DDA and reasonable adjustments

Thanks to Sarah Russell of Slater & Gordon for preparing this case summary

Was there a failure to make reasonable adjustments in dismissing a health visitor following her conviction for theft, dangerous driving and battery?

No, held the EAT in Howorth v North Lancashire Teaching PCT.

Mrs Howorth had been suffering from mental illness and pleaded guilty to the offences despite apparently suffering from automatism at the time they were committed. The employment tribunal found that the Trust's failure to consider alternatives to dismissal was a failure to make reasonable adjustments. At the remedies hearing, it then found that no adjustment could have succeeded in keeping Mrs Howorth in work. The EAT found that there was an error of law. Given that no adjustment could have succeeded, there was no failure to make reasonable adjustments.

Mrs Howorth also claimed discrimination arising from disability for the Trust's refusal to re-employ her as a health visitor following her application for another post. This claim failed, on the basis that the Trust was not required to ignore the conviction given that this was a clinical job and enhanced vetting applied. The EAT upheld the employment tribunal's original decision on this point.

Zero-hours contracts

[Thanks to Craig Gordon of HR Bullets for allowing the reproduction of his bulletin]

Having decided in June to ban the use of exclusivity clauses on zero-hours contracts (ZHCs), the government is now asking for views on how to stop employers potentially sidestepping such a ban.

A new s. 27A will be inserted into the Employment Rights Act 1996 (via the Small Business, Enterprise and Employment Bill) making exclusivity clauses unenforceable. This will be supplemented by a new s. 27B allowing the Secretary of State to make further regulations dealing with anti-avoidance issues.

The consultation asks for views on:

• what the likelihood of employers avoiding a ban on exclusivity clauses might be and how that might be achieved;
• whether the government should do more to deal with potential avoidance, how might that be best achieved, and whether to do this alongside the ban or wait for evidence of whether such avoidance is taking place;
• how potential avoidance could be dealt with;
• whether there should be consequences for an employer if they circumvent a ban on exclusivity clauses and, if so, what those consequences should be; and
• whether there are any potentially negative or unintended consequences as a result of the wording of the legislation.

As regards further guidance, rather than one overarching code of practice, the consultation envisages industry-led/owned sector-specific codes of practice on the use of ZHCs. While up to unions and employers to agree the precise contents of such codes, the consultation suggests that the issues to cover could include:

• when it is appropriate/not appropriate to use a ZHC;
• whether and how to promote clarity, e.g. job adverts and contracts stating the type of contract up front;
• the rights and responsibilities of the individual and the employer and how to calculate accrued benefits such as annual leave where appropriate;
• best practice in allocating work; and
• recommended practice around notice of hours of work or cancellation of work.

The closing date for responses to the consultation is 3 November 2014.

Constructive Dismissal

Thanks to David Leslie of Lyons Davidson for preparing this case summary Is an employee prevented by law from claiming constructive dismissal if he is in repudiatory breach of his contract? No, held the EAT in Atkinson v Community Gateway Association, following the Court of Session's decision in McNeill v Aberdeen City Council. An employee who might be dismissed for gross misconduct can jump before he is pushed. However, the misconduct will be relevant to remedy. The EAT confirmed that the employer had not breached the employee's ECHR article 8 right to respect for his private life and correspondence by reviewing personal emails of a sexual nature sent from work. The EAT's helpful analysis of the issues is at paragraphs 47 to 69. The EAT also held that the employment tribunal was wrong to strike out a claim for detriment relating to a protected disclosure on the basis that the employer could not be vicariously liable for its employees' conduct in subjecting the Claimant to a detriment. In light of the appeal findings, it was an error of law to strike out the claim without hearing all the evidence. That step should only be taken in rare cases.

TUPE and constructive dismissal

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

Does a change of location where the employee is required to work after a TUPE transfer justify a resignation and a claim for constructive dismissal?

Only where this amounts to a fundamental breach of contract or a substantial change in working conditions to an employee's material detriment, held the EAT in Cetinsoy v London United Busways Limited.

In this case bus drivers were employed by CentreWest working out of the Westbourne Park depot. The bus route on which they were employed was transferred to London United Busways. A consequence of the transfer was that the claimants were required to move to Stamford Brook. This was uncongenial to them and they resigned claiming constructive and unfair dismissal. However the employment tribunal, with which the EAT agreed, considered that there was no standing to bring an unfair dismissal claim. Although it was a contractual term that the employees worked out of Westbourne Park and the requirement to work at Stamford Brook was therefore a breach of contract, it was not a fundamental breach of contract.

