"Work for your benefits" scheme

Thanks to Lucy Boyle of 12 King’s Bench Walk Chambers for preparing this case summary

Does making Jobseeker's Allowance conditional on work or work-related activity constitute forced labour contrary to article 4 of the European Convention on Human Rights? 

No, according to the Supreme Court in R (on the application of Reilly and another) v Secretary of State for Work and Pensions.

The Respondents participated in "work for your benefit" programmes ("the schemes") implemented under the Jobseeker's Allowance (Schemes for Assisting Persons to Obtain Employment) Regulations 2011.  The Regulations were made under section 17A of the Jobseeker's Act 1995.  The Respondents issued judicial review claims challenging the legality of the 2011 Regulations and the schemes.

The Court found unanimously that the imposition of a work requirement as a condition of a benefit "comes nowhere close to the type of exploitative conduct at which article 4 is aimed".  Further, it was not unlawful for the 2011 Regulations to be enforced in the absence of a published policy on the nature of the schemes and the circumstances in which individuals could be required to undertake unpaid work.

However, the 2011 Regulations were ultra vires because they failed to provide a "prescribed description" of the schemes in accordance with section 17A of the 1995 Act, and there were individual failures to comply with the “notification” and “publication” requirements of the 2011 Regulations in the case of each Respondent.

Disability discrimination - reasonable adjustments

Thanks to Joanna Cowie of SA Law for preparing this case summary

Did an employer breach its duty to make reasonable adjustments by only offering a disabled employee reduced hours for a fixed period?
No, says the Employment Appeal Tribunal in Secretary of State for Work and Pensions v Higgins.

H was a long serving employee at the JobCentre Plus (JP) in Liverpool.  Following a long sickness absence, H presented a GP "Fit Note", which recommended a phased return to work on altered hours for 3 months.  H suggested a phased return over a period of up to 26 weeks, but JP proposed a Part-time Medical Grounds ("PTMG") plan for H to build up to his normal hours over 13 weeks.  H did not accept this plan, and refused to return to work unless JP agreed to extend the PTMG.  His request to extend the plan was refused and H was dismissed.  He presented a claim on the grounds that JP had failed to make reasonable adjustments under Section 20(3) Equalities Act 2010.

The employment tribunal had held that by failing to consider an extension to the PTMG plan beyond 13 weeks, JP had breached its duty to make reasonable adjustments.  JP appealed.

Allowing the appeal, the EAT found that the tribunal had incorrectly identified that the provision criteria or practice placing H at a substantial disadvantage was the requirement for him to work, whereas it should have been the requirement for him to work his contractual hours.  Noting that employers are often presented with Fit Notes which last a certain duration, the EAT did not consider that it is always necessary for the employer to give an explicit guarantee to extend this period.  If at the end of the agreed period, an employee continues to suffer a substantial disadvantage, then although the duty to make reasonable adjustments will still be applicable, it will be judged on the circumstances relevant at that particular time.

Diplomatic Immunity

Thanks to Paul Smith of Broadway House Chambers for preparing this case summary

If diplomatic immunity prevents an employee from obtaining redress through an employment tribunal, does this breach the employee's rights under Article 6 of the European Convention on Human Rights?

No, says the EAT in Al-Malki v Reyes & Suryadi.

The Claimants were employed as domestic staff by a diplomat and his wife at the Saudi mission in London. They brought contractual and discrimination claims against the couple, who both claimed diplomatic immunity under the Diplomatic Privileges Act 1964, the legislation which incorporates the Vienna Convention on Diplomatic Relations 1961 into domestic law.

Both parties agreed that Article 6 "generally, the right to a fair trial" was engaged because if the Respondents had diplomatic immunity the Claimants' right of access to a court or tribunal would be restricted absolutely. The Claimants argued that such interference with their Article 6 rights was disproportionate to the legitimate (diplomatic) aims of the Respondents.

In giving the judgment of the EAT, Langstaff J highlighted the distinction between "state" immunity and "diplomatic" immunity, reminding us that the latter is of wider scope than the former. Further, unlike in the case of state immunity where there is authority and international convention which shows us when such immunity may breach an individual's Article 6 rights, there is no equivalent in the case of diplomatic immunity. In the absence of judicial guidance as to how the test of proportionality is to be applied in cases of diplomatic immunity, the President concluded that there was no breach of Article 6.

