Call us now: 0141 429 8166
Call us now: 0141 429 8166
There were more than 3000 miles between where Neil Hepburn worked, and where he tried to bring a claim that he had been unfairly dismissed.
Such a distance was not lost on his employers, Hexagon Sociadad, a company registered in Equatorial Guinea, and they immediately filed an objection.
Mr Hepburn’s place of work was in fact located on an installation off the coast of the African country, where he also had accommodation. Although paid in US dollars, he paid taxes in Guinea, and all the events he complained about took place there.
It’s a general rule of employment law that disputes should be resolved in the country where they arise – but this can be over-ruled by other factors, such as an agreement by the parties.
Hepburn argued that he also paid taxes in Scotland, and that his supervisor was based in Aberdeen, which was where Hexagon’s parent company, Wood Group, had their headquarters.
His case was one of ‘protected disclosure’ (also known as ‘whistleblowing’) where he was arguing that he had been dismissed because of information he had passed on.
He lodged at the ET in Aberdeen the employment contract Hexagon had given him when they offered him the job, which stated it was to be governed by the laws of Scotland. And this was where the company’s legal argument began to come unstuck.
As is not unusual in the energy sector, Hepburn’s colleagues came from all over the world. Other employees had different wording in their contracts, which made specific reference to either Guinea or the USA, and Hepburn gave evidence that he had been influenced to take the job by the reassurance that he thought he could bring a claim in Scotland.
The Employment Judge found it therefore was unfair for the company to agree to such a contractual term with Hepburn, but then to “disown it” when a claim was brought.
But Hexagon appealed, on the basis that a similar argument at the Aberdeen ET against an earlier claim (before a different Judge) had succeeded in knocking it out. If nothing else, a judicial body should strive for consistency and certainty.
The apparent contradiction in outcomes led the case to the doors of the Employment Appeal Tribunal in Edinburgh, and the lap of Lord Summers.
Exercising his discretion to test the strength of the appeal by Hexagon, the appeal judge asked the company’s lawyers: if Hepburn could not go ahead in Scotland, what was the alternative? He did not find them prepared for this line of argument.
“The appellants did not know anything about the employment law of Equatorial Guinea. They could not tell me whether the Court in Equatorial Guinea would if seized of the claim, be obliged to recognise the choice of law clause and apply UK Employment Law legislation to the dispute. I did not consider this to be a satisfactory situation,” he commented.
On the law, he found that the wording of the contract, as well as other factors, had led to an “expectation” on the part of Hepburn that, if there was a dispute, it would be resolved in the UK Courts.
As the case was heard at appeal level, it can be relied upon by offshore employees working abroad who are dismissed and wish to bring cases in the UK Employment Tribunal.
Clearly however each case will depend on individual circumstances, and the wording of the employment contact.
All claims must be started by contacting ACAS, no later than three months (minus a day) from the date of dismissal.
This article cannot amount to legal advice, but more specific guidance can be given by Livingstone Brown’s team of specialist employment lawyers. Calls can be made in confidence on unfair dismissal, claims related to employment outwith the UK, or any other work-related issues.
Being unable to meet clients just now has not stopped us giving advice during the lockdown – our lawyers are meeting with client by virtual means. Call us today on 0141 429 8166 or complete our online form.
These are many employment situations where Settlement Agreements can be used:
The law can be tricky on how a redundancy selection process is carried out – this is the area that gives rise to most claims to the Employment Tribunal in these types of case.
Rather than embark on such a process and get it wrong, many employers will offer an enhancement to the Redundancy package to those affected. This can be made more advantageous to the employee by being offered tax-free.
An employer can be sympathetic to someone’s misfortune in being off ill, but also have practical problems keeping their role vacant, e.g. only being able to recruit a temporary replacement.
In this situation, the employer may genuinely want to offer a ‘package’ to bring the employment to an end. The employee may want this too. Goodwill can be maintained.
In more difficult long-term absence situations, the employer may have to take specialist advice on the effect of the Equality Act, which creates duties on employers not to discriminate against someone who is defined as ‘disabled’. A Settlement Agreement would resolve these issues.
Anyone who has been employed for more than two years has to be performance-managed before their employment can lawfully be brought to an end for this reason.
The removal of the maximum retirement age means that it is no longer an option to let someone who is struggling to adapt to new technology to simply serve their time. But to discipline a long-serving member of staff may be something that nobody wants to do.
As with the sickness scenario above, employees in these situations may actually welcome being approach on a ‘without prejudice’ basis to discuss whether they would enter into a Settlement Agreement.
It can be hard to explain – staff who are perfectly well-behaved in all other situations just send each other off the deep end, potentially leading to weeks of disruptive meetings, grievances, attempts at mediation, and re-organisation.
Particularly in the smaller organisation, there may ultimately be no practical way forward than for one side of the argument to depart, but a disciplinary process is only going to extend the arguments.
There may have been wrong-doing which warrants dismissal, but the evidence is not clear-cut, the employee denies any involvement, and has previously been of good character. Or the way in which the information has come to light (e.g. through a tip-off) is not something which the company does not want to have to disclose if the matter goes to an Employment Tribunal.
