Tuesday 28 May 2002

Newsflash: Government Reshuffle

Following the resignation of Stephen Byers yesterday, 10 Downing Street has just announced that the new Secretary for Work and Pensions will be Andrew Smith.

And for those who are interested in such mundane matters, the existing Work and Pensions Secretary, Alistair Darling, will replace Stephen Byers as Transport Secretary.

New EAT Decision

This decision has just been placed on the EAT website. It is currently unreported, but may be reported in due course.

Hill v Howard Chappel (HHJ Peter Clark, 20/3/02)
An employer is not entitled to deduct overpaid holiday from an employee's final salary payment, in the absence of a 'relevant agreement' under the Working Time Regulations 1998 authorising such a deduction.

Thus, on the facts, Mrs Hill had taken 15 days' holiday in the holiday year when, on a pro rata basis, she was only entitled to take 10 days. The employment tribunal, when awarding Mrs Hill her unpaid salary, gave credit to the employer for the 5 days' additional holiday. The EAT reversed this, holding that (unlike reg. 14(2) of the WTR 1998, where an employee is entitled to compensation for untaken holiday on termination of employment) an employer cannot have credit for overpaid holiday under the legislative framework.
• click here for the full transcript

Monday 27 May 2002

Chancery Division: Pensionable Salary

The High Court has held (London Borough of Newham v Skingle & The Pensions Ombudsman), on an appeal from the Pensions Ombudsman, that pensionable salary for local government employees does not include overtime payments.

The point (which is summarised in the one sentence above) is short but important, as it applies to a wide range of local government and possibly, other public service, employees.

Click here to see the Decision.

Friday 17 May 2002

TUPE: Rossiter v Pendragon - Court of Appeal

According to a case summary issued by the Independent Council of Law Reporting, the Court of Appeal decided the appeal in Rossiter v Pendragon (and the associated case, Clarke v Air Foyle Ltd) last week. The transcript is not yet available.

The Court of Appeal has overturned the EAT decisions in both cases, and held that a change to employees' terms and conditions following a TUPE transfer does not automatically amount to a constructive dismissal - the employee still needs to establish a fundamental breach of his pre-transfer rights. Thus a transferee can vary terms in the same way the original employer might have been able to do, if such a variation would not have been a fundamental breach by the original employer.

I set out the full summary below (copyright ICLR)

An employee could not claim constructive dismissal on a transfer of undertaking where his working conditions had substantially changed to his detriment without showing a fundamental breach of contract by the employer

The Court of Appeal so stated when (i) allowing the appeal of Pendragon plc against the ruling of the Employment Appeal Tribunal [2001] ICR 1265 that its employee Mr Norman Rossiter had been constructively dismissed and (ii) allowing the appeal of Air Foyle Ltd against the decision of the Employment Appeal Tribunal on 3 October 2001 which, on a preliminary ruling, dismissed its appeal against an employment tribunal's decision that Mr Crosby-Clarke had been constructively dismissed.

The two conjoined appeals raised the same issue whether an employee employed on different terms on a transfer of undertaking could establish constructive dismissal by reason of substantial change in his work conditions to his detriment when the acts of the employer were not repudiatory or in breach of contract.

PETER GIBSON LJ said that it was quite clear from the language of reg 5(5) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") that no new right was thereby intended to be created . The regulation preserved the rights arising apart from TUPE and the only such right was that of an employee to resign when faced with repudiation of his contract by the employer. If there were a right to claim constructive dismissal if there had only been a substantial change in circumstances without breach of contract that would arise apart from not under TUPE.

The language of reg 5(5) was chosen to implement art 4(2) of the Directive and s 95(1)(c) of the Employment Rights Act 1996. Only conduct of an employer amounting to repudiation would entitle an employee to terminate a contract without notice.

The appeal tribunal in Rossiter's case[2001] ICR 1265,1275 erred in holding that s 95(1(c) should be construed in a way enabling an employee to claim constructive dismissal where there was no repudiatory conduct by the employer. The test in Western Excavating (ECC) Ltd v Sharp [1978] QB 761 still applied as much to a case involving a transfer of undertaking as when there was no transfer.
Jonathan Parker LJ and Sir Christopher Slade agreed.

