Tuesday, 29 November 2011
The Court of Appeal has this morning given judgment in Birmingham City Council v Abdulla, in which 174 former employees of the Council represented by Leigh Day & Co assert that the failure to give them pay equal to that of various predominantly male groups of staff, in accordance with the Equal Pay Act 1970, comprises a breach of contract enforceable in the civil courts.
The Council applied to strike out on the basis that the civil court should decline to exercise its jurisdiction to hear claims presented to the civil courts after the 6 month time limit for presenting claims to the employment tribunal had expired. Colin Edelman QC, sitting as a Deputy Judge of the QDB, had dismissed the Council's application in December 2010. The Court of Appeal has upheld his decision.
Although there is a discretion to strike out claims that could more conveniently be determined in the ET (in section 2(3) of the Equal Pay Act and effectively reproduced in section 122 of the Equality Act 2010), Mummery LJ held that it would be an extreme exercise of judicial discretion to strike out a claim for breach of an equality clause brought within the limitation period applicable to the civil courts. That discretion should be exercised only for the purpose for which it was conferred, namely the distribution of judicial business, and not to stifle claims that had been made in time.
The Court held that the analogy that had been drawn with the principle of forum non conveniens in the Ashby v Birmingham City Council case (judgment in which had been given after Abdulla) was not helpful. Save in exceptional cases amounting to an abuse of process, it is not for claimants to have to explain why they did not go to the ET in time: Parliament had given them an option as to whether to commence proceedings in the civil courts or the ET.
The Council has applied for permission to appeal to the Supreme Court.
Friday, 25 November 2011
May an employment tribunal adopt a flexible approach to calculating pension loss, for example by using different multipliers to those annexed to employment tribunal pension loss guidelines?
A qualified 'yes', provided it gives cogent and credible reasons for so doing, says the EAT (Langstaff J presiding) in an obiter Judgment on a remedy appeal in Chief Constable of West Midlands Police v Gardner.
The EAT heard the remedy appeal despite overturning the Respondent's liability, and gave guidance on the approaches to calculating pension loss.
The employment tribunal calculated pension loss on the basis of a 'substantial loss' approach, but by using different multipliers from those in the 2003 booklet Compensation for Loss of Pension Rights Employment Tribunals 3rd Edition.
The Claimant's appeal criticised what it termed a 'pick and mix' approach to calculating pension loss. The EAT held that the tribunal had not committed an error of law, but noted that when a tribunal departs from an established approach, it must do so for good reason and state what its reasons are. The EAT stated that it would not recommend straying from established approaches "...except where it is plain that the interests of justice require it...".
The Judgment contains a useful discussion of the various approaches to pension loss and compensation.
Wednesday, 23 November 2011
The funniest comment will receive a complimentary copy of the 5th edition of the Law Society Handbook on Employment Law; by happy coincidence published on the same day as the reforms were announced and the winner of the 'most immediately out of date book of the world' competition.
To submit a joke, either tweet @daniel_barnett or email me on firstname.lastname@example.org
Several contenders (the highest ones are the most recent submissions)
(sent by Sean Jones)
(sent by Robert McCreath)
(sent by Emma Atkins)
(sent by Rachel Farr)
Picture the scene… An office. Grey. It's November outside. An employer asks an employee if they can have a protected conversation. Nervously, the employee agrees. As he does so, a disco ball is lowered through the polystyrene ceiling tiles and, as the employer strips off his jacket to reveal a sequined bustier, he begins to sing…
"At first I was afraid, I was petrified -
Kept thinking I'd employ you til the day you died.
But now we can talk frankly
And I can tell you how you're wrong
And I've grown strong - I can dismiss you for a song!
'Cos all you do is take up space
You never buy us donuts, you've a sad look on your face
I should have changed that stupid passcode
I should have made you leave your key
If I'd have known for just one second you'd come in to bother me
Go on now, walk out the door
Just turn around now
'Cos you're not welcome anymore.
Weren't you the one who makes the office groan?
Well here's your stuff - and repay your season ticket loan!
Your prospects may dive
But now you're gone here's the news - we're gonna thrive
We can fire without cause
And without breaking any laws
Protected convos are the future,
And now we're gonna boot ya…
(sent by Mark McWilliams)
Sacked by your employer? I hear Acas are recruiting...
(sent by Ian Taylor)
Employee: Sir Alan, please could we have a protected conversation?
Sir Alan: Certainly. You're fired.
(sent by Anya Palmer)
Vince walks into a bar and orders that bartender needs 2 years before he can claim unfair dismissal. Then consults on whether to order that.
