Compulsory Retirement Ages

Thanks to Keira Gore of Outer Temple Chambers for preparing this case summary

Is 65 an appropriate age for mandatory retirement?

Yes, held the EAT in Seldon v Clarkson Wright & Jakes, a well known and long-running case.

Mr Seldon, formerly a partner in a firm of solicitors, was compelled to retire at age 65 under the provisions of a partnership deed. He complained of direct discrimination on the grounds of age. The appeal courts held that such discrimination was capable of objective justification, and Lady Hale's judgment in the Supreme Court made it clear that measures which sought to achieve inter-generational fairness or dignity at work might amount to legitimate aims.

The case was remitted to the employment tribunal, which held that a mandatory retirement age of 65 was a proportionate means of achieving the legitimate aims of retention, planning and (with some caveats) collegiality. Whether or not age 65 was proportionate was then appealed to the EAT.

The EAT held that the tribunal was entitled to conclude that 65 was an appropriate age, notwithstanding that the point of retirement could have been set at age 66. The employment tribunal had to balance the discriminatory effect of choosing a particular retirement age against its success in achieving the legitimate aims. That balance would not necessarily show that a particular point/age could be identified as any more or any less appropriate than another particular point/age. On the evidence before it, the employment tribunal was entitled to find that a retirement age of 65 was reasonably necessary to achieve the legitimate aims identified.

Employment Tribunal Fees

According to a written answer in Hansard (col WA 140), the Ministry of Justice will soon be announcing a review into fees in employment tribunal proceedings.

Meanwhile, the Unison judicial review of the introduction of tribunal fees is due to be heard by the Court of Appeal, with an early hearing date requested by the Court.

Two Things

Two small things.

First, the Information Commissioner's Office has published Guidance Notes on Disclosure of Information under TUPE. It's short and easy to read. Thanks to Laurie Anstis of Boyes Turner for spotting it.

Second, did you know the preamble to the Wages Act 1986 is still on the statute books, even though the rest of it has been repealed? Well, the Law Commission is consulting on a proposal to repeal the preamble also - see page 127 of its report (internal numbering p115). But the nostalgic amongst us can still carry on referring to 'Wages Act claims' in tribunals, even though they haven't been called that for nearly a decade. Likewise with the still-existing preamble to the Employment Act 1980, the rest of which has all gone.

Reimbursement of Fees

Thanks to Nathaniel Caiden of Cloisters for preparing this case summary

HHJ Eady QC in Horizon Security Services Limited v PCS Group has laid down the following general principles in relation to appellants recovering EAT fees upon being successful on appeal:

i) There is no need for a ‘cost threshold’ to be crossed (eg unreasonable conduct) by those responding to an appeal for them to be ordered to pay the fee element of the costs under rule 34A(2A) of the Employment Appeal Tribunal Rules 1993 (judgment at [10]-[11]);

ii) The EAT however has a broad discretion in considering whether or not to award the fee element of costs. Although in general there is the expectation that a successful appellant will be entitled to recover the fee it paid from a respondent that actively sought to resist the appeal, there may be cases where no such costs will be awarded. Examples of this could include where a party has only been partly successful on appeal, or where the means of the paying party would render it unjust for it to pay the costs (judgment at [12]-[13]).

In this particular appeal, Horizon Security Services Limited were successful in its appeal and PCS, who resisted all grounds of appeal, were duly ordered to pay Horizon’s fee for appealing (£1,600).

The Small Business, Enterprise and Employment Bill 2014 Published

The Small Business, Enterprise and Employment Bill has been published today. It contains the following... First, under clause 136, a new system for enforcing tribunal awards: an 'enforcement officer' will give a 28-day warning notice if a tribunal award remains unpaid. If the monies are not then paid by the Respondent, a 'penalty notice' will be issued. The penalty is 50% of the outstanding amount, subject to a minimum of £100 and a maximum of £5,000. If the full sum, and the penalty, are then paid within 14 days, the penalty is reduced by 50%. The penalty is payable to the Secretary of State, not the Claimant. Second, details of the 'outlawing zero hour contracts', announced earlier today. Clause 139 of the Bill provides a definition of a zero-hour contract, and renders any clause which tries to stop the worker working for somebody else void. Third, a power to amend the employment tribunal procedural rules to limit the number of postponements available to a party (clause 137), and an obligation on the tribunal to consider making a costs award if the postponement application is a late one (the concept of what a late postponement is will be set in secondary legislation). Fourth, a power to allow the Treasury to require repayment of some or all of a termination payment in a public sector exit (clauses 140-142). All the details will appear in secondary legislation. Fifth, under clause 135, a framework requiring prescribed persons under the whistleblowing legislation to publish details of disclosures made to them (this is subject to detailed secondary legislation, not yet published).

