Employee's Duty to Mitigate

The Court of Appeal has handed down its decision in Wilding v British Telecommunications plc. It has dismissed the employee's appeal from the finding that he failed to mitigate his losses.

Click here to see the full decision

Facts

Mr Wilding worked for BT for 29 years. He developed back problems and, from 1997, was no longer able to work. He was dismissed on grounds of capability in early 1998. The employment tribunal held it to be an unfair dismissal and unlawful discrimination on grounds of disability because, amongst other things, the employer had failed to take into account medical evidence suggesting that Mr Wilding would be fit to work a reduced 20-hour week (and thus failed to make reasonable adjustments).

After the liability decision at the employment tribunal, BT made an open offer of re-engagement to Mr Wilding. This was on the basis of working a 20-hour week, with pro rata benefits and back pay. Mr Wilding refused. His grounds for refusal, set out in writing at the time, included:

• that BT was appealing the liability decision, maintaining it was 'perverse' for the employment tribunal to find Mr Wilding was capable of working a 20-hour week;
• the delay in making an offer of re-deployment;
• the fact that BT had refused to make any payment to Mr Wilding under its Injury Compensation Scheme;
• in the circumstances, trust and confidence had been destroyed.

The employment tribunal held that Mr Wilding's refusal to accept the offer was unreasonable, and that he had failed to mitigate his loss. In particular, it considered that the BT offer was wholly genuine and that Mr Wilding was acting unreasonably in refusing to accept the job, given he was quite incapable of obtaining employment elsewhere.

Decision

The Court of Appeal dismissed Mr Wilding's appeal (as had the EAT).

It held the tribunal had correctly approached the question of mitigation of loss. The correct test for deciding whether an employee had mitigated his/her loss was:

1. it is the duty of an employee to act in mitigation of loss as a reasonable person unaffected by the hope of compensation from the employer;
2. the onus is on the employer to show that the worker had unreasonably refused an offer of re-employment;
3. the test of unreasonableness is an objective one based on the totality of the evidence;
4. in applying that test, the attitude of the employer, the circumstances in which the offer was made and refused and the way in which the employee had been treated must be taken into account; and,
5. the court or tribunal must not be too stringent in its expectations of the injured party.

However, in adopting an objective approach, this will inevitably involve investigation into the employee's circumstances and abilities. In particular, if a suitable offer is made to an employee who has shown himself to be anxious to return to work, and that offer is then rejected for reasons peculiar to the employee, the tribunal is bound to investigate whether that decision was reasonable or unreasonable.

In this case, the tribunal had adopted the correct test and the appeal would be dismissed.

EC Temporary Workers Directive

Further to Wednesday's bulletin, the text of the draft EC Agency Workers Directive is now available from here (Adobe Acrobat required). The site was temporarily down when I tried it, but it should be working again soon!

Religious Discrimination and Remedies Bill

The Religious Discrimination and Remedies Bill has been placed on the internet today. It is a private member's Bill.

It mirrors the format of the sex and race discrimination legislation, making it an offence for employers to discriminate directly or indirectly against employees on grounds of religious belief or membership (or non-membership) of a religious group.

However, the Bill has no enforcement procedure. So employees cannot actually bring a claim anywhere to enforce their rights. Whoops!

Further, there is no definition section (eg 'employee' is undefined) and, despite the title, is completely silent about remedies.

The Bill can be seen here.

EC Temporary Workers Directive

Further to the bulletin on 18th February, the Temporary Workers Directive has now been adopted by the European Commission.

The Press Assocation has issued the following press release (below). As soon as the text of the Directive is available, I will issue a further bulletin summarising it.

More detail can be seen, for now, at the Europa website.

EC proposes new working rights for agency 'temps'

New working rights for agency "temps" are proposed by the European Commission.

The commission wants temporary workers to receive the same pay and conditions as regular company employees.

