Until April 2008 when (most of) the Corporate Manslaughter and Corporate Homicide Act 2007 came into force, a company could be convicted of corporate manslaughter only if there was evidence to find a single person guilty. For example, in the year 2000 prosecution which followed the Southall rail crash in which seven train passengers died, it was decided under the then law that a company could not be convicted of manslaughter by gross negligence in the absence of evidence establishing the guilt of an identified human individual for the same crime.  Indeed it is understood that only seven small organisations had ever been convicted of that offence.

The 2007 Act addressed the problem by enabling the courts to consider the overall picture of how an organisation’s activities were managed by its senior managers, rather than focusing on the actions of one individual. The intention was to make it easier to prosecute organisations – the 2007 Act makes no difference to the personal liability, if any, of company directors and employees.

Official Sentencing Guidelines on Corporate Manslaughter and Health & Safety offences causing death were published by the Sentencing Guidelines Council in February 2010.  They set out in detail the factors which a Court should take into account in passing sentence under the Act, including points such as considering “whether the fine will have the effect of putting the defendant out of business…; in some bad cases this may be an acceptable consequence”. In this connection, it is interesting that in October 2010 a fine of only £1 was imposed on a company called Glenmill Group (Developments) Ltd which was prosecuted under the Health & Safety legislation after a worker was killed as a result of a fall from faulty scaffolding.  The judge at Preston Crown Court  took into account that any significant fine would cause the Glenmill Group to go out of business (but the company was ordered to pay over £13,000 costs).

The proposed Corporate Manslaughter Act guidelines stress the seriousness of the offence and suggest that “…because it requires gross breach at a senior level, [it] will ordinarily involve a level of seriousness significantly greater than a health and safety offence. The appropriate fine will seldom be less than £500,000 and may be measured in millions of pounds”.

It was thought in 2009 that the first prosecution under the new Act would take place at Bristol Crown Court.  In a terrible accident in September 2008, Alexander Wright, a geologist working for a company called Cotswold Geotechnical Holdings Ltd, was killed when a pit from which he was taking trial soil samples collapsed on top of him. The company was charged under the 2007 Act.

In June 2009 Stroud magistrates remitted the case to Bristol Crown Court. The trial was due to begin there in August 2009 but was adjourned until February 2010.  It was then adjourned again and later was further adjourned until “around October” because of the ill-health of its main director. The case has now been adjourned once again, until 24th January 2011 and charges under the Health & Safety at Work etc Act against the director personally have been permanently stayed, on account of his ill health.  Whether the case will ever come to trial may be in doubt as it seems that the solicitors representing the company are looking to have the case dropped altogether.

Call Deminos on 020 7870 1090 or visit http://www.deminos.co.uk

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Especially when times are tough, employers sometimes seek to impose wage reductions or other substantial adverse changes to terms of employment of staff.  Of course from an employment law point of view there is generally no problem if the employees concerned agree, however reluctantly, to accept the change(s) – which of course they may well do if the alternative is likely to be redundancy and accepting the change is the lesser of two evils.

An employee who does not agree adverse change(s) of any significance which are imposed anyway will be entitled to resign and bring a constructive dismissal claim (which may be a claim for unfair dismissal or breach of contract or both).  As a general rule compensation awarded in that type of situation will be less than it might otherwise have been on the basis that by rejecting the offer of continued or renewed employment the employee had not done everything that he or she could reasonably be expected to do to mitigate his or her loss.

However a recent case has shown that employers must not just assume that compensation will be reduced in such circumstances.

A Mr Banks won a constructive unfair dismissal claim against his then employer, Bloxwich Fencing Ltd.  Bloxwich appealed to the EAT.  One ground for appeal was that the tribunal had not reduced the compensation it awarded for the unfair dismissal to take account of the fact that Bloxwich had offered to reengage Mr Banks, albeit on worse terms than those on which he had previously been employed. Bloxwich argued that this showed that Mr Banks had failed to take reasonable steps to mitigate his loss and that therefore compensation should be reduced.

