Ticking Fee Remission box suffices for presentation of claim

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

Must a claim be accompanied by a fee, or an application for fee remission, at the time it is presented?

Yes, held the EAT in Deangate Ltd v Hatley, but ticking the 'yes' box in relation to remission in the ET1 amounts to an application.

Three Claimants presented their claims online one day before the time limit for claiming expired. Their claims were not accompanied by a fee or an application for fee remission. However, in answer to a question in the ET1 'do you intend to submit an application for remission?' the Claimants ticked the 'yes' box. They submitted applications for fee remission within seven days.

The Respondent argued that the claims had to be rejected under Rule 11(1) of the procedural rules, which states: 'the Tribunal shall reject a claim if it is not accompanied by a Tribunal fee or a remission application'. The EAT disagreed.

Langstaff P held that the applicable legislation provided for a choice to be made at the time of presenting a claim between paying a fee or applying for remission. By ticking the 'yes' box the Claimants made an unequivocal choice to apply for remission, which was sufficient to amount to an application, albeit that it was necessary to augment the application with further information. A policy of allowing further information to be given within seven days was likely to provide a sensible timescale.

Holiday Pay - the Lock Decision

The employment tribunal in Leicester has handed down its long-awaited decision in Lock v British Gas.

Mr Lock was a salesman on a basic salary with variable commission paid in arrears. Mr Lock's commission depended not on the time worked, but the outcome of that work, i.e. sales achieved. Mr Lock could not earn commission whilst on leave, and therefore would lose income by taking it. He brought a claim for his 'lost' holiday pay after taking leave in December 2011 to January 2012.

Following the ECJ's decision last year, the employment tribunal has held that Mr Lock's holiday pay should include an element for his commission. It has done so by inserting new words into regulation 16(3) of the Working Time Regulations 1998 as follows:-

"(e) as if, in the case of the entitlement under regulation 13, a worker with normal working hours whose remuneration includes commission or similar payment shall be deemed to have remuneration which varies with the amount of work done for the purpose of section 221."

This will impact on future holiday pay entitlement. The impact on back-claims is reduced by the two year cap on backdated claims which takes effect on 1 July 2015.

Written Statement of Terms and Conditions

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

Where part of an employment tribunal claim has settled before the hearing, and the remaining elements fail, can there still be an award for failure to provide a statement of employment particulars?

No, held the EAT in Advanced Collection Systems Limited v Gultekin.

An employment tribunal can only make an award for failure to provide employment particulars under s.1(1) of the Employment Rights Act 1996 where another cause of action in the claim is successful. Here, the Employment Judge thought part of the claim (wrongful dismissal) had been settled prior to the hearing, and so treated this as a successful claim, and made an award regarding the lack of particulars, despite the rest of the claim failing.

Langstaff P held that approach was wrong.  It was not permissible to treat a settlement of an aspect of the claim as a 'successful claim' enabling a finding and damages under s.1(1).  Thus the award of compensation for failure to provide employment particulars had to fail.

Type 2 Diabetes controlled by diet is not a 'disability'

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

Does Type 2 diabetes controlled by diet automatically qualify as a disability?

No, held the EAT in Metroline Travel v Stoute.

The Claimant argued that he was a disabled person because he had Type 2 diabetes and followed a diet which was designed to reduce blood sugar levels. The employment tribunal accepted a submission that this automatically made him a disabled person under the Equality Act, and it failed to consider the specific circumstances of the case. The EAT found that this was an error of law. More controversially, the EAT ruled that a diabetic diet does not qualify as measures taken to treat or correct the condition.

This was an academic appeal as the Claimant had already lost his substantive case on liability but the EAT allowed it to be heard because the Respondent had other employees with Type 2 diabetes who would be affected by the decision. The Claimant was ordered to repay the Respondent's fees in full.

Employment Status and Agency Workers

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

Is it necessary to imply a contract between an agency worker and an end-user where factors point to a contract as the underlying reality?

No, held the Court of Appeal in Smith v Carillion, upholding the decisions of the employment tribunal and Employment Appeal Tribunal.

