Equal Pay Claims in the Civil Courts

Judgment was given this morning in the High Court case of Abdulla v Birmingham City Council, in which 174 former employees of the Council assert that the failure to give them pay equal to various predominantly male groups of staff comprised a breach of their contracts of employment.

The defendant had applied to strike out the claims, on the basis that the civil courts do not have or should not exercise jurisdiction in cases involving equal pay and the equality clause - particularly where the 6 month time limit for bringing claims in Employment Tribunal had expired.

Colin Edelman QC, sitting as a Deputy Judge of the Queen's Bench Division, dismissed the application. He held that the High Court did have jurisdiction and declined to exercise any discretion to strike out claims which had been brought outside the 6 month time limit for Tribunal claims but within the 6 year limitation period for breach of contract claims.

The council was refused permission to appeal, but is entitled to renew its application to the Court of Appeal.

The judgment will be available shortly at http://www.bailii.org/ew/cases/EWHC/QB/2010/

Costs in ETs

[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

The EAT (Underhill P) has handed down its decision in Yerrakalva v Barnsley MBC, which is authority for the proposition that while there does not have to be a precise causal relationship between unreasonable conduct and the costs claimed, any award of costs must, at least broadly, reflect the effect of the conduct in question.

Following a part-heard PHR the claimant withdrew her claim. The ET found that she had lied during the PHR on two occasions and on the basis of those lies awarded costs against her.

The EAT, allowing the appeal, held that although such behaviour was unreasonable conduct, it was necessary for the Judge to take into account "the nature, gravity and effect" of that conduct in deciding:

1. whether to make an award; and if so
2. what the amount should be (per Mummery LJ in McPherson v BNP Paribas [2004] ICR 1398), which the ET failed to do.

The EAT distinguished the line of cases that followed Daleside Nursing Home Ltd. v Matthew (UKEAT/0519/08) because the effect of the lies in this case had not been to establish that the claim was misconceived from the start.

Obiter: there should be no general rule to the effect that withdrawal of a claim constitutes, or is tantamount to, an acknowledgment that the claim was misconceived.

Annual Compensation Limit Increases

From 1st February 2011, the new maximum compensatory award for unfair dismissal increases to £68,400 (currently £65,300). The new maximum for a week's pay increases from £380 to £400. Thus the maximum unfair dismissal award (basic plus compensatory) is £80,400.

http://www.legislation.gov.uk/uksi/2010/2926/schedules/made

Bonuses and Pay in Lieu of Notice

[Thanks to Lionel Stride of Temple Garden Chambers for preparing this case summary]

The Court of Appeal has handed down its decision in Locke v Candy & Candy, upholding a decision that, where a bonus clause stipulated that an employee had to be "employed by the company in order to receive the bonus", he was not entitled to any bonus when summarily dismissed under the terms of a PILON (payment in lieu of notice) clause 10 days before it became due.

The Claimant, having been given 6 months payment in lieu of notice in accordance with the notice provisions in his contract, sought to recover a guaranteed annual bonus of £160,000, which only became payable after 12 months employment. He had been dismissed with immediate effect around 10 days short of 12 months under a laconic PILON clause permitting the Defendant simply "to make a payment in lieu of notice". The issue was whether this payment should include a bonus that he would still have received had he been asked to work his notice and/or put on gardening leave rather than being summarily dismissed. By a majority of 2:1 (with Jackson LJ dissenting), the CA held that the contract had to be constructed 'holistically'. Accordingly, as the PILON clause dealt only with termination and not quantification, the bonus clause (and its restricted operation) had to be applied when calculating the value of the payment.

Reading Witness Statement Aloud in Tribunals

The President of the Employment Appeal Tribunal, Underhill P., has given guidance on the practice of reading witness statements aloud in tribunals.

The full guidance (which is expressly stated to be guidance, not mandatory), can be read at paragraph 16 here. In summary, he states:-

• very often, reading witness statements aloud "achieves nothing of value" and "wastes the time of the Tribunal and the parties"
  
  
• but sometimes, it might be helpful to read a particular statement – or section of a statement – aloud if it requires further elucidation. Examples are technical passages in statements, or statements drafted by unrepresented litigants which require clarifying
  
  
• if both parties are represented, the lawyers should normally be able to agree whether to take statements as read – albeit it ultimately remains a decision for the tribunal.

He also suggests that those regions where reading statements aloud is standard practice should reconsider whether it remains desirable to keep that practice as standard.

Minimum Wage and ‘On Call’ Time

[Thanks to Laura Daniels, pupil at 3 Serjeants' Inn, for preparing this case summary]

The EAT gave its decision in South Manchester Abbeyfield Society v Hopkins & Ors regarding payment for time spent on call.

The Appellants employed the Respondents as housekeepers in sheltered accommodation. The housekeepers were required to spend time on call, during which they were provided with private accommodation to use.

Reversing the decision of the ET, the EAT held that not all of the hours spent on call could be taken into account for the purposes of a claim in contract under the National Minimum Wage Act; under the National Minimum Wage Regulations 15(1A) and 16(1A) the Respondents could only claim for such hours that they were awake for the purpose of working. However, a claim might have existed - were it not outside the limitation period - in respect of statutory compensation for breach of rest-break or maximum working week regulations.

The case was remitted to the ET for a freshly constituted panel to consider how long the Respondents spent awake for the purpose of working, to decide whether a payment was due under the national minimum wage.

The EAT also held that the ET had exceeded its jurisdiction by awarding £25,000 net of tax and NI, as its total jurisdiction was limited to £25,000.

Strike Outs

[Thanks to James Medhurst of Employment Law Advocates for preparing this case summary]

The decision of the EAT in Balls v Downham Market School is an interesting case about strike-out. The Claimant's wife was also employed by the Respondent. She pleaded guilty to stealing from it. The police did not bring any charges against the Claimant, but he was also dismissed on suspicion of complicity with the crimes of his wife.

Unfair dismissal claims were brought by both the Claimant and his wife, and were ordered to be heard together by the tribunal against the wishes of the Claimant. Both cases were struck out but the appeal of the claimant was allowed because the tribunal had treated the claims in the same way although their circumstances were different. It had allowed the merits of the wife's case to cloud its view of the Claimant's case.

On appeal, the EAT stated that, in considering a strike-out application, a tribunal should have regard to documents in the tribunal file even where specific matters are not raised verbally. In this case, the opposition of the Claimant to joining the claims would have alerted the tribunal to the fact that they could not be treated as one and the same.

An appeal was also allowed against a finding that the claimant had failed to pursue his claim where the claim had been stayed and he had not responded to "a number of singularly unhelpful, apparently enigmatic letters from the Tribunal which he was then criticised for not dealing with" (para 60, where the EAT is deeply critical of the tribunal). It was held that it should have been obvious that he was asking for the stay to be lifted.

