Newsflash: Holiday Pay Claims

According to a report in WSB, Unite has announced it is not appealing the Employment Appeal Tribunal's decision in Bear Scotland v Fulton case, which has the effect of (largely) preventing claims for holiday-pay backpay going back to 1998. And if anyone think that's the end of backpay claims, think again...  Someone else is bound to challenge Bear Scotland, and also test the (obiter) indications in previous cases that these backpay claims cannot be brought in the civil courts (with a six year limitation period).

Contract variations: effect of not objecting

Thanks to Naomi Cunningham of Outer Temple Chambers for preparing this case summary

Was an employment tribunal entitled to find that an employee had impliedly accepted a variation of her contract of employment by continuing to work, without expressly objecting to it, for 9 years?

Yes, held the EAT in Wess v Science Museum Group.

Ms Wess was employed in various curator roles from 1979. Originally she had been entitled to 6 months’ notice of termination. In 2003, she was sent a new contract which - among other changes - purported to reduce her notice entitlement to 12 weeks. She never signed the contract, as requested; but neither did she say that she objected to the new terms. She continued to work until her dismissal on 6 weeks’ notice.

The ET found that Ms Wess had impliedly assented to a variation of her contract, and the EAT held that that was a permissible conclusion. Although tribunals must be cautious in finding implied acceptance of a unilaterally-imposed new term whose effect is not immediate, the employer had made it plain here that future employment was offered on the basis of an entirely new contract.

The result is plainly right, even if contract pedants may regret that the EAT passed up the opportunity to clarify the often-blurred distinctions between affirmation, acceptance of variation, and waiver of breach.

Psychiatric Injury

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

What are the rules relating to remoteness in damages claims for psychiatric injury? The Court of Appeal explains this in Yapp v FCO. 

Mr Yapp was appointed British High Commissioner in Belize. A year later he was withdrawn from the post and suspended, pending investigation of allegations of misconduct. He then received a writing warning. His suspension was lifted, but he developed a depressive illness and had to undergo heart surgery. He did not in fact receive any other appointment in the Foreign and Commonwealth Office until his retirement. 

He commenced proceedings against the FCO, complaining of the withdrawal of his post and the way the disciplinary process was conducted. He said the resulting stress had caused his depressive illness, which both constituted damage in itself, and led to pecuniary loss. 

The trial Judge found that the withdrawal of the claimant from his post was both a breach of contract and a breach of the duty of care which the FCO owed him at common law (but dismissed the claims in relation to the disciplinary process. 

The FCO appealed against the finding of liability. It further contended that, even if it were in breach, the claimant was not entitled to recover damages for his depression and its consequences on grounds of causation and/or remoteness. 

The Court of Appeal (lead judgment: Underhill LJ) dismissed the FCO's appeal against the findings of breach of contract and causation. But it allowed its appeal on the issue of remoteness of the claim for psychiatric injury. There is a masterly survey of the authorities on remoteness at para 79-133. And the judgments are rich in the analysis of the law in this area generally. 

In contract, the question is: was the damage in question of kind which was "not unlikely" to result? In tort, was the damage "reasonably foreseeable"? The former test requires a higher degree of likelihood of damage occurring than the latter. It therefore made more sense to start with the claim for the breach of the common law duty of care, since the tortious test of remoteness was more favourable to the claimant. 

The Court came to the conclusion that it was wrong to find that it was reasonably foreseeable that the FCO's conduct in withdrawing the claimant from his post without having had the opportunity to state his case might lead him to develop psychiatric illness. According to the Court, it would be exceptional that an apparently robust employee, with no history of any psychiatric ill health, would develop a depressive illness as a result even of a very serious set back at work. The FCO could not have foreseen, in the absence of any sign of special vulnerability, that the claimant might develop a psychiatric illness as a result of its decision. It therefore followed that if the losses were too remote to be recoverable in tort, they were also too remote to be recoverable in contract.

Fees in the EAT

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

When may an appellant recover the fees paid to have an appeal heard in the EAT?

It depends on the circumstances of the case, held the EAT inLook Ahead Housing v Chetty.

