment discrimination claims, as well as claims on goods and services which can also be brought against employers. Like NL, I would refer you to para 35. Read it in isolation before you read any of the rest of the case. There’s something rather wonderful about a law lord feeling he has to state that a dog is not a beneficary of the Disability Discrimination Act.

Garden Leave without contractual provision

Published
by
Usefully Employed
on June 25, 2008
in Constructive Dismissal, Contracts of Employment and Garden Leave
. 0 Comments

Can an employer enforce garden leave absent a specific power in the contract of employment? Lawyers are always cautious on advising on enforcement of garden leave, as if in excluding the employee from work the employer puts itself in breach of any express or implied terms of the contract then the employee can resign without penalty. Garden leave is crucial however to an employer’s response to a key member of staff leaving, it can set up its new arrangements, contacts and personnel without having the immediate pressure of competition from the departing employee.

In the recently reported High Court case of SG & R Valuation Service Co v Boudrais & Ors [2008] EWHC 1340 (QB) the contract of employment had no such provision, therefore the court had to determine whether enforced garden leave is compatible with their existing contracts. It is settled law that there is no implied obligation on an employer to provide work for the employee: the oft-quoted principle being from Asquith J in Collier v Sunday Referee Publishing Co [1940] KB 647:

Provided I pay my cook her wages regularly she cannot complain if I choose to take any or all of my meals out.

This creates quite an image of a bachelor Asquith in war-torn Britain, being dressed by his valet in the morning, writing the odd judgment, before deciding whether it’s dinner at home or at his club. I hope it was like the Drones.

Collier is only the starting point however. The fact is that for many high value employees is their skills and expertise, as well as the interests of their own career, require them to remain in work. This will especially so if their future prospects are damaged by time away from the workplace. In this case it was held that “any dissociation from the market for a substantial period would result [the employees'] skills becoming stale”, and furthermore that a substantial part of their remuneration was performance-related bonus that they would be unable to achieve if kept from work. This means that a right to work must be placed in the contract of employment - given the nature of the parties this must have been the bargain they struck.

Mr Justice Cranston goes on to consider if this right to work is qualified in any way. He holds that it is, and usefully sets down the principle:

Employees who have a right to work have that right subject to the qualification that they have not, as a result of some prior breach of contract or other duty, demonstrated in a serious way that they are not ready or willing to work, or, to put it another way, that they have not rendered it impossible or reasonably impracticable for the employer to provide work. The breach of contract or other duty must constitute wrongdoing, by reason of which they will profit or potentially profit. In such circumstances, there is no obligation on the employer to provide work, although the contract of employment is ongoing. This is not an implied term in the employment contract but is a qualification to the legal construct, the right to work.

On the particular facts - emails between the departing employees which made their destructive intentions clear - the company did have a right to enforce garden leave. This case is a very useful reference point for employers, but also provides important safeguards for the “innocent” employee.

This case illustrates what a particular and nuanced exercise it is to construe a contract of employment in comparison with, say, a simple commercial contract. Also, finally, I was pleased to see the following at paragraph 17: 

Reference was made by the claimant to the ACAS Code of Practice on Disciplinary and Grievance Procedures. That suggests, sensibly enough, that where there is a difficulty with an employee and an allegation of gross misconduct a brief period of suspension on full pay should be undertaken. As I have said, that may well indicate good practice, but it says nothing about the contractual position of these defendants. Not only is there no evidence it was incorporated in their contracts, by usage or otherwise, but it lacks contractually binding language.

ACAS guidance is simply that - guidance as to good employment relations. Although failure to follow that guidance can be indicative of the reasonableness of a party’s action, or have statutory consequences, I’m pleased that the court here so thoroughly rejects it as valid extraneous evidence as to the construction of a contract of employment.

EAT Judgments

Published
by
Usefully Employed
on June 23, 2008
in Employment Tribunal and Lawyers
. 2 Comments

I’m delighted that I’ve at last spent 30 seconds stealing being inspired by Nick Holmes‘ use of a Yahoo Pipe to provide a good rss feed from bailii. The fruits of my labours are available on the side bar, or here as a feed you can use yourself.

Always keepin’ a man down

Published
by
Usefully Employed
on June 22, 2008
in Discrimination and Rambling
. 5 Comments

I subscribe to the feed at http://wordpress.com/tag/employment/, which I’d only recommend if you’re adept at speed-reading: the amount of content with that tag is too high, and 95% of posts are of little or no interest to the British employment law enthusiast.