Causation in Whistleblowing Cases

[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

The EAT has handed down its decision in Fecitt & ors v NHS Manchester, dealing with causation in whistleblowing cases.

The Claimants made protected disclosures which led to a breakdown of relationships with their colleagues. As a result of the "dysfunctional situation" at work because of the breakdown of relations, the Claimants were subjected to significant detriments by their coworkers, two of them were transferred out by managers and one had all working hours withdrawn (thus was effectively dismissed).

The employment tribunal held that there must be a direct causal connection between the protected disclosures and the detriments. They found that the detriments were a result of the dysfunctional situation rather than "on the ground that" (s.47B ERA) the Claimants had made protected disclosures. In other words, they viewed the breakdown of relations as an intervening act which broke the chain of causation.

The EAT, allowing the appeal, held that once less favourable treatment amounting to a detriment has been shown to have occurred following a protected disclosure, the employer has to prove that the treatment was "in no sense whatsoever on the ground of the protected disclosure", ie a more favourable approach to causation for employees.

Agency Worker not 'Employee'

[Thanks to Emma Price of Temple Garden Chambers for preparing this case summary]

The Court of Appeal has handed down its Judgment in the case of Tilson v Alstom Transport, which is authority for the proposition that a significant degree of integration of an agency worker into an organisation is not inconsistent with an agency relationship in which there is no contract between worker and end user.

The Court of Appeal also held that:

• the need to apply to a line manager before taking annual leave is not sufficient to justify the implication of a contract;
  
• there is no need to imply a contract between the agency worker and end user where there has been a breach of a clause of the contract between the agency and a third party providing services to the end user that relates to the agency worker;
  
• where the parties would have acted in exactly the same way if there had been no contract, that is fatal to the implication of a contract, The Aramis [1989] 1 Lloyd's Re 213 applied and, on the facts, the agency worker had declined to enter into a contractual working relationship with the end user.

Fixed Share Equity Partner is not an 'employee'

[Thanks to Rad Kohanzad, pupil at Old Square Chambers, for preparing this case summary]

In Tiffin v Lester Aldridge LLP, the Claimant was a fixed share partner within an LLP. When compared to the Equity Partners there was a substantial disparity between what the Claimant earned, the profits he received, his financial contribution, his involvement in the management of the LLP, and his voting rights. Dspite these differences, the EAT held that the ET had not erred in finding that the Claimant was a partner and not an employee.

Silber J stated that, there is no statutory provision or authority which states that for a person to be a partner s/he has to have a certain minimum number or certain minimum types of rights to vote or to participate in management decisions. Nor are there any which specify that the share of profit of a person or his or her contribution must reach a certain level before s/he can be regarded as a partner.

The fact that the Claimant had those rights and duties as well as a number of others, particularly the entitlement to a residue of the firm if it was wound up, meant that there was enough evidence for the ET to arrive at the conclusion it did and their decision could not be considered to be perverse.

Correction: Government abandons Socio-Economic Duty

Correction: A number of very worthy people have pointed out the announcement related to the socio-ecoomic duty on public authorities, not the equality duty. Sorry for the error.

The government is dropping the proposed socio-economic duty on public sector bodies, which would have required all public sector bodies to consider tackling wide socio-economic problems whenever taking an important decision.

More details on the BBC website.

Government abandons Equality Duty

The government is dropping the proposed Equality Duty on public sector bodies, which would have required (amongst other things) public sector employers to publish workforce data concerning the six core protected characterists.

This controversial element in the Equality Act 2010 was originally intended by the previous government to be implemented in April 2011, but plans were suspended pending a decision by the government on whether it would be implemented at all. Theresa May will announce later today that it will not be brought into force.

More details on the BBC website.

City Team Moves

[Thanks to Dr John McMullen of Short Richardson & Forth LLP for preparing this case summary]

The High Court has handed down its decision in Lonmar Global Risks Limited v West and Others

Hickinbottom J considered a claim for breach of contract and fiduciary duty against a team of employees formerly employed by Global Risks and for inducement of breach of contract and conspiracy against Tyser, a direct competitor of Global Risks and the new employer of Global Risks team.

Each of the employees were alleged to have solicited clients and other employees away from Global Risks whilst still employed by it. But the case illustrates the rule that many cases are fact sensitive. There were some breaches of enforceable restrictive covenants but no loss could be proved. Nor were the employees liable for breach of contract or fiduciary duty in failing to inform the company of any alleged wrongdoing or to inform the company of an impending team departure.

Unless an employee is a fiduciary (such as a director or senior manager) there is no duty to report one's own misconduct or of fellow employees. A fiduciary duty did not arise from the relationship of employer and employee per se. Finally there was no evidence of inducement of breach of contract by the new employer nor of conspiracy between the new employer and the departing team. [2010] EWHC 2878.

Discrimination: Cost As Justification

[Thanks to Ed McFarlane of EEF for preparing this case summary]

The EAT (Underhill P) has handed down its decision in Woodcock v Cumbria Primary Care NHS Trust, which challenges the orthodox view that an employer is not entitled to rely on cost alone when justifying discrimination.

Whilst the EAT emphasized that it was not departing from previous authorities in this area, it cast doubt on the "current orthodoxy" of the Cross v BA line of authority for the "cost plus other factor" approach to justification, suggesting that an employer can have a legitimate interest in considering cost alone, on the basis that if the cost of avoiding or rectifying a discriminatory impact would be disproportionately high, there would be scope for considering the proportionality of the measures (para. 32). The EAT also noted that the "cost plus" approach tended to lead Tribunals and parties into "artificial game-playing" of "find the other factor".

The Claimant was unfairly dismissed with notice with dismissal taking effect before a birthday triggered costly early retirement rights. On the facts, the Tribunal had correctly applied the "costs plus" test to the age discrimination, and the Claimant's appeal failed.

Serial litigants at risk of paying costs

The EAT has dismissed four appeals by alleged serial litigant John Berry.

Mr Berry was the subject of a fairly damning article in The Times earlier this year. He is in his 50s, and apparently scours the internet for job adverts calling for a 'recent school leaver' or suchlike, brings an age discrimination claim and - in the vast majority of cases - the employer settles for a few thousand pounds to avoid litigation.

Underhill P, sitting in the EAT, has dismissed four appeals by Mr Berry. Whilst making it clear that he was not in a position to assess Mr Berry's motivation in bringing his claims (Mr Berry not having attended the hearing), he stated at paragraph 29 that - in general - those who seek to exploit discrimination legislation for financial gain are liable to find themselves facing a liability for costs. This is a useful decision for anybody facing claims from Claimants who appear to be serial litigants.

Redundancy, and Discrimination Burden of Proof

[Thanks to Sarah Russell, paralegal at Pattinson & Brewer, for preparing this case summary]

The case of Hammonds LLP v C Mwitta is authority for the proposition that an otherwise fair dismissal is not rendered unfair by reason of the dismissal having taken place within the protected period for consultation in breach of s. 188 TULR(C)A. s.188(8) makes it clear that it does not confer any rights on the employee other than those provided in sections 189 to 192.