Thursday 16 May 2002

Employment Regulation: New Report

The Better Regulation Task Force (a part of the Cabinet Office) has issued a report calling for reforms to the system of implementing employment legislation, referring to the unreasonable demands the method of regulation imposes on small and medium size employers.

Its recommendations include:
• commencement dates for new legislation be grouped together, so that various Acts / SIs take effect on the same date (perhaps once or twice a year), rather than at scattered intervals during the year;
• further research on the effect of employment legislation: in particular, its indirect effects on unemployment rates and investment, and degrees of awareness / penetration amongst workers;
• 'stress tests' for new legislation, to see which sectors of industry it might have the most effect on;
• a free interactive CD-ROM on employment rights, to be given to all employers (and updated regularly - either over the net, or by post once a year)
• a free or subsidised ACAS mediation service for businesses with less than 50 employees;
• free access to ACAS seminars for employers with less than 5 employees.

Click here to see the Report (Adobe Acrobat required).

Asbestosis Case: House of Lords Decision

The House of Lords has just handed down its decision in Fairchild, the mesothelioma test case.

The issue was whether employees who had developed mesothelioma from inhalation of asbestosis could bring a claim against various previous employers, when it was not clear (and, on current medical knowledge, impossible to prove) which of several employers had been the employer at the time of inhalation of the asbestos.

The Court of Appeal had held that, because it could not be said on balance of probabilities whether a particular employer was responsible, the claims must fail against all employers.

The House of Lords has reversed this, and permitted the claims to succeed. The basis of their decision is not yet known (a press release has been issued, but the judgment is not publicly available). It should become available later today, probably on the House of Lords website at http://www.parliament.the-stationery-office.co.uk/pa/ld199697/ldjudgmt/ldjudgmt.htm

Thursday 9 May 2002

Age Discrimination Bill 2002

The Age Discrimination (No. 2) Bill 2002 has been introduced to the House of Commons.

It contains the following provisions (applying to both employees and contract workers):
• making it unlawful to discriminate directly on grounds of age;
• making it unlawful to discriminate indirectly on grounds of age, unless objectively justified;
• making it an offence to specify an actual or preferred upper age limit in a job advertisement;
• making it unlawful to set a normal retirement age in contracts of employment, unless there is an objective justification (the example is given of a retirement age linked to an occupational pension scheme agreed between the parties)
• a defence where the age requirement is a genuine and determining occupational requirement
• imposing a duty on public authorities to promote age equality in employment practices;
• setting up an Age Equality Commission, to monitor implementation of the Act and work towards the elimination of age discrimination.
A reading of the Bill (it is a private member's bill) suggests it has been 'cut and pasted' from older discrimination legislation. For example:
• it refers throughout to 'industrial', rather than 'employment' tribunals;
• it does not contain any time limit for enforcement of rights (i.e. there is simply no reference to the normal 3-month time limit);
• however, it does use the more modern terminology for indirect discrimination, namely 'a provision, criterion or practice' rather than the older 'requirement or condition'.

Click here to see the Bill (Adobe Acrobat required).

Wednesday 1 May 2002

New EAT Decisions

These decisions have just been placed on the EAT website. They are currently unreported, but may be reported in due course.

Paggetti v Cobb (HHJ Peter Clark, 22/3/02)
An employee's compensatory award was calculated on the basis of his actual wage, which was £1.88 per hour. The EAT overturned this, holding that when calculating a compensatory award, a tribunal should never base it on less than the minimum wage (then £3.60ph) because, to do so, would be to disregard the National Minimum Wage Act 1988 and allow the employer to benefit from his breach of that Act. Accordingly, the compensatory award should be calculated based on an hourly rate of £3.60, not £1.80.
• click here for the full transcript

Brown v Tomlinsons Dairies (Mr Commissioner Howell QC, 10/4/02)
The employee was at risk of redundancy, but had not been dismissed. He wrote to the employer, asserting he had been dismissed, and refused to attend work. After several attempts to persuade him he had not been dismissed, the employer eventually treated the employee as having resigned. The EAT confirmed this was a dismissal within section 95 of the ERA 1996, by way of the employer accepting the employee's repudiatory breach (refusing to work) and thereby bringing the contract to an end. However, the dismissal was fair, primarily because there was little else the employer could do.
• click here for the full transcript