Section 10 of the Employment Rights Act 1996 provides that the employment tribunal must dismiss a complaint of unfair dismissal if it is shown that the action complained of (ie dismissal) was taken for the purpose of safeguarding national security.
Mr B was a security guard with the BAA at one of its airport terminals. The Department for Transport informed BAA that it could not employ him on security grounds. BAA therefore dismissed him.
The employment tribunal held that the dismissal was for the purpose of national security, and therefore dismissed the claim.
The EAT (Burton P. presiding) held that the test is not so straightforward. It was incumbent on the tribunal to decide whether the employer acted reasonably in dismissing. The statute refers to "the action complained of", and the employer must establish that dismissal (contrasted with, for example, redeployment into another post) fell within the range of reasonable responses. Only if dismissal was a reasonable response will the tribunal be obliged to dismiss the unfair dismissal application (see paras. 38-40 of the decision).
B v BAA plc EAT 2005
Thursday, 26 May 2005
TUPE - Date of Transfer
The ECJ has provided its ruling in Celtec v Astley. The facts are set out below, reproduced from my bulletin dated 13th November 2004:
Facts
Prior to 1990, vocational training and enterprise activities were managed by the Department of Education. In 1989, the government announced the creation of Training and Enterprise Councils (known as TECs). Approximately 80 TECs were set up, using (in the main) the same premises, databases and staff as had been doing the job under the Department of Education. They took over the Department of Education's existing contracts with suppliers and other third parties.
This case was concerned with the North Wales TEC, which began operations in about September 1990. In common with the other TECs, it was a company limited by guarantee and was initially staffed by civil servants, previously working for the Department of Education, who were seconded out for a 3-year period to the TEC. The terms of secondment provided that they continued to be civil servants and that, at the end of the period, they could extend the period of secondment or return to normal civil service duties.
In September 1991 the government decided to end the secondments and arrange for staff to be directly employed by the TECs. Following a period of consultation, all staff were offered the opportunity to return to the civil service at the end of their secondment, or resign from the civil service and enter into contracts of employment with the TEC. Many employees, including the Respondents to this appeal, adopted the latter option. The three in question, who brought their claims as test cases, resigned and entered into new contracts in about October 1993 (although the process extended until 1996 for other employees).
If the TUPE transfer took place in September 1990, then "at the time of the transfer" (being the wording in ERA 1996, s218, dealing with continuity of employment) the employees were, and remained, employees of the Department of Employment. Thus s218 would not grant them continuity of employment.
If, however, the TUPE transfer was a gradual process occurring between September 1990 and October 1996 (as the staff transferred), then the employees would have retained continuity of employment for their years spent with the civil service.
Issues and Ruling.
Three issues were referred to the ECJ (I am paraphrasing the questions posed):
1.should the phrase "rights and obligations...existing on the date of a transfer", in the Acquired Rights Directive (which gave rise to TUPE and which had direct effect) be interpreted as meaning that there is a particular point in time at which the undertaking is deemed to have transferred? The ECJ has ruled that the use of the word 'date' (singular) in the Directive, combined with the need for legal certainty, means that the Claimants must be able to point to a specific date on which they say the transfer occurred. A transfer cannot occur over a period of time (see paras. 32-36). This leaves the status of reg. 3(4)(a) of TUPE, which provides that "a transfer...may be effected by a series of two or more transactions", somewhat unclear.
2.If so, how is that date to be ascertained when a transfer takes place as a series of transactions over a period of time? The ECJ completely fudged this issue, and provided a single meaningless Eurospeak sentence (para. 44) which will be of no help to tribunals or practitioners.
3.If not, how should the words 'on the date of a transfer' be interpreted? The ECJ did not need to address this question.
