Employment Law May 2008 - CIPD

Employment Law
EXAMINER’S REPORT
May 2008
Chartered Institute of Personnel and Development
Professional Development Scheme
Specialist Personnel and Development
Employment Law
May 2008
12 May 2008 13:50-16:00 hrs
Time allowed - Two hours and ten minutes
(including ten minutes’ reading time).
Answer Section A and SEVEN of the ten questions in Section B.
Please write clearly and legibly.
Questions may be answered in any order.
Equal marks are allocated to each section of the paper.
Within Section B equal marks are allocated to each question.
If a question includes reference to ‘your organisation’, this may be
interpreted as covering any organisation with which you are familiar.
The case study is not based on an actual company. Any similarities to
known organisations are accidental.
You will fail the examination if:
• you fail to answer seven questions in Section B and/or
• you achieve less than 40 per cent in any section.

Employment Law
EXAMINER’S REPORT
May 2008
SECTION A – Case Study
Note: It is permissible to make assumptions by adding to the case study
details given below provided the essence of the case study is neither changed
nor undermined in any way by what is added.
The Three Ashes is a privately-owned, run-down pub located close to the high street
in a market town. Once a successful business, it has recently fallen on hard times.
Unable either to invest the money required to make it more profitable, or to live from
the meagre profits currently generated, the pub's landlady has decided to sell the
business and retire. The new owner is an ambitious, personable former taxi-driver in
his early thirties called Jack Rose. He is convinced that with good management,
marketing flare and moderate investment, the Three Ashes can soon become a
highly lucrative operation. Jack is enthusiastic and prepared to work very hard, but he
has no previous management experience.
Later in the year Jack plans to close the pub down for two months while a major and
costly refurbishment takes place. It will then re-open under a new name - 'The
Phoenix'. This will have a cooler and much more up-market image, serving more
expensive foods and a wider range of drinks. The target clientele will be the town's
younger and more affluent population.
However, before he can plan the refurbishment Jack is made aware of two serious
staffing problems which he needs to deal with more quickly.
Top of the list is the absence record of the pub's chef. Jack is told that Diane Cobbler
began to suffer from severe migraines about six months ago, having had an
impeccable attendance record over the previous two years. The migraines appear
without warning every two or three weeks causing her to suffer from appalling
headaches, disturbed vision and to vomit everything she eats. They last two or three
days during which time she has no choice but to retire to her room above the pub,
close the curtains and take heavy doses of paracetomol. Her doctor tells her that
there is no chronic underlying medical condition, and as yet she has been unable to
identify any obvious trigger for the migraines. Once they are over she is able to return
to work as usual, and is a good worker, but when she becomes ill the pub has no
choice but to close its kitchen and revert to a reduced menu consisting of sandwiches
and chips. Lunch-time trade, in particular, has been badly affected as a result.
A more general problem concerns the management style of the longest serving
member of staff, Brian Punch, who is the pub's legendary bar manager. Brian has a
strong personality, a great sense of humour and is enormously popular with regular
drinkers. A number say that they choose to drink at the Ashes in the evenings, rather
than in other local pubs, because they enjoy his company. But the casual, hourlypaid
staff who work for him take a rather different view. They fear him and feel bullied
by him. In particular, they dislike the approach he takes to supervising them in the
evenings after he has himself drunk a pint or two. Apparently he calls them by
offensive nicknames in front of the customers and has a tendency to order them
about in a brusque manner.

