IGA News

Legal Update - July 2015

Legal Update - July 2015

25 June 2015

Vehicle Faults

“A customer wants to reject their vehicle because their clutch has failed. Can they?

This is a tricky question and deals with a number of issues that need considering.

1. Was the vehicle of satisfactory quality when sold?

This is a contractual term implied by The Sale of Goods Act 1979. What is satisfactory quality is a question of fact for a judge to decide. Goods are of satisfactory quality where

“…they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances.”

The court will therefore not expect the same quality from a brand new vehicle and a second hand vehicle. Neither will it expect the same quality form a £10,000 vehicle as it would from a £1,000 vehicle.

2. Did you accurately describe the vehicle?

It is very important that vehicles are accurately described. We all want to obtain the best value for goods sold. However, over selling can itself cause complications. Where there are issues with a vehicle it is always best to be up front about it as there is no breach of contract where the fault complained of was,

· specifically drawn to the buyer’s attention, or

· where the buyer examination before the purchase ought to have revealed the fault.

If you can prove any issue was drawn to the customer’s attention at the time of sale, and they continued to purchase the vehicle anyway then they cannot complain later; unless the issues are more serious then expected.

3. How long must a vehicle be of satisfactory quality?

A vehicle must be of satisfactory quality when sold. That doesn’t mean that if it worked when it was sold that there is no case. Satisfactory quality includes the requirement that the vehicle is fit for all the purposes for which goods of the kind in question are commonly supplied, and reasonably durable. You will therefore be liable for any faults that develop soon after sale where a reasonable person would not have expected those fault to have developed.

There is a particular risk for any faults that occur with the first 6 months from any purchase. There is a legal assumption that any faults that develop within 6 months from the time of sale were present when the vehicle was sold unless the trader can prove otherwise. This will make claims within the first 6 months significantly more difficult to defend

If a vehicle is in breach of contract a consumer can take the matter to court for 6 years from the date of the purchase.


Any issue that develops with a vehicle is capable of being a breach if it is proven to be a fault. Garages should think long and hard when considering their actions. However, where the issue is commensurate with the age, mileage and description of the vehicle it is arguably not a fault and then a court would be free to decide that this would not breach the contract. As each court must decide this for itself there are widely varying decisions on what faults can reasonably be expected during vehicles life.

As always this advice is general in nature and 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 at any stage for advice and assistance as appropriate.

Paul Carroll
Motor Industry Legal Services

Dealing With Grievances

“I have an employee who has come to me complaining that his manager has been bullying him and treating him unfairly. He said he wants to put in a “formal grievance”. To be honest we are a fairly relaxed employer and we don’t have such procedures. We usually sort out our problems informally. What do I do next?”

All employers, no matter how large or small should have a formal grievance procedure in place to deal properly with grievances at work. A formal grievance procedure needn’t be too onerous. ACAS have example policies that employers can use and ACAS publish a Code of Practice on grievances, which is referred to in Tribunals. You should certainly read the Code if ever you receive a formal grievance from an employee.

Even if you don’t have a formal grievance procedure in place, the following basic steps should be always be taken:-

  • Write to the employee setting up a formal meeting to discuss his/her grievance giving him/her the right to be accompanied by a trade union representative or work colleague;
  • Hold that grievance meeting and listen to concerns / complaints;
  • Adjourn the meeting and go away and investigate and come to a conclusion on the grievance;
  • Set out the decision in writing, with a right of appeal;
  • If the employee appeals, make sure that a more senior officer, who has not been involved so far, conducts the same basic procedure as above, i.e. write to him/her setting up a meeting, give him/her the same right to be accompanied, hold the meeting, investigate and confirm the appeal decision in writing.

Under the Employment Rights Act 1996, the size and administrative resources of an employer are relevant to how fairly and thoroughly an employer deals with such matters. The larger and more sophisticated the employer, the greater the onus to be procedurally perfect. The smaller the employer, the more Tribunals are supposed to give a degree of leeway given the lesser administrative resources. This should not however be an excuse for small employers, who should be following the basic steps above.

If you simply ignore a grievance and an employee has over 2 years’ service, then this could form the basis of a constructive unfair dismissal claim. Likewise, depending on the contents of the grievance, you can be liable if you do not deal with matters under other parts of employment law, for example discrimination or whistle-blowing. Failure to deal with a grievance can also lead to uplifts in compensation in Tribunals of up to 25%.

Practical matters: dealing with a grievance

It is, of course, often the case that an employee will not be satisfied with the employer’s decision on a grievance, especially if it is not upheld. As an employer, you have a duty to reasonably investigate and this might involve interviewing other staff, interviewing the employee in question and coming to conclusions on the balance of the evidence.

A common trap that employers sometime fall into is to promise absolute confidentiality when dealing with grievances. That is of course not always possible, because to investigate the grievance, allegations often have to be put to other employees and statements taken. Employers can ask employees to keep discussions confidential to the meetings arranged, but cannot promise complete confidentiality of information, otherwise grievances cannot be thoroughly investigated.

Setting the law aside for a moment, for good employee relations, dealing with grievances fairly and within a reasonable time is obviously important. A fair grievance investigation and procedure can often resolve issues before they become more serious.

Andrew Macmillan
Motor Industry Legal Services

Alcohol at Work

An employment tribunal has held that a worker was unfairly dismissed after a colleague reported him for smelling of alcohol at work, without evidence to show that he was unfit for work.

In McElroy v Cambridge Community Services NHS Trust, an employment tribunal held that an NHS trust unfairly dismissed an employee who was reported for coming to work smelling of alcohol, without further evidence that he was unfit for work.

The healthcare assistant was investigated following a report that he had come to work smelling of alcohol. He maintained that he had only had a few drinks the night before.

The tribunal highlighted that there was no evidence of impairment to function. No one had expressed any concern about the claimant’s behaviour, or suggested that he had been acting drunk.

The employment tribunal held that smelling of alcohol at work was not by itself sufficient to constitute gross misconduct justifying dismissal under the trust’s disciplinary procedure and substance misuse policy.

The tribunal also found that it was unreasonable for the claimant’s refusal to participate in an occupational health referral to be added to the reasons for dismissal.

This case highlights the care that needs to be taken when disciplining, or dismissing, an employee who has been drinking and alleged to be under the influence of alcohol at work.

Andrew Macmillan
Motor Industry Legal Services