Friday, 17 December 2010

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

Tuesday, 14 December 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.

Monday, 13 December 2010

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.

Thursday, 9 December 2010

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.

Thursday, 2 December 2010

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.

Wednesday, 1 December 2010

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.