Employment Law
EXAMINER’S REPORT
May 2008
Within a few days of taking over the pub, three staff come to Jack to complain about
Brian. In each case they say that they made the same complaints to the previous
owner, and that she spoke to him about it but that this had no impact. She had not
been prepared to take any formal action for fear that Brian might leave and take up a
post behind the bar in a rival establishment.
* Paul Perry complains about Brian calling him "Duracell" which he says relates
to his full head of bright red hair.
* Dominic Stout hates being referred to by Brian as "Merrick". This he says is a
reference to the 'elephant man' who, like Dominic, suffered from a
pronounced facial disfigurement.
* Magdalena Becherovka, a more recent recruit of Czech origin, complains that
Brian regularly calls her his "Little Bohemian Dumpling".
Jack is unsure how to deal with these matters. He would like to sack Diane, but has
no idea if it would be lawful to do so. He wants formally to warn Brian that he must
stop drinking on the job and must not bully his staff, but he knows that trade would be
very badly affected were Brian to leave and get a job in another pub close by.
Jack is even more unsure about what to do with the staff during the refurbishment.
With the exception of Brian, all his permanent employees have live-in
accommodation which they will have to vacate for several weeks while construction
work is carried out. Ideally, he hopes, most will resign and find other jobs when he
lays them off during this time. This will allow him to re-staff the pub with younger,
more attractive employees. But what would he do if they fail to quit of their own
accord? His plan with the casual staff is simply to offer them no further work once the
pub closes, but he is unclear about the possible legal consequences.
PLEASE TURN OVER

Employment Law
EXAMINER’S REPORT
May 2008
Task
After much thought, Jack makes decisions about how he wants to tackle these
staffing issues. He asks you to advise him about the legal aspects of his
proposals.
Jack decides that he will meet formally with Diane Cobbler and warn her that
her absence record is unacceptable. He sympathises with her situation, but he
cannot continue to employ her unless her attendance improves very
considerably. If she is off sick for more than three days in the next six months
he will give her notice of his intention to terminate her contract.
Jack decides that he will speak to Brian informally about his management
style, but that he will not, for the time being, raise with him the particular cases
that have led to formal complaints being made. In the conversation he will
stress how valued Brian is as a member of his team, but will ask him to drink
less and to be less overbearing in the way he talks to casual staff.
Jack decides that he will lay-off his permanent staff during the proposed
refurbishment later in the year and will require them to vacate their rooms
above the pub. Only Brian Punch will be paid during the seven or eight weeks
that the pub will be closed. When it re-opens Jack will rehire anyone who
wishes to return, but he hopes that most will not. This will give him an
opportunity to advertise for and recruit a younger, trendier group of staff who
will appeal to the new generation of customers he wishes to attract.
Jack decides that he will simply not offer his existing casual, hourly paid staff
any further work once the pub closes for its refurbishment.
What advice would you give Jack about each of his proposed courses of
action? Justify your recommendations both with reference to the law itself and
to the consequences of failing to act within the law in each case.

Employment Law
EXAMINER’S REPORT
May 2008
SECTION B
Answer SEVEN of the ten questions in this section.
When answering the following questions, assume that you are working in a
Human Resources (HR) role within an organisation.
To communicate your answers more clearly you may use whatever methods
you wish, for example diagrams, flowcharts, bullet points, so long as you
provide an explanation of each.
1. You are asked to explain the role and function of the House of Lords in the
UK's legal system and to state what its significance is as far as employment
law is concerned. What will you say? Illustrate your answer with at least
one example.
2. A manager receives a letter from a former employee lodging a formal
grievance. Her complaint relates to an apparent failure on the part of your
organisation to pay her the National Minimum Wage in the month before she
left. Her manager says that he is certain the accusation is unfounded and
tells you that she only worked for the organisation for three months. He thus
intends to ignore the letter. What advice will you give the manager? Justify
your answer with reference to the law.
3. A manager has been reading the disciplinary policy but is unclear about
whether or not a case she is dealing with constitutes 'gross misconduct' or
'ordinary misconduct'. You are asked to explain the difference between
these terms and their significance in law. What would you say? Illustrate
your answer with examples.
4. You start working in an HR role for a medium-sized company. For the first
time since the advent of age discrimination law, an employee is approaching
the age of 65 which is the usual retirement age in this organisation. The
manager is keen that this individual retires as he is a poor performer. What
advice will you give and why?
5. A colleague asks you to explain what is meant by 'the genuine material
factor defence' in equal pay law. What will you say? Illustrate your answer
with examples.
6. Your Chief Executive Officer has begun to investigate the possibility of your
organisation taking over a smaller competitor. She asks you to brief her
about the major rights attained by employees who have completed more
than a year's service when the business they work for is taken over by
another organisation. She also asks you to explain why there has been so
much confusion about when and where these rights apply in practice.
Outline and justify your answer.
PLEASE TURN OVER