(sent by Kim Hurley)
INTRODUCING the new and improved Cone of Silence for all your Protected Conversation needs. Buy now and you will also receive a free copy of our users manual entitled “How To tell your employees they Are rubbish, old or should quit or they’ll be Fired in Five Easy Steps.
COMING SOON – The mobile Protected Conversation device. This is an essential piece of kit which will allow you to tell all of your employees how rubbish and old they are while you are on the move!
(sent by Abigail Morris)
Shhh... I'm having a protected conversation
(author asked to remain anonymous)
There was a minister called Vince Cable
Whose time at the DTI table
Saw the erosion of rights
Lots of union fights
Just because he's a somewhat unstable
The hard-working judges in the CJEU have yesterday, in KHS AG v Schulte, handed down a judgment which casts doubt on whether a holiday taken pursuant to the Working Time Directive should involve mere relaxation and leisure.
It is now long established that workers on long-term sick leave accumulate holiday (Stringer v HMRC). However in Schulte the CJEU confirmed that this right is not without limits, and that to allow workers to accumulate unlimited amounts of holiday entitlement, or pay in lieu, does not reflect the purpose of Article 7 of the Working Time Directive. Whilst many of us might disagree with this, the CJEU held that holiday taken after a certain point in time ceases to provide a rest from work, and becomes "merely a period of relaxation and leisure". They held that a holiday which involves mere relaxation and leisure, but does not provide a worker with a rest from work, is not consistent with the aim of Article 7 of the Working Time Directive.
In Schulte, the CJEU had to consider whether German national law, which provides that workers lose their right to holiday (or pay in lieu) at the end of a "carry over period" of 15 months (starting at the end of the year in which the holiday entitlement had arisen), was compatible with Article 7 of the Working Time Directive.
The CJEU held that it was compatible, and gave the following useful guidance on the use of so-called "carry over periods":
- Any carry-over period must be substantially longer than the reference period for the holiday year in respect of which it is granted (Readers will remember that in Schultz-Hoff and Others the CJEU commented that a carry-over period of 6 months was not compatible with the Working Time Directive);
- It must ensure that the worker can have, if need be, rest periods that may be staggered, planned in advance and available in the longer-term;
- It must protect employers from the risk that a worker will accumulate lengthy periods of absence; and the consequent difficulties in organising work which lengthy periods of absence might entail.
1. If a manager is unable to evaluate the suitability or performance of his staff within one year, there is little reason to suppose he will be better able to do it within two years. The extra year simply encourages an extra year of underperformance.
2. Litigation systems exist because people can’t or won’t settle matters amicably. Governments can’t force people – whichever side of the industrial divide they sit on – to be reasonable. They can only provide effective redress systems against unreasonable employers, and effective sanctions against unreasonable employees. The reforms don’t achieve either of those aims.
3. Compulsory mediation won’t help. Without substantial investment, Acas lacks the resources to do much more than hold a few telephone conversations, which it already does in the majority of cases.
4. Protected conversations will hurt, not help, employers. If an employer wants a frank conversation about poor performance, far better to do it on the record as it will help the employer defend any subsequent claim. If an employer simply wants to say, ‘we’re going to push you out unless you resign’, why should they receive protection from the consequences of their actions?
5. The reforms do nothing to eliminate the real problem of employees bringing unfounded discrimination or whistleblowing claims, which are more disruptive to business than unfair dismissal claims and which cost more to defend/settle.
6. Countries with more employment regulation have lower unemployment rates (and thus better economies). America – with almost no employment regulation – has 9% unemployment, contrasted with the UK’s 8%. The lowest unemployment rates in EU are Austria (3.9%), Netherlands (4.5%) & Luxembourg (4.8%) - all countries with far more ‘red tape’ than the UK.
7. Employers hire because they have too much work to cope with, or foresee making a profit on the cost of hire. They don’t refuse to hire because of a fear of a statistically unlikely tribunal claim several years down the line. The premise of Vince Cable’s reforms are wrong.
AND WHY THEY WILL…
1. Making it easier to dismiss means making it easier to hire. Today’s dismissed employee is tomorrow’s new recruit.
2. Employment tribunals dealt with 248,000 claims last year; they are highly expensive to run. Anything that can reduce the cost to the public purse is a good thing.
3. Introducing a compliance fine for employers who breach employment laws and lose a case at tribunal will encourage employers to settle claims rather than fight in court, which reduces the cost to the system.
4. Anybody can bring a tribunal claim, at almost no risk of having to pay any legal costs. When it costs an employer many thousands of pounds to defend claims, it means there is no level playing-field. Introducing a fee to bring a claim shifts risk and helps redress the imbalance.