The Claimant was a 'blacklisted' agency worker with a management role in the construction industry. The Claimant argued that a 'worker' contract could be implied between him and his end-user, Mowlem (now Carillion), and alleged unfair dismissal by Mowlem for Trade Union activities.

The Court of Appeal rejected various grounds of appeal, and following James v Greenwich London Borough Council, refused to imply a contract between the Claimant and Mowlem. Various factors, such as the Claimant's integration into Mowlem's business and an interview, could not undermine the employment tribunal's finding that there was no contract between the Claimant and Mowlem. The Court noted 'A contract cannot be implied merely because the court disapproves of the employer's objective' if an 'employer' seeks to avoid legal obligations.

A Human Rights appeal was dismissed primarily because the acts complained of, with one possible exception, occurred before the HRA came into force. The Court rejected an argument that the provisions protecting 'employees' (but not 'workers') as safety representatives under S44 ERA should extend to 'workers'. The Court suggested obiter that protection for 'workers' under S146 TULR(C)A 1992 from detriments for Trade Union activities could extend to former workers.

TUPE, Insolvency and the National Insurance Fund

Thanks to Claire Darwin of Matrix Chambers for preparing this case summary

Is the Secretary of State for Business, Innovation and Skills (in accordance with the statutory scheme at Part XII of the Employment Rights Act 1996) liable for debts which accrue after a TUPE transfer?

No, held the EAT in BIS v Dobrucki.

The ordinary position is that any debts owed to employees by a transferor will transfer to the transferee under Regulation 4 of the TUPE Regulations 2006, even if those debts have not yet accrued or crystallised at the time of the transfer.

However, Regulation 4 is disapplied if the insolvency proceedings are analogous to bankruptcy proceedings and have been instituted with a view to liquidation of the assets and are under the supervision of an insolvency practitioner (Reg 8(7)).

Further, Regulation 4 is modified if the purpose of the insolvency proceedings is not with a view to liquidation of assets so that it does not transfer liability for the sums payable to the relevant employee under the statutory schemes (Reg 8(5)). The transferee will remain liable for other debts however, including sums in excess of those available under the statutory schemes.

Accordingly, the employment tribunal was wrong to hold that the Secretary of State was liable for sums owed in respect of post-transfer dismissals by the transferee. Such sums had never been owed by the transferor (because they related to post-transfer events), and therefore liability for such sums could not have transferred under Regulation 4.

The Employment Appeal Tribunal held that the statutory scheme at Part XII of the Employment Rights Act 1996 can only apply to the liabilities of the transferor i.e those debts which have accrued prior to or coincident with the transfer. The deeming provisions in Regulation 8(3) of the TUPE Regulations 2006 do not alter the position and do not have the effect that debts which have accrued post-transfer become the responsibility of the Secretary of State.

Philosophical Belief Discrimination

Thanks to Jennifer Danvers of Cloisters for preparing this case summary.

Does an accusation made as part of a heated conversation that a letter written by the Claimant was “too left-wing” amount to harassment related to belief?

Not necessarily, held the EAT in Henderson v GMB.

At first instance the employment tribunal held that Mr Henderson had been fairly dismissed for gross misconduct, but that he had suffered direct discrimination and harassment on the basis of his “left-wing democratic socialist beliefs” for which he was awarded compensation for injury to feelings. Both parties appealed.

In a detailed and carefully worded judgment that touches on many interesting aspects of discrimination complaints based on philosophical belief, Simler J upheld GMB’s appeal and dismissed the appeals of Mr Henderson.

The following points are of particular importance:

• Simler J rejected any suggestion that philosophical belief should be given less protection than religious belief.

• The awareness of alleged discriminators that a Claimant was manifesting a protected belief, will be key, so as to avoid the trap of conflating the “respondent’s reasons for treating the Claimant as it did with [the Claimant’s] reasons for acting as he did”.

• So as to avoid trivial acts being caught by the concept of harassment, context and seriousness must be carefully considered, particularly where there is a single incident.

Simler J did not consider it necessary to decide the interesting point of whether there is a distinction between direct discrimination based on how a belief is manifested and treatment based on the belief itself.