Employment Law
EXAMINER’S REPORT
May 2008
7. An employee slips on a greasy patch on the floor in the office and injures
her back. Her manager now hears that the injured person is intending to
bring a personal injury claim, suing your organisation for several thousand
pounds under the law of negligence. You are asked to advise the manager
on what major defences employers can deploy in these situations in order to
avoid being held liable for damages. What will you say and why?
8. You are asked to compile a short presentation for senior managers about
the government's plans to extend maternity and paternity rights over the
next two years. You need to speak both about the substance of the
proposals and their likely practical impact for your organisation. What will be
your main points? Justify your answer.
9. You are asked to explain why it is important from a legal point of view that
managers write job references which are full, fair and accurate. You are also
asked to explain why this issue has become more significant in recent
years. What will you say and why?
10. A senior manager who is handling a major employee relations dispute
emails you to ask in what circumstances industrial action is considered to be
lawful. He needs a brief, quick response setting out key points. What advice
will you give?
END OF EXAMINATION

Employment Law
EXAMINER’S REPORT
May 2008
Introduction
Two hundred and twenty four candidates sat the employment law examination this
May. As always, the level of knowledge and understanding varied hugely between
individual candidates and centres. The overall pre-moderated pass rate was 62%.
This is slightly lower than was achieved in November, but represents a healthy pass
rate in comparison with most recent cohorts. The full statistical breakdown was as
follows:
May 2008
Grade
Number Percentage of total
(to 1 decimal point)
Distinction 5 2%
Merit 33 15%
Pass 101 45%
Marginal Fail 14 6%
Fail 71 32%
Total 224 100
The figures shown are simply calculations based on the number of candidates sitting
the examination in May 2008, whether for the first or a subsequent time, and are for
interest only. They are not to be confused with the statistics produced by CIPD
headquarters, which are based on the performance of candidates sitting the
examination for the first time. It is from these figures that the national average pass
rates are calculated.
This was my second cohort as examiner and the first that I set. It was marked by
myself, Sue Speakman, Andrew Hambler and Astra Emir. On this occasion we also
piloted two innovations which will be repeated in November before a decision is
taken about whether or not to make them permanent:
i) The case study was 'seen', having been sent to students and their tutors
three weeks before the date of the exam.
ii)
A list of the broad topic areas covered in each of the Section B questions
was also sent three weeks ahead of the exam.
The aim of these innovations was to provide students with the opportunity to target
their revision on the areas of the standards that would be tested in the exam. It was
decided that three weeks or so before the exam was an appropriate period of time, to
make sure that tutors taught the whole of the syllabus and not just the areas to be
tested in the exam. It also allowed us to set a case study and Section B questions
which had rather more to them than has hitherto been possible, thus hopefully lifting
the standard somewhat and more closely mirroring the type of situations about which
newly qualified HR professionals might be called upon to advise. Having a seen case
study also mirrors the real world to an extent in that it permits students to check the
law and to make sure their understanding is correct, before giving advice.