Furthermore, for the purposes of regulation 4(9) of TUPE the move did not involve a substantial change in working conditions to the employees' material detriment. The addition of between 30 minutes and 60 minutes travelling per day was not, in the opinion of the employment tribunal, substantial or to the material detriment of the employees.

This kind of evaluation, held the EAT, is one based on a factual assessment and could only be set aside if the answer to the question was perverse or had not been approached properly. The EAT considered that the Employment Judge was entitled to come to the view he did, assisted by the practical experience of the employment tribunal lay members.

The timing of a TUPE transfer

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

When, precisely, does a TUPE transfer take place?

When responsibility for the management of the business or service transfers from one entity to another, held the EAT in Housing Maintenance Solutions Ltd v McAteer and others.

This case concerned a contract for the repair and maintenance of housing association properties in Liverpool. The housing association terminated its contract with Kinetic on 9 June 2011. Kinetic's staff were informed that they were redundant and that their contracts had been terminated on 9 June. The housing association began the process of setting up a subsidiary company to provide it with repair and maintenance services (Housing Management Solutions Ltd (HMS)). HMS reassured Kinetic's employees that it would employ them but it did not begin service provision until 1 July 2011. A number of employees brought claims for unfair dismissal, unpaid wages during the interim period and failure to inform and consult under both TUPE and collective redundancy procedures. A key issue for the employment tribunal was the identity of the employer between 9 June and 1 July.

At first instance, the employment tribunal found that there was a TUPE transfer on 9 June 2011. It found HMS to be the employer from this date as HMS had "accepted responsibility" for the employees and engaged with the employees in "consultation and reassurance".

On appeal, the EAT found that the employment tribunal had erred in its finding that the transfer had taken place at the point where responsibility was "assumed" for the employees. The EAT followed Celtec v Astley and others [2006] UKHL 29 to the effect that the date of the transfer is the date when responsibility for the transferor's business was transferred. According to the EAT the legal assumption of responsibility for the employees occurs on the date of the transfer, and not vice versa.

The key question for the employment tribunal should be: when did responsibility for the business or service transfer from one entity to another? This is a matter that is not determined by the wishes or intentions of the parties contrary to the facts.

TUPE

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

Where a security contractor has been engaged for a company on  land owned by a Borough, when the Borough take back the site and engage a new security company to look after the site pending its demolition, does a service provision change TUPE transfer under Reg 3 (1) (b) of TUPE apply?

No, for two reasons, held the EAT in Horizon Security Services Limited v (1) Ndeze (2) The PCS Group.

In this case, PCS, a security contractor, had been engaged to provide security services for Workspace Plc which was looking after a business centre on a site owned by the London Borough of Waltham Forest. Then the site was taken back by the London Borough of Waltham Forest who engaged a new security company, Horizon, specifically to look after the site for a limited period of 8 to 9 months pending demolition of the building for the purposes of allowing a supermarket to be erected. Employees working for PCS claimed there was a service provision change and that they should be engaged by Horizon.

But a fundamental rule in relation to service provision change is that the client for whom the services are provided must be the same. This rule derives from the Court of Appeal case of Hunter v McCarrick [2013] IRLR 26. Here, the client had changed. PCS was working for Workspace Plc and Horizon was working for London Borough of Waltham Forest, which was a different legal entity. The service provision change rules did not apply and the employees were not entitled to transfer to Horizon.

The second point in the case is that service provision change TUPE transfers cannot occur where the client intends the contract to relate to an event or task of short term duration. The contract that had been given to Horizon was of limited duration, simply to look after the site pending its demolition. This was therefore a task of short term duration and for this second reason there was no service provision change.

Age Discrimination and Voluntary Early Retirement

Thanks to Caroline Jennings of No 5 Chambers for preparing this case summary

Was a failure to allow an employee to change her choice of voluntary redundancy to redeployment (in the hope that the redeployment exercise would take her from age 49 to 50 at which point she could choose the more favourable option of voluntary retirement) an act of age discrimination?

Not in the circumstances of this case, held the EAT in Palmer v RBS.

The Claimant was placed at risk of redundancy with a number of other employees. They were all given the option of choosing voluntary redundancy or redeployment. Those over 55 were offered an additional option to take voluntary early retirement. The Respondent subsequently introduced the option of voluntary early retirement for those under 55 but over 50. The Claimant (aged 49) wanted to change her choice from redundancy to redeployment on the basis that this process would take time, during which she would reach the age of 50 and thereafter be entitled to elect early retirement. The Claimant brought a claim on the basis that the Respondent’s failure to allow her to change her choice amounted to age discrimination.