As with Benkharbouche v Sudan (reported last week), which concerned the interaction between state immunity and EU law, permission to appeal to the Court of Appeal was granted given the important point of principle at the core of the case.

Update on USDAW v Woolworths - meaning of establishment

The Employment Appeal Tribunal has published its decision giving the Secretary of State leave to appeal in USDAW v Woolworths, on the definition of "establishment" for the purposes of collective redundancy consultation.

As noted in an earlier bulletin, the Secretary of State had chosen not to appear at the Employment Appeal Tribunal hearing of the case, resulting in what was described as "wholly unique" circumstances in which "a party has sought to enter into the Court of Appeal for the first time whilst declining expressly the invitation of the court below to attend".

In view of the principles involved, HHJ McMullen QC has allowed the Secretary of State permission to appeal, but only on condition that the Secretary of State would not seek costs against the Claimants in the Court of Appeal, and would pay the reasonable costs of the Claimants in responding to the appeal in the Court of Appeal.

Dismissals / Ambiguous Resignations

Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary

When an employee states that "I have no alternative but to resign my position", are these words ambiguous?

No, says the EAT in Secretary of State for Justice v Hibbert.

The issue in this case was whether a claim for dismissal was lodged out of time.  This turned on the effect of the letter of resignation from the Claimant.
 
After problems with work the Claimant wrote to her employer saying: "I am of the view that there has been a fundamental breach of my employment contract by my employer and have no alternative but to resign my position".
 
The letter was dated 29 June 2012. The employer offered to give the employee time to reconsider.  She did not.  The employer then wrote accepting the employee's resignation, requiring her to provide 4 weeks notice, and indicating that her last day of work would be 27 July 2012.
 
If the effective date of termination was on 29 June 2012 the claim was out of time. If it were 27 July 2012, it was in time. 

The employment tribunal Judge considered that the 29 June 2012 letter was unambiguous as to resignation but not as to the date of termination of the contract, which was still to be settled.  The claim was therefore in time.
 
The EAT disagreed.  In Southern v Franks Charlesly & Co[1981] the Court of Appeal considered words such as "I am resigning" were unambiguous.  In the present case the EAT considered that the words used by the Ms Hibbert were also unambiguous.  There was no question of a decision being taken in the heat of the moment and the letter was written on legal advice.  The fact that the employer required her to give 4 weeks notice and stated that her last working day would be 27 July 2012 and that she was paid for that period had no legal effect.  As a matter of fact she resigned on 29 June 2012.  The unfair dismissal claim was lodged out of time. 

Disclosure in Employment Tribunals

Thanks to Rad Kohanzad of Serjeants’ Inn Chambers for preparing this case summary

The EAT in Plymouth City Council v White has reminded tribunals about the correct approach to take in considering an application for the disclosure of documents containing confidential information.

(1) consider whether the document is relevant (if it is not, then it need not be disclosed).

(2) if it is relevant, is it necessary for a fair trial for it to be disclosed? Where there is objection, the Judge should examine the document itself to consider whether it should be disclosed, even if confidential.

(3) if the document is relevant and necessary and is to be disclosed, the Judge should consider whether there is a more nuanced way of disclosing the material so as to respect confidentiality; usually for the document to be wholly or partially redacted.

(4) the disclosure Judge having read the disputed documents should not conduct the full hearing unless the parties agree.

Restrictive Covenants

Thanks to Ed McFarlane of Deminos HR for preparing this case summary

A restrictive covenant prohibited an ex-employee from approaching his former employer's customers to solicit business from them for six months post-termination, if the former employer could still do business with them. Was that an unreasonable restraint of trade?

No, says the Court of Appeal in Coppage v Safety Net Services.

The Appellant was a former key employee of the Respondent security company in Birmingham. He was made redundant and worked in competition with his former employer. A successful claim for damages by the former employer followed; the Claimant appealed unsuccessfully.

The principal issue was whether or not the covenant was unenforceable as an unreasonable restraint of trade. The Court of Appeal held that the restraint period of six months was a powerful factor in the overall reasonableness of the clause. Whilst noting that these cases are highly sensitive to the facts, Sir Bernard Rix noted that the purpose of the covenant was to place a key employee who was the 'face' of a business 'out of bounds' for a strictly limited period, to counter the diversion of customers who would have been realistically available to the former employee through his employment.