Employment Law
EXAMINER’S REPORT
May 2008
Our initial observation after marking this cohort's scripts was that the use of a seen
case appears to have met these objectives. There was some evidence that students
at particular centres had been overly coached ahead of the exam, every one making
the same slightly obscure point in answer to the Case Study. But in the vast majority
of cases answers written by candidates from the same centre varied considerably,
the better candidates seizing the opportunity to demonstrate a high level of
knowledge and understanding.
Evidence about the impact of giving notice of the ten topic areas featured in Section
B is less conclusive. In the case of Question 9, for example, it was apparent that
students had tended to swat up on the case law concerning job references ahead of
the exam. This enabled them to write fine answers to the first part of the question, but
in many cases far poorer answers to the second part – if there was any answer to the
second part written at all. This gives some cause for concern because it suggests
that candidates were displaying knowledge gained purely for the purposes of passing
the exam rather than a full knowledge and understanding of the subject gained over
a long course of study.
It will be interesting to hear the views of students and their tutors about these two
innovations.
Section A
Key Points
The majority of candidates gave a sufficiently full answer in response to each of
Jack's proposals, although on too many occasions a key issue was missed
altogether. For example, some candidates only wrote about the disability
discrimination aspects of Diane Cobbler's case, missing altogether or only very
superficially dealing with the unfair dismissal aspects. Others missed the potential
age discrimination issue totally, or failed to explain why Brian's bullying of casual staff
could be construed as unlawful harassment. Too many missed the significance of
employment status issues, in particular failing to appreciate the rather limited legal
rights that the casual workers described in the case would enjoy. It is unlikely, for
example, that they would be able to claim constructive dismissal, yet many described
the great risks of them doing so without qualifying their answers with reference to the
law on employment status. In addition, more generally, there were plenty of
examples of inaccuracy or apparent confusion about core principles of employment
law, and far too many examples of candidates failing to answer the question asked.
Despite the stress being placed on the word 'advice', numerous answers (often
written by able and knowledgeable candidates) did everything we could expect
except give advice. Clearly marks were awarded to such answers, but many were
lost too. Too often candidates give a splendid analysis of the law and apply it to the
facts, quoting from relevant cases and setting out possible consequences of actions,
but failing to go further and say 'therefore this is what should be done and this is
why'. In many cases these answers were wholly unsatisfactory from a P&D
perspective because they involved sitting on the fence when a clear decision needed
to be taken about how to proceed in practice. Stating that there is a risk in taking a

Employment Law
EXAMINER’S REPORT
May 2008
course of action is a lot less impressive than reaching a judgment about what should
b done in the light of the level of risk – besides not comprising an answer to the
question we actually asked.
Another general point to make concerning this case was that candidates commonly
picked up on points that the examiners failed to anticipate and had not expected. For
example, many raised the possibility that Diane's migraines were being caused by
exposure to a substance in the pub, or by stress. Others focused extensively on
TUPE, despite there being no clear indication that the situation described in the case
fell into the 'relevant transfer' category. Where appropriate marks were awarded for
points of this kind.
Specific Points
Diane Cobbler's attendance record is such that it would be reasonable under unfair
dismissal law to fire her on grounds of capability, provided she is formally warned
and a proper procedure is followed. There is a need to get hold of a medical report
from her doctor, or if necessary to commission one from a company doctor. She must
be given an adequate period of time in which to demonstrate a recovery, but if she
cannot a dismissal would be fair. Matters are less clear as far as disability
discrimination law is concerned. Despite the absence of an underlying medical
condition, Diane clearly suffers from a serious illness that strikes regularly. To date it
has lasted only six months, but there is no reason to doubt that it may well last twelve
months or more. It would thus be sensible to treat her condition as one which falls
within the remit o the DDA. This means that a further step needs to be taken before a
lawful dismissal takes place – consideration of whether any 'reasonable adjustments'
can be made to enable Diane to improve her attendance record. Given the facts of
the case and the nature of the illness it is unlikely that any reasonable adjustments
could be made here. It would therefore be lawful to dismiss on capability grounds in
due course.
Speaking to Brian informally may make sense commercially. But it is probably
insufficient from a legal point of view. It is clear that at least two of the three
complainants would have a case if they were to complain to the Employment Tribunal
about unlawful harassment – Dominic on grounds of disability (the DDA specifically
includes severe facial disfigurement in its remit), and Magdalena on the grounds of
national origin. As they are casual workers it is unlikely that they could bring claims of
constructive dismissal, but this is not impossible were they to be able to satisfy a
tribunal that their contracts should properly be classified as being employment
contracts. In any case substantial damages for injury to feelings and lost earnings
could be awarded under discrimination law were tribunal cases to be lodged. Paul
has no case under discrimination law as there is none to protect red-heads. He
could, however consider bringing a case in the county court under the Protection
from Harassment Act. In each of these cases speaking informally to the harasser is
not sufficient a defence from the employer's point of view. There is thus a good case
for taking formal disciplinary action against Brian and candidates were expected to
give this advice. That said, summary dismissal for gross misconduct (as advised by a
good number of candidates) is probably too harsh a sanction unless further facts
come to light during any formal investigation.