The EAT (Slade J) reiterated that the possibility that a respondent "could have" committed an act of discrimination is insufficient to establish a prima facie case so as to move the burden of proof to the respondent for the purposes of s. 54A of the RRA 1976 (Madarassy v Nomura International Plc [2007] ICR 867). The ET must find facts from which they could conclude that there had been discrimination on grounds of race, not there could have been. The EAT emphasised that the absence of an explanation for differential treatment may not be relied upon to establish the prima facie case.

The finding of race discrimination was set aside and the claim remitted for rehearing before a different panel.

Consultation Issue Referred to ECJ

[Thanks to Anna Thomas of Devereux Chambers for preparing this case summary]

The Court of Appeal in USA v Nolan has unanimously referred a point of general importance in industrial practice to the Court of Justice of European Union: when exactly does the employer's obligation to consult arise when carrying out collective redundancies? Is the point at which the obligation to consult arises before or after a strategic or commercial decision that will lead to collective redundancies?

In Nolan, the striking facts were:

• a decision to close an army base was taken in March 2006 by the Secretary of the US Army;
  
• the workforce were informed of the closure on 24 April; and consultation started on 5 June.

The Employment Tribunal found USA failed to engage in any meaningful consultation and made a protective award. The EAT upheld the protective award on this point.

S188 TULRA 1992 requires consultation when the employer is "proposing" to dismiss an employee. The Directive pursuant to which the 1992 Act was made requires consultation when the employer is "contemplating" redundancies. The EAT in UK Coal v NUM found that a duty arises to consult about reasons where closure and dismissals are inextricably linked. The ECJ case of Akavan v Fujitsi suggests a narrower interpretation - that the duty may only arise once the crucial operational decision has been taken. As things stand, the timing and scope of the obligation is not clear. Watch this space!

Incorporation of Collective Agreements

[Thanks to Kathleen Donnelly of Henderson Chambers for providing this case summary]

The Court of Appeal yesterday handed down its judgment in Malone and others v British Airways Plc, dismissing the individuals' appeal from the High Court's decision this February.

BA had unilaterally reduced crew complements on its aircraft below levels which had been agreed between BA and the union. The cabin crew claimed that the collective agreement had been incorporated into their individual contracts of employment, but BA argued that the provision in question was a collective provision only.

In a finely balanced judgment, the Court of Appeal held that although the particular provision impacted on the working conditions of the cabin crews (and was in that respect "apt for incorporation"), the "disastrous consequences" for the business if the provision were to be individually enforceable, drove the conclusion that the parties could not have intended such a consequence.

The CA largely decided the case on the hypothetical possibility of an individual or small group of cabin crew members bringing a flight to a halt by refusing to work under complement, which it regarded as "so serious as to be unthinkable".

It was accordingly held that the provision was intended as an undertaking towards its cabin crew employees collectively, binding only in honour.

TUPE

[Thanks to Dr John McMullen of Short Richardson & Forth LLP for providing this case summary]

The European Court has handed down its decision in Albron Catering which is authority for the proposition that the Acquired Rights Directive applies when the ownership of an undertaking is transferred by a group company, even where the employees affected are employed by another group company, provided they are assigned permanently to the undertaking being transferred.

In this case, all employees of the Heineken Group were employed by Heineken Nederlands Beheer BV. Seventy workers, including Mr Roest, however, actually worked in the catering department of Heinken Nederland BV, which catered for Heineken's staff in its various sites.

These catering activities were outsourced to Albron. The Dutch law states that an employee must be employed by the transferor for the rules on workers' acquired rights to apply (as is, interpreted literally, the case under TUPE in the UK).

Applying a purposive approach however the Court decided that the ARD provides protection to such employees because it is possible to regard the word "transferor" as being the group operating company to which the employees were assigned on a permanent basis irrespective of whether there is a contract of employment between the transferor and the employees concerned.

Compromise Agreements under the Equality Act

Everybody's talking about it, so I thought a bulletin might be useful.

On a literal interpretation of s147(5)(d) of the Equality Act 2010, it seems that it is impossible for a solicitor to sign off on a Compromise Agreement so as to settle discrimination claims, meaning that settlements must all go through Acas. Undoubtedly a drafting error, but that's what it seems to say.

So, what to do? The Law Society has asked the Home Secretary and the Government Equalities Office to look into the problem as a matter of urgency- see their practice note. Robin Allen QC of Cloisters has set out his views in a superbly argued briefing note as to why, in fact, s147 doesn't prohibit compromise agreements. But he recognises only a court can provide an authoritative determination.

The best summary of the different views (including my own) is here.

Parties Not Entitled to Insist on Tribunal Region

[Thanks to James Medhurst of Employment Law Advocates for providing this case summary]

The EAT (Underhill P) has handed down its decision in Faleye v UKME, which is authority for the proposition that there is no right for a claimant in the employment tribunal to have his or her case managed in the tribunal region which covers his or her place of work. Transfers between regions are not governed by the Employment Tribunal Rules and can be made for any reason that seems good to Regional Employment Judges, subject only to any question of the transfer giving rise to injustice.

Injustice can arise where the tribunal office is remote from where one or more of the parties is based but there was no injustice in this case, which concerned a transfer from London South to London Central. Moreover, the Regional Judge was entitled to take into account the special expertise of the London Central tribunal in state immunity, an issue which arose in only one of the four joined cases.

Redundancy Selection

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT (HHJ Ansell) has handed down its decision in County Print v Page, which is authority for the proposition that:

(i) fair consultation in a redundancy exercise involves giving an employee an explanation for his scoring and a meaningful chance to comment on the scores.

The EAT took an opportunity to review authorities in this area, and, whilst cautioning against an impermissible "microscopic analysis" of scoring by tribunals, indicated that, particularly with subjective criteria, employees should have sufficient information to understand their scores and an opportunity to challenge them.

(ii) Employers seeking to run a Polkey chance of dismissal in any event argument under Software 2000 must rely on "cogent evidence", rather than simply arguing that there was a percentage chance of dismissal. On the facts of this case, the EAT observed that it was "completely fallacious" to say that as the Claimant was in a pool of three, there was a one-in-three chance of dismissal, even on similar scores.

Reasonableness of Sanction

[Thanks to Louise Jones of Temple Garden Chambers for providing this case summary]

The EAT (HHJ Peter Clark) has handed down judgment in Weston Recovery Services v Fisher, which considered the circumstances where dismissal for conduct not amounting to gross misconduct could be fair.