Astley and ors v Celtec Ltd CA 2002
Facts
Prior to 1990, vocational training and enterprise activities were managed by the Department of Education. In 1989, the government announced the creation of Training and Enterprise Councils (known as TECs). Approximately 80 TECs were set up, using (in the main) the same premises, databases and staff as had been doing the job under the Department of Education. They took over the Department of Education's existing contracts with suppliers and other third parties.
This case was concerned with the North Wales TEC, which began operations in about September 1990. In common with the other TECs, it was a company limited by guarantee and was initially staffed by civil servants, previously working for the Department of Education, who were seconded out for a 3-year period to the TEC. The terms of secondment provided that they continued to be civil servants and that, at the end of the period, they could extend the period of secondment or return to normal civil service duties.
In September 1991 the government decided to end the secondments and arrange for staff to be directly employed by the TECs. Following a period of consultation, all staff were offered the opportunity to return to the civil service at the end of their secondment, or resign from the civil service and enter into contracts of employment with the TEC. Many employees, including the Respondents to this appeal, adopted the latter option. The three in question, who brought their claims as test cases, resigned and entered into new contracts in about October 1993 (although the process extended until 1996 for other employees).
If the TUPE transfer took place in September 1990, then "at the time of the transfer" (being the wording in ERA 1996, s218, dealing with continuity of employment) the employees were, and remained, employees of the Department of Employment. Thus s218 would not grant them continuity of employment.
If, however, the TUPE transfer was a gradual process occurring between September 1990 and October 1996 (as the staff transferred), then the employees would have retained continuity of employment for their years spent with the civil service.
Issues and Ruling.
Three issues were referred to the ECJ (I am paraphrasing the questions posed):
1.should the phrase "rights and obligations...existing on the date of a transfer", in the Acquired Rights Directive (which gave rise to TUPE and which had direct effect) be interpreted as meaning that there is a particular point in time at which the undertaking is deemed to have transferred? The ECJ has ruled that the use of the word 'date' (singular) in the Directive, combined with the need for legal certainty, means that the Claimants must be able to point to a specific date on which they say the transfer occurred. A transfer cannot occur over a period of time (see paras. 32-36). This leaves the status of reg. 3(4)(a) of TUPE, which provides that "a transfer...may be effected by a series of two or more transactions", somewhat unclear.
2.If so, how is that date to be ascertained when a transfer takes place as a series of transactions over a period of time? The ECJ completely fudged this issue, and provided a single meaningless Eurospeak sentence (para. 44) which will be of no help to tribunals or practitioners.
3.If not, how should the words 'on the date of a transfer' be interpreted? The ECJ did not need to address this question.
Astley and ors v Celtec Ltd CA 2002
Wednesday, 18 May 2005
Inadequate Reasons Appeals
The Court of Appeal held, earlier this week, that the Burns v Consignia procedure adopted by the EAT is lawful, welcome and should not be interfered with by further appeals.
In Burns v Consignia, the EAT developed a procedure for asking tribunals to clarify their reasoning when appeals were brought on grounds of inadequate reasoning.
The Court of Appeal was asked to declare that procedure unlawful on the basis that there was no statutory jurisdiction; alternatively that the power should be exercised in rare circumstances only.
The Court of Appeal, instead, declared the procedure lawful (under each of the EAT's statutory powers, the ET's statutory duties to provide reasons, and as a matter of inherent jurisdiction outside the rules).
The Court of Appeal went on to hold that the Burns procedure can be used freely and is a matter of discretionary exercise of case management powers by the EAT.
Barke v SEETEC Business Technology Centre
In Burns v Consignia, the EAT developed a procedure for asking tribunals to clarify their reasoning when appeals were brought on grounds of inadequate reasoning.
The Court of Appeal was asked to declare that procedure unlawful on the basis that there was no statutory jurisdiction; alternatively that the power should be exercised in rare circumstances only.
The Court of Appeal, instead, declared the procedure lawful (under each of the EAT's statutory powers, the ET's statutory duties to provide reasons, and as a matter of inherent jurisdiction outside the rules).