The EAT agreed with the employment tribunal that the Claimant had not established less favourable treatment. There was a material difference between the Claimant and the comparator group: the Claimant could not claim early retirement at her projected date of dismissal whereas the comparators could. The principle in Lockwood v DWP that it is not permissible to take into account any material circumstances relating to the age of a claimant or their comparators, did not apply in this case as the material difference was by reason of statute. The prevention of employees below the age of 50 being given the option of early retirement was a result of the Finance Act 2004. The Claimant’s treatment was held to be lawful age discrimination

Detrimental treatment and the burden of proof

Thanks to Sophie Beesley of Old Square Chambers for preparing this case summary .

In a case of detrimental treatment related to union activities, contrary to s.146 TULRCA 1992, does the burden of proof operate as in a discrimination claim?

No, held the EAT in Serco v Dahou.

Mr Dahou claimed the reason for his dismissal was not gross misconduct but union activity. The employment tribunal upheld part of his claim for detrimental treatment and automatically unfair dismissal. Serco appealed and the case was remitted to a fresh employment tribunal.

Serco’s position was that the employment tribunal misapplied the burden of proof by not evaluating its explanation for Mr Dahou’s treatment. The EAT agreed; it did not follow “as a matter of law or logic” that Serco’s purpose was improper just because the employment tribunal was not persuaded that its actions were to address misconduct.

The employment tribunal had taken the burden of proof as in a discrimination case (where prohibited treatment can be inferred unless the respondent demonstrates otherwise) rather than determining Serco’s purpose by reference to evidence and inferences.

This supports the decision in North Essex Partnership NHS Foundation Trust v Bone that detriment requires the employer to have acted (or deliberately failed to act) to deter union participation, this effect being foreseeable is not enough.

Issues Not In Dispute

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

May an employment tribunal determine issues not in dispute between the parties?

No, says the EAT in Mr Clutch Auto Centres v Blakemore.

In this case the principal dispute between the parties was whether the employee had resigned on 18th October 2012 (as the employer contended), or whether he had been summarily dismissed on 6th November 2012 (as he himself contended). Both parties therefore accepted that the employment relationship had come to an end, and on the employee's case this must have happened by 6th November 2012 at the latest. At first instance the employment tribunal rejected both parties' contentions, and found as a fact that the employment relationship continued.

The employer appealed to the EAT (HHJ Peter Clark presiding). The appeal was allowed, with the EAT accepting that the employment relationship had ended by virtue of the employee's election to institute proceedings on the basis of a dismissal he alleged had been effective on 6th November 2012. He would not be permitted to resile from that position.

Essentially this means that an employment tribunal may not determine issues which are not in dispute between the parties. Going further, HHJ Peter Clark suggested that an employment tribunal should not even go as far as to express an opinion on matters not in dispute.

Scope of regulators’ duty to report on whistleblowing

[Thanks to Craig Gordon of HR Bullets for giving permission to reproduce his summary]

The government has started a consultation asking for views on exactly how regulators will be obliged to report on whistleblowing disclosures they receive.

Whilst the government decided in June broadly against any substantive changes to the Public Interest Disclosure Act (despite calls from bodies such as Public Concern at Work to do so), it does intend to make some small amendments, among them requiring regulators (‘prescribed persons’) to report annually on whistleblowing issues reported to them.

The expressed aims of this reform are to ensure more systematic and consistent processes across all regulators and reassure whistleblowers that the relevant regulator is taking the matter seriously.

The consultation, which runs until 30 September 2014, proposes that prescribed persons under s. 43F of the Employment Rights Act 1996 will have to produce a report covering:

· the number of disclosures that qualify as protected public interest disclosures
· the number of these that did not require any further action
· the number of these that were referred to an alternative body
· the number of disclosures that required further research
· the number of investigations that led to action being taken
· the number of cases where the issue was resolved after first contact with the employer, and
· the number of organisations investigated that had whistleblowing policies in place

It’s not proposed that these reports will either identify the worker making the disclosure or the employer to whom the disclosure relates. And while MPs have recently been added to the list of prescribed persons, the duty to report won’t apply to them.

Illegality Defence in Discrimination Claims

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

Can an illegal immigrant bring a claim for discrimination despite the illegal nature of the contract?

Yes, held the Supreme Court in Hounga v Allen.

At common law a court will not normally enforce a contract where the basis of its performance results in an unlawful or illegal act - otherwise known as illegality of contract.