The employment tribunal had found that the Claimant's dismissal was unfair, on the basis that the relevant conduct (returning a vehicle in an unsafe condition) was not gross misconduct. The EAT did not interfere with the finding of fact that the conduct was not gross misconduct, but found as a matter of law, in line with s98(4) ERA, that the dismissal was fair: the employer passed the well-known BHS v Burchell test, had followed a fair procedure and imposed a sanction, dismissal, which fell within the range of reasonable responses. However, applying the tribunal's finding of fact, the Claimant was entitled to damages for wrongful dismissal, as the employer had not been entitled to dismiss the Claimant summarily.

Unfair Dismissal Qualifying Period may increase to two years

It leaked at the weekend, and was confirmed this morning by Lord Young on Radio 4's Today programme. The government is actively considering increasing the qualifying period for unfair dismissal from one year to two years. The timetable for a decision has not yet been announced, and it is likely there will be a consultation period (about this, and other employment law issues) first.

If the change occurs, it is moderately good news for business, but bad news for employees. In theory, employers would have an extra year to dismiss unreasonably - but they could still face allegations of discrimination (or unfair dismissal claims where no qualifying period is required, ie whistleblowing and certain health & safety, maternity and trade union related dismissals). Since such claims tend to be more expensive to defend than 'ordinary' unfair dismissal claims, it is unclear whether employers will find this proposal an entirely favourable change.

No Act of Parliament is required to bring in any change in qualifying periods - simply an Order by Ed Davey, the Minister for Employment Relations under s209 ERA 1996.

The length of service needed to qualify for unfair dismissal rights has been changed from time to time. It started in 1971 as six months. It was increased in 1980 to one year (two years for small firms of 20 or less employees) and to two years (for employees of any employer regardless of size) in 1985. In June 1999 it was reduced back to one year.

Also in June 1999, the House of Lords held by a 3:2 majority in R v Secretary of State for Employment, ex p Seymour-Smith that the (then) two year qualifying period for unfair dismissal was potentially discriminatory against women, as women were statistically less likely than men to accrue two years' employment. However, they also held that the Secretary of State for Employment could justify the social policy behind the two-year threshold, namely opening opportunities in the labour market, which meant the two year qualifying period was permitted to stand. It is likely a similar result would occur today if the increase to two years was challenged.

Supreme Court: Dismissal by Letter is Effective when employee reads it

The Supreme Court has, this morning, handed down its judgment in Gisada Syf v Barratt, dismissing the appeal from the Court of Appeal's decision.

Barratt dismissed Mrs Syf in a letter, delivered by recorded delivery and signed for by her son, on 30th November 2006. She was expecting the decision letter to arrive, but had to be away for a few days as her sister was giving birth. She did not open the letter, and learn about the decision until 4th December. She presented an unfair dismissal claim on 2nd March. If the effective date of termination was 30th November, her unfair dismissal claim was out of time. If it was 4th December, her unfair dismissal claim was presented within time.

The Supreme Court held that the effective date of termination was 4th December, ie when she actually read the letter. It held that she should not be criticised for wanting the letter to remain at home unopened, instead of asking her son to read to her, as its contents were private. As she neither knew of the decision until 4th December, nor had deliberately failed to open the letter or gone away to avoid reading it, then the effective date of termination would be the date she actually learned of the decision to dismiss. The Supreme Court stated that, on policy grounds, it was desirable to interpret the time limit legislation in a way favourable to the employee, and that strict contractual laws concerning termination of contracts should not displace the statutory framework.

Accordingly Mrs Syf's claim was presented within time.

TUPE: Failure to Inform and Consult

The EAT has handed down its decision in Todd v Care Concern, in which the EAT held that an award of 13 weeks' pay should NOT be the starting point for failure to inform and consult where the employer has done something (albeit not everything) to comply with the statutory obligations.

In this case, the employer gave some information the transferring employees, but not enough. It also failed to elect employee representatives. Underhill P, giving judgment, distinguished Susie Radin (see the line of cases), stating that the 13 week award should only be the starting point if there has been a complete failure to engage in the information/consultation process (para 29).

The case also held that the obligation to inform is engaged even where the transferor does not envisage any 'measures' will be taken.

Compulsory Retirement and Age Discrimination

An important ECJ judgment on compulsory retirement has been handed down today.

In Rosenbladt v Oellerking Gebaudereinigungsges mBh, the ECJ held that a compulsory retirement age of 65 in a contract of employment - whilst prima facie discriminatory on grounds of age - is justified if the following conditions are met:

• the contract (ie the retirement age) has been collectively negotiated with a union;
  
• the employee will receive a pension (on the facts, a state pension, but presumably an occupational pension will do when the state pension age rises) so that they have replacement income; and,
  
• compulsory retirement has been in widespread use in the relevant country for a long time without having had any effect on the levels of employment.

This has massive ramifications for employers seeking to justify a compulsory retirement age after the default retirement age is abolished in October 2011. However, be aware that UK tribunals have been reluctant to date (at least in those cases I am aware of) to follow the liberal approach of the ECJ when it comes to justifying age discrimination.

The relevant sections of the judgment appear at paragraphs 58-69.

Note that another ECJ judgment on age discrimination has also been handed down today (Anderson v Region Syddenmark), which is concerned with severance payments to older workers. I haven't had time to read it - if anyone fancies summarising it, please feel free.

Equality Act 2010 - Codes of Practice

The EHRC's Codes of Practice on the Equality Act 2010 were published and laid before parliament yesterday.

They are available on the EHRC website (labelled as 'draft', as technically they haven't been approved by parliament yet).

[Thanks to Peter Jones of Rawlinson Butler, and Darren Newman of In Company Training, for telling me about this.]

ACAS Settlements

[Thanks to James Medhurst of Employment Law Advocates for providing this case summary]

The EAT has handed down its decision in Allma Construction v Bonner, which is authority for the proposition that, in deciding whether a settlement has been concluded through ACAS, it is irrelevant whether the ACAS officer believes that a settlement has been reached or whether there are terms which have not been agreed that would normally be included in a COT3 agreement.

The consultant of the respondent communicated an offer directly to the solicitor of the claimant to settle the case for £1,000. The solicitor of the claimant indicated acceptance of the offer through an ACAS officer but did not say that the contract was subject to agreement of the wording of a COT3.

On the facts, it was held that a binding settlement had been reached. It is only necessary for the essentials of a contract to be agreed and this may consist of no more than an agreement that a sum of money be paid to bring litigation to an end. The ACAS officer had done enough to have "taken action" for the purposes of section 203 of the Employment Rights Act and, therefore, there was no need for the parties to enter into a written compromise agreement.

Discrimination (Correction to 27th September Bulletin)

An error has been pointed out in the bulletin below (issued Monday, 27th September 2010), which stated that the EAT suggested apportionment of damages between the provider and recipient of a reference to reflect their culpability. In fact, the parties had agreed that approach and it was not endorsed by the EAT. An amended version appears below.