5. Compulsory attempts at mediation through Acas will resolve a proportion of claims; sometimes the employer will recognise the employee has a point and be willing to settle, before the parties draw the battle-lines of litigation and entrench their positions.
6. Slimming down dismissal procedures means less cost to an employer when dismissing staff, and reduces the risk of ‘techincal’ unfair dismissals.
7. Portable CRB checks, which eliminate the need for a fresh application when moving jobs, will reduce cost and eliminate delay during the recruitment process.
After many months of rumour, Business Secretary Vince Cable has announced the government's proposals for what is claimed to be the biggest shakeup of employment law for decades. The government has also, this morning, published its Response to the Consultation on Resolving Workplace Disputes.
The main proposals are:-
- unfair dismissal qualifying period to increase to two years
- compulsory lodging of all claims through Acas, for an attempt at mediation, before they can be lodged with the tribunal
- consultation on the introduction of protected conversations, with the proviso that they will not extend to protect discriminatory acts
- a call for evidence, with a view to consultation, on reducing minimum period for redundancy consultation to 60, 45 or 30 days
- options for a 'rapid resolution scheme', to enable simple claims to be settled within three months
- amendment to s147 of Equality Act 2010, to clarify compromise agreements can be used to settle discrimination claims
- complaints about breach of employment contract (Parkin v Sodexho) to be taken out of whistleblowing law
- financial penalties to be introduced on employers who breach employment rights, payable to the Exchequer, subject to a discretion exercisable by Employment Judges
- a fundamental review of employment tribunal rules of procedure, to be led by Underhill J (who steps down as President of the EAT at the end of next month), to include changes to costs and desposit orders
- Employment Judges to sit alone in unfair dismissal cases
- CRB checks to be portable, so no need for a fresh application when moving jobs
- maternity and paternity leave to be 'modernised', with emphasis on greater involvement for fathers
A big thanks to PLC Employment, who attended the Press Conference and have tweeted much of the above information before DBIS has published its press release on the internet. For 'live' comment, have a look at the #ukemplaw thread on Twitter.
Tuesday, 22 November 2011
At what stage should an employment tribunal 'gross-up' a Compensatory Award for Unfair Dismissal to allow for taxation when the statutory cap applies?
'Grossing-up' occurs before the cap is applied, says the EAT (HHJ Peter Clark presiding) in Hardie Grant London Ltd v Aspden.
The Claimant won her constructive dismissal claim. Since tax was due on her Compensatory Award over £30,000, the tribunal 'grossed-up' the Compensatory Award to allow for tax, after it had applied the statutory cap (at the time £65,300). The tribunal awarded £87,166.67, on the basis that the Award in the Claimant's hands after tax would be at the cap.
The EAT held that this was the wrong approach, although a Compensatory Award is based on the loss of net earnings, and 'grossing-up' ensures that the Claimant receives net lost earnings from the taxable element of the award, grossing-up occurs before the cap is applied. The EAT reduced the Compensatory Award to the then cap of £65,300.
Thursday, 17 November 2011
Advocate General Kokott has handed down her decision today in O'Brien v Ministry of Justice. She considers that although it is for national law to decide if a part time judge is a worker, it was not permissible for national measure to discriminate between full-time and part-time judges, or between different kinds of part-time judges.
The case was referred by the Supreme Court on 28 July 2010. Mr O'Brien a part-time judge (who was paid a daily fee) had argued at the Supreme Court that the specific exclusion of part-time judges who are paid a daily fee from the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 was incompatible with the Part-Time Workers Framework Directive (97/81/EC) and so the Directive had not been properly implemented into UK Law.
The matters referred were
- 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?
- 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?
The question in the present case was whether the nature of a judge's employment relationship is substantially different from those that fall within the definition of 'worker' in national law. Mere labels attached (such as 'office holders') were therefore irrelevant in determining the nature of the employment relationship and so in answering the 'worker' question.
In answer to the second question, it was not permissible for national law to discriminate between different kinds of judges in the provision of pensions.
It will however be several months until the Court of Justice of the European Union hands down its decision; the CJEU's decisions normally, but not invariably, follow the recommendation of the Advocate General.
Should a tribunal award costs where "scandalous and vexatious" claims are withdrawn or struck out at a PHR on jurisdictional grounds?
Not necessarily – if the claims are contested and the evidence hasn't been tested – according to the Court of Appeal in Dean & Dean v Dionissiou-Moussaoui.
The Claimant made serious allegations of sex discrimination against a partner of her former firm. The Respondent said the allegations were scandalous and salacious, and bound to fail.