Miss Hounga, a Nigerian national, arrived in the UK in January 2007 having falsely obtained a visitors visa. She had no right to work in the UK and, after July 2007, no right to remain. However, she was employed by Mrs Allen as a live in nanny and lived in the Allen household. Hounga was mistreated by Allen and, in July 2008, Allen evicted Hounga from the household, effectively dismissing her from employment.

Hounga succeeded in a claim against Ms Allen for unlawful discrimination in relation to the dismissal which was subsequently upheld by the EAT. However the Court of Appeal upheld an appeal by Allen accepting that the illegality of the contract formed a material part of Hounga's complaint and to uphold it would condone illegality. Hounga appealed.

The Supreme Court upheld the appeal as they said there was an insufficiently close connection between Hounga's immigration offences and her claim for discrimination as the former merely provided the setting or context in which that tort was committed.

Withdrawing a Tribunal Claim - Tribunal not obliged to make further enquiries

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

Should an employment tribunal make enquiries of a Claimant when a claim is withdrawn, even in the heat of the moment?

No, held the unanimous Court of Appeal in Drysdale v Department of Transport. The Claimant claimed constructive dismissal, represented by his wife, who was not legally qualified. She verbally withdrew his claim during his re-examination, the employment tribunal did not expressly ask the Claimant if he agreed. The Respondent had the claim dismissed and sought costs. The appeal considered a single point: whether the employment tribunal erred in law in failing to take adequate steps to ensure that the Claimant had taken a properly considered decision to withdraw the claim.

The Court of Appeal noted that there was a '"wide margin of appreciation available to a tribunal in assessing such matters" and, setting out general principles for dealing with such matters (paragraph 49), found no error in the employment tribunal's approach. The employment tribunal here '"was under no obligation to enquire into the reasons for the decision to withdraw the claim, with either the Appellant or his representative", and the Court noted that "Other than in exceptional cases...such an enquiry would not only be unnecessary but also inappropriate".

Restrictive Covenants, Notice Period and Salary

Thanks to Caroline Field of Fox for preparing this case summary

Can an employee be restrained from working for a competitor during his notice period (and the period covered by his restrictive covenants) where the employer stops paying his salary?

Yes, held the High Court in Sunrise Brokers LLP v Michael Rodgers.

In March 2014, Mr Rodgers left Sunrise, having accepted a position with a competitor commencing in January 2015. His contract contained a 12 months' notice provision and enforceable restrictive covenants. The contract also provided for garden leave (at Sunrise's discretion which was not exercised) for a period which would not normally exceed 6 months.

From April 2014, due to his unauthorised absence, Sunrise ceased to pay Mr Rodgers' salary but confirmed that payments would recommence on his return to work. Mr Rodgers claimed that non-payment of salary was a bar to affirming the contract, which was not accepted.

The Court held Sunrise had good reason to keep the contract alive and granted an injunction to prevent Mr Rodgers working for a competitor during a reduced notice period agreed by Sunrise, deciding that this would not force Mr Rodgers to return to work for Sunrise. The Court allowed a post-termination restriction of 10 months from the last client contact. This still meant a shorter overall period of restraint than had Mr Rodgers abided by the terms of his contract.

While the courts are not prepared to order specific performance of an employment contract, the decision affirms they will not permit a wrongdoing employee to disregard protection of the employer's legitimate business interests.

New Court of Appeal Appointments

The Ministry of Justice has announced four appointments to the Court of Appeal. Mr Justice Bean and Mr Justice Sales, who will take up their appointments as Lord Justices of Appeal in the autumn, both have considerable employment law experience. Also appointed are Mr Justice Burnett and Mrs Justice King. Their full biographies are contained in the MOJ Press Release.

Health & Work Service

The new Health & Work Service, which is a government funded occupational health service, is due to go live in April 2015 (with roll-out from late 2014).

The Department for Work and Pensions has issued a press release announcing that the contract for the H&WS for England and Wales has been awarded to Maximus, one of the largest occupational health providers in the UK. In Scotland, the H&WS will be arranged by the Scottish government.

I'll be talking more about the Health & Work Service at my last three Employment Law MasterClasses in London, Edinburgh and Manchester in October. In summary, employees off sick for more than four weeks will be referred to the H&WS by their GP. The H&WS will produce a report to help integrate the employee back into the workplace. The assessment of the employee will done entirely by internet/telephone, and questions have been raised about how useful the reports will be (with the employer having very limited input into the process).