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT (Underhill P) has handed down its decision in Bullimore v Pothecary Witham Weld Solicitors, which is authority for the proposition that the provider of a discriminatory reference can be liable for loss of earnings even if the recipient also victimises a Claimant on the back of it.

The solicitor Claimant was victimised by a reference from a previous firm and a prospective employer withdrew a job offer. The Tribunal held that the claim for loss of future earnings against the reference provider was too remote. The EAT disagreed, observing that this was a not uncommon form of victimisation, and if the reference recipient were not also motivated by victimisation, the Claimant would have no remedy for loss of earnings.

The Claimant's appeal against quantum for injury to feelings ignoring inflation failed, the EAT observing that whilst such awards should be in "today's money", the Tribunal had clearly had regard to the current value of money.

Continuity of Employment

[Thanks to Leanne Targett-Parker of Temple Court Chambers for providing this case summary]

The EAT has handed down its decision in Hussain v Acorn Independent College, stating that a teacher's continuity of employment is not broken by the summer holidays, notwithstanding that he was working under different types of contracts.

Mr Hussain worked from 25 April 2008 to 8 July 2008 as a cover teacher at the Respondent college, when a teacher fell ill. The ill teacher resigned on 8 July 2008, and the Claimant was offered permanent employment from 5 September 2008. The Claimant was dismissed on 12 June 2009.

The issue was whether there was continuity of employment of both contracts because of the temporary cessation of work during the summer holidays.

The EAT held that if the only reason for the termination of the first contract was a temporary cessation of work the two contracts were bridged by the interval due to the summer break (typical within an educational institution). It was not necessary that the teacher expected to return to work when he finished at the end of the summer time. The interval was short and temporary and the Claimant fulfilled both contracts in sequence for more than 12 months.

TUPE - Temporary Cessation of Undertaking

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT (HHJ Peter Clark) has handed down its decision in Wood v London Colney Parish Council, which is authority for the proposition that a temporary cessation of activity will not prevent a transfer of an undertaking.

The First Respondent, a Social Club, employed the Claimant as a bar steward, and he was dismissed after the Club handed back its lease on the bar to the Second Respondent, the Club then surrendering its premises licence. The Second Respondent took over the bar and later obtained its own premises licence, running the bar with its own people.

The EAT held that the economic entity, the bar, was merely temporarily suspended by the loss of the premises licence and as the economic entity did not cease, there was still a relevant transfer.

1st October 2010 changes

A quick note of the changes coming into force this Friday.

1. Equality Act 2010
Most parts of the Equality Act 2010 come into force. This huge legislative tome will doubtless have lawyers arguing over the minutiae for years to come. But other than partially prohibiting pre-employment health questionnaires, it actually makes no difference whatsoever to what employers need to do. Storms and teacups. For a good summary of the Equality Act 2010, see this Law Society practice note.

2. Minimum Wage
The annual increase in the national minimum wage comes into force. The principal rate increases from £5.80 to £5.93 per hour (now payable from age 21). Other rates can be seen here. For what it's worth, London Mayor Boris Johnson has increased the London 'living wage' to £7.85 per hour, but this has no legal standing and is completely unenforceable

.

Discrimination

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT (Underhill P) has handed down its decision in Bullimore v Pothecary Witham Weld Solicitors, which is authority for the proposition that the provider of a discriminatory reference can be liable for loss of earnings even if the recipient also victimises a Claimant on the back of it.

The solicitor Claimant was victimised by a reference from a previous firm and a prospective employer withdrew a job offer. The Tribunal held that the claim for loss of future earnings against the reference provider was too remote. The EAT disagreed, observing that this was a not uncommon form of victimisation, and if the reference recipient were not also motivated by victimisation, the Claimant would have no remedy for loss of earnings.

The EAT suggested apportionment of damages between the provider and recipient of the reference to reflect their culpability.

The Claimant's appeal against quantum for injury to feelings ignoring inflation failed, the EAT observing that whilst such awards should be in "today's money", the Tribunal had clearly had regard to the current value of money.

New Guide on Stress at Work

The CIPD, in conjunction with Acas and the Health & Safety Executive, have produced a guide for employers on 'Work Related Stress: What the Law Says'.

You can download it here.

Unfair Dismissal

Is 'loss of £3,000' the same as 'theft of £3,000'? No, says the Employment Appeal Tribunal in Celebi v Compass.

An employee was believed to have stolen £3,000. The allegation put to her, though, was 'loss of £3,000'. Despite this euphemism, she knew she was actually being accused of theft. A disciplinary hearing found her guilty of 'loss' and she was dismissed.

The Employment Appeal Tribunal held that the lack of precision in the charge meant the dismissal was unfair under 'ordinary' unfair dismissal principles. It was also unfair under the (now repealed) statutory dismissal procedures, as the Step 1 letter did not accurately set out the charge.

The case has been remitted to the tribunal for consideration of an award, in particular whether there should be any reductions for contributory fault and on Polkey grounds.

Discrimination Compensation

[Thanks to Kathleen Donnelly of Henderson Chambers for providing this case summary]

The EAT (Keith J) has handed down its decision in Thaine v London School of Economics, in which the approach to apportionment of damages in psychiatric injury cases was considered. The case concerned a female employee, who made 10 claims of sex discrimination against her former employer, 2 of which were upheld.

The Tribunal found that the unlawful discrimination had been a "material and effective cause" of the claimant's ill health, but that there were other "concurrent causes" in her personal life, and her belief that she had been discriminated against in circumstances where the Tribunal had found she had not (i.e. the unsuccessful claims).

The Tribunal assessed the contribution of the unlawful discrimination at 40% and discounted compensation accordingly. The EAT considered whether it was legally open to the Tribunal to discount an award in such a way, ultimately holding that it was. The judgment suggests the proper approach in such cases is to ask

1. did the conduct for which the respondent is liable materially contribute to the harm, and if so

2. to what extent should liability for that harm fairly be attributed to the respondent.

Mitigation of Loss

[Thanks to Louise Jones of Temple Garden Chambers for providing this case summary]

The EAT (Keith J) has handed down judgment in Kelly v University of Southampton, upholding the tribunal's finding that the Claimant, an academic, had failed to mitigate her loss by failing to apply for either of two vacant posts for which she was qualified in the University's relevant academic school. The tribunal limited the Claimant's loss of earnings up to the date by which she would have been appointed to one of the posts.

The finding was challenged on the basis that the tribunal was not entitled to find that the Claimant would actually have been appointed to one of the posts, and only heard evidence stating that she was qualified to apply, which is a different animal.

The EAT, however, upheld the tribunal's finding; the tribunal was entitled to rely on facts they had heard covering the length of time that she had worked at the University, the circumstances of her previous dismissal and her qualifications - to arrive at their conclusion that the Claimant would or was extremely likely to have been appointed to one of the posts.