The claims were struck out at a PHR on jurisdictional grounds, for non-compliance with the statutory grievance procedure and statutory time limits.
The Respondent sought substantial costs against the Claimant, but the tribunal did not exercise its discretion to order any award. The Respondent appealed, arguing that the particular context of the case had not been properly taken into account by the tribunal.
The EAT and CA found no error of legal principle by the tribunal. The way in which the claims had been determined meant that the tribunal considering the costs application was not in a position to determine whether the sexual misconduct claims were true or false. It had to do the best it could with what it did know, and that decision should not be interfered with even if the CA might have reached a different decision.
Monday, 14 November 2011
Should a part-timer excluded from a pension scheme by indirect discrimination get damages if, when permitted, she does not choose to join it?
No, says the Court of Appeal, in Copple & Others v Littlewoods Plc & others.
The employer's pension scheme was historically closed to part-timers. Having opened it up to female part-timers, the employer did not permit retrospective pension rights for the 'closed period' to those who hadn't joined within three months of it opening to them. The employer applied the 'opt-out' principle; i.e. if you did not join the scheme when you could, then you would not have joined earlier anyway, so no loss means no remedy.
The Claimants challenged the 'opt-out' principle as incompatible with EU law, by not providing an effective remedy for this discrimination.
The Court of Appeal held that the 'opt-out' principle was compatible with EU law; there was no scope for the 'penal' remedy sought for indirect discrimination. However, the Court of Appeal held that part-timers excluded from the scheme who then joined should be entitled to retrospective pension rights for the closed period and an interim period when the scheme was open to them but before they decided to join, provided that the reason they deferred joining was down to their exclusion in the first place, ensuring that the remedy would fully correct the consequences of discrimination. The length of this "relatively short period" is a question of fact.
The judgment also gave guidance on the approach to the question of when an excluded employee would have joined a scheme if hypothetically permitted, the test being on the balance of probabilities.
In a speech last week, Prime Minister David Cameron stated that the government will shortly consult on 'protected conversations', enabling an employer and employee to sit down and have frank conversations about performance / ongoing employment, without the employer fearing his words will be used against him a constructive dismissal claim.
He also confirmed that the government will be introducing fees for bringing employment tribunal claims (although did not commit to a date), and will be increasing the unfair dismissal qualifying period from one year to two years with effect from April.
To view the speech, go to www.number10.gov.uk/news/prime-ministers-speech-on-exporting-and-growth. The relevant parts are at the end of the 'Deregulation' section.
Is an ET1 presented to a tribunal office in writing within the meaning of Rule 1 of the eEmployment tribunal Rules of Procedure where it is faxed to and received by the tribunal office's fax machine but a technical failure prevents that machine from producing a printout or record of receipt?
Yes, according to the EAT (Underhill P) in Yellow Pages Sales Ltd v Davie.
The ET1 was faxed to the correct fax number. The sender received a transmission report confirming that all pages had been received.
The employer argued that the tribunal office did not receive the ET1 in writing, as required by Rule 1. The EAT disagreed. The writing was conveyed to the tribunal office by a particular technological means and, absent the malfunction, would have been translated into a written document. The complaint had been presented in a fixed form that could be communicated in that form to the other party but was, in effect, lost at the tribunal's end.
Interestingly, the EAT expressed caution about accepting the employee's submission that the language of Rule 61, which concerns the sending of documents by different methods, including electronic communication, also supported the finding that the ET1 had been properly presented.
Wednesday, 9 November 2011
It is clear from CJEU cases that workers continue to accrue annual leave entitlement during sickness absence, and that workers can choose to take annual leave at the same time as being absent due to sickness. But can such an employee claim holiday pay under Reg 16 (1) of the Working Time Regulations where no notice to take the leave has been given to the employer under WTR, Reg 15?
No, says the EAT (Underhill P) in Fraser v St George's NHS Trust. In this case the employee was injured at work and was on sick leave for four years until her dismissal. For the last two years of her employment she received no pay. On the ending of her employment she sought 4 weeks holiday pay in relation to each of those two years. In the light of Stringer v HM Revenue & Customs Commissioners  ICR 932 there was no doubt that the employee had accrued the right to leave during the years in question. But the employer argued that if she wanted to exercise that right she had to give notice to the employer under Reg 15 (1) – which she had not.