Brussels has already introduced new measures which give part-time workers a share of holiday entitlement and other agreements routinely offered to full-timers.

Now it wants to boost protection at work for a major sector - the temporary agency worker brought in to fill in for staff shortages for a few weeks or months.

The Commissioner responsible for employment and social affairs, Anna Dimantopoulou, says agency "temps" deserved the same rights as other workers.

She says: "This proposal not only seeks to create more jobs but also aims to provide better jobs for temporary agency workers through a basic minimum of protection across the EU."

She says the plans provided plenty of flexibility for national authorities to apply the rules in line with domestic practice.

The temporary agency work market has been growing steadily for years, with 80% of temporary agency workers in Europe employed in just four member States - Britain, Germany, France and the Netherlands.

Euro MPs have welcomed the move. Labour's Claude Moraes says it's time the rights of full-time and part-time workers were extended to the temporary agency sector.

The proposal now goes to the European Parliament and National Employment Ministers of the member states for consideration.

Data Protection Code: Part 1

Part 1 of the long-awaited Employment Practices Data Protection Code has now been issued. It deals with recruitment and selection, and can be seen here.

The main provisions are:

• the code is stated as covering employees, job applicants, agency workers, casual workers and contract workers (whether still working or not);
• it covers data such as salary, Emails, notes about the specific worker and application forms;
• guidance on when it is appropriate to store sensitive personal data (eg race, trade union membership);
• an 'easy to follow' checklist for employers to ensure they are complying with the DPA 1998 in connection with advertising, job applications, verification, short-listing, interviews and retention of records.

Any individual can formally request to see their records (insofar as they are covered by the DPA 1998). A fee of up to (and no more than) £10 is payable, and the employer must provide the information promptly (and, in any event, within no more than 40 calendar days after receipt of the fee).

Part 2 of the Code, dealing with employment records, will be published next month. Parts 3 (monitoring at work) and 4 (medical information) follow at monthly intervals thereafter.

Tories are a Workers' best friend

We may be seeing a change to the political agenda. According to a report in The Times, Conservative frontbencher, John Bercow, has urged the Conservatives to end hard opposition to workers' rights and establish a reputation for fairness as Labour develops its associations with big business.

Warning that the Tories should back tough action against employers who discriminate against women, the shadow chief secretary to the Treasury argued that "politically it makes more sense to do so". "After all there are more employees than there are employers", he is reported as saying.

To see the full article, click here.

FOR JOURNALISTS ONLY

This message is being sent to people who selected the
'journalist' category when they joined the list. If you have
received this in error, please use the link at the bottom of the
bulletin to change your details.

This message accompanies the 'Employees Entitled to Holiday Pay whilst on Long Term Sickleave' bulletin, which will follow immediately behind this Email

SUMMARY
Employment Appeal Tribunal says that employers must pay four weeks' holiday pay to employees on long term sickleave.

DETAIL
The Employment Appeal Tribunal has held that companies must pay four weeks' holiday pay to all employees on long-term sickleave, even where their rights under their contract of employment, and their entitlement to statutory sickpay, have run out.

Daniel Barnett, barrister at 2 Gray's Inn Square, says:

"This is an example of an unintended consequence of European legislation 'trumping' common sense. The Employment Appeal Tribunal's decision has unintended social, economic and employment consequences.

"Employers will no longer be able to keep long-term sick employees on their books, at least not without paying them four weeks' salary a year. This will result in otherwise unnecessary dismissals which, in turn, might result in employees losing their entitlements to Permanent Health Insurance (sometimes a perk of remaining employed by large companies when on long-term sick).

"Equally, some employees may feel pressured to return to work before they are well, because of a fear they will be dismissed.

"The government should amend the Working Time Regulations to remove this unintended anomaly."

Employees entitled to Holiday Pay whilst on Long Term Sickleave

The EAT has handed down its decision in Kigass Aero v Brown (and associated appeals), upholding the decision of the employment tribunal below (see bulletin dated 31/3/00).

