Whistle-Blowing Law Changes
The Enterprise and Regulatory Reform Act, which came into force on June 25, 2013, introduced a number of important changes to whistle-blowing laws in the U.K.:
- The whistle-blower must reasonably believe the disclosure to be in the public interest. This means that employees will generally be precluded from being able to blow the whistle about breaches of their own employment contract.
- The disclosure is no longer required to be in good faith but if it is not, compensation can be reduced by up to 25 percent.
- Workers can now be personally liable for victimizing colleagues who have blown the whistle and employers can be vicariously liable for their workers’ unlawful behavior.
Many of these changes extend the protection available to whistle-blowers so employers should review their whistle-blowing policies to ensure compliance with the current legislation.
Collective Consultation Requirements Triggered Regardless of Dismissal Locations
In the landmark decision of USDAW & Others v WW Realisation 1 Ltd (in administration) and another UKEAT/0547 & 0548/2012, the Employment Appeal Tribunal held that collective consultation obligations are triggered when an employer proposes to dismiss as redundant 20 or more employees in a 90-day period irrespective of the number of establishments in which the employees are located.
Former employees of the insolvent Woolworths and USDAW (a trade union) brought claims against Woolworths’ administrator in respect of its failure to consult collectively with them.
The Employment Tribunal found that each store was a separate establishment for the purposes of U.K. collective redundancy legislation, which provides that employers are only obliged to consult collectively with employees where they propose to dismiss as redundant 20 or more employees at one establishment within a 90-day period. Therefore, the duty to consult had not been triggered in respect of the dismissals in the stores with fewer than 20 employees.
The appeal tribunal overturned this decision and held that U.K. collective redundancy legislation was incompatible with European law (to which it must defer) which did not require the dismissals to be at “one establishment” and that this requirement should therefore be disregarded. The duty to consult collectively had been triggered as there were more than 20 employees dismissed in a 90-day period throughout all the Woolworths stores. As a result, all the affected former employees (of which there were over 3,000) were entitled to a protective award of 90 days’ pay each.
Given the huge ramifications of this case, it is likely to be appealed. In the meantime, employers who are proposing to dismiss 20 or more employees within a 90-day period should comply with the collective consultation requirements regardless of the location of the dismissals.
Old and New Employers Liable for TUPE Compensation
In Country Weddings v Crossman UKEAT/0535/12, the Employment Appeal Tribunal held that the Employment Tribunal does not have the power to apportion liability between the outgoing and incoming employer for failure to inform and consult under the Transfer of Undertaking, Protection of Employment (TUPE) regulations. Instead, the parties must apply to the county court or the high court for a ruling on this point.
Crossman brought a claim against both her former and new employer for failure to inform and consult under TUPE. Her claim was successful and she was granted an award. The tribunal held that this award should be paid by the new employer. The appeal tribunal held that the tribunal had got this wrong as TUPE specifically provides that liability for such an award is joint and several between the outgoing and incoming employer. This means that both are equally liable for the award and the claimant can pursue either for payment. The paying employer can then pursue the other for a contribution to its share of the liability, but the apportionment of liability is a matter for the county court or high court rather than the tribunal.
This is a wakeup call for employers involved in a TUPE transfer. In particular, a transferee (i.e., the new employer) is well-advised to obtain appropriate warranty and indemnity protection from the transferor, given that the majority of the informing and consultation obligations under TUPE lie with the transferor but employees are generally more likely to pursue their new employer for any compensation.
© Copyright 2013 by Faegre Baker Daniels LLP. All rights reserved.
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