The Court of Appeal went on to hold that the Burns procedure can be used freely and is a matter of discretionary exercise of case management powers by the EAT.
Barke v SEETEC Business Technology Centre
Friday, 13 May 2005
SOSR - Business Reorganisations
In Scott & Co v Richardson, the EAT has reminded tribunals of the low threshold for deciding whether an employer has 'some other substantial reason' for dismissing an employee
. Scott & Co was a firm of debt collectors. They wanted to reorganise their employees' contracts to introduce a shift system. This meant that employees could be required to knock at debtors' doors in the evenings (rather than during the day, which is less effective).
Mr Richardson refused to agree to the change to his contract. He said that he was willing to work evenings but (as previously) he wanted to be paid at overtime rather than normal rates. After seven months of trying to persuade him, he challenged Scott & Co to dismiss him or stop insisting on the changes. So Scott & Co dismissed him.
The employment tribunal held that the employer had not demonstrated 'some other substantial reason' for the dismissal, as Scott & Co had not demonstrated that the changes in shift patterns had discernible advantages to it.
Burton P. held that this was the wrong approach. The correct approach is whether the employer reasonably believed/concluded that the change to contract terms had advantages. It was not necessary to go a step further and prove that it did have those advantages. Provided the reason was not "whimsical, unworthy or trivial", then the employer will establish 'some other substantial reason'.
The EAT accordingly remitted the case to a different tribunal to decide whether the dismissal was fair under s98(4), which involves balancing the detriment to the employee of introducing the change against the detriment to the employer of not introducing the change.
Scott & Co. v Richardson
. Scott & Co was a firm of debt collectors. They wanted to reorganise their employees' contracts to introduce a shift system. This meant that employees could be required to knock at debtors' doors in the evenings (rather than during the day, which is less effective).
Mr Richardson refused to agree to the change to his contract. He said that he was willing to work evenings but (as previously) he wanted to be paid at overtime rather than normal rates. After seven months of trying to persuade him, he challenged Scott & Co to dismiss him or stop insisting on the changes. So Scott & Co dismissed him.
The employment tribunal held that the employer had not demonstrated 'some other substantial reason' for the dismissal, as Scott & Co had not demonstrated that the changes in shift patterns had discernible advantages to it.
Burton P. held that this was the wrong approach. The correct approach is whether the employer reasonably believed/concluded that the change to contract terms had advantages. It was not necessary to go a step further and prove that it did have those advantages. Provided the reason was not "whimsical, unworthy or trivial", then the employer will establish 'some other substantial reason'.
The EAT accordingly remitted the case to a different tribunal to decide whether the dismissal was fair under s98(4), which involves balancing the detriment to the employee of introducing the change against the detriment to the employer of not introducing the change.
Scott & Co. v Richardson
Equal Pay - Injury to Feelings
The EAT (Burton P. presiding) has handed down judgment holding that damages for non-pecuniary loss (i.e. injury to feelings, aggravated damages etc.) cannot be recovered in Equal Pay Act claims, unlike in Sex Discrimination Act claims.
The EAT, noting the absence of a specific provision allowing awards for injury to feelings in the Equal Pay Act 1970, emphasised that an Equal Pay claim is based on contract, whereas a discrimination claim is based on a statutory tort. Thus the quantification of damages follows a different approach.
City of Newcastle upon Tyne v Allen
The EAT, noting the absence of a specific provision allowing awards for injury to feelings in the Equal Pay Act 1970, emphasised that an Equal Pay claim is based on contract, whereas a discrimination claim is based on a statutory tort. Thus the quantification of damages follows a different approach.
City of Newcastle upon Tyne v Allen
ACAS Leaflets
Acas has updated a number of information leaflets, all available from its website. They are:
Acas 'What's New' page
- Communicating with your Employees
- Contracts of Employment
- Controlling Labour Turnover
- Dealing with Grievances
- Discipline at Work
- Induction Training
Acas 'What's New' page
Thursday, 12 May 2005
Late Response Forms
In a decision described by Burton P. as "a matter of some considerable importance", the EAT has given guidance on how ETs should deal with Response Forms which are lodged late.