Zero Hour Contracts

Vince Cable, the Secretary of State for Business, Innovation and Skills, has this morning announced plans to ban exclusivity clauses (which prevent an individual from working for another employer, even when no work is guaranteed) in zero-hour contracts.

The government will consult further on how to prevent evasion of the ban (which, on its face, could be circumvented by offering one-hour contracts rather than zero-hour contracts).

Read the BIS announcement.

Constructive Dismissal and Affirmation of Contract

Thanks to Rad Kohanzad of Serjeants’ Inn Chambers for preparing this case summary Can delay in resigning in and of itself amount to an affirmation of a breach of contract? No, held the EAT in Chindove v Morrisons Supermarkets. The employee suffered two acts of racial discrimination at work, which the employment tribunal held amounted to a breach of contract. Although initially investigated by the employer, the HR manager ultimately failed to investigate the employee's grievance. The employment tribunal held that the employee had affirmed the breach of contract because the last act of mistreatment, the HR manager's failure to investigate the grievance, was some six weeks before the employee's resignation. Langstaff P emphasised that the matter of time is not to be taken in isolation. Rather, the principle is whether the employee has demonstrated that they have made a choice, which they will do by conduct. They will do so, generally, by continuing to work in the job or by communications which show that they intend the contract to continue. But the issue is essentially one of conduct and not of time.

Bias: EAT Guidelines where 3rd party approaches Judge

Thanks to Samantha Cooper of Outer Temple Chambers for preparing this case summary

If, during a hearing, an employment tribunal receives information from a third party that may be prejudicial, should it disclose that information to the parties and recuse itself from hearing the matter?

Yes, held the EAT in Begraj v Heer Manak Solicitors, but not in every instance.

An Employment Judge was approached by Police Officers part way through a hearing to speak in private. The Officers provided the Employment Judge with information regarding alleged criminal activity of one of the parties. The Employment Judge acceded to the request of the Officers not to reveal this communication to the parties.

Several days of evidence later, the Employment Judge determined that it was in fact necessary to disclose the approach to the parties. The Respondent made an application for the employment tribunal to recuse itself, which it did, applying the test in Porter v Magill [2002] 2 AC 357 "whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the Tribunal was biased".

Upholding the decision of the employment tribunal to recuse itself, the President noted the importance of the reality and the appearance of impartiality and provided guidance for employment tribunals in such situations at paragraph 53.

Employment Status: Football Referee

Thanks to Jahad Rahman of Rahman Lowe Solicitors for preparing this case summary Is a football referee an employee under the ERA 1996? No, held the EAT in Conroy v Scottish Football Association. The Claimant, a football referee, lodged a claim of unfair dismissal, age discrimination and holiday pay. The preliminary issue was whether Mr Conroy was an employee of the Scottish Football Association ('SFA') within the meaning of the Employment Rights Act 1996. The SFA argued that he was self-employed. The EAT dismissed Mr Conroy's appeal and upheld the decision of the employment tribunal that he was not an employee for the purposes of the ERA 1996. However, he was held to be an employee for the purposes of the Equality Act 2010 and a worker for the purposes of the Working Time Regulations 1998. The EAT held that the employment tribunal had properly considered all of the matters and found facts which could indicate employment, such as the provision of health insurance and the fact that referees are not entitled to send a substitute for any match. However, the employment tribunal found other factors pointing away from a contract of employment, such as the lack of disciplinary procedures, the fact that Mr Conroy purchased his own flags, whistles and notebooks, his right to decline matches and the SFA's right to refrain from offering him any matches at which to officiate. Lady Stacey concluded by saying that it is perfectly possible for a regulatory body such as the SFA "to have standards and rules which a referee must meet and adhere to without him being employed by it".