The flexibility of a Settlement Agreement is that it can be proposed before any disciplinary process is embarked upon – and such a step would not interfere with a later investigation.
At Livingstone Brown our employment law are experts in approaching employers and negotiating exit packages for our clients.Contact our employment law team today and one of our solicitors will be happy to help. Call us on 0141 429 8166 or complete our online contact form.
An employer does not have to be on the verge of closing down before people can be made redundant. There does not need to be a shortage of work, or a period of trading at a loss.
All the employer needs to show is that there is, or is expected to be, a reduction in the need for as many employees as they have just now.
The law of course does recognise that a closure of a business, or a branch of a business, would generate a redundancy. But the business also can decide to ‘slim down’ and shed staff. The business does not even need to be making an actual loss, or have a shortage of work – it is enough to show a potential reduction in profit if changes are not made.
To use the technical language of the law, the test is whether there is a “requirement for employees to carry out work of a particular kind”, or to do so at the place where the employee is employed, has “ceased or diminished or are expected to cease or diminish.”
So arguments that making people redundant is not necessary are usually doomed to failure: “It can occur where there is a successful employer with plenty of work, but who, perfectly sensibly as far as commerce and economics is concerned, decides to reorganise his business because he concludes that he is overstaffed. Thus, even with the same amount of work and the same amount of income, the decision is taken that a lesser number of employees are required to perform the same functions. That too is a redundancy situation.” (Case of Kingwell & others v Elizabeth Bradley Designs Ltd, 2003).
But the employer must act fairly in the way in which the redundancy is carried out. This is the area where most of the successful challenges to redundancies in the courts and Tribunals are made, in the form of a claim of wrongful dismissal or unfair dismissal.
The main duties on the employer are to be as fair as they can in two areas: 1) consultation, 2) selection.
Consultation is necessary is both with the affected employees as a group – and with their union reps – and also individually, and usually there have to be at least three meetings for it to be a fair process – the first being the notification of being “at risk” and a discussion of how the process will be gone about, the second being a look at things like the selection criteria in more detail, and the third being the decision whether to dismiss (or not).
At each stage, the onus will be on the employer to show that the consultation was genuine – so that means the arguments made by the employee have to be answered. Most importantly of all, the decision to dismiss should not be made until the end of the process. If the consultation is a “sham”, then the dismissal will be an unfair one.
How the selection is made is a complex legal area. There are no criteria set down by law for assessing who should go and who should stay. But the law does require these to be as objective as they can be to measure, so things like:
Other measurements like Performance are less straightforward to use as it can be argued that they are one person’s opinion, so are more subjective. Using Attendance can be complicated where the employee has health problems, as it may be argued this can be a form of disability discrimination. And Length of Service can be seen as unfair on those who are younger. There may have been criteria used in previous redundancies – but that doesn’t mean they have to be used again.
Another controversial area is the ‘pool’ for selection: people may do different jobs at different times, or at different locations – so which other employees is it fair to make a comparison with? Again there are no set rules, only a general requirement of fairness. Although allowances will be made for the smaller employer, there would be an expectation that specialist advice would be taken if there are any disputes.
There is a duty on the employer to look for any vacancies that those being made redundant could be redeployed to. The employee does not have to agree to the redeployment, of course. But if the employee has declined ‘suitable alternative employment’ then this could count against them in terms of damages.
Provided they have been employed for two full years, a statutory redundancy payment will be due. This is calculated based on age and length of service. The payment is a week’s pay per complete year of service up to age 41 and a week and a half’s pay per complete year of service aged 41 and over. A “week’s pay” is capped at a maximum level which changes on 6 April each year, and is currently £538, with a maximum total redundancy payment of £16,140 (untaxed).
Employees are also entitled to receive a notice and usually, in a redundancy, this does not need to be worked but is paid in advance, or ‘in lieu’ – the usual weekly pay for each year of service as a minimum, up to a maximum of 12 weeks. Both figures may be more generous if the employee’s contract of employment refers to contractual redundancy or notice, or in larger workplaces, there may be a ‘custom and practice’ of enhancing redundancy.
The Employment Tribunal is the usual forum where claims that redundancy was unfair are heard. Claims can relate to flaws in the consultation or the selection, and the ET can make orders that documents in the possession of the employer are disclosed. Under the Data Protection Act, an employee has the right to any information about their dismissal. This can include minutes of meetings, emails, comparisons with others who were not selected and also information about whether anyone has been recruited post-dismissal.
The ET can order payment of a compensatory award to reflect the lost wages, up to a maximum of one year’s salary, and if they are satisfied that there was any discrimination involved in the selection (e.g. maternity, age, disability) then this can be topped up with a separate award of damages for ‘injury to feelings’, which will be at least £1000 and can be up to £40,000 in extreme cases.