Equal Pay - Statutory Grievance Procedure

[Thanks to Lionel Stride of Temple Garden Chambers for providing this case summary]

The EAT (Cox J) has handed down its decision in Birch v Walsall MBC, which is authority for the proposition that a written grievance raised in the context of an equal pay claim can still comply with step 1 of the statutory grievance procedure (SGP) even if such a document contains questions about equal pay that are outlawed by Regulation 14. In such circumstances, the dual purpose of the document should be recognised.

Any outlawed questions can then be excluded without vitiating the remainder of the grievance, provided it otherwise meets the minimum requirements needed to be SGP-compliant.

New Acas/TUC Mediation Guide

[Thanks to Laurie Anstis of Boyes Turner for telling me about this]

Acas and the TUC have, today, launched a new guide for trade union representatives on workplace mediation, and how mediation can avoid costly disputes.

The new guide covers:

• What happens during mediation
• The role of representatives in mediation and how to support members
• Working with employers to set up mediation arrangements
• How mediation fits with other workplace procedures and agreements
• Trade Union reps acting as mediators

The new guide is available here. Another Acas mediation guide, aimed at employers, is available here.

Employment Tribunal Annual Statistics

[Thanks to Louise Jones of Temple Garden Chambers for providing this case summary]

The ET and EAT Statistics for 2009-10 have been published and can be found at www.justice.gov.uk/publications/docs/tribs-et-eat-annual-stats-april09-march10.pdf.

They reveal an overall increase (a rise of 56% from 2008-9) in accepted claims, mainly due to a rise in the number of multiple claims, but also partly due to the changing economic climate. Thus accepted claims are at their highest levels.

The particular impact of the economic recession appears to have been in the areas of unfair dismissal, breach of contract and redundancy claims, where jurisdictional claims in these areas had increased by 17% from
2008-9 and 62% from 2007-8.

Of particular note is that, of the 392,800 jurisdictional claims received in the year, just under a quarter related to the Working Time Directive (largely multiple airline industry cases that are resubmitted every three months) and 75,500 were unauthorised deductions (Wages Act).

The statistics show that there is no real difference in the number of appeals dealt with by the EAT in the last year by comparison with 2008-9.

Disability Discrimination

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT (HHJ Serota) has handed down its decision in JP Morgan v Chweidan, which is authority for the proposition that where a claim for disability-related discrimination fails, the same facts probably should not support a finding of direct discrimination.

The banker Claimant, disabled after a skiing accident, was unable to work as long hours as before, which led to a reduction in his bonus and dismissal. The Employment Tribunal held that this was not disability-related discrimination, as the Claimant was treated like a comparator in the same predicament but without his disability.

Nevertheless, the Employment Tribunal found direct discrimination under S3A (5) DDA against the Claimant out of the same facts. The EAT overturned this, holding that it was difficult to see how a claim of direct discrimination would succeed where a claim of disability-related discrimination under S3A (1) DDA fails, and remitted the issue of whether the Claimant suffered direct discrimination for the Tribunal to consider whether there were additional grounds to support such a finding.

Disability Discrimination

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT (HHJ Serota) has handed down its decision in JP Morgan v Chweidan, which is authority for the proposition that where a claim for disability-related discrimination fails, the same facts probably should not support a finding of direct discrimination.

The banker Claimant, disabled after a skiing accident, was unable to work as long hours as before, which led to a reduction in his bonus and dismissal. The Employment Tribunal held that this was not disability-related discrimination, as the Claimant was treated like a comparator in the same predicament but without his disability.

Nevertheless, the Employment Tribunal found direct discrimination under S3A (5) DDA against the Claimant out of the same facts. The EAT overturned this, holding that it was difficult to see how a claim of direct discrimination would succeed where a claim of disability-related discrimination under S3A (1) DDA fails, and remitted the issue of whether the Claimant suffered direct discrimination for the Tribunal to consider whether there were additional grounds to support such a finding.

Employer’s Ability to Pay

"But it's going to ruin us", says the client. "We can't afford to pay - we'll go bust."

It's never easy to hear a(n employer) client say that, and always slightly unreal saying that tribunals don't take an employer's ability to pay into account when assessing unfair dismissal compensatory awards. But at least we can now show them paragraphs 19 and 20 from this judgment, where the EAT states, with no equivocation, that the employer's ability to pay is not a relevant consideration.

It undoubtedly reflects tribunal practice and (the sparse) existing caselaw. Personally, I think this will change at some point. Section 123 of the Employment Rights Act 1996 requires the tribunal to award such sum as is "just and equitable in all the circumstances having regard to the loss sustained by the complainant." It doesn't say 'having regard only to the loss sustained by the complainant'. There is a powerful case for saying that one relevant circumstance is the impact a substantial award would have on the jobs of other members of the workforce. But for now, the law is clear. An employer's inability to pay is not relevant.

Daniel Barnett

Age Discrimination and a Week's Pay

[Thanks to James Medhurst of Employment Law Advocates for providing this case summary]

The EAT (Wilkie J) has handed down its decision in CIBC v Beck, which is authority for the proposition that a briefing document referring to a "younger" replacement for a person who has been dismissed is capable of reversing the burden of proof that the employee was dismissed on the grounds of his age, where the word "younger" has been retained in the face of advice from HR that it was inappropriate. The fact that the Tribunal also made findings consistent with a non-discriminatory explanation and initially considered that age discrimination was inherently unlikely did not prevent the burden of proof from reversing.

The Tribunal was not obliged to find that the burden of proof had been discharged by the selection of a shortlist in which many of the candidates were older than the Claimant, in circumstances in which the shortlist was produced by a different manager from the person who made the decision to dismiss.

In calculating a week's pay for the purposes of making a protective award, the Tribunal was entitled to exclude a discretionary bonus when the date for considering whether to award the bonus had not yet occurred. The decision was not inconsistent with EU law.

Staying Tribunal Proceedings

[Thanks to Louise Jones of Temple Garden Chambers for providing this case summary]

The EAT (HHJ Ansell) has given judgment in Gloucestershire Constabulary v Peters, finding that the tribunal erred in respect of a case management decision not to allow a further stay of proceedings brought under the DDA by an employee who was also the subject of a police fraud investigation.

The EAT noted that Employment Judges dealing with case management decisions do have "a very, very wide discretion under rule 10" which the EAT should be reluctant in the extreme to interfere with, but observed the principle in Bastick v James Lane (Turf Accountants) Ltd [1979] ICR 778 that for the EAT to interfere, it was necessary to show that the tribunal had improperly taken into account some matter, or had failed to take into account a relevant matter, or that the decision was perverse.

In this case, the employee was facing a police investigation into periods of historic sick leave, effectively to enquire into whether she had been as unwell as she maintains. Before the tribunal, she claimed that she had suffered a disability since 2003. The Employment Judge refused to grant a further stay, there having between two earlier stays, but the EAT held that there was a substantial overlap of issues between the ongoing, high-level police investigation and the tribunal proceedings which had not been properly taken into account by the Employment Judge and he had incorrectly exercised his discretion. An open-ended stay, however, was not appropriate and a limited, final stay was ordered by the EAT to give the Police time to "get their tackle in order".