It does however turn up the odd gem - such as a particularly irate blogger who tries to make a case that pay inequality between the sexes needs to be measured in light of better social benefits for women. There’s the odd cogent argument, such as a mother who has 51% of staying contact per year receiving 100% of child benefit, but when he spends over 500 words arguing that men should pay a lesser proportion of the TV licence because the programming on TV is so targeted towards women, and that speed cameras unfairly target men because it is they who like to speed, the whole thing collapses into hysterical idiocy. Read it here, and be prepared to raise your eyebrows and be glad you’re not sat in the pub with bubblyian right now.

Reading his other articles, I do wonder at whatever very sad personal story left this man feeling this way. On a quite genuine note, the family justice system (as well as sex discrimination in employment) is under attack from those who feel unjustly treated, and professionals in the system need to look at what they can do to ensure that justice is achieved, and that those who don’t or can’t get the results they want understand the rational reasons why not.

Meanwhile, those who didn’t realise the internet was populated by this sort of comment should go immediately to the spEak You’re bRanes site, for enlightenment on how the non-logical half think.

Tesco and Trade Unions

Published
by
Usefully Employed
on June 6, 2008
in Trade Unions
. 0 Comments

This is a very interesting Comment is Free piece from an American trade union leader. It would seem that as Tesco expands into America, it has adopted a very American view of trade unions. Collective bargaining is, if anything, more important in the US than it is here. True to their nature, US regulation is ’soft-touch’ when it comes to employment. Practices vary widely between states, but very few fundamental rights exist. In most states employment is ‘at will’ which means that it can be terminated without notice or fair reason by either party, regardless of length of service. Similarly, I recall once reading an advertisement for a post as a junior lawyer in the federal government. It boasted of government employee benefits, such as a “generous” three weeks’ paid vacation each year. Europe and the US look at each other with mutual amazement at the difference in approach.

Many rights that exist do so only contractually, and as a result of collective bargaining. The drive to reduce union influence is therefore arguably still stronger than it is here - cynics here might say the unions here have largely already won!

The fact that Tesco have immediately joined the union-bashing party might be seen as indicative of big business only doing what it needs to. Tesco, and the big supermarkets in general, are good employers in the UK, but although any company will announce its good practices as somehow evidencing business altruism, they will only ever do what they need to so to succeed in their current environment.

Tweet

Published
by
Usefully Employed
on May 31, 2008
in Usefully Employed
. 0 Comments

Twitter is the social networking phenomenon de jour. I’m on there, see:

http://twitter.com/u_employed

Now I’ve joined and mentioned it to people, I see with a groan that it puts up stats as to how many ‘followers’ I have. Cue months of embarassment caused by lack of friends.

Race Discrimination - Burden of Proof

Published
by
Usefully Employed
on May 31, 2008
in Discrimination
. 0 Comments

An odd situation arises from the finding in Oyarce v Cheshire County Council [2008] EWCA Civ 434. In most discrimination cases, all the Claimant need do to prove facts that would, in the absence of an adequate explanation, support his claim. The burden of proof then moves to the Respondent to disprove those facts or successfully contend that they do not constitute discrimination. This is often referred to as the Claimant creating an ‘inference’, but that word does not appear in the legislation. The Race Relations Act is older than I am, but the reversal of burden of proof was added in 2000 to comply with an EU Directive that required it.

In this case, Oyarce won at first instance because she crossed the first hurdle and created the inference, and the Respondent were unable to meet their evidential hurdle of disproving her case. Her claim however was for victimisation which, perhaps inadvertently, is not subject to the reversal of the burden of proof. This is upheld, which means that a tandem system of proof will run in cases where (as there often is) both claims of victimisation and ‘regular’ discrimination.

This is a temporary situation which applies until the discrimination statutes are consolidated into a Single Equality Act.

Strike out

Published
by
Usefully Employed
on May 31, 2008
in Discrimination and Employment Tribunal
. 0 Comments

Croke v Leeds City Council [2008] UKEAT 0512_07_2905 is a good example of a Tribunal’s decision to strike out (without hearing evidence) a discrimination case which had no reasonable prospect of success being upheld. A strike out is a draconian step for any tribunal to take, as it effectively prevents the Claimant having a full hearing of his complaint. Here the Employment Judge was clear that the facts as pleaded by the Claimant would not engage the laws which he claims to enforce. As a result he didn’t even hear formal evidence from the Claimant, although he did engage in a “long discussion” with him to see if he could unearth even a hint of a possible claim. It’s good to see the EAT upholding both the pragmatic conduct of the hearing, and the decision itself, as in a costs free environment such as the ET meritless claims are still a huge burden on the Respondent.