Acas Code of Practice

The revised Acas Code of Practice on Disciplinary and Grievance Procedures came into force yesterday, pursuant to The Code of Practice (Disciplinary and Grievance Procedures) Order 2015.

The change is minor, reflecting the EAT's judgment in Toal v GB Oils, ie that an employee has an absolute right to request his/her choice of trade union representative or workplace colleague to accompany him/her, provided the request to be accompanied is itself reasonable. The 'reasonableness' requirement does not apply to the precise choice of companion, provided they fall within the statutory categories.

Supreme Court on Disability Discrimination

Thanks to Karen Jackson of didlaw for preparing this case summary Is the proportionality test under sections 15 and 35(1)(b) of the Equality Act 2010 the same as the test under Article 8 of the European Convention on Human Rights? No, held the Supreme Court in a unanimous decision dismissing Akerman-Livingstone v Aster Communities Limited, a housing repossession case brought by Shelter with intervention by the EHRC. Under section 35(1)(b) of the Equality Act eviction is unfavourable treatment for the purposes of section 15. Article 8 of the European Convention on Human Rights protects the right to respect for a person's home. The Appellant suffered from severe chronic PTSD which was a disability. The Respondent sought repossession of the Appellant's flat following repeated offers (eleven) to rehouse him. His inability to move arose from disability. The Supreme Court agreed with the Court of Appeal that the housing association had discharged its duty to accommodate under s.193(2) of the Housing Act 1996 but that the first instance decision had incorrectly failed to consider proportionality under the Equality Act. No landlord is entitled to evict a disabled tenant because of something arising in consequence of disability unless he can show eviction to be a proportionate means of achieving a legitimate aim. Lady Hale would have allowed the appeal to give full consideration to the proportionality test under the Equality Act test but opined that there would be no kindness to the Appellant to prolong matters further since a possession order would inevitably ensue. The other Lords agreed that a different approach to proportionality under the Equality Act was required and that it was wrong to equiparate Article 8 and s.35(1)(b). The housing authority had gone out of its way to accommodate the Appellant and needed possession to allow it to meet its obligations under the Housing Act. This would constitute a proportionate means of achieving a legitimate aim.

Resignation amounting to Constructive Dismissal is not Harassment

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

Is an act of constructive dismissal in itself an act of harassment for the purposes of the Equality Act 2010?

No, held the EAT in Timothy James Consulting v Wilton.

The Claimant had a successful career in the recruitment industry and joined Timothy James, a smaller business.

Tensions arose, and several incidents occurred involving a director, Mr O'Connell, with whom the Claimant had previously had a personal relationship. Amongst other things, the Claimant was subjected to "a tirade of criticism" and described as "a green eyed monster". This was with reference to an alleged jealousy of another female colleague with whom Mr O'Connell had now formed a relationship. The employment tribunal concluded that the treatment afforded to the Claimant was because she had previously had a relationship with Mr O'Connell. It was therefore related to the protected characteristic of sex. The employment tribunal found three such incidents of sexual harassment.

In the end, the Claimant resigned, claiming constructive dismissal. The employment tribunal also found that the constructive dismissal was, in itself, an act of harassment under the Equality Act 2010. The EAT disagreed on this point. On a correct interpretation of the Equality Act, an act of constructive dismissal does not, in itself, fall within the meaning of harassment.

The employment tribunal made an order of £10,000 for injury to feelings for the harassment that did occur. It went on to gross this up to take into account income tax. The employer appealed on the grossing up point. The EAT upheld the appeal. On the true construction of the Income Tax (Earnings and Pensions) Act 2003, an award for injury to feelings under the Equality Act 2010 is not liable to income tax. The EAT relied upon a decision of HHJ McMullen QC in Orthet Limited v Vince-Cain [2005] ICR 324 in which the learned judge set out a lengthy and detailed consideration of the relevant case law and principles. This was to be preferred over contrary decisions of lower tribunals dealing with tax appeals.

Compensation: Importance of clear structure and reasoning

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

Can an employment tribunal carry out a speculative assessment of a Claimant's working hours, possible dismissal and the impact on their loss of earnings?

Yes, held the EAT in Little v Kerry Ingredients (UK), but they must set out their findings and reasons clearly.

