United Kingdom labour law 4 страница

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Free movement and immigration

Main article: Freedom of movement for workers

Treaty on the Functioning of the European Union

Immigration to the United Kingdom since 1922

British nationality law

Commonwealth Immigrants Act 1962

Commonwealth Immigrants Act 1968

Immigration Act 1971

Immigration Rules

Indefinite leave to remain

Leave to enter

UK Border Agency

Immigration to Europe

Illegal immigration to the United Kingdom

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Job security

Main articles: Reasonable notice, Unfair dismissal, Wrongful dismissal, and Layoff, and Job security

Unemployed men at a union building during the first global Great Depression, July 1930. A country comparative database on the world's dismissal regulations is found at www.ilo.org.

Originating with the Contracts of Employment Act 1963, the Redundancy Payments Act 1965 and the Industrial Relations Act 1971 UK workers have three principal job security rights, now consolidated in the Employment Rights Act 1996, sections 86, 94 and 135. These statutory provisions override the old common law position that a dismissal would only be wrongful if it contravened the contract's express or implied terms. First, after one month's work an employee must have one week's notice before dismissal. Second, after one year's work, the dismissal must be for a good business reason. If an Employment Tribunal is not convinced the dismissal is justified on grounds of an employee's capability, conduct, redundancy or another good reason, the dismissal will be "unfair" and the employee will be awarded damages. A court may order that an employee should get her job back, but this is rare. Third, after two years' work and if dismissed, an employee is entitled to a redundancy payment, which like the notice period increases according to the number of years worked. Contracts typically go beyond this bare minimum, but cannot go below. The UK has not yet ratified the ILO Termination of Employment Convention[215] and compared to its European and Commonwealth counterparts, jobs in the UK are relatively insecure, particularly since workers have little formal mechanism, excluding pressure through collective bargaining, to challenge a management's decision about dismissals before they take place. When collective redundancies are proposed, however, EU law has introduced a requirement that employers consult on changes.[216] EU law also introduced a rule that if a business is transferred, for instance, during a merger or acquisition, employees may not have their terms worsened or lose their jobs without a good economic, technical or organisational reason. If employees do lose their work, they may fall back on a minimal system of state insurance, funded primarily through income tax or National Insurance, to collect a "jobseekers allowance", and may make use of public employment agencies to find employment again.

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Wrongful dismissal[show]

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Wrongful dismissal cases

Main article: Wrongful dismissal

Wrongful dismissal refers to a termination of employment which contravenes a contract's terms, whether expressly agreed or implied by the courts. This depends on construction of the contract, read in the context of the statutory charter of rights for employees in the ERA 1996.[217] In the old common law cases, the only term implied by the courts regarding termination was that employers had to give reasonable notice, and what was "reasonable" essentially depended on the professional status of the employee. In Creen v Wright[218] Lord Coleridge CJ held that a master mariner was entitled to a month's notice, though lower class workers could probably expect much less, "respectable" employees could expect more, and the period between wage payments would be a guide.[219] Now the ERA 1996 section 86 prescribes that an employee should receive one week's notice before dismissal after one month's work, two weeks notice after two years' work, and so forth up to twelve weeks for twelve years. The employer can give payment of the weeks' wages instead of giving notice. Another important express term that may be broken could be the proper disciplinary procedure for disputes at work. If a contractual disciplinary procedure is not followed, the employee may claim damages for the time it would have taken and the potential that she would still be employed.[220]

Harold Macmillan's Conservative government introduced the first modern labour law to mandate individual rights for everyone at work, the Contracts of Employment Act 1963. It introduced reasonable notice before dismissal based on how long one had been employed.

The requirements of notice and any disciplinary procedure do not apply if the employee was the one to have repudiated the contract, either expressly, or by conduct. As in the general law of contract, if an employee's conduct is so seriously bad that it manifests to the reasonable person an intention to not be bound, then the employer may dismiss the employee without notice. But if the employer is not justified in making a summary dismissal, the employee has a claim under ERA 1996 section 13 for a shortfall in wages. The same principle, that a serious breach of contract gives the other side the option to terminate,[221] also works in favour of employees. In Wilson v Racher[222] a gardener was bullied by his employer, the heir of Tolethorpe Hall, and gave him a rude telling off for not picking up some string on the lawn. Mr Wilson, the gardener, told Mr Racher "get stuffed, go and shit yourself". The Court of Appeal held that the employer's attitude meant this breakdown in trust and confidence was his own doing, and because labour law no longer saw employment as a "czar-serf" relationship, Mr Wilson was in the right and was wrongfully dismissed. The remedy for breach of contract, following a long tradition that specific performance should not result in draconian consequences or binding hostile parties to continue working together,[223] is typically monetary compensation to put the claimant in the same position as if the contract had been properly performed.

