Constructive Dismissal

[Thanks to Emma Price of 1 Temple Gardens for providing this case summary]

The Court of Appeal has handed down its decision in Buckland v Bournemouth University, which is authority for the proposition that:

i) the correct test when an employer is said to have committed a fundamental breach on contract of employment is a unitary one and not a "range of reasonable responses" test;

ii) an employer who has committed a fundamental breach cannot "cure" it whilst the employee is considering whether to treat it as a dismissal.

The Claimant, a Professor in archaeology at the Defendant University, resigned claiming constructive unfair dismissal after exam papers he had marked were subject to re-marking by the chairman of the board of examiners. After the re-mark and before the resignation, an Inquiry set up by the Defendant University vindicated the Claimant and criticised the marking procedures in place.

The ET held that the re-mark amounted to a fundamental breach on contract and that the Inquiry did not "cure" the breach.

The EAT rejected the University's contention that the correct test for repudiatory breach of contract by an employer was a reasonable range of responses test, commending a return to settled authority and an objective test and upholding this part of the ET's decision. However, the EAT found that the breach had been "cured" by the Inquiry.

The Court of Appeal upheld the EAT's findings as to the correct test to be applied for repudiatory breach, endorsing its conclusions and reasoning but allowed the appeal against the EAT's decision that the breach had been cured. Once a breach has been done, it cannot be undone.

Introduction into employment law of the principle that where there has been a fundamental breach, that is curable and cured, an innocent party loses the option of acceptance of repudiation could only be done on grounds capable of extension to other contracts. There was no justification for this.

Also of note in this case, Lord Justice Jacob concluded with a criticism of "Ping pong", the practice of sending cases back to the tribunal or court below as anything other than a last resort, noting that it generally serves litigants badly, prolongs things and increases costs.

Aiding and abetting discrimination

[Thanks to James Bickford Smith of Littleton Chambers for providing this case summary]

In May & Baker Ltd t/a Sanofi Aventis Pharma v Okerago the EAT (HHJ Birtles) has considered the meaning and application of sections 32 and 33 of the Race Relations Act 1976 for the in overturning a finding that a Respondent employer was liable for the discriminatory acts of an agency worker. During the 2006 World Cup the agency worker had told the Claimant to "go back to her own country". The Tribunal found that the Respondent's failure to investigate this incident adequately, and its reaction to the Claimant's subsequent grievance, meant that it had "aided" the agency worker within the meaning of s. 33. The Respondent had "been complicit in allowing an environment to continue where such conduct could take place". The EAT made the following findings as to section 33:

• All the conduct of the Respondent complained of post-dated the World Cup incident. As a person cannot aid another to do something which the second person has already done, liability under s. 33 could not be based on that conduct.
• "In any event, allowing an environment where particular conduct could take place does not amount to aiding that conduct. Merely allowing an environment to exist does not amount to the relationship of "co-operation or collaboration" referred to in Anyanwu" (Anyanwu and Another v Southbank Students' Union and Southbank University [2001] IRLR 305). Nor could it amount to "knowingly" aiding that conduct.
• The tribunal failed to ask itself the question that assuming the employer aided the contract worker to do an act, would that act be unlawful if done by the worker? The agency worker's act was not unlawful in itself, and the employee had no claim against the agency worker; therefore even if the employer aided the worker's act, it would not have aided an act made unlawful by the RRA.

As to s.32, the Tribunal had failed to address the questions of employment status properly. There were no factual findings to support a conclusion that an employment or agency relationship existed between the worker and the employer. The Tribunal set aside the relevant part of the Tribunal's judgment and substituted a decision that the allegation of direct discrimination be dismissed.

Variation Clauses

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

The EAT (Silber J) has handed down its decision in Bateman v Asda Stores, which is authority for the proposition that a broad contractual right to alter terms and conditions of employment in line with business needs can, even if contained in a Company Handbook, permit an employer to make unilateral changes to contractual terms, including rates of pay and hours of work, without the need for the express consent of employees, provided that the changes are properly implemented and the employer acts in line with the implied duty to maintain trust and confidence.

The power to amend can extend beyond the right to alter non-contractual policies to cover making changes to terms of the contract without further consent.

On the facts, Asda acted properly in harmonising terms and conditions of employment for a small proportion of staff who refused to agree to a new pay structure.

Constructive Dismissal

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

The EAT (Lady Smith) has handed down its decision in Aberdeen City Council v McNeill, which is authority for the proposition that if an employee is in breach of the implied duty of trust and confidence at the time of resignation, he/she is not entitled to terminate the contract on the basis that the employer has breached that term.