Disability Discrimination

[Thanks to Lionel Stride of Temple Garden Chambers for providing this case summary]

The Court of Appeal has handed down its decision in Aylott v Stockton on Tees Borough Council, which provides useful guidance in relation to disability discrimination claims following the case of Lewisham Borough Council v Malcolm [2008] 1 AC 1399.

Following Malcolm, Mummery L.J. confirmed that the proper comparator in cases of disability-related discrimination is currently 'someone who had behaved in the same way as the person concerned, but [who] did not suffer from that person's disability'. Thus the old comparator - someone who had not acted in the way that led to the dismissal or detriment - used in the case of Clark v Novacold [1999] ICR 951 no longer applies. To reduce unnecessary complexity, the Court of Appeal then made the following 3 points:

• Since Malcolm, expert advisors have correctly shifted their target to the failure of the duty to make reasonable adjustments, which imposes a form of positive discrimination. This was described as a 'positive' change of perspective.
  
• It is not sensible or legally correct simply to carry across from the longer established fields of discrimination law (race and gender) their principles and precedents, particularly as the 'disability-related' discrimination and requirement to make 'reasonable adjustments' do not even appear in that context.
  
• Justification is no defence to direct discrimination on the grounds of disability nor any failure to comply with the duty to make reasonable adjustments but remains a defence to disability-related and indirect discrimination cases.

In issuing this guidance, however, the Court of Appeal recognised that Malcolm will no longer be applicable to discrimination in employment in any event once s.15 of the Equality Act 2010 is in force; assuming that the provision remains unaltered.

ECJ Ruling on Employee Benefits

[Thanks to www.emplaw.co.uk for allowing me to reproduce their summary of this case]

The European Court of Justice has ruled that (most) benefits provided to employees under salary sacrifice schemes are VATable. Salary sacrifice schemes are enormously popular, not only the £10 retail voucher scheme operated by Astra Zeneca which led to the present case, but also in particular 'cycle to work' schemes which allow employees to buy bikes at a substantial discount. No doubt they will now wither, if not die.

Astra Zeneca offers its employees a remuneration package which, as well as normal salary, includes selected benefits which employees can choose from a list. Each selected benefit gives rise to a deduction from the normal salary. Among those benefits, Astra Zeneca offers its employees retail vouchers to be used in certain shops, worth £10 each in the shops. This is advantageous to the employees as the deduction from salary for each £10 voucher is less than that amount (between £9.25 and £9.55 is deducted).

Astra Zeneca claimed reimbursement from HMRC of the input VAT which it incurred when buying the retail vouchers. HMRC rejected the claim, asserting that Astra Zeneca had to pay VAT in respect of retail vouchers it purchased if/when they were supplied to its employees as part of their remuneration packages (the employees, of course, are not taxable persons for the purpose of VAT).

The ECJ agreed with HMRC, holding that the provision of a retail voucher by a company to its employees as part of their remuneration constitutes a supply of services effected for consideration.

Specifically the ECJ ruled:

"Article 2(1) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, as amended by Council Directive 95/7/EC of 10 April 1995, must be interpreted as meaning that the provision of a retail voucher by a company, which acquired that voucher at a price including value added tax, to its employees in exchange for their giving up part of their cash remuneration constitutes a supply of services effected for consideration within the meaning of that provision".

Astra Zeneca UK v HMRC.

Employment Status

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT (Silber J presiding) has handed down Judgment in the case of Community Dental Centres Ltd v Sultan-Darmon which is authority for the proposition that an unfettered right of substitution in a contract is fatal to worker status.

The Claimant, a dentist, brought an unlawful deductions claim against his Practice. It was agreed that he was not an employee, but the Tribunal found he was a worker. On appeal, the EAT held that the Claimant's right of substitution meant that he could not be a worker, because he was not obliged to "perform personally any work or services" within the meaning of s230(3) Employment Rights Act 1996, and dismissed the claim for lack of jurisdiction.

The EAT took pains to get its teeth into a range of authorities on worker status and preferred the Byrne Brothers (Formwork) Ltd v Baird line (a working time case) to Redrow Homes (Yorkshire) Ltd v Buckborough. It extracted the principle that where a genuine right of substitution exists, there cannot be worker status. It was not sufficient that the individual might be obliged to personally find a substitute; that analysis (as in Redrow Homes) was inconsistent with established authorities.

Remedies in Discrimination Claims

[Thanks to Kathleen Donnelly of Henderson Chambers for providing this case summary]

The EAT (Wilkie J) has handed down its decision in St Andrew's Catholic School v Blundell. The case concerned the victimisation of a teacher over a 4 month period, culminating in her dismissal. The Tribunal awarded £22,000 injury to feelings, £5,000 aggravated damages, 5 years loss of future earnings, and recommended the Respondent send a letter to all parents and teachers stating that the headmistress accepted all criticism of the Claimant's teaching ability was unfounded.

The EAT's judgement is an interesting source of reading on remedies in SDA cases. In particular, it:

• reduced compensation for injury to feelings to £14,000. The judgment includes a helpful review of some post-Vento mid- to upper-range authorities;
  
• upheld the aggravated damages award on the basis of the manner in which the Respondent conducted the remedies hearing, criticising the Claimant's teaching ability, contrary to the evidence presented at the liability hearing;
  
• upheld the award in principle of 5 years future loss of earnings; and,
  
• held that the terms of the tribunal's recommendation should be amended so as not to require the headmistress to make statements with which she ("however wrongheaded") does not agree.

Territorial Jurisdiction

[Thanks to Leanne Targett-Parker of Temple Court Chambers for providing this case summary]

The EAT (Underhill P) has handed down its decision in MOD v Wallis, which is authority for the propositions that:

a) when working in Europe for an organisation, and being eligible for that position because the Claimants were the spouses of UK armed forces personnel, there is a sufficiently close connection between that employment and Great Britain to be within the scope of domestic, unfair dismissal legislation; and,

b) despite, on a literal reading s6 of the Sex Discrimination Act 1975, an ET would lack jurisdiction on a sex discrimination claim in Europe, the Equal Treatment Directive is intended to confer rights on expatriate employees and domestic rules limiting territorial scope must be displaced, enabling the ET to have jurisdiction on a sex discrimination claim at least within Europe.

The Claimants were wives of service personnel working at NATO headquarters in Europe, employed by schools attached to those headquarters, and were dismissed when their husbands' service ended.

This case goes marginally further than the Lawson v Serco 'special connection' being a feature of the work done, by including as a factor the trigger for the employee's eligibility to apply for the job.