Many employers choose to reduce the risk of a claim by making a financial offer to enhance the redundancy package in exchange for the employee agreeing not to contest matters. These are called Settlement Agreements (also known as a compromise agreement) and are recognised as a means by which matters can be resolved ‘out of court’. But to be valid the employee has to have been given legal advice, and it’s the employer who meets the cost of this.
Livingstone Brown have an experienced team who have dealt with redundancies for employers and employees. They have also pursued claims and defended them at the Employment Tribunal. The cost of this representation can be covered in a number of ways – insurance policies can provide for this, or a fixed fee arrangement can be entered into. For those who qualify, legal aid may also be available. The first step is to get in touch on 0141 429 8166 or complete our online form.
Speed: It means you are paid a financial settlement sooner, normally within 28 days.
Hassle-free: Avoids the stresses and strains of litigation through the Employment Tribunal, who require to hear evidence before they can make a financial award.
Certainty: A claim at the Tribunal also involves a risk of the claim being dismissed, with no award being made at all, whereas Settlement Agreements are legally-enforceable contracts.
Tax benefits: An agreed lump sum for payment of compensation for loss of employment can be paid tax free up to £30,000, whereas continuing in employment means salary being taxed in the usual way.
Reference: Employer will often agree to give a reference containing information about duties and skills, whereas the Employment Tribunal has no power to order this.
Unanswered questions: The case is ‘settled’ which means that you give up the right to pursue it further in the Employment Tribunal or Sheriff Court. Unless a crime has been committed, no further action will be taken.
Confidentiality: You will be asked to sign a ‘gagging clause’ and agreeing not to discuss it with anyone else outwith your partner and your lawyer. If you do so later, you will have to repay the money and also your employer’s legal fees.
Wider benefit: In certain cases the Employment Tribunal can make a recommendation that an employer acts differently in future towards other employees. Under a Settlement Agreement there is no equivalent power.
Certainty: Being taken to the Employment Tribunal can be unpredictable, but the one thing you can bank on is that it will not be quick. The average case takes nine months to a year, and complex cases (e.g. discrimination) much longer. The outcome can then be appealed.
Peace of mind: Even if an employer has a very strong case on paper, there are limited ways in which a claim to the ET can be blocked or thrown out, and many hearings will be required before that stage can be reached.
Cost: Although the employer has to meet the cost of the employee getting legal advice on a settlement agreement, this would be outweighed many times over by the cost of defending an ET claim, even if it is successfully defended.
Confidentiality: There may be matters which your company does not want to be aired in public, especially since Employment Tribunal judgements are now published online.
Unearned income: Any successful company has many hard-working employees – why should someone causing problems to the company be paid more than they are?
Internal reasons: Confidentiality clauses can be difficult to police, and workplace gossip may also cause disruption if there are divided loyalties and a lack of transparency.
Ethical leadership: If claims being made are baseless, then the company may wish to discourage others from following a similar path by offering a financial settlement which could be perceived as ‘hush money.’
At Livingstone Brown our employment lawyers are experts in approaching employers and negotiating exit packages for our clients.
Contact our employment law team today and one of our solicitors will be happy to help. Call us on 0141 429 8166 or complete our online contact form.
For Employment Tribunal work, we offer different feeing arrangements to suit different circumstances. As well as offering legal aid for eligible clients, we offer a competitive fixed fee arrangement to cover each stage of a case. This guarantees that clients know likely costs prior to commencing cases. It also means that client’s only pay for the stages needed in their case, often saving clients money compared with paying by hourly rate. Our specialist Employment Solicitors would be happy to assess your circumstances to reach a manageable feeing arrangement for you.
Please note that we offer equivalent arrangements for Employers and are also able to discuss fixed fee arrangements for other work or representation such as regulatory work before the SSSC, GTCS, GMC, and PVG/Disclosure Scotland.
Our team of expert Employment Lawyers who can advise you whatever your case. Get in touch today on 0141 429 8166 or complete our online form.
Livingstone Brown is a leading firm of Scottish solicitors. Based in Glasgow, but dealing with cases around the country, the firm has been at the forefront of legal service provision for over thirty years.
If you have a legal problem, getting good quality legal information at the earliest stage can be invaluable. The firm offers a free initial enquiry service; all you have to do is call in, telephone, or e-mail. You won't be charged for your enquiry; we'll let you know by return whether we can help, what we can do, and how much it's likely to cost. We can also offer legal aid where available.
Led by former senior partner Gerard Brown CBE, who continues as a consultant, the firm has built up an enviable reputation for quality of service and client care.
The firm has won various awards over the years. In the 2019 edition of the prestigious Legal 500 rankings Livingstone Brown was ranked as a 'top-tier' firm for general criminal work, and is also recommended for fraud cases. Stuart Munro and Gerard Brown were named as 'Recommended Lawyers'. In the Chambers directory the firm has a Band 1 ranking for criminal work, and Stuart Munro is a ranked financial crime lawyer. The firm was named Criminal Defence Firm of the Year and Family Law Team of the Year at the Scottish Legal Awards 2019.
Reliable, expert advice you can trust. Get in touch today