The primary implied term that may be broken is mutual trust and confidence. In Johnson v Unisys Ltd[224] the House of Lords held by 4 to 1 that damages for breach of mutual trust and confidence at the point of dismissal should not exceed the statutory limit on unfair dismissal claims, because otherwise the statutory limits (£63,500 in 2010) would be undermined. This meant a computer worker who became psychiatrically ill following a wrongful dismissal procedure could not claim the £400,000 at which damages could otherwise be quantified. However, if the breach occurs while the employment relationship subsists, that limit is inapplicable. So in Eastwood v Magnox Electric plc,[225] a school teacher who also suffered psychiatric injury, but as a result of harassment and victimisation while he still worked, could claim for a full measure of damages for the breach of mutual trust and confidence. In any event the limit is merely implied and depends on construction of the contract, so that it may be opted out of by express words providing for a higher sum, for example, by expressly providing for a disciplinary procedure.[226] A notable absence of an implied term at common law historically (ie before the development of mutual trust and confidence[227]) was that an employer would have to give any good reasons for a dismissal.[228] This was recommended to be changed in the Donovan Report 1968, and it launched the present system of unfair dismissal.

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Unfair dismissal[show]

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Unfair dismissal cases

Main article: Unfair dismissal

In contrast to "wrongful" dismissal, which is an action for unjustified breach of the terms of an employment contract, "unfair" dismissal is a claim based in the Employment Rights Act 1996 sections 94 to 134A that governs the reasons for which a contract is terminated. The Industrial Relations Act 1971, following the Donovan Report 1968, set up its structure.[229] Under ERA 1996 section 94 any employee who is employed for over one year[230] may claim for an Employment Tribunal (composed of a judge, an employer and an employee representative) to review the decision of their dismissal, and get a remedy if the dismissal was not "fair" within the meaning of the Act. An employee is only "dismissed" if the employer has decided to end the work relationship, or if they have constructively dismissed the employee through a serious breach of mutual trust and confidence. In Kwik-Fit (GB) Ltd v Lineham[231] Mr Lineham used the toilet at work after drinking at the pub, and in response to the manager rebuking him in front of other staff, he threw down his keys and drove off. He claimed he was dismissed, and the Tribunal agreed that at no time had Mr Lineham resigned. By contrast in Western Excavating (ECC) Ltd v Sharp[232] Mr Sharp walked off because the company welfare officer refused to let him collect holiday pay immediately. Although Mr Sharp was in financial difficulty, this was due to his absences, and so he was not justified in leaving, and not constructively dismissed.[233] An employee is also not dismissed if the relationship is frustrated. In Notcutt v Universal Equipment Co (London) Ltd[234] a man's heart attack meant he could no longer work. The employer paid no wages during the ordinary notice period, but was successful in arguing that the contract was impossible to perform and therefore void. This doctrine, applicable as a default rule in general contract law, is controversial since unlike commercial parties it will be rare that an employee has the foresight or ability to contract around the rule.[235]

Once it is established that a dismissal took place, the employer must show that their reason for dismissing the employee was "fair". Dismissal on grounds of union membership,[236] or any protected characteristic in the Equality Act 2010, will be automatically unfair. Otherwise the employer has the opportunity to show the dismissal is fair if it falls within five main categories listed in ERA 1996 section 98.[237] The dismissal must have been because of the employee's capability or qualifications, conduct, because the employee was redundant, because continued employment would contravene a law, or "some other substantial reason". If the employer has an argument based on one of these categories, then the Tribunal evaluates whether the employer's actual decision fell within a "reasonable range of responses", ie that a reasonable employer could have acted the same way.[238] Thus the review standard lies in between an outright perversity, or "Wednesbury unreasonableness" test and a forthright reasonable person test. It gives employers considerable latitude in the way they manage their workforce, as the Tribunal's job is not to substitute what it believes would have been fair, but only to intervene if a decision was arbitrary, harsh or contrary to acceptable business practice.[239] There is also considerable room for Tribunals to assess the facts and come to their own conclusions, which can only be appealed on legal grounds, and not on their judgment of good workplace relations. For example, in a conduct case, HSBC Bank plc v Madden,[240] the Court of Appeal held that it was acceptable for a Tribunal to have decided that dismissing an employee for potential involvement in theft of credit cards was fair, even though an actual police investigation turned up no evidence.[241] By contrast in Bowater v Northwest London Hospitals NHS Trust[242] an employer argued a nurse who, while physically restraining a naked patient, said "It's been a few months since I have been in this position with a man underneath me" was lewd and deserved dismissal for her misconduct. The Tribunal said the dismissal was unfair and the Court of Appeal held the Tribunal had competently exercised its discretion in granting the unfair dismissal claim.

