IGA News

Be Aware - February 2018

Be Aware - February 2018

30 January 2018

Whistleblowing

Whilst Whistleblowing has been an increasingly difficult area for employers over recent years, a recent case from the Employment Appeal Tribunal gives some comfort.

For many years a worker had to demonstrate ‘good faith’ in making a whistleblowing disclosure and this helped to protect employers from employees who were raising allegations simply as a means of revenge. Legislative changes some years ago removed the requirement for good faith when deciding liability. This meant that if an employee made a whistleblowing claim that satisfied the other criteria, the fact that it was brought in bad faith did not necessarily mean that the claim could not succeed against an employer. The issue of good faith now is relevant only to remedy (i.e. how much the employee might be awarded) rather than liability itself.

A case recently however has re-emphasised that, even in the present legislation, there is still the requirement that a worker believes that the disclosure is made in the public interest for it to be successful. In Parsons v Airplus International Ltd the Employment Appeal Tribunal has made clear that where an employee only had her own self-interest in mind when making disclosures, rather than any belief that they were actually being made in the public interest, that was not protected.

It is possible that a disclosure made in a worker’s self-interest may also be in the public interest and thereby protected, but in this case, there was a finding that an employee had no genuine belief that it was in the public interest and so the claims failed. The fact here that the employee hypothetically believed that they might have been in the public interest did not help her, when in fact she did not hold that belief at the time.

The case is good news for employers and reminds us that, although the good faith element in the previous legislation can no longer be relied upon, the requirement for public interest in the disclosure to some extent mitigates against an employee making disclosures for purely selfish reasons.

Suing employee for breach of contract

“I have an employee, John Smith, who walked out of the office on Monday of last week having cleared his desk and removed all his possessions. Next day we received a letter saying that he had resigned with immediate effect. His employment contract states that he has to give us 3 months’ notice.

We have made enquiries and there was absolutely no reason for him to walk out without giving the requisite notice period. We suspect he has found alternative employment and wants to join his new employer as soon as possible.

Is there anything we can do?”

The first thing to establish is whether he was legally entitled to walk out without giving the contractual 3 months’ notice.

The only basis upon which he could resign with immediate effect would be if he could establish that the employer had fundamentally breached his contract of employment. It is important to remember that this is an objective test, i.e. would a reasonable person fully aware of the facts, think that the employer had breached the contract of employment.

Contrary to popular belief this is quite a difficult hurdle for the employee to establish. The employee has to show that the employer has done something fundamentally wrong in order to establish a breach. Thus, minor issues would not be sufficient.

In these circumstances on the facts of this case, the employee as a matter of law should have given 3 months contractual notice.

The employer therefore is entitled to sue the employee for damages for the failure to abide by the employment contract terms. Damages would normally be either losses incurred by the employer in terms of extra locum costs, or indeed damages for loss of business or reputational damage. The burden would be on the employer to establish the extent of damages.

Multi User Vehicle Descriptions and Advertising: ASA Ruling

The Advertising Standards Authority have recently issued guidelines on how ex-fleet vehicles should be advertised for sale. ASA rules now require that any fleet operator selling ex-fleet vehicles to provide information regarding the nature of the vehicle and its use within any advertising.

This follows the reversal of an earlier decision on a complaint where 2 vehicles had been described in advertising as having one owner when in fact that owner was a fleet company and the vehicle was ex-fleet. Within the revised complaint the ASA stated that:

“if a dealer was aware that a vehicle was ex-fleet because it had previously been used for business purposes, then that was material information likely to influence a consumer’s decision to purchase it. Furthermore, if a dealer knew that such an ex-fleet vehicle was used by multiple users, then that too, was material information for consumers to make an informed decision.”

Whilst the most recent rulings and guidance have again highlighted the issues, the law behind it is not new and businesses have been under a duty to accurately describe and actively disclose such things under the Consumer Protection from Unfair Trading Regulations (CPUTRs) for almost a decade.

The CPUTRs came into force in May 2008 and were amended and strengthened in 2014 by The Consumer Protection (Amendment) Regulations 2014. The CPUTR expressly forbid, as the name would suggest, unfair businesses practices that could detrimentally impact a consumer or sway their decision to buy a vehicle. This includes misleading acts, such as describing a vehicle as having one owner when that one owner was a hire company, as well as misleading omissions.

Under the CPUTR a trader is required to actively disclose any information that would cause or is likely to cause the average consumer to take a transactional decision he would not have taken otherwise.

The CPUTR are not motor trade specific and do not provide a definitive list of information that should be disclosed. However, it is generally understood that issues such as significant accident damage, multi-user user use, ex-fleet and hire company vehicles as well as taxis and driving school vehicles should all be disclosed.

The CPUTR are particularly important as a breach of the regulations is a criminal offence for not only for the company but also where appropriate company officers personally. In addition, a breach of the regulations can entitle consumers to unwind the deal or claim a discount between 25% to 100% or even compensation.

Due Diligence

There is no requirement to disclose anything of which you are not aware. Where a company can establish that they have taken reasonable steps to ensure the accuracy of their description of the vehicle and to ascertain whether there are any material facts that should be disclosed, there will be no breach.

The following actions that would help establish due diligence and protect dealers from prosecution under the CPR’s are:

  • Vehicle history checks pre-sale
  • Vehicle Mileage Check pre-sale
  • Disclose Mileage Discrepancies
  • Pre-sales mechanical checks
  • Check to see if the vehicle is subject to any recalls
  • Record all vehicle checks in case there is a need at a later date to refer to them.

Holiday pay - Update

The European Court of Justice (CJEU below) has issued an important case on the issue of holiday pay. A case which employers in the motor industry need to take into account.

In King v Sash Windows, Mr King was believed to be self-employed and his employer did not therefore grant him any paid holiday. He brought a claim looking for over 24 weeks of holiday that he had accrued over many years, but not taken either because he was not allowed it or not paid it throughout his time with Sash Windows. The employer defended the case on the basis that under the Working Time Regulations 1998, if paid holidays are not taken in a leave year, then they are lost.

The CJEU in an important Judgment disagreed and have effectively held that if a worker is prevented from taking paid holiday because the “employer” won’t grant the paid holiday they are being prevented from exercising EU rights and cannot be stopped from bringing a claim just because a new holiday year starts. Insofar as UK Regulations say workers lose that right, they are incompatible with EU law and must be disregarded.

More importantly the CJEU has held that, on these facts, when an employer fails to grant paid holiday to workers they should not be able to benefit from the restrictions on time limits of how much can be carried over. It has also cast further doubt on the EAT’s decision in Bear Scotland v Fulton which has suggested any 3 months break in unpaid EU holiday leave could render the period before the 3 months break out of time.

The case is not suggesting that where employees or workers have been granted paid leave but have simply not taken it in the particular leave year, would be able to make similar claims. The case should however be of particular concern to employers who are operating with people they deem to be self-employed and the CJEU appear to be saying that, where people are found to be workers or employees and have been denied EU rights and there shouldn’t be limitations on the claims they can bring in terms of going back in time. Accordingly, it now seems likely they can accumulate large claims, going back many years.

Conclusions

This advice is general in nature and it will need to be tailored to any one particular situation. As an RMI member you have access to the RMI legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us on 0845 305 4230 at any stage for advice and assistance as appropriate.