Disclosure of 'Spent' Convictions

Thanks to Georgia Hicks of Devereux Chambers for preparing this case summary

Is the obligatory disclosure of spent convictions for specified professions or persons working with children and vulnerable adults a necessary and proportionate interference with their Article 8 right to a private life?

No, held the Supreme Court in R (on the application of T) v Secretary of State

Under the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 and ss.113A and 113B in Part V of the Police Act 1997, certain professional bodies and employers are permitted to request Enhanced Criminal Record Certificates ("ECRCs"). ECRCs disclose every 'relevant matter' on the Police National Computer, revealing all spent convictions, no matter how historic or minor.

T was given a warning, aged 11, for stealing two bicycles. When T applied for a job at a football club this had to be disclosed as the role potentially involved interaction with children. JB was given a caution for shoplifting some false nails. The compulsory disclosure of this caution was the reason she was rejected for a job as a care worker eight years later. Neither party had any other criminal record.

The Supreme Court held this violated respect to private life under Article 8 ECHR. The majority of the Supreme Court found that the interference is not justified as it is unlawful; there are no safeguards against arbitrary disclosure of personal information [108-109, 115].

Finally, the Supreme Court unanimously held that the interference is not necessary in a democratic society [50; 121; 158]. Lord Wilson echoed the Home Secretary's own words that the criminal records system should be scaled back to "common sense levels" [48].

Fee-Paid Judges and Pensions

The Ministry of Justice has issued a further statement in respect of part-time (fee-paid) judges and judicial pensions, in the light of the MOJ v O'Brien litigation.

The statement is here.

Employment Tribunal Fee Remission

Thanks to Michael Reed of the Free Representation Unit for tipping me off about this.

The Ministry of Justice has just announced a simplification of the fee remissions structure, effective 30 June.  With effect from 30 June:-
 

• applicants no longer need to provide original copies of documents; HMCTS will accept photocopies;
   
• applicant's won't have to tell HMCTS the exact amount of disposable capital they have; just the relevant threshold it falls into
   
• bank statements can be printed copies from online banking systems
   
• DWP letters can now be dated within the last three months (previously it had to be less than a month old)

HMCTS is also producing a clearer, simplified form, and has announced that if a piece of information is missing, it will endeavour to contact the applicant rather than reject the claim.

Penalty Clause in Employee's Notice Period

Thanks to James English of Hempsons solicitors for preparing this case summary

Is a clause deducting a month's salary for an employee's failure to work their notice period a penalty clause?

No, held the EAT (with some hesitation) in Li v First Marine Solutions.

The Claimant resigned and did not work her notice period because she said she had outstanding holiday. The parties agreed that the effect of the contract was that the employer could not only to withhold her pay for the period not worked but also deduct from any sum outstanding a sum equal in value to that shortfall. The Claimant argued that this was unenforceable as a penalty clause.

The employment tribunal held that the clause was enforceable. The Claimant had not worked her notice period (she did not have holiday remaining), and it was difficult and expensive to recruit a replacement at short notice.

In upholding that decision, reluctantly, the President of the EAT (Mr Justice Langstaff) expressed concerns that the parties had agreed the effect of the clause. He made a number of observations on clauses of this type (at paras.43 to 47).

Firstly, the employment tribunal should consider the 'reality of employment circumstances', and whether the effect was really intended. The normal principle is 'no work, no pay'.

Further, employment tribunals should carefully consider whether the clause was a penalty clause, a liquidated damages clause or simply a clause entitling the employer to withhold pay.

Contracts of Employment

Thanks to Chesca Lord of Cloisters for preparing this case summary Can an express contract of employment exist in the absence of an agreement to remunerate the individual for work provided to the company? No, held the EAT in Ajar-Tec Ltd v Stack. Mr Stack, a shareholder and director of Ajar-Tec, provided work to the company under no formal employment arrangement and for no remuneration. The Employment Judge held that there was an express agreement that Mr Stack would do work for the company and an implied term that he would be paid a reasonable amount for that work. He concluded that Mr Stack was both an employee and a worker. Allowing the appeal, the EAT (HHJ Birtles presiding) held that an express agreement that the claimant would do work for the company does not amount to a binding express contract if there is no consideration for such a promise, of which there was none in this case. The employment tribunal failed to apply Tilson v Alston Transport to determine whether, in the alternative, an implied contract of employment existed. In the absence of either an express or implied contract of employment, it was an error of law to find an implied term as to remuneration. The case was remitted to a fresh employment tribunal to determine whether a contract of employment could be inferred on the facts.