ACAS, headquartered at Euston Tower, issues a binding Code of Practice on how to handle workplace disputes and potential dismissals.

Partly because the courts take a deferential approach to the employer's substantive reasons for dismissal, they emphasise the importance of employers having a fair process. The Advisory, Conciliation and Arbitration Service Code of Practice (2009) explains that good industry practice for disciplinaries requires, among other things, written warnings, a fair hearing by people who have no reason to side against the employee, or with any manager involved in the dispute, and an the opportunity for union representation. Often a company handbook will include its own system, which if not followed will likely mean the dismissal was unfair.[243] Nevertheless, in Polkey v AE Dayton Services Ltd[244] the House of Lords held that, in a case where a van driver was told he was redundant on the spot, if an employer can show the dismissal would be made regardless of whether a procedure was followed, damages can be reduced to zero. In the Employment Act 2002 Parliament made an abortive attempt to instil some kind of mandatory minimum procedure for everybody, but after complaints from unions and employers alike that it was merely encouraging a "tick-box" culture, it was repealed in the Employment Act 2008.[245] Now if the ACAS Code is not followed, and this is unreasonable, an unfair dismissal award can be increased by 25 per cent.[246] Generally, under ERA 1996 sections 119 and 227, the principles for a "basic" unfair dismissal award is that, with a cap of £350 per week and a maximum of 20 weeks, an employee should receive 1 week's pay for each year employed if aged between 22 and 40, 1½ weeks if over 40 and ½ a week if under 22. By ERA 1996 section 123 the employee may also be entitled to a discretionary "compensatory" award, which should take into account the actual losses of the employee as just and equitable, based on loss of immediate and future wages, the manner of the dismissal and loss of future unfair dismissal protection and redundancy rights.[247] This is capped, but usually increased in line with RPI inflation, and in 2010 stood at £63,500. Much lower, the median award for unfair dismissal, without any element of discrimination, was £4903 in 2009-2010.[248]

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Redundancy[show]

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Redundancy cases

See also: Unfair dismissal and Layoff

An economic dismissal because of redundancy is a "fair" reason, but one that triggers a minimum statutory right to a redundancy payment. Under ERA 1996 section 162, a redundant employee who has been employed for over two years is entitled to one week's wages per year worked if aged between 22 and 40, one and a half weeks' pay if over 40 and half a week's pay if under 22. The upper limit is £240 per week. The meaning of redundancy under ERA 1996 section 139 is that diminished demand for the employee's labour was the reason for the dismissal.[249] In situations where employees have lost their jobs, this may be straightforward. In cases where an employer uses its discretion practically to worsen the employees' position the answer may depend on the employees' contracts. In Lesney Products & Co v Nolan[250] a toy company stopped giving its workers overtime. Some refused to work further, they were dismissed, and they claimed they were redundant. Lord Denning MR held they were not, because "nothing should be done to impair the ability of employers to reorganise their work force and their times and conditions of work so as to improve efficiency." Other courts have suggested the contract terms are irrelevant, and that the test should be purely based on the economic reality of diminished demand.[251] If an employee is not dismissed for redundancy it may be that the dismissal falls within the "fair" ground of "some other substantial reason". In Hollister v National Farmers’ Union[252] a farmer's refusal to accept decreased pension entitlements, after a consultation process, was a "substantial" reason for dismissal. Provided employers give proper notice and have the right to terminate the contract by consent, it is possible to worsen terms without the employee being able to claim redundancy.

Employees of over 2 years who are made redundant must receive a severance payment to cushion them in the search for their next job.

When compulsory redundancies are unavoidable and the employer must select among a group of workers, the procedure the employer follows must be procedurally fair, or the workforce will have an unfair dismissal claim. In Williams v Compair Maxam Ltd[253] Browne-Wilkinson J held that, in response to managers who had selected workers to lose their jobs based on personal preference, the proper steps should be to (1) give all warning possible (2) consult the union (3) agree objective criteria (4) follow those criteria, and (5) always check there if there is alternative employment rather than dismissal. Under ERA 1996 section 141 an employee should accept a reasonable offer for redeployment, and will lose entitlement to redundancy if she declines it. The Collective Redundancies Directive,[254] implemented in TULRCA 1992 section 188 also requires collective consultation with the union or other elected workforce representatives. If the employer fails to consult in good time it will be liable to pay a protective award to its staff.