On a proper construction of the Working Time Regulations 1988, employees continue to accrue entitlement to paid holiday whilst on long-term sickleave. Thus, even where their contractual sickpay and SSP entitlements have run out, they will be entitled to four weeks' paid holiday per annum during any long-term sickleave.

This decision means it may no longer be practical for employers to keep employees on long-term sickness absence (without pay), since they will be liable to pay four weeks' salary a year whilst the workers remain 'on the books'.

[Thanks to Navdeep Deol and Michael Stokes of Rowley Ashworth for sending me this transcript, which should be available soon on the EAT website]

Trade Union Recognition - Appropriate Bargaining Unit

The transcript in R v Central Arbitration Committee, ex p. Kwik-Fit Ltd has been released, being a judicial review of a decision of the CAC.

The case involves a determination of what is the 'appropriate bargaining unit' in an application for compulsory trade union recognition.

The union, and the CAC (who found for the union), argued that the CAC's obligation was to decide whether the bargaining unit proposed by the union was an 'appropriate bargaining unit'. Only if it was not appropriate should the CAC go on to consider the alternative bargaining unit proposed by the employer.

The employer argued that the CAC's statutory duty was to determine 'the' appropriate bargaining unit, i.e. it had to weigh up the suitability of different bargaining units and decide which was best. It was not entitled just to look at the union's proposal (and hold whether it was appropriate or not) before looking at any other proposals.

The Administrative Court held that the truth lay somewhere in between. The CAC had been wrong in just looking at the union's proposal and deciding whether it was 'appropriate'. If this was the correct approach, the statutory wording would have been clearer. Thus the decision of the CAC must be set aside.

However, it is wrong to say the CAC must choose the most appropriate bargaining unit which is compatible with fair management from the evidence before it - the CAC must, instead, have regard to the purpose of the application for recognition and base its decision as to the most appropriate unit on the location and nature of the workers seeking union recognition. As the court states, "it is obviously no answer to a claim for recognition in Bolton that there is a more appropriate bargaining unit in Liverpool."

[Thanks to John Bowers QC of Littleton Chambers, who successfully represented Kwik-Fit]

Rothschild v Ako - Issue Estoppel

The Court of Appeal's decision in Rothschild v Ako is now available. The decision was handed down on Friday, 1st March 2002.

Facts
Mrs Ako lodged an unfair dismissal and race discrimination claim against Rothschild. After seeking advice from the CRE, she realised a claim should also have been brought against a possible transferee under TUPE. She therefore checked that no IT3 had been lodged, and checked in an old law book in her library (the book dating from1980) that there was no rule prohibiting her from withdrawing and re-issuing her claim. She then wrote to the tribunal to withdraw her first claim and, within a week, issued a new claim against both Rothschild and the putative transferee.

During that week, the tribunal issued its standard order dismissing the claim against Rothschild on withdrawal by the Applicant.

Issue
The employment tribunal found the subsequent claim against Rothschild had been disposed of, and that the rules of issue estoppel prevented her from bringing a fresh claim. It relied on the well-known authority of Barber v Staffordshire Council, which provides that once a case has been dismissed on withdrawal, that is the end of the matter - it does not matter why the Applicant chose to withdraw the claim.

Decision
The Court of Appeal held that a tribunal is obliged to examine the factual matrix to decide whether the Applicant had genuinely intended to abandon the claim. If she had intended to abandon the claim, the matter ends under principles of issue estoppel (and the reason, eg being wrongly advised as to the law, is irrelevant).

However, in this case, Mrs Ako had not intended to abandon her claim. The position was similar to the recent case of Sajid v Sussex Muslim Society, where the Applicant expressly reserved the right in the IT1 to re-issue his breach of contract claim in the High Court.

Accordingly the ET's decision would be set aside, and Mrs Ako would be permitted to proceed with her claim against Rothschild.

For a copy of the judgment, click here.