Employment Law
EXAMINER’S REPORT
May 2008
The law on temporary lay-offs of permanent employees is clear. Unless authorised in
the contract this cannot be done without pay. Employers who do this are risking
constructive dismissal claims (breach of contract), claims for unfair deduction of
wages and redundancy payments to boot. Jack could try to get his employees to
agree to the lay-offs, thus authorising them contractually, but they would be unlikely
to accede. So he either needs to pay them during the refurbishment, compensating
them sufficiently for the lack of accommodation, or he needs to make them redundant
and pay them appropriate severance payments. Dismissing his casual workers is
lawful, provided the reality of the relationship they have with the pub is not one of
employment. If so, they would be able to claim unfair dismissal and redundancy
payments. Much would hinge on the extent to which 'mutuality of obligation' existed.
There is a more general issue that relates to the planned strategy of advertising for
and recruiting young, attractive staff. This might well be in breach of age
discrimination law, although there is the possibility of justifying it on genuine business
grounds - a proportionate means of achieving a legitimate aim - if the business plan
is clearly based on the need to attract a different clientele. It is probably best to play
safe on this until case law clarifies the issue. It is thus wise to advise that no
discrimination on grounds of age occurs when hiring. However, there is no general
problem in law if he wishes to hire on the basis of attractiveness.
Section B
Question 1
This was a straightforward question only attempted by a minority of candidates.
Those who could articulate an effective answer and give a good accurate example
picked up plenty of marks. All we were looking for was an understanding that the
House of Lords is the highest court in the UK system, that it makes final rulings on
UK law, and can only be appealed to the ECJ on points of EU law. Its significance as
far as employment law is concerned is that its rulings/interpretations are binding on
lower courts. The significance of its rulings and of binding precedent could be
demonstrated by making brief reference to any of the major House of Lords
judgements of recent years - Polkey, Foyle Meats, Dunnachie etc. Some students
went further and described the role of the House of Lords in its wider incarnation in a
law-making role. Some credit was given to these points, but only if they were
combined with a proper understanding of the judicial role.
Question 2
A number of candidates got themselves into something of a tangle attempting this
question. This was because they wrote extensively about the right of workers to
receive the NMW rather than giving advice about the proper response expected by
the law when a formal grievance is sent by a former employee, and the
consequences of failing to do so. The question is thus concerned with an important
aspect of the Statutory Dispute Resolution Regulations (2004). The best answers
focused on this, making reference to the possibility that the modified grievance
procedure could be used and recognised the potential danger that compensation
could be increased by between 10% and 50% if the employer does not deal with the
grievance and subsequently loses a tribunal case. The fact that a former employee

Employment Law
EXAMINER’S REPORT
May 2008
has written such a letter suggests strongly that legal action is being considered. The
advice should therefore be to take it seriously, follow the procedure and investigate
the facts thoroughly.
Question 3
The vast majority of candidates attempted this question and most did so pretty
effectively. The key points, as far as ordinary misconduct is concerned, is that it
represents a breach of the employer's rules which falls short of gross misconduct,
that summary dismissal is not lawful on the first offence, and that at least one
warning must be given before considering a dismissal. By contrast, gross misconduct
is a serious breach which the employee knows could lead to summary dismissal at
the time he/she commits the act. It must also be sufficiently serious as to breach the
duty to maintain a relationship of mutual trust and confidence. Those who could
articulate these principles reasonably clearly and illustrate their answer with
appropriate examples of both types of misconduct were marked well.
Question 4
This was also answered reasonably well, although there was a pronounced tendency
to argue that the law and ‘good practice’ are the same thing when it comes to
mandatory retirement, which is not currently the case. In particular it was common for
candidates to answer that a poorly performing employee approaching retirement
should not on any account be retired for that reason, but should instead have a right
to be warned at least once in line with a capability procedure. In fact it is entirely
within the law as matters stand for employers to retire individuals mandatorily at 65
without giving a reason at all. All that matters is that they get it right procedurally. Age
discrimination regulations require employers to write formally to employees
approaching retirement (at least six months before the 65 th birthday). asking if they
wish to request to work beyond 65. They must respond before 6 weeks short of their
65th birthdays. If they wish to continue working the request must be given full
consideration. However, as they do not need to give a reason for turning down
requests, nor do they need to objectively justify their decisions. There was thus
evidence of over-caution here.
That said, we also gave credit where candidates advised a modicum of caution,
explaining that there is a question mark over the legality of this whole approach in EU
law as a result of the challenge in the ECJ being mounted by the Heyday
organisation. However, this should not prevent a dismissal in a private company, and
its chances of success are generally accepted to be limited.
Question 5
Employers are lawfully able to pay men and women differently for carrying out the
same job, one which is broadly equivalent, ones rated as equivalent or ones of equal
value if they have a valid defence. This is termed the genuine material factor defence
and it essentially means that there must be a good, genuine, necessary business
reason for the difference in pay which has nothing to do with gender at all. Examples
are performance-related rises, differences in shift patterns, length of service,