Paid Annual Leave not Extinguished by Worker's Death

Thanks to Will Young of Outer Temple Chambers for preparing this case summary.

Does the death of a worker extinguish his or her right to paid annual leave?

No, held the CJEU in the case of Bollacke v Klass & Kock B.V.  Mrs Bollacke's husband was employed by the Respondent until his death in service on 19 November 2010. At the date of his death he had accrued 140.5 days of untaken annual leave (since he had been on extended sick leave).

On a reference from the German court, the ECJ noted that Article 7 of Directive 2003/88, entitled 'Annual Leave', did not provide for any derogations to be made from its provisions, nor was there any qualification on the right to annual leave (save that payment in lieu could be made where the employment relationship had terminated).

The Directive treats entitlement to leave and to payment on that account as being two aspects of a single right. This right is an essential principle of EU social law, and a restrictive interpretation of Article 7 could not be taken by the Court. If the entitlement to pay in lieu (of annual leave untaken on death in service) was curtailed, this would retroactively lead to the total loss of the entitlement to paid leave itself. Nor, given the wording of the Directive, could an application from the worker be a prerequisite to the entitlement to pay in lieu of untaken leave.

Thus the Directive must be interpreted as precluding any national law or practice whereby entitlement to paid annual leave is lost on the death of a worker without conferring an entitlement to an allowance in lieu of any leave outstanding.

Employment Tribunal Statistics: January - March 2014

The MOJ has released the most recent set of employment tribunal statistics.

They're not immediately easy to work out, and I've put some key points below: meanwhile, you can download my powerpoint slides on the impact of employment tribunal fees (note: these do not include today's statistics).
 

• there were 5,619 single claims lodged Jan-Mar 2014, compared with 13,491 single claims lodged Jan-Mar 2013 - which is a 58% reduction in single claims compared with the same period last year.
   
• nevertheless, there appears to be a slow rise upwards in the number of single claims compared with Oct-Dec 2013.

The statistics for October to December 2013, which were the first set to be produced showing the impact of tribunal fees, showed a 67% drop in the number of single claims, and a 79% drop overall.

Associative Discrimination

Thanks to Vanessa James of SA Law for preparing this case summary

Does an employer's duty to make reasonable adjustments extend to an employee associated with a disabled person?

No, held the Court of Appeal, upholding the EAT's decision in the case of Hainsworth v Ministry of Defence.

The Appellant was a civilian employee of the British armed forces, based in Germany. The Appellant herself was not disabled, but she had a daughter with Down's syndrome. The Appellant requested a compassionate transfer to the UK to enable her daughter to access specialist education and training facilities. Her request was refused. The Appellant brought a claim alleging the refusal amounted to a breach of the obligation to make reasonable adjustments.

Previous caselaw (Coleman v Attridge Law) had held that claims of associative discrimination can apply to direct discrimination claims. However in Hainsworth, the Court of Appeal held that the wording of the Equality Act 2010 and Article 5 of the Equal Treatment Framework Directive only applies to reasonable adjustments for the assistance of disabled employees or prospective employees, and any attempt to stretch this to cover a disabled person associated with an employee is "doomed to failure".

BIS Survey of ET Applications

BIS has today published its Findings from the Survey of Employment Tribunal Applications 2013.