On the facts of the case, the EAT held that the Tribunal had failed to consider all of the Claimant's acts of misconduct together, which included sexual harassment, intoxication at work and lying to his employer, and in minimising the seriousness of the Claimant's misconduct the Tribunal had reached a perverse conclusion.

The EAT was particularly critical of the Tribunal's approach to excusing the Claimant's behaviour, including speculation by the Tribunal that a person who seems drunk to one person may be "displaying mere exuberance", and the suggestion that sexual banter is an inherent feature of all friendships. The EAT revoked the judgment of the Tribunal and dismissed the Claimant's claim for constructive dismissal on the basis that the Claimant was himself in material breach of the implied duty of trust and confidence.

Dress Codes and Religious Discrimination

[Thanks to Louise Jones of 1 Temple Gardens for providing this case summary]

The Court of Appeal has ruled in Eweida v British Airways that by adopting a staff dress code which forbade the wearing of a visible neck adornment and so prevented the Appellant, Mrs Eweida, from wearing a small, visible cross with her uniform, British Airways did NOT indirectly discriminate against Mrs Eweida on the grounds of her religion.

The Court of Appeal rejected the submission that one individual person could be the subject of indirect discrimination, and noted that if a solitary employee could be indirectly discriminated against, this could, on a wide view, place an impossible burden on employers to anticipate and provide for what may be parochial or even facetious beliefs in society at large. The Court upheld that, for a finding of indirect discrimination, some identifiable section of a workforce, quite possibly a small one, must be shown to suffer a particular disadvantage which the Claimant shares.

The Court also found that, on the footing on which the claim had been advanced, namely disadvantage to a single individual arising out of her wish to manifest her faith in a particular way, the employment tribunal's findings of fact had shown that BA's staff dress code and the ban on a visible neck adornment, was a proportionate means of achieving a legitimate aim.

Equal Pay

[Thanks to Lionel Stride of 1 Temple Gardens for providing this case summary]

The Court of Appeal has handed down its decision in Gibson v Sheffield City Council, which is the latest case relating to whether or not UK law is consistent with EU law in matters of equal pay.

The Claimants, female care workers, successfully appealed against the Tribunal's decision that the council did not have to show objective justification for a bonus paid predominantly to male manual workers over a 40-year period on the basis that it was due to an historical productivity incentive which could not be applied to care work in the same way. This despite the finding that the bonus scheme predominantly benefited male workers and that care work was stereotypically 'women's work'.

On appeal the council relied upon the Court of Appeal case of Armstrong v Newcastle upon Tyne NHS Hospital Trust [2006] IRLR 124, as authority for the proposition that, once it had been shown that the reason for the bonus was not 'tainted with sex', it was not necessary to show objective justification. The Claimants contended that Armstrong had been wrongly decided and relied upon the ECJ case of Enderby v Fenchay Health Authority [1993] IRLR 591 to argue that, given the evidence of significant disparate impact (and therefore indirect discrimination), the burden should have passed to the employer to show objective justification for the bonus.

The Court of Appeal rejected the claimants' submission that the relevant passages in Armstrong were obiter or per icuriam. However, the Court found unanimously that, on the facts, the burden had shifted to the council to show objective justification in the light of the statistical evidence showing the disparately adverse effect of the scheme on women's work. The matter was therefore remitted to the Tribunal to consider whether the bonus scheme can be objectively justified.

Equal Pay - Potter v North Cumbria NHS Trust

I have received the following announcement from Naomi Ellenbogen and Andrew Clarke QC of Littleton Chambers, which will be of interest to those involved with equal pay litigation and which I reproduce below.

The Judgment of the EAT (Nelson J) in Potter v North Cumbria Acute Hospitals NHS Trust [2009] IRLR 176 has been the subject of an Order by Consent of the Court of Appeal (attached), allowing the appeal by the Appellant Trust which we represented. (Please note that, following the withdrawal of claims by Ms Potter, and a change to the Trust’s name, this appeal is now known as North Cumbria University Hospitals NHS Trust v Fox & Others.) Without any announcement, practitioners in this area might otherwise assume that the EAT’s Judgment is the final word on the relevant issue.

You may recall that Potter/Fox is the leading multiple in the mass NHS equal pay litigation, being litigated in the North East. For the purposes of the particular PHR giving rise to this appeal, the parties had agreed with the Tribunal a list of interrelated preliminary issues, to be determined sequentially, testing the validity of various comparisons as a matter of domestic and European law. These issues had arisen as a result of the identity of the Claimants’ and comparators’ respective employers from time to time and the respective sources of their terms and conditions.