In Blake Envelopes v Cromie, the Response Form was due to be served by midnight on 11th November (28 days after the Claim Form was sent out). It was faxed to the tribunal 44 minutes late. A letter two days later provided an explanation (apparently printing problems, which is marginally better than 'the dog ate it'!) as to why it was lodged just out of time. The letter requested a 44 minute extension of time for presenting the Response Form.
The tribunal rejected the application for an extension of time, on the grounds that the new rules (r. 4(4)) states that the request for an extension MUST be made within the 28 days.
Further, the tribunal did not actually issue default judgement (the rules say it MAY, not MUST, issue default judgment against a Respondent who does not serve a Response). Therefore the Respondent was unable to apply to set aside the default judgment.
The EAT held that it would be absurd (my word, not theirs) if an employer was left unable to defend a claim in these circumstances.
Burton P. held that it is open to a tribunal in these circumstances to review its decision not to allow the Respondent to take part in the proceedings, and as a concomitant part of that review, it can decide to admit the Response Form late (para 22).
Burton P. also gave guidance for the factors to take into account when deciding whether to admit the Response Form late (paras. 28-29) and, exercising the EAT's power to substitute a decision, ordered that the 44 minute late Response Form should be accepted.
Blake Envelopes v Cromie
In Blake Envelopes v Cromie, the Response Form was due to be served by midnight on 11th November (28 days after the Claim Form was sent out). It was faxed to the tribunal 44 minutes late. A letter two days later provided an explanation (apparently printing problems, which is marginally better than 'the dog ate it'!) as to why it was lodged just out of time. The letter requested a 44 minute extension of time for presenting the Response Form.
The tribunal rejected the application for an extension of time, on the grounds that the new rules (r. 4(4)) states that the request for an extension MUST be made within the 28 days.
Further, the tribunal did not actually issue default judgement (the rules say it MAY, not MUST, issue default judgment against a Respondent who does not serve a Response). Therefore the Respondent was unable to apply to set aside the default judgment.
The EAT held that it would be absurd (my word, not theirs) if an employer was left unable to defend a claim in these circumstances.
Burton P. held that it is open to a tribunal in these circumstances to review its decision not to allow the Respondent to take part in the proceedings, and as a concomitant part of that review, it can decide to admit the Response Form late (para 22).
Burton P. also gave guidance for the factors to take into account when deciding whether to admit the Response Form late (paras. 28-29) and, exercising the EAT's power to substitute a decision, ordered that the 44 minute late Response Form should be accepted.
Blake Envelopes v Cromie
Monday, 9 May 2005
Compromise Agreements
The Court of Appeal has overturned the EAT's decision in Hinton v University of East London, holding that it is necessary for a compromise agreement to expressly specify the cause of action being settled in order to be effective.
Mr Hinton had raised (amongst other things) a claim under s47B of the Employment Rights Act 1996, claiming he was subjected to a detriment for making a protected disclosure.
He entered into a compromise agreement. The agreement started with a recital stating that he was agreeing to compromise all his claims. It then went on to list various causes of action but, probably through error in the drafting, did not refer expressly to a s47B claim.
The employment tribunal held that his s47B claim had not been compromised under a valid compromise agreement, so he could bring his claim. The EAT disagreed, holding that the recital at the beginning covered all claims, and the list was simply illustrative rather than exhaustive.
The Court of Appeal reinstated the ET's decision. Mummery LJ (giving the leading judgment) stated that a compromise agreement must specify the particular statutory claim being compromised or - at the very least - the factual basis of the claim (para. 22). A general 'catch-all' recital was insufficient as it did not make it clear what the "particular proceedings" (the wording from s203) being compromised were.