Coming in at a whopping 280 pages, this is the first such survey in five years. About 2,000 employees and 2,000 employers were interviewed for the survey. Here are some of the key findings:-
 

• 79% of small employers had not been involved with a tribunal claim over the last two years
• although the employees surveyed issued their claims before fees were introduced, 49% said that paying an issue fee would have influenced their decision to issue proceedings (mainly those with lower salaries or unlawful deductions claims)
• 67% of employers use a representative at the hearing, whereas only 33% of Claimants use a representative
• 79% of cases in which an offer was made resulted in settlement. The opening offer was made by the employer (rather than employee) 61% of the time
• 17% of claims went to a full hearing (remember this is cases issued before fees were introduced)
• the median tribunal award was £3,000, and the median level of expected award (by Claimants) was £4,000
• 87% of employers said the award had been paid, whereas just 63% of Claimants said they had received the money of those who paid for legal or professional advice, the median amount paid was £3,000
• 72% of claims were against private sector employers (broadly similar to the 69% of people who work in the private sector).

Interesting but not life-changing stuff. For much more life-changing stuff - particularly on the impact of Acas Early Conciliation and employment tribunal fees - have a think about coming along to join me at the www.masterclass2014.com

Allegations of Bias

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

Should allegations of bias at an employment tribunal be dealt with by an application for a review (or reconsideration)?

No, held the EAT in Papajak v Intellego Group, the correct course is to appeal. The Claimant brought proceedings in person. At the hearing, a disagreement over the order of witnesses arose, and the Claimant left the proceedings without giving evidence, having been warned by the employment tribunal that her claims (which she had to prove) might fail without her evidence. The employment tribunal considered the information available to it, including the pleadings and all the witness statements, and dismissed the claims.

The Claimant sought a review (under Rule 35 of the 2004 Rules) making an unfounded allegation of bias against the original Employment Judge and arguing unsuccessfully that she should not hear the review. Rule 35 provided that the Regional Employment Judge or Vice-President of Tribunals could hear a review application where it was 'not practicable' for the original Employment Judge to do so. The Employment Judge refused the review application.

On appeal, the EAT rejected the Claimant's arguments, holding that 'practicable' is clearly intended to deal with cases where the original Employment Judge is physically unavailable, unwell or deceased. 'Practicable' does not mean 'convenient' but 'feasible'. Holding that in bias cases, the correct course would be to appeal, the EAT noted that it would be undesirable if one Employment Judge were to have to consider an allegation of bias against a fellow Employment Judge. Whilst this judgment considered the 2004 Rules of Procedure, the 2013 Rules provide for a similar process for reconsideration under Rule 72, so this judgment is likely to be of continuing relevance.

The EAT noted that with the Claimant having deliberately chosen not to participate in proceedings, there was no proper basis for the Claimant to have appealed on the ground that the decision was made in her absence. The EAT also noted that the Claimant's evidence was hearsay and the employment tribunal could not disregard well-established principles of law in regard to the admissibility of and weight given to hearsay.

Unusual bias case: Employment Judge hearing same case twice

Thanks to Rosa Dickinson of St Philips Chambers for preparing this case summary

Where an Employment Judge has announced a firm conclusion that a Claimant is disabled, but later re-hears this issue himself, does this amount to a real possibility of bias at the re-hearing?

Yes, held the EAT in Menzies Distribution Limited v Mendes. After a preliminary hearing as to disability, the Employment Judge announced his decision that the Claimant was disabled. No oral reasons were given on the basis they were to be provided later in writing.

Unfortunately, the employment tribunal mislaid the tape on which the Employment Judge’s reasons were recorded. As he could not remember aspects of the case, he was unable to comply with his rule 30 obligation to give reasons. Therefore the Employment Judge re-heard the preliminary hearing on disability, and again decided the Claimant was disabled.

Applying the test in Porter v Magill, the EAT found that a fair minded observer would conclude that there was a real possibility of bias as the Employment Judge had announced a firm conclusion (not just a preliminary view) at the first hearing, and was bound to be influenced by this in his re-hearing of the case. The EAT revoked the initial decision as to disability and remitted the question to a freshly constituted tribunal.