Jones v Associated Tunnelling Co Ltd [1981] IRLR 477 (EAT)

United States of America v Nolan [2011] IRLR 84

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Business transfers and insolvency

See also: Mergers and acquisitions in United Kingdom law and UK insolvency law[show]

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Business transfer sources

Another context in which the common law left workers particularly vulnerable was where the business for which they worked was transferred between one person and another. In Nokes v Doncaster Amalgamated Collieries Ltd[255] it was held (albeit to protect the worker from draconian sanctions in the arcane Employers and Workmen Act 1875) that an employment contract could not transfer without the consent of the parties involved. Consequently, in a situation where company A sold its assets (including contracts) to company B, the employment relationship would sever and the only claim a worker would have for dismissal would be against company A. Particularly from the 1950s, the view was increasingly accepted across Europe that workers have something more than a personal right, and akin to a property right in their jobs.[256] Just as the transfer of a freehold property between two landlords would not mean that a tenant could be evicted,[257] the first Business Transfers Directive, passed in 1978 and updated in 2001 (often still referred to as the "Acquired Rights Directive"), required that a business transferee would have to provide a good economic, technical or organisational reason if they were either to not retain all previous employees, or wanted to make detrimental variations to their workers' contracts. This means that the new employer who is a transferee of a business through an asset sale is in no better position than would be a new owner who gained control of a business by buying out a company's shares: contractual variations require the employees' consent and dismissal rights remain as if it were the old employer. As implemented by the Transfer of Undertakings (Protection of Employment) Regulations 2006, a clear example where employees contracts transfer was in Litster v Forth Dry Dock.[258] The House of Lords held that a purposive interpretation is to be given to the legislation so that where 12 dockworkers were sacked an hour before a business sale, their contracts remained in effect if the employees would still be there in absence of an unfair dismissal. This does not, however, mean that employees unfairly dismissed before a sale have a right to their jobs back, because national law's normal remedy remains with a preference for damages over specific performance.[259] The same principle goes for any variation that works to the detriment of the employee. So the transferee employer may not (without a good business reason) for example, try to impose a single new gardening clause[260] or withdraw tenure, or the employee will have a claim for constructive dismissal.[261]

An acute question for the TUPE Regulations, particularly in the years when the Conservative government was implementing a policy of shrinking the size of the public sector, was the extent they applied to jobs being outsourced, typically by a public body, like a local council, or changed between businesses in a competitive tender process for public procurement. On this point a series of ECJ decisions came to the view that there could be a relevant transfer, covered by the Directive, even where there was no contractual link between a transferor and a transferee business,[262] so long as the business entity retained its "identity". In turn the "identity" of a business would be determined by the degree to which the business' factors of production remained the same before and after a sale.[263] It could be that no employees were hired after an asset sale, but the sacked employees would still have a claim because all their old workplace and capital equipment was being used by the new employer. It is also relevant to what extent a business is capital or labour intensive. So in Oy Liikenne Ab v Liskojärvi[264] the ECJ held that it was unlikely that 45 Helsinki bus drivers' contracts were transferred, between the company that lost the contract and the new bus company that won it, even though 33 drivers were rehired, because "bus transport cannot be regarded as an activity based essentially on manpower". On the other hand, employees stand to benefit where a new employer offers old staff their jobs, the intention to rehire makes it more likely the court will deem there to be a transfer.[265][show]