The two employees at the centre of this appeal had won their claims of race discrimination and unfair dismissal against their employer, the appellant. The employer then presented an appeal to the EAT in respect of the employment tribunal's judgment on remedies. All of the contested elements of the appeal were rejected, but one element was allowed by consent. The employer then applied for an order that one of the employees pay half the £400 EAT lodging fee and £1,200 hearing fee.

The EAT (Langstaff J) rejected the employer's contention and gave very clear guidance on this matter. Firstly "and most obviously"  an appellant who fails on every point should not recover their appeal fees. In cases where an appeal succeeds in part, recovery and the amount recovered will depend on the individual case and in such circumstances it may be appropriate to order part-recovery. The key question is "whether it was necessary to incur the expense in order to bring the appeal" (paragraph 53).

If reasonable steps could have been taken to avoid having to bring the appeal, such as by applying for reconsideration or by seeking the agreement of the other party, it may not have been necessary to do so and the test would not be satisfied

Redundancy during Maternity Leave

Thanks to Ed McFarlane of Deminos HR for preparing this case summary Can an employer arrange a redundancy process so as to determine when it is obliged to offer a suitable alternative vacancy to a redundant employee on maternity leave? No, held the EAT in Sefton Borough Council v Wainwright. The Claimant was on maternity leave, and in a pool of two managers, the other male, facing redundancy as their roles were combined. The Council gave the combined role to the other manager ahead of her, making her dismissal automatically unfair under the Employment Rights Act. The EAT rejected the Council's distinctions between processes leading to 'displacement' or 'redeployment', and 'redundancy'. For the purposes of Regulation 10 of the Maternity and Parental Leave Regulations, requiring employers to offer redundant employees on maternity leave suitable alternative employment, it was not for the employer to determine when the redundancy arose, the statutory definition of redundancy should be used, otherwise the protection of Regulation 10 could be undermined if employers abused their position to determine how redundancy processes run. However, the EAT found that the employment tribunal erred in concluding that the breach of Regulation 10 in failing to offer the new post to the Claimant meant that it had committed maternity discrimination under S18 of the Equality Act. The employment tribunal had not fully considered the reason why the Claimant was not offered the alternative job, it was not inherently discriminatory to offer the job to a candidate better qualified than the Claimant. The matter was remitted to the same employment tribunal for reconsideration. The EAT also ordered the Claimant to pay only part of the hearing fee award to the Council, exercising its discretion, as the appeal was only partly successful.

Acas Early Conciliation

Acas has published the first six months' figures showing how early conciliation is working. Key figures:-
 

• over the first six months, it has conciliated in 37,000 cases (of which about 1,000 were multiple claims, covering about 8,000 potential Claimants)
• 3% of early conciliation requests came from the employer
• 10% of employees reject the offer of early conciliation once they have submitted the EC Form
• similarly, 10% of employers decline to participate in early conciliation when Acas contacts them
• preliminary indications show that 18% of early conciliations resulted in a COT3. Of those that did not result in settlement, over 2/3rds did not progress to a tribunal claim (but bear in mind there is some time lag built into this as an employee will have at least a month to bring a claim, and they might not have done so during the survey period)

For more information, see Darren Newman's blog post on this.

ET shouldn't research evidence/arguments on Wikipedia

Thanks to Ed McFarlane of Deminos HR for preparing this case summary Should an employment tribunal conduct its own enquiries into evidence (for example, on Wikipedia during an adjournment)? No, held the EAT in East of England Ambulance Service v Sanders. After hearing evidence on a preliminary point relating to disability, the employment tribunal researched a point on the internet before informing the parties of their research. The Respondent asked that the employment tribunal recuse itself, which was refused. The Employment Judge asked leading questions of the Claimant about her condition. The EAT upheld the Respondent's appeal and remitted the case. The EAT considered Rule 41 noting "Rule 41 does not, in our view, allow a Tribunal to make enquires on its own behalf into evidence which was never volunteered by either party". An employment tribunal may ask questions of those before it, but to elicit evidence: "not the evidence which the Tribunal wishes to hear but the evidence which the witness wants to give, as best the Tribunal can understand it". The EAT advised employment tribunals that "In assisting one party, it should be cautious not to cross the line between impartiality (which it must maintain) and acting as an advocate (which it must never do)...". The EAT noted that there was the risk of an appearance of bias arising from the position in which the employment tribunal had put itself, and noted that criticisms of the Respondent's cross-examination was of matters that the employment tribunal was entitled to control. The EAT also made general observations on the importance of parties highlighting relevant passages in authorities bundles.