The Claimant was employed as a Maintenance Engineer by the Respondent food processing company. Following a heart attack, he returned to work on full pay, working about 50% of his normal hours. His employer asserted that this was a 'non-job', he was productive for only 20% of his time, and his duties were covered by his colleagues and an agency worker. His claims, including unfair dismissal and disability discrimination, were upheld. The employment tribunal found that he would have worked 70% of his hours for a further 39 weeks, although there was a 20% chance he would be fairly dismissed within that time.

The employer's appeal was upheld. Whilst it was not wrong for the employment tribunal to engage in the speculative assessment that he would increase his hours from 50% to 70%, they had to engage with the evidence before them. It might have been a legitimate conclusion but they had to spell out their findings. The finding that he would not return to work full-time fed into the prospect that he might have been fairly dismissed, bearing in mind the duty to make reasonable adjustments. These conclusions were not necessarily perverse but the employment tribunal would need to set out their findings clearly. The matter was remitted to the same tribunal to consider these matters.

Reimbursement of EAT Fees by Respondent

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

If a Union pays an Appellant's fee, does Rule 34A (2A) of the EAT Rules permit the EAT to order unsuccessful Respondents to pay the EAT fees of the Appellant?

No, held the EAT in Goldwater v Sellafield Ltd. Rule 34A (2A) provides 'If the Appeal Tribunal allows an appeal...it may make a costs order against the Respondent specifying the Respondent pay to the Appellant an amount no greater than any fee paid by the Appellant...' .

As the GMB had paid its members' EAT fees, the EAT could not order the Respondent to pay a fee where "the plain fact is that the Appellants have paid no fees at all...and...the maximum order that can be made is therefore nil."

The EAT noted that the judgment was limited to Rule 34A (2A) and not other rules which allow for costs orders for 'costs incurred by another party'. Practitioners may wish to note that the corresponding rule 76 (4) in the employment tribunals permits an employment tribunal to order a party to pay costs 'where a party has paid a Tribunal fee', similar to Rule 34A (2A).

The judgment is likely to be controversial and if followed in the EAT and in employment tribunals, would present a stark contrast to the costs rules allowing insurers to recover costs on public policy grounds (see Mardner v Gardner). This might lead to supported parties entering 'loan' arrangements to pay fees and so be able to recover them.

Employment Tribunal Fees: Bits and Bobs

Several developments on tribunal fees: each small, but cumulatively worth a mention. 1. Parliament has made an amending statutory instrument, clarifying an ambiguity in the original fees order. It is now clear than an employer counter-claim for breach of contract is charged a 'type A' fee, irrespective of whether the employee is also bringing 'type B' claims. 2. Bristol University have published a research study, Employment Tribunal Claims: Debunking the Myths, which makes some interesting (albeit probably uncontroversial) observations about fees. 3. The always excellent blogger Richard Dunstan has produced apost on how the fee system can be restructured to achieve a much fairer result without spending more government money. Definitely worth reading.

Judicial Bias (unusual case)

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

Was there bias in a salaried Employment Judge, hearing a part-time workers claim from a Tribunal lay member, deciding the case with the benefit of his own experience of the bench?

No, held the EAT in McGrath v Ministry of Justice, dismissing the Claimant's appeal. The Claimant compared his lack of a pension with the pension of a full-time salaried Employment Judge. An Employment Judge sitting alone dismissed the claim, as the roles were not comparable.

The employment tribunal heard evidence from a retired Employment Judge as to what his role entailed vis-à-vis lay members. The Employment Judge hearing the case, a Regional Employment Judge, drew on and made observations from his own experience as well as the evidence before him. The Claimant characterised the Employment Judge's approach as taking a 'personal view' leading to an unfair hearing.

The EAT disagreed, there was no closed mind, the Employment Judge gave the Claimant an opportunity to deal with his observations, and had fully engaged with the Claimant in challenging his perception of the roles of lay members and Employment Judge. The whole of the evidence had been considered. Furthermore, the Employment Judge's reasoning was plainly and unarguably right.

The EAT made observations as to the value of lay members, whilst noting that Parliament's will was that lay members should have less involvement in employment tribunals.