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Employees and insolvency

Often business transfers take place when a company has plunged into an insolvency procedure. If a company enters liquidation, which aims to wind down the business and sell off the assets, TUPER 2006 regulation 8(7) states that the rules on transfer will not apply.[266] The main objective, however, in an insolvency procedure particularly since the Cork Report and the Enterprise Act 2002, is to effect rescues through the system of company administration. An administrator's task under the Insolvency Act 1986 Schedule B1, paragraph 3, is either to rescue the company as a going concern, rescue the business typically by finding a suitable buyer and thus save jobs, or as a last resort put the company into liquidation. If employees are kept on after an administrator is appointed for more than 14 days, under paragraph 99 the administrator becomes responsible for adopting their contracts. The liability on contracts is limited to "wages and salaries".[267] This includes pay, holiday pay, sick pay and occupational pension contributions, but has been held to not include compensation for unfair dismissal cases,[268] wrongful dismissal,[269] or protective awards for failure to consult the workforce before redundancies.[270] If the business rescue does ultimately fail, then such money due employees achieves the status of "super priority" among different creditors' claims. The priority list in insolvency sees creditors with fixed security (typically banks) get paid first, preferential creditors third, unsecured creditors up to a limit of £600,000 third, floating charge holders (usually banks again) fourth, remaining debts to unsecured creditors (in the unlikely event that anything remains) fifth, "deferred debts" (typically to company insiders) sixth, and shareholders last.[271] Among the preferential creditors, the insolvency practitioners' fees together with adopted contracts attain super-priority. Otherwise, employees wages and pensions still have preferential status, but only up to an £800 limit, a figure which has remained unchanged since 1986.[272] Employees having priority among creditors, albeit not above fixed security holders, dates back to 1897,[273] and is justified on the ground that employees are particularly incapable, unlike banks, of diversifying their risk, and forms one of the requirements in the ILO Protection of Workers' Claims (Employer's Insolvency) Convention.[274] Often this limited preference is not enough, and can take a long time to realise. Reflecting the Insolvency Protection Directive[275] under ERA 1996 section 166 any employee[276] may lodge a claim with the National Insurance Fund for outstanding wages. Under ERA 1996 section 182 the amount claimable is the same as that for unfair dismissal (£350 in 2010) for a limit of 8 weeks. If an employee has been unpaid for a longer period, she may choose the most beneficial 8 weeks.[277] The Pensions Act 2004 governs a separate system for protecting pension claims, through the Pension Protection Fund. This aims to fully insure all pension claims.[278] Together with minimum redundancy payments, the guarantees of wages form a meagre cushion which requires more of a systematic supplementation when people remain unemployed.

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Unemployment

See also: Unemployment and Unemployment in the United Kingdom

An Inland Revenue stamp from 1912 commemorating unemployment insurance.

Unemployed men discuss the growing jobless rate in 1931.

Poor Law Amendment Act 1834 and Royal Commission into the Operation of the Poor Laws 1832

National Insurance Act 1911 and National Insurance

Karl Marx, Das Kapital (1867) and reserve army of labour

Unemployment Act 1934

Great Depression in the United Kingdom

White Paper, Employment Policy (May 1944) Cmd 6527

W Beveridge, Full Employment in a Free Society (1944)

A W Phillips (1958) 'The Relation between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957, Economica

Supplementary Benefit, Statutory sick pay and Income Support

Jobseekers Act 1995 (c 18) and Jobseeker's Allowance and Jobcentre Plus

Jobseekers Act 1995 s 19, disparity in definitions on misconduct

New Deal (United Kingdom)

Youth unemployment in the United Kingdom

Employment Act of 1946 and the Humphrey–Hawkins Full Employment Act of 1978 in the United States, and full employment

Automatic stabilisers, effective aggregate demand, fiscal stimulus, natural rate of unemployment

Public employment agency

Employment Agencies Act 1973

Jobcentre Plus

Income Support, means tested benefit for people on low incomes

Severe Disablement Allowance replaced by Incapacity benefit in 2001, replaced by Employment and Support Allowance 2008

Housing Benefit

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Enforcement and tribunals

The Employment Appeal Tribunal at 58 Victoria Embankment.

Employment tribunal

Employment Appeal Tribunal

Industrial Tribunals

Employment Rights (Dispute Resolution) Act 1998

Employment Act 2002

ACAS

Health and Safety Executive

Employment Agency Standards Inspectorate

Gangmasters Licensing Authority

Inland Revenue

Equality and Human Rights Commission

Under the Equality Act 2006,[279] a new Equality and Human Rights Commission was established, subsuming specialist bodies from before. Its role is in research, promotion, raising awareness and enforcement of equality standards. For lawyers, the most important work of predecessors has been strategic litigation[280] (advising and funding cases which could significantly advance the law) and developing codes of best practice for employers to use. Around 20,000 discrimination cases are brought each year to UK tribunals.

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International labour law

See also: International Labour Organisation, World Trade Organisation, and Private international law

Versailles Treaty 1919

Right to Organise and Collective Bargaining Convention, 1949

ILO on Hours of Work Industry Convention, No 1 (1919) this required an 8 hour day and a 48 hour working week, but Great Britain did not ratify it.

ILO 40 hour week Convention, No 51 (1936)

ILO Convention on Holidays with Pay, No 52 (1936)

GATT and World Trade Organisation

Labour Standards in the World Trade Organisation

Lawson v Serco Ltd [2006] UKHL 3, [2006] 1 All ER 823

Duncombe v Secretary of State for Children, Schools and Families [2011] UKSC 36

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