Burden of Proof

Thanks to Barnaby Large of No.18 Barristers Chambers for preparing this case summary. When dealing with a multitude of discrimination allegations, may employment tribunals go beyond the first stage of the burden of proof test to look at 'the reasons why' and should they look at the allegations individually or as a whole? Yes to the first question and holistically, taking a step back after analysing each allegation, to the second held the EAT in Fraser v Leicester University. The Claimant, a black Afro-Caribbean professor of economics employed by the First Respondent, raised a total of sixty-six allegations of discrimination against his employer. The employment tribunal assessed each before it stood back to consider the full picture. In assessing burden of proof, the employment tribunal did not stop at the first stage of the Igen v Wong criteria (facts on which the tribunal could conclude discrimination) but assessed the reasons why the Respondent behaved as it did. After dismissal of the claim, the Claimant appealed, asserting the employment tribunal analysed the case in a fragmented fashion and, by considering the reason for treatment, required the claimant to demonstrate this was linked to race. The EAT (HHJ Eady QC presiding) dismissed the appeal. Applying Shamoon v Ulster Constabulary, it was open to the employment tribunal to examine the reason for the Claimant's treatment and this effectively put the spot light on the Respondent to establish a non-discriminatory reason. In addition, addressing each complaint separately and then considering them holistically to see both wood and trees was compliant with Qureshi v Victoria University.

Minimum Wage Enforcement

The government has 'named and shamed' 25 new employers who have failed to pay the minimum wage.

Like last time, the list only represents a tiny proportion (estimated at less than 1%) of those breaching the legislation. No large employers are identified, just the usual hotchpotch of restaurants, contract cleaners and hair salons.

See the full list here.

The Flexible Working Regulations 2014

The Flexible Working Regulations 2014  were laid before parliament yesterday and come into force on 30th June.

They extend the right to make a request for flexible working to any employee who has been employed for 26 weeks (not just parents of children under 17, or 18 if disabled, and certain carers - as was previously the case).

The basic right to request is unchanged. Employees can make up to one written request every year, the employer needs to deal with it within three months, and can refuse on any of eight (very wide) business grounds. A tribunal cannot normally investigate the rights and wrongs of the refusal, only whether the procedure has been properly followed. Maximum compensation for a failure to comply is eight weeks' pay (currently capped at £464 per week).

Employment Law Reforms in the Queen's Speech

The Queen's Speech today identified various (minor) employment law proposals:-
 

• “Strengthen UK employment law by tackling National Minimum Wage abuses and cracking down on abuse in zero hours contracts”.  No details are given, although speculation on Twitter is that this might give be a (fairly useless) right to request not working zero hour contracts.

 

• “Stop highly paid public sector employees keeping redundancy payments when they come back to the same part of the public sector within a short period of time.”

 

• Legislation to “reduce delays in employment tribunals".  Since delays have been reduced considerably by the introduction of tribunal fees, it's not clear what this refers to.  Again, speculation on Twitter suggests it might concern reforms to equal pay claim procedure.

(Additional details from Prime Minister's Office background briefing notes and a hat-tip to Laurie Anstis's blog.)

Indirect Discrimination: Proving Disadvantage

Thanks to Thomas O’Donohoe of 3 Paper Buildings for preparing this case summary In a claim for indirect discrimination do members of a disadvantaged group have to show why they have suffered the disadvantage, in addition to the fact that they have done so? No, held the EAT (Langstaff P) in Essop & others v Home Office (UK Border Agency). For the purposes of this test case it was assumed that black and minority ethnic ('BME') candidates over the age of 35 were systematically less likely than non-BME and younger candidates to pass a Core Skills Assessment and so to obtain promotion in the Civil Service. At a pre-hearing review the Respondent had argued successfully that the claims of indirect discrimination could not succeed unless the individual Claimants could prove the reason they failed the test. Otherwise, they could not show that they were 'at that disadvantage' as required by s.19(2)(c) of the Equality Act 2010. The EAT held that the tribunal judge had erred in imposing that requirement which was not required by the statute. It did however remain open to Respondents to indirect discrimination claims to show that a particular member of the disadvantaged group was not in fact disadvantaged by the relevant provision, criterion or practice.

New TUPE Guidance

Acas has, today, published new guidance on Handling TUPE transfers, as well as a useful flowchart.

This comes hot on the heels of Acas' new guidance and advice on the World Cup.

If you're a TUPE afficionado (and who isn't?), I'll be talking about the 2014 changes to TUPE at next month's Employment Law MasterClass.  But don't worry - since there's no way to make TUPE interesting, I won't speak for long on it!  And then we'll all go and get some coffee.