The EAT held the claim should fail. An employee is only entitled to holiday pay under Reg 16 (1) if she has actually taken the leave to which the pay relates and has done so in accordance with the WTR by giving notice pursuant to Reg 15. The authorities of List Design Group Ltd v Catley  ICR 686 and Canada Life Ltd v Gray  ICR 673 were wrong, and Kigass Aero Components Ltd v Brown  ICR 697 was to be preferred. The EAT also considered that the condition of notification by the employee under Reg 15 of the WTR was not inconsistent with the CJEU ruling in Pereda v Madrid Movilidad  IRLR 959.
Friday, 4 November 2011
Yes and no, says Burton J in Brown-Quinn v Equity Syndicate Management.
It is quite clear, and has been for some time, that legal expense insurers cannot restrict an insured's choice of solicitor. An individual has complete freedom to choose his own solicitor.
But that does not mean the firm – in this case, Webster Dixon LLP – can charge its normal hourly rate. Nor does it mean that the insurer can insist on only paying its panel (or slightly higher) rate, in this case, £139ph. Rather, and subject to assessment, the hourly rate payable by the insurer will be assessed as a reasonable hourly rate having regard to the insurer's standard panel rates. But in cases of particular complexity, substantive Defendants and claims requiring senior and specialist fee-earners, the panel rate becomes less important as a guide when assessing a 'reasonable' recoverable hourly rate from the insurers.
Burton J indicated that because these test cases were complex employment claims against banks and substantial public bodies, and because Webster Dixon LLP is a specialist firm of solicitors in London, recognised in Chambers & Partners for its employment law expertise, the rates charged by panel firms would be "of less weight" when determining a reasonable hourly rate.
The moral? It will still be difficult to negotiate hourly rates with BEI insurers if you are not a panel firm. But they are not entitled to refuse to instruct you if you will not agree their rates. You'll just have to fight about it after the case is finished.
Tuesday, 1 November 2011
Is there an implied term in contracts of employment that disciplinary processes be conducted fairly and without undue delay? In Dr Lim v Royal Wolverhampton Hospitals NHS Trust, the High Court held there is.
Dr Lim is a consultant anaesthetist employed by the defendant Trust. Dr Lim's breach of contract claim concerned a proposed combined capability and conduct hearing.
In respect of the proposed capability hearing, Dr Lim claimed that the Trust had been acting in breach of his contract of employment by referring him to a capability panel without first referring him to NCAS to carry out an assessment to determine whether any of the deficiencies in his practise could be addressed by way of an educational or organisational action plan. The Court held that the Trust was required to refer Dr Lim to NCAS and also to wait until an NCAS assessment panel had considered whether an assessment should be carried out and also to decide that no action plan would have a realistic chance of success. Only then could the Trust proceed directly to a capability hearing. As such the Trust was held to be in breach of contract.
In respect of the proposed conduct hearing, Dr Lim argued that the Trust had breached his contract by seeking to revive allegations of misconduct some three years after the occurrence of the events upon which the allegations were based. The Court however held that, whilst there was an implied (and possibly also express) term requiring that disciplinary processes be conducted fairly and without undue delay, the Trust had not on the facts of the case breached that obligation.
What factors should the Court consider when deciding whether a particular provision has contractual effect? In Hussain v Surrey and Sussex Healthcare NHS Trust, the High Court held that relevant factors included: (a) the importance of the provision to the contractual working relationship; (b) the level of detail prescribed by the provision; (c) the certainty of what the provision required; (d) the context of the provision; (e) whether the provision was workable. (Paragraph 168)
Dr H brought a claim for breach of contract against the defendant Trust in respect of her exclusion from work and disciplinary proceedings being brought against her.
In respect of her exclusion, the Court held that the nature and extent of Dr H's exclusion was in breach the clause of her contract of employment requiring the Trust to give full consideration to whether she could continue in or return to work in a limited capacity or in an alternative, possibly non-clinical role, pending resolution of her case. (Paragraphs 75-94)
In respect of the disciplinary proceedings, Dr H had challenged the Trust's decision to proceed with the conduct allegations only prior to any hearing in respect of the capability allegations. The Court accepted that the contract of employment permitted this and that a valid decision had been made in respect of this. Whilst the Court held that the Trust had improperly exercised its discretion when referring the charges as originally drafted to a conduct hearing on the basis that the charges could not properly be regarded as limited to conduct, the Court did not find that referring the charges as later amended to a conduct hearing would be in breach of Dr H's contract of employment. (Paragraphs 95-115)
A significant part of the judgment relates to the incorporation of the relevant disciplinary policy into Dr H's contract of employment. The Court held that the disciplinary policy was apt for incorporation and that key provisions relating to exclusion from practice and how to proceed where issues of both conduct and capability were involved were incorporated into Dr H's contract of employment.