Amendment of Claims

[Thanks to James Medhurst of Employment Law Advocates for providing this case summary]

The Court of Appeal has handed down its decision in New Star v Evershed, which is authority for the proposition that adding a public interest disclosure claim to an unfair dismissal claim with similar facts does not require "wholly different evidence" such that the application to amend should be refused.

The claimant had made a disclosure about work colleagues being bullied but the same allegations had been raised in the context of his unfair dismissal claim, where he argued that they contributed to the intolerable atmosphere causing him to resign. Although the respondent said the allegations were irrelevant to the unfair dismissal claim, they had not been struck out and remained part of the case.

The Court of Appeal accepted that this was not a mere 're-labelling' and specific findings would now have to be made about the individual components of the public interest disclosure claim; but it upheld the reasoning of the Employment Appeal Tribunal that there was a substantial overlap in the issues.

Part-Time Judges' Pensions - ECJ Reference

[Thanks to Claire Darwin of Matrix Chambers for providing this case summary]

The Supreme Court has unanimously referred the appeal of Mr O'Brien QC, a former fee-paid part-time Judge who is seeking retrospective admission to the Judicial Pension scheme, to the Court of Justice of the European Union.

O'Brien and others argue that the specific exclusion of part-time judges paid a daily fee from the protection of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 is incompatible with the Part-Time Workers Framework Directive (97/81/EC), and that the 2000 Regulations have not properly implemented the Directive into UK law.

The Directive leaves Member States free to define who is a worker in accordance with national law and practice, provided that the definitions respect the content of the pan-European Framework Agreement on part-time work.

The Supreme Court has referred the following questions to the Court of Justice:

(1) Is it for national law to determine whether or not judges as a whole are workers within the meaning of the Framework Agreement, or is there a Community norm by which this matter must be determined?

(2) If judges as a whole are workers within the Framework Agreement, is it permissible for national law to discriminate (a) between full-time and part-time judges, or (b) between different kinds of part-time judges in the provision of pensions?

Lord Walker, delivering the judgment of the court, observed that judicial office "partakes of most of the characteristics of employment". This suggests that the Supreme Court is of the view that judges generally are workers within the 2000 Regulations; however the court has not expressed a concluded view on this issue.

Supreme Court Press Release
Supreme Court Judgment

Taxation of Awards

[Thanks to Lionel Stride of Temple Garden Chambers for providing this case summary]

The EAT (HHJ Peter Clark) has handed down its decision in Yorkshire Housing v Cuerden, which is authority for the proposition that awards of personal injury and injury to feelings relating to a tortious act (such as a failure to make reasonable adjustments in a disability discrimination claim) that pre-dates the termination of employment are not taxable and, consequently, should not be subject to 'grossing up'.

It was further held that awards in respect of pension and earnings loss should ordinarily be grossed up by taking into account the appropriate marginal tax rates for each part of the award: it is wrong simply to apply the highest marginal tax rate to the whole sum.

The EAT declined to comment on the controversial observations in Orthet Ltd v Vince Cain [2004] IRLR 857 that awards for injury to feelings are always non-taxable regardless of when the discrimination occurred, which remains open to argument.

TUPE

[Thanks to James Medhurst of Employment Law Advocates for providing this case summary]

The EAT (Slade J) has handed down its decision in Nationwide Building Society v Benn, which is authority for the proposition that, where there has been a dismissal in the context of a TUPE transfer, it is an error of law for a tribunal to take into account a breach of the consultation requirements in concluding that the dismissal was unfair, in circumstances in which there has been no successful claim for a failure to consult. In this case, no such claim had even been pleaded. However, it would be permissible to take into account the extent of consultation, both collective and individual, about changes to terms and conditions.

An individual employee has no standing to bring a claim for a failure to consult in a case in which employee representatives have been elected but the consultation with those representatives is said to have been inadequate. Such a claim can only be brought by the elected representatives.

In order for there to be an economic, technical or organisational reason entailing changes in the workforce, it is not necessary for the entire workforce to be affected by the changes. It is sufficient for the changes to affect the transferred employees only.

Mandatory Retirement Ages

[Thanks to Tom Mountford, pupil barrister at Blackstone Chambers, for providing this case summary]

The Court of Appeal has handed down its decision in Seldon v Clarkson, Wright & Jakes, a case concerning the ability of a partnership to justify a mandatory retirement age of 65. The Court, dismissing the appeal of Mr Seldon, held:

• the Framework Directive permitted Member States to derogate from the principle of equal treatment in relation to direct age discrimination by permitting justification. This power of derogation (Article 6) is directed at Member States implementing the Directive and not at private employers.
  
  
• the UK implemented that derogation by way of, amongst other provisions, Regulation 3 of the Age Regulations which provides that a person discriminates against another as long as the first person cannot show the treatment or, as the case may be, provision, criterion or practice is a proportionate means of achieving a legitimate aim. Regulation 3 thus allows for employers to justify both direct and indirect discrimination. This was held by Blake J to be a lawful derogation in Age UK.
  
  
• the requirement in Article 6 of the Framework Directive of an objective and reasonable justification by a legitimate aim, including legitimate employment policy, labour market and vocational training objectives, achieved by appropriate and necessary means, (which the ECJ in Heyday has glossed as a requirement of "legitimate social policy objectives") is not a test which private employers need to satisfy in seeking to justify direct age discrimination under Regulation 3 of the Age Regulations.
  
  
• rather, an employer's legitimate aims are not limited to "social policy objectives". As the ECJ noted the legislation gives employers "some discretionary powers or a degree of flexibility". The Court of Appeal held that the appropriate test is whether an employer's actions are consistent with the social or labour policy of the United Kingdom which justified the Regulations.
  
  
• the principle that a discriminatory measure may be justified by a legitimate aim other than that which was specified at the time when the measure was introduced, applied by the ECJ in the context of indirect discrimination in Schönheit, is equally applicable in the context of direct discrimination.
  
  
• a private employer's aim of producing a happy workplace is within, or consistent with, the UK Government's social policy justification for the Age Regulations. To allow people to retire with dignity would also seem to be a justification for having a mandatory retirement age.
  
  
• it is a legitimate consideration that a rule such as a mandatory retirement age in a partnership deed has been agreed by parties of equal bargaining power.
  
  
• the assessment of justification in the context of a mandatory retirement age must be made at the point of termination, involving the two interrelated questions: (1) as at the date of termination was a rule requiring retirement at that age justified? (2) was the application of that rule justified in the particular circumstances?
  
  
• however, in general, it is of the essence of a mandatory rule that it is generally applied. As such, it will be rare that the second question requires much beyond the justification of the general rule.
  
  
• a compulsory retirement age cannot be defeated on the basis that a less discriminatory means could be employed by reference to a higher age. Such an effect cannot have been within the legislative intendment as it would mean that it would be impossible to justify any retirement age yet Recital 14 of the Directive seems to contemplate the legitimacy of a retirement age.