Reimbursement of EAT Fees by Respondent

Thanks to James Medhurst of Employment Law Advocates for preparing this case summary

Is there a presumption that the successful Appellant in an appeal will recover the £400 issue fee and £1,200 hearing fee from the unsuccessful Respondent?

Seemingly not, given the EAT's decision in Old v Palace Fields Primary Academy.

The Claimant was a teacher who had been dismissed after being accused of encouraging the bullying of one of her pupils.  The employment tribunal found the dismissal was fair.  The EAT found two (minor) faults in the tribunal's reasoning and the case remitted back to the same employment judge.

However, the EAT did not make an order for recovery of the £400 issue fee and ordered only half of the £1,200 hearing fee to be repaid. It said that it had a wide discretion as to recovery of fees and that the Claimant had only been "partially successful" because the case had been remitted back to the same Employment Judge.

Judicial Review not normally appropriate in employment cases

Thanks to Barnaby Large of No.18 Barristers Chambers for preparing this case summary.

Is judicial review a mechanism for examining employment practices?

On the face of the Court of Sessions' decision (Lords Essie's lead judgment) in Gray v Watson, generally no.

Mr Gray, managing director of Braid Logistics UK (BULK) and shareholder its parent company Braid Group, had a contract providing for summary dismissal.

The Group's board of directors met and appointed a committee, including First and Second Respondent, to investigate Mr Gray's alleged misuse of an expense account. He was not invited to the meeting.

The Second Respondent suspended Mr Gray and the first issued disciplinary proceedings. The Second Respondent then summarily dismissed Mr Gray, offering the right of appeal to the remaining Respondents, temporarily appointed as directors of BULK.

The Petitioner applied to strike down suspension, disciplinary proceedings and dismissal and to restrain the remaining Respondents from further action on the grounds that the committee's appointment was procedurally flawed and the Respondents' apparent bias.

Applying West v Secretary of State for Scotland, the Court dismissed the petition.

The Respondents' use of powers were as agents of BULK, there was no tripartite relationship. Furthermore, they were not exercising quasi-judicial functions.

Finally, supervisory jurisdiction was available only in absence of other remedy. Reference to final decision on appeal in the contract was to the internal process, not excluding judicial jurisdiction. Remedy lay in employment law so supervisory jurisdiction could not be invoked.

Holiday Pay: Government announces taskforce

Following this morning's important ruling on holiday pay, Business Secretary Vince Cable has announced he is setting up a new taskforce to assess the impact of the ruling.

Although the press release uses the neutral language "assess the possible impact", this tweet from the BIS Press Office does rather give the game away...


Plus (according to the press release) the members of the taskforce consist of seven employer's organisations, but no unions, law centres or employee organisations.  No prizes for guessing what they're going to recommend...

Important Case: Holiday Pay

The Employment Appeal Tribunal has, this morning, handed down judgment in Bear Scotland v Fulton (and conjoined cases).

Key points:-

1.  workers are entitled to be paid a sum of money to reflect normal non-guaranteed overtime as part of their annual leave payments

2.  that applies only to the basic 4 weeks' leave granted under the Working Time Directive, not the additional 1.6 weeks under regulation 13A of the Working Time Regulations

3.  claims for arrears of holiday pay will be out of time if there has been a break of more than three months between successive underpayments (subject to the reasonable practicability test)

4.  travel time payments, which exceed expenses incurred and so amount to additional taxable remuneration, should also be reflected when calculating holiday pay.

The Employment Appeal Tribunal refused to grant a reference to the Court of Justice of the European Union, but gave permission to appeal to the Court of Appeal (stating that ground 3 was the most significant point for the Court of Appeal to consider).