It was common ground between the parties that, for claims which did not fall within the ambit of section 1(6) of the EPA 1970, the Claimants were required to demonstrate that the differences in pay were “attributable to a single source” i.e. a “body which is responsible for the inequality and which could restore equal treatment” (see the ECJ in Allonby v. Accrington & Rossendale College C-256/01 [2004] IRLR 224 at para. 46). In that context, one of the issues to be determined (“B4”) was framed in the following terms:

“If the claimant is employed on Whitley Council terms and conditions and the comparator is employed on local terms and conditions, or vice versa, [whether or not employed by the same employer] do Whitley Council terms and/or the Secretary of State for Health constitute a “single source”?”

Issue B4 therefore raised the closely related questions as to whether either Whitley Councils or the Secretary of State could provide the required “single source” of the terms and conditions of employment of both the Claimant and a particular comparator where:

1. One of the two employees was on Whitley Council terms and the other on local terms; and

2. Either (1) both were employed by the same employer, or (2) each was employed by a different employer.

Issue B4 was entirely overlooked by the ET in its Judgment. Whilst accepting that fact, the EAT held that such omission was immaterial because, at the date of claim, all Claimants were on Whitley Council terms and the relevant comparators either were or had been on such terms at a point in the past. It held that, in accordance with MacCarthys v Smith [1980] IRLR 210, ECJ, historical comparisons were permissible as there is no requirement for contemporaneous employment. In all cases of common employment, the Trust was, as found in the context of an earlier issue, the single source. The EAT’s finding (if any) as to the position where there was no common employment was unclear and/or inconsistent with its earlier findings.

The Trust’s appeal was limited to Issue B4. Before the Court of Appeal (but not below), the Secretary of State for Health was joined as an intervener. Allowing the appeal, the Court of Appeal has made an Order by Consent substituting the EAT’s finding as to issue B4 with an Order that the Trust was not the single source for any of those comparisons in which the Claimant and her comparator(s) were never in common employment.

The explanation which all parties to the appeal put before the Court of Appeal in explaining the form of Order sought, was as follows. On the EAT’s view, Whitley Council was merely the mechanism for determining pay adopted by each Trust rather than the source of the relevant employee’s terms and conditions: the employing Trust was the single source of terms and conditions for the purposes of the comparisons in which such a source was required. The fact that historical comparisons are permissible is irrelevant in this context. A Claimant in the employ of the Appellant Trust can rely, as a comparator, upon employees of that Trust whose employment ceased before hers began. She cannot rely upon employees of a different employer as comparators unless their terms and conditions of employment came from the same source. The fact that their respective terms are derived, in each case, from Whitley Council terms, does not establish that single source, given the EAT’s other findings.

Potter has been the subject of three EAT decisions and will visit the Court of Appeal again in April 2010, on appeal from the EAT (Slade J. [2009] IRLR 900). We therefore thought it might be helpful to identify the particular issues the subject of the attached Order.

DDA and ET1s

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

The EAT (Slade J) has handed down its decision in Baker v Metropolitan Police, concerning issues of procedure and approach in a discrimination / victimisation claim. The EAT held as follows:-

• The Tribunal did not err in its finding that the ET1 did not include a claim for disability discrimination. Although a technical approach to the question of whether a particular claim is raised in an ET1 is inappropriate, in this case whilst the Claimant had ticked the box marked "Disability" he did not thereafter make a recognisable complaint of disability discrimination.
• The Tribunal did err in refusing to hear the Claimant's application to amend the ET1, which was made in the course of closing submissions. The lateness of the application was just one factor to be considered and the Tribunal should have considered the balance of injustice to the parties.
• In respect of the approach to the victimisation claim, the Tribunal did not err in introducing characteristics relevant to the reason why the Respondent acted as it did at the comparative stage of the test. In any event the decision to dismiss the victimisation claim was plainly and unarguably right.

Agency Workers

[Thanks to Louise Jones of 1 Temple Gardens for providing this case summary]

The Court of Appeal has handed down its decision in Muschett v HM Prison Service, where the Court considered whether the relationship of the Appellant, an agency worker, with HM Prison Service had developed into that of an 'employee', within the meaning of both section 230(1) of the ERA 1996 and the wider test in discrimination law, in particular that of section 78 of RRA 1976.

Where contractual terms are clear, as they were in this case, by an analysis of the elements of control, personal performance and mutuality of obligation in the work carried out by the Appellant (applying the Court of Appeal's decision in James v LB Greenwich [2007] IRLR 168), there is no need to imply a contract of employment. The application of the ERA test confirmed the Appellant was not an employee.

Further, because the Appellant had no contractual obligation to HM Prison Service to do any work for them, and because there was no contract between him and HM Prison Service, he had no contract for service in the context of section 78 of the RRA 1976: he was not an 'employee' applying the discrimination law test.