Employment Law
EXAMINER’S REPORT
May 2008
qualifications, London weightings and red-circling situations. This was a popular
choice of question, answered well on the whole, although some struggled to give
more than one example or to give accurate examples.
Question 6
This was not answered by the majority of candidates, and poor answers were
common. Even the most basic principles underlying TUPE – the core rights the
regulations give – cause some candidates a great deal of difficulty.
The key rights are to be collectively consulted, to have one's contract honoured
(except any pension and collective agreement elements) and not to be dismissed
unless there is a clear ETO reason in addition to the transfer itself that justifies a
dismissal. The confusion arises because of the complexity of establishing what is and
what is not 'a relevant transfer'. The law has recently been clarified here with regard
to most contracting-out situations, but there remains confusion when businesses
change their identity after being taken over and when a contract to provide a service
is lost by one provider and taken over by another.
Question 7
This was another question which proved effective at helping us to identify the
candidates who had gained a really good understanding and those whose
understanding was more superficial. There were plenty of poor answers here, many
describing the HSWA 1974 and the criminal side of health and safety law rather than
the personal injury aspects featured in the question.
The most common defence under negligence is that the injury was not reasonably
foreseeable. But it can also be argued that following a risk assessment it was
decided that the level of the risk was too low given the costs of taking effective
preventative action. Voluntary assumption of risk is another defence as is the claim
that an accident occurred while the protagonists were not 'at work'. Sometimes
injuries originate outside work and are made worse by the accident rather than
caused by it. All of these were acceptable and were rewarded with marks. However,
we also gave some credit where students described risk assessment processes and
indicated their relevance or described leading cases without fully explaining their
relevance to the question.
Question 8
The first part of this question was generally answered well. Candidates appreciated
that the government aims to extend paid maternity leave to 12 months for all
employees and that it also intends to introduce a scheme where by fathers can 'trade'
six months of the leave with mothers to enable the mother to return to work earlier.
Where answers were weak, or non-existent, was in terms of the likely impact. This
will clearly vary from organisation to organisation depending on the extent to which
there are local arrangements that offer more than is required in law and the
percentage of employees who are of child-bearing/rearing age. Answers here tended
to be superficial and poorly thought-through.

Employment Law
EXAMINER’S REPORT
May 2008
Question 9
As explained above, this was the one question which was not answered as well as it
might have been because candidates had studied aspects and could quote case law,
but struggled to give convincing answers to both the parts.
All we were looking for was an appreciation that it matters because there are several
types of legal action that can be brought against the writers of inaccurate references
that lead to a detriment being suffered, and potentially their new employers. These
include sex and race discrimination, negligent misstatement and defamation.
Answers to part two of the question were expected to refer to data protection rights.
Writing accurate and fair references has become more significant in recent years
because data protection law now effectively gives people the right to see references
written about them. However, where a plausible alternative argument was made in
answer to this part of the question credit was given. Too many though simply ignored
part 2 altogether and lost marks as a result.
Question 10
We were looking for two areas of understanding here. First, an appreciation of 'the
golden formula' and its application in practice and, secondly, an understanding of the
significance of lawful balloting procedures. Those who also stated that action had to
be 'official', made reference to 7 days cooling off periods and peaceful picketing
gained additional marks.
A surprisingly large minority of candidates attempted this and those who knew their
collective labour law picked up plenty of marks.
Stephen Taylor
Examiner