Hinton v University of East London CA 2005
Mr Hinton had raised (amongst other things) a claim under s47B of the Employment Rights Act 1996, claiming he was subjected to a detriment for making a protected disclosure.
He entered into a compromise agreement. The agreement started with a recital stating that he was agreeing to compromise all his claims. It then went on to list various causes of action but, probably through error in the drafting, did not refer expressly to a s47B claim.
The employment tribunal held that his s47B claim had not been compromised under a valid compromise agreement, so he could bring his claim. The EAT disagreed, holding that the recital at the beginning covered all claims, and the list was simply illustrative rather than exhaustive.
The Court of Appeal reinstated the ET's decision. Mummery LJ (giving the leading judgment) stated that a compromise agreement must specify the particular statutory claim being compromised or - at the very least - the factual basis of the claim (para. 22). A general 'catch-all' recital was insufficient as it did not make it clear what the "particular proceedings" (the wording from s203) being compromised were.
Hinton v University of East London CA 2005
Wednesday, 4 May 2005
Agency Workers
Yet another case on agency workers...
The Court of Appeal has, today, upheld a tribunal's findings that an agency worker was not employed by the agency.
Mr Bunce worked through an employment agency called Skyblue. The contract stated he was not an employee, and that there was no mutuality of obligation. The tribunal found the lack of mutuality of obligation was fatal and, even if not, the agency did not exert sufficient day-to-day control to make him an employee.
This finding was attacked by Mr Bunce on two grounds.
First, he argued that there was a series of short-term contracts, even if there was no mutuality of obligation under an overriding 'umbrella' contract. The Court of Appeal held that there was, in theory, the possibility of a series of separate contracts which, taken together, might give rise to sufficient continuity of employment to bring a claim. But where the express contract contained sufficient detail to set out the obligations for the worker (eg pay rate, obligation to follow instructions from the end-user client etc.), then there was no room to imply a series of second, additional, contracts (paras. 21-24).
Second, he argued that the fact that the contract provided that he should follow the instructions of the end-user was, in itself, sufficient control to give rise to an employment relationship. He argued that the agency had day-to-day control, but delegated it to the end-user. The Court of Appeal rejected this argument, holding that the correct approach is to look at the amount of day-to-day control the agency exerts in practice rather than in theory (paras. 27-29)
Accordingly, the Court of Appeal upheld the finding that Mr Bunce was not the employee of the agency.
Thanks to John Bowers QC of Littleton Chambers, who successfully represented the agency, for notifying me of this decision.
Bunce v Postworth Ltd t-a Skyblue CA 2005
The Court of Appeal has, today, upheld a tribunal's findings that an agency worker was not employed by the agency.
Mr Bunce worked through an employment agency called Skyblue. The contract stated he was not an employee, and that there was no mutuality of obligation. The tribunal found the lack of mutuality of obligation was fatal and, even if not, the agency did not exert sufficient day-to-day control to make him an employee.
This finding was attacked by Mr Bunce on two grounds.
First, he argued that there was a series of short-term contracts, even if there was no mutuality of obligation under an overriding 'umbrella' contract. The Court of Appeal held that there was, in theory, the possibility of a series of separate contracts which, taken together, might give rise to sufficient continuity of employment to bring a claim. But where the express contract contained sufficient detail to set out the obligations for the worker (eg pay rate, obligation to follow instructions from the end-user client etc.), then there was no room to imply a series of second, additional, contracts (paras. 21-24).
Second, he argued that the fact that the contract provided that he should follow the instructions of the end-user was, in itself, sufficient control to give rise to an employment relationship. He argued that the agency had day-to-day control, but delegated it to the end-user. The Court of Appeal rejected this argument, holding that the correct approach is to look at the amount of day-to-day control the agency exerts in practice rather than in theory (paras. 27-29)
Accordingly, the Court of Appeal upheld the finding that Mr Bunce was not the employee of the agency.