The Court observed that a previous, unreported Court of Appeal decision in this area, Arbuthnot Fund Managers Ltd v Rawlingsshould best be regarded as confined to the contractual provision and facts in question in that case.

The Court of Appeal declined, on the facts and history of the case, to comment on the impact of sections 170-177 of the Companies Act 2006 on the common law fiduciary duties of company directors (paragraphs 25-30), and left the finding on quantum undisturbed.

Unfair Dismissal: Redundancy / Reorganisation

Thanks to Lisa Joyce of DTM Legal LLP for preparing this case summary Can an employer consider a potentially redundant candidate for an alternative role fairly, if one candidate is aware of the full job description but the other is not?   No, according to the EAT in Somerset CC v Chaloner.   When the Respondent suffered a downturn, it was proposed that four senior management posts be reduced to two vacancies, one being Business Development Manager ('BDM'). Based on the job description, the Claimant considered her role comparable to the vacancy and she applied.   Upon further review, the Respondent’s finances were worse than initially thought and so the re-organisation was extended to other management, including the Finance Officer who applied for the BDM role. The job description was revised to include additional financial responsibilities and the additional candidate was considered, but the Respondent omitted to inform the Claimant of either. The Claimant was unsuccessful at interview and dismissed.   The EAT concluded that the introduction of a competing candidate and an amended job description, both of which the Claimant was oblivious to, gave the Claimant’s competition an unfair advantage at interview. As such, the Respondent failed to consider the Claimant in a fair manner and the dismissal was found to be unfair.

State Immunity

Thanks to Miranda de Savorgnani of Outer Temple Chambers for preparing this case summary

Does the EU Charter of Fundamental Rights oblige tribunals to disapply provisions of the State Immunity Act 1978 which would otherwise render employment law claims inadmissible in a dispute between private parties?

Yes, says the EAT in Benkharbouche v Sudan.  Provisions of primary law which conflict with a general principle of EU law must be disapplied where the substantive rights in issue fall within the material scope of EU law.

In joined appeals, two Claimant domestic workers brought claims against the embassies of Libya and Sudan in London under the Working Time Directive, for discrimination and unfair dismissal inter alia.  When their claims were dismissed under Sections 16 and 4 of the SIA, they argued this breached their right of access to a court or tribunal under Article 6 ECHR and (equivalent protection under) Article 47 of the EU Charter.

The President of the EAT agreed that the provisions were contrary to Art 6, but found that it is not possible to read Art 6 compatibly with the SIA under Section 3 of the Human Rights Act 1998.  However, recent EU case law C-555/07 Kücükdeveci v Swedex GmbH & Co KG and C-617/10 Aklagaren v Franssonconfirmed that where a general and fundamental principle of EU is concerned, such as the right to a fair hearing, UK courts must disapply a provision of domestic law which stands in its way, regardless of whether the dispute takes place between private persons. Langstaff P ruled that the obligation is limited to the material scope of EU law, i.e. rights under statutory provisions which implement Directives or Regulations.

Therefore, claims relating to discrimination and working time were caught, but claims relating to unfair dismissal and minimum wage would have to be pursued via a declaration of incompatibility under the Human Rights Act 1998 only.

Due to the far-reaching impact of the ruling, permission to appeal was granted to all parties.

Age Discrimination

Thanks to Tamar Burton of Cloisters Chambers for preparing this case summary

In deciding if there had been less favourable treatment in an age discrimination claim, was the employment tribunal correct to take into account differences between a Claimant and a comparator that related to age?

No, held the Court of Appeal in Lockwood v (1) Department of Work and Pensions; (2) Cabinet Office.

The Court of Appeal found that the employment tribunal had failed to conduct the comparison exercise properly. Regulation 3(2) of The Employment Equality (Age) Regulations 2006 provides that the ‘relevant’ circumstances of the Claimant and the comparator must be ‘the same, or not materially different’. The employment tribunal wrongly relied on the differences between the Claimant and the comparator, which were based on her age; namely she was less likely to have family ties, a mortgage and less difficulty to recover from redundancy because she was younger than her comparator. 

The Court found that once the correct comparator exercise had been made, Ms Lockwood had suffered less favourable treatment. However, Ms Lockwood’s appeal was unsuccessful as the Court agreed that the less favourable treatment was objectively justified.

This case provides an important restatement of the two stage test for direct age discrimination claims.