The EAT dismissed this argument. The EAT found that on the facts of this particular case relations between Mr Banks and Bloxwich Fencing had deteriorated to such an extent that it had been open to the original tribunal to conclude that it was not reasonable to expect Mr Banks to go back to work for them. That was enough to dispose of the employer’s argument.

For those who may want to read a transcript of the full judgment it is available here – Bloxwich Fencing Ltd v Banks, EAT.

Call Deminos on 020 7870 1090 or visit http://www.deminos.co.uk

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Has Parliament (and the law draftsman) got it wrong?

October’s employment law news was largely given over to looking at the new Equality Act.  From 1st October 2010 this has replaced in one single Act the previous mish-mash of anti-discrimination Acts and Regulations enacted since 1970 so that the old Equal Pay Act, the Sex and Disability Discrimination Acts, the Race Relations Act, the Age discrimination regulations and so on are all replaced.  In most cases the practical effect of the changes for employers and employees will be negligible or non-existent although (as noted in last month’s newsletter) there are some important conceptual changes and of course all the section and paragraph numbers are different.

This note considers a couple of anomalies which have crept in with the new wording.

The first is of considerable practical importance.  It concerns “out of court” agreements made between employers and employees when settling disputes.  The basic law remains unchanged: such agreements are generally not fully valid unless either an Acas conciliation officer has been involved or specified statutory conditions have been complied with.  The specified conditions which ensure that a “compromise agreement” of an employment dispute will be fully valid include that the agreement must be in writing, that it must relate to specified problems and that the employee must have received advice about its terms and effect from an independent adviser.

The first of the two anomalies noted here concerns qualification as an ”independent adviser”.  Unfortunately the draftsman of the Equality Act 2010 has used a slightly different definition from the one used in the now replaced anti-discrimination Acts and regulations. The new definition specifies that a person cannot be an “independent adviser” for this purpose if he or she is acting for a “person who is a party to the contract or the complaint” (anoraks should go to Equality Act 2010 s.147(5)(d)). No legal training is needed to see that, if this means what it says, it is impossible for someone to qualify as an “independent adviser”.  If the wording means what it says, it  it is impossible for the employee to receive advice from an “independent adviser” because the adviser does not count as independent if he or she is acting for the employee!  The result, if this means what it says, is that compromised agreements can no longer be valid in discrimination cases .

No doubt the draftsman intended to specify that a person cannot be an “independent adviser” if he or she is acting for the employer.  That was the case in the now replaced anti-discrimination Acts and regulations and is still the case for compromise agreements settling unfair dismissal and other non-discrimination complaints under the Employment Rights Act 1996.

The Law Society has already notified the government of its concern on this issue, so hopefully this first anomaly will soon be corrected.  And anyway in the past judges have shown themselves adept at inventing ingenious ways of correcting mistakes made by Parliament in the wording of Acts, so perhaps the courts and tribunals will find a way of sorting this matter out if the government does not do so.

A second anomaly in Equality Act 2010 is unlikely to be of much practical importance.  It concerns the time-limits for presenting discrimination claims to an employment tribunal.  There is no change to the basic time limit which remains at 3 months starting with the date of the act to which the complaint relates. However there is a change to the power of an employment tribunal to extend this 3 months where it is “just and equitable” to do so.  Under pre-1st October 2010 law this was a only a power to extend.  Under the new law (again for anoraks, Equality Act 2010 s.123(1)(b)) an employment tribunal has power to set any time limit which it “thinks just and equitable”. So, at least in theory, an employment tribunal now has power to reduce the normal 3 month time limit for presenting a discrimination claim if it thinks that would be just and equitable.

The existence of the two anomalies noted above should not be allowed to detract from the value of the job done by those who drafted the Equality Act 2010.  It is no mean feat to have replaced such a variety of Acts and regulations with a single piece of relatively short legislation. After an initial bedding in period during which lawyers and others may struggle to find their way around the new Act,  what might be called this “Harmanisation Act” should be generally welcomed.  If the only problems are the minor wording anomalies noted above it will be a remarkable achievement.

Call Deminos on 020 7870 1090 or visit http://www.deminos.co.uk

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