Thanks to John Bowers QC of Littleton Chambers, who successfully represented the agency, for notifying me of this decision.
Bunce v Postworth Ltd t-a Skyblue CA 2005
Tuesday, 3 May 2005
Tribunal Claim Forms
Under the new Procedural Rules, employment tribunal Claim Forms must contain certain matters, inlcuding "details of the Claim".
The EAT has held that it is sufficient to identify the statutory right that it is alleged has been breached (in that case, the Claim Form just said 'flexible working' but provided no other relevant details).
HHJ Prophet, overturning the tribunal's refusal to admit the claim, held that the test is "...whether it can be discerned from the claim as presented that the claimant is complaining of an alleged breach of an employment rights which falls within the jurisdiction of the Employment Tribunal" (para. 15).
He went on to make it clear that 'details of the claim' was not the same thing as 'particulars of the claim', and if a chairman thought that the claim was insufficiently particularised, the correct approach is to order further particulars rather than refuse to admit the claim.
Grimmer v KML Cityhopper
The EAT has held that it is sufficient to identify the statutory right that it is alleged has been breached (in that case, the Claim Form just said 'flexible working' but provided no other relevant details).
HHJ Prophet, overturning the tribunal's refusal to admit the claim, held that the test is "...whether it can be discerned from the claim as presented that the claimant is complaining of an alleged breach of an employment rights which falls within the jurisdiction of the Employment Tribunal" (para. 15).
He went on to make it clear that 'details of the claim' was not the same thing as 'particulars of the claim', and if a chairman thought that the claim was insufficiently particularised, the correct approach is to order further particulars rather than refuse to admit the claim.
Grimmer v KML Cityhopper
Equal Pay - Michelle Alabaster v DWP
The Court of Appeal has, this morning, handed down its decision in Alabaster v DWP.
Last year in this case, the ECJ held that Article 141 required any pay rise awarded to a pregnant woman between the beginning of the pay reference period and the end of maternity leave should be included when the amount of maternity leave is calculated - whether or not the payrise is backdated to the period covered by the reference pay.
The Court of Appeal has now concluded the drama by stating that s1 of the Equal Pay Act 1970, insofar as it requires a pregnant woman to cite a male comparator, should be disapplied (meaning that no comparator is needed if it can be shown that the reason for not paying the pay increase is because of the woman's pregnancy). This adopts the House of Lords's approach in Webb v EMO Cargo.
The Court of Appeal declined to make any ruling, since it became unnecessary once the need for a comparator was disapplied and Mrs Alabaster could win her claim under the EqPA, on whether the 3 month time limit for claiming unlawful deductions under the Employment Rights Act 1996 offended EU law.
As one would expect, this is a complicated decision. But after eight years, and a trip to the ECJ, Mrs Alabaster has recovered her £204.53. It's always nice for the DWP to maintain its firm grasp of the concepts of proportionality.
Last year in this case, the ECJ held that Article 141 required any pay rise awarded to a pregnant woman between the beginning of the pay reference period and the end of maternity leave should be included when the amount of maternity leave is calculated - whether or not the payrise is backdated to the period covered by the reference pay.
The Court of Appeal has now concluded the drama by stating that s1 of the Equal Pay Act 1970, insofar as it requires a pregnant woman to cite a male comparator, should be disapplied (meaning that no comparator is needed if it can be shown that the reason for not paying the pay increase is because of the woman's pregnancy). This adopts the House of Lords's approach in Webb v EMO Cargo.
The Court of Appeal declined to make any ruling, since it became unnecessary once the need for a comparator was disapplied and Mrs Alabaster could win her claim under the EqPA, on whether the 3 month time limit for claiming unlawful deductions under the Employment Rights Act 1996 offended EU law.
As one would expect, this is a complicated decision. But after eight years, and a trip to the ECJ, Mrs Alabaster has recovered her £204.53. It's always nice for the DWP to maintain its firm grasp of the concepts of proportionality.
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