Do you trust your employees?

I hope so because the Court of Appeal has recently reaffirmed that an employer is vicariously liable for the theft of a third party’s goods by one of its employees!

‘What?!’ I hear you cry - How can employers be expected to control dishonest actions of employees when, if they had any knowledge that such employees were dishonest, they wouldn’t employ them in the first place! Well, if they are doing it while they are at work….you are at risk.

In this particular case, the theft was from a container to which access was restricted to ‘authorised employees’ only and as such was held to have been done ‘in the course of employment’.

The Court of Appeal rejected the employers argument that the employment had merely provided him with the opportunity to steal and that the act of theft itself was outside the course of employment.

The Court said that it was appropriate to consider whether the act of theft could fairly be regarded as ‘a risk reasonably incidental to the purpose for which the employee was employed’. Therefore, there has to be a sufficiently close connection to make it fair and just that the employer be held vicariously liable.

So, even if a dishonest act appears wholly unconnected to the employees work the employer may still be held liable if, when the act is considered in the context and circumstances in which it was done, it may be seen as incidental to and within the scope of their employment! So beware!

Brink's Global Services Inc and others v Igrox Ltd [2010] EWCA Civ 1207 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Compromising discrimination: An Equality Act loophole?

On a literal interpretation of section 147 of the Equality Act 2010, it appears that a solicitor can no longer execute a Compromise Agreement settling a discrimination claim. The section, as it is currently drafted, appears to say that a lawyer acting for an employee cannot be an ‘independent adviser’ for the purposes of advising on a compromise agreement under the Equality Act. This effectively precludes any lawyer from qualifying as an ‘independent legal adviser’ as soon as they are consulted by an employee. This is a ludicrous result.

Presumably, this ambiguity has been created by a simple drafting error but a grey area arises nonetheless. The Law Society has requested that the Home Secretary and Government Equalities Office look into the issue and provide clarity, as a matter of urgency.

Whilst many have insisted that the law remains unchanged, caution is undoubtedly required. Whilst awaiting any authority on the point, it would be prudent for all such agreements to be dealt with by ACAS by way of COT3 Agreement. Alternatively, solicitors should be advising their clients of the theoretical loophole and the scope for an attempt to avoid the agreement.

In practice, I suspect the risk is minimal. Any court asked to order that the money be returned to an employer on the basis of section 147 would be very reluctant to make that finding. In addition, any employee bringing a tribunal claim on that basis would be likely to have their claim struck out under rule 18(5) as being an abuse of process. 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Comment on the Equality Act 2010

So, October 2010 harboured the first round of ‘Equality Act’ implementation…..but what does this ultimately mean for businesses?

The Equality & Human Rights Commission, politicians, NGO’s, and academics have worked tirelessly on the 238 pages and 218 sections of the Act for many years. Their goal was to achieve a comprehensive piece of equality legislation, bringing cohesion to the numerous strands of anti-discrimination laws that had accrued since the 1970’s. So were they successful?

It has already been judiciously recognised that the Equality Act does indeed provide uniformity of the law and commitment to such uniformity has become, essentially, a policy driver.  We have, it seems, finally reached agreement on the development of equality law.  For example, no longer do we face contentious arguments as to the merits of interference with the market for labour in order to assist women to overcome prejudice. Instead, we disagree on the best method of closing the gender pay gap.

However, this shift to a focus on ‘detail’ rather than ‘aim’ does not remove controversy or uncertainty. Changes to and the use of equality law is driven as much by economics as it is by what it aims to achieve and as we are all more than aware, economics are unfortunately far from stable. As Government priorities are forced to remain variable in a global recession, so too will the implementation of the remainder of the Act. Will a more radical approach become necessary?

Keep an eye on forthcoming blogs for the answers to all of these questions. 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Phasing out of the default retirement age

Employers will soon only be able to retire employees by satisfying an objective justification test for direct age discrimination. With this in mind, many employers should consider revising their policies and procedures now.

From 1 October 2011, employers will not be able to rely on the default retirement age to justify a dismissal. Employers will be unable to issue new notifications of retirement using the default retirement age from 6 April 2011. 

Compulsory retirement will be direct age discrimination. However, employers can objectively justify the difference in treatment on the grounds of age if they can prove that it is necessary to meet a legitimate employment policy, labour market or vocational training objective and demonstrate that compulsory retirement is an appropriate and necessary means of achieving that objective. 

Alternatively, employers can ensure that a fair dismissal procedure is followed under the ordinary unfair dismissal rules, relying on one of potentially fair reasons for dismissal (capability, conduct, illegality, redundancy or some other substantial reason). Thus, if an older employee is under-performing, they should be dealt with in the same manner as any other under-performing employee with a focus on performance as opposed to age. 

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]

Proposal to increase Unfair Dismissal qualifying period to two years

You may have heard the rumour over the weekend that the government is actively considering increasing the qualifying period for unfair dismissal, from one year to two years. Lord Young confirmed, on this morning's Radio 4 ‘Today’ programme, that this is indeed the case.  

This is, potentially, good news for employers. Theoretically, it means that businesses will have an extra year to dismiss employees unreasonably. In practice however, employers will still have to be cautious as there will remain the risk of allegations for discrimination, whistleblowing and other exempt unfair dismissal claims, for which no qualifying period is required!

It is likely that there will be a consultation period on this change and no timetable for a decision has been announced…Watch this space!

[The information and commentary contained in this blog does not, and is not intended to, amount to legal advice and does not form the professional advice or opinion of any Solicitor or Law Firm]